Economy

US: Fed rate cuts may wait as inflation ticked up in Dec. Federal Reserve policymakers may not be quite as eager to start cutting interest rates as soon as March after fresh data showed inflation ticked up in Dec. The consumer price index (CPI) rose 0.3% in Dec after increasing 0.1% in Nov, the Labor Department's Bureau of Labor Statistics said. From a year earlier, consumer prices rose 3.4%, more than the 3.2% economists polled by Reuters had expected. (Reuters)

US: Weekly jobless claims unexpectedly edge down to 202,000. First-time claims for US unemployment benefits unexpectedly edged slightly lower in the week ended Jan 6th, according to a report released by the Labor Department on. The report said initial jobless claims slipped to 202,000, a decrease of 1,000 from the previous week's revised level of 203,000. Economists had expected jobless claims to rise to 210,000 from the 202,000 originally reported for the previous week. With the modest decrease, jobless claims fell to their lowest level since hitting 200,000 in the week ended October 14th. (RTT)

EU: Rate cuts to occur if it is clear inflation has fallen to 2% -ECB's Lagarde. ECB President Christine Lagarde said that the'hardest and worst bit' regarding inflation was likely over and thatinterest rates would be cut if the ECB had certainty that inflationhad fallen to the 2% level. The ECB sees inflation oscillating in the2.5% to 3% range for much of this year and policymakers have saidany talk of a rate cut before crucial first-quarter wage data due inMay would be premature. Investors have priced in at least five ratecuts in 2024 with the first move coming in March or April - a timelineseveral ECB policymakers have called excessive given lingeringprice pressures. (Reuters)

EU: Weak euro zone growth a key downside rating risk forcentral Europe -S&P. Protracted economic weakness in the eurozone could harm central Europe's recovery prospects, a key riskthat could ultimately put downward pressure on sovereign ratingsin the region, S&P Global Director Karen Vartapetov said. Datapublished earlier this week showed Nov industrial output falling inthe Czech Republic and Hungary following a decline in industrialproduction in Germany, Europe's largest economy and centralEurope's key trading partner. (Reuters)

China: REITs plumb record lows as economic gloom lingers.China's real estate investment products are tumbling, extending last year's slump as investors lose hope for a recovery in the economy and property assets such as industrial parks and logistics hubs. Chinese real estate investment trusts (REITs), which issue shares to investors against a portfolio of real estate holdings, have hit successive lows in the first few days of 2024. (Reuters)

Japan: OECD urges central bank to gradually raise interestrates. The Bank of Japan (BOJ) should gradually raise short-terminterest rates and make its bond yield control policy more flexible,if inflation stays around its 2% target and is accompanied bysustained wage growth, the OECD said. While the BOJ madetweaks to its yield curve control (YCC) last year to loosen its tightgrip on long-term interest rates, markets could challenge the policyagain if inflation remains above its 2% target and global yields goup, it said. (Reuters)

South Korea: Bank of Korea hints at pivot towards policyeasing after standing pat. South Korea's central bank hinted itmay pivot towards monetary easing along with its global peers,sending bond futures up after a widely-expected decision to keepits policy interest rate unchanged for an eighth meeting. The Bankof Korea (BOK) held its benchmark rate at 3.50% at a policy reviewin Seoul, an outcome correctly forecast by all 38 economists polledby Reuters. (Reuters)

Thailand: Dec consumer confidence at high of nearly 4 yearson govt measures, tourism. Thai consumer confidence rose inDec, reaching the highest level in 46 months, boosted bygovernment measures to ease living costs and increased tourism,a survey showed. The consumer index of the University of the ThaiChamber of Commerce (increased to 62.0 in Dec from 60.9 theprevious month, the university said in a statement. (Reuters)

Markets

Hume Cement: Sells Prai industrial plot for RM39.8m. Hume Cement Industries (HCIB) has accepted an offer to sell its plot of land in the Prai Industrial Estate in Penang for RM39.8m cash, that will bring it an estimated net gain of RM32m. The offer for the leasehold industrial land, together with the buildings built on it, was made by Skygate Technology (KL) SB. The plot measures about 653,400 sq ft and was acquired in 1982, with a net book value of RM1.3m as of 30 June 2023. (The Edge)

EVD: Co-founder temporarily suspended amid ongoing litigations. EVD has announced the immediate temporary suspension of its ED of Operations, Mah Seong Huak. Mah, a cofounder and significant shareholder, has been relieved of operational duties. The suspension is asserted to have no financial or operational repercussions, and notably, the company did not specify reasons for this action. (The Malaysian Reserve)

Warisan TC: Enters exclusive partnership for EVs distribution. Warisan TC Holdings (WTCH) has taken a significant step into the EV market by securing an exclusive agreement of distribution and service with China’s GAC AION New Energy Automobile Company Ltd (GAC AION) through its subsidiary, WTC Automotif (M) SB (WTCA). Under the three-year agreement, WTCA will serve as the sole and exclusive distributor of GAC AION’s electric vehicles and spare parts in Malaysia. (The Malaysian Reserve)

Borneo Oil: Ends gold mining ops in Pahang land as it scraps plan to buy concessionaire. Borneo Oil has ended its gold-mining venture with Syarikat Ratna Pura SB (SRP) and Ricco Mining SB in Rompin, Pahang, as part of plans to downsize its mining operations in the state. It has entered into a deed of cancellation and novation with vendors to acquire a 90% stake in SRP for RM1.8m cash. (The Edge)

Fajarbaru: RMAF Butterworth base redevelopment contract sum revised higher to RM16.3m. The value of Fajarbaru Builder Group’s contract for the planning phase of the redevelopment of military facilities at the Royal Malaysian Air Force (RMAF) base in Butterworth, Penang has been revised to a higher sum of RM16.3m, from RM7.4m previously. The revision was to provide for the 50% schematic design report to be a planning phase milestone, and to defer the date for the delivery phase approval. (The Edge)

NetX: Proposes one-for-two bonus issue of warrants. NetX Holdings has proposed a bonus issue of 468.98m free warrants on the basis of one warrant for every two shares held on an entitlement date to be determined later. NetX said the illustrative exercise price is eight sen per warrant. Based on the exercise price and in the event the warrants are fully exercised, NetX is expected to raise gross proceeds of about RM37.5m for working capital purposes. (The Edge)

Atlan Holdings: 3Q earnings up 9.5%, declares dividend of 4 sen. Atlan Holdings reported a 9.5% increase in net profit to RM6.5m in 3Q. The growth was fueled by higher revenue in the automotive segment, leading to a 19.1% rise in quarterly revenue to RM117.2m. Its automotive segment’s profit before tax surged by 53.1%, while the duty-free segment experienced a lower profit before tax due to a decrease in revenue. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open flat today as Wall Street stocks werelittle changed early today after data showed US consumer pricesrose more than expected in December. The Department ofLabour’s consumer price index, a key measure of inflation, was up3.4% from a year ago and higher than November’s figure. FromNovember to December, CPI rose 0.3%, compared withexpectations for a 0.2% increase. The Dow Jones IndustrialAverage rose 15.29 points, or 0.04%, to 37,711.02. The S&P 500lost 3.21 points, or 0.07%, at 4,780.24 and the Nasdaq Compositegained just 0.54 points, at 14,970.19. European shares endedlower on Thursday with the pan-European STOXX 600 ended 0.8%lower after rising as much as 0.8% during the day, its third straightday of losses with banks at the forefront of the selloff, down 1.9%.

Back home, Bursa Malaysia took a breather to end at an intraday low on Thursday, dragged down mainly by the consumer products and services as well as industrial products and services sectors. At the closing bell, the FBM KLCI had edged down by 3.86 points to 1,483.00, from Wednesday’s close at 1,486.86. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.8% higher, on course to snap its seven-day losing streak. Japan's Nikkei breached 35,000 for the first time since February 1990 in a blistering start to the year, after rising 28% in 2023, its strongest yearly performance in a decade. The Nikkei was last up 1.9% at 35,085 on Thursday.

Source: PublicInvest Research - 12 Jan 2024