This article first appeared in The Edge Malaysia Weekly on December 9, 2024 - December 15, 2024
With about three weeks to go before 2024 gives way to 2025, global markets should still have plenty to watch out for this week, even though the US Federal Open Market Committee (FOMC) will be in a blackout period from Dec 7 before it makes its last scheduled rate decision for the year on Dec 18. Of interest will be the US inflation reading for November, to be released on Dec 11, following payroll data last week.
While a third rate cut for 2024 (after September and November) of 25 basis points is widely expected, Fed officials have given little guidance before blackout commenced for the meeting that will take place ahead of the Jan 20 inauguration of US President-elect Donald Trump, whose policies on import tariffs and taxes could change the inflation and economic outlook next year.
Ahead of the Fed, at least three major central banks are expected to cut rates this week. The Bank of Canada is expected to trim rates on Wednesday (Dec 11) while the European Central Bank and Swiss National Bank on Thursday (Dec 12). The Reserve Bank of Australia is expected to maintain rates on Tuesday (Dec 10).
Meanwhile, expectations for a big Chinese stimulus were further tempered last week after Chinese state media warned against the fleeting “worship” of fast growth and blind addiction to projects that may temporarily lift growth at the expense of “an overdraft from the future”.
Still, the spotlight could turn to China for clues on additional consumption stimulus plans, retaliatory action on US tariff threats or economic growth targets for 2025 (which would otherwise be announced only when parliament begins in March) as Chinese President Xi Jinping and other senior leaders begin their annual closed-door Central Economic Work Conference this week.
Apart from China, Mexico and Canada, Trump had, via social media, also threatened 100% tariffs on BRIC nations if they were to create a rival currency to the US dollar (to counter the potential weaponisation of the greenback). Malaysia, Thailand, Indonesia and Vietnam are partner countries but not members of the BRIC alliance founded by Brazil, Russia, India and China that has since expanded to include South Africa, Iran, Egypt, Ethiopia and the United Arab Emirates. China has been Malaysia’s largest trading partner since 2009.
With South Korea being a key US ally and among key producers of semiconductors, batteries and automobiles globally, news headlines should continue to provide updates on the motion to impeach South Korean President Yoon Suk Yeol. Yoon’s short-lived declaration of martial law last week caused the Seoul stock exchange to close lower by more than 1% on Dec 4, despite the finance ministry saying it was ready to deploy “unlimited” liquidity to ensure market stability, following emergency talks with Bank of Korea governor Rhee Chang-yong. At least eight votes are needed from Yoon’s own party members, in addition to opposition votes, to oust the president.
Attention will also be on Bitcoin, which finally breached the US$100,000 mark last Thursday (Dec 5), a level that cryptocurrency bulls have been eyeing, especially after the US presidential election.
Globally, investors are looking out for cues on future Fed rate cuts to determine the demand for US dollars as well as fresh catalysts for commodities such as gold, which has fallen some 5% from its high of about US$2,788 an ounce in October.
Back home, Prime Minister Datuk Seri Anwar Ibrahim is scheduled to officially launch on Saturday (Dec 7) the Penang Silicon Design @5km+ initiative spearheaded by InvestPenang to foster a robust ecosystem for integrated circuit design and technology enterprises within a 5km radius of the Bayan Lepas Industrial Park.
In Kuala Lumpur, the Department of Statistics Malaysia (DoSM) is scheduled to release labour force statistics for October on Monday (Dec 9) and the Industrial Production Index (IPI) for October on Tuesday (Dec 10). The unemployment rate was 3.2% in August and September, down from 3.3% earlier in the year. The IPI had been trending lower, rising only 2.3% year on year in September, falling short of expectations as well as the 4.1% recorded in August and 5.3% in July. The 2023 Salaries and Wages Survey Report and Graduate Statistics are also scheduled for release not later than Friday (Dec 13).
Companies holding shareholders meetings this week include TMC Life Sciences Bhd (KL:TMCLIFE), which has scheduled an extraordinary general meeting (EGM) on Dec 9 to remove its suspended group CEO Wan Nadiah Wan Mohd Abdullah Yaakob as a director. Two of its largest shareholders, Sasteria (M) Pte Ltd and the Regent of Johor, Tunku Ismail Sultan Ibrahim, with a 70.13% and 7.64% stake respectively, had requisitioned the EGM. In a stock exchange announcement on Dec 4, TMC Life’s board said an “independent domestic inquiry” found her “guilty of all five charges of misconduct levelled against her” and will proceed with the next phase of the disciplinary process.
Others that will hold annual general meetings (AGMs) include GuocoLand (M) Bhd (KL:GUOCO) on Dec 10, Berjaya Land Bhd (KL:BJLAND) on Dec 10, Berjaya Food Bhd (KL:BJFOOD) on Dec 11, Berjaya Corp Bhd (KL:BJCORP) on Dec 12 and Alam Maritim Resources Bhd (KL:ALAM) on Dec 13.
TMK Chemical Bhd (KL:TMK) is slated to debut on the Main Market on Dec 12. The chemical management and storage company is led by Datuk Lee Soon Hian, the youngest son of the late Tan Sri Lee Loy Seng and youngest brother of Kuala Lumpur Kepong Bhd (KL:KLK) chairman and CEO Tan Sri Lee Oi Hian and Batu Kawan Bhd (KL:BKAWAN) managing director Datuk Lee Hau Hian.
TMK, which is selling 220 million new shares, or 22% of its enlarged capital, at RM1.75 apiece to raise RM385 million for expansion, saw the public portion oversubscribed by 14.28 times.
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