HEADLINES

Economy

US: Fed seen poised to cut rates this month, debate 2025 pause. Fed officials appear on track to cut interest rates this month after data showed the US labour market remained strong but continued to cool in Nov, even as debate emerged over a possible pause to rate cuts in the new year. US employers added 227,000 jobs last month, a rebound from a hurricane-impacted slowdown in Oct, but the unemployment rate ticked up to 4.2%. (Reuters)

US: Job market bounces back from impact of strikes, hurricanes. US job growth surged in Nov after being severely hindered by hurricanes and strikes, but a rise in the unemployment rate to 4.2% pointed to an easing labour market that should allow the Fed to cut interest rates again this month. The labour market's resilience is driving the economy through strong consumer spending, with the closely watched employment report from the Labour Department showing solid wage growth last month. The economy created 56,000 more jobs in Sept and Oct than previously estimated. Nonfarm payrolls increased by 227,000 jobs last month after rising by an upwardly revised 36,000 in Oct, the Labour Department's Bureau of Labour Statistics said. (Reuters)

EU: Eurozone GDP growth rises on domestic demand. The euro area economy expanded as initially estimated in the third quarter on household and government spending and investment, revised data published by Eurostat showed. GDP climbed 0.4 % sequentially, which was double the 0.2 % growth posted in the Q2. The rates matched the preliminary estimate. On an annual basis, economic growth improved to 0.9 %, in line with estimate, from 0.5% a quarter ago. Data today showed that household consumption expenditure advanced 0.7% and government spending climbed 0.5%. Gross fixed capital formation moved up 2.0%. (RTT)

EU: Romania Q3 GDP growth improves as estimated. Romania's economic growth accelerated somewhat as initially estimated in the third quarter, the latest data from the statistical office showed. On an unadjusted basis, GDP expanded 1.1% annually in the Sept quarter, following a 0.9% rise in the preceding three-month period. That was in line with the flash data published on 14 Nov. The expenditure breakdown showed that final consumption expenditure of households grew 3.0 %, while government consumption dropped by 0.3%. Gross fixed capital formation advanced 0.3% from last year. Net foreign demand showed a 1.4% decline, as exports fell amid an increase in imports. (RTT)

UK: House prices hit record in Nov, Halifax says. Britain's property sector gathered more pace in Nov, with house prices rising by a faster-than-expected 1.3% in Nov from Oct to hit a record high, mortgage lender Halifax said, but affordability challenges remain. The increase was well above a 0.2% rise on the month predicted by a Reuters poll of economists, and it was the highest increase so far this year, Halifax said. The annual growth rate rose by 4.8%, the most in two-years. Both the monthly and annual figures were above all estimates in a Reuters poll of economists. Amanda Bryden, head of mortgages at Halifax, said while demand for mortgages and borrowing costs had improved, buyers and movers still faced significant challenges. (Bloomberg)

India: Keeps rates unchanged, lowers CRR to boost liquidity. The RBI left its key policy rates unchanged for the eleventh straight session and maintained a neutral stance, but its move to cut the cash reserve ratio by 50bps to infuse liquidity signaled that policymakers are more concerned about the growth outlook than inflation. After the conclusion of the three-day monetary policy meeting, RBI Governor Shaktikanta Das said the committee voted 4-2 to maintain the policy repo rate at 6.5%. The repo has been at 6.5% since Feb 2023. The central bank lowered the CRR for all banks by 50bps to 4.0%. (Reuters)

Markets

Cypark Resources (Neutral, TP:RM0.70): Terengganu Inc to develop hybrid hydro floating solar plant at Tasik Kenyir. Cypark Resources and Terengganu Inc SB have entered into a partnership to develop a 500MW hybrid hydro floating solar (HHFS) plant at Tasik Kenyir, Terengganu. Malaysia's leading renewable energy (RE) solutions provider and the strategic investment arm of the Terengganu state government have signed a heads of agreement to establish a joint venture. TNB Power Generation SB will design, build, and operate the plant, further showcasing Malaysia's leadership in green energy innovations. (Bernama) Comment: We are positive with the formation of the JV with Terengganu Incorporation and TNB Power Generation, allowing Cypark to own a minority stake in the largest solar farm in Malaysia. The development is expected to kick off in 2025 and to be completed in 2027. The estimated cost of the project would be up to RM2bn, assuming RM4m for 1MW. However, we make no changes on our estimates as the details of the agreements are yet to be disclosed. The EPCC award of the project is still in tendering process, and we believe that Cypark would be the frontrunner as the EPCC contractor given its stake in the JV. We maintain Neutral with TP of RM0.70.

Genting (Outperform, TP:RM5.15): Resorts World Las Vegas appoints new board members. Genting's indirect wholly owned subsidiary Resorts World Las Vegas LLC (RWLV) has announced the establishment of a board of directors with industry veteran Jim Murren as chairman, effective 4 Dec 2024. The integrated Las Vegas gaming resort also announced the appointment of Alex Dixon, who will come on board on 16 Jan 2025, as its CEO. (The Edge)

Kawan Food (Outperform, TP:RM 2.45): Enters JV in IT sector with acquisition of Regaltech Automation. Kawan Food announced that its wholly owned subsidiary, KG Pastry Marketing SB (KGPM), has entered into a JV focused on the IT sector, specifically the supply and distribution of IT equipment. The JV is established through a special purpose vehicle (SPV), Reka Innotech SB (REKA), which will acquire Regaltech Automation SB (RA) for RM2.5m. (The Malaysian Reserve)

ITMAX: Forms JV with Aim-Force to develop smart parking solutions. ITMAX System has partnered with Aim-Force SB to jointly develop smart parking enforcement solutions and enterprise mobility software through a new JV company, Enforcemax. ITMAX holds a 70% stake in Enforcemax, with Aim-Force owning the remaining 30%. The JV will focus on creating and developing smart parking solutions, with Enforcemax retaining all related intellectual property rights. (The Malaysian Reserve)

Crescendo: To dispose of JB land for RM120.1m. Crescendo Corp's wholly owned subsidiary Panoramic Industrial Development SB has inked a deal to dispose of five plots of freehold land measuring a combined 669,733 sq ft in Pulai, Johor Bahru, to Data Cloud Innovation SB for RM120.1m. It said the land will be used for the development and operation of a data centre. Crescendo is expected to record a consolidated gain after taxation of about RM65.2m from the sale. (StarBiz)

MARKET UPDATE

The KLCI might open flat today as US stocks rose to records Friday after data suggested the job market remains solid enough to keep the economy going, but not so strong that it raises immediate worries about inflation. The S&P 500 climbed 0.2%, just enough top the all-time high set on Wednesday, as it closed a third straight winning week in what looks to be one of its best years since the 2000 dot-com bust. The Dow Jones Industrial Average dipped 123.19 points, or 0.3%, while the Nasdaq composite rose 0.8% to set its own record. The quiet trading came after the latest jobs report came in mixed enough to strengthen traders' expectations that the Federal Reserve will cut interest rates again at its next meeting in two weeks. The report showed US employers hired more workers than expected last month, but it also said the unemployment rate unexpectedly ticked up to 4.2% from 4.1%. A report on Friday suggested sentiment among US consumers may be improving more than economists expected. The preliminary reading from the University of Michigan's survey hit its highest level in seven months. The survey found a surge in buying for some products as consumers tried to get ahead of possible increases in price due to higher tariffs that President-elect Donald Trump has threatened. In stock markets elsewhere, France's CAC 40 rose 1.3% after French President Emmanuel Macron announced plans to stay in office until the end of his term and to name a new prime minister within days. Earlier this week, far-right and left-wing lawmakers approved a no-confidence motion due to budget disputes, forcing Prime Minister Michel Barnier and his cabinet to resign. In Asia, stock indices were mixed. They rallied 1.6% in Hong Kong and 1% in Shanghai ahead of an annual economic policy meeting scheduled for this week. South Korea's Kospi dropped 0.6% as South Korea's ruling party chief showed support for suspending the constitutional powers of President Yoon Suk Yeol after he declared martial law and then revoked that earlier this week. Yoon is facing calls to resign and may be impeached. Back home, the KLCI dropped 2.39 points or 0.15% to 1613.25.

Source: PublicInvest Research - 9 Dec 2024