Hi all, welcome to this week’s Fresh Off The Oven (FOTO) newsletter where we talk everything about economies and markets around the world. This is for the week of 29 July – 2 August.

This is a free version of the newsletter. Consider subscribing to our paid Substack for the full content on this.

Markets Fresh from the Oven

Malaysia (FBMKLCI): Flat like my che – I mean, the Malaysian market was relatively flat for the week, dropping by 0.1%.

United States (S&P500): Paint the town red. The S&P500 index declined by 2.1% for the week to 5,347 as the recession boogeyman rears its head.

China (HSCEI): The Chinese markets remain weak. The Hang Seng China Enterprise Index (HSCEI) declined by 0.6% to 5,975 for the week as manufacturing remains weak.

Slicing the Economic Pie

This week, we take some economic slices from both the United States and China.

United States: More people seem to be jobless in the United States. Initial jobless claims increased to 249k for the week from 235k previously. And this is bad news. The unemployment rate had also unexpectedly increased to 4.3% in June 2024 from 4.1% in May 2024 – the highest it has been since 4.6% in October 2021.

China: It’s a week of PMIs. There’s the government one, and then there’s the Caixin one. The government manufacturing PMI shows that things are still not that great at 49.4 points, and the Caixin manufacturing PMI went down even worse to 49.8 points in July 2024 (June 2024: 51.8).

Pie in the Sky?

Two Malaysian stocks have soared last week – Sime Darby and Mr. DIY

Sime Darby Property (+5%): Sime Darby is on a winning streak. Its share price rose by 5% for the week, and it can do no wrong for the year.

Mr. DIY (+4%): It has risen by 45.9% since the beginning of the year, and most importantly, it has crawled out of its RM1.60 hell (that’s its listing price).

Digging the Bottom of the Barrel

This week, we highlight two Malaysian stocks that have traded at cheap valuations.

Berjaya Corp: Ah, Starbucks. Seems like the news of Berjaya trying to bring Berjaya Foods private isn’t going so well. It is now trading at a paltry price-to-earnings ratio of 4.5 times.

Hibiscus Petroleum: Hibiscus Petroleum was originally a Special Purpose Acquisition Company or SPAC. Their mandate was to acquire oil & gas assets initially and be profitable down the line.