Oil breaks US$100, Wall Street retreats and bond yields rise, inflation is becoming the market’s biggest risk again Global markets are starting Thursday in a more defensive position. Brent crude has broken above US$100 a barrel , U.S. Treasury yields are pushing higher, and Wall Street fell for a third straight session as investors reassess whether central banks may need to keep tightening rather than easing. For Malaysian investors, the key chain today is increasingly clear: Oil → inflation → interest rates → bond yields → USD/MYR → Bursa valuations. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,636.36, -0.48% 🇺🇸 Dow Jones 52,380.66, -0.77% 🇺🇸 Nasdaq 26,253.34, -0.64% 🇲🇾 FBM KLCI 1,714.34, virtually flat 💵 USD/MYR ~4.06 🇺🇸 U.S. 10Y Treasury ~4.84% 🇺🇸 U.S. 2Y Treasury ~4.42% 🥇 Gold ~US$4,396/oz 🛢️ Brent crude US$101.21/bbl 🛢️ WTI crude US$96.05/bbl ₿ Bitcoin ~US$79,300 🇯🇵 Nikkei ~64,760, -0.6% this morning Brent jumped about 3.4% Wednesda...
Shares of YTL Power International Bhd continued to decline for the third consecutive day, dropping by as much as 7% to a six-month low of RM3.61 on Thursday, following the news that one of its subsidiaries, YTL Communications Sdn Bhd, was questioned by the Malaysian Anti-Corruption Commission (MACC).
Key Highlights:
MACC Inquiry Related to 1BestariNet Project: YTL Power confirmed that the MACC had recently requested information from its subsidiary YTL Communications regarding the 1BestariNet project, a contract undertaken for the Ministry of Education in mid-2017. YTL Communications won the project through a tender involving 19 companies, but the contract ended in June 2019, just two years into a planned 15-year agreement.
Impact on Stock Performance: YTL Power's share price fell by 28 sen to RM3.61 and was trading at RM3.68, down 21 sen, at 11:20 am on Thursday, with a market capitalization of RM30.41 billion. The decline also pulled down the Bursa Malaysia Utilities Index by 0.7%, while the broader benchmark KLCI saw a modest increase of 0.08%.
Market Reaction and Analyst Views: Macquarie noted that YTL Communications is likely only assisting the MACC in its investigations and has not been implicated in any wrongdoing. However, they anticipate an initial sell-off due to the news. Macquarie maintained its "outperform" rating on YTL Power, with a target price of RM7.30. In a bear case scenario, excluding YTL Power’s artificial intelligence projects could reduce projected earnings per share for FY2026 by 31% and lower the fair value to RM3.64.
Background on 1BestariNet and Dispute: The 1BestariNet project was intended to provide internet connectivity and virtual learning environments to 10,000 schools across Malaysia. YTL Communications only managed two years of the contract before it was terminated, having invested over RM4 billion. YTL Communications later claimed that the Ministry of Education breached contractual obligations by appointing other providers for the remaining period in 2019, despite YTL's offer to continue the service for free.
The ongoing MACC inquiry and uncertainty surrounding the 1BestariNet project have raised concerns among investors, leading to a notable decline in YTL Power's stock.
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