HEADLINES

Economy

US: Fed's Powell says he expects to see more tariff-driven price hikes in coming months. Fed Chair Jerome Powell said goods price inflation will pick up over the course of the summer as President Donald Trump's tariffs work their way to US consumers, who he argued would bear some of those costs. "Ultimately, the cost of the tariff has to be paid, and some of it will fall on the end consumer," Powell told a news conference after the Fed again held rates steady. "We know that because that's what businesses say. That's what the data say from the past." (The Star)

EU: Construction output grows 1.7%, most since Feb 2023. Eurozone construction output recovered at the quickest pace in more than two years in April, first estimates from Eurostat revealed. Production in construction climbed 1.7% on a monthly basis in April, reversing a 0.2% fall in March. Moreover, a similar growth rate was last seen in Feb 2023. Construction of buildings gained 0.9%, and specialized construction activities advanced by 1.1%. (RTT)

EU: Swiss central bank lowers policy rate to zero as expected. The Swiss National Bank reduced its policy rate to zero as inflation turned negative and the currency strengthened further amid global trade tensions. The bank decided to lower the SNB policy rate by 0.25ppts to zero%. This was the sixth consecutive reduction. The bank has reduced the key rate by 175bps since March 2024. The bank had exited its negative rate in 2022 after holding it for over seven years. (RTT)

EU: Dutch jobless rate remains stable at 3.8%. The Netherlands' unemployment rate held steady in May, data from the Central Bureau of Statistics showed. The seasonally adjusted ILO jobless rate stood at 3.8% in May, the same as in the previous month. In the corresponding month last year, the jobless rate was 3.6%. There were 385,000 unemployed people in May, down from 387,000 in the preceding month. The youth unemployment rate, which applies to the 15-25 age group, also held steady at 8.8%. (RTT)

UK: BOE holds rate steady on higher inflation. The BOE maintained interest rates unchanged as inflation in the UK has remained persistently above the target and geopolitical tensions escalated, raising the upside risks to inflation. The BOE Monetary Policy Committee, led by Governor Andrew Bailey, voted 6-3 to hold the Bank Rate at 4.25%. Three members preferred to reduce the rate by 25bps. The UK central bank has reduced the benchmark interest rate four times since last Aug. The previous change was in May, when the rate was lowered by 25bps in a three-way split on the rate-setting body. (RTT)

Japan: BOJ's gloomy projections suggest no rate hike this year, ex-top economist says. The BOJ is likely to hold off raising interest rates this year unless a dramatic, positive turn of events in US tariffs allows it to overhaul gloomy projections made in May, its former top economist Seisaku Kameda said. In a quarterly outlook report released on May 1, the BOJ cut its price forecasts and said underlying inflation will stagnate for some time as uncertainty on US trade policy weighs on the export-reliant economy. (Reuters)

Australia: Surprising job losses bolster the case for rate cuts. Australia's economy surprisingly shed jobs in May although unemployment held steady as fewer people sought work, suggesting a slight loosening of the labour market and bolstering the case for the RBA to reduce interest rates further. Employment fell by 2,500, driven completely by part-time roles as full-time gained, against economists' expectations for a 21,200 increase, data from the Australian Bureau of Statistics showed. (The Star)

Taiwan: Central bank holds key rate at 2.0%. Taiwan's central bank retained its key interest rate at its June meeting as the policy board observed that the current rate level would help sustain sound economic and financial development on the whole. The central bank board unanimously decided to maintain the key discount rate at 2%. In addition, the rate on refinancing of secured loans and the rate on temporary accommodations are unchanged at 2.4% and 4.3%, respectively. (RTT)

Markets

Flexidynamic: Buys loss-making manufacturer of glove formers. Flexidynamic Holdings said on Thursday it is acquiring a loss-making manufacturer of glove formers, Formtech Engineering (M) SB, for RM10.39m. Although Formtech has accumulated losses of RM4.5m, the acquisition offers long-term value and growth opportunities, as it will expand Flexidynamic's portfolio and diversify its income streams. Formtech, which is based in Nilai, Negeri Sembilan, has been loss-making for the past three years, following industry-wide overexpansion in glove production capacity during the Covid-19 pandemic. (The Edge)

MSM Malaysia: Aims to increase export volumes. MSM Malaysia is targeting a significant jump in export volumes of value-added products like liquid sugar and premixes from MSM Johor this year. The group aims to ramp up exports to 360,000 tonnes in 2025, up from 240,000 tonnes last year, leveraging enhanced production capacity from its Johor refinery (MSM Sugar Refinery Johor SB) and strategic partnerships, said its group CEO Syed Feizal Syed Mohammad. He added that MSM Malaysia seeks to penetrate deeper into China's high-potential market while consolidating its position in Asean, as part of its strategic move to expand its export footprint. (The Star)

Theta Edge and Agmo: Form JV to drive AI and blockchain innovation. Theta Edge is forming a joint venture company (JVCo) with Agmo Holdings to accelerate the commercialisation of artificial intelligence (AI), blockchain, and platform-based services, with an initial emphasis on public sector transformation. The JVCo will be incorporated via Theta Technologies SB and Agmo Capital SB, holding 51% and 49% stakes respectively. The initial growth strategy will centre around three core pillars: halal traceability intelligence, AI-driven digital health solutions, as well as super analytics and infrastructure dashboards. The JVCo will serve as the execution arm for Theta Edge's proprietary AI suite, ThetaNeuron, enabling rapid deployment of AI-powered applications across digital health, halal traceability and smart analytics. (The Edge)

Deleum: Wins five-year solar gas turbine maintenance contract from Hess Malaysia. Deleum, via its 90%-owned indirect subsidiary Turboservices SB has secured a contract from Hess Exploration and Production Malaysia BV for the provision of solar gas turbine generator (GTG) maintenance services and materials supply for the North Malay Basin (NMB). Deleum said Turboservices accepted the letter of award on June 19, with the contract taking effect from 10 June 2025. Under the contract, Turboservices will provide a wide range of services, including supply of service parts, field service call-outs, exchange engines, equipment health management, and other maintenance services for solar gas turbines, on a reimbursable basis if requested. (The Malaysian Reserve)

Binastra: Records 43% revenue growth, order book at RM4.1bn in 1Q. Binastra Corporation Bhd's revenue rose by 43% to RM256.8m in the first quarter ended 30 April 2025 (1Q FY2026), a 43% increase YoY compared to 1Q FY2025. Meanwhile, its net profit jumped by 38.9% YoY to RM25.1m, driven by strong contributions from the group's core construction segment. MD Datuk Jackson Tan Kak Seng said the company is "operating at full capacity" as it pursues a record year, targeting RM4.0bn in new contract wins for FY2026. (New Straits Times)

MARKET UPDATE

Stock futures were lower ahead of Friday's session, with investors monitoring conflict in the Middle East between Iran and Israel, and potential direct US involvement. Futures tied to the Dow Jones Industrial Average slipped 154 points or 0.3%. The Nasdaq 100 futures ticked down 0.2%, while S&P 500 futures fell 0.2%. Regular trading was closed in the US on Thursday for the Juneteenth holiday. European markets closed lower Thursday as investors reacted to the Bank of England's monetary policy decision and the ongoing Israel-Iran conflict. European markets were lower with most sectors and major bourses in negative territory. The French CAC 40 index slumped 1.3% while Germany's DAX was off by 1.1%. The UK FTSE slipped 0.5%. Asian markets declined across the board following the US Fed's decision to hold rates unchanged while sentiment further pressured by geopolitical tensions. The Nikkei 225 shed 1%, the Hang Seng tumbled 2% and Shanghai Composite lost 0.7%. Meanwhile, the KLCI was down 0.7% to close at 1,501.44.

Source: PublicInvest Research - 20 Jun 2025