HEADLINES

Economy

US: Services index unexpectedly climbs to two-year high in Oct. Service sector activity in the US unexpectedly grew at an accelerated rate in the month of Oct, according to a report released by the Institute for Supply Management. The ISM said its services PMI rose to 56.0 in Oct from 54.9 in Sept, with a reading above 50 indicating growth. The uptick surprised economists, who had expected the index to dip to 53.8. (RTT)

US: Trade deficit widens to largest in over two years in Sept. A report released by the Commerce Department showed a substantial increase in the size of the US trade deficit in the month of Sept, as imports surged and exports slumped. The trade deficit widened to USD84.4bn in Sept from a revised USD70.8bn in Aug. Economists had expected the trade deficit to jump to USD84.1bn from the USD70.4bn originally reported for the previous month. (RTT)

EU: Spain unemployment rises in Oct. Joblessness in Spain increased in Oct but logged the smallest gain for the month since 2006 except for the pandemic years of 2021 and 2022, data from the labor ministry showed. The number of unemployed rose by 26,769 persons, which was a below average increase for the month of Oct. Economists were looking for an increase of 26,500 persons. In Sept, the number of jobless increased by 3,164 persons from the previous month. The Oct jobless total decreased 5.7% from the same month last year, which was the biggest annual fall since Sept 2023. (RTT)

EU: Ireland service sector growth softens. Ireland's services sector growth softened in Oct from a six-month high on slowing output growth, data released by S&P Global showed. The AIB Ireland Services PMI fell to 53.8 in Oct from 55.7 in Sept. Although the index has remained fractionally below the average, it was above the neutral 50.0 mark. Data showed a slowdown in output growth in Oct. However, total new work increased at a faster pace than in the prior month due to higher consumer spending. Moreover, business from abroad grew at an accelerated pace in Oct. Employment growth was recorded in each month since March 2021 but the rate of job creation was the second-lowest seen over this period. (RTT)

UK: Services sector lost steam in lead up to the budget, PMI shows. Britain's services sector lost momentum in the run-up to the new government's first budget in Oct, with business activity growing at the weakest rate in 11 months and the first fall in employment since Dec, a survey showed. The S&P Global UK Services PMI stood at 52.0 last month from Sept's 52.4, the slowest pace of increase since Nov 2023. Oct's reading was slightly higher than a preliminary estimate of 51.8. The composite PMI, which combines the services data with last week's downwardly revised manufacturing survey, also fell to an 11-month low, slipping to 51.8 from Sept's 52.6. (Reuters)

China: Services growth picks up more than expected after stimulus. China's service activity expanded at the fastest pace since July, a private survey showed, a sign that consumer demand may be on the mend after Beijing moved to shore up growth with a barrage of stimulus measures. The Caixin China services PMI rose to 52 in Oct from 50.3 the previous month, the biggest jump since March last year. The pace of expansion exceeded a median forecast of 50.5 by economists. (Bloomberg)

Indonesia: Q3 GDP rises 4.95% from a year ago, slightly slower than Q2. Indonesia's GDP in the third quarter increased 4.95% from a year earlier, its slowest pace in a year, data from the statistics bureau showed, as household consumption showed softer growth. The third-quarter result came slightly below annual growth of 5% expected by analysts polled by Reuters and compared with an increase of 5.05% in the second quarter. On a quarterly, non-seasonally adjusted basis, GDP grew 1.50%, compared with a forecast of 1.59%. (Reuters)

Philippine: On-target inflation gives room for more rate cuts. Philippine inflation quickened within market expectations in Oct, giving the central bank room to sustain its easing cycle. Consumer prices rose 2.3% YoY in Oct, matching median economists forecast in a Bloomberg survey and falling within the central bank's estimate of 2% to 2.8% for the month. Food inflation accelerated as rice price gains snapped a downtrend due to base effects. While inflation ticked up after decelerating in Sept, average inflation for the past ten months was at 3.3%, still within the central bank's 2% to 4% goal. (Bloomberg)

Markets

IOI Corporation (Neutral, TP RM4.08): Allocates land in Johor for solar power plant. IOI Corp Bhd said it has allocated part of its aged plantation landbank in Johor to build a solar power plant, in a move to venture into the renewable energy sector. The group did not disclose the land size, saying the project is still in its early stages. IOI Corp's total landbank in Johor spans 23,961ha, according to the group's latest annual report. IOI Corp MD and CEO Datuk Lee Yeow Chor said the solar power project will be developed through a consortium comprising three or four partners. "We've allocated land in Johor specifically for this solar power plant, to be developed through the consortium. (The Edge)

Gagasan Nadi Cergas: To acquire student hostel asset management for RM185m. Gagasan Nadi Cergas has proposed the strategic acquisition of a student hostel asset management concession valued at RM185m. Group managing director Datuk Wan Azman Wan Kamal said the strategic acquisition will strengthen the group's concession and facility management operations which remain its key strength, delivering a steady and stable stream of recurring income. (Bernama)

T7 Global: Bags ExxonMobil agreement. T7 Global has secured an enabling agreement from ExxonMobil Exploration and Production Malaysia Inc for the provision of offshore maintenance, construction, modification and hook-up and commissioning services for Pan-Malaysia's Package B2 - Guntong. The group said the contract was effective for a period of five years from 1 Dec 2024 to 30 Nov 2029, with subsequent extension options of three and two years. (The Star)

TCS: Bags RM86.4m contract from SD Property. TCS Group's unit TCS Construction SB has secured a RM86.38m contract from Sime Darby Property (SD Property) to develop 60 units of double-storey semi-detached factories in Elmina Business Park, Selangor. The contract will begin in December and run for two years, with expected completion by Dec 2026. TCS managing director Datuk Tee Chai Seng said the company appreciates SD Property's confidence in its ability to deliver high-quality projects on time and with a strong commitment on workplace safety. (New Straits Times)

Aneka Jaringan: Unit secures RM39m contract for KL project. Aneka Jaringan Holdings said its wholly-owned subsidiary Aneka Jaringan SB has accepted a RM39m contract from GDP Architects SB on behalf of Murni Lapisan SB to undertake earthworks, piling, pilecaps and contiguous bored piling works for a mixed-use development in Pantai Sentral, Kuala Lumpur. The contract shall commence on 7 Nov 2024, and be completed on 6 March 2026. (The Star)

Fraser & Neave: Profit falls 38% on higher taxes from Thai ops, pays 33 sen dividend. Fraser & Neave Holdings' net profit for the fourth quarter ended 30 Sept 2024 (4QFY2024) dropped 38.21% YoY to RM84.99m from RM137.6m, impacted by higher tax expenses and increased withholding taxes on dividends repatriated from its Thailand operations. The higher tax expense followed the expiration of a Board of Investment incentive for F&N's Thailand food and beverage (F&B) division in 3QFY2024. This resulted in earnings per share dropping to 23.2 sen in 4QFY2024, down from 37.5 sen in the same quarter last year. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks rallied Tuesday as voters headed to the polls on the last day of the presidential election and as more data piled up showing the economy remains solid. The S&P 500 rose 1.2% to pull closer to its record set last month. The Dow Jones Industrial Average climbed 427 points, or 1%, while the Nasdaq composite gained 1.4%. The market got a lift from a report showing growth accelerated last month for retailers, transportation companies and other businesses in the US services industries. That was despite economists' expectations for a slowdown, and the Institute for Supply Management said it was the strongest growth in more than two years. The report offered more hope that the US economy will remain solid and avoid a long-feared recession following the worst inflation in generations. In stock markets elsewhere, indices were mixed in Europe and Asia. The moves were mostly modest outside of jumps of 2.3% in Shanghai and 2.1% in Hong Kong. Back home, the FBM KLCI added 4.27 points or 0.26% to end at 1620.70

Source: PublicInvest Research - 6 Nov 2024