PublicInvest Research

PublicInvest Research Headlines - 1 Nov 2023

PublicInvest
Publish date: Wed, 01 Nov 2023, 09:11 AM
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.

All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp

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Economy

US: Consumer confidence shows moderate deterioration in Oct. The Conference Board released a report showing a moderate deterioration in U.S. consumer confidence in the month of Oct. The report said the consumer confidence index slipped to 102.6 in Oct from an upwardly revised 104.3 in Sept. Economists had expected the consumer confidence to decrease to 100.0 from the 103.0 originally reported for the previous month. (RTT)

US: Wall St predicts record USD114bn US quarterly debt refunding. Wall Street bond dealers expect the US Treasury to unveil another round of increases this week to its note and bond auctions, though a sizeable minority forecast the department will slow the pace of growth to avoid jolting yields higher. Against a backdrop of swelling US deficits, the Treasury is set to announce auction details for Nov through Jan. The consensus projection for next week’s quarterly refunding sales — encompassing three-, 10- and 30-year securities — is for a USD114bn (RM543.2bn) combined slate, up from USD103bn three months ago. (Bloomberg)

US: Annual home price growth accelerates again in Aug. US annual home price growth accelerated for a third straight month in Aug, underscoring the recovery of the housing market after a period of softening, data showed.Home prices rose 5.6% on a YoY basis in Aug, up from a 4.6% increase in the prior month, the Federal Housing Finance Agency (FHFA) said. The June reading had marked the first acceleration in annual house price growth since Feb 2022. The report also showed prices rose moderately on a MoM basis, in line with the trend over the past quarter. Prices were up 0.6% in Aug, compared with a 0.8% MoM increase in July. (Reuters)

EU: Inflation and growth fall as ECB hikes bite. Inflation in the euro zone is falling fast and the economy has begun contracting, illustrating the dual impact of a steady diet of ECB interest rate hikes. Prices rose by just 2.9% in Oct, their slowest pace since July 2021, a time when the ECB was still worried about inflation getting stuck below its 2% target. But the brisk decline from double-digit figures just a year ago is coming at a cost: the euro zone economy shrank by 0.1% in the three months to Sept, according to a separate Eurostat release, and is flirting with a recession. (Reuters)

EU: German retail sales unexpectedly fall in Sept. Germany's retail sales declined in Sept, defying expectations for a rebound, as high inflation and interest rates continued to damp spending. Retail sales fell 0.8% MoM following a 1.2% slump in Aug, preliminary data from the statistical office Destatis showed. Economists had forecast a 0.5% gain. Sales of food grew 2.2% from the previous month, while those of non-food goods shrunk 3.7%. Internet and mail order sales declined 3.7% compared to the previous month. On a YoY basis, retail sales decreased 4.3% in Sept after a 2.3% fall in the previous month. (RTT)

EU: France inflation at 20-month low. France's consumer price inflation softened to a 20-month low in Oct on slower growth in energy and food prices. Consumer price inflation slowed to 4.0% in Oct, as expected, from 4.9% in Sept. The rate reached the lowest since Feb 2022. EU harmonized inflation also weakened in Oct, to 4.5% from 5.7% registered in the prior month. The rate matched expectations. (RTT)

China: Manufacturing activity shrinks in Oct. China's manufacturing activity contracted unexpectedly in Oct and the growth in the non-manufacturing sector softened, survey data from the National Bureau of Statistics showed. The manufacturing PMI declined unexpectedly to 49.5 in Oct. The score was forecast to remain unchanged at 50.2. A score below 50.0 indicates contraction in the sector. (RTT)

China: Vows system to resolve local govt debt risks. China said it will set up a system to resolve debt risks of its local governments, as state leaders and top bankers wrapped up a two-day, closeddoor meeting to set the priorities for the USD61trn (RM290.6trn) financial sector. After the twice-a-decade meeting chaired by President Xi Jinping, China Central Television reported that oversight of the financial sector would be boosted further to resolve risks and to promote high-quality developments. (Bloomberg)

Japan: BoJ relaxes grip on rates as end to yield control looms. The BoJ further loosened its grip on long-term interest rates by tweaking its bond yield control policy again, taking another small step towards dismantling the past decade's massive monetary stimulus. The nine-member board also revised up its price forecasts to project inflation well exceeding its 2% target this year and next, underscoring a growing conviction that conditions for phasing out ultra-loose monetary policy are falling into place. (Reuters)

Australia: Manufacturing PMI slips to 48.2 in Oct. The manufacturing sector in Australia continued to contract in Oct, and at a faster pace with a manufacturing PMI score of 48.2. That's down from 48.7, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. Incoming new orders for Australian manufactured goods fell for the eleventh month in a row and at one of the fastest rates on record. (RTT)

Hong Kong: Economy grows slower than expected as recovery cools. Hong Kong’s economy grew less than expected in Q3 of this year, suggesting the Asian financial hub’s postpandemic boost may be fading. GDP rose 4.1% in July to Sept from a year earlier, according to advance estimates released by the government. That’s worse than the 5.2% estimated by economists, albeit faster than Q2’s 1.5% pickup. The figure benefited from a low base last year, when GDP fell 4.5% over the same period as pandemic isolation still battered the financial hub. (Bloomberg)

Markets

Pensonic: MD steps down after ceasing to be substantial shareholder. Vincent Chew Chuon Ghee has stepped down as Pensonic Holdings managing director to pursue other interest and personal commitment after reducing his stake in the electrical home appliances maker to below 5%, the threshold that requires timely disclosure to Bursa Malaysia for any shareholding changes. (The Edge)

Berjaya Land: Secures USD330m syndicated financing for development of Four Seasons Resort in Okinawa, Japan. Berjaya Land has secured a syndicated loan of USD330m (RM1.58 bn) from a consortium of Japanese financial institutions to fund the development of the prestigious Four Seasons Resort & Private Residences in Okinawa, Japan. The consortium is led by Tokyo Star Bank Ltd and co-led by Okinawa Development Finance Corporation (ODFC) and Bank of The Ryukus. (The Edge)

PTT Synergy: Bags RM53.29m contract from Sime Darby Property. PTT Synergy Group has accepted a letter of award (LoA) worth RM53.29m from Sime Darby Property to conduct construction works in Gombak, Selangor. The contract will entail the construction and completion of earthworks, retaining wall, main drain, detention pond and other associated works for Phase 4A (Package 1) in Elmina Business Park 2. (StarBiz)

ECA Integrated: Naza emerges as substantial shareholder of ECA Integrated. Naza Corp has emerged as a substantial shareholder of ECA Integrated Solution after acquiring a 5.18% stake or 30m shares. Following the stake acquisition, the conglomerate is now the fourth largest shareholder of the automated manufacturing solutions provider. The largest shareholder of the group is executive director and chief operating officer Chua Lye Hock with a 21.26% stake, followed by Siew Ooi Chin with 20.02% and Kang Ewe Kheng with 11.66%. (The Edge)

Reneuco: Bags RM14.9m civil, telco works contract along SKVE, federal roads. Reneuco will be undertaking civil construction and telecommunication works along the South Klang Valley Expressway (SKVE) and two roads in Kuala Langat and Sepang for a sum of RM14.93m. Reneuco’s unit Reneuco Engineering SB secured the letter of award for the project from MSA Resources SB. The works involve installation of fibre optic cables and provision of broadband network services along the highway. (The Edge)

DNeX: Bags RM3.09m contract from Securities Commission. Dagang NeXchange's sub-subsidiary Innovation Associates Consulting SB (IAC) has bagged a RM3.09m contract from the Securities Commission to set up a registration, licensing and authorisation platform for applications made to the SC. New features include customised functionalities and workflows as well as automated monitoring list and investor alerts. Data-driven insights will also be made available for internal and external stakeholders for improved decision-making. (BTimes)

MISC: Inks FSU supply deal for PETRONAS RGTP. MISC has entered into a head of agreement with Pengerang LNG (Two) SB, a subsidiary of Petronas Gas, for the supply, operation and maintenance of a liquefied natural gas (LNG) floating storage unit (FSU) for deployment at the PETRONAS LNG Regasification Terminal Pengerang (RGTP) in Johor. (StarBiz)

MARKET UPDATE

The FBM KLCI might open higher today after Wall Street's main indices ended Tuesday's session with gains as investors looked ahead to the Federal Reserve's monetary policy update while they digested a mixed batch of earnings reports. The Fed kicked off a two-day monetary policy meeting. The central bank is widely expected to hold interest rates steady on Wednesday, and investors will monitor its statement and Fed Chair Jerome Powell's comments for clues about its plans. Optimism that the Fed would pause rate hikes was offset by reactions to disappointing earnings reports and jitters over geopolitics. The Dow Jones Industrial Average rose 123.91 points, or 0.38%, to 33,052.87, the S&P 500 gained 26.98 points, or 0.65%, to 4,193.8 and the Nasdaq Composite added 61.76 points, or 0.48%, to 12,851.24. European markets finished mixed with the CAC 40 gained 1.33% and the DAX rose 0.64%. The FTSE 100 lost 0.17%.

Back home, Bursa Malaysia closed marginally higher on Tuesday, despite a mixed regional peers performance, as risk appetite in the broader market improved on bargain hunting activities. At the closing bell, the FBM KLCI gained 2.94 points to 1,442.14 from Monday's closing of 1,439.20. In the region, the Nikkei 225 gained 0.53%, while the Hang Seng led the Shanghai Composite lower. They fell 1.69% and 0.09% respectively.

Source: PublicInvest Research - 1 Nov 2023

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