Economy

US: Leading economic index drops more than expected in Oct. Leading US economic indicators fell by more than expected in the month of Oct. The leading economic index slid by 0.8% in Oct after falling by 0.7% in Sept. Economists had expected the index to decrease by 0.6%. (RTT)

EU: Construction output rebounds 0.4%. Eurozone construction output expanded in Sept after falling in the previous month. Construction output advanced 0.4% MoM in Sept, reversing a 1.1% decline in Aug. Civil engineering posted an increase of 1.5%, while building construction rose only 0.2%. On a yearly basis, production in the construction sector slid 0.3% after remaining flat in the previous month. (RTT)

EU: German budget shock major blow for economy. The ruling by Germany’s top court curbing the use of off-budget special funds is a major blow for Europe’s biggest economy and could lead to higher power costs for households and companies. Constitutional Court judges said that EUR60bn (USD65.5bn) in untapped credit authorizations can’t be transferred into the government’s Climate and Transformation Fund, potentially threatening projects like the expansion of hydrogen infrastructure and charging stations for electric vehicles. (Bloomberg)

EU: Germany producer prices continue to fall. Germany's producer prices declined for the fourth straight month in Oct due to the decrease in energy prices. Producer prices dropped 11.0% from a year ago in Oct, in line with expectations. The annual decline in Sept was 14.7%, which was the biggest fall since records began in 1949. The decline was largely attributed to the base effect as the war in Ukraine pushed up producer prices in Aug. (RTT)

UK: Retail sales slide again in Oct in new blow for economy. British retail sales volumes fell unexpectedly in Oct as consumer finances remain stretched, in a new warning sign for the economy. Retail sales volumes dropped 0.3% MoM, following a revised 1.1% decline in Sept that was worse than first estimated. (Reuters)

China: Early policy key to China’s strong performance. China’s top economic regulator vowed to front-load policy support early next year to achieve a solid start for the Chinese economy in 2024, as mixed economic indicators for Oct necessitated more stimulus to sustain recovery momentum. Stepped-up fiscal expansion will likely bolster economic growth in 1H2024, experts said, as earlier government bond issuances and a deficit-to-GDP ratio that may exceed 3% help boost infrastructure investment. (The Star)

China: Keeps lending benchmark rates unchanged, as expected. China left benchmark lending rates unchanged at a monthly fixing, matching expectations, as a weaker yuan continued to limit further monetary easing and policymakers waited to see the effects of previous stimulus on credit demand. (Reuters)

Thailand: 3Q GDP growth disappoints, missing forecasts amid weak exports. Thailand's economy grew at a much slower-thanexpected pace in 3Q weighed down by weak exports and government spending. GDP expanded 1.5% in the July-Sept quarter from a year earlier. The quarterly growth was the slowest in the past three quarters, having risen 1.8% YoY in the second quarter and 2.6% in the Jan-March period. (Reuters)

Markets

Muhibbah Engineering: Secures two contracts worth RM479m. Muhibbah Engineering (M) has accepted a contract from Petronas Carigali SB for the construction, commissioning and installation of light weight structure project, around 190km from Terengganu shore for a contract value of approximately RM318m. The engineering company has also been awarded by Lumut Maritime Terminal SB, for the proposed construction and completion of Lumut Maritime Terminal expansion project at Manjung, Perak with contract value of approximately RM161m. (StarBiz)

Green Packet: Drops plan to sell investment banking business after failing to get approval. Green Packet is not proceeding with its proposed disposal of its entire 100% stake in Oasis Capital Investment Bank Ltd (OCIB) after the investment bank failed to obtain the required approval from the Labuan Financial Services Authority (LFSA). The group said it has received a notice from the purchaser, WKJ Capital Equity SB, to terminate the sale agreement as OCIB was unable to obtain LFSA's approval for the change of shareholder within the stipulated time frame. (The Edge)

Mesiniaga: Bags RM38.1m Royal Malaysian Customs contract. Mesiniaga has secured a RM38.1m contract from the Royal Malaysian Customs for the provision of the MYGST System Maintenance Services and License Renewal from 2023 to 2025. The total value of the contract is RM38.1m inclusive of sales and service tax. It is of the view that the contract will contribute positively to the company's earnings and net assets for the financial year ending Dec 31, 2023 onwards until the expiry of the contract. (BTimes)

Eurospan: RM55m asset sale to controlling shareholder fair and reasonable. Eurospan Holdings’ proposed RM54.55m sale of its furniture manufacturing unit and properties in Seberang Perai to its controlling shareholder for future leaseback has been deemed fair and reasonable by independent adviser Mainstreet Advisers SB. Eurospan is disposing of Dynaspan Furniture SB (DFSB) for RM38.9m cash to its executive chairman and largest shareholder Guan Kok Beng, managing director Guan Shaw Yin and deputy MD Guan Shaw Kee. (The Edge)

XL Holdings: Buys stake in Sabah-based firm to venture into seaweed cultivation activities. XL Holdings is buying 25% equity interest in Sabah-based Samajutera SB to venture into seaweed cultivation activities through Samajutera’s 70%-owned subsidiary, WAF Holding SB. WAF Holding is a 70:30 joint venture (JV) between Samajutera and Inno Resource Development SB (IRD), a subsidiary of Innoprise Corp SB, which is an investment arm of Yayasan Sabah. (The Edge)

IPO: Main Market-bound CPE Technology sets IPO price at RM1.07, to raise RM179.58m. Engineering precision parts manufacturer CPE Technology as priced its shares at RM1.07 apiece for its IPO, which seeks to raise approximately RM179.58 m. The valuation will give CPE a market capitalisation of RM718.31m upon listing on Bursa Malaysia’s Main Market on Dec 7, 2023, based on an enlarged issued share capital of 671.31m. The IPO involves the issuance of 167.83m new ordinary shares in the company or 25% of the enlarged share capital. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after Wall Street's three major stock averages closed higher on Monday with Nasdaq's 1% rally leading the charge as heavyweight Microsoft hit a record high after it hired prominent artificial intelligence executives. The Nasdaq boasted its highest closing level since July 31 while the S&P 500 registered its highest close since Aug. 1. The Dow Jones Industrial Average rose 203.76 points, or 0.58%, to 35,151.04, the S&P 500 gained 33.36 points, or 0.74%, at 4,547.38 and the Nasdaq Composite added 159.05 points, or 1.13%, at 14,284.53. European shares also edged higher on Monday after a strong week driven by aggressive bets on interest rate cuts, while drugs-topesticides group Bayer posted its worst day ever weighing on the healthcare sector and Germany's benchmark index. The panEuropean STOXX 600 inched 0.1% higher after jumping nearly 3% last week.

Back home, Bursa Malaysia extended its downtrend to end marginally lower on Monday in the absence of buying interest amid a mixed performance in the regional markets. At the closing bell, the FBM KLCI fell 3.75 points to 1,456.92 from Friday’s closing of 1,460.67. Japanese shares hit highs not seen since 1990, thanks to strong earnings and offshore demand that fueled a three-week winning streak. The Nikkei 225 ran into profit taking but was still up 8.2% for the month so far with the Topix not far behind.

Source: PublicInvest Research - 21 Nov 2023