Economy

Global: Factories deliver mixed performance globally in Jan. Global factories delivered a largely patchy performance at the start of 2024, surveys showed, as soft Chinese demand left Asia's economies on a shaky footing while disruption to Red Sea shipping delayed deliveries in Europe. The prolonged downturn in euro zone manufacturing activity eased for a third month but could stretch through this quarter as a majority of sub-indices in the region's Purchasing Managers' Index (PMI) remained within the contraction zone. (Reuters)

US: Weekly jobless claims unexpectedly rise to 224,000. With the more closely watched monthly jobs report looming, the Labor Department released a report unexpectedly showing a modest increase in first-time claims for US unemployment benefits in the week ended January 27th. The Labor Department said initial jobless claims rose to 224,000, an increase of 9,000 from the previous week's revised level of 215,000. Economists had expected jobless claims to edge down to 212,000 from the 214,000 originally reported for the previous week. Jobless claims continued to rebound after falling to their lowest levels since Sept 2022 in the week ended Jan 13th. The 9,000 rise in jobless claims last week bucked our expectation of a small decline, but cutting through the recent seasonal noise, claims have been steady at low levels over the past five months, signaling that there are still very few layoffs. (RTT)

EU: Inflation softens in Jan. Eurozone inflation weakened in Jan after accelerating in Dec, flash data from Eurostat showed. The harmonized index of consumer prices rose 2.8% on a yearly basis, slightly slower than the 2.9% increase in Dec. The rate came in line with expectations. Excluding energy, food, alcohol and tobacco, core inflation eased to 3.3% in January from 3.4%. The rate was seen at 3.2%. On a monthly basis, the HICP was down 0.4%. Final data is due on February 22. (RTT)

UK: Bank of England hints at rate cut. The BoE opened the door for interest rate cuts this year after holding the policy rate steady for four straight meetings, and lowered its inflation projections. The Monetary Policy Committee, led by Governor Andrew Bailey, decided in a 6-3 split vote to keep the bank rate at a 15-year high of 5.25%, as expected. Interest rates have now peaked and markets are pricing in a rate cut as early as June. The BoE dropped the wordings related to further tightening in the latest policy statement. Six MPC members said that maintaining the current rate was warranted at this meeting. Headline inflation eased sharply and the restrictive stance of policy was weighing on activity and leading to a looser labor market. The risks to inflation were more balanced, they noted. (RTT)

China: Manufacturing activity continues to expand. China's factory sector continued to expand with sustained increases in output and new orders amid the improving sentiment, survey results from S&P Global showed. The Caixin manufacturing Purchasing Managers' Index, or PMI, posted 50.8 in Jan, unchanged from Dec. The manufacturing sector has strengthened for three straight months, to mark the longest period of continuous improvement for two-and-a-half years, the survey showed. However, the official PMI survey data showed that the manufacturing contracted for the fourth consecutive month in Jan. (RTT)

China: Pledges to stick with fiscal expansion to spur economy. China will maintain fiscal expansion this year to spur an economic recovery, Vice Finance Minister Wang Dongwei said, reinforcing market views that public spending will be the government's main tool to lift growth. The government will "increase the intensity of fiscal macroeconomic adjustments, implement a proactive fiscal policy to consolidate and enhance the positive trend of economic recovery," Wang said at a press conference. China's economy has been stuck in an uneven and sputtering post-Covid recovery, with persistent deflationary pressures, a prolonged housing downturn and geopolitical challenges keeping alive calls for more policy support. (Reuters)

Hong Kong: Dec retail sales up 7.8% as tourism recovers. Hong Kong's retail sales rose for the 13th consecutive month in Dec as tourism continued to improve, official data showed. Sales increased 7.8% YoY to HKD36.3bn (USD4.64bn) in Dec, the Hong Kong government said. That compared with a 15.9% jump in Nov, a 5.8% rise in Oct, 13% growth in Sept and a 13.7% increase in Aug. "Visitor arrivals should increase further, alongside the continued recovery of handling capacity," a government spokesman said. Rising household income and the government's efforts to promote mega events should provide support to retail businesses. (Reuters)

Markets

Kimlun: Wins RM134m construction job. Kimlun Corp’s whollyowned subsidiary, Kimlun SB, has accepted a construction contract from Sunway Parkview SB for main building works for houses, ancillary buildings and amenities in its development in Johor Baru, Johor, for RM133.6m. The construction work is expected to be completed in the 3Q 2026. (StarBiz)

MAHB: 2023 passenger traffic surpasses 100m, approaches pre-pandemic levels. Malaysia Airports Holdings’ (MAHB) total passenger movements surpassed the 100m mark in 2023, marking the first time since 2020 at 120m passengers. This represents a substantial recovery rate of 84.6% against 2019 levels. Local airports played a pivotal role in achieving yet another milestone. Airports in Malaysia experienced a further uptick in passenger traffic in Dec 2023, with a total of 7.7m recorded, in line with the long year-end holidays. (The Edge)

GDB: Secures RM306m job for KL Wellness City hospital. GDB Holdings via its wholly-owned subsidiary Grand Dynamic Builders SB has been appointed the main contractor for the development of a private hospital for RM306m. The construction services firm secured the contract from KL International Hospital SB, a subsidiary of KL Wellness City SB, the master developer and owner of the KL Wellness City mixed-development in Bukit Jalil, Kuala Lumpur. (StarBiz)

Haily: Bags RM46m building deal. Haily Group has accepted a letter of award worth RM45.8m from RDC Arkitek SB on behalf of Property Village, for the construction and completion of 120 units of double storey cluster houses in Kulai, Johor. The contract will also comprise the construction of two Tenaga Nasional substations and one guard house. (StarBiz)

Mah Sing: Plans RM2bn GDV industrial park in Sepang; RM101m for 185-acre first parcel. Mah Sing Group plans to purchase 185 acres of land in Sepang for RM100.72m as it plans the development of an industrial development called Mah Sing Business Park, which may potentially span 561.65 acres, with a GDV of up to RM2bn. A conditional sale and purchase agreement was inked for the 185-acre land to be purchased from Premier Land Resources SB (PLR) at RM12.50 per sq ft by Fusion Heights Development SB (FHD), a wholly owned unit of its 70%-owned joint venture (JV) Mah Sing South Sea Industrial Development SB (MSSSID). (The Edge)

Yinson: Integrates Brunei’s BEV Charging Company into chargEV. Yinson Holdings’ green technologies arm is to expand the use of its smart electric vehicle (EV) charging infrastructure application chargEV into Brunei. The app is set raise the number of chargers offered to motorists on the platform across Brunei, Malaysia and Singapore to over 1,000. (The Edge)

Minetech: Gets RM230m job extension. Minetech Resources has entered into an agreement with Able Return SB and Damar Consolidated Exploration SB to renew its Selinsing Gold Mine Project contract for a further 36 months, valued at RM230m. The project consisted of waste removal, ore deliveries and associated works for open pit mining. (StarBiz)

MARKET UPDATE

The FBM KLCI might open with a positive bias today after US stocks rebounded on Thursday as investors looked to a spate of high-profile earnings and the Friday's employment report a day after the Federal Reserve quashed lingering bets that interest rate cuts could begin as early as March. On Wednesday, the Federal Open Markets Committee (FOMC) left its policy rate unchanged as expected. At his press conference, Fed Chair Jerome Powell called a March rate cut "unlikely," resetting market expectations of a dovish Fed pivot in the first quarter, and prompting a steep sell-off. The S&P 500 climbed 1.25% to end the session at 4,906.19 points. The Nasdaq gained 1.30% to 15,361.64 points, while Dow Jones Industrial Average rose 0.97% to 38,519.84 points. Meanwhile, Euro zone inflation eased as expected last month but underlying price pressures fell less than forecast, likely boosting the European Central Bank's argument that rate cuts should not be rushed. The pan-European STOXX 600 index lost 0.37%. Back home, the regional markets were choppy overnight. MSCI's broadest index of Asia-Pacific shares rose 0.2%, helped by Chinese blue chips that snapped a four-day slide, along with better surveys on home prices and manufacturing. Japan's Nikkei eased 0.8% as the yen gained.

Source: PublicInvest Research - 2 Feb 2024