Economy

US: Construction spending climbs slightly less than expected in Nov. Construction spending in the US rose by slightly less than expected in Nov, although the report also showed a significant upward revision to the increase in spending in Oct. Construction spending climbed by 0.4% to an annual rate of USD2.05trn in Nov after surging by 1.2% to an upwardly revised rate of USD2.04trn in Oct. (RTT)

EU: Manufacturing stuck in contraction territory. The euro area manufacturing sector ended the year firmly in the contraction territory due to the sustained decline in new orders and output, strongly supporting the view that the region has entered a recession at the end of 2023. The final HCOB manufacturing PMI rose to 44.4 in Dec from 44.2 in Nov. The index has remained below the neutral 50.0 mark indicating contraction. Nonetheless, the reading was the highest in seven months. (RTT)

UK: Shop price inflation holds at lowest since June 2022. Prices charged by British store chains rose at the joint slowest pace in a year and a half in Dec. Annual shop price inflation held at 4.3%, the same as in the 12 months to Nov and its weakest since June 2022. The pace of price growth had weakened in each of the previous six months. Food price inflation cooled to 6.7% but nonfood inflation rose to 3.1% after Black Friday discounts in Nov and as retailers prepared for sales promotions in Jan. (Reuters)

China: Home sales during New Year holiday fall 26% compared with 2023. China's average daily home sales during the three-day New Year holiday in 40 cities, based on floor area, fell 26% compared with the same period last year. Sales fell the most in smaller cities, dropping 50% during the holiday. Shifts in residents' expectations and policy support are key to real estate stabilisation in 2024. For 2024, expect more easing of restrictive property policies, with full relaxation on home buying curbs in second-tier cities. Authorities in recent months have been rolling out measures to support the crisis-hit property market. (Reuters)

China: Injects USD50bn into policy banks in financing push. The People’s Bank of China injected nearly USD50bn (RM230bn) worth of low-cost funds into policy-oriented banks last month, suggesting the central bank may be ramping up financing for housing and infrastructure projects to support the economy. The outstanding amount of the PBOC’s Pledged Supplemental Lending program to policy banks climbed to CNY3.3trn at the end of Dec from CNY2.9trn in the previous month. (Bloomberg)

Australia: Manufacturing activity contracts most since May 2020. Australia's manufacturing sector deteriorated at the fastest pace in more than 3.5 years in Dec, largely due to weaker demand conditions in both the home and foreign markets. The Judo Bank Manufacturing Purchasing Managers' Index fell to 47.6 in Dec from 47.7 in Nov. Any score below 50 indicates contraction in the sector. Further, activity fell for the tenth successive month in Dec. (RTT)

Singapore: Home prices up 2.7% in 4Q on demand. Singapore home prices rose for a second straight quarter, as local demand continued to prop up the market despite government cooling measures. Private residential prices climbed 2.7% in the last three months of 2023 from the previous quarter, when they gained 0.8%. Prices increased 6.7% for the whole of last year, slowing from an 8.6% rise in 2022. Singapore remains one of the most expensive and resilient property markets in the world, as demand withstands rising interest rates that triggered downturns in other major global cities, including rival Hong Kong. (Bloomberg)

Singapore: 4Q GDP speeds up on firmer construction, manufacturing. Singapore's economy grew 2.8% in 4Q YoY, faster than some economists expected and helped by improvements in construction and manufacturing. The 4Q growth in GDP was faster than the 1% expansion in 3Q of 2023. For the full year of 2023, Singapore's economy grew 1.2%, moderating from the 3.6% growth in 2022. (Reuters)

Markets

PBA Holdings: Shares hit record RM1.89 after Penang govt says inking water deal with Perak this year. PBA Holdings, whose main subsidiary Perbadanan Bekalan Air Pulau Pinang (PBAPP) is the licensed operator for water supply in Penang, saw its share price surge to RM1.89, its highest since the company's listing. Penang Chief Minister Chow Kon Yeow announced that the state will be signing either a MoU or an agreement on financing with Perak on the Sungai Perak water scheme in 2024. Under the scheme, Perak will be supplying Penang with treated water, with Penang requesting for 700m litres of water per day, according to the Malay Mail. (The Edge)

Edaran: Wins RM357m MoF contract. Edaran has received a contract worth RM356.56m from the Finance Ministry (MoF) to set up a Customs information system mainframe hardware and software rental services for the Royal Malaysian Customs Department. Edaran said the contract was for a period of 48 months, commencing on Jan 1, 2024. Proceeds from the contract will contribute to the earnings of Edaran Group for the financial year ending June 30, 2024 (FY24) until FY28. (The Star)

LYC Healthcare: To buyout JV partner for JB confinement care facility. LYC Healthcare's subsidiary, LYC Mother & Child Centre SB (LYCMC), plans to buy out its joint venture partner to take over a 67-bedroom confinement care facility in Johor Bharu for RM4.5m. LYC said LYCMC signed a share sale agreement with Singaporebased SOG Mummy & Baby Centre Pte Ltd on 30 Dec 2023 to buy 1.96m ordinary shares and 5.39m redeemable preference shares or a 49% interest in LYC SOG Mother & Child SB. (New Straits Times)

Nestcon: Bags RM252m construction job in Klang Valley. Nestcon has bagged RM251.5m construction works for a mixed development project in Mukim Petaling in the Klang Valley. Nestcon said its wholly-owned subsidiary Nestcon Builders SB had accepted a Letter of Award (LOA) from Altimas SB. The work under the LOA consists of main building works for the proposed mixed development of parcel 2, one block of 30-storey apartment suites (408 units) and one block of 34-storey apartment suites (526 units) comprising amenities, car parks and shops. The completion of the contract works is within 34 months, which will commence on 3 Jan and is scheduled for completion by 2 Nov 2026. (The Edge)

HeiTech Padu: Gets RM58.89m IRB contract. Heitech Padu has accepted and signed a letter of award from the Inland Revenue Board (IRB) for a “Next Generation Network” service, worth RM58.89mil. HeiTech Padu said the contract is for a period of three years and six months, commencing from 1 Jan, 2024 to 30 June, 2027. (The Star)

Sunview: Inks MOU with Saudi-based firm to collaborate on renewable energy projects. Sunview Group has via its whollyowned Fabulous Sunview SB inked a MOU with Saudi Arabiabased Vision Ambassadors Company for International Trade Consultancy to seek renewable energy development and investment opportunities. The renewable energy company said the collaboration will jointly identify locations of potential projects, with both parties serving as the principal investors. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks fell on the first trading day of 2024 as Apple shares dipped on a broker downgrade and Treasury yields climbed after investors tempered expectations around interest-rate cuts this year. Wall Street’s three major indices notched monthly, quarterly and annual gains on Friday as traders priced in higher chances of rate cuts from the Federal Reserve this year. The S&P 500 ended last week within 1% of a record closing high reached on Jan. 3, 2022. On Wall Street, the Dow Jones Industrial Average rose 0.07%, the S&P 500 lost 0.57% and the Nasdaq Composite dropped 1.63%. In Europe, the pan-regional STOXX 600 index closed down 0.11%, while MSCI's U.S.-centric gauge of stocks across the globe shed 1.01%.

Back home, Bursa Malaysia closed marginally lower on Tuesday, the first trading day of the year, due to a lack of buying interest amid subdued market performance across the region. At the closing bell, the FBM KLCI closed 0.1% or 1.56 points easier to 1,453.1 from last Friday’s close of 1,454.66. Elsewhere in the region, Hong Kong is down 1.4%, while China, Singapore, South Korea, Indonesia and Taiwan are lower by between 0.1 and 0.7 % each.

Source: PublicInvest Research - 3 Jan 2024