HEADLINES

Economy

US: Blowout US employment report reinforces economy's resilience. US job gains increased by the most in six months in Sept and the unemployment rate fell to 4.1%, pointing to a resilient economy that likely does not need the Fed to deliver large interest rate cuts for the rest of this year. In addition to the bigger-thanexpected increase in nonfarm payrolls reported by the Labor Department, wages rose at a solid pace last month. The closely watched employment report also showed the economy added 72,000 more jobs in July and Aug than previously estimated. (Reuters)

US: Inflation is set to reassure a labour market-focused Fed. US inflation probably moderated at the end of the 3Q, reassuring a Fed that’s shifting more of its policy focus toward shielding the labour market. The CPI is seen rising 0.1% in Sept, its smallest gain in three months. Compared with a year earlier, the CPI probably rose 2.3%, the sixth-straight slowdown and the tamest since early 2021. The gauge excluding the volatile food and energy categories, which provides a better view of underlying inflation, is projected to rise 0.2% from a month earlier and 3.2% from Sept 2023. (The Edge)

US: Manufacturing is a weak spot in surprisingly strong US jobs data. US manufacturers shed 7,000 jobs in Sept, a weak spot in an otherwise strong employment report. The US has lost 34,000 manufacturing jobs in the past two months, according to Bureau of Labor Statistics data. Employment now stands at a two-year low in a sector that has been struggling from weak demand, high interest rates and uncertainty about the presidential election that has hindered capital spending. Manufacturing jobs represent a fraction of total non-farm payrolls, about 8% today compared with almost a third in the 1950s. (The Edge)

EU: ECB's Centeno says seeing "first doubts" on labor market. ECB policymaker Mario Centeno said that inflation in the euro area is under control but expressed concern over early signs of cooling in the labour market, reports said. "The topic of growth in Europe is central, we have started to see the first doubts in the labour market," Centeno, who is the governor of the BOP. Inflation is now close to the 2% target in Eurozone. Eurozone inflation fell to 1.8% in Sept, below the 2% target for the first time in more than three years and raised speculation of faster interest rate cuts from the ECB. (RTT)

EU: French industrial output rebounds in Aug. France's industrial production rebounded in Aug driven by a strong rise in transport equipment output, data from INSEE showed. Industrial output grew 1.4% on a monthly basis in Aug, faster than the 0.2% increase in July. Output was forecast to grow 0.3%. Manufacturing output advanced 1.6%, in contrast to the 0.2% fall in the previous month. The rise in manufacturing output was driven primarily by the increase in the output for "other manufacturing industries." Output also increased sharply by 3.3% in the manufacture of transport equipment. (RTT)

UK: Construction activity growth fastest since early 2022. The UK construction activity posted its fastest expansion in nearly 2.5 years in Sept on improving output and new order growth amid falling interest rates, survey data from S&P Global revealed. The construction PMI registered 57.2 in Sept, up from 53.6 in Aug. The reading was forecast to climb moderately to 53.1. The index has remained above the neutral 50.0 threshold for the seventh straight month and the reading suggested the steepest rate of growth in 29 months. All three sub-sectors of construction showed faster rates of output growth. (RTT)

China: Stimulus draws investors back to offshore bonds of troubled property sector. Some Chinese and global institutional investors are revisiting Chinese property bonds, betting on an improvement in outlook as the government accelerates efforts to boost economic growth and revive a property sector in the throes of a debt crisis. Investors began returning after the announcement of the most aggressive stimulus measures since the pandemic, mostly targeting the property sector and triggering a rally in the offshore bonds of property developers. (Reuters)

Japan: BOJ's rate hike plans face political curveball. BOJ Governor Kazuo Ueda's efforts to lift rock-bottom borrowing costs face fresh challenges as a JPY rebound and the new political leadership's preference for loose monetary policy raise the hurdle for rate hikes. New Japanese premier Shigeru Ishiba stunned markets when he said the economy was not ready for further rate hikes, an apparent about-face from his previous support for the BOJ unwinding decades of extreme monetary stimulus. (Reuters)

Markets

Velesto Energy: Signs MoU with SLB to improve rig capabilities. Velesto Energy Bhd, through its subsidiary Velesto Drilling SB, has signed a MoU with global technology company, SLB to enhance rig capabilities., Velesto said the three-year collaboration will see SLB deploy its drillops intelligent well delivery and insights solutions as well as its drilling emissions management solutions on designated Velesto rigs. It said these digital solutions are designed to enhance and optimise drilling performance and monitor emissions, unlocking commercial potential for both parties. (The Star)

Solar District Cooling: Plans to expand energy services into Brunei. Solar District Cooling Group announced on Friday its plans to expand its solar and energy efficiency services into Brunei. Its wholly owned subsidiary, Solar District Cooling SB, has entered into a MOU with Brunei-based Serikandi Oil Field Services SB to explore collaboration opportunities. (The Edge)

Pastech: Dhaya Maju Infrastructure new controlling shareholder. Pestech International (Pestech) has entered into a conditional subscription agreement with Dhaya Maju Infrastructure (Asia) SB (DMIA) for the proposed restricted issuance of the company's shares worth RM160m. The agreement entails the issuance of 1.33bn shares at the price of 12 sen per share, representing approximately 135.43% of Pestech's existing total number of issued shares (excluding treasury shares) and approximately 57.52 per cent of the enlarged issued shares of the company. As of Sept 20, 2024, its issued share capital stood at RM232.94m, comprising 992.22m shares, including 7.67m treasury shares. (New Straits Times)

Aneka Jaringan: Abort private placements as deadlines lapse. Aneka Jaringan Holdings said that it has aborted its planned private placement of up to 10% of its issued share capital, which was intended to raise up to RM15.51m. Aneka Jaringan said the extension period to complete the private placement will lapse after 5 Oct. "After further deliberation, the company has decided not to proceed with the private placement," it said. Aneka Jaringan had announced the proposal to issue new shares to third-party investors on Sept 3 last year, aiming to raise up to RM15.51m to fund ongoing construction projects. (The Edge)

Artroniq: Gets extension till Sept 2025 to hold AGM. Artroniq has secured approval from the Companies Commission of Malaysia (SSM) for an extension of time to hold its 2025 annual general meeting up to Sept 30, 2025., Artroniq said the company also received approval to circulate its audited financial statements for the financial year ending 31 Dec, 2024 up to 9 Sept, 2025, under Section 340(4) and Section 259(2) of the Companies Act 2016 (CA 2016). (The Star)

HeiTech Padu: Unaware of reason for unusual market activity as shares rally past RM4 for first time. HeiTech Padu said that it is not aware of any corporate development that caused the unusual market activity (UMA) in its shares which spiked to a record high. HeiTech Padu received the UMA query from Bursa Malaysia after its shares surged by as much as 56 sen, or 15.34%, to a record high of RM4.21. The stock pared some gains to close at RM4.10, still up by 45 sen or 12.33%, making it the second-highest gainer on the stock exchange in terms of value. YTD, the stock has risen over 360%. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today as US stocks rallied Friday after a surprisingly strong report on the US job market raised optimism about the economy. The S&P 500 climbed 0.9% and got close to its all-time high set on Monday. The Dow Jones Industrial Average rose 341 points, or 0.8%, to set its own record, while the Nasdaq composite clambered 1.2% higher. Leading the way were banks, airlines, cruise-ship operators and other companies whose profits can benefit the most from a stronger economy where people are working and better able to pay for things. Norwegian Cruise Line steamed 4.9% higher, JPMorgan Chase rose 3.5% and the small companies in the Russell 2000 index gained 1.5%. Friday’s report capped a week of mostly encouraging data on the economy, helping to allay one of Wall Street’s top questions: Can the job market continue to hold up after the Fed earlier kept interest rates at a two-decade high? In stock markets elsewhere, indices rose across much of Europe following the strong jobs report from the world’s largest economy. In Asia, Hong Kong’s Hang Seng jumped 2.8% in its latest sharp swerve. It soared a bit more than 10% over the week on excitement about a flurry of recent announcements from Beijing to prop up the world’s second-largest economy. Back home, the FBM KLCI lost 11.58 points to end at 1629.97.

Source: PublicInvest Research - 7 Oct 2024