Economy

US: Inflation rose 9.1% in June, even more than expected, as consumer pressures intensify. The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked the fastest pace for inflation going back to November 1981. Excluding volatile food and energy prices, so called core CPI increased 5.9%, compared with the 5.7% estimate. (CNBC)

EU: Industrial output rises for second month. Eurozone industrial production grew for the second straight month in May. Industrial output gained 0.8% on month in May, faster than the 0.5% increase in April. This was the second consecutive rise in production and also better than the expected growth of 0.3%. The breakdown showed that energy output declined 3.3% in May and intermediate goods output remained flat on month. (RTT)

EU: Germany inflation eases as estimated in June. Germany's consumer price inflation moderated in June from a record high in May, as initially estimated. Consumer price inflation eased to 7.6% in June from 7.9% in May. That was in line with flash data published on June 29. Similarly, the EU measure of inflation, or HICP, slowed to 8.2% from 8.7% in May. (RTT)

UK: Economy to shrink in Q3. The UK economy is set to contract in the third quarter after expanding in the previous three months as high inflation hurt consumer demand, the National Institute of Economic and Social Research (NIESR) said on July 13. GDP is set to drop 0.1% in the third quarter after growing 0.2% in the three months to June, the think tank predicted. The NIESR expects growth to slow further beyond the third quarter as inflation drags on consumer demand. (RTT)

China: Exports growth exceeds expectations in June. China's exports growth accelerated in June as companies revived operations following the easing of restrictions related to the pandemic, while imports logged a slower growth. With the reopening of ports, the annual growth in exports accelerated to 17.9% from 16.9% in May. The rate was forecast to ease to 12%. On the other hand, imports grew only 1% annually, slower than the 4.1% growth in May and the economists' forecast of 3.9%. As a result, the trade surplus surged to USD97.9bn in June from USD78.7bn in May. This was well above the expected level of USD75.7bn. (RTT)

Markets

Nestcon: Proposes RM23.8m private placement. Nestcon, which made its debut on the ACE Market about a year ago, is raising RM23.82m fresh capital via a private placement of new shares at an indicative issue price of 37 sen per share. The construction firm raised RM45m from its listing exercise at 28 sen per share. The placement exercise, which is expected to be completed by the second half of this year, entails issuance of up to 64.38m new shares. (The Edge)

MGRC: Inks partnership for business expansion in MENA region. Malaysian Genomics Resource Centre (MGRC) has partnered with Saudi Arabia-based United Doctors Hospital (UDH) to develop genetic screening tests for hereditary conditions and diseases that are prevalent in the Middle East and Northern Africa (MENA). (The Edge)

UMW Group: Auto sales surged 14% to 30,103 units in June. UMW Group's automobile sales increased by 14% to 30,103 units in June 2022, up from 26,480 units in May 2022, as the company continues to fill its optimistic backlog of orders. For the first half of the year, UMW has delivered a total of 173,254 units, 32% higher than the 131,401 units registered in the corresponding period of 2021. Sales in June 2021 were affected by the implementation of the Full Movement Control Order (FMCO) from June 1 to Aug 15, 2021. (Business Times)

MN Holdings: Secures RM12.2m solar EPCC contract. Underground utilities and substation engineering specialist MN Holdings (MNHB) has secured a contract for the engineering, procurement, construction, and commissioning (EPCC) of high voltage systems and related works for a large-scale solar photovoltaic (LSSPV) plant in Pekan, Pahang, worth RM12.2m. (Business Times)

BCorp: Plans to list unit in Singapore. Berjaya Corp (BCorp) has proposed to list its indirect 51.62%-owned subsidiary, Singapore Institute of Advanced Medicine Holdings Pte Ltd (SIAMH), on the Singapore Exchange’s Catalist board. The diversified group said the proposed listing exercise will be by the way of an initial public offering (IPO). PrimePartners Corporate Finance Pte Ltd (PPCF) has been appointed to act as the sponsor, issue manager and placement agent to SIAMH for the proposed listing. (StarBiz)

Zhulian: 2Q net profit up 7.63% to RM11.85m, declares three sen dividend. Zhulian Corp registered a 7.63% rise in net profit to RM11.85m in the 2QFY22 against RM11m reported a year ago, underpinned by higher contributions from its operational activities. The multilevel marketing group quarterly revenue, however, fell by 4.07% to RM36.4m from RM37.94m, on the back of overall weak consumer sentiment associated with the prolonged Covid-19 pandemic. (The Edge)

IPO: Ecoscience logs RM1.17m net profit ahead of ACE Market listing. Ecoscience International posted a net profit of RM1.17m for the 1QFY22, on revenue of RM25.71m ahead of its ACE Market listing on July 18. The palm oil mills builder said RM12m of its revenue was derived from the construction of plants and facilities segment, followed by RM10.8m from its fabrication and equipment segment. (The Edge)

Market Update

The FBM KLCI might open lower today after a closely watched signal of recession risk in Treasury markets on Wednesday hit its most extreme level in more than 20 years, as hotter than expected inflation data fuelled investor bets that the Federal Reserve will aggressively raise interest rates. The yield on the two-year Treasury note, which is particularly sensitive to short-term rate expectations, rose 0.09 percentage points to 3.13% after data showed the annual rate of US consumer price inflation hit 9.1 per cent last month. Yields rise when prices fall. At the same time, the yield on the benchmark 10-year note fell 0.05 percentage points to 2.91%. Wall Street’s benchmark S&P 500 dropped as much as 1.4% in response to the inflation data, before clawing back some of its losses to close 0.4% lower. The Nasdaq Composite slipped 0.2%. The Stoxx Europe 600 share index — which has fallen 15% this year in a broad global stock downturn driven by big central banks raising interest rates — closed 1% lower. London’s FTSE 100 fell 0.7%.

Back home, Bursa Malaysia ended in the red on Wednesday, with the key index declining by 1.04% amid heavy profit-taking in plantation and energy stocks. At closing, the FBM KLCI erased 14.76 points to 1,411.32 from Tuesday's close of 1,426.08, marking its lowest level since May 18, 2020 which closed at 1,410.16. In the region, the Shanghai Composite Index added 0.1% and Japan’s Nikkei 225 gained 0.5%.

Source: PublicInvest Research - 14 Jul 2022