HEADLINES

Economy

US: Fed lowers rates but sees fewer cuts in 2025 due to stubbornly high inflation. The US central bank lowered interest rates, but Fed Chair Jerome Powell said more reductions in borrowing costs hinge on further progress in lowering stubbornly high inflation, remarks that showed policymakers are beginning to reckon with the prospects for sweeping economic change under an incoming Trump administration. Powell's explicit and repeated, references to the need for caution from here jolted Wall Street. (Reuters)

US: Single-family housing starts rebound in Nov. US single-family homebuilding rebounded in Nov as the drag from hurricanes faded, but the threat of tariffs on imported goods and potential labour shortages from mass deportations could hamper new construction next year. Single-family housing starts, which account for the bulk of homebuilding, jumped 6.4% to a seasonally adjusted annual rate of 1.01m units last month, the Commerce Department's Census Bureau said. Data for Oct was revised to show homebuilding declining to a rate of 950,000 units from the previously reported pace of 970,000 units. Homebuilding has struggled for much of this year after benefitting from a severe shortage of previously owned homes for sale. (Reuters)

UK: Inflation highest in 8 months. UK consumer price inflation accelerated to an eight-month high in Nov, reinforcing the chances of the BoE deciding to keep the interest rate unchanged. The consumer price index rose 2.6% YoY following a 2.3% gain in Oct, the Office for National Statistics reported. The rate matched expectations and it remained above the 2% target for the second straight month. Core inflation, which excludes prices of energy, food, alcohol and tobacco, advanced to 3.5% from 3.3%. This was slightly below forecast of 3.6%. The CPI goods rose 0.4% on year, reversing a 0.3% fall. Meanwhile, services inflation, which is closely watched by policymakers for signs of lingering price pressures, held steady at 5.0%. Monthly inflation softened to 0.1%, in line with expectations, from 0.6% in the previous month. (RTT)

China: Youth jobless rate falls for third straight month. Joblessness among the youth in Chinese cities eased for a third straight month in Nov after reaching its highest this year in Aug, official data showed. The urban jobless rate for 16-to-24-year-olds, excluding students, fell to 16.1% from 17.1% in Oct, according to data from the National Bureau of Statistics. The unemployment rate for 25-29-year-olds also dropped, falling slightly to 6.7% from 6.8%, while the jobless rate for 30-59-year-olds was unchanged at 3.8%. The nationwide jobless rate was at 5% in Nov, according to data released by the statistics bureau. (Reuters)

Indonesia: Central bank maintains status quo. Indonesia's central bank left its benchmark interest rate unchanged as policymakers were more concerned about the exchange rate of rupiah. The Board of Governors of Bank Indonesia, headed by Perry Warjiyo, decided to maintain the seven-day reverse repo rate at 6.00%. The interest rate has been left on hold for three consecutive meetings. The governor said the focus of monetary policy is directed towards strengthening the stability of the rupiah amid escalating geopolitical tensions and the direction of US policy. In Nov, inflation fell to 1.5%, which was at the lower end of the 1.5-3.5% target range. (RTT)

Thailand: Central bank holds rate steady. The BoT left its key interest rate unchanged after reducing it in the previous rate-setting session as policymakers assessed that the current level was consistent with the macroeconomic conditions. The Monetary Policy Committee unanimously decided to hold the policy rate steady at 2.25%. That was in line with economists' expectations. The previous change in the policy rate was a quarter-point reduction in Oct. "The Committee voted to maintain the policy rate, deeming the current rate is consistent with the economic trajectory close to potential, inflation moving towards the target range, and safeguarding long-term macro-financial stability, together with preserving policy space amid increasing uncertainties going forward," the central bank said. (RTT)

Markets

MRCB: Drops out of Berjaya-led KL-SG HSR project. The Berjaya-led consortium vying for the Kuala Lumpur-Singapore High-Speed Rail (KL-SG HSR) project announced today that Malaysian Resources Corporation (MRCB) has withdrawn from the consortium to pursue other strategic opportunities. The consortium was involved in MyHSR's Request for Information (RFI) exercise for the project early this year. Berjaya Corp founder and advisor Tan Sri Vincent Tan Chee Yioun in a statement said the group remains steadfast in its mission to deliver a world-class HSR system. (BTimes)

YTL Power: MACC clears YTL Communications of any wrongdoing in 1BestariNet project. YTL Power International announced that its 60%-owned subsidiary, YTL Communications SB, has been cleared of any wrongdoing by the Malaysian Anti-Corruption Commission (MACC) concerning the multi-billion-ringgit 1BestariNet Internet project. The 1BestariNet project, initiated by the Ministry of Education (MOE) in 2011, was designed to provide high-speed internet access to schools and introduce a virtual learning system. (BTimes)

Supermax: Proposes 1-for-5 bonus issue with 1-for-20 free warrants. Supermax Corp is planning a bonus share issue on the basis of one share for every five existing shares held, along with the issuance of bonus warrants on the basis of one free warrant for every 20 existing shares held, to reward shareholders. The proposed bonus issuances will involve up to 544.12m new Supermax shares, and up to 163.24m free warrants. The entitlement dates will be fixed and announced later. (The Edge)

YNH Property: MD Kuan Huat replaces brother Kuan Chon as new chairman. YNH Property executive chairman Datuk Dr Yu Kuan Chon has been redesignated as an executive director of the property developer. Kuan Chon, 62, is YNH Property's largest shareholder controlling a direct and indirect shareholding of 32.58% as at Oct 7, 2024. Kuan Chon's brother, Datuk Yu Kuan Huat, who is currently managing director of YNH Property, has been named to take over the role of executive chairman. Kuan Huat, 66, is the second largest shareholder with a direct and indirect shareholding of 29.34%. (The Edge)

Advancecon: Wins RM417.7m contract for Silver Valley Technology Park. Advancecon Holdings' wholly owned subsidiary, Advancecon Infra SB, has secured a RM417.7m contract from Advancecon Development SB, another indirect wholly owned subsidiary of Advancecon. The contract appoints Advancecon Infra as the main contractor for the development of the Silver Valley Technology Park (SVTP) in Perak. In a statement, Advancecon said the group's unbilled order book has risen to RM739.3m as of Sept 30 following the latest contract win. (StarBiz)

T7 Global: Appointed Petronas panel contractor for well continuity services in sixth pan-Malaysia contract. T7 Global has been appointed by Petroliam Nasional (Petronas) as a panel contractor to provide integrated well continuity services for a five-year term. Under the pan-Malaysia appointment, which commenced on Oct 10, T7 Global is to provide well intervention, workover and abandonment services for Sub-Package B1, Sub-Package B3 and Sub-Package D1, according to the offshore oil and gas services provider's bourse filing. (The Edge)

MARKET UPDATE

The KLCI might open lower today as US stocks tumbled to one of their worst days of the year after the Federal Reserve hinted Wednesday it may deliver fewer shots of adrenaline for the US economy in 2025 than earlier thought. The S&P 500 fell 2.9%, just shy of its biggest loss for the year, to pull further from its all-time high set a couple weeks ago. The Dow Jones Industrial Average lost 1,123 points, or 2.6%, and the Nasdaq composite dropped 3.6%. The Fed said Wednesday it's cutting its main interest rate for a third time this year, continuing the sharp turnaround begun in September when it started lowering rates from a two-decade high to support the job market. Wall Street loves easier interest rates, but that cut was already widely expected. The bigger question centers on how much more the Fed will cut next year. A lot is riding on it, particularly after expectations for a series of cuts in 2025 helped the US stock market set an all-time high 57 times so far in 2024. Fed officials released projections on Wednesday showing the median expectation among them is for two more cuts to the federal funds rate in 2025, or half a percentage point's worth. That's down from the four cuts expected just three months ago. In stock markets elsewhere, London's FTSE 100 edged up by less than 0.1% after data showed inflation accelerated to 2.6% in November, its highest level in eight months. The Bank of England is also meeting on interest rates this week and will announce its decision on Thursday. In Japan, where the Bank of Japan will wrap up its own policy meeting on Friday, the Nikkei 225 slipped 0.7%. That was despite a 23.7% jump for Nissan Motor Corp., which said it was in talks on closer collaboration with Honda Motor Co., though no decision had been made on a possible merger. Honda Motor's stock lost 3%. Back home, the KLCI added 2.25 points or 0.14% to 1599.58.

Source: PublicInvest Research - 19 Dec 2024