27/06/2025

BIZ & FINANCE FRIDAY | JUNE 27, 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

Kenanga: Global tensions to lift Malaysia’s bond yields KUALA LUMPUR: Malaysia’s bond yields may rise modestly in the near term amid renewed global trade tensions, said Kenanga Investment Bank Bhd (Kenanga Research). The investment bank said markets are growing wary of escalating US-EU tariff frictions, Donald Trump’s forthcoming fiscal bill, and the potential reimposition of tariffs in the weeks ahead. “Investors will closely monitor upcoming US economic data for signs of weakness that could justify rate cuts by the US Federal Reserve (Fed),“ it said in a research note yesterday. According to Kenanga Research, yields on Malaysian Government Securities (MGS) and Government Investment Issues (GII) fell by 0.1 to 7.9 basis points (bps) across the curve over the week. The 10-year MGS eased by 4.6 bps to 3.54%, while the 10-year GII slipped by 3.6 bps to 3.54%. “Initial risk-off sentiment, spurred by US involvement in the Iran Israel conflict, dissipated following the announcement of a ceasefire. “Market sentiment was further buoyed by the signing of a free trade agreement with the European Free Trade Association (EFTA) members – Switzerland, Norway, Iceland, and Liechtenstein – alongside deepening economic ties with Kyrgyzstan and Uzbekistan,“ it said. Additionally, recent constructive progress in Malaysia–US tariff negotiations, coupled with encouraging reports of Intel’s planned semiconductor expansion in the country, further bolstered investor sentiment. These developments not only enhanced the overall positive tone but also reinforced Malaysia’s attractiveness as a strategic and forward-looking investment destination in the region. – Bernama

Ringgit climbs as Trump pushes Fed to cut rates

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

THE ringgit extended its gains against the greenback at the close on Wednesday, as US President Donald Trump ramped up pressure on the US Fed to cut interest rates. It has been reported that Trump is considering naming a new Fed chairman early, a move seen as undermining the current chairman, Jerome Powell, who has been reluctant to cut interest rates as demanded by the US president. At 6pm, the local note inched up to 4.2300/2355 versus the greenback from Wednesday’s close of 4.2335/2405. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said news of Trump’s intention to name the next Fed chair early caused the US Dollar Index (DXY) to fall 0.6% to 97.093 points. “It remains to be seen how this can be made possible as the current chairman’s term will end in May next year. Despite that, the underlying tone is about pressing the Fed to lower the Fed funds rate as soon as possible,“ he told Bernama. At the close, the ringgit traded lower against a basket of major currencies and Asean countries. It depreciated against the Japanese yen to 2.9359/9399 from 2.9070/9120, slid versus the British pound to 5.8141/8217 from 5.7631/7726, and slid against the euro to 4.9597/9661 from 4.9113/9194 yesterday. Against its Asean peers, the ringgit declined vis-à-vis the Singapore dollar to 3.3192/3240 from 3.3061/3121, and dipped against the Thai baht to 13.0254/0488 from 12.9584/9858 at Wednesday’s close. It eased against the Indonesian rupiah to 260.9/261.4 from 259.7/260.2, and slipped against the Philippine peso to 7.47/7.49 from 7.46/7.48, previously.

1 US Dollar

4.2900 2.8150 3.3610 3.1240 5.0170 2.6060 3.3610 5.8820 5.3700

4.1560 2.7010 3.2620 3.0390 4.8550 2.5100 3.2620 5.6960 5.1430 3.3320 57.7500 63.4300 52.4400 4.7600 0.0247 2.8710 40.0400 1.4400 7.2400 112.8900 109.7100 22.6800 1.3500 42.5700 12.2400 111.9700 N/A

4.1460 2.6850 3.2540 3.0270 4.8350 2.4940 3.2540 5.6760 5.1280 3.1320 57.7500 63.2300 52.2400 4.5600 0.0197 2.8610 39.8400 1.2400 7.0400 112.6900 109.5100 22.4800 1.1500 42.3700 11.8400 111.7700 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

118.1000 3.5780 60.2900 68.9400 55.2000 5.0700 0.0273 2.9660 15.7000 43.5300 1.5400 7.6800 118.9100 115.5700 25.1100 1.4700 46.7400 13.8100

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

Real Estate Overweight

May 2025 CPI Headline inflation at 51-month low

SD Guthrie Bhd Buy. Target price: RM5.52

June 26, 2025: RM4.58

Source: Maybank Investment Bank

Source: Bloomberg

PORT DICKSON Free Zone (PDFZ) will be SDG’s 6th industrial park JV initiatives and its 3rd JV in MVV 2.0. While details are scant, this latest JV (together with the other 5 JVs announced so far) will help SDG achieve its targeted RM500 million p.a. recurring income emanating from its new business verticals in the coming years. SDG has signed a SPA for 300 acres of land, and a MOU to establish a JV to develop an industrial park on an additional 300 acres of land, with Menteri Besar Incorporated Negeri Sembilan. The 600-acre site is located in SDG’s Sengkang Estate, which lies within the Mukim of Pasir Panjang in the district of Port Dickson, Negeri Sembilan. The area is accessible via the Seremban–Port Dickson Highway and the Port Dickson–Linggi road network. This industrial park is expected to facilitate the development of the Port Dickson Free Zone (PDFZ), the state’s strategic economic initiative. PDFZ will be developed on approx. 600 acres across from the future site of Midport, a smart AI-powered container port. Together, the two projects are set to reshape Port Dickson into a dynamic “New Port City”. PDFZ complements Midport by providing ready industrial space and support facilities, including smart warehouses, advanced manufacturing zones and high capacity utilities. Subject to the JV’s incorporation and finalisation of a masterplan targeted in Q1’26, infrastructure works for the industrial park are expected to commence in Q2’26. Details remain sketchy including JV structure, land injection cost, government incentives, etc. BUY with RM5.52 TP. – Maybank Investment Bank, June 26

THE MARKET has become somewhat challenging, with the changing tariff policies on the global front and further geopolitical tensions in the Middle East. Demand and investor sentiment on the sector should recover once further clarity on regulatory changes emerges. Foreign interest on data centre investments in Malaysia remains strong, hence the industrial segment should continue to be the main investment theme, driven also by the prolonged US-China trade war. The stable interest rate outlook should support housing demand. The exemption of the Sales & Service Tax (SST) for serviced apartments built on commercial titles is a relief for industry players. The government recently clarified that this segment is now exempted from the SST, as long as the units are intended for residential use and fall under the purview of the Housing Development Act (HDA). In addition, essential construction materials such as cement, aggregates and sand are still subjected to a 0% tax. As such, only part of the construction component will be subject to the 6% tax, and this will only affect the industrial and commercial property segments. Property prices and demand in Iskandar Malaysia continue to escalate. A number of recent launches by private developers was met with overwhelming demand. Hotel occupancy rates remain high during weekend, despite the global concerns over the US’ reciprocal tariff policies, while food prices and rental rates for some well-established commercial shop clusters are now comparable to the rates in the central Klang Valley market. – RHB Research, June 26

Source: PublicInvest Research

MALAYSIA’S headline CPI eased to +1.2% YoY in May (April: +1.4% YoY), falling below market expectations. Core inflation also moderated to +1.8% YoY (April: +2.0% YoY), indicating that underlying demand-side pressures remain largely contained. For the first five months of 2025, headline inflation averaged +1.4% YoY, down from +1.8% YoY in the same period of 2024, underscoring continued disinflationary momentum. The increase in the national minimum wage to RM1,700 per month (from RM1,500), effective Feb 1 for firms with five or more employees, has thus far exhibited minimal pass-through to consumer prices. On a monthly basis, CPI rose by +0.1% MoM in May, unchanged from April. We have lowered our 2025 headline inflation forecast to +1.9% YoY (from +2.4% YoY), following a reassessment of inflationary pressures in light of the government’s narrower RON95 fuel subsidy rationalisation. The revision reflects lower expected passthrough from fuel to headline CPI, while core inflation remains contained across most demand-driven components. We continue to monitor potential upside risks from Tenaga Nasional’s non-domestic tariff adjustments effective July, though the impact on CPI should be limited given protections for residential users. Other factors to watch include the SST base expansion from July, phased foreign worker levy reforms, and the deferred EPF contribution hike in Q4’25. – PublicInvest Research, June 26