26/03/2025

BIZ & FINANCE WEDNESDAY | MAR 26, 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 dips against dollar on back of bullish US data THE ringgit ended marginally lower against the US dollar yesterday as the greenback strengthened on the back of upbeat US economic data. S&P Global’s flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 53.5 this month from 51.6 in February. Bank Muamalat’s chief economist Dr Mohd Afzanizam Abdul Rashid, noted that the US Dollar Index (DXY) rose to 104.454 points, even as equities rebounded on optimism about measured US tariffs. “As for the ringgit, the USD/MYR oscillates within a narrow range of RM4.4375 and RM4.4450. All eyes will be on the favoured inflation gauge by the US Federal Reserve (Fed) on Friday and a series of Fed speakers that will shed more light on how the Fed policy will evolve in the near term, especially when reciprocal tariffs are announced on April 2,” he told Bernama. The ringgit was traded higher against a basket of major currencies. It appreciated against the euro to 4.7908/7946 from 4.8039/8088 on Monday, rose against the British pound to 5.7351/7396 from 5.7441/7499, and gained against the Japanese yen to 2.9480/9503 from 2.9631/9663. The local note was also mostly higher against Asean currencies. It bounced against the Philippine peso to 7.70/7.71 from 7.73/7.74, strengthened against the Thai baht to 13.0633/0813 from 13.0849/1043, and advanced against the Indonesian rupiah to 266.9/267.3 from 267.5/267.9. However, the ringgit edged down against the Singapore dollar to 3.3158/3186 from 3.3148/3184 at the previous close.

Oasis Harvest addresses Bursa reprimand, focuses on growth KUALA LUMPUR: Oasis Harvest Corporation Bhd, a Bursa Malaysia listed F&B company, has acknowledged Bursa Malaysia’s public reprimand over the cancellation of a 2023 rights issue, which took place before its rebranding from Dolphin International Bhd. Oasis Harvest reaffirms its commitment to strong corporate governance, transparency, and increasing shareholder value. The rights issue, announced in May 2023 under Dolphin International’s previous management, led to major changes in the company. The company said a newly appointed board of directors has since implemented enhanced internal controls and governance frameworks, ensuring all future corporate exercises align with best practices and prioritise shareholder interests. Since rebranding as Oasis Harvest in July 2024, the company has undertaken strategic initiatives to fortify its financial standing and recover from past challenges. Among these initiatives, Oasis Harvest has actively pursued legal and financial measures to recover compensation related to the challenging acquisition of High Reserve F&B Sdn Bhd. Additionally, the company has successfully raised equity funds through a private placement exercise, which has supported business expansion and operational improvements. These efforts have contributed to a turnaround in Oasis Harvest’s financial performance, as reflected in its latest financial results. “While the reprimand pertains to a corporate exercise predating the restructuring of Oasis Harvest, we fully respect and acknowledge the importance of regulatory compliance,” said Oasis Harvest managing director Ch’ng Eu Vern.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.5040 2.8480 3.3620 3.1420 4.8710 2.5880 3.3620 5.8270 5.1350

4.3710 2.7340 3.2660 3.0590 4.7150 2.4940 3.2660 5.6430 4.9170 3.5250 59.8100 61.6100 55.6500 5.0200 0.0253 2.8990 40.4400 1.5300 7.5100 118.6100 115.2600 23.1000 1.4300 41.9300 12.2600 117.6700 N/A

4.3610 2.7180 3.2580 3.0470 4.6950 2.4780 3.2580 5.6230 4.9020 3.3250 59.8100 61.4100 55.4500 4.8200 0.0203 2.8890 40.2400 1.3300 7.3100 118.4100 115.0600 22.9000 1.2300 41.7300 11.8600 117.4700 N/A

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

124.0500 3.7840 62.4200 66.9300 58.5500 5.3500 0.0280 2.9940 14.7000 43.9500 1.6400 7.9700 124.9400 121.4100 25.5700 1.5600 46.0200 13.8200

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

Banking Neutral

AME REIT Buy. Target price: RM1.75

Technology Overweight

March 25, 2025: RM1.57

Source: PublicInvest Research

Source: Bloomberg

Source: PublicInvest Research

MALAYSIA’S technology sector came under heavy selling pressure recently, rattled by concerns over a potential US recession and other uncertainties such as tariff threats, the sustainability of the spending budgets toward artificial intelligence data centre projects, the rising threat from China’s AI tools, and the curb on AI chip exports by the US. Meanwhile, Malaysia has planned to tighten controls over the flows of Nvidia’s advanced chips following US requests. Apple has been counting on the introduction of artificial intelligence features to boost its iPhone sales. However, a delayed promised AI update to Siri, its digital assistant, could hurt those hopes. A more advanced Siri alongside broader Apple Intelligence language support is much needed immediately to boost smartphone sales. We believe the key issue lies in the collaboration with the local software partners in China and Europe, ensuring its AI features comply with the local regulations, while Siri, which is less advanced than its rival systems- has become a symbol of Apple’s AI challenges. Despite numerous concerns over the i) US AI chip export curb, ii) US chip tariff, and iii) the emergence of China’s AI start-up DeepSeek’s open-sourced R1 model, we gather that there are no signs of delays in Malaysia’s data centre investments as our country remains an attractive spot due to its proximity to Singapore- a major data centre hub and a relatively low-cost base. The surging demand for hyperscale data centres is mainly fuelled by the growing adoption of AI technologies, including machine learning, deep learning, natural language processing and large language models. – PublicInvest Research, March 25

AME REIT is purchasing three industrial properties; i-TechValley 35 (RM30.8 million), i-TechValley 36 (RM30.8 million), and i-Park SAC 34 (RM39.3 million). All three properties are still under construction, with the acquisition of the first two properties expected to be completed in Q2’26, while the latter is only expected to be acquired in Q4’26. The three properties are fully leased for a period of 10 years with built-in rental escalation clauses ranging from 1.91% to 10% for each term. During the first year, the three properties on an annual basis provide RM7.3 million in gross rental (7.2% gross yield). AME REIT intends to fully satisfy the purchase consideration via Islamic financing facilities, which on top of RM122 million in acquisitions previously announced in Jun 2024, would likely raise the REIT’s gearing ratio to 35% (Dec 2024: 15%) with RM931 million in total assets. We think management may fund its future acquisitions partially via fundraising as it nears the 40% gearing ratio mark. The starting gross yield of 7.2% makes it an accretive acquisition, notwithstanding the built-in rental escalations. We lower our FY25 earnings by 2%, and raise our FY27 earnings by 3% to factor in the acquisitions and adjust our cost of borrowing assumptions. With RM177 million worth of acquisitions still ongoing (RM46 million completed in Q4’25), FY26 is shaping up to be a strong year for the REIT. There could also be more upside from an upcoming lease renewal for its dormitories in FY26 which makes up 16% of its current gross rental income. BUY with RM1.75 TP. – RHB Research, March 25

ACCORDING to Bank Negara Malaysia’s (BNM) 2H’24 Financial Stability report, we gather that Malaysia’s banking system remains sound amidst global geopolitical uncertainties. Latest stress test from BNM continues to affirm banks’ abilities to withstand significant shocks while supporting economic growth. Credit demand remains resilient on sustained economic activity, where the banking system has sufficient liquidity to meet the said demand. While global markets are expected to remain unstable amidst heightened volatilities, domestic financial markets are expected to remain orderly supported by the banking system’s healthy liquidity buffers. The aggregate Liquidity Coverage Ratio and Net Stable Funding Ratio stood at 160.7% and 116.3% respectively. Meanwhile, banking system total capital ratio at 18.3% and capital buffers of RM136.8 billion suggests that Malaysia’s banking system remained well-capitalised against unexpected shocks. Resilience in business sector is underpinned by sustained domestic demand, especially among the firms in the construction sector and export-oriented firms given the global trade expansion and technology upcycle. This had led to an improvement in businesses debt-servicing ability, with median Interest coverage ratio expanding to 6.4x (1H’24: 5.7x), while the share of firms-at-risk were lower at 23.5% (1H’24: 27.7%). Higher materials, labour and operating costs will continue to weigh on the financial performance of businesses especially among the manufacturing, wholesale and retail, as well as hotels and restaurants. – PublicInvest Research, March 25