HEADLINES

Economy

US: Consumer sentiment improves more than expected in Nov. Preliminary data released by the University of Michigan showed consumer sentiment has improved by more than expected in the month of Nov. The University of Michigan said its consumer sentiment index climbed to 73.0 in Nov from 70.5 in Oct. Economists had expected the index to inch up to 71.0. With the bigger than expected increase, the consumer sentiment index reached its highest level since hitting 77.2 in April. (RTT)

EU: Italy retail sales recover in Sept. Italy's retail sales recovered at a stronger-than-expected pace in Sept, official data revealed. Retail sales grew 1.2% from Aug, when turnover was down 0.3%. Economists had forecast only a 0.2% increase in Sept. Food sales increased 1.7% after stagnating in Aug. At the same time, non-food turnover rebounded 0.9%, following a 0.6% drop. Compared to last year, retail sales posted an increase of 0.7%, which was weaker than the 0.9% increase seen in Aug. Nonetheless, sales expanded for the third straight month. (RTT)

EU: French trade gap near 1-year high. France's trade deficit widened to a near one-year high in Sept, data from customs office showed. The trade deficit increased to EUR8.3bn in Sept from EUR7.7bn in the previous month. This was the biggest shortfall since last Oct. Economists had forecast the trade deficit to narrow to EUR7.0bn in Sept. Exports posted a monthly fall of 1.4%, while imports dropped only 0.3%. YoY, exports were down 3.4% and imports decreased 4.4% in Sept, data showed. (RTT)

EU: Italy industrial production falls. Italy's industrial production declined in Sept, data from the statistical office ISTAT showed. Industrial output fell 0.4% on a monthly basis, as expected, after remaining flat in Aug. Within total production, capital goods output gained 1.8% and intermediate goods production moved up 1.9%. Meanwhile, production of consumer goods and energy decreased 2.5% and 3.8%, respectively. (RTT)

EU: ECB's Makhlouf says no need to rush interest-rate cuts. ECB Governing Council member Gabriel Makhlouf said officials shouldn't hurry in loosening monetary policy. Commenting on inflation, he said increases in the services gauge of around 3% would be more consistent with the goal of 2% for the headline reading. Services prices rose 3.9% from a year ago in Oct. ECB policymakers are preparing for their final rate meeting of the year next month, with a quarter-point cut seen by investors as the most likely outcome. (Bloomberg)

China: CPI rises slow to 0.3% on year in Oct. China's CPI rose more slowly in Oct, while PPI deflation deepened, even as Beijing doubled down on stimulus policies to prop up its sputtering economy. China unveiled a 10trn yuan (USD1.4trn) package to ease local government hidden debt burdens, rather than directly injecting money into the economy. The CPI edged up 0.3% last month from a year earlier, slowing from Sept's 0.4% rise and the lowest since June, data from the National Bureau of Statistics showed, missing a 0.4% increase estimate in a Reuters poll of economists. CPI dropped 0.3% MoM, versus an unchanged outcome in Sept and below a forecast 0.1% decline. (Reuters)

Japan: BOJ hopes to keep 2% inflation target while monitoring climate shock risks. The BOJ hopes to maintain its 2% inflation target even if climate change causes long-term shocks to future price developments. The BOJ will monitor carefully how the economic impact of climate change, as well as the fallout from government measures to promote the green transition, could affect inflation expectations. Japan will likely introduce a carbon tax sometime in the future, which could affect inflation expectations, Ueda said at the conference, held to discuss the impact of climate change on the economy and monetary policy. (Reuters)

India: Inflation to rise further to 5.81% on rising food costs. CPI in India climbed to a 14-month high of 5.81% in Oct primarily due to a spike in vegetable and edible oil prices, a Reuters poll of economists predicted, a shade below the central bank's tolerance threshold of 6.0%. Food prices, which make up nearly half of the inflation basket, likely increased at a faster pace last month. Tomatoes, a key ingredient in every Indian kitchen, are expected to have surged by double digits in price as uneven rains disrupted production. (Reuters)

Hong Kong: Cuts rate as Trump's return raises Fed uncertainties. The Hong Kong Monetary Authority cut its base interest rate after the Fed eased policy, though relief may be limited as the risks of potentially inflationary policies in the US under Donald Trump are set to pare back the easing path. The HKMA lowered rates by a quarter percentage point to 5% on Friday, in a move that should bolster an economy struggling with weak spending. Decisions move in lockstep as the city has a currency peg to the greenback. While the cut may help lower borrowing costs, the future pace of easing remains unclear, especially after the re-election of Trump as US president. (Bloomberg)

Markets

Cypark (Neutral, TP: RM0.70): CFO resigns after just three months in role. Renewable energy producer Cypark Resources announced that its CFO Vinie Chong Pui Ling has resigned, just three months after her appointment on Aug 15. The company said Chong is stepping down to "pursue other interests". Chong's last day with the company will be Dec 31, 2024. Prior to joining Cypark, Chong served as group CFO at Cenergi SEA, a renewable energy firm under Khazanah Nasional. (The Edge)

Steel Hawk: Secures subcontract for offshore services in Sarawak. Steel Hawk's wholly owned subsidiary, Steel Hawk Engineering SB has secured a subcontract from Petra Resources SB. The contract for the provision of offshore living quarter (LQ) maintenance and repair services for EPOMS offshore facilities in Sarawak. Steel Hawk stated that the subcontract is on a call-out basis, meaning it does not have a fixed contract value. The company is engaged by Petra Resources to provide specified services for the duration of the contract, as and when required. (StarBiz)

Fajarbaru: Pulls out of RM192m affordable housing project in Putrajaya. Construction and property development outfit Fajarbaru Builder Group has pulled out from participating in the affordable housing development in Putrajaya dubbed Residensi Cemara, which is estimated to have a gross development value of RM192m. No reason was given. Fajarbaru said Perbadanan Putrajaya has accepted its wholly owned subsidiary Fajarbaru Land (M) SB's withdrawal as the developer for the proposed development. (The Edge)

JF Tech: Buys into Singapore-based semiconductor firms for RM26m. JF Technology acquiring stakes in Singapore-based companies for a combined value of about RM26m, in a bid to expand its business and market reach globally. The integrated circuit maker is buying all stakes in Singapore-based Transcend Target Companies, consisting of Transcend Technologies (S) Pte Ltd and Transcend Tech Asia Pacific Pte Ltd (TTAP), for SGD6m (RM19.9m). TTAP also owns a 95.5% stake in Transcend Technologies Inc Philippines. It is also buying an 80% stake in front-end wafer testing Q3 Probe Pte Ltd from Spire Manufacturing Inc, which is incorporated in the US but based in Singapore, for USD1.4m (RM6m). (The Edge)

Milux: Gets takeover offer at 43.2 sen per share. Milux Corp has received an unconditional mandatory takeover offer notice at 43.2 sen per share from several joint offerors to acquire the remaining shares not held by them. Milux stated that the joint offerors for the offer are Lim Aik Hoe, Lim Aik Kiat, and Mak Wai Hoong, who are directors and shareholders of the offeror and serve as the joint ultimate offerors. The offer price of 43.2 sen is at a discount to the home appliances distributor's last traded price of 57.5 sen. (StarBiz)

REDtone: Ceases to be substantial shareholder in HeiTech Padu. REDtone Digital has ceased to be a substantial shareholder of HeiTech Padu after disposing of a 1.01% stake in the open market. The sale price was not disclosed. Following this sale, REDtone is left with 5.5m shares or a 4.93% stake in HeiTech. Tycoon Tan Sri Vincent Tan's Berjaya Group has a deemed interest in HeiTech Padu via REDtone. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks cruised to more records as they closed their best week in a year on Friday. The S&P 500 rose 0.4% to cap its biggest weekly gain since early November 2023 and briefly crossed above the 6,000 level for the first time. The Dow Jones Industrial Average climbed 259 points, or 0.6%, while the Nasdaq composite added 0.1%. The relatively quiet trading followed huge gains earlier in the week after Donald Trump won the presidential election and the Federal Reserve cut interest rates again to make things easier for the economy. In stock markets elsewhere, Trump's talk about tariffs has raised worries about possible trade tensions and disruptions to the global economy. European indices mostly sank to close out a losing week. Markets in Hong Kong and Shanghai fell as investors awaited much-anticipated steps by Beijing to rev up the slowing Chinese economy following a meeting of the legislature's Standing Committee. Officials announced a 6trn yuan ($839bn), three-year plan to help local governments refinance their many trillions of debt that has ballooned during the COVID-19 pandemic and a collapse of the property market. Financial markets worldwide have swung sharply as investors lay bets on what Trump's plans for higher tariffs, lower tax rates and lighter regulation could mean for the global economy. But many professional investors have also urged caution, saying snaps back in prices could occur as it becomes more clear what proposals will become policy versus just starting points for negotiations. Back home, the FBM KLCI dropped 2.04 points or 0.13% to 1621.24.

Source: PublicInvest Research - 11 Nov 2024