Latest news with #MARCRatings
The Sun
2 days ago
- Business
- The Sun
MARC Ratings: Triple ‘A' with stable outlook for Johor
PETALING JAYA: Malaysian Rating Corporation Bhd (MARC Ratings) has assigned an unsolicited sub-sovereign credit rating of AAA, with a stable outlook, to Johor. The rating reflects the state's resilient and growing economy, consistent fiscal surpluses, low debt levels, and a stable political landscape supporting its long-term development. MARC Ratings noted that Johor plays a key role in Malaysia's economy, contributing RM148.2 billion or 9.5% to the national gross domestic product (GDP) in 2023. This strength is driven by a robust services sector – making up 54% of its GDP – and the country's largest agricultural sector, accounting for nearly 20% of national output. Johor's proximity to Singapore has generated significant spillovers in retail, hospitality, and investment, reinforcing its economic momentum. The upcoming Johor-Singapore Special Economic Zone (JS-SEZ) is expected to accelerate high-value growth by attracting advanced industries. In terms of fiscal management, Johor's debt has remained at just 0.1% of GDP from 2021 to 2023 – one of the lowest in the country – thanks to disciplined financial practices and growing tax revenues. The state has recorded consistent fiscal surpluses over the past decade, with the only deficit occurring in 2021 due to pandemic-related revenue declines, MARC Ratings said. These efforts have allowed Johor to build healthy reserves, rising to RM2.4 billion in 2023 from RM1.8 billion in 2013. At the same time, it has maintained a strong focus on development, with 39.4% of total expenditure allocated to development projects between 2019 and 2023. While Johor's revenue structure is solid, MARC Ratings said, it remains reliant on traditional sources like quit rent and land title premiums. To boost fiscal sustainability, the state has introduced new revenue-enhancing measures for 2025. The consolidated funds-to-expenditure ratio, though slightly reduced to 143.3% (2019–2023) from 174.5% (2014–2018), still signals strong liquidity and financial flexibility. MARC Ratings also highlighted Johor's consistent political stability as a key strength. 'The stable outlook reflects our expectation that Johor will continue its disciplined fiscal practices and maintain healthy surpluses in the medium term,' it said. 'Strong revenue from established sources and robust economic activity will support financial stability. Moving forward, additional revenue growth and efficient development spending will be crucial to preserving Johor's strong credit profile.'
The Sun
6 days ago
- Business
- The Sun
MARC Ratings projects Malaysia's 2025 GDP growth at 4.4%
PETALING JAYA: Malaysian Rating Corporation Bhd (MARC Ratings) forecasts the Malaysian economy to grow by 4.4% in 2025, down from 5.1% in 2024, as external trade uncertainties dampen export momentum. Nonetheless, domestic demand remains resilient, driven by labour market improvements, accommodative policy settings, and tourism recovery. The rating agency also noted that the global economic growth is expected to moderate in the second half of 2025 as trade tensions and geopolitical risks weigh on sentiment. MARC Ratings noted that the US's sweeping tariffs have reignited protectionist concerns, contributing to slower global growth. The US economy contracted by 0.2% in the first quarter of 2025, with the Purchasing Managers' Index for both manufacturing and services falling below the neutral 50 mark in May. Consumer sentiment also weakened, with the University of Michigan Consumer Sentiment Index dropping to 52.2 in May from 74.0 in December 2024. US President Donald Trump on Monday announced new tariff rates ranging from 20% to 40% on 14 countries, effective Aug 1, superseding the initially imposed tariff rates. MARC Ratings said for Malaysia, the US imposed tariffs of 25%, signalling the need for greater reciprocity in future negotiations. 'Over time, US tariffs are anticipated to settle significantly higher than the long-term global average rate of 2.7%, potentially in the high teens,' it said. MARC Ratings also noted that the US outlook remains uncertain, depending on the progress of disinflation, the Fed's policy stance, and clarity surrounding fiscal and trade policy directions. 'In contrast, the eurozone economy expanded by 1.5% in Q1 2025, benefiting from front-loaded trade activities during the US tariff pause. 'Key economies such as Germany also saw gains from increased defence spending and industrial policy shifts,' MARC Rating noted. MARC Ratings said China continues to face weak domestic demand and persistent deflation, with May's Consumer Price Index at -0.1%. 'However, a recent trade deal with the US, alongside ongoing stimulus and a gradual consumption rebound, may help China reach its 'around 5%' growth target.' For Malaysia, MARC Ratings said the wholesale and retail trade index grew 4.8% year-to-date (YTD) through April, up from 3.6% in the same period last year. Construction rose 14.2% in first-quarter 2025, while agriculture rebounded by 0.6%. However, lingering external uncertainties prompted Bank Negara Malaysia (BNM) to cut the Overnight Policy Rate from 3% to 2.75% on Wednesday. MARC Ratings said BNM is expected to retain policy flexibility and respond accordingly to incoming data. Malaysia's inflationary pressures remain contained, with headline inflation easing from 1.7% in January to 1.4% in April. The expanded Sales and Service Tax (SST), effective July 1, is expected to cause only mild price increases, as essential items remain exempt. Meanwhile, lower oil prices – Brent crude is projected to average US$70 per barrel – are expected to cushion inflation. As a result, MARC Ratings has revised its 2025 inflation forecast to 2.3% from 2.6% previously. On bonds, MARC Ratings stated that the Malaysian Government Securities (MGS) experienced strong demand in 1H2025, supported by healthy fundamentals and dovish pivots by major central banks. Cumulative net foreign debt inflows reached RM26.9 billion between January and May, driving MGS yields 15–42 bps lower. 'These factors contributed to a 5.3% YTD appreciation of the ringgit as of mid-June,' it said. MARC Ratings opines that these trends may moderate in the second half of 2025 amid ongoing external uncertainties. Nevertheless, structural reforms under the 13th Malaysia Plan, SST adjustments and anticipated Fed easing could help mitigate downside risks. 'We expect the 10-year MGS yield to anchor around 3.50% and the ringgit to approach RM4.25/USD by year end,' the rating agency said.
The Star
6 days ago
- Business
- The Star
MARC Ratings projects Malaysian economy to grow 4.4% in 2025
KUALA LUMPUR: The Malaysian Rating Corporation Bhd (MARC Ratings) forecasts the Malaysian economy to grow by 4.4 per cent in 2025, down from 5.1 per cent in 2024, as external trade uncertainties dampen export momentum. It said that domestic demand remains resilient, driven by labour market improvements, accommodative policy settings and tourism recovery. "The wholesale and retail trade index grew 4.8 per cent year-to-date (YTD) through April, up from 3.6 per cent in the same period last year,' it said in a statement today. MARC Ratings said construction rose 14.2 per cent in 1Q2025 (4Q2024: 20.7 per cent), while agriculture rebounded by 0.6 per cent (4Q2024: -0.7 per cent). "However, lingering external uncertainties prompted Bank Negara Malaysia (BNM) to cut the Overnight Policy Rate to 2.75 per cent in July from 3.0 per cent previously, and the central bank is expected to retain policy flexibility and respond accordingly to incoming data,' it said. On the global outlook, MARC Ratings said global economic growth is expected to moderate in the second half of this year (2H2025) as trade tensions and geopolitical risks weigh on sentiment. The United States' (US) sweeping tariffs have reignited protectionist concerns, contributing to slower global growth. "The US imposed tariffs of 25 per cent, signalling the need for greater reciprocity in future negotiations. "Over time, US tariffs are anticipated to settle significantly higher than the long-term global average rate of 2.7 per cent, potentially in the high teens,' it added. As for the Malaysian Government Securities (MGS), MARC Ratings said MGS saw strong demand in 1H2025, supported by healthy fundamentals and dovish pivots by major central banks. "Cumulative net foreign debt inflows reached RM26.9 billion between January and May, driving MGS yields 15 to 42 basis points lower. These factors contributed to a 5.3 per cent YTD appreciation of the ringgit as of mid-June. "We opine that these trends may moderate in 2H2025 amid ongoing external uncertainties. Nevertheless, structural reforms under the 13th Malaysia Plan, Sales and Service Tax (SST) adjustments, and anticipated US Federal Reserve's (US Fed) easing could help mitigate downside risks,' it added. The ratings agency also expects the 10-year MGS yield to anchor around 3.50 per cent and the ringgit to approach RM4.25/US dollar by year-end. The ringgit opened slightly lower against the US dollar on Friday, easing to 4.2440/2640 against the greenback from Thursday's close of 4.2410/2505, supported by a slightly firmer US Dollar Index (DXY) and mixed signals from the US Fed. - Bernama
New Straits Times
6 days ago
- Business
- New Straits Times
Malaysia's economy seen slowing to 4.4pct in 2025: MARC Ratings
KUALA LUMPUR: MARC Ratings expects Malaysia's economy to grow by 4.4 per cent in 2025, a moderation from 5.1 per cent in 2024, as external trade uncertainties weigh on export momentum. However, it said domestic demand is likely to remain resilient, supported by improvements in the labour market, accommodative policy settings, and a recovery in tourism. "The wholesale and retail trade index expanded by 4.8 per cent year-to-date (YTD) through April, compared with 3.6 per cent in the same period last year. "Construction activity grew 14.2 per cent in the first quarter of 2025 (1Q25), slowing from 20.7 per cent in the fourth quarter of 2024, while the agriculture sector rebounded by 0.6 per cent after contracting 0.7 per cent in the previous quarter," it said in a statement. MARC Ratings also noted that amid lingering external uncertainties, Bank Negara Malaysia cut the Overnight Policy Rate (OPR) from 3.00 per cent to 2.75 per cent in July. It added that the central bank is expected to maintain policy flexibility and adjust its stance in response to incoming data. Meanwhile, MARC Ratings said the expanded Sales and Service Tax (SST) is expected to lead to only mild price increases, as essential items remain exempt. It said lower oil prices with Brent crude projected to average US$70 per barrel in 2025, down from US$74.58 per barrel in 2024, are expected to help cushion inflationary pressures. As a result, MARC Ratings has revised its 2025 inflation forecast to 2.3 per cent, down from 2.6 per cent previously. The rating agency also noted strong demand for Malaysian Government Securities (MGS) in the first half of 2025, supported by healthy fundamentals and dovish pivots by major central banks. Cumulative net foreign debt inflows totalled RM26.9 billion between January and May, driving MGS yields 15 to 42 basis points lower. "These factors contributed to a 5.3 per cent year-to-date appreciation of the ringgit as of mid-June. "MARC Ratings opines that these trends may moderate in the second half of 2025 amid ongoing external uncertainties. "Nevertheless, structural reforms under the 13th Malaysia Plan, SST adjustments, and anticipated Federal Reserve easing could help mitigate downside risks," it noted. MARC Ratings expects the 10-year MGS yield to anchor around 3.50 per cent and the ringgit to approach RM4.25 against the US dollar by year-end. On the global front, MARC Ratings said global economic growth is expected to moderate in 2H25 as trade tensions and geopolitical risks weigh on sentiment. It added that the US' sweeping tariffs have reignited protectionist concerns, contributing to slower global growth.
New Straits Times
29-04-2025
- Business
- New Straits Times
SP Setia sets up Islamic financing programmes with combined value of RM4bil
KUALA LUMPUR: SP Setia Bhd has established two major Islamic financing programmes with a combined nominal value of RM4 billion. In a filing with Bursa Malaysia, the property developer said it lodged the necessary documents today with the Securities Commission (SC) for the implementation of a sukuk wakalah programme of up to RM3.5 billion and an Islamic commercial papers (ICP) programme of up to RM500 million. SP Setia also announced the establishment of a Sustainability Financing Framework to provide transparency and disclosure to the investors and stakeholders on its undertakings to issue or raise instruments in a "use of proceeds" -- i.e. green, social, and/or sustainability -- format. The sukuk wakalah programme allows for the issuance of both senior Islamic medium term notes (senior sukuk wakalah) and subordinated perpetual Islamic notes (perpetual sukuk wakalah). The tenure of the programme will be perpetual unless cancelled, and the first issuance will be made within 90 business days from today, it said. MARC Ratings has given the senior sukuk wakalah and perpetual sukuk wakalah preliminary ratings of AAIS and A+IS, respectively. Meanwhile, the ICP programme will have a tenure of seven years, and individual ICP issuances will range from one to 12 months in tenure. The first issuance will also be made within 90 business days, SP Setia said. It said the programme has received a top-tier short-term preliminary rating of MARC-1IS from MARC Ratings. The company said that under the Sustainability Financing Framework, it will have the flexibility to issue sustainability sukuk wakalah and sustainability ICPs in accordance with a range of globally recognised standards. These include the Sustainable and Responsible Investment (SRI) Sukuk Framework by the SC; the ASEAN Green, Social, and Sustainability Bond Standards; and the principles established by the International Capital Market Association (ICMA), among others. This move reflects SP Setia's broader commitment to environmental, social, and governance (ESG) practices and its intention to align future financing activities with sustainable development goals. The company said that proceeds from both programmes, excluding sustainability issuances, will be channelled toward shariah-compliant purposes, including working capital, refinancing of existing borrowings, general corporate needs, capital expenditure, project development, and related operational costs. The proceeds raised from its sustainability sukuk wakalah and sustainability ICP will be used to finance or refinance eligible green and socially responsible initiatives, as outlined in SP Setia's Sustainability Financing Framework and/or the applicable sustainability guidelines or frameworks. HSBC Amanah Malaysia Bhd and Maybank Investment Bank Bhd are the joint sustainability structuring coordinators for SP Setia's Sustainability Financing Framework.
