Economy

EU: Private sector expansion accelerates unexpectedly . Eurozone private sector growth improved unexpectedly in Nov after slipping to a six-month low in October, flash survey data from IHS Markit showed. The composite output index rose to 55.8 in Nov from 54.2 in Oct. The reading was expected to fall to 53.2. The stronger expansion in the private sector is unlikely to prevent the Eurozone from suffering slower growth in the fourth quarter, especially as rising virus cases look set to cause renewed disruptions to the economy in December.(RTT)

EU: Germany private sector growth improves in Nov. Germany's private sector grew at a faster pace in Nov, although the upturn was only moderate amid subdued manufacturing growth, flash survey results from IHS Markit showed. The composite output index climbed to 52.8 in Nov from 52.0 in the previous month. The reading was forecast to fall to 51.0. Output was again weighed on by supply delays in Nov. (RTT)

UK: BoE's Haskel says interest rates to rise if labor market stays tight. UK interest rates would have to be raised if the labor market stays tight, Bank of England Policymaker Jonathan Haskel said. "Even though much of the current inflation is due to outside forces such as energy prices, but the labor market is tight and we have to be vigilant," the banker said. If the labor market stays tight, Bank Rate will have to rise, he said. (RTT)

China: Slowdown tests central bank amid debate over easing . China’s marked economic slowdown in the second half of the year is testing the central bank’s policy mettle and dividing economists over whether more aggressive action is needed to avoid a deeper downturn. The PBOC has to juggle multiple economic risks, pulling policy in different directions. Growth is heading for lows not seen since 1990 if last year’s pandemic year is excluded -- factory-gate inflation is soaring. (Bloomberg)

Singapore: Oct core inflation up 1.5%, biggest jump in nearly three years . Singapore's key price gauge rose by the fastest pace in nearly three years in Oct, mainly driven by higher services and food inflation. The core inflation rate — the central bank's favoured price measure — rose to 1.5% in Oct on a YoY basis, compared with 1.2% in the prior month, the Monetary Authority of Singapore (MAS) said in a statement (Reuters)

South Korea: Business confidence index holds at 90 in Nov . Business confidence in South Korea was steady in Nov, the latest survey from the Bank of Korea showed with a Business Survey Index (BSI) core of 90 - unchanged from the Oct reading. The outlook was also unchanged at 88. In the non-manufacturing sector, the BSI on business conditions for Nov was 83, down 1 point from the previous month, and that for the outlook for the following month fell by 2 points to 83. (RTT)

Australia: Manufacturing sector accelerates in Nov – Markit . The manufacturing sector in Australia continued to expand in Nov, and at a faster pace, the latest survey from Markit Economics showed with a manufacturing PMI score of 58.5. That's up from 58.2 in Oct and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Growth of manufacturing output and new orders accelerated in November amid reports of a further reopening of the Australian economy while market confidence improved alongside better COVID-19 conditions. (RTT)

Markets

Serba Dinamik (Neutral, TP: RM0.31): Bursa seeks court order to compel Serba Dinamik to disclose update on independent review factual findings. Bursa Malaysia Securities is seeking a court order to force Serba Dinamik Holdings to disclose the factual findings of the special independent review conducted by EY Consulting on its financial accounts. (The Edge)

MISC: Debuts on Dow Jones Sustainability Emerging Markets Index. MISC has made its debut as a constituent of the Dow Jones Sustainability Indices (DJSI) under the Emerging Markets category, making it the only Malaysian transportation sector company listed under the category. (The Edge)

Ta Win: Begins construction on electron beam irradiation plant. Copper product manufacturer Ta Win Holdings has commenced construction on Malaysia's first local privately owned electron beam irradiation plant. The facility will be located at the subsidiary Cyprium Wire Technology existing manufacturing facilities in Alor Gajah Industria Estate in Melaka and is targeted for completion by April 2022. (The Edge)

Boustead Plantations: Net profit surged to RM95.56m in 3Q driven by higher palm product prices. Boustead Plantations's (BPB) net profit surged to RM95.56m in the 3Q ended 30 September 2021, from the RM17.97m recorded in the same quarter a year ago. Revenue in the same quarter increased 42.8% to RM293.77m from RM205.68m. (BTimes)

Power Root: Posts 2Q net profit of RM5.6m, dividend Of 1.2 sen. Power Root recorded a net profit of RM5.6m in the 2Q of its financial year ending 31 March 2021, compared to a net profit of RM8.45 in the previous corresponding quarter due to higher advertising and marketing expenses. The group declared a dividend of 1.2 sen per share, which brought year-to-date payout to 1.7 sen per share. (StarBiz)

Leong Hup: Falls into the red in 3Q on margin compression. Leong Hup International posted a net loss of RM53.42m in the 3Q ended 30 Sept 2021, compared to a net profit of RM22.53m in the same quarter in the previous year. EBITDA from livestock and other poultry-related products decreasd 350.6% due to the lower average selling price (ASP) of broiler chickens in Vietnam and margin compresion from the general increase in input cost of feed, which could not be passed on due to weaker demand from the Covid-19 pandemic. (StarBiz)

Batu Kawan: 4QFY21 net profit more than triples, lifting annual profit to record high of RM1.15bn. Batu Kawan posted a 262% spike in its net profit to RM308.04m for the 4QFY21, from RM85.17m in the previous year’s corresponding quarter, helped by higher crude palm oil (CPO) and palm kernel (PK) prices. Quarterly revenue grew 50% to RM6.16bn, from RM4.12bn. (The Edge)

Takaful Malaysia: 3Q net profit drops 12%, revenue hit by lower family takaful sales. Syarikat Takaful Malaysia Keluarga saw a 11% drop in net profit to RM72.6m for the 3Q ended 30 Sept 2021, from RM82.6m a year ago, due to a lower net wakalah fee income. Quarterly revenue fell 9% to RM648.32m from RM753.47m, mainly attributable to lower sales generated from family takaful. (The Edge)

Market Update

The FBM KLCI might open with a negative note after global stocks dropped on Tuesday led by a slide in technology shares, as traders weighed Jay Powell’s nomination for a second term as Federal Reserve chair and the further surge of coronavirus cases across Europe. The tech-focused Nasdaq Composite index closed 0.5% lower, while Wall Street’s blue-chip S&P 500 index closed 0.2% higher. The share gauges had ended Monday’s session down 1.3% and 0.3% respectively. The FTSE All World index finished lower for a third consecutive day, falling 0.2%. Since fast growing tech stocks are often more sensitive to changes in interest rate policy, they have moved dramatically as traders have started to bet on more hawkish policy from the US central bank under Powell. In Europe, the regional Stoxx 600 index closed down 1.3%.

Back home, Bursa Malaysia ended lower on Tuesday on lack of buying interest, with the key index declining by 0.26%. At 5pm, the benchmark FBM KLCI fell 3.99 points to finish at 1,522.88. Regional equities also moved slightly lower on Tuesday, with the MSCI All Country Asia Pacific index off 0.4% in US dollar terms. Hong Kong’s Hang Seng share gauge dipped 1.2% while the Shanghai Composite Index added 0.2%.

Source: PublicInvest Research - 24 Nov 2021