HEADLINES

Economy

EU: Eurozone wage growth surges in test for ECB rate cuts. A key gauge of eurozone wages jumped by the most since the common currency was introduced in 1999 - complicating the ECB's plans for interest-rate cuts as inflation eases. Third-quarter negotiated pay rose 5.4% from a year ago, the ECB said. That's up from 3.5% in the previous three months and was largely driven by Germany. The data come less than four weeks before the ECB's final policy meeting of the year, with officials tipped to lower the deposit rate for a fourth time. The surge in pay, however, could damp expectations among investors and analysts for a spate of rate reductions in 2025. (Bloomberg)

UK: Inflation rises by more than expected to 2.3% in Oct 2024. British inflation jumped by more than expected to go back above the BOE's 2% target last month, and measures of underlying price growth gathered speed too, showing why the BOE is moving cautiously on interest rate cuts. Consumer prices rose by an annual 2.3% in Oct, pushed up in large part by an increase in regulated domestic energy tariffs, after a 1.7% increase in Sept, which was the first time the inflation rate had fallen below the BOE's target since 2021. (Reuters)

UK: BOE's Bailey says budget tax rises support gradual rate cuts. The UK Labour government's tax increases reinforce a gradual approach to easing interest rates, BOE Governor Andrew Bailey said. Employers could choose to react to the hike in their National Insurance contributions - which lifts the cost of employment - by raising prices charged to consumers, absorbing the costs themselves, reducing the pace of wage rises or by cutting hiring, Bailey said. "There are different ways in which the increase in employer National Insurance Contributions announced in the Autumn Budget could play out in the economy," Bailey said. (Bloomberg)

China: Chinese banks hold lending rates steady after big cut last month. Chinese banks held their benchmark lending rates following a major cut last month. The one-year loan prime rate will stay at 3.10% and the five-year rate remains at 3.60%, according to a statement from the PBOC. The moves were in line with the forecasts of economists surveyed by Bloomberg. (Bloomberg)

Indonesia: Central bank holds rates steady as it focuses on FX stability. Indonesia's central bank left interest rates unchanged, as expected, saying changed global dynamics after the US election meant it had to focus on stabilising the currency, and analysts saw little chance of a near-term rate cut. Bank Indonesia (BI) kept the benchmark rate steady at 6.00%, as predicted by 25 of 34 analysts polled by Reuters. (Reuters)

South Korea: Should normalise monetary policy, IMF says. South Korea should continue to normalise monetary policy to provide support for shoring up economic activity, even as headline inflation is easing, the IMF said. "While inflation is around the Bank of Korea's target of 2%, a gradual monetary policy normalisation seems appropriate, given high uncertainty," the IMF said in a statement, concluding its annual visit to the country. (Reuters)

Markets

RHB Bank: KL High Court says Tokio Marine Life has first priority for RHB Bank's bancassurance. The Kuala Lumpur High Court has ruled that a 10-year-old bancassurance agreement between RHB Bank and Tokio Marine Life Insurance is in force. The bancassurance arrangement agreement dated Dec 29, 2014, between RHB Bank and Tokio Marine Life grants the insurer the opportunity to match the bancassurance terms offered by the best bid. (BTimes)

IFCA MSC: Targets RM440m in new sales for next three years. IFCA MSC said it is targeting RM440m in new sales over the next three years mainly through new customers arising from its property management system solutions, optimising pricing and growing its distributors programme. Chief executive officer Ken Yong Kian Keong said about RM170m of the sales is expected to come from new large property owners via its new property management system solutions "PropertyX". (The Edge)

Sapura Energy: Gets pan-Malaysia services contract. Sapura Energy has secured a contract to provide pan-Malaysia services from Petronas Carigali SB. The contract involves offshore maintenance, construction, and modification (MCM) as well as hook-up and commissioning (HUC) services for Package C2 for the Sarawak asset (SKA Oil), according to Sapura Energy's bourse filing. The contract was awarded to its wholly owned unit Sapura Fabrication SB. (The Edge)

E&O: Launches RM60bn masterplan for Andaman Island development. Malaysian property developer, Eastern & Oriental (E&O) has unveiled its masterplan for its Andaman Island development project, with a GDV of RM60bn. Under the masterplan, the Andaman Island project, spanning 307.56-hectares, will feature a mixed-use development, including luxury condominiums, shopping malls, office buildings, hotels, and community parks. The island is strategically positioned to meet the demand for luxury properties, offering premium residential spaces within a holistic and balanced urban environment in terms of sustainability, accessibility and quality of life. (BTimes)

Reservoir Link: To provide well continuity services to Petronas. Reservoir Link Energy said one of its subsidiaries has been appointed as a panel contractor for integrated well continuity services by national oil-and-gas company Petronas. The appointment will run for five years until Oct 9, 2029, Reservoir Link said in a statement. Under the agreement, Reservoir Link will provide services, including slickline, electric wireline, wellhead maintenance, perforation, and workover for production enhancement and abandonment. (The Edge)

Velesto: To integrate robotics in drilling ops with Petronas, NOV help. Velesto Energy's subsidiary Velesto Drilling SB will implement rig mechanised automation processes and integrate robotics into drilling operations. To facilitate this, Velesto signed a memorandum of understanding (MoU) with Petroliam Nasional (Petronas), through Malaysia Petroleum Management, and National Oilwell Varco L.P. (NOV). The MoU aims to establish a collaborative framework that leverages NOV's drilling automation system and other energy carbon optimisation solutions, including robotics technology, on rigs operated by Velesto to enhance operational performance and safety. (BTimes)

MARKET UPDATE

The FBM KLCI might open flat today after US stocks drifted to a mixed finish on Wednesday, though the modest moves for indices masked some thrashing underneath the surface. Target lost more than a fifth of its value after the retailer gave a dour forecast for the holiday shopping season. The S&P 500 finished the day virtually unchanged after coming back from a loss of 1% during the morning. The Dow Jones Industrial Average eked out a gain of 139 points, or 0.3%, and the Nasdaq composite slipped 0.1%. Hints about how US consumers are doing are under particular scrutiny, given that they'll need to keep spending if the US economy is to continue growing and avoid a recession. Shoppers are contending with high prices across the economy and still-high interest rates. In stock markets elsewhere, indices moved modestly across much of Europe and Asia. The FTSE 100 in London slipped 0.2% after the Office for National Statistics reported the inflation rate picked up to a six-month high in October. Japan's Nikkei 225 slipped 0.2% after the Finance Ministry reported the country recorded a trade deficit in October for a fourth straight month. Back home, the FBM KLCI gave away 4.16 points or 0.26% to 1598.18.

Source: PublicInvest Research - 21 Nov 2024