HEADLINES

Economy

US: New York manufacturing index indicates significant turnaround in Sept. The Federal Reserve Bank of New York released a report showing regional manufacturing grew for the first time in nearly a year in the month of Sept. The New York Fed said its general business conditions index surged to a positive 11.5 in Sept from a negative 4.7 in Aug, with a positive reading indicating growth. Economists had expected the index to inch up to a negative 3.9. With the sharp increase, the index returned to positive territory for the first time since hitting a positive 9.1 last Nov. (RTT)

US: The Fed has the proof it wants that inflation is slowing, but the next move is still up in the air. Federal Reserve officials head into their policy meeting closer to their goal of low inflation, but how much they will ease back on interest rates remains an open question. A week’s worth of inflation data showed that price pressures have eased substantially since their meteoric rise in 2021-22. One gauge of consumer prices showed 12-month inflation at its lowest since Feb 2021, while wholesale price measures indicated pipeline price increases are mostly under control. (CNBC)

EU: Denmark producer prices rise most in 18 months. Denmark's producer prices increased further and at the fastest pace in eighteen months in Aug, figures from Statistics Denmark showed. The producer price index rose 5.8% YoY in Aug, much faster than the 0.3% rise in July. Further, this was the quickest increase since Feb 2023, when prices had risen 8.3%. The upward trend was primarily due to a 7.2% price rise in the industrial sector, and there was an increase of 1.5% in the in the raw material extraction segment. (RTT)

EU: Italy trade surplus grows in July. Italy's foreign trade surplus increased in July from a year ago as exports grew faster than imports, data from the statistical office Istat showed. The trade surplus rose slightly to EUR6.7bn from EUR6.1bn in the corresponding month last year. In June, there was also a surplus of EUR5.1bn. Exports rebounded strongly by 6.8% annually in July after a 6.1% fall in the previous month. Outgoing flows to EU countries increased by 6.0%, while those to non-EU countries rose by 7.6%. (RTT)

UK: British manufacturers see brighter days. British manufacturers grappling with falling output and fading growth in new orders see better days ahead, helped by a more stable political environment after the landslide election win for the Labour Party, a survey showed. Industry body Make UK and accountants BDO said their gauge of factory output fell to a four-year low of -2% in the third quarter from +9% in the second quarter. With optimism returning however, respondents forecast a surge to +33% in the fourth quarter of 2024. (Reuters)

China: Cyclical recovery in China unlikely without additional stimulus efforts. A meaningful cyclical recovery seems increasingly unlikely in the absence of a significant increase in stimulus efforts, economists at Capital Economics said. Official data released over the weekend showed that industrial production posted a slower annual growth of 4.5% in Aug after rising 5.1% in July. Likewise, retail sales growth decelerated to 2.1% from 2.7%. During Jan to Aug period, fixed asset investment was up 3.4%, which was weaker than the 3.6% increase in Jan to July. (RTT)

Markets

DKSH (Outperform, TP: RM5.85): DKSH and Hwa Tai tie up to fuel growth via robust distribution ops. DKSH Holdings (M) remains optimistic about its fast-moving consumer goods (FMCG) segment, expecting sustained growth driven by rising disposable income, digital transformation and increasing health awareness. This positive outlook is bolstered by its recent collaboration with Hwa Tai Industries, with DKSH appointed as the authorised distributor of Hwa Tai’s LUXURY biscuits. The agreement sees DKSH providing comprehensive market expansion services, including marketing, sales, distribution, logistics, as well as credit and collection services. (StarBiz)

Grand Central Enterprises: Minority shareholders block Grand Central Enterprises' privatisation plan. Grand Central Enterprises major shareholders failed in their bid to take the hotel operator private, after the proposal was rejected by minority shareholders at an extraordinary general meeting (EGM). Tan Chee Hoe & Sons SB and Hotel Grand Central Ltd — which together hold a 72.65% stake in GCE — had offered to buy the remaining shares in the company at 46 sen per share. (The Edge)

Globetronics: EPF and Tabung Haji no longer substantial shareholders of Globetronics. The EPF and Lembaga Tabung Haji are no longer substantial shareholders of Globetronics Technology following the company's recent announcement that its external auditor KPMG PLT had voluntarily resigned. EPF sold 9.5m Globetronics shares on Sept 10, while Tabung Haji disposed of 4.0m of the company's shares — the same day that Globetronics announced KPMG's departure and its shares dived over 30%. (The Edge)

Pansar: Bags second infrastructure job in fortnight. Pansar has bagged RM777.1m contract for road construction related to phase 2 of Sabah-Sarawak Link Road (SSLR) project. Pansar’s wholly owned subsidiary Perbena Emas SB has received a letter of acceptance from Maltimur Aktif Unggul JV SB (MAUJV) for phase 2 of the SSLR project related to package 4A, its bourse filing showed. (The Edge)

Powerwell: Plans to expand market presence. Powerwell Holdings is confident that its plan to significantly increase its market presence and technological capabilities will bode well for it. And, being the only public-listed company on Bursa Malaysia that produces and exports electrical switchboards, it has the goods to back it up. According to executive director Soh Wei Wei, the company deals mainly in the production of low and medium voltage switchboards. (StarBiz)

HeiTech Padu: Secures RM133.7m contract from JPJ. HeiTech Padu has secured a RM133.7m contract from the Road Transport Department Malaysia (JPJ). The contract involves the development and supply of hardware and software for JPJ, and a revamp of the agency's digital system. (The Edge)

MMAG: Buys out Velocity Capital’s stake in loss-making subsidiary. MMAG Holdings is going to take over Velocity Capital Partner’s stake in its 86.09%-owned loss-making subsidiary, courier and logistic firm Line Clear Express SB (LCE). It plans to acquire Velocity Capital's 8.91% stake in LCE for RM13.8m, cash, which will raise MMAG's stake in LCE to 95%. (The Edge)

MARKET UPDATE

US stocks ticked higher as investors awaited the Federal Reserve’s highly anticipated policy meeting, during which central bankers are expected to cut rates for the first time since 2020. The Dow Jones rose to a new all-time high by 0.5% while the S&P 500 added 0.1%. Meanwhile, the tech-heavy Nasdaq Composite shed 0.5% with Apple shares falling 2.8% after analysts at firms, including Bank of America and JPMorgan, noted that shipping times could point to lighter demand for iPhone 16 Pro models than the prior year. European stocks mostly closed lower as investors braced for a pivotal week of interest rate decisions from the US Federal Reserve and the Bank of England. The German DAX retreated 0.3%, French CAC 40 shed 0.2%, while the FTSE 100 inched up by 0.1%. Asian stocks mostly closed higher as investors parsed through economic data from China and awaited the Federal Reserve’s monetary policy move. The Hang Seng Index rose 0.3%, the Japanese markets were closed for Respect for the Aged day, and the Chinese market were closed for the Mid-Autumn Festival.

Back home, the FBM KLCI gained 13.84 points to close at 1,652.15 on Friday. HeiTech Padu has secured a RM134m contract from the JPJ to revamp of the agency's digital system while Seal’s associate company, MSR Green Energy SB, has accepted a letter of award from Sabah Electricity SB for a battery energy construction job worth RM645m. Market is expected to be quiet and thinly traded as some parts of the economy remain closed for public holiday.

Source: PublicInvest Research - 17 Sept 2024