The Week Ahead

3Q earnings season closes out

CORPORATE earnings will dominate this holiday-shortened week in the absence of key economic data.

Some of the companies expected to announce their earnings are PETRONAS Dagangan Bhd, Malakoff Corp Bhd, Velesto Energy Bhd, FGV Holdings Bhd, and Mah Sing Group Bhd.

Meanwhile, the S&P Global manufacturing purchasing managers’ Index (PMI) is due on Wednesday. The manufacturing PMI slipped to 48.7 in October from 49.1 in September.

PMI data

MANUFACTURING PMI data for November will be released at the start of the final month of the year.

The data, according to S&P Global, will be eagerly awaited after flash PMI data pointed to falling output across major developed economies including the United States, Europe and Japan.

It will be of interest to study how the manufacturing sector performance varied across the different regions, particularly in Asia.

ING said both official manufacturing and non-manufacturing PMIS for China should be in deeper contraction in October as the number of Covid cases increased, affecting both factory and retail activities.

Bloomberg’s median estimate for China’s manufacturing PMI to ease further to 49.0 (from 49.2 in October) while non-manufacturing PMI may ease to 48.0 (from 48.7 in October).

Meanwhile, ING said PMI indices for both South Korea and Taiwan should edge lower due to stalling demand for semiconductors

from the United States, Europe, and China.

Prices on the rise

INFLATION data from Indonesia, South Korea, and Australia are due this week.

According to ING, inflation in Indonesia will likely pick up further, with core inflation likely accelerating to 3.5% year-on-year (y-oy) while headline inflation should settle at 5.9% y-o-y .

It expects inflation to inch higher in the coming months which could ensure that Bank Indonesia will stay hawkish going into 2023.

Separately, ING said inflation in South Korea is expected to decelerate quite sharply to 5.1% y-o-y, mainly due to base effects.

Fresh food and petrol prices stabilised during the month while pipeline prices suggest a further deceleration in the coming months.