12/08/2025

BIZ & FINANCE TUESDAY | AUG 12, 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

June jobless rate holds steady at 3% on services sector hiring KUALA LUMPUR: Malaysia’s unemployment rate remained unchanged at 3% for the third consecutive month in June, supported by steady hiring in the services sector. According to Kenanga Investment Bank Bhd, the unemployment numbers continued to decline at the same pace for three straight months, with the total unemployed falling sharply to 518.7k from 522.4k in May – the lowest since January 2020 (511.7k). Meanwhile, the actively unemployed dropped to 414.4k (May: 418.6k), the lowest since February 2020 (343.2k). Kenanga said the employment growth in June remained unchanged at 0.3% month-on-month, sustaining the year-to-date average of 0.3%, which is higher than the 2024 average of 0.1% month-on-month. The Department of Statistics Malaysia reported steady hiring in the services sector, particularly in wholesale and retail trade, accommodation and food and beverage services, as well as information and communication activities. Similar trends were observed in manufacturing, construction, agriculture, and mining and quarrying. By employment status, the number of employers grew at a slower pace of 0.8%, while employee growth held steady at 0.2% for the fifth consecutive month. Unpaid family workers declined more sharply by 0.2%, while own-account workers expanded at a slightly faster rate of 0.6%. Kenanga said the unemployment rate averaged 3.1% in 1H25, reflecting a steady labour market as employment growth remained stable amid a sustained momentum in the domestic economy.

Ringgit higher against major currencies on Fed rate cut hopes THE ringgit rebounded to close higher against the greenback and other major currencies on market optimism that the US Federal Reserve will implement an interest rate cut at its September Federal Open Market Committee (FOMC) meeting. At 6pm, the local note rose to 4.2320/2360 versus the greenback, compared with last Friday’s close of 4.2420/2480. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted the US Dollar Index (DXY) dropped, albeit marginally by 0.03% to 98.152 points. Despite that, he said it is still early days as the market will wait for the US Consumer Price Index, which will be announced this week. “At the current juncture, markets appear to be divided as the US data has begun to flash a weakening trend when the Non-Farm Payrolls came in below expectations and the prior month data saw a significant downward revision,” he told Bernama. However, Mohd Afzanizam said signals from the Fed members are mixed, suggesting that the Fed may not be inclined to cut the interest rate aggressively. All this will continue to shape market sentiments and the indecisiveness has led to a tight range in DXY, he added. At the close, the ringgit edged up against the yen to 2.8657/8686 from 2.8720/8763 at the close last Friday, and improved against the euro to 4.9269/9316 from 4.9381/9451 and increased versus the British pound to 5.6933/6987 from 5.7034/7114. The ringgit also strengthened against the Singapore dollar to 3.2936/2973 from 3.3014/3064 and rose against the Thai baht to 13.0569/0769 from 13.1173/1419. It appreciated to 259.9/260.3 against the Indonesian rupiah from 260.3/260.8 previously and gained to 7.42/7.43 against the Philippine peso from 7.43/7.44.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3140 2.8260 3.3560 3.1330 5.0260 2.5730 3.3560 5.8010 5.3720 3.6150 60.4000 69.0300 55.5000 5.0100 0.0274 2.9240 43.0300 1.5500 7.6900 119.5400 116.0700 25.1800 1.4700 46.4500 13.9200 118.7200 N/A

4.1750 2.7090 3.2490 3.0440 4.8600 2.4770 3.2490 5.6130 5.1400 3.3810 57.8100 63.4700 52.6900 4.7000 0.0248 2.8280 39.5500 1.4400 7.2400 113.4800 110.1900 22.7300 1.3500 42.2800 12.3300 112.4900 N/A

4.1650 2.6930 3.2410 3.0320 4.8400 2.4610 3.2410 5.5930 5.1250

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

112.2900 3.1810 63.2700 52.490 4.5000 0.0198 2.8180 39.3500 1.2400 7.0400 113.2800 109.9900 22.5300 1.1500 42.0800 11.9300 N/A 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

IJM Corp Bhd Buy. Target price: RM3.73

Gaming – NFOs Neutral

MCE Holdings Bhd Buy. Target price: RM2.40

AUG 11, 2025: RM3.10

AUG 11, 2025: RM1.48

Source: Bloomberg, RHB Research

WE took a look at the progress of IJM Corp’s two ongoing warehouse-related jobs in Shah Alam and felt upbeat on the progress so far. The presence of Maersk’s 2.1m sq ft storage and office site in Section 26, Shah Alam is a testament to the importance of the area in fulfilling logistics needs, and this should help IJM secure new jobs within the area in the future. The first job in Shah Alam, awarded in Jun 2023, is worth MYR654m, and is for the design, execution, and construction of phase one of the Shah Alam International Logistics Hub (SAILH), commissioned by Global Vision Logistics. Phase one of SAILH includes a 4-storey warehouse complex, 4-storey multi-level parking facility, and a 1-storey office alongside ancillary buildings. The second warehouse-related job in Shah Alam is worth MYR584m, awarded in Jun 2024 by Strategic Sonata for the construction of Plot A of a logistics hub (Plot A hub) in Section 15. Progress has been quite commendable, especially for the Plot A hub. While we did not observe many high structures during our previous visit in March, progress had picked up in July, with many cranes being deployed, turning the area into the ‘Valley of Cranes’ Based on our estimates, both projects (SAILH and Plot A Hub) are roughly 60-80% done, and should reach completion in 1HCY26. Industrial building jobs, excluding data centres (DC), made up 26-28% of IJM’s MYR6.6bn outstanding orderbook as of end-Mar 2025, based on our projections. We envisage that demand for warehousing in Shah Alam will remain robust, as it is within a 30-40 minute drive from Port Klang, making the area close enough to serve import/export needs while avoiding the congestion at the Port Klang area. Keep BUY, new RMR3.73 TP. – RHB Research, Aug 11

Source: Hong Leong Investment Bank Research

Source: Company data, RHB Research

MCE, a Tier-1 supplier of automotive electronics and mechatronics, is poised for a multi-year growth phase driven by its landmark Perodua EV contract, which marks entry into high-value infotainment and ADAS, as well as strategic US wins with Dorman and JVIS that broaden its export footprint. The group is also diversifying into new verticals via non-automotive manufacturing, ADAS mmWave radar production, Chery’s localisation supply chain and the Indian automotive market. We view MCE as a resilient, scalable proxy to Malaysia’s transition toward high-value auto electronics and the global “China + N” supply chain realignment. MCE is a Tier-1 supplier of OEM automotive electronics and mechatronics with key customers Perodua, Proton and Toyota. Its portfolio spans electronics and mechatronics, with new developments in infotainment, meter clusters and ADAS for both EVs and ICE vehicles. MCE operates plants in JB and Klang and is building a high-tech Serendah plant. MCE’s contract win with Perodua mark its first entry into the EV supply chain, securing supply of high-value infotainment and ADAS components, with revenue per vehicle at ~RM3k - 10x its typical value. With Perodua targeting an affordable launch price, we estimate MCE’s annual revenue from this programme could amount to RM39.8–59.7m per annum, or 26-38% of FY24 revenue, making it a powerful earnings catalyst. We initiate coverage on MCE with a BUY rating and TP of RM2.40. – Hong Leong Investment Bank Research, Aug 11

WE believe the at-mean valuation of number forecast operators (NFOs) is fair, reflecting their defensive nature and limited growth catalysts, while offering an attractive 5-7% yield. Among the stocks, we favour Sports Toto (SPTOTO) for its compelling valuation and superior yield. It stands out as a top choice for investors seeking high income stability with limited upside from growth drivers in the sector, making it a strong defensive stock pick. Ticket sales are expected to normalise sequentially following the strong 1Q25 performance, which was boosted by the Lunar New Year and high jackpot run. Beyond the immediate term, our channel checks indicate that illegal NFOs continue to pose strong competition, having gained market share during the COVID-19 pandemic and after the suspension of legal operations in the northern states. The NFOs are currently awaiting a court decision to resume operations there, which would help them regain some lost ground. SPTOTO’s HR Owen is expected to encounter ongoing challenges due to weak economic conditions, high inflation, and elevated interest rates in the UK. However, as SPTOTO mainly relies on its lottery operations to finance dividend payments, the issues at HR Owen are unlikely to materially affect its dividend distributions. Magnum’s 6.3% stake in U Mobile currently has a book value of MYR385.4m. With U Mobile targeting an IPO valuation of MYR10bn, the value of Magnum’s stake could rise to MYR633m - potentially adding an additional 12% upside to our MYR1.29 TP. We remain NEUTRAL on the sector. – RHB Research, Aug 11