HEADLINES

Economy

US: Weekly jobless claims edge up; falling imports compress trade deficit. The number of Americans filing new applications for unemployment benefits rose slightly last week, pointing to steadily easing labour market conditions heading into the final stretch of 2024. Sluggish hiring, however, means some people who lose their jobs are collecting unemployment checks for longer periods relative to early this year, potentially keeping the jobless rate above 4.0%. Economists said this should allow the Fed to cut interest rates again this month despite stalled progress in lowering inflation to the US central bank's 2% target. (Reuters)

US: Economy grew slightly in recent weeks, Fed survey says. US economic activity has expanded slightly in most regions since early Oct, with employment growth "subdued" and inflation rising at a modest pace and businesses expressing optimism about the future, the Fed said in a summary of surveys and interviews from across the country known collectively as the "Beige Book." "Though growth in economic activity was generally small, expectations for growth rose moderately across most geographies and sectors," the US central bank said in its regular temperature check on the economy. (Reuters)

EU: Retail sales fall 0.5%. Eurozone retail sales declined for the first time in four months in Oct, and at a faster-than-expected pace, data published by Eurostat showed. Retail sales logged a decrease of 0.5% on a monthly basis in Oct, reversing a 0.5% rise in Sept. The expected fall was 0.4%. Sales of non-food products fell 0.9% over the month, and those of automotive fuel in specialized stores dropped by 0.3%. Meanwhile, food, drinks, and tobacco sales rebounded by 0.1%.YoY, retail sales growth eased to 1.9% from 3.0% in Sept. In the EU, retail sales declined 0.3% from Sept, while they grew 2.1% from the previous year. (RTT)

EU: German construction downturn deepens in Nov. Germany's construction sector logged further steeper contraction in Nov, purchasing managers' survey data from S&P Global showed. The HCOB construction PMI fell to 38.0 in Nov from 40.2 in Oct. A score below 50.0 indicates contraction. Among categories, housing activity was the worst-performing sector, and the commercial work fell at the fastest pace since Jan. Meanwhile, civil engineering declined at a slightly slower pace. (RTT)

UK: Construction growth improves in Nov. The UK construction sector's growth picked up pace in Nov, driven by a strong upturn in commercial work, survey results from S&P Global showed. The construction PMI rose to 55.2 in Nov from 54.3 in Oct. A reading above 50 indicates expansion. The index signalled growth for the ninth consecutive month. Commercial activity was the best-performing category on the back of improving customer demand and new opportunities to tender, despite relatively subdued economic conditions. (RTT)

Japan: Dovish BoJ policymaker urges caution in raising rates. The BoJ must move cautiously in raising interest rates as consumption remains weak and small firms may struggle to keep increasing wages, a dovish board member says, highlighting uncertainty over the chances of a hike this month. Toyoaki Nakamura, who did not back the BoJ's decision to raise rates in July, emphasised the risk that inflation may miss the central bank's 2% target next year and beyond, as slowing global growth and soft consumption cloud the economic outlook. (The Star)

South Korea: Q3 GDP +0.1% QoQ, unchanged from advanced estimate. South Korea's economy grew 0.1% in Q3, revised central bank data showed, unchanged from its advance estimates issued in Oct. On an annual basis gross domestic product was 1.5% higher in the July-Sept quarter, slower than the 2.3% growth logged in Q2. (Reuters)

Indonesia: Interest rate cuts seen to narrow in 2025. Bank Indonesia (BI) governor Perry Warjiyo has signalled that the central bank will have less room for continued monetary policy easing next year as pressure mounts on the rupiah as a result of the more inward-looking policy expected from the administration of US president-elect Donald Trump. (The Star)

Singapore: Retail sales growth improves to 2.2%. Singapore's retail sales expanded at a slightly faster pace in Oct, preliminary data from the Department of Statistics showed. HRetail sales rose 2.2% year on year in Oct, following a 1.9% increase in Sept. Sales excluding motor vehicles rebounded 0.3% versus a 1.5% decrease in the previous month. There was an 18.4% surge in sales of motor vehicles, and the demand for food and alcohol was 5.5% higher. Meanwhile, sales of computer and telecommunications equipment showed a sharp decline of 10.9%. (RTT)

Markets

Dialog (Neutral, TP:RM2.12): Secures 14-year PSC for Petronas' RAJA cluster asset. DIALOG Group has signed a 14-year production sharing contract (PSC) with Petroliam Nasional (Petronas) for the RAJA Cluster Small Field Asset, with subsidiary Dialog Resources SB holding a 100% stake and acting as the operator. The contract includes a two-year pre-development phase for feasibility studies, followed by a two-year development phase targeting first production, and a 10-year production phase. Dialog said it was committing USD3.0m (RM13.3m) for initial studies and aimed to strengthen its upstream oil and gas capabilities. (The Malaysian Reserve) Comments: We are positive with the PSC award as it will strengthen its position as oil producer operators. However, there is no further information being disclosed at this juncture such as estimated resource reserve, daily production volume and development capital expenditure. The development of the field will be dependent on feasibility studies and final investment decision (FID), within next 2 years. We make no changes on our estimate. Maintain Neutral and TP of RM2.12.

T7 Global: Bags new Petrofac job. T7 Global has bagged a contract from Petrofac (Malaysia-PM304) to provide Malaysia-wide maintenance, construction, modification (MCM) and hook-up as well as commissioning (HUC) services. Its wholly owned subsidiary Tanjung Offshore Services received the letter of award for the B3 package, which did not state the contract value. The contract, beginning 30 Oct 2024, will run for five years plus three and two years extension option (5+3+2). (The Malaysian Reserve)

Deleum: Eyes more acquisitions after 70% stake buy in Indonesian O&G valve outfit. Deleum said it is exploring more acquisition opportunities, after firming up a 70% stake purchase in an Indonesian valve solutions provider that could triple its addressable control and pressure relief valve market size. The ambition is to go beyond Malaysia and Indonesia, said Deleum Group CEO Ramanrao Abdullah, who noted that the natural development would be to look at Thailand and Vietnam for its next acquisition. (The Edge)

Pavilion REIT: To acquire two iconic KL hotels. Pavilion Real Estate Investment Trust (Pavilion-REIT) is proposing to acquire two prestigious hospitality assets in Kuala Lumpur, the Banyan Tree Kuala Lumpur (BTKL) and Pavilion Hotel Kuala Lumpur (PHKL), in a transaction worth RM480.0m. The acquisition of BTKL is valued at a purchase consideration of RM140.0m, while the acquisition of PHKL is at a purchase consideration of RM340.0m. (StarBiz)

Destini: To buy Aussie firm for RM285. Destini plans to acquire loss-making Australian firm, Trovon Group, for AUD100.0 (RM285.1) as it seeks to capitalise on Trovon's AUD43.4m orderbook in rail-related services. In a filing with Bursa Malaysia, the engineering solutions provider said Trovon specialises in maintenance, repair and overhaul or MRO services, with expertise spanning mainline, high-speed, freight, metro and light rail component remediation. (StarBiz)

NationGate: Launches locally manufactured AI servers. NationGate Holdings has launched its latest artificial intelligence (AI) servers catering for clients from start-ups to hyperscale data centres. The launch sees NationGate emerging as the first in Malaysia to manufacture the servers. (The Edge)

MARKET UPDATE

The KLCI might open flat today after the huge rally for US stocks lost momentum on Thursday as Wall Street counted down to a big jobs report that's coming on Friday. The crypto market had more action, and bitcoin briefly burst to a record above $103,000 before pulling back. The S&P 500 slipped 0.2% from the all-time high it had set the day before, its 56th of the year so far, to shave a bit off what's set to be one of its best years of the millennium. The Dow Jones Industrial Average fell 248 points, or 0.6%, while the Nasdaq composite slipped 0.2% from its own record set the day before. Bitcoin powered above $100,000 for the first time the night before, after President-elect Donald Trump chose Paul Atkins, who's seen as a crypto advocate, as his nominee to head the Securities and Exchange Commission. The cryptocurrency has climbed dramatically from less than $70,000 on Election Day, but it fell back as Thursday progressed toward $99,000, according to CoinDesk. This week's highlight for Wall Street will be Friday's jobs report from the US government, which will show how many people employers hired and fired last month. A report on Thursday said the number of US workers applying for unemployment benefits rose last week but remains at historically healthy levels. In stock markets elsewhere, indices were mostly calm in Europe after far-right and left-wing lawmakers in France joined together to vote on a no-confidence motion that will force Prime Minister Michel Barnier and his Cabinet to resign. The CAC 40 index in Paris added 0.4%. In South Korea, the Kospi fell 0.9% to compound its 1.4% decline from the day before. President Yoon Suk Yeol was facing possible impeachment after he suddenly declared martial law on Tuesday night. He revoked the martial law declaration six hours later. Back home, the KLCI added 1.55 points or 0.10% to 1615.64.

Source: PublicInvest Research - 6 Dec 2024