Economy

US: Continuing jobless claims rise for seventh straight week. Recurring applications for US unemployment benefits rose for a seventh straight week, adding to evidence that the labour market is cooling. Continuing jobless claims, increased to 1.8m in the week ended Oct 28, the highest since mid-April. Initial claims ticked lower to 217,000 in the week ending Nov 4. (Bloomberg)

US: 30-year mortgage rate plunges by most in nearly 16 months. The interest rate on the most common type of US residential mortgage plunged last week by the most in nearly 16 months on the back of a rally in the Treasury market that drove down the benchmark yields used to set home loan costs. (Reuters)

EU: ECB won’t hike rates again, barring shocks. The ECB is done with interest-rate increases unless it has to deal with any more shocks. The inflation rate in the euro area has fallen threefold in a year and, despite some volatility, the trend is “clearly downward”. The ECB’s intense bout of hiking since July last year has had an impact on underlying inflation in particular. (Bloomberg)

UK: BoE’s Pill says monetary policy needs to be restrictive. The monetary policy needs to be restrictive in order to bring inflation back to the target. Having established monetary policy in restrictive territory it is not the case that we need to raise rates in order to bear down on inflation. Sustaining rates at their current level will continue to bear down inflation. Markets anticipate first rate cut in Aug 2024. At the Oct meeting, the BoE had left the bank rate unchanged at a 15-year high of 5.25%. The rate was lifted by a cumulative 515 bps since Dec 2021. (RTT)

UK: Downturn in housing market bottoms out in Oct. Britain saw some of the most widespread falls in house prices since 2009 last month, but the declines were at a slightly slower pace than in the previous two months and surveyors are less downbeat about the year ahead. Data showed MoM upturns in house prices in Oct after months of declines. (Reuters)

China: Nov new yuan loans seen retreating, policy support in place. China's new yuan loans are expected to dip in Oct from the previous month because of seasonal factors, but the expected lending may exceed the year-earlier amount as the central bank sought to spur economic growth. Chinese banks are estimated to have issued CNY665bn (RM428.4bn) in net new yuan loans last month, less than a third of the CNY2.3trn in Sep. (Reuters)

China: Consumer prices dip back into decline amid limp demand. China's consumer prices swung back into contraction and factory-gate deflation persisted in Oct, as domestic demand struggled, weighing on the outlook for any broader-based recovery in the world's second-largest economy. The CPI dropped 0.2% in Oct from a year earlier, a faster decline than the 0.1% fall expected. (Reuters)

Japan: Cabinet to approve USD88bn extra budget to fund stimulus. Japan’s Cabinet is set to approve a JPY13.2trn (USD87.5bn or RM410bn) supplementary budget to help fund Prime Minister Fumio Kishida’s latest economic stimulus package, which aims to boost growth and mitigate the impact of inflation on households. The extra budget will be partly financed by issuing JPY8.9trn in additional government bonds. The remainder will be funded by a JPY3.4trn surplus from the previous year, JPY171bn in tax revenue and other sources. (Bloomberg)

India: Soymeal exports seen picking up as global prices rally. India's soymeal exports are likely to rise in coming months, as concerns over soybean output in top producer Brazil lifts global prices to two-month highs, prompting buyers to turn to the south Asian country. (Reuters)

Singapore: Housing rally set to end. Singapore’s seven-year rally in private home prices, the longest upcycle since the 1980s, is about to end as a demand-supply imbalance could reverse next year. Analysis of leading indicators including housing vacancies and sales showed that home prices will likely decline 3% in 2024, and the downturn may persist for as many as two years. (Bloomberg)

Markets

Sime Darby Plantation (Neutral, TP:RM4.02): To shift focus to India, China. Sime Darby Plantation (SDP) will progressively shift its focus to India and China and away from the European Union (EU) market as the two nations offer significant potentials to the company, said group managing director Datuk Mohamad Helmy Othman Basha. He said the company is looking for more partnerships and business opportunities in China and India and does not rule out the possibility of supplying ingredients to the final product suppliers in the two countries. (The Sun)

Samaiden: Secures 43.32MWac solar power capacity from Energy Commission under CGPP. Samaiden Group has been selected as one of the solar power producers under the Corporate Green Power Programme (CGPP) by the Energy Commission (EC). Samaiden said its wholly owned subsidiary Samaiden SB (SSB) has been awarded by the EC with an individual export capacity of 13.42 megawatts (MWac) under the CGPP. On top of that, SSB, in a consortium with Premier Supreme SB, has additionally secured a quota of 29.90MWac, bringing the total capacity won to 43.32MWac. (The Edge)

Westports: Sees volume growing by single digit. Westports Holdings expects its container throughput volume in the current year to still be in the single-digit growth range, compared to the previous year. It said this is despite the volume recovery in recent quarters had been marginally better than initial expectations at the beginning of the current financial period. Westport’s net profit for the third quarter ended 30 Sept, 2023, increased to RM195m compared with RM150.39m in the same period last year. Revenue rose to RM542.31mil from RM520.54m, while earnings per share stood at 5.72 sen versus 4.41 sen previously. (The Star)

Sentral REIT: 3Q net property income up 6% on higher revenue. offset by higher property expenses: Incurs second straight quarterly loss amid cost escalation in ongoing projects. Sentral REIT’s net property income (NPI) rose 6.05% to RM30.1m in the third quarter ended on 30 Sept, 2023 (3QFY2023) from RM28.40m a year ago, underpinned by higher gross revenue, offset by higher property expenses. Gross revenue for the quarter increased by 11.43% to RM39.78m from RM35.7m a year prior, mainly due to higher revenue generated from Menara Shell, Platinum Sentral and Sentral Building 3. (The Edge)

Vestland: Gets RM240m building job. Vestland has received a letter of award from Ambang Besar SB (ABSB) for building works in Taman Desa, Kuala Lumpur, for RM240m. Vestland said the contract will involve mechanical and electrical and external works for two blocks of council homes of 34 storeys and 29 storeys respectively. The commencement date shall be 15 Nov 2023 or on the site possession date to be advised by ABSB, whichever is later and the completion of the construction works under the contract shall be 30 months from the site possession,” it said. (The Star)

KNM: Italian govt rejects proposed disposal of entire stake in FBM Hudson. The Italian government has rejected the proposed disposal by KNM’s wholly owned subsidiary KNM Europa BV of its entire stake in FBM Hudson Italiana SpA (FBM Hudson), its Bursa Malaysia filing showed on Thursday. KNM said the buyer, the United Arab Emirates' Petro MAT FZCO, had failed to obtain the Golden Power clearance from the Italian government, according to a letter from the company dated 7 Nov.

MARKET UPDATE

US markets ended lower overnight as bond yields started to rise again due to weak demand. US FED chair Jerome Powell, in a speech at an IMF event, also said more work may need to be done to tackle inflation though recent softening is encouraging. The S&P 500 saw its 8-day winning streak come to an end with a 0.8% decline. The Nasdaq Composite fell 0.9% as the Dow Jones Industrial Average slipped 0.7%. European markets were mostly higher however as sentiment improved on account of relatively healthy corporate earnings. France’s CAC 40 led gainers on the continent with a 1.1% rise. Germany’s DAX and UK’s FTSE 100 were 0.8% and 0.7% higher respectively. Sector-wise, industrials rose 2.5% to lead gains, with travel and leisure stocks heading the opposite direction with a 2.0% drop. Asian markets ended mixed earlier in the day, with data showing China’s consumer prices shrinking faster than expected in October. The Shanghai Composite Index was largely unchanged with a 0.91-pt gain, though the Hang Seng Index slipped 0.3%. Japan’s Nikkei 225 jumped 1.5% higher however. South Korean stocks ended marginally higher (+0.2%) on the day, after the benchmark KOSPI dropped 3.2% in the last two sessions, erasing more than half of what it gained earlier in the week when the country re-imposed a ban on short selling.

Source: PublicInvest Research - 10 Nov 2023