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...
Oil prices began the week on a positive note, buoyed by expectations of further US policy support for global economic growth following cooling inflation data.
Brent crude futures rose by 0.4% to $73.20 per barrel, while US West Texas Intermediate (WTI) crude futuresclimbed 0.5% to $69.77 per barrel by early trading on Monday.
Drivers of the Oil Price Recovery
- Cooling Inflation: US inflation data showed signs of easing, alleviating concerns about the Federal Reserve's hawkish stance and raising hopes for further policy support in 2025.
- US Senate Action: Legislation passed by the US Senate to avert a government shutdown over the weekend added to market optimism.
- European Supply Stability: The Druzhba pipeline, a major conduit for Russian and Kazakh oil to Europe, resumed operations after a brief technical halt, easing supply concerns.
Challenges for Oil Markets
- China's Oil Demand Forecast: Research from Sinopec indicated that China's oil consumption is expected to peak in 2027, adding to concerns about long-term demand.
- Geopolitical Tensions: US President Donald Trump urged the European Union to increase imports of American oil and gas, threatening tariffs on European exports if demands are not met. Trump also made controversial remarks about reasserting US control over the Panama Canal, drawing criticism from Panama's President.
- Rig Activity: The number of operating US oil rigs rose by one to 483 last week, the highest count since September, signaling potential increases in US oil supply.
Market Outlook
Despite last week’s over 2% decline in oil prices, market sentiment has improved, with risk assets like crude oil and equities showing a firmer footing. Analysts are closely monitoring geopolitical developments and the Federal Reserve's policy signals for further direction in the weeks ahead.
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