Economy

US: Pending home sales surge in Oct. Contracts to buy US previously owned homes jumped in Oct, reversing a decline in the prior month, likely as buyers raced to snap up properties as mortgage rates edged upward. The National Association of Realtors (NAR) said that its Pending Home Sales Index, based on signed contracts, rose 7.5% last month to 125.2. Pending home sales increased in all four regions. Economists had forecast contracts, which become sales after a month or two, would rise 0.9% in Oct. Pending home sales declined 1.4% in Oct on a YoY basis. Limited inventory has led to double-digit growth in home prices. Demand for housing shot up early in the pandemic as Americans decamped from city centers to suburbs. (Reuters)

US: Fed's Powell sees inflation lingering, risks from COVID. US Federal Reserve Chair Jerome Powell said he continues to expect inflation to recede over the next year as supply and demand come into better balance, but warned that the new strain of COVID-19 muddies the outlook, and prices could continue to rise for longer than earlier thought. The Fed this month began reducing its support for the economy by gradually decreasing its asset purchases at a pace that would end them by next June. But with inflation registering more than double the Fed's 2% target, Fed officials have increasingly said they are open to potentially speeding up the taper to clear the way for earlier interest rate hikes if needed. (Reuters)

EU: Economic confidence at 6-month low. Eurozone economic confidence weakened to a six-month low in November largely due to the deterioration in consumer sentiment, survey results from the European Commission showed. The economic sentiment index fell to 117.5 in Nov, in line with expectations, from 118.6 in the previous month. This was the lowest score since May. The weakness in overall confidence was driven by a marked decline in consumer confidence, while sentiment remained broadly unchanged in industry and services and improved in retail trade and construction. The industrial sentiment indicator came in at 14.1, down slightly from October's 14.2. The expected level was 13.9. (RTT)

EU: German inflation climbs above 5%. Germany's consumer price inflation accelerated more than expected in November, preliminary figures from Destatis showed. The consumer price index rose 5.2% YoY following a 4.5% increase in Oct. Economists had forecast 5.0% inflation. The record high of CPI inflation for Germany is 6.2% logged in 1992. Compared to the previous month, the CPI decreased 0.2% from Nov after a 0.5% rise in Oct. Economists had forecast a 0.4% fall. The harmonized index of consumer price, or HICP, rose 6.0% YoY following a 4.6% climb in the previous month. Economists were looking for a 5.5% increase. The EU measure of inflation rose 0.3% from the previous month, when it climbed 0.5%. (RTT)

EU: Italy producer prices rise in Oct. Italy's producer prices rose for the ninth month in a row in Oct, data from the statistical office Istat showed. The producer price index increased 20.4% YoY in  Oct, following a 13.3% rise in Sept. On a monthly basis, producer prices rose 7.1% in Oct, after a 1.6% increase in the preceding month. In the domestic market, producer prices grew 9.4% MoM in Oct. Producer prices in the foreign market increased by a 0.8% monthly in Oct. (RTT)

UK: Mortgage approvals, lending fall in Oct. UK mortgage approvals and lending declined in Oct as buyers brought forward their borrowing to Sept to take advantage of stamp duty holiday, official data revealed. Approvals for house purchases fell to 67,200 in Oct from 71,900 in Sept, the Bank of England said. This was the lowest since June 2020 and also below the expected level of 71,250. Net borrowing of mortgage debt by individuals totaled GBP1.6bn in Oct, down from GBP9.3bn in Sept. This was the lowest since July 2021. The bank said Oct's decrease was driven by borrowing brought forward to Sept to take advantage of stamp duty land tax relief, before it was completely tapered off. (RTT)

China: Economy likely remained weak as factories slump. China’s manufacturing activity likely remained subdued in Nov, with weak domestic demand in the economy outweighing any relief that came from an easing in energy shortages. The official manufacturing purchasing managers’ index is forecast to improve slightly to 49.7 from 49.2 in Oct when it’s released Tuesday, according to the median estimate in a Bloomberg survey of economists. The non-manufacturing gauge, which measures activity in the construction and services sectors, is forecast to fall to 51.5 from 52.4 in the previous month. (Bloomberg)

Japan: Retail sales rise 0.9% on year in Oct. The value of retail sales in Japan was up 0.9% on year in Oct, the Ministry of Economy, Trade and Industry said, coming in at JPY12.552trn. That was shy of expectations for an annual increase of 1.1% following the 0.5% decline in Sept. The data also showed that wholesale sales jumped 6.6% on year to JPY34.323trn, slowing from 8.7% in the previous month. Commercial sales were up 5.0% to JPY46.875trn, slowing from 6.2% a month earlier. On a monthly basis, retail sales rose 1.1%. (RTT)

Australia: Business inventories sink 1.9% in 3Q. Company inventories in Australia were down a seasonally adjusted 1.9% on quarter in the 3Q of 2021, the Australian Bureau of Statistics said. That missed expectations for a flat reading following the 0.2% increase in the previous three months. Company gross profits climbed 4.0% on quarter, beating forecasts for a gain of 3.0% and slowing from 7.1% in the three months prior. Wages and salaries were down 0.8% on quarter and wholesale trade sank 5.9%. On a yearly basis, inventories rose 0.7%, while profits climbed 5.4%, wages gained 4.7% and wholesale sales perked 2.1%. (RTT)

Singapore: Producer price inflation increases in Oct. Singapore's producer price inflation increased in Oct, data from the Department of Statistics showed. The manufacturing producer price index increased 16.3% YoY in Oct, following a 14.4% rise in Sept. The oil index surged 99.5% annually in Oct and the non-oil indices rose 8.3%. The Domestic Supply Price Index grew 25.4% YoY in Oct, following a 21.3% increase in Sept. On a monthly basis, producer prices rose 2.2% in Oct, following a 1.0% increase in the preceding month. Another report from the statistical office showed that the import prices gained 20% annually in Oct. (RTT)

Markets

ATA IMS: Expects another 40% drop in revenue for FY23 amid Dyson termination . ATA IMS is expecting another 40% drop in turnover for FY23 following the termination of its contracts with Dyson, its largest customer, which contributes to about 80% of its revenue. Cost-cutting measures will be undertaken in response to the termination of contracts and that the company is working towards maintaining profitability by lowering costs to ensure sustainability. The termination of the contracts does not affect its operations, it said, except for the termination of tenancy and organisation-wide cost-cutting measures, and restructuring of bank borrowings for excess facilities, as the company is not required to hold as high levels of stock as before. (The Edge)

7-Eleven: Caring Pharmacy signs deal to establish pharmaceutical business in Indonesia. 7-Eleven Malaysia Holdings’ (SEM) 75%-owned subsidiary, Caring Pharmacy Retail Management SB, has inked a JV agreement to establish a pharmaceutical business to distribute and administer pharmaceutical products in Indonesia. The group said the IDR28.98bn (RM8.55m) deal represents an opportunity for SEM to venture into the pharmaceutical industry in Indonesia. (The Edge)

Crest Builder: Bags RM107.5m construction contract from Sime Darby Property . Crest Builder Holdings said that it has bagged a construction contract for a service apartment with car park worth RM107.5m from Sime Darby Property (Ara Damansara) SB via its wholly-owned subsidiary Crest Builder SB. The contract was awarded for the construction of one block service apartment with car park podium at Ara Damansara and will be in effect for a period of 33 months from Oct 22, 2021 to July 21, 2024. (The Edge)

EP Manufacturing: Undertakes private placement to raise RM56.9m . EP Manufacturing (EPMB), which is involved in automotive and engineering, is diversifying into the property development business. In a statement today, the company said it is undertaking a proposed private placement which is expected to raise gross proceeds of up to RM56.9m. (Business Times)

Glomac: To launch projects with RM216m GDV before June 2022 . Glomac targets to launch property projects with GDV of RM216m in 2HFY22. Group MD and CEODatuk Seri FD Iskandar said moving into the later part of the financial year, the company will be focusing on mid-market affordable landed residential products in existing township developments. These projects are Saujana KLIA, Saujana Perdana, Saujana Utama 5 and Saujana Jaya in Johor. Without disclosing the initial target numbers, FD Iskandar said the GDV for the new launches is lower than what was initially targeted. (Business Times)

IPO: Aurelius Technologies aims to raise RM104.73m from Main Market listing . Aurelius Technologies plans to raise RM104.73m in proceeds from its IPO to fund its expansion plans and increase its working capital. The firm, which is a provider of electronics manufacturing services (EMS) for industrial electronic products, said of the proceeds, RM40m will go towards new machinery and equipment, RM29.52m towards the repayment of borrowings, RM28.13m for working capital and RM7.08m for listing expenses. (StarBiz)

Market Update

The FBM KLCI might open higher today as US and European stocks partially recovered on Monday after news of the Omicron coronavirus variant triggered a sharp sell-off late last week. Wall Street’s benchmark S&P 500 index gained 1.3%, after falling 2.3% in a truncated trading session on Friday. Technology stocks — which were some of the biggest winners during earlier phases of the pandemic — drove the gains again on Monday. The tech heavy Nasdaq Composite index rose 1.9%, while the Nasdaq 100 index of the largest companies on the exchange rose 2.3%, reversing all of Friday’s losses. In Europe, the regional Stoxx 600 closed up 0.7%, after dropping more than 3.5% on Friday. London’s FTSE 100 gained 0.9%.

Back home, Bursa Malaysia closed lower on Monday as the market remained under pressure throughout the day due to lack of buying interest and was further dampened by the spillover effects of regional selldown. At 5pm, the benchmark FBM KLCI lost 0.11% or 1.65 points to end at 1,510.57 from 1,512.22 last Friday. Regional stock markets remained under pressure. Japan on Monday announced a ban on foreign citizens entering the country, reversing a three-week-old relaxation of its rules. The Topix in Tokyo closed 1.8% lower and Hong Kong’s Hang Seng index fell 0.9%.

Source: PublicInvest Research - 30 Nov 2021