Economy

US: Rising inflation, relentless pandemic dampen consumer confidence. US consumer confidence dropped to a nine-month low in Nov amid worries about the rising cost of living and pandemic fatigue, but that did not change expectations for stronger economic growth this quarter. The survey from the Conference Board showed consumers less enthusiastic about buying a house and big-ticket items such as motor vehicles and major household appliances over the next six months, likely because of shortages, which have boosted prices. The consumer confidence index fell to 109.5 this month from 111.6 in Oct. (Reuters)

US: Powell warns omicron could slow labor market progress, intensify supply-chain disruptions. With the Omicron variant of the coronavirus making headlines, Federal Reserve Chair Jerome Powell is set to appear before the Senate Banking Committee to discuss the pandemic and the CARES Act. The recent surge in new Covid-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation. Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and supply-chain disruptions. (RTT)

EU: Inflation rises to record high. Eurozone inflation accelerated more than expected to a record high in November driven by higher energy prices, flash estimate from Eurostat showed. Annual inflation advanced to 4.9% in Nov from 4.1% in Oct. The rate was above the expected level of 4.5%. Likewise, core inflation that excludes energy, food, alcohol and tobacco, increased to a record 2.6% from 2% in Oct. Core inflation was forecast to advance to 2.3%. Among main components of inflation, Eurozone energy prices logged its biggest annual growth on record, up 27.4%. (RTT)

EU: German unemployment falls more than expected. Germany's unemployment declined more than expected in Nov, data published by the Federal Labor Agency revealed. The number of people out of work decreased 34,000 from Oct, when unemployment was down 40,000. Economists had forecast a monthly fall of 25,000. The unemployment rate fell to 5.3% in Nov from 5.4% in Oct. The rate came in line with economists' expectations. The recovery of the last few months has continued on the labor market. (RTT)

EU: France inflation strongest since 2008. France inflation accelerated to the highest level since 2008 driven by surging energy prices, the provisional estimate from the statistical office Insee showed. In a separate communiqué, the statistical office also confirmed the sequential growth for the 3Q. Consumer price inflation advanced to 2.8% in Nov from 2.6% in Oct. The rate was expected to remain unchanged at 2.6%. The latest inflation was the strongest since Sept 2008, when prices were up 3%. The annual increase was driven by the acceleration in energy prices, manufactured goods prices and services cost. (RTT)

China: Nov non-manufacturing PMI edges lower to 52.3 from 52.4 in Oct. Activity in China’s services sector grew at a slightly slower pace in Nov, official data showed, as the sector took a hit from fresh lockdown measures as authorities raced to contain the latest outbreak. The official non-manufacturing Purchasing Managers’ Index (PMI) fell to 52.3 in Nov from 52.4 in Oct, data from the National Bureau of Statistics (NBS) showed. The 50-point mark separates growth from contraction on a monthly basis. The services sector is more vulnerable to sporadic COVID-19 outbreaks, clouding the outlook for the much anticipated rebound in consumption. (Reuters)

Japan: Output rises for first time in 4 months as supply snags ease for carmakers. Japan's industrial output rose in Oct for the first time in four months as re-opening of Asian factories eased supply constraints for automakers, offering some hope for the export-reliant economy as it struggles to mount a solid recovery. The increase was smaller than market expectations, underscoring the lingering impact of global supply chain disruptions. Factory output grew 1.1% from the previous month in Oct, government data showed, marking the first increase since June. (Reuters)

Japan: Housing starts rise in Oct. Japan's housing starts increased in Oct, data from the Ministry of Land, Infrastructure, Transport and Tourism showed. Housing starts increased 10.4% YoY in Oct, following a 4.3% rise in Sept. Economists had forecast an annual 5.2% rise. Annualized housing starts rose to 892,000 in Sept from 845,000 in the previous month. Data also showed that construction orders received by big 50 contractors grew 2.1% on year in Oct, after a 27.3% increase in Sept. (RTT)

Japan: Jobless rate falls to 2.7% in Oct. The unemployment rate in Japan came in at a seasonally adjusted 2.7% in Oct, the Ministry of Internal Affairs and Communications said. That was below expectations for 2.8%, which would have been unchanged from the Sept reading. The job-to-applicant ratio was 1.15, missing forecasts for 1.17 and down from 1.16 in the previous month. The participation rate was 62.0%, down from 62.3% a month earlier. (RTT)

India: Economy expands 8.4% in Sept quarter. India's economic growth remained robust in the Sept quarter, preliminary data from the government showed, after the pace of expansion hit a record in the previous three months boosted by a low base-effect due to the coronavirus pandemic last year. GDP grew 8.4% YoY in the three months to Sept. That was in line with economists' expectations. In the same quarter of 2020, the economy had contracted 7.4% as the coronavirus ravaged economic activity across the country. In the April to June quarter this year, the economy grew a record 20.1% vs. a 24.4% contraction in the same period last year. (RTT)

Markets

Hong Seng: Completes 51% acquisition of RZAC Immunesafe for RM20m . Hong Seng Consolidated (HSC) had completed its acquisition of 51% stake in RZAC Immunesafe SB (RZAC) through a shares sale agreement (SSA) for RM20m. The acquisition of RZAC adds another dimension to HS Bio's already broad nexus of healthcare solutions that it provides through the companies it owns, including the ability for access to and from healthcare providers and customers. (Business Times)

Berjaya Land: Forms JV with Selangor MBI unit for Klang Valley river projects, paving way for RM10bn housing developments. Berjaya Land (BLand) has formed a JV with Menteri Besar Inc Selangor’s subsidiary Landasan Lumayan SB (LLSB) to undertake river cleaning, river rehabilitation and river developments in the Klang Valley. Dubbed Landasan Lumayan Berjaya SB (LLB), BLand holds a 55% stake in the JV company, while the remaining 45% is held by LLSB. Among the river initiatives which LLB will undertake is the Selangor Maritime Gateway, a high economic impact project which will see approximately 600 acres of land along about 56 km of the Klang River to be developed over the next eight years. (The Edge)

Johan Holdings: Dynacare starts production at newly-bought glove plant . Johan Holdings’ subsidiary Dynacare SB has rolled out its first commercial glove production of its first high capacity double-former dipping line at its plant in Perak on Nov 27. Johan Holdings said Dynacare had completed its acquisition of the 71,980 square metres of land in Lumut Port Industrial Park on Nov 26 this year. The land has been utilised as the company's glove manufacturing plant. "All approvals for the manufacturing and export of gloves have been obtained. Dynacare is expected to commission subsequent dipping lines in stages with a total of six dipping lines in commercial production by Feb 2022," it said. (Business Times)

ATA IMS: Independent non-executive director resigns, citing 'differences in opinion' with the board . ATA IMS said its independent non-executive director Wong Chin Chin has resigned due to “differences in opinion”. Her resignation also leaves the group's audit and nomination & remuneration committees with only two members. (The Edge)

Serba Dinamik: High Court blocks sharing of Serba Dinamik special independent review update through court system . The High Court presiding over the legal suit filed by Bursa Malaysia Securities against Serba Dinamik Holdings has blocked the sharing of the oil & gas company’s special independent review (SIR) factual findings update through the Court system. In a filing with the stock exchange, Serba Dinamik said the High Court has directed that affidavits which contain updates on the SIR be “locked out from the court system for view and/or download by all parties except for the Court”. (The Edge)

IPO: Swift Haulage to raise RM162m from IPO, one of Bursa's largest in 2021 . Swift Haulage targets to raise RM161.9m from its IPO. The logistics services provider said at RM1.03 per share, the IPO will be one of the largest of the year, having attracted the support of cornerstone investors that took up 58.7% of the institutional offering. (Business Times)

Market Update

The FBM KLCI might open lower today after global stock prices slumped on Tuesday, as fears over the potentially damaging economic effects of the Omicron coronavirus variant and hawkish comments from the chair of the US central bank swirled through financial markets. The benchmark S&P 500 index closed the day down 1.9%, erasing gains made on Monday. Since news of the Omicron variant hit markets on Friday, the S&P has fallen by 2.9%. The technology-heavy Nasdaq Composite share gauge was down 1.6% at the bell. The equities sell-off deepened on Tuesday after Fed chair Jay Powell signalled that he would support accelerating the central bank’s monetary tightening programme to combat soaring inflation even as he acknowledged the potential risk of Omicron to the US economy. His comments pushed up yields on shorter-dated Treasury securities, which move with interest rate expectations, while driving down longer-dated Treasury yields that track economic growth and inflation expectations. Earlier on Tuesday, Europe’s Stoxx 600 index closed down 0.9% lower, following a choppy day of trading marked by worries about the new variant’s potential to evade vaccines.

Back home, Bursa Malaysia rebounded to close marginally higher on Tuesday due to bargain hunting in selected heavyweights, particularly telecommunications, oil and gas and plantation stocks. At 5pm, the benchmark FBM KLCI rose 0.23% or 3.41 points to 1,513.98 from 1,510.57 at Monday’s closing. In the region, Hong Kong’s Hang Seng index and Tokyo’s Nikkei 225 both lost 1.6%.

Source: PublicInvest Research - 1 Dec 2021