March 2025

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Showing posts from March, 2025

Market Daily Report: Bursa Malaysia Ends Lower On Profit-taking, Earthquake In Myanmar Shakes Investor Sentiment

KUALA LUMPUR, March 28 (Bernama) -- Bursa Malaysia closed lower today on profit-taking after a strong three-day rally, and investor sentiment was further shaken in the late afternoon session following news of an earthquake in Myanmar with tremors felt in neighbouring Thailand, said Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) slid 1.44 per cent or 22.08 points to 1,513.65, its intraday low, from Thursday’s close of 1,535.73. The benchmark index opened 4.16 points lower at 1,531.57 and hit an intraday high of 1,533.52 during the midday session. On the broader market, decliners outpaced gainers 563 to 395, while 408 counters were unchanged, 1,106 untraded, and 133 suspended. Turnover slipped to 2.25 billion units valued at RM2.13 billion from 2.52 billion units worth RM2.41 billion on Thursday.

Lululemon Slips Despite Solid Q4 — Weak Guidance Weighs on Stock

Key Takeaways for Investors: Q4 Beat Expectations, But That’s Not the Focus Lululemon posted strong Q4 earnings of $6.14 per share , beating estimates of $5.85. Revenue came in at $3.6 billion , up 13% and in line with forecasts. But the stock dropped 5.9% in after-hours trading. FY25 Guidance Disappoints Wall Street Management expects FY25 revenue of $11.15–$11.3 billion , which implies growth of just 5%–7%, below the 7% consensus. EPS guidance of $14.95–$15.15 also missed expectations ($15.37). Soft Q1 Outlook Fuels Concern For Q1, Lululemon sees revenue of $2.335–$2.355 billion and EPS of $2.53–$2.58 — both short of analyst forecasts. This adds to investor anxiety about slowing consumer demand and rising competition . Traffic and Competition Trends Add Pressure In-store traffic dipped in February, while rivals like Alo Yoga saw double-digit growth. Analysts point to rising competition from bran...

Markets Slip as Tariff Fears Eclipse Growth Boost — All Eyes on Friday's Inflation Data

Key Takeaways for Investors: Stocks Retreat Despite Stronger GDP: Major US indexes dipped Thursday even as Q4 GDP was revised up to 2.4%. Markets instead focused on Trump’s 25% auto import tariffs , reigniting fears of a widening trade war. Automakers Hit Hard: Shares of Toyota, Mercedes-Benz, and GM fell as the tariffs are set to take effect next week. The broader S&P 500 lost 0.3% , while the Nasdaq 100 fell 0.6% and the Dow slid 0.4% . Tariff Worries Trump Economic Data: Despite upward revisions in GDP and lower inflation revisions, analysts say investors remain focused on forward-looking risks , including inflation persistence and trade uncertainty. Fed Likely to Hold Rates Steady: Inflation remains "sticky," and the Fed’s preferred gauge — core PCE — is expected to show sustained pressure when released Friday. Fed officials are cautious, citing tariff escalation risks. Investor Sentiment Rebounding Slightly: Bearish sentime...

Tariff Turbulence Hits Carmakers' Bonds as Funding Costs Climb

Key Takeaways for Investors: Tariff Impact Hits Debt Markets: Auto bonds slumped on Thursday after President Trump imposed 25% tariffs on imported vehicles , set to start April 3. Yields widened as investor concerns over higher vehicle costs and potential profit erosion intensified. VW & BMW Bonds Under Pressure: Volkswagen’s 5.35% 2030 bonds , issued just last week, saw their spreads widen by 24 basis points to 135 bps. BMW’s 5.4% 2035 bonds also weakened, with spreads rising 6 basis points to 122 bps. Bonds from Honda and GM showed similar lagging performance. Auto Debt Trails Broader Market: Spreads on high-grade auto bonds have widened 26 bps YTD , more than double the 10 bps widening in the overall high-grade corporate bond market. Automakers like Volkswagen, Toyota, Mercedes-Benz, and Hyundai are most exposed to rising funding costs. Primary Market Cooling Off: French parts supplier Forvia SE ...

Signs of Life in China’s Property Sector: Vanke, COLI Recovery in Focus Ahead of Earnings Week

Key Takeaways for Investors: Vanke and COLI in the Spotlight: China Vanke and China Overseas Land & Investment (COLI) are set to report earnings next week amid fragile signs of recovery in the property sector. While both face steep profit declines, analysts believe large write-offs in 2024 may pave the way for a rebound in 2025. 2024 Was Brutal: Core earnings for China’s top 5 developers — including Vanke, COLI, China Resources Land, Longfor, and Greentown — are estimated to have plunged 93% YoY , according to CGS International. Vanke is bracing for a record RMB45 billion loss , its first annual net loss since listing in 1991. Why There’s Still Optimism: Bloomberg Intelligence suggests that these deep losses could help clean up balance sheets, improve 2025 earnings, and open doors to future equity financing , which is vital for liquidity. Government policy support remains a key factor, with more cities easing housing...

Trump’s 25% Auto Tariff Set to Shake Global Trade – Tesla Emerges as Early Winner

Key Takeaways for Investors: New 25% Tariff on All Auto Imports: President Donald Trump signed a proclamation to impose 25% tariffs on all imported cars , effective April 3 . The move escalates trade tensions and is expected to raise car prices for US consumers. Canada & EU in the Crosshairs: Trump warned of even steeper tariffs on Canada and the EU if they coordinate economic actions against the US. Canada, which sent nearly US$35 billion in auto exports to the US last year, is likely to be hit hard. Tesla Gains from Domestic Production: Tesla is seen as the biggest winner in this tariff war. Its EVs are manufactured in Texas and California , largely shielding it from the auto import levies. Ford may fare better than foreign brands too, with 80% of its US sales made domestically. Wall Street M&A Slows: Despite hopes of a Trump-era dealmaking boom, only seven US$10B+ deals hav...

US GDP Beats Expectations, But Caution Lingers Amid Trump Trade Risks

Key Takeaways: US GDP rose 2.4% in Q4 2024, higher than the previous 2.2% estimate, signalling stronger-than-expected economic momentum at year-end. The upgrade was driven by net exports, government spending, and business investment . However, consumer spending growth was revised down to 4%, still solid but less robust than initially reported. The Fed’s preferred inflation gauge — core PCE — was revised down to 2.6% , a small but notable relief as markets brace for the February PCE report on Friday. Another key indicator, Gross Domestic Income (GDI) , surged 4.5% , marking a notable rebound from the previous quarter. The average of GDP and GDI stood at 3.5% , the best in a year. Jobless claims remained steady, suggesting the labour market is still resilient , with continuing claims dropping to a one-month low. Still, economic forecasts for 2025 remain cautious , with concerns growing over...

Wall Street Slips as Tariffs Take Centre Stage Despite Strong GDP Data

Key Takeaways: US stocks dipped on Thursday as investor focus shifted from strong GDP data to heightened trade war fears , following Trump’s confirmation of a 25% auto tariff . The S&P 500 fell 0.3% , on track for its worst quarter since 2023 . The Nasdaq 100 lost 0.6% and the Dow Jones dropped 0.4% . Automakers were among the hardest hit. General Motors, Toyota, and Mercedes-Benz all declined. Trump warned of more severe action if the EU and Canada retaliate . While the fourth-quarter US GDP growth was revised higher and inflation data was adjusted lower, analysts say markets remain focused on the current economic environment , not past performance. The bond market reflected inflation concerns, with short-dated Treasuries outperforming , and the 10-year yield rising to 4.36% . Investors now await the PCE inflation report on Friday — the Fed’s preferred gauge — which ma...

Trump’s Auto Tariffs Threaten Affordable Cars and Industry Stability

Key Takeaways: Trump’s 25% import tariff on cars and light trucks , expected to take effect next week, could push US car prices even higher , especially affecting low-cost models built overseas by brands like GM, Ford, Kia, and Hyundai . Americans already face rising vehicle costs , and the latest tariffs risk further squeezing consumers and disrupting automotive supply chains , particularly at the entry-level market segment . Mexico, Japan, and South Korea , the largest sources of US car imports, will be among the hardest hit . The EV market could see selective benefit , with at least one electric carmaker poised to gain from the shake-up. Market Reaction : Shares of major automakers, including Toyota, Mercedes-Benz, and GM , fell as investors weighed the impact of worsening global trade tensions . Despite calling these tariffs “permanent,” Trump has recently backtracked on some trade threats — offerin...

Fed’s Collins Signals Rates May Stay Higher for Longer Amid Cloudy Outlook

Key Takeaways: Boston Fed President Susan Collins says it’s likely appropriate to keep interest rates steady for a longer time , citing growing economic uncertainty. Speaking at a Thursday event hosted by 100 Women in Finance and others, Collins noted that tariffs from the White House may temporarily boost inflation , though the timing of when price pressures ease remains unclear. She also flagged a potential slowdown in business activity , with firms appearing to adopt a "wait-and-see" approach amid policy shifts and market jitters. Despite recent weak sentiment surveys, Collins emphasized that fundamental strengths in the economy remain intact , warning against letting negative narratives drive a self-fulfilling slowdown. Why It Matters: Collins’ comments support the Fed’s patient stance on rate cuts, reinforcing the narrative that policymakers won’t rush to ease despite soft patches in da...

Malaysia’s Producer Price Growth Eases to 0.3% in February Amid Slower Mining Output

Key Takeaways: PPI Eases: Malaysia’s Producer Price Index (PPI) for local production rose 0.3% year-on-year (YoY) in February 2025, down from 0.8% in January , signaling moderating cost pressures at the producer level. Agriculture Drives Growth: The agriculture, forestry and fishing sector continued to lead, up 15.2% YoY , driven by a 26.1% surge in perennial crops . Mining Sector Contracts Sharply: Mining output fell 9.7% YoY , deeper than January’s 1.3% drop, due to declines in crude petroleum (-9.8%) and natural gas (-9.4%) . Manufacturing Softens: Manufacturing PPI fell 0.3% YoY , a smaller drop than January’s 0.6%. Biggest declines: Coke & refined petroleum products (-12.7%) Computer, electronic & optical products (-3.2%) Utilities: Electricity & gas supply dipped 0.2% Water supply remained resilient with a 2.9% increase....

Malaysia's Takaful Sector Poised for Stronger Growth in 2025 Amid Reforms and Economic Stability

Key Takeaways: Stronger Sector Outlook: Fitch Ratings expects Malaysia’s takaful sector to maintain strong growth in 2025, backed by regulatory reforms, digitalisation , rising public awareness , and macroeconomic stability . Upcoming Regulatory Enhancements: RBC2 Framework (effective Jan 2027) will align capital standards with global norms, including new catastrophe risk charges and revised reserve requirements . Hajah and Darurah Policy (implemented Jan 2025) now clarifies when conventional reinsurance can be used in takaful, especially under fund-threatening scenarios. Refined digital insurer entry rules (from Mar 2025) to ensure early-stage viability and drive innovation. Medical Takaful in Focus: Rising health claim costs due to medical inflation have prompted gradual repricing and the introduction of co-payment rules since Sept 2024 to manage affordability. Profitability an...

Malaysia’s Air Travel Up 7% YoY in February, Aviation Recovery Gains Altitude

Key Takeaways: Passenger Growth: Malaysia recorded 8.7 million air passengers in February 2025, up 6.9% YoY from the same month last year. Slight Monthly Dip: Traffic declined 5.9% MoM , but travel demand remained strong due to school holidays, visa exemptions , and new routes . Domestic vs International: Domestic traffic: 4.3 million (+6.6% YoY) International traffic: 4.4 million (+7.2% YoY), making up 51.5% of total passenger volume YTD. Strong Non-ASEAN Travel: Non-ASEAN passengers: 2.6 million (+10% YoY) ASEAN passengers: 2.2 million (+4.4% YoY) Busy Airports: KLIA (+7.2%) Penang (+8.7%) Senai (+6.9%) Kota Kinabalu (+5.3%) Langkawi (+2.3%) Kuching (+1.7%) Boosting Factors: Higher seat capacity, visa exemptions for China and India , and new routes like Kota Kinabalu–Tokyo , KL–Ürümqi , and Penang–Zhangjiajie supported growth. Outlook for 2025: MAV...

Sapura Energy Swings to Profit with RM189 Million in FY25, Signals Strong Recovery Ahead

Key Takeaways: Back in the Black: Sapura Energy reported a profit after tax and minority interest of RM189 million for FY25, a strong turnaround from a RM509 million loss in FY24. Revenue Growth: Group revenue rose 8.9% year-on-year to RM4.7 billion , driven by solid performance in its Engineering & Construction and Operations & Maintenance segments. EBITDA Performance: The Group posted RM524 million in EBITDA for the financial year ended January 31, 2025. Debt Restructuring Progress: The majority of financiers under its multi-currency financing have granted Approval-in-Principle for the company’s proposed restructuring scheme. Strong Order Book: Sapura Energy’s group order book now stands at RM8.5 billion , with an additional RM5.5 billion held through joint ventures and associates — the highest level in recent years . PN17 Exit ...

PCE Inflation Data Drops Friday — Is Sticky Inflation Here to Stay?

All eyes are on the Fed’s favorite inflation gauge this Friday — and the market might not like what it sees. After a brief sigh of relief from softer CPI and PPI earlier this month, February’s Personal Consumption Expenditures (PCE) data is expected to show that inflation hasn’t cooled further — and might be getting stickier. Key Takeaways: 1. Headline PCE Expected to Hold Steady Total PCE inflation is forecasted at +0.3% MoM and 2.5% YoY — unchanged from January . Even Fed Chair Jerome Powell hinted at the same 2.5% figure. 2. Core PCE Might Tick Higher Core PCE (ex-food & energy) is projected at +0.3% MoM and 2.7% to 2.8% YoY — slightly hotter than January. Key drivers: rising goods prices , healthcare , and financial services . 3. Why This Matters for Investors The Fed won’t tolerate inflation drifting further from its 2% target . If Friday’s data is sticky, rate cuts may get delayed o...

FBM KLCI Climbs to Two-Week High as Local Stocks Outperform Despite U.S. Tariff Jitters

The FBM KLCI surged 1.16% to 1,535.73 , hitting a two-week high on Thursday, buoyed by gains in banking and energy stocks , even as Wall Street dipped on Trump’s proposed 25% tariffs on imported vehicles . Market Summary Wall Street Recap S&P 500: 5,693.31 ( -0.33% ) Dow Jones: 42,299.70 ( -0.37% ) Nasdaq: 17,804.03 ( -0.53% ) Market sentiment was cautious as Trump’s auto tariffs reignited trade tension fears , especially impacting the tech-heavy Nasdaq. Bursa Malaysia Highlights FBM KLCI: 1,535.73 ( +1.16% ) Top Gainer: Gamuda (RM4.32, +7.73%) Top Loser: Axiata (RM1.84, -1.60%) USD/MYR: 4.4315 ( +0.05% ) KLCI saw its strongest single-day gain since March 13 , reflecting local resilience and limited exposure to U.S. auto trade . Economic & Sectoral Developments Producer Price Index (PPI): Feb 2025 PPI growth slowed to 0.3% y-o-y (from 0.8% in Jan), driven by ...

HI Mobility Jumps 6.56% on Main Market Debut; Strong Demand and EV Focus Draw Investor Interest

HI Mobility (5335.MY) made a strong debut on Bursa Malaysia’s Main Market , opening at RM1.27 , hitting a high of RM1.33 , and closing at RM1.30 , marking a 6.56% gain from its IPO price of RM1.22 . IPO Performance & Demand Trading Volume: 98.4 million shares Closing Price: RM1.30 Oversubscription: Overall: 6.57x Public: 10.12x Bumiputera: 3.03x This indicates strong investor appetite , especially from the public segment, for HI Mobility's growth potential in the transportation and EV sectors. IPO Fund Allocation (RM115.9M Raised) 60.4%: Expand bus fleet (electric + ICE vehicles) 12.9%: Build EV charging infrastructure 4.4%: AI for vehicle monitoring & driver management 22.3%: Working capital & listing expenses Focus on sustainability and smart mobility positions the company well in the green transport movement. Market Cap & Advisory Estimated Market Cap: ...

UK Bonds Tumble as Investors Eye Fragile Finances and Global Risks

UK government bonds (gilts) fell sharply , erasing Wednesday’s gains, as markets shifted focus from a smaller debt plan to long-term fiscal concerns and the threat of rising global borrowing costs. Key Market Moves: 10-year gilt yield surged to 4.81% , highest since mid-January Gilts underperformed European peers as investor optimism faded Market concerns include: Limited fiscal headroom Potential shocks (like global rate hikes or US tariffs) What’s Fueling the Selloff? Despite Chancellor Rachel Reeves restoring her fiscal buffer , analysts say the UK remains vulnerable to external shocks . The Office for Budget Responsibility (OBR) warned Reeves’ buffer could be wiped out if: Trump imposes 20% tariffs globally Borrowing costs rise by just 0.6% Fiscal Uncertainty Ahead Autumn budget in October could bring tax hikes or spending cuts . OBR estimates a 46% chance of Reeves breaking her fiscal rule (taxes funding ...

China's Tech Stocks Cool Off: AI Hype No Longer Enough to Drive Rally

After a red-hot start to 2025, China’s tech rally is losing steam . Despite big promises in artificial intelligence (AI), investors are demanding real earnings growth and clear macro signals to stay bullish. Hang Seng Tech Index Stalls The Hang Seng Tech Index came close to correction territory this week. Only Alibaba saw notable post-earnings gains, thanks to its US$53 billion AI investment plan over the next three years and continuous AI product rollouts. Other tech giants like Tencent , Baidu , JD.com , and Meituan failed to impress, despite beating earnings expectations . AI Hype Isn’t Enough (For Now) DeepSeek’s breakthrough had sparked a 25% year-to-date gain , but now markets want more than hype . “Share prices have run ahead of earnings,” noted Andy Wong of Solomons Group. Investors need tangible AI monetization and sustained business improvement , especially as core...

Porsche & Mercedes Face US$3.7 Billion Blow from Trump’s Car Tariffs

President Trump’s new 25% import tariffs on foreign cars are poised to deal a major financial hit to Germany’s top carmakers — with Porsche AG and Mercedes-Benz Group AG taking the brunt of the impact. What’s Happening: New tariffs take effect April 3 , potentially slashing around 25% of Porsche and Mercedes’ 2026 projected operating earnings , according to Bloomberg Intelligence. The estimated hit: €3.4 billion (US$3.7 billion or RM16.2 billion) . Automakers may have to raise prices or shift more production to the US to absorb the blow. Market Reaction: Porsche shares fell 5% , Mercedes down 5.2% , BMW -4.9% , Volkswagen -4.3% , and Aston Martin tumbled 8.9% in London. The tariffs threaten Europe’s export-heavy auto industry , particularly German brands , which ship a large portion of their high-margin vehicles like the Porsche 911 and Mercedes S-Class to the US. Industry Concern...

Dividend Payout Showdown: Which Malaysian Bank Rewards Shareholders the Most?

As dividend season heats up, investors are eyeing which Malaysian bank gives the most back to its shareholders —and Maybank (1155.MY) is clearly leading the pack with a generous 73% dividend payout ratio . What is Dividend Payout Ratio? It measures how much of a company’s net earnings are returned to shareholders as dividends. Formula: Per-share: DPS / EPS × 100% Aggregate: Total Dividends / Net Profit × 100% Example: If Maybank earns 83.61 sen per share and pays 61 sen in dividends → 73% payout = RM73 returned for every RM100 earned. Who’s the Most Generous? MAYBANK – 73% payout : Prioritizes shareholder rewards with stable, high cash returns. HLBANK : More conservative—prefers reinvesting for growth and resilience. CIMB, RHBBANK, PBBANK : Balanced strategy—combines dividends with regional expansion and risk management. Why a High Payout Ratio Matters 1. Real Cash Flow: Great for income-seeking investors like retirees. 2. Matu...

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