KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
RHB Research has revised its earnings forecasts for YTL Power International Bhd for the fiscal years 2025 to 2027, cutting projections by 5% to 6% due to the strengthening ringgit against major currencies such as the US dollar, Singapore dollar, and British pound. These currencies are crucial to PowerSeraya and Wessex Water, which are key contributors to YTL Power's income.
As a result, RHB has lowered its target price for YTL Power from RM5.94 to RM5.68, while maintaining its "buy" call. PowerSeraya and Wessex Water accounted for 68% and 23% of YTL Power's total revenue in FY2024, but their income is expected to be impacted by the stronger ringgit.
Additionally, YTL Power's exposure to the US dollar will likely increase with the upcoming commercialization of its artificial intelligence data center (AI-DC). While colocation services revenue will be in both MYR and USD, AI-DC's costs are expected to be largely in USD.
RHB maintained a positive long-term outlook on YTL Power’s earnings potential, particularly from the AI-DC development, citing its current undemanding valuation at a 10x FY2026F price-to-earnings ratio, below the five-year mean of 12x.
RHB also noted the US Federal Reserve's 50 basis points rate cut has weakened the US dollar, which dropped 6% quarter-on-quarter against the ringgit in Q3 2024. Further US rate cuts are expected in 2024 and 2025, which could affect global currency exchange rates.
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