MY Morning Wrap | Keyfield International Secures US$10 Million Contract for Maritime Vessel Supply

Shares in Malaysian property developers surged as analysts highlighted strong sector fundamentals bolstered by data centre land transactions. Sime Darby Property and UEM Sunrise Bhd experienced significant gains, with their stocks rising by 8.8% and 9.5% respectively, following notable land sales for data centre developments. Mah Sing Group Bhd also saw its shares increase by 8% after announcing a joint venture for a data centre project. The property index reflected this positive trend, gaining 4.6%. Maybank Investment Bank upgraded the property sector to "positive," citing resilient sales in the industrial property segment and attractive valuations after recent sell-downs, alongside the potential impact of major projects like the Johor-Singapore Special Economic Zone and the high-speed rail project.

Deputy Finance Minister Lim Hui Ying has indicated that the substantial inflow of foreign funds into Malaysia's market is a harbinger of a stronger ringgit and a robust local economy. With the ringgit achieving its biggest daily gains in nearly a decade and hitting a peak since April 2023, investor confidence is on the rise. This comes amid expectations that Bank Negara Malaysia will maintain the overnight policy rate, juxtaposed with forecasts of interest rate cuts by the U.S. Federal Reserve. Additionally, the Association of Public Sector Accountants (PSA) Malaysia is preparing to educate civil servants on the new mechanism for calculating salary adjustments, ensuring comprehensive understanding of the Ministry of Finance's guidelines.

Malaysia's Services Producer Price Index (SPPI) has seen a modest increase of 0.7% in the second quarter of 2024, reaching 115.7 points, although this is a deceleration from the 1.0% growth observed in the first quarter. The climb was led by the arts, entertainment, and recreation sector with a 7.7% rise, while accommodation and food services also continued to grow, driven by higher food prices. Education and real estate activities experienced small upticks, and both health and professional services indices saw marginal increases. In contrast, the transport sector witnessed a 1.4% decline, with passenger air transport significantly down by 5.9%. Additionally, the information and communication sector saw a slight decrease. Overall, the SPPI experienced a quarter-on-quarter contraction of 0.1%, marking the first drop since the end of 2020 during the COVID-19 pandemic, primarily due to the downturn in the transportation sector.