Economy

US: Economy grew at a 2.8% pace in the second quarter, much more than expected. Economic activity in the US was considerably stronger than expected during the second quarter, boosted by a strong consumer, government spending and a sizeable inventory build, according to an initial estimate from the Commerce Department. Real GDP, a measure of all the goods and services produced during the April through June period, increased at a 2.8% annualized pace adjusted for seasonality and inflation. Economists surveyed by Dow Jones had been looking for growth of 2.1% following a 1.4% rise in the first quarter. (CNBC)

US: Durable goods orders unexpectedly plunge 6.6% in June. Reflecting a steep drop in new orders for transportation equipment, the Commerce Department released a report unexpectedly showing a sharp decline in orders for durable goods in the month of June. The Commerce Department said durable goods orders plunged by 6.6% in June after inching up 0.1% in May. Economists had expected durable goods orders to rise by 0.3%. (RTT)

US: Weekly jobless claims fall more than expected. The number of Americans filing new applications for unemployment benefits fell more than expected last week as distortions from the weather and temporary automobile plant closures faded. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 235,000 for the week ended July 20, the Labor Department said. Economists polled by Reuters had forecast 238,000 claims for the latest week. (Reuters)

EU: British manufacturing sentiment falls in July. Optimism among British manufacturers dropped marginally in July but their output expectations hit the strongest since March 2022, a closely watched survey showed. After rising in April for the first time in nearly three years, the business confidence index fell to -9% from +9 in April, the latest quarterly Industrial Trends Survey results from the Confederation of British Industry showed. At the same time, export optimism was flat in the three months to July after rising in the preceding quarter. A net 3% of manufacturers said output volumes declined in the quarter to July compared to a net 3% reporting increase in the prior period. (RTT)

UK: Car production declines as manufacturers switch to electric models. UK car output declined in the first six months of the year as manufacturers continue to shift their investment to make electrified models, the Society of Motor Manufacturers and Traders said. In the first six months of the year, car production declined 7.6% from the previous year. Factories turned out 416,074 units, down by 34,094 from the same period last year. During January to June, electrified vehicle production also dropped 7.6% annually. (RTT)

China: Central bank surprises by lending again at lower rates. China's central bank surprised markets for a second time this week by conducting an unscheduled lending operation at steeply lower rates, suggesting authorities are trying to provide heavier monetary stimulus to prop up the economy. The medium-term lending facility (MLF) operation comes after the central bank cut several benchmark lending rates on Monday, just days after a top leadership meeting, which had outlined other major reforms. (Reuters)

Japan: Producer prices rise 3% in June amid stable monthly wholesale prices. The bank of Japan announced that producer prices, also known as wholesale prices, rose by 3% in June, marking an increase from the 2.7% rise reported for May, according to revised data. The preliminary data had initially indicated a 2.5% rise for May. This uptick reflects a continued upward trend in wholesale prices, driven by various economic factors affecting production costs and pricing. On a MoM basis, wholesale prices remained unchanged for the second consecutive month, suggesting a stabilization after previous fluctuations. (MENAFN)

Hong Kong: Trade gap narrows slightly in June. Hong Kong's foreign trade deficit decreased somewhat in June from a year ago as exports grew faster than imports, data from the Census and Statistics Department showed. The trade deficit narrowed to HKD55.7bn in June from HKD56.5bn in the same month last year. In May, the trade shortfall was HKD12.1bn. The visible trade deficit of HKD55.7bn was equivalent to 13.0% of the value of imports. The annual increase in exports was 10.7% in June, versus a 14.8% surge in May. (RTT)

Markets

SCIB: Secures RM162m deal in Perak. Sarawak Consolidated Industries (SCIB) via its wholly owned SCIB Properties SB has secured a RM162m contract from Awana JV Suria SB for the development, infrastructure and main building works of the civil servant housing programme in Mualim, Perak. The industrialised building systems specialist said the project involves the construction of both affordable housing and commercial units across two phases. The group said the development spans about 48.56ha across several lots in Mukim Hulu Bernam Timur in Mualim. (StarBiz)

Ahmad Zaki: Gets RM152m contract to build Port Dickson specialist hospital. Ahmad Zaki Resources said it has secured a contract worth RM152m to design and build the Port Dickson Specialist Hospital in Negeri Sembilan. The construction engineering company said that its wholly owned subsidiary, Ahmad Zaki SB (AZSB), received the LOA from the public works department for the proposed work. The contract will commence on 6 Aug and span over 156 weeks, AZRB noted. The latest contract is Ahmad Zaki's second win from the public works department in 2024. (The Edge)

JAKS Resources: Inks land lease MOU with TDM unit for LSS5 project. JAKS Resources said it has signed a MOU with subsidiary of TDM to collaborate on a land lease as part of its bid for the fifth Large Scale Solar (LSS5) programme. The construction and power utilities group said its wholly owned unit, JAKS Solar Power Holdings SB signed the MOU with TDM's 70%-owned subsidiary, TDM-YT Plantation SB, for the proposed lease of land in the Merang sub-district in Setiu, Terengganu. (The Edge)

PMHB: Plans up to RM185m green sukuk. Pesona Metro Holdings is seeking to establish an Asean Sustainability Sustainable and Responsible Investment (SRI) Sukuk Wakalah programme of up to RM185m. The construction and trading group said its 70%-owned subsidiary, SEP Resources (M) SB, made the lodgement with the Securities Commission (SC) for the sukuk issuance with a tenure of up to 12 years. The proceeds raised will be used for early redemption of SEP Resources’ outstanding obligations, pre-funding the Finance Service Reserve Account, defraying issuance fees and subscribing to new Murabahah stocks for eligible projects. (StarBiz)

Iqzan: To be delisted from 30 July after Bursa dismisses extension appeal. Iqzan Holdings will be delisted from Bursa Malaysia (30 July) after the regulator dismissed an appeal from the company for a further extension of time to submit its regularisation plan. “The company will continue to exist but as an unlisted entity. The company is still able to continue its operations and businesses and proceed with its corporate restructuring and its shareholders can still be rewarded by the company’s performance. However, the shareholders will be holding shares which are no longer quoted and traded on Bursa Securities,” it said. (The Edge)

ViTrox: Posts net profit of RM28.1m in 2Q. ViTrox said it is confident in achieving steady growth and improvements in the semiconductor back-end sector. The group said it will vigorously invest in R&D to deliver cutting-edge solutions to maintain its competitive edge, capitalising on the opportunities presented by Industry 4.0 and the AI boom. (StarBiz)

MARKET UPDATE

The FBM KLCI might open lower today after Wall Street’s split widened Thursday, as smaller stocks and other formerly downtrodden areas of the market rose up while superstar Big Tech stocks gave back more of their stellar gains. A swirling day of trading left the S&P 500 with a loss of 0.5% following its slide from the day before, which was its worst since 2022 and led to a wipeout for financial markets around the world. The Dow Jones Industrial Average rose 81 points, or 0.2%, while the Nasdaq composite sank 0.9%. Weighing on Wall Street were continued losses for Nvidia and most of the handful of Big Tech stocks that have been primarily responsible for the S&P 500’s run to records this year. They had tumbled a day earlier after profit reports from Tesla and Alphabet underwhelmed and raised concerns that the market’s frenzy around artificial-intelligence technology had sent prices too high. In stock markets elsehwere, indices dropped worldwide following Wall Street’s wipeout on Wednesday. They fell 3.3% in Tokyo, 1.8% in Hong Kong and 1.2% in Paris as worries spread about whether companies would meet expectations for profit growth and about potential moves by central banks on interest rates. In Japan, the rising value for the yen against the US dollar has hurt shares of the country’s exporters. The yen has been rising on speculation the Bank of Japan will raise interest rates soon, and its next policy meeting ends on July 31. Chinese stocks fell as investors questioned a central bank decision to cut another key interest rate after several similar moves earlier this week. Back home, Bursa Malaysia’s key index staged a modest pullback to end lower today, sparked by the downbeat performance on Wall Street overnight which spilled over into regional markets. At the closing bell, the FBM KLCI slid 5.96 points, or 0.37%, to 1,615.18 from Wednesday's close of 1,621.14.

Source: PublicInvest Research - 26 Jul 2024