04/02/2026

BIZ & FINANCE WEDNESDAY | FEB 4, 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

CGSI expects M’sian bank loan growth to be stable this year KUALA LUMPUR: CGS International Securities (CGSI) expects Malaysian banks’ loan growth to be stable in 2026, with a projected growth rate of between 4.5% and 5.5% on the back of its GDP growth forecast of 4.6% in 2026. In a research note, it estimated expansion of 5-5.5% for household loans and 4-5% for business loans. “Banks’ loan growth of 4.8% for 2025 was below the expansion of 5.5% in 2024. We are not overly concerned about the slower loan growth in 2025 as this is in line with normalised growth of circa 5% in our view,” it said. It also projects a stable gross impaired loan (GIL) ratio at 1.3 1.4% for banks in 2026 following the banking industry’s GIL ratio falling 7 basis points in 2025 to 1.37% at end-December 2025. Meanwhile, taking its cue from the large RM1.56 billion drop in total provision for the banking industry in the fourth quarter of 2025 (Q4’25), CGSI thinks banks’ loan loss provisioning (LLP) likely declined quarter-on- quarter to RM800-RM900 million in Q4’25 (inclusive of provision for financial investments) from the level of RM960 million in Q3’25. “However, this is still higher than the RM771.1 million recorded in Q4’24 (and hence, a year-on-year increase in Q4’25),” it said. CGSI retains its Overweight stance on Malaysian banks, premised on potential re-rating catalysts of write-backs in management overlay, improvement in net interest margin in 2026 forecast and expectations for increases in the dividend payout ratios for most banks. “Potential downside risks are material deterioration in loan growth and asset quality. Our top pick for the sector is Maybank,” it added. – Bernama

THE ringgit rebounded yesterday, snapping a two-day losing streak as it strengthened against the US dollar, other major currencies and Asean peers, buoyed by optimism over Malaysia’s economic growth prospects. At 6pm, the ringgit appreciated to 3.9295/9360 against the US dollar, up from 3.9440/9500 at Friday’s close. On Monday, S&P Global reported that Malaysia’s headline manufacturing purchasing managers’index (PMI) climbed to a 20 month high of 50.2 in January 2026, up from 50.1 in December 2025, marking the third consecutive month of improvement in the manufacturing sector’s health. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the PMI increase suggests businesses have been benefitting from lower input costs, supported by the stronger ringgit. “The persistent appreciation of ringgit reflects confidence that the Malaysian economy would be able to record respectable growth this year. “Thus, the traders and investors remain constructive on ringgit today, with the currency gaining 0.41%,” he told Bernama. At the close, the ringgit traded higher against other major currencies, it gained versus the Japanese yen to 2.5210/5253 from 2.5562/5603, appreciated vis-à-vis the British pound to 5.3704/3793 from 5.4163/4245 and climbed against the euro to 4.6341/6417 from 4.6957/7029 at Friday’s close. The local note also traded higher against its Asean peers. It strengthened vis-à-vis the Singapore dollar to 3.0919/0973 from 3.1077/1127, and advanced versus the Thai baht to 12.4584/4845 from 12.5250/5544. Ringgit snaps two-day losing streak on growth optimism

Exchange Rates

FOREIGN CURRENCY

SELLING TT/OD

BUYING TT

BUYING OD

1 US Dollar

4.0170 2.8050 3.1530 2.9280 4.7340 2.4170 3.1530 5.4850 5.1800

3.8710 2.6920 3.0530 2.8450 4.5800 2.3280 3.0530 5.3090 4.9580

3.8610 2.6760 3.0450 2.8330 4.5600 2.3120 3.0450 5.2890 4.9430

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

110.3100 3.3360 58.0900 64.9800 51.8100 4.5300 0.0250 2.5990 13.7000 42.4400 1.4900 6.9000 111.0700 107.9400 25.8600 1.3600 46.1700 13.2700

104.5600 3.1160 55.6200 59.7800 49.2200

104.3600 2.9160 55.6200 59.5800 49.0200

4.2100 0.0221 2.4780

4.0100 0.0171 2.4680

N/A

N/A

38.9500 1.3300 6.5000 105.4400 102.4700 23.3500 1.1900 42.0300 11.7700

38.7500 1.1300 6.3000 105.2400 102.2700 23.1500 0.9900 41.8300 11.3700

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

Oil & Gas Neutral

Economy PMI: A Promising Start to the Year

Banks Overweight

Source: PublicInvest Research

Source: S%P Global, TA Research

Source: RHB, BNM

THE slight uptick in the headline index was driven by a renewed increase in manufacturing output in January. Notably, the seasonally adjusted production index returned to expansion territory for the first time in five months, signalling a tentative recovery in factory activity. Although the improvement remained modest, the pace of growth was the strongest recorded since July 2022, suggesting that output conditions may be gradually gaining traction after an extended period of softness. Following a slight moderation in the previous month, demand conditions stabilised in January. Anecdotal evidence suggests that while overall demand remained subdued, there were emerging signs of improvement at the start of the year. Encouragingly, new export orders rose for the first time in five months, recording the fastest pace of expansion since July 2024, pointing to a tentative pickup in external demand and a more supportive outlook for Malaysia’s manufacturing sector. In line with higher production requirements, manufacturers increased their purchasing activity modestly in January, marking a return to growth after a brief pause in the previous month. Notably, the latest upturn was the most pronounced in 45 months, indicating a renewed improvement in input demand as firms gradually adjust to firmer output conditions. The uptick in purchasing activity partly helped soften the ongoing downturn in holdings of pre-production inventories. The rate of decrease eased further and was only marginal. Holdings of finished items were also depleted at a softer pace. – TA Research, Feb 3

DIRECT impacts were most evident across Hook-Up and Commissioning (HUC), Modification, Construction and Maintenance (MCM), and Offshore Support Vessel (OSV) segments. HUC and MCM activities were the hardest hit amid sector challenges, underperforming expectations by 4.55m man hours and 2.17m man-hours, respectively in 2025. Reflecting the softer activity outlook, HUC and MCM activity assumptions for 2026–2027 have also been revised down by 2.71m man-hours and 0.47m man-hours respectively. Similarly, weaker offshore activity reduced OSV demand, with actual vessel requirements in 2025 falling short by around 30 vessels. Looking ahead, OSV requirements for 2026–2027 have been further revised lower by 118 vessels, in line with the more subdued upstream activity outlook. However, on positive note, the outlook for well services has improved meaningfully, with the addition of 18 development wells, 14 appraisal wells and 43 plug and abandonment (P&A) wells scheduled for 2026–2027. Activity outlook supports ecosystem stability, downside risks remain. In our view, the PAO adopts a conservative stance amid near-term headwinds from softer oil prices and domestic regulatory uncertainties. The internal reorganisation undertaken by Petronas in 2025 further underscores deeper structural challenges relative to previous downturns in 2016 and 2020. We expect any scaling back of Petronas’ capital expenditure to be structural and gradual on a year-to-year basis, rather than abrupt, to mitigate immediate shocks while sustaining the broader industry ecosystem. – PublicInvest Research, Feb 3

SYSTEM loans moderated to 4.8% YoY (+0.4% MoM) in Dec 2025, down from +5.2% YoY in Nov 2025 but in line with our 4.5-5% estimate for last year. Household loans saw steady YoY growth of 5.3% YoY (+0.5% MoM) led by auto loans (+6.8% YoY, +0.6% MoM) and residential mortgages (+5.9% YoY, +0.4% MoM). Non-household loan growth, though, slipped to +4.1% YoY (+0.3% MoM) in Dec 2025 (Nov 2025: +5% YoY, +0.5% MoM) – possibly on higher funds raised via capital markets. Within the business segment, growth was led by sectors such as utilities (+28.5% YoY, +2.9% MoM), transport, storage & communications (+9.1% YoY, +1.8% MoM), construction (+6.3% YoY, +2.7% MoM), as well as finance, insurance, and business activities (+6.3% YoY, -1% MoM). Looking ahead to 2026, we believe that, with the build-up in non-household loan approvals, coupled with delays in drawdowns, we expect system loan growth to pick up pace to 5-5.5%. Strong business loan pipeline to help support 2026 loan growth. Full-year loan applications and approvals rose by 4.6% and 4.1% YoY. Non-household loan applications were up 8% YoY while approvals rose 6%. Meanwhile, household loan applications and approvals grew by 2% YoY. As mentioned above, we believe the delay in loan disbursements – especially for the non-household segment – was just a matter of timing and should translate to stronger loan growth this year. Deposits picked up pace but remained a laggard, growing 3.4% YoY (+1.4% MoM), as compared to +2.7% YoY (flat MoM) in Nov 2025. – RHB Research, Feb 3