Economy

US: Wholesale inventories revised lower in Sept. US wholesale inventories increased less than initially thought in Sept amid decreases in stocks of petroleum and computer equipment, also suggesting that businesses were carefully managing their inventory amid slowing demand. The Commerce Department said that wholesale inventories rose 0.6% instead of 0.8% as reported last month. Stocks at wholesalers advanced 1.4% in Aug. Economists polled by Reuters had expected that inventories would be unrevised. (Reuters)

US: Biden says US not near recession, needs time to cut prices. President Joe Biden said he is optimistic the US isn’t nearing a recession the day after Democrats fared better than expected in midterm elections clouded by voter anxiety about inflation and the economy. (Bloomberg)

US: Evans, in exit interview, says it’s time for Fed to slow down. Charles Evans, the outgoing president of the Federal Reserve Bank of Chicago, said it’s time for the central bank to begin slowing down its blistering pace of interest-rate increases given how high they’ve already gone, even if inflation data continue surprising to the upside in the coming months. (Bloomberg)

EU: Ireland manufacturing output grows sharply in Sept. Ireland's manufacturing output expanded markedly at the end of the third quarter, preliminary figures from the Central Statistics Office showed. Production in the manufacturing industries climbed a seasonally adjusted 31.3% YoY in Sept, much faster than the 9.1% rebound in Aug. On a monthly basis, manufacturing output advanced 14.1% from Aug, when it rose by 15.1%. (RTT)

China: Consumer price inflation eases, factory-gate prices fall for first time since 2020. China consumer price inflation slowed more than expected in Oct on weaker demand and producer prices declined for the first time since Dec 2020, official data revealed. Consumer prices grew 2.1% in Oct from the same period last year, the National Bureau of Statistics reported. This was slower than the 2.8% increase posted in Sept and also economists' forecast of 2.4%. (RTT)

Japan: Manufacturers' mood down amid weak yen, global risks. Japanese manufacturing optimism dropped to a 22-month low in Nov, while the service-sector mood brightened to a three year high, the Reuters Tankan poll showed, underscoring the fragility and unevenness of Japan’s post-COVID recovery. The monthly poll, which tracks the closely watched tankan quarterly survey of the BOJ, found that manufacturers expected their business conditions to improve over the coming three months while service-sector respondents expected little change. (Reuters)

South Korea: Jobless rate steady at 2.8%. South Korea's unemployment rate remained unchanged in Oct, data from Statistics Korea showed. The unemployment rate was a seasonally adjusted 2.8% in Oct, same as in Sept. In Aug, the rate had eased to 2.5% from 2.9% in July. In Oct last year, the unemployment rate was 3.2%. On an non-adjusted basis, the jobless rate remained unchanged at 2.4% in Oct. (RTT)

Australia: RBA's Bullock says rate hikes, cost of living crisis to bring inflation down. Reserve Bank of Australia Deputy Governor Michele Bullock said the interest rate hikes together with the cost of living pressures are set to weigh on consumption and cool demand, thus help to bring inflation back to the target. Although inflation forecasts were revised up a little, there are good reasons to believe that the peak of the inflation is approaching, Bullock said in Sydney. (RTT)

Indonesia: Retail sales growth remains strong. Retail sales growth in Indonesia remained strong in Sept despite easing slightly from Aug, and retailers expected sales to maintain growth momentum in Oct, results of a survey by Bank Indonesia showed. Retail sales rose 4.6% YoY in Sept, following a 4.9% gain in Aug. The overall growth in September was driven by improvements in sales of food, beverages and tobacco, and other household appliances, while growth in the motor vehicle fuel and clothing subgroups slowed. (RTT)

Philippine: Q2 GDP growth revised up. The Philippine economy grew slightly more than previously estimated in the second quarter, revised data from the Philippine Statistics Authority showed. GDP advanced 7.5% in the second quarter, which was revised up from 7.4%. The pace of expansion was weaker than the first quarter's 8.2% growth. The major contributors to the upward revision were construction, real estate and ownership of dwellings and manufacturing. (RTT)

Markets

CapitaLand Malaysia Trust: Proposes acquisition of Queensbay Mall for RM990.5m . MTrustee Bhd, the trustee of Capitaland Malaysia Trust (CLMT), has entered into agreements to acquire 91.8% of the total strata floor area of retail parcels in Queensbay Mall in Penang for RM990.5m. CapitaLand Malaysia REIT Management SB (CMRM), the manager of CLMT, said the purchases from parties related to CapitaLand Investment Ltd (CLI) represent a discount of about 1% to the independent valuation of RM1bn. (StarBiz)

F&N: Aims to raise RM800m in capex for FY2023, mainly for dairy farm business . Fraser & Neave Holdings aims to raise up to RM800m in capital expenditure (capex) for the financial year ending Sept 30, 2023, with most of the funds earmarked for its dairy farm business, the food and beverage giant has completed the acquisition of agricultural land — Ladang Permai SB — in Gemas, Negeri Sembilan for RM215.6m, and the group is on track to resume its plans for the upstream fresh milk business — for downstream production and distribution of fresh milk. This will enable the group to own vertical integration businesses and operations based on locally-grown crops for feed to F&N’s dairy farm, which in turn will lower the value chain cost per litre. (The Edge)

EG Industries: Expects to create 1,000 high-value jobs as new Penang plant set to run in 2024 . EG Industries expects its RM180m Smart Factory 4.0 in Batu Kawan, Penang, to potentially create more than 1,000 high-value jobs for the local community upon its commencement in 2024. EG Industries said that its first fully automated Lights-Out Smart Factory 4.0 will be situated on a six-acre piece of industrial land under its unit SMT Technologies SB. (The Edge)

Paragon Globe: Proposes RM71.5m purchase of Johor Bahru tract for industrial development . Paragon Globe has proposed to acquire a tract of freehold land in Plentong, Johor Bahru, measuring about 42.29ha for RM71.5m. The group said it expects to fund the purchase consideration via a combination of internally generated funds, bank borrowings and equity fundraising. Following the completion of the acquisition, Paragon Global intends to develop the land into an industrial area with 171 units of industrial properties. The project is expected to commence in 2024, and is projected to take eight to 10 years to complete. (StarBiz)

UEM Edgenta: Sells 51% stake in Indian facilities management firm for RM40m . UEM Edgenta is selling its 51% stake in Faber Sindoori Management Services Pte Ltd for INR700m (RM40m) to Apollo Sindoori Hotels Ltd (ASHL). The group has entered into a share purchase agreement with ASHL, which holds the remaining 49% in Faber Sindoori, which is mainly involved in the provision of integrated facilities management services in India. (The Edge)

Kejuruteraan Asastera: To acquire biogas power plant in Kedah for RM15m . Kejuruteraan Asastera (KAB) is expanding its sustainable energy solutions (SES) segment through the proposed acquisition of the entire equity of Future Biomass Gasification SB (FBG) for RM15m. KAB said FBG owns a biogas power plant in Kedah with an installed capacity of 2.4 megawatt. KAB said it would benefit from long-term recurring income via FBG’s existing renewable energy power purchase agreement with TNB. (The Edge)

Market Update

The FBM KLCI might open lower today after US stocks fell on Wednesday as investors digested the results of tighter than expected midterm elections and looked ahead to a closely watched inflation update on Thursday. Wall Street’s benchmark S&P 500 fell 2.1%, while the tech-heavy Nasdaq Composite slid 2.5%. Many pollsters had predicted a “red wave” of Republican victories before Tuesday’s vote, but early results showed Democrats performing better than expected with control of Congress still hanging in the balance. Data released on Thursday is expected to show the consumer price index’s core measure of inflation, which strips out volatile energy and food costs, remains close to its highest level in four decades. Elsewhere, the fall in bitcoin continued, giving up close to 14% on Wednesday to drop below $16,000 after the near collapse of Sam Bankman-Fried’s FTX, one of the world’s largest crypto exchanges, prompted a broad sell-off in crypto assets. Europe’s Stoxx 600 retreated 0.3%, trimming earlier losses, and London’s FTSE 100 fell 0.1%.

Back home, Bursa Malaysia closed marginally higher on Wednesday, with the key index gaining 0.33%, in sync with the mixed performance in regional markets. At the closing bell, the benchmark FBM KLCI had risen 4.84 points to end at 1,446.19, from Tuesday's close at 1,441.35. In China, the CSI 300 index of Shanghai- and Shenzhen-listed stocks dropped 0.9%, while Japan’s Topix shed 0.4% and Hong Kong’s Hang Seng fell 1.2%. The Hang Seng Mainland Properties index rose 4% after Beijing expanded a programme to support bond sales in the sector, which had been hit by a liquidity crisis.

Source: PublicInvest Research - 10 Nov 2022