Economy

US: Holiday retail sales grow 3.1%, down from prior year, Mastercard says. US retail sales rose 3.1% between Nov 1 and Dec 24, as shoppers looked for last-minute Christmas deals amid big promotions, a Mastercard report showed. The increase is lower than the 3.7% growth Mastercard forecast in Sept and last year's 7.6% rise as higher interest rates and inflation pressured consumer spending. Amazon.com and Walmart ramped up promotions through Nov in the US to entice bargain-hunting shoppers, but analysts said that the discounts were not as deep as the prior year, when retailers were saddled with excess stock after the pandemic. Some of those discounts were rolled back starting in December, when customers were expected to buy last-minute gifts and household goods on the Saturday before Christmas — dubbed "Super Saturday". Arun Sundaram, an analyst at CRFA Research, said many shoppers waited for Black Friday and Cyber Monday to make holiday purchases and finished the final sprint during Super Saturday. (Reuters)

EU: Spain extends measures put in place to ease inflation hit. Spain extended some measures including lower tax on food that the government had put in place to shield households from a surge in living costs, even as inflation eased last month. The value-added tax rate on certain basic food products will remain at 0% for the first six months of 2024, Prime Minister Pedro Sanchez said at a press conference in Madrid. Meanwhile, taxes on windfall profits of banks and energy firms will be extended for one year. The tax applied to energy companies will be modified so that strategic investments in certain projects can be deducted, Sanchez said. Spanish inflation unexpectedly eased to 3.3% in Nov, retreating for the first time since June thanks to drops in the costs of fuel and tourism. (Bloomberg)

China: Industrial profits log sharp growth. China industrial profits registered a double-digit strong growth in Nov, which was largely driven by the low base of comparison. Industrial profits advanced 29.5% in Nov from a year ago, the National Bureau of Statistics reported. This follows a 2.7% rise in Oct. During Jan to Nov, industrial profits decreased at a slower pace of 4.4% from the same period last year to CNY6.98trn. Profits had decreased 7.8% in the Jan to Oct period. The uptrend in November was underpinned by the improvement in the manufacturing sector together with macro polices and base effects. (RTT)

China: Threatens more trade sanctions on Taiwan as election nears. The Chinese government threatened to place further trade sanctions on Taiwan if the ruling party "stubbornly" adheres to supporting independence, in a further escalation of the war of words as Taiwanese elections approach next month. Taiwan's Jan 13 presidential and parliamentary elections are taking place as China, which views the island as its own territory, has sought to force Taiwan to accept Chinese sovereignty claims. (Reuters)

Japan: BOJ summary suggests Ueda can wait for wages before hiking. Bank of Japan (BOJ) board members discussed the potential timing of the nation’s first interest rate hike since 2007 during their meeting last week, with several members indicating they see no rush to make the move. “It would not be too late even if the bank makes a decision after it sees developments in labourmanagement wage negotiations next spring,” one of nine board members said at the Dec 18-19 gathering. There is only a small risk of underlying inflation overshooting its 2% target by a significant degree, the same member said. (Bloomberg)

Japan: Housing starts fall 8.5%, more than expected. Japan's housing starts decreased for the sixth straight month in Nov, and at a faster-than-expected pace, data from the Ministry of Land, Infrastructure, Transport, and Tourism showed. Housing starts dropped 8.5% YoY in Nov, which was worse than the 6.3% decline in Oct. Economists had expected a decrease of 4.3%. Data showed that new construction was contracted in the majority of categories, including owned, rented, and built for scale. The seasonally adjusted annualised number of housing starts fell to 775,000 in Nov from 808,000 in the previous month. (RTT)

South Korea: Industrial output surprises to the upside. Industrial production in South Korea was up a seasonally adjusted 3.3% on month in November, Statistics Korea said. That exceeded expectations for an increase of 1.0% following the 3.5% contraction in Oct. On an annual basis, industrial output jumped 5.3% - again beating forecasts for a gain of 3.0% and accelerating from 1.1% in the previous month. The stats bureau also said that retail sales rose a seasonally adjusted 1.0% on month in November after slipping 0.8% in October. (RTT)

Thailand: Govt set to further increase spending in 2025 fiscal year. Thailand is planning a larger budget deficit of THB713bn (RM95.9bn) for the 2025 fiscal year and higher spending of THB3.6trn that year, the government said, in a plan that would see a rise in spending over the next two years. The government predicts GDP growth of 3.6% in 2025, it said in a statement dated Dec 26, the day when the plans were approved by the cabinet without being fully, pro-actively divulged. The 2025 fiscal year starts on Oct 1, 2024. (Reuters)

Markets

Tenaga Nasional (Outperform, TP: RM11.50): Partners Trina Solar in Malaysian energy transition advancement. Tenaga Nasional (TNB) is collaborating with Trina Solar Co Ltd to advance clean energy solutions. With this agreement, TNB continues to drive sustainable energy transition with its subsidiary GSPARX SB and Trina Solar. This alliance highlights the company’s commitment to accelerating Malaysia’s energy transition goals. (The Malaysian Reserve)

Awantech: Secures MOE contract for digital learning platform. AwanBiru Technology (Awantech) has secured a three-year contract worth RM4.9m from the MoE for the procurement of Learning Management System licence subscription services. The group said the three-year contract seeks to meet the requirements of the digital competence improvement course for education service officers. The contract represents Awantech's first major success in providing a digital learning platform. (The Edge)

Jentayu: Announces completion of Telekosang Hydro project as second plant attains FiTCD. Jentayu Sustainables said the Telekosang Hydro 2 (TH2) hydropower plant in Sabah, with a capacity of 16 megawatts (MW), has attained the feed-in-tariff commencement date (FiTCD) as of 25 Dec. TH2 has now fully completed its development phase, and is now fully online and operating commercially, successfully supplying power to Sabah Electricity SB (SESB) as contracted. The project was subsequently included as a confirmed project in the Plant Up Plan for Sabah released on 19 Sep 2023, outlining the development plan for future power-generating plants in Sabah. The estimated cost for the project is RM2.8bn, and it is anticipated to be completed by Dec 2027. (The Edge)

Ekovest: Partners China's CICO to explore infrastructure projects in Malaysia. Ekovest is teaming up with Zhejiang Communications Investment Group Co Ltd (CICO), the largest state-owned enterprise established by the Zhejiang provincial government in China, for the joint exploration and development of infrastructure and other projects in Malaysia. The two groups will participate in infrastructure concession assets, large-scale infrastructure projects, food security and trading initiatives, retailing ventures and transit-oriented development (TOD) projects. (The Edge)

Ni Hsin: Delivers 50 EV bikes to USM. Ni Hsin Group via its wholly-owned subsidiary, Ni Hsin EV Tech SB, has handed over 50 EBixon Bold electric motorcycles to Universiti Sains Malaysia (USM) on behalf of Dongguan Tailing Electric Vehicle Co Ltd. On 16 Oct 2023, Ni Hsin EV Tech had signed a collaboration-cumdonation agreement with USM, Focus Applied Technologies SB and Dongguan Tailing EV to promote electric mobility. (StarBiz)

IPO: TSA Group prices IPO at 55 sen a share to raise RM42.5m on ACE Market. TSA Group is pricing its shares at 55 sen apiece, seeking to raise some RM42.5m through an IPO on Bursa Malaysia’s ACE Market. At 55 sen per share, the industrial hardware products and stainless steel pipes and metal products manufacturer is expected to have a market capitalisation of RM170.1m after listing, valuing the company at about 4.2 times its price-earnings multiple. At the prospectus launch, the group said RM42.5m of the proceeds will be raised from the issuance of 77.3m new shares, representing 25% of its expanded share capital of 309.3m shares. (The Edge)

MARKET UPDATE

Stocks finished higher as traders kept an eye on the S&P 500’s march toward record levels. The S&P 500 inched up 0.1% while the Nasdaq Composite added 0.2%. The Dow rose 111.19 points or 0.3%. It has been a strong year for stocks. The Dow and S&P 500 are poised to end 2023 higher by 13% and 24%, respectively. The Nasdaq Composite has jumped 44%. Despite the upbeat sentiment, some on Wall Street worry that the market may be overly optimistic, which could lead to disappointment if the Federal Reserve starts cutting rates later than expected. European markets also traded higher with the FTSE 100, DAX and CAC gaining 0.4%, 0.2% and 0.1% respectively. Meanwhile, shares in Asia-Pacific advanced, with Chinese and Hong Kong indexes bouncing on the back of a strong showing for video game stocks. The Shanghai Composite and Hang Seng Index rose 0.5% and 1.7% respectively while Straits Times added 1%.

Back home, FBM KLCI closed 0.2% or 3.44 points higher to settle at 1,454.22. Ekovest Bhd is teaming up with Zhejiang Communications Investment Group Co Ltd, the largest stateowned enterprise established by the Zhejiang provincial government in China, for the joint exploration and development of infrastructure and other projects in Malaysia. The groups will participate in infrastructure concession assets, large-scale infrastructure projects, food security and trading initiatives, retailing ventures and transit-oriented development projects.

Source: PublicInvest Research - 28 Dec 2023