HEADLINES

Economy

US: Weekly jobless claims fall; second-quarter GDP revised higher. The number of Americans filing new applications for jobless benefits slipped last week, but re-employment opportunities for laid-off workers are becoming more scarce, a sign that the unemployment rate probably remained elevated in Aug. Though the labour market is slowing, it is doing so in an orderly fashion that is keeping the economic expansion on track. (Reuters)

US: Pending home sales unexpectedly pull back sharply in July. After reporting a sharp increase by pending home sales in the US in the previous month, the National Association of Realtors released a report unexpectedly showing a sharp pullback by pending home sales in the month of July. NAR said its pending home sales plunged by 5.5% to 70.2 in July after surging by 4.8% to 74.3 in June. (RTT)

EU: Inflation down in six German states, pointing to national decline. Inflation fell in six important German states in Aug due to lower energy prices, preliminary data showed, suggesting Germany's national inflation rate could decline noticeably this month. In Saxony, the inflation rate fell in August to 2.6% from 3.1% in the previous month, in Brandenburg it fell to 1.7% from 2.6%, in Baden-Wuerttemberg it fell to 1.5% from 2.1%, in Hesse it fell to 1.5% from 1.8% and in Bavaria it fell to 2.1% in August from 2.5% in July. (Reuters)

EU: Spanish inflation cools to one-year low with ECB set to cut rates. Spanish inflation eased to its lowest level in a year — a retreat that’s likely to be mirrored across the eurozone, allowing the ECB to continue lowering interest rates. Consumer prices advanced 2.4% from a year ago, according to data published by the national statistics agency. That’s less than the 2.5% median estimate in a Bloomberg survey of economists. The third straight monthly slowdown came thanks to lower fuel costs, as well as those of food and non-alcoholic beverages.. (Bloomberg)

UK: Set to delay bank capital reforms until at least Jan 2026. The UK’s top financial regulator is set to delay the next wave of bank capital reforms, according to people with knowledge of the situation, the latest example of a major global rulemaker abandoning its timetable for the changes until the US finalises its package. (Bloomberg)

Japan: Raises economic assessment for first time in 15 months. The Japanese government has upgraded its economic assessment for the first time in more than a year on signs of improved consumption, fostering optimism for a broader recovery. Consumption is picking up as the impact of shipping stoppage at some automakers is easing, the government said. (Reuters)

Markets

Hartalega (Outperform, TP:RM3.16): Wins breach of fiduciary duties suit against former exec director. The High Court in Shah Alam has ruled in favour of Hartalega Holdings in its lawsuit against Dr Danaraj Nadarajah, declaring that the former executive director had committed a breach of his fiduciary duties and his contract of employment. The court also found that Danaraj had breached Section 317A of the Capital Markets and Services Act, which prohibits directors of a listed corporation from causing wrongful loss to the company, as well as Sections 213 and 218 of the Companies Act, which relates to the duties and responsibilities of directors, and the prohibition against improper use of the company's properties for self-gain. (The Edge)

KIP REIT: Expands portfolio with RM98m acquisition of four industrial properties. KIP Real Estate Investment Trust, which primarily invests in retail properties, has proposed to acquire another four industrial properties for a total purchase price of RM98.3m. In a bourse filing, the trust said Pacific Trustees, acting as its trustee, has entered into four separate sale and purchase agreements (SPAs) for the acquisitions. The first SPA was signed with Sin Chee Heng SB to acquire a leasehold land with an industrial building in Cheras Jaya for RM22.6m. The building includes a factory with a net lettable area of 66,632 sq feet. (The Edge)

Binastra: Bags RM155m sewage treatment plant project in Sri Hartamas. Binastra Corp, formerly known as Comintel Corp, has secured a RM155.01m contract for the redevelopment of a sewage treatment plant in Sri Hartamas. Its wholly owned Binastra Builders SB received the letter of award on Thursday from Greenearth Landmark SB (GLSB) to design and build a membrane biological reactor (MBR)-type sewage treatment plant, which will have a capacity of 160,000 population equivalents. The contract shall be completed in 36 months from the date of commencement, which will be notified by GLSB, said Binastra in a filing with the bourse. (The Edge)

Divfex: Bags RM47m data centre contract. Divfex’s 51%-owned subsidiary Excel Commerce Solutions SB has accepted a contract from Extreme Broadband SB (EBB) to supply and install data centre equipment system for EBB. In a filing with Bursa Malaysia, Divfex noted the award had a contract value of RM46.6m. The supply and install contract will commence in Sept and is expected to be completed by Feb 2025. Excel was incorporated in 2005 to provide IT outsourcing services in Malaysia and has over the years established itself as a leading provider of managed network services. (StarBiz)

Capital A: To reactivate aircraft. Capital A will reactivate 15 aircraft from the 22 non-active aircraft as well as receive eight new aircraft with the aim of investing in network growth across the region. For the second quarter ended June 30, 2024, it registered a net loss of RM454.18m on the back of higher foreign exchange losses and aircraft depreciation charges. Its revenue, however, increased 54% YoY to RM4.86bn attributed to the strong recovery in demand from both domestic and international travel. In a statement yesterday, the company said that 20% of its fleet from the 165 operating aircraft was not in operation during the quarter under review. (StarBiz)

MARKET UPDATE

The FBM KLCI might open flat today after a late-afternoon slide by some Big Tech companies cut into Wall Street’s gains Thursday, leading to a mixed finish for US stock indices. The S&P 500 ended flat after giving up an earlier gain of nearly 1%. The benchmark index is about 1.3% away from its record set in July. The Dow Jones Industrial Average managed a 0.6% gain, enough for its third all-time high since Monday. The Nasdaq composite, which is heavily weighted with technology stocks, slipped 0.2%. It had been up 1.3% in the early going. Despite the mixed finish, gainers outnumbered decliners by roughly two to one on the New York Stock Exchange. Nvidia, which has ridden the frenzy over artificial intelligence to become one of the S&P 500’s most influential companies, was the biggest weight on the market. Its shares fell 6.4% despite stellar results for the second quarter. The stock, with a total market value topping $3 rn, is still up 138% in 2024. Markets in Europe were mostly higher and markets in Asia were mixed. Bursa Malaysia snapped a three-day winning streak to end in the red on Thursday, as investors took profit amid the negative performance of most regional peers. At the close, the FBM KLCI fell 21.69 points or 1.29% to 1,653.55 from Wednesday's close of 1,675.24

Source: PublicInvest Research - 30 Aug 2024