HEADLINES

Economy

US: Fed vice-chair says risks to inflation, employment now balanced. Fed officials lowered interest rates at their meeting last month for the first time since the onset of the Covid-19 pandemic, reducing them by a 0.5ppt. The move came amid further signs of cooling inflation and growing concerns about the labour market. Forecasts released the same day showed the median projection from Fed officials called for an additional 50bps in reductions this year, implying smaller, quarter-point cuts at each of their two remaining meetings in 2024. (Bloomberg)

EU: ECB policymakers press case for Oct rate cut. Several ECB policymakers argued their case for another interest rate cut next week, even if some of their colleagues remained unconvinced as turmoil in the Middle East fuels volatility in energy costs. The ECB has already lowered rates twice this year and a cut to the 3.5% deposit rate on Oct 17 is almost fully priced in by financial markets, indicating investors expect the bank to accelerate the pace of policy easing given a weak economy and an unexpectedly quick slowdown in price growth. (Reuters)

EU: ECB's Stournaras backs two quarter-point rate cuts in 2024, FT says. ECB policymaker Yannis Stournaras is backing two interest rate cuts this year and expects further easing in 2025 as inflation continues to trend lower. "Even if we have one cut of 25bps now and another one in Dec, we will be back to just 3 per cent — still in highly restrictive territory," Stournaras told, referring to the ECB's main policy rate. (Reuters)

India: Central bank policy stance shift to neutral opens door for rate cuts. The RBI maintained its interest rate for the tenth straight meeting, and shifted its monetary policy stance to neutral, paving the way for the first interest rate cut in four years as inflation is expected to moderate. The RBI Monetary Policy Committee (MPC), led by Governor Shaktikanta Das, voted 5-1 to keep the policy repo rate unchanged at 6.5%. New MPC member Nagesh Kumar voted to reduce the policy repo rate by 25bps. (RTT)

New Zealand: Steps up pace of rate cuts as economy weakens. New Zealand’s central bank cut interest rates by 0.5ppt, stepping up the pace of easing as policymakers become more concerned about the economic slowdown. The RBNZ Monetary Policy Committee (MPC) lowered the OCR to 4.75% from 5.25% in Wellington, as anticipated by 19 of 23 economists. The remainder expected a quarter-point move. (The Edge)

Markets

Ecomate: To acquire factory, machinery in Muar to expand operations. Ecomate Holdings has proposed to acquire a singlestorey factory in Muar, Johor, along with machinery and components, from SWS Capital. It is part of the company’s plans to establish a new factory and warehouse, while securing a permanent premises to support its business expansion. The company said it will be buying the factory, situated on 8,217 square metres of leasehold industrial land, for RM7m, and pay another RM1.85m for the machinery and component. Ecomate noted that the new manufacturing facility is located near its existing plants, allowing for improved administrative control, reduced production costs, and enhanced product quality. (The Edge)

Key Asic: Collaborates with Japan's NSW to develop ASIC business. Key Asic has signed a collaboration agreement with NSW Inc, one of Japan's largest system solution developers, to develop the Application-Specific Integrated Circuit (ASIC) design business. The company said that NSW will offer a wide range of solutions, allowing both companies to jointly develop their ASIC design capabilities and better address customer needs. Key Asic highlighted NSW’s unique and impressive expertise in software, hardware, and chip development, particularly in the Internet of Things (IoT) and artificial intelligence (AI) technologies, which have been successfully deployed in the market. (Bernama)

SkyWorld: Partners PR1MA to develop affordable homes in Brickfields. Skyworld Development's wholly-owned subsidiary Aspirasi Cekap SB has entered into a joint development agreement with PR1MA Corp Malaysia to build PR1MA homes on a 1.97-acre leasehold land in Brickfields, Kuala Lumpur. In a statement, Iit said the project, known as SkyAwani Prima, will feature 491 units of affordable apartments, with built-up areas of 900 sq ft each. Under the terms of the agreement, Aspirasi Cekap will be responsible for the development and construction of the project, which has a gross development value of RM191.49m. (The Star)

Guan Chong: To acquire 25% stake in Ivory Coast cocoa processor. Guan Chong (GCB) is planning to acquire a 25% stake in Transcao Côte d’Ivoire, a cocoa processing company in Ivory Coast. GCB’s subsidiary, GCB Cocoa Singapore entered into a MoU along with the Ivorian cocoa regulatory body, Conseil du Café- Cacao (CCC), and Transcao Negoce, a CCC subsidiary. (The Malaysian Reserve)

Kitacon: Secures RM64.05m construction job for Shah Alam project. Kumpulan Kitacon Bhd's wholly-owned subsidiary Kitacon SB has secured a RM64.05m contract from SP Setia Eco-Projects Management Sdn Bhd for the construction of 130 units of doublestorey detached houses and a Tenaga Nasional substation in Precinct Arundina in Setia Alam, Shah Alam. It said the contract shall commence on 14 Nov 2024, and be completed within 27 months. (The Edge)

Tropicana: Seals RM240m land deal in Johor. Tropicana Corp Bhd's wholly-owned subsidiary Tropicana Firstwide SB (TFSB) has sold 38.527 acres of freehold land for RM240m in Gelang Patah, Johor. The purchaser, Computility Technology (Malaysia) Sdn Bhd, which is a sub-subsidiary of Beijing-headquartered cloud and IT infrastructure services firm ZData Technologies Co Ltd, plans to use the land to establish a regional data centre hub in Johor. (The Star)

MARKET UPDATE

The FBM KLCI might open higher today as US stocks set records Wednesday after the latest wild swerves for Chinese stocks left few ripples in markets worldwide. The S&P 500 rose 0.7% to top the all-time high it had set last week. The Dow Jones Industrial Average climbed 431 points, or 1%, to hit its own record, while the Nasdaq composite gained 0.6%. The relative calm on Wall Street followed another manic day in China. After earlier surging on hopes for stimulus to prop up the world’s second-largest economy, Chinese stocks have since slumped on disappointment that more isn’t on the way. Stocks in Shanghai tumbled 6.6% for their worst loss since February 2020, when fears were rising about a virus seen in Wuhan and other cities in China. In Hong Kong, the Hang Seng index fell 1.4% after dropping more than 9% the day before, which was its worst loss since the global financial crisis of 2008. Moves announced by China in late September fueled a rally that has since fizzled. That ministry is due to hold a briefing on Saturday that could provide further details on planned government outlays that so far have fallen short of what investors have been hoping for. The Shanghai Composite is still up 9.5% for the year so far, while Hong Kong’s index is up 21.1%. Indices were more stable elsewhere around the world on Wednesday and rose 0.9% in Japan and 1% in Germany. Back home, the FBM KLCI closed flat, down 0.71 of a point to 1634.91.

Source: PublicInvest Research - 10 Oct 2024