HEADLINES

Economy

US: Leading economic index dips slightly less than expected in June. The Conference Board released a report showing a modest decrease by its reading on leading US economic indicators in the month of June. The report said the leading economic index edged down by 0.2% in June after falling by a revised 0.4% in May. Economists had expected the leading economic index to dip by 0.3% compared to the 0.5% decline originally reported for the previous month. (RTT)

EU: ECB keeps rates unchanged, Sept move "wide open". The ECB kept interest rates unchanged as expected but said Sept's meeting was "wide open" as it downgraded its view of the euro zone's economic prospects and predicted that inflation would keep on falling. The ECB cut rates from record highs last month in a move that even some of its policymakers considered rushed given stalling disinflation, and the bank is proving more cautious about a follow-up step. (Reuters)

EU: Construction output falls for third month. Eurozone construction output declined for the third straight month in May, Eurostat reported. Construction output posted a bigger fall of 0.9% on a monthly basis in May, after a 0.4% drop in April. This was the third consecutive decrease. Specialized construction activities and construction of buildings shrank 1.1% and 1.0%, respectively. At the same time, civil engineering logged a slower 0.6% decrease. (RTT)

EU: German building permits post sharp decline in May. Germany's building permits posted another sharp decline in May, reflecting the ongoing weakness in the construction sector, data from Destatis showed. The number of permits for construction of apartments shrank 24.2% in May from the last year, which was worse than the 17.0% decrease posted in April. Compared to May 2022, the number of building permits even fell by 43.9% or 13,900 apartments. For Jan to May period, 89,000 apartments were approved, down by 21.5% or 24,400 apartments from the same period last year. (RTT)

UK: Pay growth slows but remains high for BOE. Wages in Britain grew a bit more slowly but still increased at a pace that would normally be too strong for the BOE, leaving in doubt the possibility of an interest rate cut in two weeks' time. A day after official data showed stubbornly high inflation pressure, Britain's statistics office said earnings excluding bonuses grew by an annual 5.7% in the three months to May. (Reuters)

China: Stubborn savers ignore inducements to spend as growth slows. Chinese consumer spending has failed to respond to government measures even though household deposits are slowing and banks have slashed interest rates, a sign risk-averse residents prefer to repay debt and buy wealth management products. Chinese households added CNY9.3trn (USD1.3trn) in new deposits in the first half including 2.1trn in June, down 22% from a year earlier, according to data from the People's Bank of China. Outstanding household yuan deposits rose 10.6% YoY in June, but remained near the lowest in at least three years. (Reuters)

India: Cenbank pegs natural rate higher, analysts caution on policy easing. India's central bank said that the economy's natural rate of interest has increased since the pandemic and will rise further, driven by the growth of potential output, which analysts said could limit the scope to ease monetary policy. The natural rate of interest is associated with an economy operating at full capacity without generating inflationary pressures, and though not observable, it serves as a reference point for monetary policy, the Reserve Bank of India said in its monthly bulletin. (Reuters)

Australia: Jobless rate rises slightly in June. Australia's unemployment rate rose slightly in June despite a sharp increase in employment, data from the Australian Bureau of Statistics showed. The jobless rate rose slightly to a seasonally adjusted 4.1% in June, while it was expected to remain unchanged at 4.0%. Employment increased by 50,200 in June, much bigger than economists' forecast of 20,000. The participation rate came in at 66.9% in June, up from 66.8% in May. Further, the employment-topopulation ratio rose by 0.1%age point to 64.2%, data showed. (RTT)

Singapore: Central bank expects 2024 growth closer to potential rate of 2-3%. Singapore's full-year economic growth will come in closer to its potential rate of 2% to 3% and core inflation is expected to ease more significantly in the final quarter of the year, the head of its central bank said. Monetary Authority of Singapore MD Chia Der Jiun, speaking at the release of the central bank's annual report, said growth across major sectors of the city-state's economy was expected to gradually return to pre-pandemic rates. The GDP growth forecast is in the upper half of the Trade Ministry's forecast range of 1% to 3% for the year, and compared with growth of 1.1% in 2023. (Reuters)

Markets

MAHB: Relevant parties to review takeover offer - MOF. Any decision on whether to review the takeover offer of Malaysia Airports Holdings (MAHB) will only be made by the relevant parties since the offer is commercial in nature, according to the Finance Ministry (MOF). In principle, MAHB's takeover offer is a commercial transaction submitted by a consortium led by its two existing shareholders, Khazanah Nasional and the Employees Provident Fund (EPF). (Bernama)

Haily: Bags RM76m construction job in JB. Haily Group has secured a RM76.65m contract to construct 171 units of link houses in Kempas Baru, Johor Bahru. Haily said its wholly-owned subsidiary, Haily Construction SB, has accepted a letter of award issued by Razin Architects SB on behalf of Kews Senibong SB. The project will be executed in two phases. The first phase, commencing on 16 July, is expected to be completed by 15 October 2025. (The Edge)

Sapura Resources: Seeks to form aviation JV, eyes regional market expansion. Sapura Resources (SRB) is collaborating with Subang MRO SB (SMRO) through its subsidiary, Sapura Aero SB (SASB), to establish a joint venture company aimed at becoming a prominent regional player in the private jet services market. The joint venture will provide comprehensive aviation services including aircraft management, maintenance, repair and overhaul (MRO), ground handling, and aircraft parking/hangarage. SRB announced that SASB has entered into a MOU with SMRO to form the joint venture, with shares of Aerohandlers SB, a ground handling and aircraft management company currently owned by SASB, and SMRO to be transferred to the new entity. (The Malaysian Reserve)

Sunview: In Uzbek power generation deal. Sunview Group has entered into a heads of terms agreement with Uzbekistan to develop solar photovoltaic (PV) power plants and a battery storage energy system. The deal outlines the terms in principle before the main terms of the collaboration are formalised. Sunview will establish a special purpose company in Uzbekistan, which will construct and operate a 400MWAC solar PV power plant in the Andijan region and a 200MWAC solar PV power plant in the Fergana region. (The Star)

Samaiden: To raise RM1.5bn from sukuk issuances. Samaiden Group has established RM1bn Islamic medium term notes (IMTN) programme and a RM500m Islamic commercial papers (ICP) programme under the shariah principle of Wakalah bi al-Istithmar. The renewable energy (RE) specialist said the programmes will allow it to issue both rated and unrated Islamic notes and papers, with the option for them to be secured or unsecured, with or without a financial guarantor. (New Straits Times)

Ancom Nylex: Posts record high annual profit in FY2024, declares second interim dividend. Ancom Nylex net profit in the fourth quarter ended 31 May 2024 (4QFY2024) grew 1.44% to RM18.44m from RM18.18m a year ago, while quarterly revenue increased 1.82% to RM486.96m from RM478.25m. The quarterly profit helped to lift Ancom Nylex’s annual net profit to record high of RM81.47m for the financial year ended 31 May, 2024 (FY2024). (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after a widespread washout for US stocks dragged Wall Street lower on Thursday. The S&P 500 dropped 0.8% to pull further from its all-time high set on Tuesday. The Dow Jones Industrial Average tumbled 533 points, or 1.3%, from its own record set a day before, while the Nasdaq composite sank 0.7%. As they did the day before, when the Nasdaq tumbled to its worst loss since 2022, several Big Tech stocks led the market lower. Drops of 2% for Apple, 2.2% for Amazon and 0.7% for Microsoft were three of the heaviest weights on the S&P 500. Unlike much of the last week, though, Thursday’s losses hit many corners of the market. Smaller stocks, which had been cranking higher after badly lagging their larger rivals, fell more than the rest of the market. The Russell 2000 index lost 1.8% after jumping more than 1% in five of the last six days. In stock markets elsewhere, European indices were mixed after the European Central Bank held its main interest rate steady. Back home, Bursa Malaysia recouped its earlier losses to end flattish amid a weaker broader market primarily due profit-taking after hitting a fresh threeyear high yesterday. At the closing bell, the FBM KLCI edged up 0.27 of-a-point to 1,633.81 from Wednesday’s close of 1,633.54. Hong Kong's Hang Seng Index ticked up 0.22%, Singapore's Straits Times Index declined 0.53%, and Japan's Nikkei 225 sank 2.36%.

Source: PublicInvest Research - 19 Jul 2024