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New Straits Times
01-05-2025
- Business
- New Straits Times
Bursa maintains FY25 targets, despite market headwinds
KUALA LUMPUR: Bursa Malaysia Bhd has reaffirmed its financial year 2025 (FY25) key performance indicators (KPIs), maintaining its pre-tax profit target of RM369 million to RM408 million and aiming for 60 new listings with a combined market capitalisation of RM40.2 billion, despite facing ongoing market headwinds. CIMB Securities reported that Bursa's management shared these updates during a recent analyst briefing. However, the research house noted that a review of these KPIs could take place, with any revisions likely to be announced in the second quarter of 2025 (2Q25). Adopting a more cautious approach, Bursa has also confirmed plans to reduce its annual capital expenditure (capex) from the earlier range of RM50 million–RM60 million, as it prioritises key investments and considers deferring non-critical initiatives amid an increasingly challenging external environment. CIMB said the regulator is actively managing operating expenses to offset softer revenue performance, with particular focus on marketing, professional fees, development spending, and variable staff costs. In the first quarter of 2025 (1Q25), Bursa's operating expenses rose 6.7 per cent year-on-year (YoY) but fell 7.2 per cent quarter-on-quarter (QoQ), resulting in a cost-to-income (CTI) ratio of 50.4 per cent—higher than 46.5 per cent in 1Q24 but lower than 53.8 per cent in 4Q24. Bursa aims to bring its CTI ratio back below 50 per cent through continued cost containment efforts. Following adjustments to its forecasts, CIMB now expects Bursa's FY25 earnings per share (EPS) to decline by 14.5 per cent YoY, with modest growth of 0.5 per cent and 0.8 per cent YoY anticipated in FY26 and FY27, respectively. CIMB reiterated a 'Hold' call on Bursa Malaysia, lowering its discounted cash flow (DCF)-based target price to RM7.40 (from RM8.15), reflecting a forecast FY25 price-to-earnings (P/E) multiple of 22.6 times. Bursa is currently trading at an FY25F P/E of 23.2 times, which is one standard deviation above its 10-year historical average of 18.1 times. "We view Bursa as fairly valued at its current price level, supported by a dividend yield of 4.1 per cent," CIMB said. For 1Q25, Bursa reported a 10 per cent YoY decline in net profit to RM67.5 million, down 2 per cent QoQ, missing analysts' expectations. The weaker earnings were mainly due to a 12.2 per cent YoY (5.5 per cent QoQ) decline in securities trading revenue, as the securities average daily value (ADV) dropped 11.9 per cent YoY and 5.3 per cent QoQ to RM2.8 billion. However, revenue from derivatives trading rose 13.7 per cent YoY (down 12.2 per cent QoQ) on the back of a 21.3 per cent YoY increase in average daily contracts (ADC) to 102,184. Other trading revenues, including contributions from Bursa Suq Al-Sila', Bursa Gold Dinar, and BR Capital, rose 24.5 per cent YoY (up 12.1 per cent QoQ). While the results slightly exceeded CIMB's earlier projections—helped by stronger-than-expected conference, exhibition, and other income—they still fell below expectations, as a weaker 2Q25 net profit is anticipated due to cautious market sentiment following US tariff announcements on April 2. No dividend was declared for 1Q25, in line with expectations, CIMB said. CIMB has also revised its ADV forecasts downward to RM2.7 billion for FY25 (from RM3.2 billion previously) and to RM2.8 billion and RM2.9 billion for FY26–FY27 (previously RM3.2 billion and RM3.3 billion). The revisions reflect expectations of continued weak trading activity amid global trade tensions and evolving US tariff policies, which are expected to weigh on global growth, prolong inflationary pressures, and increase market volatility. While Malaysia's domestic economy remains resilient, CIMB cautioned that global uncertainties could dampen investor and consumer confidence, capping Bursa's earnings upside potential. "As such, we project ADV to ease to RM2.4 billion in Q225. A rebound is anticipated in 2H25 as market uncertainty fades and greater clarity emerges post-negotiations during the 90-day pause," CIMB said. Hong Leong Bank Bhd (HLIB) maintains a HOLD call on Bursa but lowers its target price to RM7.70 (from RM8.83) following the earnings revision. "Although the share price has fallen recently, we still find Bursa's risk-reward profile to be balanced. Considering ADV moderation over the next two quarters, along with the absence of immediate positive catalysts, we envision limited price upside in the near term. Nevertheless, the stock offers a fairly decent dividend yield of 4 per cent," it said in a note. Looking ahead, HLIB expects ADV to remain subdued in the coming months (at lower RM2.2 billion till October 2025) as investors continue to embrace a cautious 'wait-and-see' posture amid prevailing market uncertainties.
Business Times
24-04-2025
- Business
- Business Times
KLCI tumbles as RM10b flees – Malaysia sees worst quarterly outflow in 7 years
[KUALA LUMPUR] Malaysia's equity rally has hit a wall as the FBM KLCI tumbled 7.3 per cent in the first quarter – making it one of the region's worst performers. Foreign investors pulled more than RM10 billion (S$3 billion) from the market over the three-month period, marking the biggest quarterly outflow since the landmark 2018 general election. A cocktail of global trade tensions, delayed initial public offerings (IPOs) and investor unease over US President Donald Trump's second term has soured the mood and upended early-year optimism. The sell-off, led by persistent foreign outflows and rising geopolitical headwinds, has wiped out much of the euphoria that drove the KLCI nearly 16 per cent higher in 2024, when it closed the year at 1,642.33 – its highest level since 2017. That rally, fuelled by expectations of upbeat macro prospects, US rate cuts and resurgent foreign inflows, now looks increasingly fragile. Sentiment has turned sharply negative from the final three months of 2024 and deteriorated further since with hopes of a dovish US Federal Reserve fading and concerns over Trump's intensifying protectionist trade agenda. Foreign funds have been net sellers for 26 straight weeks since November, pulling the index down to 1,513.65. The index has fallen 7.3 per cent in the first quarter of this year, underperforming the Asean-5 average decline of 4 per cent. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up IPO pipeline stalls The chill has also hit Malaysia's IPO pipeline, which was the biggest star last year by deal count among regional exchanges. The exchange drew 55 listings, raising RM7.4 billion in 2024. At least two listings – Cuckoo International and SPB Development – have been postponed, citing unstable market conditions. Bloomberg reported that advisers for South Korea's OCI Holdings have paused work on the IPO of its Malaysian polysilicon unit due to global market volatility. Despite these listing delays, Bursa Malaysia chairman Abdul Wahid Omar in an event in early April affirmed the bourse's target of 60 IPOs for the year, aiming for a combined market capitalisation of RM40.2 billion. That may sound a tad ambitious in today's climate – especially after 2024's glittering run, in which Bursa chalked up the highest number of new listings in two decades. That included the notable debut of 99 Speed Mart Retail, Malaysia's largest IPO in eight years and the biggest retail float in South-east Asia since 2020. As at Apr 15, Bursa Malaysia recorded 16 IPOs for the year. More than half closed above their offer price on debut – though most of the strong performers hit the market before February, which signals a slowdown in investor appetite since. All IPOs listed since March have experienced a marked decline in share prices on their maiden day of trading, with the notable exception of public bus services provider HI Mobility – which not only traded higher on its debut but has continued to outperform other recent IPOs. From sunny to gloomy 'The optimism that propelled last year's rally, particularly from the data centre boom in Johor, has waned,' said Neoh Jia Man, portfolio manager at Tradeview Capital. He noted that the technology sector has lost momentum, especially after Washington introduced the Artificial Intelligence Diffusion Rule, which dampened investor appetite for tech-related counters. Fourth-quarter earnings in 2024 broadly missed expectations, said Neoh, adding that companies grappled with rising operating costs, higher taxes and an uneven demand recovery. 'Investors are also nervous about the risk of retaliatory tariffs from the US, adding further strain to emerging-market sentiment,' he told The Business Times. Noting the significant capital flight, Apex Securities head of research Kenneth Leong said: 'Investors are now watching for clarity on the upcoming tariff negotiations and domestic fiscal direction.' Defensive tilt RHB Investment Bank slashed its year-end FBM KLCI target to 1,650 from 1,750, citing the unpredictability of US trade policy under the Trump administration. 'The risk of transactional tariffs leaves investor sentiment on edge,' said Alexander Chia, head of regional equity research at RHB. The brokerage recommends a defensive stance with higher cash allocations and selective exposure to quality domestic names. MIDF Research highlighted resilience in real estate investment trusts and financials, buoyed by attractive dividend yields. It also favours ringgit-centric stocks with minimal foreign revenue exposure. Macquarie echoed that view, noting that Malaysian, Indonesian and Philippine equities are trading at steep discounts to historical price to earnings levels, suggesting bottom-up stock picking over index-focused strategies. Fiscal cushion Malaysia spends heavily to shield consumers from rising fuel costs, with Ron95 petrol capped at RM2.05 per litre – the lowest in South-east Asia TAN AI LENG, BT Energy remains a potential bright spot – not for exports but domestic stability. Lower oil prices could help alleviate inflationary pressures in Malaysia, where energy costs ripple across transportation, manufacturing and food supply chains. Macquarie projects Brent crude to average between US$60 and US$68 per barrel till 2026, a level that could ease the fiscal pressure of Malaysia's fuel subsidy regime. Despite being a net oil and gas exporter, Malaysia spends heavily to shield consumers from rising fuel costs, with Ron95 petrol capped at RM2.05 per litre – the lowest in South-east Asia. Analysts expect the Malaysian government to delay adjustments to the Ron95 petrol price, citing the country's resource surplus and the narrowing gap between market and subsidised prices. 'We think it likely Malaysia will now defer any reform on Ron95 prices, given the narrowing gap between the market and subsidised price, and given a less predictable economic backdrop,' said analysts from Macquarie in an Apr 14 report. Still, downside risks loom. OCBC warned that if US tariffs extend to Malaysian semiconductor exports, which make up nearly a third of shipments to the US, Bank Negara Malaysia may be forced to cut rates sooner than anticipated. GDP downgrades, ringgit outlook The ringgit has shown modest strength, trading at 4.4348 per US dollar as at Mar 31, up 0.8 per cent from 4.4715 at the start of the year. Bloomberg Weaker external demand is prompting economists to lower Malaysia's 2025 growth outlook. OCBC now expects gross domestic product to expand 4.3 per cent, down from 4.5 per cent, while RHB cut its forecast to 4.5 per cent from 5 per cent. Citing broader downward revisions in regional forecasts, the International Monetary Fund on Apr 23 lowered its real GDP growth outlook for Malaysia this year to 4.1 per cent, down from the 4.7 per cent it predicted in January. MIDF and Kenanga Research remain more upbeat on the country's economic growth, with forecasts of 4.6 per cent and 4.8 per cent, respectively, pointing to resilient consumer spending and investment. Official data released on Apr 18 showed that the economy expanded 4.4 per cent year-on-year in the first quarter – slower than the 5 per cent pace in the previous quarter and below the Bloomberg median estimate of 4.8 per cent. The Department of Statistics Malaysia said the growth was underpinned by solid domestic activity and a healthy labour market. The Overnight Policy Rate is expected to remain at 3 per cent for now, though some analysts expect rate cuts could be on the table if downside risks materialise. The ringgit has shown modest strength, trading at 4.4348 per US dollar as at Mar 31, up 0.8 per cent from 4.4715 at the start of the year. MIDF forecasts the currency will strengthen further to 4.23 by year-end, though capital flow volatility tied to US policy remains a key risk. Earnings crunch The first-quarter corporate reporting season, beginning in May, could be a crucial inflection point. Investors will be closely watching for signs of resilience or further weakness as global uncertainty looms over markets. Tradeview's Neoh warned that volatility is likely to remain elevated in the months ahead as the persistent uncertainty surrounding US trade policy will continue to drive capital flows. 'Coming closer, investors will be paying close attention to corporate earnings releases next month, but more critically, to the forward-looking guidance offered by corporations given the prevailing circumstances,' said Apex's Leong. He noted that beyond corporate earnings announcements, the tabling of the 13th Malaysia Plan in July will also be closely watched. The 13th Malaysia Plan (2026-2030) is expected to outline strategies emphasising talent development and innovation to propel Malaysia towards a high-income nation status.
Yahoo
13-03-2025
- Business
- Yahoo
SumiSaujana Group Berhad to Raise RM74.4 Million from ACE Market IPO
KUALA LUMPUR, MALAYSIA / / March 13, 2025 / SumiSaujana Group Berhad ("SumiSaujana" or the "Company") and its subsidiary ("Group"), an established manufacturer of oil and gas ("O&G") specialty chemicals, has launched its prospectus in conjunction with its proposed Initial Public Offering ("IPO") on the ACE Market of Bursa Malaysia Securities Berhad ("Bursa Securities"). This IPO marks a significant step in SumiSaujana's corporate evolution, providing the Group with the resources to expand its production capacity, enhance global market penetration, and strengthen business sustainability. L-R: (From SumiSaujana Group Berhad) Mr. Ramli Bin Mohamad, Executive Director/ Chief Operating Officer; Mr. Toh Chee Seng 陀志成, Executive Deputy Chairman; Mr. Norazlam bin Norbi, Executive Director/ Chief Executive Officer; (From RHB Investment Bank Berhad) Mr. Kevin Davies, Chief Executive Officer/ Managing Director; Mr. Tommy Har 夏荣斌, Director, Head, Corporate Finance Established in 2010, SumiSaujana has built a reputation as a trusted manufacturer and supplier of high-performance specialty chemicals for the oil and gas industry. The Group specialises in drilling fluid chemicals, production chemicals, and refinery chemicals, which are essential in enhancing operational efficiency, equipment protection, and process optimisation across the upstream, midstream, and downstream oil and gas sectors. Over the years, SumiSaujana has secured long-term partnerships with multinational oilfield service providers, international oil companies, and national oil corporations, reinforcing its strong market presence. Over 70% of SumiSaujana's revenue comes from international markets, including the Asia Pacific, Middle East, Africa, Europe, and the Americas region. Through this IPO exercise, SumiSaujana aims to raise RM74.4 million via the issuance of 310.0 million new shares at an issue price of RM0.24 per share. The proceeds from the IPO will be allocated as follows: RM40.2 million (54.0%) for the acquisitions of the New Puncak Alam Warehouse and New Puncak Alam Corporate Office to consolidate its operational and warehousing facilities. RM18.9 million (25.4%) for the acquisition of its existing Puncak Alam Factory to support long-term operational sustainability. RM2.1 million (2.8%) for capital expenditure, supporting enhancements to its facilities. RM7.6 million (10.3%) for expansion of R&D division. RM5.6 million (7.5%) for listing expenses. As part of the IPO, an Offer for Sale of up to 90.0 million shares, representing 6.23% of the enlarged share capital, will be made available via private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (MITI). The proceeds from the Offer for Sale will accrue to the Selling Shareholders. Applications for the IPO open today following the prospectus launch and will close on 25 March 2025. SumiSaujana is expected to debut on the ACE Market of Bursa Securities on 9 April 2025. At an IPO price of RM0.24 per share, the company's market capitalisation upon listing will be approximately RM346.5 million. Encik Norazlam Bin Norbi, Executive Director/ Chief Executive Officer of SumiSaujana Group Berhad, commented, "The launch of our IPO prospectus represents a transformative moment for SumiSaujana Group Berhad. Since our establishment, we have continuously expanded our capabilities and strengthened our position as a trusted solutions provider for the oil and gas industry. Our ability to consistently meet the evolving demands of our customers has been key to our success, and this IPO will enable us to further accelerate our growth trajectory." He added, "We are committed to driving business sustainability and innovation, ensuring that our customers continue to receive high-quality specialty chemicals that enhance efficiency and reliability in their operations. With the funds raised, we will focus on expanding our production capacity, strengthening our global footprint, and reinforcing our commitment to delivering value to all our stakeholders." Mr. Kevin Davies, Chief Executive Officer/ Managing Director of RHB Investment Bank Berhad, stated, "We are honoured to partner with SumiSaujana Group Berhad on this significant milestone. Thier IPO marks the beginning of a new phase of expansion and opportunity for SumiSaujana, positioning it for continued success in the highly specialised oil and gas industry. As the Principal Adviser, Sponsor, Sole Underwriter, and Sole Placement Agent, RHB Investment Bank Berhad is privileged to be part of this journey and looks forward to supporting the Group as it takes this next step forward." Beyond O&G specialty chemicals, SumiSaujana is expanding into the industrial specialty chemicals sector to diversify its product portfolio. Internationally, the Group is strengthening its global footprint with plans to set up a new production facility in North America and the Middle East, reinforcing its presence in key international markets. With its upcoming listing on the ACE Market of Bursa Securities, the Company is poised for accelerated growth, market expansion, and long-term value creation for stakeholders. The Group's strategic investments in manufacturing, R&D, and sustainability initiatives reinforce its position as a trusted name in the global O&G specialty chemicals sector. RHB Investment Bank Berhad is the Principal Adviser, Sponsor, Sole Underwriter and Sole Placement Agent for SumiSaujana Group Berhad's IPO. About SumiSaujana Group Berhad SumiSaujana Group Berhad and its subsidiary ("SumiSaujana Group") is an established manufacturer of oil and gas ("O&G") specialty chemicals with over a decade of experience, specialising in the formulation, manufacturing, and supply of drilling fluid chemicals, and production, and refinery chemicals for the upstream, midstream, and downstream segments in the O&G industry. With a strong presence in Malaysia and exports to the Asia Pacific, Middle East and North America regions, SumiSaujana Group serves top-tier global O&G service providers, production and refinery companies and chemical manufacturers. As a Petronas-licensed manufacturer, SumiSaujana Group is committed to innovation, quality, and sustainability, continuously enhancing its product offerings to meet the evolving needs of the global O&G industry. For more information, visithttps:// and Issued By: Swan Consultancy Sdn. Bhd. on behalf of SumiSaujana Group Berhad For more information, please contact: Jazzmin Wan Email: William Yeo Email: SOURCE: SumiSaujana Group Berhad View the original press release on ACCESS Newswire Sign in to access your portfolio
