Economy

US: Economy grew at 4.9% pace last quarter, fastest since 2021. The US economy grew at the fastest pace in nearly two years last quarter on a burst of consumer spending, which will be tested in coming months. GDP accelerated to a 4.9% annualised rate, more than double the second-quarter pace, according to the government’s preliminary estimate. (Bloomberg)

EU: ECB presses pause after barrage of hikes to tame inflation. The ECB left interest rates unchanged for the first time in more than a year, as it gauges whether an unprecedented series of hikes will succeed in subduing inflation. Following last month’s knife-edge decision to lift the deposit rate to a record 4%, policymakers kept it there — matching the predictions of all economists surveyed by Bloomberg. (Bloomberg)

EU: Norway's jobless rate falls to 3.5%. Norway's unemployment rate dropped slightly in Sept after remaining stable in the previous month, the labor force survey data from Statistics Norway showed. The seasonally adjusted jobless rate came in at 3.5% in Sept, down from 3.6% in Aug. The number of unemployed people decreased to 105,000 in Sept from 109,000 in the prior month. (RTT)

Japan: BOJ to end negative interest rates in 2024. The BOJ will end its negative interest rate policy next year, according to nearly two-thirds of economists in a Reuters poll, with more now saying the central bank is inching closer to phasing out ultraaccommodative monetary policy. BOJ Governor Kazuo Ueda is seeking to dial back the complex monetary stimulus deployed by his predecessor, but faces a challenging task of doing so without causing sharp and disruptive swings in capital markets. (Reuters)

Canada: Bank of Canada holds rates, says inflationary risks have increased. The BOC held its key overnight rate at a 22-year high of 5.0% as expected but left the door open to more hikes, saying price risks were on the rise and inflation could exceed its target for another two years. (Reuters)

Thailand: Exports unexpectedly rise in Sept despite weak global demand. Thailand's exports unexpectedly increased for a second straight month in Sept as farm product shipments rose despite weak global demand, but the commerce ministry said fullyear exports would not show growth. (Reuters)

Markets

DRB-Hicom (Outperform, TP: RM2.10): Unit EON invests in auto fintech startup. DRB-Hicom’s wholly-owned subsidiary, Edaran Otomobil Nasional Bhd (EON), has made an investment in Genie Malaysia, a subsidiary of Carro, Southeast Asia’s largest online used-car platform. The investment is aligned to the group’s move to enhance its automotive distribution ecosystem. The two groups said the collaboration will unlock valuable cross-selling opportunities for DRB-Hicom within myTukar’s dealer network, comprising over 2,600 dealers nationwide. (The Edge)

UEM Sunrise (Underperform, TP: RM0.42): Raises financing options for buyers. UEM Sunrise has partnered with five major banks to introduce a range of financing options for its developments. The banks are Maybank, CIMB Bank, Affin Bank, AmBank and Alliance Bank through its second Happy Hunt Property Showcase. This is for its developments including this year’s launches such as The MINH, The Connaught One, Residensi ZIG, and Serene Heights Intrika. (The Edge)

Fitters Diversified: To gain RM12.35m from Cameron Highlands land disposal. Fitters Diversified is disposing of an 8.05-hectare freehold land in Cameron Highlands for RM15m, with an estimated gain on disposal of RM12.35m. The disposal of the land to Cameron Highlands Floriculture SB is part of Fitters’ ongoing initiative to rationalise its assets and focus its resources on more promising areas of its operations. (The Edge)

Citaglobal: Buys 30% stake in iFACTORS. Citaglobal is expanding the scope of its renewable energy and telecommunications business with the acquisition of a 30% stake in submarine cable systems company iFACTORS SB for RM25.2m. The deal is expected to be earnings-accretive, with the acquisition coming with a two-year net profit guarantee of RM21m. (StarBiz)

MGRC: Independent director seeks legal action against directors, management for alleged breaches of fiduciary duties. Malaysian Genomics Resource Centre Bhd (MGRC) has received a notice from an independent non-executive director on his intention to apply for leave of court to commence derivative proceedings in the company's name against individual directors and management of the company. The name of the independent non-executive director was not disclosed. (The Edge)

Lotte Chemical: Narrows 3Q net loss due to inventory writedown reversal, improved margin. Lotte Chemical Titan Holding (LCT) narrowed its net loss to RM55.58m or 2.44 sen per share for the 3QFY23 due to reversal of inventory write-down as well as improved margin spreads resulting from lower feedstock costs. In comparison, LCT posted a huge net loss of RM355.5m or 15.61 sen per share in 3QFY22. It has been loss making for six straight quarters. (The Edge)

Luxchem: 3Q profit rises 3.3% on manufacturing segment, despite lower revenue. Luxchem Corp's net profit for 3QFY23 rose 3.3% to RM9.07m, from RM8.78m a year ago, due to the manufacturing segment. However, the plastic materials and resin manufacturer's revenue slipped 2.8% to RM165.78m, from RM170.55m, attributable to the trading segment. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks tumbled on Thursday, dragged by tech and tech-adjacent megacap shares as investors digested mixed quarterly earnings and signs of economic resiliency that could encourage the Federal Reserve to keep interest rates at a restrictive level longer than expected. All three major US stock indices ended in the red, and all remain on track for weekly declines. The Dow Jones Industrial Average fell 251.63 points, or 0.76%, to 32,784.3, the S&P 500 lost 49.54 points, or 1.18%, to 4,137.23 and the Nasdaq Composite dropped 225.62 points, or 1.76%, to 12,595.61. European markets also finished broadly lower today with shares in Germany leading the region. The DAX slumped 1.08% while London's FTSE 100 dropped 0.81% and France's CAC 40 gave away 0.38%.

Back home, Bursa Malaysia ended mixed on Thursday as the US 10-year yield rebounded to 4.95%, causing a sell-off in global equity markets despite Malaysia's positive producer price index (PPI) data. At the closing bell, the FTSE Bursa Malaysia KLCI eased 1.91 points to 1,440.6 from Wednesday’s closing of 1,442.51. Regional markets finished with the Shanghai Composite gained 0.48%, while the Nikkei 225 led the Hang Seng lower. They fell 2.14% and 0.24% respectively.

Source: PublicInvest Research - 27 Oct 2023