Economy

US: Trade deficit narrows significantly in Oct. US trade deficit narrowed significantly in the month of Oct amid a spike in the value of exports. The trade deficit decreased to USD67.1bn in Oct from a revised USD81.4bn in Sept. Economists had expected the deficit to narrow to USD67.5bn from the USD80.9bn originally reported for the previous month. (RTT)

US: Labor productivity plunges even more than initially estimated in 3Q. Labor productivity in the US plunged by even more than initially estimated in the 3Q. The labor productivity tumbled by 5.2% in the 3Q compared to the previously reported  5.0% nosedive. Economists had expected the slump in productivity to be revised to 4.9%. (RTT)

EU: Economy expands as estimated in 3Q. The euro area economy expanded as initially estimated in the 3Q largely driven by household spending. GDP grew at a steady pace of 2.2% in the 3Q. The estimate for the 2Q was revised up from 2.1% and the 3Q rate was confirmed by Eurostat. On a yearly basis, GDP advanced 3.9% instead of 3.7% expansion estimated previously. However, this was slower than the 2Q's 14.4% increase. (RTT)

EU: Germany industrial output growth exceeds expectations. Germany industrial output recovered at a stronger than expected pace in Oct underpinned by auto production. Industrial production grew 2.8% on a monthly basis in Oct, reversing a 0.5% fall in Sept. Production was forecast to grow 0.8%. Excluding energy and construction, industrial production was up 3.2% in Oct. Within industry, the production of capital goods showed a monthly growth of 8.2%. The production of motor vehicles, trailers and semi-trailers was up 12.6%. (RTT)

EU: German economic confidence weakens in Dec. Germany's economic confidence weakened in Dec as supply bottlenecks continue to weigh on production and retail sales. The ZEW Indicator of Economic Sentiment fell 1.8 points to 29.9 in Dec. Nonetheless, the score remained above the expected level of 25.1. The current conditions index plunged 19.9 points to -7.4 in Dec. This was the first time since last June that the indicator entered the negative territory. (RTT)

UK: House prices climb for fifth month. UK house prices rose for fifth straight month and the average home price hit a fresh record high in Nov, reflecting the resilience of the housing market. The house price index rose 8.2% YoY, same as in Oct, which was the highest rate since June. Compared to the previous month, house prices rose 1.0% in Nov, same as in Oct. Economists had forecast a 0.8% increase. (RTT)

China: Nov soybean imports up on month, boosted by US cargoes. China's soybean imports rose sharply in Nov from the previous month, as more shipments from the United States arrived during the peak North American export season. The world's top buyer of soybeans brought in 8.57m tonnes in Nov, up 68% from Oct's figure of 5.11m. (Reuters)

China: Exports and imports hit new records on strong demand. China’s exports and imports grew faster than expected in Nov, with both hitting records as external demand surged ahead of the year end holidays and domestic production rebounded on an easing power crunch. Exports rose 22% in dollar terms from a year earlier to almost USD326bn, while imports grew almost 32% to about USD254bn. (Bloomberg)

Japan: Oct coincident index posts first rise in four months. Japan’s coincident indicator index rose for the first time in four months in Oct, as economic activity improved after coronavirus infections subsided. The index of coincident economic indicators, which consists of a range of data including factory output, employment and retail sales, gained a preliminary 1.2 points from the previous month to 89.9 in Oct. (Reuters)

Markets

Cypark: Inks MoU with Huawei Malaysia for long-term cooperation on renewable energy projects . Cypark Resources inked a Memorandum of Understanding (MoU) with Huawei Technologies (Malaysia) SB (Huawei Malaysia) for long-term cooperation on a total of 500MW renewable energy (RE) projects in and outside of Malaysia on an exclusive basis. Under the deal, Huawei would act as the technology enabler and would provide the technical and after sales support for all products and solutions. (The Edge)

Yinson: Upsize sukuk issuance to RM1bn due to overwhelming demand. Yinson Holdings (Yinson) has successfully priced Malaysia's first sustainability-linked sukuk by issuing RM1bn in five-year sustainability-linked sukuk wakalah in compliance with Islamic medium-term notes (IMTN). Due to overwhelming demand with an orderbook of RM1.66bn, the offer was upsized from an initial target of RM700m to RM1bn. The Sukuk Wakalah oversubscribe by 1.66 times. (BTimes)

Ireka: Bags projects worth RM468m in GDV from Terengganu state govt. Ireka Corp has secured development projects with an estimated GDV of RM468m from the Terengganu state government. These projects comprise affordable and mixed housing developments in Bandar Kerteh Jaya, Kertih and Kampung Semayor, Kemasik. It will be the developer for the two projects. (BTimes)

Atlan: Buys back remaining 15% not held in duty-free unit DFZ for RM45.8m. Atlan Holdings has acquired the remaining stake representing 15% shareholding plus one share in duty-free retail arm DFZ Capital SB for RM45.8m from Heinemann Asia Pacific Pte Ltd (HAP). The acquisition was made by Duty-Free International Ltd (DFI), a wholly-owned unit of Atlan, for which DFI entered into a termination deed with HAP and DFZ. (The Edge)

TAFI Industries: Proposes bonus share, warrant issue. TAFI Industries had proposed a bonus issue of 252.95m (252,951,400) new shares on the basis of two bonus shares for one existing share held besides a bonus issue of up to 63.24m (63,237,850) warrants on the basis of one warrant for every two existing shares to reward shareholders. The bonus share issue will be implemented concurrently with the bonus issue of the 63.24m warrants. (The Edge)

Daibochi: 1Q net profit drops 23% on higher raw material prices, declares 2.5sen dividend. Plastic packaging producer Daibochi saw its net profit in the 1QFY22 decline by 23.37% to RM9.8m from RM12.79m a year ago, mainly due to higher raw material prices, freight cost and Covid-19 related expenses. As a result, earnings per share fell to 2.99sen from 3.91sen. (The Edge)

IPO: Aurelius Technologies shares oversubscribed by 20.27 times ahead of main market listing. Aurelius Technologies (ATech) shares oversubscribed by 20.27 times ahead of the company's listing on the main market of Bursa Malaysia. Executive director and group chief executive officer Lee Chong Yeow said investors are confident of ATech's business prospects and future plans. (BTimes)

Market Update

The FBM KLCI might open higher today after stocks globally rallied by the most in over a year on Tuesday, with investors encouraged by signs that the Omicron coronavirus variant may prove less serious than feared as well as signals from Chinese authorities that they are willing to stimulate the country’s slowing economy. The FTSE All World share index rose 2.1%, marking its best day since November 2020, while the S&P 500 and Nasdaq Composite indices in the US enjoyed their biggest one-day gains since March. The S&P 500 closed 2.1% higher, bringing it within 0.5% of the record closing price it hit before the new variant was first reported last month. There were gains across the board, with more than 400 of the index’s constituents in the green. The tech-heavy Nasdaq Composite climbed 3% while the small cap-focused Russell 2000 rose 2.1%. Stock markets have whipsawed over the past fortnight, driven by concerns about Omicron and expectations that the US central bank could tighten monetary policy faster than previously predicted. Scientists are still studying the severity of Omicron and its potential to evade vaccines, but some early data from South Africa have suggested the strain could result in less serious illness than previous waves of infections. The Europe-wide Stoxx 600 closed up 2.4%, with tech stocks and cyclical businesses rising. London’s FTSE 100 gained 1.5%.

Back home, Bursa Malaysia turned positive on Tuesday after a broad recovery rally, thanks to window-dressing activities and risk on mode. At 5pm, the benchmark FBM KLCI advanced 14.52 points or 0.98% to 1,497.97 from 1,483.45 at Monday’s close. Meanwhile, investors in the region were also encouraged by news on Monday that China’s central bank would free up liquidity for the banking system by cutting the share of deposits that financial institutions must hold in reserve. The government’s top decision making body also pledged to maintain a proactive fiscal policy and “flexible” monetary policy. Hang Seng share index rose 2.7%, while Tokyo’s Topix closed 2.2% higher.

Source: PublicInvest Research - 8 Dec 2021