Economy

US: Underlying inflation pressures eased in October, NY Fed says. Underlying inflation pressures eased in October compared to the prior month, according to the Federal Reserve Bank of New York. The bank said that its Multivariate Core Trend (MCT) inflation reading for Oct stood at 2.6%, from Sept 2.88%.

US: Factory orders fall 3.6% in October. New orders for U.S.- made goods fell more than expected in Oct, marking the biggest monthly drop in roughly three and a half years, constrained by weakening demand for durable goods and transportation equipment and bolstering the view that high interest rates are beginning to bite into spending. Factory orders fell 3.6% after a downwardly revised 2.3% in Sept, the Commerce Department's Census Bureau said the biggest monthly drop since April 2020. Economists polled by Reuters had forecast orders would decline 2.8%. Orders advanced 0.5% on an annual basis in Oct. (Reuters)

EU: Investor Confidence Highest Since May. Euro area investor sentiment rose for a second straight month in December, raising expectations for an economic turnaround at the start of the next year, survey data from the behavioral research institute Sentix showed. The Sentix investor confidence index climbed to -16.8 from -18.6 in Nov. Economists had forecast a reading of -15.0. The score was the highest since May this year. Both the expectations sub-index and the current situation measure improved in Dec. The expectations sub-index climbed to -9.8 from -10.0 and marked its highest level since Feb this year. (RTT)

EU: German exports unexpectedly drop in October. German exports unexpectedly fell in Oct, edging down 0.2% on the previous month as demand in the European Union slumped, data from the federal statistics office. The result compared with a forecast 1.1% increase in a LSEG poll, following a strong 2.5% fall in Sep. Exports to EU countries shrank by 2.7% in Oct, the office said. The trade data follows a Nov survey by the Ifo economic institute that indicated a stabilisation in exports in Europe's largest economy, although few sectors expected exports to increase. (Reuters)

EU: German budget crisis 'stings' already weak economy. Germany's budget crisis has dealt another blow to an already battered economy, the president of the ZEW economic research institute said, and this is likely to be reflected in its upcoming monthly survey on investor morale. Achim Wambach's comments add to concerns over the state of Europe's largest economy following last month's ruling of the German constitutional court that tore a EUR 60bn (USD 65bn) hole into Berlin's finances. (Reuters)

UK: Christmas sales are off to weak start as Brits delay spending. UK retail sales were sluggish in Nov as Black Friday discounts failed to lure droves of shoppers struggling with the burden of the higher cost of living. Total sales grew 2.7% in Nov, compared with 4.2% growth a year earlier, the British Retail Consortium and consultancy KPMG said in a report. Sales of nonfood items declined, with shoppers particularly avoiding expensive categories including jewelry and watches. (Bloomberg)

Australia: Retail sales slip 0.2% in Oct. The value of retail sales in Australia was down a seasonally adjusted 0.2% on month in Oct, the Australian Bureau of Statistics said - coming in at AUD35.8bn. That was in line with expectations following the 0.9% increase in Sept. Individually, sales were up for food retailing, but down for sales of household goods, clothing, department store items, other retailing and restaurants. (RTT)

Australia: Company gross operating profits sink 1.3% in Q3. Company gross operating profits were down a seasonally adjusted 1.3% on quarter in the third quarter of 2023, the Australian Bureau of Statistics said. That was shy of forecasts for a decline of 0.5% following the 13.1% slump in the three months prior. (RTT)

Markets

Cypark (Neutral, TP: RM0.90): Inks deal with Abu Dhabi Future Energy. Cypark Resources has signed a strategic MoU with Abu Dhabi Future Energy Company PJSC-Masdar, one of the world’s largest RE companies. This collaboration, estimated at one gigawatt (GW) of RE projects in Malaysia, marks a pivotal addition to the overarching Malaysian Investment Development AuthorityMasdar 10GW MoU. (StarBiz)

UMW: To sell industrial land in Serendah to Perodua in related party deal. UMW Holdings has proposed to dispose of a 22.22- acre industrial leasehold land within the UMW High Value Manufacturing Park in Serendah, Selangor to Perusahaan Otomobil Kedua SB (Perodua) in a related party transaction. (The Edge)

EITA: Unit bags RM56.3m substation rehabilitation job from TNB. EITA Resources has secured a contract from TNB to rehabilitate a main intake substation in Kedah for RM56.31m. EITA’s 60%-owned TransSystem Continental SB (TSC) received a letter of acceptance from TNB for the "rehabilitation of PMU 132/11kV Gurun (Rehab), Kedah”. (The Edge)

UEM Edgenta: Acquires majority stakes in two UAE-based companies for RM55.1m. UEM Edgenta’s indirect wholly-owned subsidiary Edgenta International Investments LLC (EII) has entered into a SPA and shareholders’ agreement with United Arab Emirates (UAE)-based NW Kaizen Holding Ltd to acquire 60% equity interest in Kaizen Owner Association Management Services LLC (KOA) and Kaizen AMS Property Supervision LLC. (The Edge)

SCIB: Gets RM16.8m contract. Sarawak Consolidated Industries Bhd (SCIB) has accepted a letter of award and acceptance worth RM16.8m for substantial contract works from S & I Urban Designers SB. The contract involves the supply and delivery of precast components for the apron and taxiway of Projek Pembinaan Pangkalan Pasukan Gerakan Udara PDRM Sarawak. (StarBiz)

Bioalpha: To develop an 8-acre agro park in Langkawi. Bioalpha Holdings has entered into a manage and operate agreement with the Langkawi Development Authority (LADA) to develop, manage, and operate an agro park in Langkawi, Kedah (Langkawi Agro Park). LADA is an agency under the Ministry of Finance, tasked to propel the tourism economy of Langkawi to advance the island to become a world-renowned tourist destination. (StarBiz)

HB Global: RM30m acquisition of KK Fresh falls through due to unmet conditions. HB Global Ltd’s proposed acquisition of frozen meat and poultry products trader KK Fresh Frozen SB for RM30m has collapsed, as the specified conditions precedent within the conditional period were not fulfilled. (The Edge)

CSC Steel, Mycron: Get nod from High Court to challenge Miti's removal of anti-dumping duties on cold-rolled coils. The High Court here has granted both CSC Steel Holdings and Mycron Steel leave to commence judicial review against the government's decision in June this year to remove anti-dumping duties on cold-rolled coils of iron or non-alloy steel of more than 1,300mm from Korea and Vietnam. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after Treasury yields rose as investors awaited US labour market data to indicate the likely route of the Federal Reserve's rate policy. Softening economic data and recent comments from Fed officials, including Chair Jerome Powell, have heightened expectations that the US central bank has ended its interest-rate-hiking cycle and will begin to cut rates as soon as March. The next Fed policy meeting is scheduled to take place on Dec. 12-13. On Wall Street, the Dow Jones Industrial Average closed down 41.06 points, or 0.11%, to 36,204.44, the S&P 500 lost 24.85 points, or 0.54%, to 4,569.78 and the NASDAQ lost 119.54 points, or 0.84%, to 14,185.49. Stocks in Europe also edged lower, with the pan-European STOXX 600 index closing down 0.09% after initial gains pushed it to a four-month high. MSCI's gauge of stocks across the globe was down 0.43% after hitting its highest level since Aug. 2 earlier in the day.

Back home, Bursa Malaysia closed lower on Monday in tandem with the weaker regional market performance as investors were cautiously awaiting a slew of key economic data from several countries. At the closing bell, the FBM KLCI shed 0.37% or 5.36 points to 1,451.02 from Friday’s close of 1,456.38. The benchmark index opened 1.41 points weaker at 1,454.97 and moved between 1,448.17 and 1,457.02 throughout the trading session. In the region, Hong Kong’s Hang Seng Index dropped 1.09% to 16,646.05, Singapore’s Straits Times Index slid 0.2% to 3,084.08, Shanghai Stock Exchange Composite Index fell 0.29% to 3,022.91, and Japan's Nikkei 225 shed 0.6% to 33,231.27.

Source: PublicInvest Research - 5 Dec 2023