07/07/2025

BIZ & FINANCE MONDAY | JULY 7, 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

CPO futures to trade sideways as market awaits key MPOB data KUALA LUMPUR: The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trade sideways this week as market participants await key industry data for clearer direction. Palm oil trader David Ng said the market is likely to remain range-bound as traders adopt a cautious stance ahead of the Malaysian Palm Oil Board (MPOB) June supply and demand report, which is scheduled for release on Thursday. “We expect prices next (this) week to trade in a sideways range between RM3,980 and RM4,150 per tonne as traders wait for fresh data to guide the market,” he told Bernama. Similarly, Fastmarkets Palm Oil Analytics senior analyst Sathia Varqa said the market will be closely watching the MPOB report next week to assess the extent of the anticipated production drop and its impact on end-month stock levels. “Market participants will be keenly watching for the MPOB June supply and demand report to gauge production, export and stock trends that will set the tone for the market in the coming weeks.” On a weekly basis, the July 2025 contract fell RM9 to RM3,995 per tonne, while August 2025 dropped RM48 to RM4,053 per tonne. September 2025 rose RM51 to RM4,062 per tonne, October 2025 gained RM53 to RM4,064 per tonne, November 2025 added RM48 to RM4,065 per tonne and December 2025 increased RM41 to RM4,072 per tonne. The weekly trading volume decreased to 253,182 lots from 267,618 lots in the previous week, while open interest went up to 226,243 contracts from 224,560 contracts. The physical CPO price for July South increased by RM30 to RM4,050 per tonne.

Ringgit likely to be range-bound ahead of BNM policy meeting THE ringgit is expected to trade range-bound against the greenback this week, as investors adopt a cautious approach ahead of Bank Negara Malaysia’s Monetary Policy Committee (MPC) meeting on Wednesday. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the local note is likely to stay steady, with market participants focusing on the central bank’s upcoming decision. “The outcome of the meeting could shape the ringgit’s near-term trajectory. We are calling for a 25-basis point cut in the Overnight Policy Rate (OPR), as the need for monetary support has grown given the increasingly challenging macroeconomic outlook for the second half of 2025,” he told Bernama. Mohd Afzanizam said subdued global demand, ongoing geopolitical tensions and signs of moderating domestic activity may lead the central bank to adopt a more accommodative stance. “In the absence of major external shocks, the ringgit is expected to trade within a narrow band of RM4.22 to RM4.23 against the greenback throughout the week,” he added. The ringgit ended higher against the greenback last week, closing at 4.2180/2260 from 4.2300/2355 in the week before. The local note appreciated vis-a-vis the Japanese yen to 2.9225/9282 from 2.9359/9399, and increased against the British pound to 5.7601/7710 from 5.8141/8217. However, it fell versus the euro to 4.9675/9770 from 4.9597/9661 at the end of last week. The ringgit improved against the Singapore dollar to 3.3114/3182 from 3.3192/3240, stronger versus the Indonesian rupiah to 260.6/261.2 from 260.9/261.4, while it weakened versus the Thai baht to 13.0302/0609 from 13.0254/0488 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3000 2.8400 3.3680 3.1610 5.0600 2.6180 3.3680 5.8740 5.4450

4.1660 2.7250 3.2700 3.0760 4.8970 2.5220 3.2700 5.6870 5.2120 3.3410 57.8000 63.9800 52.5700 4.8000 0.0249 2.8780 40.3500 1.4400 7.2700 113.1600 109.9800 22.9700 1.3500 42.1400 12.2500 112.2300 N/A

4.1560 2.7090 3.2620 3.0640 4.8770 2.5060 3.2620 5.6670 5.1970 3.1410 57.8000 63.7800 52.3700 4.6000 0.0199 2.8680 40.1500 1.2400 7.0700 112.9600 109.7800 22.7700 1.1500 41.9400 11.8500 112.0300 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

118.3800 3.5630 60.3500 69.5300 55.3300 5.1100 0.0275 2.9730 16.0000 43.8700 1.5400 7.7200 119.2000 115.8500 25.4300 1.4700 46.2800 13.8200

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

Data centres DC goldmine intact

Banking Overweight

Property Overweight

July 3, 2025: RM0.205

Source: MIDA/Hong Leong Investment Bank Research

WE recently hosted the 19th edition of the Bursa Malaysia-HLIB Stratum Focus Series, titled Data Centre 2.0: The Ecosystem and What’s Next for Malaysia? , featuring five esteemed speakers to provide their holistic 360 view on the evolving DC landscape in Malaysia. The panel included representatives from MIDA, JLL, IJM Construction, MN Holdings, and Master Tec Group. Key-takeaways include the fact that Malaysia remains a preferred DC destination vs regional peers like Indonesia, Philippines, and Vietnam, although rising interest in Thailand highlights the need to accelerate domestic power and water infrastructure rollout to retain its lead. In 1Q25, approved investments increased 3.8% YoY to RM90bn, with RM35bn from the information and communications sub-sector (93% of which was DC-related). Thus, we find the DC growth narrative remains firmly in place. Land acquisition activities have recently slowed, entering a consolidation period as many DC players hold sufficient undeveloped lands to support phased build-outs over the next 1-2 years. While this may raise concerns for property players, it signals sustained momentum in construction flows. Importantly, land banking has never been a core profit driver for most, and the moderation should not be viewed negatively - land prices in the southern region have already appreciated significantly (c.70%) over the past three years. Many colo clients are offering acceleration fees to fasttrack delivery timelines; this underscores the urgency and competitive intensity within this sector. Also, there are no signs of project deferrals. Sector beneficiaries of burgeoning DC in Malaysia include: utilities, RE, sub-utilities, construction, and telco. – Hong Leong Investment Bank Research, July 4

Source: Hong Leong Investment Bank Research

Source: Hong Leong Investment Bank Research

ON July 3, Singapore tightened property cooling measures by extending the Seller’s Stamp Duty (SSD) holding period from 3 to 4 years and raising rates by 4 percentage points per tier, effective July 4. This move targets speculative buyers, particularly those flipping uncompleted units, but is expected to have minimal impact on developers, as genuine end-user and long-term investor demand should remain intact. IOI Properties’W Residences Marina View is less exposed due to its unique, untested concept, lack of CCR benchmarks and higher upfront payments from its partially constructed status. Similarly, Sunway’s private condos (The Continuum, Terra Hills) face limited risk given their construction progress, while its ECs (Novo Place, Otto Place) are unaffected due to the existing 5-year Minimum Occupation Period. The SSD is payable by those who sell a residential property within a specified period after purchase. In 2017, this period was reduced from four to three years, and the SSD rates were also reduced by four percentage points for each tier of the holding period. The government is reverting to the SSD holding period of four years, and raise the SSD rates by four percentage points for each tier of the holding period. In Singapore, the number of private residential property transactions with short holding periods has increased sharply in recent years. In particular, there has been a significant increase in the sub-sale of units that have not been completed. We maintain an OVERWEIGHT call on Malaysia’s property sector, supported by structural growth drivers and resilient fundamentals. – Hong Leong Investment Bank Research, July 4

THE KL Finance Index (KLFIN) faced a tumultuous first half of 2025, marked by significant geopolitical unrest, the evolving landscape of AI thematics, abrupt shifts in US trade policy, and the cascading effect of US recession fears. This challenging environment saw a notable reversal of fortunes among key players: the top gainers of 2024 turned into the top losers in 1H25. CIMB was the worst performer, plummeting 17.2%, primarily due to concerns surrounding its Indonesian operations. Alliance Bank followed with a 7.8% decline, having been impacted by its rights issue announcement. Over the next three quarters, scrutiny will be on how banks continue to execute their strategies to navigate a turbulent market. We anticipate slower YoY earnings growth. We also foresee banks making top-ups in management overlays, given the current dynamic economic environment. This is especially if business-as usual expected credit loss remains low, aiming to further strengthen loan loss coverage. Our house view for the 2H25 is a quarter of stark contrasts, with 3Q being turbulent before transitioning to calmer conditions in 4Q. We anticipate that markets are becoming increasingly desensitised to rhetoric surrounding trade, suggesting that peak trade uncertainty is now behind us. We reiterate our overweight stance on the Malaysian banking sector, viewing the KLFIN Index’s 7.5% YTD decline as a strategic opportunity to build positions ahead of an anticipated market recovery in the latter half of 2025. – Hong Leong Investment Bank Research, July 4