Economy

US: Invests USD553m in Adani’s Sri Lanka port to curb China’s influence. The US will provide USD553m (RM2.6bn) in financing for a port terminal in Sri Lanka’s capital being developed by Gautam Adani, as New Delhi and Washington look to curtail China’s influence in South Asia. The funding from International Development Finance Corp (DFC) underscores renewed US and Indian efforts to loosen Beijing’s sway over Sri Lanka after Colombo borrowed heavily to splurge on Chinese port and highway projects before its economic meltdown last year. (Bloomberg)

US: Debt interest bill rockets past a cool USD1trn a year. US Treasuries may face renewed selling pressure into the new year if one measure of the nation’s swelling debt repayment bill is any guide. Estimated annualised interest payments on the US government debt pile climbed past USD1trn (RM4.67trn) at the end of last month. (Bloomberg)

US: Q3 credit card debt up on strong economy, as credit woes tick higher. US total household debt levels rose in Q3 amid strong growth in credit card borrowings fuelled by a hot economy, although there were mounting signs some borrowers are facing increased challenges managing the money they've borrowed. In its quarterly report, the overall debt levels increased by 1.3% during Q3 to a level of USD17.29trn. (Reuters)

EU: Retail sales fall in Sep, exposing weak consumer demand. Eurozone retail sales fell roughly in line with expectations in Sep, highlighting weak consumer demand and the prospect of recession. Retail sales in the 20 countries sharing the euro fell 0.3% MoM and by 2.9% YoY in Sep. (Reuters)

UK: Job market remains sluggish in Oct. A decline in hiring by British employers eased slightly in Oct, but pay growth slowed and rising redundancies led to an increase in the number of jobseekers. The number of permanent job placements fell last month, but by the smallest amount since June, while businesses' spending on temporary staff was steady. (Reuters)

UK: Home prices defy pressure with more buyers than houses on sale. Britain’s housing market is shaking off forecasts for a crash, with a slump in the number of properties changing hands preventing a sizable drop in prices. A stand-off between buyers and sellers has dried up housing transactions but also limited any plunge in valuations, with few households forced into selling up. (Bloomberg)

China: Passenger car sales continue to climb. China's passenger car sales grew at a stronger pace in Oct and the trend is expected to continue, boosted by promotions ahead of the yearend and increased demand for new energy vehicles as well as due to better consumer confidence amid signs of economic recovery. (RTT)

China: Growth target for 2023 within reach. China is expected to hit its annual GDP growth target this year, and the country must transform its growth model to pursue high-quality and sustainable expansion. Growth momentum has improved recently with production and consumption recovering steadily and employment and consumer prices remaining stable overall. (The Star)

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)

Japan: Leading index falls in Sep. Japan's leading index declined in Sep after recovering in Aug. The leading index, which measures future economic activity, fell to 108.7 in Sep from 109.2 in the previous month. The reading was slightly below economists' forecast of 108.8. (RTT)

Markets

Duopharma Biotech: Expects longer-term revenue recovery. Duopharma Biotech is looking at a gradual recovery in revenue as it continues to strengthen its portfolio with high-value innovative offerings and niche products. Group managing director Leonard Ariff Abdul Shatar said the group will focus on the ethical and consumer healthcare segments, while weathering persistent industry-wide challenges. "We are also heartened by the government's commitment to healthcare funding, with a record allocation of RM41.2bn in Budget 2024. (The Star)

Swift Haulage: 3Q net profit more than doubles on bargain purchase gain. Swift Haulage’s net profit more than doubled to RM28.4m in the third quarter ended 30 Sept 2023 (3QFY2023), from RM11.7m a year earlier. Earnings per share rose to 3.22 sen from 1.32 sen. The improved earnings were due to higher other income earned from gain from bargain purchase through the acquisition of a 17.5% stake in Global Vision Logistics SB (GVL). (The Edge)

OCK: Secures RM48.73m ICT rental contract from MoE. OCK Group's wholly-owned subsidiary OCK Setia Engineering SB has accepted a RM48.7m contract from the Ministry of Education for the rental of eco-friendly ICT hardware that meet green requirements on a lease-to-use basis. In a filing with Bursa Malaysia, the group said the equipment is for the teaching and learning needs in Phase 3 of the Ministry's school computer laboratories. The contract is for a duration of 65 months from 26 Oct 2023, to 25 March 25 2029, which comprises four months for the supply, installation, testing and hardware commissioning, 60 months for the leasing of the laptops and a one-month return period. (The Star)

MHB: Incurs second straight quarterly loss amid cost escalation in ongoing projects. Malaysia Marine and Heavy Engineering Holdings (MHB) incurred a net loss of RM105.2m for the third quarter ended 30 Sept 2023 (3QFY2023), its second straight quarterly loss amid cost escalation in existing projects, and has warned that its heavy engineering segment and marine business will remain challenging. In the corresponding period last year (3QFY2022), the group made a net profit of RM15.95m. (The Edge)

F&N: On track for dairy farm phase 1 completion by early 2025. F&N is on track to meet its Phase 1 completion of the group’s dairy farm in Ladang Permai Damai in Gemas, Negeri Sembilan by early 2025 when the first milking is expected to begin. CEO Lim Yew Hoe said for Phase 1, the company would start to bring in 2,000 cows before slowly increasing the numbers in phases to about 4,000 cows in the first year, with a capital expenditure of around RM1.3bn. "We are creating an integrated dairy farm where there will be corn planting (the main feedstock for the cows), dairy farming, followed by milk processing and packaging all at the same site. (The Star)

Hup Seng: 3Q net profit jumps threefold to RM13.0m. Hup Seng Industries’ net profit in the third quarter ended 30 Sept, 2023 (3QFY2023) jumped threefold to RM13.02m, from RM3.84m in the same period last year. In 3QFY2022, it was adversely affected by the escalation of input costs. With better profit, its earnings per share increased to 1.63 sen from 0.48 sen. (The Edge)

MARKET UPDATE

US benchmarks ended the day mixed though the S&P 500 notched an 8th day of consecutive gains to extend its longest winning streak in 2 years. With the earnings reporting season at its tail-end and almost 90% of companies beating estimates, markets also appear to be pricing the US Federal Reserve remaining on the sidelines with regard to interest rates. The S&P 500 and Nasdaq Composite both inched 0.1% higher though the Dow Jones Industrial Average slipped 0.1%. European markets were mostly higher with earnings the key driver of individual share price movements. Germany’s DAX and France’s CAC 40 rose 0.5% and 0.7% though UK’s FTSE 100 slipped 0.1%. Asian markets were mostly lower earlier in the day. Japan’s Tankan survey showed manufacturers’ business confidence improving for the first time since August while the service sector improved for a second month running. The Nikkei 225 fell 0.3% however. The Shanghai Composite Index was 0.2% lower while the Hang Seng Index dropped 0.6%.

Source: PublicInvest Research - 9 Nov 2023