Economy

US: Mortgage rates slide sharply, reinvigorating housing demand. US mortgage rates dropped sharply, capping the biggest four-week slide in nearly a year and spurring a fresh round of applications to purchase homes. The contract rate on a 30-year fixed mortgage tumbled 20bps to 7.4. The index of home-purchase applications increased 3.9% in the week ended Nov 17, the most since June. (Bloomberg)

US: Existing home sales slump to more than 13-year low in Oct. US existing home sales dropped to the lowest level in more than 13 years in Oct as the highest mortgage rates in two decades and a dearth of houses drove buyers from the market. Existing home sales tumbled 4.1% last month to a seasonally adjusted annual rate of 3.4m units, the lowest level since Aug 2010. (Reuters)

US: Weekly jobless claims fall; business spending on equipment easing. The number of Americans filing new claims for unemployment benefits fell more than expected, but that likely does not change the view that the labor market is gradually slowing as higher interest rates cool demand in the economy. (Reuters)

EU: ECB warns weak economy heightens stability risks from rate hikes. Sluggish growth in the eurozone economy is threatening to amplify risks to financial stability posed by higher interest rates. As the impact of the ECB’s historic monetarytightening campaign continues to unfold, household incomes, corporate revenues and public finances could feel an additional squeeze if the economy continues to disappoint, the central bank cautioned in its bi-annual Financial Stability Review. (Bloomberg)

EU: ECB rates may plateau for a few quarters. The ECB will likely keep rates at 4% for a few quarters and may wind down its Covid bond-buying portfolio earlier than planned, pushing back against expectations for a hasty loosening of inflation-fighting measures. (The Star)

EU: Italy construction output rises for second month. Italy's construction output expanded for the second straight month in Sept, though slightly. Construction production advanced a seasonally adjusted 0.2% MoM in September, much slower than the 2.1% rebound in the previous month. On a yearly basis, construction output remained flat in Sept after a 0.3% drop in Aug. (RTT)

UK: Budget winners and losers: the pound, bonds and brewers. Britain's finance minister announced a raft of measures aimed at reviving the sluggish economy without upsetting markets, but a degree of caution over the outlook for borrowing and inflation rattled bonds and sterling. Nerves about cuts to social security payments were minor. Sharply lower growth forecasts for 2024 kept sentiment on sterling tepid, while some pockets of the stock market got a fillip from business investment and tax relief measures. (Reuters)

Japan: Government downgrades economic view. Japan's government downgraded its economic assessment for the first time since Jan citing the weakness in business investment. For six straight months until Oct, the government had said the economy is recovering at a moderate pace. The government warned that slowing down of global economies is a downside risk for the Japanese economy, including the effects of global monetary tightening and the concern about the prospect of the Chinese economy. (RTT)

Japan: BoJ to end negative interest rates in 2024. The BoJ will end its negative interest rate policy next year, with more convinced the central bank is getting closer to exiting its controversial monetary settings. BoJ Governor faces the difficult task of navigating Japan away from the extremely accommodative policy of the past decade without causing market turmoil or squashing a fragile economic recovery. (Reuters)

India: Falling oil prices should ease inflation pressure. A decline in international crude oil prices will help control India's inflationary pressures going forward. India's retail inflation eased in Oct to a four-month low of 4.9%, edging closer to the central bank's target of 4%. India's crude oil basket has averaged USD83.9 a barrel in Nov so far, compared with USD90.1 a barrel in Oct. (Reuters)

Singapore: 3Q GDP tops initial estimates on financial services, tourism. Singapore's economy grew faster than initial estimates in 3Q, helped by a resurgence in tourism and service sector activity, although authorities warned of risks to the outlook from inflation and geopolitics. GDP rose 1.1% YoY, higher than the initial estimates of 0.7% released last month. (Reuters)

Markets

Maxis (Neutral, TP: RM3.90): Partners with Blueshark and JomCharge in smart scooter tie-up. Maxis has collaborated with smart scooter provider Blueshark and the operator of the JomCharge charging network, EV Connection SB (EVC), to provide 4G and 5G network connectivity solutions. Maxis inked MoU with both Blueshark and EVC at the E-Mobility Asia (EMA) 2023 exhibition yesterday, with the aim of accelerating the adoption of emobility solutions. (StarBiz)

MAHB: Aims for full reopening of retail space by 1Q2024. MAHB aims to reopen all its retail space at KLIA by the first quarter of next year, and 90% of the space by end of this year. MAHB is undertaking a major overhaul of the retail and F&B area at KLIA, which resulted in certain portions of the country’s main air travel gateway to be dotted by shop front hoarding even though it is one and a half years since Malaysia reopened its borders. (The Edge)

Sam Engineering: To buy Aviatron, proposes rights issue. Sam Engineering & Equipment (M) (Samee) has proposed to acquire Aviatron (M) SB from Singapore Aerospace Manufacturing Pte Ltd for USD43.4m (approximately RM202.2m) cash. In the same filing, Samee has proposed a renounceable rights issue, involving the issuance of 135.4m new ordinary shares. The issue price for these rights shares will be announced by the Samee board later, on one-for-every-four existing Samee shares held by eligible shareholders on a yet-to-be-determined entitlement date. (The Edge)

Pertama Digital: Short selling halted again as share price dives further. Shares of Pertama Digital fell as much as 94 sen or 26.78% in early trade on Nov 22, prompting Bursa Securities to suspend the counter’s intraday short selling (IDSS) for a second day. The counter, which fell 24.5% on Nov 21 extended its losses in the first hour of trading, with 4.66m shares changing hands — double its two-month average daily volume of 2.11m shares. (The Edge)

Astramina: External auditors resign four months into the job. Mazars PLT was appointed auditor at the last AGM of the company on Aug 30, 2023 and was to to hold office until the conclusion of the next AGM of the company. Its resignation is with effect from Nov 22, 2023. The company has nominated Ong & Wong Chartered Accountants as auditors of the company subject to their consent to act. (BTimes)

Land & General: Sees boardroom shuffle. Land & General (L&G) has appointed a new director to its board while redesignating one of its directors to a senior director. It had appointed Faezali Mustafa R Jumabhoy as an independent non-executive director from Nov 21. Faezali has over three decades of experience in international real estate, hospitality industry investment and development advisory, funding, financing, asset management, and investment banking. (The Edge)

IPO: KJTS gets Bursa nod for ACE Market listing. KJTS Group has received the approval from Bursa Securities to list on Bursa Malaysia’s ACE Market. The group, which installs and manages building cooling energy systems and provides other facilities management services in Malaysia, Thailand and Singapore, is set to offer 31.69% of its enlarged share capital through an IPO with no offer for sale by existing shareholders. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after markets were buoyant ahead of the Thanksgiving holiday in the US, with stocks resuming their massive rally this month that has been fueled by hopes of a more benign interest rate backdrop. Economic reports on jobless claims, durable goods, and consumer sentiment seemed to suggest the economy is easing but may stay strong enough to avoid recession. Data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week. The Dow Jones Industrial Average rose 184.74 points, or 0.53%, to 35,273.03, the S&P 500 gained 18.43 points, or 0.41%, at 4,556.62 and the Nasdaq Composite added 65.88 points, or 0.46%, at 14,265.86. European shares hit a two-month high on Wednesday, led by rate-sensitive real estate stocks, while British software firm Sage jumped to a record high after reporting strong annual operating profit and announcing a share buyback plan. The pan-European STOXX 600 closed 0.3% higher, with real estate stocks leading gains and rising 1.5%.

Back home,Bursa Malaysia retreated from Tuesday's gains to finish marginally lower on Wednesday, dragged by profit-taking activities as the risk-off mode intensified. At the closing bell, the FBM KLCI fell 7.51 points to 1,455.89 from Tuesday’s closing of 1,463.4. Japanese markets were also set to be closed for a national holiday on Thursday. On Wednesday, the Nikkei 225 edged up 0.3%, putting the Japanese index near a fresh three-decade high. Also in Wednesday's session, China stocks slid as market participants awaited more stimulus for the Chinese economy. The blue-chip CSI 300 Index sank 1%.

Source: PublicInvest Research - 23 Nov 2023