Economy

Global: IMF chief expects to keep 2023 global growth forecast steady at 2.7%. The IMF is not expected to downgrade its forecast for 2.7% growth in 2023, noting that concerns about an oil price spike had failed to materialize and labor markets remained strong. IMF Managing Director said 2023 would be another tough year for the global economy, and inflation remained stubborn, but did not expect another year of successive downgrades. (Reuters)

US: Inflation cools again, puts Fed on track to downshift. US inflation continued to slow in Dec, adding to evidence price pressures have peaked and putting the Fed on track to again slow the pace of interest-rate hikes. The overall CPI fell 0.1% from the prior month, with cheaper energy costs fueling the first decline in 2.5 years, according to a Labor Department report. The measure was up 6.5% from a year earlier, the lowest since Oct 2021. (Bloomberg)

US: Jobless claims unexpectedly edge down to three-month low. First-time claims for US unemployment benefits unexpectedly edged slightly lower in the week ended 7 Jan. The report said initial jobless claims slipped to 205,000, a decrease of 1,000 from the previous week's revised level of 206,000. The dip surprised economists, who had expected jobless claims to rise to 215,000 from the 204,000 originally reported for the previous week. (RTT)

US: Dec deficit quadruples as outlays grow, debt ceiling nears. The US government's Dec budget deficit quadrupled from a year earlier to USD85bn as receipts shrank slightly and outlays grew to a new Dec record, the Treasury Department as it neared the USD31.4trn federal debt limit. The results confirmed forecasts that revenues would start to ease as a red-hot economy cools, and showed that reductions in pandemic relief spending have faded. (Reuters)

EU: Eurozone consumer inflation expectations ease. Euro area consumers' inflation expectations eased in Jan, warranting slower pace of tightening from the ECB. CPI prediction for one-year ahead slowed to 5.0% from 5.4%, and that for three years ahead eased marginally to 2.9% from 3.0%, the latest Consumer Expectations Survey from the ECB showed. (RTT)

Japan: BoJ to review side effects of ultra easing in next week's policy session. The BoJ is set to review the side-effects of its massive monetary easing during the policy session on 17 and 18 Jan, and may make additional policy adjustments to correct the distortions in the yield curve. In the Dec monetary policy session, the nine-member board unexpectedly decided to expand the range of the 10-year JGB yield fluctuations to 0.5ppts from 0.25ppts. Despite the surprise tweak to the yield curve control last month, the market functioning has improved little. (RTT)

South Korea: Export prices sink 6.0% in Dec . Export prices in South Korea tumbled 6.0% on month in Dec, the Bank of Korea said - after sinking 5.4% in Nov. Individually, export prices for agricultural, forestry and marine product fell 2.1% on month, while manufacturing products shed 6.0%. Import prices slumped 6.2% last month after dropping 5.5% in Nov. Individually, import prices for raw materials lost 9.9%, intermediate goods fell 4.7%, capital goods slid 2.9% and consumer goods shed 3.0%. On a yearly basis, export prices rose 3.1% and import prices jumped 9.1%. (RTT)

India: Inflation slows slightly in Dec. India's CPI slowed slightly at the end of the year. CPI advanced 5.72% on a yearly basis in Dec, slower than the 5.88% increase seen in Nov. In the same period last year, inflation was 5.66%. Inflation remained within the Reserve Bank of India's tolerance band of 2-6% for the second straight month. Food price inflation also weakened in Dec, to 4.19% from 4.67% a month ago. On a monthly basis, consumer prices were down 0.45% and food prices decreased 1.64% in Dec. The Reserve Bank of India has raised its interest rates by a cumulative 225 bps since May to curb the above target inflation. (RTT)

Markets

Capital A: Optimistic about exiting PN17 status by year end. Capital A is optimistic about its potential growth this year, following a strong rebound in travel demand post Covid, and expects to be out of PN17 status by the end of this year. The investment holding group, which is involved in aviation, logistics, lifestyle, and financial services ventures, plans to submit its finalised regularisation plan to Bursa Malaysia as early as Feb. (The Edge)

Yinson: Completes 16-year contract for FPSO Adoon, offshore Nigeria. Yinson Production, the offshore production business unit of Yinson Holdings, has announced the completion of a 16-year contract for FPSO Adoon, which has been operating at Block OML 123 offshore Nigeria. The contract had an original period of 8 years with an option to extend by up to 8 more years until 2022. (StarBiz)

JAKS Resources: JAKS-KACC JV filing application to stay adjudication decision to pay GUH’s unit. A JV of JAKS Resources is filing an application to stay and set aside the adjudication decision to pay RM11.5m to GUH Holdings, plus other interests, costs and adjudicator's fees, following the termination of a work contract.. The adjudication decision delivered on Dec 23, 2022 was in favour of GUH Holdings — which ordered JAKS-KACC JV to pay the company within 14 days of the award date. (The Edge)

Ireka: Warns of possible losses as it reverses decision to put unit under judicial management. Ireka Corp is giving a profit warning that its financials are expected to be dragged by the huge losses in its wholly-owned unit Ireka Engineering & Construction SB (IECSB) in 3QFY2023. The reason is that Ireka Corp has decided to discontinue its application to place its loss-making unit under judicial management (JM OS), 6 months after it submitted the application in late July last year. By doing that, it would be required to reconsolidate the financial results of IECSB in 3QFY2023 if control of the unit remains with the company until then, according to the company's bourse filing. (The Edge)

Destini: Putrajaya ups ceiling of aircraft parts supply contract by RM60.5m. The Ministry of Defence has increased the ceiling value of a contract awarded to Destini in July 2020 for the supply of non-proprietary aircraft parts to the Royal Malaysian Air Force. The contract value has been raised by RM60.5m to RM181.5m from RM121m, while the expiry date remains the same. (The Edge)

Harn Len: To buy plantation assets from Jakel. Jakel Group is likely to emerge as a shareholder in Johor-based oil palm planter and property developer Harn Len Corp. Jakel will be injecting its privately-owned plantation firm into Harn Len for RM55m in a cash plus-shares deal. The acquisition of Jakel’s plantation company will be satisfied via 60% cash and 40% shares in Harn Len. As a result, Jakel will become a shareholder of Harn Len with at least a 5% stake. (The Edge)

Market Update

The FBM KLCI might end the week higher as US stocks and Treasuries rallied after data showed US inflation continued to slide in December, easing pressure on the Federal Reserve to make further sharp interest rate rises. Wall Street’s blue-chip S&P 500 reversed an early dip to close 0.3% higher for the day, its third consecutive day of gains. The tech-heavy Nasdaq Composite rose 0.6%. The moves came after a report from the Department of Labor showed annual consumer price growth in the US fell to 6.5% in December, down from 7.1% in November and broadly in line with economists’ expectations. The latest figures raised expectations that the Fed will further slow the pace of its interest rate rises with a 0.25 percentage point increase at its next policy meeting at the end of January. Across the Atlantic, Europe’s Stoxx 600 added 0.6% and Germany’s Dax rose 0.7% on Thursday, while London’s FTSE 100 gained 0.9%, inching closer to an all-time high.

Back home, Bursa Malaysia ended Thursday's trading session little changed as investors seemed reluctant to make more significant moves due to the absence of buying catalysts amid a better regional market performance. At the closing bell, the benchmark FBM KLCI rose marginally by 0.79 of-a-point or 0.05% to 1,488.66 from Wednesday's closing of 1,487.87. In the region, Hong Kong’s Hang Seng rose 0.3% and China’s CSI 300 of Shanghai and Shenzhen-listed stocks added 0.2%.

Source: PublicInvest Research - 13 Jan 2023