Economy

US: Barkin says fed will stick to the task of curbing inflation. Federal Reserve Bank of Richmond President Thomas Barkin said the US central bank will “persist” in its efforts to bring high inflation under control. “Inflation should come down. But don’t expect its drop to be immediate or predictable,” he said during an event hosted by his bank. “Our rate and balance sheet moves take time to bring inflation down, but the Fed will persist until they do. (Bloomberg)

EU: Eurozone yields rise on inflation, bond supply concerns. Eurozone borrowing costs edged higher as traders awaited key US inflation data later in the week, amid fading hopes for a quick end to the central bank rate hiking cycle. Potential upside surprises in consumer price data and expectations of increasing bond supply due to public spending to tackle the energy crisis would prop up German Bund yields in the medium term. (Reuters)

EU: Investor confidence improves in Nov. Eurozone investor confidence rose more-than-expected in Nov reflecting the easing situation on the European gas and electricity markets, survey results from the behavioural research institute Sentix showed. The Sentix investor sentiment index rose to a three-month high of -30.9 in Nov from -38.3 in Oct. The score was forecast to rise moderately to -35.0. (RTT)

UK: House prices fall most since early 2021. UK house prices declined at the fastest pace since early 2021 amid rising cost of living coupled with stretched mortgage affordability weighing on the property market activity, data published by the Llyods Bank subsidiary Halifax showed. (RTT)

China: Trade unexpectedly shrinks as COVID curbs, global slowdown jolt demand. China's exports and imports unexpectedly contracted in Oct, the first simultaneous slump since May 2020, as a perfect storm of COVID curbs at home and global recession risks dented demand and further darkened the outlook for a struggling economy. (Reuters)

China: Forex reserves rise in Oct. China's foreign exchange reserves increased in Oct on valuation effects, official data showed. Foreign exchange reserves increased by USD23.5bn from last month to USD3.052trn in Oct. The expected level was USD3.018trn. The State Administration of Foreign Exchange reportedly said the forex reserves increased due to the combined impact of currency translation and changes in asset prices. (RTT)

China: Oct copper imports slide on softening demand. China’s imports of copper fell in Oct on the year for the first time since May, hit by softening demand as stringent COVID-19 curbs curtailed factory activity, while domestic production increased. Imports of unwrought copper and copper products by the world’s largest consumer of the metal were 404,414 tonnes in Oct, data from the General Administration of Customs showed. (Reuters)

China: Oct iron ore imports fall 4.7% on month, customs. China’s imports of iron ore fell 4.7% in Oct from the previous month, customs data showed, as a deepening property crisis curbed demand for the steelmaking ingredient. The world’s top iron ore consumer brought in 94.9m tonnes of the commodity last month, down from Sep’s 99.7m tonnes, the General Administration of Customs said. (Reuters)

Australia: Inflation expectations continue to jump. Australian inflation expectations continue to jump, hitting the highest level in the history of a survey by ANZ Bank and pollster Roy Morgan. Weekly inflation expectations rose 0.2 percentage points to 6.8% last week, its highest value on record going back to 2010. Its four week moving average rose 0.3 percentage points to 6.4%, the survey data showed. (Bloomberg)

Indonesia: Q3 GDP growth improves less than expected. Indonesian economic growth improved at a slower-than-expected pace in the three months ended Sep, official data revealed. GDP advanced 5.72% YoY in the third quarter, slightly faster than the 5.45% rise in the second quarter, Statistics Indonesia reported. This was the biggest expansion since the second quarter of 2021. (RTT)

Thailand: Headline CPI rises 5.98% YoY in Oct, slightly below forecast. Thailand's headline CPI rose 5.98% in Oct from a year earlier, official data showed, slightly lower than forecast and the slowest pace in six months. The rise follows Sep's 6.41% increase and was just shy of the 6.0% forecast in a Reuters poll. It was the lowest since April's 4.65%. (Reuters)

Markets

Tenaga Nasional (Outperform, TP: RM12.42): Weighs up to USD1bn renewable unit stake sale. Tenaga Nasional, Malaysia’s state-owned electric utility, is exploring selling a minority stake in a planned renewable energy unit to help fund its expansion into the sector, according to people with knowledge of the matter. The Kuala Lumpur-listed power firm has asked banks to submit proposals and could raise USD300m to USD1bn from potential investors. Tenaga hasn’t picked a financial adviser yet, said the people, who asked not to be identified as the process is private. (StarBiz)

Boustead Plantations: Zainal Abidin Shariff resigns as CEO. Zainal Abidin Shariff has resigned as CEO of Boustead Plantations (BPB) effective from today. BPB, in a statement, said Zainal wanted to pursue other interests. The company will commence the process of identifying the successor soon. During the interim period, BPB board member Fahmy Ismail was redesignated as executive director and appointed as acting CEO effective immediately. Formerly BPB CEO from 2014 until 2018, Fahmy is also Boustead Group finance director. (BTimes)

Velesto: Bags USD135m North Malay Basin contract from HESS. Velesto Energy Bhd’s wholly owned unit Velesto Drilling SB, has bagged a USD135m contract from Hess Exploration And Production Malaysia BV. It said the contract was for the provision of integrated rig, drilling and completion (I-RDC) services for Hess’ 2022 to 2024 North Malay Basin full field development campaign. The contract is to provide I-RDC services covering 14 wells with an expected commencement date in the 4QFY22. Velesto said the group would assign its jack-up rig NAGA 5 for the contract. (Bernama)

Datasonic: Bags RM140m i-Kad job from govt. Datasonic Group has clinched a contract worth RM140m to supply foreign worker cards (i-Kads) to the Immigration Department of Malaysia (IDM) for a period of three years. The security-based ICT solutions provider said the group’s wholly owned subsidiary Datasonic Technologies SB (DTSB) received the letter of award from the Ministry of Home Affairs. Datasonic noted that DTSB is to supply the i-Kads to the IDM from 1 Nov 2022 to 31 Oct 2025. Meanwhile, the group said DTSB will also implement the Professional Training and Education for Growing Entrepreneurs (PROTÉGÉ) programme as set by the government. (The Edge)

Acme: Inks JV to develop Penang land. Acme Holdings is teaming up with Koperasi Kampung Melayu Balik Pulau Bhd (KKMBPB) to jointly develop seven parcels of land measuring about 178.34 acres in Penang into a multi-phased integrated development. Acme said its wholly owned subsidiary Ayana Bayu Sdn Bhd (ABSB) had entered into a joint venture agreement (JVA) with KKMBPB to jointly develop the land with an estimated minimum GDV of RM1.4bn. (The Edge)

United Plantations: Posts its best quarterly profit, declares 40 sen dividend. United Plantations’s net profit for the 3QFY22 jumped 27.62% to RM196.72m, its best quarterly net profit to date from RM154.15m in the same period last year, thanks to elevated CPO and palm kernel prices. Revenue for the quarter under review climbed 23.62% to RM649.62m from RM525.5m. EPS advanced to 47.43 sen from 37.16 sen. The group declared an interim dividend of 40 sen per share, to be paid on 5 Dec, with an ex-date of 18 Nov. (The Edge)

Market Update

The FBM KLCI might open stronger today after US stocks finished higher on Monday as investors prepared for this week’s inflation data and the midterm elections, while keeping close tabs on China’s Covid-19 measures. Wall Street’s benchmark S&P 500 added 1% and the tech-heavy Nasdaq Composite closed 0.9% higher in New York. Monday’s session came on the eve of the US midterm elections. Pollsters expect a tight Senate race that could result in the Democrats losing their razor-thin majority, and Republicans reclaiming the House of Representatives, which could slow down President Joe Biden’s expansive economic agenda. The US central bank signalled last week that interest rates will rise slower, but higher than previously expected. Jobs data last Friday also indicated the US labour market was still running hot, although a small rise in the unemployment rate helped ease those concerns. A reading on inflation in the world’s biggest economy, due later this week, should provide further clues on the trajectory for domestic interest rates. Europe’s Stoxx 600 closed up 0.3%. The FTSE 100 fell 0.5%.

Back home, Bursa Malaysia reversed earlier losses to close higher on Monday amid improved regional market sentiment and last minute buying in local equities led by Maxis Bhd and PPB Group Bhd. At the closing bell, the benchmark FBM KLCI improved 3.84 points, or 0.27%, to end at 1,442.12 compared to Friday's close of 1,438.28. Elsewhere in the region, Japan’s Topix rose 1% and South Korea’s Kospi gained 1%.

Source: PublicInvest Research - 8 Nov 2022