Latest news with #KenLow
New Straits Times
4 days ago
- Business
- New Straits Times
'Extraordinary tribute' initiative lifts optimism, but caution remains for investors
Commentary by Ken Low, Head of Dealing, Moomoo Malaysia THE government's recently unveiled appreciation package offers a reaffirmation of economic stability and an acknowledgement of public resilience. With gross domestic product (GDP) projected at 4.5 per cent for the second quarter (Q2) of 2025, a five per cent appreciation in the ringgit against the US dollar, and a record RM384 billion in approved investments last year, the speech signals renewed confidence in Malaysia's recovery trajectory. While the headline figures are encouraging, investors should be mindful that short-term sentiment gains may eventually give way to more nuanced market dynamics, particularly as the government moves forward with long-anticipated structural reforms. MACROECONOMIC STRENGTH AND ITS MARKET TRANSLATION The numbers are telling: Malaysia's economy expanded 4.4 per cent in Q1 and is forecast to hit 4.5 per cent in Q2. Simultaneously, Malaysia has climbed 11 spots to rank 23rd on the World Competitiveness Index, and recorded RM384 billion in approved investments last year - a 17 per cent year-on-year increase. These signals reflect improving investor confidence, foreign fund inflows, and a more favourable backdrop for risk-taking, especially in domestic equities and government bonds. The ringgit's over five per cent appreciation against the US dollar, supported by stronger fundamentals and policy clarity, also improves purchasing power and reduces imported inflation risk - factors that could influence earnings in consumer-facing sectors and improve margin expectations in the near term. The next few months will test the government's ability to sustain growth while executing reforms. For investors, the focus should remain on companies with sound fundamentals, pricing power, and proactive cost management strategies. SPENDING POWER AND DOMESTIC DEMAND: A SECTORAL VIEW The appreciation package goes beyond symbolic policy - it delivers immediate, broad-based support to household incomes, with potential implications for consumer demand. Key measures include a minimum wage increase to RM1,700, enhanced living wage provisions for government-linked company and government-linked investment company employees, and the RM100 "SARA for All" cash transfer reaching over 22 million adults. These measures are likely to generate a short-term uplift in disposable income, supporting consumption across key categories. For equity investors, this points to potential near-term tailwinds in: • Consumer staples and discretionary sectors (groceries, apparel, personal care) • Telecommunications (prepaid/top-up driven segments) • Retail and Fast-moving Consumer Goods (especially mass-market and convenience-driven brands) • Food & Beverage (quick-service, ready-to-eat, and value-tier offerings) However, it's critical to differentiate short-term sentiment-driven gains from structurally sustainable consumption trends. One-off transfers, while impactful, do not guarantee prolonged demand momentum—especially amid persistent food inflation risks and looming subsidy reforms that could erode real income over time. For investors, focus on companies with pricing power, efficient distribution, and exposure to the value-for-money segment. A selective approach is key, given the transitory nature of the stimulus and potential volatility in consumer confidence. RON95 AND ELECTRICITY COULD CREATE DIVERGENCE ACROSS SECTORS Of greater consequence is the upcoming restructuring of RON95 fuel subsidies, with new pricing and eligibility criteria expected to be announced by end-September. The proposal to fix prices at RM1.99 per litre for eligible Malaysians aims to prevent RM20 billion in annual leakage, a necessary step for fiscal sustainability. At the same time, the revised electricity tariff structure introduced in July 2025 offers relief to the majority of households, with over 85 per cent of domestic users seeing up to a 14 per cent reduction in their monthly electricity bills. However, high-usage residential and commercial categories are expected to face steeper rates, in line with a more targeted subsidy framework. Both changes introduce new cost variables for businesses. While lower residential energy bills may indirectly support consumption, sectors with high energy intensity - such as manufacturing, logistics, and data centres, could face margin pressures if unable to absorb or pass on higher input costs. Investors should monitor these shifts closely, especially in companies with low operational flexibility or narrow pricing buffers. INVESTOR OUTLOOK: STAY SELECTIVE AMID SHIFTING CURRENTS In the short term, the Appreciation Package is likely to support domestic sentiment and encourage rotation into consumer-linked sectors. However, as policy reforms progress, particularly around fuel subsidies and fiscal recalibration, the market may begin to reprice risk across vulnerable industries. Investors are advised to remain selective, focusing on companies with diversified revenue streams, healthy balance sheets, and strategic agility to adapt to changing cost structures. Defensive positioning in utilities, consumer staples, and dividend-yielding assets may also provide stability as the broader effects of the subsidy shift materialise.
New Straits Times
4 days ago
- Business
- New Straits Times
Malaysia's appreciation package signals renewed economic optimism, but investors should stay selective
Commentary by Ken Low, Head of Dealing, Moomoo Malaysia THE government's recently unveiled appreciation package offers a reaffirmation of economic stability and an acknowledgement of public resilience. With gross domestic product (GDP) projected at 4.5 per cent for the second quarter (Q2) of 2025, a five per cent appreciation in the ringgit against the US dollar, and a record RM384 billion in approved investments last year, the speech signals renewed confidence in Malaysia's recovery trajectory. While the headline figures are encouraging, investors should be mindful that short-term sentiment gains may eventually give way to more nuanced market dynamics, particularly as the government moves forward with long-anticipated structural reforms. MACROECONOMIC STRENGTH AND ITS MARKET TRANSLATION The numbers are telling: Malaysia's economy expanded 4.4 per cent in Q1 and is forecast to hit 4.5 per cent in Q2. Simultaneously, Malaysia has climbed 11 spots to rank 23rd on the World Competitiveness Index, and recorded RM384 billion in approved investments last year - a 17 per cent year-on-year increase. These signals reflect improving investor confidence, foreign fund inflows, and a more favourable backdrop for risk-taking, especially in domestic equities and government bonds. The ringgit's over five per cent appreciation against the US dollar, supported by stronger fundamentals and policy clarity, also improves purchasing power and reduces imported inflation risk - factors that could influence earnings in consumer-facing sectors and improve margin expectations in the near term. The next few months will test the government's ability to sustain growth while executing reforms. For investors, the focus should remain on companies with sound fundamentals, pricing power, and proactive cost management strategies. SPENDING POWER AND DOMESTIC DEMAND: A SECTORAL VIEW The appreciation package goes beyond symbolic policy - it delivers immediate, broad-based support to household incomes, with potential implications for consumer demand. Key measures include a minimum wage increase to RM1,700, enhanced living wage provisions for government-linked company and government-linked investment company employees, and the RM100 "SARA for All" cash transfer reaching over 22 million adults. These measures are likely to generate a short-term uplift in disposable income, supporting consumption across key categories. For equity investors, this points to potential near-term tailwinds in: • Consumer staples and discretionary sectors (groceries, apparel, personal care) • Telecommunications (prepaid/top-up driven segments) • Retail and Fast-moving Consumer Goods (especially mass-market and convenience-driven brands) • Food & Beverage (quick-service, ready-to-eat, and value-tier offerings) However, it's critical to differentiate short-term sentiment-driven gains from structurally sustainable consumption trends. One-off transfers, while impactful, do not guarantee prolonged demand momentum—especially amid persistent food inflation risks and looming subsidy reforms that could erode real income over time. For investors, focus on companies with pricing power, efficient distribution, and exposure to the value-for-money segment. A selective approach is key, given the transitory nature of the stimulus and potential volatility in consumer confidence. RON95 AND ELECTRICITY COULD CREATE DIVERGENCE ACROSS SECTORS Of greater consequence is the upcoming restructuring of RON95 fuel subsidies, with new pricing and eligibility criteria expected to be announced by end-September. The proposal to fix prices at RM1.99 per litre for eligible Malaysians aims to prevent RM20 billion in annual leakage, a necessary step for fiscal sustainability. At the same time, the revised electricity tariff structure introduced in July 2025 offers relief to the majority of households, with over 85 per cent of domestic users seeing up to a 14 per cent reduction in their monthly electricity bills. However, high-usage residential and commercial categories are expected to face steeper rates, in line with a more targeted subsidy framework. Both changes introduce new cost variables for businesses. While lower residential energy bills may indirectly support consumption, sectors with high energy intensity - such as manufacturing, logistics, and data centres, could face margin pressures if unable to absorb or pass on higher input costs. Investors should monitor these shifts closely, especially in companies with low operational flexibility or narrow pricing buffers. INVESTOR OUTLOOK: STAY SELECTIVE AMID SHIFTING CURRENTS In the short term, the Appreciation Package is likely to support domestic sentiment and encourage rotation into consumer-linked sectors. However, as policy reforms progress, particularly around fuel subsidies and fiscal recalibration, the market may begin to reprice risk across vulnerable industries. Investors are advised to remain selective, focusing on companies with diversified revenue streams, healthy balance sheets, and strategic agility to adapt to changing cost structures. Defensive positioning in utilities, consumer staples, and dividend-yielding assets may also provide stability as the broader effects of the subsidy shift materialise. While the current sentiment uplift is encouraging, sustained market momentum will depend on how effectively Malaysia navigates this next phase of policy execution.
The Star
5 days ago
- Business
- The Star
Consumer sector to gain
PETALING JAYA: Analysts from research houses and fund managers appear to be largely positive on the 'Appreciation Package' unveiled by the Madani government on Wednesday, generally agreeing it would provide a short-term boost to the consumer sector. In addition, they see the benefits likely cascading down to tourism-related industries such as hotels and restaurants, as well as the food and beverage (F&B) sector. In a strategy report to clients, Hong Leong Investment Bank Research (HLIB Research) reported that the RM100 cash handout is estimated to benefit 22 million Malaysians, involving an allocation of RM2bil. 'As a result, the total allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) has increased from RM13bil to RM15bil for this year,' the research house said, adding that the government remains committed to implementing targeted subsidies for RON95 petrol, with full details to be announced by the end of September. The research house anticipates that the one-off RM100 cash transfer and lower RON95 petrol price for the majority of Malaysians should increase private consumption growth by approximately 0.2 percentage points. With regards to the potential impact on the country's fiscal deficit, HLIB Research said the additional cash transfer of RM2bil translates to 0.1% of gross domestic product (GDP), as it also highlighted that the government is also expected to experience some increase in subsidy spending from lowering the subsidised price for RON95 from RM2.05 per litre to RM1.99. Nevertheless, it said this is expected to be fully offset by the government's targeted subsidy rationalisation plan, lower oil prices and stronger ringgit. 'At the same time, the government had already implemented the sales and services tax (SST) expansion on July 25 with a target of RM5bil – representing 0.2% of GDP – as additional revenue for 2025. 'Taking all this into account, we maintain our fiscal deficit projection of minus 3.8% of GDP, up from the minus 4.1% of 2024,' said the research house. Notably, HLIB Research said 99 Speed Mart Retail Holdings Bhd and Aeon Co (M) Bhd would benefit from the handouts, maintaining its 'buy' call for both companies with respective target prices of RM2.98 and RM1.82. It said 99 Speed Mart, with 2,800 outlets nationwide and an average basket size of RM21.40, is particularly well positioned to capture recurring spend from consumers using Sara credits, while Aeon, with its urban footprint and diversified merchandise, may see uplift from middle-income segments with improved purchasing sentiment. Head of dealing at Moomoo Malaysia, Ken Low, sees consumer staples, F&B, and fast moving consumer goods as the most immediate beneficiaries, before adding that the RM100 cash transfer, wage hikes, and expanded living wage coverage put more cash into lower-and middle-income hands. 'This typically translates into spending on groceries, essentials, and value-tier offerings. We also see telecommunications and quick-service F&B as near-term winners, especially in prepaid-driven or convenience-focused segments,' he told StarBiz. However, he cautioned that the upside may be short-lived unless sentiment is sustained, suggesting investors to focus on companies with pricing power, efficient cost structures, and strong reach in the value-for-money space. From a foreign investor perspective, Low believes that Malaysia's recent ringgit strength, competitive index climb, and solid investment flows suggest that confidence is returning, not because of spending, but because of clearer policy direction. 'That said, execution remains key, as markets are likely to stay selective until the full impact of fuel subsidy reforms is known. 'In our view, the bulk of the 'relief rally' sentiment is already priced in, what investors need next is proof of reform credibility and growth delivery,' he said. Of interest, while selecting popular consumer players such as 99 Speed Mart, Farm Fresh Bhd and Padini Holdings Bhd among its top picks for the sector, with respective target prices of RM2.60, RM2.25 and and RM2.55, CIMB Research is keeping its 'neutral' call on the industry. Explaining from a broader technical view, it said the consumer sector is currently trading at 27.2 times one-year forward price-over-earnings (PE), slightly over one standard deviation below its five-year mean of 29.1 times. 'We believe valuations are fair at this juncture, reflecting ongoing soft consumer sentiment and higher sales tax on discretionary goods, on top of the impact of boycott activities on selected consumer names, and cost pressures from the expanded SST on rental costs,' it added. Meanwhile, aside from familiar consumer names such as Fraser & Neave Holdings Bhd at a target price of RM32.68 and Life Water Bhd at RM1, MBSB Research has also picked Pavilion Real Estate Investment Trust (REIT) at 1.88 and Petronas Dagangan Bhd (PetDag) at RM22.25, respectively, as its picks in the REIT and oil and gas industries. The research house expects the RM100 cash handout to be positive for retail REITs as it will increase disposable income of the public, improving shopper footfall and tenants' sales of shopping malls. Additionally, it believes the demand for RON95 will remain supported due to continuous utilisation for fossil fuel out of necessity. 'While the margins for the dealers through a two-tiered pricing system due to the targeted subsidy are yet to be disclosed, PetDag is expected to be compensated for selling the fuel below market price to eligible consumers, while higher margins are anticipated for the unsubsidised fuel sold to ineligible recipients. 'Initial risks may persist in terms of uptake and utilisation post-implementation of the RON95 targeted subsidy, although we believe PetDag still has the upper hand to mitigate them,' said MBSB Research. Meanwhile, Tradeview Capital chief investment officer Nixon Wong said the declaration of a special public holiday on Sept 15 may provide a temporary boost to domestic tourism, as the extended four-day weekend encourages travel and leisure spending. He told StarBiz the 'Appreciation Package' could shift public and investor perception of the current administration's fiscal stance, which has so far been seen as focused primarily on subsidy rationalisation and financial consolidation. Wong said the move may signal a more balanced approach – one that still accommodates short-term support for the rakyat while preparing for structural reforms. 'It could also lay the groundwork for greater market optimism ahead of Budget 2026, particularly in anticipation of further handouts or potential infrastructure allocations,' he added. Meanwhile, an analyst with a foreign research outfit opined that QL Resources Bhd may also stand to gain as a major player in consumer staples, including poultry and convenience store chains, which could see higher sales due to increased foot traffic and spending on essentials. She projected that automotive players MBM Resources Bhd and Bermaz Auto Bhd will also likely benefit from lower RON95 fuel prices that will reduce operating costs for vehicle owners, particularly for the middle and lower-income groups. 'At this juncture, it seems natural that the biggest winners are consumer-facing and infrastructure-related sectors. While these measures are pro-rakyat, the government's long-term credibility also depends on how well they are balanced with fiscal reforms. 'Foreign investors may not react negatively now – but they are watching if this trend continues into 2026, and whether it will be coupled with structural revenue growth or fiscal sustainability,' she said.
The Star
13-05-2025
- Business
- The Star
Easing of US-China trade war opens up temporary window of opportunity
Moomoo Malaysia head of dealing Ken Low KUALA LUMPUR: Investors should view the easing of trade tensions between the United States and China as a temporary respite rather than a resolution, said digital investment firm Moomoo Malaysia. Head of dealing, Ken Low, said portfolio strategies should remain balanced and selective, with a focus on fundamentally strong companies and diversified exposures. "For Malaysia, an export-oriented economy, the temporary 90-day tariff pause presents a near-term boost for key sectors such as electronics, palm oil, and manufacturing - segments that have been under pressure from global supply chain disruptions and weaker external demand,' he said in a statement today. The US and China have agreed to scale back tariffs and initiate a 90-day pause in additional duties. The US will lower its tariffs on Chinese imports to 30 per cent from 145 per cent, while China will reduce its tariffs on US goods to 10 per cent from 125 per cent. Low said for Malaysian markets, this development offers a reprieve from the prolonged uncertainty that has weighed on investor sentiment since the start of 2025. "The truce, which includes the rollback of tariffs on hundreds of products, is widely seen as a step toward stabilising supply chains and improving cross-border trade flows. However, gold prices experienced a steep decline, with spot gold falling over three per cent on May 12 - the sharpest drop since April,' he noted. He said the gold selloff reflects a broader shift in market sentiment, as investors pull back from safe-haven assets in favour of riskier positions, driven by renewed optimism in equity markets. "The recent sharp decline in gold prices serves as a cautionary reminder of how quickly market sentiment can shift. While gold's drop may reduce its immediate appeal, it still plays a valuable role as a hedge, particularly if trade talks stall or volatility returns,' he added. - Bernama
Borneo Post
13-05-2025
- Business
- Borneo Post
Moomoo Malaysia: Easing of US-China trade war opens up temporary window of opportunity
The US and China have agreed to scale back tariffs and initiate a 90-day pause in additional duties. – Bernama photo KUALA LUMPUR (May 13): Investors should view the easing of trade tensions between the United States and China as a temporary respite rather than a resolution, said digital investment firm Moomoo Malaysia. Head of dealing, Ken Low, said portfolio strategies should remain balanced and selective, with a focus on fundamentally strong companies and diversified exposures. 'For Malaysia, an export-oriented economy, the temporary 90-day tariff pause presents a near-term boost for key sectors such as electronics, palm oil, and manufacturing – segments that have been under pressure from global supply chain disruptions and weaker external demand,' he said in a statement today. The US and China have agreed to scale back tariffs and initiate a 90-day pause in additional duties. The US will lower its tariffs on Chinese imports to 30 per cent from 145 per cent, while China will reduce its tariffs on US goods to 10 per cent from 125 per cent. Low said for Malaysian markets, this development offers a reprieve from the prolonged uncertainty that has weighed on investor sentiment since the start of 2025. 'The truce, which includes the rollback of tariffs on hundreds of products, is widely seen as a step toward stabilising supply chains and improving cross-border trade flows. However, gold prices experienced a steep decline, with spot gold falling over three per cent on May 12 – the sharpest drop since April,' he noted. He said the gold selloff reflects a broader shift in market sentiment, as investors pull back from safe-haven assets in favour of riskier positions, driven by renewed optimism in equity markets. 'The recent sharp decline in gold prices serves as a cautionary reminder of how quickly market sentiment can shift. While gold's drop may reduce its immediate appeal, it still plays a valuable role as a hedge, particularly if trade talks stall or volatility returns,' he added. – Bernama lead Moomoo Malaysia tariffs trade war
