HEADLINES

Economy

EU: Eurozone economic confidence rises unexpectedly. Eurozone economic confidence rose unexpectedly in Nov on improving sentiment among industrial managers and retailers, survey results from the EC revealed. The economic confidence index rose slightly to 95.8 in Nov from revised 95.7 in the previous month. The score was expected to fall to 95.1 from Oct's initially estimated value of 95.6. The index registered only a marginal improvement in Nov as higher confidence in industry and retail trade was offset by lower confidence in services and among consumers. Industrial confidence recovered some of its lost ground from previous two months. (RTT)

EU: Eurozone lending to private sector rises in Oct. Eurozone lending to the private sector increased in Oct at a steady pace, data published by the European Central Bank showed. Adjusted loans to the private sector grew 1.6% YoY in Oct, unchanged from the previous month. Among borrowing sectors, annual growth in loans to households rose at a slightly faster pace of 0.8% after a 0.7% gain. Likewise, loans to non-financial corporations climbed 1.2%, slightly faster than the 1.1% rise a month ago. (RTT)

EU: German annual inflation unchanged at 2.4% in Nov. German annual inflation remained flat in November despite expectations of a second consecutive increase, breaking a downward trend in Europe's troubled largest economy. Inflation stayed at 2.4%, the federal statistics office said. Analysts polled by Reuters had expected a reading of 2.6% this month, after German consumer prices, harmonised to compare with other EU countries, had risen by 2.4% YoY in Oct. Core inflation, which excludes volatile food and energy prices, was at 3.0% in November up from 2.9% in the previous month. Energy prices fell by 3.7% compared with the previous year, while food prices rose by 1.8% YoY in Nov, data from the statistics office showed. The stickiness of inflation at slightly too high a level looks set to continue as favourable energy base effects will continue to peter out while wages increase, said Carsten Brzeski, global head of macro at ING. (Reuters)

UK: Services sector sentiment falls at fastest pace in two years, CBI says. Business sentiment in Britain's services sector is falling at the fastest rate in two years, partly as a result of tax rises in finance minister Rachel Reeves' first budget on Oct. 30, the Confederation of British Industry said. The downturn was sharpest in consumer services - where large employers will bear the brunt of a GBP25bn (USD32 bn) rise in payroll taxes - but the mood at business and professional services companies soured too, the CBI said. The survey showed that optimism among consumer services businesses sank to its lowest since Aug 2022 at -55 in November, down from -19 in August, while among business and professional services sentiment fell to -29 from +9. The index represents the difference between the%ages of businesses which say they are more optimistic and those who are more pessimistic. (Reuters)

Japan: BOJ's retreat from low rates heightens Japan's debt troubles. The Bank of Japan's (BOJ) retreat from a decade-long radical stimulus is pressuring the government to rethink the way it funds its big spending packages with additional debt, a challenge made more daunting by political demands for permanent tax breaks. Prime Minister Shigeru Ishiba's administration plans to spend JPY13.9tr (USD92 bn) for a package of steps to cushion the blow from rising living costs, which will be funded by this year's supplementary budget to be finalised on Friday. Ishiba's ruling coalition is also seen swallowing opposition party demands for permanent tax breaks, which analysts say may slash next year's tax revenues by up to JPY4tr. Such steps would come in the wake of the BOJ's exit from ultra-low interest rates, which increases the cost of funding Japan's JPY1,100 tr debt pile - the biggest among advanced nations and nearly double the size of its economy. (Reuters)

India: Central bank to delay cutting rates to early 2025 amid inflation concerns: Reuters poll. The Reserve Bank of India (RBI) is set to hold interest rates on 6 Dec as a sharp rise in consumer inflation has led several economists in a Reuters poll to push back their forecasts for the first cut in the cycle by a couple of months to Feb. Annual retail inflation surged past the RBI's 6% tolerance ceiling in Oct, driven by soaring food prices. RBI Governor Shaktikanta Das, whose term is likely to be extended, recently said any premature move to lower rates would be risky. This was despite the RBI changing its monetary policy stance to 'neutral' in Oct and calls from top government ministers to cut interest rates to support a slowing economy. A strong majority of economists, 62 of 67, in the 18-27 Nov Reuters poll predicted the RBI would hold its key repo rate at 6.50% at the end of its 4-6 Dec meeting. Five forecast a 25 bps cut. (Reuters)

Markets

Public Bank: Formally extends MGO for remaining LPI shares. Public Bank has formally extended a conditional mandatory general offer (MGO) for the remaining shares in LPI Capital at RM9.80 sen apiece. This after the bank's sale and purchase agreement (SPA) with the estate of the late Tan Sri Teh Hong Piow and its private vehicle Consolidated Teh Holdings SB to acquire a 44.15% stake or 175.9m shares in the insurer for RM1.72bn cash or RM9.80 sen per share turned unconditional. (The Edge)

Globetronics: Partners with Canada's POET Technologies to manufacture optical engines for data centres. Globetronics Technology said it is partnering Canada-headquartered POET Technologies Inc to work together on advanced manufacturing and testing of optical engines, designed for applications such as data centres and telecommunications. POET is a Nasdaq-listed design and development company offering integration solutions for electronic and photonic devices into a single multi-chip module using advanced wafer-level semiconductor manufacturing techniques and packaging methods. (The Edge)

Yinson: Unit secures financing for solar project. Yinson Holdings' renewables business unit, Yinson Renewables (YR), has secured a USD59m senior secured green financing facility for the Matarani solar project in Peru from IDB Invest and Natixis Corporate & Investment Banking (Natixis CIB). YR chief financial officer Vegard Urnes said the financing marked a significant milestone for the company in Latin America. He said this achievement not only underscores YR's commitment to advancing renewable energy solutions but also highlights the importance of strategic partnerships with institutions like IDB Invest and Natixis CIB. (Bernama)

Dnex: Actively pursuing more producing assets. Dagang Nexchange's near-term priority is the reactivation of the brown field, Abu Cluster, targeting first oil production in the second half of 2025, at an anticipated rate of 2,500 barrels per day. This is following a further revision to the UK Energy Profits Levy policy, which have led Dnex via its oil and gas subsidiary, Ping Petroleum Ltd, to prioritise its Malaysian assets in the near term. The company said it is actively pursuing opportunities to acquire additional producing assets to enhance production levels and improve its overall performance. (StarBiz)

Farm Fresh: Declares dividend of one sen as 2Q earnings double. Farm Fresh's net profit more than doubled in the 2QFY2025, as contributions from Inside Scoop, Sin Wah and profitable Australian operations were boosted by decreased dairy raw material costs. Net profit rose 105% to RM26.2m or 1.40 sen per share, from RM12.8m or 0.68 sen per share a year ago, a bourse filing showed. Farm Fresh declared an interim dividend of one sen per share, with an ex-date of Dec 12, payable on Dec 27. (The Edge)

Icon Offshore: Mulls rename to Lianson Fleet Group, 3Q profit triples on higher daily charter rates. Icon Offshore, which has proposed a name change to Lianson Fleet Group, posted a threefold jump in net profit to RM19.4m in 3QFY2024 from RM6.2m a year ago, on higher daily charter rates. This is despite utilisation dropping to 78% versus 86% due to unplanned maintenance. Revenue increased 20.66% to RM70.6m from RM58.5m. (The Edge)

MARKET UPDATE

The FBM KLCI might add a few points at the opening as shares opened higher in Europe on Thursday after a mixed session in Asia following a Big Tech-led retreat on Wall Street. Germany's DAX advanced 0.7% to 19,394.41 while the CAC 40 in Paris gained 0.6% to 7,185.13. Britain's FTSE 100 rose 0.2% to 8,290.37. The futures for the S&P 500 and the Dow Jones Industrial Average edged 0.1% higher. In the region, Tokyo's Nikkei 225 index gained 0.6% to 38,349.06 and Australia's S&P/ASX 200 advanced 0.5% to 8,444.30. South Korea's Kospi gained less than 0.1% to 2,504.67 after the central bank cut its benchmark interest rate to relieve pressure on its slowing economy. The Bank of Korea cut its key rate by a quarter percentage point to 3% and lowered its outlook for the country's economic growth from to 2.2% from 2.4% for this year and to 1.9% from 2.1% for 2025. Chinese shares fell as investors sold to lock in profits from recent gains. Hong Kong's Hang Seng index lost 1.2% to 19,366.96 and the Shanghai Composite index fell 0.4% to 3,295.70. US markets was closed Thursday for Thanksgiving, and will reopen for a half day on Friday. Back home, the FBM KLCI lost 6.76 points or 0.42% to 1597.49.

Source: PublicInvest Research - 29 Nov 2024