Economy

US: Fed on pause as policy makers parse mixed data. Fed policymakers are signalling a pause in hiking interest rates for another couple months as they wait for a resolution of mixed signals: strong economic data, signs of progress on still-stubbornly high inflation, and the potential for the recent rise in longer-term borrowing costs to do some of their work for them. "I believe we can wait, watch and see how the economy evolves before making definitive moves on the path of the policy rate," Fed Governor Christopher Waller told the European Economics & Financial Center Seminar in London. (Reuters)

US: Economy little changed in recent weeks, Fed survey. US economic activity was little changed over the last month and a half, as labour market tightness continued to ease and prices continued to increase at a modest pace, according to a Federal Reserve report published. "The near-term outlook for the economy was generally described as stable or having slightly weaker growth," the Fed said in the latest "Beige Book," a compendium of surveys, interviews and observations gathered across the central bank's 12 districts, from Boston to San Francisco, through Oct. 6. "Overall, firms expect prices to increase the next few quarters, but at a slower rate than the previous few quarters," it said. (Reuters)

US: Mortgage application flow plunges to lowest since 1995. The volume of US mortgage applications plummeted to the lowest in nearly three decades last week as the interest rate on the most popular type of home loan rose for a sixth straight week to the highest since 2000, the latest data to point to no near-term relief for the slumping housing market. The Mortgage Bankers Association's weekly index of mortgage application activity fell 6.9% in the week ended Oct. 13 to 166.9, the lowest since May 1995. Applications for loans to buy a home fell 5.6% to the lowest since February 1995 and applications to refinance an existing mortgage tumbled 9.9% to the lowest since January. (Reuters)

US: Housing starts surge 7.0% in Sept. A report released by the Commerce Department showed a substantial rebound in new residential construction in the US in the month of Sept. The Commerce Department said housing starts spiked by 7.0% to an annual rate of 1.358m in Sept after plunging by 12.5% to a revised rate of 1.269m in Aug. Economists had expected housing starts to jump to a rate of 1.380m from the 1.283m originally reported for the previous month. (RTT)

EU: Eurozone inflation eases as estimated in Sept. Eurozone inflation slowed to the lowest level in nearly two years in Sept after the sharp monetary policy tightening. The harmonized inflation came in at 4.3% in Sept, well below 5.2% posted in Aug, final data from Eurostat showed. The statistical office confirmed the flash estimate published on Sept 29. The latest inflation figure was the weakest since Oct 2021, when the rate stood at 4.1%. Excluding volatile energy, food, alcohol and tobacco, core inflation softened to 4.5%, as initially estimated, from 5.3% in the previous month. (RTT)

EU: Eurozone construction output contracts in Aug. Eurozone construction output contracted in Aug, data from Eurostat showed. Construction output shrank 1.1% on a monthly basis in Aug, offsetting the 1.0% gain in July. Civil engineering posted a notable 2.1% decrease, while building construction was down only by 0.7%. On a yearly basis, production in the construction sector slid 0.1%, in contrast to the 1.2% increase in July. Construction output in the EU27 fell 0.7% on a monthly basis in Aug but it grew 0.2% from the same period last year. (RTT)

EU: Austrian inflation eases more than estimated to 6.0%, lowest in 19 months. Austria's CPI moderated slightly more than initially estimated in Sept, the latest data from Statistics Austria showed on. The CPI climbed 6.0% YoY in Sept, slower than the 7.4% increase in Aug. The latest rate of increase was revised from the 6.1% seen in the flash report published on Sept 29. Further, this is the lowest value since the outbreak of the war in Ukraine in Feb 2022. (RTT)

UK: Inflation steady at 6.7%. UK consumer price inflation remained unchanged in Sept as the rise in oil prices was offset by the slowdown in food inflation, but this is unlikely to prompt the BOE to end the current pause and raise rates further in the Nov policy session. The CPI, posted a steady annual growth of 6.7% in Sept, the Office for National Statistics reported. Economists had expected the rate to ease to 6.6%. Excluding Au 2023 inflation figure, the Sept rate was the lowest since Feb 2022. The largest downward contribution to the annual inflation came from food and non-alcoholic beverages, while rising prices for motor fuel made the biggest upward contribution. (RTT)

China: GDP growth exceeds expectations. China's economy expanded more than expected in the 3Q underpinned by policy support, suggesting that Beijing is all set to achieve its around 5% growth target this year as the property market downturn remains the only major drag on growth. GDP posted an annual growth of 4.9% in the 3Q, the National Bureau of Statistics said. The rate exceeded the 4.4% that economists had pencilled in. However, the growth rate weakened from the 6.3% logged in the 2Q, which was largely due to the low base of comparison. QoQ, GDP climbed 1.3%, much faster than the revised 0.5% expansion seen in the 2Q and the expected rate of 1.0%. (RTT)

Markets

Seni Jaya: Proposes private placement to raise up to RM13.6m. Seni Jaya Corp plans to place out up to 29.1m shares, or 10% of its issued share capital, to third-party investors who have yet to be identified. The outdoor advertising services provider said based on an indicative price of 46.6 sen per placement share, the private placement is expected to raise RM13.6m under the maximum scenario. The group said the proceeds are intended largely for the B-Star Verse exhibition project and expenditure in relation to the LRT Ampang Line project, and the upgrading of existing billboards to digital billboards. (The Edge)

EP Manufacturing: Inks MOU on local production of China’s Great Wall Motor vehicle. EP Manufacturing (EPMB) has signed a MOU with the Malaysian unit of China’s Great Wall Motor Co Ltd (GWM) to look into the production and assembly of selected GWM vehicles locally. The MOU was inked between EPMB’s whollyowned unit PEPS-JV (Melaka) SB (PJVM) and Great Wall Motor Sales Malaysia SB. The local assembly of GWM models is expected to include the brand’s sport utility vehicles, as well as pickup and EVs. (The Edge)

DNeX: Bags RM18.1m contract for maritime digital platform. Dagang Nexchange has accepted a contract from the Port Klang Authority for the installation of the Malaysia Maritime Single Window Phase 1 (MMSW) for the Ministry of Transport. IThe group said the contract, with a value of RM18.1m, will be carried out for a period of three years and six months from Oct 23, 2023, to Apr 22, 2027.The MMSW is a unified digital platform to facilitate trade and shipping services at the national level. (StarBiz)

Impiana Hotels: Executive director raises stake to nearly 22%. Impiana Hotels’s recently-appointed executive director Datuk Seri Lee Hock Seng has raised his direct and indirect stake in the company to 21.97%, after acquiring 25m shares in the company. Lee, who first emerged as a substantial shareholder of Impiana in Aug, bought the 25m shares or 3.1% stake at nine sen apiece or RM2.3m. With the new shares acquired, Lee has a 14.29% direct stake, and a 7.68% indirect stake held by his spouse Datin Seri Joanne Yew Hong Im. (The Edge)

SunCon: Agrees to RM193m data center development contract. Sunway Construction Group (SunCon) has agreed to a letter of initial appointment (LOIA) from K2 Strategic Infrastructure Malaysia SB, establishing the terms for the development of a data center in Johor, with a fixed price of RM192.9m. The work is expected to take approximately 13 months and should be completed by Nov 2024. (The Malaysian Reserve)

Sarawak Cable: Auditor issues disclaimer opinion on FY2023 financial results. Sarawak Cable said its external auditor Baker Tilly Monteiro PLT has issued a disclaimer opinion on the group's financial statements for the year ended FY2023. "We have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements," the group quoted the auditor as saying. According to the auditor, Sarawak Cable's FY2023 financial position and the group's PN17 status indicate material uncertainties that may cast significant doubt on the group's ability to continue as a going concern. (The Edge)

MARKET UPDATE

The FBM KLCI might open weaker today after US stocks ended sharply lower on Wednesday, with the S&P 500 and Nasdaq falling more than 1% each, as Treasury yields rose again and investors assessed the latest batch of quarterly corporate results and forecasts. Yields edged higher after data showing US single-family homebuilding rebounded in September, supporting the view that the Federal Reserve will keep interest rates higher for longer. The Dow Jones Industrial Average fell 332.57 points, or 0.98%, to 33,665.08, the S&P 500 lost 58.6 points, or 1.34%, to 4,314.6 and the Nasdaq Composite dropped 219.45 points, or 1.62%, to 13,314.30. Meanwhile, UK stocks fell on Wednesday as higherthan-expected consumer inflation data cemented fears of the Bank of England further tightening monetary policy. The FTSE 100 closed 1.1% lower, with heavyweight drug maker AstraZeneca falling 5.8% to the bottom of the index after a data abstract on its experimental precision drug's use in lung cancer patients in a latestage trial disappoint came in below expectations.

Back home, Bursa Malaysia extended Tuesday's gains to end at an intraday high on Wednesday, after recouping earlier losses. At the closing bell, the FBM KLCI rose 2.41 points to end at an intraday high of 1,446.54 from Tuesday’s closing of 1,444.13. Regional bourses were mixed after China registered better-thanexpected third-quarter gross domestic product at 4.9%, while the Middle East conflict continues to weigh on sentiment. Singapore's Straits Times Index fell 1.11% to 3,136.62, Hong Kong’s Hang Seng Index trimmed 0.23% to 17,732.52 and China’s SSE Composite slipped 0.8% to 3,058.71. Elsewhere, Japan’s Nikkei 225 edged up 0.01% to 32,042.25 and South Korea’s Kospi added 0.1% to 2,462.60.

Source: PublicInvest Research - 19 Oct 2023