Economy

US: Producer prices unchanged in Nov, annual growth slows to 0.9%. Ahead of the Federal Reserve's monetary policy announcement later in the afternoon, the producer prices in the US unexpectedly came in flat during the month of Nov. The report said the producer price index for final demand was unchanged in November after falling by a revised 0.4% in Oct. (RTT)

EU: ECB to focus on shrinking balance sheet as markets bet on rate cuts. The ECB meets this week with investors closely monitoring to see when the Frankfurt institution might start to cut interest rates. It will be too early to declare victory in the battle against inflation, but with inflation at a two-year low, it certainly gives the ECB’s Governing Council breathing space to focus on another important issue: its gigantic balance sheet. (CNBC)

UK: Economy logs unexpected contraction. The UK economy unexpectedly contracted in Oct as higher interest rates took its toll on activity, adding to expectations that the BoE is close to interest rate cuts. GDP shrank 0.3% in Oct, partially offsetting growth of 0.2% in Sept. The fall was the first in three months and confounded expectations for flat growth. (RTT)

China: Bank lending rises in Nov. China's bank lending increased notably in Nov. Bank lending increased to CNY1.09trn in Nov from CNY738.4bn in the previous month. However, lending was below economists' forecast of CNY1.3trn. The annual increase in outstanding total social financing rose to 9.4% in Nov from 9.3% in Oct. Broad credit growth continued to rise in Nov driven by a pickup in government bond issuance. (RTT)

Switzerland: Sees well below average growth next year. The Swiss economy is set to register well below average growth in 2024 as the weaker momentum in the euro area hurts Swiss exports and higher financing cost curbs investment. In the economic forecast, GDP will grow 1.3% this year, which was unchanged from the previous outlook. But the government trimmed the outlook for 2024 to 1.1% from 1.2%. (RTT)

New Zealand: GDP slumps 0.3% on quarter in Q3. New Zealand's GDP contracted a seasonally adjusted 0.3% on quarter in 3Q2023. That was well shy of expectations for an increase of 0.2% following the downwardly revised 0.5% gain in the previous three months (originally 0.9%). On an annualized basis, GDP sank 0.6% - again missing expectations for a gain if 0.5% following the downwardly revised 1.5% improvement in the second quarter (originally 1.8%). GDP expenditure was down 0.7% on quarter after gaining 0.9% in the three months prior. (RTT)

Markets

Chin Hin: MGO for Ajiya turns unconditional as shareholding surpasses 50%. Chin Hin Group’s conditional mandatory general offer (MGO) to acquire the remaining shares it does not own in Ajiya has turned unconditional after its collective shareholding — together with persons acting in concert with it — climbed past 50%. The offer, it said, will now remain open for acceptances until 3 Jan, 14 days from the day it turned unconditional. (The Edge)

Al-`Aqar: Proposes to dispose of Jeta Gardens facility for RM74.9m. Aqar Australia Pty Ltd, a wholly-owned subsidiary of Al- `Aqar Healthcare REIT (Al-‘Aqar) has entered into a land sale contract (LSC) with Principal Healthcare Finance Pty Ltd to dispose of lands and buildings of Jeta Gardens Aged Care Facility in Australia for approximately RM74.9m. Al-`Aqar said the proceeds will be utilised for apportionment to Jade Aged Care Facility, buildings owned by Jeta Gardens, capital recycling and redemption of Al-`Aqar’s financing facilities as well as expenses related to the proposed disposal. (The Star)

AWC: Gets shareholders’ nod for RM110m acquisitions of Stream Group, Premium Patents. AWC has obtained its shareholders' approval to buy the remaining 49% equity interest in Stream Group SB not already owned by AWC from Premium NXL SB (PNSB). Shareholders have also agreed to its acquisition of a 51% equity interest in Premium Patents SB from PNSB and Premium Deluxe SB (PDSB). It will be paying a collective RM110m, cash, for the acquisitions — the most it has spent on asset acquisitions so far. (The Edge)

Scientex Packaging: Higher electricity bill and lower exports weigh on 1QFY2024 net profit. Scientex Packaging’s net profit shrank by 37.2% to RM7.7m 1QFY2024 from RM12.3m a year ago due to lower revenue and higher electricity costs. The group’s quarterly revenue declined by 19% to RM173.0m from RM213.9m because of lower export sales. Scientex Packaging said the ongoing political uncertainties, rising inflationary pressures as well as soft market sentiments continue to weigh on its operational costs and market demand. “The group continues on its actions to address operational efficiency, with a focus on waste reduction, machine and labour optimisation. (The Edge)

UMW: Registers sales of 396,820 vehicles in Jan-Nov period. UMW Group registered sales of 396,820 units in the Jan-Nov period, an increase of 16% from 341,390 units in the same period last year. "YTD Nov 2023, both companies registered higher sales compared with the same period of 2022. "The strong sales achieved was driven by the introduction of competitive and exciting new models as well as attractive sales promotions," it said in a statement. (The Star)

Eco World International: Posts lower 4Q losses, declares another RM144m in dividends, bringing full-year amount to RM936m. Eco World International (EWI) net loss narrowed to RM37.7m for 4QFY2023, from RM95.7m in the previous year’s corresponding period. The improvement is thanks to a foreign exchange (forex) gain of RM15.53m in the quarter under review, compared to a forex loss of RM5.3m in 4QFY2022 due to the appreciation of the British pound against the ringgit as a result of the repayment of advances by its UK joint venture (JV) EcoWorldBallymore and the conversion of British pound-denominated bank balances. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher after US stocks surged to a sharply higher close on Wednesday and benchmark Treasury yields slipped to their lowest level since August after the Federal Reserve flagged the end of its tightening cycle and struck a dovish tone for the year ahead. All three major US stock indices jumped to fresh closing highs for the year after the Federal Open Markets Committee (FOMC) left its fed funds target rate unchanged at 5.25%-5.50%. The Dow Jones Industrial Average rose 512.3 points, or 1.4%, to 37,090.24, the S&P 500 gained 63.39 points, or 1.37%, at 4,707.09 and the Nasdaq Composite added 200.57 points, or 1.38%, at 14,733.96. European shares ended a subdued session with a nominal loss as investors largely avoided risky bets ahead of the Fed decision. The pan-European STOXX 600 index lost 0.06% and MSCI's gauge of stocks across the globe gained 1.22%.

Back home, Bursa Malaysia reversed earlier losses to finish in positive territory due to late buying after experiencing choppy trading throughout the day. At the closing bell, the FBM KLCI rose 0.92 of-a-point to 1,448.04 compared with Tuesday's closing of 1,447.12. The key index opened 1.04 points easier at 1,446.08 and moved between 1,443.72 and 1,448.48 throughout the day. Emerging market stocks lost 0.07%. MSCI's broadest index of AsiaPacific shares outside Japan closed 0.03% lower, while Japan's Nikkei rose 0.25%.

Source: PublicInvest Research - 14 Dec 2023