Economy

US: Job openings, quits near three-year low as labour market eases. US job openings fell to nearly a three-year low in Nov as the labour market gradually cools, which could pave the way for the Fed to start cutting interest rates this year. Americans are also feeling the shift in the labour market, with the number of people quitting their jobs, most likely for higher paying positions, dropping to the lowest level since Feb 2021. With fewer people job-hopping, wage growth could continue to moderate and ultimately contribute to lower inflation. (Reuters)

US: Car sales slow as US buyers suffer sticker shock. US auto sales softened at the end of last year as higher financing costs and near-record prices took their toll on would-be buyers. Pent-up demand that propped up sales in the wake of the pandemic has been sated, and shoppers are now balking at 10% interest rates on car loans and average prices around USD48,000 (RM222,360). (Bloomberg)

US: Manufacturing index indicates slightly slower contraction in Dec. US manufacturing activity contracted at a slightly slower rate in the month of Dec. Its manufacturing PMI rose to 47.4 in Dec from 46.7 in Nov, but a reading below 50 still indicates contraction. Economists had expected the index to inch up to 47.1. The uptick by the headline index partly reflected a turnaround by production, with the production index climbing to 50.3 in Dec from 48.5 in Nov. (RTT)

EU: German unemployment edged up in Dec. The number of unemployed people in Germany rose slightly in Dec, though by much less than analysts had expected, and the 2023 rate was one of the lowest since German reunification. The number of people out of work increased by 5,000 in seasonally adjusted terms to 2.7m. The labour market is still holding up well in terms of the extent of the burdens and uncertainties. The seasonally adjusted jobless rate grew slightly in Dec to 5.9%. (Reuters)

EU: Spain unemployment falls more than forecast. Spain's unemployment declined more than expected in Dec and hit the lowest level for the month since 2007. The number of unemployed decreased 27,375 or 1.0% compared to the previous month. This was bigger than the expected fall of 15,700. Registered unemployment reached 2.71m, which was the lowest for Dec since 2007, before the outbreak of the financial crisis. Unemployment decreased by 25,158 in the service sector and by 1,965 in agriculture. (RTT)

UK: Factory revival prospects suffer setback in Dec. Britain's manufacturing sector suffered a setback in its attempts to return to growth as output and employment fell more sharply in Dec than the previous month. The final reading of the S&P Global/CIPS manufacturing PMI weakened to 46.2 in Dec, ending a run of three months of improvement and down from a seven-month high of 47.2 in Nov. (Reuters)

China: Top banks tighten exposure to smaller peers to curb credit risk. Some of China's top banks have sharpened scrutiny of smaller peers' asset quality and have tightened standards for interbank lending, in an effort to curb credit risk as a deepening property debt crisis ripples through the economy. Two of China's biggest state-owned banks and a leading joint-stock bank have stepped up reviews of smaller lenders over the past couple of months to identify those with poor asset quality and have a high risk of default. (Reuters)

India: Factory growth ends 2023 at 18-month low on weaker new orders, output. India's manufacturing industry ended 2023 on a slightly shaky footing as factory growth decelerated to an 18- month low in Dec, pressured by a weaker rise in new orders and output. The HSBC India Manufacturing PMI (INPMI=ECI), fell to 54.9 in Dec from Nov's 56.0. Still, the reading was above the 50- mark separating growth from contraction for a 30th straight month. (Reuters)

Australia: RBA sees living-cost pressure weighing on growth. Australia’s central bank says meetings with industry and community groups suggest rising prices and elevated interest rates are weighing on consumption and broader economic growth. Retailers report that consumers, particularly those facing higher cost-of-living pressures, are more budget conscious in their spending. Domestic tourism demand had slipped from high levels and a further softening is anticipated due to cost pressures and elevated rates. (Reuters)

Markets

Eversendai: Terminates RM235m liftboat business injection. Eversendai Corp has agreed to scrap a planned injection of a liftboat business into the group, proposed almost four years ago. Eversendai said the mutual termination was due to the inability of Vahana Offshore (M) SB to satisfy the schedule of conditions precedent set in the share sale agreement dated 30 June 2020, to obtain the new financing facility upon the terms and conditions satisfactory to Eversendai (the purchaser). (The Edge)

Meta Bright: To install solar PV system for Kemaman Municipal Council. Meta Bright Group Bhd has announced that the Kemaman Municipal Council has accepted its proposal for a 407.8kWp solar photovoltaic (PV) system at Kijal Mall in Terengganu. The group said it would design, construct, install, commission, operate and maintain the solar PV system at the said premise, which is owned by the council. (The Star)

PGF Capital: Plans RM3bn development near Automotive High-Tech Valley. PGF Capital is planning to turn its 161.87 hectare land near the Automotive High-Tech Valley (AHTV) in Proton City, Tanjong Malim, Perak, into a RM3bn self-sustaining township over the next 10 to 15 years. This development aims to complement the growth of AHTV and will include over 6,000 residential and commercial units with an estimated total value of RM3.0bn. (New Straits Times)

EP Manufacturing: Bags eight-year vehicle assembly contract from China's Great Wall Motor. EP Manufacturing (EPMB) announced that its subsidiary PEPS-JV (Melaka) SB (PJVM) has been appointed as the contract vehicle assembler for the Malaysian unit of China's Great Wall Motor Co Ltd (GWM), making it a key player in the assembly and production of selected GWM models in Malaysia for the next eight years. (The Edge)

HSS Engineers: Bags RM4.94m consultancy job at Port Klang Cruise Terminal. HSS Engineers via its associate HSS Integrated SB (HSSI) has accepted a letter of award from Port Klang Cruise Terminal SB for the provision of project management consultancy services at the terminal. The group said the contract, valued at RM4.94mil, entailed consultancy services for the extension of the wharf and development of associated facilities. The job will commence on 8 Jan 2024, and is estimated to be completed 29 months later on 9 July 2026. (The Star)

JcbNext: Sells 1.8% stake in Taiwan-listed 104 Corp for RM17.7m, expects net gain of RM9.5m. JcbNext has disposed of a total of 581,225 shares, representing a 1.8% stake, in Taiwanlisted company 104 Corp between 21 June, 2023 to 3 Jan, 2024 for TW$119.86m (approximately RM17.67m). Following the sale in the open market of the Taiwan Stock Exchange, the group's shareholding in 104 Corp has been reduced to 6.17m shares or an 18.6% stake. (The Edge)

Power Root: To appeal against RM23m verdict in Indonesian trademark dispute. POWER Root and its subsidiary, Power Root (M) SB (PRM), are poised to appeal a substantial 74.5bn rupiah (approximately RM23m) verdict in a trademark dispute with CV Ego Sun Star Sukses Mandiri. The verdict, issued on 15 Nov, 2023, resulted from a trademark infringement claim filed by CV Ego, a limited liability partnership in Indonesia, revolving around the “Ah Huat” trademark. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open lower today after US stock indices ended the second session of the year down again in extended profit-taking yesterday after a strong finish to 2023, with minutes from the Federal Reserve's December meeting failing to shake off the funk hanging over markets. It was the first time the benchmark S&P 500 index has started the year with two straight declines since it kicked off 2015 with a three-session skid. It is also its worst twoday result, on a %age basis, since late-October. The S&P 500 lost 38.02 points, or 0.8%, to end at 4,704.81 points, while the Nasdaq Composite lost 173.73 points, or 1.18%, to 14,592.21. The Dow Jones Industrial Average fell 284.85 points, or 0.76%, to 37,430.19. Europe's benchmark stock index dropped to a three-week low in a broad-based sell-off on Wednesday, testing 2023's rally spurred by hopes of major central banks pivoting to easier monetary policy this year. The pan-European STOXX 600 ended 0.9% lower, hitting its lowest level since Dec. 14 and logging its worst single-day performance since November after kicking off the New Year on a lacklustre note on Tuesday.

Back home, Bursa Malaysia closed higher on Wednesday as bargain hunting emerged following Tuesday's sell-down, despite the mostly lower regional market performance. At the closing bell, the FBM KLCI ended 0.63% or 9.27 points firmer to 1,462.37 from Tuesday’s close of 1,453.1. In Japan, markets remained closed due to the aftermath of a New Year's Day earthquake centred in the Sea of Japan. In China, the Shanghai Composite managed to edge up slightly by 0.17% to reach 2,967.25, while the Shenzhen Component declined by 0.75% to settle at 9,330.86. Hong Kong's Hang Seng Index faced a decline of 0.85%, closing at 16,646.41 while South Korea's Kospi index experienced a drop of 2.34%, closing at 2,607.31.

Source: PublicInvest Research - 4 Jan 2024