Economy

US: New-home sales surge to fastest clip since Feb 2022. US sales of new houses rose in Sept to the fastest pace since early 2022, suggesting there’s still some appetite for homes despite soaring mortgage rates. Purchases of new single-family homes increased 12.3% to a 759,000 annualized pace last month, government data showed. The figure topped all estimates in a Bloomberg survey of economists. The market for new homes has broadly held firm in the face of decades-high mortgage rates and elevated housing prices. (Bloomberg)

EU: German business sentiment improves in Oct. Germany's business confidence improved in Oct, survey results from the Ifo Institute showed. The business climate index rose to 86.9 in Oct from 85.8 in the previous month. The reading was well above economists' forecast of 85.9. Companies are somewhat more satisfied with their current business and managers were less pessimistic about coming months. The current situation index registered 89.2, up from 88.7 a month ago and the expected level of 88.5.The expectations index advanced to 84.7 from 83.1 in Sept. The reading was seen at 83.3. (RTT)

UK: BoE likely to keep high rates on hold even as signs of slowdown mount. The BoE looks set to keep interest rates on hold next week but also stress that it is far from relaxing its fight against Britain's high inflation rate, despite growing worries about a recession. The BoE's job of getting inflation down to its 2% target from 6.7% in Sept has been complicated by uncertainty about how much of the impact of its 14 rate hikes to date has yet to be felt. Governor Andrew Bailey and his colleagues are expected to keep Bank Rate at a 15-year high of 5.25% on Nov 2, repeating September’s decision when they put their long run of rate increases on hold. The last Monetary Policy Committee meeting in Sept resulted in five members voting to pause, just outnumbering the four who sought another increase. (Reuters)

China: New bonds to help economic recovery, as budget deficit rises. China's new sovereign bonds will help bolster the economic recovery, China's vice finance minister Zhu Zhongming said, as the government's stepped-up fiscal stimulus sharply raises its budget deficit. China's top parliament body has approved a CNY1trn (RM654.8bn) in sovereign bond issuance to help rebuild areas hit by this year's floods and improve urban infrastructure to cope with future disasters, state media said. "After the treasury bond funds are put into use, it will help drive domestic demand and further consolidate the recovery of the economy," Zhu said. The world's second-largest economy grew faster than expected in the third quarter, improving the chances that Beijing can meet its growth target of around 5% for 2023. (Reuters)

Australia: Surprisingly strong 3Q inflation raises odds of Nov rate hike. Australian inflation was surprisingly strong in the 3Q amid broad-based and stubborn cost pressures, a headache for policymakers that added greatly to the risk of a rise in interest rates as early as next month. Investors reacted by narrowing the odds on the RBA restarting the tightening cycle in Nov after four rate pauses, with futures now pricing in a 66% chance of a quarter-point hike to 4.35%, compared with 35% before the data. Data from the Australian Bureau of Statistics showed the CPI rose 1.2% in the third quarter, above market forecasts of 1.1% and up from a 0.8% increase the previous quarter. The annual pace of inflation slowed to 5.4%, from 6.0%, but was again above forecasts of 5.3%. For Sept alone, the CPI rose 5.6% YoY, up from 5.2% in Aug. (Reuters)

Hong Kong: Targets stock, housing taxes to revive role as hub. Hong Kong is slashing extra stamp duties for some homebuyers and reversing a pandemic-era increase in stock trade levies as officials seek to boost the beleaguered property sector and revive the city’s status as a financial hub. Chief Executive John Lee detailed the measures during the second policy address of his tenure, including a highly anticipated move to cut taxes for homebuyers who aren’t from the city as well as residents who already own property. He announced the city will lower the stock trade stamp duty to 0.10% from 0.13%, which the tax was raised to at the height of the pandemic in 2021. (Bloomberg)

South Korea: GDP climbs 0.6% on quarter in 3Q. South Korea's GDP expanded a seasonally adjusted 0.6% on quarter in the 3Q of 2023, Statistics Korea said. That was unchanged from the 2Q reading, and it exceeded expectations for a gain of 0.5%. On an annualized basis, GDP climbed 1.4% - again topping expectations for 1.1% and up from 0.9% in the three months prior. Real gross domestic income (GDI) increased by 2.5% compared to the previous quarter. (RTT)

Markets

Astro Malaysia (Neutral, TP: RM0.59): Unit accepts RM160m loan from AmBank. Astro Malaysia wholly-owned subsidiary, Measat Broadcast Network Systems SB (MBNS), has accepted a term loan facility of up to RM160m from AmBank. The facility is to finance and/or reimburse MBNS’ costs relating to the production, purchase and licensing of content, programme or channels. (StarBiz)

MAHB: Sells 11% stake in Hyderabad airport firm for RM479m cash. Malaysia Airports Holdings Bhd (MAHB) has disposed of its 11% equity interest in GMR Hyderabad International Airport Ltd (GHIAL) for USD100m (RM478.85m) cash. MAHB is expected to net a gain of USD23.7m from the disposal. (The Edge)

Mestron: Bags RM5.3m contract. Mestron Holdings has clinched a RM5.28m contract from Singapore’s Tamaco Pole Manufacturing Pte Ltd. Under the terms of the agreement, Mestron will supply various products totalling SGD1.5m to Tamaco Pole. (StarBiz)

Careplus: Gets green light from Miti to go into EV business. Careplus Group subsidiary had secured a licence from the Miti to manufacture and assemble energy efficient vehicles. The licence granted to Nexv Manufacturing Sdn Bhd (NMSB), a 51:49 joint venture (JV) between Careplus and GoAuto Group SB, applies to passenger vehicles, commercial vehicles and electric motorcycles. (The Edge)

Capital A: Posts stronger load factor of 89% in 3Q while capacity grew 44% on year. Capital A reported a load factor of 89%, carrying 14.7m passengers in 3Q23, compared with the 86% load factor a year ago. The surge in passengers is largely driven by consistently high travel demand after the Covid-19 pandemic. (The Edge)

Hextar Technologies: Ventures into fintech with mobile superapp. Hextar Technologies Solutions (HexTech) has ventured into fintech with the introduction of its MoneyX, fintech mobile superapp. The app, a personal financial information management app with artificial intelligence (AI) supported tools, was first released by its wholly-owned subsidiary Hextar Vision SB in Sept 2023. (StarBiz)

Annum: Unable to release annual report by deadline, faces trading suspension. Annum is unable to release its annual report for the FY23 by the Oct 31 deadline as required under the listing rules, as the group has been unable to find a suitable auditor since the resignation of the previous auditor. (The Edge)

AEON Credit: Gets regulators’ approval for initial shareholding structure of Islamic digital bank. AEON Credit Service (M) has obtained financial regulators’ approval for the initial shareholding structure of its Islamic digital bank venture. (The Edge)

Classita: Forensic investigation reveals irregularities, but unable to disclose pending litigation procedure. Classita Holdings revealed that the forensic investigation on its whollyowned unit Caely (M) SB (Caely-M) found “irregularities in transactions with certain parties”. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks tumbled in a broad sell-off on Wednesday as Alphabet shares slid after the Google parent posted disappointing earnings and as US Treasury yields rose, reviving fears that interest rates could stay higher for longer. The Dow fell 105.45 points, or 0.32%, to 33,035.93, the S&P 500 lost 60.91 points, or 1.43%, to 4,186.77 and the Nasdaq Composite dropped 318.65 points, or 2.43%, to 12,821.22. In Europe, the FTSE 100 added 0.33% while France's CAC 40 rose 0.31% and Germany's DAX tacked on 0.08%.

Back home, Bursa Malaysia closed higher on Wednesday on the back of bargain-hunting activities with more than two-thirds of the key index components advancing, driven by the calmer market conditions on Wall Street overnight. At the closing bell, the FBM KLCI gained 6.86 points to 1,442.51 from Tuesday’s closing of 1,435.65. The regional stocks also finished higher with the Nikkei 225 added 0.67% while Hong Kong's Hang Seng rose 0.55% and China's Shanghai Composite was up 0.40%.

Source: PublicInvest Research - 26 Oct 2023