HEADLINES

Economy

US: Manufacturing PMI rises more than expected but still indicates contraction. The Institute for Supply Management released a report showing its reading on US manufacturing increased by more than expected in the month of but continued to indicate a contraction. The ISM said its manufacturing PMI rose to 48.4 in from 46.5 in Oct, although a reading below 50 still indicates contraction. Economists had expected the index to inch up to 47.5. The bigger than expected advance by the manufacturing PMI came amid a turnaround by new orders, as the new orders index jumped to 50.4 in from 47.1 in Oct. (RTT)

EU: factory activity fell sharply; outlook gloomy. Euro zone manufacturing activity fell sharply last month and a further decline in demand likely dashed any hopes for an imminent recovery after the sector had showed some signs of stabilisation in Oct, a survey showed. HCOB's final euro zone manufacturing PMI, compiled by S&P Global, sank to 45.2 in matching a preliminary estimate and further below the 50 mark separating growth from contraction. In Oct it was 46.0 and the headline reading has been sub-50 since mid-2022. (Reuters)

EU: Jobless rate remains unchanged. The euro area unemployment rate remained unchanged in Oct, data from Eurostat showed. The jobless rate came in at seasonally adjusted 6.3%, the same as in Sept and also matched expectations. The rate was below the 6.6% posted in Oct 2023. The number of unemployed declined 3,000 from the previous month. Compared to last year, unemployment was down 411,000. The youth unemployment rate rose only marginally in Oct but remained at an elevated level. The rate came in at 15.0%, up from 14.9% in the previous month. The overall EU unemployment rate was steady at 5.9% in Oct. (RTT)

EU: German manufacturing sector mired in downturn in. Germany's manufacturing sector remained firmly entrenched in contraction territory in as firms struggle with weak demand and competitive pressure, highlighting ongoing challenges for Europe's largest economy. The HCOB Germany Manufacturing PMI, compiled by S&P Global, held steady at 43.0, unchanged from Oct. This final reading comes in slightly below a preliminary reading of 43.2 and remains well below the 50-point threshold separating growth from contraction. While the rate of decline in output and new orders eased slightly, employment, output prices and export sales quickened their fall. (Reuters)

UK: Manufacturing activity contracts most in 9 months. The UK manufacturing sector deteriorated at the steepest pace in nine months in, as output and new orders declined amid concerns surrounding the economic outlook, high costs, and weak demand, final survey data released by S&P Global revealed. The manufacturing PMI dropped to 48.0 in from 49.9 in Oct. Any reading below 50 indicates contraction. The flash reading was also 48.6. Among components, output, new orders, employment, and stocks of purchased goods all deteriorated in weaker demand conditions from both domestic and foreign clients forced firms to scale back their production levels. (RTT)

Japan: Factory activity falls at fastest pace in 8 months. Japan's factory activity shrank at the fastest pace in eight months in ember as soft demand prompted firms to trim production, a private-sector survey showed. The final au Jibun Bank Japan manufacturing PMI slipped to 49.0 in ember, the lowest level since March, from 49.2 in Oct. The index was unchanged from the flash reading and remained below the 50.0 threshold that separates growth from contraction for the fifth straight month. (Reuters)

India: Home prices to rise 6.5% in 2025, driven by demand from wealthy. Average home prices in India are set to rise steadily over the coming years driven mainly by demand from wealthy individuals, while the rising cost of living will make owning a property unattainable for most people. While India's middle class tightens its belt, cutting back on everything from tea to two-wheelers due to soaring consumer inflation, the richest 1% who own 40% of the country's wealth are snapping up homes in cities with well-paying jobs. Though that is enough to sustain price rises in the short-term, property analysts say there are limits to how much the rich can keep demand alive in an economy which is already slowing down. (Reuters)

Australia: Retail sales firm for 3 months as consumer mood brightens. Australian retail sales firmed for a third straight month in Oct as tax cuts flowed through to wage packets and consumers became more confident that interest rates would not increase again, although policy easing still looked distant. Data on inventories proved to be a bit of a drag on the economy in Q3, but contribution from net exports suggests growth still likely picked up. Data from the Australian Bureau of Statistics showed retail sales rose 0.6% in Oct from Sept, when they grew a meagre 0.1%. Analysts had looked for a gain of 0.4% in Oct. (Reuters)

Markets

Yinson: To build new FSO vessel for charter by Murphy Oil unit in Vietnam. Yinson Holdings 49%-owned joint venture with PetroVietnam Technical Service Corp (PTSC) has executed a provision, charter, operation and maintenance contract with a unit of Murphy Oil Corp, for a floating, storage and offloading (FSO) vessel in Vietnam. The 500,000 barrels of oil equivalent capacity FSO, to be built for operations from 4Q 2026, will be chartered for a firm period of 10 years, Yinson said. The contract comes with options to extend for up to five years, it said. In total, the contract has a value of up to USD416.0m, it added. The two parties, through joint ventures, have been operating FSO PTSC Bien Dong 01 since 2013, and the floating production storage and offloading (FPSO) vessel PTSC Lam Son since 2014, it said. (The Edge)

T7 Global: Wins third Pan Malaysia contract with Package B3 from Jadestone Energy. T7 Global has won a contract from Jadestone Energy (M) for the provision of Pan-Malaysia maintenance, construction, modification (MCM) and hook-up and commissioning (HUC) services for Package B3. The contract, won by T7's wholly owned unit Tanjung Offshore Services, commenced from 17 Oct, and will last five years until 16 Oct, 2029. It also has two extension options for three years and two years respectively. Jadestone operates four production sharing contracts offshore Peninsular Malaysia, of which two, PM323 and PM329, are producing. (The Edge)

Datasonic: Bags RM81.4m contract extensions from Home Ministry. Datasonic Grouphas secured two letters of extension (LOEs) from the Home Ministry, valued at RM81.4m. Datasonic said the first LOE pertains to the contract extension for maintenance services at the card personalisation centres of the National Registration Department (NRD). The contract commences from 1 Dec 2024, to 30 Nov, 2025, for an additional fourth ceiling contract value of RM21.4m, inclusive of an 8% SST. The group said the second LOE involves the supply of MyKad, MyTentera, and MyPOCA raw cards, along with related consumables, to NRD. This contract is also for 12 months, from 1 Dec 2024 to 30 Nov 2025 with an additional second ceiling contract value of RM59.9m. (Bernama)

Willoeglen MSC: Bags RM79.2m systems contract from Singapore Public Utilities Board. Willowglen Services has secured a contract valued at RM79.2m from the Public Utilities Board, Singapore, for the installation of supervisory control and data acquisition (Scada) and telemetry systems for construction works and maintenance services. It said in a stock exchange filing the contract will commence on 23 Dec 2024, and be completed on 22 June 2032. The contract is expected to contribute positively to the group's earnings and net assets per share for the financial years ending 31 Dec 2025 to 2032. (The Star)

Pesona Metro: Wins RM181.8m Cyberjaya construction job. Wholly owned subsidiary Pesona Metro has accepted a RM181.8m contract from NRY Architects for substructure and main building works for a residential project in Cyberjaya, Selangor. The group said in a bourse filing the scope of the project includes the construction of two blocks of 28-storey condominiums with 606 units, a clubhouse with a layered shop, a two-level carpark as well as shared facilities. (The Star)

MARKET UPDATE

The KLCI might add a few points at the opening as technology stocks pulled Wall Street to another record amid a mixed Monday of trading. The S&P 500 rose 0.2% from its all-time high set on Friday to post a record for the 54th time this year. The Dow Jones Industrial Average fell 128 points, or 0.3%, while the Nasdaq composite gained 1%. Big Tech stocks also helped prop up the market. Gains of 1.8% for Microsoft and 3.2% for Meta Platforms were the two strongest forces pushing upward on the S&P 500. Retailers were mixed amid what's expected to be the best Cyber Monday on record and coming off Black Friday. Target, which recently gave a forecast for the holiday season that left investors discouraged, fell 1.2%. Walmart, which gave a more optimistic forecast, rose 0.2%. Amazon, which looks to benefit from online sales from Cyber Monday, climbed 1.4%. The stock market largely took Donald Trump's latest threat on tariffs in stride. The president-elect on Saturday threatened 100% tariffs against a group of developing economies if they act to undermine the US dollar. Trump said he wants the group, headlined by Brazil, Russia, India and China, to promise it won't create a new currency or otherwise try to undercut the US dollar. A report in the morning showed the US manufacturing sector contracted again last month, but not by as much as economists expected. This upcoming week will bring several big updates on the job market, including the October job openings report, weekly unemployment benefits data and the all-important November jobs report. They could steer the next moves for Federal Reserve, which recently began pulling interest rates lower to give support to the economy. In financial markets elsewhere, Chinese stocks led gains worldwide as monthly surveys showed improving conditions for manufacturing, partly driven by a surge in orders ahead of Trump's inauguration next month. Both official and private sector surveys of factory managers showed strong new orders and export orders, possibly partly linked to efforts by importers in the US to beat potential tariff hikes by Trump once he takes office. Indices rose 0.7% in Hong Kong and 1.1% in Shanghai. Back home, the KLCI added 1.19 points or 0.07% to 1595.48.

Source: PublicInvest Research - 3 Dec 2024