Economy

US: Weekly jobless claims at nine-month low, labour market remains tight. The number of Americans filing new claims for unemployment benefits fell to a nine-month low last week, indicating that strong job growth persisted in Oct as the labour market remains tight. The unexpected decline in initial jobless claims reported by the Labour Department added to solid retail sales and factory production in Sept in suggesting sustained momentum in the economy. (Reuters)

US: Existing home sales tumble to 13-year low in Sept. A report released by the National Association of Realtors showed a notable decrease in US existing home sales in the month of Sept. NAR said existing home sales tumbled by 2.0% to an annual rate of 3.96m in Sept after sliding by 0.7% to an annual rate of 4.04m in Aug. Economists had expected existing home sale to drop to an annual rate of 3.89m. Existing home sales decreased for the fourth consecutive month, falling to their lowest level since Oct 2010. (RTT)

US: Leading Economic Index declines more than expected in Sept. A reading on leading US economic indicators fell by more than expected in the month of Sept, according to a report released by the Conference Board. The Conference Board said its leading economic index slid by 0.7% in Sept after falling by a revised 0.5% in Aug. Economists had expected the leading economic index to decrease by 0.4%, matching the drop originally reported for the previous month. (RTT)

EU: Euro area borrowing costs steady, Italian yield hits highest in almost 11 years. Euro area borrowing costs were close to their highest in around a decade as investors balanced expectations for higher-for-longer rates against appetite for safehaven assets on fears that the conflict in the Middle East might widen beyond Gaza. Bond prices move inversely to yields. (Reuters)

EU: Eurozone current account surplus increases on goods trade. The euro area current account surplus increased in Aug driven by the sharp rise in the visible trade surplus, the ECB reported. The current account balance showed a surplus of EUR28bn compared to a EUR21bn surplus in the previous month. Data showed that the surplus on goods trade surged to EUR35bn from EUR25bn. (RTT)

EU: French manufacturing confidence weakens in Oct. French manufacturers' sentiment weakened slightly in October reflecting the deterioration in personal production expectations, survey results from the statistical office INSEE showed. The manufacturing sentiment index dropped to 98 in Oct from 99 in Sept. (RTT)

China: New home prices extend declines, defying broader recovery. China’s new home prices fell for the third straight month in Sept, official data showed, dashing hopes of a turnaround in demand during a traditionally peak home buying period despite efforts to revive the crisis-hit property sector. New home prices fell 0.2% MoM but narrowed from a 0.3% drop in Aug, according to Reuters calculations based on National Bureau of Statistics (NBS) data. Prices were down 0.1% from a year earlier, matching August’s decline. (Reuters)

South Korea: Bank of Korea maintains status quo. South Korea's central bank left its benchmark interest rate unchanged for the sixth straight session and maintained its restrictive policy stance as geopolitical tensions pose upside risks to inflation. The Monetary Policy Board of the Bank of Korea, governed by Rhee Chang-yong, decided to maintain the policy rate at 3.50%. (RTT)

Indonesia: Bank Indonesia lifts key rate unexpectedly. Indonesia's central bank unexpectedly raised its key interest rate by a quarter-point in order to curb the fall in the domestic currency rupiah after retaining the policy rate unchanged for eight consecutive sessions. The Board of Governors of Bank Indonesia, led by Governor Perry Warjiyo, decided to lift the seven-day reverse repo rate by 25 basis points to 6.00%. (RTT)

Markets

TNB (Outperform: TP: RM11.50): Partners Siemens Energy to accelerate decarbonisation of its thermal power plants. Tenaga Nasional (TNB) is collaborating with Siemens Energy to speed up the decarbonisation of its thermal power plants, utilising green hydrogen produced from renewable energy (RE) resources. TNB said it has formalised the partnership through a MOU with Siemens Energy in Aug at the Energy Transition Conference. The agreement gives TNB access to cutting-edge knowledge and resources in hydrogen-based power generation, specifically on green hydrogen production using electrolyser and RE generation sources such as pumped hydro and solar. (The Edge)

MUI: Partners Fusionex to launch Metrojaya online marketplace. Malayan United Industries (MUI Group) has signed a partnership agreement with local data technology provider Fusionex Group to launch a Metrojaya online marketplace that is set to go live in early Dec. Metrojaya is run by MUI Group’s retail arm MJ Department Stores SB. The marketplace website will operate as an omnichannel platform similar to Shopee, Lazada and Zalora. (The Edge)

Global Oriental: Acquiring 55% stake in car park management firm. Global Oriental is acquiring a 55% stake in a car park management firm to expand its earnings base. The group is buying the stake in Edisijuta Parking SB (EPSB) for RM27.5m cash from Cahaya Impian SB. Cahaya Impian currently holds a 70% equity interest in EPSB, while the remaining 30% is owned by Edisijuta SB. The group said it believes the acquisition will potentially augur well for its prospects and may contribute positively to its financial performance by contributing a recurring revenue stream. (The Edge)

AAX: Relief application rejected. Bursa Malaysia has rejected AirAsia X’s (AAX) application for proposed relief and Practice Note 17 (PN17) upliftment. AAX said Bursa Securities had, vide its letter dated Oct 18, 2023, rejected the company’s application for the proposed relief PN17 upliftment. AAX said the local bourse has granted the company an extension of time until Jan 17, 2024 to submit its regularisation plan to the regulatory authorities. “In this regard, the company will consider all available options (including the possibility of an appeal) and announce the next course of action to be undertaken in due course.” (StarBiz)

Industronics: To explore tokenisation of corporate bonds. Industronics has inked an agreement with China Information Technology Development (Hong Kong) Ltd (CITD) to jointly develop and market tokenised corporate bonds. Industronics said its unit and CITD have entered a strategic partnership to explore the tokenisation of corporate bonds up to HK$180m, for one of Olympex's corporate clients. It said the tokenisation of corporate bond leverages Xtreme Business Enterprises Limited’s proprietary DOT technology and CITD’s AI and cloud technologies. (StarBiz)

Minho: Acquires land in Kuala Selangor to build factories, warehouses. Minho said it is acquiring a 7.84-hectare piece of freehold land in an industrial area in Kuala Selangor for RM18.4m. The group plans to construct factories and covered warehouses on the land as part of its long-term plan to relocate some of its operations and existing tenants from its current location on Jalan Kapar. The purchase consideration will be satisfied entirely by cash which will be funded by internally-generated funds and bank borrowings, said Minho. (The Edge)

MARKET UPDATE

The FBM KLCI might open weaker today after US Treasury yields rose to their highest level in 16 years and global stocks sank on Wednesday as nervous investors weighed up signs of US economic resilience to higher interest rates. Benchmark 10-year Treasury yields rose 0.07 percentage points to 4.91%, the highest level since 2007, while 30-year Treasury yields rose 0.06 percentage points to 5.01%. On Wall Street, the benchmark S&P 500 fell 0.8% and tech-heavy Nasdaq Composite declined by 1%. The region-wide Stoxx Europe 600 lost 1%. The moves will revive worries that last month’s bond market rout has further to run, and come after data on Tuesday showed stronger than expected US retail sales in September.

Back home, Bursa Malaysia ended lower on Thursday on profittaking activities, in sync with regional peers taking the cue from the sharp fall on Wall Street on Wednesday and rising tension in the Middle East. At the closing bell, the FBM KLCI shed 3.88 points to 1,442.66 from Wednesday’s closing of 1,446.54. In the region, Japan’s Nikkei 225 slipped 1.91% to 31,430.62, Hong Kong’s Hang Seng Index fell 2.46% to 17,295.89, China’s SSE Composite lost 1.74% to 3,005.39 and South Korea’s Kospi shed 1.90% to 2,415.80.

Source: PublicInvest Research - 20 Oct 2023