Economy

US: Fed report shows US loan officers see tighter credit, weaker demand. Banks tightened lending standards for US businesses and households in Q3, but the pace of change appeared to ease, and demand for loans fell broadly in a sign of the impact higher interest rates are having on the economy. The tightening of standards for business loans applied to firms of all sizes, while consumers faced tighter credit for home and home equity loans, credit cards, and tougher terms on auto loans. (Reuters)

US: Banking system still vulnerable. While the US banking sector is stable, growing vulnerabilities leave at least some institutions under a near-term threat of funding pressure and capital shortfalls. The risks to the system are rising, albeit modestly, and those weaknesses are still below the levels that preceded the global financial crisis. (Bloomberg)

EU: German industrial output falls further, construction activity downturn deepens. Germany's industrial production declined for the fourth straight month in Sep and the downturn in construction deepened further, reinforcing fears of a recession at the end of the year. Industrial output registered a monthly fall of 1.4%, faster than the revised 0.1% drop in Aug. (RTT)

EU: Producer prices plunge on energy prices. Eurozone producer prices continued to decline in Sep on continuing downward trend in energy prices. Producer prices posted an annual fall of 12.4% in Sep, following an 11.5% decrease in Aug. Prices were expected to decline 12.5%. Excluding energy, producer price growth eased to 0.5% from 1.0% in the prior month. (RTT)

UK: House prices rise for the first time in 7 months. House prices in the UK rose in Oct, after falling for six months in a row and at a faster than expected pace despite the subdued market. The house price index rose 1.1% from Sep, when they declined 0.3%. Economists had forecast a 0.2% gain. Property prices fell 3.2% YoY after a 4.5% slump in Sep. (RTT)

China: Records bigger-than-expected slump in Oct exports. China’s export slump unexpectedly deepened in Oct, underscoring the fragility of an economic recovery that has been trying to stabilise. Overseas shipments fell 6.4% from a year ago, worse than the 3.5% decline. Imports surprisingly expanded 3%, in contrast with expectations of a 5% decline. (Bloomberg)

China: Imports unexpectedly grow as demand makes cautious comeback. China's imports unexpectedly grew in Oct while exports contracted at a quicker pace, in a mixed set of indicators that showed the world's second-largest economy facing persistent risks despite a recent improvement in domestic demand. (Reuters)

Japan: Wages, consumer spending extend declines in test for BoJ policy. Japan's real wages slipped in Sep for an 18th month, while consumer spending extended a months-long decline, with rising prices squeezing households' purchasing power, and likely to add to pressure from labour groups for higher wage increases. (Reuters)

Markets

Dialog (Neutral, TP: RM2.40): Morimatsu JV plans RM250m fabrication facility expansion, eyes RM300m annual revenue. Dialog Group and its partner Hong Kong-listed Morimatsu International Holdings Co Ltd said they will spend RM250m for the expansion of their joint venture (JV) company’s engineering and fabrication facilities in Pengerang, Johor. This will support Morimatsu Dialog in meeting the demands and opportunities in the region and beyond while contributing more opportunities to the state’s job market. (The Edge)

Sime Darby (Neutral, TP: RM2.41): Columbia Asia to buy Ramsay Sime Darby Health Care. Columbia Asia, a South-East Asian healthcare firm backed by TPG, has emerged as the frontrunner to buy Malaysia-based private hospitals operator Ramsay Sime Darby Health Care for USD1.5bn, according to sources. (StarBiz)

Gas Malaysia: To build two more biomethane plants by 1H2024, allocates RM15m-20m capex each. Gas Malaysia is planning to commission another two biomethane projects by 1H2024 to be injected into the Natural Gas Distribution System (NGDS), as part of its venture into the biogas renewable and sustainable energy sector. Gas Malaysia Group CEO Ahmad Hashimi Abdul Manap said about RM15m to RM20m would be allocated in capital expenditure (capex) for the construction of each biomethane plant. (The Edge)

Kanger: Buys 15 units of serviced apartments in Genting Highlands. Kanger International Bhd has acquired 15 units of the proposed serviced apartments in Tower A of Antara Genting Highlands Resort Suites for RM19.77m. Its wholly-owned subsidiary KIB Global Resources SB had entered into a sale and purchase agreement with Aset Kayamas SB. (BTimes)

Icon Offshore: To supply vessel for SEA Hibiscus' drilling campaign. Icon Offshore said it has secured a contract to supply a 60-tonne anchor handling tug supply vessel, which will be used for SEA Hibiscus SB’s drilling campaign. Its wholly owned unit Icon Offshore Group SB received the letter of award from SEA Hibiscus on 18 Oct to perform its 2023/2024 drilling campaign. The provision of service commenced on Oct 24. (The Edge)

Borneo Oil: Sabah Development Bank grants RM50m facility for working capital. Borneo Oil said the facility comprises a term loan facility of up to the maximum aggregate principal amount of RM20m (Tranche 1) and another of up to the maximum aggregate principal amount of RM30m (Tranche 2). (The Edge)

Crescendo: In RM117m land sale. Crescendo Corp’s (CCB) wholly-owned subsidiary, Panoramic Industrial Development SB (PID), has entered into two conditional sales and purchase agreements to dispose of seven parcels of land to STT GDC Malaysia 2 SB for a combined value of RM117.02m. (StarBiz)

MPay: Group CEO for payment services division resigns after four years. ManagePay Systems (MPay) group CEO for its payment services segment Tan Yew Loong resigned on Sunday (Nov 5) after spending four years with the electronic payment solutions provider’s senior management. MPay said that Tan, 47, has stepped down due to his other personal commitments. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks rose on Tuesday, with the S&P 500 and Nasdaq notching their longest streak of gains in two years, as a retreat in US Treasury yields buoyed megacap growth stocks while investors sought more clarity on interest rates from the Federal Reserve. The benchmark 10- year Treasury note yield was on pace for its fifth decline in six sessions on expectations the Fed is done with its rate hike cycle. Yields extended losses after a solid auction of USD48bn in 3-year notes with auctions of the 10-year note and 30-year bond due later this week. The Dow Jones Industrial Average rose 56.94 points, or 0.17%, to 34,152.8; the S&P 500 gained 12.40 points, or 0.28 %, at 4,378.38 and the Nasdaq Composite added 121.08 points, or 0.90 %, at 13,639.86. European markets finished mixed with the DAX gained 0.11%, while the CAC 40 led the FTSE 100 lower. They fell 0.87% and 0.09% respectively.

Back home, Bursa Malaysia recouped most of its earlier losses to close marginally lower on Tuesday on profit taking. At the closing bell, the FBM KLCI fell 1.3 points to end at 1,463.37 from Monday's closing of 1,464.67. In China, data showed imports unexpectedly grew in October, while exports contracted faster than expected, in a mixed set of indicators that showed the recovery in the world's second-largest economy remains uneven. Hong Kong's Hang Seng fell 1.7%, while mainland China blue chips CSI 300 fell 0.4%.

Source: PublicInvest Research - 8 Nov 2023