25/08/2025

BIZ & FINANCE MONDAY | AUG 25, 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

Rubber market likely to trade cautiously with downward bias KUALA LUMPUR: The Malaysian rubber market is expected to trade range-bound with a downward bias, driven by ongoing market volatility and various global uncertainties. Industry expert Denis Low noted that uncertainty is inevitable as the European Union Deforestation Regulation (EUDR) comes into effect in January 2026, however, much ambiguity still surrounds the implementation of this new rule. “Most rubber farmers in major producing regions are generational farmers working on ancestral land, making it very difficult for them to meet EUDR compliance requirements,” he said. “Moreover, certification under the EUDR can be costly and ambiguous. It must be noted that large-scale rubber plantations are no longer common,” he told Bernama. As a result, Low expects the run-up to the EUDR deadline to generate some volatility and uncertainty, both locally and in the EU market. He added that latex processors may pass the cost of certification onto buyers, but the weak market sentiment in the EU may not support higher prices. “For this week, we expect the rubber market to trade within a narrow range, with a downward tendency,” he added. Meanwhile, Low said the Thai Meteorological Department has forecast that the Southwest monsoon prevailing over the Andaman Sea, Thailand and the Gulf will strengthen, bringing rainfall and isolated heavy showers. Malaysia is also expected to experience isolated thunderstorms or rain in various regions. On a more optimistic note, the Malaysian Rubber Glove Manufacturers Association said the rubber market may find support from China’s economic growth and potential supply disruptions due to weather conditions, especially in Thailand. – Bernama

Ringgit poised to strengthen on Fed rate cut hopes THE ringgit is poised to march stronger this week after the US Federal Reserve chair Jerome Powell hinted at a potential interest rate cut in September. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the USD/MYR may attempt to break the psychological level of 4.20 this week, following Powell’s remark at the Jackson Hole Economic Policy Symposium on Friday. “The US Dollar Index tumbled along with the US Treasury yields as Powell signals that the restrictive monetary policy stance may need to be realigned to support economic growth,”he told Bernama. Hence, investors increased bets on a rate cut at the Federal Open Market Committee’s Sept 16-17 meeting. This week, investors will be monitoring US Conference Board data on consumer confidence, as well as the personal consumption expenditures price index, which is known for capturing inflation or deflation across a wide range of consumer expenses, he said. Meanwhile, on a Friday-to-Friday basis, the ringgit ended the week lower against the greenback, closing at 4.2245/2295 versus 4.2085/2155 previously. The ringgit appreciated vis-a-vis the Japanese yen to 2.8408/8443 from 2.8653/8702 the previous week, it rose versus the euro to 4.8996/9054 from 4.9185/9267 and strengthened against the British pound to 5.6659/6726 from 5.7050/7145. The ringgit also trended firmer against Asean currencies. The local note improved against the Singapore dollar to 3.2763/2805 from 3.2820/2877 at the end of last week, gained versus the Indonesian rupiah to 258.3/258.7 from 260.2/260.8 previously and inched up versus the Thai baht to 12.9387/9592 from 12.9760/13.0032 in the previous week.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.3010 2.7760 3.3360 3.0910 4.9970 2.5090 3.3360 5.7730 5.3490 3.6070 60.2500 68.6200 55.5800 5.0100 0.0273 2.9060 43.3600 1.5400 7.6300 119.0200 115.7600 25.1500 1.4600 46.1000 13.7500 118.3700 N/A

4.1640 2.6640 3.2320 3.0030 4.8340 2.4160 3.2320 5.5890 5.1200 3.3580 57.6900 63.1300 52.8000 4.7000 0.0247 2.8010 39.8800 1.4400 7.1800 112.9900 109.8900 22.7100 1.3400 41.9700 12.1800 112.2000 N/A

4.1540 2.6480 3.2240 2.9910 4.8140 2.4000 3.2240 5.5690 5.1050

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

112.0000 3.1580 62.9300 52.6000 4.5000 0.0197 2.7910 39.6800 1.2400 6.9800 112.7900 109.6900 22.5100 1.1400 41.7700 11.7800 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

UEM Sunrise Bhd Buy. Target price: RM1.28

YTL Power Bhd Buy. Target price: RM4.77

Sime Darby Property Bhd Buy. Target price: RM2.33

AUG 22, 2025: RM4.24

AUG 22, 2025: RM1.67

AUG 22, 2025: RM0.77

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

WE believe the commercialisation of YTL Power’s first artificial intelligence-data centre (AI-DC) will help to seal more future deals despite income from co-location services remaining minimal. YTL PowerSeraya’s earnings moderation should be cushioned by improving Wessex Water post a tariff revision. We see further re rating catalysts if YTLP is able to secure new domestic gas plant and battery storage projects. FY25 core earnings of RM2.7bn (-19% YoY) came in within expectations at 98% and 104% of our and Street’s full-year estimates. 4QFY25 core profit inched up by 1% QoQ to RM636m, backed by stronger PowerSeraya contributions - led by higher pool prices and better margins - as well as a better Wessex Water performance post a tariff hike. This was largely offset by widened losses from YTLP’s telecommunications arm, which resulted from lower project billings. FY25 core earnings were weakened by a 14% YoY drag due to lower PowerSeraya contributions (-29% YoY on lower pool and retail prices). This was partially cushioned by improvements in Wessex Water’s performance following a price revision. PowerSeraya’s earnings normalisation is expected to continue at a lower magnitude given that pool prices have recovered from the recent low in 3QFY25. YTLP has expressed interest in bidding for the competitive bidding programme for new gas generation capacity and Malaysia’s first grid-scale battery projects. Meanwhile, management guided that a portion of the first 20MW AI-DC is ready to be commercialised next month. YTLP will continue to engage with potential clients to expand its AI-DC and could take 9-12 months to build new facilities when necessary. Additionally, we expect Wessex Water’s earnings to improve on the back of higher tariffs. Keep BUY, new RM4.77 TP from RM4.18 – RHB Research, Aug 22

UEM Sunrise’s 2Q25 earnings fell below estimates, but its performance should pick up in 2H - driven by the disposal of some land and non-core assets. The company should be able to meet its full-year RM1.05bn sales target, as 1H25 sales have already reached RM649m. 2H25 should see sales contributions stream in from the Subiaco project in Perth as well as some newly launched projects in late 2Q25. Financially, the recent issuance of RM500m sukuk at attractive rates should help ease financing costs ahead. 2Q25 results review. Revenue improved slightly QoQ, mainly underpinned by billings from The Minh, Residensi AVA, Aspira Hills and Aspira LakeHomes. Compared to its RM133m land sale in 1Q25, 2Q25 land disposal revenue only amounted to RM80m, mainly from the tranches of completed sales for Tapah land. The quarter also saw higher contributions from JV/associates. While net gearing stayed at 0.41x, finance costs came down by 14% QoQ. We highlight that it recently issued RM500m in sukuk at 3.92% and 4.02% rates for 10 and 12-year tenors. 2Q25 sales eased slightly. 2Q25 property sales came up to RM278.7m, vs RM370.6m in 1Q25. Sales in 2Q25 were mainly generated from new launches in the past few quarters, as more recent launches were only released on 30 Jun ie the last day of 2Q25. Of the total sales of RM649.3m for 1H25, the central and southern regions accounted for RM424.4m and RM224.9m. During the quarter, new landed homes were launched at Symphony Hills (GDV: RM143m) and Aspira Hills Phase 2A and 3A (GDV: RM270m). The 97% take-up rate for non-bumiputera lots in Aspira Hills within two days of launch continued to indicate that the Iskandar Malaysia property market remains favourable. Maintain BUY and RM1.28 TP. – RHB Research, Aug 22

SIME Darby Property’s 2Q25 earnings fell below expectations, as some projects are at the initial stage of construction. Property sales were fairly strong, with RM2bn booked in 1H25, ie on track to meet its full-year RM3.6bn target. Looking ahead, SDPR will start developing three more warehousing facilities in Bandar Bukit Raja, as Metrohub 1 and 2 are already 100% and 88% occupied. This should strengthen the company’s long-term recurring income base and expand its asset portfolio for the upcoming REIT listing exercise. 2Q25 results review. As expected, property development revenue improved QoQ, as construction works accelerated after a slow 1Q25. The property investment segment continued to grow, with full-quarter contributions from the warehouse in Bandar Bukit Raja following the completion of the acquisition of the remaining 50% stake, back in March. The performance of the leisure & hospitality segment was boosted by increased banqueting activities, especially during the Aidil Fitri festive season. Meanwhile, net gearing increased to 0.31x from 0.28x in 1Q25, driven by funding requirements to grow income generating investment properties. Just like in 2Q24, a 1.5 sen first DPS was declared. Stronger property sales in 2Q25. 2Q25 property sales amounted to RM1.07bn, vs RM927.5m in 1Q25. 1H25 total sales of RM2bn were mainly contributed by industrial products (RM803m, 40% of total), followed by residential landed (RM506.2m, 25% of total), residential high-rise (RM449m, 22% of total), and commercial products (RM211.6m, 10% of total). Among all the segments, residential landed grew the most QoQ - chiefly due to the strong take-up rate in Elmina Ridge 2. Maintain BUY and RM2.33 TP. – RHB Research, Aug 22