Economy

US: Consumer spending exits third quarter on strong note, monthly core inflation rises. US consumer spending surged in Sept as households boosted purchases of motor vehicles and travelled, keeping spending on a higher growth path heading into the fourth quarter. The stronger-than-expected increase in spending reported by the Commerce Department was accompanied by elevated monthly inflation readings, against the backdrop of higher costs for services like housing. (Reuters)

US: Personal income rises slightly less than expected in Sept. A report released by the Commerce Department showed personal income in the US increased by slightly less than expected in the month of Sept. The Commerce Department said personal income rose by 0.3% in Sept after climbing by 0.4% in Aug. Economists had expected income to advance by another 0.4%. Meanwhile, the report said personal spending increased by 0.7% in Sept after rising by 0.4% in Aug.. (RTT)

EU: Euro zone bond yields set to end the week lower after ECB decision. Euro zone government bond yields were set to end the week lower after the ECB held interest rates steady and US inflation data came in broadly as expected. Germany’s 10-year bond yield was last down 3bps at 2.826%, putting it on track for a weekly fall of 6 bps. The yield hit a 12-year high of 3.024% in early Oct and tested those levels again earlier this week as strong US economic data sent the all-important US 10-year Treasury yield past 5% before it later pared its gains. Yields move inversely to prices. (Reuters)

EU: Italy industrial sales fall for second month. Italy's industrial turnover decreased for the second straight month in Aug, data from the statistical office Istat showed. Industrial sales dropped a seasonally adjusted 0.4% MoM in Aug, following a 0.5% fall in the previous month. Domestic market turnover declined 0.6% after falling 1.3%. Meanwhile, foreign market turnover rose 0.1% versus a 1.1% gain in the previous month. After adjusting for calendar effects, industrial turnover declined 5.0% annually in Aug, which was worse than the 1.7% drop in the previous month. (RTT)

EU: Spain GDP Growth Exceeds Expectations. Spain's economy grew more than expected in the 3Q on household spending, advance estimate from the statistical office INE showed. GDP expanded 0.3% sequentially, following second quarter's revised 0.4% expansion. The growth rate was seen at 0.2%. On a yearly basis, economic growth eased to 1.8% from 2.0% a quarter ago. Nonetheless, this was better than the expected 1.6%. The expenditure-side breakdown showed that household spending grew at a faster pace of 1.4% on quarter after a 0.9% gain. (RTT)

EU: Irish economy shrinks 1.8% in Q3. Ireland's economy contracted in the 3Q after recovering in the previous quarter, mainly due to the weaker performance in the multinational-dominated sectors, preliminary figures from the statistical office CSO showed. GDP fell a seasonally adjusted 1.8% sequentially in the Sept quarter, in contrast to a 0.5% expansion in the June quarter. In the first quarter of this year, the economy contracted 2.6%. (RTT)

China: Industrial profits rise for second month. China's industrial companies registered profits for the second straight month in Sept, data released by the National Bureau of Statistics showed. Industrial firms posted an 11.9% rise in profits in Sept compared to last year. This followed a 17.2% jump in Aug. However, industrial profits declined by 9.0% in Jan to Sept period. (RTT)

South Korea: Pension fund to keep increasing overseas investments through 2028. South Korea’s National Pension Service (NPS) will increase its overseas investments to 60% of total assets by 2028, the welfare ministry said. The NPS will also prepare a portfolio-setting mechanism to expand alternative investments more easily, employ more personnel for such investments, and diversify its portfolio with mid-risk, mid-return investments. (Reuters)

Markets

Hextar Global (Neutral, TP: RM0.63): Acquires Propel Chemical for RM16.5m, strengthens itself in the O&G sector. Hextar Global has entered into a SSA to acquire the entire equity interest in Propel Chemicals SB for RM16.5m. The Proposed Acquisition is another step that allows us to further expand our Specialty Chemicals business in the O&G sector. PCSB owns a licensed chemical storage and refilling facility spread over 5 acres of land in Kemaman that will triple the current capacity of ours. The additional capacity will enable us to expand our specialty chemical repacking business which is currently limited by our existing capacity. (Business Today)

Cengild: Medical reports data breach in unit’s IT system. Cengild Medical said the information technology system used by its wholly-owned subsidiary Cengild SB was affected by a data breach that may have leaked patient data. A police report was filed, and a formal report was made to the relevant authorities. The group said there was no impact on the provision of medical services and no disruption to patient care. (The Edge)

YNH: Auditor issues qualified opinion on financial statements in relation to JV, turnkey contracts. YNH Property’s external auditor has issued a qualified opinion on the group’s financial statements for the 18-month period ended June 30, 2023, in relation to its JV and turnkey contracts for property development work. (The Edge)

Plytec: Wins Sarawak tech contract. ACE Market-bound Plytec Holding has secured a 42-month contract to set up a digital ecosystem in Sarawak. In a statement, the construction engineering solution and services group of companies said its wholly-owned subsidiary BIM Engineering Solution & Technology SB secured the contract from PPES Consults SB to facilitate the digital transformation of the state into a smart city. (StarBiz)

Meta Bright: Diversifies into building materials trade via RM28m acquisition. Meta Bright Group has proposed to diversify into the building materials trade through the acquisition of a 70% stake in a ready-mixed concrete manufacturing business in Sabah for RM28.04m. The purchase of the stake in Expogaya SB (Expo) will be settled via a cash consideration of RM5m and the issuance of 98m new shares in Meta Bright at 23.4sen each. (The Edge)

Seremban Engineering: Secures RM162m construction contract in Bentong. Seremban Engineering (SEB) has secured a RM161.83m contract for the construction of two apartment blocks near Genting Highlands. The group said it has been appointed by IBN Highland SB to undertake the main building architectural works, mechanical and electrical works, and associated external works, for the two blocks of 29-storey apartments at Highland City, Genting Permai in Bentong, Pahang. (The Edge)

Southern Steel: Unaware of any agreement requiring disclosure after Bursa query on stake sale report. Seremban Engineering (SEB) has secured a RM161.83m contract for the construction of two apartment blocks near Genting Highlands. The group said it has been appointed by IBN Highland SB to undertake the main building architectural works, mechanical and electrical works, and associated external works, for the two blocks of 29- storey apartments at Highland City, Genting Permai in Bentong, Pahang. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks closed mostly lower on Friday, losing momentum as investors digested a hectic week of mixed earnings, and economic data that seemed to support the "higher for longer" interest rate scenario. The Nasdaq advanced, with tech and tech-adjacent momentum stocks led by Amazon.com, Apple and Meta Platforms providing much of the heavy lifting, while the S&P 500 and the Dow Jones Industrial Average lost ground. The Commerce Department's hotly anticipated Personal Consumption Expenditures (PCE) report showed inflation gradually cooling down as expected, getting closer to the Federal Reserve's 2% annual target while consumer spending, which accounts for about 70% of the U.S. economy, posted a robust upside surprise. The Dow Jones Industrial Average fell 366.71 points, or 1.12%, to 32,417.59, the S&P 500 lost 19.86 points, or 0.48%, at 4,117.37 and the Nasdaq Composite added 47.41 points, or 0.38%, at 12,643.01. European markets finished broadly lower on Friday with the CAC 40 down 1.21% while London's FTSE 100 lost 0.82% and Germany's DAX gave away 0.30%.

Back home, Bursa Malaysia ended the week slightly higher on Friday as bargain-hunting activities emerged, with buying seen mainly in transportation and logistics stocks. At the closing bell, the FBM KLCI edged up 1.3 points to 1,441.9 from Thursday's closing of 1,440.60. Regional markets also finished broadly higher on Friday with the Hang Seng up 2.08% while Japan's Nikkei 225 added 1.27% and China's Shanghai Composite rose 0.99%.

Source: PublicInvest Research - 30 Oct 2023