Economy

US: USD is near to its peak. The US dollar’s winning streak looks to be running out of steam. Strategists caution that bets on the greenback are getting increasingly stretched. Options positioning shows the weakest appetite for new dollar positions in two months. (Bloomberg)

US: Manufacturing sector slumps in Oct. US manufacturing contracted sharply in Oct after showing signs of improvement in prior months as new orders and employment slumped, likely reflecting strikes by the United Auto Workers (UAW) union against Detroit's Big Three car makers. The Institute for Supply Management (ISM) said that its manufacturing PMI dropped to 46.7 last month from 49.0 in Sept, which was the highest reading since Nov 2022. (Reuters)

UK: House prices show surprise rise in Oct. British house prices unexpectedly rose by almost 1% in Oct but the increase was due more to a lack of homes for sale than a turnaround in the market which has been hit by a jump in borrowing costs, mortgage lender Nationwide said. Prices increased by 0.9% from Sept when they had risen by a marginal 0.1%. It was the biggest monthly increase since Aug 2022. In YoY terms, prices in Oct were down 3.3%, a less sharp fall than Sept's 5.3% drop. (Reuters)

China: Caixin PMI drop adds to signs of economic fragility. China’s manufacturing activity unexpectedly shrank in Oct, signalling that the economic recovery is losing momentum and pressuring policymakers who are trying to shore up growth. The Caixin manufacturing PMI fell to 49.5 from 50.6 in Sept, missing economists’ forecast of 50.8. The 50 line separates expansion from contraction. (Bloomberg)

Japan: Factory activity squeezed by weak demand, inflation in Oct, PMI. Japan's factory activity contracted for a fifth straight month in Oct, as subdued demand and inflationary pressures squeezed businesses. The final au Jibun Bank Japan manufacturing PMI stood at 48.7 in Oct, slightly improved from 48.5 in Sept, but still below the 50.0 point threshold that separates growth from contraction. Subindexes of output and new orders also contracted for a fifth straight month in Oct. Respondents said that sales demand at home and abroad was weak. (Reuters)

Japan: Weak yen, inflation overshoot may prod BoJ to phase out stimulus by year-end. The BoJ may prefer to go slow in ending ultra-low interest rates, but the weak yen and risks of an inflation overshoot could prod it to act before year-end, former central bank official Hiromi Yamaoka told. Under pressure to phase out years of massive monetary stimulus amid rising inflation, the BoJ loosened its grip on long-term interest rates by tweaking its controversial bond yield control policy. (Reuters)

India: Manufacturing growth softens in Oct. India's manufacturing growth slowed in Oct but remained robust despite challenging global economic conditions, survey results from S&P Global showed on Wednesday. The manufacturing PMI posted 55.5 in Oct, down from 57.5 in Sept. The score was forecast to rise to 57.7. A score above 50.0 indicates expansion. However, manufacturing activity registered its slowest growth since Feb. The current sequence of increase in production stretched to over two years in Oct. (RTT)

Australia: Rate risk grows as house prices jump and IMF chimes in. Chances of an imminent hike in Australian interest rates grew after data showed house prices rebounding to near record highs and the IMF recommended tightening monetary and fiscal policy screws to curb inflation. Markets responded by pricing in a near-70% chance that the RBA will raise rates by a quarter point to 4.4% when it meets on Nov 7, ending four months of keeping rates on hold. (Reuters)

Markets

Malakoff: Inks solar power purchase deal with DRB-Hicom. Malakoff Corp has signed a solar power purchase agreement with DRB-Hicom to develop, operate and maintain solar photovoltaic systems at 14 locations in Selangor, Perak, Melaka and Pahang. According to the group's statement, its subsidiary Malakoff Radiance SB had entered into the deal with 10 companies under the DRB-Hicom banner for the project, which has a total capacity of 20.78 MWp and total electricity generation of 26,546.45 MWh per annum. (The Edge)

Boustead Heavy: Disposal of 20.77% stake in Boustead Naval Shipyard to MOF Inc extended by a month. Boustead Heavy Industries Corp (BHIC) and Minister of Finance Inc (MOF Inc) have mutually agreed to extend the conditional period for the disposal of a 20.77% stake in Boustead Naval Shipyard SB (BNS) to MOF Inc by another one month to Dec 1. The parties require additional time for the fulfilment of the conditions precedent to finalise the conditional agreement. (The Edge)

YTL Power: Emerges as substantial shareholder of Ranhill Utilities. Independent power producer YTL Power International has become a substantial shareholder of smaller rival Ranhill Utilities, after acquiring 243.33m shares, equivalent to an 18.87% stake, in Ranhill. At market close, Ranhill emerged as the top gainer on the local bourse, surging 15.5 sen or 26.7% to 73.5 sen, giving it a market capitalisation of RM953.1m. (The Edge)

Heitech Padu: Wins RM29.7m contract. Heitech Padu has secured a RM29.68m contract from the Ministry of Domestic Trade and Cost of Living. The contract is to strengthen the IT technology system of the ministry. The contract is for a period of 36 months commencing from Nov 1, 2023 till Oct 31, 2026. (StarBiz)

Capital A: To list on Nasdaq via SPAC deal. Capital A has entered into a letter of intent (LOI) with Aetherium Acquisition Corp (GMFI), a special purpose acquisition corporation (SPAC) listed on the Nasdaq in the US. In a statement, Capital A said under the deal, Aetherium Acquisition will acquire all the issued and outstanding share capital of Capital A International, resulting in the formation of a new listed entity. (StarBiz)

HIL Industries: To buy land in KL for RM47m. HIL Industries’ indirect wholly-owned subsidiary, Amverton Prop SB, has entered into a conditional sale and purchase agreement with A & M Modern Homes SB (AMMH) to acquire a 1.21-hectare piece of land in KL for RM47.0m. The proposed acquisition would be satisfied in cash, and the proposed acquisition would enable HIL Industries to replenish its land bank and property development projects in view of the upcoming completion of its ongoing projects. (StarBiz)

Salutica: Denies undisclosed developments, rules out rumours but cites ongoing legal suit with Apple Malaysia. Salutica has stated that while there are no undisclosed corporate developments, rumours, or reports explaining unusual market activity (UMA), the ongoing legal suit involving their subsidiary and Apple Malaysia is a potential contributing factor. In a response to Bursa Securities regarding the UMA of the counter, Salutica said there is no rumour or report concerning the business and affairs of the group that may account for the trading activity. (The Edge)

MARKET UPDATE

The FBM KLCI might open stronger today after Wall Street's major indices closed higher on Wednesday with the Nasdaq's 1.6% advance leading gains, after the US Federal Reserve kept interest rates unchanged and comments from its top official fueled investor optimism rate hikes were done even though the central bank left the door open for more. Fed Chair Jerome Powell said policy makers would proceed carefully although they were not yet confident financial conditions were restrictive enough to get inflation as low as the central bank would like. The Dow Jones Industrial Average rose 221.71 points, or 0.67%, to 33,274.58, the S&P 500 gained 44.06 points, or 1.05%, to 4,237.86 and the Nasdaq Composite added 210.23 points, or 1.64%, to 13,061.47. European markets also finished broadly with shares in Germany leading the region. The DAX rose 1.61% while France's CAC 40 added 0.68% and London's FTSE 100 tacked on 0.28%.

Back home, Bursa Malaysia ended the first trading day of November on Wednesday on a negative note on the back of sluggish purchasing managing index data in October, recording the 14th consecutive month of contraction. At the closing bell, the FTSE Bursa Malaysia KLCI closed 0.47% lower, or 6.81 points, to 1,435.33 from Tuesday's closing of 1,442.14. In the region, Japan’s Nikkei 225 added 2.41% to close at 31,601.65 while South Korea’s Kospi ended 1.03% higher at 2,301.56. Hong Kong’s Hang Seng index was down 0.06% at 17,101.78. China’s CSI300 index closed down 0.04% at 3,571.03 and the Shanghai Composite index was up 0.14% at 3,023.08 points.

Source: PublicInvest Research - 2 Nov 2023