26/06/2025

BIZ & FINANCE THURSDAY | JUNE 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

HEB associate wins Davao transport consultancy deal KUALA LUMPUR: HSS Engineers Bhd’s (HEB) associate HSS Integrated Sdn Bhd (HSSI) has secured a consultancy contract for the Davao Public Transport Modernisation Project in the Philippines. In a filing with Bursa Malaysia, HEB said HSSI, as part of a joint venture (JV) had signed a contract with the Philippine Department of Transportation to provide general consultancy services. “The JV will provide services covering project and contract management, risk and quality control, interface and communication management, environmental and social safeguards, economic benefit review, tender support, and anti corruption compliance. “It will also oversee civil works through design reviews, construction monitoring, quality assurance, safety, and cost management, as well as manage diesel and electric bus procurement including design reviews, testing, inspection, site preparation, and commissioning,” it said. The estimated project value attributable to HSSI is US$4.54 million (RM19.27 million), comprising a professional fee of US$4.01 million and reimbursable expenses of US$534,400. The 42-month project is scheduled to begin in May 2025. HEB said the project is expected to contribute positively to its revenue, earnings and net assets from the financial year ending Dec 31, 2025, to Dec 31, 2028. “The project will not affect the share capital or shareholding structure of HEB and will be funded through internally generated funds and/or external borrowings,” the company said. – Bernama Malaysian Economy Modest Inflationary Pressure in May 2025

Ringgit rises against dollar and other major currencies THE ringgit ended firmer yesterday, supported by easing geopolitical tensions and weaker US economic data that continued to pressure the greenback. At 6pm, the local rose to 4.2335/2405 versus the greenback from Tuesday’s close of 4.2410/2465. SPI Asset Management managing partner Stephen Innes said that the sustained ceasefire between Israel and Iran has dampened safe-haven demand for the US dollar. “In addition, the US consumer confidence index deteriorated by 5.4 points in June, falling to 93.0 from 98.4 in May,”he told Bernama. Innes said that Federal Reserve chair Jerome Powell’s recent cautious remarks, interpreted as keeping the door open to a possible rate cut, had pushed US treasury yields lower, providing some relief to Asian currencies. “Although trading remained subdued, the ringgit held on to modest gains at the close,” he added. At the closing, the ringgit traded higher against a basket of major currencies. It appreciated against the Japanese yen at 2.9070/9120 from 2.9256/9296, escalated versus the British pound to 5.7631/7726 from 5.7707/7782, and improved against the euro to 4.9113/9194 from 4.9225/9289 on Tuesday. The local note traded mixed against its Asean counterparts. It advanced vis-a-vis the Singapore dollar to 3.3061/3121 from 3.3130/3178, and appreciated against the Thai baht to 12.9584/9858 from 12.9793/13.0021 at Tuesday’s close. Meanwhile, it eased against the Indonesian rupiah to 259.7/260.2 from 259.3/259.7, and slipped against the Philippine peso to 7.46/7.48 from 7.41/7.44, previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3060 2.8110 3.3610 3.1320 5.0070 2.5980 3.3610 5.8670 5.3810 3.5910 60.4100 68.8000 55.4000 5.0900 0.0272 2.9710 43.6800 1.5400 7.6400 119.3500 115.9700 25.1500 1.4700 46.6300 13.7700 118.5500 N/A

4.1710 2.6960 3.2620 3.0460 4.8440 2.5020 3.2620 5.6790 5.1530 3.3440 57.8400 63.2900 52.6300 4.7800 0.0246 2.8760 40.1700 1.4500 7.1900 113.3000 110.0900 22.7000 1.3500 42.4600 12.2100 112.3700 N/A

4.1610 2.6800 3.2540 3.0340 4.8240 2.4860 3.2540 5.6590 5.1380

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

112.1700

3.1440

N/

63.0900 52.4300 4.5800 0.0196 2.8660 39.9700 1.2500 6.9900 113.1000 109.8900 22.5000 1.1500 42.2600 11.8100 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

IGB REIT Buy. Target price: RM2.60

Consumer Products Neutral

June 25, 2025: RM2.49

Source: DOSM, TA Securities

Source: Bloomberg

Source: Bloomberg

HEADLINE Inflation: The Consumer Price Index (CPI) rose moderately by 1.2% YoY in May, easing by 0.2 percentage points from April and coming in below market expectations of 1.4% YoY. On a month-on month basis, CPI increased marginally by 0.1%, indicating stable price conditions. Although the inflation was softer than anticipated, it remained broadly in line with expectations, reflecting the continued absence of significant cost pressures in the economy. The moderation in headline inflation was largely attributed to stable commodity prices, particularly Brent crude oil, and a favourable base effect, as CPI had increased by 2% YoY in May 2024. Core Inflation: Rose by 1.8% YoY during the month. A lower headline inflation rate, compared to the core-CPI may suggest global commodity prices (oil, raw materials, and food) were stable, while domestic-driven factors (like wages and services) kept core inflation high. States differences: 11 states recorded increases below the national inflation rate with Kelantan recording the lowest increase at 0.3% YoY in May 2025. However, five states recorded increases above the national inflation level namely Johor (1.8% YoY), Negeri Sembilan (1.6% YoY), Selangor (1.5% YoY), Malacca (1.5% YoY) and Wilayah Persekutuan Kuala Lumpur (1.4% YoY). Regional differences: Malaysia’s slower inflation trend in May 2025 was broadly in line with the moderation observed across other open economies, reflecting easing global cost pressures. Several regional and advanced economies also recorded softer inflation readings during the month, including the Eurozone and South Korea (both at 1.9% YoY), Indonesia (1.6% YoY), and the Philippines (1.3% YoY). – TA Research, June 25

IGB REIT announced that it has entered into a conditional sale and purchase agreement with Southkey Megamall (SMSB), a subsidiary of the REIT’s sponsor, for the proposed acquisition of Mid Valley Southkey Mall (MVSM) for RM2.65 billion. IGB REIT will finance the acquisition with a combination of borrowings and a unit placement. RM1 billion of the purchase price will be funded via borrowings (medium-term notes), while the balance RM1.65 billion will be raised from the issuance of 699m new units (increasing the REIT’s share base by 19%) at an issue price of RM2.36. The acquisition is expected to be completed in Q4’25. Opened in 2019, MVSM has an NLA of 1.5 million sq ft (Mid Valley Megamall: 1.8 million sq ft, The Gardens Mall: 834k sq ft) comprising five levels of retail mall and a 10-level carpark, all located within an integrated mixed commercial development known as Mid Valley Southkey in Johor Bahru. The mixed development also consists of two blocks of high-rise Grade A office towers on top of the mall, as well as St Giles Southkey, which is a 4-star hotel. The mall offers a diverse range of tenants with luxury boutiques, international brands, as well as fitness and wellness brands, and the list of its anchor tenants includes SOGO, Village Grocer, Golden Screen Cinemas, and Aurum Theatre. Currently, the mall has an occupancy rate of 95%. We think this acquisition provides a key re-rating catalyst, offering the REIT a significant bump via inorganic growth and the opportunity to diversify its earnings base in the long term. The purchase price translates to an attractive NPI yield of 7.2%. BUY with RM2.60 TP. – RHB Research, June 25

WE recently took clients to Johor and visit SDS Group (SDS MK, NR), Farm Price (FPHB MK, NR), and Teo Seng Capital (TSCB MK, NR) to get insights into small-cap firms not under our coverage and get a sense of consumer sentiment on the ground. In short, observations were largely in line with our sector base case assumption – staple-oriented firms like FPHB and TSCB continue to see steady demand while SDS’ retail operations are relatively more challenging in light of constrained discretionary spending. SDS is involved in the manufacturing and retailing of bakery products under the Top Baker and Daily wholesale brands. It also operates retail outlets under three formats: Bakeries, cafeterias, and bakeries-cum-cafeterias. SDS plans to open 4-6 outlets annually, focusing on higher-density Klang Valley areas. FPHB is a wholesale distributor of fresh vegetables, groceries, and F&B products. Backed by >20 years of experience and a portfolio of >1,000 SKUs, the group plays a vital role in the food security agendas of both Malaysia and Singapore. It is currently constructing a new centralised distribution centre in Senai, which is on track for completion by end 2025, and will double its processing and distribution capacities. TSCB is one of Malaysia’s largest egg producers with a >13% domestic market share and growing presence in the downstream processed eggs segment. The local table eggs ASP has normalised post Ramadan, and the shift to a free-market pricing mechanism by August could benefit efficient players like TSCB. Downside risks to our sector weighting include more-inflationary than-expected subsidy rationalisation measures and a slowdown in the global economy. – RHB Research, June 25