Economy

US: Consumer confidence rises for first time in four months. US consumer confidence rose for the first time in four months in Nov, aided by more optimistic views about the outlook for the labor market. The Conference Board’s index rose to 102 this month from a downwardly-revised 99.1 in Oct, data showed. The median estimate in a Bloomberg survey of economists called for a reading of 101. A measure of expectations advanced, while the group’s gauge of current conditions ticked lower. The steady slowdown in inflation is offering consumers some much-needed relief after years of stubborn price increases. Combined with a still-resilient labor market, that has allowed real wages to begin rising again and given Americans the wherewithal to keep spending. (Reuters)

EU: German consumer confidence rises in Dec. Consumer morale in Germany rose moderately in Dec amid the slowing inflation but sentiment stayed at a very low level signaling no signs of sustainable recovery, survey results published jointly by GfK and the Nuremberg Institute for Market Decisions, showed. The consumer confidence index rose to -27.8 in December from -28.3 in Nov. The reading was seen at -27.0. Consumer climate level remains very low and there are no signs of sustainable recovery in the coming months, Rolf Burkl, consumer expert at NIM, said. "After three consecutive months of decline, consumer sentiment is stabilizing as the year draws to a close," Burkl said. (RTT)

UK: Retailers turn a bit more hopeful despite sluggish sales, CBI says. British retailers turned slightly more optimistic about the outlook for their businesses in the coming months but sales continued to fall in Nov ahead of the key Christmas shopping season, a survey showed. The Confederation of British Industry's (CBI) monthly retail sales balance, a gauge of sales over the year to November, picked up to -11 from a very weak -36 in Oct. It was the seventh consecutive monthly negative reading for sales, reflecting the squeeze on many households from an inflation rate that is still running at 4.6% in the latest figures and the climb in borrowing costs. (Reuters)

China: Central bank signals slower credit growth, lower rates. China’s central bank foreshadowed a slowdown in credit extension while pledging it would press banks to lower their real lending rates, amid concerns that sluggish borrowing demand has weakened the effect of monetary easing. The PBOC highlighted the changing structure of lending and called on observers to look beyond the volume of new loans, in its third-quarter monetary policy report published. New loans are rapidly flowing into strategic sectors such as technology and manufacturing, while lending to property and local governments’ financing platforms is slowing, the PBOC said. “Credit growth may slow from its previous expansion pace,” Zheshang Securities economists, including Li Chao, said. “China has kept the pace of credit expansion at above 10% in the past few years, and there’s now a possibility it will fall below 10% going forward.” (Bloomberg)

Taiwan: Lowers 2023 GDP growth outlook. Despite continued recovery in tourism, Taiwan downgraded its growth projection for this year citing weak global demand and investment. The Directorate General of Budget, Accounting and Statistics forecast real GDP to grow 1.42% in 2023 and 3.35% next year. The 2023 outlook was revised down from 1.61% estimated in Aug. The initial forecast for 2024 was 3.32% expansion. The agency expects exports to shrink 3.75% in 2023 and real fixed capital formation to decline 9.81%. Real private consumption is projected to grow 8.36%. In the third quarter, GDP grew 2.32% on a yearly basis, much faster than the 1.41% rise a quarter ago. On a QoQ, seasonally-adjusted annualized basis GDP advanced 7.81% after rising 7.47% in the preceding period. (RTT)

South Korea: Consumer confidence falls to 97.2, lowest in 7 months. South Korea's consumer sentiment weakened in Nov to the lowest level in seven months as households' current living conditions worsened, survey results from the Bank of Korea showed. The consumer confidence index fell to 97.2 in Nov from 98.1 in Oct. This was the lowest reading since April 2022, when it was 95.1. The consumer confidence survey was conducted between Nov 10 and 17 among 2,500 households. The sub-index for households' assessment of current living standards dropped to 87 from 88, while the measure for prospective living standards remained stable at 90.0. Similarly, the index measuring consumers' prospective household income held steady at 88.0. (RTT)

Markets

DRB-Hicom (Outperform, TP: RM2.10): Proton eyes export market expansion with forecast of 250,000 units per year by 2035. Proton Holdings is looking to expand into more export markets in Asean and beyond to grow its export volume, for which it has forecast will hit a lofty 250,000 units per annum by 2035. (The Edge)

Gadang: Acquires land in Kwasa Damansara to undertake residential project. Gadang Holdings is acquiring a 21.08-acre land in Kwasa Damansara for RM114.8m, or RM125psf, to be developed into a residential project. The proposed development is estimated to have a potential gross development value of RM700m, over a minimum period of five years. The project is expected to commence in the 2H 2024. (The Edge)

Maxim: Unit to undertake sewerage treatment plants job in Cheras under privatisation deal. Maxim Global is to undertake the decommissioning and upgrading of several sewerage treatment plants within the Alam Damai catchment area in Cheras under a privatisation deal with the government. The project includes the provision of the necessary amenities and utilities via a land swap. (The Edge)

EA Technique: Bags contract extension from Petronas worth RM18.4m. Marine vessels operator EA Technique (M) made its third contract win announcement this year, this time an extension by Petronas for the supply and operation of three harbour tugs worth approximately RM18.4m. The contract duration will be for two years, commencing in Dec 2023. (The Edge)

MAHB: Registers over 10m total passenger movements in Oct. Malaysia Airports Holdings Bhd (MAHB) registered more than 10m total passenger movements in Oct 2023, despite the month being generally a low season month for travelling. International and domestic passenger movements registered 5.1m and 5.0m passengers, an increase of 40.3% and 7.0% respectively over the same month last year reaching more than 87% of pre-pandemic levels for both sectors. (StarBiz)

MKH: Unit gets nod for proposed listing. MKH has obtained approval from its shareholders for the proposed listing of its whollyowned subsidiary, MKH Oil Palm (East Kalimantan) Bhd (MKHOP), on the Main Market of Bursa Malaysia. (StarBiz)

Critical Holdings: To expand data centre segment. Critical Holdings will expand its data centre segment as it expects more clean rooms to be built in response to clients’ indications that a semiconductor recovery is anticipated by 2024. (StarBiz)

Catcha Digital: To buy 51% stake in Digital Symphony for RM21.2m. Digital media company Catcha Digital is planning to acquire a 51% equity interest in digital agency DS Services SB, more commonly known as Digital Symphony, for RM21.2m. (The Edge)

IPO: Public portion of CPE Tech’s IPO oversubscribed by over 17 times. Engineering support services provider CPE Technology, which is en route to listing on the Main Market of Bursa Malaysia on Dec 7, said its initial public offering (IPO) has been oversubscribed by 17.69 times by the Malaysian public. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks ended with modest gains on Tuesday as investors parsed conflicting remarks from Federal Reserve officials, with upbeat consumer data providing some lift. All three major U.S. stock indices lost momentum as the session progressed, but ended the range-bound session in the green. Market participants are now scrutinizing remarks from monetary policymakers ahead of next month's meeting of the Federal Open Market Committee (FOMC). Later in the week, the Commerce Department is due to release its second estimate for third-quarter Gross Domestic Product, and its broadranging Personal Consumption Expenditures (PCE) report, which covers income, spending and crucially, inflation. The Dow Jones Industrial Average rose 83.51 points, or 0.24%, to 35,416.98, the S&P 500 gained 4.46 points, or 0.10%, at 4,554.89 and the Nasdaq Composite added 40.73 points, or 0.29%, at 14,281.76. European shares fell for a second session on Tuesday, stalling November's strong run of gains, after comments by European Central Bank policymakers dampened expectations of interest rate cuts next year. The pan-European STOXX 600 index eased 0.3%, with market heavyweights such as Novo Nordisk and LVMH falling 3.1% and 1.8%, respectively.

Back home, the FBM KLCI pared losses on Tuesday but remained in negative territory as investors were reluctant to make significant moves due to lack of buying interests and weak market sentiment. At the closing, the FBM KLCI declined 0.13 of a point to 1,448.02 from Monday’s closing of 1,448.15. MSCI's gauge of stocks across the globe gained 0.27%. In the region, Hang Seng dropped 0.98% and Nikkei 225 eased marginally by 0.12%.

Source: PublicInvest Research - 29 Nov 2023