Economy

US: Labour market loosens as job gains slow, unemployment rate hits 3.9%. US job growth slowed in Oct in part as strikes by the United Auto Workers (UAW) union against Detroit's "Big Three" car makers depressed manufacturing payrolls, and the increase in annual wages was the smallest in nearly 2.5 years, pointing to an easing in labour market conditions. The Labour Department's closely watched employment report also showed the unemployment rate rising to 3.9% last month, the highest level since Jan 2022, from 3.8 in Sept. (Reuters)

US: Service sector at five-month low in Oct. The US services sector slowed for a second straight month in Oct, but momentum is likely to pick up in the near term amid an acceleration in growth in new orders. The non-manufacturing PMI dropped to a five-month low of 51.8 from 53.6 in Sept. The Services PMI has been declining since Aug, when it rose to the highest level in six months. A reading above 50 indicates growth in the services industry, which accounts for more than two-thirds of the economy. Economists polled by Reuters had forecast the index slipping to 53.0. (Reuters)

EU: France industrial output falls unexpectedly. France industrial production declined unexpectedly in Sept on sharp downturn in the transport equipment output. Industrial production posted a monthly fall of 0.5% in Sept, following a 0.1% drop in Aug. Output was expected to remain flat. At the same time, the decline in manufacturing output worsened to 0.4% from 0.3% in Aug. (RTT)

EU: Spain unemployment increases sharply in Oct. Spain's unemployment increased sharply in Oct but the number of people out of work was the lowest for the month of Oct since 2007. The number of unemployed rose by 36,936 people or 1.36% from the previous month. This increase was more moderate than usual in Oct. Compared to the same period last year, registered unemployment decreased by 155,488. (RTT)

EU: Eurozone jobless rate rises in Sept. The euro area unemployment rate rose slightly in Sept as weak economic activity damped job creation. The unemployment rate edged up to 6.5% from 6.4% in Aug. However, the rate was down from 6.7% in the same period last year. Economists had forecast the unemployment rate to remain at 6.4%. Data showed that nearly 11m people were unemployed in Sept. (RTT)

UK: Service sector logs another contraction in Oct. The UK service sector shrank for the third straight month in Oct as the cost of living pressures, high interest rates and weak consumer sentiment curbed demand. At 49.5, the services PMI rose from 49.3 in Sept. The flash reading was 49.2. Despite an increase, the score below 50.0 signalled contraction in the sector. (RTT)

China: To accelerate issuance of government bonds, finance minister says. China will accelerate the issuance and use of government bonds, citing an interview with new finance minister Lan Foan. The finance ministry will steadily promote the resolution of local government debt risk and increase efforts to better leverage the role of special bonds to boost the economy. (Reuters)

China: Pledges to expand market access at annual trade fair amid foreign criticism. China will further expand market access and increase imports, amid criticism from European firms who said they wanted to see more tangible improvement in the country's business environment. Li Qiang told that the country was committed to opening up its economy, and that imports of goods and services were set to reach a cumulative USD17trn (RM80.4trn) within the next five years. (Reuters)

Japan: BoJ plans to exit from easy policy next year but needs some good fortune. BoJ Governor Kazuo Ueda will continue to dismantle the central bank's ultra-easy monetary policy settings and look to exit the decade-long accommodative regime sometime next year, an inherently risky plan that would require skilful execution. Ultimately, however, the BOJ chief's exit strategy will require a bit of good fortune too, especially given global uncertainties including the Middle East conflict and worries about whether the US economy could achieve a soft landing as well as China's growth trajectory. (Reuters)

India: Service sector growth softens to 7-month low. India's service sector growth decelerated at the start of Q3 but the pace of growth remained robust. The services PMI fell to 58.4 in Oct from 61.0 in Sept. The score signalled the slowest rate of expansion since March. (RTT)

Markets

Yinson: 285 MWP NOKH solar park in India up and running. Yinson Holdings renewables business unit, Yinson Renewables (YR), has commenced operations at Nokh Solar Park in Rajasthan, India. YR said through its indirect subsidiary, Rising Sun Energy K Private Ltd (RSEK), the park will export power to the Rajasthan power grid, aligning with the Indian government’s National Solar Mission. "The 285 MWp solar project is YR’s largest operating solar project and its third operational asset in India, generating enough energy to power approximately 38,000 Indian households every year while reducing carbon emissions to about 470,000 tonnes of carbon dioxide per year," it said. (Bernama)

GFM: Buys remaining 51%-stake in Highbase Strategic for RM18.2m. GFM Services has entered into a share sale agreement (SSA) to acquire the remaining 51% stake in Highbase Strategic SB for RM18.2m. Highbase specialises in the provision of O&G facilities maintenance focusing on downstream operators. “The acquisition of the remaining stake in Highbase marks a key milestone for the group. When GFM first invested in the company back in Dec 2019, we recognised its synergistic potential although it was a distressed asset with operational and financial challenges.” (The Star)

BHIC: Winding-up petition against unit BNS for RM56m claim withdrawn. Boustead Heavy Industries Corp Bhd (BHIC) said a winding-up petition served on its associate company Boustead Naval Shipyard SB (BNS), for a RM56m claim, had finally been withdrawn. The petition was over an indebted sum of about RM56m, allegedly owed to MTU Services (Malaysia) SB (MSM), regarding the equipment supplied and services provided to BNS. To recap, BNS was served a winding-up petition over an alleged debt owed to MSM in July 2020. MSM had appealed against the Kuala Lumpur High Court's decision to allow BNS’ application to strike out MSM’s petition on 9 Mar 2021. (The Edge)

UMediC: Aims to spend RM7.9m unutilised IPO proceeds on business development. UMediC Group plans to spend its unutilised initial public offering (IPO) proceeds of RM7.9m on developing its marketing distribution and manufacturing segments. UMediC saw a 56.25% premium to its IPO price, when it made its debut on the ACE Market of Bursa Malaysia in 2022. UMediC chairman Datuk Ng Chai Eng said the group plans to further diversify its portfolio by venturing into nursing home management and ambulance services next year, which is in line with its commitment to providing essential healthcare services to the community. (The Edge)

KNM: To appeal against High Court decision to dismiss restraining order extension. KNM Group Bhd said it will appeal against a High Court decision to dismiss its application to extend the restraining order against its scheme creditors. In the meantime, the group was granted an interim restraining order under the Erinford Injunction. KNM had secured the restraining order against its creditors since 15 Dec 2022, which was later extended to 14 Aug 2023, concurrent with its court application to conduct meetings to consider a proposed scheme of arrangement. (The Edge)

Infomina: Wins RM49.4m contract from Home Affairs Ministry. Infomina Bhd has secured a RM49.4m contract from the Home Affairs Ministry to provide the maintenance, upgrades and technical support services on the National Registration Department’s (NRD) applications. (The Star)

MARKET UPDATE

The FBM KLCI might open stronger today after US stocks rallied sharply last week, as economic data and Fed commentary spurred a decline in interest rates. The outlook for monetary policy remains firmly behind the wheel for financial markets. The Fed held rates steady at its meeting last week (as expected), but it struck a more balanced tone around its outlook for upcoming rate decisions. The Dow Jones Industrial Average rose 0.66%, the S&P 500 gained 0.94% and the Nasdaq Composite added 1.38%. European stock markets closed cautiously higher on Friday, rounding off a weekly rally powered by a series of solid earnings and a perceived dovish tilt from central banks. The Stoxx 600 ended 0.2% higher, led by retail stocks, which were up 1.7%. Oil and gas saw the biggest drop, down by 2.2%. The index withheld the downward drag from shipping giant Maersk, which plummeted 17% after saying profits would come in at the low end of guidance and announcing 10,000 job cuts.

Back home, local equities ended the week mostly positive, reflecting the growing investor confidence after the temporary halt in US interest rate increases. At the closing bell, the FBM KLCI closed 0.7%, or 10.16 points higher, to 1,449.93 from Thursday's closing of 1,439.77. In the region, Hong Kong's Hang Seng Index increased 2.5% to 17,664.12, while Japan's Tokyo Stock Exchange was closed. The Shanghai Composite Index increased 0.7% to 3,030.80, and the KOSPI Composite Index rose 1.1% to 2,368.34, while Aust

Source: PublicInvest Research - 6 Nov 2023