HEADLINES

Economy

US: Consumer price growth matches estimates in Dec. The Commerce Department released a closely watched report showing consumer prices in the US increased in line with economist estimates in the month of Dec. The report said the personal consumption expenditures (PCE) price index rose by 0.3% in Dec after inching up by 0.1% in Nov. The increase matched expectations. Prices for goods edged up by 0.2% compared to the previous month, while prices for services climbed by 0.3%. (RTT)

US: Labor costs rise moderately in fourth quarter. US labor costs rose marginally in the fourth quarter, offering some comfort to Federal Reserve officials after progress lowering inflation stalled at the end of 2024. The employment cost index (ECI), the broadest measure of labor costs, gained 0.9% last quarter after rising 0.8% in the third quarter, the Labor Department's Bureau of Labor Statistics said. Economists polled by Reuters had forecast the ECI would climb 0.9%. Labor costs increased 3.8% in the 12 months through Dec after rising 3.9% in the year through Sept. (Reuters)

US: Trump hits China, Canada, Mexico with tariffs to open trade war. President Donald Trump unleashed the first salvo of his tariff war, with general levies of 25% on Canada and Mexico and 10% on China, the start of a wave of promised trade barrages against foreign allies and adversaries alike. Trump signed orders for the tariffs Saturday, according to White House officials who briefed reporters on condition of anonymity. The orders also include retaliation clauses that would ramp up tariffs if the countries respond in kind. (Bloomberg)

EU: Italy producer prices rise 0.6%. Italy's producer prices increased for the third straight month in Dec, data from the statistical office ISTAT showed. Producer prices posted a monthly increase of 0.6% after a 1.2% rise in Nov. The upward trend was mainly driven by a 1.9% rise in energy costs. Prices for consumer goods and capital goods grew only 0.1% and 0.2%, respectively. Prices in the domestic market were up 0.8%, while those in the foreign market increased by 0.1%. On a yearly basis, producer prices climbed 1.1% in Dec, reversing a 0.5% fall in the prior month. (RTT)

EU: German inflation unexpectedly eases in Jan. Consumer price pressures in Germany slowed unexpected at the start of the year amid a sharp slowdown in food inflation, offering some relief for the European Central Bank that lowered interest rates a day earlier and plans to continue easing to boost the single currency economy that came to a standstill in the final three months of 2024. The CPI rose 2.3% YoY in Jan following a 2.6% increase in Dec, preliminary estimates from the statistical office Destatis showed. Economists had expected the inflation rate to remain unchanged after accelerating in the previous three months. Inflation based on the harmonized index of consumer prices was unchanged at 2.8% in Jan, as expected. (RTT)

India: Economy report predicts sluggish growth, pushes for more reforms. India's economy is likely to continue its sluggish pace of growth next fiscal year weighed down by global risks, according to a finance ministry report that has called on states to pursue business reforms to boost economic activity. The annual Economic Survey, which was presented in parliament by Finance Minister Nirmala Sitharaman, has projected GDP growth at 6.3%-6.8% in the next fiscal year that starts on April 1, with growth set to sag to a four-year low this year from 8.2% last year. (Reuters)

Japan: Housing starts fall 2.5%. Japan's housing starts decreased for the eighth straight month in Dec, though at a slower-than-expected pace, data from the Ministry of Land, Infrastructure, Transport, and Tourism showed. Housing starts dropped 2.5% YoY in Dec, faster than the 1.8% fall in the previous month. Economists had expected a decrease of 3.7%. Data showed that new construction was contracted sharply by 14.7% in the built-for-sale segment, while growths were seen in rented, issued, and owned categories. (RTT)

Philippine: Producer prices rise 0.2% in Dec. Philippine producer prices increased for the second straight month in Dec, and at a slower pace, data from the Philippine Statistics Authority showed. The PPI edged up 0.2% YoY in Dec after a 0.4% rise in Nov. The slower increase in Dec was mainly due to price developments in the food products industry, where prices grew at a weaker pace of 1.7% versus a 2.4% climb in Nov. Similarly, the annual price growth decelerated in the manufacture of basic metals to 1.5% from 3.2%. (RTT)

Markets

Cypark (Neutral, TP: RM0.80): Floating solar farm achieves commercial operations for remaining 30MW. Cypark Resources said its remaining 30MW floating solar plant at Danau Tok Uban (DTU), Kelantan, achieved commercial operation date (COD), marking the successful completion of all outstanding projects. The plant, dubbed DTU1, is one of two 30MW solar installations at DTU. Its sister DTU2, with a 30MW capacity, achieved COD back on Jan 7. The project is Malaysia's largest floating solar installation, according to Cypark. (The Edge)

Compugates: To jointly develop Cyberjaya land into RM1.4bn GDV project. Compugates Holdings said it has teamed up with a property developer to undertake a mixed-use development on a 14.5-hectare land in Cyberjaya with an estimated GDV of RM1.4bn. The land, owned by Compugates' 70%-owned subsidiary Compugates Development and Mining SB (CDMSB), has a market value of RM134.6m, while its audited net book value stood at RM95.6m as of end-Dec 2023, said Compugates. Through CDMSB, Compugates will be entitled to a minimum landowner's entitlement of RM234m. (The Edge)

Citaglobal: Acquires prime land in Kuala Lumpur for RM73m. CIitaglobal said that its wholly-owned subsidiary, Sinergi Dayang SB (SDSB), has entered into a conditional SPA with Bank Islam Malaysia (BIMB) to acquire a piece of leasehold land in Kuala Lumpur for RM73m. The land, measuring approximately 6,410 square metres and located on Jalan Tun Razak, will be acquired for a leasehold period expiring on Dec 29, 2093. This acquisition is positioned as a valuable opportunity for long-term growth, given the land's high visibility, strong accessibility. (The Malaysian Reserve)

Awantec: Sells office building for RM25m in asset rationalisation. Awanbiru Technology (Awantec)'s wholly owned subsidiary, Awantec Systems SB, has entered into eight separate sale and purchase agreements (SPAs) with Puncak Hartanah Intelek SB to dispose of an eight-storey office building for RM25m. The agreements cover the sale of each floor in the semi-detached signature corporate office and retail building in Sepang, Selangor. Awantec said seven floors, totalling 35,904 square feet, are currently leased to Commerce Dot Com SB as business office space. (StarBiz)

Lebtech: Bags RM21m building contract for Shah Alam project. Lebtech said its wholly-owned subsidiary Lebtech Construction SB has secured a RM21m contract from Brighton Land SB for main building works at a proposed development in Section U13, Shah Alam. The group said the job entails 104 units of two-storey terrace houses and a Tenaga Nasional substation. (StarBiz)

DXN: Scraps plans to develop medicine facility and wellness centre. DXN Holdings said it is terminating its plan to develop a medicine facility and a wellness centre due to a lack of progress and failure to achieve the expected benefits. The group had signed a memorandum of agreement with Persatuan Holistik dan Herba Malaysia (MMHO) in Sept 2023 for the establishment of the medicine facility, and an MoU with European Wellness Centres Inc (EW) in Oct 2023 for the development of the wellness centre. (The Edge)

MARKET UPDATE

The KLCI might open within a tight range today after stocks on Wall Street surrendered early gains and closed broadly lower Friday after the White House said President Donald Trump would impose promised tariffs on key US trading partners. The S&P 500 fell 0.5% and the Nasdaq composite dropped 0.3%. The indices, which had posted solid gains in morning trading, posted their first weekly loss in three weeks. The Dow Jones Industrial Average fell 0.8%. Trump will put in place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China effective Saturday. The White House provided no word on whether there would be any exemptions to the measures that could result in swift price increases to US consumers. The selling was broad, with about 75% of the stocks in the S&P 500 closing lower. Technology and energy companies accounted for a large share of the decline. The earlier gains on Wall Street had helped shave losses from the start of the week over worries that the artificial-intelligence boom may not require as much investment as thought. In stock markets elsewhere, indices ended mixed in Europe after also finishing mixed in Asia. Japan's Nikkei 225 index added 0.1% after a report showed that the country's core inflation rate topped the central bank's 2% target, paving the way for further hikes to interest rates. The Kospi in South Korea fell 0.8% after trading resumed following holidays. Markets remained closed in Hong Kong and Shanghai for the Lunar New Year. Back home, the KLCI added 4.23 points or 0.27% to 1556.92.

Source: PublicInvest Research - 3 Feb 2025