Economy

US: New York manufacturing index indicates downturn in Oct. A report released by the Federal Reserve Bank of New York showed a downturn in regional manufacturing activity in the month of Oct. The New York Fed said its general business conditions index fell to a negative 4.6 in Oct from a positive 1.9 in Sept, with a negative reading indicating a contraction in activity. Economists had expected the index to drop to a negative 7.0. Twenty-four% of respondents reported that conditions had improved over the month, while twenty-nine% reported that conditions had worsened, the New York Fed said. (RTT)

EU: Eurozone trade balance swings to surplus in August. The euro area trade balance registered a surplus in August largely due to the fall in oil import costs, data from Eurostat showed. On an unadjusted basis, the trade balance posted a surplus of EUR6.7bn compared to a sharp deficit of EUR54.4bn in the same period last year. Imports plunged 24.6% on a yearly basis, while exports dropped only 3.9%. MoM, exports posted an increase of 1.6%, while imports decreased 2.0% from July. (RTT)

EU: Germany wholesale prices decline at fastest pace since 2020. Germany's wholesale prices declined at the fastest pace in more than three years in Sept data from Destatis showed. Wholesale prices posted an annual fall of 4.1% in Sept largely due to a base effect originating from the large price increases in 2022 as a result of the war in Ukraine. Prices have been falling since April 2023. The latest fall was the biggest since May 2020. There was a sharp 19.8% decline in wholesale prices of mineral oil products. By contrast, fruit and vegetables prices surged 19.7%. On a monthly basis, wholesale prices gained 0.2%, the same pace of increase as seen in Aug. (RTT)

EU: Italy inflation confirmed at 20-month low. Italy's consumer price inflation eased in Sept to the lowest level in more than oneand-a-half years, final data from the statistical office, ISTAT, showed. The CPI climbed 5.3% YoY in Sept, slightly below the 5.4% gain in the previous month. That was in line with the flash report published on Sept 29. Further, this was the weakest inflation since Jan 2022, when prices had risen 4.8%. (RTT)

China: Central bank raises liquidity support. The People's Bank of China ramped up its liquidity supply to the banking system via its medium-term lending facility and reverse repos in order to ease the stress in the market. The Chinese central bank added CNY789bn through one-year MLF. However, the rate on the MLF was kept unchanged at 2.5%. As the MLF acts as a guide to loan prime rates, no change is expected in the LPR rate this month. Earlier, the PBoC had reduced the MLF rate in June and Aug. The bank also injected CNY106bn via seven-day reverse repos at an interest rate of 1.8%. (RTT)

Japan: Industrial output falls 0.7%. Industrial output in Japan declined for the second straight month in Aug, the latest report from the Ministry of Economy, Trade, and Industry said. Industrial production dropped 0.7% MoM in Aug, though slower than the 1.8% fall in July. In the initial report, the rate of change in production was flat compared to the previous month. Shipments dropped 0.3% monthly in Aug, while inventories decreased 1.3%. (RTT)

India: Wholesale prices fall for sixth month. India's wholesale prices continued to decline in Sept, defying economists' expectations for an increase, data published by the National Statistical Office showed. The wholesale price index, or WPI, dropped 0.26% YoY in Sept, slower than the 0.52% decrease in Aug. Meanwhile, economists had expected a 0.5% rise. The overall downward trend was primarily due to the fall in prices of chemical and mineral products, mineral oils, textiles, basic metals, and food products, the ministry said. (RTT)

Indonesia: Trade surplus shrinks to USD3.42bn. Indonesia's foreign trade surplus decreased in Sept from a year ago as exports fell faster than imports, figures from Statistics Indonesia showed. The trade surplus shrank to USD3.42bn in Sept from USD4.96bn in the same month last year. Economists had expected a surplus of USD2.13bn. In August, the surplus was USD3.12bn. Exports logged a double-digit annual decrease of 16.17% in Sept, versus an expected fall of 13.5%. The decline was largely attributed to lower overseas demand for non-oil and gas. (RTT)

New Zealand: Annual inflation slows to 5.6% in Q3. Consumer prices in New Zealand were up 5.6% on year in the 3Q of 2023, Statistics New Zealand said. That was beneath expectations for 5.9% and down from 6.0% in the three months prior. On a seasonally adjusted quarterly basis, inflation rose 1.8% - again below forecasts for 2.0% but up sharply from 1.1% in the 2Q. Nontradeable inflation was up 1.7% on quarter and 6.3% on year, while tradeable inflation rose 1.8% on quarter and 4.7% on year. (RTT)

Markets

DXN: Inks third MOU in less than a month, share price stays below IPO price. DXN Holdings entered into a MOU with a unit of European Wellness Biomedical Group to explore collaboration opportunities in establishing wellness centres together. DXN said the MOU was signed with a British Virgin Islands unit called European Wellness Centers Inc (EW), which is based in Hong Kong, and deemed to be the Asia-Pacific arm of European Wellness Biomedical Group. Both parties will also engage in R&D with universities, including the Heidelberg University of Germany, the University of California of Irvine, and local universities. (The Edge)

AME REIT: Concludes RM69m maiden post-listing acquisition exercise. AME Real Estate Investment Trust (AME REIT) has fully concluded its maiden post-listing acquisition exercise of three industrial properties in Iskandar Malaysia, Johor worth RM69.3m. This comes after the completed acquisition of the third industrial property of Plot 16 at i-Park @ Indahpura in Iskandar Malaysia from its sponsor, AME Elite Consortium, for RM26.5m. (The Edge)

KNM: Sues former executives. KNM Group, along with Deutche KNM GmbH and Borsig GmbH, has taken legal action against two former executives, Flavio Porro and Terence Tan Koon Ping. KNM said the civil suit stems from the terminated sale of Borsig to Vorsprung Industries GmbH in Dec 2022. The plaintiffs are alleging that the defendants, as directors, had failed to obtain approval and had breached their duties, resulting in significant financial repercussions and a subsequent settlement with Vorsprung. The legal action includes allegations of conspiracy, breach of loyalty, negligence and breach of statutory duties. In response to the alleged breaches of duties, KNM and the other plaintiffs have filed a lawsuit demanding EUR3.4m (RM17.2m) from both of the former executives. (StarBiz)

PMB Technology: Sells Klang land for RM36.6m. PMB Technology has proposed to dispose of a piece of leasehold land in Klang in a non-related party transaction to an individual named Ong Saut Mee. The company, has proposed to dispose of the 56,655 sq metres piece of land, where the lease will expire on March 30, 2097, for RM36.6m. With an original cost of investment of RM4.9m, the proposed disposal is expected to generate an estimated one-off gain of RM25. (StarBiz)

Straits Energy: To transform Labuan Port into a smart port. Straits Energy Resources’s indirect subsidiary, Straits CommNet Solutions SB (SCS) has signed a MOU with Megah Port Management SB (MPM), a 51% owned indirect subsidiary of Straits to transform the Labuan Port into a smart port. SCS is a 70% owned subsidiary of Straits Technology Solutions SB, while Straits Technology Solutions SB is a 75% owned subsidiary of Straits. (StarBiz)

Swift Haulage: Commits to procuring exclusively electric prime movers, trucks from 2030. Swift Haulage is keen to be the first logistics player to transition its fleet to renewable-powered trucks, as it commits to procure only electric prime movers or trucks powered from 2030 onwards. Notably, Swift is the country's largest haulier and a leading integrated logistics service provider with a fleet of over 1,500 prime movers. The move was in conjunction with the official launch of Swift's green logistics division at the Malaysia International Trade and Exhibition Centre (Mitec). (The Edge)

MARKET UPDATE

The FBM KLCI might open stronger today after major US stock indices ended sharply higher on Monday as investors were optimistic about the start of earnings season, while transportation and small-cap shares also jumped. The Dow Jones Industrial Average rose 314.25 points, or 0.93%, to 33,984.54, the S&P 500 gained 45.85 points, or 1.06%, to 4,373.63 and the Nasdaq Composite added 160.75 points, or 1.2%, to 13,567.98. Data earlier showed that the New York Fed's General Business Conditions index, otherwise known as "the Empire State index," has gone back into negative territory. European markets finished mixed with the DAX gained 0.34% and the CAC 40 rose 0.27%. The FTSE 100 rose 0.4%.

Back home, Bursa Malaysia closed broadly lower on Monday, in tandem with the weaker performance in regional bourses as cautious sentiment following geopolitical tensions in the Middle East weighed on investors risk appetite. At the closing bell, the FBM KLCI eased 5.18 points to 1,438.96 from Friday’s close of 1,444.14. Similarly, the key regional markets were also in negative territory with Japan’s Nikkei 225 dropped 2.03% to 31,659.03, and Hong Kong’s Hang Seng Index fell 0.97% to 17,640.36, while China’s SSE Composite dipped 0.46% to 3,073.81.

Source: PublicInvest Research - 17 Oct 2023