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US Inflation Spike Hits Rate-Cut Optimism
Fri, 15-Aug-2025 07:30 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI (-0.35%) ended lower, snapping a seven-day winning streak as investors took profit after the week’s rally. Meanwhile, lower liners were mixed. Sector wise, property (+0.39%) topped the gains, while transportation and logistics (-1.11%) was the worst performer.

 

Global Markets Review: Wall Street ended mixed on Thursday as the Producer Price Index (PPI) came in hotter-than-expected. July’s wholesale prices rose 0.9% MoM, well above the 0.2% consensus, tempering hopes for aggressive Fed rate cuts. Still, CME FedWatch shows a 92.1% probability of a 25bp rate cut in September, only marginally lower from 94.3% before the data release. The S&P 500 inched up 0.03% to notch a third straight record close, while the Nasdaq and Dow slipped 0.01% and 0.02%, respectively. In Europe, stocks ended at two-month highs, driven by strong corporate earnings and gains in defence and financial stocks, with the STOXX 600 up 0.6%. Asian markets were mixed, with Japan’s Nikkei 225 retreating after hitting two record highs as investors took profits on concerns the Bank of Japan may eventually tighten monetary policy, following US Treasury Secretary Scott Bessent’s warning that Japan is “behind the curve” on rate hikes. The Hang Seng Index fell 0.37%, snapping a three-day winning streak, while the Kospi ended flat (+0.04%).

 

Market Outlook: Global sentiment remains fragile as the mixed performance on Wall Street underscores lingering inflation concerns from Trump’s tariffs and the Fed’s limited room to cut rates amid softening labour data. Investors are advised to stay cautious and adopt a defensive stance amid persistent global headwinds. Focus now shifts to Friday’s US retail sales for clues on consumer strength. Domestically, attention will be on the 2Q GDP release today alongside a slew of corporate earnings, which could provide further direction for the market. We anticipate short-term profit-taking in the local bourse as the market consolidates recent gains.

 

Sector focus. We remain positive on selective domestic power ancillary and renewable energy stocks, supported by long-term growth catalysts such as data centre expansion and the energy transition, which should continue to show resilience amid global trade challenges.

 

FBMKLCI Technical Outlook

 

Technical Commentary: FBM KLCI ended its seven-day rally with a shooting star, rejecting the RM1,600 level. Indicators remained positive, with the MACD Line ending the day above the Signal Line, while the RSI floated above 50. Immediate resistance is located at 1,600, followed by 1,640. Support is envisaged at around 1,550.

 

Company News (source: various)

Sime Darby Property Bhd is negotiating a RM3bn (US$714m) loan, with a five-year term and an optional two-year extension, to fund the construction of a data centre that will be leased to Google, though discussions are still ongoing and details may change.

 

Keyfield International Bhd’s Q2net profit fell 5.26% y-o-y to RM66.36m (from RM70.04m), dragged by lower utilisation of its offshore support vessel (OSV) and reduced daily charter rates, despite a RM25.7m gain from a vessel disposal, while revenue dropped 33.67% y-o-y to RM131.97m (from RM198.98m), bringing earnings per share down to 8.23 sen (from 9.37 sen).

 

Swift Haulage Bhd’s Q2 net profit fell 19.02% y-o-y to RM6.75m on higher costs, while revenue rose 9.18% to RM188.75m on stronger freight, land transport, and warehousing; earnings per share slipped to 0.77 sen, with a 0.8 sen interim dividend payable Oct 10.

 

I-Bhd’s Q2 net profit jumped 110% y-o-y to RM11.45m on stronger contributions from all segments, with earnings per share at 0.62 sen and revenue up 12% to RM62.3m; the leisure and hospitality segment led with RM28.6m revenue and RM4.77m PBT, while no dividend was declared.

 

Cuckoo International Bhd’s Q2 net profit fell 1.83% q-o-q to RM27.35m on RM4.7m listing expenses and higher net impairment losses, while revenue rose 3.51% to RM306.67m, driven by the CUCKOO co-created segment’s 21.3% share versus 78.5% from the CUCKOO branded segment.

 

N2N Connect Bhd’s Q2 net profit rose 41% y-o-y to RM3.19m on lower operating expenses and higher associate contributions, with earnings per share at 0.57 sen; core profit jumped 48.6% to RM2.54m despite a 19% drop in revenue to RM22.4m on weaker contributions from several business segments.

 

Chin Hin Group Property Bhd will divest its commercial vehicle and bodyworks operations by selling its stakes in four subsidiaries for RM74m to focus on property development, expected to yield a pre-tax gain of RM2.4m; the subsidiaries, acquired for RM64.92m, contributed RM125,318 PAT for the period ended May 31, 2025.

 

Catcha Digital Bhd is acquiring a 60% stake in trade show organiser One International Exhibition Sdn Bhd for RM11.38m cash, expanding into agriculture and construction events to complement its existing exhibitions business and tap new industry verticals and client segments.

 

Aemulus Holdings Bhd’s wholly owned subsidiaries, TMSS and Aemulus Corporation, will acquire Revotronix’s camera sensor testing business for 32.46 million yuan (RM19.09m), including IP, technology, customer and supplier contracts, selected employees, inventories, and fixed assets, giving TMSS direct access to one of the world’s largest CMOS image sensor makers.

 

Malakoff Corp Bhd appointed Syahrunizam Samsudin as group CEO effective Sept 1, following Anwar Syahrin Abdul Ajib’s resignation; the company has 6,953MW capacity and a 173MW renewable portfolio.

Sentiment: Negative
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