HEADLINES

Economy

US: Trump to declare 'national energy emergency' to boost fossil fuels, power projects. President Donald Trump laid out a sweeping plan to maximize already record high U.S. oil and gas production by declaring a national energy emergency, stripping away excess regulation, and withdrawing the U.S. from an international pact to fight climate change. The moves signal a dramatic U-turn in Washington's energy policy after former President Joe Biden sought for four years to encourage a transition away from fossil fuels in the world's largest economy and establish the U.S. as a leader in combating global warming. (Reuters)

EU: Ministers agree on unity, more competitive economy, need for deeper US ties. EU finance ministers agreed on Monday to stay united in their approach to the new U.S. administration and that a more competitive EU economy was the best protection from potential transatlantic economic challenges, EU diplomats said. The EU's 27 finance ministers also agreed that deeper ties with the U.S. were in the best interests of both the EU and the US, EU diplomats familiar with the discussions said. There was also agreement among the ministers that low and stable energy prices were key to prosperity in Europe, because the bloc's industry and consumers pay twice as much as their counterparts in the US and four times as much as in China. Lowering energy prices was therefore crucial for Europe to stay competitive in the global economy, diplomats said. The IMF said in a paper prepared for the discussions that further EU energy-market integration and joint investment would solve the issue. (Reuters)

EU: Market pricing of up to four ECB rate cuts this year is reasonable, Vujcic says. Market expectations for European Central Bank interest rate cuts are reasonable and risks around the inflation outlook are broadly balanced, Croatian central bank chief Boris Vujcic said. Investors expected as many as five rate cuts from the ECB this year but dialled back those bets since the turn of the year, primarily because they are also seeing fewer cuts from the US Federal Reserve. "There has been a repricing recently from four to five (rate cuts this year) to three to four cuts and I think it's reasonable," Vujcic told a webinar with LC Macro Advisors. "I don't feel uncomfortable with the current market pricing." "Markets have to make these predictions, we don't. We can always wait for the data and then decide," Vujcic, a member of the ECB's Governing Council, said. (Reuters)

China: Leaves benchmark lending rates unchanged. China left benchmark lending rates unchanged for a third consecutive month, as expected, as a weakening yuan has limited Beijing's monetary policy easing efforts. At the monthly fixing, the one-year loan prime rate (LPR) was kept at 3.1%, while the five-year LPR was unchanged at 3.6%. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. In Oct 2024, Chinese lenders slashed lending benchmarks by bigger-than-expected margins to revive economic activity. China's economy hit the government's ambitions for 5% growth last year, effectively reducing the urgency for imminent monetary stimulus at a time the yuan currency is facing renewed depreciation pressure. Banks' narrowing interest rate margin also limits the scope for monetary easing. (Reuters)

Japan: BOJ poised to raise rates to highest in 17 years. The BOJ is expected to raise interest rates on Friday barring any market shocks when US President-elect Donald Trump takes office, a move that would lift short-term borrowing costs to levels unseen since the 2008 global financial crisis. A tightening in policy would underscore the central bank's resolve to steadily push up interest rates, now at 0.25%, to near 1% - a level analysts see as neither cooling nor overheating Japan's economy. At the two-day meeting ending on Friday, the BOJ is likely to raise its short-term policy rate to 0.5% unless Trump's inaugural speech and executive orders upend financial markets, sources have told Reuters. In a quarterly outlook report, the board is also expected to raise its price forecasts on growing prospects that broadening wage gains will keep Japan on track to sustainably hit the bank's 2% inflation target. (Reuters)

Japan: Nov machinery orders beat forecast on strong factory investment. Japan's core machinery orders rose 3.4% in Nov from the previous month to beat analysts' forecast, government data showed on Monday, signalling a recovery in capital expenditure ahead of a central bank interest rate review later this week. The reading was stronger than a 0.4% decline estimated in a Reuters poll and marked a second consecutive month of increase. Orders from manufacturers rose 6.0%, while those from "core" non-manufacturers excluding the ship and electricity sectors rose 1.2%. On a year-on-year basis, core machinery orders - a highly volatile data series regarded as a leading indicator of capital spending in the coming six to nine months - increased 10.3%, better than a forecast for 5.6% growth, Monday's data showed. (Reuters)

Japan: Japan's industrial production decreased slightly less than initially estimated in Nov, the latest data from the Ministry of Economy, Trade and Industry showed. Industrial production fell a seasonally adjusted 2.2 % MoM in Nov, reversing a 2.8% rise in Oct. In the flash report, the rate of decline was 2.3%. On a yearly basis, the decline in industrial production was 2.7%, revised from 2.8%, after rising 1.0% a month ago. Shipments were down 2.5 % on the month and dipped 3.6% on the year. Similarly, inventories fell 1.0% on the month and slid 2.2% on the year. Meanwhile, the inventory ratio showed a monthly increase of 32 %. Separate official data showed that tertiary activity dropped 0.3% monthly in Nov, in contrast to a 0.1% increase in Oct. Among the individual components, wholesale trade, information and communications, living and amusement-related services, business-related services, transport and postal activities, utilities, medical, health care and welfare, goods rental and leasing, and finance and insurance decreased in November. (RTT)

Markets

MAHB: Khazanah-led consortium lowers acceptance terms for MAHB takeover to 85%, deadline extended. A consortium led by Khazanah is revising the terms for its takeover offer for Malaysia Airports Holdings to lower the acceptance conditions to at least 85%. The offer price of RM11 per share, as well as all other terms and conditions of the offer, remained unchanged. The revisions came as the consortium secured acceptance of 86.51%, below the initial rate of 90% required for the offer to become valid, following several extensions. The consortium which also includes the Employees Provident Fund, Abu Dhabi Investment Authority and Global Infrastructure Partners said it "shortly expects to declare the offer unconditional and remains confident that total acceptances will exceed 90%". (The Edge)

7-Eleven Malaysia: To set up 100 Seven Bank cash recycling machines at its outlets. 7-Eleven Malaysia Holdings, in which Berjaya Group founder Tan Sri Vincent Tan owns a 28.07% stake, is setting up 100 original cash recycling machines (CRM) at its outlets across Malaysia. (The Edge)

Fajarbaru Builder: To lead Medi-City project in Penang. Fajarbaru Builder Group has signed the master purchase and development agreement with Penang Development Corp (PDC) for the first phase of the Penang Medi-City project in Batu Kawan. As part of the agreement, Fajarbaru Builder will acquire Parcel 1 of the project, measuring 51.2 acres, for RM111.5m, to be funded through a mix of bank borrowings and internally generated funds. The development of Parcel 1 is projected to have a GDV of RM2bn over eight years. A profit-sharing arrangement has also been established, ensuring that PDC will receive RM36.8m over the same period. (The Edge)

Datasonic: Secures one-year extensions for passport supply and biodata page contracts. Datasonic Group has received one- year extensions for its contracts to supply Malaysian passports and polycarbonate biodata pages to the Immigration Department of Malaysia. The extensions came with additional contract ceilings of RM57.15m for the passport supply contract, and RM93.3m for the polycarbonate biodata pages supply contract. The extensions for both contracts are effective from Dec 1, 2024 to Nov 30, 2025. (The Edge)

Scanwolf: MD-linked vehicle triggers mandatory takeover offer, intends to maintain listing. Scanwolf Corp MD Eddy Seah Ley Hong has triggered a mandatory takeover offer to acquire all the remaining shares it does not own in the plastic extrusion maker at 54 sen per share. The takeover offer was triggered after the offeror, Mighty Alliance SB, acquired a 34.38% stake or 69.8m shares in Scanwolf from its shareholders' vehicles at 54 sen apiece. (The Edge)

UUE: Secures RM27.5m in contract renewals, boosting total 2025 contract wins to RM64m. UUE Holdings has secured two contract renewals worth a total of RM27.5m from Sutera Utama SB. The first contract, valued at RM13m, involves the installation, testing and commissioning of 11kV underground cables and related accessories in Tenaga Nasional Bhd's East Coast distribution network. This renewal brings the total value of the project to RM39.1m and is expected to be completed by February 2026. The second contract, worth RM14.5m, covers similar works in the southern region of Malaysia. (The Edge)

MARKET UPDATE

Wall Street breathed a collective sigh a relief after Donald Trump held off from imposing China-specific tariffs on his first day in office, pushing US equity futures higher, though US market was closed for a holiday. After being sworn into office, the president promised to sign a series of executive orders, including one that declares a national emergency at the US-Mexico border. For now, the executive action will not include new tariffs on the three biggest US trading partners. European markets closed slightly higher as the world looked to the US Capitol and the second inauguration of Donald Trump. The UK FTSE, German DAX and French CAC rose 0.1%, 0.4% and 0.3% respectively. The euro and British pound strengthened against the USD, putting the currencies on course for their biggest single-day gains against the greenback for more than a year, as it was reported the new president will not impose tariffs on US trading partners on his first day in office. Asian markets were mixed with Shanghai Composite and Hang Seng Index increased by 0.1% and 1.75% respectively while Straits Times falling 0.1%. Meanwhile, the KLCI rose 0.4%.

Source: PublicInvest Research - 21 Jan 2025