HEADLINES

Economy

US: BOA CEO urges Fed to not go too hard on rates. BOA Corp chief executive officer Brian Moynihan has urged Fed policymakers to be measured in the magnitude of interest rate reductions. Moynihan said during 3Q earnings that the firm expects “no landing” for the US economy, referring to a situation in which growth stays strong, forcing central banks to remain hawkish on their inflation fight for longer. “With an unemployment rate at 4% and wage growth at 5%, it’s hard for an economist to convince the world there’s going to be a recession,” he said. (Bloomberg)

EU: ECB policymakers increasingly worried over too-low inflation. ECB policymakers joined forces to warn about the risk of inflation falling below the central bank's 2% target, signalling a change in their focus after years of excessive price growth. Inflation in the eurozone dipped to 1.7% last month and could be back at 2% on a durable basis in the first months of 2025, ending three years of excessive price growth, when inflation even briefly rose into double digits. (Reuters)

EU: Lagarde says ECB sees ‘really good progress’ on inflation so far. President Christine Lagarde said the ECB is “rather satisfied” with how inflation has slowed to below the 2% goal targeted by officials. She described how policymakers have seen consumer-price growth weaken from a peak above 10%, and claimed credit for some of that. “We are now below 2% for the moment, but we have reasons to believe that it will move up again above 2% in the next few months,” Lagarde said. (Bloomberg)

India: Inflation on downward trend but need to be cautious, cenbank minutes show. India cannot risk another bout of inflation and the monetary policy committee (MPC) must adopt a cautious approach to lowering interest rates, members of the rate-setting panel said in the minutes of the Oct meeting. The MPC, which consists of three RBI and three external members, had kept the repo rate unchanged at 6.50% for a tenth straight policy meeting while changing the policy stance to 'neutral'. (Reuters)

Canada: BOC slashes interest rates by 50bps. Following three straight quarter point interest rate cuts, the BOC announced its widely expected decision to slash rates by a half point. The BOC said it decided to reduce its target for the overnight rate by 50bps to 3.75%, with the Bank Rate at 4% and the deposit rate at 3.75%. The Canadian central bank's decision to continue lowering rates came as consumer price inflation has declined significantly from 2.7% in June to 1.6% in Sept. (RTT)

South Korea: Consumer confidence improves in Oct. South Korea's consumer sentiment increased in Oct to the highest level in three months, survey results from the BOK showed. The consumer confidence index rose to 101.7 in Oct from 100.0 in Sept. The consumer confidence survey was conducted between Oct 8 and 16 among 2,500 households. (RTT)

Singapore: Core inflation supports tight policy stance. Singapore’s core inflation remained elevated in Sept, driven by healthcare and education, suggesting that price pressures are still sticky and underscoring the need for monetary policy to remain tight for now. The core measure, which excludes housing and private transportation costs, rose 2.8% last month from a year earlier. (Bloomberg)

Markets

LFE Corp: Gets RM81.7m building contract. LFE Corp has accepted an LoA worth RM81.7m from Puncakcity Development SB (PDSB) to be the main contractor for main building works, for a period of approximately 32 months. The contract commenced on 15 Oct 2024 and will be completed on 14 June 2027. The contract is expected to contribute positively to the earnings and net assets per share of LFE Group for the FYE 31 Dec 2024 and up to the expiry of the contract. (StarBiz)

TAS Offshore: Secures RM49m shipbuilding contracts. TAS Offshore has secured shipbuilding contracts for eight units of tugboats worth about RM49.1m. The vessels, which are set to be delivered in 2Q25, were awarded by “new customers from Indonesia”, the company said. Nonetheless, the contracts are expected to contribute positively to the group’s earnings and net assets for the FYE 31 May 2025. TAS Offshore’s major customers are from Indonesia, with the Indonesian market accounting for 84.3% of its total revenue in FY2024. (The Edge)

ABM Fujiya: Chinese battery maker to land 40% stake in unit for RM48m. ABM Fujiya said that Chinese battery maker Jujiang Power Technology Co Ltd will subscribe for a 40% stake worth RM48m in one of its wholly owned unit. The consideration for the stake in Fuya Energy SB will be offset with most of the cash advanced earlier from Jujiang, ABM said. That means there would not be any cash proceeds for Fuya Energy from the issuance of new shares to Jujiang. (The Edge)

SC Estate Builder: Terminates RM4.3m solar project contract. SC Estate Builder has announced the mutual termination of an LoA with Merchant Esteem SB for a project involving the prototyping of solar power systems on terrace/shop house roofs and the construction of 28 single-storey units in Alor Setar, Kedah. The termination, effective immediately, was mutually agreed upon by both parties. The company stated that this termination will not significantly impact its earnings or net assets for the FYE 31 July 2025. (The Malaysian Reserve)

Protasco: Development contracts cancelled, replaced with new ones. Protasco has received new LoA from Perbadanan Putrajaya (Putrajaya Corp) to develop to develop 654 units of apartments under "Projek Residensi Madani Melur" and 984 units of apartments under "Projek Residensi Harga Bebas Kenanga. The LoAs from Putrajaya Corp on 22 July 2022, had been cancelled and will be replaced with the latest contracts. Protasco said the latest contracts are expected to contribute positively to the future earnings of the group. (StarBiz)

Sapura Industrial: Establishes new unit to target electrified vehicle market. Sapura Industrial has set up a new unit that will focus on business opportunities in mobility and new energy vehicles, encompassing all types of electrified vehicles, along with their parts and components. The new wholly owned subsidiary was incorporated with an initial paid-up share capital of RM100. The incorporation of SIBV is not expected to materially impact Sapura Industrial’s earnings or net assets for the FYE 31 Jan 2025, and there are no interests from directors or major shareholders in the new unit. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks took a dive Wednesday as mounting concerns over big tech earnings, rising Treasury yields and political uncertainty drove down all three major indices. Investors have been increasingly on edge about the prospect of former President Donald Trump winning the election, a possibility for which Wall Street has been preparing to a greater extent. While polls remain effectively dead-even, Trump’s prospects have grown since the start of this month in political betting markets. That rise in bond yields made stock investors nervous. The tech-heavy Nasdaq Composite led the decline, ending the day down by 1.6%; while the S&P 500 and Dow both fell about 1%. For the Dow, this translated to a drop of just over 400 points. At one point early Wednesday, the Dow was down more than 600 points, marking the third consecutive day of losses for US markets. All three indexes settled slightly lower later Wednesday afternoon. In stock markets elsewhere, the MSCI All-World index lost 0.79%, while in Europe, the STOXX 600 finished down 0.30%.

Back home, the FBM KLCI lost 1.01 points or 0.06% to end at 1641.53. t 1641.53 yesterday. Nonetheless, market breadth turned positive as gainers LCI 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 - 24 Oct 2024