HEADLINES

Economy

EU: German inflation confirmed at 2% in Oct as food prices rise. Rising prices for food and services led German inflation to climb to 2% in Oct, confirming initial estimates. The Federal Statistical Office said YoY inflation jumped to 2% from 1.6% in Sept, after months of decline. The figure is in line with the 2% threshold which the ECB has explicitly targeted in efforts to control inflation across the eurozone. Economists expect a moderate rise in prices until the end of 2024, but another wave of inflation as seen in 2022 is unlikely. A main driver of Oct's bump in prices were food, which cost consumers 2.3% more than last year. In particular, cooking fats and oils became much more expensive, up 21.3%, while the price of butter soared by 39.7%. (DPA News)

EU: Hungary inflation rises to 3.2%, less than forecast. Hungary's CPI increased slightly in Oct after easing in the previous two months, the Hungarian Central Statistical Office showed. Consumer prices climbed 3.2% YoY in Oct, faster than the 3.0% rise in Sept. Economists had expected inflation to rise to 3.5%. Further, the inflation rate came above the central bank's target of 3.0%. However, core inflation softened to 4.5% from 4.8% a month ago. (RTT)

UK: Grocery inflation higher again as countdown to Christmas begins. British shoppers faced renewed pressure on their budgets in Oct after grocery price inflation edged higher for the second month in a row, industry data showed. Market researcher Kantar said annual grocery price inflation was 2.3% in the four weeks to Nov 3, having been 2.0% in the previous four-week period. The data showed prices are rising fastest in products such as chilled soft drinks and chocolate confectionery, and falling fastest in items such as toothbrushes, household paper products and sparkling wine. UK supermarkets have warned that tax rises in the new Labour government's first budget last month, together with another rise in the national minimum wage, will be inflationary. (Reuters)

UK: Jobless rate rises, wage growth slows. The UK unemployment rate rose more than expected in the third quarter and wage growth softened, adding pressure on the BoE to cut interest rates further. The unemployment rate rose to 4.3% in the Sept quarter from 4.0% in three months to Aug period, the Office for National Statistics reported. The rate was seen at 4.1%. Excluding bonus, average earnings gained 4.8% in three months to Sept, the weakest since mid-2022. This follows an increase of 4.9% in the preceding period. Wage growth was forecast to ease to 4.7%. Average earnings including bonus grew 4.3% annually. The ONS said the annual increase was affected by the civil service one-off payments made in July and Aug 2023. Economists had expected an increase of 3.9%. (RTT)

India: Inflation at 14-month high gives RBI reason to hold. India's inflation accelerated to a 14-month high and breached the upper end of the central bank's target, giving it further reason to delay cutting interest rates. The CPI jumped 6.21% in Oct from a year earlier, data from the statistics ministry showed, higher than the 5.9% rise predicted by economists in a Bloomberg survey. Inflation climbed 5.49% in Sept. India's benchmark 10-year bonds were up one basis point to 6.83% after climbing as much as 3 basis points in earlier trade. (Bloomberg)

India: Industrial output up 3.1% YoY in Sept. India's industrial output rose 3.1% YoY in Sept, backed by manufacturing activity, government data showed. Economists polled by Reuters had expected a growth of 2.5%. In Aug, industrial output had contracted for the first time in nearly two years. Manufacturing output climbed 3.9% YoY in Sept, electricity generation grew 0.5% and mining activity rose 0.2%, the data showed. The sectors had grown by 5.1%, 9.9% and 11.5%, respectively, a year ago. India's manufacturing sector in Sept recovered from a 22-month low hit in the previous month, as stockpiling ahead of India's festive season lifted industrial production. India's annual festival season typically runs from late Sept to early Nov.

South Africa: Unemployment rate dips under coalition government. South Africa's unemployment rate fell in the three months after the formation of a coalition government that has boosted business confidence and led to hopes for more progress on economic reform. The official unemployment rate fell to 32.1% in the third quarter of 2024, from 33.5% in the second quarter, the first time the official rate had fallen in a year, Statistics South Africa figures showed. The coalition government was formed in June after the African National Congress lost its parliamentary majority for the first time in 30 years, pushing it into a broad alliance with the market-friendly Democratic Alliance and other smaller parties. (Reuters)

Markets

Paragon Globe: Secures RM733m residential project in Iskandar Puteri, eyes RM188m profit. Paragon Globe has acquired development rights for a 67.4-acre residential project in Iskandar Puteri, Johor, with a GDV of RM733.1m. Through its subsidiary Paragon Globe Properties SB, Paragon secured an agreement with Iskandar Capital SB (ICSB) to develop two freehold parcels of 11.5 and 55.92 acres, located near major roads. The project will feature 340 landed properties and construction is set to start in 2025, with a seven-year timeline. (The Malaysian Reserve)

Fajarbaru: Withdraws from RM192m Residensi Cemara project due to sustainability concerns. Fajarbaru Builder Group said it withdrew from the Residensi Cemara affordable housing development in Putrajaya, which had an estimated gross development value of RM192m citing the project as "not sustainable" after a change in requirements by Perbadanan Putrajaya. The company explained that the decision to pull out as the project's developer was prompted by these revised requirements. (The Malaysian Reserve)

Sapura Energy: Accepts creditors' terms on proposed USD705m SapuraOMV disposal. Sapura Energy said it has accepted the terms and conditions set forth by its multi-currency financing (MCF) creditors for the proposed disposal of its 50% stake in SapuraOMV Upstream SB to TotalEnergies Holdings SAS for USD705.3m (RM3.4bn). Among the conditions is that net proceeds from the disposal will be held in a segregated account held by Sapura Energy's wholly owned subsidiary Sapura Upstream Assets SB (SUA) at either Malayan Banking or Maybank Islamic Bank. (The Edge)

Solarvest: Gains TNB approval for 30MW solar power project in Kedah. Solarvest Holdings' subsidiary, Selarong Pertama Energy SB (SPESB), has received approval from Tenaga Nasional (TNB) to operate as a merchant generator with a 29.99MW solar facility in Kulim, Kedah. The company announced that SPESB signed a new enhanced dispatch agreement (NEDA) with TNB on Nov 7, 2024, enabling SPESB to sell energy to a single buyer. Under the NEDA agreement, SPESB will construct, own, and operate the facility. (The Malaysian Reserve)

Atlan: To contest award compensation for compulsory land acquisition. Atlan Holdings, which has been ordered to compulsorily acquire its lands in Bukit Kayu Hitam, Kedah, will be accepting the award compensation of RM69.9m under protest. The lands were acquired by Malaysia's Home Affairs Ministry and are administered by the Department of Director General of Lands and Mines, Kedah. (StarBiz)

MCE: Plans private placement to raise up to RM26.5m for new Serendah factory, projects on hand. Automotive parts manufacturer MCE Holdings plans to raise up to RM26.5m via a private placement of shares to partly finance a new manufacturing factory in Serendah and projects it has secured. Assuming all 61.75m of its outstanding warrants are exercised prior to the proposed placement (maximum scenario), the placement will involve up to 18.53m new MCE shares or 10% of its total number of issued shares at an issue price to be determined later. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks drifted lower Tuesday as momentum cooled for the torrid "Trump trade" that swept Wall Street following Donald Trump's presidential victory. The S&P 500 slipped 0.3% a day after setting its latest all-time high. The Dow Jones Industrial Average dropped 382 points, or 0.9%, and the Nasdaq composite fell 0.1%. Stocks had been broadly rising since last week on expectations that Trump's preference for lower tax rates and other policies may mean faster economic growth, as well as bigger US government debt and higher inflation. Some areas of the market rocketed on particularly high-grade fuel, such as smaller US stocks seen as benefiting the most from Trump's America First ideas. They gave back some of their big gains Tuesday, and the Russell 2000 index of smaller companies fell a market-leading 1.8%. Even Tesla, which is run by Trump's ally Elon Musk, sank. It dropped 6.1% for its first loss since before Election Day. In stock markets elsewhere, indices fell across much of Europe and Asia. Hong Kong's Hang Seng dropped 2.8% for one of the worst declines. It closed below the 20,000 level for the first time since China announced a stimulus package in September. Back home, the FBM KLCI ended marginally lower by 0.83 of a point or 0.05% to 1608.43.

Source: PublicInvest Research - 13 Nov 2024