17/06/2025

BIZ & FINANCE TUESDAY | JUNE 17, 2025

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Malaysian Paper

/thesundaily /

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

Local institutions extend buying streak with RM620.6m net inflow KUALA LUMPUR: Local institutions continued their buying activities for the fourth consecutive week with net inflow amounting to RM620.6 million, said MIDF Amanah Investment Bank Bhd. However, the local retailers extended their streak of outflows to two weeks, recording a net outflow of -RM176.2 million or three times higher than the previous week’s net selling of -RM57.3 million, according MIDF’s Fund Flow Report for the week ended June 13. Similarly, foreign investors continued their streak of net outflows on Bursa Malaysia for the fourth consecutive week, recording a net outflow of -RM444.4 million, slightly higher than the previous week’s outflow of -RM387.4 million. “The foreign investors were net sellers on every trading day except Wednesday, with outflows ranging from -RM34.6 million to -RM211.6 million. “The largest outflow was recorded on Friday, followed by Thursday with -RM127.4 million, while Wednesday recorded a net inflow of RM10.1 million,” said the investment bank. It added the three sectors that recorded the highest net foreign inflows were industrial products and services (RM19.4 million), transportation (RM17.3 million) and real estate investment trusts (RM8.2 million). Meanwhile, the top three sectors that recorded the highest net foreign outflows were financial services (-RM305.2 million), healthcare (-RM51.7 million) and property (-RM36.8 million). “The average daily trading volume saw a broad-based incline last week, with the exception of foreign investors. “Local institutions and local retailers saw an increase of +12.6% and +14.6%, respectively, while foreign investors saw a plunge of -8.4%,” it said. – Bernama

Ringgit higher against US dollar amid heightened uncertainties THE ringgit ended higher against the US dollar, supported by a weaker US Dollar Index (DXY) which fell by 0.21% to 97.979 points amid heightened uncertainties, an economist said. At 6 pm, the local note appreciated to 4.2370/2450 against the greenback from Friday’s close of 4.2435/2480. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ongoing military conflict between Israel and Iran continues to dominate market attention at a time when investors are bracing for the upcoming US Federal Open Market Committee (FOMC) meeting, scheduled for June 17 and18. “Euro, British pound and Swedish krona were gaining against the greenback, while emerging market currencies were mixed with dollar-ringgit oscillating within a tight range. “The USD/MYR started off in the morning session at RM4.2513 but later in the day appreciated towards RM4.2450,”he told Bernama. He noted Brent crude oil is currently hovering around US$73.84 per barrel, suggesting that the crude oil market is fairly calm compared to last Friday where it hit around US$77 in the intraday session. “Expect market sentiments to be guarded as they observe how the military conflict would evolve,” he said, adding that the downside risks to growth are clearly visible. Mohd Afzanizam said that this week’s FOMC meeting will be critical as to how the US Federal Reserve would navigate such challenges along with weak fiscal position by the US government and disruptive trade policies adopted by the current administration. At the closing, the ringgit was higher versus the Japanese yen to 2.9397/9455 from 2.9448/9482 at Friday’s close, but weakened against the British pound to 5.7555/7664 from 5.7482/7543 and decreased vis-à-vis the euro to 4.9077/9170 from 4.8906/8958 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2970 2.7980 3.3510 3.1490 4.9710 2.5950 3.3510 5.8380 5.3570

4.1610 2.6840 3.2510 3.0630 4.8070 2.4990 3.2510 5.6510 5.1250 3.3380 57.6900 62.8300 52.5100 4.7800 0.0248 2.9120 40.6900 1.4500 7.3600 113.0500 109.8400 22.4500 1.3600 42.5400 12.2800 112.1000 N/A

4.1510 2.6680 3.2430 3.0510 4.7870 2.4830 3.2430 5.6310 5.1100

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

118.3000 3.5870 60.2700 68.3100 55.2900 5.1000 0.0274 3.0100 15.6000 44.3100 1.5500 7.8200 119.0900 115.7000 24.8800 1.4700 46.7600 13.8600

111.9000

3.1380

N/A

62.6300 52.3100 4.5800 0.0198 2.9020 40.4900 1.2500 7.1600 112.8500 109.6400 22.2500 1.1600 42.3400 11.8800 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

Consumer Products Neutral

MyNews Bhd Buy. Target price: RM0.86

Transportation Neutral

June 16, 2025: RM0.55

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

THE recent escalation in the Israel-Iran war has ramped up uncertainties over global seaborne trade, particularly key trade passages near regional flashpoints, ie Suez Canal and the Strait of Hormuz. Traffic at the Suez Canal had already slowed down even before the war broke out as shippers rerouted their vessels around the Cape of Good Hope due to the risk of being attacked by Houthi rebels. While the Strait of Hormuz remains open, we do not rule out the possibility of this passage being blocked if the war escalates. If a blockade or a serious disruption happens, route diversions around the African continent might be considered by the shipping lines, which may result in port congestions across various regions due to longer travel times. Being one the largest oil chokepoints, disruptions at the strait could also result in Saudi Arabia and the United Arab Emirates pipelines being used as alternatives - although their combined capacity of 6.5m bpd is far below Strait of Hormuz’s oil flows of >20m bpd. Higher oil prices, coupled with potentially rising insurance premiums, could drive up freight rates. 1Q25 results were generally in line, with Westports’ 1Q performance making up 23% and 24% of our and consensus full year forecasts. In contrast, logistics players’ results disappointed, with FM Global Logistics’ 3QFY25 (Jun) earnings falling short of expectations due to higher-than-expected opex, despite its gross profit tracking our estimates. As 9MFY25 core earnings declined by 8.5%, management adjusted its guidance to flat FY25 earnings vs positive growth previously. TASCO’s 4QFY25 net profit plunged by 67.7% YoY, with FY25 core earnings down 36.9% to RM39.9m - below expectations, at 76-88% of full-year forecasts. Maintain NEUTRAL on transportation sector. – RHB Research, June 16

THE sector had a solid start to the year, as 1Q25 captured the festive spending of both the Lunar New Year and Aidil Fitri. That said, most of the management teams of the companies we spoke to have continued to observe cautious consumer sentiment and soft spending - consumers were price-sensitive and prioritised essential purchases in trying to stretch their money. The thrifty spending patterns suggest that consumers generally are still trying to cope with inflationary pressures. In addition, the recessionary fears stemming from the disruptive US tariff policies may have dampened consumer confidence. Meanwhile, we saw the effects of a stronger MYR kicking in positively for importers, including retailers (Mr DIY and Padini) and food manufacturers (Farm Fresh and Leong Hup International). 2Q25F may be softer than usual, particularly for the retailers since the Aidil Fitri festive sales were frontloaded. Hence, a more aggressive promotional drive may be adopted by the retailers to entice footfalls. Beyond the immediate term, wage hikes in the public and private sectors are positive catalysts to lift disposable income and consumer sentiment. Additionally, healthy economic growth and job markets should lend further support to consumption, whilst the lower-income groups will continue to be supported by various aid measures extended by the Government. On the flip side, we anticipate more inflationary pressures from the SST expansion and the imminent implementation of the petrol subsidy rationalisation. Maintain sector NEUTRAL. Top Picks: Mr DIY Group, Guan Chong, Farm Fresh, and Focus Point. – RHB Research, June 16

MYNEWS is tentatively scheduled to report its 2QFY25 results on June 24. Despite the seasonally softer quarter, we anticipate a YoY improvement during the Ramadan period. Further ahead, we expect 2HFY25 earnings to reflect more significant growth, driven by narrowing losses from CU and improvements across other business unit. We expect CU to break even by 2025, from an estimated quarterly PBT loss of RM4-5m currently. This is underpinned by enhanced product assortments and improved fresh food quality, driven by ongoing R&D efforts. CU has also rationalised its offerings to focus on high-performing SKUs, while exercising greater discipline in equipment-related capex-avoiding investments in niche or low-demand items that entail limited utilisation and higher maintenance costs. Concurrently, it continues to intensify marketing efforts and seasonal promotions to sustain foot traffic. The group plans to open 100 new stores in FY25 (net addition of 70 after closures), with the majority being Mynews outlets - given their stronger profitability and lower capex requirement (RM350k vs RM600k for CU). Higher volumes from network expansion, along with solid SSSG (we project low-to-mid single digits), should improve bargaining power with suppliers, support GPM expansion across both brands and enhance FPC utilisation to sustain the turnaround. The introduction of an 8% service tax on rental and leasing services (previously 0%) is expected to increase rental costs for the group, since 70% of its outlets are located in shopping malls. We estimate that the potential incremental cost could be RM5m annually in a worst-case scenario, where landlords fully pass on the tax. Still BUY, new RM0.86 TP from RM0.77 – RHB Research, June 16