13/10/2025

BIZ & FINANCE MONDAY | OCT 13, 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

Salam to enhance internet connectivity, data transmission KULAI: The development of the Madani Submarine Cable Connection (Salam), with an allocation of RM2 billion under Budget 2026, is set to play a pivotal role in ensuring seamless internet connectivity and efficient data transmission throughout the country. Deputy Communications Minister Teo Nie Ching said yesterday the implementation of the project represents a crucial step towards strengthening Malaysia’s digital infrastructure, in line with the government’s commitment to building a resilient and inclusive digital ecosystem under the Malaysia Madani framework. She said the initiative also aims to accommodate the capacity limitations of the existing 1Malaysia People’s Cable System (SCREAM), which has been in operation for many years. “SCREAM has been established for a long time, and its capacity is now reaching its limits. Therefore, there is an urgent need for us to build a new submarine cable network,” she said. She added that the demand for data transmission continues to grow rapidly, especially with the expansion of artificial intelligence technologies and increasing reliance on digital platforms. “The volume of data being transmitted via the internet today is extremely large, and it continues to rise sharply in this era of AI,” she told media after officiating the fish release programme at Sungai Pontian Besar here. The construction of the 3,190km submarine cable will be undertaken by the Malaysian Communications and Multimedia Commission. The undersea route will stretch from Sedili in Johor to Kuching and Sibu in Sarawak, before extending to Tuaran, Kudat, Pulau Banggi, Sandakan and Tawau in Sabah. – Bernama Hong Leong Financial Group Bhd Buy. Target price: RM21.70

Ringgit likely to trade within stable range against US dollar THE ringgit is anticipated to trade within a stable range against the US dollar this week, as external greenback strength is moderated by Malaysia’s improving fiscal outlook following Friday’s Budget 2026 announcement. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said that while the greenback remains supported by safe-haven flows and lingering political uncertainty in the United States, its rally appears to be nearing exhaustion as markets anticipate a potential Federal Reserve rate cut by late October. Domestically, he noted that Malaysia’s credible fiscal trajectory, anchored by a 3.5% deficit target, disciplined spending, and the strategic mobilisation of government-linked investment company balance sheets, continues to underpin investor confidence. “In the medium term, the ringgit is expected to strengthen gradually as the fiscal deficit narrows and Malaysia’s policy credibility gains further traction. Overall, the USD/MYR is likely to consolidate within a narrow band, with sentiment broadly steady barring major surprises in US inflation data or global risk sentiment,” Mohd Sedek told Bernama. On a weekly basis, the ringgit weakened against the greenback, closing at 4.2200/2260 versus 4.2055/2125 previously. However, the local note appreciated against the Japanese yen to 2.7618/7659 from 2.8537/8586, increased versus the euro to 4.8838/8907 from 4.9360/9442, and rose against the British pound to 5.6084/6164 from 5.6577/6671. The ringgit traded mostly firmer against its Asean peers, except versus the Indonesian rupiah to 254.6/255.1 from 253.9/254.4 previously.

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.2950 2.8270 3.3010 3.0570 4.9620 2.4730 3.3010 5.7090 5.3500 3.5790 60.5300 68.1300 55.6600 4.9100 0.0268 2.8100 43.6900 1.5500 7.4500 118.8600 115.5000 25.8300 1.4500 46.3600 13.6600 118.0700 N/A

4.1470 2.7120 3.1960 2.9700 4.7990 2.3810 3.1960 5.5230 5.1200 3.3550 57.9400 62.6500 52.8600 4.6000 0.0242 2.7060 40.1700 1.4400 7.0000 112.8400 109.6500 23.3300 1.3400 42.2000 12.1000 111.8800 N/A

4.1370 2.6960 3.1880 2.9580 4.7790 2.3650 3.1880 5.5030 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

111.6800 3.1550 62.4500 52.6600 4.4000 0.0192 2.6960 39.9700 1.2400 6.8000 112.6400 109.4500 23.1300 1.1400 42.0000 11.7000 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

CIMB Group Bhd Hold. Target price: RM7.60

Agrofood sector Building Malaysia’s food security

Oct 10, 2025: RM17.02

Oct 10, 2025: RM7.50

Source: Agriculture and Food Security Ministry, RHB Research

Source: FactSet, Maybank Investment Bank

Source: FactSet, Maybank Investment Bank

WE have revisited CIMB’s ESG disclosures and assigned an ESG score of 71 (out of 100), which is comfortably above average (average ESG rating = 50), and one of the highest on our ESG scoring matrix. CIMB’s strong sustainability focus is reflected in its top quartile status in S&P’s Global Corporate Sustainability Assessment. CIMB’s ESG rating of 71 is higher than its score of 69 in 2024, and it is a comfortable position. Where it could have fared better was in terms of its financed emissions, which was 16% higher YoY. Positively, energy, water and petrol consumption was relatively stable YoY. Moreover, its attrition rate declined further to 13% in 2024 from 13.8% in 2023. In 2024, CIMB was the first Malaysian bank to complete its 2030 decarbonisation target setting for high-emitting sectors. With the addition of two new targets i.e. a 16% reduction in Financed Emissions Lending Intensity (FELI) for oil & gas and a 34% decrease in operational emissions intensity for commercial real estate by 2030, the group now has interim targets across 6 key sectors: thermal coal, cement, power, palm oil, oil & gas, and commercial real estate. These 6 sectors represent 60% of the group’s financed emissions and 47% of its total portfolio exposure. For FY25, management targets a) loan growth of 5-7% (1H25: +3.6% constant currency basis; MIBG: 3.5%), b) NIM compression of 5-8bps (1H25: -5bps; MIBG: -7bps), c) cost/income ratio (CIR) <46.7% (1H25: 46.2%; MIBG: 47.3%), d) credit cost of 25-35bps (1H25: 29bps; MIBG: 33bps) and e) ROE of 11-11.5% (1H25: 11.1%; MIBG: 10.9%). Our TP of RM7.60 is maintained, as is our HOLD call. – Maybank Investment Bank, Oct 10

GLOBAL food security is vitally important in light of the seven mega trends of rising and ageing population, urbanisation, climate change, resource scarcity, geopolitical tensions, globalised diets and food inefficiencies. Malaysia, being a net importer of agrofood, is particularly vulnerable, and urgent reform must be made to attract younger farmers, improve profitability via technology and government support. The Malaysian agrofood sector exhibits a dual reality: Resilience in growth juxtaposed with a structural dependency on imports. Economically, the sector is robust, with a GDP growth of 5.1% YoY and value-added agrofood products increasing by 4.2% YoY in 2024. However, Malaysia is a net food importer – with imports of agrofood rising by 14% vs exports of 11.5% during the same year – coming from imports of rice and wheat, and inputs like seeds, fertiliser and even machinery. To secure sustainable growth for agrofoods in Malaysia, a strategic shift towards diversification via intercropping and agroforestry is essential, as this approach not only enhances soil health but generates additional income streams. This would attract younger farmers. Concurrently, governments must collaborate with other Asean countries and provide robust support through improved extension services, targeted subsidies, and the development of adequate infrastructure to assist smallholders to plant, manage, and efficiently monetise crops. Ensuring fair pricing is equally critical to securing a living income for farmers and strengthening household food security. Our Top Picks to benefit from these changes are Farm Price, Guan Chong, IOI Corp, Leong Hup International, and SD Guthrie. – RHB Research, Oct 10

WE have revisited HLFG’s ESG disclosures and have assigned an ESG score of 71 (out of 100), which is marginally higher than the score of 68 that we assigned previously. Hong Leong Bank, which contributes to about 90% of HLFG’s group earnings, scores a 75. Where HLFG has scored particularly well is in its cumulative Scope emissions, which declined 6.7% YoY while its GHG intensity was 4.9% lower YoY. Energy and water consumption also declined. As a financial holding company, with a 65.5% stake in HLBK, 100% in HLA Holdings and a 73.7% stake in HL Capital, HLFG is essentially a financial supermarket. Nevertheless, that it derives about 90% of its earnings from HLBK does imply that the onus for ESG compliance lies predominantly with the commercial banking group. Positively, HLBK’s ESG score of 75, as per our ESG scoring matrix, is higher than its score of 71 in FY24, and is the highest among banks in our coverage. Our Sum-Of-Parts (SOP) TP of RM21.70 is unchanged. We maintain our TP of RM22.80 for HLBK (CY25 PBV: 1.2x. COE: 10.3%. R0E: 11.2%, LT growth: 4%). We have applied a P/EV of 1x to HL Assurance’s Embedded Value (EV) of RM4.4b end-Jun 2025. We value MSIG at a historical PBV of 1.4x, in line with recent M&A valuations. Our holding company discount is 30%, to reflect the fact that ~90% of group earnings is derived from HL Bank, which is also a separately listed entity. BUY on HLFG maintained with RM21.70 TP. – Maybank Investment Bank, Oct 10