Economy

US: Fed’s inflation battle hinges on convincing Americans price hikes are done. The way inflation has fallen toward the US Federal Reserve’s (Fed) goal with little cost to jobs has many convinced the central bank has won the battle. Victory, however, requires persuading people like Steve DelGiorno that price increases are a thing of the past. DelGiorno’s restaurant group — Crema Concepts LLC in Danville, Virginia — has tried to hold menu prices stable over the past two years despite the higher cost of everything from paper cups to eggs. But he doesn’t think he can hold out much longer. (Bloomberg)

UK: Job vacancies fall by most in three years in sign labour market is cooling. Job vacancies in the UK fell by the most in more than three years in Dec, another sign a red-hot labour market is cooling. Figures in latest Job Market Report published by online portal Adzuna showed advertised vacancies declined 6.95% in Dec, the largest drop since June 2020. Early data suggests Jan will see a similar-sized fall, marking what could be the start of difficult year for jobseekers, Adzuna said. The shift may ease upward pressure on wages that’s been a symptom of persistent inflationary pressures the BoE is trying to rein in. (Bloomberg)

China: Deflation pressures seen persisting through mid-2024. China’s deflation pressures are likely to continue for at least another six months on weak demand and as the property crisis continues to sap confidence within the economy. A measure of economy-wide prices called the gross domestic product (GDP) deflator is expected to decline for at least two more quarters, according to 12 of 19 economists in a new Bloomberg survey. (Bloomberg)

Singapore: Keeps monetary policy unchanged as inflation slows. Singapore's central bank kept its monetary policy settings unchanged, as expected, in its first review of the year as inflation pressures continued to moderate and growth prospects improved. The Monetary Authority of Singapore (MAS) said it will maintain the prevailing rate of appreciation of its exchange rate-based policy band known as the Nominal Effective Exchange Rate, or S$NEER. The width and the level at which the band is centred did not change. "Barring any further global shocks, the Singapore economy is expected to strengthen in 2024, with growth becoming more broadbased. (Reuters)

Singapore: Producer prices fall further. Singapore's producer prices declined for the eleventh successive month in Dec amid a decline in the oil and non-oil index, data from the Department of Statistics showed. The manufacturing producer price index fell 2.4% YoY in Dec, slower than Nov's stable decline of 4.5%. The oil index dropped 2.7% annually in Dec, and the non-oil index showed a decrease of 2.4%. (RTT)

Thailand: Economy in recession, needs a boost — deputy finance minister. Thailand's economy is in a state of recession owing to a high level of household debt, a deputy finance minister said, reiterating the need for stimulus to jumpstart the economy. Deputy Finance Minister Julapun Amornvivat said the government was committed to delivering on its signature THB500bn (USD14.05bn or RM66.5bn) handout plan of transferring 10,000 baht to 50m Thais, and hoped a delay in its rollout would not be long. (Reuters)

Markets

Telekom Malaysia (Outperform, TP: RM6.20): To be exploring plans to build new hyperscale data centre. Telekom Malaysia (TM) is said to be exploring plans to build a new hyperscale data centre (HDC) in Malaysia, expanding its capacity from the existing Klang Valley Data Centre (KVDC) and Iskandar Puteri Data Centre (IPDC). HDCs are large facilities offering at least 40 MW of IT power capacity and often bigger, catering to large cloud service providers and internet companies, according to the research house. Leveraging its extensive submarine and terrestrial networks, as well as strong local relationships, TM may be able to attract strong strategic international partners to co-invest in such an HDC. (The Edge)

TMC Life Sciences: Suspends GCEO; appoints temporary replacement. TMC Life Sciences has appointed director Dr Melvin Heng Jun Li as its group chief executive officer (GCEO) with immediate effect, following the suspension of Wan Nadiah Wan Mohd Abdullah Yaakob. Wan Nadiah was also suspended as CEO of Thomson Hospitals SB, resulting in the powers, authorities and functions vested in her as the GCEO and CEO to be suspended with effect from Jan 29, 2024 until further announcement by the board. (StarBiz)

Bintai Kinden: Agrees to RM58.6m debt settlement with KTIMB. Bintai Kinden Corp’s (BKCB) wholly-owned subsidiary, Optimal Property Management SB (OPM) has accepted an interim settlement proposal (ISP) with Kolej Teknologi Islam Melaka (KTIMB) with regards to the default and outstanding debts of RM58.6m as of Dec 2023. According to the mechanical and electrical (M&E) engineering services specialist, the agreement entailed an immediate disbursement of RM1.5m to OPM by Jan 30, and a series of six-monthly RM250,000 per month instalment totalling an additional RM1.5m from Jan to June 2024. (StarBiz)

VSTECS: Partners SpaceX to distribute Starlink in Malaysia. Vstecs’ wholly owned subsidiary, VSTECS Astar SB, has collaborated with SpaceX to be Starlink authorised distributor in Malaysia to offer high-speed Internet nationwide. The collaboration complements the government’s vision to achieve 100% Internet penetration throughout the country. The group has appointed Harvey Norman as the first official retailer and is actively building a network of retailers to maximise seamless deployment across the country. (StarBiz)

Haily: Bags RM32.33m residential development job. Haily Group has secured a letter of award worth RM32.33m from Gunung Impian Development SB for a residential development in Johor Baru, Johor. The contract will comprise the construction and completion of 76 units of double storey cluster houses and one double chamber Tenaga Nasional substation. (StarBiz)

Varia: Secures RM95m contract for Klang River flood mitigation project in Shah Alam. Varia, formerly known as Stella Holdings, has secured a RM94.86m contract for the Klang River flood mitigation project in Shah Alam, Selangor. Its wholly-owned unit, Mewah Kota SB, has accepted a letter of award from Kator Construction SB, appointing it as a subcontractor for the project. The project is scheduled to span 60 months, commencing on Feb 1, 2024, and concluding on Jan 31, 2029. (The Edge)

MARKET UPDATE

The FBM KLCI might edge higher today after US stocks rallied yesterday, with both the Dow and S&P 500 ending at records to kick off a heavy news week that includes tech titan earnings and a Federal Reserve interest rate decision. The Nasdaq actually led major US indices with a 1.1 % gain, although it was the Dow and S&P 500 that ended at fresh records. The Dow and S&P 500 rose 0.59% and 0.76% respectively. Markets are girding for the Fed to again keep interest rates unchanged. But traders hope to hear some guidance from officials on their plans, with a cut in March seen as a toss-up. While European stocks finished little changed, the Shanghai stock market closed lower following news that a Hong Kong court had issued a winding-up order against Chinese developer Evergrande, stoking fresh worries about the property sector and economy. Evergrande’s Hong Kong-listed shares collapsed more than 20% on the news before they were suspended. Back home, Bursa Malaysia maintained its upward trajectory to end higher for the sixth straight trading day on Monday, with the key index breaking the 16-month high, on the back of persistent buying in plantation and financial services counters. The FBM KLCI gained 9.11 points to end at 1,515.39 from Friday’s (Jan 26) close of 1,506.28.

Source: PublicInvest Research - 30 Jan 2024