Economy

EU: Turkish central bank raises key rate by 500 bps to 40%. Turkey's central bank announced a further massive hike in the key interest rate with the aim of ensuring a decline in the underlying trend of inflation and return it to the 5% target in the medium term. The MPC of the Central Bank of the Republic of Turkey, or CBRT, headed by Governor Hafize Gaye Erkan, decided to hike the policy rate from 35.0% to 40.0%. (RTT)

UK: Private sector economy expands modestly in Nov. The UK private sector activity almost stabilised in Nov after contracting in the previous three months, the purchasing managers' survey results from S&P Global and the Chartered Institute of Procurement & Supply showed. The flash composite output index rose to a fourmonth high of 50.1 in Nov from 48.7 in the previous month. Any score above 50 indicates expansion in the sector. (RTT)

Indonesia: Bank Indonesia holds rate steady. Indonesia's central bank left its benchmark rate unchanged after an unexpected quarter-point hike in Oct to curb the fall in the rupiah currency. The Board of Governors of Bank Indonesia, led by Governor Perry Warjiyo, decided to hold the seven-day reverse repo rate at 6.00%. The central bank has raised the key rate by 250bps in the current tightening cycle that began in Aug 2022. The deposit facility rate was retained at 5.25% and the lending facility rate at 6.75%. (RTT)

Taiwan: Industrial production decline softens; retail sales growth eases. Taiwan's industrial production continued to fall in Oct, though at the weakest pace in fourteen months, preliminary data from the Ministry of Economic Affairs showed. Separate official data showed that retail sales growth moderated at the start of the final quarter. (RTT)

Thailand: Car production drops 7% YoY in Oct as local sales fall. Car production in Thailand declined 7.02% in Oct from a year earlier to 158,734 units on weak domestic sales. The figure compared with Sept’s 8.45% YoY fall. Domestic car sales in Oct declined 8.75% YoY after Sept’s 16.27% on-year drop, due to tighter autos loans, said Surapong Paisitpattanapong, a spokesperson for the Federation of Thai Industries’ automotive industry division. (Reuters)

Singapore: Inflation rises to 4.7%, highest in 5 months. Singapore's CPI accelerated for the second straight month in Oct to the highest level in five months amid higher private transport costs along with the rise in core inflation, data released by the Monetary Authority of Singapore and the Ministry of Trade and Industry revealed. The CPI climbed 4.7% YoY in Oct, faster than the 4.1% rise in Sept. Economists had expected the rate to rise to 4.45%. The rise in Oct was mainly reflected in higher private transport costs, in addition to the rise in core inflation. (RTT)

Markets

Kerjaya Prospek (Neutral, TP: RM1.52): Demands RM20m in termination damages from Ecofirst’s subsidiary. Kerjaya Prospek is demanding RM20m in termination damages from BCM Holdings SB, a subsidiary of Ecofirst Consolidated, after BCM suddenly decided not to proceed with the RM404.4m residential project it awarded to the group in June 2023. (The Edge)

Comment: The RM20m termination damages will be recorded as a one-off gain and would add 9.3% to KPGB’s war chest of RM215.4m as of 3QFY23. The sum represents 5% of the contract value of RM404.4m from BCM Holdings SB. Additionally, BCM Holdings SB is given 7 days from 21 Nov 2023 to remit the payment otherwise would result in legal action taken by KPGB.

Pestech: Subsidiary restrained from calling on RM14.25m bonds. Pestech International has been issued against its indirect wholly-owned subsidiary CRSE SB to restrain the company from calling on two bonds worth RM14.25m. The bonds were issued in favour of CRSE pursuant to a sub-supply contract entered into in 2018 between Pestech's 50%-owned unit Pembinaan Tajri SB and Universal Cable (M), a wholly-owned unit of Sarawak Cable. (The Edge)

Jentayu: To dispose Jalan Mayang land for RM25m. Jentayu Sustainables, which engages in renewable energy, healthcare and trading of building materials, is disposing of a 12,884 sq ft piece of residential land in Jalan Mayang here to Armani Development SB for RM25m, which will be satisfied via a combination of RM19m cash and the remaining RM6m in contra of units. The original cost of investment by Jentayu Sustainables was RM15.5m on Sept 30, 2010, while the audited net book value of the property amounted to RM25m as at June 30, 2023. (The Edge)

KSL: Buys land from S P Setia for RM229m. KSL Holdings is acquiring freehold land measuring 72,820 sq m in Shah Alam, Selangor, from S P Setia for RM228.8m. The acquisition will enlarge the group’s land bank and enhance its future revenue and earnings. The land will be used for residential development projects and further enhance its presence in the property market in Selangor. The project is expected to commence in 2025 and is envisaged to spread over a period of 10 to 15 years. (StarBiz)

Kanger: Acquires remaining 49% stake in building materials supplier for RM72m cash. Bamboo products manufacturer Kanger International said it is acquiring the remaining 49% stake in building materials supplier Sung Master Holdings SB for RM72m cash. The group had acquired the other 51% stake in Sung Master in April 2021 for RM94.8m. Sung Master is primarily involved in the sales and trading of building materials, including timber flooring, tiles, bulk cement, concrete, locksets and sanitary ware. (The Edge)

AAX: To start direct flights to Almaty, Kazakhstan in March 2024. AirAsia X is set to fly to Almaty, Kazakhstan from Kuala Lumpur making it the first Malaysian-based airline to venture into the Central Asian country. The inaugural flight will commence starting March 14, 2024. Kazakhstan is an entirely new market for AirAsia X and a strategic route to expand into. It is a strong testament to our vision and determination to explore new destinations while resuming services to our most popular destinations post pandemic. (BTimes)

MARKET UPDATE

The FBM KLCI might open flat today with Wall Street shut for Thanksgiving on Thursday. Stocks in Europe ended firmer, with the ECB news cementing the view that the global central banks are done with their latest tightening campaign, and if price pressures ease, 2024 could be the year of rate cuts. But some of the inflationeasing trade is already priced into the market, reflected in the near 11% rally in the MSCI world index in the past 18 trading days. European shares rose on Thursday, supported by gains in energy stocks, while investors digested minutes of the European Central Bank's (ECB) October meeting where policymakers were cautiously optimistic about inflation falling in the euro zone. The pan-European STOXX 600 added 0.3%, extending gains to notch a fresh two-month high.

Back home, Bursa Malaysia extended Wednesday's losses to close lower on Thursday, amid mixed global cues and the fall in crude oil prices, dealers said. At the closing bell, the FBM KLCI slid 2.6 points to 1,453.29 from Wednesday’s closing of 1,455.89. Friday's release of Japan's core inflation data for October will set the tone for trading in the region. Japan's core consumer inflation likely accelerated again in October, staying above the central bank's 2% price target for a 19th straight month. In the region, Hong Kong’s Hang Seng reversed early losses, gaining 1% to 17,910.84 and the Shanghai Composite index rose 0.6% to 3,061.86.

Source: PublicInvest Research - 24 Nov 2023