Economy

US: Consumer confidence pulls back much more than expected in Oct. A US consumer confidence pulled back by much more than expected in the month of Oct. Consumer confidence index slumped to 102.5 in Oct from a revised 107.8 in Sep. Economists had expected the index to dip to 106.0 from the 108.0 originally reported for the previous month. Consumer confidence retreated in Oct, after advancing in Aug and Sep. Concerns about inflation—which had been receding since July—picked up again, with both gas and food prices serving as main drivers. Looking ahead, inflationary pressures will continue to pose strong headwinds to consumer confidence and spending, which could result in a challenging holiday season for retailers. The bigger than expected pullback by the headline index came as the present situation index tumbled to 138.9 in Oct from 150.2 in Sep, suggesting economic growth slowed to start the fourth quarter. (RTT)

EU: Eurozone banks see fall in demand for housing, corporate loans in Q4. The euro area banks expect fall in demand for housing and corporate loans in the fourth quarter. Reflecting rising interest rates and easing consumer confidence, demand for housing loans declined substantially in the third quarter. Demand for consumer credit and other lending to households also decreased in net terms.However, there was an increase in demand from firms for loans or drawing of credit lines due to rising financing needs for working capital and inventories.For the fourth quarter, lenders expect a further strong net decrease in the demand for housing loans and relatively strong fall in demand for consumer credit. They forecast a net decrease in firms' demand for loans. (RTT)

EU: Germany business confidence lowest since May 2020. G ermany's business confidence dropped further in Oct to reach its lowest level in 29 months as companies were less satisfied with their current business and were more concerned about the future. The business confidence index decreased marginally to 84.3 in Oct from 84.4 in Sep. The index was forecast to fall to 83.3. This was the lowest score since May 2020, when it was 80.2. The German economy is facing a difficult winter. In Oct, companies were less satisfied with their current business conditions. Meanwhile, their expectations improved, though companies were still worried about the coming months. (RTT)

Japan: Government maintains economic view; cautious about market volatility. Japan's government maintained its economic view for the 4th straight month, but remained cautious about the market volatility amid falling bond yields and the weakening yen. The Japanese economy is picking up moderately, while the slowdown of global economies poses downside risk to the Japanese economy. Moreover, full attention should be given to price increases, supply-side constraints and fluctuations in the financial and capital markets. (RTT)

South Korea: Consumer confidence weakens in Oct. South Korea's consumer confidence weakened in Oct after improving a month ago. The consumer confidence index fell to 88.8 from 91.4 in the previous month. Among sub-indicators, the measures for current and future living standard dropped 2pts each to 83 and 84, respectively. The index measuring future household income decreased 2pts to 94, while that concerning future household spending gained one point to 110. The survey showed that household sentiment concerning current domestic economic situation was 3pts lower than in Sep, at 47, and that concerning future economic conditions 6pts lower than in the previous month, at 56. (RTT)

Australia: Treasurer unveils budget of restraint. Australia unveiled a budget of restraint, promising relief from the rising cost of living without adding to inflation. In 2022-23 and 2023-24, when inflationary pressures are most acute in the forecasts, additional tax receipts have been returned to the budget, new policy decisions have been largely offset and real growth in spending decline. Net debt is seen at 23% of GDP in 2022-23 and is projected to finally hit 28.5% of GDP in 2025-26. The underlying cash deficit is forecast to be AUD36.9bn, or 1.5% of GDP in 2022-23, which is AUD41.1bn lower. The cumulative deficit until 2025-26 is projected to total AUD181.8bn. (RTT)

Hong Kong: Exports continue to fall in Sep. Hong Kong's exports and imports continued to decline in Sep. Exports declined 9.1% YoY in Sep, slower than the 14.3% fall in Aug. This was the 5th successive monthly decline. The downward trend in exports was largely driven by a marked fall in outflow of office machines and automatic data processing machines, non-ferrous metals, and miscellaneous manufactured articles. Imports also decreased 7.8% annually in Sep, after falling 16.3% in the previous month. (RTT)

Singapore: Inflation remains stable as expected. Singapore's consumer price inflation held steady in Sep to remain at its highest level in more than 14 years. Consumer prices climbed 7.5% YoY in Sep, the same rate of increase as in Aug, which was the strongest inflation since June 2008. That was in line with economists' forecast. The rate remained unchanged due to lower private transport inflation offsetting higher core and accommodation inflation. MAS core inflation rose to 5.3% in Sep from 5.1% in the previous month. (RTT)

Markets

Tanco: Signs term sheet with Perkeso for RM100m RPS subscription . Tanco Holdings signed the term sheet for the proposed RM100m redeemable preference shares (RPS) subscription by the Social Security Organisation (PERKESO). Tanco said the issuance of one hundred million RPS was priced at RM1 each and the issuance intended for the company to raise funds for, among others; working capital requirements, investments and targeted expansion of the companies within Tanco and its subsidiaries. (Bernama)

Sunview: Bags RM94m EPCC contract for LSSPV plant . Sunview Group has clinched a RM93.8m engineering, procurement, construction and commissioning contract for the development of a 26-megawatt large-scale solar photovoltaic (PV) plant in Kuala Langat, Selangor. The newly-listed solar PV construction player said the contract was awarded to the group’s wholly-owned subsidiary Fabulous Sunview SB from LSS TPG SB, a unit of Advancecon Holdings. (The Edge)

Ni Hsin: Gets VTA approvals from Road Transport Dept for EV bikes . Ni Hsin Group Bhd's electric vehicle (EV) unit has received the vehicle type approvals from the Road Transport Department for two models of its EBIXON EV bikes - the TAILG BOLD and TAILG TORQ - in the personal and commercial categories respectively. According to Ni Hsin EV Tech SB MD Khoo Chee Kong, the company will commence completely knocked down (CKD) assembly of the EBIXON EV Bikes in November this year for launch on the Malaysian market. (StarBiz)

Yew Lee: Plans one-for-two bonus issue of warrants, ESOS scheme . Yew Lee Pacific Group has proposed a bonus issue of warrants on the basis of one warrant for every two existing ordinary shares, on an entitlement date to be determined later. The exercise entails the issuance of 266.2m warrants, based on Yew Lee’s total issued share capital of RM67.5m, comprising 532.4m ordinary shares as of Oct 3 (latest practicable date, a.k.a. LPD). (The Edge)

Advancecon: To dispose of Kedah land to Thong Guan for RM34m . Advancecon Holdings Bhd’s 51%-owned indirect subsidiary Spring Energy SB is disposing of a piece of land in Kedah to plastic packaging manufacturer Thong Guan Industries for RM34m or RM9.95 per sq ft. (The Edge)

Mulpha: Independent adviser recommends shareholders reject 'not fair, not reasonable' Mulpha takeover offer . Independent adviser MainStreet Advisers SB has advised shareholders of Mulpha International to reject the unconditional voluntary takeover bid of the group by several joint offerors, deeming the offer price of RM2.30 per share as “not fair and not reasonable”. (The Edge)

Ornapaper: Minority shareholders advised to reject takeover offer . Minority shareholders of Ornapaper, have been also advised by MainStreet Advisers to reject the mandatory takeover offer launched by its substantial shareholders, Sai Ah Sai, Sai Han Siong, Sai Chin Hock and persons acting in concert, who collectively hold 33.01% of Ornapaper shares, to acquire the remaining shares at RM1.06 each or RM52.7m. MainStreet Advisers said the offer is not fair, after taking into consideration that the offer price represents a discount of RM1.52 or 58.91% to the net assets per Ornapaper share of RM2.58. (The Edge)

Market Update

The FBM KLCI might open stronger today after US stocks closed higher on Tuesday ahead of a busy day of third-quarter corporate results, while Asian equities fell further after suffering historic declines in the previous session. On Wall Street, the broad S&P 500 index added 1.6% and the Nasdaq Composite gained 2.3%, as investors looked ahead to earnings reports after the close from some of the world’s largest technology companies including Alphabet, Spotify and Microsoft. Investors have been sifting through corporate earnings reports over the past two weeks for signs of strain from high inflation and rising borrowing costs. The US Federal Reserve has raised interest rates aggressively this year, implementing extra-large increases of 0.75 percentage points over each of its past three meetings to a target range of 3 to 3.25%. The central bank’s rate-setters meet again next week. The pressure of tighter monetary policy has weighed heavily on equity and bond markets in recent months, with the S&P 500 last month closing out its longest streak of quarterly losses since 2008. Europe’s regional Stoxx 600 closed 1.4% higher and Germany’s Dax reversed losses to rise 0.9% even as the country’s Ifo Institute noted that domestic business sentiment “continues to be grim”.

Back home, Bursa Malaysia ended in the red, taking a pause after a six-day winning streak due to profit-taking in heavyweights led by Petronas Chemicals Group Bhd and Public Bank Bhd Significant gains in Axiata Group Bhd and CIMB Group Holdings Bhd, however, helped to curb further downtrend in the FBM KLCI, which ended 2.01 points easier at 1,444.41 compared to last Friday's close of 1,446.42. In the region, Hong Kong’s Hang Seng index fell 0.1% following its biggest single-day drop since 2008 on Monday and confirmation of China president Xi Jinping’s third term in power. The CSI 300 index of Shanghai- and Shenzhen-listed equities fell 0.2%, while China’s renminbi hit its weakest level against the dollar since 2007.

Source: PublicInvest Research - 26 Oct 2022