HEADLINES

Economy

US: Small inflation pickup won’t derail Fed rate cut in Sept. US inflation probably picked up modestly in July, but not enough to derail the Fed from a widely anticipated interest-rate cut next month. The CPI is expected to have risen 0.2% from June for both the headline figure and the so-called core gauge that excludes food and energy. While each would be an acceleration from June, the annual metrics should continue to rise at some of the slowest paces seen since early 2021. (Bloomberg)

EU: France jobless rate falls in 2Q. France's unemployment rate dropped in 2Q, data from the statistical office INSEE showed. The jobless rate fell unexpectedly to 7.3% from 7.5% in 1Q. The rate was forecast to remain unchanged at 7.5%. Data showed that the number of unemployed persons decreased by 40,000 sequentially to 2.3m. (RTT)

EU: French 3Q growth to get a lift from Olympics. The Paris Olympics will drive an acceleration in French economic growth in 3Q, according to a monthly survey by the country’s central bank. The Bank of France said GDP is set to increase between 0.35% and 0.45%, compared with 0.3% expansion in the two previous periods, thanks to revenue from ticket sales for the Games and TV rights contracts. The full impact on activity has yet to be assessed. (Bloomberg)

China: Consumer prices boosted by weather disruptions; domestic demand still soft. China's consumer prices rose at a slightly faster-than-expected rate in July partly due to weather disruptions to food supplies, while producer deflation persisted, keeping the country's underlying consumption trends soft in a test for policymakers. China's frail consumer sector has been a major focus for Beijing as weak domestic demand hobbles the world's second-biggest economy while manufacturing activity shrinks. (Reuters)

China: Inflation at 5-month high. China's consumer price inflation rose more than expected to a 5-month high in July amid Beijing struggling to kickstart household consumption as the road to achieve about 5% growth target remains challenging. Consumer prices posted an annual increase of 0.5% after rising 0.2% in June, the National Bureau of Statistics reported. (RTT)

Japan: Bank of Japan’s policy path fraught with risks after global market turmoil. BOJ Governor Kazuo Ueda’s path to policy normalization got a lot rockier after market ructions this week, leaving him facing multiple risks ahead. When he took the helm at the BOJ in April of 2023, Ueda inherited a complex monetary framework that seemed almost impossible to exit. After more than a decade of unconventional monetary easing, the bank held more than half of the market for Japan’s government bonds. (Bloomberg)

Markets

Mitrajaya: Secures RM151.99m contract from NCIA. Mitrajaya Holdings (MHB) secured a contract from the Northern Corridor Implementation Authority (NCIA) to construct Phase 2A of the Kedah Science and Technology Park in Bukit Kayu Hitam, Kedah for RM151.99m. The construction firm said the contract was secured via its wholly owned subsidiary, Pembinaan Mitrajaya SB and is for a duration of 24 months from the date of commencement on 20 Aug, 2024. MHB added that the contract is expected to contribute positively to its earnings and net assets for the financial years ending 31 Dec in 2025 and 2026. (Bernama)

Asteel: Consortium bags RM61m Elmina data centre cladding deal. Asteel Group via its wholly-owned subsidiary Asteel (Sarawak) SB (ASWK), has jointly secured a RM61.2 million contract for roof and wall cladding of the EBP1A Hyperscale Data Centre at the Elmina Business Park, Selangor. Asteel said the contract was awarded by Gamuda Engineering SB to a consortium comprising ASWK and Sarnatec SB. (The Edge)

TMC Life Sciences: To issue domestic inquiry notice to suspended CEO after failed mediation. TMC Life Sciences said it will issue a domestic inquiry notice to suspended group chief executive officer (CEO) Wan Nadiah Wan Mohd Abdullah Yaakob for her to be heard by an independent panel, after a mediation process between the company and Nadiah failed. (Business Times)

Swift Haulage: 2Q net profit down 14% on lower profit margins. Swift Haulage the country's largest container haulier by the number of prime movers, saw its net profit fall 14.3% to RM8.33 million for the second quarter ended 30 June, 2024 (2QFY2024), from RM9.72m a year earlier, attributed to lower profit margins. As a result, earnings per share came in lower at 0.95 sen for 2QFY2024, compared with 1.48 sen for 2QFY2023. However, revenue for 2QFY2024 grew 4.7% to RM172.87m, from RM165.1m a year earlier. The container haulage and land transportation segments collectively contributed about 75.3% of total revenue. (The Edge)

Ekovest: MARC Ratings says 32-km SPE concessionaire has cashflow issues. MARC Ratings has flagged 32-km SetiawangsaPantai Expressway (SPE) toll concessionaire Lebuhraya DUKE Fasa 3 SB (DUKE 3) for cashflow issues. It revised its rating outlook on the concessionaire to negative from stable due to the thinning liquidity buffer to meet its financial obligations under the rated programme. It maintained its AA-IS rating on the toll concessionaire's outstanding RM3.64bn sukuk wakalah. MARC Ratings said in a statement, given the tolling delay, traffic levels were lower than projected. (Business Times)

Ranhill Utilities: Another four independent directors resign after YTL takeover. Ranhill Utilities — which has been taken over by YTL Power International—announced the resignation of four independent directors. This comes a day after the group added five new members to its board. The four directors who have resigned are Datuk Abdullah Karim, 72, Abu Talib Abdul Rahman, 70, Dr Arzu Topal, 60, and Jeffrey Bosra, 56, according to the group's bourse filings. A quick check with the group's 2023 annual report showed that Abdullah was appointed to the board in 2017, while Abu Talib was appointed in 2015. Meanwhile, Arzu, who is of Turkish nationality, was appointed in 2022. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after the S&P 500 rose 0.5% to shave what had been a brutal loss for the week down to a barely registerable 0.04%. The Dow Jones Industrial Average added 51 points, or 0.1%, and the Nasdaq composite climbed 0.5%. The gains pulled the S&P 500 back within 5.7% of its all-time high set last month, after it had sunk nearly 10% below that record during the week. It was a vicious return of volatility for a market that had been rising smoothly, and a measure of fear on Wall Street briefly surged toward its highest level since the 2020 COVID crash. It also may not be over. Worries are still high about the strength of the US economy, and reports are due next week on inflation, sales at retailers and other measures of strength. But on Friday, at least, the mood was one of calm after more big US companies joined the pile reporting better profit for the Earlier in the day, indices rose for many other stock markets worldwide. They’ve also been frenetic since last week because of a number of factors slamming together at once. At the forefront is the value of the Japanese yen, whose sudden and sharp strengthening recently forced hedge funds and other traders to scramble out of a popular trade en masse. MSCI's gauge of stocks across the globe rose 5.39 points, or 0.69%, to 787.16 but was virtually unchanged for the week, down 0.01%. Earlier, Europe's STOXX 600 index closed up 0.57%. Back home, Bursa Malaysia's benchmark index ended the rollercoaster week on a firmer footing, rising 0.35%, driven by continued bargain hunting in tandem with the mostly positive regional market performance. At the closing bell, the FBM KLCI rose 5.67 points to 1,596.05 from Thursday’s close of 1,590.38.

Source: PublicInvest Research - 12 Aug 2024