30/07/2025

BIZ & FINANCE WEDNESDAY | JULY 30, 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 forecasts strong consumer spending in Malaysia until 2026 KUALA LUMPUR: BMI, a Fitch solutions company, has main tained its broadly positive outlook for consumer spending in Malaysia over 2025, with the country’s healthy macroeconomic outlook driving real terms growth in household incomes. With inflation averaging lower than expected in May, BMI lowered its forecast for headline inflation to an average of 1.9% year-on-year (y-o-y) in 2025, down from 2.1% previously, and only slightly up from an average of 1.8% in 2024. It noted this remained low enough to support household purchasing power. Overall, the firm forecasted household spending to grow by 3.8% y-o-y over 2025, in real terms, to a value of RM930.7 billion, up from RM896.9 billion in 2024. “As a result, household spending has returned close to pre Covid levels of growth, where it grew at a real average rate of 5.2% y-o-y during the 2015-19 period. “However, spending will continue to be restrained by Malaysian consumers’ high levels of indebtedness and the corre spondingly high debt servicing costs,” it said in its latest Malaysia Consumer Outlook: Strong Growth Forecast Over 2025 and 2026. Looking ahead to 2026, BMI expected consumer spending to accelerate, underpinned by strong GDP growth and a stable employment outlook. It said consumer confidence and willingness to spend would be further supported by a stable inflationary environment and Bank Negara Malaysia returning to a loosening mode, cutting its benchmark interest rate by a further 25 basis points from a fore cast of 2.75% in December 2025 to 2.5% by end-2026. – Bernama

Ringgit ends lower against US dollar ahead of FOMC meeting THE ringgit ended lower against the US dollar yesterday as market traders await the outcome of the United States (US) Federal Open Market Committee (FOMC) meeting, said an economist. The two-day FOMC meeting, taking place from July 29 to 30 in Washington, is expected to provide key guidance on the US Federal Reserve’s monetary policy direction. At 6pm, the local note eased to 4.2320/2365 versus the green back from yesterday’s close of 4.2275/2345. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that in the meantime, the US labour market data will be the key focus tonight when the Job Openings and Labour Turnover Survey (JOLTS) will be published. “Consensus estimates have pegged the number of jobs open ings to decline to 7.55 million in June from 7.769 million in the prior month,” he told Bernama. Thus far, he said, the US Dollar Index (DXY) has risen to as high as 99.01 but later hovers around 98.816 points. At the close, the ringgit ended higher against major currencies. It rose against the Japanese yen to 2.8479/8511 from 2.8497/8546 at the close on Monday, appreciated versus the British pound to 5.6518/6578 from 5.6720/6814 last week, and edged higher against the euro to 4.8990/9042 from 4.9331/9412 previously. The ringgit was also mostly higher against regional peers. It was higher against the Indonesian rupiah at 257.8/258.2 from Monday’s 258.3/258.9, gained against the Singapore dollar to 3.2875/2913 from 3.2917/2974, improved against the Philippine peso to 7.38/7.39 from 7.39/7.41, but weakened versus the Thai baht to 13.0537/0740 from 13.0511/0787 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2995 2.8190 3.3380 3.1240 4.9880 2.5760 3.3380 5.7460 5.3850

4.1665 2.7060 3.2410 3.0410 4.8280 2.4810 3.2410 5.5650 5.1570 3.3350 57.7300 63.0600 52.5800 4.7300 0.0246 2.8040 39.8100 1.4500 7.1700 113.1500 109.9400 22.4800 1.3400 42.0000 12.2800 112.2400 N/A

4.1565 2.6900 3.2330 3.0290 4.8080 2.4650 3.2330 5.5450 5.1420 3.1350 57.7300 62.8600 52.3800 4.5300 0.0196 2.7940 39.6100 1.2500 6.9700 112.9500 109.7400 22.2800 1.1400 41.8000 11.8800 112.0400 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

118.3700 3.5800 60.2600 68.5200 55.3200 5.0400 0.0272 2.8970 15.6000 43.2700 1.5400 7.6100 119.1900 115.8100 24.9000 1.4600 46.1000 13.8400

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

Guan Chong Bhd Buy. Target price: RM2.58

Eco-Shop Marketing Bhd Buy. Target price: RM1.51

Paramount Corporation Bhd Buy. Target price: RM1.48

JULY 29, 2025: RM1.29

JULY 29, 2025: RM1.13

JULY 29, 2025: RM1.10

Source: Bloomberg

PARAMOUNT has announced a series of proposals involving Dynamic Gates Sdn Bhd (DGSB), the special purpose vehicle hold ing three university campuses (Glenmarie, Batu Kawan, and George Town) under a 2018 securitisation exercise valued at RM456 million. DGSB is consolidated into Paramount’s financials and operates effectively as part of the group. Paramount will redeem its RM126 million cumulative redeem able non-convertible preference shares (CRNCPS) in DGSB through the issuance of new perpetual Redeemable Preference Shares (RPS). This avoids cash redemption, given the absence of distribut able profits in DGSB. Unlike the CRNCPS, which carried cumulative dividends, the RPS only offer discretionary dividends subject to profit availability and the settlement of securitisation obligations. The tenure of the CRNCPS subscription agreement, lease, and call/put option arrangements will be extended by seven years to align with DGSB’s planned extension of its Medium-Term Notes (MTN) programme. These MTNs were originally issued in 2018 to partially fund DGSB’s RM294 million acquisition of the campus assets from Paramount as part of a sale-and-leaseback securitisation exercise. Paramount’s call and DGSB’s put options to acquire/dispose of the campuses will now reflect updated market valuations. Independent valuer Jones Lang Wootton (JLW) has appraised the Glenmarie campus at RM281 million, Batu Kawan at RM105 mil lion, and George Town at RM70 million, bringing the total to RM456 million. The lease between Paramount (via subsidiary Janahasil) and DGSB will be extended by 7 years. Monthly lease payments will increase progressively from RM1.35 million to RM1.43 million, translating into a lease yield rising from 3.55% to 3.77% over the term. The campuses remain leased to University of Wollongong Malaysia (UOWM) and its affiliates via subleases. BUY with RM1.48 TP. – TA Research, July 29

Source: Bloomberg

Source: Bloomberg

BLOOMBERG reports that European cocoa grindings have declined for four consecutive quarters (-5% YoY), while Malaysian grindings fell 22% YoY in Q2’25. This reflects changes in product formulations, reduced pack sizes, and substitution with alterna tive ingredients amid elevated bean prices and ongoing tariff uncertainties. Coupled with lower cocoa butter ratio, these dynamics have tightened the supply of cocoa powder, which remains expensive but fails to incentivise higher grindings due to substantial working capital requirements and volatile market conditions. Consequently, GUAN’s overall utilisation rate could ease to 85-90% in 2H’25, as its US customers (15% of revenue) adopt a wait-and-see approach on tariff uncertainties. On a positive note, this reduction in production could improve working capital efficiency and cash flow. However, management has observed improving sales trends at more moderate bean prices and expects pickup in spot buying closer to the seasonal peak sea son (late Q3-early Q4), as customers move to secure their positions. While cocoa butter ratios have declined from six months ago due to improved bean availability and tariff-induced caution, they remain elevated relative to historical norms. Importantly, this is being offset by: i) The higher powder ratio, ii) discounted bean price differential (vs a premium last year), iii) a potential return of contango market structure after taking into account bean discount (vs last year’s back wardation), iv) lower interest rates. The healthy combined ratios real ised in Q1’25 are expected to sustain into Q2’25 before normalising

YOY, FY25 revenue jumped 16% to RM2.8 billion – underpinned by 74 net new store additions with SSSG flattish at -0.4% (Q4’25: - 8% following the April price increase). On a positive note, the price increase expanded FY25 GPM by 1.8ppts to 28.2% , more than off setting the rise in opex stemming from higher minimum wages. Correspondingly, FY25 core net profit surged 17% to RM214 mil lion. QoQ, Q4’25 revenue dipped 6% to RM689 million after vol ume declined in reaction to the price increase. Consequently, Q4’25 core net profit fell 9% to RM57 million as GPM expansion (1.5-month impact of price increase) was insuffi cient to offset the topline weakness and higher opex (full impact of higher minimum wages). In addition, RM5 million expenses were incurred in Q4’25 to replace price tags, banners, billboards and etc. ECOSHOP is focused on opening at least 70 new outlets pa in order to penetrate the underserved markets and consolidate its market leadership in the burgeoning dollar store industry. Meanwhile, it recently launched targeted marketing campaigns to drive footfall and SSSG by leveraging on the elevated GPM. Whilst volume has yet to recover fully following the price increase in April, we believe the model of dollar stores will continue to appeal to value-conscious consumers after acclimatising to the new pric ing. On top of that, the group’s participation in the Sumbangan Asas Rahmah programme (168 outlets approved, 81 stores enabled) could be another effective lever to lift foot traffic. Risks to our recommendation include reputational risks, major delays in expansion plans and sharp spikes in input or operating costs. BUY with RM1.51 TP. – RHB Research, July 29

in FY26, a scenario already reflected in our forecasts. BUY with RM2.58 TP. – RHB Research, July 29