Economy

US: Inflation slowed to a 3.1% annual rate in Nov. Prices across a broad range of goods and services edged higher in Nov but were mostly in line with expectations, further easing pressure on the Federal Reserve. The CPI, a closely watched inflation gauge, increased 0.1% in Nov, and was up 3.1% from a year ago. Economists surveyed by Dow Jones had been looking for no gain and a yearly rate of 3.1%. While the monthly rate indicated a pickup from the flat CPI reading in Oct, the annual rate showed another decline after hitting 3.2% a month earlier. Excluding volatile food and energy prices, the core CPI increased 0.3% on the month and 4% from a year ago. Both numbers were in line with estimates and little changed from Oct. (CNBC)

EU: German ZEW investor sentiment hits 9-month high. Germany's investor confidence strengthened to a nine-month high in Dec despite the current budget crisis. The ZEW Indicator of Economic Sentiment rose to 12.8 in Dec from 9.8 in Nov. This was the highest score since March and also came in above forecast of 8.8. The assessment of current economic situation also improved slightly in Dec. At -77.1, the corresponding index was up from -79.8. The expected score was -76.0. (RTT)

EU: Germany wholesale prices continue to fall. Germany's wholesale prices continued to decline in Nov mainly due the high base of comparison. Wholesale prices decreased 3.6% on a yearly basis in Nov but slower than the 4.2% decline seen in Oct. Wholesale prices have been falling since last April. The main reason for the current decline is a base effect due to the high price increases in the previous year due to the war in Ukraine. (RTT)

UK: Wage growth slows, jobless rate stable at 4.2%. The UK wage growth slowed more than expected in three months to Oct raising expectations that the BoE will cut interest rates as early as next June. The unemployment rate stood at 4.2% in three months to Oct. This was unchanged from the preceding period and also matched expectations. Excluding bonus, average earnings increased at a slower pace of 7.3% in three months to Oct after a 7.8% gain. (RTT)

South Korea: Resilient job market says high rates for longer. Labour’s market loosened more-than-expected in Nov but still remains tight, backing our view that the central bank’s policy rate will stay at the current high level for longer. A resilient job market supports consumer spending and limits the impact of monetary tightening, making it harder to cool core inflation. With worries about more-persistent-than-anticipated price pressure, we think the BOK will wait until 3Q24 to start its rate cuts. (Bloomberg)

India: Industrial output growth hits 16-month high. India's industrial production expanded at the quickest pace in sixteen months in Oct, underpinned by broad-based growth across all sectors, especially the electricity segment. Industrial production advanced 11.7% year-on-year in Oct, well above the 6.2% growth seen in Sept. That also exceeded economists' forecast for an increase of 10.0%. Production of electricity posted the biggest rise of 20.4%. Mining output grew 13.1%, and manufacturing gained 10.4%. During April to Oct, industrial production grew 6.9% from the same period last year. (RTT)

Australia: NAB business confidence, conditions weaken in Nov. Australia business confidence as well as conditions softened in Nov indicating that economic growth is unlikely to improve. The business confidence index fell to -9 in Nov from -3 in Oct. The index dropped for the second straight month and hit its lowest since 2012, excluding the pandemic period. The business conditions indicator posted 9, down from 13 in the previous month. (RTT)

Philippine: Trade gap widens in Oct. The Philippine foreign trade deficit increased in Oct from a year ago as exports fell faster than imports. The trade deficit rose to USD4.17bn in Oct from USD3.31bn in the same month last year. In Sept, the shortfall was USD3.58bn. Exports plunged 17.5% YoY in Oct, much faster than the 6.3% slump in the previous month. Further, this was the fastest rate of decline in six months. Imports declined 4.4% annually in Oct, slower than the 14.1% fall in the previous month. (RTT)

Markets

Yinson: Singapore unit seals USD500m corporate loan for FPSO projects. Yinson’s Singapore unit Yinson Production Offshore Pte Ltd announced in a statement that it has sealed the deal on a five-year corporate facility loan of up to USD500m (RM2.3bn). The company added that a general syndication process is anticipated to commence in January 2024, by which the facility loan is earmarked for refinancing certain existing debt, as well as for general corporate purposes. (The Edge)

Unitrade: Acquires 51% stake in metal recycling company for RM66.3m. Unitrade Industries has entered into a share sale agreement with Intergreen Holdings SB, Intergreen Corp (M) SB and Pong Wing Seng to acquire 51% stake in Intergreen Metals SB for RM66.3m. Unitrade MD Nomis Sim Siang Leng said the proposed acquisition complements and synergises with its core operations in building materials wholesaling and distribution. “By venturing into metal recycling, we are penetrating the circular economy market and promoting responsible consumption through optimisation of material usage.” (The Star)

Barakah: Proposes to auction vessel to repay debts. Barakah Offshore Petroleum has proposed to undertake an auction to seek a buyer for its vessel for at least USD11.4m (RM53.3m) in cash. The PN 17 company said it decided on the move after four proposals over the past 12 months from interested buyers for the Kota Laksamana 101 barge “had not materialised”. “The proposed disposal offers an opportunity for Barakah to dispose of an asset that is not generating revenue/profits. Currently, the company has no existing contracts that utilises the barge,” Barakah told Bursa Malaysia. (The Edge)

SCIB: Inks MoU for RM250m Bintulu housing project. Sarawak Consolidated Industries (SCIB) wholly-owned subsidiary, SCIB Properties SB (SCIBP) has entered into a memorandum of understanding (MoU) with Kemena City Development SB (KCD) and Smart Borneo Properties SB (SBP). In a statement, the industrialised building systems specialist said the MoU marked the preliminary stage for a potential joint venture focusing on a substantial residential development project in the Kemena Land District, Bintulu, Sarawak, with a projected value of RM250m. The proposed project envisages the development of approximately 50 acres of land into around 600 residential units, signifying a major undertaking in Bintulu's property development sector. (The Star)

Sarawak Cable: Finds white knight with RM250m. Sarawak Cable Bhd (SCB), a PN17 company, announced that it had found a white knight in Serendib Capital Ltd to undertake a “resuscitation exercise” to revive the loss-making manufacturer. SCB’s share price made a big leap on Tuesday, soaring 10 sen to 16 sen as at 3.40pm, with 38.38m shares traded. (The Edge)

Kinergy Advancement: In bioenergy partnership to innovate palm oil industry. Kinergy Advancement (KAB) has teamed up with Agromate Holdings SB, to spearhead bioenergy or renewable energy (RE) generation across palm oil mills (POM) in the country. The sustainable energy & engineering solutions specialist said the KAB-AGROMATE collaboration seeks to capitalise on a largely under-tapped market with huge recurring income potentials. (The Star)

MARKET UPDATE

The FBM KLCI might open higher after US stocks closed at fresh highs of the year on Tuesday, after inflation data did little to alter views for the timing of a rate cut by the Federal Reserve, as investors awaited the central bank's last policy decision of the year on Wednesday. The November Consumer Price Index rose 3.1% on an annual basis, in line with estimates from economists polled by Reuters, as a drop in gasoline prices was overshadowed by a rise in rents. Core prices, excluding volatile items such as food and energy costs, also matched expectations, showing a 4% annual rise. The Dow Jones Industrial Average rose 173.01 points, or 0.48%, to 36,577.94, the S&P 500 gained 21.26 points, or 0.46%, to 4,643.70 and the Nasdaq Composite gained 100.91 points, or 0.70%, to 14,533.40. European shares reversed course to close lower following the CPI report, after Germany's DAX and France's CAC 40 touched record highs. The pan-European STOXX 600 index lost 0.21% and MSCI's gauge of stocks across the globe gained 0.39%.

Back home, Bursa Malaysia ended choppy trading with modest gains on Tuesday, driven by late buying in selected plantation and banking heavyweights although cautious trading was seen throughout the day amid the reshuffling of the Cabinet ministers earlier in the morning. At the closing bell, the FBM KLCI rose 0.73 of a point to 1,447.12 from Monday's closing of 1,446.39. Emerging market stocks rose 0.40%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.51% higher, while Japan's Nikkei rose 0.16%.

Source: PublicInvest Research - 13 Dec 2023