HEADLINES

Economy

US: Weekly jobless claims at seven-month low; home resales rebound in Oct. Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 213,000 for the week ended 16 Nov, the lowest reading since April. Economists polled by Reuters had forecast 220,000 claims for the latest week. The data included the Veterans Day holiday, which could have injected some volatility. Unadjusted claims decreased 17,750 to 213,035 last week. Home sales jumped 3.4% in October to a seasonally adjusted annual rate of 3.96m units after slumping to a 14-year low in Sept, the National Association of Realtors said in a separate report. Economists had forecast home resales rebounding to a rate of 3.93m units. (Reuters)

EU: Euro zone business activity falls sharply in Nov, survey shows. Euro zone business activity took a surprisingly sharp turn for the worse this month as the bloc's dominant services industry contracted and manufacturing sank deeper into recession. HCOB's preliminary composite euro zone PMI, compiled by S&P Global, sank to a 10-month low of 48.1 in Nov, below the 50 mark separating growth from contraction. A Reuters poll had predicted no change from October's 50.0. (Reuters)

UK: firms report first contraction since 2023 after budget, PMI shows. The new British government's plan to increase taxes on businesses contributed to the first contraction in private sector activity in over a year, a survey showed, after signs the economy was losing momentum even before last month's budget. The preliminary S&P Global Flash Composite PMI, fell to 49.9 in Nov from 51.8 in Oct. The first survey on the health of the economy after the budget makes for gloomy reading," Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said. It is the first time the index has been below the 50.0 no-change level in 13 months. Williamson said the survey suggested the economy was contracting at a quarterly 0.1% pace, but the hit to confidence hinted at worse to come, including further job losses. (Reuters)

Japan: Inflation holds above BOJ target, fanning Dec rate hike bets. Japan's core inflation in Oct held above the central bank's 2% target and a key index stripping away the effect of fuel accelerated, keeping pressure on the central bank to raise its still-low interest rates. The nationwide core consumer price index, which includes oil products but excludes fresh food prices, rose 2.3% in Oct from a year earlier, government data showed, slightly exceeding a median market forecast for a 2.2% gain. It slowed from a 2.4% increase in Sept, mostly due to the base effect of last year's government decision to halve fuel subsidies that bumped up prices from Oct 2023. A separate index that strips away the effect of volatile fresh food and fuel, scrutinised by the BOJ as a better gauge of demand-driven inflation, rose 2.3% in October from a year earlier, accelerating from a 2.1% gain in Sept. (Reuters)

Japan: Factory activity extends declines on sluggish demand, PMI shows. Japan's factory activity contracted for the fifth straight month in November due to sluggish demand caused by worries over China's economic slowdown and persistent cost pressures. The au Jibun Bank flash Japan manufacturing PMI slipped slightly to 49.0 in Nov from 49.2 in Oct. The index stayed below the 50.0 threshold separating growth from contraction for a fifth straight month. The subindex for output contracted for the third straight month in Nov and that of new orders also shrank for the month, staying below the 50.0 threshold since June last year. Manufacturers also reduced employment for the first time since Feb, the survey found. (Reuters)

India: Robust services drive business activity to 3-month high in Nov, cost pressures grow. India's business activity rose at its fastest pace in three months in Nov, helped by an improving services industry and record job creation, but output inflation spiked to a near 12-year high, a survey showed. The findings are likely to add to economic growth in the ongoing festive quarter which is expected to pick up thanks to a rebound in private consumption, despite Asia's third-largest economy reporting its highest retail inflation in 14 months. HSBC's flash India Composite PMI, compiled by S&P Global, rose to 59.5 this month from October's final reading of 59.1, taking the expansionary streak to 40 months. (Reuters)

New Zealand: Has NZD1.544bn trade shortfall in Oct. New Zealand posted a merchandise trade deficit of NZD1.544bn in October, Statistics New Zealand said. That follows the downwardly revised NZD2.154bn shortfall in September (originally NZD2.108bn). Exports were up 7.5% on year to NZD5.77bn in Oct, after showing a downwardly revised NZD4.91bn in the previous month (originally NZD5.01bn). Imports added an annual 3.0% to NZD7.31bn, up from the downwardly revised NZD7.06bn a month earlier (originally NZD7.12bn). Annual goods exports were valued at NZD69.7bn, up NZD1.3m from the previous year. Annual goods imports were valued at NZD78.6bn, down NZD5.9bn from September. The annual trade deficit was NZD9.0bn after showing NZD14.8bn in Oct 2023. (RTT)

Markets

Top Glove (Neutral, TP: RM1.12): in JV for high density polyethylene glove biz. Top Glove Corp has entered into a JV with US glove importer Tronex (Asia) Ltd, and Polywel International Trade Co Ltd for the production and distribution of high-density polyethylene gloves. Under the agreement, TQG will hold a 60% stake in JV company TG Meditech SB, while Tronex and Polywel will each own 20%. Business operations are expected to commence by Dec 2024. (The Edge)

Vizione: Quits RM116m hotel construction job over alleged unpaid works. Vizione Holdings said its unit has served a notice to Inspirasi Langkawi SB to terminate its employment as main contractor for the development of a 14-storey hotel in Langkawi, claiming it had not been properly paid for its works so far. The termination of its wholly owned subsidiary Vizione Builder SB is with immediate effect, it said. Vizione Builder had, on Oct 8, served a default notice to Inspirasi Langkawi on Oct 8 over the partial or non-payment of its works, and warned that it would suspend work or quit the job if the outstanding sum was not settled. As of Oct 29, 2024, the outstanding sum remained unsettled, Vizione alleged. (The Edge)

SkyWorld: Nears deal for Vietnam joint venture on completion of due diligence, says on track for RM4.6bn launch target by 2026. SkyWorld Development said it is on target to launch developments with an estimated gross development value of RM4.6bn by 2026, having achieved RM1.1bn worth of launches so far. "The cumulative GDV for our pipeline of planned developments to be launched within the next two years is more than RM3.5bn. (The Edge)

Lagenda Properties: Secures right to develop another Kota Tinggi plot for RM99.6m. Lagenda Properties said that an indirectly owned subsidiary of the company has secured the right to develop a 139-acre land in Kota Tinggi, Johor, for RM99.6m, cash. The final purchase price may still vary. It said the unit, Opti Vega SB, had exercised an option in a development rights agreement signed with Intact Corporate Approach SB (ICA) earlier this year. (The Edge)

PICorp: Secures RM14.74m contract from Air Selangor. Progressive Impact Corp's (PICorp) wholly-owned subsidiary, Alam Sekitar Malaysia SB (ASMA) has secured a RM14.7m contract from Pengurusan Air Selangor Sdn Bhd (Air Selangor). PICorp said the contract is for the provision of preventive and corrective maintenance services for 190 Nos. of hybrid distribution water quality real-time analyzer (HYDRA) stations Selangor. PICorp said the contract is for 36 months, starting from the date the project site is received or any other date specified by Air Selangor (StarBiz)

Solarvest: Secures RM142m solar EPCC contract in Kedah. Solarvest Holdings has secured a RM142m contract from SM01 SB for a design, engineering, procurement, construction, and commissioning (EPCC) contract. Solarvest said the EPCC involved the construction of a solar photovoltaic energy generating facility with a capacity of 29.99 MWac in Gurun, Kedah. SM01 has been established as a special purpose vehicle (SPV) solely to carry out the Project under the corporate green power programme (CGPP). (StarBiz)

MARKET UPDATE

The FBM KLCI might open with positive bias today after stocks closed higher on Wall Street as the market posted its fifth straight gain and the Dow Jones Industrial Average notched another record high. The S&P 500 rose 0.3%. The benchmark index's 1.7% gain for the week erased most of its loss from last week. The Dow rose 1% as it nudged past its most recent high set last week, and the Nasdaq composite rose 0.2%. Markets have been volatile over the last few weeks, losing ground in the runup to elections in November, then surging following Donald Trump's victory, before falling again. The S&P 500 has been steadily rising throughout this week to within close range of its record. It's now within about 0.5% of its all-time high set last week. A majority of stocks in the S&P 500 gained ground, but those gains were kept in check by slumps for several big technology companies. European markets closed mostly higher and Asian markets ended mixed. Retailers remained a big focus for investors last week amid close scrutiny on consumer spending habits headed into the holiday shopping season. Walmart, the nation's largest retailer, reported a quarter of strong sales and gave investors an encouraging financial forecast. Target, though, reported weaker earnings than analysts' expected and its forecast disappointed Wall Street. Consumer sentiment remains strong, according to the University of Michigan's consumer sentiment index. It revised its latest figure for November to 71.8 from an initial reading of 73 earlier this month, though economists expected a slight increase. It's still up from 70.5 in October. The survey also showed that consumers' inflation expectations for the year ahead fell slightly to 2.6%, which is the lowest reading since December of 2020. Back home, the FBM KLCI added 1.10 points or 0.07% to 1589.78.

Source: PublicInvest Research - 25 Nov 2024