Latest news with #RUPINDERSINGH
Malaysian Reserve
12-05-2025
- Business
- Malaysian Reserve
Ringgit poised for further gains in 2025
HLIB Research predicts further ringgit gains in 2025, supported by global recovery by RUPINDER SINGH THE ringgit's rally appears to have staying power, with Hong Leong Investment Bank Bhd (HLIB Research) expecting further strengthening this year amid a weaker US dollar, improved global sentiment, and renewed foreign capital inflows. In its latest report, the research house maintained its forecast for the ringgit to average RM4.35 against the dollar in 2025, strengthening from RM4.57 in 2024. By year-end, HLIB Research expects the local note to appreciate further to RM4.10. 'Ringgit has appreciated 6.5% year-to-date (YTD), largely benefitting from a shift in global sentiment following the perceived reduction in macro headwinds,' the report stated. A key turning point, according to HLIB Research, was April 22 — dubbed Liberation Day — when global markets began to recover in earnest, as inflation fears subsided and investors started reallocating capital from US assets to emerging markets (EMs). 'We believe the technical bottom of RM4.80/US dollar is likely in,' said HLIB, pointing to the confluence of macro improvements and policy clarity that support a stronger ringgit going forward. While a firmer ringgit bodes well for companies with high import content or US dollar liabilities, HLIB Research cautioned that it may compress margins for exporters due to adverse currency translation effects. The strengthening of the ringgit is also part of a broader trend across the region. 'With the US dollar being the primary source of weakness, regional currencies have rallied in tandem,' HLIB Research noted. However, it pointed out that this foreign exchange shift has yet to significantly lift Malaysian equities, suggesting the recent rally may be more liquidity-driven than driven by foreign flows. 'Despite the equity rebound, the US dollar has lagged since 'Liberation Day,' indicating US recovery is driven by domes- tic liquidity rather than foreign inflows,' the report observed. Still, Malaysia appears to be attracting renewed foreign interest. HLIB Research highlighted that foreign investors were net buyers of Malaysian equities over the past two weeks, with net inflows of RM1.4 billion. The local bond market also saw RM2.8 billion in foreign inflows in March, while foreign holdings of Malaysian Goverment Securities (MGS) and Government Investment Issue (GII) rose to 21.1% in March — recovering from a 13-year low of 20.2% in January. The research house believes these trends, alongside improving fiscal discipline and structural reforms under Ekonomi MADANI, could underpin a more sustained re-rating of the ringgit and broader Malaysian assets. 'Malaysia not only has a growth story to tell but also a policy narrative to share,' HLIB Research said. Still, risks loom on the horizon. Chief among them is the second Donald Trump presidency, which could revive protectionist trade policies. 'Trump tariffs 2.0 pose a key risk to macro, sectoral and corporate outlooks,' HLIB Research warned. Trade-dependent economies like Malaysia may be exposed to collateral damage if broad-based US tariffs return, stalling global growth and commodity demand. Geopolitical tensions also remain a source of uncertainty. On the domestic front, HLIB Research-views Malaysia's macroeconomic fundamentals as sound. However, it did not rule out the possibility of monetary easing if downside risks materialise. The research house reiterated its 'tactically constructive' stance on Malaysian equities, maintaining its FTSE Bursa Malaysia KLCI (FBM KLCI) year-end target of 1,690. It recommends a 'sell on strength' strategy in the near term, advocating a barbell approach that balances defensive sectors with laggards poised for catch-up. It maintains a preference for banks, construction and utilities, while remaining cautious on export-heavy and commodity-linked sectors. This article first appeared in The Malaysian Reserve weekly print edition
Malaysian Reserve
07-05-2025
- Business
- Malaysian Reserve
Malaysia launches chip fund to boost IPO-ready firms
BSIF I aims to future-proof Malaysia's high-tech manufacturing sector by RUPINDER SINGH IN A landmark move to fortify Malaysia's semiconductor ecosystem and accelerate the growth of IPOs-ready companies, the Malaysian Investment Development Authority (MIDA), Federation of Malaysian Manufacturers (FMM) and Bintang Capital Partners have launched the Bintang Semiconductor Impact Fund I (BSIF I) — a pioneering initiative that blends financial support with sustainability and social impact. The tripartite collaboration was formalised through a memorandum of understanding (MOU) signed on April 16, 2025. The fund aims to future-proof Malaysia's high-tech manufacturing sector by building resilience in the domestic semiconductor value chain, enhancing environmental and social performance, and preparing companies for eventual public listing. MIDA CEO Datuk Sikh Shamsul Ibrahim Sikh Abdul Majid hailed the partnership as a turning point for the country's semiconductor ambitions. 'This transformative partnership marks a pivotal moment in Malaysia's semiconductor journey. By combining MIDA's strategic oversight, FMM's extensive industry network and Bintang Capital's financial expertise, we're creating a powerful ecosystem that will elevate local companies to global standards,' added Sikh Shamsul. 'Our focus is to develop world-class capabilities, attract premium investments and establish Malaysia as a trusted global semiconductor hub. This collaboration provides the perfect platform to nurture innovation, drive sustainable practices and create lasting economic impact for our nation,' he added. The launch of BSIF I aligns with the objectives of Malaysia's National Semiconductor Strategy (NSS), a multi-pronged roadmap aimed at building up domestic capabilities and capturing greater value across the semiconductor supply chain. The fund is designed to target investments in companies within and adjacent to the semiconductor space, particularly those engaged in high-tech manufacturing, advanced automation, and IR4.0 solutions. FMM president Tan Sri Soh Thian Lai described the initiative as a critical enabler for small and medium enterprises (SMEs), which make up the backbone of Malaysia's manufacturing base. 'As the voice of the manufacturing sector, FMM is pleased to support this initiative, which will enable local businesses to enhance their capabilities, tap into funding opportunities and adopt best practices in governance and sustainability. 'At the same time, it aligns with FMM's ambitious aspiration to cultivate 100 IPO-ready companies within five years. Helping companies become IPO-ready and granting them access to financing are crucial steps in enabling their growth. By supporting these promising enterprises, FMM aims to strengthen Malaysia's manufacturing landscape, driving innovation and competitiveness across the region,' Soh added. The fund also incorporates a strong environmental, social and governance (ESG) framework. BSIF I will support businesses that are committed to carbon transition goals and promote women's empowerment through workforce development. Portfolio companies will be expected to pursue B Corp certification, which signifies high standards in governance, environmental sustainability and social impact. Bintang Capital CEO Johan Rozali-Wathooth described the collaboration as a holistic model that integrates financial capital with values-based investing. 'As the saying goes, it takes a village to raise a child — the collaboration between Bintang Capital, MIDA and FMM brings together three critical elements needed to 'raise' a vibrant and sustainable high-technology manufacturing industry. 'The collaboration combines Bintang Capital's investment and impact track record, MIDA's deep policy expertise, and FMM's extensive networks within Malaysia's manufacturing sector,' he said. 'On the impact front, Bintang Capital is a passionate advocate for building compa- nies which represent the very best ideals of responsible capitalism: Companies which meet the highest standards of governance and ethicality as represented by B Corp Certification, that also promote and support the empowerment of women, and who also champion environmental sustainability.' BSIF I will serve as a catalytic platform to accelerate Malaysia's positioning in the global semiconductor supply chain at a time when geopolitical shifts and digitalisation are reshaping the sector. By focusing on sustainable development and IPO-readiness, the fund aims not only to create financial returns but also to build a new generation of globally competitive, socially responsible Malaysian enterprises.
Malaysian Reserve
24-04-2025
- Business
- Malaysian Reserve
Mayu Global redesignates Tan Kim Hee amid money laundering probe
by RUPINDER SINGH MAYU Global Group Bhd has announced the redesignation of Tan Kim Hee to non-executive director from executive director, effective May 2, 2025, as part of wider corporate measures taken in response to an ongoing police investigation under Malaysia's anti-money laundering laws. The board's decision, made by mutual consent and without prejudice, follows recommendations by its nomination and remuneration committee and was formalised during a board meeting on April 23. Tan abstained from the deliberations and vote, it told the bourse in a filing today. The company stated that the change 'serves as a precautionary measure to uphold good corporate governance, preserve the integrity of the investigation process and prevent any potential conflict of interest during the course of the investigation.' Tan will no longer be involved in the day-to-day management of the group or its subsidiaries, particularly in matters involving monetary transactions. Leadership of operations will remain with executive directors Goh Chin Heng, Tan Qian Hui, and Chow Choon Hoong, supported by the senior management team. The redesignation follows disclosures made by the group previously, including the freezing of banking accounts of Mayu and its subsidiaries – amounting to RM10.67 million – under Section 44 of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLATFPUAA). The freezing orders, issued on April 10, are valid for 90 days. In a filing dated April 15, the company revealed that Tan, who is a substantial shareholder holding 11.095% of Mayu Global, was detained by Bukit Aman police on April 2 and released on April 7 without charges. He is also reported to be the brother-in-law of MBI Group founder Tedy Teow Wooi Huat. To safeguard its interests, MAYU has appointed legal counsel to handle all aspects of the ongoing investigation. According to the company, the legal team has 'initiated engagements with PDRM and is providing full cooperation, including the submission of any requested documentation to safeguard the Group's operations and assets.' In addition to legal representation, the company has tightened internal controls. 'Controls over payments, procurement processes, and banking transactions have been tightened,' the board said. Internal monitoring has been intensified, especially for transactions that may trigger red flags under AMLA, and the finance team is providing regular updates to assess operational impact and maintain continuity. A comprehensive third-party internal audit is also underway. Mayu has engaged Baker Tilly Monteiro Heng PLT to conduct a review of Sunrise Manner Sdn Bhd – an 80%-owned subsidiary since October 10, 2018 – focusing on cash flow and financial transactions. The audit will emphasise identifying the source of funds related to the company's operations. The company further stated that 'an Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) policy will be adopted in due course' to enhance compliance across the group.
Malaysian Reserve
21-04-2025
- Business
- Malaysian Reserve
Malaysia well shielded from China's dumping risks
Report says nation's manufacturing structure, trade laws and supply chain position, shield it from the worst of any dumping-related risks by RUPINDER SINGH FEARS that Malaysia could be swamped by a wave of cheap Chinese imports, especially in the wake of shifting US-China trade tensions, are likely misplaced, according to RHB Research. In its recent report by the RHB Investment Bank Bhd unit, its team of economist argues that Malaysia's manufacturing structure, trade laws and supply chain position, shield it from the worst of any dumping-related risks — and might even allow local manufacturers to benefit from lower input costs. US Tariffs Push Chinese Exports into ASEAN The background to these concerns stems from ongoing global trade tensions, especially after recent US tariff hikes targeting Chinese goods. As the US clamps down on imports from the world's largest exporter, manufacturers in China have increasingly sought alternative buyers in Southeast Asia — raising eyebrows over the risk of dumping, especially in price-sensitive sectors like electronics, base metals and machinery. But according to RHB Research's report, the Malaysian economy is more resilient than many feared. The bank's economists believe Malaysia's industrial structure and legal safeguards are strong enough to prevent any material harm. Trade Model that Reduces Risk At the core of RHB Research's argument is Malaysia's unique trade flow pattern, which revolves around importing intermediate goods rather than competing directly with finished products from China. 'Malaysia's manufacturing chain is led by the imports of intermediate goods and exports of final goods,' RHB Research stated in its April 17 note. The data backs this up: Intermediate goods account for 71.9% of Malaysia's total imports, while processed goods make up 90.6% of its exports. This structure means Malaysia functions more like a global production hub than a domestic consumer of mass-market products, making direct competition with Chinese finished goods less likely. E&E Sector Focussed on Export Markets Electronics, one of Malaysia's largest export sectors, offers a prime example of this dynamic. According to RHB Research, the domestic economy absorbs just a fraction of the sector's output. 'Our input-output table suggests Malaysia's electrical and electronic (E&E) sector's value-add relies only on 13.2% of domestic final demand,' the report highlighted. In other words, Malaysia's E&E producers are focussed overwhelmingly on global markets, not on local retail shelves, insulating them from direct competition with low-cost Chinese imports. RHB Research also noted that any reallocation of Chinese exports, particularly in intermediate products, could help Malaysian manufacturers lower their input costs — an unexpected silver lining in the trade conflict. Anti-Dumping Laws Provide a Strong Defence Alongside its trade structure, Malaysia's regulatory framework further reduces the risk of harm from foreign dumping. The country's anti-dumping laws, established under the Countervailing and Anti-Dumping Duties Act 1993, allow authorities to investigate and impose duties on imported goods sold at unfairly low prices. 'Malaysia's anti-dumping law is a critical shield against unfair trade practices,' RHB Research wrote, noting that the legal framework empowers regulators to act before predatory pricing can damage local industries. The government has already shown its willingness to enforce these rules. Earlier this year, Deputy Trade Minister Liew Chin Tong confirmed the imposition of provisional anti-dumping duties of between 6.33% and 37.44% on imports of polyethene terephthalate (PET) as well as flat-rolled iron and steel products from China, India, Japan and South Korea. Liew said these measures are part of the government's commitment to ensuring 'local industries are not undermined by unfair trade practices'. Lower Producer Prices, Higher Manufacturing Profits Interestingly, the influx of cheaper Chinese goods may actually benefit Malaysian manufacturers, at least in the short term, by reducing the price of imported inputs. RHB Research's regression analysis found a clear link between lower producer prices and higher revenue expectations for Malaysian manufacturers. 'The data suggest that a potential direct impact from US tariffs on China may be a boon to Malaysia's manufacturing firms in lowering producer prices, benefiting firms' bottomline,' the report concluded. This means that the trade shock, rather than hurting domestic production, could actually enhance the competitiveness of Malaysian manufacturers — particularly those producing for export. Inflation Outlook Remains Stable Despite the possibility of lower producer prices, RHB Research does not expect Malaysia's Consumer Price Index (CPI) to be materially affected. The research showed that inflation in Malaysia is primarily driven by the services sector rather than manufacturing input costs. 'Malaysia's price pressures are a function of services PPI rather than manufacturing prices,' the firm noted, based on its statistical analysis. Regression results showed that services producer prices has a strong influence on CPI, while manufacturing prices had a negligible impact. RHB Research reaffirmed its 2025 inflation forecast at 2.2%, suggesting that even with lower manufacturing costs, consumer-level prices would likely remain stable. Elastic Import Demand Suggests Resilience RHB Research also pointed to Malaysia's long-run import behaviour as another reason for confidence. The bank calculated the elasticity of Malaysia's import demand at -1.2 over the past decade, meaning lower input prices are likely to result in increased import volumes. 'This suggests that a decline in input prices would likely encourage higher import volumes, particularly for intermediate goods, smoothing any supply chain disruptions and supporting production,' RHB Research wrote. In essence, Malaysia's import patterns are designed to self-correct: Cheaper imported inputs don't just push out local producers, instead feed directly into the country's export machinery, sustaining its role in global supply chains. Policy Stability Supports Outlook The bank also maintained its base-case scenario for the central bank's Overnight Policy Rate (OPR) at 3%, provided Malaysia's GDP growth remains within the official forecast range of 4.5% to 5.5% this year. However, if economic growth were to fall below 4% as a result of global uncertainties, RHB Research did not rule out a 25-basis-point rate cut in the second half of 2025. 'Downside risks to GDP, manageable inflation, and a lower global interest-rate environment strengthen the case for a rate reduction,' the report noted. At its core, RHB Research's message is that Malaysia's position as a downstream manufacturing hub, bolstered by strong laws and resilient supply chains, will shield it from short-term disruptions caused by global trade realignments. With over 90% of its exports comprising processed goods, Malaysia is less exposed to being outcompeted by a flood of cheap Chinese products, and more likely to benefit from cost-effective inputs that enhance its global competitiveness. As the global trade environment shifts under the weight of geopolitical tensions and protectionist policies, Malaysia's focus on value-added exports and regulated market practices seems set to pay off. This article first appeared in The Malaysian Reserve weekly print edition
