Economy

• US: Homebuilder confidence falls to a four-month low in Jan. US homebuilder confidence slipped to a four-month low in Jan as firms became slightly less optimistic about sales against a backdrop of higher house prices and construction costs. A gauge of builder sentiment fell to 83 from Dec’s reading of 86, National Association of Home Builders data showed. The figure was weaker than the median forecast of 86 in survey of economists. (Bloomberg)
   
• EU: Inflation remains negative as estimated. Eurozone inflation remained negative for the fifth straight month in Dec, as initially estimated, final data from Eurostat showed. The harmonized consumer price index, or HICP, dropped 0.3% YoY, the same as in Nov, and in line with flash estimate. The core inflation that excludes prices of food, energy and alcohol & tobacco, held steady at 0.2% in Dec. The rate matched the preliminary estimate released on Jan 7. (RTT)
   
• UK: Inflation subdued during brief respite from lockdown. Britain’s inflation rate picked up in Dec after shoppers were allowed back into stores between lockdowns but held well below the Bank of England’s target. Consumer prices rose 0.6% from a year earlier, up from 0.3% the previous month, the Office for National Statistics said. Economists had expected a 0.5% gain. The headline rate has now remained less than half the BOE’s 2% goal since April, although policy makers expect a sharp rebound in the spring as a sales-tax cut for hospitality venues expires. (Bloomberg)
   
• China: Retains benchmark lending rates. China's benchmark lending rates were left unchanged as widely expected. The one-year loan prime rate was retained at 3.85% and the five-year loan prime rate was maintained at 4.65%. The one-year and five-year loan prime rates were last lowered in April 2020. The one-year loan prime rate was cut by 20 basis points and five-year rate by 10 basis points in April. Markets have expected the rates to remain on hold today as the People's Bank of China had kept the rate on its medium-term lending facility unchanged early this month. The loan prime rate is fixed monthly based on the submission of 18 banks. (RTT)
   
• Japan: BOJ to sit tight on policy with focus on outlook. The Bank of Japan is widely expected to stand pat Thursday with the focus shifting to the bank’s economic outlook amid rising virus cases and a widening state of emergency that’s likely to throw the recovery into reverse. All 44 economists surveyed by Bloomberg see the BOJ leaving its main policy tools unchanged. Some 25% project the bank will take additional steps to ensure companies can get access to credit amid the country’s escalating crisis. The BOJ is likely to consider downgrading its overall assessment of the economy and could cut its growth forecast for the year through March. (Bloomberg)
   
• Singapore: Business investments rise 13%, highest in over a decade. Business investment commitments into Singapore rose 13% last year to their highest in more than a decade, helped by sectors such as semiconductors, energy and chemicals even as the city-state suffered its worst recession from the Covid-19 pandemic. Commitments for investments in fixed assets such as facilities, machinery and other equipment swelled to SGD17.2bn (USD13bn) in 2020. (Reuters)

Markets

• Hibiscus Petroleum (Neutral, TP: RM0.65): Unit’s two UK licence agreements fully executed. Hibiscus Petroleum said that the UK Oil and Gas Authority (OGA) had advised that two of the three licence agreements pursuant to the OGA’s offer for award received by Hibiscus’ indirect wholly-owned subsidiary Anasuria Hibiscus UK Ltd (AHUK), have been fully executed. (The Edge)
   
• Cymao: Clinches construction contract worth RM134m. Cymao Holdings (CHB) announced its wholly-owned subsidiary Billion Apex SB (BASB) has accepted the letter of award (LoA) from HYC Properties SB for a sub-contract works worth RM134m. The contract duration is for 24 months from the date of obtaining relevant authority approval. (Business Times)
   
• Widad: To develop Widad@Langkasuka in Langkawi with RM40bn GDV. Widad Business Group SB (WBG), is planning to build a mixed development named Widad@Langkasuka in Pulau Langkawi, Kedah that has an estimated GDV of RM40bn. It is expected to be completed within 15 to 20 years. (Business Times)
   
• MAHB: Looking at self-funding airport expansions under new operating agreement. Malaysia Airports Holdings (MAHB) is looking at several options in airport investments under the new operating agreement (OA) that it is currently negotiating with the government, including the option of self-funding, supported by profit guarantees from the government. (The Edge)
   
• YTL Corp: Unit submits plan for new Hangout pop-up village in Bristol. YTL Group has reportedly submitted its planning application to local councils for a new development called the Hangout, a pop-up village which offers tipi-style restaurants, temporary retail and entertainment space in Bristol, the UK. According to a report by the Bristol Post, the group, through YTL Corp's wholly-owned YTL Developments (UK) Ltd, plans to create a pop-up village which covers an 8.3-acre site at the north-east of the former airfield in Filton. (The Edge)
   
• Zhulian: 4Q net profit climbs 49%, declares eight sen dividend. Zhulian Corporation’s net profit rose 49% to RM13.55m for the 4QFY20, from RM9.1m a year earlier, thanks to higher revenue. During the quarter under review, it reported higher sales in Malaysia, Cambodia and Myanmar. The group declared a fourth interim dividend of three sen per share, as well as a special dividend of five sen per share, which will be paid on March 10. (The Edge)
   
• IPO: Mobilia heads for ACE Market-listing by March. Mobilia Holdings has signed an underwriting agreement with Kenanga Investment Bank (Kenanga IB) for its IPO by March. The company is targeting a prospectus launch in the 1Q of 2021 with an IPO comprising a total of 60m new shares and an offer for sale of 40m existing shares. (Business Times).

MARKET UPDATE

The FBM KLCI might add a few points at opening today after US stock markets hit new records as Joe Biden became the 46th US president, propelled by optimism that his administration’s $1.9tn stimulus spending plan could help insulate the global economy from the damage wrought by coronavirus. The benchmark S&P 500 index ended the day up 1.4% in New York to a closing record, adding to the gains it enjoyed on Tuesday when Janet Yellen, Treasury secretary nominee, urged Congress to “act big” on stimulus. The technology-focused Nasdaq Composite rose 2% to a record, boosted by a 16.9% rise for Netflix after the video streaming service passed 200m subscribers in its latest earnings update and hinted at share buybacks. In Europe, the benchmark Stoxx 600 equity index closed 0.7% higher, while Germany’s Xetra Dax rose 0.8% and the UK’s FTSE 100 added 0.4%.

Back home, the FBM KLCI gave up its earlier gains and closed at its intraday low of 1,601.54 after Bank Negara Malaysia (BNM) maintained its overnight policy rate (OPR) at 1.75%. The bellwether index finished the day 0.34 of a point or 0.021% lower after rising to a high of 1,616.84 earlier. In the region, Hong Kong’s Hang Seng index closed 1.1% higher, while the mainland China benchmark CSI 300 and South Korea’s Kospi both gained 0.7%.

Source: PublicInvest Research - 21 Jan 2021