HEADLINES

Economy

Global: Economy's growing resilience at odds with rate cut expectations: Reuters poll. Optimism about global growth prospects this year and next is building among hundreds of economists polled by Reuters, with risks still tilted toward higher inflation even as they cling on to their forecasts for interest rate cuts. While most major central banks were successful last year in taming sky-rocketing inflation rates with rapid rate hikes, a resilient global economy with strong employment and wage growth has kept alive risks of price pressures surging again. In all, a 56% majority of economists said it was more likely to be higher than they forecast for the remainder of the year than lower. (Reuters)

US: Yellen rebuffs Trump argument on dollar hurting US manufacturing. In former president Donald Trump’s view, a strong dollar is walloping US manufacturers. For Treasury Secretary Janet Yellen, it’s just not that simple. Yellen, who consistently hews to the longstanding Group of Seven commitment to market-set exchange rates, said in an interview last week that a muscular US dollar needs to be considered in a broader context when assessing its impact. She also played down the role of international trade in undermining American factory jobs. “A very strong dollar can discourage exports and contribute to imports,” Yellen said in an interview with Bloomberg News. (Bloomberg)

UK: Retail sales decline sharply on poor weather: CBI. UK retail sales declined at a faster pace in July on unfavorable weather conditions and market uncertainty, the Distributive Trades Survey results from the Confederation of British Industry showed. The retail sales balance declined to -43% in July from -24% in June. A net 32% expects sales volume to fall next month. Retailers continued to report disappointing sales for the time of year and they expect sales to remain below seasonal norms in Aug. (RTT)

Japan: BOJ to cut bond buying as fate of rate policy stirs jitters. Bank of Japan (BOJ) Governor Kazuo Ueda will have investors on high alert when he lays out a detailed plan for quantitative tightening after years of massive easing. He may also double down by adding an interest rate hike to boot. While only about 30% of BOJ watchers predict a hike as their base-case scenarios, almost nobody is ruling out the possibility, according to a Bloomberg survey. The high degree of uncertainty has propelled the yen and Japanese stocks on a roller coaster ride that’s likely to continue until the decision and beyond. Some BOJ officials are open to the idea of raising rates this month with inflation remaining broadly in line with forecasts, according to people familiar with the matter. (Bloomberg)

Singapore: Producer price inflation accelerates in June. Singapore's producer price inflation accelerated further in June amid an increase in both the oil and the non-oil index, data from the Department of Statistics showed. The manufacturing producer price index climbed 4.4% YoY in June, faster than May's 3.5% rise. Prices have been rising since Dec last year. The non-oil index rose 7.3% annually in April, and the oil index showed an increase of 3.9%. Domestic supply prices were 4.3% higher in June than a year ago, following a 2.7% increase in the prior month. On a monthly basis, producer prices moved up 0.4% in June, reversing a 0.8% fall in May. (RTT)

Markets

Datasonic: Secures RM30m smart card contract in Indonesia. Datasonic Group (Datasonic), through its subsidiary PT Datasonic Teknologi Indonesia (DTI), has secured a three-year, RM30m smart card supply contract with Perum Percetakan Negara Republik Indonesia (PNRI). In a statement, Datasonic said the sales and purchase agreement was signed by DTI president director Azwan Omar and PNRI director of production and marketing B. Sigit Yanuar Gunarto. The signing ceremony took place at the PNRI headquarters in Johar Baru, Central Jakarta. (StarBiz)

Kelington Group: To acquire remaining stake in Ace Gases for RM35.69m. Kelington Group has entered into a conditional share sale agreement (SSA) to acquire 2.53m ordinary shares in Ace Gases SB for RM35.69m. In a Bursa Malaysia filing today, Kelington said the acquisition represents the remaining 9.29% equity interest and will allow it to fully control Ace Gases. The acquisition would provide greater flexibility in planning and implementing long-term strategies for its business and services, enhancing its growth potential. (StarBiz)

PMB: Proposes RM300m rights issue, seeks underwriting from Koon brothers. PMB Technology has proposed to undertake a renounceable rights issue of up to 266.78m new ordinary shares on the basis of six rights shares for every one existing ordinary share held to raise around RM300m. The producer of silicon metal and metal fabricator is also proposing to procure irrevocable undertakings from its major shareholders to subscribe for their respective entitlements, amounting to RM144.6m. (The Edge)

Ekovest: Disposes of more land in KL in related party transaction. Infrastructure and construction group Ekovest said it is disposing of another four parcels of land along Jalan Pahang in Kuala Lumpur, measuring a total of 2,286 sq m. The disposal of the parcels to Airman SB, a wholly owned subsidiary of Lim Seong Hai Holdings SB (LSHHSB), for RM9.82m is deemed a related party transaction, as Ekovest's non-independent and non-executive director Tan Sri Lim Keng Cheng is a major shareholder and director of LSHHSB with a 25% stake. The other shareholders of Airman, with a 25% stake each, are Datuk Lim Keng Guan, Lim Pak Lian and Lim Keng Hun. (The Edge)

Paragon Globe: To acquire freehold land in Johor Bahru for RM34.96m. Paragon Globe (PGB) has proposed to acquire two parcels of freehold land in Plentong, Johor Bahru, Johor for RM34.96m. In a filing with Bursa Malaysia, PGB said its whollyowned subsidiary, Paragon Business Hub SB, today signed a conditional sale and purchase agreement (SPA) with EKL Holdings Sdn Bhd for the acquisition of the proposed Lands D, measuring 4.48 ha and 3.33ha respectively. (StarBiz)

Tune Protect: Names How Kim Lian as new group CEO. Tune Protect Group Bhd has appointed How Kim Lian as its new group chief executive officer (GCEO) effective from today, succeeding Rohit Nambiar who stepped down in May. How's new role involves deepening Tune Protect's penetration into the lifestyle ecosystem and engaging with key regional players to establish the group as a leading regional insurance provider in the travel sector. (BTimes)

MARKET UPDATE

US benchmarks were mostly flat overnight as investors waited on key corporate earnings and the start of the Federal Reserve’s (FED) policy meeting. Quarterly results from the likes of Merck, Pfizer, PayPal and Procter & Gamble, amongst others, are expected to have some bearing on market direction. Microsoft, Advanced Micro Devices and Starbucks are expected to disclose their results after market-close later today. On the FED policy meeting meanwhile, Jerome Powell is widely expected to signal the timing and number of rate cuts expected in the coming months. On the day, the S&P 500 and Nasdaq Composite both inched 0.1% higher though the Dow Jones Industrial Average slipped 0.1%. Over in Europe, markets were mostly lower as investors here also waited on outcomes from corporate earnings and central bank meetings. The Bank of England also meets this week. Notable movers on the continent – share of Philips jumped as much as 15% at one point after the company reported better-than-expected second-quarter earnings. Heineken shares fell over 9% however, after the brewing giant’s first-half profit growth came in weaker than expected. France’s CAC 40 and Germany’s DAX fell 1.0% and 0.5%. UK’s FTSE 100 inched 0.1% higher. Asian markets were mostly higher earlier in the day, Japan’s Nikkei 225 leading gains (+2.1%) in the region after a key US inflation report late Friday raised hopes for an interest rate cut. On a separate note, the Bank of Japan will also start its policy meeting today, with markets expecting a 0.1% rate hike at its conclusion. The Hang Seng Index rose 1.3% though the Shanghai Composite ended largely unchanged (+0.03%) for the day.

Source: PublicInvest Research - 30 Jul 2024