HEADLINES

Economy

US: Third-quarter economic growth unrevised at 2.8%. The US economy grew at a solid clip in the third quarter, the government confirmed on Wednesday, amid robust consumer spending. GDP increased at an unrevised 2.8% annualized rate, the Commerce Department's Bureau of Economic Analysis said in its second estimate of third-quarter GDP. Economists polled by Reuters had forecast GDP would be unrevised. Slight downward revisions to consumer spending, government outlays and exports, were offset by upgrades to private inventory accumulation, business investment as well as state and local government spending. The economy grew at a 3.0% pace in the April-June quarter. It is expanding at a pace that is well above what Federal Reserve officials regard as the non-inflationary growth rate of around 1.8%. Consumer spending, which accounts for more than two-thirds of economic activity, grew at a still-brisk 3.5% pace. That was revised down from the previously estimated 3.7% rate. (Reuters)

US: Weekly jobless claims decline further. Initial claims for state unemployment benefits dropped 2,000 to a seasonally adjusted 213,000 for the week ended 23 Nov, the Labor Department said. Economists polled by Reuters had forecast 216,000 claims for the latest week. Claims have retreated from the near 1.5-year high seen in early October, which was the result of hurricanes and strikes at Boeing and another aerospace company. They are now at levels consistent with low layoffs and a rebound in employment in November. In Oct, the storms and recently ended seven-week Boeing strike reduced the increase in nonfarm payrolls to a paltry 12,000 jobs. Despite the anticipated bounce back in payrolls, the unemployment rate is likely to be unchanged or even rise this month. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 9,000 to a seasonally adjusted 1.907 million during the week ending 16 Nov, the claims report showed. (Reuters)

EU: German consumer sentiment tumbles on job cut fears, survey shows. German consumer sentiment looks set to tumble in the last month of the year as households, worried by reports of job cuts, grow more pessimistic about their income prospect. The consumer sentiment index, published by GfK and the Nuremberg Institute for Market Decisions (NIM), fell significantly more than expected going into Dec, to -23.3 points from a downwardly revised -18.4 points the month before. Analysts polled by Reuters had expected a reading of -18.6. The December figure marks the lowest point for consumer sentiment since May, when it was -24 points, and is similar to levels seen at the end of last year when Germany's economy was contracting. "The last few weeks of the year are ending with a significant setback in the consumer climate," said NIM analyst Rolf Buerkl. (Reuters)

EU: French consumer morale hits 5-month low as political crisis looms. French consumer confidence fell to a five-month low in Nov as households fretted over the outlook for the economy and the job market in the face of a looming political crisis. Statistics agency INSEE said its consumer confidence index fell to 90 from a downwardly-revised 93 in Oct, well below the long-term average of 100 and its lowest point since June, when morale dropped after President Emmanuel Macron called a snap legislative election. Economists surveyed by Reuters were on average expecting household confidence to come in at 93 points in Nov. France's far right National Rally party has stepped up threats to back a no confidence motion to bring down France's minority-led government if its demands are not reflected in the final cut of the budget bill going through parliament. (Reuters)

China: Oct industrial profits narrow decline, but headwinds loom. China's industrial profits fell again in October but less sharply than the previous month as deflation pressures dragged while demand remained soft in the crisis-hit the economy. Industrial profits in October fell 10% year on year, better than a 27.1% slump in September though earnings slid 4.3% in the first 10 months versus a 3.5% decline in January-September, National Bureau of Statistics (NBS) data showed. Profits in most industries improved compared with the previous month, with new drivers such as equipment and high-tech manufacturing playing a strong supporting role, NBS statistician Yu Weining said in an accompanying statement. But some private-sector economists attributed the Oct improvement partly to the effect of a low base from a year earlier. Industrial profits in Oct 2023 grew 2.7%, easing from double-digit gains in August and Sept last year. (Reuters)

New Zealand: Cuts rates by 50bps, flags further easing. New Zealand's central bank cut rates for a third time in four months on Wednesday and flagged more substantial easing, including a likely half percentage point reduction in February, as inflation moderated to around the bank's target. The Reserve Bank of New Zealand lowered the cash rate by half a percentage point to 4.25%, as expected by most economists in a Reuters poll. RBNZ Governor Adrian Orr said there had been little discussion on cutting by anything other than 50bps, a reality check for some in the market who had expected more,but signalled the likelihood of further loosening next year. "Even with 50bps, we remain somewhat restrictive. There's significant output gap, significant spare capacity so 50 (bps) felt right," he said at a news conference. He added that the bank's forward projection for the Feb meeting was consistent with a further 50bps cut. (Reuters)

Markets

Citaglobal: Firms up collaboration to develop eco-friendly industrial park, proposes one-for-five bonus warrants. Citaglobal has firmed up its collaboration with electric vehicle maker Tree Technologies SB to develop an industrial park with green elements in Pahang. It also proposed a bonus issue of up to 88.1m free warrants. Following a binding term sheet inked in late August, Citaglobal and wholly-owned unit Sinergi Dayang SB have now inked a JV agreement with Tree Technologies to develop the industrial park on a 247-acre land in Gebeng, based on the previously agreed 65:35 equity basis, according to the company's bourse filing. (The Edge)

JF Tech: Plans RM46m private placement to fund new investment and capital expenditure. JF Technology plans to raise RM46.4m via a private placement to fund its new investment and ongoing business expansion. The exercise involves the placement of up to 10% of its issued shares totalling 92.7m shares to independent third-party investors to be identified later, the company said in a bourse filing. (The Edge)

Binastra: Clinches RM68m job. Binastra Corp has accepted a letter of award from F3 Cheras Development SB for the redevelopment of a sewage treatment plant in Taman Bukit Cheras, Kuala Lumpur, via its wholly-owned subsidiary, Binastra Builders SB. In a statement, the developer said the contract worth RM67.6m would be for a comprehensive scope of engineering, procurement, construction and commissioning works. Its completion date is expected to be within 36 months from the date of the possession of the site. (StarBiz)

BHIC: Sells its 51% stake in CAD unit for RM54m. Boustead Heavy Industries Corp (BHIC) is disposing of 2.55m shares (or a 51% stake) in Contraves Advanced Devices SB (CAD) to Germany-based Rheinmetall AG for RM54m. BHIC said the stake disposal provides an opportunity for the company to fully exit and monetise its investment in CAD, which is involved in the manufacturing of industrial printed circuit board assemblies. (StarBiz)

TMC Life: Suspended CEO says TMC Life Sciences trying to 'pin blame' on her over certain contract issues. The suspended group CEO of TMC Life Sciences has pushed back against allegations of misconduct levied upon her, alleging that the healthcare provider is attempting to "pin the blame" on her over certain contract decisions. Wan Nadiah Wan Mohd Abdullah Yaakob is currently facing five allegations of misconduct relating to contract terminations with Great Eastern Life Assurance (M) and Allianz Life Insurance Malaysia and a contract entry with T-Systems Malaysia SB, according to a representation letter penned by her and published on the bourse by TMC Life Sciences. (The Edge)

Meta Bright: To collaborate with Tunas Manja on solar PV installations. Meta Bright Group has entered into a strategic partnership with grocery and retail operator Tunas Manja SB for the installation of rooftop solar photovoltaic (PV) systems. Meta Bright said the the installations will take place at Tunas Manja-owned, leased and operated buildings under the Net Energy Metering (NEM) 3.0 Programme. (StarBiz)

MARKET UPDATE

The FBM KLCI might open weaker today after technology stocks helped pull stocks lower on Wall Street Wednesday, handing the market its first loss in more than a week. The S&P 500 fell 0.4%, even though more stocks in the index notched gains than ended lower. The loss snapped a seven-day winning streak for the benchmark index. The Dow Jones Industrial Average fell 0.3%, its first loss after five gains. The Dow and S&P 500 remain near the all-time highs they set on Tuesday. The Nasdaq composite, which is heavily weighted with technology stocks, fell 0.6%. Losses for tech heavyweights like Nvidia, Microsoft and Broadcom were the drag on the market. Semiconductor giant Nvidia fell 1.2%. Its huge value gives it outsized influence on market indexes. Microsoft fell 1.2% and Broadcom finished 3.1% lower. The US economy expanded at a healthy 2.8% annual pace from July through September, according to the Commerce Department, leaving its original estimate of third-quarter growth unchanged. The growth was driven by strong consumer spending and a surge in exports. The update followed a report on Tuesday from the Conference Board that said confidence among US consumers improved in November, but not by as much as economists expected. The latest inflation data, though, is a sign that the rate of inflation seems to be stalling as it falls to within range of the Fed's target of 2%. The central bank started raising its benchmark interest rate from near-zero in early 2022 to a two-decade high by the middle of 2023 and held it there in order to tame inflation. US markets will be closed Thursday for Thanksgiving, and will reopen for a half day on Friday. MSCI's gauge of stocks across the globe fell 0.84 points, or 0.10%, to 858.24, while Europe's STOXX 600 index closed down 0.19% earlier in the day. Japan's Nikkei ended lower, with automakers leading the losses, amid concerns about the impact of Trump's tariff plans and a stronger yen. Elsewhere, key China equity gauges gained more than 1%, as data showed a less sharp decline in the country's industrial profits and traders bet that Beijing will provide stimulus to counter risks from the US tariffs. Back home, the FBM KLCI added 1.10 points or 0.07% to 1604.25.

Source: PublicInvest Research - 28 Nov 2024