Economy
US: Fed committed to getting inflation to 2% target, Barkin says . The Fed is committed to getting inflation under control and returning it to the US central bank’s 2% target, Richmond Fed President Thomas Barkin said, the latest in a litany of policymakers voicing determination to rein in price increases running at the highest pace in four decades. “We are committed to returning inflation to our 2% target and have made clear we will do what it takes,” Barkin said in prepared remarks for an event in Virginia. (Reuters)
US: Services sector surprises with momentum; supply, price pressures easing. The US services industry unexpectedly picked up in July as new orders grew solidly, supporting views that the economy was not in recession despite output slumping in the first half. The Institute for Supply Management (ISM) survey also showed supply bottlenecks were easing while a measure of prices paid by businesses dropped by the most since 2017, benefiting in part from declining commodity prices. But shortages of labor, especially truck drivers, persisted. (Reuters)
US: Factory orders rise solidly in June, beat expectations. New orders for US-manufactured goods increased solidly in June and business spending on equipment was stronger than initially thought, pointing to underlying strength in manufacturing despite rising interest rates. The Commerce Department said that factory orders rose 2.0% in June after advancing 1.8% in May. Economists polled by Reuters had forecast factory orders would increase 1.1%. Orders increased 13.5% on a YoY basis. Manufacturing continues to grow, though its momentum has slowed as higher interest rates cool demand for goods. (Reuters)
EU: Germany exports growth exceeds expectations . Germany's exports growth accelerated more than expected in June, while imports increased at a weaker pace, official data showed. Exports climbed 4.5% in June from the previous month, Destatis reported. The increase in shipments exceeded economists' forecast of 1.0% and also May's revised 1.3% growth. Meanwhile, imports growth eased more-than-expected to 0.2% from revised 3.2% in May. Economists had forecast imports to rise 1.3%. (RTT)
EU: Eurozone private sector slips into contraction . The euro area private sector contracted in July as a deepening downturn in manufacturing was accompanied by another slowdown in the service sector, final survey results from S&P Global showed. In June, retail sales declined unexpectedly as high inflation weighed on spending, figures from Eurostat revealed. (RTT)
China: Service sector growth accelerates in July . China's service sector growth gained momentum in July driven by a recovery in operating conditions and client demand following the easing of the pandemic related restrictions, data released by S&P Global showed. The Caixin services Purchasing Managers' Index rose to 55.5 in July from 54.5 in June. A score above 50.0 indicates expansion in the sector. (RTT)
Japan: Services sector nearly stagnates in July – PMI. Japan’s services sector activity almost completely stagnated in July as rising inflation and growing economic uncertainty weighed on sentiment, while firms also said a boost from the lifting of COVID-19 pandemic curbs had faded. (Reuters)
Markets
IJM Corp (Neutral, TP: RM1.92): Formed a JV company with CHEC for mixed development and logistics hub in Kuantan. IJM Corp marks its first foray into the industrial and logistics market by partnering with China Harbour Engineering Company Ltd (CHEC) to develop a mixed development and logistics hub in Kuantan. (The Edge) Comments: We are positive on this development as Kuantan Port stands as the Group’s biggest catalyst and is expected to contribute significantly to the Group’s earnings moving forward. To note, Kuantan Port contributed a pre-tax profit of RM99.2m in FY22, translating to 19.1% of the Group’s core pre-tax profit. Under the JV agreement, CHEC will hold a stake of 51% while IJM Group holds a direct stake of 29.4% via Asas Panorama. The development of MCKILP would serve as the missing logistic link from the port to the 640-acre MCKIP3 site which will benefit IJM Group in terms of 1) construction orderbook and; 2) cargo throughput. However, it is preliminary to measure the impact of this development as efforts are still forefront. We make no changes to our earnings estimates and maintain our Neutral call on IJM.
SCIB: Inks partnership with Indonesian firms on 4G telecom tower project. Sarawak Consolidated Industries Bhd (SCIB) has inked a MOU with PT Semesta Noor Berkarya (SNB) and PT Envy Manajemen Konsultansi (EMK) to explore the formation of a partnership in relation to the construction of 4G telecommunications towers for Indonesia’s outermost regions. (The Edge)
ILB Group: Minority shareholder sues to block RM16m acquisition said to be stock dilutive. BT Investment Capital Ltd, a minority shareholder of ILB Group has filed a lawsuit against the logistics services company and the company's board members in an attempt to block an acquisition that could dilute shares owned by existing shareholders. (The Edge)
Globaltec: Unit gets additional exploration time for Muralim gas field. Globaltec Formation’s 52%-owned Australia-listed subsidiary NuEnergy Gas Ltd has obtained approval for additional exploration time at the Muralim gas field. NuEnergy said it has received approval from the Indonesian Ministry of Energy and Mineral Resources for additional exploration time until July 18, 2023. (The Edge)
Fintec: To sell two pieces of machinery for RM14.47m. Fintec Global has entered into a S&P agreement with Joe Glove SB for the sale of two machinery for RM14.47m. Its wholly owned subsidiary Fintec Glove SB had entered into the agreement to sell two NBR/NR (nitrile butadiene rubber/natural rubber) powder free double former dipping lines to Joe Glove. (StarBiz)
Widad: Inks MoU with EW Group in bio-regenerative sciences R&D. Widad signed a MoU with EW European Wellness International GMBH (EW Group) with the aim to collaborate on the R&D in bio-regenerative sciences as well as providing higher education certificates in the field. StarBiz)
IPO: PT Resources inks IPO underwriting agreement with Mercury Securities. PT Resources Holdings has sealed an underwriting agreement with Mercury Securities SB in conjunction with its IPO on the ACE Market of Bursa Malaysia. The frozen seafood processor, wholesaler and retailer said it aimed to launch the prospectus for its IPO in the third quarter of 2022. (StarBiz)
Market Update
The FBM KLCI might track Wall Street to open higher today after US stocks jumped to a sharply higher close and Treasury yields touched two-week highs on Wednesday as robust economic data, upbeat corporate guidance and easing geopolitical concerns boosted investor risk appetite. The Dow Jones Industrial Average rose 416.33 points, or 1.29%, to 32,812.5, the S&P 500 gained 63.98 points, or 1.56%, to 4,155.17 and the Nasdaq Composite added 319.40 points, or 2.59%, to 12,668.16. European stocks closed higher, reclaiming losses suffered in recent sessions as a series of upbeat earnings helped investors look past disappointing euro zone economic data. The pan-European STOXX 600 index rose 0.51%.
Back home, Bursa Malaysia closed lower for the second consecutive day on Wednesday amid mixed performance in regional peers as investors remained in profit-taking mode. At the closing bell, the FBM KLCI fell 4.48 points to 1,490.57, its intraday high, compared with Tuesday's close of 1,495.05. The regional markets finished mixed with the Nikkei 225 gained 0.53% and the Hang Seng rose 0.40%. The Shanghai Composite lost 0.71%.
Source: PublicInvest Research - 4 Aug 2022