Economy

US: Housing starts tumble from nine-year high, permits suggest strength. US homebuilding fell more than expected in Nov, tumbling from a nine-year high as construction activity declined broadly, the latest sign of slower economic growth in the 4Q. Groundbreaking on new housing projects dropped 18.7% to a seasonally adjusted annual rate of 1.09m units, the Commerce Department said. Last month's percentage decline was the largest in nearly two years, and unwound the bulk of Oct's 27.3% surge. Oct's starts were revised up to a 1.34m-unit rate, the highest since July 2007, from the previously reported 1.32m rate. (Reuters)

US: Gas prices jump 6 cents over 2 weeks to USD2.26 a gallon. The average price of regular-grade gasoline has jumped 6 cents nationally over the past two weeks, to USD2.26 a gallon. Gas in San Diego was the highest in the continental US at USD2.68 a gallon on average Friday. The low average was in El Paso, Texas, at USD1.99 a gallon. The US average diesel price is USD2.48, up 4 cents from two weeks ago. (Bloomberg)

EU: Brexit entails budget cuts for what’s left of EU, Denmark says. Without Britain’s contributions, the remaining EU members will need to get by on a smaller budget, according to Denmark. No one, including Germany, wants to fill the EUR7.6bn (USD7.9bn) hole that will be left once Britain -- a net contributor to the EU -- leaves the bloc, Danish Finance Minister Kristian Jensen said. “The EU cannot continue spending the same amount of money when one of the largest countries, one of the largest contributors, leaves,” said Jensen. (Bloomberg)

China: Must curb speculation amid bubble, top official says. China must do more to deflate a property bubble that expanded this year by "strictly" controlling speculation while also stepping up the fight to rein in excessive corporate borrowing, a top economic official said. "We need to give a higher priority to preventing and controlling financial risks," Yang Weimin, deputy director of the Office of the Central Leading Group on Finance and Economic Affairs, said. "We need to defuse a flurry of risks, contain asset bubbles, and improve oversight to ensure there won’t be a systemic financial risk." (Bloomberg)

Markets

Maybank: Sees surge in customers using contactless payments. Maybank expects its newly-launched Maybank Samsung Pay in Malaysia to boost the number of customers using contactless payments. This follows the success of the Maybank Pay launch in Malaysia in July which has seen nearly 40,000 installations of the digital wallet. Maybank group chief strategy officer Michael Foong said the bank was optimistic that more cardholders would subscribe to Maybank Samsung Pay which is the most widely-accepted contactless mobile payment service. It can be used for debit, credit and prepaid cards in numerous overseas locations too. (StarBiz)

TMC Life Sciences: Medical hub in Iskandar to begin ops by 2020. TMC Life Sciences’s integrated medical hub called Thomson Iskandar, part of the RM5bn Vantage Bay Healthcare City project in Iskandar Malaysia, Johor, is expected to begin operations by 2020. Located just off the Causeway linking Johor and Singapore, the medical hub will house a 500-bed tertiary hospital, 400 special medical suites and related health and wellness facilities. (SunBiz)

Puncak Niaga: To buy TRIplc for RM210m. Puncak Niaga Holdings has proposed to acquire TRIplc from Pimpinan Ehsan for RM210m. Puncak Niaga said the proposed acquisition entails the acquisition of the entire issued and paid-up share capital of TRIplc from Pimpinan Ehsan, free from encumbrances, together with all rights, interest, benefits, title to and entitlements. It said the rationale for the acquisition is to enhance its construction revenue and long-term growth prospects and that of its subsidiaries. (StarBiz)

Teo Guan Lee: To spend RM30m to expand range. Teo Guan Lee will spend about RM30m to expand its range of stocks next year. Group MD Toh Kian Beng said that the funds were available in trust receipts and bankers’ acceptance facilities, which the group had yet to utilise. “So we are in a good position to widen our stocks. We plan to improve the baby apparel stocks to tap the baby market, which is a growing segment. We plan to increase our outlets for the baby apparel products. The baby segment currently generates about 20% of group revenue,” Toh said. Toh said the group expected the 2HFY17 to improve over the first half. (StarBiz)

Heitech Padu: Gets RM2.34m transmission line engineering job from Tenaga. Heitech Padu has won a contract for transmission line engineering works in Kota Bahru, Kelantan, worth RM2.34m from Tenaga Nasional (TNB).The company said its unit Duta Technic SB has received the letter for the appointment. The job is for civil and structural works and supply of double circuit transmission towers to facilitate looping in and out for the proposed 132kV single circuit loop in/out into main intake substation Tunjung From Kota Bharu — Tanah Merah Transmission Line. (Financial Daily)

Construction (Neutral): Value of construction jobs down slightly, but optimism on RM200bn target. The value of construction jobs given out in the country over the past nine months declined slightly to RM97.3bn from RM98.4bn in the same period of 2015. Despite the decline in value, the Penang Master Builders and Building Materials Dealers’ Association (PMBBMDA) immediate past president Datuk Lim Kai Seng said the association was still optimistic that its targeted RM200bn in value of jobs would still be achieved. The RM97.3bn generated 3,899 jobs, compared to 5,571 created in the same period of 2015. (StarBiz)

Market Update

The FBM KLCI might start the week with a negative note after the stocks on Wall Street edged lower on Friday as investors digested last week’s Federal Reserve meeting. The focus of last week was the Fed, which increased interest rates for only the second time since the financial crisis and forecast three more rate rises next year, up from a September estimate of two. The news accelerated a bond rout that began after election day, with the 10-year Treasury yield rising above 2.6% for the first time since 2014. On Wall Street, the equities market was muted with the Dow Jones Industrial Average lost 8.83 points, or less than 0.1%, at 19,843.41, the S&P 500 declined 3.96 points, or 0.2%, to close at 2,258.07 and the Nasdaq Composite fell 19.69 points, or 0.4%, to finish at 5,437.16. Across the Atlantic, mood was better with European stocks mostly gained, lifted by drugmaker shares. German and French stocks closed at their highest levels of 2016 on Friday. Performance-wise, Germany’s DAX 30 rose 0.3% to end at 11,404.01 and France’s CAC 40 index gained 0.3% to finish at 4,833.27. Meanwhile, the UK’s FTSE 100 index gained 0.2% to 7,011.64.

Back home, the FBM KLCI index added 0.80 of a point or 0.05% to 1,637.79. Trading volume increased to 1.31bn worth RM1.81bn. However, market breadth was negative with 360 gainers as compared to 392 losers. In the region, Asian shares steadied Friday, tracking U.S. gains, with financials leading the Japan stock market to a fresh high for the year. Japan’s Nikkei Stock Average closed up 0.7%, having reached its highest level since last December at 19,439.97 earlier in the session. Elsewhere, Australia’s S&P/ASX 200 ended 0.1% lower, Korea’s Kospi finished up 0.3%, and Hong Kong’s Hang Seng Index closed down 0.2%. Chinese stock markets managed to eke out gains after early losses with the Shanghai Composite Index closing up 0.2%

Source: PublicInvest Research - 19 Dec 2016