HEADLINES

Economy

US: Existing-home sales rose in Oct after mortgage-rate drop. Sales of previously owned US homes rose in Oct by the most since earlier this year, as buyers took advantage of a dip in mortgage rates in the previous month. Contract closings increased 3.4% from a month earlier - the most since Feb - to a 3.96m annualised rate, according to data released by the National Association of Realtors (NAR). That was in line with the median estimate in a Bloomberg survey of economists and followed the weakest pace since late 2010. Despite the uptick in sales, the housing market remains bogged down by topsy-turvy mortgage rates and limited choices. Mortgage rates had dipped to a two-year low in Sept, persuading buyers to sign contracts that then closed the following month. (Bloomberg)

US: Weekly jobless claims hit seven-month low. The number of Americans filing new applications for unemployment benefits fell to a seven-month low last week, suggesting that job growth likely rebounded in November after abruptly slowing last month amid hurricanes and strikes. It is, however, taking longer for the unemployed to find new work. The report from the Labor Department also showed unemployment rolls swelling to levels last seen in late 2021. Labour market slack keeps the door open for a third interest rate cut from the Federal Reserve (Fed) next month, despite a recent lack of progress lowering inflation to its 2% target. (Reuters)

EU: Trade war could leave Europe in recession with high inflation, ECB policymaker warns. Europe will suffer in case of a fresh trade war with the US, and could face a recession coupled with high inflation, Cypriot central bank Governor Christodoulos Patsalides said. Incoming US President Donald Trump promised to impose tariffs on most imports and said Europe would pay a big price for having run a huge trade surplus for years. "Trade tensions are rising," Patsalides told a conference. "If trade restrictions materialise, the outcome may be inflationary, recessionary or worse, stagflationary," Patsalides said. Still, the ECB could for now continue to lower interest rates with the next move possibly coming in December, Patsalides added. "While growth in the euro area economy has been anaemic for some time now, the approach to rate cuts must be gradual and data driven," Patsalides said. (Reuters)

China: Bracing for Trump tariffs, China's Xi makes diplomatic push at global summits. In his first global meetings since Donald Trump was reelected to lead the US, Chinese President Xi Jinping went on a diplomatic offensive, hedging against expected new tariffs and preparing to exploit potential future rifts between Washington and its allies. At meeting after meeting, from Apec in Peru to G20 in Brazil over the last week, Xi sought to draw a contrast with Trump's "America First" message, presenting himself as a predictable defender of the multilateral global trade order. Summit organisers, diplomats and negotiators also describe a noticeable shift from previous summits in a more constructive posture by Chinese diplomats, who were less focused on their narrow interests and more involved in building a broader consensus. (Reuters)

Thailand: Economy to grow 2.7% this year, beat 2025 forecast, PM says. Thailand's economy is expected to grow 2.7% this year, helped by an anticipated annual rise of 28% in foreign visitors to 36 million, Prime Minister Paetongtarn Shinawatra said. Southeast Asia's second-largest economy will grow more than forecast in 2025, and the government will accelerate investment spending of more than THB960bn (USD27.7bn, or RM123.6bn), she told a business forum. "The economy is in the recovery phase. In each quarter, we have done better than expected," she said. Thailand's economy grew 3% in the July-Sept quarter annually, the fastest pace in two years and beating expectations. But officials and analysts expect increased challenges next year, including the fallout from trade wars. Paetongtarn said the government would seek support measures if the US takes action on countries with which it has trade deficits, which would include Thailand and China. (Reuters)

Indonesia: 3Q2024 current account deficit narrows to 0.6% of GDP. Indonesia's current account deficit narrowed to 0.6% of GDP, or USD2.2bn (RM9.8bn) in the 3Q2024, from 0.9% of GDP in the previous quarter, the central bank said. The narrower deficit was supported by continuous trade surpluses and smaller deficit in the services balance, due to a higher number of foreign visitors, Bank Indonesia (BI) said in a statement. BI maintained its outlook for the full-year current account deficit to be within 0.1% to 0.9% of GDP this year. The balance of payments for the third quarter was a surplus of USD5.9bn, compared with a deficit of about USD600m in the previous quarter, BI added. (Reuters)

Markets

Thong Guan Industries: To sell unit in related party transaction. Thong Guan Industries (TGIB) entered into a conditional share sale agreement with Foremost Equals SB (FESB) to sell its entire 100% stake, consisting of 3,735 ordinary shares in Syarikat Thong Guan Trading SB (STGT), for RM60m. The proposed disposal is regarded as a related party transaction in view of the interests of certain directors and major shareholders of TGIB in the sale as FESB is a major shareholder of TGIB. (StarBiz)

Theta Edge: To form JV with iStream360 to develop AI, blockchain solutions. Theta Edge has partnered local data-science company iStream360 SB to develop market transformative AI, blockchain and advanced system solutions. The company's wholly owned unit Theta Innovation SB inked a JV cum shareholder's agreement with iStream360 for the collaboration. Theta Edge is to be the majority owner of the JV company, while iStream360 will own the remaining 49%. (The Edge)

Globetronics: Partners with Taiwan's ChipMOS for Integrated Circuit Services. Globetronics Technology has formed a strategic partnership with Taiwan-based ChipMOS Technologies Inc for Integrated Circuit Services. ChipMOS is a global leader in semiconductor assembly and testing services, listed on both Taiwan's stock exchange and Nasdaq. The company specialises in memory and mixed-signal integrated circuit testing, as well as advanced packaging. Under the agreement, Globetronics will provide cutting-edge dicing, packaging, and testing services for integrated circuit products delivered by ChipMOS. (StarBiz)

Atlan: Home Affairs Ministry pays Atlan RM69.6m for compulsory purchase of its Kedah plot. Atlan Holdings' Singapore-listed subsidiary Duty Free International Ltd (DFIL), which plans to challenge the compulsory acquisition of two plots of land in Kedah by the Malaysian government, announced that it had received RM69.6m as compensation for the land. The sum was received from the Home Affairs Ministry, which is force-buying the plot from DFIL's wholly-owned Cergasjaya SB and Cergasjaya Properties SB. DFIL itself is 75.53% owned by Atlan. (The Edge)

Maxim Global: Gives up plantation concession permits in Indonesia. After two years, property developer Maxim Global has decided not to pursue further action against the revocation of plantation concession licenses issued by Indonesia's Ministry of Environment and Forestry in Jan 2022 in relation to assets owned by its 90%-owned subsidiaries, PT Trimegah Karya Utama (PT TKU) and PT Manunggal Sukses Mandiri (PT MSM) in Papua, Indonesia. This follows the decision on Oct 2 this year by the Indonesia Investment Coordinating Board to revoke the concession licenses held by PT TKU and PT MSM despite their appeal since 2022 and the related litigation against the Boven Digoel Regency in Papua in relation to the revocation. (The Edge)

IPO: Northern Solar Holdings signs underwriting agreement with M&A Securities. Northern Solar Holdings has signed an underwriting agreement with M&A Securities SB for its proposed IPO on the ACE Market of Bursa Malaysia. The solar energy firm said its IPO scheduled to take place in Feb 2025. M&A Securities will underwrite a total of 27.7m new shares made available to the Malaysian public and shares set aside to eligible persons under pink form allocations. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks climbed Thursday after market superstar Nvidia and another round of companies said they're making even fatter profits than expected. The S&P 500 pulled 0.5% higher after flipping between gains and losses several times during the day. Banks, smaller companies and other areas of the stock market that tend to do best when the economy is strong helped lead the way, while bitcoin briefly broke above $99,000. Crude oil, meanwhile, continued to rise. The Dow Jones Industrial Average jumped 461 points, or 1.1%, and the Nasdaq composite edged up by less than 0.1%. Nvidia rose just 0.5% after beating analysts' estimates for profit and revenue yet again, but it was still the strongest force pulling the S&P 500 upward. It also gave a forecast for revenue in the current quarter that topped most analysts' expectations due to voracious demand for its chips used in artificial-intelligence technology. Stock indices elsewhere in Asia and Europe were mixed. Fewer US workers applied for unemployment benefits last week in the latest signal that the job market remains solid. Another report, though, said manufacturing in the mid-Atlantic region unexpectedly shrank. Sales of previously occupied homes, meanwhile, strengthened last month by more than expected. Back home, the FBM KLCI gave away 9.50 points or 0.59% to 1588.68.

Source: PublicInvest Research - 22 Nov 2024