12/07/2025

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SATURDAY | JULY 12, 2025

Limited impact from global headwinds: Funding Societies

LGMS proposes to acquire 27% stake in IT company Antarex KUALA LUMPUR: Cybersecurity services provider LGMS Bhd has proposed to acquire a 27% stake in Antarex Holdings Sdn Bhd for RM22.68 million. In a Bursa Malaysia filing, LGMS said the stake acquisition in information techno logy company Antarex is a strategic investment, marking a significant mile stone in the collaboration between LGMS and Antarex, aimed at advancing cyber security capabilities and capturing new growth opportunities across Southeast Asia. Headquartered in Singapore, Antarex was part of the inaugural cohort of the CyberBoost Catalyse Programme, an initiative by the CyberSG TIG Collaboration Centre, powered by Plexal, supported by Singapore’s Cyber Security Agency and the National University of Singapore. LGMS said the acquisition also reflected a significant step forward in realising both companies’ shared vision of delivering integrated, artificial intelligence-powered cybersecurity solutions across the region, as it followed on the heels of both companies having inked a memorandum of under standing to this effect earlier this year. LGMS chairman Fong Choong Fook said the investment marks a key milestone in LGMS’ regional growth strategy. “Together, our combined platforms are set to deliver real-time threat detection, automated incident response and compliance-ready solutions tailored for enterprise and infra structure-critical environments. “This partnership enables us to offer end-to-end protection across a broader segment of the market – from infra structure operators to regional enterprises – and fast-track our presence in high growth Asen markets,” he added. Antarex CEO Tan Pek Loon said the alignment of technical capabilities pro mises to drive innovation further for both companies. “This equity partnership supercharges our ability to jointly innovate, co-develop new solutions and deliver even greater protection to our customers across Southeast Asia.” – Bernama

o P2P lending platform combining knowledge and experience in SME unsecured lending with technology to respond to market uncertainties

Ű BY JOHN GILBERT sunbiz@thesundaily.com

However, if trade and market conditions don’t improve, we expect some investors to increase caution and invest less collectively,” he said. Ho noted that since the US’s first tariff announcement in April, central banks have indicated a willingness to cut interest rates and boost economic growth. “With higher risk premiums for us, but lower interest in deposits and more volatile risk return in other investment options, we see investors remaining steadfast in P2P investment for diversification and short-term fixed income, especially for investors who know our short and diversified loan portfolio, strict credit assess ment and resilient organisation.” As a fintech firm, Ho said, Funding Societies has been utilising data analytics and artificial intelligence (AI) to navigate and manage credit risk throughout the three-year pandemic and multi-decade period of high interest rates. “However, generative AI further enables us to increase efficiency and accuracy across the entire end-to-end process, from sales to credit assessment, credit monitoring to compliance, and operations to collections. “There is no silver bullet. Ultimately, we are combining our 10 years of knowledge and experience in SME unsecured lending here with tech to respond to the market uncertainties.” Ho said that Funding Societies’ culture is to continuously improve, notably in resilience, diversification and nimbleness, to navigate new market shocks and take advantage of new opportunities. “However, ultimately, a global trade war is a black swan event that severely impacts not only companies, but also nations. “Certain government support, such as in Covid-19, would go a long way to protect the social and economic fabric of society and companies,” he said.

response to these tariffs and market downturns, Ho said that early indications show a limited impact in the short term, given the domestic-focused nature of its SME borrowers, and the company is monitoring second-order effects. “Our strategic plan for 2025 is to lend further into specific stable verticals and diversify funding, and also add resilience to our business.” Although many of Funding Societies’ SME borrowers operate primarily within domestic markets, US tariffs would inevitably elevate their risk premiums, Ho said. “This mirrors the impact of other significant market disruptions we have witnessed over the past decade, including sectoral recessions, the unprecedented global pandemic and multi decade interest rate increases. “Despite these challenges, peer-to-peer lending and SME private debt remain com pelling investment opportunities,” he said. Ho pointed out that investors are drawn to P2P lending for several key reasons: it offers competitive fixed returns, provides flexibility through shorter investment periods, ensures ease of access for investors, and delivers portfolio diversification benefits due to its relatively low correlation with traditional asset classes. “Investors understandably inquire about our perspective, portfolio impact and precautions on tariffs. “Our investor interests have remained strong, due to our diversified presence across Southeast Asia and our oversubscribed equity fundraise last year. “Some investors even invest more, moving funds from public equity to us for private credit.

KUALA LUMPUR: Trade setbacks due to US tariffs and geopolitical tensions in the Middle East will have a limited impact on peer-to peer (P2P) platform Funding Societies’ small and medium enter prise (SME) borrowers’ operational cash flow and creditworthiness, as most of them are domestically focused. Group chief financial officer

Junxiong Ho ( pic ) said that in the short term, Funding Societies’ portfolio review indicates that trade tensions and tariff-induced volatility will have a limited impact. “For the medium term, we are watchful of the indirect, second-order effects of the tariffs on the overall economy and specific sectors, subject to our trade negotiations and responses by other major economies. “The base scenario is that SMEs would see lower revenue and higher costs, but some sectors may benefit from additional orders due to trade diversion. “Overall, as a niche player, the risk is manageable because our working capital loan tenures are short, allowing us to be nimble in adjusting sectoral focus, and we have successfully navigated other market shocks such as unprecedented pandemics and interest rate hikes,” Ho told SunBiz . He said Funding Societies has conducted an impact assessment on its portfolio, tightened credit parameters such as loan tenure due to medium-term market uncertainty, and imple mented additional checks on SMEs with US exposures. Explaining further on investor behaviour in

MARC Ratings projects Malaysia’s 2025 GDP growth at 4.4% PETALING JAYA: Malaysian Rating Corporation Bhd (MARC Ratings) forecasts the Malaysian economy to grow by 4.4% in 2025, down from 5.1% in 2024, as external trade uncertainties dampen export momentum. 52.2 in May from 74.0 in December 2024. US President Donald Trump on Monday announced new tariff rates ranging from 20% to 40% on 14 countries, effective Aug 1, super seding the initially imposed tariff rates. It said China continues to face weak domestic demand and persistent deflation, with May’s Consumer Price Index at -0.1%. “However, a recent trade deal with the US, alongside ongoing stimulus and a gradual consumption rebound, may help China reach its “around 5%” growth target.” in January to 1.4% in April. The expanded Sales and Service Tax, effective July 1, is expected to cause only mild price increases, as essential items remain exempt. Meanwhile, lower oil prices are expected to cushion inflation.

MARC Ratings said for Malaysia, the US imposed tariffs of 25%, signalling the need for greater reciprocity in future negotiations. “Over time, US tariffs are anticipated to settle significantly higher than the long-term global average rate of 2.7%, potentially in the high teens,“ it said. MARC Ratings also noted that the US outlook remains uncertain, depending on the progress of disinflation, the Fed’s policy stance and clarity surrounding fiscal and trade policy directions. “In contrast, the eurozone economy expanded by 1.5% in Q1 2025, benefiting from front-loaded trade activities during the US tariff pause. Key economies such as Germany also saw gains from increased defence spending and industrial policy shifts,“ MARC Ratings noted.

Nonetheless, domestic demand remains resilient, driven by labour market improvements, accommodative policy settings and tourism recovery. The rating agency also noted that the global economic growth is expected to moderate in the second half of 2025 as trade tensions and geopolitical risks weigh on sentiment. MARC Ratings noted that the US’s sweeping tariffs have reignited protectionist concerns, contributing to slower global growth. The US economy contracted by 0.2% in the first quarter of 2025, with the Purchasing Managers’ Index for both manufacturing and services falling below the neutral 50 mark in May. Consumer sentiment also weakened, with the University of Michigan Consumer Sentiment Index dropping to

As a result, MARC Ratings has revised its 2025 inflation forecast to 2.3% from 2.6% previously. On bonds, MARC Ratings stated that the Malaysian Government Securities (MGS) ex perienced strong demand in first-half 2025, supported by healthy fundamentals and dovish pivots by major central banks. Cumulative net foreign debt inflows reached RM26.9 billion between January and May, driving MGS yields 15–42 bps lower. “These factors contributed to a 5.3% YTD appreciation of the ringgit as of mid-June,“ MARC Ratings said. “We expect the 10-year MGS yield to anchor around 3.50% and the ringgit to approach RM4.25/USD by year end,“ it added.

For Malaysia, MARC Ratings said the wholesale and retail trade index grew 4.8% year to-date (YTD) through April, up from 3.6% in the same period last year. Construction rose 14.2% in first-quarter 2025, while agriculture rebounded by 0.6%. However, lingering external uncertainties prompted Bank Negara Malaysia (BNM) to cut the Overnight Policy Rate from 3% to 2.75% on Wednesday. MARC Ratings said BNM is expected to retain policy flexibility and respond accordingly to incoming data. Malaysia’s inflationary pressures remain con tained, with headline inflation easing from 1.7%