The electronics manufacturing services (EMS) sector in Malaysia has seen mixed performance in 2024 despite being part of the broader tech upcycle, with rising costs, inflation, and supply chain disruptions offsetting growth from increased global demand and outsourcing trends. Key EMS Performances Winners : SKP Resources Bhd (+76% YTD) V.S. Industry Bhd (+47% YTD) NationGate Holdings Bhd (+51% YTD) P.I.E. Industrial Bhd (+29% YTD) Strugglers : ATA IMS Bhd (-8% YTD) JHM Consolidation Bhd (-36% YTD) Growth Drivers and Challenges Diversification Opportunities : The China+1 and Taiwan+1 strategies have positioned Malaysian EMS players to gain market share. However, reliance on major customers, such as Dyson, continues to be a concern. Cost Pressures : High inflation and production costs have affected profit margins. Company Highlights SKP Resources : Recorded a 27% y-o-y net profit increase , benefiting from a recovery in consumer demand. V.S. Indust...
The yen hit a three-month low on Monday after Japan's ruling Liberal Democratic Party (LDP) lost its parliamentary majority, while oil prices tumbled following Israel's weekend airstrike on Iran, which avoided oil or nuclear targets.
Japan's Nikkei index, which initially dropped, later rebounded by 1.6%, while the yen fell 0.5% to 153.3 per dollar, marking its weakest point in three months. The LDP and its junior coalition partner, Komeito, won only 215 lower-house seats in Sunday’s election, falling short of the 233 seats needed for a majority. This election result raised concerns that any new government could lean towards more dovish economic policies, further weakening the yen.
Oil prices dropped sharply, with Brent crude futures falling 4.2% to trade as low as US$67.80 a barrel. Israel's airstrikes, which were in response to an Iranian missile attack, targeted missile factories and other sites near Tehran, without disrupting energy supplies.
In broader markets, the US dollar continued its upward momentum, on track for its largest monthly rise in over two and a half years. The strengthening dollar was driven by positive signs in the US economy and the prospect of a Donald Trump presidency, which has pushed US Treasury yields higher.
Benchmark 10-year Treasury yields rose to 4.23%, gaining 43 basis points in October, while European bunds and UK gilts saw smaller rises of 16 and 23 basis points, respectively.
Market expectations for a Federal Reserve (Fed) rate cut in November have diminished, with almost no chance of a cut being priced in, according to the CME's FedWatch tool.
Meanwhile, the euro held steady at US$1.0796, though it was down 3% for October, and the New Zealand dollar has dropped nearly 6% this month due to dovish central bank policies and weak economic stimulus from China.
Looking ahead, US stock futures rose 0.5% as investors brace for a big week of earnings reports from major tech companies, including Alphabet, Microsoft, Meta, Apple, and Amazon. The upcoming US jobs report on Nov 1 and inflation data from Europe and Australia will also be key factors as investors assess whether a stronger-than-expected economy might lead to fewer interest rate cuts.
In commodities, gold, which hit record highs last week, hovered just below those levels at US$2,736 an ounce.
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