26/01/2026

BIZ & FINANCE MONDAY | JAN 26, 2026

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

Malaysian govt bonds post gains except for 10-year MGS KUALA LUMPUR: The Malaysian Government Securities (MGS) and Government Investment Issues (GII) moved broadly higher across the curve, with the exception of the 10-year MGS. Weekly changes ranged from -2.6 to 9.0 basis points (bps). The 10-year MGS decreased 2.6 bps to 3.51%, while the 10-year GII rose 4.0 bps to 3.56%. Kenanga Investment Bank Bhd said the modest decline in the 10-year MGS reflected improving confidence in Malaysia’s near-term macro outlook. The firm said the Q4 2025 advance GDP print of 5.7% surpassed expectations, while a wider than anticipated monthly trade surplus signalled resilient external momentum. “Fiscal consolidation efforts also underpinned sentiment. BNM’s decision to keep the OPR at 2.75% further anchored rate expectations, offering stability for duration positions. “These supportive domestic factors were partially offset by external headwinds. A sharp sell-off in Japan’s government bond (JGBs), triggered by renewed fiscal expansion rhetoric, lifted global term premia, while rising EU–US geopolitical frictions weighed on broader risk sentiment. “As a result, the decline in the 10-Y MGS remained contained, even as shorter and intermediate tenors faced mild upward pressure.” Ahead of the upcoming FOMC meeting, Kenanga noted that the domestic yields are likely to exhibit a modest upward bias as global rates remain sensitive to policy signals and external volatility. That said, upside pressure should remain limited. “A stable OPR, credible fiscal consolidation and resilient macro fundamentals should continue to anchor medium- to long-end yields,” Kenanga said.

THE ringgit is likely to trade higher as investors remain constructive towards the local note, aiming to break the 4.00-level again this week. On Friday, the ringgit broke through the key psychological level of 4.00 against the US dollar, touching an over seven-year high of 3.9992. This also marks the Malaysian currency’s strongest level in more than seven years, which was last seen on June 18, 2018, at 3.9960/9990. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said investors would also shift their focus towards the Federal Open Market Committee (FOMC) meeting on Jan 27-28. “It is likely that the United States Federal Reserve (Fed) would keep the rate steady. But, more important is its latest assessment of the economic condition,” he told Bernama. Meanwhile, Kenanga Investment Bank Bhd expects the ringgit to trade in the 4.04-4.05 range this week, provided the FOMC meeting outcome is hawkish, which would push the US dollar index higher. “Our base case remains two cuts this year, more likely starting in the first half of 2026 rather than concentrated at year-end, as incoming data ahead of the March FOMC should support an earlier move,” it said in a research note. The ringgit strengthened against the Japanese yen to 2.5337/5361 from 2.5637/5670 a week earlier, appreciated versus the euro to 4.6993/7034 from 4.7076/7134 and appreciated vis-a-vis the British pound to 5.4177/4224 from 5.4332/4399 previously. Ringgit likely to trade higher, aiming to breach 4.00 mark

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.1000 2.8130 3.1940 2.9650 4.8110 2.4280 3.1940 5.5270 5.2160 3.4050 59.0300 66.0300 52.9900 4.5600 0.0253 2.6020 42.6200 1.5200 7.0400 113.3800 110.1900 26.2800 1.3900 46.8300 13.7400 112.6300 N/A

3.9520 2.6980 3.0920 2.8800 4.6520 2.3370 3.0920 5.3470 4.9910 3.1810 56.4900 60.7200 50.3200 4.2400 0.0224 2.4810 39.1700 1.3600 6.6200 107.6400 104.6100 23.7200 1.2100 42.6300 12.1600 106.7100 N/A

3.9420 2.6820 3.0840 2.8680 4.6320 2.3210 3.0840 5.3270 4.9760

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

106.5100 2.9810 60.5200 50.1200 4.0400 0.0174 2.4710 38.9700 1.1600 6.4200 107.4400 104.4100 23.5200 1.0100 42.4300 11.7600 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

AirAsia X Bhd Buy. Target price: RM3.35

Kobay Technology Bhd Not rated. Fair value: RM3.33

Kelington Group Bhd Buy. Target price: RM6.10

Jan 23, 2026: RM1.88

Jan 23, 2026: RM5.45

Jan 23, 2026: RM1.84

Source: Hong Leong Investment Bank Research

Source: Bloomberg, RHB Research

Source: Bloomberg, RHB Research

KOBAY Technology is poised for a meaningful earnings turnaround, driven by the repurposing of its under-utilised operations into a high-margin artificial intelligence (AI) server manufacturing business. Demand is supported by accelerating AI server deployment amidst Malaysia’s data centre (DC) expansion. This, coupled with cyclical tailwinds from the recovering semiconductor and resilient aerospace sectors, positions Kobay to return to its prior peak profitability levels. The repurposing of Kobay’s >175,000 sq ft Prai facility into an AI server manufacturing hub has materially improved fixed cost absorption and operating leverage. Following a RM45m investment to retrofit the plant with upgraded electricity infrastructure, assembly floors, and burn-in facilities, the site now supports end-to-end AI server manufacturing, including assembly, aging, and testing. Operations have scaled from two to four assembly lines, with near-full utilisation and a workforce of 500 contract workers. Kobay provides service-only high-level assembly (HLA), without exposure to component procurement or GPU chip costs, allowing it to avoid low-margin, high-revenue pass-through models. Kobay’s AI server manufacturing activities have transitioned from pilot scale to commercial contribution, with revenue recognised from Sep 2025 following initial shipments to its customers, which include China’s largest AI server provider. Order visibility is stable for at least the next 12 months, primarily serving local DC customers, providing near-term earnings visibility. Based on an ascribed 18x P/E on FY27F earnings, we derive a RM3.33 FV. – RHB Research, Jan 23

AAX has completed its restructuring exercise and has emerged as one of the largest Asean-based airline groups with a fleet of around 250 aircrafts. AAX focuses on short- and medium-haul routes across Asia, Australia, and the Middle East, with plans to establish a Bahrain hub to connect to Europe and Africa, while leveraging on its order book of 377 A321 aircrafts to improve cost and drive growth. Industry yields have stabilized amid strong travel demand and capacity constraints. AAX is well positioned to benefit from VM2026, easing jet fuel prices, and a stronger ringgit. Leveraging on its orderbook of 377 next-generation A321 aircraft, the new AAX Group (to be renamed AirAsia Aviation Group - AAG) aims to enhance its cost structure while driving capacity expansion. By 2030, management expects the fleet to grow to around 300 aircraft. AAX is well positioned to be a major beneficiary of Visit Malaysia 2026 (VM2026). Data from Malaysia Airports and AirAsia indicated significantly stronger air travel demand, particularly in the international segment during previous VM campaigns in 1990, 1994, 2007, and 2014. With the largest network connectivity and flight frequencies serving the Malaysia hub, AAX is well placed to capture this incremental demand. In addition, VM2026 is expected to stimulate domestic travel, supported by the RM1,000 in tax relief for local tourism-related spending. Despite a relatively weak balance sheet at the start of FY26, we believe AAX will strengthen its balance sheet materially over FY26–27f, driven by robust earnings and cash flow generation. Initiate with BUY, TP: RM3.35. – Hong Leong Investment Bank Research, Jan 23

WE believe Kelington Group’s share price still has legs, despite a strong run-up in 2025. Its unique position in the upstream/ front-end semiconductor value chain, expanding global reach, and technical capabilities offers scarcity value. A strong finish in 4Q25 is a foregone conclusion, helped by seasonally higher revenues and sustained GPM. We see any share price pullback as a renewed opportunity to accumulate. KGRB’s investment thesis (double-digit earnings growth, record tenderbook, and improving margins) remains intact, with 4Q25 core earnings (its results announcement is slated for 25 Feb) likely to hit RM48-53m (+25-33% YoY) against a low base in 4Q24. In our view, FY26 is shaping up to be another illustrious year, anchored by: i) An outsized tenderbook and orderbook (3Q25: RM4.6bn and RM1.6bn, ii) the focus on higher-yield advanced engineering jobs, iii) new markets, and iv) positive developments on the carbon capture and utilisation (CCU) and bio-gas front, which the market has yet to price in. While there are concerns over the sustainability of its >RM4bn tenderbook (and, hence, order wins), we caution against an inordinate emphasis on the value, as the number is evolving. Sizeable tenders where outcomes are expected in 1H26 include projects in Europe (RM1.5bn) and India (RM1.9bn). Other new markets where KGRB is actively pursuing jobs include Japan and the United States (potential M&A). We see upsized tenders in India, new Singapore tenders, and an expanding domestic tenderbook potentially off-setting softer tenders from Europe. Maintain BUY and RM6.10 TP. – RHB Research, Jan 23