03/02/2025

MONDAY | FEB 3, 2025

20

BIZ & FINANCE

MARKETS/FROM THE BROKERS

SUNBIZ presents extracts of a selection of commentaries and research reports received from stockbrokers on counters that could be of interest to investors.

DISCLAIMER: The information is extracted from stockbrokers’ commentaries and research reports and do not represent the views or opinions of Sun Media Corporation Sdn Bhd. It is not a solicitation, recommendation or an offer to buy or sell the equities featured. Sun Media Corporation shall not be liable or responsible for any consequences resulting from usage of the information.

[ Compiled by SunBiz Team

Ringgit falls on new US tariffs, trade worries THE ringgit weakened against the US dollar last Friday as market sentiment deteriorated following US President Donald Trump’s latest tariff announcements targeting China, Canada and Mexico. At 6pm, the ringgit fell to 4.4550/4600 against the greenback from Tuesday’s close of 4.3905/3980. SPI Asset Management managing partner Stephen Innes said the new tariffs heightened concerns over North American trade stability and broader global economic headwinds. “Trump also signalled a potential escalation of tariffs on China, raising fears of renewed trade tensions. “While the measures may not be as severe as initially feared, even moderate tariffs could add pressure on China’s economy, which is already struggling with the fallout from its property market downturn,” he told Bernama. Innes added that despite China’s monetary easing and fiscal stimulus, policy interventions had yet to drive a meaningful recovery, further weighing on regional currencies, including the ringgit. The ringgit also weakened against other major currencies. It fell against the Japanese yen to 2.8798/8832 from 2.8242/8292, against the euro to 4.6247/6299 from 4.5819/5898, and against the British pound to 5.5336/5398 from 5.4653/4746. The local note also lost ground against Asean currencies. It eased against the Singapore dollar to 3.2854/2896 from 3.2481/2542 and against the Thai baht to 13.2274/2498 from 12.9437/972. It also declined against the Indonesian rupiah to 273.2/273.6 from 271.5/272.0 and against the Philippine peso to 7.63/7.64 from 7.51/7.53. CIMB Group Holdings Bhd Buy. Target price: RM9.20

Rubber market to stabilise amid rainfall, CNY supply delays KUALA LUMPUR: Rubber market prices are expected to be trading at equilibrium this week, with supply and demand dynamics offsetting each other due to the incessant rains in rubber-producing countries and the long Chinese New Year (CNY) holidays, said industry expert Denis Low. He said there will be sporadic buying and replenishment activities of stock based on current usage. “Prices should remain flattish with a slight tendency to be higher mainly due to the uncanny weather in the rubber producing region, which would affect the rubber production during this period,” he told Bernama. Quoting the Meteorological Department of Thailand forecast, Low said there would be a significant drop in temperatures across Thailand, particularly in the northeast region. He said that as the Southeast Asian monsoon intensifies, it will lead to more rainfall in the southern regions and cold temperatures with strong winds in the northern regions. Meanwhile, a dealer expected the rubber market to trend downward weekly due to mixed signals from regional futures, influenced by the uneven economic performance of the US and China. She said sentiment would be pressured by the strengthening of the ringgit against the US dollar and declining crude oil prices following the latest tariff declarations by the US. “However, further losses were limited by expectations of upcoming Chinese stimulus measures aimed at addressing economic challenges, along with the US Federal Reserve’s decision to keep interest rates unchanged,” she said.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.4660 2.7910 3.2990 3.0780 4.6500 2.5250 3.2990 5.5570 4.9430

4.3310 2.6760 3.2020 2.9940 4.4980 2.4300 3.2020 5.3780 4.7300

4.3210 2.6600 3.1940 2.9820 4.4780 2.4140 3.1940 5.3580 4.7150

1 Australian Dollar 1 Brunei Dollar 1 Canadian Dollar 1 New Zealand Dollar 1 Singapore Dollar 1 Sterling Pound 1 Swiss Franc 100 UAE Dirham 100 Bangladesh Taka 100 Chinese Renminbi 100 Danish Krone 100 Hongkong Dollar 100 Indian Rupee 100 Indonesian Rupiah 100 Japanese Yen 100 New Taiwan Dollar 100 Norwegian Krone 100 Pakistan Rupee 100 Philippine Peso 1 Euro

123.0000

116.6000

116.4000

3.7240

3.4930

3.2930

N/A

N/A

N/A

63.8700 57.9200 5.2400 0.0284 2.9000 40.4900 1.6300 7.7700 123.8200 120.3500 24.9500 1.5400 41.7200 13.8700 N/A

58.7600 55.0300 4.9200 0.0257 2.8060 37.2200 1.5300 7.3300 117.5500 114.2500 22.5300 1.4200 37.9600 12.3000 N/A

58.5600 54.8300 4.7200 0.0207 2.7960 37.0200 1.3300 7.1300 117.3500 114.0500 22.3300 1.2200 37.7600 11.9000 N/A

100 Qatar Riyal 100 Saudi Riyal

100 South Africa Rand 100 Sri Lanka Rupee 100 Swedish Krona

100 Thai Baht

Source: Malayan Banking Bhd/Bernama

Oil & Gas Overweight

Ramssol Group Bhd Buy. Target price: RM1.00

Jan 31, 2025: RM0.835

Jan 31, 2025: RM8.02

Source: Petronas Activity Outlook 2025-2027

Source: Maybank Investment Bank

RAMSSOL (via whole owned unit RAMS AutoTech) officially launched Rider Gate on Jan 18. A domestic online marketplace for used motorbikes, Rider Gate differentiates itself from incumbents by offering a slew of auxiliary services including ownership transfer, inspections, insurance, extended warranties and smart financing. RAMSSOL has invested >RM10 million into the development of the platform and aims to be the“Carsome equivalent”for the Malaysian used motorbikes market. AMR posits the global used motorbike market was valued at US$38.7 billion in 2021 and is expected to grow at a 10Y CAGR of 5.6% to reach US$66.2 billion by 2031. M’sia has an estimated 16.7m registered motorbikes and was the 13th largest 2-wheeler market in the world in 2023. With 500-600k bikes sold in Malaysia annually, facilitating transactions for just a small fraction of the pie could equate to tangible future earnings accretion for RAMSSOL. At launch, RAMSSOL disclosed that it had onboarded 150 registered dealers onto the platform and aims to grow its network to 800 dealers spanning 3,000 outlets nationwide by end-2025. During its trial phase in 2024, Rider Gate successfully executed 1,450 transactions. Our model has imputed for 2,500 transactions in FY25-26 at a charge of RM85 per transaction (mgmt guidance: RM100-130) yielding forecasted revenue/CNP accretion of RM6.4 million/RM1.3 million p.a. for FY25 and FY26 respectively. There are several risk factors that may have some implication to our recommendation, target price and earnings forecasts for RAMSSOL. These include heavy reliance on HCM software vendors in the provision of its HCM services to clients, and risk of security breaches on its applications. BUY with RM1.00 TP – Maybank Investment Bank, Jan 31

Source: Maybank Investment Bank

THE general reduction in upstream activities is premised on the slowdown in spending by Petronas. Drilling activities will be scaled down sizeably this year while overall offshore support demand is also likely to decline (-9% YoY) as a result of that. We anticipate project delays for offshore fabrication, pipeline installation and decommissioning, with a more prominent uptick in activities starting from 2026 onwards. Oil prices are projected to stay at US$70-80/bbl in the long term, and the national oil major remains committed to sustaining Malaysia’s production target of 2mboepd (from 1.7mboepd in 2024). Petronas has also guided for an average of 367 facility improvement projects (FIPs) pa (vs the guided 300 FIPS pa last year) to be carried out in the next three years. We continue to favour the maintenance space, which should feel the least impact from the spending scaleback, given the importance of maintaining production levels for operating cash flow generation purposes. Toning down drilling activities: Petronas only utilised 23 rigs in 2023, which is slightly lower than the initially planned 28, due to lower HWU and higher tender assisted drilling rigs (TADR) utilisation. Overall rig guidance was further decreased to 20 in 2025 vs last year’s report – mainly due to a lower guidance of jack-up rigs (from 14 to 10) and HWU (from eight to four). Demand for the number of jack-up rigs is estimated to hover around 9-11 in 2026 2027. This somewhat confirms our view that drilling activities are likely to slow down, in view of relatively cautious spending by Petronas. As such, we expect drillers such as Velesto Energy to see a slowdown in new contract awards. On the other hand, there is an upward revision for TADR demand over 2025 and 2026 to 4-6 (from three previously) and this could benefit TADR owner Sapura Energy. – RHB Research, Jan 31

HAVING seen a strong 9M’24, we expect CIMB’s Q4’24 earnings to be softer QoQ. While loan growth is likely to have picked up sequentially due to higher corporate loan disbursements, NIMs are expected to have been softer QoQ, while NOII is expected to have tapered off from an exceptionally strong Q3’24. Credit cost, nevertheless, is expected to have remained fairly benign. That Q4’24 is likely to have been softer is already baked into our forecast, whereby we are looking at an 8% QoQ decline in earnings, but for Q4’24 net profit to be up 9% YoY. What is positive into FY25 is that domestic corporate lending picked up momentum in Q4’24, and is likely to sustain into FY25, while mortgage lending is likely to resume amid more reasonable pricing. In Thailand, the consumer portfolio has stabilised. NIMs are likely to recover in Malaysia (amid less aggressive deposit competition), and eventually Indonesia (as NIMs adjust to recent rate cuts). Credit cost, however, is likely to normalise higher from a low base. The group is likely to have achieved its 11-11.5% FY24 ROE target, which would be within our expectations. To drive future ROEs higher, the focus will be on countries and businesses that generate high returns such as Indonesia, Singapore and commercial banking. Also, the turnaround of CIMB Thai should also be given emphasis. We, however, do not expect any capital management plans via special dividends. CIMB Group CEO, Novan Amirudin, is expected to unveil his strategic business plan on March 5. BUY with RM9.20 TP. – Maybank Investment Bank, Jan 31