HEADLINES

Economy

US: GDP revised up to 3.1% on stronger consumer spending, exports. The US economy expanded at a faster pace in the third quarter than previously estimated, owing in part to stronger consumer spending and exports. GDP increased at a 3.1% annualised rate in the third quarter, the third estimate of the figures from the Bureau of Economic Analysis showed. That compared to a previous projection of 2.8%. Consumer spending was marked up to a 3.7% pace from 3.5%. Exports expanded by 9.6% in the July-to-Sept period, up from 7.5% in the prior estimate. That was entirely due to services. The numbers reinforce the notion that the economy is still powering ahead despite expectations among forecasters for an eventual slowdown. (Bloomberg)

UK: Bank of England keeps rates steady, policy split widens. The BOE kept its main interest rate unchanged at 4.75% but policymakers became more divided about whether rate cuts were needed to tackle a slowing economy. Three of the BoE's nine-person Monetary Policy Committee - deputy governor Dave Ramsden and external members Swati Dhingra and Alan Taylor - voted for a quarter-point rate cut to 4.5%. Economists polled by Reuters had expected only one MPC member to vote for a cut. But BOE governor Andrew Bailey said the central bank needed to stick to its existing "gradual approach" to cutting rates. (Reuters)

Japan: BOJ keeps ultra-low rates, gives few clues on when it might hike. The Bank of Japan (BOJ) kept interest rates unchanged and its governor offered few clues on how soon it could push up borrowing costs, sending the yen and bond yields tumbling on fresh doubts over the near-term chances of a rate hike. As widely expected, the nine-member board maintained its short-term policy rate at 0.25% in a sign policymakers preferred to tread cautiously amid uncertainty over US president-elect Donald Trump's economic plans. But hawkish board member Naoki Tamura dissented and proposed, unsuccessfully, to raise interest rates to 0.5% on the view that inflationary risks were building. (Reuters)

Taiwan: Raises growth forecast, keeps interest rates unchanged. Taiwan's central bank held its policy interest rate unchanged while raising its growth estimate for the year, but flagged risks for next year from trade policies from the incoming Trump administration in the US. The central bank left the benchmark discount rate at 2%, where it has been since March, in a unanimous decision at a quarterly board meeting. All 33 economists in a Reuters poll had predicted the central bank would keep the rate unchanged. The central bank has chosen to chart its own path and not to follow the lead of the US Federal Reserve, which cut its benchmark interest rate by a quarter of a percentage point. (Reuters)

Hong Kong: Central bank cuts interest rate tracking Fed move, banks follow. The Hong Kong Monetary Authority (HKMA) cut its base interest rate charged via the overnight discount window by 25 bps to 4.75%, tracking a move by the US Federal Reserve. Major Hong Kong banks followed with reductions, but some at a smaller magnitude. HSBC cut its Hong Kong dollar best lending rate by 12.5 bps to 5.25% and Bank of China (Hong Kong) lowered its Hong Kong dollar prime rate to 5.25% from 5.375%. "The future path of rates remains highly uncertain going into 2025," HSBC's Hong Kong CEO Luanne Lim said in a statement. (Reuters)

Markets

UEM Sunrise (Underperform, TP:RM0.70): Appellate court grants UEM Sunrise unit leave to challenge additional tax assessment. The Court of Appeal has granted UEM Sunrise's wholly-owned unit UEM Land leave to challenge the Inland Revenue Board's (IRB) additional tax assessment and penalty of RM8.49m. The appellate court, in its decision, allowed UEM Land's appeal against the High Court's decision in March last year to dismiss the company's leave for a judicial review application and stay on payments of the additional taxes and penalty, according to UEM Sunrise's bourse filing. (BTimes)

Pentamaster: Partner to privatise HK-listed unit. Pentamaster Corp proposed to privatise its 63.9%-owned Hong Kong-listed Pentamaster International Ltd (PIL) with a partner in an exercise that would raise its stake to 71%.The exercise entails Main Market-listed Pentamaster and partner Puga Holdings Ltd acquiring a 7.1% and 29% stake, respectively, in the HK unit, at HKD0.93 per share (RM0.54), a premium of 16.25% to its last traded price of HKD0.80 (RM0.46) before its trading suspension on Dec 4. (The Edge)

Vestland: Bags RM70m building job. Vestland's wholly-owned subsidiary, Vestland Resources SB, has secured a construction contract worth RM70m from Sg Besi Construction SB. In a filing with Bursa Malaysia, Vestland announced the contract involves the design and construction of a 59-storey strata office block. The work scope includes the design, approval, construction, completion, testing, and commissioning of the building and its related facilities at Jalan Mayang, Kuala Lumpur. (StarBiz)

Bonia: Fashion retailer Bonia ventures into health and wellness with investment in Macroverse. Fashion retailer Bonia Corp is venturing into the health and wellness market with a joint investment in fitness centre operator, Macroverse SB (MVC). Bonia signed a shareholders' agreement with Peak Physique Health & Fitness SB (PPH) to jointly subscribe to 3m new shares in MVC, representing its entire equity. Bonia will hold a 50% stake, valued at RM1.8m, financed by internal funds. Bonia and PPH had agreed to co-operate in a joint venture to manage MVC's health and fitness centre under the brand 'Peak Fitness', located at Ikon Connaught Cheras. PHP holds the brand's trademark and owns a string of fitness centres under the same brand throughout Malaysia. (The Edge)

Catcha Digital: Buys 70% interest in Tastefully Malaysia for RM7.6m. Catcha Digital has entered into a share sale agreement to acquire a 70% stake in consumer food expo company Tastefully Malaysia SB for RM7.6m. In a filing with Bursa Malaysia Securities, the company said the acquisition reflected Catcha Digital's ambition to grow its integrated digital media business to provide an omnichannel online-to-offline advertising solutions to its client base. This transaction is expected to contribute positively to Catcha Digital's earnings in the future. (BTimes)

MR DIY: Indonesian arm of local retail player MR DIY climbs on market debut. The Indonesian arm of Malaysia-based home improvement retailer MR DIY Group shook off a wobbly start to rise on its stock market debut yesterday. The listing came against the backdrop of broad weakness in Asian stocks after the US Federal Reserve cautioned it would ease the pace of rate cuts in the coming year. Bond yields rose and the dollar was perched near a two-year high yesterday. (StarBiz)

MARKET UPDATE

The KLCI might open lower today as an early rebound for US stocks on Thursday petered out by the end of the day, leaving indices close to flat. The S&P 500 edged down by 0.1% following Wednesday's tumble of 2.9% when the Federal Reserve said it may deliver fewer cuts to interest rates next year than earlier thought. The index had been up as much as 1.1% in the morning. The Dow Jones Industrial Average rose 15 points, or less than 0.1%, following Wednesday's drop of 1,123 points, while the Nasdaq composite slipped 0.1%. This week's struggles have taken some of the enthusiasm out of the market, which critics had been warning was overly buoyant and would need everything to go correctly for it to justify its high prices. But indices remain near their records, and the S&P 500 is still on track for one of its best years of the millennium with a gain of 23%. One report showed the overall economy grew at a 3.1% annualized rate during the summer, faster than earlier thought. The economy has remained remarkably resilient even though the Fed held its main interest rate at a two-decade high for a while before beginning to cut them in September. A separate report showed fewer US workers applied for unemployment benefits last week, an indication that the job market also remains solid. But a third report said manufacturing in the mid-Atlantic region is unexpectedly contracting again despite economists' expectations for growth. In stock markets elsewhere, London's FTSE 100 fell 1.1% after the Bank of England paused its cuts to rates and kept its main interest rate unchanged on Thursday. The move comes as inflation there moved further above the central bank's 2% target rate, while the British economy is flatlining at best. The Bank of Japan also kept its benchmark interest rate unchanged, and Tokyo's Nikkei 225 fell 0.7%. Indices likewise sank across much of the rest of Asia and Europe. Back home, the KLCI added 0.51 of a point or 0.03% to 1600.09.

Source: PublicInvest Research - 20 Dec 2024