14/05/2025

BIZ & FINANCE WEDNESDAY | MAY 14, 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 weakens against dollar as US rate cut expectations shrink THE ringgit closed lower against the US dollar yesterday as investors scaled back their expectations for the US Federal Reserve (Fed) to cut interest rates. This shift led to higher US treasury yields and a stronger greenback. At 6pm, the local note depreciated to 4.3185/3250 versus the US dollar compared to Friday’s close of 4.2970/3005. SPI Asset Management managing partner Stephen Innes said that the market had previously expected three rate cuts by the Fed this year. However, that has now been revised down to one or two, following stronger US economic data and fading recession risks. “This shift has lifted US 10-year bond yields and made the US dollar more attractive, putting pressure on the ringgit and other regional currencies,“ he told Bernama. At the close, the ringgit traded mostly higher against a basket of major currencies. It was up against the Japanese yen at 2.9181/9227 from 2.9565/9591, and climbed against the euro to 4.7961/8033 from 4.8320/8359. It traded marginally lower against the British pound at 5.7056/7142 from 5.7004/7050 previously. The local note was traded mostly higher against its Asean peers. It was marginally higher versus the Singapore dollar to 3.3084/3137 from 3.3095/3124, enhanced against the Indonesian rupiah to 259.7/260.2 from 260.0/260.4, and surged against the Thai baht to 12.9958/13.0240 from 13.0082/0267 at last week’s close. Meanwhile, the ringgit was unchanged against the Philippine peso at 7.74/7.76, as of last Friday.

Foreign investors extend net buying on Bursa with RM422m KUALA LUMPUR: Foreign investors extended their streak of net inflows on Bursa Malaysia for the third week, recording a net inflow of RM422.6 million last week, though lower than the previous week of RM853.3 million. According to MIDF Amanah Investment Bank Bhd’s Fund Flow Report for the week ended May 9, foreign investors recorded net buying activity on all trading days of the week, with the exception of Monday and Thursday. On those two days, the market experienced net outflows amounting to RM92.4 million and RM42.4 million, respectively. It said the highest net inflow was recorded on Wednesday at RM364.8 million, followed by Friday with RM135.1 million. “The three sectors that recorded the highest net foreign inflows were utilities (RM253.3 million), telecommunications and media (RM53.3 million), and financial services (RM51.1 million). “The only two sectors that recorded net foreign outflows were energy (RM57.5 million) and technology (RM56 million),” it said. Meanwhile, MIDF reported that local institutional investors continued their trend of net selling for the third consecutive week, recording total outflows amounting to RM397.8 million over the period. It said the local retail investors extended their trend of net selling to the fourth week, though the outflow eased to RM24.8 million compared to RM161.2 million the week before. “The average daily trading volume saw a broad-based increase last week, with local institutions and local retailers seeing an increase of 8.6% and 2.9%, respectively, while foreign investors saw an increase of 6.1%,“ it said. – Bernama

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3650 2.8100 3.3600 3.1320 4.9170 2.5830 3.3600 5.7950 5.2890 60.6300 3.6650 67.5600 56.6900 5.1900 0.0273 3.0090 43.1200 1.5800 7.9700 117.6100 24.8700 1.5000 46.4600 13.8100 120.1700 121.0300 15.5000

4.2310 2.6960 3.2610 3.0470 4.7580 2.4870 3.2610 5.6110 5.0650 58.0700 3.4130 62.1600 53.8700 4.8700 0.0247 2.9130 39.6300 1.4800 7.5100 111.6500 22.4600 1.3800 42.3200 12.2500 113.9500 114.8900

4.2210 2.6800 3.2530 3.0350 4.7380 2.4710 3.2530 5.5910 5.0500 58.0700 3.2130 61.9600 53.6700 4.6700 0.0197 2.9030 39.4300 1.2800 7.3100 111.4500 22.2600 1.1800 42.1200 11.8500 113.7500 114.6900

1 Australian Dollar 1 Brunei Dollar 1 Canadian Dollar 1 New Zealand Dollar 1 Singapore Dollar 1 Sterling Pound 100 Chinese Renminbi 100 Bangladesh Taka 100 Danish Krone 100 Hongkong Dollar 100 Indian Rupee 100 Indonesian Rupiah 100 Japanese Yen 100 Norwegian Krone 100 Pakistan Rupee 100 Philippine Peso 100 South Africa Rand 100 Sri Lanka Rupee 100 Swedish Krona 1 Euro 1 Swiss Franc 100 Saudi Riyal

100 Thai Baht 100 UAE Dirham 100 Qatar Riyal

100 New Taiwan Dollar

N/A

N/A

Source: Malayan Banking Bhd/Bernama

Sentral REIT Buy. Target price: RM0.88

Westports Holdings Bhd Hold. Target price: RM4.78

Malaysian Economy Stable Labour Market

May 13, 2025: RM4.56

May 13, 2025: RM0.765

Source: DOSM, TA Research

Source: Maybank Investment Bank

Source: Maybank Investment Bank

IN MARCH 2025, Malaysia’s employment rose by 3% YoY (0.3% MoM) to 16.78 million persons. Statistics also showed that the labour force participation rate sustained at 70.7% while the employment-to-population ratio increased to 68.6%. Job gains were mainly concentrated in the Services sector, particularly in Accommodation and food & beverage services; Information & communication; and Professional scientific & technical activities. An increasing number of employed persons has also been seen in the Manufacturing, Construction, Agriculture, and Mining & quarrying sectors. Meantime, the number of unemployed persons continued its decline, decreasing by 4.9% YoY to 529.6k individuals (Feb 25: 532.8k persons), heading towards the pre-pandemic levels of 519k in 2019. On a monthly basis, the number of unemployed persons decreased by 0.6%. During the month, the jobless rate stood at 3.1%, the same rate seen in the previous month. Malaysia’s labour market continues to exhibit resilience, with the unemployment rate projected to average 3.1% in 2025, improving from an estimated 3.2% in 2024. We expect the jobless rate to ease further to 3% by end-2024, marking a continuation of the post-pandemic recovery trend. This sustained decline in unemployment underscores the strength of domestic demand, a rebound in tourism-related activities, and ongoing structural shifts towards higher-value, knowledge-intensive industries. In Q1’25, total employment averaged 16.73 million, marking a 2.6% YoY increase. Meanwhile, the number of unemployed persons averaged 532,100, translating to an unemployment rate of 3.1% (Q4’24: 3.2%). – TA Research, May 13

Q1’25 core net profit (CNP) rose 9% YoY, supported by a 9% revenue increase, despite flat volume, driven by stronger container yield (+4% YoY to RM183k/TEU) on higher value-added services (VAS) charges such as reefer and storage. Higher storage income was largely attributed to increased metal commodity inspections. QoQ, CNP declined 13% due to a 4% revenue dip from seasonal factors and a 49% QoQ jump in tax expenses, as Investment Tax Allowances tapered. Throughput was 2.69m TEUs in Q1’25, relatively flat YoY (Transshipment: +2%; Gateway: -2%) and down 6% QoQ (Transshipment: -6%; Gateway: -7%), due to seasonality and normalisation post-Q4’24 frontloading. Gateway volumes softened after 10 straight quarters of YoY growth, partly from stricter import checks on metal cargo. As of May 2025, volumes continue to track Q1 trends, with no major impact yet from the recently announced US tariffs. Westports plans to implement its dividend reinvestment plan in Q2’25 to aid funding for Westports 2.0. The company anticipates a tariff hike in 2025, earlier than our FY26 assumption. Westports operations remain unaffected by trade tensions for now. There are several risk factors for our earnings estimates, target price and rating for Westports. Abrupt changes to trading routes or a substantial slowdown in the global economy may lead to lower container throughput and hence earnings for Westports. An unexpected delay in tariff hikes/surged in operational costs will also lead to a dampening of future earnings growth. HOLD with RM4.78 TP. – Maybank Investment Bank, May 13

Q1’25 core net profit was RM19.6 million (-2% YoY, +4% QoQ). Realised revenue declined 2% YoY to RM47.1 million, weighed by softer contributions from Menara Shell and Sentral Building 3, as well as adjustments from MFRS 16 lease accounting. NPI dropped by 1.2% YoY, with a 4.8% YoY decline in property opex cushioning the revenue softness. On sequential basis, core net income improved due to reduced finance costs (-7% QoQ), helped by interest savings from the interest rate swap arrangement which converted RM317 million of borrowings from floating to fixed rate. Portfolio occupancy remained unchanged at 84% in Q1’25. About 21% of total NLA are due for renewal in FY25, involving key tenants such as DHL, BMW (at Sentral Building 1,2 &3 in Cyberjaya), and some tenancies at Menara Shell and Platinum Sentral. On a positive side, the vacant space formerly occupied by AmGeneral (~95k sf, or 17% of NLA) at Menara Shell is gradually being re-tenanted (at least half of the space), with rental contribution expected from Q3’25. We revise our FY25–27 earnings forecasts lower by 4% p.a. as we exclude Wisma Sentral Inai from our earnings model. Wisma Sentral Inai remains actively marketed for divestment, alongside longer-term capital recycling opportunities from the Cyberjaya assets. Management is focused on rebalancing its office-heavy portfolio (currently 90%) to a more diversified 50-60% mix over five years, with future acquisitions in retail, industrial, healthcare and education segments. The targeted acquisition yield is 6.5– 7.2%. Gearing stood at 0.45x as at end-March 2025. BUY with RM0.88 TP. – Maybank Investment Bank, May 13