Economy

US: Fed minutes hint at slower pace of interest rate hikes. The Fed released the minutes of its early Nov monetary policy meeting, providing further evidence the central bank is considering slowing the pace of its interest rate hikes. The minutes said a "substantial majority" of meeting participants judged that a slowing in the pace of rate hikes would likely "soon be appropriate." A slower pace of rate hikes would better allow the Fed to assess progress toward its goals of maximum employment and price stability, the minutes said. (RTT)

US: Consumer confidence edges lower in Nov . Citing a recent increase in gas prices, the Conference Board released a report showing a modest decrease in U.S. consumer confidence in the month of Nov. The Conference Board said its consumer confidence index dipped to 100.2 in Nov from a revised 102.2 in Oct. Economists had expected the index to slip to 100.0 from the 102.5 originally reported for the previous month. The modest decrease by the headline index came as the present situation index edged down to 137.4 in November from 138.7 in October. (RTT)

EU: German inflation eases, boosting calls for slower ECB rate hikes. Germany followed Spain and Belgium in reporting slower inflation, offering ammunition to those who want the ECB to ease the pace of interest-rate increases. Consumer prices in Europe’s largest economy rose 11.3% from a year earlier in Nov, down from October’s 11.6% jump, the statistics office said, citing factors including energy costs for the deceleration. Analysts surveyed by Bloomberg had expected an advance of 11.3%. (Bloomberg)

South Korea: Oct factory output drops at fastest pace since May 2020. South Korea’s factory output dropped in Oct by more than expected and at the fastest pace in nearly 2-1/2 years, government data showed. The country’s industrial output fell by a seasonally adjusted 3.5% in Oct from a month earlier, accelerating from a revised 1.9% decline in Sept, according to the Statistics Korea. It missed economists’ expectations of -1.0% tipped in a Reuters survey and marked the fastest decline since May 2020. The output fell 1.1% on a yearly basis, also below 0.0% expected in the survey. (Reuters)

Taiwan: Cuts GDP growth forecast for 2022 and 2023 on weakening exports. Taiwan's economy is likely to grow more slowly than previously forecast this year and next, the statistics office said, as it also cut its exports outlook due to global inflation, rate rises and China's zero-COVID policy. Taiwan, home to the world's largest contract chip maker TSMC, had benefited over the past two years from soaring demand for tablets, laptops and other electronics to support the work and study from home trend during the COVID-19 pandemic. (Reuters)

Singapore: PPI inflation eases further in Oct . Singapore's producer price inflation eased for the fourth straight month in Oct, data from the Department of Statistics showed. The manufacturing producer price index climbed 11.6% YoY in Oct, slower than the 13.8% surge in the prior month. The oil-index grew 20.6% annually in Oct and the non-oil index registered an increase of 10.0%. Domestic supply prices were 8.5% higher in Oct from a year ago, after a 12.8% gain in Sept. On a monthly basis, producer prices edged up 0.2% in Oct, after showing no variations in the previous month. (RTT)

Markets

AAX (Outperform, TP: RM1.04), Capital A (Neutral, TP: RM0.69): AirAsia X seeks to merge with Capital A’s aviation arm AirAsia, confirms The Edge report. AirAsia X Bhd (AAX) has proposed to acquire Capital A Bhd’s aviation arm through AirAsia Bhd (AAB) and AirAsia Aviation Group Ltd (AAAGL), as part of its regularisation strategy to uplift itself from PN17 status. AAX expects to announce the regularisation plan to Bursa Malaysia in Jan 2023, followed by official submission for approval thereafter in Feb. (The Edge)

MHB: Unit bags RM4.5bn EPCIC contract from Petronas Carigali for Kasawari CCS project. Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) has secured a RM4.5bn contract from Petronas Carigali SB (PCSB). The contract is for the engineering, procurement, construction, installation and commissioning (EPCIC) services for the Kasawari carbon capture and storage (CCS) project, located off the coast of Sarawak. (The Edge)

PPB: 3Q net profit jumps 92% driven by sharply higher contribution from Wilmar. PPB Group’s net profit for the 3QFY22 jumped 92.38% to RM784.7m from RM407.9m in the same period last year, on improved revenue contribution from all of its key segments including its 18.5%-owned Singapore-listed Wilmar International Ltd. (The Edge)

Press Metal: 3Q net profit grows 11.5% to RM315.8m. Press Metal Aluminium’s net profit rose 11.5% to RM315.8m in the 4QFY22 from RM283.3m a year ago, buoyed by improved revenue on the back of production volume expansion and increased share of profits from associates. (StarBiz)

MAHB: 3Q net loss narrows to RM9.0m. Malaysia Airports Holdings Bhd (MAHB)’s net loss narrowed to RM9.0m against RM182.3m a year ago in 3QFY22. The company is making concerted efforts in seeking out revenue generation and actively unlocking untapped opportunities to strengthen its financial position. (StarBiz)

Velesto: Returns to black in 3Q as revenue jumps 90%. Velesto Energy returned to the black with a net profit of RM15.0m for the 3QFY22, against a net loss of RM52.0m in the same quarter last year, on the back of higher revenue. (The Edge)

Hengyuan: Posts loss for 3Q on lower motor gas cracks, high crude premium, stockholding losses. Hengyuan Refining slipped into the red again in the 3QFY22, after three consecutive quarters of profit, on adverse refining margin. (The Edge)

Datasonic: 2Q net profit jumps as Malaysians rush to renew passport, issue MyKad. Datasonic's net profit made a big leap to RM24.9m in the 2QFY23 from RM1.0m in the year-ago quarter as revenue more than doubled. Datasonic's quarterly revenue more than tripled to RM93.6m from RM28.7m a year earlier. (The Edge)

Litrak: 2Q net profit doubles to RM81m on higher tollable traffic volume. Lingkaran Trans Kota Holdings Bhd (Litrak)’s net profit for the 2QFY22 doubled to RM81.2m, from RM37.5m a year earlier, on the back of higher revenue and a lower depreciation and amortisation charge. (The Edge)

Market Update

The FBM KLCI might open lower today as US stocks dipped on Tuesday, but the moves were modest as investors held off on making big bets ahead of remarks from Federal Reserve Chair Jay Powell on Wednesday and November’s employment report set to be released on Friday. Wall Street’s benchmark S&P 500 fell 0.2% in the New York session while the tech-heavy Nasdaq Composite lost 0.6%. Powell will speak at The Brookings Institution amid uncertainty about the path forward for US monetary policy as some signs of cooling inflation emerge. The uncertainty has been evident in the minutes from the central bank’s November meeting as well as in recent remarks from officials including New York Fed President John Williams, St Louis President James Bullard and San Francisco President Mary Daly. Elsewhere in equity markets, Europe’s regional Stoxx 600 fell 0.1%, having lost 0.6% on Monday, while London’s FTSE 100 added 0.5%.

Back home, Bursa Malaysia ended the day in negative territory as profit-taking activities continue following the strong rally last Thursday. At the closing bell, the FBM KLCI eased 9.58 points to 1,476.96 from last Friday's closing of 1,486.54. Regionally, Japan’s Nikkei 225 fell 0.48% to 28,027.84 while Hong Kong’s Hang Seng jumped 5.24% to 18,204.68.

Source: PublicInvest Research - 30 Nov 2022