HEADLINES

Economy

US: Weekly jobless claims edge up; worker productivity growth slows. The number of Americans filing new applications for unemployment benefits increased moderately last week, consistent with steadily easing labor market conditions, though opportunities for those out of work are becoming scarce amid tepid hiring. Initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 219,000 for the week ended Feb 1, the Labor Department said. Economists polled by Reuters had forecast 213,000 claims for the latest week. Unadjusted claims increased 11,370 to 239,690, with applications in New York soaring by 4,092. Filings rose by 3,999 in California, likely reflecting some residual effects from the recent fires in Los Angeles. Claims dropped by 1,343 in New Jersey. There were no significant increases or decreases for the rest of the states, territories and the District of Columbia. (Reuters)

US: Labor productivity growth slows more than expected in 4Q. A report released by the Labor Department showed US labor productivity and unit labor costs both increased by less than expected in the fourth quarter of 2024. The Labor Department said labor productivity climbed by 1.2% in the fourth quarter after surging by an upwardly revised 2.3% in the third quarter. Economists had expected labor productivity to jump by 1.7%. The bigger than expected slowdown in the pace of productivity growth came as output shot up by 2.3% in the fourth quarter compared to the 3.6% spike in the third quarter. Productivity is a measure of output per hour. The report said hours worked increased by 1.0% in the fourth quarter after climbing by 1.3% in the third quarter. (RTT)

EU: Bulgarian retail sales growth strongest in 8 months. Bulgaria's retail sales growth improved for the third straight month in Dec to the highest level in eight months, figures from the statistical office showed. Retail sales climbed 7.8% annually in Dec, faster than the 6.8% in Nov. Further, this was the sharpest growth since May, when sales had risen 9.9%. The annual sales growth in food, beverages, and tobacco eased to 9.4% from 11.0% a month ago. The slowdown in growth was also influenced by the continued sales decline of automotive fuel in specialized stores, where sales plunged 10.7%. (RTT)

EU: Romanian retail sales expand least in 5 months. Romania's retail sales grew at the slowest pace in five months, figures from the National Institute of Statistics showed. Retail sales rose by a working-day-adjusted 7.8% year-on-year in Dec, slower than the 8.8% gain in Nov. Further, this was the slowest rate of growth since July, when sales had risen 7.6%. A 15.7% surge in sales of non-food products predominantly drove the overall growth in Dec. Demand for food products climbed 1.0% annually, but slower than the 3.7% rise in Nov. On a monthly basis, retail sales dropped 1.3% in Dec, after a flat change in the prior month. (RTT)

UK: Bank of England cuts rates and growth outlook, sees inflation 'bump'. The Bank of England cut interest rates by a quarter-point and some policymakers wanted a bigger move to offset a slowdown, but the BoE said it would be careful about further moves in the face of an expected inflation spike and global economic uncertainty. The BoE halved its 2025 growth outlook, a blow for finance minister Rachel Reeves who is pushing to speed up the economy and said inflation would be almost double its 2% target this year. Governor Andrew Bailey said he thought that would prove to be a "bump in the road" before inflation falls back. (Reuters)

Japan: BOJ's fresh take on labour crunch opens door for more rate hikes. The Bank of Japan is increasingly blaming chronic labour shortages, not stagnant demand, as the main reason for its weak economic activity, a justification it may use to lift interest rates beyond what was initially expected. From factories to hotels to restaurants, Japanese businesses are struggling to hit full capacity not because they can't find customers but because they can't find workers, goes the commentary now emerging more from the central bank. (Reuters)

Australia: Business conditions remain stable, confidence improves. Australia's business conditions remained unchanged in the fourth quarter, while confidence improved moderately, data from the National Australia Bank showed. The business conditions index held steady at 3 in the 4Q. Trading and profitability decreased by one point each, while employment remained stable. At the same time, the business confidence index rose to -4 in the 4Q from -7 in the 3Q. Despite the improvement, confidence remained in negative territory. Leading indicators of the survey were more mixed. (RTT)

Philippine: Jobless rate falls slightly to 3.1%. The Philippines' unemployment rate decreased unexpectedly in Dec to the lowest level in six months, preliminary figures from the Philippine Statistics Authority showed. The unemployment rate dropped to 3.1% in Dec from 3.2% in Nov. Meanwhile, the rate was expected to rise to 3.3%. In the corresponding month last year, the rate was also 3.1%. The number of unemployed people declined to 1.63m in Dec from 1.66m in the previous month. Data showed that the employment rate stood at 96.9% versus 96.8% in Nov. (RTT)

Markets

IHH Healthcare (Outperform, TP: RM8.64): Seeks up to RM5.7b in compensation in Fortis stake dispute. IHH Healthcare has escalated its legal claim against Daiichi Sankyo Company, now seeking compensation of up to RM5.7bn (INR109.3bn) over a failed stake acquisition in Fortis Healthcare Ltd. The claim comes after a revised expert report and an increase in the amount of compensation originally sought by IHH's subsidiary, Northern TK Venture Pte Ltd (NTK). The dispute began in 2018, when NTK tried to acquire a larger stake in Fortis through an open offer. (The Malaysian Reserve).

Notion VTec: To acquire land for RM30m. Notion VTEC has entered into an SPA with Ng Soon Hing Dan Anak-Anak SB via its wholly owned subsidiary, Bentong Resources SB, to acquire land for RM29.6m. The agreement involved the acquisition of 4.04ha vacant freehold agriculture land in Kapar, Selangor together with a gas pipeline and other infrastructure."As the land is adjacent to our existing extrusion plant, a planned large factory will be built for the expansion needs of the group," Notion VTec stated. (StarBiz)

Zecon: Signs PV deal with Petrosabah. Zecon has entered into an MoU with Petrosabah SB, a wholly owned subsidiary of Innoprise Corp SB, to jointly develop a large-scale photovoltaic or PV floating integrated project in Lahad Datu, Sabah. Innoprise Corp is the investment vehicle for Yayasan Sabah, focusing on socioeconomic progress for Sabahans. Zecon said the partnership is expected to pave the way for the signing of a JV agreement or other relevant agreements related to the proposed project. (StarBiz)

MN Holdings: Ends MoU with Intelligent Pie due to lack of successful tenders. MN Holdings (MNHB) has announced the expiry and termination of its MoU with Intelligent Pie Consulting SB (IPIE). The agreement, signed through MNHB's wholly owned subsidiary MN Power Transmission SB, aimed at collaborating on operational technology cybersecurity projects within Malaysia's energy sector. The decision to terminate the MoU was driven by a weak flow of tenders in the targeted market segments, including Tenaga Nasional, Sarawak Energy, and Independent Power Plants, with no successful project awards. (The Malaysian Reserve).

Bina Puri: Seeks to restructure debt with Exim Bank. Bina Puri Holdings said it is in the midst of restructuring its loan with Export-Import Bank of Malaysia (Exim Bank), following a winding-up petition from the bank. "The escalation of the USD against MYR and the increase of interest rates from 4% to 11% had warranted the company to negotiate a restructuring of the loan with Exim Bank," Bina Puri said. The loss-making property developer said it had taken a USD7.7m (RM33.9m) loan, with an initial interest rate of 4%. (The Edge)

Scomi Energy: To be delisted on Feb 12. Scomi Energy Services is set to be delisted from Bursa Malaysia on Feb 12, following the company's failure to submit its regularisation plan on time. The bourse regulator Bursa Securities said it has dismissed Scomi Energy's bid for an extension of time to submit its regularisation plan, keeping the deadline on Jan 31. As such, Bursa Securities said the company's shares are to be removed from the official list effective Feb 12. (The Edge)

MARKET UPDATE

The KLCI might open within a tight range today after Wall Street drifted through mixed trading Thursday as rising fashion and cigarette stocks worked against drops for Ford Motor and Qualcomm. The S&P 500 rose 0.4% following healthy gains for stock markets across much of Europe and Asia. The Dow Jones Industrial Average dipped 125 points, or 0.3%, and the Nasdaq composite gained 0.5%. Qualcomm also kept indices in check after falling 3.7%. The company, whose products help power smartphones and other devices, reported profit for the latest quarter that topped analysts' forecasts, and analysts called the performance solid. But they also said expectations were high, and worries are rising about the wireless chip industry broadly. In the bond market, Treasury yields held relatively steady after a report said more US workers filed for unemployment benefits last week than expected, though the number remains low compared with history. A more comprehensive report will arrive on Friday, showing how many jobs US employers added during the month of January. The hope is Friday's data will show a job market that remains solid enough to keep worries about a possible downturn at bay but not so strong that it pushes upward on inflation. The US economy has remained much more solid than critics feared, but pressure is rising in part because of the threat of potential tariffs coming from President Donald Trump. After rocking financial markets around the world at the start of this week, worries about a potentially punishing global trade war have eased a bit after Trump gave 30-day reprieves for tariffs on both Mexico and Canada. In stock markets elsewhere, London's FTSE 100 jumped 1.2% after the Bank of England cut its main interest rate as it slashed its forecast for economic growth. The British economy has barely grown over the past six months, and the Bank of England halved its growth projection for the British economy this year to 0.75%. Stock indices also rose 1.5% in Paris, 1.4% in Hong Kong and 0.6% in Tokyo. Back home, the KLCI added 10.66 points or 0.68% to 1585.17.

Source: PublicInvest Research - 7 Feb 2025