The Week Ahead: 3Q earnings, Brexit talks and Black Friday in focus

This article first appeared in The Edge Malaysia Weekly, on November 19, 2018 - November 25, 2018.
-A +A

All eyes will be on the slew of third-quarter corporate earnings expected in earnest during the holiday-shortened week. Markets will be closed Tuesday to commemorate the birthday of Prophet Muhammad.

AirAsia X Bhd (Nov 21) and Thriven Global Bhd (Nov 23) are among companies slated to release their results. It will be interesting to see how corporates performed in 3Q2018, during which the economy expanded at its slowest pace in two years.

Bank Negara Malaysia announced last Friday that the economy grew 4.4% in 3Q2018, below a Bloomberg consensus forecast of 4.7% and slower than the previous quarter’s 4.5%.

“Growth has bottomed and is on [the] upside going forward,” governor Nor Shamsiah Mohd Yunus said.

She added that Malaysia was on track to grow 4.8% this year and 4.9% next year. In August, the central bank had projected a slightly higher growth of 5% this year.

On Thursday, Bank Negara will announce its international reserves position as at Nov 15. Reserves have been on a downward trend, slipping to US$101.7 billion as at Oct 31 from US$104.4 billion about two months ago.

On Friday, the Department of Statistics will release October inflation figures, as measured by the Consumer Price Index. In September, the CPI grew 0.3% year on year — marginally higher than August’s 0.2%, which had been the slowest growth in 42 months.

Elsewhere, some new developments could emerge at the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Papua New Guinea, held over the Nov 17 weekend. Australian Prime Minister Scott Morrison and Chinese President Xi Jinping were expected to be there, along with US Vice-President Mike Pence and Russian Prime Minister Dmitry Medvedev.

This week, the following financial markets will be closed for their respective holidays: Indonesia (Nov 20), India (Nov 21 and 23) and Myanmar (Nov 21 and 22).

It is a data-light week in China, but on Monday, there will be foreign exchange settlement data, which could provide insights into the country’s buying and selling activity in the foreign exchange market.

US financial markets will close for the Thanksgiving holiday on Nov 22, and operate on shorter hours on Nov 23. Black Friday sales will start the day after Thanksgiving, marking the start of the Christmas shopping season and putting retailers in focus.

There will be a slew of data in the US related to housing, kicking off on Nov 19 with the National Association of Home Buyers Housing Market Index, a gauge of builder opinion on the relative level of current and future single-family home sales. Last month’s reading was 68. Anything above 50 indicates a positive outlook. Readings have been in the high 60s since June.

Nov 20 will see the release of October housing starts and building permits data, and the day after, the latest mortgage application numbers as well as October data for existing home sales.

On Nov 21, preliminary numbers for October durable goods orders and the latest initial jobless claims will be released, while on Nov 23, the preliminary readings for the Markit US manufacturing and services Purchasing Managers’ Index will be out.

In Europe, Brexit negotiations will be closely watched. “Brexit negotiations are at the tipping point. Donald Tusk, president of European Council, has called for a special European Union leaders’ summit on Nov 25 to meet and endorse the draft Brexit agreement with the UK government, but it may still be postponed depending on UK domestic politics,” observes UOB Global Economics & Markets Research in its weekly outlook report last Friday.

It noted that calls for a no confidence vote against UK Prime Minister Theresa May are growing. A poll last week revealed that voters want a fresh referendum in which they would vote to stay in the EU.

Singapore will be announcing its third-quarter gross domestic product data on Monday and its October CPI on Friday. An advanced estimate, released last month, indicated that the country’s economic growth had slowed for the second straight quarter to 2.6% year on year, sharply slower than the 4.1% in 2Q and 4.6% in 1Q.

“We expect 3Q GDP to be revised lower to 2.4% year on year,” says UOB.

Thailand, too, will announce its third-quarter GDP numbers on Monday. The economy expanded at a slower pace of 4.6% year on year in the second quarter compared with 4.9% in the first. According to a Bloomberg poll, 3Q GDP growth is likely to slow further to 4.2%.

At home, companies with annual general meetings include Sime Darby Plantation Bhd, GuocoLand (M) Bhd (both on Nov 21), Scicom (MSC) Bhd, Paos Holdings Bhd, Lion Forest Industries Bhd (Nov 22), Malton Bhd, FACB Industries Incorporated Bhd and Parkson Holdings Bhd (Nov 23).

Those with extraordinary general meetings include Sime Darby Plantation and Borneo Aqua Harvest Bhd.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.