HEADLINES

Economy

US: Fed officials uneasy about job market as they get ready for Jackson Hole. Federal Reserve officials gathering at the annual central banking conference in Jackson Hole, Wyoming, this week can take some satisfaction that the US unemployment rate, at 4.3%, remains low by historical standards. The US experience of unemployment since the late 1940s has involved jobless rates that far more often than not are below the 5.7% long-run average, until they rise fast and far above it, a phenomenon Fed official is worried about repeating. The emerging trend is not fully clear. The steady rise in the unemployment rate from 3.7% in Jan of 2023 to 4.3% as of July 2024 has also been accompanied by an increase of 1.2m in the number of people looking for work, something that is usually considered a positive sign for the economy but that can cause the unemployment rate to rise. (Reuters)

EU: Austrian inflation confirmed at 3-year low. Austria's CPI eased slightly, as initially estimated in July, and came under 3.0% for the first time in three years, the latest data from Statistics Austria showed. The CPI climbed 2.9% YoY in July, slower than the 3.0% increase in June. That was in line with the flash data published on July 31. Further, the latest inflation was the weakest since July 2021, when prices had risen the same 2.9%. Inflation for food in particular weakened significantly compared to the previous year, and the rise in housing prices in July was in line with general inflation, the agency said. (RTT)

EU: Eurozone current account surplus surges in June. The euro area current account surplus increased sharply in June on improving goods trade and primary income, the European Central Bank reported. The current account balance showed a EUR51bn surplus in June compared to a EUR38bn surplus in the previous month. This was the highest since Jan 2013. The surplus on goods trade increased further in June, to EUR39bn from EUR34bn in May. Meanwhile, the surplus on services trade decreased to EUR12bn from EUR14bn. (RTT)

China: Leaves key lending benchmarks unchanged, as expected. China left benchmark lending rates unchanged at a monthly fixing, in line with market expectations. The steady monthly LPR fixings met market expectations, as shrinking interest margins at lenders hampered continued easing efforts after China lowered a string of key interest rates a month earlier. The one-year loan prime rate (LPR) was kept at 3.35%, while the five-year LPR was unchanged at 3.85%. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. (Reuters)

Taiwan: Export orders up for 5th straight month in July amid AI boom. Taiwan's export orders rose almost 5% from a year earlier in July on the back of solid demand for emerging technologies, such as artificial intelligence applications and highperformance computing (HPC) devices. With the country's consumer electronic suppliers also receiving a boost from international clients' moves to build up inventories ahead of the debut of new products, data compiled by the MOEA showed Taiwan's export orders rose 4.8% from a year earlier to USD50.03bn after a 3.1% year-on-year increase in June. (Focus Taiwan CNA)

South Korea: Consumer confidence weakens in Aug. South Korea's consumer sentiment decreased in August to the lowest level in three months, survey results from the Bank of Korea showed. The consumer confidence index dropped to 100.8 in Aug from July's score of 103.6. The sub-index for households' assessment of current living standards decreased to 90 from 91 in July. Their prospective living standards also worsened, with the respective index falling to 94 from 95. Similarly, the index measuring consumers' prospective household income decreased from 100 to 98. (RTT)

Markets

MCE: Secures RM52.1m supply contracts from Proton. MCE Holdings has secured contracts from Proton Holdings with an approximate value of RM52.13m to supply automotive electronic and mechatronic components. The company said the project, which spans 60 months, will see MCE providing parts such as the front reading, lamp, rear reflector and pull cup handle assembly for Proton vehicles, starting in 1Q of the FYE 31 July 2026. MCE group managing director said, “Securing another project from Proton reflects the trust it places in our design and manufacturing expertise”. (StarBiz)

Willowglen MSC: Secures RM42.8m contract to supply security systems to Singapore's Education Ministry. Willowglen MSC said that it has secured a contract worth approximately RM42.8m from the Ministry of Education in Singapore for the design, supply and installation of security systems. The computer-based control systems supplier said the contract was awarded to its wholly owned subsidiary Willowglen Services Pte Ltd. The contract, which will commence on 29 Aug this year, will be completed by 28 Feb 2026. "The contract is not renewable and the risks in respect of the contract are the normal business risks," said the company. (The Edge)

Jati Tinggi: Clinches RM41m sub-contract for underground cable works in Selangor. Jati Tinggi Group has accepted a LOA from Worktime Engineering SB for sub-contract works valued at RM41.1m. The project involves laying 33 kV of aluminum XLPE underground cables and accessories in Selangor. The scope of work includes the erection of power cables, fibre optic cables, joint and termination works, along with all related ancillary tasks. (The Malaysian Reserve)

Steel Hawk: Secures scaffolding provision services contract from PetChem. Steel Hawk via its wholly owned subsidiary Steel Hawk Engineering SB has entered into a contract with Petronas Chemicals Group’s wholly owned subsidiary, Kertih Port SB, for the provision of scaffolding services for Kertih Port. Steel Hawk said the contract is on a call-out basis (which does not have a fixed contract value), adding that it is engaged by Kertih Port to provide specified services for the duration of the said contract, as and when such services are required. (StarBiz)

Solarvest: To form JV to develop digital products with Agmo. Solarvest Holdings said it is partnering with Agmo Holdings to jointly develop digital products catering to the clean energy sector. The two companies will set up a JV to produce the digital products, including software, digital platform, data analytics and technology integration services, Solarvest said. Solarvest will hold 70% in the JV while Agmo will have the remaining 30%. Developments are likely to take place over the period of six months to one year. (The Edge)

South Malaysia Industries: Gets takeover offer. South Malaysia Industries (SMI) has received a takeover offer worth over RM47m from its major shareholders. It said the shareholders comprised Francis Leong and two subsidiaries of Techbase Industries, which are offering 45 sen per share to acquire the remaining shares they do not already own in SMI. They own 50.05% in the company. (StarBiz)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks ticked lower Tuesday and snapped an eight-day winning streak, the longest of the year. The S&P 500 slipped 0.2%, but it’s still just 1.2% below its all-time high set last month. It has roared back from its scary summer drop, where the index briefly dropped nearly 10% below its record. The Dow Jones Industrial Average fell 61 points, or 0.2%, and the Nasdaq composite slipped 0.3%. Nvidia was the heaviest weight on the market after falling 2.1%. The chip company is one of Wall Street’s most influential stocks because a frenzy around artificial-intelligence technology has made it one of the US stock market’s most valuable companies at roughly $3trn. In stock markets elsewhere, Japan’s Nikkei 225 jumped 1.8% to claw back all of its sharp loss from the day before. Tokyo has been home to some of the world’s most vicious moves for financial markets recently after the Bank of Japan raised their interest rates last month. In Europe, the STOXX 600 index lost 0.5%, having recovered most of the losses seen after a weak US labour market report prompted worries about the health of the economy. Back home, Bursa Malaysia snapped a seven-day winning streak to end lower today due to profit-taking in utilities, energy, and technology stocks. At the close, the FBM KLCI slid 5.93 points or 0.36 per cent to 1,642.77 from yesterday’s close of 1,648.70.

Source: PublicInvest Research - 21 Aug 2024