16/07/2025

BIZ & FINANCE WEDNESDAY | JULY 16, 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

Miti’s AI chip rule unlikely to affect data centres: MIDF KUALA LUMPUR: MIDF Amanah Investment Bank Bhd believes that data centres will not be affected by the Ministry of Investment, Trade and Industry’s (Miti) latest directive on artificial intelligence (AI) chips. The ministry has issued a directive which requires all exports, transshipments and transits of high-performance AI chips of US origin in Malaysia to obtain a Strategic Trade Permit. In a research note yesterday, the investment bank said the import of US-made advanced AI chips for use in domestic servers does not fall under the scope of the new rules unless the data centre operators intend to move the chips out of Malaysia. MIDF noted that since the beginning of the year, it has consistently reiterated that most new data centres are AI ready, though some may eventually be used for non-AI purposes. The investment bank said the directive primarily addresses the movement of AI chips out of Malaysia, which it views as a prudent move by Miti to prevent suspected smuggling of chips into China through intermediaries. MIDF said negotiations between Malaysia and the US will likely focus on regulatory enforcement, end-user monitoring, and the seriousness in addressing violations of the control measures. “Miti’s latest directive covers all these. It is hoped that this will be able to placate the US when negotiating the restrictions of AI chip exports under Trump’s refashioned AI Diffusion Rule,” it said. – Bernama

Ringgit rises against dollar as China data lifts sentiment THE ringgit finished higher against the US dollar at the close yesterday as market sentiment improved on the back of better than-expected economic data from China. News that NVIDIA can resume microchips sales to China also suggested that US tariff shocks could be managed, further lifting sentiments. At 6pm, the local note rose to 4.2395/2440 from Tuesday’s close of 4.2505/2560. SPI Asset Management managing partner Stephen Innes said the ringgit “caught a gentle tailwind” after China’s second quarter gross domestic product surprised to the upside, which is a regional morale boost driven not by American demand, but by “China’s resilience in non-US export lanes.” “It’s a reminder that Asean currencies, particularly the ringgit, can still find traction when Beijing’s supply engine hums and its trade compass pivots south and east rather than west,” he added. At the close, the ringgit was traded higher against a basket of major currencies. It strengthened against the British pound to 5.7047/7107 from 5.7305/7379, improved against the Japanese yen to 2.8702/8734 from 2.8858/8897 and was up versus the euro at 4.9539/9591 from 4.9693/9757. The local note also trended higher against Asean currencies. It traded higher vis-à-vis the Singapore dollar at 3.3095/3133 from 3.3184/3229 on Monday, improved against the Indonesian rupiah to 260.6/261.0 from 261.5/262.0 and strengthened versus the Philippine peso to 7.47/7.49 from 7.50/7.51. It gained against the Thai baht to 13.0784/0988 from 13.1213/1439. – Bernama

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3210 2.8410 3.3660 3.1490 5.0460 2.5900 3.3660 5.8080 5.4530

4.1880 2.7270 3.2680 3.0650 4.8840 2.4950 3.2680 5.6240 5.2210

4.1780 2.7110 3.2600 3.0530 4.8640 2.4790 3.2600 5.6040 5.2060

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

118.9700 3.6430 60.6600 69.3100 55.6000 5.1000 0.0275 2.9280 15.8000 43.7200 1.5400 7.7200 119.7900 116.4300 25.0200 1.4700 46.3200 13.8900

112.8100 3.3930 58.1100 63.7900 52.8400

112.6100 3.1930 58.1100 63.5900 52.6400

4.7900 0.0249 2.8350

4.5900 0.0199 2.8250

N/A

N/A

40.2200 1.4500 7.2800 113.7200 110.5300 22.6000 1.3600 42.2000 12.3200

40.0200 1.2500 7.0800 113.5200 110.3300 22.4000 1.1600 42.0000 11.9200

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

Technology Overweight

Solarvest Holdings Bhd Buy. Target price: RM3.05

Economy Distributive trade eases slightly in May 2025

JULY 15, 2025: RM2.31

Source: Bloomberg

Source: PublicInvest Research

Source: DOSM, TA Securities

SOLARVEST has already secured a 30% market share of the total 2GWac quota under LSS5 and is currently in active negotiations to finalise additional EPCC contracts by Q3’25, which could potentially lift its market share to 40-50%. Looking ahead, the upcoming LSS5+ programme is expected to introduce a further 2GW of quota into the market, with bid finalisation anticipated by July 25 and EPCC contract awards commencing in Q1’26. Backed by a strong execution track record in the LSS programme and robust bidding advisory capabilities, we anticipate Solarvest to maintain its 30% market share in LSS5+. Including the group’s newly secured LSS5 projects and its Brunei solar venture, the group now has a solar assets pipeline of 334MWp, targeted to be operational by FY28. Post earnings adjustment, our 12-month SOP-derived TP is raised to RM3.05 (from RM2.45) after rolling forward our valuation base to FY27 with a lower ascribed PE of 30x (from 35x) for the EPCC segment to align with our valuation multiple across our RE sector coverage. The recent restructuring of TNB’s electricity tariff presents a potential catalyst for the RE sector with a clear focus on energy efficiency. A key component is the introduction of the Time of Use scheme, which incentivises consumers to shift their electricity consumption to off-peak hours, offering a lower tariff rate of 10%. The newly imposed 6% SST on construction services is expected to have a minor impact on Solavest’s EPCC segment, primarily affecting the engineering and construction portion, which typically makes up 20-30% of the total EPCC contract value. BUY with RM3.05 TP. – Phillip Capital Research, July 15

MALAYSIA’S Ministry of Investment, Trade and Industry announced that, effective immediately, any export, transhipment, or transit of high-performance US-origin AI chips will now require a government-issued trade permit. The ministry further emphasised that companies must notify the authorities at least 30 days in advance before the exporting or shipping of such items. Additionally, companies must inform the authorities if they know or have reasonable grounds to suspect that the items will be misused or involved in illicit trading activities. It is worth noting that Malaysia exported US$16.2 billion worth of chips to the US in 2024, making up nearly 20% of all US semiconductor imports. Generally, Malaysia does not fabricate these AI chips but these chips usually enter Malaysia for testing, packaging, assembling and re-exported as part of the sub-systems like AI servers or AI hardware. In our view, the enforcement of trade permits demonstrates Malaysia’s firm stance against attempts to circumvent export controls or engage in illicit trade. This could ease the US concerns about the possible diversion of AI chips through intermediaries in Malaysia. Furthermore, it may reduce the risk of a US-imposed AI chip export ban on Malaysia and Thailand. However, it could increase compliance burden on companies handling US-origin AI chips as well as the risk of delays. Following this latest initiative, we believe there is a low risk of a US chip export restriction being imposed on Malaysia, which is positioned to become a data centre hub in Southeast Asia. Our channel checks indicate that five multi-billion-ringgit data centre contract tenders from a US-based hyperscaler are expected to be launched in the coming months. – PublicInvest Research, July 15

MALAYSIA’S Distributive Trade Index (DTI) rose by 4.1% YoY in May 2025, reaching 163.3 points, slightly moderating from 4.3% YoY in April. Distributive Trade Sales also grew by 4.4% YoY to RM154.3 billion, easing from 4.7% YoY in the previous month. On a month-on month basis, both trade volume and sales posted a 1.7% increase, indicating continued, albeit more moderate, growth momentum. The Volume Index for Wholesale Trade, holding the largest share of the total distributive trade at 44.9%, registered a growth of 5.8% YoY (Apr 25: 6.6% YoY) to 150.2 points (Sales value: RM68.2 billion). The growth was recorded in non-specialised wholesale trade (8.3% YoY), Wholesale of machinery, equipment & supplies (7.8% YoY), Wholesale of household goods (7% YoY), and Wholesale of food, beverages & tobacco (5.8% YoY). Meanwhile, the Retail Trade sector experienced a faster YoY growth of 3.7%, reaching 186 points (Sales value: RM67.1 billion). This is as compared with 3.4% YoY recorded in the prior month. Among the groups that contributed to this growth were Retail sale of information & communication equipment in specialised stores (7.7% YoY), Retail sale via stalls & markets (5.8% YoY), Retail sale of automotive fuel in specialised stores (5.8% YoY), Retail sale of other household equipment in specialised stores (5.4% YoY), Retail sale of food, beverages & tobacco in specialised stores (5.4% YoY), and Retail trade not in stores, stalls or markets (3.7% YoY). In addition, the volume index of Motor Vehicles registered a marginal increase of 0.1% YoY (Apr 25: 0.8% YoY) to 140.2 points (Sales value: RM19 billion). The increase was attributed to Sale, maintenance & repair of motorcycles 6.4% YoY and Sale of motor vehicles parts & accessories 1.2% YoY. – TA Research, July 15