Economy

US: Trade deficit rises marginally in Dec; narrows sharply in 2023. The US trade deficit widened slightly in Dec, but contracted by the most in 14 years in 2023 as imports declined and exports jumped to a record high. The report from the Commerce Department also showed the US rising status as a major oil producer, with the inflation-adjusted value of petroleum exports surging 15.9% to a record high in Dec. The nation is now a net oil exporter and has reduced its dependence of foreign oil, helping to shrink the current account deficit. The trade deficit increased 0.5% to USD62.2bn, the Commerce Department's Bureau of Economic Analysis said. Data for Nov was revised higher to show the trade gap shrinking to USD61.9bn instead of USD63.2bn as previously reported. (Reuters)

EU: German industrial output falls more than expected in Dec. German industrial production fell more than expected in Dec, the federal statistics office said on Wed, marking the seventh monthly decline in a row and highlighting weakness in the backbone of Europe's largest economy. Industrial production fell in Dec by 1.6% compared with the previous month. Analysts polled by Reuters had predicted a 0.4% fall. In energy-intensive industries, production fell by 5.8% in Dec on the month, the office said. (Reuters)

EU: US set to overtake China as Germany's top trade partner. The US is set to overtake China as Germany's most important trade partner by 2025 at the latest if current trends continue, according to the head of foreign trade at the German Chamber of Industry and Commerce (DIHK). German exports and imports to China together totalled around EUR253bn (USD272bn) last year, according to calculations by Reuters based on preliminary data from the Federal Statistics Office. (Reuters)

UK: Builders most optimistic in two years on rate cut hopes: PMI. British construction firms turned their most optimistic in two years as the prospect of interest rate cuts raised hopes of a turnaround in the sector, a survey showed. The S&P Global/CIPS UK PMI headline measure of the construction industry improved to 48.8 in Jan from 46.8 in Dec, its highest since Aug 2023 although still in no-growth territory. Economists polled by Reuters had forecast a smaller rise to 47.3. Construction firms said higher shipping costs pushed up prices paid for raw materials for the first time since last Sept. There have been signs in other surveys that disruption to shipping in the Red Sea has delayed deliveries to British manufacturers. (Reuters)

UK: Falling mortgage rates boosts UK housing market. Easing mortgage rates as well as softening inflation helped to lift British home buyers' confidence that pushed up house prices for the fourth straight month in Jan, taking the annual growth rate to the highest level in a year. Data published by the Lloyds Bank subsidiary Halifax and S&P Global showed that house prices grew at a faster pace of 1.3% MoM in Jan. That followed a 1.1% gain in Dec. The pace of growth was forecast to slow to 0.8%. The annual price growth accelerated to a 1-year high of 2.5% in Jan from 1.8% a month ago. A typical house costs GBP 291,029 in Jan, compared to GBP 287,244 in Dec. (RTT)

Japan: Leading index at 14-month high. Japan's leading index rose more than expected to a 14-month high in Dec, preliminary data from the Cabinet Office. The leading index, which measures future economic activity, advanced to 110.0 from 108.1 in Nov. This was the highest reading since Oct 2022. The score was expected to rise moderately to 109.4. Likewise, the coincident index that measures the current economic situation improved to 116.2 in Dec from 114.6 in the previous month. At the same time, the lagging index rose moderately to 106.0 from 105.7 a month ago. (RTT)

India: Eyes USD100bn investment deal with Switzerland, Norway. India is close to finalizing a trade deal that could see a small group of European nations invest as much as USD100bn over 15 years for easier trade access to the country, The European Free Trade Association (EFTA), which includes Norway, Iceland, Liechtenstein and Switzerland, made a commitment as part of a trade pact that is in final negotiations, Bloomberg reported, citing people familiar with the matter. (Reuters)

Thailand: Central bank holds key rate as expected, PM disagrees. Thailand's central bank left its key interest rate unchanged for a second straight meeting as expected, resisting government pressure to reduce borrowing costs to revive faltering growth. The Bank of Thailand's (BOT) monetary policy committee in a 5-2 vote decided to hold the one-day repurchase rate opens new tab at 2.50%, the highest in more than a decade. It had raised the rate by 200bps since Aug 2022 to curb inflation. (Reuters)

Markets

One Glove: Proposes internal reorganisation of business. One Glove Group announced that it plans to implement an internal reorganisation of its gloves business, including the manufacturing and trading of all types of gloves and related activities. It said the reorganisation would involve the realignment of the group’s gloves business to focus solely on its existing glove factory in Kamunting, Perak. One Glove said the reorganisation would include the reallocation of operational resources utilised by One Glove Venture SB (OGVSB) to Onetexx SB, a wholly owned subsidiary of One Glove which operates its Kamunting glove factory, given that OGVSB will not be carrying out the gloves business moving forward. (Bernama)

PLB Engineering: To sell vacant land in Penang to improve cash flow. PLB Engineering has entered into a deal to sell a vacant piece of land in Bandar Tanjung Bungah, Penang, measuring 1,922 square metres, from Victorious Triumphant SB for RM11.5m. The group said it bought the land in 2009 for RM5.5m. As at Aug 31, 2023, the audited net book value of the land stood at RM8.5m. As such, the disposal is expected to result in a gain of about RM1.5m. PLB Engineering said net proceeds will be utilised for repayment of bank borrowings worth up to RM8.1m, and as working capital for the group. (The Edge)

Econpile: Bags contract for RM30m substructure works in Shah Alam. Econpile Holdings has secured a RM30m contract from Chingsan Development SB to undertake substructure works for a 15-storey office building in Shah Alam. The contract’s scope of work includes site clearing, earthworks, substructure and structure works for a five-storey basement car park, and is scheduled for completion within 16 months from Feb 24, 2024. (The Edge)

YTL-REIT: Buys Ipoh hotel for RM55m. YTL Real Estate Investment Trust (YTL-REIT) is acquiring Syuen Hotel in Ipoh, Perak from Syuen Hotel for RM55m. YTL-REIT said the 13-storey standalone hotel building had 290 rooms and ceased operations in May 2020. It was categorised as a four-star hotel. “The property will be renovated and proposed to be reopened under the AC Hotels by Marriott brand, which the board believes will create value for YTL-REIT. It will be leased under a variable rental arrangement where YTL-REIT will participate in the income to be generated from the property,” it said. (StarBiz)

ITMAX: DBKL expands scope of KL street lighting job for ITMAX by RM47.2m. Kuala Lumpur City Hall (DBKL) has expanded the scope of ITMAX System’s contract to install and maintain the networked street lighting systems in Kuala Lumpur by RM47.2m. This comes after DBKL awarded the company with a variation order for the job to include the replacement of broken lightemitting diode (LED) street lights with an expired warranty in the city. (The Edge)

Carlsberg: FY2023 profit hits record high on absence of oneoff prosperity tax, recommends 31 sen final dividend. Carlsberg Brewery Malaysia’s net profit for 4QFY2023 rose 39.75% to RM84.0m from RM60.1m a year ago, in the absence of the oneoff loss recorded from the disposal of its old bottling line and prosperity tax, as well as recognition of deferred tax income. Quarterly revenue slipped 5.26% to RM580.5m versus RM612.8m previously, amid lower sales in both Malaysia and Singapore. (The Edge)

MARKET UPDATE

US markets continued to edge higher on the back of strong earnings reports and upbeat guidance which suggests that consumer spending and economic strength remains relatively robust. Chipmaker and designer Arm saw shares jump a whopping 23% in extended trading after the company reported stronger-thanexpected earnings and gave an upbeat profit forecast. Shares of Disney surged about 6% in after-hours trading meanwhile as the media giant beat quarterly earnings estimates and raised its guidance amid its cost-cutting effort. On the day, the Dow Jones Industrial Average and S&P 500 gained 0.4% and 0.8% while the Nasdaq Composite rose 1.0%. European markets ended lower amid the lack of fresh catalysts however, with growing uncertainties over the timing of rate cuts also weighing on sentiment. UK’s FTSE 100 and Germany’s DAX both fell 0.7% as France’s CAC 40 ended 0.4% lower. Asian markets were mixed as investors monitored corporate earnings and China’s efforts to support its equity market. The Shanghai Composite added another 1.4% to its gain the day before though the Hang Seng Index was unable to follow suit, slipping 0.3%. Japan’s Nikkei 225 fell 0.2%

Source: PublicInvest Research - 8 Feb 2024