Economy

US: Leading economic index jumps slightly more than expected in Oct. The Conference Board released a report showing its index of leading US economic indicators increased by slightly more than expected in the month of Oct. The leading economic index jumped by 0.9% in Oct after inching up by a revised 0.1% in Sept. Economists had expected the index to climb by 0.8% compared to the 0.2% uptick originally reported for the previous month. The coincident economic index increased by 0.5% in Oct after remaining unchanged in Sept. The report showed the lagging economic index also rose by 0.4% in Oct after jumping by 1.0% in the previous month. (RTT)

US: Fed's Evans, erstwhile dove, says may need 2022 rate hike. Chicago Federal Reserve President Charles Evans, one of the US central bank's most reliable policy doves, said he is "open-minded" to adjustments in monetary policy next year, if inflation continues to stay high. That's not, he said, his expectation, given his view that price pressures will ease next year as supply chains get repaired and consumer demand now concentrated on goods shifts to services in what would be a return to a more normal economic balance. (Reuters)

US: Weekly jobless claims nearly unchanged at pandemic-era low. First-time claims for US unemployment benefits were nearly  unchanged in the week ended Nov 13th, according to a report released by the Labor Department. The initial jobless claims edged down to 268,000, a decrease of 1,000 from the previous week's revised level of 269,000. Economists had expected jobless claims to dip to 260,000 from the 267,000 originally reported for the previous week. With the slight decrease and the revision to the previous week's number, jobless claims once again hit their lowest level since the week ended March 14, 2020. (RTT)

US: Philly Fed Index indicates significantly faster growth in Nov. A report released by the Federal Reserve Bank of Philadelphia showed a significant acceleration in the pace of growth in regional manufacturing activity in the month of Nov. The diffusion index for current activity jumped to 39.0 in Nov from 23.8 in Oct, with a positive reading indicating growth. Economists had expected the index to inch up to 24.0. The much bigger than expected increase by the headline index was partly due to a substantial acceleration in the pace of growth in new orders, as the new orders index spiked to 47.4 in Nov from 30.8 in Oct. (RTT)

EU: France needs long-term spending rule to restore finances - OECD. France needs a multi-annual spending rule to bring its post COVID public finances under control, the Organisation for Economic Cooperation and Development said as it raised its growth forecasts. The recovery has surpassed most expectations this year as consumer spending bounded back following a mass vaccination campaign. Growth is now set to reach 6.8% this year and 4.2% in 2022, the OECD said. It had previously pencilled in forecasts of 6.3% this year and 4.0% next year. With public spending already among the highest the world at nearly 60% of GDP, France needed a multi-annual spending rule. (Reuters)

China: Central bank governor says still unclear if inflation pressure transitory. China’s central bank governor Yi Gang said that global inflation has increased sharply and whether this inflation pressure is transitory still remains under debate. New variants of (the) COVID virus could undermine the effectiveness of vaccines, affecting economic activities and disrupting supply chains. Prolonged mismatch of supply and demand will hinder a long-term economic recovery. China had staged an impressive rebound from last year’s pandemic slump, but has since lost momentum as it grapples with a slowing manufacturing sector, debt problems in the property market and COVID-19 outbreaks. (Reuters)

South Korea: Producer prices jump 0.8% in Oct – BoK. Producer prices in South Korea were up 0.8% on month in Oct, the Bank of Korea said, accelerating from 0.4% in Sept. Individually, process for agricultural, forestry and marine products tumbled 4.7% on month, while manufacturing products rose 1.8%, utilities gained 2.3% and services were flat. On a yearly basis, producer prices spiked 8.9%, up from 7.6% in the previous month. Individually, process for agricultural, forestry and marine products gained 2.6% on year, while manufacturing products rose 15.4%, utilities gained 6.2% and services were up 2.4%. (RTT)

Indonesia: Central bank keeps rate unchanged. Indonesia's central bank left its key interest rate unchanged for the ninth consecutive meeting. The board of governors of Bank Indonesia decided to hold the BI 7-Day reverse repo rate at 3.50%. The previous change in the rate was a quarter-point reduction in Feb. The deposit facility rate was maintained at 2.75% and the lending facility rate at 4.25%. The board reiterated that the decision was in line with the need to maintain stability in the exchange rate and financial system, amidst low inflation forecasts and efforts to support economic growth. (RTT)

Markets

TNB (Outperform, TP: RM12.42): Plans RM22bn investment for 2022-2024 to further develop 'grid of the future'. Tenaga Nasional (TNB) plans to invest RM22bn in 2022 to 2024 under the Incentive-Based Regulation (IBR) framework, subject to government approval, to continuously develop the grid of the future into a key enabler of the energy transition. In support of the country’s goal to shift from using fuel to 31% renewable energy (RE) by 2025, the national grid must be ready to receive RE to support dynamic two-way energy flows while maintaining voltage stability. (The Edge)

Kejuruteraan Asastera: Bags three jobs worth RM55.72m. Kejuruteraan Asastera’s (KAB) and Energy Optimisation (Thailand) Co (EOT) have bagged three new projects worth RM55.72m for grid connected photovoltaic (GCPV) solar systems. The projects have an estimated aggregate capacity of 4,537 kWp in Thailand. (BTimes)

Datasonic: Secures extensions to passport supply contracts. Datasonic Group has received extensions on its contracts for the supply of Malaysian passport chips, documents and polycarbonate biodata pages to the Home Affairs Ministry. The original three contracts, awarded to Datasonic Group, had been extended for 24 months from 30 Nov 2021 to 30 Nov 2023. (StarBiz)

KNM: Misses Thai bond payments amid pandemic challenges. KNM Group has missed principal and coupon payments on bonds issued in Thailand worth THB2.78bn (RM352.57m) which matured on 18 Nov. The oil and gas equipment and services group blamed this on the challenges arising from Covid-19 and the unfavourable operating conditions of its subsidiary Impress Ethanol Co (IECL), which operates an ethanol plant in Thailand. (The Edge)

GDB: 3Q profit at RM6.4m. GDB Holdings’s net profit fell 14.4% to RM6.4m in the 3Q ended 30 Sept, against RM7.48m a year ago on the back of lower revenue. Additionally, the group faced rising construction material prices, various costs incurred during the full Movement Control Order (FMCO) and Covid-19 standard operating procedure compliance costs. GDB’s revenue decreased by 7.97% to RM88.27m from RM95.91m for the corresponding quarter last year mainly due to the imposition of FMCO. (StarBiz)

ELK-Desa: Net profit falls more than half. Elk-Desa Resources’s net profit for the 2Q ended 30 Sept fell more than half to RM4.75m from RM10.79m a year ago. The decline in performance was predominantly due to business disruptions during the full lockdown imposed between June and Sept 2021. (StarBiz)

NCT Alliance: Net profit soars sixfold. NCT Alliance's net profit jumped sixfold to RM8.04m in the 3Q ended 30 Sept 2021 from RM1.23m a year earlier, on the back of improved revenue. NCT Alliance revenue rose 31% to RM26.3m from RM20.1m a year ago. For the first nine months, the company's net profit grew 1.95% to RM17.6m from RM0.9m in last year's corresponding period. (BTimes)

MISC: 3Q profit surges 55% to RM401m. MISC net profit surged 55.0% to RM401.00m in the 3Q ended 30 Sept 2021 from RM258.30m a year ago on the back of higher contribution from liquified natural gas (LNG) asset solutions, offshore business and marine and heavy engineering segments. (BTimes)

Market Update

The FBM KLCI might open lower today after emerging market equities fell for the second consecutive session as concerns over high global inflation added to nerves about a Chinese slowdown and tighter financing conditions rippling out from the US. The FTSE emerging index, a broad barometer of developing nations’ shares, fell about 0.9% on Thursday in US dollar terms. The moves came after Turkey’s central bank cut interest rates for the third time in three months, sparking concerns about its methods for dealing with spiralling inflation. In India, shares in Paytm owner One Communications fell 27% following its $2.5bn initial public offering. The Stoxx Europe 600 share index closed 0.5% lower, as energy and mining groups underperformed. London’s FTSE 100 dropped by the same amount. Wall Street was mostly unaffected, with the broad-based S&P 500 index rising 0.3% higher to set a record closing high, although it remained below its all-time intraday high set earlier this month. The technology-focused Nasdaq Composite index was 0.5% higher at the bell.

Back home, Bursa Malaysia finished trading on an easier note on Thursday, dragged down by losses in glove, banking, and gaming counters, and in sync with most key regional bourses. At 5pm, the benchmark FBM KLCI was down 1.34 points to 1,523.79, having fluctuated between 1,519.91 and 1,525.12 throughout the day. Regionally, the Singapore Straits Times Index rose 0.12%, the South Korean Kospi shed 0.51% while Shanghai’s SSE eased 0.47%. Elsewhere, Japan’s Nikkei was 0.3% easier and Hong Kong’s Hang Seng Index shed 1.29%. In China, investors have been spooked by Beijing’s apparent unwillingness to prop up the nation’s economically significant real estate sector and liquidity issues at many developers.

Source: PublicInvest Research - 19 Nov 2021