Economy

US: Existing home sales fall in Dec, supply shows signs of improvement. US existing home sales fell in Dec to the lowest level in nearly 13-1/2 years, but a recovery could be in the cards this year as mortgage rates decline and housing inventory shows signs of improving. Existing home sales slipped 1.0% last month to a seasonally adjusted annual rate of 3.78m units, the lowest level since Aug 2010. Home resales are counted at the closing of a contract. (Reuters)

US: Consumer sentiment races to 2-1/2-year high. US consumer sentiment improved in Jan, hitting the highest level in 2- 1/2 years amid growing optimism over the outlook for inflation and household incomes, which bodes well for the economy's prospects this year. The better-than-expected reading in sentiment reflected a brightening of moods across all age and income groups, education and geographical locations as well as political affiliation. (Reuters)

EU: Italy construction output grows further. Italy's construction output expanded for the fourth straight month in Nov. Construction production advanced a seasonally adjusted 1.0% MoM in Nov, though slower than the 1.3% increase in the previous month. The annual growth in construction output also moderated to 1.5% in Nov from 2.7% a month ago. (RTT)

EU: Poland producer prices fall at faster pace. Poland's producer prices declined for the sixth successive month in Dec, and at a faster rate, largely due to a sharp decrease in prices in the manufacturing sector. Producer prices declined 6.4% annually in Nov, following a 5.1% fall in the prior month. A decrease of 7.9% in prices in the manufacturing sector triggered the yearly decline. (RTT)

EU: Swiss producer and import prices fall 1.1%. Switzerland's producer and import prices declined for the eighth successive month in Dec. Producer and import prices dropped 1.1% YoY in Dec, following a 1.3% fall in the previous month. The producer price index climbed 0.5% annually in Dec, while import prices registered a notable decrease of 4.4%. (RTT)

UK: Retail sales fall more than forecast. UK retail sales declined more than expected at the end of the year. Retail sales declined 3.2% on month in Dec, reversing the 1.4% increase in Nov. The decline was also bigger than forecast of 0.5% drop. (RTT)

Japan: Tertiary activity index falls 0.7%. Japan's tertiary activity index decreased for the third straight month in Nov. The seasonally adjusted tertiary activity index dropped 0.7% MoM in Nov, faster than the 0.2% decline in Oct.. (RTT)

Markets

KPJ (Outperform, TP: RM1.54): Sues 11 former board members over alleged breach of duty in Lablink stake sale. KPJ Healthcare has filed a lawsuit against 11 former board directors over the sale of a 49% stake in its pathology and laboratory unit Lablink (M) SB to KL Kappa SB for RM119.9m in March 2018. KPJ, which still owns a 51% stake in Lablink, claimed that these individuals who sat on its board at the time had allegedly breached their fiduciary and/or statutory duties to the group, and failed to exercise reasonable care and diligence in the transaction with KL Kappa. (The Edge)

Capital A: Gets up till June 30 to submit PN17 exit plan. Capital A now has up till June 30, 2024 to submit its proposal to regularise its PN17 condition after getting Bursa Malaysia's approval for another six-month extension — its fourth extension in a row. It was initially supposed to submit the plan by Jan 7, 2023, but the deadline was extended thrice — first to July 7, then to Oct 7 and subsequently to Dec 31, 2023. (The Edge)

Edelteq: Signs MOU with Chinese, local firms for semiconductor-related ventures. Edelteq has inked one MOU with CYG Semiconductor Equipment (Zhuhai) Co Ltd to set up two companies. The entity in China will be involved in semiconductor equipment design, manufacturing and the sale of substrate wafer automatic optical inspection, while the Malaysian entity will deal with semiconductor equipment design, manufacturing and sale of IGBT module packaging machines. (The Edge)

Kinergy Advancement: To develop solar power project with LCS Holdings in Philippines. Kinergy Advancement (KAB), is expanding into the Philippines, its fourth market in Southeast Asia via a solar power project with Philippine conglomerate, LCS Holdings Inc. KAB and LCS will jointly develop a 20 MWp solar farm project located at Santa Ilocos Sur, Philippines. The project can be expanded up to 100 MWp. (BTimes)

LB Aluminium: Buys factories in Selangor for RM30m to boost warehousing space. LB Aluminium is acquiring two factories and an office on a 4.56-acre freehold parcel of land in Beranang, Selangor, for RM30.4m, cash from Puspajaya Realty SB for the proposed land acquisition. The property, which is sited next to its manufacturing operations and factories, to grow its warehouse capacity in Beranang, relocate its operations and cater for any future expansion plans. (The Edge)

Eupe Corp: Buys two more Sungai Petani plots for investment. Eupe Corp is purchasing two parcels of freehold land in Sungai Petani, located in the Kuala Muda district of Kedah, for RM40.7m, which will increase the land area around its proposed township, for investment. It is buying the freehold plots, totalling 221,238 sqm, from Sing Na Tian Development SB. (The Edge)

IPO: TSA Group oversubscribed by 8.62 times. TSA Group, which is scheduled to make its ACE Market debut on Feb 2, was oversubscribed by 8.62 times by the Malaysian public. The manufacturer of industrial hardware products, stainless steel pipes and metal products said the IPO received 4,304 applications for 148.8m shares valued at RM81.8m for the 15.465 shares made available to the Malaysian public. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after the S&P 500 posted a record high close yesterday for the first time in two years, fuelled by a rally in chipmakers and other heavyweight technology stocks on optimism around artificial intelligence. The S&P 500 jumped 1.23% to end the session at 4,839.81 points. Nvidia climbed 4.2% and Advanced Micro Devices rallied over 7% after server maker Super Micro Computer lifted its second-quarter profit forecast, sending its shares soaring 36 %. Meanwhile, the Nasdaq jumped 1.70% to 15,310.97 points, while Dow Jones Industrial Average rose 1.05% to 37,863.80 points. European shares logged weekly declines on Friday, as investors tempered their expectations around major central banks reducing borrowing costs this year, with the focus now squarely on the European Central Bank's next policy meeting. The pan-European STOXX 600 index ended 0.3% lower after rising as much as 0.5% during the day.

Back home, Bursa Malaysia snapped three consecutive days of losses to end at its intraday high on Friday on bargain hunting in selected heavyweights led by the financial services and utilities sectors. At the closing bell, the FBM KLCI rose 7.19 points to 1,486.37 from Thursday's close of 1,479.18. In the region, Japan's Nikkei 225 rose 1.4% to 35,963.27, South Korea’s Kospi surged 1.34% to 2,472.74, Hong Kong’s Hang Seng Index eased 0.54% to 15,308.69 and Shanghai Stock Exchange Composite Index shed 0.47% to 2,832.28.

Source: PublicInvest Research - 22 Jan 2024