Latest news with #AffinHwangInvestmentBankBhd
New Straits Times
2 days ago
- Business
- New Straits Times
Bursa Malaysia Q2 earnings likely to fall on weak trading, says Affin Hwang
KUALA LUMPUR: Bursa Malaysia Bhd may report a second straight quarterly decline in earnings for the second quarter of 2025 (2Q25), as weak market sentiment and reduced trading activity continue to weigh on its performance. Affin Hwang Investment Bank Bhd expects Bursa Malaysia's 2Q25 net profit to come in at RM64 million, down 6.4 per cent quarter-on-quarter and 20.3 per cent year-on-year. Affin Hwang said the weaker performance would be attributed to lower trading activity across the board, particularly among local institutional investors. "Due to a more cautious market sentiment, Bursa Malaysia saw another subdued quarter, with 2Q25 average daily value (ADV) declining to RM2.4 billion. "This further dampens the overall the first half of 2025 equity ADV, which came in lower by 23.5 per cent year-on-year at RM2.6 billion," the firm added. "Until there is more clarity regarding ongoing global trade negotiations, we believe investors are likely to maintain a wait-and-see approach, keeping market sentiment muted in the near term," Affin Hwang said. Affin Hwang also revised its earnings forecast for Bursa Malaysia downwards, citing the lack of a strong catalyst in the second half of the year. It also lowered its equity ADV assumptions for 2025, 2026 and 2027 to RM2.6 billion, RM2.8 billion, and RM2.9 billion respectively, from RM2.8 billion, RM2.9 billion and RM3.0 billion previously. This has resulted in earnings forecast cuts of 5 per cent for 2025, and 3 per cent each for 2026 and 2027. Bursa Malaysia is expected to release its latest results on July 29. Affin Hwang maintained its "Hold" call on Bursa Malaysia but reduced its target price to RM7.50 from RM7.70 previously. The firm said the revised valuation is based on a price-to-earnings ratio (PER) of 22 times, which is in line with Bursa Malaysia's 10-year average. "At a calendar year 2026 price to earnings ratio of 23 times, Bursa Malaysia is trading slightly below the regional peers at about 26 times, which we view as fair given Malaysia's relatively smaller market capitalisation and lower trading velocity," it added.
The Star
07-07-2025
- Business
- The Star
Property sector earnings visibility set to improve
Affin Hwang Investment Bank Bhd said it will maintain an 'overweight' stance on the sector. PETALING JAYA: Malaysia's property market is expected to experience a reacceleration in the second half of 2025, says Affin Hwang Investment Bank Bhd. In a report, it said it will maintain an 'overweight' stance on the sector as earnings visibility is set to improve as developers ramp up billings from deferred launches and back-loaded execution. 'While the revised sales and service tax (SST) framework introduces incremental cost pressure, 6% to 8%, our analysis suggests that margin drag remains manageable,' it noted. SST absorption could weigh incrementally on margins for developers with larger exposure to industrial, data centre, or non- Housing Development Act mixed-use products. 'Developers typically pass on SST-related costs via higher selling prices, though weaker markets like offices may see partial absorption to sustain take-up. 'However, we think demand in the industrial and commercial segment should remain strong and enhance pass-through ability, reducing the likelihood of any meaningful margin erosion,' the report said. But it is worth noting that serviced apartments built on commercial land but intended for residential use will be exempted from the 6% SST on construction services. The research house explained the sector is shifting its focus toward industrial monetisation and lease-based recurring income, with developers like Sime Darby Property Bhd (SimeProp) and Eco World Group Development Bhd (EcoWorld Malaysia) benefiting from strong traction in data centre (DC) and custom built facilities) deals. It also said UOA Development Bhd (UOAD) is gaining momentum, supported by healthy sales at well-located projects such as Bamboo Hills. 'We favour developers with active land banking strategies, strong DC land sales, and rising leasing income. 'SimeProp (industrial projects comprise 35% of remaining gross development value) and EcoWorld Malaysia (33%) stand out for their execution consistency and leasing strength,' it noted. Furthermore, the research house said the sector's current share price discount to revalued net asset value is at 41%, nearly a standard deviation below its five-year average. Affin Hwang Investment noted it sees a potential re-rating as the Johor-Singapore Special Economic Zone remains a standout catalyst. A catalyst would be Exsim Group's Causewayz @ Lumba Kuda that achieved full take-up within an hour for phase one. 'EcoWorld Malaysia and SimeProp are best positioned to leverage industrial and data centre demand given strong land monetisation pipelines. 'UOAD now offers a differentiated angle via its Johor RTS-linked project; with average-selling-prices guided at RM1,000 to RM1,200 per sq ft, pricing could be revised upward amid expectations of stronger-than-expected demand,' Affin Hwang explained. Meanwhile, Affin Hwang said while it has a positive view, key downside risks still exist, and include a rise in property overhang adversely impacting demand and product pricing; and labour shortages and rising building material costs, which will lead to higher operation costs.
New Straits Times
22-04-2025
- Business
- New Straits Times
Johor-Singapore SEZ remains dynamic, warm response from businesses across Causeway
KUALA LUMPUR: Businesses in Singapore have responded positively to the Johor-Singapore Special Economic Zone (JS-SEZ), Affin Hwang Investment Bank Bhd said. Most surveyed companies expressing interest in potential expansion through the initiative, Affin Hwang added. The firm said while some concerns have been raised regarding the possible impact on small local businesses near Johor, there has been no significant public opposition thus far. The JS-SEZ outlook remains positive, buoyed by strong commitments from both the Malaysian and Singaporean governments, as well as encouraging feedback from the corporate sector, Affin Hwang added. The JS-SEZ aims to attract 50 high-value projects within the next five years and reach 100 projects over the next decade, with the goal of creating 20,000 high-skilled jobs. According to recent reports, the Iskandar Regional Development Authority said the Invest Malaysia Facilitation Centre Johor has received over 250 enquiries from prospective investors. They include Danish companies in the medical and pharmaceutical sectors, as well as Chinese firms exploring opportunities in artificial intelligence. The firm noted that Malaysia-Singapore bilateral relations are currently strong, with both nations enjoying relative political stability. It added that the initiative has received support at all levels including the federal and state governments, as well as the Johor royal household. "From a global perspective, the JS-SEZ is a strategic response to the diversification of global supply chains amid ongoing US-China tensions. "Additionally, Singapore faces resource constraints such as limited land and manpower, making the JS-SEZ a practical expansion avenue for its businesses," the firm said in a note. Affin Hwang further highlighted that both governments believe collaboration between Johor and Singapore can yield outcomes greater than the sum of their individual efforts. The primary goal of the JS-SEZ is to foster synergy between the two regions, creating a distinct value proposition through strategic cooperation. Initial efforts are concentrated on attracting new investments and supporting business expansion by addressing key challenges including talent shortages, improving the ease of doing business, and enhancing the cross-border movement of people and goods. "While current efforts are centered on rolling out early-stage initiatives, the JS-SEZ remains a dynamic project, with further measures expected to follow," the firm added. On the infrastructure front, current efforts are focused on enhancing efficiency at land checkpoints.
