HEADLINES

Economy

Global: Inflation will remain high for years, economists tell Ifo. Economists expect global inflation to remain high at least until 2028, according to a new survey that may add to market concerns about sticky price pressures. They forecast an average inflation rate of 3.5% in three years, only slightly below the 3.9% anticipated for 2025, a quarterly study conducted by the German Ifo Institute and the Institute for Swiss Economic Policy published showed. Almost 1,400 experts from 125 countries took part in the survey in early Dec. (Bloomberg)

US: Wholesale inflation surprisingly eases on drop in food prices. US wholesale inflation unexpectedly cooled in Dec, helped by a drop in food costs and flat services prices that may help temper concerns of lingering price pressures. The producer price index for final demand rose 0.2% from a month earlier, according to a Bureau of Labour Statistics report released. The median forecast in a Bloomberg survey of economists called for a 0.4% gain. A measure excluding food and energy was unchanged from Nov. Compared with a year earlier, the overall PPI climbed 3.3% and the core measure advanced 3.5%, both the highest since February 2023. (Bloomberg)

US: Biden administration finalises US crackdown on Chinese vehicles. US President Joe Biden's outgoing administration is finalising rules that will effectively bar nearly all Chinese cars and trucks from the US market, as part of a crackdown on vehicle software and hardware from China. Washington's latest move against Chinese vehicles comes after the Commerce Department said this month it was considering a similar crackdown on Chinese-made drones, in the wake of last year's steep tariff hikes on imports of its electric vehicles. (Reuters)

US: Fed's balance-sheet dynamics still weigh heavy five years on. As the Federal Reserve (Fed) continues to unwind its balance sheet, it's still dogged by the same issues that it faced more than five years ago. While market dynamics have evolved, the main issue facing policymakers and investors is how to measure liquidity in the financial system and avoid turmoil that forced the Fed to intervene in Sept 2019, as the Fed runs down it holdings. The central bank has reduced its assets by more than US$2 trillion (RM9.01 trillion) since the process known as quantitative tightening began in mid-2022. (Bloomberg)

China: Reiterates goal to keep yuan stable as pressure grows. The People's Bank of China (PBOC) emphasised its goal to keep the yuan stable, as the currency hovers near a record low in offshore trading, amid headwinds from a slowing economy. The central bank has confidence that it can achieve the mission of maintaining a stable currency, Xuan Changneng, the deputy governor of the PBOC, said. The yuan has shown resilience against the dollar, and China will use monetary tools such as interest rates and the reserve requirement ratio (RRR) to keep liquidity ample, Xuan added. (Bloomberg)

South Korea: Export prices accelerate in Dec. Export prices in South Korea were up 10.7% on year in Dec, the Bank of Korea said - up from 7.0% in Nov. On a monthly basis, export prices climbed to 2.4% in Dec from 1.6% in Nov. For all of 2024, export prices rose 6.2%. Individually, export prices for agricultural, forestry and marine products rose 2.7% on month and 3.9% on year, while prices for manufacturing products added 2.4% on month and 10.7% on year. Import prices rose 7.0% on year and 2.4% on month, up from 2.8% on year and 0.9% on month in Nov. (RTT)

Thailand: Consumer confidence hits six-month high in Dec on stimulus, tourism. Thai consumer confidence rose for a third consecutive month in Dec to reach its highest level in six months as sentiment was bolstered by government stimulus measures and tourism, a survey showed. The consumer index of the University of the Thai Chamber of Commerce increased to 57.9 in Dec from 56.9 in Nov, the university said in a statement. "Consumers started to believe that the economy will recover in the future if the government continues to stimulate the economy," it said. (Reuters)

Markets

Kawan Food (Outperform, TP:RM2.45): Bins IT equipment JV after failed talks. Kawan Food's plan to set up an information technology equipment joint venture with several individuals, including its founder cum major shareholder, and current chairman, has fallen through. Talks ceased after Kawan Food and Sun Cheng Leng, Huang Er-Wen, Gan Thiam Chai and Lim Hun Soon @ David Lim failed to arrive at a consensus on revised terms for the JV. (The Edge)

Yinson: Secures USD1bn investment from Abu Dhabi consortium. Yinson Production, an indirect subsidiary of Yinson Holdings, has secured USD1bn (RM4.51bn) worth of funding from a consortium of international investors, led by a wholly owned subsidiary of Abu Dhabi Investment Authority (Adia), for expansion. Adia's Platinum Lily B 2024 RSC Ltd, together with funds managed by British Columbia Investment Management Corp (BCI) and RRJ Group, will subscribe to redeemable convertible preference shares (RCPS) and warrants issued by Yinson Production, giving the unit a post-money valuation of USD3.7bn. (The Edge)

Mah Sing: Confident data centre projects will pass through potential US chip export restrictions. Mah Sing Group, whose stock price had declined by 12% over the past five days, said it is confident that its data centre projects will pass through the proposed US restrictions on the export of artificial intelligence (AI) chips. Companies in Malaysia can secure validated end-user designations by adhering to US standards on security, cyber resilience, and human rights, the property developer said in a statement. Mah Sing will ensure full compliance and mitigate potential risks. (The Edge)

YTL Power: MOF approves digital banking licence to YTL Digital Bank. MOF has approved the issuance of a digital banking licence to YTL Digital Bank, a JV between YTL Digital Capital SB and Sea Ltd. The next-generation digital bank, operating as Ryt Bank, has received approval to commence operations as of Dec 20, 2024. YTL Digital Bank said the bank will be launched in phases to the public to ensure a smooth rollout. Ryt Bank chief executive officer Melvin Ooi said Ryt Bank, backed by the formidable strengths of YTL Digital Capital and Sea Ltd, is set to redefine banking in Malaysia. (BTimes)

Sunway Property: Names Chung Soo Kiong as new MD, Serena Cheah now executive deputy chair. Sunway Property, the property arm of Sunway Group, has appointed Chung Soo Kiong as its new managing director. Chung, who succeeds Datin Sarena Cheah, brings more than 20 years of extensive experience in property development and construction businesses within Sunway Group. Chung most recently served as the managing director of Sunway Property's international division, where he spearheaded regional ventures and key projects in Singapore, China and other markets. (BTimes)

Theta Edge: Calls off JV agreement to develop AI, blockchain solutions. Theta Edge said its subsidiary's JV deal with a data-science company to develop artificial intelligence and blockchain solutions has been terminated. The telecommunications and technology company said its wholly owned unit Theta Innovation SB (TISB) and iStream360 SB have mutually agreed to terminate the JV agreement entered on Nov 21 last year. (The Edge)

MARKET UPDATE

The KLCI might open higher today after most US stocks rose Tuesday following an encouraging update on inflation, though drops for Eli Lilly and other influential stocks kept indexes in check. The S&P 500 rose 0.1% as three out of every four stocks in the index climbed. The Dow Jones Industrial Average added 221 points, or 0.5%, and the Nasdaq composite slipped 0.2%. Stocks got a boost from a report showing inflation at the US wholesale level wasn't as high last month as economists expected. It's an encouraging signal ahead of a report coming Wednesday, which will show how much inflation US consumers faced at gasoline pumps, grocery registers and auto lots in December. Stubbornly high readings on inflation and a run of better-than-expected updates on the US economy have sent Wall Street into a weekslong rut, pulling it further from the dozens of all-time highs set last year. The fear is that all the strong data will convince the Federal Reserve to deliver less relief this year through lower interest rates. In stock markets elsewhere, indices were higher across much of Europe and Asia with a few exceptions. Japan's Nikkei 225 index fell 1.8% following a holiday on Monday, but indices were much stronger in China where stocks rose 1.8% in Hong Kong and 2.5% in Shanghai. Back home, the KLCI ended down by 9.13 points or 0.58% to 1576.46.

Source: PublicInvest Research - 15 Jan 2025