HEADLINES

Economy

US: Strong US data feeds doubts about Fed Dec rate cut. Strong US economic and inflation data continue to reshape the debate among Federal Reserve (Fed) policymakers over the pace and extent of interest rate cuts as investors further downgraded their expectations for a rate reduction at the central bank's Dec meeting. In the latest round of comments on US monetary policy, US central bankers continued to express faith that inflation was coming under control and would allow the central bank to lower its benchmark rate over time from the current 4.5%-4.75% range, a level felt to discourage spending and investment, to a more neutral setting. (Reuters)

US: Oct industrial production falls on strike, hurricane disruptions. US industrial production declined in Oct as the impacts from a Boeing Co machinists' strike and a pair of hurricanes reverberated through manufacturing for a second month. The 0.3% decline in output at factories, mines and utilities followed a revised 0.5% decrease a month earlier, Federal Reserve data showed. Manufacturing output, which accounts for about three-fourths of total industrial production, slid another 0.5%, after a revised 0.3% drop the previous month. Mining and energy extraction rose 0.3%, while output at utilities climbed 0.7%, the most in four months. (Bloomberg)

US: Retail sales slightly above expectations in Oct. US retail sales increased slightly more than expected in Oct, but underlying momentum in consumer spending appeared to slow at the start of the fourth quarter. Retail sales rose 0.4% last month after an upwardly revised 0.8% advance in Sept, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, climbing 0.3% after a previously reported 0.4% gain in September. Estimates ranged from no change to an increase of 0.6%. Robust consumer spending helped the economy maintain its strong pace of growth last quarter. (Reuters)

EU: Blanket tariffs do more harm than good and may be ineffective, ECB's policymaker says. Blanket trade barriers could do more harm than good and may not even be effective, ECB policymaker Fabio Panetta said, just as incoming US President Donald Trump looks to impose tariffs on many, if not most, imports. "We must avoid the illusion that blanket measures erecting protectionist barriers are the solution to our problems," Panetta, the Bank of Italy governor, said in Rome. "A blanket measure is like a kitchen knife: it is not the right instrument to perform complex surgery." Import duties, including a 10% universal tariff on imports from all foreign countries and a 60% tariff on imports from China, have been a key plank of Trump's policies and may have the biggest global impact. (Reuters)

UK: Inflation hiccup may buttress case for BOE caution. UK inflation probably surged back above the Bank of England's target in Oct, reinforcing the case for policymakers to act cautiously when cutting interest rates. The consumer price index rose an annual 2.2%, according to the median of 24 forecasts in a Bloomberg survey. That's up from 1.7% last month, when it slipped below the BOE's 2% target for the first time in more than three years. While the headline gauge is seen quickening because of higher energy costs, underlying measures including services inflation are likely to have weakened slightly. The overall picture - of slowly moderating but still-excessive price growth - may support the BOE's gradual approach toward monetary easing so far. Officials delivered a second quarter-point rate cut in November and avoided sending any signal that faster easing may be needed. The stance is more restrained than that of the neighbouring eurozone, and chimes with the unhurried tone espoused in the past week by US Federal Reserve chief Jerome Powell. (Bloomberg)

China: Industrial output rises less than forecast; retail sales growth accelerates. China industrial production growth slowed unexpectedly in Oct and the decline in property investment deepened but retail sales growth accelerated as recent stimulus measures strengthened consumer sentiment. Industrial production posted an annual growth of 5.3% in Oct after rising 5.4% in Sept, the National Bureau of Statistics. The slowdown in growth was unexpected as output was forecast to climb 5.5%. Meanwhile, retail sales advanced at a faster pace of 4.8% after rising 3.2% in the previous month. This was the fastest growth since Feb and also exceeded economists' forecast of 3.8%. During Jan to Oct, fixed asset investment climbed 3.4%, the same pace of growth as reported in the Jan to Sept period. Economists had forecast an annual increase of 3.5%. (RTT)

Markets

Prolintas Infra: Says it won't face financial loss over order to pay RM46m in arbitration case. Prolintas Infra Business Trust said it will not face any financial losses after its subsidiary, Prolintas Expressway SB (GCE Co), was ordered by an arbitrator to pay RM46.13m to Bina Puri Holdings' associate company KL-Kuala Selangor Expressway (Latar). This is because the major unitholder of the trust, Projek Lintasan Kota Holdings SB (PLKH), had previously agreed to indemnify the trustee manager, Prolintas Managers SB, against any losses incurred and made against GCE Co from the arbitration case. (The Edge)

Citaglobal: To build Azerbaijan's first RE project with solar power. Citaglobal has entered into a deal with the Port of Baku to develop a 5.4MW solar photovoltaic (PV) facility in Azerbaijan. This marks Azerbaijan's first commercial renewable energy project integrating solar power with a cutting-edge battery energy storage system (BESS). The initiative represents a significant step forward in Azerbaijan's renewable energy ambitions, supported by a 21-year power purchase agreement (PPA) that guarantees fixed tariffs, ensuring cost stability and sustainability for the Port of Baku. (BTimes)

Farm Price: Aborts plan for bonus warrants a week after announcing it. Vegetable supplier Farm Price Holdings has scrapped its recently announced plan for a one-for-two bonus issue of warrants, saying it will revisit the plan next year instead. The initial proposal, which it announced just last week on Nov 7 to reward shareholders, involved issuing up to 225m warrants on the basis of one warrant for every two shares held by shareholders. (The Edge)

Petra Energy: Bags offshore crane operation contract from Shell. Petra Energy has secured a four-year contract from Sarawak Shell and Sabah Shell Petroleum Company Ltd for the provision of offshore crane operations and maintenance services. No fixed value was stated in the letter of award to its subsidiary Petra Resources SB. The company expects the award to contribute positively to its earnings and net assets during the tenure of the contract. (The Edge)

Mudajaya: Secures RM41m contract to build condo in Kuching. Mudajaya Group has bagged a contract worth RM41.34m for the construction of a 17-storey condominium in Kuching, Sarawak. The group said its wholly owned subsidiary, Mudajaya Corp Bhd, was awarded the contract on Friday by MJC City Development Sdn Bhd. The project, comprising 128 units at the Batu Kawah new township, is expected to be completed within 22 months. (The Edge)

IPO: Cropmate to raise RM42m from IPO on ACE Market. Cropmate aims to raise RM42m for its IPO, priced at 20 sen per share to enhance operations and customer service capability in Malaysia's fertiliser industry. The conventional and specialty fertiliser producer and distributor announced the issuance of 210m new shares on the ACE Market of Bursa Malaysia. Cropmate managing director Lee Chin Yok said as the first-ever pure-play fertiliser company to be listed on Bursa Malaysia, the IPO represents its commitment to enhancing agricultural productivity and sustainability in Malaysia. (BTimes)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks tumbled Friday as the "Trump bump" that Wall Street got from last week's presidential election, along with a cut to interest rates by the Federal Reserve, kept fading. The S&P 500 dropped 1.3% for its worst day since before Election Day to close out a losing week. The Dow Jones Industrial Average fell 305 points, or 0.7%, and the Nasdaq composite sank 2.2%. Makers of vaccines helped drag the market down after President-elect Donald Trump said he wants Robert F. Kennedy Jr., a prominent anti-vaccine activist, to lead the Department of Health and Human Services. Moderna tumbled 7.3%, and Pfizer fell 4.7% amid concerns about a possible hit to profits. Kennedy still needs confirmation from the Senate to get the job, and some analysts are skeptical about his chances. "However, if Kennedy is confirmed, it is hard to bookend risks for investors as his views are so outside the traditional Republican health policy orthodoxy," Raymond James analyst Chris Meekins wrote in a research note. Meekins is a former deputy assistant secretary at the department known as HHS. Friday's data on retail sales, though, may not be quite as strong as it appeared. After taking away purchases of automobiles, sales at retailers were weaker last month than economists expected. In stock markets elsewhere, London's FTSE 100 fell 0.1% after data from the Office for National Statistics showed economic growth slowed to 0.1% in the July-September quarter from the 0.5% in the previous quarter. It was weaker than expected. Tokyo's Nikkei 225 gained 0.3% after data showed growth for Japan's economy accelerated in the latest quarter, even as the Bank of Japan raised interest rates in July. Back home, the FBM KLCI dropped 8.24 points or 0.51% to 1592.44.

Source: PublicInvest Research - 18 Nov 2024