HEADLINES

Economy

US: Weekly jobless claims at 11-month low amid labor market stability. The number of Americans filing new applications for unemployment benefits fell to an 11-month low last week, pointing to a stable labor market, though a slowdown in hiring has led some laid-off workers to experience long bouts of joblessness. Signs of a steadily cooling labor market could allow the Fed to keep interest rates unchanged in Jan against the backdrop of still high inflation. The US central bank last month projected a shallower path of rate cuts this year than had been forecast in Sept, when it launched its policy easing cycle. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 201,000 for the week ended Jan 4, the lowest level since Feb 2024, the Labor Department said. (Reuters)

US: Consumer borrowing drops on plunge in credit-card balances. US consumer debt outstanding unexpectedly fell in Nov by the most in over a year as credit-card balances plunged. Total credit dropped USD7.5bn after a revised USD17.3bn gain in Oct, according to Federal Reserve data released. The median estimate in a Bloomberg survey of economists called for a USD10.5bn advance. The figures aren't adjusted for inflation. Outstanding credit-card and other revolving debt decreased USD13.7bn, the most since early in the pandemic, after surging a month earlier. Non-revolving credit, such as loans for vehicle purchases and school tuition, increased USD6.2bn, the Fed's report showed. The data suggest consumers are making an effort to pay down credit-card balances as borrowing rates remain near a record well above 20%. (Bloomberg)

US: Crude oil inventories fall more than expected. A report released by the Energy Information Administration showed crude oil inventories in the US fell by more than expected in the week ended Jan 3. The EIA said crude oil inventories dipped by 1.0m barrels last week after falling by 1.2m barrels in the previous week. Economists had expected crude oil inventories to edge down by 0.3m barrels. At 414.6m barrels, US crude oil inventories are about 6% below the five-year average for this time of year, the report said. Meanwhile, the report said gasoline inventories surged by 6.3m barrels last week but remain about 1% below the five-year average for this time of year. (RTT)

EU: German retail sales fall unexpectedly in Nov. German retail sales fell unexpectedly in Nov, despite hopes for a boost from pre-Christmas promotions like Black Friday and Cyber Monday. Retail sales declined by 0.6% in real terms compared with the previous month, the federal statistics office reported. Analysts polled by Reuters had predicted a 0.5% increase. According to an annual estimate given by the statistics office, the retail sector in Germany generated 1.3% more sales in real terms in 2024 than in 2023. Real sales in 2024 are expected to be 2.6% above the pre-pandemic level of 2019, the office said. (Reuters)

EU: Iceland trade gap widens in Dec. Iceland's foreign trade deficit increased in Dec from a year ago as imports grew much faster than exports, figures from Statistics Iceland showed. The trade gap widened to ISK 46.7bn in Dec from ISK 28.1bn in the corresponding month last year. The value of exports rose 19.0% annually in Dec, and imports surged 32.0%. For the last 12 months, the deficit in the balance of trade in goods was ISK 397.6bn, or ISK 29.3bn less favorable than during the previous 12 months, the agency said. (RTT)

EU: Bulgaria retail sales growth strongest in 4 months. Bulgaria's retail sales growth accelerated for the second straight month in Nov, data from the National Statistical Institute showed. Retail sales climbed a calendar-adjusted 6.8% yearly in Nov, faster than the 5.1% rise in Oct. This was the quickest growth since July, when sales had risen the same 6.8%. Sales of food, beverages, and tobacco grew the most by 11.0% over the year, and those of non-food products, except fuel, surged by 9.1%. On the other side, sales of automotive fuel in specialized stores slid by 7.9%. On a monthly basis, retail turnover increased at a steady pace of 1.3% in Nov. (RTT)

Japan: Consumer mood worsens, casting doubt on rate hike timing. Japan's consumer sentiment deteriorated in Dec, a government survey showed, casting doubt on the central bank's view that solid household spending will underpin the economy and justify a rise in interest rates. The results precede the BoJ's policy meeting on Jan 23-24, when some analysts anticipate a potential interest rate increase from the current 0.25%. An index measuring consumer sentiment fell to 36.2 in Dec, a 0.2 point drop from the previous month, according to the survey by the Cabinet Office. Separate data showed Japan's output gap, which measures the difference between an economy's actual and potential output, stayed negative in July-Sept for the 18th straight quarter. A negative output gap means actual output is running below the economy's full capacity, and is considered a sign of soft demand. (Reuters)

India: Modi looks to new economic playbook as risks mount. After world-beating economic growth last year, India's policymakers are scrambling to head off a sharp slowdown as worsening global conditions and domestic confidence wipe out a recent stock market rally. Asia's third-largest economy forecast annual growth of 6.4% in the fiscal year ending in March, the slowest in four years and below the government's initial projections, weighed by weaker investment and manufacturing. The downgrade follows disappointing economic indicators and a slowdown in corporate earnings in the second half of 2024, which have forced investors to rethink the country's earlier outperformance and cast doubts over Prime Minister Narendra Modi's ambitious economic targets. (Reuters)

Markets

Reservoir Link: Bags RM20m Selangor job. Reservoir Link Energy's 45%-owned associate Founder Group Ltd has secured a RM20m contract for the construction of a floating solar farm located in Kuala Langat, Selangor. Founder Group will serve as a sub-contractor and be responsible in supplying labour, hand tools, materials and necessary machinery and equipment to support the execution of general conditions preliminaries and consultation. (The Edge)

HSS Engineers: To develop 95MW solar plant in Perak. HSS Engineers, through its wholly owned subsidiary HEB Energy SB and consortium partner Unique Fire Holdings, has been awarded a contract to develop a 95MW alternating current (MWAC) large-scale solar photovoltaic (LSS) plant in Teluk Intan, Perak. The plant, part of the government's LSS PETRA initiative, is scheduled to commence operations on Oct 11, 2027. HEB Energy will hold a 40% equity stake in the project's special purpose vehicle, with Unique Fire owning the remaining 60%. (The Malaysian Reserve)

Mclean: Raises RM13m via private placement. MClean Technologies has completed its private placement, issuing 49m new shares at RM0.27 each, representing about 25% of the company's total issued shares, excluding treasury shares. The provider of precision cleaning and surface treatment solutions said the private placement exercise raised a total of RM13.2m, which will be used mainly to fund the acquisition of We Total Engineering SB's (WTE) plastic business and as working capital of the plastic business. (StarBiz)

UUE Holdings: Directors sell RM30m worth of shares. The directors of UUE Holdings, an underground utilities engineering firm, have collectively disposed of shares valued at RM29.1m on the ACE Market to institutional funds, following the expiry of the typical six-month moratorium period on directors' shares after the company's IPO. Its managing director and largest shareholder Ting Kok Hwa sold 24.3m shares, equivalent to a 3.99% stake in the company, for RM19.9m. This leaves him with a 46.87% stake in UUE Holdings. (The Edge)

AEON: Granted conditional stay in RM18.7m dispute with AZRB. AEON Co. (M) that it has filed a Notice of Appeal and Stay Application to contest the High Court's Dec 16, 2024, decision, which ruled in favor of Ahmad Zaki Resources' (AZRB) subsidiary, Betanaz Properties SB, over a tenancy dispute. AEON stated that on Jan 7, 2025, the High Court granted a conditional stay of execution. AEON is required to deposit RM18.7m into an interest-bearing account held by Betanaz's solicitors as stakeholders, and pay RM200,000 in legal costs to Betanaz and RM100,000 to AZRB by Jan 28, 2025. (The Malaysian Reserve)

CJ Century Logistics: Names Kim HyunChul as new deputy CEO. CJ Century Logistics Holdings has appointed Kim HyunChul as its new deputy CEO, succeeding Kim JinMok, who resigned after nearly two years of service with the company. The total logistics provider announced that HyunChul's appointment as the deputy CEO takes effect on Jan 8. The 47-year-old man has spent nearly 20 years building his career with CJ Logistics Corporation, a logistics company headquartered in Seoul, South Korea, since Dec 2004. (The Edge)

MARKET UPDATE

The KLCI might open higher today after Wall Street held firmer on Wednesday, a day after strong reports on the economy hurt US stocks by stirring up worries that inflation and interest rates may remain higher than expected. The S&P 500 rose 0.2% to recover a bit of its 1.1% slump from the day before. The Dow Jones Industrial Average added 106 points, or 0.3%, and the Nasdaq composite edged down by 0.1%. The increased calm returned to the market after reports on the economy Wednesday weren't as strong as Tuesday's. That can counterintuitively help Wall Street because it raises hopes that the Federal Reserve may keep cutting short-term interest rates. Wall Street loves lower rates, which can goose the economy and boost prices for investments. Fed Governor Christopher Waller said in a speech Wednesday he still expects the central bank to deliver more easing of rates in 2025, pushing back against nascent speculation it may already be done after cutting three times since September. A separate report on Wednesday, meanwhile, said fewer US workers applied for unemployment benefits last week than economists expected. It's the latest signal that the job market remains remarkably solid. In stock markets elsewhere, indices weakened were mixed across Europe and Asia. South Korea's Kospi climbed 1.2%, but Hong Kong's Hang Seng fell 0.9%. Back home, the KLCI lost 14.96 points or 0.92% to 1614.83.

Source: PublicInvest Research - 9 Jan 2025