Economy

US: Unemployment rises in nearly a third of US states in Dec. Unemployment rates increased in 15 US states in Dec, up by three from the prior month, but was unchanged in the majority of states and the District of Columbia. Nonfarm payroll employment levels, meanwhile, remained essentially unchanged in all states last month from Nov, according to Bureau of Labor Statistics data. From a year earlier, employment rose in 30 states while remaining essentially unchanged in 20 others and DC. (CNBC) EU: Eurozone consumer confidence unexpectedly weakens. Euro area consumer sentiment deteriorated unexpectedly at the start of the year, after improving in the previous two months, preliminary data from a survey by the European Commission showed. The flash consumer confidence index fell to -16.1 from - 15.0 in Dec. Economists had expected the score to improve to - 14.3. The corresponding index for the EU eased to -16.2 from - 16.0. Both readings are well below their long-term average. (RTT)

EU: Turkey consumer confidence at 7-Month high. Consumer confidence in Turkey rose for the fifth consecutive month in January, reaching its highest level in seven months, figures from the consumer tendency survey carried out by Turkstat and the central bank showed. The seasonally adjusted consumer confidence index improved to 80.4 in Jan from 77.4 in Dec. The latest reading was the highest since June 2023, when it was 85.1. The indicator reflecting the assessment of the current financial situation of households rose to 67.2 in Jan from 63.4 in Nov. (RTT)

UK: Sharp fall in UK government borrowing in Dec raises prospect of Budget tax cuts. The UK government borrowed much less than expected in Dec, in a boost to chancellor Jeremy Hunt’s plans to cut taxes ahead of this year’s expected general election. Public sector borrowing fell to GBP7.8bn last month, about half the sum from a year earlier and the lowest figure for a Dec since 2019, according to data published by the Office for National Statistics. The figure, which was driven down by inflation-related debt interest costs, is substantially lower than the GBP14bn prediction for the month from the Office for Budget Responsibility, the UK’s fiscal watchdog. (FTimes)

New Zealand: Inflation slows more than RBNZ expected. New Zealand inflation slowed in the final three months of 2023, even as indicators of domestic price pressures remained stubbornly strong, suggesting policymakers are likely to stand pat until there’s a clearer picture for the economy. Annual consumer price growth eased to 4.7% from 5.6% in the third quarter, government data showed. That matched economists’ expectations, while coming in below the Reserve Bank’s 5% forecast. Consumer prices rose 0.5% in the fourth quarter from three months prior, also in line with estimates. (Bloomberg)

Australia: Manufacturing PMI moves to expansion in Jan. The manufacturing sector in Australia climbed up into expansion territory in Jan, the latest survey from Judo Bank revealed with a manufacturing PMI score of 50.3. That's up from 47.6 in Dec and it moves above the boom-or-bust line of 50 that separates expansion from contraction. Supporting the rise in the headline PMI index was a marked deterioration in lead times, with suppliers' delivery times having lengthened to the largest extent since Aug 2022 amid mentions of shipping delays due to port congestions and conflicts in the Middle East. (RTT)

South Korea: Turn optimistic on hopes rate pain will ease. South Korean households turned optimistic for the first time in five months on expectations that the pain from high borrowing costs and rising consumer prices will moderate this year while the economy gains momentum from improving exports. The composite consumer sentiment index reached 101.6 in Jan, rising above a threshold that determines whether pessimism or optimism prevails, according to data from the BoK. (Bloomberg)

Markets

TNB (Outperform, TP: RM11.50): Partners Kuwait-based AI Dhow to expand power plant maintenance business in Kuwait. Tenaga Nasional (TNB) subsidiary TNB Repair and Maintenance Sdn Bhd (TNB Remaco) has partnered with Kuwait-based Al Dhow Engineering to expand its power plant maintenance business in Kuwait. The joint venture has signed a long-term service agreement with General Electric Global Services (GE Vernova) to provide maintenance service solutions for the gas turbines at Shuaiba North Power Generation and Water Distillation Plant in Al Ahmadi, Kuwait. (BTimes)

LBS Bina (Outperform, TP: RM0.67): Kicks off sukuk programme with RM200m sustainability sukuk issuance. The first tranche of Islamic debt papers is secured and has a five-year tenure, maturing on Jan 23, 2029. The sustainability sukuk is priced at a yield of 5% with a periodic distribution of 5% per annum. Proceeds raised under the first tranche are to be used to finance or refinance eligible social and green projects in line with the group’s Sustainability Financing Framework. (The Edge)

AirAsia X: Achieves 80% passenger load factor for FY2023. The company carried over 2.8m passengers in the year, 6.8 times more than the 417,195 it carried in FY2022. With the increase in the number of operational aircraft and the number of flights to 9,799 flights for the year, AAX Malaysia’s available seat kilometres (ASK) capacity — total seats flown multiplied by number of km flown — surged by 7.5 times YoY to 15.6bn. AAX Malaysia's total fleet comprised 18 A330s as of end-Dec 2023, with 16 aircraft activated and operational. It served a total of 22 destinations, eight of which were launched in the last 12 months. (The Edge)

Mah Sing: Ventures into manufacturing, trading of plastic pallets in Indonesia. Mah Sing entered into a master cooperation agreement with PT Gaya and that the venture will be carried out through a joint venture company whereby MSPI will hold 70% shareholding while PT Gaya will hold another 30%. The JV is strategically aligned with market trends of growing demand for plastic pallets in Indonesia, addresses capacity constraints in Malaysian facilities to meet rising global demand for plastic pallets, leverages a trusted local partner. (The Edge)

Hextar Capital: To divest stakes in Unigel units, refocus resources on core businesses. The group is looking to refocus its resources on its fibre optic cables and cable-related products manufacturing activities, while diversifying into the power generation and transmission businesses. Unigel Compounds SB, will sell its 40% stake in Unigel (UK) to Unigel Technologies Ltd for GBP1.3m (RM7.6m) and its 40% stake in Unigel IP to Unigel Ltd for GBP400,000 (RM2.34m). (The Edge)

Ni Hsin: Inks deal with MYUS to promote EBIXON motorcycles. Ni Hsin Group signed a master dealer agreement with MYUS Autotech SB to promote and market EBIXON motorcycles in Perlis and Langkawi. MYUS, as a master dealer, will be promoting both the sale and rental of EBIXON motorcycles. The rental operations will be based at the Kuala Perlis Jetty, where there is a constant stream of visitors and tourists coming in and out from Langkawi. (The Edge)

MARKET UPDATE

The FBM KLCI might open within a tight range today after the benchmark S&P 500 and the Nasdaq were flat overnight as a mixed bag of earnings from industry bellwethers threatened to douse a recent rally, while the Dow treaded water on the back of losses in 3M. 3M tumbled 9.5% after forecasting dour annual earnings as the company grapples with weak demand, while General Electric dropped 2.1% after the engine maker’s bleak quarterly profit forecast. At the close, the Dow Jones Industrial Average was down 96.36 points, or 0.25%, at 37,905.45, the S&P 500 was up 14.17 points, or 0.29%, at 4,864.60, and the Nasdaq Composite was up 65.66 points, or 0.43%, at 15,425.94. European equities ended lower as investors refrained from making big bets ahead of the European Central Bank's policy meeting later this week, while advancing mining stocks helped limit losses. The pan-European STOXX 600 index ended 0.3% lower, with utilities and ratesensitive real estate stocks among top losers, down 0.8% and 1.3% respectively, while heavyweight healthcare stocks shed 0.9%.

Back home, Bursa Malaysia closed higher for the third consecutive day on Tuesday, buoyed by continuous buying support in the heavyweight counters, especially banking-related stocks, ahead of Bank Negara Malaysia’s overnight policy rate decision. At the closing bell, the FBM KLCI rose 4.92 points to 1,496.11 from Monday's close of 1,491.19. Hong Kong’s Hang Seng index jumped almost 3%, with tech stocks leading the charge. Mainland China’s CSI 300 rose 0.4%, rebounding off a near-five year low, to close at 3,231.93. The Nikkei 225 slipped marginally to close at 36,517.58, while the Topix fell 0.11% to 2,542.07.

Source: PublicInvest Research - 24 Jan 2024