10/07/2025

BIZ & FINANCE THURSDAY | JULY 10, 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

Palm oil output to see modest growth in 2025–26 KUALA LUMPUR: BMI, a unit of Fitch Solutions, expects a partial recovery in Malaysia’s palm oil output in 2025 and 2026, forecasting a 0.5% year-on-year increase to 19.5 million tonnes, supported by favourable weather conditions. In a note yesterday, BMI said the Malaysian Meteorological Department has projected normal to slightly below-normal rainfall between July and September 2025, followed by a return to normal and above-normal rainfall with the onset of the Northeast Monsoon from October to December. “Major palm oil-producing states including Sarawak, Sabah, Pahang, Johor and Perak are anticipated to experience largely normal weather conditions, signalling minimal weather-related disruptions to the upcoming harvest season,” it said. BMI noted that with most land in Malaysia already cultivated or allocated for urban development, there is little scope for further expansion of planted areas. “Consequently, production growth must rely on yield improvements driven by the replanting of ageing trees. “Nevertheless, according to the Malaysian Palm Oil Council, merely 2% of Malaysia’s total planted area for palm oil was replanted in 2024, significantly below the country’s annual target of 4% to 5%,” it said. It said that persistently high palm oil prices since 2021 have led farmers to prioritise short-term gains from lower-yielding ageing trees over longer-term replanting. “This trend may ease in the short term as palm oil prices dip in 2025–26, but it’s expected to persist longer term due to sustained high prices and limited policy support,” it added. – Bernama

Ringgit weakens as US tariff worries weigh on sentiment THE ringgit closed lower against the greenback yesterday as concerns over US tariffs continued to dominate market sentiment, an analyst said. Additionally, the 25 basis points (bps) cut in the Overnight Policy Rate (OPR) announced by Bank Negara Malaysia (BNM) at 3pm had also contributed to the easing of the ringgit. At 6pm, the local note fell to 4.2500/2540 against the greenback from Tuesday’s close of 4.2365/2445. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that, overall, the ringgit continues to trade within a narrow range. He said BNM has been forthcoming in managing the economy by delivering a preemptive cut in OPR, which would provide support to the economic growth in the second half of 2025. “On that note, this should be positive for the ringgit as Malaysia’s macroeconomic condition remains resilient, be it the fiscal and monetary condition,” he told Bernama. At the close, the ringgit was lower against a basket of major currencies. It slid against the Japanese yen to 2.8983/9012 from 2.8970/9026, fell versus the British pound to 5.7787/7842 from 5.7591/7700, and depreciated against the euro to 4.9780/9827 from 4.9745/9839. The local note was mixed against Asean currencies. It went down vis-à-vis the Singapore dollar to 3.3182/3219 from 3.3152/3217, but rose versus the Thai baht to 12.9946/13.0128 from 13.0182/0488. It marginally increased against the Indonesian rupiah to 261.3/261.8 from 261.4/262.0 and was flat against the Philippine peso to 7.51/7.52 from 7.51/7.53.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3160 2.8310 3.3680 3.1510 5.0630 2.5940 3.3680 5.8640 5.4520 3.6090 60.5300 69.5500 55.5300 5.1100 0.0275 2.9410 43.8500 1.5400 7.7400 119.6100 116.2500 25.1300 1.4700 46.7100 13.8300 118.8300 N/A

4.1800 2.7160 3.2680 3.0650 4.8960 2.4980 3.2680 5.6770 5.2190 3.3590 57.9500 63.9700 52.7400 4.8000 0.0249 2.8450 40.3200 1.4500 7.2900 113.5400 110.3600 22.7000 1.3500 42.5200 12.2600 112.6000 N/A

4.1700 2.7000 3.2600 3.0530 4.8760 2.4820 3.2600 5.6570 5.2040

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

112.4000

3.1590

N/A

63.7700 52.5400 4.6000 0.0199 2.8350 40.1200 1.2500 7.0900 113.3400 110.1600 22.5000 1.1500 42.3200 11.8600 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

Binastra Corporation Bhd Buy. Target price: RM2.64

AEON Credit Service (M) Bhd Buy. Target price: RM8.10

Plantation Neutral

July 9, 2025: RM5.55

July 9, 2025: RM1.87

Source: Company data, RHB

SPOT CPO prices have moderated from RM4,600-4,800/tonne in Q1’25 to a low of RM3,780/tonne in May, only to bounce back to the current levels of RM3,900-4,100/tonne. The downward movement was mainly driven by geopolitics in the light of the US trade tariffs, wars, and crude oil prices falling – all of which pushed CPO prices in the same direction. Correlation between CPO prices and crude oil prices surged to 0.47 in April 2025 from -0.6 in Q1’25, and subsequently rose further to current levels of 0.68, due to raised geopolitical risks. Besides following crude oil price trends, CPO prices also followed the lead of soybean oil (SBO) prices which rose due to the recent US biofuel policy change, leading to a rise in blending targets. We expect CPO prices to remain volatile given the ever changing geopolitical situation. Fundamentally however, global supply and demand will likely be more balanced in 2026, as supply improves, while demand should pick up given the more attractive relative prices. Supply of 17 oils and fats complex is expected to improve YoY in 2026, coming from a partial recovery of palm, sunflower and rapeseed supplies, as well as continued growth from soybeans. Still, the stock/usage ratio of the 17 oils and fats complex is still expected to remain below the historical average of 13.6%, at 12.9% for Oct 2025/Sept 2026, albeit up from 12.7% in 2025.This leaves very little cushion in case of any short-term bullish supply or demand surprises, hence raising the risk of price volatility going forward. – RHB Research, July 9

Source: Bloomberg

Source: Bloomberg

BINASTRA Corporation has secured a job worth RM405 million from Exsim Jalil Link – its fifth job win for FY26. This contract involves main building and infrastructure works for two apartment blocks that have 1,004 residential units in Bukit Jalil. The job shall be completed within a 41-month period from the commencement date, which is yet to be confirmed. This contract involves a project called The Queenswoodz, and is the fourth one awarded to BNASTRA from Exsim Jalil Link in relation to the latter’s 17.9-acre land in Bukit Jalil. The previous three contracts include two data centres (15MW each) and the Kingswoodz condominium. As such, the cumulative contract value secured for all four projects by BNASTRA on the 17.9-acre land is approximately RM1.8 billion, with no more upcoming jobs left on the land parcel. We expect the NPM for this job to be in the normal range of 8 10%. BNASTRA’s new job wins for YTD FY26 now stand at RM1.4 billion (vs our RM4 billion assumption for FY26), with an outstanding orderbook of RM4.6 billion. We expect the remaining RM2.6 billion that BNASTRA needs to hit our RM4 billion new job win target for FY26, to partly come from four mixed development projects awarded by three key clients – EXSIM Development (EXSIM), Maxim Global (MAXIM MK, NR), and Platinum Victory – with RM3.5 billion (we expect RM1.5-2 billion of this to be dished out this year) worth of construction

ACSM posted a Q1’26 net profit of RM77.5 million (-27% YoY, -41% QoQ), which accounts for 17% and 20% of our and consensus full year estimates. The key deviation from our numbers arose from impairment allowances, where the Q1’26 net credit cost of 5% tracked ahead of our 3.3% assumption. Elsewhere, PPOP growth was a strong 19% YoY (QoQ: +1%) driven by decent operating income growth of 15% (QoQ: +4%), while a mild increase in opex helped to lower the CIR by 2ppts YoY to 37.4% (Q4’24: 35.4%). Associate losses during the quarter amounted to RM16 million (Q1’25: RM12 million loss), which is largely tracking management’s guidance for flat YoY losses for the digital bank in FY26 (FY25 total associate losses: RM68 million). Total gross financing receivables stood at RM14.6 billion and reflected a 16% YoY increase (QoQ: +4%), ie well ahead of management’s +10% target for the year. The YoY growth drivers were still the payments business (+23%) and personal financing (+23%) while, on a QoQ basis, the Easy Payment pillar’s (vehicle and objective financing) 3% growth was driven by strong traction in the superbike class. ACSM’s Q1’26 NPL ratio of 2.57% implied a 7bps QoQ decline (YoY: +11bps), and reflects the group’s stable collection ratios alongside improving credit quality of new originations. We gather that the sharp rise in credit costs to near-peak levels was a result of: i) A spike in write-offs to RM192 million, the highest level ever recorded by the group; and ii) business-as-usual ECL provisions of RM37 million, vs a write-back of RM5 million in Q1’25. BUY with RM8.10 TP. – RHB Research, July 9

jobs yet to be awarded, based on our estimates. BUY with RM2.64 TP. – RHB Research, July 9