Economy

US: Rate hike benchmarks could be cleared in 2022. The Fed could clear its benchmarks for raising interest rates next year with jobs restored to where they were before the pandemic and inflation already pushing beyond comfortable levels. While the Fed remains a ways away from considering raising interest rates if current outlook for the economy proves correct then the “necessary conditions for raising the target range for the federal funds rate will have been met by year-end 2022. (Reuters)

EU: Inflation to subside, debt must fall but without hurting growth. EU finance ministers agreed that the current surge in consumer prices would subside next year and that high public debt created by the pandemic had to be reduced, but in a way that would not hurt economic growth. Inflation rose 4.1% YoY last month in the 19 countries sharing the euro, up from 3.4% in Sept and the ministers are starting to worry that the rise might fuel stronger wage growth, creating an inflationary spiral. While the increase in prices is largely due to temporary factors, this increase is more persistent than anticipated due to the strength of the recovery but continue to expect their changing and lessening over 2022 and into 2023. (Reuters)

EU: Eurozone sentix investor confidence unexpectedly improves. Eurozone investor confidence improved unexpectedly in Nov driven by the rebound in expectations. The investor sentiment index advanced to 18.3 in Nov from 16.9 in Oct. The reading was forecast to fall to 15.5. Moreover, the indicator rose for the first time since July 2021 despite a fall in the current situation. The current situation index dropped to 23.5 in Nov from 26.3 in Oct. This was the lowest reading since June 2021. Meanwhile, the expectations index climbed to 13.3 from 8.0 in the previous month. Supply bottlenecks and high inflation are causing problems for companies and are having a certain braking effect. However, investors only expect a temporary burden and are therefore somewhat more confident about the next 6 months. (RTT)

EU: German retailers optimistic about Christmas sales . German retailers are expecting Christmas sales to rise 2% to EUR111.7bn (USD129.06bn) despite inflation, delivery problems and a new wave of coronavirus infections. High levels of saving and strong consumer sentiment point to a forgiving end to the year after what was for many retailers a difficult first six months due to lockdowns that threatened their existence. Online sales, which are expected to grow by 17.3%, to EUR23.1bn (USD26.69bn), are expected to save Christmas. The positive outlook comes even as German retailers are staring down the same factors that are hampering other industries: About three quarters of the companies surveyed by HDE for their forecast said supply bottlenecks could hurt their sales. Consumer electronics and household appliances may feel the pinch of the global chip shortage, but Genth said that beyond popular video game consoles, it will not lead to empty shelves. (RTT)

EU: French economy on course for 0.75% 4Q growth. France’s economic rebound is set to moderate in the 4Q with most firms seeing further improvement despite persisting supply-chain and staffing difficulties. The eurozone’s second biggest economy is set to grow 0.75% in the 4Q. Last week the economy grew 3.0% in the 3Q, which surpassed the Bank of France’s forecast for 2.3% as the economy returned faster than expected to pre-crisis levels of activity. Firms participating in the business climate survey said they expected business conditions to keep improving this month in the services sector and cool slightly in industry and construction. The share of executives in the industrial sector reporting supply problems stabilised from Oct at 56%, though the proportion was as high as 86% in the automobile sector. It fell in the construction sector for the first time in months, easing back to 58% from 62% in Oct. (Reuters)

Japan: Leading index falls in Sept. Japan's leading index decreased in Sept. The leading index, which measures the future economic activity, fell to 99.7 in Sept from 101.3 in Aug. This was the lowest since Feb, when it was 98.9. The coincident index decreased to 87.5 in Sept from 91.3 in the previous month. This was the lowest since Sept last year. The lagging index declined to 94.9 in Sept from 94.1 in the prior month. In July, the index was 95.2. (RTT)

Singapore: Retail sales grow in Sept. Singapore retail sales grew in Sept. Retail sales grew 6.6% YoY in Sept, after a 2.8% fall in Aug. Motor vehicle sales declined 2.0% annually in Sept, following a 17.5% fall in the previous month. Excluding motor vehicles, retail sales 8.3% yearly in Sept, after remained unchanged in the preceding month. Singapore retail sales grew in Septr, data from the Department of Statistics showed. Sales of computer and telecommunications equipment gained 66.1% and those of petrol service stations rose 22.3%. Sales of watchers and jewelry, and food and alcohol increased by 13.3% and 7.2%, respectively. Sales of cosmetics, toiletries and medical goods, and wearing apparels and footwear rose by 7.1% and 6.9%, respectively. On a monthly basis, retail sales rose 6.0% in Sept, after a 0.6% fall in the prior month. (Reuters)

Markets

MYEG: Gets green light from JPJ to set up automated training and driving test system. MY EG Services Bhd (MYEG) has received approval from the Road Transport Department (JPJ) to commence the proof of concept (POC) to set up an automated training and driving test system. The POC is designed to assess the competencies of candidates going through the driver training curriculum. (The Edge)

UWC: Acquires 4.9ha land at Batu Kawan Industrial Park for RM28.96m. UWC has signed a sales and purchase agreement with Penang Development Corp (PDC) to acquire a 4.9ha land at Batu Kawan Industrial Park, Penang, for RM28.96m. The acquisition would be funded via internally generated funds and is expected to be completed by 2021. (BTimes)

Ta Win: Acquires industrial land in Port Klang for RM35m. Ta Win Holdings signed a conditional sale and purchase agreement with BRB Properties SB to acquire leasehold industrial land with factory buildings in Westport, Port Klang, for RM35m. The acquisition was a strategic expansion plan for the company and was reached on a willing-buyer willing-seller basis after considering the land's market value. (BTimes)

Ireka Corp: Bags RM45.77m contract in Terengganu. Ireka Corp has bagged a RM45.77m contract from Wanland Metro SB to construct the infrastructure and associated works at Bukit China, in Terengganu. The contracts include the construction for 68 units one-storey terrace houses type A, 280 units one-storey terrace houses type B, eight units shophouses, community hall, surau and kindergarten. (BTimes)

Perak Corp: Inks agreements to settle RM88.59m debts with CIMB Bank, Affin Islamic Bank. Perak Corp has inked two agreements to settle debts amounting to RM88.59m with its creditors. The company had entered into the debt settlement agreements with CIMB Bank and Affin Islamic Bank to settle its respective debts of RM34.72m and RM53.87m with the banks. (The Edge)

Bertam Alliance: Secures RM16m contract in Sabah. Bertam Alliance has been awarded a contract worth RM15.76m for repair and improvement works for the non-revenue water programme in Sabah. It has received a letter of award from Wijaya Daya SB for the design, manufacture and installation of a stainless steel tank for the programme. The project will run for 4.5 months, starting from Nov 15, 2021. (The Edge)

Pecca: Cancels RM100m stake buy in PPE supplier Rentas Health as it shelves healthcare diversification. Pecca Group has cancelled its proposed acquisition of 51% equity interest in personal protective equipment (PPE) supplier Rentas Health SB to seek different methods of collaboration by entering into a mutual rescission and release agreement with the latter. (The Edge)

JF Technology: Propose plans to transfer to main market. JF Technology has proposed to transfer the listing and quotation of the entire issued share capital and the outstanding warrants from the ACE market to the main market of Bursa Malaysia. The company had met the criteria for the transfer, including profit track record requirements, a healthy financial position and liquidity, and an adequate public shareholding spread. (BTimes)

Market Update

The FBM KLCI might open higher today after the S&P 500 on Monday completed its longest streak of all-time closing highs since 1997, with market sentiment buoyed by strong corporate earnings and big central banks affirming their easy monetary policies. The blue-chip index inched up 0.1%, enough to mark an eighth straight record close. The technology-focused Nasdaq Composite also closed 0.1% higher. Strong gains in sectors sensitive to economic growth and commodity prices were enough to outweigh the drag of Tesla, which fell 4.9% after chief executive Elon Musk polled Twitter followers on whether to sell more than $20bn worth of shares in the carmaker. Earnings in Europe have also been strong, with total quarterly earnings from companies listed on the Stoxx Europe 600 share index beating forecasts by 7% so far, according to Goldman Sachs. On Monday, the Stoxx closed roughly flat.

Back home, Bursa Malaysia ended mixed on Monday with the barometer index closing higher as consistent buying support from the consumer products and services as well as plantation counters halted the downtrend. At 5pm, the benchmark FBM KLCI rose 3.68 points to 1,535.41 from Friday's close of 1,531.73. In the region, the Shanghai Composite gained 0.20%, while the Hang Seng led the Nikkei 225 lower. They fell 0.43% and 0.35% respectively.

Source: PublicInvest Research - 9 Nov 2021