Economy

US: Fed ready to talk about conditions for rate cuts. The FOMC is widely expected to hold rates steady for a third consecutive time at the Dec. 12-13 meeting. Two straight holds could be seen as a temporary pause, but we think three constitute an end to the cycle. Officials will deliberate the conditions under which they could start cutting rates next year. At the same time, Fed Chair Jerome Powell, at the presser, will likely push back against the idea that rates cuts are right around the corner. (Bloomberg)

EU: Denmark inflation rises to 0.6%. Denmark's CPI increased somewhat in Nov after easing in the previous three months. The consumer price index rose 0.6 percent YoY in Nov, following a 0.1 percent increase in Sept. The higher inflation in Novcompared to last month is mainly due to price changes for gas, electricity, furniture, and home furnishings. Core inflation, which excludes energy and unprocessed food, nonetheless eased to 3.0 percent from 3.3 percent. (RTT)

EU: Irish construction downturn deepens in Nov. The Irish construction sector contracted at its steepest pace this year so far amid weaker performances in both commercial and residential activity. The headline BNP Paribas Real Estate Ireland Construction PMI dropped to 44.5 in Nov from 47.3 in Oct. Any score below 50 indicates contraction, while a reading above 50 suggests expansion in the sector. A slowdown in the economy, the completion of projects, and delays in decision-making at clients were all factors leading activity to fall. (RTT)

China: Year-end meet to show fiscal pivot, urgency. The 2023 Central Economic Work Conference will set the policy agenda for 2024 — a critical year that could determine the medium-term growth path. The annual year-end conference will address many familiar issues — like how to support growth, confidence and the property market — but the pressure will likely be more intense compared to prior meetings. We expect the conference to be held in the coming week or so. (Bloomberg)

Japan: Large manufacturers' sentiment improves in Q4. Sentiment among Japanese large manufacturers improved at the end of the year. The business survey index of large manufacturers rose to 5.7 in the fourth quarter from 5.4 in the preceding period. Meanwhile, the BSI of non-manufacturing companies declined to 4.4 from 6.0. As a result, the BSI of overall industries dropped to 4.8 from 5.8 in the third quarter. Both manufacturers and nonmanufacturers forecast business conditions to deteriorate in the first quarter of 2024. (RTT)

Japan: M2 money stock rises 2.3% on year in Nov. The M2 money stock in Japan was up 2.3 percent on year in Nov, according to the Bank of Japan - coming in at JPY1,239.9trn. That was shy of expectations for an increase of 2.5 percent and down from 2.4 percent in Oct. The M3 money stock rose an annual 1.7 percent to JPY1,594.6trn, easing from 1.8 percent in the previous month. The L money stock was unchanged at 2.1 percent, standing at JPY2,121.5trn. (RTT)

Turkey: Industrial output growth slows to 4-month low. Turkey's industrial production expanded at the slowest pace in four months in Oct. Industrial production rose 1.1 percent YoY in Oct, slower than the 4.1 percent increase in Sept. This was the sixth successive month of increase, and the latest rate of growth was the weakest since June, when production had risen only 0.2 percent. (RTT)

Argentina: Monthly inflation set to spike to 12% as Milei era begins. Argentina's CPI likely spiked around 12% in Nov alone, which will be the first monthly inflation data under the government of new libertarian President Javier Milei. The South American country, which swore in its new government on Sunday, is battling triple-digit annual inflation already at 143% and climbing fast. Milei has said he will fight "tooth and nail" to bring inflation down. The Reuters poll of 22 analysts gave a median estimate of the CPI rising 11.9% in Nov, up from 8.3% in Oct. (Reuters)

Markets

MAHB: Appointed Former SP Setia deputy president Koe Peng Kang as independent director. Malaysia Airports Holdings Bhd (MAHB) has appointed former SP Setia deputy president and COO Datuk Seri Koe Peng Kang as its independent and non-executive director, effective 12 Dec. The airport operator said Koe, 62, commenced his journey at S P Setia in 1997 as a senior project manager, gradually advancing through various business and operational roles until his appointment as senior executive vice president of the company in 2019. (The Edge)

Jentayu: Telekosang Hydro 2 power plant in Sabah achieves initial operating date. Jentayu Sustainables run-of-river hydropower plant Telekosang Hydro 2 (TH2) has achieved its initial operating date of 9 Dec 2023, with a target feed-in-tariff commencement date (FiTCD) within the next 30 days. Together with the FiTCD of Telekosang Hydro 1 (TH1) in Feb, Jentayu said in a statement that the successful commissioning of both hydropower plants is a major step towards satisfying the condition precedent necessary for the company to acquire TH1 and TH2. This, it said, would be subject to final approval by shareholders and regulators. (The Star)

Sentral REIT: Completes RM450m acquisition of Menara CelcomDigi from MRCB. Sentral Real Estate Investment Trust (Sentral REIT) said that it has completed the acquisition of Menara CelcomDigi in Petaling Jaya from Malaysian Resources Corp Bhd (MRCB) for RM450m. MRCB is the single largest unitholder of Main Market-listed Sentral REIT, with a 27.94% equity interest. Sentral REIT had on July 25 struck a deal with MRCB’s wholly-owned unit Puncak Wangi SB to acquire Menara CelcomDigi, a 27-storey office building. (The Edge)

Censof: Gets RM9.47m JPJ contract. Censof Holdings has received a letter of acceptance from the Road Transport Department Malaysia worth RM9.47m for the maintenance, verification and calibration services for 48 weighing instruments at the latter’s enforcement stations. Censof said the tenure of the project is for a period of 36 months from 1 Jan 2024 to 31 Dec 2026, with no option to extend and/ or renew upon its expiry. (The Star)

Hong Leong Industries: Sells investment holding unit to major shareholders’ firm. Hong Leong Industries (HLI) has sold its investment holding firm HLI Trading Ltd (HLIT) to Guoline International Ltd (GIL) for USD7.78m (RM36.22m) in a relatedparty cash transaction. “The disposal of HLIT enables HLI to streamline its offshore non-operating company," HLI said. “The proceeds will be placed with financial institutions pending identification of suitable investment opportunities and expansion plans. (The Edge)

Straits Energy: Signs MoU for reforestation project. Straits Energy Resources subsidiary, Benua Hijau SB has signed a memorandum of understanding (MoU) with the Management Council of Terengganu State Parks (MPTN) and the Setiu Land Office. The MoU is for a multi-year reforestation project to restore degraded forest areas in the Setiu Wetlands State Park, one of the largest natural wetland in the East Coast region of Peninsular Malaysia. Benua Hijau, a 51%-owned unit of Straits, is focused on the development and execution of environmental and social sustainability initiatives. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher after US stocks ended in positive territory and gold slid yesterday, as investors looked ahead to crucial inflation data and the US Federal Reserve's two-day monetary policy meeting. In a busy week for central banks, the yen weakened for a second straight day as expectations faded for the Bank of Japan to shift to a less dovish policy. All three major US stock indices gained momentum as day progressed, ending the session at their highest close of the year. The Dow Jones Industrial Average rose 157.06 points, or 0.43 %, to 36,404.93, the S&P 500 gained 18.07 points, or 0.39 %, at 4,622.44 and the Nasdaq Composite dropped 34.64 points, or 0.24 %, to 14,432.49. European shares notched modest gains ahead of critical US economic data and interest rate decisions from major central banks. The pan-European STOXX 600 index rose 0.30 % and MSCI's gauge of stocks across the globe gained 0.29 %.

Back home, Bursa Malaysia snapped five consecutive days of losses last week to end higher on Monday on late buying amid the mixed regional market performance. At the closing bell, the FBM KLCI rose 4.42 points to 1,446.39 from Friday’s closing of 1,441.97. Emerging market stocks lost 0.15 %. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.21 % lower, while Japan's Nikkei rose 1.50 %.

Source: PublicInvest Research - 12 Dec 2023