Economy

US: Homebuilder confidence unexpectedly rebounds in Jan. The NAHB/Wells Fargo Housing Market Index climbed to 35 in Jan from 31 in Dec, while economists had expected the index to come in unchanged. With the unexpected increase, the index rebounded from its lowest reading since mid-2012, with the exception of the onset of the pandemic in the spring of 2020.(RTT)

US: Industrial production decreases much more than expected in Dec. Industrial production in the US decreased by much more than expected in the month of Dec. The Fed said industrial production slid by 0.7% in Dec after falling by a revised 0.6% in Nov. The bigger-than-expected decline in industrial production partly reflected a continued slump in manufacturing output, which plunged by 1.3% in Dec after tumbling by 1.1% in Nov. Mining output also showed a continued decrease, falling by 0.9% in Dec after slumping by 1.2% in the previous month. (RTT)

US: Business inventories increase in line with estimates in Nov. Business inventories in the US increased in line with economist estimates in the month of Nov. The Commerce Department said business inventories rose by 0.4% in Nov following a revised 0.2% uptick in Oct. Economists had expected business inventories to climb by 0.4% compared to the 0.3% increase originally reported for the previous month. The increase in business inventories largely reflected a surge in wholesale inventories, which jumped by 1.0% in Nov after climbing by 0.6% in Oct. (RTT)

EU: Eurozone core inflation rises in Dec. Raising scope for another aggressive rate hike in Feb, eurozone core inflation accelerated in Dec, as estimated, while overall inflation slowed to a 4-month low on energy prices. Core inflation that excludes energy, food, alcohol and tobacco, advanced to 5.2% from 5.0% in Nov. The rate came in line with the preliminary estimate published on Jan 6. Meanwhile, overall consumer price inflation slowed to 9.2% in Dec, as estimated, from 10.1 in Nov. A year earlier, inflation was 5.0%. On a monthly basis, the harmonized index of consumer prices dropped 0.4% in Dec. (RTT)

UK: Inflation at 3-month low. UK consumer prices grew at the slowest pace in three months in Dec, largely due to the slowdown in motor fuel inflation, which in turn reduced the squeeze on household spending. Consumer price inflation slowed for the second straight month in Dec, to 10.5%, as expected, from 10.7% in Nov. On a monthly basis, consumer prices gained 0.4%, the same pace of growth as seen in Nov, and in line with expectations. Excluding energy, food, alcoholic beverages and tobacco, core inflation held steady at 6.3%, while the rate was forecast to ease to 6.2%. (RTT)

UK: House price inflation eases in Nov. UK house prices registered a slower annual growth in Nov. House prices grew 10.3% YoY, slower than the 12.4% increase in Oct. The average UK house price was GBP295,000 in Nov, a slight decrease from last month's record high of GBP296,000. Nonetheless, this was GBP28,000 higher than this time last year. On a monthly basis, house price edged up 0.1% in Nov, following an increase of 0.5% in the previous month. (RTT)

Japan: BoJ keeps rate, yield curve control unchanged. The BoJ kept its interest rates as well as yield curve control unchanged and modified some of its lending programs. The Policy Board of the BoJ unanimously decided to maintain a negative interest rate of -0.1% on current accounts that financial institutions maintain at the central bank. The bank will also continue to purchase a necessary amount of JGBs without setting an upper limit so that 10-year JGB yields will remain at around 0%. After unexpectedly expanding the tolerance band of 10-year JGB yields in Dec, the bank today maintained the stance that it will allow yields to fluctuate in the range of plus and minus 0.5 ppts from the target level. (RTT)

Taiwan: Economy shrinks 0.9% on weaker exports, worst contraction in 13 years. Taiwanese economy contracted the most in thirteen years as export demand was impacted by the Covid pandemic related woes in China. GDP, fell 0.86% YoY in the Dec quarter, reversing a 4.01% increase in the Sept quarter. Further, this was the worst economic downturn since 3Q of 2009, when GDP shrank 1.13%. On a QoQ seasonally-adjusted annualized basis, GDP fell 4.24%, in contrast to the 7.51% contraction a quarter ago. (RTT)

Markets

Capital A: Engineering arm opens MRO facility in Senai Airport. Asia Digital Engineering (ADE), the engineering arm of Capital A, is on track to have 21 maintenance, repair and overhaul (MRO) lanes by 2024. This is set to materialise with the opening of ADE's new RM4m MRO hangar facility in Senai Airport’s Free Industrial Zone (Safiz) here, focusing on delivering the best value, best-in-class MRO services with high efficiency across an extensive coverage of locations. (StarBiz)

MISC: Pens carbon capture MoU's with international entities. MISC inked separate MoUs with Mitsui & Co. Ltd, Samsung Heavy Industries (SHI) and ANDRITZ AG to tap opportunities for carbon capture and storage (CCS) solutions in the maritime value chain, including identifying storage hubs, development of floating solutions as well as carbon capture parts and equipment. (StarBiz)

Mikro MSC: Proposes 10% private placement to raise up to RM11.5m, mainly for working capital. Mikkro MSC has proposed a private placement by issuing up to 58.92m new shares, equivalent to 10% of its total issued share capital, to raise up to RM11.5m, mainly for working capital purposes. It appointed KAF Investment Bank as adviser and placement agent for the corporate exercise. (The Edge)

Maybulk: Diversifies into commercial shelving business via RM70m acquisition. Malaysian Bulk Carriers has proposed to venture into the business of commercial and industrial shelving through the acquisition of a firm for RM70m. Maybulk said it has entered into an agreement to buy E Metall Systems SB (EMTS) from its co-owners Grand East Metal (Kulim) SB (70%) and Goh Ting Hong (30%). (The Edge)

Mah Sing: Buys 8.2 acres of land in Puchong for RM86m from Tanco MD Andrew Tan’s firm. Mah Sing Group is buying two parcels of land measuring 8.2 acres in Puchong for RM85.86m from Millennium Acres SB, an entity 50%-owned by Tanco Holdings’ MD Datuk Seri Andrew Tan Jun Suan. Mah Sing said the land parcels located in Puchong Perdana have a potential GDV of about RM726m. The group intends to develop one of the parcels into a residential project and the other into a mixed-used development. (The Edge)

Datasonic: Clinches contract in Africa worth almost RM1bn — sources . Datasonic Group has secured a contract, which has an estimated value of close to RM1bn over 10 years, to provide total turnkey solutions for the land office of a West African nation, according to market sources. (The Edge)

Artroniq: Proposes one-for-two bonus issue of warrants. Artroniq has proposed a bonus issue of 164.2m free warrants, on the basis of one warrant for every two shares held. The group expects to raise gross proceeds of up to RM106.7m upon full exercise of the warrants. The proceeds will be utilised for working capital requirements. (The Edge)

Signature: Plans placement to fund acquisition of stakes in Singapore firms . Signature International plans to undertake a private placement of no more than 10% of its total shares to independent investors to be identified, to raise as much as RM61.9m to partly fund its SGD47.8m (RM156.5m) acquisition of stakes in two Singapore-based integrative interior fit-out solutions providers. (The Edge)

Market Update

US markets tumbled overnight as weaker-than-expected retail sales (-1.1% YoY) in the month of December raised concerns of an impending recession, driving investors to take profits on strong year-to-date gains. Shares of banking stocks also fell after 10-year US Treasury yields slipped to its lowest levels since September last year. On the day, the Dow Jones Industrial Average and S&P 500 slumped 1.8% and 1.6% as the Nasdaq Composite lost 1.2%. European markets were mixed as uncertainties continue to persist over the global economic outlook. On the data front, UK’s annual inflation rate fell to 10.5% in December, slightly below expectations, to mark a second month of decline. UK’s FTSE 100 slipped 0.3% though France’s CAC 40 inched 0.1% higher. Germany’s DAX was largely unchanged with a 5-point (-0.03%) drop. Asian markets were mostly higher earlier in the day, led by the Nikkei 225 which jumped 2.5% as the Bank of Japan announced no changes to its yield curve control policy. Elsewhere, the Shanghai Composite Index was fractionally higher as the Hang Seng Index gained 0.5%. Oil prices are continuing to climb on further China re-opening optimism and a rebound in demand, meanwhile.

Source: PublicInvest Research - 19 Jan 2023