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MACRO RESEARCH
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Reserves surpassed 2016 high
by
Suhaimi Ilias
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Total gross external reserves rose USD0.7b to this
year’s new high of USD98.7b in mid-June 2017 (end-May 2017: USD98.0b)
underpinned by the USD0.7b rise in foreign currency reserves
component to USD92.3b (end-May 2017: USD91.6b). Total gross external
reserves level has also risen to surpass last year’s high of USD98.3b
level in mid-Nov 2016.
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Suhaimi Ilias
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Zamros
Dzulkafli
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GDP growth momentum intact
by
Suhaimi Ilias
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Index of leading economic indicators rose +1.4% YoY in
Apr 2017 (Mar 2017: +1.7% YoY), suggesting the real GDP growth
momentum is intact in 2Q 2017 following the better-than-expected
+5.6% YoY expansion in 1Q 2017.
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Suhaimi Ilias
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Zamros
Dzulkafli
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On hold, as expected
by
Suhaimi Ilias
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As expected, BSP kept the policy rates unchanged at
its fourth Monetary Board (MB) meeting for the year on 22 June 2017.
The key policy rate – the overnight borrowing rate – was left
unchanged at 3.00%, together with the overnight lending rate and
overnight deposit rate which stayed at 3.50% and 2.50% respectively.
Maintain our view for a +25bps rate hike this year.
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Suhaimi Ilias
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Zamros
Dzulkafli
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BM Technology Index – Base building
by Nik
Ihsan Raja Abdullah
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FBMKLCI rebounded yesterday amid bargain hunting. At
day’s end, the index rose 1.86pts to 1,777.43. Sentiment has improved
with gainers outpacing losers by 459 to 389. Trading volume, however,
decreased to 1.64b shares valued at MYR1.79b. While a minor recovery
in oil price overnight could lend support to the local bourses,
expect profit taking activities to accelerate in the afternoon ahead
of the long weekend break.
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Nik Ihsan Raja
Abdullah
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Tee Sze Chiah
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NEWS
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Outside Malaysia:
U.S: Biggest banks clear their first hurdle in Fed’s
stress tests. Thirty-four of the largest banks operating in the U.S.
cleared a Federal Reserve stress test of their ability to withstand
economic shocks, showing firms are getting the hang of the once-dreaded
reviews -- a trend that may continue if the Trump administration dials
them back. Every bank subject to the annual tests’ first phase exceeded
minimum thresholds, though Morgan Stanley trailed the rest of Wall Street
on a key measure of leverage -- the second year it performed worse than
peers on one of the main metrics. Last year, during a second phase
examining proposals to pay out capital to shareholders, the bank was
forced to resubmit its plan to address a “material weakness.” Results
from that round are due next week. (Source: Bloomberg)
U.S: Jobless claims show tight labor market even with
increase. The slight gain in filings for U.S. unemployment benefits last
week is still consistent with a resilient job market, Labor Department
figures showed. Initial jobless claims increased by 3k to 241k (forecast
was 240k); 43-year-low of 227k was reached in February. Continuing claims
rose by 8k to 1.94m in week ended June 10 (data reported with one-week
lag). (Source: Bloomberg)
U.K: Britain’s factories saw their order books jump to the
highest in almost 30 years this month, with growth across most sectors
and export demand improving. The positive readings from a Confederation
of British Industry survey come in the week the U.K. began its formal
exit talks with the European Union. The CBI orders index jumped to 16 in
June, the highest since 1988, from 9 in May. Its export gauge rose to 13,
the strongest reading in 22 years. While a measure of output declined,
the pace of growth remained “robust” and firms expect it to accelerate in
the coming months. (Source: Bloomberg)
Taiwan: Kept its benchmark interest rate unchanged for a
fourth-straight quarter as policy makers assess the impact of a
strengthening currency and the robustness of economic expansion. Policy
makers held the discount rate for banks at a six-year low of 1.375%, the
central bank said. (Source: Bloomberg)
Australia: Buying more cars than ever despite miserly wage
gains. Motor vehicle sales, one of the nation's least-watched economic
data, reached an all-time monthly high in May as buyers splashed out on
more than 100,000 new vehicles. The buoyant trend appears to defy central
bank and economists' warnings about weak consumer spending amid
record-low wage growth and record-high household debt. (Source:
Bloomberg)
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Other News:
MISC: Secured long-term contract to operate shuttle
tankers in North Sea. The company has secured a contract to own and
operate two specialist DP2 offshore loading shuttle tankers via its
wholly-owned subsidiary, AET Tanker Holdings Sdn Bhd. The vessels will
operate in oilfields on the Norwegian Continental Shelf of the North Sea,
Norwegian Sea and the southern Barents Sea. The contract, which is
granted by Norwegian-based energy company Statoil ASA, has an estimated
value of USD200m (MYR857m) for a 5-year charter period or USD275m for a
7-year charter period. Statoil will decide on and announce the charter
period by Dec 31, 2017, said MISC. (Source: The Edge Markets)
AirAsia: To order 14 more A320ceo aircraft. The company
has signed an agreement with Airbus to order an additional 14 A320
current engine option (CEO) aircraft to meet higher than expected
near-term growth on the carrier’s regional network. The contract, which
is subject to AirAsia board approval, was announced at the Paris Air Show
on Thursday. This will see the total number of A320 Family aircraft
ordered by AirAsia rise to 592. To date, 171 A320ceo and eight A320neo
have already been delivered to the airline and are flying with its units
in Malaysia, India, Indonesia, Thailand and the Philippines. (Source: The
Star)
George Kent: Sees good year ahead. The company is positive
on its outlook and confident of recording another good year ahead with
ample cashflow and a strong balance sheet. According to the company’s
chairman Tan Sri Tan Kay Hock,“It is looking good so far. We recorded
double-digit growth for the first quarter. It is progressing smoothly for
the rest of the year. We expect this year to be a good year as well”.
George Kent also said that in the first quarter, it had secured a major contract
for the supply and delivery of water meters. “Together with contracts
secured by the engineering division in the last financial year, the order
book has grown to MYR6.1b,” it said. Tan added the current order book
could last the company for “many years” of up to seven years. (Source:
The Star)
Bintai Kinden: Bags MYR122m construction job. The group
has bagged a SGD39.6m (MYR122.m) contract from Singapore's Land Transport
Authority (LTA) to undertake mechanical services work for the four-in-one
rail and bus depot in Singapore. Bintai Kinden said its 69.82%-owned
subsidiary Bintai Kindenko Pte Ltd had yesterday accepted a LOA from the
LTA to undertake the mechanical work for the supply and installation of
the environmental control system for the depot. "No major risk is
foreseeable on the contract, except for the possibility of long
construction period that will overstretch the preliminary costing, but
this can be mitigated with close monitoring of status and planning on
manpower required," it added. (Source: The Edge Markets)
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