Economy

US: Home prices slip for fourth month with US market slowing. The US housing market continued to sag in Oct as the impact of higher mortgage rates and concerns over the economy rattled buyers and sellers. Prices fell 0.5% from Sept, the fourth consecutive monthly decline for a seasonally adjusted measure of home prices in 20 large cities, according to the S&P CoreLogic Case-Shiller index. The market began downshifting earlier this year as the Fed started hiking its benchmark interest rate, with the goal of easing high inflation that has been driven in part by skyrocketing housing costs. (Bloomberg)

China: Industrial profits decline further . China's industrial profits declined at a faster rate in the Jan to Nov period as slowing demand and the resurgence of Covid cases weighed on industrial activity, official data revealed. Industrial profits decreased 3.6% in January to November period, which was bigger than the 3.0% decline in Jan to Oct, the National Bureau of Statistics reported. Industrial output slowed down and business operations came under pressure due to factors such as the resurgence of the epidemic and the weak demand, NBS statistician Zhu Hong said. (RTT)

Japan: Retail sales rise as travel subsidies boost spending. Japanese retail sales continued to increase in Nov as the travel subsidy program initiated to stimulate the tourism sector boosted consumer spending and unemployment rate was the lowest in three months, official data revealed. Retail sales grew 2.6% in November from the same period last year. This was the ninth consecutive rise in sales, the Ministry of Economy, Trade and Industry reported. However, growth was weaker than Oct's 4.4% and also less than economists' forecast of 3.7%. On a monthly basis, retail sales decreased 1.1%, reversing a 0.3% rise in Oct. The government had launched a travel subsidy program for residents of Japan in Oct. The scheme provides discounts and coupons equivalent to JPY 11,000 per traveler per day. (RTT)

Japan: Jobless rate down to 2.5% in Nov . Japan's jobless rate fell to 2.5% in Nov, while the availability of jobs stayed at its highest level since March 2020, government data showed. The seasonally adjusted unemployment rate matched economists' median forecast in a Reuters poll, and was down from 2.6% in Oct. The jobs-to applicants ratio stood at 1.35, Labour Ministry data showed, unchanged from Oct. (Reuters)

India: Banks may need to lift deposit rates as credit demand surges — RBI . India's banking sector remained resilient in 2021/22 and lenders may have to raise deposit rates more to meet a surge in credit demand, the central bank said in a report. The Reserve Bank of India (RBI) has raised rates aggressively this year to tame inflation. While banks have swiftly transmitted the hikes to their lending rates, deposit rates have been laggards for most. (Reuters)

Thailand: Economy may hit 2023 growth goal if Chinese tourists come — finance minister. Thailand's economy may accelerate next year and hit the 3.8% growth forecast provided its vital tourism sector will get a boost from China's reopening plans needed to offset slowing global demand, the finance minister said. Growth in southeast Asia's second-largest economy has lagged that of other peers as the tourism sector just started to recover from the coronavirus pandemic. (Reuters)

South Korea: Consumer confidence highest in 3 months . South Korea's consumer sentiment improved to the highest level in three months in Dec as households' economic expectations strengthened survey results from the Bank of Korea showed. The consumer confidence index rose to 89.9 in Dec from 86.5 in Nov. This was the highest since Sept. Among sub-indicators, the measure of assessment of current living standards remained unchanged at 83 in Dec and that for the view on future living standards increased by three points to 85. The index measuring future household income rose two points to 95, while that concerning future household spending gained one point to 108. (RTT)

Markets

BCorp: Considers major acquisition in financial services segment. Berjaya Corp (BCorp) is currently contemplating and evaluating a major potential acquisition involving a licensed entity that is governed by Bank Negara Malaysia, under the Financial Services Act 2013 (FSA). BCorp said Section 92 of the FSA provides that “no individual shall hold more than 10% of interest in shares of a licensed person. (StarBiz)

G Capital: Inks 21-year renewable energy PPA with TNB for 8MW mini-hydropower plant in Perak. G Capital’s (GCap) 96%- owned subsidiary Gunung Hydropower SB has signed a 21-year renewable energy power purchase agreement (PPA) with TNB. Under the deal, the utilities giant will buy electricity generated by GCap’s Perak mini-hydropower plant at a feed-in-tariff (FiT) rate of 24.6 sen per kWh. (The Edge)

Toyo Ventures: To issue ICULS to major shareholders to offset RM354m debt. Toyo Ventures is going to issue irredeemable convertible unsecured loan stocks (ICULS) to settle RM354m worth of debts related to its Vietnam power plant project. The manufacturer plans to issue 295m ICULS at RM1.20 apiece to settle the bulk of the RM355.2m in debt owed to three creditors: Ng Lu Siong @ Ng Soon Huat, Eng Lian (L) Inc (ELLI), and Bukit Asa SB (BASB). (The Edge)

Ranhill Utilities: Wins RM38.5m job from JKR to upgrade Lumut navy base's piping system. Ranhill Utilities’ unit secured a RM38.5m contract from the Public Works Department (JKR) to upgrade the piping system for treated water supply at the Royal Malaysian Navy Base in Lumut, Perak. The project, which will be fully funded by JKR, is estimated to span 27 months starting from 6 Jan 2023, and be completed by 27 March 2025. (The Edge)

Techbond: Buys adhesives, chemicals producing unit from PPB for RM57m. Techbond Group is spending RM57.3m cash to acquire a company that produces adhesives and its related chemicals under the business empire of tycoon Robert Kuok. The industrial adhesives producer entered into an agreement to buy a 99.57% stake in Malayan Adhesives and Chemicals SB (MAC) from Chemquest SB, which is 55% owned by PPB Group and 45% owned by Kuok Brothers SB. (The Edge)

Comintel: Independent adviser BDO tells shareholders to reject takeover offer. Minority shareholders of Comintel Corp have been advised to reject a mandatory takeover offer launched by the company’s largest shareholder Datuk Jackson Tan Kak Seng, to acquire the remaining shares at 15 sen apiece or RM24.97m. Independent adviser BDO Capital Consultants SB held the view that the offer is “not fair and not reasonable” and recommended that shareholders reject the offer by Tan. (The Edge)

KNM: Defaults on loan. KNM Group has defaulted on a principal repayment of USD3.4m (RM15.04m) and and interest of USD16,104 (RM71,227) to the BoC (M). Cash-strapped KNM, which had announced a default on three credit facilities totalling RM417.6m earlier this month, said the latest default occurred on Dec 26 via its wholly-owned subsidiary, KNM Capital Labuan Ltd. (StarBiz)

Market Update

The S&P 500 fell 0.4% at the start of the holiday-shortened week, as bond yields climbed and investors weighed the economic outlook for 2023. The Dow Jones rose 0.1% while the Nasdaq Composite shed 1.4%. China-linked stocks advanced as the country loosened Covid restrictions. Tesla dropped more than 11% on news of an extended production pause. European stocks moved higher as positive sentiment continues in the final trading days of 2022. Germany’s DAX ended the day 0.39% higher, while France’s CAC 40 added 0.7%. The UK’s FTSE index was closed for a public holiday. Stocks in Europe received a boost from their counterparts in Asia-Pacific after China officially announced overnight that it will end quarantine for inbound travelers. Stocks in Asia also advanced, due to news of an end to China’s zero-Covid policy. Shanghai Composite and Singapore’s Straits Times rose 1% and 0.3% respectively. Hong Kong was closed.

Back home, FBM KLCI was flat, settling at 1,474.69. Palm oil posted its biggest advance since July as China's decision to end quarantine for inbound visitors buoyed expectations that demand in one of the world's top consumers of edible oils will improve. Palm oil futures climbed 7.2% to close at RM4,104/tonne, the highest close in more than three weeks. Other commodities including crude oil also gained.

Source: PublicInvest Research - 28 Dec 2022