Latest news with #MaybankInvestmentBank
The Star
2 days ago
- Business
- The Star
IPO market expected to improve in 2H25
Maybank Investment Bank regional head for equities capital market Raymond Chooi PETALING JAYA: Industry experts are upbeat that Malaysia's initial public offering (IPO) market will continue its buoyancy into the second half of this financial year (2H25) despite global uncertainties. Maybank Investment Bank regional head for equity capital markets Raymond Chooi told StarBiz he expects the momentum of IPO launches to continue and it would be possible to meet Bursa Malaysia's target of 60 listings for this year. 'The first half of 2025 saw increased volatility and caution with the FBM KLCI posting a decline of 6.7% and average daily trading volume in the market falling to RM2.5bil from RM3bil in 2H24. 'Further de-escalation in trade tensions is expected as there are clearer outcomes of trade negotiations. 'Locally, whilst individuals and businesses are adjusting to the impact of the sales and service tax's (SST) scope expansion, we believe the easier interest rate environment would help cushion any impact as well as improve liquidity that would eventually be positive for the equity market,' Chooi noted. From January to July 2025, there were 37 IPOs on Bursa Malaysia which raised about RM4.2bil, out of which six IPOs were listed on the Main Market, 28 on ACE Market and the remaining three on the LEAP Market. He highlighted that external developments remain a key factor on the country's economic performance. Unless there's a major shock globally, Chooi expects the IPO momentum for the second half to improve compared to the first half as there's still ample domestic liquidity. 'Companies with good growth track record and trajectory and firm growth plans and strategies are expected to continue to pursue their IPO plan in the second half of the year. 'Since March 2025, we have completed three Main Market IPOs during a volatile period and successfully sustained investors' interest throughout the process, he noted. Chooi said based on the latest filings (December 2024 to July 2025), he expects the IPOs in the second half to be primarily in the consumer, industrial, transport and logistics, energy and construction sectors. Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the prevailing trend of IPO in 2025 thus far has been quite commendable. 'Nonetheless, the outlook for the global and domestic economy is likely to be challenging in view of the impending US tariff and geopolitical risks as well as the ongoing fiscal consolidation which would exert cost of doing business higher in the near term,' he noted. He said this could result in prospective companies who wish to go for listing feeling jittery as the equity prices might not get the right premium post listing based on the prevailing trend. 'While the market condition is part of the consideration for the IPO, there are also other factors such as capital structure, ownership goals, corporate readiness, strategic goals and regulatory environment. 'I suppose the IPO listing target of 60 could be achieved,' Mohd Afzanizam said. He added that sectors such as ports, healthcare, consumer and retail, industrial and manufacturing, technology and data centre, real estates and real estate investment trusts (REITS) are the possible ones that would dominate the IPO markets during the second half of the year. Deloitte Malaysia transactions accounting support partner Wong Kar Choon Meanwhile, Deloitte Malaysia transactions accounting support partner Wong Kar Choon said the IPO outlook in the country remains optimistic for the remainder of 2025, with 32 listings recorded as of June 30, 2025, putting Bursa Malaysia on track toward its full year target of 60 listings. 'However, the recent US trade tariffs and geopolitical tension have introduced uncertainty and we foresee that there could be an impact on the IPO market. 'Additionally, companies may delay their IPO plans, especially for export-driven companies that are affected by supply chain disruptions and cost pressures,' he said.
The Star
6 days ago
- Business
- The Star
OPR cut is supportive of economic growth
CGS International Research is maintaining its 2025 consumer price index forecast at 2% y-o-y. PETALING JAYA: The 25 basis points (bps) cut to the overnight policy rate (OPR) to 2.75% on July 9, is growth-supportive rather than inflationary, given the benign inflation environment, according to Maybank Investment Bank (IB) Research. In a report, the research house said with the first half 2025 average inflation rate of 1.4%, its full-year 2025 inflation forecast of 2% implied upside risk to inflation in the second half of the year. 'This is due to the factoring in of the impact of the sales and service tax as well as electricity tariff review (effective since July 1), full compliance in new minimum wage (effective Aug 1, 2025), RON95 petrol subsidy rationalisation in the second half of 2025, and higher foreign labour costs with EPF contributions effective from October. 'The upside to inflation rate in the second half of 2025 may be less than expected following news that the government is delaying the rollout of RON95 petrol subsidy rationalisation to fine-tune the targeted subsidy mechanism,' the research house added. 'Prolonged delay will result in another year of sub 2% inflation rate.' Despite headline inflation coming in at a multi-year low last month, analysts said there are upside risks that might cause the inflation rate to trend higher in 2025. Headline inflation eased further to 1.1% year-on-year (y-o-y) in June, the lowest level since February 2021, from 1.2% in May. However, core inflation, which excluded items with volatile price changes, like fresh food and energy, remained unchanged at 1.8% y-o-y. UOB Global Economics and Markets Research said despite subdued inflation readings year-to-date, it anticipated headline inflation to gradually trend higher from July, ending the year with an average of 1.8%. 'This outlook is supported by potential second-round effects from the expanded SST, despite its limited direct impact, as well as low base effects from the previous year,' it said. The research house said the inflation outlook remained benign over the policy horizon, while downside risks to growth had risen, particularly from potential tariff actions and persistent geopolitical tensions. 'If these risks escalate further, a more accommodative monetary policy stance may be warranted to support domestic growth into 2026, considering that monetary policy typically takes about a year to exert its full impact on the economy. 'As such, we continue to see scope for a further 25 basis points cut in the OPR to 2.5% by end-fourth quarter 2025,' it noted. CGS International Research is maintaining its 2025 consumer price index forecast at 2% y-o-y. On the review of electricity tariffs effective this month, it said the authorities had indicated that domestic consumers are likely to see a reduction in their electricity bill by 5%, on average.
The Star
7 days ago
- Business
- The Star
Corporate 2Q earnings expected to reflect external challenges
PETALING JAYA: Malaysia's upcoming second-quarter (2Q) earnings season is expected to be relatively muted, with overall corporate performance continuing to reflect challenges from external uncertainties, particularly the ongoing US-Malaysia tariff negotiations. While earnings growth may remain soft, the reporting cycle begins against a backdrop of stabilising macroeconomic indicators and fewer forecast revisions compared to the previous quarter. As such, Maybank Investment Bank (MaybankIB) Research believes the worst of the earnings downgrades may now be behind. 'The 2Q25 results season may yet be another unexciting one but at least one with fewer earnings downgrades in our view,' the research house said in its latest strategy note. MaybankIB Research has forecast a modest 2.5% earnings growth for the FBM KLCI in 2025, primarily weighed down by the banking sector. It anticipates a stronger rebound in 2026 with a projected growth of 7.7%. The brokerage's base case target for the FBM KLCI stands at 1,660, pegged to 14.4 times 2026 estimated price-to-earnings ratio (PER), representing -0.5 standard deviation of the 10-year mean, amid continued market volatility and uncertainty over trade policy. 'Our base case assumes further de-escalation in trade tensions and favourable outcome from tariff negotiations,' the report noted. Conversely, in a bearish scenario where earnings growth moderates to 5%, the index could dip to 1,450 based on 13 times PER. Despite a softer external environment, Malaysia's domestic economic fundamentals appear encouraging. The research points to robust consumer activity, a sustained investment cycle, and signs of resilient private demand as cushioning the impact of weaker exports, particularly in May and June. 'The 2Q25 real GDP growth advanced estimate of 4.5% year-on-year, with a rebound quarter-on-quarter from 4.4% in 1Q25, suggests a steady growth momentum and indicates external headwinds due to US tariffs are being mitigated by domestic tailwinds,' it said. Inflation has also cooled to 1.1% in June, while the labour market remains firm with the unemployment rate steady at 3%. MaybankIB Research attributed rising disposable incomes—fuelled by civil servant pay hikes, minimum wage increases, and a surge in Employee Provident Fund contributions—as supportive of its positive stance on the consumer, real estate investment trusts (REITs), and construction sectors. Sector-wise, consumer, construction, healthcare, REITs, and renewable energy remain MaybankIB Research's key overweights, with minimal changes to its top stock picks apart from Solarvest Holdings Bhd , which has outpaced its target price. 'We expect some positive momentum for construction, healthcare, property and, more selectively, the oil and gas and utilities sectors,' the research added. The technology sector may face near-term weakness, but MaybankIB Research noted that most of the necessary earnings downgrades have already been made. 'From our channel checks, we expect most sectors are likely to deliver flattish earnings with few surprises,' it said. Notably, while plantation firms may post weaker quarterly numbers due to lower crude palm oil prices, some could benefit from disposal gains and forex tailwinds. The recent 25-basis-point cut to the overnight policy rate, announced in July, is expected to have a limited impact on second-quarter bank earnings. 'We had already factored this rate cut into our bank forecasts; we stay 'neutral' on banks,' MaybankIB Research stated.
The Star
21-07-2025
- Business
- The Star
KPJ earnings outlook likely to remain resilient
PETALING JAYA: Maybank Investment Bank (IB) Research expects KPJ Healthcare Bhd 's earnings outlook to remain resilient, underpinned by expected volume recovery in the second half of the year, rising case complexity and cost optimisation efforts. It added that the further delay in the diagnosis-related group (DRG) system is positive as it leaves earnings potential uncapped for the near-term. Last year, the Health Ministry said it was considering implementing a DRG system to help manage rising healthcare costs, particularly in private hospitals. The research house viewed KPJ's asset monetisation and lease renewal exercise as a strategic effort to unlock capital and support its 6,000-bed target by 2030. KPJ recently launched a 60-bed hospital in Kuala Selangor as part of its organic expansion, supporting progress towards its 6,000-bed financial year 2030 (FY30) target. 'Alongside five other hospitals under gestation (four are earnings before interest, taxes, depreciation, and amortisation or ebitda positive), this could pose near-term earnings upside,' it said. On July 8, KPJ said it had fulfilled all conditions precedent of the sale and purchase agreements related to its proposed sale and leaseback, as well as lease renewal. The sales and leaseback agreement for the new wings of KPJ Ampang Puteri and KPJ Penang for RM241mil cash. Maybank IB Research said KPJ has historically injected assets into its 34%-owned associate Al-Aqar Healthcare REIT to unlock asset value while retaining operational control via leasebacks. It said apart from the injection of these new hospital wings, the resolution also includes lease renewals on existing leaseback properties with Al-Aqar for KPJ Penang, KPJ Seremban, Taiping Medical Centre, KPJ Healthcare University and KPJ Healthcare College Penang, The research house maintained its FY25 to FY27 ebitda margin forecast of 24% as it leaves earnings estimates unchanged on potential impact of 8% sales and service tax (SST) on leases, pending clarity on possible business-to-business exemption. It has, however, trimmed FY25 to FY27 earnings by 2%, 4% and 4%, respectively. The research house is 'neutral' on the SST expansion of 6% on foreign patients, and 8% on leased assets. 'For the latter, we believe there is a possibility for KPJ to be eligible for exemptions,' it said.
New Straits Times
17-07-2025
- Business
- New Straits Times
Analysts stay upbeat on Malaysia's renewable energy outlook
KUALA LUMPUR: Analysts have stayed positive on Malaysia's renewable energy outlook in the second half of this year, underpinned by a strong orderbook, reported Xinhua. Maybank Investment Bank said in its recent report that it retains a positive view on the country's renewable energy sector, underpinned by strong Corporate Green Power Programme (CGPP) execution, stabilising trend on solar panel prices, and upcoming catalysts from large-scale solar 5+ programme (LSS5+) and LSS6 rollouts. Looking ahead, it noted that orderbook visibility in the sector has improved. This will be driven by solar project commissioning, stable engineering, procurement, construction, and commissioning (EPCC) margins and initial progress on battery energy storage system (BESS) investment. The report also noted that the government is progressing toward LSS5+ and LSS6 rollouts, with requests for proposals (RFPs) expected to be released in the second half. Meanwhile, LSS6 is anticipated to open up two gigawatts (GW) of new solar capacity and may incorporate BESS elements as part of grid firming requirements. "CGPP and LSS5 remain critical growth engines, with most awarded projects targeting to complete by FY2026-FY2027," said the research house. Maybank also highlighted that solar panel prices have remained stable at multi-year lows, with the latest quotes below US$0.10 per watt. This is supportive of the project's internal rate of return and is expected to sustain through the second half due to global oversupply, despite higher demand from Southeast Asia, it added. Meanwhile, Kenanga Research highlighted in its recent report that the EPCC contract value for the sector has now surged to 17.4 billion ringgit (US$4.1 billion). While LSS5+ is entering the award phase, the research house noted that Corporate Renewable Energy Supply Scheme (CRESS) is also back in play as the recent tariff hike hits data centres, triggering a surprise jump in EPCC job flow. Hong Leong Investment Bank Research also anticipates an extended growth phase in EPCC orderbooks due to the coming solar EPCC award cycle driven by LSS5, LSS5+ and LSS6. "Domestic orientation reduces the risk of negative earnings revision due to uncertain external developments," the research house said in its recent report.
