Economy

US: Construction spending unexpectedly inches higher in Nov. US construction spending unexpectedly showed a modest increase in in the month of Nov. The construction spending crept up by 0.2% to an annual rate of USD1.808trn in Nov after edging down by 0.2% to a revised rate of USD1.803trn in Oct. The uptick surprised economists, who had been expecting construction to decrease by 0.4% compared to the 0.3% dip originally reported for the previous month. (RTT)

EU: German inflation slows more than expected to 8.6%. Germany's consumer price inflation slowed at a faster than expected pace in Dec as the rate of increase in energy prices slowed sharply after the government took relief measures to support households and businesses. The CPI rose 8.6% YoY following a 10.0% rise in Nov. Economists had expected headline inflation to slow to 9.1%. Energy inflation sharply eased to 24.4% from 38.7% in the previous month. (RTT)

UK: Manufacturing decline gathers pace amid subdued demand. U K manufacturing contraction worsened in Dec as output, new orders, and employment declined at faster rates due to subdued demand conditions both domestically and internationally impacted by price pressures and increased market volatility. The S&P Global/Chartered Institute of Procurement & Supply manufacturing PMI fell to a 31-month low of 45.3 in Dec from 46.5 in Nov. The index has remained below the neutral 50.0 mark for five successive months. Nonetheless, the score was above the flash estimate of 44.7. (RTT)

China: Manufacturing activity weakens on covid containment measures. China's factory activity deteriorated further at the end of the year as Covid-19 containment measures together with softer demand forced manufacturers to downsize production. The Caixin manufacturing PMI edged down to 49.0 in Dec from 49.4 in the previous month. The reading has remained below the neutral 50.0 mark for the fifth successive month suggesting contraction as Covid-19 outbreaks dampened manufacturing activity. (RTT)

Singapore: House price growth slows sharply on weak sales. Singapore private home prices rose at a slower pace in the final three months of 2022 and for the year as a whole, thanks to a decline in housing. The private residential property price index increased 0.2% from 3Q, when prices grew 3.8%. For the whole of 2022, prices of Singapore private homes rose 8.4%, which was slower than the 10.6% rise in 2021. (RTT)

Vietnam: Manufacturing downturn worsens on weaker demand. Vietnam's manufacturing contraction gathered pace at the end of the year amid weaker demand conditions at home and abroad. The PMI dropped to 46.4 in Dec from 47.4 in Nov. Further, the latest decline was the most marked since the pandemic-related downturn seen in the 3Q of 2021. New orders fell solidly in Dec due to weaker demand conditions in key export markets, including Mainland China, the EU, and the US. In response, producers reduced their output for a second consecutive month. Manufacturing employment decreased at a marked pace, and it was the sharpest in 14 months. On the price front, input price inflation accelerated to a five-month high in Dec, linked to higher costs for raw materials, gas, and shipping. (RTT)

Markets

Kejuruteraan Asastera: Bags RM230m EPCC job from Petronas Gas . Kejuruteraan Asastera has secured a letter of award from Petronas Gas Bhd’s unit Regas Terminal (Lahad Datu) SB for the engineering, procurement, construction, and commissioning (EPCC) of a 52-megawatt (MW) power plant and its associated facilities in Sabah. The contract is for a total non-escalating all inclusive fixed lump sum of RM230m. (The Edge)

MAG: Proposes private placement . Mag Holdings has proposed to undertake a private placement of new ordinary shares in the company, representing up to 10% of its total number of issued shares. Based on an illustrative issue price of 0.1668 sen per placement share, the proposed private placement is expected to raise gross proceeds of RM24.1m under the minimum scenario, and RM35.5m under the maximum scenario. The proceeds will be utilised for the expansion of the Wakuba Farm, working capital, and expenses related to the proposed private placement. (Bernama)

Sunway Construction: Bags RM1.7bn data centre construction job . Sunway Construction Group has entered into a RM1.7bn contract with Yellowwood Properties SB to provide general contractor services for a data centre construction project in Sedenak Tech Park (STeP), Johor. SunCon said the contract is expected to be completed by the third quarter of 2024. (The Edge)

G Capital: School bus service contract with Mindef extended for another year . G Capital’s two-year contract for the chartering of school buses for the children of armed forces personnel has been extended by another year at an additional value of RM8.4m. The contract with the Ministry of Defence (Mindef) now ends on Dec 31, 2023, with the total value rising to RM52.6m from RM44.2m. (The Edge)

Hextar Technologies: Changes at the helm of Hextar Technologies Solutions. Hextar Technologies Solutions has appointed Tan Sri Muhammad Ibrahim as its new independent non executive chairman and Datuk Ong Choo Meng as group CEO and ED. Muhammad, who was the eighth governor of Bank Negara, was appointed to the role following the resignation of Datuk Iskandar Sarudin as independent non-executive chairman. (StarBiz)

Bintai Kinden: Bags RM4m subcontracts, receives PETRONAS supply licences . Bintai Kinden Corp's 51%-owned sub-subsidiary Bintai Energy SB has been awarded a series of subcontracts by Petro Flanges & Fittings SB (PFF) and various customers recommended by PFF for the supply of high-grade carbon steel/stainless steel piping, valves and piping accessories to various oil and gas businesses. In a statement, the group said the contracts are worth a combined value of RM4m. (StarBiz)

Cypark: Jakel to surface as new major shareholder— sources . Jakel Group is expected to surface as the single largest shareholder in renewable energy company Cypark Resources, according to sources. Market sources told The Edge that Jakel’s investment arm Jakel Capital could be taking up the whole block of Cypark’s private placement exercise, involving 30% of the total issued shares. Another source, however, said Jakel Group will only be subscribing to half of the private placement shares — representing a 15% stake of the company — while the remaining half block is to be taken up by another friendly party. (The Edge)

Market Update

The FBM KLCI might open lower today after US stocks started 2023 on a downbeat note, pulled lower by companies including Tesla and Apple, drawing a contrast to the more optimistic New Year’s performance across the Atlantic. Wall Street’s benchmark S&P 500 index fell 0.4% on Tuesday and the tech-heavy Nasdaq Composite dropped 0.8%, erasing deeper losses from early in the trading session. The worst performing stock in the S&P 500 was electric car maker Tesla, which dropped 12.2% on the first US trading day of the New Year after new-vehicle deliveries fell short of analysts’ expectations in the fourth quarter. Apple’s shares fell 3.7% amid concerns of slowing demand for its gadgets, taking the company’s market capitalisation below $2tn. In contrast, the regional Stoxx Europe 600 gained 1.2%, extending gains from an upbeat start to 2023 the previous day. London’s FTSE 100, which was closed on Monday, kicked off the year by rallying 1.4%. The moves came after fresh data showed German inflation slowed more than expected in December, with consumer prices increasing 9.6% on the year, from 11.3% in November.

Back home, Bursa Malaysia ended the first trading day in 2023 lower with the key index falling 1.44% on profit-taking due to recent gains. At the closing bell, the benchmark FBM KLCI dropped 21.5 points to 1,473.99 from last Friday's closing of 1,495.49. China’s CSI 300 index of Shanghai- and Shenzhen-listed shares added 0.4% as the country continued to battle large outbreaks of Covid-19 following the relaxation of measures designed to slow the spread of the virus. Elsewhere, the Hang Seng gained 1.84% while the Nikkei 225 ended flat.

Source: PublicInvest Research - 4 Jan 2023