HEADLINES

Economy

US: Fed cuts interest rates by a quarter point. The Fed approved its second consecutive interest rate cut, moving at a less aggressive pace than before but continuing its efforts to right-size monetary policy. In a follow-up to Sept's big half percentage point reduction, the FOMC lowered its benchmark overnight borrowing rate by a quarter percentage point, or 24bpts, to a target range of 4.50%-4.75%. (CNBC)

US: Wholesale inventories dip slightly more than expected in Sept. The Commerce Department released a report showing wholesale inventories in the US fell by slightly more than expected in the month of Sept. The report said wholesale inventories slipped by 0.2% in Sept after rising by 0.2% in Aug. Economists had expected wholesale inventories to edge down by 0.1%. The modest decrease by wholesale inventories came as inventories of durable goods fell by 0.5%, more than offsetting a 0.3% increase by inventories of non-durable goods. (RTT)

EU: Norway interest rates to remain unchanged. Norway's interest rates are set to remain unchanged till the end of this year as the outlook for the economy remains uncertain. The Monetary Policy and Financial Stability Committee of the Norges Bank decided to keep the policy rate unchanged at 4.5%. That was in line with economists' expectations. The previous change in the policy rate was a quarter-point hike in Dec last year. The Sept monetary policy report had indicated a gradual reduction in the policy rate from the first quarter of 2025. (RTT)

EU: German construction sector downturn deepens. Germany's construction sector downturn deepened in Oct with faster decreases in activity and new orders, purchasing managers' survey data from S&P Global showed. The HCOB construction PMI fell to 40.2 in Oct from a 16-month high of 41.7 in Sept. A score below 50.0 indicates contraction. All three broad categories of construction recorded faster decreases in activity in Oct. Housing activity once gain posted the steepest rate of contraction, followed by the commercial segment. Meanwhile, the decline in civil engineering accelerated most notably, with the sector registering its worst performances in three months. (RTT)

UK: BoE cuts rates but sees higher inflation after Reeves's budget. The BoE cut interest rates for only the second time since 2020 and said future reductions were likely to be gradual as it predicted the British government's first budget would lead to higher inflation and economic growth. The MPC voted 8-1 to cut rates to 4.75% from 5%. Analysts polled by Reuters had expected a 7-2 vote. Only Catherine Mann favoured keeping rates on hold. (Reuters)

China: Exports growth fastest in more than 2 years as imports fall. China's exports expanded the most in more than two years in Oct, while imports declined at a sharper-than-expected pace due to weaker domestic demand, official data showed. Exports grew 12.7% on a yearly basis, following an increase of 2.4% in Sept, customs data revealed. Shipments were forecast to climb only 5.0%. On the other hand, imports dropped 2.3% annually after a 0.3% rise in the previous month. Economists had forecast imports to drop 1.5%. (RTT)

Markets

Microlink: Wins RM84m ministry job. Microlink Solutions' wholly-owned subsidiary, Microlink Systems SB, has secured a project worth RM83.5m from the Home Affairs Ministry. Microlink said the contract is for a period of two years, commencing on 6 Nov 2024 and ending on 5 Nov 2026. The project involves studying, proposing, designing, developing, supplying, delivering, installing, integrating, testing and commissioning of the Advanced Passenger Screening or APS System for the Immigration Department. (The Star)

Ramssol: Unit bags RM36m AI-powered healthcare project in Thailand. Ramssol Group said its 51%-owned subsidiary in Thailand has secured a contract worth THB275m (RM35.6m) to undertake an artificial intelligence (AI) healthcare solutions project for a hospital. Under the contract, GeekStart Company Ltd is appointed by Multi Distribution Services Company Ltd as the hospital's service partner in the deployment of the AI-integrated healthcare system for outpatient and emergency services at an existing seven-storey building in a southern province of Thailand. (The Edge)

KKB Engineering: Bags RM93m contracts from three firms. KKB Engineering Bhd (KKB) has secured three new contracts worth RM93m, boosting its growth prospects across multiple sectors. The contracts consist of a long-term agreement with Petroleum Sarawak (Petros), a sub-work with Bina Puri Builder SB for a water supply project and a purchase order from Greenchain Capital SB. The Petros deal involves a three-year price agreement for the re-conditioning, re-qualification, and re-painting of liquefied petroleum gas cylinders, extending until the third quarter of 2027 (Q3 2027). (New Straits Times)

Kumpulan Jetson: It is not a party to disputed contract under OCR's RM88m suit. Kumpulan Jetson, which is being sued by OCR Group over alleged breaches of an RM88.0m contract to build four blocks of serviced apartments in Jalan Yap Kwan Seng here, said on Thursday it is not a party to the disputed contract as Jetson Construction SB (JCSB), which was contracted to undertake the job, is no longer its subsidiary. Kumpulan Jetson said the legal action involves claims related to a RM4.4m corporate guarantee it provided to JCSB for the construction of the project during the contract period. (New Straits Times)

Pentamaster: 3Q net profit halves to RM11.8m. Pentamaster Corp says the current macroeconomic weakness is significantly limiting its ability to drive revenue growth. "Weak demand across key segments, particularly in the automotive sector, where capital investments are sensitive to economic cycles and shifting government policies has prolonged the expected structural growth trend, leading to slow demand up-tick for the group's solution offerings," Pentamaster said. (The Star)

FGV: Sued for RM90m over alleged breach of supply agreement. FGV Holdings Bhd (FGV) said that its subsidiary, FGV Bulkers SB (FGVB), is facing a legal suit from South Asian International Distribution SB, which is seeking damages totaling RM90.8m. The suit, filed in the High Court of Kuala Lumpur, centers on an alleged breach of a Supply and Delivery Agreement (SDA) for the supply of palm kernel shells (PKS), bringing to light disputes over pricing terms. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after most US stocks rose Thursday, as the Federal Reserve cut interest rates again to make things easier for the economy. The S&P 500 climbed 0.7% to add to its surge from the day before following Donald Trump's presidential victory. The Dow Jones Industrial Average was virtually unchanged and edged down by less than a point, while the Nasdaq composite rallied 1.5%. The Fed's announcement that it was easing its main interest rate caused few ripples in the market because even the precise size of it was so well anticipated by investors. The central bank began easing rates in September and indicated more cuts were likely to come, as it focuses more on keeping the job market humming after helping get inflation nearly down to its 2% target. What's less certain in the minds of investors now is how much Trump's victory may upset the Fed's plans. A report on Thursday showed slightly more US workers applied for unemployment benefits, though the number remains relatively low. A separate report suggested US workers improved their productivity during the summer, which can help keep a lid on inflation, but not by quite as much as economists expected. In stock markets elsehwere, London's FTSE 100 fell 0.3% after the Bank of England cut its own interest rate by a quarter of a percentage point. In the region, Japan's Nikkei 225 slipped 0.3% amid worries about the potential for a revival of trade tensions under a Trump administration. Stocks rallied 2% in Hong Kong and 2.6% in Shanghai rallied after the Chinese government reported exports jumped in October at the fastest pace in more than two years. Back home, the FBM KLCI dropped 10.89 points or 0.67% to 1623.28.

Source: PublicInvest Research - 8 Nov 2024