06/10/2025

BIZ & FINANCE MONDAY | OCT 6, 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

Soft rubber market expected on slowing demand KUALA LUMPUR: The Malaysian rubber market is expected to trade sideways this week due to slowing demand for commodities including rubber, said industry expert Denis Low. He said demand and prices are likely to soften in the week. “We see the market as soft and expect demand to come down quite significantly. Prices may move lower but not substantially, as weather conditions will act as a counterweight,” he told Bernama. Citing the Thai Meteorological Department, he said the agency has forecast scattered rain, strong winds and rough seas due to shifting monsoon patterns and a nearby tropical storm, while Malaysia’s Meteorological Department has issued thunderstorm warnings for several states. He added that crude oil prices and the volatile US dollar may also affect demand and pricing. “Such acute volatility represents uncertainties and may warrant both caution and fear. Thus, we may see a more measured approach to trading this commodity,” he said. Meanwhile, the Malaysian Rubber Glove Manufacturers Association said the rubber market may also be impacted by slowing US economic growth following the government shutdown. “The International Monetary Fund also sees mixed views on inflation amid tariff impacts. The rubber market may ease over supply concerns due to adverse weather conditions in top producing nations,” it said. On a week-to-week basis, the Malaysian Rubber Board’s reference price for Standard Malaysian Rubber 20 (SMR 20) fell by 12 sen to 731.50 sen per kilogramme, while latex-in-bulk also slipped 12 sen to 570.50 sen per kg.

Ringgit to trade in narrow range ahead of Budget 2026 THE ringgit is expected to trade within the range of RM4.20 to RM4.22 against the US dollar this week as traders tread cautiously amid the US government shutdown and ahead of Malaysia’s Budget 2026. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the tabling of Budget 2026 on Friday will be closely watched, especially on the total allocation, the country’s gross domestic product (GDP) forecast and the fiscal deficit target. “In the past three years, the government has (embarked on) a fiscal consolidation exercise involving new taxes such as the low value goods tax and capital gains tax, among others, as well as subsidy rationalisation. “It should be positive for the ringgit as the government has been consistent in its financial discipline, which can be deemed as credit-positive,“ he told Bernama. On a weekly basis, the ringgit strengthened against the greenback, closing at 4.2055/2125 versus 4.2200/2250 previously. However, the local note weakened against a basket of major currencies. It depreciated against the Japanese yen to 2.8537/8586 from 2.8171/8206, dropped versus the euro to 4.9360/9442 from 4.9281/9340, and slid against the British pound to 5.6577/6671 from 5.6345/6412. The ringgit traded mixed against its Asean peers, rising against the Singapore dollar to 3.2621/2678 from 3.2630/2671, and improving against the Thai baht to 12.9807/13.0084 from 13.0587/1069. However, it eased against the Philippine peso to 7.26/7.28 from 7.25/7.27 and declined versus the Indonesian rupiah to 253.9/254.4 from 252.1/252.5 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2830 2.8370 3.3170 3.0600 5.0170 2.4970 3.3170 5.7540 5.3960

4.1370 2.7230 3.2140 2.9750 4.8550 2.4050 3.2140 5.5700 5.1660

4.1270 2.7070 3.2060 2.9630 4.8350 2.3890 3.2060 5.5500 5.1510

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

117.7400

111.6200

111.4200 3.1380 63.1800 52.5300 4.4000 0.0191 2.7960 40.2300 1.2300 6.8300 112.3400 109.1800 22.9300 1.1300 42.4900 11.7900 N/A N/A

3.5850

3.3380

N/A

N/A

68.8800 55.5000 4.9000 0.0267 2.9110 43.9600 1.5300 7.4700 118.5500 115.2200 25.6100 1.4500 46.8700 13.7500 N/A

63.3800 52.7300 4.6000 0.0241 2.8060 40.4300 1.4300 7.0300 112.5400 109.3800 23.1300 1.3300 42.6900 12.1900 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

VS Industry Bhd Buy. Target price: RM0.71

Gaming – NFO Neutral

Tenaga Nasional Bhd Buy. Target price: RM15.80

Oct 3, 2025: RM13.28

Oct 3, 2025: RM0.57

Source: Tenaga, TA Research

WE recently hosted a meeting with Tenaga Nasional’s Nuclear Taskforce, which was represented by Dr Mohd Syukri Yahya (TNB Nuclear Taskforce Member/Director of Nuclear Energy Institute UNITEN), accompanied by TENAGA’s Investor Relations team. Broadly, TENAGA sees imminent inclusion of nuclear into the energy mix with the possibility of the country commissioning its first nuclear power plant within the next 6 years (by 2031). Over 3GW of nuclear capacity is targeted to come online by 2034 and TENAGA is positioning itself as a candidate to serve as Developer-Owner-Operator of Malaysia’s nuclear projects. Overall, the potential transition from coal to nuclear energy creates capacity replenishment opportunities for TENAGA alongside generation portfolio decarbonisation. TENAGA sees nuclear as a critical component of Malaysia’s energy transition, and views that the inclusion of nuclear into the energy mix is no longer a question of ‘if’ but ‘when’ and ‘how’. TENAGA’s view is underpinned by the emergence of nuclear power under the 13th Malaysia Plan (13MP) as a strategic pathway to low carbon energy and to meet rising demand, being a viable replacement for coal and gas as baseload generation while complementing renewables and emitting low GHG emissions. TENAGA views that electrification of transport, industry and population growth and the growth of data centres will sharply increase electricity demand which in turn, adds pressure to the energy trilemma in balancing energy security, affordability and sustainability. Compounding the situation, Malaysia’s entire coal capacity of 12GW – which is currently the country’s main source of energy accounting for up to 61% of generation mix - will be retired by 2044. This will increase the country’s reliance on gas to meet demand and manage RE intermittence, which in turn, will increase Malaysia’s dependence on imported fuels. Maintain BUY at DCF-based TP of RM15.80. – TA Research, Oct 3

Source: Bloomberg, RHB Research

VS Industry’s management reaffirmed its earnings recovery at its results briefing. Amidst tariff-related disruptions, VSI has managed to maintain key customers’ orders, and secured new ones to bolster its orderbook. Our positive outlook is underpinned by market share gains with Customer X, the turnaround of its loss-making operations, and new orders from opportunities that emerged from US-China trade war diversions. With the majority of its key customers adopting a cautious stance - in view of the demand challenges and uncertainties from US reciprocal tariffs - VSI is focusing on retaining or garnering more orders from existing key customers by accommodating their cost-down requests. Whilst this could translate to lower profitability in the near term, management believes this is the best option for the company over the longer run. After a loss-making 4QFY25, management is expecting a swift turnaround in 1QFY26F as sales volumes have picked up post final tariff decision on 1 Aug. This would be driven by seasonal year-end demand and new product launches. VSI has commenced operating four new production lines for Customer X, and these are estimated to generate additional sales of MYR800m in FY26 while its coffee brewer customer and US-based customer have also launched two new models. In addition, management shared that it has secured a new customer - for which it will start production by end-2025 - which is expected to RM300m pa in sales, as a start. The abovementioned new product launches should translate to higher capacity offtake and reduced losses (FY25:RM46m) for its 60%-owned subsidiary, HT Press Work. . Maintain BUY, TP drops to RM0.71. – RHB Research, Oct 3

Source: Company data, RHB Research

OF the two companies under our coverage that reported results between April and June, one was in line while the other exceeded our expectations. Magnum’s (MAG) results were ahead of forecasts, while Sports Toto’s performance met expectations. MAG’s better earnings stemmed from lower prize payouts and a substantial saving in interest expenses. We expect 2H25 to remain challenging, with trading conditions weighed down by persistent illegal lottery activities that continue to erode market share from legal operators. Lottery game sales per draw for both SPTOTO (RM16-18m) and MAG (RM13-14m) have normalised this year, with the 3Q25 surge above RM20m for the former happening on the back of extraordinary jackpot prize rollovers that temporarily boosted player participation. Meanwhile, the sector’s earnings momentum should remain highly sensitive to the luck factor and any potential government policy shifts on enforcement against illegal NFOs. SPTOTO’s gaming sales are anticipated to improve in the coming quarter, supported by the recent RM78m accumulated Supreme Toto 6/58 Jackpot pool (won on Aug 20). Meanwhile, HR Owen sales should also improve slightly, with the commencement of the September car plate campaign in the UK. MAG’s 6.3% stake in U Mobile currently has a book value of RM385.4m. With U Mobile targeting an IPO valuation of RM10bn, the value of MAG’s stake could rise to RM633m. Still NEUTRAL on the number forecast operators (NFOs). Top Pick: Sports Toto. – RHB Research, Oct 3