HEADLINES

Economy

US: Job seekers are sour on the cooling labor market. Workers are souring on the state of the job market. Job seeker confidence in Q2 2024 fell to its lowest level in more than two years, according to a quarterly survey by ZipRecruiter, which has tracked the metric since Q1 2022. That decline suggests workers are more pessimistic about their ability to land their preferred jobs. Workers had reason for euphoria two to three years ago: The job market was red-hot and, by many metrics, historically strong. It has remained remarkably resilient even in the face of an aggressive interest-rate-hiking campaign by US Federal Reserve to tame high inflation. However, the labor market has slowed gradually. Workers are now having a harder time finding jobs and the labor market, while still solid, could be in trouble if it continues to cool, economists said. (CNBC)

US: Crude oil inventories unexpectedly continue to decline. Crude oil inventories in the US unexpectedly saw further downside in the week ended July 19th, according to a report released by the Energy Information Administration. Crude oil inventories fell by 3.7m barrels last week after tumbling by 4.9m barrels in the previous week. Economists had expected crude oil inventories to rise by 0.7m barrels. At 436.5m barrels, US crude oil inventories are about 5% below the five-year average for this time of year, the EIA said. (RTT)

US: 10-year Treasury yield dips as investors closely monitor economic data. Treasury yields slipped as investors looked ahead to a fresh batch of economic data and considered the outlook for the US economy. The yield on the benchmark 10-year Treasury note was more than 4 basis points higher at 4.283%, while the yield on the 2-year Treasury note was flat at 4.424%. Yields and prices move in opposite directions, and one basis point is equivalent to 0.01%. (CNBC)

EU: Private sector recovery wanes in July. The euro area private sector recovery waned further in July amid deteriorating manufacturing sector performance and softening services activity growth, a survey compiled by S&P Global showed. The HCOB composite output index dropped unexpectedly to 50.1 in July from 50.9 in June. The score was seen at 51.1. A score above 50.0 indicates expansion. The manufacturing was the key source of weakness, while an increase in services activity stopped the private sector from falling into contraction. (RTT)

EU: Denmark industrial confidence remains stable. Denmark's business confidence stayed steady in July amid weaker demand conditions, figures from Statistics Denmark showed. The industrial confidence index stood at 0.0 in July, the same as in June. In May, the confidence turned to a positive figure of 2.0. The survey revealed that 35% of the companies in the industry said that their production was limited by a lack of demand. The overall economic confidence index, which includes consumer expectations, declined to 100.6 in July from 101.2 in the previous month. The index measuring production expectations weakened to 8 from 12 in the prior month. Meanwhile, the order backlog rose somewhat, but remained negative, and the respective index came in at -14 versus -16 in June. (RTT)

UK: Private sector growth strengthens in July. The UK private sector activity expanded at a faster pace in July, underpinned by robust demand and strengthening business confidence, flash survey results published by S&P Global revealed. The flash composite output index rose to a 2-month high of 52.7 in July from 52.3 in June. The score was forecast to rise to 52.6. A reading above 50.0 suggests expansion in the private sector. During July, service activity growth accelerated slightly, while manufacturing output rose to the strongest degree since February 2022. (RTT)

Japan: BOJ to weigh rate hike next week, detail plan to halve bond buying. The Bank of Japan is likely to debate whether to raise interest rates when it meets next week and unveil a plan to roughly halve bond purchases in coming years, sources said, signaling its resolve to steadily unwind its massive monetary stimulus. The rate decision will depend on how long the board members prefer to wait for clarity on whether consumption will recover and keep inflation stably around the bank's 2% target, said four people familiar with the BOJ's thinking. (Reuters)

India: Private sector growth strongest in 3 months. India's private sector activity expanded at the quickest pace in three months amid strong rises in new business and output, flash survey data from S&P Global showed. The flash HSBC composite output index rose to 61.4 in July from 60.9 in June. A score above 50 indicates sectoral expansion. During July, growth strengthened at goods producers and service providers, with the former leading the upturn, the survey said. (RTT)

Markets

UEM Sunrise (Underperform, TP: RM0.70): Divestment in South Africa falls through again. Property developer UEM Sunrise’s disposal of its 80.4% stake in South Africa’s Roc-Union Proprietary Ltd has fallen through again as the buyer Azishe Properties Proprietary Ltd failed to fulfil its payment obligations within the stipulated time frame. This is the second attempt by UEM Sunrise to sell its stake in Roc-Union. To recap, UEM Sunrise South Africa had entered into a sale of shares and claims of total shareholder advance worth ZAR18.4m (RM29.5m) with Azishe for the proposed divestment in Aug 2023. (The Edge)

AME Elite: Sells four Johor industrial properties to AME REIT for RM119.5m. AME Elite Consortium is selling four industrial properties in Johor to its 49.6%-owned unit AME Real Estate Investment Trust for a total of RM119.5m, to realign its property investments into a REIT. This is AME REIT’s second acquisition from AME Elite within 10 months. The trust bought three industrial properties in Iskandar Malaysia from AME Elite for RM69.3m in Oct last year. (The Edge)

MN Holdings: Bags RM136m substation engineering contract. The underground utilities and substation engineering firm said its wholly owned subsidiary MN Power Transmission SB received and accepted a LOA from a customer that provides data centre services. The contract scope of work comprises design, supply, installation, maintenance, testing and commissioning for a new 275kV consumer landing station (CLS). MN Holdings said this includes main building works, guardhouse and external works and dismantling and relocating the existing 33/11kV Containerised CLS to the new 33/11kV interim CLS. (StarBiz)

SC Estate Builder: Signs pacts to bid for solar projects, develop homes. SC Estate Builder is forming a consortium to bid for projects with a total capacity of 2,000MW under the fifth largescale solar programme (LSS5). SC Estate has signed a JV agreement with Anjung Meriah SB. Under the agreement, SC Estate will hold a 40% stake, while Anjung Meriah will have a 60% stake. The agreement is deemed a related party transaction, as Kuay Jeaneve is deputy chairman at SC Estate and also a director and shareholder, with a 97.2% stake in Anjung Meriah. (The Edge)

Axteria: Scraps plans to jointly develop Johor mixed project with RM413.2m GDV under first phase. Property developer Axteria Group, formerly known as Acoustech, has scrapped plans with Alpha Astral Properties SB (AAPSB) to jointly undertake a mixed development project on land measuring 83,037 sq m in Johor Bahru. The reason for the termination was due to the condition precedent not being met prior to the end of the extended condition period. Axteria said the two companies have mutually agreed to terminate the JV agreement signed in 2022. (The Edge)

BAT Malaysia: Reports lower 2Q24 earnings. British American Tobacco (M) is urging the government to consider addressing the high incidence of the tobacco black market in Malaysia, which is about 54.8% of the total industry. It suggested the government can do this by reviewing its taxation policies to complement its intensified enforcement initiatives in the upcoming Budget 2025. In its 2Q ended J30 une 2024, BAT Malaysia recorded revenue of RM640.5m, about 5.6% lower compared with RM678.1m registered a year earlier. (StarBiz)

MARKET UPDATE

The FBM KLCI might open lower today after a wipeout on Wednesday sent US stock indices to their worst losses since 2022 after profit reports from Tesla and Alphabet helped suck momentum from Wall Street’s frenzy around artificial-intelligence technology. The S&P 500 tumbled 2.3% for its fifth drop in the last six days. The Dow Jones Industrial Average dropped 504 points, or 1.2%, and the Nasdaq composite skidded 3.6%. Tesla was one of the heaviest weights on the market and tumbled 12.3% after reporting a 45% drop in profit for the spring, and its earnings fell short of analysts’ forecasts. In stock markets elsewhere, indices slumped across Europe and Asia. France’s CAC 40 index fell 1.1% as shares of luxury giant LVMH dropped 4.7% in Paris after the owner of Louis Vuitton and Dior reported quarterly sales that missed expectations. Back home, Bursa Malaysia closed on a weaker note, in tandem with the downbeat regional market performance as investors took profits amid the global sell-off. At the closing bell, the FBM KLCI shaved off 8.54 points, or 0.52%, to 1,621.14 from yesterday’s close of 1,629.68.

Source: PublicInvest Research - 25 Jul 2024