HEADLINES

Economy

US: Tight credit conditions add to case for Fed interest-rate cut. The Fed has plenty of reasons to deliver a widely expected interest rate cut, including a decline in inflation and a cooling in labor markets that makes it harder for Americans to find jobs. Continued weak demand for loans and strict lending standards may provide another, though less obvious, reason. Stringent credit conditions discourage businesses from borrowing, and therefore from hiring, potentially slowing job growth further. (Reuters)

US: Crude oil inventories rebound more than expected. After reporting an unexpected dip by US crude oil inventories in the previous week, the Energy Information Administration released a report showing crude oil inventories rebounded by more than expected in the week ended Nov 1. The report said crude oil inventories climbed by 2.1m barrels last week after edging down by 0.5m barrels in the previous week. Economists had expected crude oil inventories to rise by 1.8m barrels. At 427.7m barrels, US crude oil inventories remain about 5% below the five-year average for this time of year. (RTT)

EU: Euro zone business holds steady in Oct, PMI shows. Euro zone business activity held steady last month, a small improvement from Sept's modest decline, supported by an expansion in the bloc's dominant services industry that offset an ongoing but stabilizing, decline in manufacturing. HCOB's composite PMI for the currency union, compiled by S&P Global and seen as a good gauge of overall economic health, rose to 50.0 in Oct from Sept's 49.6. That was bang on the 50-mark separating growth from contraction and above a preliminary 49.7 estimate. (Reuters)

EU: Producer prices decline in Sept. Producer prices in the euro area fell on a monthly basis for the first time in four months in Sept amid a slump in energy prices, figures from the statistical office Eurostat showed. Producer prices in the domestic market decreased 0.6% MoM, reversing a similar size gain in the previous month. This was the first decline since May. Prices excluding energy were unchanged from the previous month when they edged up 0.1%. Energy prices decreased 1.9%, which was the first fall since May. (RTT)

EU: German factory orders jump in boost for beleaguered sector. German factory orders surged in Sept, a positive signal for the industrial sector whose prolonged bout of weakness may be coming to an end. Demand rose 4.2% from the previous month, much more than the 1.5% economists polled by Bloomberg had estimated. The size of the advance was boosted by bulk orders, though even without them there'd have been a 2.2% rise, the German statistics office said in a statement. (BTimes)

UK: Construction sector growth weakens in Oct. The UK construction sector growth slowed notably in Oct but overall industry activity remained solid on civil engineering work, survey results from S&P Global showed. The construction PMI posted 54.3 in Oct, down from 57.2 in Sept. The index signaled expansion for the eighth consecutive month. Civil engineering was the best-performing category. Commercial work also increased but the growth was the weakest since the current sequence of expansion began in April. (RTT)

India: Services growth strengthens in Oct. India's services activity growth recovered from Sept's ten-month low on sharper expansion in output and new business, final data from S&P Global showed. The HSBC final services PMI registered 58.5 in Oct, up from 57.7 in Sept. The flash score was 57.9. New business growth accelerated from a ten-month low seen in Sept. Driven by strengthening demand from Africa, Asia, the US, the Middle East and the UK, new export sales recovered in Oct. (RTT)

South Korea: USD11.12bn current account surplus. South Korea posted a current account surplus of USD11.12bn in Sept, up from USD6.60bn in Aug. The goods account recorded a USD10.67bn surplus as exports increased annually by 9.9% to USD61.67bn and as imports rose 4.9% to USD51.00bn, both compared to one year earlier. The services account posted a USD2.24bn deficit owing to deficits in the travel, the manufacturing services, and the use of intellectual property accounts. (RTT)

Taiwan: Inflation drops to lowest level since April 2021. The CPI in Oct fell to 1.69%, its lowest level in three-and-a-half years. Typhoon Krathon caused significant damage to agriculture, forcing up the price of fruit and vegetables, with vegetable oil and eating out. Rent and registered mail also became notably more expensive. Nevertheless, the rises were offset by the falling cost of eggs, oil products, and airline tickets. (Taiwan News)

Markets

Deleum: Ups stake in gas turbine supplier to 90%. Deleum Bhd's wholly-owned subsidiary Deleum Services SB (DSSB) has purchased an additional 16% stake in gas turbine supplier Turboservices SB (TSSB) from Solar Turbines International Co for RM7.34m., Deleum said the transaction will increase its stake in Turboservices to 90% from the current 74%. The balance 10% equity in Turboservices will continue to be held by Solar Turbines International. (The Star)

Lotte Chemical Titan: Posts higher net loss of RM246.4m in 3Q. Lotte Chemical Titan (LCT) posted a wider net loss of RM246.4m during the third quarter ended 30 Sept 2024 (3Q 2024), as compared to a net loss of RM55.6m in the same quarter last year. Revenue also fell to RM1.94bn in 3Q from RM1.96bn last year due to lower sales volume, increased losses from foreign exchange and higher losses from its associate, Lotte Chemical USA Corp (LCUSA). For the cumulative nine months of 2024, the group posted a higher net loss of RM673.3m against a loss of RM593.8m year ago, while revenue also eased to RM5.64bn from RM5.79bn previously. (Bernama)

Haily: Outstanding order book breaches RM1bn as it bags RM89.9m construction job in Johor. Haily Group has secured a contract worth RM89.9m from Mah Sing Group to build terrace homes for a housing project in Taman Tiara Indah, Johor Bharu, Johor, which pushes the value of its outstanding orders past RM1bn. The latest win raised the group's new project wins for 2024 to RM617.31 million, over two times its 2023 total of RM272.1m. So, Haily now has a portfolio of 27 ongoing projects, with a cumulative value of RM1.01bn. (The Edge)

SCIB: Buys plots of land in Sibu for RM18.4m. Sarawak Consolidated Industries (SCIB), via subsidiary SCIB Properties SB, has signed four sale and purchase agreements to buy land totalling 7.34 hectares along Jalan Bintulu-Sibu for RM18.4m. SCIB said it is still in the early stage of development planning for the land. This makes it difficult to determine the overall development costs and consequently, to provide a definitive timeline for the project's start and completion. (New Straits Times)

Parkson: Secures two major lease agreements in China. Parkson Holdings' subsidiary, Parkson Retail Group Ltd (PRGL), has secured two major lease agreements in Shanghai and Nanning, China with a total combined value of approximately RM358.8m. The company said PRGL's indirect subsidiary, Shanghai Nine Sea Parkson Plaza Co. Ltd, has secured a 15-year tenancy for a property on Huaihai Middle Road in Shanghai. It said the lease, agreed with Shanghai Nine Sea Industry Co. Ltd, will commence on 30 Nov 2024 until 29 Nov 2039, with a value of RM185.3m. (The Star)

TMC Life Sciences: Revives Thomson Iskandar medical hub in JB, targets 2030 completion. TMC Life Sciences said that it will begin construction of its integrated medical hub, Thomson Iskandar in Johor Bahru, by late 2025, with completion targeted for 2030. The tender process for construction is expected to commence in early 2025 and take approximately nine months to finalise due to extensive clarifications required, acting CEO Dr Melvin Heng Jun Li said during the company's post 22nd AGM. The construction costs are now expected to appreciate by as much as 30% from the previously reported RM1.2bn due to hikes in construction cost, he added. (The Edge)

MARKET UPDATE

The FBM KLCI might open stronger today after US stocks rocketed higher Wednesday following a decisive and consequential victory for former President Donald Trump in Tuesday's US presidential election. The massive rally kicked off in premarket trading and continued through the morning and afternoon trading sessions. The Dow soared by 1,507 points, or 3.57%, to close at a new record high. It's the first time the blue-chip index has gained more than 1,000 points in a single day since November 2022. The S&P 500 and Nasdaq also reached new highs, with the S&P surging by 2.5% and the tech-heavy index closing 2.95% higher. The US dollar had its best day in two years and Treasury yields also rose. Markets were mostly juiced by the fact that the election was decided relatively quickly. The election - and the widely held belief that Trump and his allies could contest the result in courts - has served as a cloud over the US economy and stock market in recent months. Markets, in particular, crave certainty, and the clear path forward will allow companies to adjust their business and hiring plans. European stocks underperformed their US peers Wednesday. The Stoxx Europe 600 index, the benchmark for the region, was up 0.1%, paring earlier gains. Germany's DAX fell by 0.3% and France's CAC rose 0.1%, while London's FTSE 100 was trading 0.5% higher on the day. Back home, the FBM KLCI added 13.47 points or 0.83% to 1634.17. In China, the Shanghai Composite Index finished the session broadly flat, while Hong Kong's Hang Seng index closed 2.2% lower.

Source: PublicInvest Research - 7 Nov 2024