Economy

Global: 2024 staple food supplies to be strained by dry weather, export curbs. High food prices in recent years have prompted farmers worldwide to plant more cereals and oilseeds, but consumers are set to face tighter supplies well into 2024, amid adverse El Nino weather, export restrictions and higher biofuel mandates. Global wheat, corn and soybean prices — after several years of strong gains — are headed for losses in 2023 on easing Black Sea bottlenecks and fears of a global recession, although prices remain vulnerable to supply shocks and food inflation in the New Year, analysts and traders said. "The supply picture for grains certainly improved in 2023 with bigger crops in some of the key places which matter. But we are not really out of the woods yet," said Ole Houe, director of advisory services at agriculture brokerage Ikon Commodities in Sydney. "We have El Nino weather forecast until at least April-May, Brazil is almost certainly going to produce less corn, and China is surprising the market by buying larger volumes of wheat and corn form the international market." (Reuters)

US: Home prices extend records, rising for a ninth straight month. Home prices in the US rose for a ninth straight month, reaching a fresh record as buyers battled for a stubbornly tight supply of listings. A national gauge of prices rose 0.6% in Oct from Sept, according to seasonally adjusted data from S&P CoreLogic Case-Shiller. A seasonally adjusted measure of prices in 20 of the largest cities also rose 0.6%. “US home prices accelerated at their fastest annual rate of the year in Oct,” Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement. “We are experiencing broad-based home-price appreciation across the country, with steady gains seen in 19 of 20 cities. (Bloomberg)

EU: Spain producer prices continue to fall sharply. Spain's producer prices declined for the ninth successive month in November amid cheaper energy costs, the statistical office INE said. The producer price index fell 7.4% YoY in Nov, following a 7.7% decline in Oct. Prices have been falling since March. Excluding energy, producer price inflation moderated to 0.9% from 1.3%. On a monthly basis, producer prices declined 2.0% in Nov, which was worse than the 1.4% decline seen in Oct. The annual fall in overall producer prices was driven by the sharp 23.0% decline in energy prices. Intermediate goods prices also showed a fall of 5.5%. Meanwhile, prices for capital goods and consumer goods grew by 2.5% and 7.2%, respectively, in November from last year. (RTT)

Japan: Labour demand holds steady in positive sign for wages. Japan’s labour market remained relatively tight in Nov, keeping pressure on employers to boost pay in order to fill positions, as companies prepare to engage in annual wage negotiations with unions. The job-to-applicants ratio eased a tad to 1.28, meaning there were 128 jobs offered for every 100 applicants, the Labour Ministry reported. Economists had forecast that the reading would be unchanged at 1.30. A separate report from the Ministry of Internal Affairs showed that the unemployment rate held steady at 2.5% in Nov. The number of workers rose by 560,000 from the same month a year earlier, marking the 16th consecutive increase, while those without jobs rose by 40,000. The number of female workers rose by 420,000 from a year earlier. On a MoM basis, there were 260,000 more workers in Nov than Oct. (Bloomberg)

Singapore: Inflation eases to 25-month low, industrial output grows. Singapore's consumer price inflation moderated sharply in Nov to the highest level in just over two years, largely due to lower private transport inflation, data released by the Monetary Authority of Singapore and the Ministry of Trade and Industry revealed. Another piece of official data revealed that industrial production expanded for the second successive month in Nov. The consumer price index climbed 3.6% YoY in Nov, slower than the 4.7% rise in Oct. Economists had expected the rate to ease to 3.8%. Further, this was the weakest inflation rate since Oct 2021, when prices had risen 3.2%. Core inflation edged lower to 3.2% from 3.3% in Oct due to slower rise in prices for retail and other goods, food, as well as electricity and gas. (RTT)

Thailand: Plans new minimum wage hike, keeps inflation target next year. Thailand will increase its minimum wage in Jan, the government said, confirming a previous deal while planning to raise it further in March. A wage committee, comprised of government, employers and employee representatives, had previously agreed to increase the daily minimum wage by 2.37%, effective in Jan, but Prime Minister Srettha Thavisin deemed the hike too low. Srettha said the committee would meet in Jan to seek a further wage hike to be announced in March. "There is no need to raise wages once a year," he told reporters. Srettha's ruling Pheu Thai party campaigned on a populist platform with a key plank of raising the daily minimum wage to 400 baht (RM53.38), despite concerns over competitiveness. Separately, Thailand's cabinet approved the central bank's headline inflation target range of 1% to 3% for 2024, unchanged from this year. (Reuters)

Markets

Mflour: To challenge MyCC's RM70m penalty decision. Malayan Flour Mills and its joint venture company, Dindings Poultry Development Centre SB are in consultation with their external legal counsel to challenge the Malaysia Competition Commission's decision to impose a penalty of RM70m for a price-fixing infringement. The companies said that the MyCC’s finding of infringement was without merit. Malayan Flour and Dindings Poultry will take the necessary and appropriate action to appeal the decision and apply for a stay of the decision in the interim. On Dec 22, MyCC said it had imposed a penalty of nearly RM415.5m against five poultry feed manufacturers for infringing Section 4 of the Competition Act 2010 (Act 712) by forming a price-fixing cartel for poultry feed. (StarBiz)

Green Packet: Leong Seng Wui resigns as executive director. Green Packet has announced the resignation of its executive director Leong Seng Wui effective 29 Dec. Leong, 43, tendered his resignation as director on 1 Dec to pursue other interests. Leong, who has held the position since Feb 2022, ceased to become a substantial shareholder in the group after he disposed of all his shares in March. Prior to the disposal, Leong owned 124.3m shares, or 8.9% of the issued shares of Green Packet, which he acquired in Jan 2022. (The Edge)

Ho Hup: Contests RM23m adjudication decision. Golden Wave SB, a subsidiary of Ho Hup Construction Company with an indirect ownership stake of 52.5%, is gearing up to pursue a stay of the adjudication decision, compelling the payment of a significant total sum amounting to RM23.2m. On 12 Dec, Golden Wave received a notice of adjudication under the Construction Industry Payment and Adjudication Act 2012. The decision, issued by Eko Bina SB, centres around payment claims related to a mixed commercial development project in Kota Kinabalu, Sabah. According to the adjudication decision, Golden Wave is obligated to pay EKB the substantial sum of RM23.2m. Golden Wave must also bear the costs of adjudication (RM61.3m) and pay Eko Bina’s legal costs (RM30,000.00) within thirty days. (The Malaysian Reserve)

MAHB: Passenger movement up 22.3% YoY to 9.6m in Nov. Malaysia Airports Holdings (MAHB) saw a 22.3% YoY increase in passenger movement in both its Malaysian and Turkish airport network, reaching 9.6m passengers in Nov, compared to 7.86m in the same month the previous year. In its monthly passenger traffic snapshot to Bursa Malaysia, MAHB disclosed that Malaysia accounted for 6.6m passengers, while the remaining 3m came from the Istanbul Sabiha Gökçen International Airport (SGIA). Local airports in Malaysia registered 3.4m passengers for international sectors and 3.9m for domestic sectors in Nov, despite the off-peak travel season and minor structural changes in the domestic landscape. (The Edge)

Ajiya: Shareholders advised to accept not fair, but reasonable takeover offer. BDO Capital Consultants SB recommended that shareholders of Ajiya accept the unconditional voluntary takeover bid by Chin Hin Group and other joint offerors, deeming the offer price of RM1.53 per share as not fair, but reasonable. The offer price per share is unfair as it represents a discount of 40 sen or 20.7% for each Ajiya share, based on revalued net asset value approach. However, it deemed the offer as reasonable especially for those holding a significant number of Ajiya shares, considering it provides an opportunity to realise their investments. (The Edge)

MARKET UPDATE

The US markets traded mostly flat with the Dow and S&P 500 added 0.4% each. The technology-heavy Nasdaq advanced 0.5%. These gains add to what’s already been a strong year for the stock market. With just three sessions left in 2023′s trading year, the Dow and S&P 500 are poised to end 2023 higher by 13% and 24%, respectively. The Nasdaq Composite has jumped 44%, outperforming amid mega-cap technology’s rebound and the artificial intelligence craze. European markets were still closed for Christmas holiday. Asian markets were steady in holiday-thinned trading with some markets in the region remained closed for holidays. Shanghai’s benchmark led losses in Asia on heavy selling of technology and computer chip-related shares as worries revived over trade tensions with the US and other western countries. The Shanghai Composite was down 0.7%. The Singapore’s Straits Times was flat.

Back home, FBM KLCI closed 0.3% lower to settle at 1,450.78. Bina Puri Holdings Bhd, whose share price more than doubled this year, fell as much as 16% to a low of 8.0 sen following its proposal to raise up to RM75.6m through a private placement after undertaking a consolidation of every five shares into one share.

Source: PublicInvest Research - 27 Dec 2023