HEADLINES

Economy

US: Treasury yields are flat as investors gear up for inflation data. Treasuries were muted as the final week of June began, with investors set to zero in key inflation report. The 10-year Treasury yield was marginally lower at 4.246%. The 2-year Treasury yield was less than 1bpts higher at 4.734%. Yields and prices move in opposite directions. One basis point is equivalent to 0.01%. (CNBC)

US: Fed’s Daly warns of labor market risks, nearing inflection point. Federal Reserve Bank of San Francisco President Mary Daly warned the US labor market is nearing an inflection point, where further slowing could mean higher unemployment. Daly, who votes on monetary policy this year, said restrained demand will likely be needed to return inflation to the central bank’s 2% target. That may stress a labor market that while good, is no longer frothy. (Bloomberg)

UK: Manufacturing orders fall at slower pace despite weaker foreign demand: CBI. UK manufacturers reported an improvement in total orders in June despite a notable decline in export order volume, the Industrial Trends Survey results from the Confederation of British Industry showed. The order book balance rose to -18% in June from -33% in May. The score was also better than economists' forecast of -25%. Meanwhile, the export order book balance hit -18%, which was the weakest outturn since Feb 2021. (RTT)

EU: German business morale deteriorates on weak expectations: Ifo. Germany's business sentiment softened in June due to more pessimistic expectations, highlighting the hardship that the economy faces amid headwinds, survey results from the ifo Institute showed. The business confidence index fell to a threemonth low of 88.6 in June from 89.3 in May. The score was forecast to rise slightly to 89.7. The German economy is having difficulty overcoming stagnation, ifo President Clemens Fuest said. The decline in the business climate indicator to a very low level highlights that even after Germany's economy grew in the first quarter, it is far from back to full health, Capital Economics' economist Jack Allen-Reynolds said. (RTT)

EU: Poland retail sales growth improves to 5.0%. Poland's retail sales growth accelerated less-than-expected in May, figures from Statistics Poland showed. At constant prices, retail sales climbed 5.0% YoY in May, following a 4.1% rise in April. The expected increase was 5.7%. In May, sales of motor vehicles, motorcycles, and parts grew the most by 23.5% annually, and those of solid, liquid, and gaseous fuels by 11.5%. On the other hand, sales of textiles, clothing, and footwear showed a sharp fall of 17.2%. (RTT)

Japan: BoJ summary shows board discussed possibility of early rate hike. The board of the Bank of Japan discussed the chance of an early rate hike as there is rising upside risks to prices, according to the summary of opinions at the monetary policy meeting on June 13 and 14. Therefore, it is necessary for the bank to consider whether further adjustments to monetary accommodation are needed from the perspective of risk management. One member said it should raise the policy rate not too late, in response to an increase in the likelihood of achieving the target. Members observed that the weakness of the yen raises the possibility of an upward revision to the outlook for the inflation rate. (RTT)

Singapore: Inflation climbs to 3.1%. Singapore's CPI increased more-than-expected in May to the highest level in three months amid higher private transport charges, data published by the Monetary Authority of Singapore and the Ministry of Trade and Industry showed on Monday. The CPI climbed 3.1% YoY in May, faster than the 2.7% stable increase in the previous month. Economists had expected inflation to rise to 3.0%. Data showed that MAS core inflation remained stable at 3.1% in May. MoM, core consumer prices edged up 0.1% in May. The total CPI rose 0.7 versus a 0.1% gain in the prior month. (RTT)

Taiwan: Industrial production surges, retail sales rise further. Taiwan's industrial production expanded at the fastest pace in four months on the back of strong manufacturing growth, preliminary data from the Ministry of Economic Affairs showed. Separate official data showed that retail sales expanded at a slightly faster pace in May. Industrial production advanced 16.06% YoY in May, extending from the 14.48% growth in April. Among the main sectors, manufacturing output alone surged 16.70% annually in May, and utility production showed an increase of 3.95%. Meanwhile, mining and quarrying output dropped 1.52%. (RTT)

Markets

Mi Technovation (Outperform, TP: RM2.67): Consolidates RM29m investment in China to capitalise on semiconductor growth. Mi Technovation is consolidating its investment in Talentek Microelectronics in China by having its wholly owned subsidiary, Suzhou Mi Equipment Co Ltd, transfer its shareholding to another wholly owned subsidiary, Mi Semiconductor (Ningbo) Pte Ltd, at the original subscription price of RMB45m (approximately RM29.2m). The move aims to strengthen business synergies and position the company for growth in the semiconductor industry. (The Malaysian Reserve)

Solarvest: Partners GreenRock Energy to further RE goals. Solarvest Holdings has formed a strategic partnership with Taiwan's GreenRock Energy to accelerate the development of green energy solutions in Taiwan and Malaysia. Solarvest, a clean energy expert, said the partnership has a target of achieving 1GW of renewable energy projects in the next five years. It said GreenRock Energy has become the first Taiwanese company to participate in the Malaysian government's green energy projects as it looked to expand into international markets. (StarBiz)

Kinergy Advancement: Teams up with Permodalan Kedah for sustainable energy projects. Kinergy Advancement has inked an MOU with state-owned investment company Permodalan Kedah (PKB) to develop sustainable energy projects. KAB said it will take on the technical responsibilities and utilise its experience in the energy sector, while PKB will identify potential land for renewable energy projects and assist in authorisation responsibilities such as obtaining project licensing. (The Edge)

Systech: Enters partnership to develop data centres. IT services firm Systech said that it plans to develop and operate data centres, together with a firm offering industrial-grade servers and storage solutions. Under the partnership with Eh Integrated Systems SB (EISSB), Systech said it will develop essential applications and software for data centre operations, including design, coding, testing and deployment. (The Edge)

Sunway: To acquire shares in Daiwa Sunway Development for RM25m. Sunway’s unit, Sunway Iskandar SB (SISB), a 60%- owned joint venture company, plans to acquire a 70% equity interest in Daiwa Sunway Development SB (DSD) from Daiwa House Malaysia SB (DHM) for RM25.5m. This move follows agreements made in 2015, where Sunway and Japan’s largest prefabricated home builder Daiwa House Industry Co Ltd had formed DSD, a JV company, to develop residential properties using advanced prefabricated housing technologies. Consequent to the completion of the acquisition, DSD will become a wholly owned subsidiary of SISB. (StarBiz)

Catcha Digital: Partners with KJ and Shahril to launch KS Lagi. Catcha Digital, through its subsidiary, has partnered with Khairy Jamaluddin and Shahril Hamdan, the founders of Keluar Sekejap SB, in a JV agreement to establish a new disruptive digital media venture, KS Lagi. Catcha Digital said the new business will combine the digital reach and strength of Catcha Digital with Keluar Sekejap, one of the new champions of the digital media and podcast space in Malaysia. Catcha Digital intends to assume commercial and business responsibilities for the existing Keluar Sekejap’s business and KS Lagi. (StarBiz)

MARKET UPDATE

The FBM KLCI might open lower today after another slide for Wall Street heavyweight Nvidia kept US indices mixed Monday, even as the majority of stocks rallied. The S&P 500 slipped 0.3% to pull further from its record set last week. The drops for Nvidia and other winners of Wall Street’s artificial-intelligence boom pulled the Nasdaq composite down 1.1%, while the Dow Jones Industrial Average rose 260 points, or 0.7%. Stocks of oil-and-gas companies were among the market’s strongest, as seven out of every 10 stocks in the S&P 500 rose. Exxon Mobil climbed 3%, and oilfield services provider SLB gained 4% as oil prices hung near their highest levels since April. In stock markets elsewhere, indices rose across much of Europe after mostly falling in Asia. The MSCI AllWorld index rose 0.1% on the day, having fallen for the previous two sessions. In Europe, the STOXX 600 gained 0.5% while Japan’s Nikkei closed up 0.5%, with the continued decline in the yen putting pressure on the Bank of Japan to tighten policy despite patchy domestic data. Back home, Bursa Malaysia closed lower for the sixth consecutive day today in a tight trading range as investors continued profit-taking activities and were reluctant to make significant moves following the technology sell-off on Wall Street last Friday. At the closing bell, the FBM KLCI was marginally lower by 0.05% or 0.71 of-a-point to 1,589.66 from last Friday’s close of 1,590.37.

Source: PublicInvest Research - 25 Jun 2024