MIDF Optimistic Exports Of Good To Rebound By 5.2% In 2024

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May 3, 2024

klang westports — (photo credit:cogoport)

The seasonally adjusted S&P Global Malaysia manufacturing purchasing managers’ index (PMI) rose to 49.0 in April from 48.4 in March, indicating a softer downturn in the country’s manufacturing sector.

MIDF noted that this is an improvement from the 3-month low recorded in the previous month. Demand conditions remained muted, as new businesses moderated for the 20-straight months. However, foreign demand improved to the strongest level since Apr-21. Manufacturers tapered production for 21-consecutive months although the pace slowed from Mar-24. Employment levels steadied while input price inflation remained stable, contributing to a marginal rise in output prices after staying flat in Mar-24.

Confidence among manufacturers waned, reaching to 8-month low amid uncertainty over speed of demand recovery. Looking ahead, MIDF foresees better pick-up of global trade activities as regional economies recorded improving manufacturing PMI figures. For instance, China registered 51.4 (Mar-24: 51.1), Philippines 52.2 (Mar-24: 50.9), Vietnam 50.3 (Mar-24: 49.9), Taiwan 50.2 (Mar-24: 49.3) and Japan 49.6 (Mar-24: 48.2). The house keeps its forecast for Malaysia’s exports of goods to rebound by +5.2% in 2024 (2023: -8.0%).

Ringgit Strengthens 225 Basis Points Against U.S. Dollar On Mixed US Economic Data, Possibility Of Fed Rate Cut

By

ainul fatihah

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May 3, 2024

Closeup of Malaysia Ringgit currency notes and coins

The ringgit gained 225 basis points and strengthened against the US dollar subsequent to the United States’ release of mixed economic data and investors’ anticipation of an interest rate cut based on the Federal Open Market Committee (FOMC) meeting earlier this week.

At 9 am, the ringgit opened at 4.7310/7380 against the greenback from Thursday’s close of 4.7535/7555.

Frontken Benefiting From Niche Exposure

By

Editor

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May 3, 2024

Frontken Corp kicked-off FY24 on a strong note in 1Q, with outperformance at its TW and MY subsidiaries (collectively accounting for 85%/92% of group turnover/earnings). Kenanga is maintaining its FY24-26E earnings call and placing a BUY rating with a TP of MYR4.75.

The company remains a top pick for Malaysia semicon, for its unique high-margin exposure to the world’s leading TW-based wafer chip manufacturer.

Results within expectations
Ex-one offs (-MYR3.4m, including unrealised FX gains of MYR2.7m), FRCB‘s 1Q24 core net profit of MYR26.7m (+16% YoY, -18% QoQ) met expectations at 16%/15% of ours/consensus’ FY24E earnings. Group turnover in 1Q24 of MYR140.5m was FRCB’s highest quarterly revenue on record, despite historically weak seasonality in 1H. Buoyed by the continued ramp-up of volumes at its P2 plant in Kaohsiung, the house expect earnings delivery in the remaining quarters of FY24 to be stronger.

TW margins at all-time high (with room for more)
TW and MY both posted quarterly turnover highs of MYR90.5m and MYR29.1m. Positively, EBIT margins for TW has reverted to its previous record high of 44% with mgmt indicating there is scope for further expansion if optimum utilisation is attained in 2H24. However, 1Q24 CNP margins contracted 1ppt YoY/6ppts QoQ, primarily from an increase in tax charges due to one-off provisioning for undistributed earnings surtax in TW. Kenanga says it expects FRCB’s elevated 1Q24 ETR (34%) to normalise sequentially. SG memory woes likely to dissipate soon

The house believes that FRCB has reached an inflection point and its outlook now appears bright. Previously tepid volume delivery from its memory-heavy SG-base customers will likely alleviate amidst robust global demand for high-bandwidth memory (HBM) chips used in AI processing. Elsewhere, its main TW customer is also a direct beneficiary of resilient demand for GPU chipsets used in AI-based applications/services. BUY rating maintained.

Hang Seng Index Futures: Breaching 18,000-Pt Psychological Resistance; Bulls Getting Stronger

By

ainul fatihah

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May 3, 2024

The HSIF surged past the 18,000-pt resistance level on Thursday to close at 18,165 pts.

RHB Retail Research in a note today the index started the session at 17,663 pts.

It climbed to the day’s high of 18,219 pts before closing at 18,165 pts.

In the evening, it rose 355 pts and was last traded at 18,520 pts.

With the evening session still in progress, the index may attempt to close above the 18,500-pt immediate resistance.

If this happens, it may attract further buying pressure to lift the index towards 20,000 pts.

Meanwhile, the 20-day and 50-day SMA lines continued rounding upwards, showing that the underlying trend is bullish.

The RSI indicator is pointing upwards, indicating that strong bullish momentum is in play.

As the bullish setup has strengthened, they retain the positive trading bias.

They recommend traders keep the long positions initiated at the close of 25 Apr (17,342 pts).

To manage trading risks, the stop-loss is adjusted higher to 17,200 pts from 16,600 pts.

The immediate support is revised higher to 17,200 pts, followed by 16,600 pts.

On the upside, the immediate resistance is pegged at 18,500 pts, followed by the higher resistance at 20,000 pts.

Energy Drink Powder Brand Bolsters Football Community As Official Broadcast Sponsor

By

ainul fatihah

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May 3, 2024

Extra Joss, renowned for its commitment to uplifting the global football community, is making significant strides, especially in Malaysia.

Kalbe Malaysia Sdn Bhd (parent compant and maker of Extra Joss), Country Manager, Oktavianus underscored the company’s dedication. “Locally, we’re proud to serve as the official broadcast sponsor of Malaysia, while also backing several football clubs to foster talent and engage fans through thrilling events and initiatives,” he said.

Internationally, Extra Joss is forging strategic partnerships with key football leagues and clubs, aiming to bolster their global brand visibility and connect with enthusiasts worldwide. Oktavianus emphasised the alignment with football sponsorship, rooted in the shared values of passion and perseverance between the sport and the brand.

Extra Joss’s status as the Official Broadcast Sponsor of the Malaysia Football League on Astro signifies a significant stride, aligning the brand with Malaysia’s football fervor. This collaboration promises extensive brand exposure during match broadcasts and halftime shows, coupled with interactive campaigns to deepen engagement with fans across social media platforms.

Astro, Head of Sports, Nicholas John expressed excitement about the partnership. “We are thrilled to have Extra Joss as our official broadcast sponsor of the Malaysia Football League for the upcoming season,” he said, highlighting the enhanced viewing experience for customers.

Leveraging Astro’s status as Malaysia’s home of sports channel and Extra Joss’s popularity among Malaysian football enthusiasts, the collaboration offers a mutually beneficial opportunity to enhance both brands.

Oktavianus elaborated on the partnership’s initiatives, including prominent brand visibility during live match broadcasts, half-time shows, and interactive fan engagement on social media. Furthermore, community outreach efforts, such as support for university and high school football programs, aim to nurture young talents.

With its unique energy-boosting products tailored to the needs of passionate football fans, Extra Joss stands out in the crowded Malaysian League market. Looking ahead, the brand teased upcoming surprises for loyal customers, hinting at expansions in sports support and market presence.

Through integrated marketing campaigns spanning digital platforms and live events, Extra Joss cultivates memorable experiences for football enthusiasts. On-ground activations at stadiums and interactive fan engagement zones ensure a holistic brand experience, amplified by social media integration.

Thong Guan Sees Uptick In Orders, Moves To Investing For Future

By

K. Harinderan

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May 3, 2024

Thong Guan Industries (TGUAN) is guided for a 10% sales volume growth for its plastics products in FY24, buoyed by its stretch film division. It recently viewed a shrink film machine that uses up to 50% recycled input, and is investing in new warehouse in Rawang to optimise its operations.

Kenanga Investment Bank (Kenanga) maintain their forecasts with a TP of RM2.86 and OUTPERFORM call.

Kenanga said today (may 3), they came away from a recent engagement with TGUAN feeling reassured of its long-term prospects. The key takeaways are as follows:

1. TGUAN guided for a 10% sales volume growth for its plastic products in FY24 (which is in line with our assumption), driven by the stretch film division as its customers replenish depleting inventories. To recap, its stretch film division accounted for half of its total revenue in FY23.

2. Its food wrap division has also seen an uptick in orders, particularly from the US and Middle East. This surge, especially from the US, is attributed to a newly recruited local sales representative. Nevertheless, challenges persist for the courier bag division, prompting a production capacity reallocation towards loop-handle bags for the European market. The sales at other divisions (including industrial bags and garbage bags) have remained relatively stable.

3. It recently commissioned its tenth nano stretch film machine. Originally slated for commissioning in mid-FY23, TGUAN had decided not to rush it given the soft market condition. Fast forward to the present, on the back of a recovery in demand, the line will cater to the US and Europe, with contribution streaming in from May 2024.

4. TGUAN’s personnel were recently in China to view a shrink film machine which costs about USD500k (RM2.4m). This machine with a production capacity of 200MT/month will appeal to sustainability conscious customers as it could produce film containing 30%-50% recycled content. This compares favourably to its existing Germany made machine which is three times more costly and only produces films from virgin resin.

5. TGUAN is building a new RM6m warehouse in Sungai Buaya (near Rawang), Selangor. Spanning over 40,000 sq ft, TGUAN will use it to centralise its operations, optimise space utilisation and enhance logistics for both its plastic products and the F&B division.

Forecasts. Maintained.

Valuations. Kenanga also kept their TP of RM2.86 based on 11x FY24F PER, at a discount to the sector’s average historical forward PER of 13x to reflect TGUAN’s low share liquidity. There is no adjustment to their TP based on ESG given a 3-star rating as appraised by them.

Investment case. Kenanga continues to like TGUAN due to: (i) the growth potential from exports as more competitive local players, such as TGUAN, gain market shares from overseas producers, (ii) its aggressive push into Europe and US markets with environmentally-friendly, high-performing products, and (iii) its expansion plans for premium products, such as nano stretch films, courier bags, food wraps and some industrial bags (wicketed bags, oil/flour/sugar bags).

Risks to Kenanga’s call include: (i) a sudden surge in resin costs, (ii) weak demand for packaging materials due to prolonged global recession, and (iii) supply chain disruptions.

Westports Holdings: Middle-East Conflicts Reverberate

By

K. Harinderan

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May 3, 2024

Westports Holdings Berhad’s (WPRTS) 1QFY24 results met expectations. Its 1QFY24 core net profit grew 12% YoY driven by a 5% increase in container throughput, slightly better yields, and lower finance cost.

Kenanga Investment Bank (Kenanga) today (May 3) reiterated guidance for a cautious outlook on the prolonged war in the Middle East and maintained their forecasts, TP of RM3.80 and MARKET PERFORM call.

Its 1QFY24 results met expectations at 26% and 25% of Kenanga full-year forecast and the full-year consensus estimate, respectively. No dividend was declared as WPRTS typically distributes half-yearly dividends.

YoY, its 1QFY24 revenue rose 6%. A stronger container volume (+5%) was boosted by the improved average revenue per TEU (+1% compared to negative growth throughout last year) from better revenue mix toward higher tariff rate of gateway cargoes. Additionally, storage income normalised to pre-pandemic levels.

Its transhipment volume fell 3%. The prolonged war in the Middle East with no immediate sign of the Red Sea conflict de-escalating, weighed down on the Asia-Europe trade and led to intermittent port congestions due to vessels bunching (vessels arrive back-to-back or within a short time interval between each vessel).

Adding salt to the wound, a shipping liner has ceased its operations in Malaysia on docking ban on Israel-flagged ships. Meanwhile, its gateway container volume (+17%) remained strong on the back of brisk exports by local manufacturers (partly fuelled by the weak MYR).

On the other hand, its conventional cargo volume eased to 2.76m metric tonnes (-4%) due to lower break bulk throughput (ingots, coils, mixed steel and rubber) and the transition toward containerised cargoes, which more than offset the higher throughput of liquid bulk cargoes (with increased LPG, palm oil and gasoline/diesel products handled).

Its core net profit grew by a sharper 12% due to a better mix skewed towards higher-margin gateway cargoes and lower finance cost (-10%; yearly sukuk repayment of RM125m in June 2023 and RM50m in 1QFY24, with balance sukuk borrowings at RM800m).

QoQ, its 1QFY24 revenue fell 2% due to a seasonally weaker container volume (-7%) partially cushioned by an improved average revenue per TEU (+5%). However, its core net profit only fell 1% on a better mix towards higher-margin gateway cargoes.

The key takeaways from the results briefing are as follows:

1. It maintained its guidance for a low single-digit container volume growth rate in FY24 (vs. our assumption of 4%) as it believes the prolonged war in the Middle East with no immediate sign of the Red Sea conflict de-escalating will continue to weigh down on the Asia-Europe trade. The diversion from Suez Canal to the Cape of Good Hope has resulted in a longer voyage for the Asia-Europe route (which contributes to 30% of global container volume), reducing the frequency of calls the shipping service could make at WPRTS (and all other ports in the region).

Not helping either, the drought-induced low water levels of Panama Canal will continue to disrupt the movement of shipping liners. Nonetheless, it is slightly more positive on FY25, guiding for a single-digit container volume growth rate (vs. our assumption of 4%).

2. The diversion of shipping liners from Suez Canal to the Cape of Good Hope has resulted in intermittent port congestion due to vessels bunching (vessels arrive back-to-back or within a short time interval between each vessel). Nevertheless, it remains optimistic that the port congestion is manageable.

The container yard utilisation is at the optimal level of about 80% while the percentage of empty container boxes has normalised to the pre-pandemic level (at 26% of total containers, lower compared to 27% as three months ago). Also, with its container yard operating at an optimal level, there are efficiency gains.

3. Meanwhile, the approvals for container tariff revision and the Westports 2 (WP2) expansion project are still pending. On the other hand, the new RM5.0bn Sukuk Wakalah programme has now been put in place with initial drawdown within this year, mainly to finance the land reclamation and capital dredging of WP2.

It expects slight increases in its finance cost (from the initial drawdown of the sukuk) and fuel bills (elevated diesel price which is unsubsidised).

Recall, after much delay, WPRTS in Dec 2023 finally signed a Third Supplemental Privatisation Agreement with the federal government and PKA governing the development of CTs 10 to 17, which also entails the extension of the port operation concession for both existing facilities (i.e. CTs 1 to 9) and new facilities (i.e. CTs 10 to 17) by 58 years from Sep 2024 to Aug 2082. The new CTs will nearly double its capacity to 27m TEUs from 14m TEUs, spread over 26 years, Kenanga said.

Forecasts. Maintained.

Valuations. Kenanga also maintained their DCF-derived TP at RM3.80 which is based on a discount rate equivalent to its WACC of 6.1% and a terminal growth rate of 2%. There is no adjustment to their TP based on ESG given a 3-star rating as appraised by them.

Investment case. Kenanga likes WPRTS for: (i) its resilient earnings underpinned by long-term contracts with key clients such as Ocean Alliance, (ii) its long-term growth prospect driven by the Westports 2 expansion project, and (iii) its price competitiveness, i.e. lower transhipment tariffs vs. peers such as Port of Tanjung Pelepas and Port of Singapore. However, its container volume growth is limited as middle-east conflicts persist.

Risks to Kenanga’s call include: (i) a significant slowdown in the global economy, dampening the global containerised trade traffic, (ii) rising operating costs, particularly fuel, and (iii) its expansion plans and tariff revision fail to materialise.

Higher RM93.8m Net Profit Allows Dayang To Ride On Stronger O&G Industry Capex

By

K. Harinderan

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May 3, 2024

Dayang Enterprise Holdings Berhad (DAYANG) delivered stronger net profit QoQ. In 4Q23, DAYANG has achieved a net profit of RM93.8m from RM76.4m (+22.8% QoQ), on the back of higher revenue from the completion of a few outstanding job orders despite being in the monsoon season.

Malacca Securities (MSSB), in its Technical Focus of the company today (May 3), said as of December 2023, DAYANG has an outstanding call-out contracts worth an estimated RM1.9bn. This will provide earnings visibility going forward, coupled with ongoing tenders with potential increases to the orderbook.

Improving margins going forward. DAYANG should see improving margins going forward on the back of higher revised chartering rates.

Technical Outlook

Share price has been consolidating around and last closed at RM2.60. As the technical readings are positive, MSSB expects follow-through buying interest to be seen in the near term, targeting RM2.75-2.80, with a LT target at RM2.90. Support is set around RM2.50-2.55, with a cut loss set around RM2.45.

DAYANG provides offshore maintenance services. Furthermore, DAYANG offers minor fabrication operations, offshore hook-ups, and commissioning and chartering of marine vessels to the oil and gas industry.

Yen Poised For Best Week In Over A Year; Dollar Waits On U.S. Jobs Data

By

K. Harinderan

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May 3, 2024

The yen was headed for its best week in more than a year on Friday, helped by Tokyo’s suspected intervention this week to pull the Japanese currency away from 34-year lows, which also left the dollar broadly on the back foot.

The yen rose to a session-high of 152.895 per dollar in early Asia trade and was set to clock a weekly gain of more than 3%, its largest since December 2022. It was last more than 0.4% stronger at 152.96 per dollar.

Traders were left on tenterhooks for any further huge swings in the yen after Tokyo is suspected to have intervened to support its currency this week to the tune of some 9.16 trillion yen ($59.79 billion), as suggested by data from Bank of Japan (BOJ).

Japan’s latest forays into the currency market came during periods of thin liquidity, with the country out for a holiday on Monday while the second attempt happened late on Wednesday after Wall Street had closed.

“Calculated and opportunistic market action for maximum effect is preferred. And the (Ministry of Finance) is practiced in this. What’s more, the element of unknown and surprise are key advantages that the BOJ and MoF will want to retain,” said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank.

The yen has strengthened nearly eight yen against the dollar since the start of the week, when it first slid past the key 160 per dollar level which some have said could be the line in the sand for authorities.

Elsewhere, the dollar lost ground against most of its peers and was headed for its worst week in nearly two months, in part due to the sharp rise in the yen this week.

Traders are now looking to U.S. nonfarm payrolls data due later on Friday to guide the dollar’s next moves, after Federal Reserve Chair Jerome Powell told markets this week that the central bank’s next move in interest rates would likely be down, and not up as some had feared.

The Fed held interest rates steady at the conclusion of its two-day monetary policy meeting, as expected, and signalled it is still leaning towards eventual rate cuts, even if they may take longer to come than initially expected.

The euro ticked up 0.05% to last trade at $1.0730, and was eyeing a weekly gain of 0.35%. Sterling steadied at $1.25365 and was similarly set to rise more than 0.3% for the week.

Against a basket of currencies, the dollar, which has struggled to regain its footing in the wake of the less-hawkish-than-feared Fed comments, was little changed at 105.32.

The dollar index was on track to lose 0.7% for the week, its worst performance since March.

“Recent Fed speech has acknowledged the lack of progress on inflation and the desire to maintain the current level of policy rates for longer. That said, it does seem clear the Committee remains biased to cut rates, but any policy easing will be determined by how inflation develops over the next few months,” said Tai Hui, APAC chief market strategist at J.P. Morgan Asset Management.

“We now expect the Committee to reduce rates 1-2 times this year, with risks skewed to fewer cuts.”

Down Under, the Australian dollar edged 0.07% higher to $0.6570, and was on track to gain nearly 0.6% for the week.

The New Zealand dollar tacked on a marginal 0.03% to $0.5963, and was eyeing a 0.4% weekly gain. – Reuters

Bursa Malaysia May Test Resistance At 1,600 Points

By

ainul fatihah

-

May 3, 2024

Bursa Malaysia bounced higher again on Thursday, one session after ending the two-day winning streak in which it had advanced almost 15 points or 1 percent.

The Kuala Lumpur Composite Index now sits just above the 1,580-point plateau and it may add to its winnings on Friday.

At 9.16am the FBMKLCI rose +1.77 points to open at 1,581.59.

RHB Retail Research in a note today (May 3) the FKLI resumed its bullish momentum yesterday, climbing 8 pts to settle at 1,584.50 pts.

This solidifies the overall technical setup, which remains bullish.

The index initially started off trading at 1,577 pts.

After touching the 1,574.50 pts day’s low, it rebounded towards the end of the session, hitting the 1,586 pts high prior to closing.

The latest bullish candlestick reverses Tuesday’s profit-taking activities – reaffirming the FKLI’s uptrend above the 50-day SMA line.

The current bullish setup would see the index trend higher for immediate sessions, heading towards the 1,600-pt mark.

Therefore, RHB maintained their bullish bias.

Malacca Securities (MSSB) said the FBMKLCI (+0.27%) ended higher due to buying interest in selected consumer and utilities heavyweights, as the sentiment was lifted after the PM’s statement on the civil servants’ wage hikes and the RM10bn local investment from
Microsoft on AI and cloud infrastructure.

The Day Ahead
Again, the FBMKLCI has rebounded, charging towards its 52-week high with the help of selected YTL-related and Consumer heavyweights.

Over in the US, Wall Street gained momentum on the back of bargain hunting activities as the market perceived the Fed’s action to keep the interest rates unchanged and the less hawkish interest rate guidance.

MSSB believes the post-market jump in Apple and Qualcomm after their earnings beat will be able to provide decent buying support in the local exchange.

Still, the market will be monitoring closely on the jobs data that will be released later tonight. On the commodity markets, Brent oil further retraced and traded below USD84, while the CPO continues to rangebound around RM3800-3900.

Sectors focus: With the post-market bullish tone from Apple and Qualcomm, coupled with the Microsoft investments in Malaysia, these should provide decent support towards the Technology sector.

Meanwhile, the FBM Small Cap has trended positively at its 52-week high, which may suggest more upside on the overall market conditions.

They opine that the Construction, Property, Utilities, Solar and Building Material segments will trade relatively strong on the back of the domestic catalysts like (i) potential revival of mega infra projects and (ii) ongoing execution of the NETR and NIMP masterplans.

Bloomberg FBMKLCI Technical Outlook
The FBMKLCI index returned to the 1580. The technical readings on the key index, however, were positive with the MACD Histogram extending another positive bar, while the RSI maintains above 50.

The resistance is envisaged around 1,595-1,600 and the support is set at 1,560-1,565.

CGS International (CGS) said Asian stocks market finished mixed on Thursday after US Fed avoided offering a timeline for rate cuts.

The local benchmark FBMKLCI (KLCI) rebounded 4.33pts or 0.27% to end the day at 1,580.30.

Sectors wise, REIT (+0.56%) was the best performing index, followed by consumer products (+0.55%) and industrial products (+0.47%).

The top laggards were energy (-1.20%), telecommunications (-0.85%) and technology (-0.60%).

Trading volume decreased to 3.81bn (down from 4.18bn on Tuesday) while trading value fell to RM3.06bn (down from RM3.75bn previously).

Market breadth turned negative as 530 gainers lost out to 620 decliners.

The benchmark recovered from previous loss, supported by buying interest in consumer heavyweights.

The 1,570-1,583 range remains as the immediate resistance until the index can successfully close above the said levels.

The 1,600 psychological level is the next resistance.

Any pullback should find support near the 1,552-1,559 levels to keep the bullish momentum intact.

The rising 50-day EMA (1,543 currently) is the following support. Their portfolio stays in risk-on mode this week.

KPDN Takes Action Against Premises Who Sell ‘No Palm Oil’ Labelled Products

By

K. Harinderan

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May 3, 2024

Ministry of Domestic Trade and Cost of Living (KPDN) moved in on a convenience store in Precinct 3, Putrajaya for being suspected of selling food items with the words ‘No Palm Oil’ printed on the plastic packaging yesterday (May 2).

The raid was carried out by a team of enforcement officers from KPDN Putrajaya which began at 11.45am resulting from public complaints received by the Ministry. The raiding team found various ice cream products that have ‘No Palm Oil’ printed on their packaging. All products were seized for further investigation and carried a value amounting to RM897.60.

This case is being investigated under the Trading Regulations (Prohibition on the Use of Statements, Expressions or Indications) (Production of Palm Oil and Palm Oil Products) 2022.

If found guilty, the concerned party can be fined not more than RM250,000.00 or imprisonment for a period not exceeding five years.

Meanwhile, KPDN noted that the Legislation under the Trading Regulations (Prohibition on the Use of Statements, Expressions or Indications) (Production of Palm Oil and Palm Oil Products) 2022 came into force beginning March 15, 2022.

Based on enforcement statistics beginning March 15, 2022 until May 2, 2024 under this legislation, a total of 5,057 inspections has been done across the country on various premises and distribution chain and of that amount, as many as four cases are being investigated.

“Strict action will be taken against any importing company, distributors, sellers and related parties who sell the products imported from abroad that do not comply with relevant legislation.

“Types of errors include wrongful labelling in the form of expressions or indications that may discriminate or boycott any products or goods involving the country’s main commodity which is palm oil,” Minister of Domestic Trade and Cost of Living Datuk Armizan Mohd Ali said in statement released today (May 3).

Biden Calls Japan ‘Xenophobic’ Along With India, Russia And China

By

K. Harinderan

-

May 3, 2024

President Joe Biden on Wednesday called close US ally Japan “xenophobic” at a Washington, D.C., fundraiser, just weeks after lauding the US-Japan alliance at a state dinner.

The president made the remark at the off-camera event while arguing that Japan, along with India, Russia and China, would perform better economically if the countries embraced immigration more.

“You know, one of the reasons why our economy is growing is because of you and many others. Why? Because we welcome immigrants. We look to – the reason – look, think about it – why is China stalling so badly economically? Why is Japan having trouble? Why is Russia? Why is India? Because they’re xenophobic. They don’t want immigrants,” Biden said, according to an official White House transcript released Thursday. An initial report of Biden’s comments that was released by pool reporters did not include India in the list of countries he mentioned.

On Thursday, press secretary Karine Jean-Pierre said the president was attempting to make a larger point when he described Japan and India as “xenophobic.”

“He was saying that when it comes to who we are as a nation, we are a nation of immigrants, that is in our DNA,” she told reporters aboard Air Force One, adding later Biden was making a “broad comment” in his comments about Japan and India.

She described the US-Japan relationship as “important” and “enduring” that would continue, despite Biden’s comment. As for whether the president would make similar remarks going forward, she said: “That is up to the president.”

Earlier in the day, National Security Council spokesman John Kirby said he wasn’t aware of any communications between the White House and the governments of Japan or India.

“President Biden values the capabilities that they bring across the spectrum on a range of issues, not just security related,” Kirby said.

Biden had similarly cast Japan, Russia and China as “xenophobic” during an interview with a Spanish language radio station in March.

“The Japanese, the Chinese, they’re xenophobic, they don’t want any – the Russians, they don’t want to have people, other than Russians, Chinese, or Japanese,” the president said at the time.

The latest critique of Japan comes less than a month after he hosted Japanese Prime Minister Fumio Kishida for a state visit and nearly a year after the president hosted Indian Prime Minister Narendra Modi for his own state visit. Biden has leaned on improving relations with both Japan and India as important counterweights to China’s growing global influence.

At the state dinner held at the White House in April, Biden said Japan and the US share “the same values, the same commitment to democracy and freedom to dignity.”

“And today without question, our alliance is literally stronger than it has ever been,” Biden said during the dinner.

Japan has long experienced a demographic crisis with far-reaching consequences for the country’s workforce and economy. Japan and other East Asian nations have largely shied away from using immigration to bolster their populations.

The president’s comments also come as he’s facing political pressure at home over his own immigration policies amid strained resources to deal with an influx of migrants and sharp Republicans criticism. – CNN

Oil Set For Biggest Weekly Drop Since February On Demand Concern

By

K. Harinderan

-

May 3, 2024

Oil is headed for its biggest weekly decline since February on signs of weakening demand, increasing speculation that OPEC+ will prolong output cuts to shore up prices.

West Texas Intermediate traded near $79 a barrel for a weekly loss of more than 5%, after settling little changed on Thursday, while Brent closed below $84 a barrel. Almost 90% of traders and analysts surveyed by Bloomberg predict the Organization of the Petroleum Exporting Countries and its allies will extend curbs when they meet on June 1.

Oil has plunged about 10% from a five-month high in mid-April as the fallout from Iran’s unprecedented attack on Israel remained limited. A surprise surge in US crude stockpiles this week added to concerns about demand from top importer China and weakness in product markets including diesel and gasoline. – Bloomberg

Asian Stocks To Rise As Tech Lifts Wall Street

By

K. Harinderan

-

May 3, 2024

Equities in Asia were set for early gains after stocks and bonds rallied on Wall Street Thursday, ahead of crucial US jobs data due later Friday.

Share futures for Australia and Hong Kong edged higher while markets in Japan and mainland China are closed for a holiday. The S&P 500 advanced 0.9% and tech-heavy Nasdaq 100 climbed 1.3% on Thursday, only to strengthen further in futures trading following better-than-estimated results from Apple Inc..

The company’s stock rose more than 6% in post-market trading after a small gain during regular hours. The iPhone maker predicted a return to growth in the current period, after posting sales declines in five of the past six quarters, hurt by a sluggish smartphone market and headwinds in China.

The yen strengthened early Friday after ending the Thursday session at the highest level against the greenback in almost three weeks. The currency has likely faced official support, with estimates indicating the country spent more than $20 billion in its latest round of intervention. An index of the dollar was steady after falling by the most since December on Thursday.

Australian and New Zealand yields fell Friday after Treasuries rallied across the curve Thursday. The US 10-year yield fell five basis points to 4.58%, while the policy-sensitive two-year yield dropped nine basis points. Treasuries trading in Asia will be closed due to the holiday in Japan.

The moves come ahead of US nonfarm payrolls data that will help identify the path forward for Federal Reserve policy. Economists surveyed by Bloomberg forecast a 240,000 gain in payrolls, which would be the slowest pace since November.

The Fed decided Wednesday to leave the target range for the benchmark rate at 5.25% to 5.5% following a slew of data that pointed to lingering price pressures. Yet Chair Jerome Powell said it’s unlikely that the Fed’s next move would be to raise rates.

“While the Fed appears to have all but ruled out a rate hike, it also made clear it’s willing to keep rates higher for longer,” said Chris Larkin at E*Trade from Morgan Stanley. “The markets will be hungry for any data suggesting the economy isn’t heating up any more than it did in the first quarter.”

A survey conducted by 22V Research shows that 30% of the investors polled think Friday’s jobs report will be “risk-on,” 27% expect a “risk-off” reaction, and 43% said “mixed/negligible.” Among the labor indicators, the tally showed investors will be paying the most attention — by far — to average hourly earnings.

“Markets will likely still react more to a weaker print than strong data as investors have turned more hawkish,” said Oscar Munoz and Gennadiy Goldberg at TD Securities. “However, the recent string of upside surprises to economic data is unlikely to be sustained for long as expectations continue to reset higher.”

The options market is betting that stocks will swing widely after Friday’s US jobs report, which traders expect will offer more clarity on how much the Fed may cut interest rates this year.

The S&P 500 is expected to move 1.2% in either direction after the release, based on the cost of at-the-money puts and calls expiring Friday, according to Stuart Kaiser, Citigroup Inc.’s head of US equity trading strategy. That figure, based on the prices of S&P straddles as of Wednesday’s close, is the largest implied swing ahead of an employment report since March 2023, he said.

In Asia, data set for release includes Thai inflation and retail sales for Hong Kong and Singapore.

Oil edged higher early Friday after ending the prior session little changed. Gold was also flat early Friday at around $2,303 per ounce. – Bloomberg

Win Streak May Continue For Singapore Shares

By

ainul fatihah

-

May 3, 2024

The Singapore stock market has moved higher in three straight sessions, collecting more than 15 points or 0.5 percent along the way. The Straits Times Index now rests just beneath the 3,300-point plateau and it may extend its gains on Friday.

The global forecast for the Asian markets is upbeat on an improved outlook for interest rates. The European markets were mixed and the U.S. bourses were up and the Asian markets figure to follow the latter lead.

The STI finished slightly higher on Thursday as gains from the financial shares were offset by weakness from the industrials.

For the day, the index perked 4.20 points or 0.13 percent to finish at 3,296.89 after trading between 3,285.30 and 3,324.77.

Among the actives, CapitaLand Investment climbed 0.79 percent, while City Developments retreated 1.46 percent, Comfort DelGro sank 0.67 percent, DBS Group spiked 1.86 percent, Emperador rallied1.18 percent, Genting Singapore slumped 1.12 percent, Keppel DC REIT tumbled 1.75 percent, Keppel Ltd dropped 0.87 percent, Mapletree Pan Asia Commercial Trust jumped 1.85 percent, Mapletree Industrial Trust declined 1.32 percent, Mapletree Logistics Trust advanced 0.74 percent, Oversea-Chinese Banking Corporation collected 0.63 percent, SATS added 0.40 percent, Seatrium Limited plummeted 3.06 percent, SembCorp Industries stumbled 1.30 percent, Singapore Technologies Engineering skidded 0.99 percent, Thai Beverage tanked 2.02 percent, Wilmar International shed 0.62 percent, Yangzijiang Shipbuilding plunged2.27 percent and Hongkong Land, Yangzijiang Financial, CapitaLand Integrated Commercial Trust and SingTel were unchanged.

The lead from Wall Street is firm as the major averages opened higher on Thursday and continued to strengthen as the day progressed, ending near session highs.

The Dow jumped 322.37 points or 0.85 percent to finish at 38,225.66, while the NASDAQ rallied 235.48 points or 1.51 percent to close at 15,840.96 and the S&P 500 advanced 45.81 points or 0.91 percent to end at 5,064.20.

The strength that emerged on Wall Street came as traders breathed a sigh of relief following the Federal Reserve’s monetary policy announcement on Wednesday. Traders had expressed some concerns the Fed’s next monetary policy move could actually be an interest rate hike rather than a cut, but Fed Chair Jerome Powell post-meeting alleviated those worries.

Earlier in the day, stocks saw volatility as traders reacted to the latest batch of U.S. economic data, including a Labor Department report showing a surge by labor costs in the first quarter of 2024. A separate Labor Department showed initial jobless claims came in unchanged last week, while a Commerce Department report showed the U.S. trade deficit narrowed slightly in March.

Oil futures failed to hold early gains and settled slightly lower on Thursday amid easing concerns over supply disruptions and worries about the outlook for economic growth and energy demand. West Texas Intermediate Crude oil futures for June ended down by $0.05 at $78.95 a barrel.

Closer to home, Singapore will provide March data for retail sales later today; in February, sales were up 3.0 percent on month and 8.4 percent on year. – RTT News

Stock Picks Of The Day – Master Tec Group, SkyWorld Development

By

ainul fatihah

-

May 3, 2024

Master Tec Group is looking to resume its uptrend – it inched up yesterday, heading towards the MYR1.08 immediate resistance level.

RHB Retail Research in a note today (May 3) said if a breakout occurs above this level, the stock should trend higher towards MYR1.18 (the historical high), followed by the MYR1.50 level.

On the flip side, a fall below the MYR0.90 support level would negate the bullish setup.

SkyWorld Development is set to rebound from its recent corrections after surpassing the MYR0.62 immediate resistance level yesterday.

The bullish bias above this level should drive the stock higher towards the MYR0.66 resistance level, followed by MYR0.70.

However, a fall below the MYR0.60 support level would reverse the momentum, as it would form a “lower low” bearish structure.

Apple Fiscal Q2 Results Top Estimates; Unveils Bumper US$110B Stock Buyback

By

K. Harinderan

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May 3, 2024

Apple reported Thursday fiscal second-quarter results that topped Wall Street estimates amid better-than-feared performance in its key China market and the tech giant unveiled its largest ever stock buyback.

Apple Inc (NASDAQ:AAPL) rose more than 7% in afterhours trading following the report.

For the quarter ended Mar 30, the company announced earnings of USD1.53 per share on revenue of USD90.8 billion. Analysts polled by Investing.com had anticipated EPS of USD1.5 on revenue of USD90.32B.

In greater China, a key market for the iPhone maker, sales fell 8% to USD16.37B, amid rising competition from smartphone rivals in the country. But that was less bad than feared as analysts had forecast revenue in China falling to USD15.25B.

iPhone revenue, which makes up about half of total revenue, fell to USD45.96B from USD51.33B a year earlier, but that just missed estimates of USD46B.

The weaker than expected iPhone revenue, and pressured margins “show that the revenue growth plateau is more than a regional problem and should keep on deepening without new, more innovative products,” Investing.com senior analyst Thomas Monteiro said Thursday.

Revenue from Apple’s service business, which includes Apple Music, Apple TV+ and iCloud, grew to USD23.87B from USD20.91B a year earlier, above estimates of USD23.27B.

Wearables and accessories raked in $7.91B in revenue, down from USD8.76B, while iPad revenue fell 16.7%, while Mac sales were up 3.9% in Q2 from a year earlier.

“We expect AAPL trade higher on the better-than-expected F3Q24 revenue guidance (+LSD% yoy), a surprise upgrade in buyback authorization to $110 bn suggesting a strong FCF outlook for the next year, and in-line F2Q24A results that included record Services revenue and better-than-expected China performance,” Goldman Sachs analysts said.

The company also announced a USD110B stock buyback program and hiked its dividend by 4% to USD0.25 a share.

The largest ever buyback could buy investor support and trust, Monteiro adds, that will be needed in the mid-term for the company to launch new products and solutions that “will shift its behemoth operation back into the sustained growth path.”

The shift for the company to resume its growth path would likely involve “higher and better hardware-to-product AI integration,” Monteiro said. “This is something that has already begun to show some success on a smaller scale on the Mac operation, which did surprisingly well despite the overall woes.”

Looking ahead, Apple CEO Tim Cook told CNBC’s Steve Kovach that sales would “grow low single digits” in the June quarter. – Investing.com

U.S. Stock Futures Bounce On Apple Boost; Nonfarm Payrolls Awaited

By

K. Harinderan

-

May 3, 2024

U.S. stock index futures rose in evening deals on Thursday tracking better-than-feared earnings from tech behemoth Apple Inc, although sentiment remained on edge ahead of key payrolls data.

Apple’s earnings, which came after the market close, added to a positive session on Wall Street, which saw the technology sector bounce back from two days of losses after the Federal Reserve said interest rates will remain higher for longer.

S&P 500 Futures rose 0.3% to 5,107.50 points, while Nasdaq 100 Futures rose 0.6% to 17,150.0 points by 19:15 ET (23:15 GMT). Dow Jones Futures rose 0.6% to 38,608.0 points.

Apple surges 6% on better-than-feared earnings, buyback

Apple Inc (NASDAQ:AAPL) rose 6% in aftermarket trade, adding to gains in the tech sector after the Cupertino, California-based giant posted earnings which were not as bad as markets were fearing.

Specifically, declines in its revenue and earnings were not as deep as expected, although revenue from iPhone sales still missed expectations. This came amid softening demand and increased competition across its major markets, specifically China.

But Apple’s services revenue still beat expectations, while the firm forecast a return to revenue growth in the June quarter.

Apple’s shares were also boosted by a record $110 billion stock buyback, while the firm also increased its dividend payout.

Gains in Apple herald extended gains in Wall Street indexes after a positive session on Thursday. But they were still trading down for the week.

The S&P 500 rose 0.9% to end at 5,064.20 points on Thursday. The NASDAQ Composite jumped 1.5% to 15,840.96 points, while the Dow Jones Industrial Average rose 0.9% to 38,225.66 points.

Still, all three indexes were trading down between 0.1% and 0.7% for the week, as fears of higher-for-longer interest rates weighed.

Nonfarm payrolls present next challenge

Despite a strong session on Thursday, sentiment in stock markets still remained on edge ahead of key nonfarm payrolls data, due on Friday.

The reading is widely expected to factor into the Federal Reserve’s outlook on interest rates, and comes after a Fed meeting earlier this week, where the central bank warned that interest rates will remain high for longer in the face of sticky inflation.

Sustained strength in the labour market gives the Fed more impetus to keep rates high, although the central bank also said it will not raise rates any further.

Friday’s nonfarm payrolls data comes after the reading beat expectations for five straight months.

Block surges on Q1 beat, Coinbase, Cloudflare sink

Among other major after-market movers, payments firm Block Inc (NYSE:SQ) surged 7% after its first-quarter earnings topped estimates. The firm also revealed that it had been steadily investing in Bitcoin.

Cryptocurrency exchange Coinbase Global Inc (NASDAQ:COIN) fell 2.2% even as its quarterly earnings beat expectations, as pressure came chiefly from a sustained slump in cryptocurrency prices.

Cybersecurity firm Cloudflare Inc (NYSE:NET) slid 13% after weak guidance overshadowed strong quarterly earnings. – Investing.com

Indonesia Dismisses Claims Of Apple Cancelling Investment Plans

By

Editor

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May 2, 2024

The Indonesian Communication and Informatics Minister stated on Thursday that Apple, a major technology company, is still interested in investing capital in Indonesia.

The minister refuted rumors that had been circulating on social media platforms, claiming that Apple had canceled its plan to invest in the country. He assured journalists that Apple had expressed interest in investing in Indonesia and that the government is currently developing incentives to attract the company.

He added that the Coordinating Ministry for Maritime Affairs and Investment is working on the incentives and that Microsoft is also interested in investing.

On April 17, 2024, Apple’s CEO, Tim Cook, met with President Joko Widodo in Jakarta to discuss the company’s potential investment in Indonesia.

Petronas Renames Melaka Refinery To Melaka Energy Park

By

Editor

-

May 2, 2024

Petronas owned subsidiary Malaysian Refining Company Sdn Bhd announced the renaming of its Melaka Refinery Complex one of the largest capacities in Malaysia to Melaka Energy Park to commemorate the company’s Pearl Jubilee milestone.

Melaka Energy Park contributes significantly to meeting 60 percent of Peninsular Malaysia’s petroleum product demand, boasting a daily production rate of 300,000 barrels. It is equipped with several specialised processing units designed with the flexibility to handle various crude oils from sweet crudes to heavier imported crude oils. The latest addition to the energy park – the DELIMA plant – launched in 2021, can produce EURO-5 Diesel, which has lower sulphur content and lesser toxic emissions, making it a cleaner fuel alternative.

For the past three decades, MRCSB, with the support of local authorities and the surrounding communities have contributed to the economic growth and social development of the state. Beyond providing job opportunities to the natives of Melaka, the company supports the advancement of the state’s human capital through educational programmes for students whilst contributing to environmental conservation via nature-based solutions.