HEADLINES

Economy

US: Producer prices flat; higher monthly core inflation expected in Sept. US producer prices were unchanged in Sept as a small rise in the cost of services was offset by cheaper goods, pointing to a still-favorable inflation outlook and supporting views that the Fed would cut interest rates again next month. The unexpected flat reading reported by the Labour Department followed data showing consumer prices increased slightly more than expected last month. (RTT)

EU: ECB seen cutting faster to release economic shackles next year. The ECB will speed up interest-rate cuts over the months ahead to bolster the economy, taking borrowing costs to levels that no longer restrict demand by the end of 2025. With inflation now a touch below the 2% goal, analysts see the ECB decreasing its deposit rate by a quarter-point next week and at every meeting through March. (Bloomberg)

EU: German inflation confirmed at 43-month low. Germany's CPI eased further as initially estimated in Sept to the lowest level in just over three-and-a-half years, the latest data from Destatis showed. The CPI registered an annual increase of 1.6% in Sept, slower than the 1.9% rise in Aug. That was in line with the flash data published. Further, this was the lowest inflation rate since Feb 2021, when prices had risen 1.5%. (RTT)

EU: ECB is set to deepen global easing with rate cut it didn’t expect. The ECB will probably advance the global push for monetary easing in the coming week, with an interest-rate cut that policymakers had all but ruled out just a month ago. The third quarter-point reduction of this cycle is seen likely by economists to herald a longer-lasting acceleration in action, by officials seeking to cushion the eurozone from the hit to growth created by an extended period of high borrowing costs, and now playing out with a lag. (Bloomberg)

UK: Economy returns to growth in Aug after two months of stagnation. Britain's economy grew in Aug after two consecutive months of stagnation, providing some relief to finance minister Rachel Reeves ahead of the new Labour government's first budget later this month. Economic output rose by 0.2% in monthly terms in Aug, according to figures from the Office for National Statistics that were in line with expectations in a Reuters poll of economists. (Reuters)

China: Deflationary pressures build in Sept, consumer inflation cools. China's CPI unexpectedly eased in Sept, while producer price deflation deepened, heightening pressure on Beijing to roll out more stimulus measures quickly to revive flagging demand and shaky economic activity. Finance Minister Lan Foan told a news conference there will be more "counter-cyclical measures" this year, but officials did not provide details on the size or timing of fiscal stimulus being prepared, which investors hope will ease deflationary pressures in the world's second-largest economy. (Reuters)

Canada: Jobless rate dips in Sept, weakens case for 50bps rate cut. Canada's economy added a net 46,700 jobs in Sept and the unemployment rate unexpectedly decreased, data showed, weakening bets for a 50bps rate cut this month. The jobless rate fell for the first time in 8 months to 6.5%, compared with analysts' estimate for an increase to 6.7% from 6.6% in Aug. (Reuters)

Markets

Kerjaya Prospek (Neutral, TP: RM2.00): Files fresh lawsuit against Yong Tai and CEO over RM105m contract dispute. Kerjaya Prospek Group has filed a new lawsuit against Yong Tai and its CEO Datuk Boo Kuang Loon over an alleged unpaid contract sum of RM105.1m related to a construction project in Melaka. Kerjaya Prospek has served a writ of summons and statement of claim to Yong Tai and Boo. (The Edge)

Pharmaniaga: Unit secures grant from Mosti for vaccine R&D. Pharmaniaga has secured funding from the government for research and development (R&D) of vaccines through the National Vaccine Production Development and Strengthening Fund (DPVN). The pharmaceutical group's wholly-owned unit Pharmaniaga Lifescience SB (PLS) has entered into a fund agreement with the National Institutes of Biotechnology Malaysia on behalf of the Ministry of Science, Technology and Innovation (Mosti). (The Edge)

Steel Hawk: Secures operational pigging supply and services contract from Petronas Gas. Steel Hawk has been awarded an operational pigging supply and services contract by Petronas Gas. The three-year contract is on a call-out basis and so does not have a fixed value. It expects the contract to contribute positively to its earnings for the financial year ending Dec 31, 2024. (The Edge)

Press Metal: Founder sells 6.3m shares for RM32.04m. Press Metal Aluminium Holdings ED Datuk Koon Poh Kong has offloaded 6.3m shares, representing 0.08% in the aluminium company, for a total of RM32m. The shares were sold through a direct business transaction at RM5.0853 per share, trimming his stake in the company from 2.082% to 2.006%. (The Edge)

WMG Holdings: Exsim to acquire 52.5% of WMG, plans MGO. Exsim Borneo SB has agreed to acquire a 52.5% stake in WMG Holdings from Syarikat Kretam (Far East) Holdings SB for RM75.1m cash or 16.5 sen per WMG share. WMG noted that Ben Kong Chung Vui, a person acting in concert with Exsim, has proposed to buy an additional 17.5% in WMG from Syarikat Kretam for RM25m, also at 16.5 sen per share. (StarBiz)

Gadang: Unit to dispose of land in Sungai Buloh, Selangor for RM65m. Gadang Holdings has entered into a sale and purchase agreement with Opulent Abode SB to dispose of a piece of leasehold land in Sungai Buloh, Selangor for RM65m. Gadang said that the proposed disposal is expected to strengthen the group's cash flow position, which can be reallocated to ongoing and future construction projects. The proposed disposal aligns with the group’s strategy to reduce its existing borrowings and improve its gearing ratio. (Bernama)

Fajarbaru: To sell 44.44% stake in BFB Project for RM12.1m. Fajarbaru Builder Group has entered into a share purchase agreement (SPA) with Mayfair International Investments Pty Ltd (MII) to dispose of 44.44% stake in BFB Project Pty Ltd for AUD4.2m (RM12.1m). The principal activity of the Australia-based BFB Project is property development. Fajarbaru said the disposal consideration is payable in two parts: a deposit of AUD420,000, which is 10% of the total and is due within 14 days of signing the SPA, and AUD3.78m, the remaining 90%, which is due within three months of signing. (StarBiz)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks rose to records Friday as big banks rallied following a run of reassuring profit reports. The S&P 500 climbed 0.6% to top its all-time high set earlier in the week and close out its fifth straight winning week, while the Dow Jones Industrial Average jumped 409 points, or 1%, to set its own record. The Nasdaq composite lagged the market with a gain of 0.3% after a slide for Tesla kept it in check. In the bond market, Treasury yields were mixed following the latest updates on inflation at the wholesale level and on sentiment among US consumers. Prices paid by producers were 1.8% higher in September than a year earlier. That was an improvement from August’s year-over-year inflation level, but not as much as economists expected. Analysts said it likely helped calm worries stirred a day earlier, when a report showed inflation at the consumer level wasn’t cooling as quickly as economists expected. A separate report on Friday suggested sentiment among US consumers is lower than economists expected. But the preliminary reading’s decline in sentiment was still within the margin of error, according to Joanne Hsu, director of the University of Michigan’s Surveys of Consumers. In markets elsewhere, stocks fell 2.5% in Shanghai for their latest sharp swing ahead of a briefing scheduled for Saturday by China’s Finance Ministry. Investors hope it will unveil a big stimulus plan for the world’s second-largest economy. South Korea’s Kospi slipped 0.1% after its central bank cut interest rates for the first time in more than four years in hopes of boosting its economy. Back home, the FBM KLCI ended lower by 7.39 or 0.45% to end at 1633.55.

Source: PublicInvest Research - 14 Oct 2024