Economy

US: Economic growth slows more than expected in 3Q. US economic growth slowed dramatically in the 3Q, according to preliminary data released by the Commerce Department. The real GDP increased by 2% in the 3Q after jumping by 6.7% in the 2Q. Economists had expected the pace of GDP growth to slow to 2.7%. The bigger than expected slowdown in GDP growth came as consumer spending rose by just 1.6% in the 3Q after spiking by 12% in the 2Q. (RTT)

US: Pending home sales unexpectedly fall in Sept. Contracts to buy US previously owned homes unexpectedly fell in Sept likely as some potential buyers delayed purchases amid higher prices. The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, decreased 2.3% last month to 116.7. Pending home sales fell in all four regions. Economists had forecast contracts, which become sales after a month or two, would be unchanged. (Reuters)

US: Weekly jobless claims once gain dip to pandemic-era low. First-time claims for US unemployment benefits decreased for the fourth straight week in the week ended Oct 23rd, the Labor  Department revealed in a report. The initial jobless claims dipped to 281,000, a decrease of 10,000 from the previous week's revised level of 291,000. Economists had expected jobless claims to come in unchanged compared to the 290,000 originally reported for the previous week. (RTT)

EU: ECB leaves rates unchanged. The European Central Bank left its key interest rates and its forward guidance on asset purchases unchanged, in line with expectations, amid concerns over high inflation. The Governing Council, led by ECB President Christine Lagarde, left its key interest rate, the main refinancing rate, unchanged at zero, the deposit rate at -0.50% and the marginal lending rate at 0.25%. (RTT)

EU: Inflation likely to ease next year. European Central Bank President Christine Lagarde said that inflation is set to remain higher for longer than expected, but it is temporary and price growth is set to ease over the course of next year. The ECB expects Eurozone inflation, which hit a 13-year high of 3.4% in Sept, to rise further this year. Core inflation accelerated to 1.9% in Sept. (RTT)

EU: German labour market continues post-pandemic recovery. German unemployment fell more than expected in Oct, official figures showed, showing that companies in Europe’s largest economy were firmly on a post-pandemic hiring spree despite supply bottlenecks that have hurt manufacturers. The Labour Office said the number of people out of work fell by 39,000 in seasonally adjusted terms to 2.466m. A poll had forecast a fall of 20,000. The seasonally adjusted jobless rate dropped to 5.4%. (Reuters)

EU: Germany consumer price inflation fastest since 1993. Germany's consumer price inflation accelerated the most since 1993, largely driven by higher energy prices, preliminary data from Destatis showed. Consumer price inflation advanced to 4.5% in Oct from 4.1% in Sept. The rate was also above economists' forecast of 4.4%. A similar higher price growth was last seen in Oct 1993. The harmonized index of consumer prices grew 4.6% after climbing 4.1% in Sept. The expected rate was 4.5%. (RTT)

Japan: Bank of Japan maintains monetary stimulus; cuts FY2021 GDP outlook. The Bank of Japan maintained its monetary stimulus and downgraded its growth outlook for the current fiscal year as supply-side constraints dampened production and exports amid weak consumption. The board, governed by Haruhiko Kuroda, voted 8-1, to hold the interest rate at -0.1% on current accounts that financial institutions maintain at the central bank. (RTT)

Japan: Sept retail sales decline for a second month. Japan’s retail sales fell for a second month in Sept as consumers limited spending amid concerns over the coronavirus pandemic, reinforcing expectations the world’s third-largest economy stalled in the 3Q. Retail sales in Sept slipped 0.6% from the same month a year earlier, government data showed, better than economists’ median forecast for a 2.3% decline in a poll. (Reuters)

South Korea: Business sentiment steady in Oct – BoK. Business confidence in South Korea was little changed in Oct, the Bank of Korea said. Business Survey Index on business conditions in the manufacturing sector posting a score of 90, unchanged from the Sept reading. The outlook fell from 93 to 88. In the non-manufacturing sector, the BSI on business conditions for Oct was 84, up 5 points from the previous month, and that for the outlook for the following month also rose by 4 points to 85. (RTT)

Markets

Leon Fuat: Making sustainable energy charge. Leon Fuat is making its move towards having sustainable energy powering production operations through an investment in solar panels. The company is involved primarily in trading, processing and manufacturing of steel products. A total of RM5.26m is being invested for solar panels as part of its sustainability initiatives. These panels will be gradually installed in stages depending on the readiness of project sites. (The Edge)

Southern Cable: Targets to ride on 5G network expansion. Southern Cable Group is targeting to ride on higher demand for cables and wires, as the nation embarks on its infrastructure growth and 5G network expansion plans. Currently the company has secured a rectifier system supply contract worth RM30.4m from Telekom Malaysia (TM). (The Edge)

Maxim Global: To buy land in Setapak for RM25.7m. Maxim Global is buying a piece of leasehold land measuring 9,775 sq metres in Setapak for RM25.7m. The purchase will enable the group to further supplement its existing land bank at strategic locations with potential growth. (The Edge)

Kanger: To distribute Sinopharm's Covid-19 testing solutions. Kanger International has entered into a heads of agreement (HoA) with Sparmak Medical Equipment Trading LLC to distribute Sinopharm's Covid-19 testing solutions using OXLAMP technology in Malaysia. Kanger will make an initial purchase of 1m Covid-19 testing solutions and corresponding diagnostic devices, with deliveries expected to commence as soon as Nov. (The Edge)

EP Manufacturing: Appoints two new directors. EP Manufacturing (EPMB) has appointed two new directors to its board as it seeks to undertake a new business agenda to turnaround the prospect of the company. (StarBiz)

Ancom: Net profit jumped threefold to RM9m in 1Q FY22. Ancom net profit jumped nearly threefold to RM9.0m in the 1QFY22 from RM3.1m YoY. Ancom's revenue for the quarter rose by 16.9% YoY to RM404.7m from RM346.1m YoY. Stronger performances led to the increase in its chemicals businesses due to higher global commodity prices. (BTimes)

BAT: Net profit for 3Q increased 23.43% to RM78.68m. British American Tobacco (Malaysia)'s (BAT) net profit increased 23.43% to RM78.68m in the 3Q ended 30 Sept 2021, from RM63.74m YoY, boosted by an increase in market share. Revenue in the same quarter decreased marginally by 2.31% to RM613.02m from RM627.52m YoY. (BTimes)

Chin Teck: 4Q net profit jumps 21% to RM17m as higher ASPs offset lower sales volume. Chin Teck Plantations saw its net profit for the 4Q ended 31 Aug 2021 jump 20.59% to RM16.54m from RM13.71m YoY, mainly due to significant improvement in the group’s revenue. (The Edge)

IPO: Furniture maker Ecomate IPO's Malaysian public portion oversubscribed by about 99 times. The Malaysian public portion of Ecomate Holdings’s initial public offering (IPO) was oversubscribed by about 98.94 times ahead of the furniture maker's listing on Bursa Malaysia's ACE Market. (The Edge)

Market Update

US markets continued on their upward moves despite mixed economic data releases on the day. 3Q 2021 GDP came in at 2.0%, below expectations of 2.8% though initial jobless claims numbers last week came in at 281,000 and ahead of forecasts. Strong earnings reports, notably from the likes of Ford, Merck and Caterpillar continued to bolster sentiment. The Dow Jones Industrial Average gained 0.7%. The S&P 500 and Nasdaq Composite added on 1.0% and 1.4%, both incidentally closing at record-highs. European markets were mixed as investors digested earnings reports amid news that the European Central Bank is leaving its rates and monetary policy stance unchanged despite recent inflationary pressures. France’s CAC 40 jumped 0.8% higher though Germany’s DAX and UK’s FTSE 100 both slipped 0.1%. Asian markets were mostly lower earlier in the day in line the weak overnight session on Wall Street. The Bank of Japan also kept its kept interest rate targets unchanged though it cut real GDP growth outlook and consumer inflation forecasts for fiscal year 2021. The Nikkei 225 fell 1.0%. Elsewhere, the Shanghai Composite and Hang Seng indices lost 1.2% and 0.3% respectively.

The FBM KLCI slumped 1.0% ahead of the Budget 2022 announcement later today. Yinson Holdings is said to be back in the race for Petrobras’ floating production, storage and offloading (FPSO) vessel contract in the Parque das Baleias field offshore Brazil. Southern Cable Group is targeting to ride on higher demand for cables and wires, as the nation embarks on its infrastructure growth and 5G network expansion plans meanwhile.

Source: PublicInvest Research - 29 Oct 2021