Economy

US: Consumer sentiment jumps in Dec as inflation expectations tumble. Consumer sentiment index surged to 69.4 in Dec from 61.3 in Nov. Economists had expected the index to inch up to 62.0. Consumer sentiment soared 13% in Dec, erasing all declines from the previous four months, primarily on the basis of improvements in the expected trajectory of inflation. Sentiment is now about 39% above the all-time low measured in June of 2022 but still well below pre-pandemic levels. (RTT)

US: Job growth exceeds estimates in Nov, unemployment rate unexpectedly dips. Employment in the US increased by more than expected in the month of Nov. The non-farm payroll employment jumped by 199,000 jobs in Nov after rising by 150,000 jobs in Oct. Economists had expected employment to climb by 180,000 jobs. The stronger than expected job growth partly reflected a notable increase in employment in the health care and social assistance sector, which added 93,200 jobs. Employment in the manufacturing sector also rebounded, reflecting the return of workers from a strike, while employment in the retail sector declined. (RTT)

US: Wholesale inventories fall more than expected in Oct. Wholesale inventories declined by 0.4% in Oct after coming in unchanged in Sept. Economists had expected wholesale inventories to dip by 0.2%. The bigger than expected decrease came as inventories of non-durable goods slumped by 1.0%, more than offsetting a 0.1% uptick in inventories of durable goods. The report also showed a sharp pullback in wholesale sales, which tumbled by 1.3% in Oct after surging by 2.0% in Sept. Sales of nondurable goods plunged by 2.0% during the month, while sales of durable goods fell by 0.5%. (RTT)

EU: Swedish economy recovers, industrial output contracts. Sweden's economy expanded in Oct after contracting in the previous two months, driven by strong net exports. Separate official data showed that industrial production decreased at the start of the final quarter. GDP advanced 1.2% MoM in Oct, reversing a 0.5% fall in Sept. The largest contribution to the uptick came from strong figures for net exports concerning goods, with smaller increases in some other aggregates such as consumption among households and the general government. (RTT)

UK: Job placements decline in Nov. UK employers reduced recruitment in Nov amid weaker economic outlook. Permanent staff appointments declined at the second-fastest pace since June 2020. At the same time, temporary billings declined after two months of expansion. Due to the slowdown in hiring and reports of redundancies, availability of workers increased for the ninth straight month. The upturn in permanent staff supply continued to exceed that seen for temp candidates. Further, there is another fall in the rate of starting salary inflation in Nov. (RTT)

China: Nov consumer prices fall the fastest in 3 years. The CPI dropped 0.5% both from a year earlier and compared with Oct. The falls were deeper than the median 0.1% declines, both YoY and MoM, forecast in a Reuters poll. The YoY CPI decline was the steepest since Nov 2020. YoY core inflation, excluding food and fuel prices, was 0.6%, the same as Oct, pointing to a daunting task faced by Chinese authorities to revive demand as deflationary forces persist. (CNBC)

Taiwan: Trade surplus grows on exports rebound. Taiwan's foreign trade surplus increased notably in Nove from a year ago as exports rose amid a sharp fall in imports. The trade surplus climbed to USD9.8bn in Nov from USD3.6bn in the corresponding month last year. The surplus also grew from USD5.8bn in Oct. Exports rebounded 3.8% YoY in Nov, following a 4.5% fall in the prior month. (RTT)

Indonesia: Economic growth predicted to reach 4.8% in 2024. Indonesia's Institute for Development of Economics and Finance (INDEF) projected the country's economy to grow 4.8% on an annual basis in 2024, lower than the macro assumption in the country’s 2024 State Budget of 5.2%. According to INDEF's calculations, the 2024 economic growth is not high as the macro assumption because of the many difficult challenges. Indonesia’s national economic growth is forecast to slow down next year in line with slowing global economic growth due to the geopolitical crisis between Russia and Ukraine as well as between Israel and Palestine that is predicted to continue in 2024. INDEF projected that the people's purchasing power will decline in 2024 and credit growth to the real sector will moderate due to Bank Indonesia's high benchmark interest rate and windfall from the rising commodity prices to year-end. (StarBiz)

Markets

YTL Power: To build AI infrastructure, bring fastest supercomputers to Malaysia by mid-2024. YTL Power International (YTL) has announced a collaboration with US multinational technology company Nvidia Corp to build artificial intelligence (AI) infrastructure that will bring the fastest supercomputers to Malaysia by the middle of 2024. YTL said it will deploy Nvidia H100 Tensor Core GPUs, which power today’s most advanced AI data centres, and use Nvidia AI Enterprise software to streamline production AI. (Bernama)

Westports: Signs third supplementary privatisation deal with government. Westports Holdings has entered into a third supplemental privatisation agreement with the government and Port Klang Authority (PKA) for the proposed expansion of its container terminals. Previously, the Westports Privatisation Agreement (Original) between the government, PKA, and Westports Malaysia Sdn Bhd was signed for a period of 30-years effective from 1 Sept 1994 to 31 Aug 2024. (The Star)

Supermax: US factory nears completion. Supermax Corp Bhd announced that its first glove manufacturing facility in the US is nearing completion, with the group having fulfilled and complied with various regulatory requirements, including permits, to operate the plant in Brazoria County, Texas. “Supermax’s American and Malaysian teams have been working very hard to manage the setting-up of the US operations and we are pleased to announce that construction of our first manufacturing facility will be substantially completed before the end of Dec 2023. (The Edge)

Pecca: Aims for aviation segment to make up 15% of earnings in 5 years. Pecca Group is banking on its aviation segment to unlock its next phase of growth, according to MD Datuk Kelvin Teoh Hwa Cheng. "In the 2023 fiscal year, Pecca earned nearly 98% of its revenue from the automotive upholstery business. In five years, we aim to derive at least 15% of our earnings from our aviation business,” Teoh said in a statement. Pecca secured its first purchase order to service a 180-seat, Europe-registered Airbus A320 passenger aircraft in the first quarter ended 30 Sept 2023 (1QFY24). The Star)

Chin Hin Group Property: Buys RM40m land in Penang for residential project. Chin Hin Group Property is acquiring a freehold plot in Penang measuring about 1.2 acres for RM40m from Ivory Properties Group for RM40m to build a multi-storey serviced residence. As part of the deal, Chin Hin Group will award construction works of the development to a member company of the Ivory group as the turkey builder. Chin Hin said it has on Friday signed a binding term sheet with Ivory Properties' wholly-owned Ivory Gleneary SB (IGSB) for the proposed land acquisition. (The Edge)

Axis-REIT: To acquire shopping mall in Temerloh for RM25.75m. Axis Real Estate Investment Trust (Axis-REIT) has proposed to acquire a two-storey shopping mall in Temerloh, Pahang, for RM25.75m cash. The REIT said the acquisition of Temerloh Mall in Taman Damai, from Amal Mewah Development SB, will be funded by its existing bank financing. The freehold property with a net lettable area of 93,854 sq ft (square feet) will be leased to TF Value-Mart SB, the fund said in a bourse filing on Friday. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after a gauge of global stocks rose last Friday, on pace for its sixth straight week of gains, while US Treasury yields shot higher after a strong US jobs report forced markets to modify expectations for the timing of rate cuts by the Federal Reserve. US job growth accelerated in November, with the Labour Department’s employment report showing nonfarm payrolls increased by 199,000 jobs last month, above the 180,000 estimate of economists polled by Reuters, after rising by an unrevised 150,000 in October. The unemployment rate fell to 3.7 % from the near two-year high of 3.9 % in October. On Wall Street, stocks closed higher after a choppy session with the S&P 500 closing at its highest level since March 2022, led by a 1.1 % gain in energy shares as oil prices bounced. The Dow Jones Industrial Average rose 130.49 points, or 0.36 %, to 36,247.87, the S&P 500 gained 18.78 points, or 0.41 %, to 4,604.37 and the Nasdaq gained 63.98 points, or 0.45 %, to 14,403.97. European shares closed at their highest since February 2022 with the STOXX 600 index up 0.80%. MSCI’s gauge of stocks across the globe gained 0.29% and was poised for a sixth straight weekly gain, its longest streak in four years.

Back home, soft market sentiment saw Bursa Malaysia's barometer index barely move throughout the day as global uncertainties continued to keep investors on the sidelines pending crucial US jobs data slated for release on Friday. At the closing bell, the FBM KLCI eased 0.88 of a point to 1,441.97 with continued modest gains by Petronas Chemicals Group Bhd helping to curb further losses. Japan’s Nikkei 225 fell 1.68%, while Hong Kong’s Hang Seng index dropped 0.07%.

Source: PublicInvest Research - 11 Dec 2023