03/07/2025

BIZ & FINANCE THURSDAY | JULY 3, 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

BMI keeps 2025 CPO futures price forecast at RM4,150 a tonne KUALA LUMPUR: BMI, a Fitch Solutions unit, has maintained its view that the average annual price forecast for Bursa Malaysia-listed crude palm oil (CPO) futures contracts will trade at RM4,150 a tonne in 2025. In a note, BMI said that as of the market’s closure on June 27, front month CPO contracts settled at RM3,986 per tonne, bringing the year-to-date average to RM4,360 per tonne. “Accordingly, we expect palm oil prices to trade between RM3,800 per tonne and RM4,000 per tonne for the remainder of 2025,” it said. BMI said palm oil prices came under significant pressure throughout the second quarter (Q2), declining by 17.7% in the quarter-to-date, driven by weaker global crude prices, improved Malaysian output and subdued demand. However, it said the market found some “support” in June following a brief rally, sparked by both geopolitical and policy developments. “Prices rose by around 6% between June 12 and June 16, initially as global crude oil prices surged in the wake of the Israel-Iran conflict. “This rally was further reinforced by the US Environmental Protection Agency’s announcement of sharply higher proposed biofuel blending targets for 2026 and 2027, with the 2026 target representing a 67.5% year-on-year (y-o-y) increase,” it said. While these proposals primarily buoyed soya oil, the resulting strength in the broader edible oils complex also benefited palm oil prices, it added. Meanwhile, BMI expects Malaysian palm oil output to reach 19.5 million tonnes in the 2025/2026 season, representing a y-o-y increase of 0.5%. – Bernama

Ringgit falls as US tariff deadline nears, trade deal hopes fade THE ringgit closed lower against the US dollar yesterday, as fading hopes of a trade deal ahead of the upcoming US tariff deadline weighed on investor sentiment. At 6pm, the local note depreciated to 4.2245/2305 versus the greenback from Tuesday’s close of 4.1995/2005. SPI Asset Management managing partner Stephen Innes said the ringgit, which had enjoyed solid momentum in recent weeks, is now facing headwinds as markets brace for the July 9 tariff deadline, with US President Donald Trump making it clear there will be no extension. “With the deadline fast approaching, markets are shifting into defensive mode. “Asia foreign exchange market feels like it is trading in the dark – nervous, reactive, and unsure where the next blow will come from,” he told Bernama. At the close, the ringgit traded mostly lower against a basket of major currencies. It eased versus the British pound to 5.7859/7941 from 5.7797/7866, and fell against the euro to 4.9748/9818 from 4.9566/9625 yesterday. However, it appreciated against the Japanese yen to 2.9316/9360 from 2.9351/9389. The local note was also traded lower against its Asean counterparts. It slipped against the Indonesian rupiah to 259.9/260.5 from 258.9/259.4, weakened against the Philippine peso to 7.49/7.51 from 7.45/7.46, shed vis-à-vis the Singapore dollar to 3.3167/3217 from 3.3015/3059, and declined against the Thai baht to 13.0233/0482 from 12.9363/9585 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2800 2.8260 3.3570 3.1300 5.0510 2.6160 3.3570 5.8830 5.4420 3.5450 60.0900 69.4000 55.0600 5.0800 0.0273 2.9820 43.5600 1.5300 7.7000 118.6400 115.3000 25.1500 1.4600 46.5100 13.7500 117.8200 N/A

4.1460 2.7110 3.2590 3.0460 4.8880 2.5210 3.2590 5.6990 5.2110 3.3240 57.5500 63.8600 52.3200 4.7700 0.0247 2.8860 40.0500 1.4400 7.2600 112.6300 109.4600 22.7100 1.3500 42.3500 12.1900 111.7000 N/A

4.1360 2.6950 3.2510 3.0340 4.8680 2.5050 3.2510 5.6790 5.1960

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

111.5000 3.1240 57.5500 63.6600 52.1200

4.5700 0.0197 2.8760

N/A

39.8500 1.2400 7.0600 112.4300 109.2600 22.5100 1.1500 42.1500 11.7900

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

Power Overweight

Telekom Malaysia Bhd Buy. Target price: RM8.15

Kerjaya Prospek Group Bhd Buy. Target price: RM2.80

July 2, 2025: RM6.71

July 2, 2025: RM2.10

Source: Bloomberg

Source: PublicInvest Research

Source: Bloomberg

KERJAYA Prospek has proposed to acquire three parcels of freehold land at Jalan Puchong in Kuala Lumpur via three separate sale and purchase agreements (SPAs) for a cumulative consideration of RM112.8 million. It also entered into a JV and subscription and shareholders’ agreement with Aspen Vision Tanjung (AVT) to jointly develop two freehold land parcels measuring 4.5 acres in Tanjung Bungah, Penang into a mixed development with serviced apartments, residential components, retail units, and office blocks. For the Jalan Puchong deal, the first 3.9 acre land is to be purchased from Sunrise Bright City for RM59.1 million. Another two land parcels (1.7 and 1.8 acres) will be acquired from Top Up Properties for RM53.7 million. The price per sq ft of RM350 is deemed fair, as transactions for surrounding areas ranged between RM300 and RM417 per sq ft. The land parcels are located in established areas with access to major highways including Lebuhraya Shah Alam, the Federal Highway, and Lebuhraya Damansara-Puchong. Completion for the acquisition is expected by September. The JV with AVT will see the establishment of a special purpose vehicle called Tanjung Bungah Development (TBD), with KPG’s subsidiary holding 60%, while the rest is held by AVT. The 4.5 acre land parcels carry a total consideration of RM117 million, comprising RM105 million in cash and RM12 million via in-kind property units. TBD will reimburse AVT a total of RM60 million (as AVT has paid RM53 million and incurred RM7 million in pre-development costs), of which RM4 million will be converted into AVT’s share capital in TBD,

TENAGA Nasional (TNB) recently held an analyst briefing to provide further clarity on three key components of Regulatory Period 4 (RP4): (i) the base tariff revision, (ii) the Automatic Fuel Adjustment (AFA) mechanism, and (iii) the new tariff schedule structure. The briefing broadly reaffirmed our earlier report dated June 23 with more details on the customer impact across segments. About 23 million users including Domestic with equal or less than 1,000kWh and Low Voltage SMEs with equal or less than 200kWh are eligible for Energy Efficiency Incentive (EEI), which could reduce monthly bills by up to 15%. For non-domestic users, the tariff hike is skewed toward non-energy components i.e. Capacity and Network charges, previously known as Maximum Demand charge, which incentivises users with high load factor efficiency. However, data centres, falling under the Ultra High Voltage (UHV) category are an exception, as it is expected to incur a 10-15% increase in electricity bills, based on our estimates, due to higher energy charges during off peak period. Nonetheless, we believe Malaysia’s data centre prospects remain intact, supported by its regional cost competitiveness, infrastructure resilience, and geographical strength. The briefing reaffirmed our earlier report dated June 23, confirming that the marginal 0.22 sen/kWh reduction in the RP4 base tariff is primarily attributed to a stronger ringgit assumption, revised from RM4.40 to RM4.307, which lowered generation cost component. – PublicInvest Research, July 2

TELEKOM Malaysia’s (TM) expansion of its twin-core data centres (DC) in Cyberjaya and Iskandar Puteri is on track for completion by Q4’25. We see a potentially doubling up of DC revenue/EBITDA by FY27 upon full utilisation of the expanded IT load of 40MW. TM is also a key beneficiary of managed wavelength and DC fibre connectivity revenues with increased demand from hyperscalers. Recent ground checks showed good progress made on the construction of TM’s Klang Valley Data Centre Block 2 (KVDC2). The DC construction was awarded to Gadang Holdings in April 2024 for a contract value of RM280 million with a two-year project timeline. Construction progress is now well over 60% with structural works (core and shell) for the four-storey facility completed. TM’s other twin-core facility at Nusajaya Technology Park, the Iskandar Puteri Data Centre (IPDC) is also undergoing a similar expansion with Block 2 (IPDC2) expected to be ready by Q3’25 (additional 10MW IT load). The construction contract was awarded to IJM last June for a contract value of RM332 million. Construction progress of the four-storey building is currently at more than 70%. TM is already hosting GPUaas for international customers at IPDC. Risks include i) Delays in the commercialisation and operations of the expanded DC capacity, ii) slower-than-expected offtakes, iii) competition from DC colocation providers, and iv) negative geo political developments which could crimp enterprise budgets and spending. TM does not disclose revenue from its DC business specifically. BUY with RM8.15 TP. – RHB Research, July 2

and RM56 million will be recognised as advances. BUY with RM2.80 TP. – RHB Research, July 2