05/03/2025

BIZ & FINANCE WEDNESDAY | MAR 5, 2025

20

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 slightly higher against dollar as Fed rate cut odds rise THE ringgit closed slightly higher against the US dollar yesterday as broader macro forces kept a floor under the domestic currency despite the US tariff barrage rattling global markets. At 6pm, the ringgit rose slightly to 4.4635/4680 from 4.4640/4680 at Monday’s close. SPI Asset Management managing partner Stephen Innes noted the biggest factor supporting the ringgit was rising odds for a US Federal Reserve (Fed) rate cut as cracks in the US economy grew wider. “With recent data signalling weakening US growth, markets are now leaning harder into the dovish Fed pivot narrative, offering some much-needed support to the Asia forex market. “Adding to the resilience, optimism around China’s fiscal expansion ahead of today’s National People’s Congress is keeping regional foreign exchange market sentiment afloat,” he told Bernama. Meanwhile, the ringgit was traded lower against major currencies. It was broadly lower against the British pound to 5.6789/6846 against Monday’s 5.6394/6444, declined against the euro to 4.6916/6963 from 4.6586/6628 and slipped against the Japanese yen at 2.9956/9989 versus 2.9683/9711. The local currency was traded easier against Asean currencies. It depreciated against the Singapore dollar to 3.3203/3242 from 3.3130/3163 and eased against the Thai baht to 13.1853/2057 from 13.0576/0762. The ringgit went down against the Indonesian rupiah to 271.3/271.8 from 270.8/271.2 and weakened against the Philippine peso to 7.72/7.74 from 7.71/7.72.

SP Setia, Penang agency in industrial park collaboration PENANG: S P Setia has signed a memorandum of collaboration (MoC) with the Penang Development Corporation (PDC) to jointly develop about 350 acres of land within Setia Fontaines into a mixed and/or industrial development yesterday. This collaboration marks a significant milestone in Setia’s efforts to kick off the potential industrial estate for Setia development in Penang. With PDC’s proven track record of transforming Penang into a thriving industrial region, this partnership is both timely and essential in accelerating growth. Setia Fontaines, a 1,691-acre mega township located in the heart of North Seberang Perai, is in the process of rezoning approximately 350 acres of total development as part of S P Setia’s broader strategy to expand its green-themed industrial parks portfolio. Setia is also focusing on developing green-themed industrial parks at Setia Alaman in Shah Alam and Tanjung Kupang in Johor. Starting in 2025, these developments are expected to contribute to Setia’s industrial development revenues, continually driving growth in Setia’s sales and further strengthening the company’s bottom line. President and CEO Datuk Choong Kai Wai said this partnership will accelerate the growth and boost our regional industrial land strategy. “With our focus on developing green-themed industrial parks including Setia Alaman and Setia Tanjung Kupang, we are confident that this initiative will contribute significantly to our sales growth and profitability. The development of these industrial estates will create a robust foundation, leveraging high demand in the industrial real estate sector to ensure enduring value and growth to be injected into Setia REIT in the future,” Choong added.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.5355 2.8340 3.3660 3.1250 4.7600 2.5530 3.3660 5.7660 5.0920

4.4015 2.7210 3.2690 3.0410 4.6070 2.4600 3.2690 5.5820 4.8750 3.5490 60.0400 60.2100 56.0100 4.9600 0.0258 2.9460 38.2000 1.5500 7.5100 119.4600 116.0900 22.8200 1.4500 40.5100 12.3300 118.4800 N/A

4.3915 2.7050 3.2610 3.0290 4.5870 2.4440 3.2610 5.5620 4.8600

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

124.9500 3.8110 62.6800 65.4200 58.9400 5.2800 0.0285 3.0420 14.8000 41.6100 1.6500 7.9800 125.8400 122.2900 25.2800 1.5800 44.4800 13.9100

118.2800

3.3490

N/A

60.0100 55.8100 4.7600 0.0208 2.9360 38.0000 1.3500 7.3100 119.2600 115.8900 22.6200 1.2500 40.3100 11.9300 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

Malaysian Economy PMI Manufacturing improves further

Sime Darby Property Bhd Buy. Target price: RM2.33

IOI Corporation Bhd Neutral. Target price: RM4.33

March 4, 2025: RM3.84

March 4, 2025: RM1.30

Source: PublicInvest Research

Source: Bloomberg

FOR 1H’25, FFB production registered a decline of 2% YoY to 1.5 million mt, mainly due to i) a lagged effect from an El Nino event in 2024, ii) heavy rainfall in Sabah estates, and iii) aggressive replanting activities. The breakdown between Indonesian and Malaysian production stood at 10% and 90%. Nevertheless, management expects the FFB production to start picking up in April and should see a 1-2% growth for the full-year compared to the earlier assumption of 5%. On the CPO production cost, it averaged around RM2,100/mt after taking into consideration of i) amortisation, ii) windfall tax, iii) Sabah sales tax (RM600/mt and iv) palm kernel credit (RM550/mt). Meanwhile, there was an additional mature area of 140ha. 1H’25 refining business suffered a loss of RM45 million as the refining margin was initially positive before turning negative due to Indonesia’s CPO levy hike. On the other hand, oleochemical recorded a gain of RM41 million. Meanwhile, both refinery and oleochemical sales volume saw an increase of 8% and 7%, respectively. Oleochemical margins are expected to improve going forward as it is able to gradually pass on the additional costs from the feedstock, palm kernel oil, as it usually has a one-quarter lagged effect. In addition, it also expects to see replenishment of oleochemical products from the European region following the frontloading ahead of the European Union Deforestation Regulation implementation. There is little concern on the US tariff hike as the IOI Corp’s exports to the US market only made up less than 3%. On the CPO production cost outlook, the group expects to be below RM2,100/mt level, while the fertiliser costs are likely to see a decline of 10-12% YoY. NEUTRAL with RM4.33 TP. – PublicInvest Research, March 4

Source: TA Securities, S&P Global

ABOUT RM4 billion worth of SDPR’s projects will enter the market this year (vs RM4.2 billion in FY24). Of these, projects valued at RM1.75 billion will be launched in 1H. Pipeline products to be launched are rather balanced, in our view – comprising residential landed (28%), residential high-rise (27%), industrial (31%) and commercial (14%) segments. The percentage of high-rise projects will be lower YoY (it made up 38% of total launches last year), while commercial products will account for a higher portion of its total launches this year. As most of the launches are predominantly new phases in existing townships and projects (such as Bandar Bukit Raja, the Elmina township and business park, and Serenia City), we believe the demand momentum should continue. Recurring income-generating assets contributed about 10% of total earnings last year. While both KL East Mall and Elmina Lakeside Mall have already achieved high occupancy rates of almost 100%, the occupancy rates for Metrohubs 1 and 2 (logistics warehouses jointly developed with LOGOS) have improved to 68% and 73%, from 47% and 67% in the previous quarter. KLGCC Mall (previously known as Senada Mall) will be the next retail asset to be opened in Q3’25. SDPR secured two build-and-lease agreements with Pearl Computing Malaysia last year worth RM7.6 billion in lease value. The construction of Phase 1 is very much on schedule, while the team will have a few sessions with potential tenderers for Phase 2 on the technical requirements over the next two quarters. Management has clarified that SDPR is only involved in design & planning, infrastructure planning and construction management in the pre-operation stage, and will be leasing only the shell & core facility upon completion. BUY with RM2.33 TP – RHB Research, March 4

MALAYSIA’S manufacturing sector experienced a stabilisation in business conditions midway through the first quarter of the year. The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers’Index (PMI) was 49.7 in February, up from 48.7 in January. It was only fractionally below the neutral 50.0 threshold and marked its highest reading since last August. New orders rose for the first time since last October in the latest survey period, marking the strongest expansion since May 2024, albeit at a modest pace. Firms that reported growth attributed it to a gradual improvement in demand, though others highlighted that client confidence remained largely subdued. Data indicated that the uptick in overall new business was driven in part by domestic sales, while new export orders fell for the third consecutive month, with particularly weak demand in the Asia-Pacific region. Nonetheless, despite the expansion in order books, Malaysian manufacturers reduced production for the ninth consecutive month. The pace of decline was modest and the slowest in six months, yet firms continued to report subdued operating conditions. The latest PMI reading remains aligned with modest growth in official GDP statistics for Q1’25, extending the trend observed in the third and fourth quarters of last year. The data suggests that the expansion in manufacturing production has continued into 2025. Based on the historical correlation of approximately 60% between the PMI and official GDP, S&P Global estimates that a headline PMI reading of 31.4 corresponds to zero annual GDP growth. – TA Research, March 4