KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Aluminium Prices Hit One-Year High
Maybank Investment Bank (Maybank IB) remains positive on Press Metal Aluminium Holdings Bhd (PMETAL) as aluminium prices climb to their highest in a year amid tight global supply. Prices on the London Metal Exchange (LME) rose to US$2,737 per tonne in September, already exceeding Maybank’s year-end forecast of US$2,550 per tonne.
The research house highlighted that inventories remain near multi-decade lows, while sanctions on Russia and China’s 45 million tonne production cap continue to squeeze supply. High energy costs have also led to smelter shutdowns in some regions, adding to the deficit risk.
U.S. Dollar Weakness a Key Earnings Headwind
While a weaker greenback could support aluminium demand globally, Maybank IB cautioned that it poses a downside risk for Press Metal’s earnings. This is because the company earns revenue in U.S. dollars but reports in ringgit.
Maybank estimates that a 5% depreciation of the U.S. dollar against the ringgit could shave 13% off Press Metal’s earnings.
Target Price and Valuation
The bank maintained its target price at RM6.34, pegged to 25x FY2026 earnings. Bloomberg consensus stands close at RM6.36, suggesting an upside potential of up to 7.6% versus the last closing price of RM5.91.
Supply and Demand Outlook
Supply: Russia’s exports remain restricted, China is capped, and new projects in India and Indonesia face delays.
Demand: Growth is uneven — the U.S. is weighed down by tariffs, Europe remains soft, while China is expected to see modest demand growth with targeted government support.
Alumina Dynamics and Downstream Impact
Alumina prices are expected to stay soft in 2025, with a supply surplus of 1–2 million tonnes. For Press Metal, this implies:
Lower input costs for its downstream business.
But weaker earnings contribution from upstream associate Nanshan Aluminium International Holdings Ltd (NAIHL), as the alumina-aluminium price spread has narrowed to 12% (from 15% in June).
Capacity Expansion Plans
NAIHL: On track to reach 4 million tonnes by 2026.
PT Kalimantan Alumina Nusantara (KAN): 80% owned by Press Metal, set to commission 1.0–1.2 million tonnes capacity in Q1 2027.
Long-Term Drivers
Maybank IB expects structural demand growth for aluminium to remain intact, driven by:
Clean energy transition
Artificial intelligence and data centres
Broader industrial applications
Takeaway: Press Metal benefits from favourable aluminium prices and constrained global supply, but earnings remain vulnerable to U.S. dollar swings. Long-term fundamentals tied to clean energy and AI support a constructive outlook.
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