Latest news with #PChem
New Straits Times
30-07-2025
- Business
- New Straits Times
Late buying interest lifts Bursa Malaysia to close at intraday high
KUALA LUMPUR: Bursa Malaysia languished in the red for most of the day but managed to eke out paltry gains to settle at an intraday high on Wednesday due to late buying interest in selected heavyweights led by industrial products and financial services sectors. At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) inched up 0.68 of-a-point, or 0.05 per cent, to close at 1,524.50 from Tuesday's close of 1,523.82. The benchmark index opened 0.28 of-a-point higher at 1,524.10 and hit a low of 1,516.96 during the morning session. However, the broader market was negativeve, with losers outpacing gainers 570 to 377, while 508 counters were unchanged, 1,076 untraded and 89 suspended. Turnover declined to 2.65 billion units worth RM2.07 billion from 3.36 billion shares worth RM2.18 billion yesterday. UOB Kay Hian Wealth Advisors Sdn Bhd's head of investment research Mohd Sedek Jantan said the market barometer traded within a narrow range for most of the day, hovering around 1,522, before a sharp uptick in the final 10 minutes pushed it to close at 1,524.50. He said the financial services counters lagged earlier in the session, pressured by the widening divergence in monetary policy between Bank Negara Malaysia (BNM) and the United States (US) Federal Reserve (Fed). "Earlier this month, BNM cut the Overnight Policy Rate by 25 basis points to 2.75 per cent and the Fed is widely expected to keep its benchmark rate unchanged at 4.33 per cent. "This growing policy gap has amplified the risk of capital outflows from interest rate–sensitive sectors, prompting foreign investors to reduce their positioning in Malaysian financials," he told Bernama. Mohd Sedek also noted that markets are beginning to price in increased volatility, with less than 48 hours remaining before the US tariff negotiation deadline and ahead of the Federal Open Market Committee (FOMC) decision later tonight. Meanwhile, Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng expects investors to gradually re-enter the market, anticipating potential catalysts such as regional policy easing, progress on trade negotiations, and renewed interest in undervalued blue-chip stocks. "We retain our weekly FBM KLCI target at between 1,510 and 1,540," he said. Heavyweights Petronas Chemicals (PChem) rose 28 sen to RM4.07, Public Bank gained eight sen to RM4.29, and Hong Leong Bank was 26 sen higher at RM19.30, while CIMB slipped nine sen to RM6.55 and Maybank lost seven sen to RM9.45. Tenaga Nasional fell four sen to RM13.28 and IHH Healthcare climbed three sen to RM6.63. Of the most active counters, NexG and Zetrix AI were flat at 53 sen and 84.5 sen, respectively, Lotte Chemical Titan advanced four sen to 72 sen, while Tanco slid nine sen to 83.5 sen, and Pharmaniaga erased two sen to 16 sen. Besides PChem, other top gainers were Chin Teck Plantations which garnered 27 sen to RM9.76, Hong Leong Bank rose 26 sen to RM19.30, and Far East Holdings surged 20 sen to RM4. Among the top losers, Nestle fell 40 sen to RM87.40, Fraser and Neave dipped 30 sen to RM28.60, and Allianz Malaysia slid 28 sen to RM17.42.
The Sun
09-05-2025
- Business
- The Sun
CIMB downgrades PChem to Hold, cuts target price to RM3.53
KUALA LUMPUR: CIMB Securities Sdn Bhd has downgraded its recommendation for Petronas Chemicals Group Bhd (PChem) to a 'Hold' from 'Buy'. CIMB Securities also reduced its target price for PChem to RM3.53 from RM4.41, following a 13 to 26 per cent cut in its earnings forecasts for the financial years (FY) 2025 to 2027. In a research note today, the brokerage said the downgrade was driven by an unplanned shutdown at PChem's high-margin Kertih cracker, prolonged downtime at Pengerang Petrochemical Complex (PPC) due to feedstock disruptions from Pengerang Refining Company (PRC), and rising risks linked to potential United States (US) tariffs. 'This led us to lower our sum-of-parts (SOP)-based target price to RM3.53 from RM4.41. We downgrade PChem as global trade uncertainties and persistent structural issues at the PRC could continue to weigh on earnings,' the firm said. CIMB Securities noted that its recent meeting with PChem revealed another unplanned downtime at the Kertih plant, with the first cracker taken offline due to vessel wall wear and tear at one of the units. This marks the second shutdown at Kertih this year, following a 20-day stoppage in January caused by utility disruptions from Petronas Gas. The current issue, ongoing since April, is being resolved, and operations are expected to resume by end-May after approximately 25 days. 'As a result, we anticipate weaker earnings for the olefins and derivatives (O&D) segment in the second quarter (2Q) 2025,' it said. Although overall plant utilisation may remain near 90 per cent, the cost of repairs, lost production from the high-margin cracker, and increased reliance on strategic sourcing are expected to pressure margins and weigh on 2Q 2025 earnings. 'Nonetheless, we expect the O&D segment (excluding PPC) to remain profitable, with adjusted earnings before interest and other finance income (EBITDA), excluding forex impact, of RM100 million in the 2Q 2025, compared to RM80 million in the 1Q 2025,' the firm said. On a positive note, PChem is in discussions with the Department of Occupational Safety and Health to postpone the planned turnaround of its second Kertih cracker from 4Q 2025 to 1Q 2026. If approved, this could enable Kertih to optimise production in 4Q 2025, it said. CIMB Securities estimates that PPC's losses could widen significantly, projecting a group-level loss before interest and other finance income (LBITDA) of RM536.1 million in FY 2025, up from RM320 million in FY 2024. 'Our FY2025 earnings forecast for PChem currently assumes no special feedstock discount, given the uncertain industry outlook and ongoing structural issues at PRC that continue to constrain PPC's profitability. 'That said, we anticipate PPC could secure a special feedstock discount from FY 2026, supported by an expected industry recovery driven by firmer demand, slower capacity additions, and improved pricing dynamics,' the firm said. Although PChem has minimal direct exposure to US tariffs—selling less than two per cent of its volume to the US—CIMB Securities warned of potential indirect impacts on earnings. 'PChem indicated a cautious view on possible indirect effects of broader macroeconomic spillovers from US trade policy, which could further weaken petrochemical demand and exacerbate the ongoing weakness in average selling prices. 'Additionally, such developments may increase input and logistics costs for manufacturers globally, potentially squeezing margins and slowing the pace of recovery across the sector,' it said. Nonetheless, CIMB pointed out several upside risks, including potential feedstock discounts at PPC, recovery in product spreads, and earnings rebound at its European unit, Perstorp. At lunch break today, PChem shares were up three sen to RM3.48.
