PublicInvest Research

PublicInvest Research Headlines - 28 Nov 2023

PublicInvest
Publish date: Tue, 28 Nov 2023, 10:24 AM
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.

All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp

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Economy

US: New home sales fall more than expected in Oct. Sales of new US single-family homes fell more than expected in Oct, likely as higher mortgage rates reduced affordability, but the housing segment remains supported by a persistent shortage of previously owned properties on the market. New home sales dropped 5.6% to a seasonally adjusted annual rate of 679,000 units last month, the Commerce Department said. Sept's sales pace was revised lower to 719,000 units from the previously reported 759,000 units. Economists polled by Reuters had forecast new home sales, which account for a small share of US home sales, would fall to a rate of 723,000 units. New home sales are counted at the signing of a contract, making them a leading indicator of the housing market. (Reuters)

US: As US job market softens, gains of minority groups hang in the balance. Economists who have studied employment during the recovery from the coronavirus pandemic agree that Black, Hispanic, and less-educated workers saw outsized gains relative to whites or college degree holders whose fortunes typically outpace others. But as the demand for workers begins to ease, they are also hoping the US may break the historic pattern where the burden of rising joblessness falls most heavily on those same groups. (Bloomberg)

EU: ECB's Lagarde says Eurozone inflation outlook surrounded by considerable uncertainty. Euro area price growth outlook continued to be surround by significant uncertainty and it is not yet time to declare the end of the fight against inflation, ECB President Christine Lagarde said. "Looking ahead, we expect the weakening of inflationary pressures to continue, even though headline inflation may rise again slightly in the coming months, mainly owing to some base effects," Lagarde said in a speech at a European Parliament hearing. "However, the medium-term outlook for inflation remains surrounded by considerable uncertainty." The ECB chief pointed out that the bank's indicator of domestic inflation has not eased much, signaling that "inflation is now driven more by domestic sources than by external sources.” (RTT)

EU: German Ifo export expectations rise in Nov. German export expectations improved in Nov, survey data from the ifo institute showed. The ifo export expectations indicator climbed to minus 3.8 points in Nov from minus 6.3 points in Oct. "However, the export economy still isn't managing to develop any momentum," Klaus Wohlrabe, Head of Surveys at ifo said. "German companies have yet to benefit much from the economic upswing in many countries", added Wohlrabe. The survey showed that exports are expected to improve only in a few industries. While companies in the food industry are optimistic about the months ahead, printing companies remain the most pessimistic. (RTT)

UK: British retailers expect sales to fall at slower pace: CBI. UK retailers expect sales to fall for the eighth straight month in Dec but the pace of decrease is forecast to slow amid uptick in sentiment, survey results from the Confederation of British Industry showed. The retail sales balance rose to -11% in Nov from -36% in Oct, the Distributive Trades Survey results revealed. Only a net 6% forecast sales to fall again in the festive period. "Retail sales have languished in negative territory for much of 2023, reflecting the impact of strained household finances on the sector's fortunes," CBI Principal Economist Martin Sartorius said. "Given the weakness in trading conditions, it's little surprise that firms are scaling back on their investment ambitions," Sartorius added. Confidence among retailers recovered in November, with the corresponding balance rising to +4% from -14% in Aug. (RTT)

China: Industrial profits continue to rise. China industrial profits continued to increase in Oct albeit at a slower pace, the National Bureau of Statistics said. Industrial profits grew 2.7% on a yearly basis in Oct. The pace of increase slowed notably from the 11.9% rise posted in Sept. During Jan to Oct, industrial profits decreased 7.8% from the same period last year. Nonetheless, this was slightly slower than the 9% decline seen in the first nine months of the year, data showed. (RTT)

Hong Kong: Trade gap widens to HKD25.8bn. Hong Kong's trade deficit increased in Oct from a year ago as imports rose faster than exports, data from the Census and Statistics Department showed. The visible trade deficit rose to HKD25.8bn in Oct from HKD20.9bn in the same month last year. In Sept, the trade deficit was HKD64.5bn. The visible trade gap of HKD25.8bn was equivalent to 6.3% of the value of imports. The annual increase in exports was 1.4% in Oct versus a 5.3% fall in Sept. Exports to the Mainland and the US rose, while those to the EU continued to fall notably. Total exports to Asia as a whole climbed by 5.2%. Within this, shipments to Singapore surged the most, by 28.6%, followed by Vietnam with a 15.2% increase. (RTT)

Thailand: To lower 2023 growth forecast after weak 3Q. Thailand's previous 2023 economic growth forecast of 2.7% will be lowered after a weaker-than-expected 3Q, Deputy Finance Minister Krisada Chinavicharana said. Southeast Asia's second-largest economy expanded much slower than expected, at 1.5%, in the July-Sept quarter from a year earlier, the slowest this year, due to declining exports and government spending. For next year, while the ministry is aiming for economic growth of slightly higher than 3%, it will try to push for even more with upcoming government stimulus measures, he told reporters. The finance ministry's current forecasts are for 2.7% economic growth in 2023 and 3.2% growth in 2024. (Reuters)

Markets

Velesto Energy: Bags USD74m contract extension with Carigali Hess. Velesto Energy’s unit, Velesto Drilling SB, has secured a contract extension with Carigali Hess Operating Company SB for one year and six months. The contract, valued at an estimated USD74m, involves providing a 10K jack-up drilling rig named NAGA 8. (Malaysian Reserve)

UMediC: Proposes to transfer listing from ACE to Main Market. Medical equipment supplier UMediC Group, which was just listed over a year ago in July 2022, is now planning to transfer its listing from the ACE Market to the Main Market of Bursa Malaysia. UMediC has met the requirements issued by the SC Malaysia for the proposed transfer, including in terms of profit and public shareholding spread, with a healthy financial position. (The Edge)

Siab: Unit accepts LoA to develop residential project worth RM106.80m. Siab Holdings's wholly-owned subsidiary, Siab (M) SB, has accepted a letter of award (LoA) recently from Murni Lapisan SB (MLSB) for the proposed residential development project in Pantai Sentral, here, for RM106.80m. (StarBiz)

Perak Corp, Advancecon: Team up as part of business regularisation plans. Perak Corporation has appointed Advancecon Development SB as a JV partner for the development of the main infrastructure for the Silver Valley Technology Park (SVTP) in Perak. The appointment also includes the sale of completed industrial lots with main infrastructure on 39 parcels of leasehold land measuring 323.04 hectares in Kinta, Perak, for RM1.03bn in total GDV. (StarBiz)

LKL International: Aborts plans to promote Singapore firm’s medical products in M'sia. Medical and healthcare bed manufacturer LKL International has aborted plans with Singaporebased Serv Medical Pte Ltd to open up the digital healthcare market in Malaysia with Serv Medical's various product suites. (The Edge)

MRCB: Eyes growth with RM5.5bn property launches. Malaysian Resources Corp Bhd’s (MRCB) future growth will be driven by the launching of RM1.5bn in properties in Australia and Malaysia in 2023, followed by RM4.0bn in New Zealand and Malaysia in 2024. (StarBiz)

Capital A: AirAsia adds over 5m seats for China, India and Malaysia flights in 2024. AirAsia announced a major expansion of its services covering China, India and Malaysia, totalling an astounding 230 weekly flights for the first quarter of 2024 with up to 5.2m seats per year. (StarBiz)

UMW: 3Q net profit jumps 72% on sustained demand across all business segments. UMW Holdings' net profit for the 3QFY2023 jumped 71.91% to RM173.1m from RM100.7m a year ago, as it recorded higher revenue with improved contributions from all its businesses, driven by sustained demand. (The Edge)

IPO: Critical Holdings aims to raise RM26m. ACE Market-bound Critical Holdings (CHB) is seeking to raise RM26m from its Dec 18, 2023 debut, with its IPO priced at 35 sen per share. CEO Tan Si Lim said the funds generated would be used to acquire a new regional office in central Peninsular Malaysia to strategically facilitate future expansion into central and southern regions and expand its sales and technical teams, among others. (StarBiz)

MARKET UPDATE

The FBM KLCI might open higher lower after MSCI’s global equity index fell on Monday and US Treasury yields fell while investors digested weak US housing data and waited for key inflation readings later in the week. Oil prices also fell, with the Brent settling under $80 a barrel, as investors awaited this week's OPEC+ meeting and expected curbs on supplies into 2024. On Wall Street, the Dow Jones Industrial Average fell 56.68 points, or 0.16%, to 35,333.47, the S&P 500 lost 8.91 points, or 0.20%, to 4,550.43 and the Nasdaq Composite dropped 9.83 points, or 0.07%, to 14,241.02. The pan-European STOXX 600 index lost 0.34% and MSCI's gauge of stocks across the globe shed 0.19% on the day after rising for four weeks in a row.

Back home, Bursa Malaysia finished lower on Monday, dampened by selling in selected heavyweights as well as mid- and small-cap stocks. At the closing bell, the barometer index declined 5.77 points to 1,448.15 from Friday’s closing of 1,453.92. The regional shares slipped on Monday ahead of potentially market-moving inflation data from the United States and Europe later in the week, and a meeting of oil producers that could stop, or extend, the recent slide in prices. The approach of the month-end could also cause some caution given the hefty gains investors are sitting on. Japan's Nikkei eased 0.5%, but was still up 8.4% so far in November. MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.4%, giving it a monthly gain of 6.3%.

Source: PublicInvest Research - 28 Nov 2023

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