Economy

US: Weekly jobless claims pull back to 260,000, matching estimates. After reporting a bigger than expected increase in first time claims for US unemployment benefits in the previous week, the initial jobless claims pulled back in line with estimates in the week ended 22 nd January. The initial jobless claims fell to 260,000, a decrease of 30,000 from the previous week's revised level of 290,000. Economists had expected jobless claims to drop to 260,000 from the 286,000 originally reported for the previous week. (RTT)

US: GDP spikes more than expected in 4Q. Preliminary data released by the Commerce Department showed a sharp increase in US economic activity in the 4Q of 2021. The report said real GDP spiked by 6.9% in the 4Q after jumping by 2.3% in the 3Q. Economists had expected GDP to surge up by 5.5%. The stronger than expected GDP growth reflected increases in private inventory investment, exports, consumer spending and nonresidential fixed investment. (RTT)

US: Durable goods orders slump more than expected in Dec. Reflecting a sharp pullback in orders for transportation equipment, the Commerce Department released a report showing new orders for US manufactured durable goods fell by more than expected in the month of Dec. The Commerce Department durable goods orders slumped by 0.9% in Dec after soaring by an upwardly revised 3.2% in Nov. (RTT)

US: Core capital good orders unchanged in Dec. New orders for US-made capital goods were unexpectedly unchanged in Dec, suggesting a loss of momentum in business spending on equipment amid shortages. The unchanged reading last month in orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, followed a 0.3% gain in Nov. Economists polled by Reuters had forecast these so-called core capital goods orders increasing 0.4%. Shipments of core capital goods jumped 1.3% last month after rising 0.4% in Nov.. (Reuters)

EU: German GfK consumer confidence to improve in Feb. German consumer confidence is set to improve in Feb. After two consecutive declines, the consumer sentiment index rose to -6.7 in Feb from revised -6.9 in Jan. Economists had forecast the index to fall to -7.8. Both the economic and income expectations as well as the propensity to buy improved in Jan compared to the previous month. Despite rising incidences and inflation, consumers are somewhat more optimistic at the beginning of the year. (RTT)

EU: Spain jobless rate lowest since 2008. Spain's unemployment rate declined in 4Q to the lowest since 2008 as the economy continued to recover. The jobless rate fell to 13.33% from 14.57% in 3Q. The rate was the lowest since 3Q of 2008, when it stood at 11.23%. The rate was forecast to drop moderately to 14.2%. The number of unemployed decreased by 312,900 to 3.103m in 4Q. Employment increased by 78,700 in agriculture and by 45,900 in services. In industry, job creation rose by 37,100. Meanwhile, employment in construction declined by 7,700. (RTT)

UK: Retail sales drop below seasonal norms in Jan. UK retail sales declined below seasonal norms in Jan due to the tightened Covid restrictions amid the spread of the Omicron wave. A net 23% of retailers said sales were seen as poor for the time of the year in Jan compared to -2% in Dec. This was the biggest fall since March 2021. About 17% said sales are expected to remain below norms in Feb. (RTT)

UK: 2021 car production falls to lowest since 1956. The number of cars made in Britain fell last year to the lowest since 1956, reflecting a major shortage of semiconductors used for electronic components, broader COVID disruptions and the closure of a Honda factory. The Society of Motor Manufacturers and Traders (SMMT) said 859,575 cars were made in Britain in 2021, 6.7% fewer than in 2020 - when COVID also hit production - and a third less than in 2019 when over 1.3m cars rolled off production lines. (Reuters)

China: Industrial profits rise at slower pace in Dec. China's industrial profits increased at a slower pace at the end of the year. Industrial profits increased 4.2% on a yearly basis in Dec, slower than the 9.0% rise in Nov. Higher input costs increased operational cost of smaller firms. In the whole year of 2021, industrial profits advanced 34.3% from the last year. Data released earlier this month showed that the Chinese economy logged a stronger growth of 8.1% in 2021, better than the government's target of above 6%. (RTT)

Indonesia: Targets 33% jump in 2022 investment by tapping resource processing. Indonesia aims to boost total investment this year by a third, bolstered by an influx of investment into its resource-processing sector, after reporting foreign direct investment (FDI) rose 10% in 2021. Southeast Asia's largest economy wants to attract IDR1,200trn (USD83.43bn) in investment this year, from both domestic and foreign sources, up from 2021's IDR901.02trn. (Reuters)

Markets

Affin Bank: Sells asset management arm to CVC Capital Partners for over RM2bn, say sources . Affin Bank is said to have clinched a cash deal to sell its asset management arm, Affin Hwang Asset Management (Affin Hwang AM), the banking group’s crown jewel. The price tag is believed to be in the range of RM2.3bn to RM2.6bn cash, according to sources. Private equity fund CVC Capital Partners is among interested parties wanting to take over Affin Hwang AM, whose asset under management has grown to RM81bn as of end-2021. (The Edge)

LKL International: Unit buys 13.78% stake in Parlo for RM13.24m. LKL International said its wholly-owned unit LKL Advance Metaltech SB (LKLAM) is buying 60.2m shares, representing a 13.78% stake, in travel management company Parlo at the price of 22 sen each, for a total cash consideration of RM13.24m. (The Edge)

Eita Resources: Bags two contracts worth RM58m in Sarawak . Eita Resources has secured two contracts worth a total of RM58.35m for substation extension and reinforcement of supply at Mambong and Entinggan substations in Sarawak. The projects, which will commence on Feb 7, were awarded by Sarawak Energy to Eita Resources’ 60%-owned unit TransSystem Continental SB (TSC) and Terapan Dinamik (M) SB on Wednesday (Jan 26). (The Edge)

Boustead Heavy Industries: To cooperate with MACC in combat vessels probe. Boustead Heavy Industries Corporation (BHIC) will extend its fullest co-operation to the Malaysian Anti Corruption Commission (MACC) and other authorities in any investigation pertaining to the Littoral Combat Ship (LCS) project. "We firmly stand in the fight against all forms of corruption and will continue to steadfastly address the issues identified by the external and internal auditors and to meet the expectations of our board of directors and government stakeholders in demonstrating good corporate governance and values,” BHIC said in a statement. (StarBiz)

Gagasan Nadi Cergas: Commences 30-year chilled water supply to Datum Jelatek Mall . Gagasan Nadi Cergas (GNC) has begun a 30-year supply agreement with Datum Jelatek mall in Gombak, Selangor, to provide chilled water from the district cooling system (DCS). GNC's subsidiary Naditech Energy SB (NESB) has achieved its commercial operation date on 3 January 2022 to generate and supply 2,100 RT of chilled water to the mall, encompassing a total lettable area of 317,011.5 square feet. The mall is expected to be operational in the first half of 2022. (Business Times)

China Automobile: Ends MoU to buy Master Tec as latter's late financial statements stymie regularisation plan . China Automobile Parts Holdings Ltd (CAP) is terminating the MoU to buy Master Tec Wire & Cable SB with immediate effect. Last month, CAP signed the MoU with Master Tec’s shareholder and director Datuk Lau Kim San to acquire the entire equity interest of the target company, which is principally engaged in the manufacturing, trading and sale of wires and fibre optic cables. (The Edge)

Market Update

The FBM KLCI might end the week weaker after Wall Street equities ticked lower on Thursday, while the dollar reached its highest level since July 2020 after the US central bank a day earlier signalled that it would raise interest rates as soon as March. The benchmark S&P 500 share index closed the day 0.5% lower, while the technology-heavy Nasdaq Composite fell 1.4%. Both indices had a brief period of relief on Thursday morning, but by afternoon the selling spurred by the hawkish message from Jay Powell, Federal Reserve chair, resumed. The S&P has lost about 9% this year. Powell on Wednesday declined to rule out raising interest rates at every policy meeting this year in order to combat inflation. Markets are now pricing in between four and five quarter point rate increases this year, with the first coming in March. In Europe, the Stoxx 600 share index rose 0.5%.

Back home, Bursa Malaysia rebounded to end marginally higher due to bargain-hunting activities during the final hour of trading. At 5pm, the benchmark FBM KLCI gained 0.02% or 0.23 of-a-point to 1,515.99 from 1,515.76 at Wednesday's close. The regional markets finished sharply lower with shares in Japan leading the region. The Nikkei 225 was down 3.11% while Hong Kong's Hang Seng lost 1.99% and China's Shanghai Composite gave away 1.78%.

Source: PublicInvest Research - 28 Jan 2022