HEADLINES

Economy

US: Private sector job growth exceeds estimates in Jan. Payroll processor ADP released a report showing private sector employment in the US increased by more than expected in the month of Jan. ADP said private sector employment climbed by 183,000 jobs in Jan after rising by an upwardly revised 176,000 jobs in Dec. Economists had expected private sector employment to rise by 150,000 jobs compared to the addition of 122,000 jobs originally reported for the previous month. ADP said hiring momentum in the fourth quarter of 2024 carried into Jan with some exceptions, including manufacturing, which shed 13,000 jobs. The report also said YoY pay growth for job-stayers was 4.7%, while pay growth for job-changers was 6.8%. The Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs. (RTT)

US: Services sector cools in Jan, price pressures abate. US services sector activity unexpectedly slowed in Jan amid cooling demand, helping to curb price growth. The Institute for Supply Management (ISM) said its nonmanufacturing purchasing managers index (PMI) slipped to 52.8 last month from 54.0 in Dec. Economists polled by Reuters had forecast the services PMI edging up to 54.3. A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of the economy. The ISM associates a PMI reading above 49 over time with expansion in the overall economy. Domestic demand was strong in the fourth quarter, fuelled by robust consumer spending. (Reuters)

US: Record high imports pressure US trade deficit. The US trade deficit widened sharply in Dec as imports surged to a record high against the backdrop of tariff threats, which might have prompted businesses to rush purchases of foreign-made goods like finished metals and computers. The report from the Commerce Department showed the US experienced significant deficits with several trade partners, including China, Mexico and Canada, which have been targeted by President Donald Trump's administration for broad or additional tariffs. Trump on Monday suspended a 25% tariff on Mexican and Canadian goods until next month. (Reuters)

EU: Iceland central bank cuts rates for third time. The Central Bank of Iceland lowered the key interest rate for a third policy session in a row as policymakers assessed that inflationary pressures continue despite a slowdown in price growth. The Monetary Policy Committee, led by Governor Asgeir Jonsson, cut the benchmark, which is rate on seven-day term deposits, by 50bps to 8.0% in a unanimous vote. The previous change in the key interest rate was a similar reduction in Nov that followed a quarter-point cut in Oct. The central bank expects continued disinflation in coming months. Economic activity is apparently stronger than estimated and wage costs continue to rise, the bank noted. (RTT)

UK: Car sales continue to fall, EV share rises. The UK car market contracted for the fourth straight month in Jan due to weak consumer confidence and tough economic conditions, but the market share of electric vehicles increased, data from the Society of Motor manufacturers and Traders or SMMT showed. Car registrations decreased 2.5% on a yearly basis to 139,345 units in Jan. The volume of battery electric vehicle sales surged 41.6% to claim a 21.3% market share. However, the SMMT said the BEV market share still remained short of the 22% target set by government for last year, and was even further behind the 28% requirement for 2025. Both hybrid electric vehicles and plug-in hybrids registered volume growth and saw their market shares rise to 13.2% and 9.0%, respectively. (RTT)

Singapore: Retail sales fall 2.9%. Singapore's retail sales decreased for the second straight month in Dec, preliminary data from the Department of Statistics showed. Retail sales dropped 2.9% annually in Dec, faster than the 0.5% decrease in Nov. Sales excluding motor vehicles declined 4.0% versus a 1.1% fall in the previous month. There was a 13.1% plunge in sales of computer and telecommunications equipment, and the demand for wearing apparel and footwear was 6.7% lower. Retail sales at mini-marts and convenience stores contracted 9.3% in Dec from last year. Meanwhile, sales of food and alcohol showed an increase of 9.4%. (RTT)

Indonesia: GDP expands 5% In 2024. Indonesia's economy expanded almost at a steady pace in 2024 but far behind President Prabowo Subianto's ambitious goal of 8%, official data revealed. In 2024, Southeast Asia's largest economy advanced 5.03%, slightly slower than the 5.05% growth in 2023, Statistics Indonesia reported. In the fourth quarter, gross domestic product registered an annual growth of 5.02%. This follows 4.95% growth in the third quarter. On a quarterly basis, the economy expanded 0.53% after rising 1.50% in the third quarter. The expenditure-side of GDP showed that growth was largely driven by the exports of goods and services, which rose 7.63% in fourth quarter. Imports logged a double-digit growth of 10.36%. (RTT)

Philippine: Inflation steady at 2.9%. The Philippines' CPI held steady at the start of the year after rising in the previous three months, data from the Philippine Statistical Authority showed. The CPI climbed 2.9% YoY in Jan, the same as in Dec, which was the highest inflation rate in four months. Moreover, inflation remained within the central bank's target range of 2 to 4%. The core inflation rate, which excludes the prices of selected food and energy items, eased to 2.6% from 2.8%. The annual price growth in food and non-alcoholic beverages quickened to 3.8% from 3.4%. Similarly, the rise in transport costs accelerated to 1.1% from 0.9%. (RTT)

Markets

Gamuda (Outperform, TP: RM5.20): Inks exclusive agreement with Perak government to address water shortages. Gamuda has entered into an exclusive agreement with the Perak government to develop infrastructure that will address water shortages in the northern region of the state. The agreement, signed with Perbadanan Kemajuan Negeri Perak (PKNPk), involves facilitating raw water transfer from Sungai Perak to Bukit Merah and establishing infrastructure for treated water distribution. (The Malaysian Reserve)

CapitaLand: Buys three industrial properties in Senai for RM72m. CapitaLand Malaysia Trust is buying three industrial properties located in Senai Airport City for RM72m from Gromutual's subsidiary Rainbow Entity SB. CLMT said the acquisition is conditional upon the vendor, Rainbow Entity, completing the construction of the three factories at its own cost and obtaining the necessary approvals and the issuance of the Certificate of Completion and Compliance before April 30, 2025. The construction of the properties is scheduled to be completed in Q1 of 2025. (The Edge)

ITMAX: Bags 15-year outdoor parking contract in Pontian, Johor. ITMAX System said that its subsidiary, Southmax SB, has secured a contract to operate the outdoor parking system in Pontian district, Johor. The contract, which began on Feb 1, 2025, spans 15 years. This marks ITMAX's sixth contract in Johor. The achievement highlights our in-house expertise in delivering seamless, end-to-end parking solutions that integrate parking collection and enforcement," its MD William Tan stated. (The Malaysian Reserve)

Citaglobal: No immediate plan to develop RM73m land on Jalan Tun Razak. Citaglobal said that the company has no immediate plan to develop the 1.58-acre land at Jalan Tun Razak, Kuala Lumpur that it intends to acquire from Bank Islam Malaysia for RM73m. "This strategic approach is to maximise long-term value creation (of the land)," Citaglobal said. The company previously said the land "presents a strategic opportunity" for long-term value growth. The land will be acquired by Citaglobal's indirect wholly-owned unit Sinergi Dayang SB (SDSB). (The Edge)

Asia Poly: Strengthens supply chain with EcoGreen stake for RM7.5m. Asia Poly Holdings strengthened its raw material supply while advancing sustainability in Sept 2024 by subscribing to new shares for a 35% equity stake in EcoGreen Monomer SB (formerly known as Zhen Xing Plastic SB) for RM7.5m in cash. EcoGreen is in the business of producing depolymerized methyl methacrylate monomer (green MMA). MMA is the raw material used to manufacture acrylic plastics, it can be the form of virgin MMA or green MMA. (StarBiz)

Hextar: Chairman steps down. Hextar Industries has announced the resignation of its chairman Datuk Chan Choun Sien. Hextar said Chan, 54, had stepped down from his post "due to other commitments." Chan was redesignated to the chairman's post on Oct 22, 2018. He graduated from the University of Melbourne with a Bachelor of Laws (Hons) and Bachelor of Commerce. Chan was previously managing director in investment banking of a leading investment bank with over 20 years of experience in corporate finance and investment banking, as well private banking covering South-East Asia. (StarBiz)

MARKET UPDATE

The KLCI might open higher today after Wall Street drifted higher Wednesday as gains for most stocks outweighed drops for Alphabet and some other big-name companies following their latest profit reports. The S&P 500 rose 0.4% following mixed trading across European and Asian markets. The Dow Jones Industrial Average added 317 points, or 0.7%, and the Nasdaq composite gained 0.2%. Yields in the bond market fell Wednesday after a report said growth for mining, finance and other US services businesses was weaker last month than economists expected. The survey by the Institute for Supply Management found many businesses citing poor weather conditions. In stock markets elsewhere, European indices were mixed amid relatively modest movements. In Asia, Hong Kong's Hang Seng fell 0.9%, while South Korea's Kospi gained 1.1%. Japan's Nikkei 225 edged up 0.1% as Honda Motor Co. jumped after Japanese media reports said its talks to set up a joint holding company with rival Nissan Motor Corp were unravelling. Nissan's stock fell 4.9%. Back home, the KLCI added 9.95 points or 0.64% to 1574.51.

Source: PublicInvest Research - 6 Feb 2025