Economy

Global: Growth to slow but avoid a hard landing — OECD. The global economy will slow slightly next year but the risk of a hard landing has subsided despite high levels of debt and uncertainty over interest rates, the Organisation for Economic Cooperation and Development said. Global growth is set to moderate from 2.9% this year to 2.7% in 2024 before picking up in 2025 to 3.0%, the Parisbased policy forum said in its latest Economic Outlook. Growth in advanced economies that make up the OECD's 38 members was seen headed for a soft landing, with the United States holding up better than expected so far. "Our central projections are for a soft landing, but that cannot be taken for granted," OECD chief economist Clare Lombardelli told a news conference. (Reuters)

US: Economy grew 5.2% in 3Q, more than first estimated. The US economy grew at an even faster pace in the third quarter than originally estimated, reflecting upward revisions to business investment and government spending. GDP rose at an upwardly revised 5.2% annualised pace in the third quarter, the fastest in nearly two years. Consumer spending advanced at a less-robust 3.6% rate, according to the government’s second estimate of the figures issued. The downward revision to household outlays reflected slower growth in services spending. After a previously reported decline, business investment was revised up to a 1.3% gain on the back of firmer outlays for structures. Housing was also stronger than initially reported. The government’s other main gauge of economic activity — gross domestic income — rose a more moderate 1.5%. GDI is a measure of the income generated and costs incurred from producing goods and services. (Bloomberg)

EU: German inflation sinks more than expected as energy retreats. German inflation eased more than forecast in Nov on retreating energy and travel costs, putting the ECB’s 2% target within reach. Consumer prices rose 2.3% from a year ago — down from 3% in Oct and less than the 2.5% estimated by economists in a Bloomberg survey. They fell 0.7% on the month, with package tours alone responsible for 0.15 ppt of the decline. German bonds extended gains, with the yield on two-year debt down seven basis points on the day to 2.85%. The rally began after Spain earlier on Wednesday reported a similar slowdown in inflation. (Bloomberg)

UK: Mortgage approvals hit 3-month high. UK mortgage approvals increased more than expected to a three-month high in Oct signaling a slowdown in the housing market downturn after the central bank kept interest rates unchanged in Sept and Nov. Net mortgage approvals for house purchases rose to a three-month high of 47,400 in Oct from 43,700 in Sept, the BoE reported. The expected level was 45,000. The actual interest paid on newly drawn mortgages increased 24 bp to 5.25%. The BoE had kept its key interest rate unchanged at 5.25% at Nov and Sept meetings, snapping a streak of 14 consecutive rate hikes. The rate was lifted by a cumulative 515 bps since Dec 2021. Individuals repaid GBP0.1bn of mortgage debt in Oct compared to GBP1.0bn of net repayments in Sept. Consumer credit decreased to GBP1.3bn from GBP1.4bn in the previous month. The fall largely reflects the decrease in net borrowing through credit cards. (RTT)

China: New home prices now seen climbing this year after policy steps. Prices of new homes in China are now expected to climb 3% this year after a slew of policy measures to support the country's beleaguered property market, up from earlier expectations for prices to be flat, a Reuters poll showed. But the poll of 11 economists, conducted Nov 20-28, also showed expectations for 1% growth in new home prices in 2024 were little changed from an Aug poll. Economists said more measures from authorities are needed. Defaults on debt payments by many developers in China's cash-squeezed and highly indebted property sector have sparked fears of a broader financial crisis, weighed on consumer confidence and hindered economic growth. Authorities, particularly those in major cities, have embarked on a string of steps to bolster demand, including allowing smaller down payments, easing curbs on home buying such as the number of homes that can be bought, lowering borrowing costs and encouraging the extension of loans. (Reuters)

Indonesia: Central bank signals rate to be kept steady into 2024. Bank Indonesia (BI) will maintain its benchmark rate at the current level into 2024 barring any major changes in global dynamics, Governor Perry Warjiyo said, signalling the central bank is done with its rate hiking cycle. Speaking at an annual gathering of financial executives and government officials hosted by the central bank, Warjiyo said the benchmark seven-day reverse repurchase rate at 6% should be sufficient to keep domestic inflation within a target range of 1.5% to 3.5% in 2024 and 2025. The bank's inflation target range this year is 2% to 4%. "To ensure inflation remains under control within target... the BI rate will be maintained, with further responses to be aligned with global and domestic economic dynamics," the governor said. (Reuters)

Thailand: Keeps rate steady at a decade high as growth ebbs. Thailand’s central bank kept its benchmark interest rate unchanged for the first time in 17 months, as policymakers look to support the economy’s recovery amid subdued inflation. The Monetary Policy Committee voted unanimously to maintain the one-day repurchase rate steady at 2.5%, as expected by all 22 economists in a Bloomberg survey. The Bank of Thailand (BOT) said the rate — the highest in a decade — was appropriate “for supporting long-term sustainable growth” and keep inflation in check. “The committee will take into account growth and inflation outlook as well as associated risks in deliberating monetary policy looking ahead,” the BOT said in a statement. The rate will probably remain at the current level for a while, Assistant Governor Piti Disyatat said at a briefing that followed the decision. (Bloomberg)

Markets

MMHE: Unit secures RM1.2bn subcontract for Netherlands offshore wind project. Malaysia Marine and Heavy Engineering Holdings Bhd's (MMHE) unit has secured a subcontract of the first offshore substation (OSS) high voltage direct current (HVDC) platform consisting of topside and jacket for the Ijmuiden ver Alpha Project from Petrofac International (UAE) LLC. (StarBiz)

Pharmaniaga: Plans to raise up to RM655m. Pharmaniaga plans to raise up to RM655m to bolster its financial position and exit its PN17 status. The company’s proposed regularisation plan entailed the proposed capital reduction, rights issue with warrants and private placement. The company has proposed a capital reduction of the issued share capital of the company by the cancellation of RM180m issued share capital. (StarBiz)

PIE: Stake in Thai firm PIT reduced. PIE Industrial Bhd 99.99% owned subsidiary Pan International Electronics (Thailand) Co Ltd (PIT) has entered into a subscription agreement with Pan International Industrial Corp (PIIC) for the issuance of 4.09m new ordinary shares at 50 baht per share, raising a total of RM27.1m. Following the share subscription, PIE ownership in PIT will be reduced to 55%, while PIIC, also the ultimate holding company of PIE, will hold the remaining 44.99%. (StarBiz)

Titijaya Land: Confirms fatal accident at construction site in Penang. Titijaya Land reported an accident occurred on Nov 28 at its purpose-built logistics facility construction site in Barat Daya, Penang, resulting in the death of a worker. (The Edge)

PJBumi: Gets nod from local authority to develop industrial factories in Sungai Petani with RM42m GDV. PJBumi has received a conditional development order from the Sungai Petani Municipal Council for the proposed development of its 4.6 acre industrial land in Sungai Petani, Kedah. The development comprises 24 units of smart medium industrial factories with an estimated GDV of RM42m. (The Edge)

PPB Group: Net profit down 53% in 3Q. PPB Group Bhd suffered a 53% drop in net profit after almost all segments posted reduced earnings in the 3Q23. The conglomerate, however expects its biggest revenue contributor, the grain and agribusiness segment to continue performing well in the last three months of the year. (StarBiz)

Genetec: 2Q profit falls 26% amid forex loss, lower margin. Genetec Technology, which completed its transition to Main Market of Bursa Malaysia last month, saw its net profit fall 26.35% to RM18.5m for 2Q24 from RM25.0m in the corresponding quarter a year ago, due to loss on foreign exchange and lower margin in product mix, despite higher revenue. (The Edge)

IPO: TSA inks underwriting agreement with AmInvestment Bank for ACE debut. TSA Group, a supplier of industrial hardware products that also manufactures stainless steel pipes and metal products, has inked an underwriting agreement with AmInvestment Bank for its upcoming IPO on the ACE Market of Bursa Malaysia. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks edged lower on Wednesday as a robust upward GDP revision eased recession fears, while Federal Reserve officials' remarks raised questions about the duration of the central bank's restrictive policy. The Nasdaq joined the S&P 500 in negative territory, while the Dow ended nominally higher, as investors took a wait-and-see position ahead of Thursday's crucial personal consumption expenditure (PCE) inflation report. The Dow Jones Industrial Average rose 13.44 points, or 0.04%, to 35,430.42, the S&P 500 lost 4.31 points, or 0.09%, at 4,550.58 and the Nasdaq Composite dropped 23.27 points, or 0.16%, to 14,258.49. Across the Atlantic, the continentwide STOXX 600 index rose 0.4%, with rate-sensitive real estate and technology stocks rallying over 1.5% each.

Back home, Bursa Malaysia closed lower for the third straight session on Wednesday after reversing all its intraday gains, dragged down by selling in telecommunication and banking heavyweights. At the closing bell, the FBM KLCI edged lower by 0.13% or 1.95 points to 1,446.07 from Tuesday's closing of 1,448.02. Regional markets were trading lower on Wednesday, led by Hong Kong markets, while China’s benchmark index closed at its lowest level in over a month as investors assessed earnings and comments from the US Federal Reserve board members. The mainland Chinese CSI 300 index closed 0.86% lower at 3,488.31, falling to the lowest level since late October. Hong Kong’s Hang Seng index tumbled 2.10%.

Source: PublicInvest Research - 30 Nov 2023