HEADLINES

Economy

US: Progress lowering US consumer inflation stalling; rate cut pace uncertain in 2025. US consumer prices increased as expected in Oct amid higher costs for shelter such as rents, and progress toward low inflation has slowed in recent months, which could result in fewer interest rate cuts from the Fed next year. The report from the Labor Department, which also showed underlying inflation continuing to run a little warmer last month did not change expectations that the US central bank would deliver a third rate cut in Dec against the backdrop of a softening labor market. The CPI rose 0.2% for the fourth straight month, the Labor Department's Bureau of Labor Statistics said. (Reuters)

US: Red sweep may speed US debt ceiling deal, stoke long- term bond worries. A unified government under Donald Trump may offer investors reprieve from the bruising battles around the US debt ceiling that have roiled markets in recent years, even as it raises the prospect of unbridled fiscal expansion that could pressure bonds over the longer term. The President-elect's Republican Party will control both houses of Congress when he takes office in Jan, Edison Research projected. The so-called Red Sweep gives the Trump administration more leeway to push through its economic platform, including tax cuts and tariffs, which could spur growth while juicing inflation and adding to worries over the US budget deficit. (Reuters)

US: Argentine consumers feel squeezed even as inflation dips below 200%. Argentine inflation has dipped to 193%, landing below the 200% threshold for the first time in close to a year, data from statistics agency INDEC showed, as President Javier Milei's dramatic austerity agenda bears fruit. Slowing inflation, pulled back in part by the government's dramatic public spending adjustments, has however come at the cost of consumption in a battered economy where more than half of the country has fallen into poverty. Data from INDEC showed that monthly inflation slowed to 2.7% in Oct from 3.5% the previous month, its lowest since Nov 2021. The annual rate dipped below 200% for the first time since Nov last year. (Reuters)

EU: Romanian industrial production shrinks 3.6%. Romania's industrial output continued to decline in Sept, data from the National Institute of Statistics showed. Industrial production logged a seasonally and working-day adjusted decrease of 3.6% YoY in Sept, maintaining the same pace as the previous month. Manufacturing output contracted 3.7% annually in Sept. Output in the energy sector fell 2.8%, and mining and quarrying production dropped 4.1%. On an unadjusted basis, industrial production declined 3.7% from last year. Industrial production fell slightly by 0.1% MoM in Sept. (RTT)

EU: French unemployment rate rises in Q3. France's unemployment rate rose marginally in the Q3, data from the statistical office INSEE showed. The ILO jobless rate rose to 7.4% from 7.3% in the Q2. The rate was 7.4% in the same period last year and also matched expectations. Nonetheless, the unemployment rate remained only slightly above its lowest level since 1982. The number of unemployed people increased 35,000 from a quarter ago to 2.3m, data showed. The unemployment rate among young people aged between 15 and 24 hit the highest since the Q1 of 2021. The rate came in at 19.7%, which was up sharply from 17.9% a quarter ago. Further, the statistical office said that about 1.8m wanted a job without being considered unemployed, because they either did not seek a job or were not immediately available, they made up the halo around unemployment. (RTT)

EU: Portugal inflation confirmed at 2.3%. Portugal's CPI increased slightly, as initially estimated in Oct, the final data from Statistics Portugal showed. CPI rose to 2.3% in Oct from 2.1% in Sept. That was in line with the flash data published on Oct 31. The annual price growth for unprocessed food products accelerated to 2.1% in Oct from 0.9% in Sept. Meanwhile, costs for energy products fell at a slower pace of 0.2% versus 3.5% in Sept. Excepting energy and unprocessed food products, core inflation eased to 2.6% from 2.8%. On a monthly basis, consumer prices rose slightly by 0.1% after increasing 1.3% in the previous month. (RTT)

Japan: Producer prices jump in Oct. The costs of goods traded between companies in Japan were up in Oct. This was due mainly to higher prices of rice and copper. The preliminary PPI rose 3.4% from the same month last year. That compares to a 3.1% increase in Sept. BOJ officials say a spike in rice costs pushed up overall wholesale inflation. Copper also rose as the market rebounded. But import prices decreased 2.2% in yen terms from a year earlier, marking a second straight month of decline. The officials attribute this to a stronger yen and a drop in crude oil prices. They say they will keep an eye on whether this trend of passing on material costs also starts to affect prices at smaller businesses. (NHK World Japan)

Markets

Bumi Armada (Outperform, TP:RM0.80): FPSO gets contract extension worth RM331m. Bumi Armada said its floating production storage and offloading (FPSO) vessel, Armada TGT1, has secured a two-year charter extension worth USD74.4m (RM330.9m). The bareboat charter contract was extended by Vietnam's petroleum producer Hoang Long Joint Operating Co for the Te Giac Trang field located offshore Vietnam. It said that since commencing operations at the Te Giac Trang field project in Aug 2011, the Armada TGT1 has achieved an average oil and gas uptime of more than 98% and zero lost time incidents. (The Edge)

Scientex: Establishes RM1.5bn multi-currency sukuk programme. Packaging solution provider Scientex said it has established a multi-currency Islamic medium-term notes programme of RM1.5bn in nominal value. The group, which lodged the Sukuk Wakalah Programme with the Securities Commission Malaysia, said proceeds from the issuance of the sukuk will be used to finance and reimburse capital expenditure. It will also be used to refinance existing and future financing, investment, and working capital requirements, Scientex said. (The Edge)

Pasdec: To dispose of industrial land for RM73.5m. Pasdec Holdings is disposing of an industrial piece of land measuring 59.2 acres in Kuantan, Pahang to Petroluxe Refinery (M) SB (PRSB) for RM73.5m. The proposed disposal will enable the group to unlock the value of the property, adding that PRSB will build an integrated refinery and petrochemical facilities complex on the land.In addition, the proposed disposal will be able to strengthen the cashflow position of the group and provide greater financial flexibility to carry out its plans. (StarBiz)

EVD: Faces RM29.5m lawsuit from Hitachi Rail GTS Hong Kong Ltd. EVD is facing a lawsuit from Hitachi Rail GTS Hong Kong Limited, formerly Thales Transport & Security (Hong Kong) Ltd, involving its wholly owned subsidiary, EV-Dynamic SB. The lawsuit, filed on Nov 12, 2024, in the Shah Alam High Court, demands payment of USD6.4m (approximately RM29.5m) for unpaid sums, including retention and variation claims. Additionally, Hitachi Rail GTS is seeking general damages, interest, and legal costs. The case could have significant financial implications for the company. (The Malaysian Reserve)

Aizo: Secures RM24.1m infrastructure contract. Minetech Construction SB (MCSB), a wholly owned subsidiary of Aizo Group formerly known as Minetech Resources, has clinched an LoA from China State Construction Engineering (M) SB to undertake external infrastructure works in Jalan Pantai Dalam, Kuala Lumpur. With a contract sum of RM24.1m, MCSB was appointed as the subcontractor for the phased development project. The project comprises three high-rise residential towers and supporting infrastructure, including car parking, resident facilities, a swimming pool as well as a rooftop mechanical area. (StarBiz)

Uzma: Bags five-year contract with Petronas for integrated well continuity services. Uzma said that its subsidiaries, Uzma Engineering SB (UESB) and Setegap Ventures Petroleum SB (SVP), have been appointed as panel contractors by Petroliam Nasional (Petronas) for the provision of integrated well continuity services (IWCS) for intervention, workover, and abandonment for Petroleum Arrangement Contractors (PAC). (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open within a tight range today as US stocks drifted to a mixed finish Wednesday after the latest inflation update boosted hopes that more help for the economy will arrive next month through a cut to interest rates. The S&P 500 was nearly unchanged and edged up by less than 0.1%, coming off its first loss since a big rally erupted after Election Day last week. The Dow Jones Industrial Average added 47 points, or 0.1%, and the Nasdaq composite slipped 0.3%. The bond market was also mixed after a report said the inflation that US consumers felt last month was exactly as economists expected. It accelerated to 2.6% from 2.4%, but an underlying measure called "core inflation" did not accelerate. Such core inflation can be a better predictor of future trends, economists say, and the as-expected number boosted expectations for help coming from the Federal Reserve. In stock markets elsewhere, Japan's Nikkei 225 fell 1.7% after its wholesale inflation rate reached its highest level since July of last year. South Korea's Kospi sank 2.6% after Samsung Electronics shares fell to their lowest level in over four years. Indices were modestly lower across much of the rest of Asia and Europe. Back home, the FBM KLCI added 3.07 points or 0.19% to 1611.50.

Source: PublicInvest Research - 14 Nov 2024