HEADLINES

Economy

Global: Debt surges past USD320trn as risk appetite returns. The world's debt stock surged by over USD12 trn (RM53.6 trn) in the first three quarters of 2024 to a fresh record of nearly USD323 trn, thanks to falling borrowing costs and rising risk appetite, a report by a banking trade group showed. Large government budget deficits suggest that sovereign debt could rise by a third by 2028 to approach USD130 trn, the report from the Institute of International Finance (IIF) found, increasing repayment risks worldwide. (Reuters)

US: Job openings jumped and hiring slumped in Oct, key labour report for the Fed shows. Available jobs rose in Oct while hiring fell during a month in which payrolls growth hit its lowest level in nearly four years, the Bureau of Labor Statistics reported. Job openings totaled 7.7m on the month, up 372,000 from Sept and more than the Dow Jones estimate for 7.5m, the BLS said in its Job Openings and Labor Turnover Survey. The rate of openings as a share of the labour force rose to 4.6% from 4.4%. That brought the ratio of available positions to unemployed workers up to 1.1, about half of where it was during the peak of a massive gap between supply and demand in 2022. (CNBC)

US: Fed policymakers steer clear of Dec rate-cut guidance. US central bankers said they continue to believe inflation is heading down to their 2% target and signalled support for further interest rate cuts ahead, but none pushed strongly for or against doing so when they next meet to set rates in two weeks. "We have to continue to recalibrate policy, now, whether it will be in Dec or sometime later, that's a question we'll have a chance to debate and discuss in our next meeting," San Francisco Fed President Mary Daly said. (Reuters)

EU: Faces higher power prices next summer. Electricity costs in Europe are forecast to increase by as much as 27% next summer on the back of rising gas prices and lower nuclear and hydro power production. Higher carbon contracts will also help make fossil-fuel generation more expensive in 2025. Any increase in solar generation likely will be offset by a drop in hydro generation and the closings of some nuclear plants, said Sabrina Kernbichler, lead power analyst at Energy Aspects Ltd. "This leaves Europe to fill a similar fossil-fuel gap in summer 2025 compared with summer 2024, but at higher marginal costs," she said. (The Star)

EU: Swiss inflation rises slightly to 0.7%. Switzerland's consumer price inflation rose marginally in Nov from a more than three-year low in Oct, the Federal Statistical Office reported. The CPI rose 0.7% on a yearly basis in Nov, following a 0.6% rise in the previous month, which was the lowest inflation since June 2021. The expected inflation rate was 0.8%. The annual decline in transport costs eased to 1.7% from 2.7%, which had an upward effect on inflation. Meanwhile, costs for recreation and culture were 1.2% more expensive, and charges at hotels and restaurants rose by 2.3%. (RTT)

UK: Retailers report weakest sales since April. British retailers reported lacklustre sales in Nov, according to industry data affected by the timing of the Black Friday sales, although it still pointed to weakening consumer confidence. Sales volumes dropped by 3.3% in the 12 months to Nov, the weakest reading since April when they fell 4.0%, and below an increase of 0.6% in the year to Oct, the British Retail Consortium said. Last month's decline reflected the fact that this year's data did not include Black Friday sales in late Nov, which will be reflected in the Dec numbers, though they were included in last year's comparison. (Reuters)

China: Bans export of key minerals to US as trade frictions escalate. China has banned exports to the US of items related to the minerals gallium, germanium and antimony that have potential military applications, it said, a day after Washington's latest crackdown on China's chip sector. A commerce ministry directive on dual-use items with both military and civilian applications cited national security concerns. The order, which takes immediate effect, also requires stricter review of end-usage for graphite items shipped to the US. "In principle, the export of gallium, germanium, antimony, and superhard materials to the US shall not be permitted," the commerce ministry said. (The Star)

Australia: Services sector slows in Nov. The services sector in Australia continued to expand in Nov, albeit at a lower pace, the latest survey from Judo Bank revealed with a services PMI score of 50.5. That's down from 51.0 in Oct, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Higher new business, driven by improvements in underlying demand and business development efforts bearing fruits, supported the latest expansion in services activity. The rate of new business growth was modest after easing from Oct, however. (RTT)

Markets

Binastra: Wins RM328.0m building contract for Bukit Jalil serviced apartment. Binastra Corp said it had bagged a building contract worth RM327.7m to build two blocks of a 58-storey serviced apartment for The Vividz @ Bukit Jalil project. The contract was awarded by Exsim Bukit Jalil City to Binastra's wholly owned subsidiary Binastra Builders. Lee Seng Yong, who owns a 12.95% stake in Binastra and serves as an executive director of the company, is also a shareholder of Exsim Bukit Jalil City, where he holds a 5% stake via TRE Towers Holding. Binastra said the deal is not a related party transaction, as Lee is not a director of Exsim Bukit Jalil City despite his 5% shareholding. The company said the contract will commence on 9 Dec 2024, and construction works are to be completed within 42 months. (The Edge)

Mah Sing: Mah Sing buys land in Johor for RM63.0m. Mah Sing Group has acquired 59.1 acres of freehold land in Johor Baru for RM63.0m, which will be utilised for a proposed development of super-linked homes. Mah Sing said the new land will be named M Tiara 3 and will have an estimated gross development value or GDV of approximately RM463.0m. "This marks the group's third acquisition in Pulai, following the purchase of 100.4 acres of land in April 2024 named M Tiara 2 and the 75.7-acre M Tiara acquired in June 2023. The company said the contract will commence on 9 Dec 2024, and construction works are to be completed within 42 months. (The Star)

Solarvest: To acquire 30% stake in SIW Manufacturing for RM36.0m. Solarvest Holdings is acquiring a 30% equity interest in SIW Manufacturing (SMSB), a manufacturer of waste gas abatement systems and gas system-related modules for the semiconductor industry, for RM36.0m. The purchase will be made in three tranches: RM12.0m by Dec 2024, RM12.0m by April 2025 (subject to financial performance), and RM12.0m by July 2025. Upon the first tranche payment, the sale and purchase of the shares will be considered complete. The acquisition will be funded through a combination of internally generated funds and debt financing, with the proportions to be determined later. (The Malaysian Reserve)

MMAG: Signs deal to serve as MASKargo's exclusive freighter operator. MMAG Holdings has taken a step forward in its recovery efforts by securing a partnership with Malaysia Airlines. The company said it has through its subsidiary, MJets Air, accepted a letter of award (LOA) from the national carrier to serve as the dedicated narrow-body freighter operator for MAB Kargo (MASKargo) from 1 Jan to 31 Dec next year. MASKargo is the air cargo arm of Malaysia Airlines. Both companies are units of the Malaysia Aviation Group. (The Edge)

PJBumi: Partners with China's Intlef for oilfield equipment supply and land rig manufacturing. PJBumi's subsidiary, PJBumi Heavy Engineering & Services (PJBumiHES), has entered a strategic partnership with Intlef Oil and Gas Group (INTLEF), a China-based company. The five-year collaboration aims to supply oilfield equipment and manufacture land rigs in Malaysia and Indonesia. Under the agreement, PJBumiHES will handle business development, procurement, and maintenance, while INTLEF will provide technical support and expertise. Future plans include setting up a maintenance hub, training center, and equipment showcase in Malaysia. (StarBiz)

MARKET UPDATE

The KLCI might add a few points at the opening as technology stocks pulled Wall Street to another record amid a mixed Monday of trading. The S&P 500 rose 0.2% from its all-time high set on Friday to post a record for the 54th time this year. The Dow Jones Industrial Average fell 128 points, or 0.3%, while the Nasdaq composite gained 1%. Super Micro Computer, a stock that's been on an AI-driven roller coaster, soared 28.7% to lead the market. Following allegations of misconduct and the resignation of its public auditor, the maker of servers used in artificial-intelligence technology said an investigation found no evidence of misconduct by its management or by the company's board. It also said that it doesn't expect to restate its past financials and that it will find a new chief financial officer, appoint a general counsel and make other moves to strengthen its governance. Retailers were mixed amid what's expected to be the best Cyber Monday on record and coming off Black Friday. Target, which recently gave a forecast for the holiday season that left investors discouraged, fell 1.2%. Walmart, which gave a more optimistic forecast, rose 0.2%. Amazon, which looks to benefit from online sales from Cyber Monday, climbed 1.4%. The stock market largely took Donald Trump's latest threat on tariffs in stride. The president-elect on Saturday threatened 100% tariffs against a group of developing economies if they act to undermine the US dollar. Trump said he wants the group, headlined by Brazil, Russia, India and China, to promise it won't create a new currency or otherwise try to undercut the US dollar. A report in the morning showed the US manufacturing sector contracted again last month, but not by as much as economists expected. This upcoming week will bring several big updates on the job market, including the October job openings report, weekly unemployment benefits data and the all-important November jobs report. They could steer the next moves for Federal Reserve, which recently began pulling interest rates lower to give support to the economy. In financial markets elsewhere, Chinese stocks led gains worldwide as monthly surveys showed improving conditions for manufacturing, partly driven by a surge in orders ahead of Trump's inauguration next month. Indices rose 0.7% in Hong Kong and 1.1% in Shanghai. Back home, the KLCI added 11.48 points or 0.72% to 1606.96.

Source: PublicInvest Research - 4 Dec 2024