Economy

US: Housing starts unexpectedly spike to six-month high in Nov. The Commerce Department released a report unexpectedly showing a substantial increase in new residential construction in the US in the month of Nov. The report said housing starts soared by 14.8% to an annual rate of 1.56m in Nov after inching up by 0.2% to a downwardly revised rate of 1.36m in Oct. (RTT)

EU: ECB's Villeroy: Lowering of interest rates should happen some time in 2024. The lowering of interest rates should happen some time in 2024, said Bank of France governor and ECB member Francois Villeroy de Galhau. Villeroy also reaffirmed to France Inter radio that inflation should be back down to 2% by 2025 at the latest. "I am going to say this very clearly this morning — this is not just a forecast, this is a commitment. (Reuters)

UK: Manufacturers expect output to recover in 1Q: CBI. UK manufacturers expect output to rise in the first quarter of 2024 and selling price expectations hit the weakest in two years in Dec, data from the Confederation of British Industry showed. Output volumes were unchanged in the three months to Dec, which was up from - 17% in the three months to Nov, the latest Industrial Trends Survey revealed. The new order balance improved to -23% in December from -35% in the preceding period. At the same time, the export order books balance posted -23%, up from -31% a month ago. Expectations for average selling price inflation were little changed in Dec. (RTT)

Japan: BOJ keeps ultra-loose policy, focus shifts to exit timing. The Bank of Japan maintained ultra-loose monetary settings in a widely expected move, underscoring policymakers' preference to await more clues on whether wages will rise enough to keep inflation durably around its 2% target. The central bank also made no change to its dovish policy guidance that pledges to take additional monetary easing steps "without hesitation" if needed. Markets are focusing on any hints governor Kazuo Ueda offers at his post-meeting briefing on how soon the central bank could end its negative interest rate policy. (Reuters)

Hong Kong: Jobless rate stable at 2.9%. Hong Kong's unemployment rate held steady in the Sept-Nov period, labour force statistics from the Census and Statistics Department showed. The seasonally adjusted unemployment rate came in at 2.9% in the Sept-Nov period, the same as in the Aug-Oct period. The data showed that the underemployment rate remained unchanged at 1.0%. On an unadjusted basis, the unemployment rate dropped to 2.9% from 3.0%. The number of unemployed persons was 112,400, compared to 115,800 from Aug to Oct of 2023. (RTT)

Markets

Astro (Neutral, TP: RM0.43): Appoints Lee as CFO. Astro Malaysia Holdings has appointed Dr Grace Lee Hwee Leng as its new CFO with effect from Jan 1, 2024. In a filing with Bursa Malaysia, Astro said Lee will succeed Shafiq Abdul Jabbar. Lee rejoined Astro as the group chief operating officer in August 2023. Prior to that, she was the CFO of Aeon Co (M). Before joining Aeon, she had served Astro from 2002 until 2021 and held several roles which included head of process improvement, group financial controller, chief risk officer, chief executive officer of Go Shop and group transformation officer. (StarBiz)

Dataprep: To buy 70% of DACS Network, plans RM40.2m private placement. Dataprep Holdings has proposed to acquire a 70% stake in DACS Network Solutions SB for a total purchase consideration of RM10.5m. The group told Bursa Malaysia that its unit, Solisnet SB has acquired the stake in DNS from Cloudaron Group. It added that the purchase consideration will be satisfied via issuance of 82.7m shares in the group, at an issuance price of 12.7 sen per share. (The Edge)

IGB REIT: Joint COO Daniel Yong passes away. IGB REIT announced the passing of its joint chief operating officer Daniel Yong Chen-I, due to a sudden cardiac arrest. Yong, a law graduate from the University of Bristol, England, had been an integral part of Mid Valley City SB since 1999, initially joining as a member of the pre-opening retail development team. He was later appointed as the executive director of MVC in 2003 and served as its chief executive officer, responsible for overseeing the management and operations of Mid Valley Megamall. (The Edge)

TT Vision: Secures RM7.5m solar cell equipment deal. TT Vision Holdings has secured several purchase orders for its solar cell inspection equipment totaling RM7.5m from an undisclosed buyer. The Penang-based automated test equipment maker did not disclose information about the buyer, citing non-disclosure agreements signed. The group merely described the as one of the largest solar cell manufacturers globally. (The Edge)

Advance Information: Rights issue oversubscribed by 32.9%. Advance Information Marketing’s three-for-one rights issue with free warrants has been oversubscribed by 32.9%. The group said it received valid acceptances and excess applications for a total of 388.9m rights shares, in respect of the 292.7m shares available for subscription. (The Edge)

Prolexus: Units sue for alleged rights violation. Two subsidiaries of Prolexus, who collectively own 10% in South Malaysia Industries, are suing SMI and its board of directors for allegedly violating their rights as shareholders after SMI sought for more time to hold its annual general meeting. The suit was filed after the Companies Commission of Malaysia granted SMI until March 31, 2024 to hold its 52nd AGM, from the previous cut-off date of Dec 31, 2023, following an application from SMI to extend the deadline. (The Edge)

Poh Kong: Posts improved net profit of RM19m in 1Q. Poh Kong Holdings says it is confident it has put in place adequate measures to meet the challenges in the current financial year. The group will continuously monitor the impact of the current uncertainties on our operations, uphold and honour our financial obligations and evaluate our performance on a continuous basis. (StarBiz)

MARKET UPDATE

US markets ended the day higher again as investors continued to pour into equities amid a dovish stance by the US Federal Reserve on rates. Energy stocks outperformed as crude oil prices climbed further as a result of troubles in the Red Sea. On the day, the Dow Jones Industrial Average rose 0.6% as both the S&P500 and Nasdaq Composite gained 0.7%. European markets were also higher though it was travel and leisure stocks leading gainers on the continent. Finance ministers and central bank governors from the G7 nations met overnight meanwhile. Germany’s DAX led gainers amongst major markets with a 0.6% rise. UK’s FTSE 100 and France’s CAC 40 were 0.3% and 0.1% higher. Asian markets were mixed with Japan’s Nikkei 225 up 1.0% after the Bank of Japan (BoJ) left its policy rates unchanged. The BoJ pushed back against the idea of moving away from its negative rate policy though markets continue to believe it will, by April next year. The Hang Seng Index fell 0.8% while the Shanghai Composite Index inched 0.1% higher.

Source: PublicInvest Research - 20 Dec 2023