In today’s briefing:
- Malaysia Economics: Is “Digital Tiger” Malaysia About to Roar Again?
- The Week at A Glance: Everything you need to know ahead of the FOMC and CPI
- Indonesia Economics: New Capital Faces More Than Just Personnel Woes
- Champion Iron (CIA AU): Q4 Results Update and Future Outlook
- Yield Curve Inverts Further on Rising Recession Risk
- Why China loves Gold & a Beautiful Setup in Bitcoin
- The Week That Was in ASEAN@Smartkarma – Alfamart Uncut, CP Axtra Revealed, and Jardine Matheson
- UK Politics: Labour’s Energy Policies
Malaysia Economics: Is “Digital Tiger” Malaysia About to Roar Again?
- After a period of economic and political turbulence, Malaysia is now re-entering the spotlight, performing admirably in attracting technology-focused investments.
- The success in luring semiconductor and data centre investments is not down to pure luck; policymakers have worked hard to ensure that the country friendly to global tech business.
- If momentum on business investments and policy reform can be maintained, the country may be on the verge of a virtuous cycle that helps it escape the middle-income trap.
The Week at A Glance: Everything you need to know ahead of the FOMC and CPI
- Welcome to our concise weekly overview of key events, expectations, and positioning strategies.
- This week, we focus on the Federal Reserve meeting, US inflation data, and the crucial Bank of Japan meeting.
- As usual, the most crucial forward-looking inflation evidence is found in the NFIB report released ahead of the CPI report.
Indonesia Economics: New Capital Faces More Than Just Personnel Woes
- Reading between the lines, the resignations of two senior officials of the New Capital Authority strikes us as a de facto sacking.
- While there may be gripes with the pace of delivery in developing Nusantara, the fundamental problem remains that the economics of the new capital are unfavourable.
- Incoming president Prabowo should also not be assumed to continue placing the same priority on Nusantara as his predecessor Widodo currently does.
Champion Iron (CIA AU): Q4 Results Update and Future Outlook
- Champion Iron (CIA AU) reported an inline result for FY24, with revenue/profits up 9%/16% YoY. Q4 revenue/profits were -28%YoY/-73%YoY due to lower pricing on 60% of volumes in transit.
- The company-guided production volumes have reached the annualized 15 mnt mark, but logistics continued to be challenging in Q1. Easing is expected in August, and base case a 1.5-year destock.
- The name carries some risks trading at 7x PE FY25 (March end), but it could be one to watch in case the 65-62 spread widens.
Yield Curve Inverts Further on Rising Recession Risk
- Discrepancies between establishment and household job surveys highlight economic stress; full-time employment declines, indicating households remain stressed even as non-farm payrolls rise.
- Subsequent bond yield movements, particularly the persistent inversion of the 30Y-2Y spread, reflect investor skepticism about long-term economic stability and delayed rate cuts.
- Upcoming U.S. elections and this week’s economic reports, including the May CPI and revised Federal Reserve projections, may push rate cut expectations even further ahead.
Why China loves Gold & a Beautiful Setup in Bitcoin
- Unpredictable Corn Supply from South America The grain supply from South America, especially corn, is among the most unpredictable globally.
- During the 2022-23 season, Argentina’s corn production dropped by nearly 29% due to drought, but then surged by 26% in the 2023-24 season, influenced by the El Niño phenomenon.
- Similarly, favorable weather conditions boosted Brazil’s corn production by approximately 17% in 2022-23. However, in 2023-24, it declined by 16% due to varying weather patterns.
The Week That Was in ASEAN@Smartkarma – Alfamart Uncut, CP Axtra Revealed, and Jardine Matheson
- The past week saw insights in Sumber Alfaria Trijaya Tbk Pt (AMRT IJ), CP Axtra (CPAXT TB), and Jardine Matheson Holdings (JM SP).
- There were also macro insights on inflation in Thailand and the Philippines, a sector view on EVs in ASEAN and the 14 top picks in ASEAN from Dr. Andrew Stotz.
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.
UK Politics: Labour’s Energy Policies
- Labour’s flagship energy proposals have received a considerable amount of criticism, some of which is purely political.
- There are numerous legitimate and significant doubts about whether the party can fulfill its proposed agenda.
- This agenda is crucial for the decarbonisation process and the overall economic prospects of the UK.
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