HEADLINES

Economy

Global: IMF lifts US growth forecast but marks down China; sees lacklustre global economy. The IMF raised its 2024 economic growth forecasts for the US, Brazil and Britain but cut them for China, Japan and the eurozone, adding that risks abound from armed conflicts, potential new trade wars and the hangover from tight monetary policy. The IMF's latest World Economic Outlook said the shifts will leave 2024 global GDP growth unchanged from the 3.2% projected in July, setting a lacklustre tone for growth as world finance leaders gather in Washington this week for the IMF and World Bank annual meetings. (Reuters)

US: America’s most famous inflation gauge is easing, but some of the biggest expenses are left out. Price pressures have eased substantially over the past two years, but a disconnect remains between what US inflation data show and what millions of Americans experience with their finances. That’s in part because price levels are still higher than they were before the pandemic. Another explanation, the government’s key inflation measure excludes a number of major everyday costs that have surged in recent years. (Bloomberg)

EU: Italian growth to be weaker than government targets, IMF and business lobby say. Italy's economic growth this year and next will be weaker than the government's targets of 1% and 1.2% respectively, the IMF and the country's main business lobby said. The eurozone third-largest economy will expand by 0.7% in 2024, in line with last year's rate, the IMF said in its "World Economic Outlook", unchanged from its previous estimate in July. (Reuters)

China: Youth unemployment rate falls after climbing for two straight months. The jobless rate for 16 to 24 year olds in China, excluding students, fell to 17.6% in Sept from 18.8% a month prior, official data showed, offering officials relief after youth unemployment hit fresh highs for two straight months. Unemployment among young people and college graduates jumped from 13.2% in June to 17.1% in July, as some 12m students entered the labour market, before the Aug figure rose to its highest level since the National Bureau of Statistics decided to change the methodology to not include students in Dec 2023. (Reuters)

South Korea: Economy likely returned to growth in 3Q; Reuters poll. The South Korean economy likely returned to growth last quarter after a mild contraction in the prior quarter thanks to an export-led expansion that offset higher borrowing costs squeezing domestic demand, a Reuters poll found. After an unexpected 0.2% contraction in the April-June quarter, Asia's fourth-largest economy was projected to have grown a seasonally adjusted 0.5% in the third quarter, according to a median forecast from 23 economists. (Reuters)

Japan: IMF cuts Japan's growth forecast, projects rebound in 2025. IMF cut this year's economic growth forecast for Japan, but projected a rebound in 2025 on the view rising real wages will underpin consumption. The IMF's upbeat projection on consumption is line with the BOJ’s view that continued wage hikes will boost households' purchasing power and keep the economy strong enough to weather further interest rate hikes. (Reuters)

Markets

Green Ocean: Proposes RM92.5m share capital reduction. Loss-making Green Ocean Corp has proposed to undertake a RM92.5m share capital reduction to wipe out the F&B distributor’s accumulated losses. The ACE Market-listed company has been in the red for four consecutive years, racking up losses totalling RM60.8m by end-Sept 2023.The RM92.5m to be credited from the share capital reduction will be used to set off the accumulated losses and give rise to retained earnings of RM31.4m based on audited financial statements for the 15-month financial period ended 30 Sept 2023. (The Edge)

Willowglen MSC: Bags RM16m contract for security systems in Singapore. Willowglen MSC’s wholly owned subsidiary, Willowglen Services Pte Ltd, has secured a contract worth about RM16.4m from Kandenko Co Ltd in Singapore. The contract involves the supply, installation, configuration, testing, and commissioning of hardware and software for security systems for electrical facilities. The contract commenced on 22 Oct 2024 and is set to be completed by 30 May 2028. The contract is expected to positively impact the group’s earnings and net assets per share for the FYE 31 Dec 2025 to 2028. (The Malaysian Reserve)

Globetronics: Announces resignation of CEO, executive director. Globetronics Technology said its CEO Heng Charng Yee and executive director Kang Wei Luen have resigned from their positions. Both of them cited personal matters and other commitment as the reason for the resignation. Heng's last day of employment will be 31 Dec while Kang is vacating his post with immediate effect. Globetronics said its COO Yip Wai Chee, 56, will be re-designated as the CEO effective 2 Jan next year. (The Edge)

HSS Engineers: Forms JV with OPUS International. HSS Engineers (HEB) has entered into a JV with OPUS International (M) to establish a JV company, OPUS-HSS SB, aimed at providing engineering, construction, asset management, and energy efficiency services. HEB said that its subsidiary, HSS Engineering SB (HSSE), signed a JV and shareholders’ agreement (JVA) with OPUS International. OPUS International, a subsidiary of UEM Edgenta, will hold 60% equity in the JV, while HSSE will own 40%. (The Malaysian Reserve)

Bahvest: Gets gold mining contract. Wullersdorf Resources SB (WRSB), a wholly owned subsidiary of Bahvest Resources, had entered into an exclusive prospecting and contract of works agreement with Aurelius Borneo Mining SB for the prospecting, exploration and gold mining of Mount Andrassy in Tawau, Sabah. The partnership would grant WRSB exclusive rights to also conduct sampling, surveying, and drilling activities of gold containing ore at the 18,000-ha site. The agreement is not expected to significantly impact Bahvest Group’s earnings per share, net assets per share, or gearing for the FYE 30 Sept 2025. (StarBiz)

Ge-Shen: Shareholders approve stake buy in EMS firm. Contract manufacturer Ge-Shen Corp, whose share price has jumped over 200% YTD, has obtained shareholders’ approval to buy a 40% stake in EMS firm Local Assembly SB for RM48m cash, and diversify its existing business to include EMS. At the EGM, Ge- Shen’s shareholders voted 100% in favour of the acquisition deal and proposed diversification. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after US stock indices barely budged after a quiet day of mixed trading on Tuesday. The S&P 500 edged down by less than 0.1%. It was a tiny loss, but it still marked the first back-to-back drop for the index in a month and a half. The index fell modestly on Monday after coming off a sixth straight winning week, its longest such streak of the year. The Dow Jones Industrial Average slipped 6 points, or less than 0.1%. Like the S&P 500, it’s been on a long, record-breaking rally and set its all-time high on Friday. The Nasdaq composite rose 0.2%. General Motors jumped 10.4% for its best day since 2020 after delivering stronger profit and revenue for the latest quarter than analysts expected. It benefited from stronger sales to individual U.S. customers, even as sales slowed to large fleet buyers. Philip Morris International was another one of the strongest forces pushing upward on the S&P 500 and rallied 10.5% after topping forecasts for both profit and revenue. CEO Jacek Olczak said the company is seeing momentum across regions and business lines, including growth for both its smoke-free business and for its combustible cigarettes. In stock markets elsewhere, European indices were modestly lower despite German software giant SAP nudging past profit expectations. In Asia, Japan’s Nikkei 225 dropped 1.4%, and South Korea’s Kospi fell 1.3%, but indices were more resilient in China. Back home, the FBM KLCI closed down by 3.14 points or 0.19% to 1642.54. nd at 1642.54 yesterday. Market breadth remained negative as decliners KLCI is anticipated to trend sideways between the 1636 and 1652 horizons 1622 and 1600, while resistance levels stand at 1652, 1664 and 1680.

Source: PublicInvest Research - 23 Oct 2024