Economy

US: Consumer sentiment plunges to 10-year low on inflation worries -UMich. US consumer sentiment plunged in early Nov to the lowest level in a decade as surging inflation cut into households' living standards, with few believing policymakers are taking sufficient steps to mitigate the issue, a widely followed survey published showed. The University of Michigan's Consumer Sentiment Index plunged to 66.8  in its preliminary Nov reading from Oct's final reading of 71.7. (Reuters)

US: Workers quitting reaches record high, job openings edge down in Sept. The number of Americans voluntarily quitting their jobs rose to a record high in Sept while job openings stayed stubbornly above pre-pandemic levels, a sign that businesses may have to continue to raise wages in order to attract workers. The Labor Department's monthly Job Openings and Labor Turnover Survey, or JOLTS report, reflects an uneven economy with strong demand grinding against labor and goods shortages, driving overall inflation to its biggest annual gain in 31 years. (Reuters)

EU: Industrial production falls less than expected in Sept. Eurozone industrial output dropped less than expected in Sept, data released by Eurostat showed. Industrial production dropped 0.2% MoM, slower than the 1.7% decline seen in Aug. Economists had forecast a monthly decline of 0.5%. Among main industrial grouping, non-durable consumer goods posted the biggest growth of 1%, followed by the 0.5% rise in durable consumer goods output. Production of capital goods was down 0.7% and intermediate goods output dropped 0.2%. Meanwhile, output of energy remained unchanged in Sept. (RTT)

Hong Kong: Economy grows 5.4% YoY in 3Q. Hong Kong’s economy grew 5.4% in the third quarter from a COVID-19 induced slump a year earlier, with longer-term prospects hanging on the impact of the city’s zero-COVID policy. YoY growth slowed from 7.6% in the 2Q. On a quarterly basis, the economy expanded by a seasonally adjusted 0.1% in July-Sept. That compared with a contraction of 0.9% in the previous quarter. (Reuters)

Japan: Economy shrinks as Kishida mulls stimulus package. Japan’s economy shrank more than expected last quarter, underscoring the need for Prime Minister Fumio Kishida to put together a stimulus package to help shore up a recovery from the pandemic. GDP contracted an annualized 3% in the three months through Sept from the previous quarter, the Cabinet Office reported. Economists forecast a 0.7% decline. The economy has now fallen in size in five of the past eight quarters. Consumption dropped as a summer wave of Covid-19 cases hit the country, triggering a resumption and extension of emergency restrictions. Supply-chain constraints hit production as Japanese manufacturers ran short of chips and components. (Bloomberg)

India: Industrial production growth eases in Sept. India's industrial production growth slowed more than expected in Sept, data from the statistics ministry showed. Industrial output expanded 3.1% on a yearly basis in Sept, much slower than the 12% growth logged in Aug. In the same period last year, production was up 1%. The annual growth in production was forecast to ease to 4.8% in Sept. Within overall output, mining posted the fastest increase of 8.6%. Manufacturing and electricity output rose 2.7% and 0.9%, respectively. During April to Sept period, industrial production advanced 23.5% from the same period last year. (RTT)

India: Inflation accelerates in Oct. India's consumer price inflation accelerated in Oct, after slowing in Sept, preliminary data from the statistics ministry showed. The consumer price index rose 4.48% YoY following a 4.35% increase in Sept. Economists had forecast inflation to slow further to 4.32%. In August, the CPI inflation was 5.30%. In Oct 2020, inflation was 7.61%. The food price inflation climbed to 0.85% from 0.68% in the previous month. Compared to the previous month, the CPI increased 1.41% after a 0.18% gain in Sept. (RTT)

Markets

Berjaya Sports Toto (Outperform, TP: RM2.40): Kedah to ban all 4D shops, punters told to go to Penang. Kedah will ban all 4D lottery shops in the state by not renewing the business licenses issued by local councils in a bid to stamp out social ills. (The Edge)

Comment: It was reported that all shops selling number forecast lottery draws in Kedah will no longer have their business licences renewed by the local councils. Kedah Mentri Besar said the move aims “to tackle the ills resulting from gambling”. Based on our estimate, just under 3% of Berjaya Sports Toto’s (BST) total outlets are located in Kedah and as such, we believe this would have a minimal impact on the group’s earnings. In any case, customers could still purchase numbers at neighbouring state i.e Penang. Generally, we do not view this positively as it may further encourage the proliferation of illegal activities and resulting in loss of tax revenue to the government.

Haily: Bags RM14.57m community housing project in Kulai. Haily Group (HGB) has accepted a letter of award (LoA) from IOI Properties Group for a community housing project in Kulai, Johor worth RM14.57m. This contract shall increase the value of the company's projects which now amounts to a total of RM543.22m, involving 22 building construction projects and two ongoing civil engineering-related construction projects. (BTimes)

LFE Corp: Clinches RM90m residential development in D'sara. LFE Corp clinched a RM90m contract from PD Ara to execute and complete a residential development project in Damansara. LFE Corp would develop one block of an 18-storey service apartment, consisting of 126 units, one block of 11-storey SOHO (129 units), with seven levels of commercial offices and medical centre and a five-level health trading podium comprising car park. (BTimes)

Ipmuda: Gets nod for special dividend of 30sen and venture into healthcare. Ipmuda has received its shareholders’ approval for all five proposed corporate exercises including a special cash dividend of 30sen and the acquisition of the 100% equity in healthcare service provider Ultimate Forte. Meanwhile, Ipmuda highlighted that the acquisition of Ultimate Forte for a total purchase consideration of RM18m will be satisfied via a combination of cash (RM6.68m) and Ipmuda shares amounting to RM11.32m. (The Edge)

Widad: Gets revised contract of RM194m for Port Klang roadworks. Widad Group has accepted a contract from the Public Works Department with a higher revised value of RM194.32m for road upgrading works. The contract is to upgrade the Northport roadworks from Klang Container Terminal to Northport in Port Klang. The project is expected to be funded via internally generated funds and/or external borrowings. (The Edge)

Titijaya Land: Signs deed of discharge and release. Titijaya Land had entered into a deed of discharge and release with Golden Vogue (GVSB) pursuant to the joint venture agreement (JVA). Pursuant to the deed of discharge and release, (The Edge)

Supermax: Canada halts imports from Supermax over forced labour allegations. Canada has halted imports from Malaysian glove-maker Supermax Corp weeks after a similar move from the US amid allegations of forced-labor practices. Canada barred additional deliveries from Supermax Healthcare Canada to the government until an audit report on the matter mandated by the firm is reviewed by authorities. (BTimes)

Market Update

The FBM KLCI might open higher today after Wall Street stocks ticked up on Friday as investors looked past inflation concerns to focus on strong corporate earnings. The S&P 500 index closed up 0.7%, ending the week less than half a percent lower after hitting a series of record highs earlier this month. Sentiment was also lifted by Johnson & Johnson, the world’s largest healthcare group, announcing a spin-off of its consumer business. Elsewhere, the technology-focused Nasdaq Composite index was up 1% at the bell. Europe’s regional Stoxx 600 closed up 0.3%. Meanwhile, the 10-year break-even inflation rate — a market measure of expected US inflation a decade from now — rose to 2.76% on Friday, its highest level since 2006. The five-year break-even rate, measuring the pace of inflation in five years, rose to 3.18%, the highest level in data going back to 2002.

Back home, Bursa Malaysia ended higher on Friday on persistent buying support for financial services as well as healthcare counters amid mixed sentiments on regional markets. At 5pm, the benchmark FBM KLCI settled 12.37 points higher at 1,531.22 from Thursday's close at 1,518.85. In the region, Japan’s Nikkei 225 rose 1.1%, Hong Kong’s Hang Seng edged higher 0.3% and the Shanghai Composite added 0.2%.

Source: PublicInvest Research - 15 Nov 2021