Economy

US: Homebuilder confidence unexpectedly slumps to 11- month low in Nov. With mortgage rates approaching 8% earlier this month, unexpectedly showing a continued deterioration in U.S. homebuilder confidence in the month of Nov. The NAHB/Wells Fargo Housing Market Index slumped to 34 in Nov from 40 in Oct, while economists had expected the index to come in unchanged. The housing market index decreased for the fourth consecutive month, falling to its lowest level since hitting 31 in Dec 2022. (RTT)

US: Housing starts, building permits unexpectedly jump in Oct. New residential construction in the US unexpectedly increased in the month of Oct. Housing starts jumped by 1.9% to an annual rate of 1.4m in Oct after surging by 3.1% to a downwardly revised rate of 1.3m in Sept. Economists had expected housing starts to dip to a rate of 1.4m from the 1.4m originally reported for the previous month. (RTT)

US: Industrial production drops more than expected amid auto strikes. Industrial production in the US fell by much more than expected in the month of Oct. The Fed said industrial production slid by 0.6% in Oct after inching up by a downwardly revised 0.1% in Sept. Economists had expected industrial production to decrease by 0.3%, reversing the 0.3% increase originally reported for the previous month. (RTT)

EU: German budget blow triggers 2024 growth and jobs warnings. A German court ruling that wiped billions from the federal budget could drag down growth by as much as 0.5pp next year in Europe's biggest economy. The coalition is scrambling to fix a large hole in its finances after a court ruling blocked the government from transferring EUR60bn (USD65bn) in unused funds from the pandemic towards green initiatives and industry support. (Reuters)

EU: Inflation unrevised at 2.9%, lowest in 27 months. Eurozone inflation eased further in Oct to the lowest level in more than two years amid cheaper energy costs along with a slowdown in food prices. Harmonized inflation stood at 2.9% in Oct, well below the 4.9% rise seen in Sept. The latest inflation figure was the weakest since July 2021, when the rate stood at 2.2%. Nonetheless, the inflation rate is still above the ECB’s target of 2.0%. (RTT)

UK: Retail sales slide again in Oct in new blow for economy. British retail sales volumes fell unexpectedly in Oct as consumer finances remain stretched. Retail sales volumes dropped 0.3% MoM, following a revised 1.1% decline in Sept that was worse than first estimated. Economists had forecast that sales volumes would rise by 0.3% on the month in Oct. (Reuters)

China: Sailing its way through a record year of debt sales. People’s Bank of China (PBOC), the world’s only major central bank on a policy easing path, and a slowing economy that sustains voracious appetite for risk-free assets. China has issued CNY9.6trn of government bonds so far in 2023, against an estimated annual target of CNY11.1trn. (Bloomberg)

China: Vows to support property sector, tackle local debt. China's central bank and financial regulators pledged to ensure financing support for the property sector and to work together to resolve local government debt risks. Chinese leaders are trying to revive the economy and fend off potential financial risks from a property slump and CNY92trn (USD12.8trn) in local government debt. (Reuters)

China: Xi offers more investment in South China Sea claimant Brunei. China offered to buy more goods from Brunei and to encourage investment in the Islamic sultanate as President Xi Jinping lauded relations with the tiny nation that have centred more on economics than territorial disputes in the South China Sea. (Reuters)

Japan: BoJ will debate easy-policy exit when inflation nears target. BoJ Governor Kazuo Ueda said the central bank will discuss a strategy for exiting ultra-loose monetary policy when sustained achievement of its 2% inflation target approaches. The fate of the central bank's purchases and holdings of ETF will also be discussed as and when the BoJ considers an exit from ultraloose policy. (Reuetrs)

Japan: BoJ’s Ueda says weak yen isn't only negative for Japan’s economy. BoJ governor Kazuo Ueda said that there are both positives and negatives to the weak yen’s impact, suggesting he’s determined to keep stimulus unchanged for now, despite heightened concerns over the yen. While it’s true that a weak yen amplifies negative economic impacts by lifting up import prices, it also helps boost exports including inbound spending, and lifts global businesses’ profits, Ueda said. (Bloomberg)

Markets

UEM Sunrise (Underperform, TP:RM0.42): Sells 47ha of freehold land in JB to Paragon Globe. UEM Sunrise is selling 46.9 ha (115.91 acres) of freehold land in Johor Bahru to Paragon Globe (PGB) for a total consideration of RM146.1m. The property developer said in a statement that its indirect wholly-owned units Nusajaya Rise SB (NRSB), Symphony Hills SB (SHSB) and Nusajaya Heights SB (NHSB), are selling the land to PGB’s whollyowned unit PGB Landmark SB. UEM Sunrise said NRSB and SHSB executed five SPAs with PGB Landmark pertaining to the divestment of 19.52ha of land in Mukim Tanjung Kupang. (The Edge)

Berjaya Land: Secures USD50m loan from Exim Bank for Four Seasons Okinawa project. Berjaya Construction, the construction arm of Berjaya Land (BLand), has secured a USD50m (RM234.2m) construction loan from Export-Import Bank of Malaysia (Exim Bank) for the construction of the Four Seasons Resort and Private Residences Okinawa (Four Seasons Okinawa) in Japan. Leading the signing was Seikou Okinawa Construction KK, a wholly-owned subsidiary of Berjaya Construction, acting as the primary contractor in collaboration with Japanese subcontractors. (The Edge)

Marco Holdings: To take over clock and watch retailer Time Galerie for RM37.55m. Marco Holdings is taking over clock and watch retailer Time Galerie (M) SB (TGSB) for RM37.55m. The company entered into a share sale agreement with Giro Laksana SB and Lim Siew Sooi to acquire the remaining 59.61% stake it does not own in TGSB. Currently, TGSB has 56 retail outlets located in major shopping complexes and retail stores throughout Malaysia. (BTimes)

MGRC: RM617,754 lost from share buyback, trading of SNS and Reneuco shares. Malaysian Genomics Resource Centre announced losses of RM617,754 from the buy-back and disposal of company shares, as well as trading of shares in listed companies SNS Network Technology and Reneuco in the seven months from Sept 2022 till March 2023. In three separate belated announcements on Friday, MGRC acquired 53.17m of its shares from Sept 5, 2022 till March 20, 2023 in the open market for a gross cash consideration of RM39.873m or an average of 75sen per share. (The Edge)

Nextgreen Global: Partners Bioeconomy Corp on biomass production. Nextgreen Global has inked a MoU with Malaysian Bioeconomy Development Corporation SB to collaborate on the potential of enhancing biomass into higher value products, utilising biotechnology applications for the biomaterial and agricultural farm sector. The pulp and paper manufacturer said that under this agreement, the two companies would collaborate to support the National Biotechnology Policy 2.0 Flagship Programme and the National Biomass Action Plan 2022-2030. (StarBiz)

Crescendo: Disposes of Johor land for RM315.17m. Crescendo Corp said its wholly-owned subsidiary Panoramic Industrial Development SB (PID) has inked a deal with Microsoft Payments (Malaysia) SB to dispose of 2.63m sq ft of vacant freehold land in Pulai, Johor, for RM315.17m cash. The properties are located within a prime and mature industrial estate in Pulai and surrounded by a mix of residential, commercial and industrial developments. (StarBiz)

MARKET UPDATE

The FBM KLCI might have a flat opening today after Wall Street's three major indices edged up slightly on Friday as investors digested recent gains while remarks from Federal Reserve officials clouded the outlook about when the US central bank might start cutting interest rates. The Dow Jones Industrial Average rose 1.81 points, or 0.01%, to 34,947.28, the S&P 500 gained 5.78 points, or 0.13%, to 4,514.02 and the Nasdaq Composite added 11.81 points, or 0.08%, to 14,125.48. For the week, the S&P 500 added 2.2% while the Nasdaq composite rose 2.4% and the Dow climbed 1.9%. European shares also rose on Friday, boosted by financials and healthcare, ending the week higher on growing optimism that central banks will aggressively cut interest rates next year. The pan-European STOXX 600 rose 1.0%, ending the week 2.8% higher, as bond yields fell.

Back home, Bursa Malaysia ended Friday lower as worries over economic and financial developments in the US and China weighed on global sentiment. At the closing bell, the FBM KLCI fell 4.01 points to 1,460.67 from Thursday’s closing of 1,464.68. In the region, Japan's Nikkei closed up 0.48%, firming about 3% for the week, helped by the Bank of Japan's reassurance that it was sticking with its super loose policy. Elsewhere, Chinese blue chips’ CSI 300 fell 0.12%, having missed on the general rally so far this week. Sentiment in Asia had been supported by the apparent easing of US-China tensions, with the Chinese press lauding the meeting between President Xi Jinping and President Joe Biden. Meanwhile, the Shanghai Composite rose 0.11% and the Hang Seng lost 2.12%.

Source: PublicInvest Research - 20 Nov 2023