Economy

Global: World Bank forecasts 2024 global growth to slow for third consecutive year. The World Bank warned that global growth in 2024 is set to slow for a third year in a row, prolonging poverty and debilitating debt levels in many developing countries. Hamstrung by the COVID-19 pandemic, then the war in Ukraine and ensuing spikes in inflation and interest rates around the world, the first half of the 2020s now looks like it will be the worst halfdecade performance in 30 years, it added Global GDP is likely to grow 2.4% this year, the World Bank forecast in its latest Global Economic Prospects report. (Reuters)

US: Small business sentiment up, but labour, inflation worries persist. US small business sentiment rose for the first time in five months in Dec, a survey published showed, but hiring costs and ongoing concerns around inflation continue to sour business owners' confidence. The National Federation of Independent Business (NFIB) index rose to 91.9 in Dec from Nov’s 90.6. It was the first increase since July and matched that month's reading, but it held below its 50-year average of 98 for a 24th-straight month. Conditions have tracked the Fed’s most aggressive rate hike campaign since the 1980s, launched in 2022, during which small business owners have described tightened credit conditions. (Reuters)

EU: German industrial output drops unexpectedly in Nov. German industrial production unexpectedly fell in Nov, the federal statistics office said, marking the sixth monthly decline in a row. Industrial production decreased in Nov by 0.7% compared to the previous month. Analysts polled by Reuters had predicted a 0.2% rise. Industrial orders rose by only 0.3% MoM in Nov, the federal statistics office said. The decline in output was broad-based. The production of capital goods decreased by 0.7% on the month, the production of intermediate goods fell by 0.5% and that of consumer goods by 0.1%. Outside manufacturing, there was a 3.9% increase in energy production, while production in construction dropped by 2.9% from the previous month. (Reuters)

UK: Retail sales growth remains weak despite festive period. UK retail sales growth weakened in Dec despite the festive season, data from the British Retail Consortium and KPMG showed. Retail sales grew only 1.7% on a yearly basis in Dec, which was slower than the 6.9% expansion posted in the same period last year. Food sales climbed 6.8% over three months to Dec, while non-food sales dropped 1.5%. Over the three months to Dec, in-store non-food sales were down 1.3% on a total basis from the last year. Online non-food sales decreased 0.8%, against a decline of 3.0% in the last year. (RTT)

China: Exports grow for first time in 7 months in relief for factories. China's exports grew for the first time in seven months in Nov, suggesting factories in the world's second-largest economy are attracting buyers through discount pricing to get over a prolonged slump in demand. Mixed manufacturing data for Nov has kept alive calls for further policy support to shore up growth but also raised questions about whether predominantly negative sentimentbased surveys have masked improvements in conditions. Exports grew 0.5% from a year earlier in Nov, customs data showed, compared with a 6.4% fall in Oct and beating the 1.1% drop expected in a Reuters poll. Imports fell 0.6%, dashing forecasts for a 3.3% increase and swinging from a 3.0% jump last month. (Reuters)

Japan: Inflation in capital keeps slowing, takes pressure off BOJ. Core inflation in Japan's capital slowed for the second straight month in Dec as cost-push price pressures continued to ease, data showed, taking some pressure off the central bank to rush into exiting ultra-loose monetary policy. The Tokyo inflation data, closely watched as a leading indicator of nationwide price trends, is among key factors the Bank of Japan (BOJ) will scrutinise at the next policy-setting meeting on Jan. 22-23. Tokyo's core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, rose 2.1% in Dec from a year earlier, government data showed, matching a median market forecast. It followed a 2.3% rise in Nov and matched a low hit in June 2022. (Reuters)

Markets

Kelington: Secures RM143m for gas hookup system works in Shanghai. Kelington Group has bagged a contract worth about RM143m from China's largest semiconductor foundry to build a gas hookup system in Shanghai, China. The job, which entails the design, procurement, construction and commissioning of the entire system, was awarded to Kelington's wholly owned Kelington Engineering (Shanghai) Co. (The Edge)

Datasonic: Gets 6-month extension for passport contract valued RM135m. Datasonic Group, a security-related integrated ICT solutions provider, has received letters of extension from Kementerian Dalam Negeri for the supply of the Malaysian passport chips, passport documents and polycarbonate biodata pages for a period of six months from 1 Dec 2023 to 31 May 2024. The group has also announced that it received the letter of award from KDN for the supply of MyKad, MyTentera, MyPOCA raw cards and consumables to the National Registration Department for the same period for a contract sum of RM28.7m. (The Malaysian Reserve)

Rohas Tecnic: Secures construction job for RTS Link project. A consortium led by the construction engineering group has secured a contract worth RM199.8m under the Johor Bahru– Singapore RTS Link project. The contract for the construction of the Bukit Chagar station's facade was awarded by Malaysia Rapid Transit System SB. Rohas-Euco Industries (REI) and Sediabena Builders SB (SBSB), which are both involved in the design and fabrication of steel structures, will be entering into a JV agreement, with REI holding 70% equity in the company and SBSB the remaining 30%. (The Edge)

SunCon: Gets RM21m settlement from Indian govt. The Indian government has agreed to pay INR375.3m (RM21m) to a unit of Sunway Construction Group (SunCon) as a settlement for a previous highway contract in the state of Rajasthan. Sunway Construction SB (SCSB) had entered into a settlement agreement with the National Highways Authority of India for all the claims and disputes pertaining to a contract for the East West Corridor project. The settlement amount is expected to be disbursed by NHAI to SCSB within a month. (StarBiz)

Leong Hup: Appeals fines by MyCC over poultry feed cartel. Leong Hup International has filed an appeal against the decision of the Malaysia Competition Commission, submitting a notice of appeal to the Competition Appeal Tribunal while simultaneously requesting a stay of the decision. This move comes in response to the MyCC imposing cumulative penalties of RM415.5m on 22 Dec 2023, against five feed millers. Notably, this marks the highest amount of fines ever levied by the quasi-judicial body in its 12-year history. (The Malaysian Reserve)

GDB: Files winding-up petition against KSK Land. GDB Holdings’ unit Grand Dynamics Builders SB (GDBSB) has filed a winding-up petition with the High Court against KSK Land SB. GDBSB is seeking for KSK Land to be wound up by the court, and the appointment of a private liquidator nominated by GDBSB to liquidate the company. The filing of the petition follows the court's setting aside of KSK Land's restraining order against its creditors, as well as an ex parte court order for leave to summon a meeting with the creditors as part of a proposed scheme of arrangement. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after global stock indexes mostly dipped and Treasury yields edged higher yesterday, with investors bracing for key US inflation data this week and the start of fourth-quarter company earnings. The Dow Jones Industrial Average fell 157.85 points, or 0.42%, to 37,525.16, the S&P 500 lost 7.04 points, or 0.15%, to 4,756.50 and the NASDAQ gained 13.94 points, or 0.0 %, to 14,857.71. Boeing shares fell 1.4%. The US National Transportation Safety Board said late on Monday it could not yet tell whether a recovered cabin panel that blew off an Alaska Airlines Boeing 737 MAX 9 plane during a flight last week had been properly attached. The MSCI world equity index, which tracks shares in 49 nations, lost 0.23 %, while European stocks ended down 0.2%.

Back home, Bursa Malaysia continued its recent bullish streak, ending higher on Tuesday for the fifth straight session with buying activities mainly on banking, telecommunication and consumer stocks while profit-taking was seen on utility stocks. The barometer index had increased by 45.73 points over the five days. At the closing bell, the FBM KLCI climbed 0.21%, or 3.13 points to 1,498.83 from Monday's close of 1,495.7.

Source: PublicInvest Research - 10 Jan 2024