HEADLINES

Economy

US: Producer price data points to subsiding inflation pressures. US producer prices increased slightly more than expected in June amid a rise in the cost of services, but that did not change expectations that the Fed could start cutting interest rates in Sept. (Reuters)

US: Consumer sentiment unexpectedly drops to eight-month low in July. Consumer sentiment in the US has unexpectedly deteriorated in the month of July, according to preliminary data released by the University of Michigan. The report said the consumer sentiment index fell to 66.0 in July from 68.2 in June. Economists had expected the index to inch up to 68.5. (RTT)

EU: France inflation rises more than initial estimate. France's consumer price inflation increased slightly more than estimated in June, final data from the statistical office INSEE showed. The CPI grew 2.2% YoY in June, following a 2.3% rise in the previous month. The rate was slightly faster than the initial estimate of 2.1%. (RTT)

EU: Spain inflation slows as estimated. Spain consumer price inflation softened in June on lower food and fuel costs, final data released by the statistical office INE showed. The CPI registered an annual increase of 3.4%, as initially estimated, after climbing 3.6% in April. However, EU harmonized inflation moderated lessthan-estimated to 3.6% in June from 3.8% in the prior month. The figure was revised up from 3.5%. At the same time, core inflation that excludes prices of unprocessed food and energy, held steady at 3.0% in June. (RTT)

China: Exports top forecasts, but falling imports point to more stimulus. China's exports grew at their fastest in fifteen months in June, suggesting manufacturers are front-loading orders ahead of tariffs expected from a growing number of trade partners, while imports unexpectedly shrank amid weak domestic demand. The mixed trade data keeps alive calls for further government stimulus as the USD18.6trn economy struggles to get back on its feet. (Reuters)

China: Central bank seen holding medium-term lending rate steady. China's central bank is widely expected to leave a mediumterm interest rate unchanged and drain some cash from the banking system when rolling over such maturing loans. While the economy continues to sputter, a weak Chinese currency has remained the key constraint limiting Beijing's monetary easing efforts, as that could further widen the yield gap with other major economies, particularly the US, and trigger more capital outflows. (Reuters)

Japan: Consumer inflation to quicken as BOJ weighs interest rate hikes. Japan's core consumer inflation probably picked up in June for a second straight month, a Reuters poll of 18 economists showed, keeping the central bank under pressure to raise interest rates. Separate data from the MOF will likely show that export growth slowed down YoY in June, undershooting import gains and leaving behind a trade deficit. (Reuters)

Japan: Steps up yen warnings, data suggest intervention. Japan's top currency diplomat said authorities would take action as needed in the foreign exchange market, resuming his jawboning after the yen's spike overnight raised market speculation about currency intervention. (Reuters)

India: Inflation at 4-month high. India's consumer prices grew at the fastest pace in four months in June, the National Statistical Office reported. Consumer price inflation advanced to 5.1% in June, while the rate was forecast to remain unchanged at 4.8%. This was the fastest since Feb. In the same period last year, inflation was 4.9%. (RTT)

Markets

MYEG: Expands ZTrade service to enable cross border digitised trade documentation. MY E.G. Services Bhd (MYEG), the developer of Zetrix and related Web 3 applications including ZTrade, today announced ZTrade’s coverage expansion to include digital verification of Certificates of Origin (COOs) issued by the General Administration of Customs of China (GACC). ZTrade is a Web 3 platform that facilitates the cross-border trading of goods with China. The company said the enhancement will make ZTrade the first platform to verify and exchange digitised trade documents on the Zetrix blockchain, a two-way cross-border facilitation service for trade with China. (Bernama)

Radiant Globaltech: To acquire 80% stake in Rymnet for RM53m. Radiant Globaltech (RGTECH) is set to acquire an 80% stake in Rymnet Solutions SB for RM52.5m. The agreement, formalised through a legally binding term sheet, outlines the transaction structure between RGTECH and Un Sze Hau, the current majority shareholder of Rymnet. Under the terms, RGTECH will pay RM42.50m in cash and issue RM10m worth of new RGTECH shares to finalise the purchase. Rymnet, known for its expertise in digitalising human resource management operations, presents a strategic fit for RGTECH’s business objectives. (The Malaysian Reserve)

FGV: launches improved sustainability framework to help transform palm oil sector. FGV Holdings has introduced its improved Sustainability Framework to support the nation's initiatives in transforming the palm oil industry and achieving broader sustainability objectives. FGV said the framework expands on its current sustainability commitments and includes five key pillars: economic growth, governance, social, environment, and innovation and technology. FGV group chief executive officer Datuk Nazrul Mansor said the framework demonstrates its commitment to inclusive economic growth, social responsibility and environmental protection. (New Straits Times)

Theta Edge: Now says RM673.8m 'investment' for new IoT project is actually opex. Theta Edge Bhd is now saying that the RM673.8m it planned to invest to develop Internet of Things (IoT) technology for a project for the Ampang Jaya Municipal Council (MPAJ) is actually the operating expenditure (opex) that is required for the project over a 20-year concession period. (The Edge)

Minetech: Bags RM4.05m contract for Banting Industrial City project. Minetech Resources’ wholly-owned subsidiary, Minetech Construction SB (MCSB), has secured a RM4.05m contract from VED Engineers SB. Minetech said the contract is to undertake the construction and completion of road and drainage works for Banting Industrial City (Part of Phase 2D). (The Star)

Tafi: Bags RM207m related-party transaction for mixed-used development in Setia Alam. Tafi Industries has bagged a construction contract as well as piling and project furniture works worth a combined total of RM207.46m for a mixed-use development project that comprises a serviced apartment and a small-office, home-office (SOHO) block in Setia Alam, Selangor. The contract, awarded by Armani KPF2 Development Sdn Bhd (AKDSB), is expected to contribute positively to its earnings for the financial year ending 31 Dec 2024 (FY2024) until FY2027, said its group chief executive officer Datuk Seri Bryan Wong Sze Chien. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks rose Friday after some mixed signals on big banks’ profits and inflation did little to dent Wall Street’s belief that easier interest rates are on the way. The S&P 500 climbed 0.6% to close its fifth winning week in the last six. The Dow Jones Industrial Average rose 247 points, or 0.6%, and Nasdaq composite added 0.6%. All three indices had been on track to set all-time highs in afternoon trading but finished shy of them. Also helping to keep yields anchored was a report suggesting US households aren’t as fearful about inflation staying so high in the future. Over the coming year, US consumers are forecasting inflation of 2.9%, according to preliminary data from the University of Michigan. It’s the second straight month such expectations have eased. That helps calm worries about a potential spiral where expectations for high inflation could drive US consumers toward behavior that would push inflation even higher. That in turn could give the Federal Reserve more of the evidence of slowing inflation that it says it needs to begin cutting its main interest rate, which is at its highest level in more than two decades. In stock markets elsewhere, Japan’s Nikkei 225 gave back some of its recent recordbreaking run and fell 2.4%, though it’s still up more than 23% for the year so far. Indices were mixed across the rest of Asia and higher in much of Europe. The pan-European STOXX 600 index closed up nearly 0.9%. Back home, the FBM KLCI was down 4.06 points, or 0.25% at 1,619.06 last Friday, dragged down by losses in YTL Power, YTL Corp and Tenaga Nasional.

Source: PublicInvest Research - 15 Jul 2024