HEADLINES

Economy

Global: IMF lifts US outlook, warns countries against protectionism, subsidies. The International Monetary Fund raised its forecast for global growth in 2025 by one-tenth of a ppts, with stronger-than-expected growth in the US offsetting downward revisions in Germany, France and other major economies. In its latest World Economic Outlook, the IMF projected global growth of 3.3% in both 2025 and 2026, and said global headline inflation was set to drop to 4.2% in 2025 and 3.5% in 2026, allowing a further normalization of monetary policy and ending the global disruptions of recent years. (Reuters)

US: Manufacturing output accelerates in Dec. US manufacturing output surged in Dec likely as production at Boeing picked up following the end of a crippling strike by factory workers at the aerospace giant. Factory output increased 0.6% last month after an upwardly revised 0.4% rebound in November, the Federal Reserve said. Economists polled by Reuters had forecast production rising 0.2% after a previously reported 0.2% gain. Production at factories was unchanged on a YoY basis in Dec. (Reuters)

UK: To have third-strongest G7 growth in 2025, IMF forecasts. The IMF on Friday raised its forecast for British growth for 2025 by 0.1 ppts to 1.6%, making it the third-strongest among the Group of Seven advanced economies after the US and Canada. The IMF outlook for British gross domestic product growth in 2026 remained at 1.5%, again the third-fastest in the G7 and unchanged from its October estimate. IMF Chief Economist Pierre-Olivier Gourinchas said the "modest" growth upgrade reflected a net positive impact from Reeves' first budget on 30 Oct. - as greater public investment would outweigh headwinds created by higher taxes - as well as rising household incomes and Bank of England rate cuts. (Reuters)

China: Economy meets official growth target, but many feel worse off. China's economy grew 5% last year, matching the government's target, but in a lopsided fashion, with many people complaining of worsening living standards as Beijing struggles to transfer its industrial and export gains to consumers. The imbalance raises concerns that structural problems may deepen in 2025, when China plans a similar growth performance by going deeper into debt to counter the impact of expected US tariff hikes, potentially as soon as Monday when Donald Trump is inaugurated as president. (Reuters)

Japan: Projects primary budget surplus in fiscal 2026, delayed by a year. Japan's ambition to deliver a primary budget surplus for the first time in decades is going to be pushed back a year, a government estimate showed, as pressures for more spending weigh on the state budget this year. The forecast, presented at a meeting of the government's top economic council, could be pushed back again as Prime Minister Shigeru Ishiba's minority government faces various demands from opposition parties that could potentially inflate the budget. The latest estimate suggests a primary budget surplus of JPY800bn (USD5.15bn) for fiscal 2026, indicating tax revenues will slightly exceed expenditure. The primary budget balance, which excludes new bond sales and debt-servicing costs, is a key gauge of the extent to which policy measures can be funded without resorting to debt. (Reuters)

Markets

Homeritz (Neutral, TP: RM0.62): Hit by RM3m loss in Muar facility fire, no insurance coverage. Homeritz Corp said that the fire at one of its production facilities in Muar, Johor, has been confirmed to result in an estimated loss of RM3m, and will be recognised in the company's financial results for 2QFY2025. (The Edge) Comment: While the one-off loss will be excluded from our core net profit estimates, we anticipate that Homeritz's earnings may be impacted by delayed orders and the other additional operational cost arising from incident. We maintain our Neutral call and TP of RM0.62.

Berjaya: Still eyeing KL-S'pore HSR, awaiting Putrajaya's decision, says Vincent Tan. Berjaya Corp remains committed to participating in the Kuala Lumpur-Singapore high-speed rail (HSR) project. However, the project's progression depends on the government's decision-making process and financial conditions, said the group's founder Tan Sri Vincent Tan Chee Yioun. "We tried to be in the consortium, but the government is still tidak tentu (undecided on the railway project)," he said. (The Edge)

Mitrajaya: Clinches RM376m contract for data centre construction in KL. Mitrajaya Holdings said it has secured a RM375.5m contract for the construction of a data centre in Kuala Lumpur. The construction group said the contract was awarded by NextDC SB, the Malaysian unit of Australia's data centre operator NextDC Ltd. The contract, awarded to its wholly-owned subsidiary Pembinaan Mitrajaya SB, is expected to contribute positively to the group's earnings and net assets for the financial years ending Dec 31, 2025 and 2026, said Mitrajaya. (The Edge)

HeiTech Padu, Datasonic: Awarded fresh contracts for immigration system maintenance. HeiTech Padu has secured a second-time contract extension for the provision of maintenance services for the Malaysian Immigration System (MyIMMs), valued at RM28.3m. The two-year extension will commence on Feb 18, 2025, and runs until Feb 17, 2027. Any further renewal or extension remains at the government's discretion, the company said. Meanwhile, Datasonic Group has secured a fresh contract from the Home Ministry for the maintenance of the facial live capture (FLC) system at Immigration Department offices. (The Edge)

Petronas Gas: Dialog to partake in Petronas Gas' LNG-driven air separation unit project. Petronas Gas has executed and completed a share subscription agreement with Dialog Equity (Three) SB (DE3SB) for the development of Malaysia's first liquefied natural gas (LNG)-driven air separation unit (ASU) in Pengerang, Johor. Under the shareholder agreement, DE3SB, a wholly-owned unit of Dialog Group, will subscribe to 27.78% of shares in RGTP by acquiring 500 ordinary shares for RM500,000, and 9,724 redeemable preference shares for RM9.7m. (The Edge)

MYMBN: Malaysia lifts suspension of bird's nest exports to China after nearly one month. MYMBN said that the Department of Veterinary Services Malaysia has lifted the temporary suspension of exports of both raw-cleaned edible bird's nest (RCEBN) and raw-uncleaned edible bird's nest (RUCEBN) products to China after nearly one month. This is expected to bring major relief to MYMBN, given that China is a primary market for the group. (The Edge)

MARKET UPDATE

US markets ended up the last day of trading under US President Joe Biden, as investors headed into a three-day weekend that will see Donald Trump inaugurated today. The Dow Jones Industrial Average rose 0.7%, the S&P 500 advanced 1.0%, and the Nasdaq Composite climbed 1.5%. European markets closed higher, benefiting from a broad-based rally which was fuelled by declining government bond yields and encouraging economic data from China. The German DAX rose 1.2%, the French CAC 40 advanced 0.9%, and the FTSE 100 gained 1.3%. Meanwhile, Asian markets were mixed as investors reacted to China's fourth-quarter GDP update, which exceeded expectations. Tokyo's Nikkei 225 edged down 0.3%, the Hang Seng Index rose 0.3%, and the Shanghai Composite gained 0.1%.

Source: PublicInvest Research - 20 Jan 2025