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The Star
18-07-2025
- Business
- The Star
Upside potential for ringgit
PETALING JAYA: The ringgit is likely to close at RM4.10 against the US dollar by the end of this year and RM4 by the end of 2026, amid a continuous softening of the US dollar and portfolio inflows. Malayan Banking Bhd (Maybank) head of foreign-exchange (forex) research Saktiandi Supaat said the ringgit's performance in 2025 so far has been supported by a broad decline in the greenback, which stemmed from fading US 'exceptionalism' and tariff-driven concerns on US growth. He noted that Federal Reserve rate cuts had also been priced in, which in turn made global investors shift away from the United States. 'The broad decline in the dollar will still be on track for the next six months and most of 2026. Generally, tariffs will be the key theme on top of others,' he said at Maybank Investment Bank's second half of 2025 (2H25) Market Outlook virtual media briefing yesterday. Currently, US$1 equals to around RM4.25. He reckoned that the ringgit was still fairly valued at this stage, with upside potential. Ongoing domestic initiatives such as government-linked companies forex conversions, resident investor programmes and promoting the ringgit in cross-border trade are steps in the right direction, he added. Saktiandi also noted that foreign currency deposits in Malaysia had grown, particularly among corporates. Meanwhile, Standard Chartered, which also held its second-half market outlook briefing yesterday, expects the ringgit to trade within a narrow range of 4.20 to 4.30 against the US dollar over the next 12 months, also supported by a broadly weak greenback. Senior investment strategist Yap Fook Hien said the US dollar's weakness had largely been priced in, and the currency is expected to stay soft – at least for the next 12 months. 'Most of the weakening has already happened and we do not expect a bounce back. At the moment, our view is that at least for the next 12 months, it will be weak,' he said at the bank's 2H25 Global Market Outlook briefing. 'But also important to note, we're not looking at a collapse of the US dollar.' He noted that the US Dollar Index (DXY), which has hovered between 100 and 110 since 2022, slipped below 100 in April amid 'Liberation Day' tariff concerns, and now trades around 98. Standard Chartered's 12-month target for the DXY is 96. On the local economy, Maybank group chief economist Suhaimi Ilias said he was maintaining Malaysia's 2025 real gross domestic product growth forecast at 4.1%. It has been revised downwards twice this year from the original 4.9% as a result of the reciprocal tariff announcement in April and lower-than-expected first-quarter growth. The prolonged uncertainties plus overhangs in US trade policy and tariff actions, as well as the outcome of Malaysia's negotiations with the United States will continue to be in focus, he said. 'There is still resilience in domestic demand, especially consumer spending and investment,' he said, adding that the country's investment upcycle appeared intact. Head of equity research Lim Sue Lin said Maybank's year-end FBM KLCI target remained at 1,660 points, 14.4 times the 2026 price earnings ratio. 'Three sector thematics to explore for the rest of 2025 are plantations, utilities/renewable energy and ports,' Lim said. Although 'neutral' on banks, Lim noted that they remained a 'crucial driver' in terms of the direction of the stock market benchmark index. Lim is also positive on the consumer, healthcare and real estate investment trust sectors. 'The (newly imposed) sales and service tax will only affect the consumer discretionary sector,' she said, adding that she remained positive on consumer staples. At its briefing, Standard Chartered Malaysia head of managed investments and advisory Ng Shin Seong added that the narrowing interest rate gap between the United States and Malaysia could support the ringgit, although 'there's just a couple more percent in our 12-month view'. 'There has been a pre-emptive cut in Malaysia's overnight policy rate, and the US Federal Reserve is expected to cut rates further,' he said. Despite market uncertainty from US trade tensions, Ng said the macroeconomic data for Malaysia remained resilient. 'Once uncertainties are alleviated, that could help the market. Based on the hard data, the country is doing okay.' Yap said a weak US dollar typically supports equities and favours non-US assets, prompting the bank to upgrade its view on emerging market local currency bonds and Asia ex-Japan equities. 'We expect a soft landing in the United States, which is positive for global equities, but the tilt is towards non-US assets,' he said. 'Asia ex-Japan valuations are attractive, and we prefer China and South Korea due to ongoing stimulus and artificial intelligence developments.' Within China, Yap said Standard Chartered adopted a barbell strategy, favouring high-dividend state-owned enterprises for stability and technology stocks for growth. In South Korea, he said improving corporate governance and fiscal stimulus are expected to attract more inflows. As for Asean, Yap said the region remained defensive and resilient, but may underperform in a strong global rally. 'Asean tends to outperform in weaker markets. At the moment, we prefer other markets for outperformance potential,' he said. He added that gold and alternative assets remained relevant in a diversified portfolio, especially amid global uncertainties, while reiterating that the US dollar remained the world's most liquid currency despite its weakness. On tariff developments, Yap said further delays are likely, given the complexity of reaching consensus across multiple countries. 'It's quite likely you'll see a bit more postponement further down the road because to get agreement from so many countries is actually very difficult. Each country has its own specific tariff, and how they calculate that number can be a mystery,' he said.
Bloomberg
11-07-2025
- Business
- Bloomberg
Investor Survey, Trade War and Dollar, 2H Outlook: Credit Crunch
Credit and high yield had a good 1H, shaking off tariffs and a spread rout with a strong recovery. Will 2H be as strong, and why? Thomas Samson, high yield portfolio manager at Muzinich & Co., joins Mahesh Bhimalingam, Bloomberg Intelligence's global head of credit strategy, on this episode of the Credit Crunch podcast, to discuss the results of BI's 3Q High Yield Investor Survey, along with the market outlook. They also talk about dollar flows into euro-denominated assets, the trade war's effect on market dispersions, and how private credit and loan markets are influencing high yield and default rates in 2H. They cover investor positioning, sentiment, key return drivers, supply forecasts and relative value across asset classes (high grade vs. junk), geography (Europe vs. US), ratings and sectors.
The Sun
15-06-2025
- Business
- The Sun
Embraer: Asia-Pacific to propel global aviation, aircraft demand growth
PETALING JAYA: The Asia-Pacific region stands at the heart of global aviation's most dynamic growth, with airlines set to face both opportunities and complex challenges over the next two decades as they seek to connect rapidly expanding populations, serve new destinations and adapt to shifting market demands. According to Embraer's Market Outlook for 2025, Asia-Pacific will account for 39% of global air traffic by 2044, making it the world's largest aviation market and a magnet for new investment. The report said demand for air travel in the Asia-Pacific is projected to grow at an average annual rate of 4.1% through 2044, driven by a combination of steady economic expansion, rising middle-class populations and increasing consumer appetite for travel and tourism. In emerging markets – such as those in Asean and the South Asian Association for Regional Cooperation (SAARC) – economic growth is especially robust. Despite this potential, airlines in the Asia-Pacific region remain highly concentrated in a few key markets. The Embraer report noted that between 30% and 35% of all flights in Asean and SAARC countries operate at the top five airports, compared to just 15% in North America and Western Europe, which boast broader, more diverse networks. This concentration has led to intense competition, price wars, and thin profit margins – Asia-Pacific airlines collectively reported a mere 1.3% profit margin in 2024. The region still has more than 1,000 low-density and 350 mid-density markets, many of which are underserved or served by just one airline, it said. Embraer noted that the path to profitability lies in right-sizing aircraft fleets and expanding beyond congested hubs. Airlines that deploy up-to-150-seat jets and turboprops can unlock new routes, increase frequencies and better match capacity to demand. In fact, Embraer forecasts demand for 1,050 new up-to-150-seat jets and 640 turboprops in the Asia-Pacific through 2044, supporting both network expansion and sustainability goals. In mature markets such as Japan, South Korea and Australia, the up-to-150-seat segment is already critical to maintaining robust domestic and regional connectivity, especially as populations stabilise or decline and airlines seek more efficient operations. Beyond the region, Embraer noted that, while Asia-Pacific leads in growth and scale, other regions are also shaping the future of aviation, each with unique opportunities and challenges. The report finds that China will be the fastest-growing market, with annual passenger traffic projected to rise by 5.7% through 2044. Demand is accelerating in lower-tier cities, outpacing growth in major hubs, and fleet flexibility will be key to unlocking regional connectivity. China is expected to require 1,500 new up-to-150-seat jets by 2044, reflecting its expanding middle class and evolving tourism landscape. As for Latin America and the Caribbean, this region will see annual passenger traffic growth of 4.7%, driven by new infrastructure and the need for better regional connectivity. Small narrowbodies are expected to play a crucial role in opening underserved markets and optimising operations at challenging airports. The region will require 770 new jets and 160 turboprops through 2044. Embraer's report also noted that Africa offers significant untapped potential, with annual passenger traffic growth projected at 4.4%. The continent's emerging middle class and rising incomes are expected to drive demand, but economic, infrastructure, and regulatory barriers remain. Africa will need 380 new jets and 220 turboprops, with small aircraft essential for connecting low-density markets and supporting sustainable development. Europe and the Commonwealth of Independent States (CIS) are forecast to grow at 3.1% annually, with a focus on maximizing sustainable connectivity and airline profitability. Embraer sees small narrowbodies as vital for serving low-density markets and ensuring efficient network integration, particularly as environmental regulations tighten. The region will require 1,990 new jets and 260 turboprops. As for the Middle East, Embraer said the growth is projected at 4.4% annually, with tourism and intra-regional connectivity as key drivers. Small narrowbodies will help airlines unlock new domestic and regional markets, supporting national diversification strategies. The region is expected to require 350 new jets and 20 turboprops. North America will see slower growth (2.4% annually) but remains the largest market for jet deliveries (2,680 up-to-150-seat jets and 280 turboprops). Regional aviation is the backbone of the US network, with small narrowbodies complementing large aircraft to maximize frequencies and maintain capacity discipline. The Embraer report noted that Asia-Pacific is poised to redefine global aviation, driven by rapid economic growth, demographic trends and the need for smarter, more flexible air networks. As airlines across the world adapt to new realities – from shifting geopolitics to environmental priorities – the ability to connect people, places and economies will remain at the heart of the industry's future. Embraer said that with the right fleet strategies and a focus on underserved markets, the aviation sector can unlock new opportunities for growth and resilience in every region.
New Straits Times
13-06-2025
- Business
- New Straits Times
World needs 10,500 sub-150-seat jets, turborprops in next 20 years: Embraer
KUALA LUMPUR: Embraer expects demand for 10,500 sub-150-seat jets and turboprops within the next 20 years for the market in general. In its Market Outlook 2025w, the global aerospace company estimates 10,500 orders for new jets and turboprops through 2044. It also presents analyses of global influences and trends in seven world regions that impact the demand for new aircraft. "Because of its growing prominence in commercial aviation, statistics for China are detailed separately in this year's market outlook for the first time," it said. The report noted that world passenger traffic, measured in revenue passenger kilometers (RPK) is forecast to grow 3.9 per cent annually through 2044. "China will lead among seven global regions," it said. Embraer president and chief executive officer of commercial aviation Arjan Meijer attributes the consistency of the estimate to the longevity of social, supply chain, and geopolitical trends Embraer identified during the pandemic. "Five years after the onset of the pandemic, many of the structural changes it triggered have proven to be quite long lasting. "In our first post-pandemic market outlook, we highlighted the transition from globalisation to a more polarised geopolitical outlook," he said. Today, as countries and regions pursue greater strategic autonomy, Meijer said the demand for regional access will continue to grow. He said the company believes mixed fleets that combine small and large narrowbody aircraft are essential for that long-term growth. "They provide the versatility needed to better match capacity with demand, expand networks, and support national and regional development goals," he added. The market outlook also analyzes demand for cargo aircraft, including a forecast for passenger- to-freighter conversions. The overall forecast for the number of new sub-150-seat aircraft remains almost unchanged from Embraer's previous estimate.
Yahoo
09-06-2025
- Business
- Yahoo
T. ROWE PRICE RELEASES 2025 MIDYEAR INVESTMENT OUTLOOK
Investing in a post-globalization world with reconfigured global trade necessitates a careful assessment of market opportunities and risks BALTIMORE, June 9, 2025 /PRNewswire/ -- T. Rowe Price, a global investment management firm and a leader in retirement, released its midyear outlook for global financial markets for the remainder of 2025. Underpinning the outlook for the next six months is an accelerated trend toward deglobalization, a tariff-driven reconfiguration of global trade, an expected broadening of stock market opportunities globally beyond U.S. equities and mega-cap tech stocks, and a bond market regime change driven by trade policy changes and German fiscal expansion. Some key takeaways from the 2025 Midyear Market Outlook include: Economics: The global economy is under pressure from multiple directions. Trade war fallout could slow the global economy. U.S. fiscal and tax policy will likely take center stage in the second half of the year. Expect rising costs for businesses and a reduction in consumer purchasing power. Equities: The broadening of equity markets should continue, reducing the U.S./mega-cap market concentration of recent years in favor of value stocks and select emerging markets. Fixed income: The fundamental shift in the global fixed income landscape is manifested in above-target inflation in some developed markets, especially the U.S. Corporate bonds are likely entering an economic downturn with historically high credit quality, positioning them more defensively than in the past. Multi-asset: Inflation protection and equity diversification will receive renewed emphasis in T. Rowe Price multi-asset portfolios. Inflation protected bonds and real assets can provide effective hedges against expected inflation. More attractive valuations signal favoring international and value equities in determining multi-asset portfolio allocations. While there continues to be a place for both active and passive management in investors' portfolios, this challenging market environment, including higher interest rates, more volatile markets, and greater policy uncertainty, supports the conditions for active managers to outperform. QUOTES Blerina Uruçi, chief U.S. economist "The U.S. administration's tariffs—combined with any retaliatory measures from its trading partners—will deliver a supply shock to the U.S. and a demand shock to the rest of the world, including China and Europe. The severity of these shocks will depend on the outcome of ongoing trade negotiations and legal challenges, but it seems certain that the world's two largest economies, the U.S. and China, will experience lower economic growth than projected at the beginning of the year—and the ramifications of this will be felt across the globe, irrespective of any individual trade deals struck." Josh Nelson, head of Global Equity "An expanding opportunity set in stock markets was on its way prior to last year's U.S. presidential election; the trade policies implemented since then have merely sped up the process. We believe this will lead to an expansion of investable stocks in the U.S. and abroad. We are returning to an investing environment in which more sectors and regions can generate meaningful returns—an environment demanding diversification and favoring active management. The broadening of equity market leadership is likely to favor value stocks and select emerging markets." Ken Orchard, head of International Fixed Income "The U.S. administration's tariffs and the massive German fiscal expansion have broken historical precedent and shifted the global fixed income landscape, resulting in a weaker outlook for developed market sovereign bonds and a stronger one for credit and some emerging markets. The likelihood of a global recession—with the U.S. leading the downturn—has also increased. However, instead of a traditional recession, what may transpire—especially in the U.S.—is a longer period of subpar growth with both higher unemployment and higher inflation." Tim Murray, Capital Markets strategist "In times of rapid geopolitical change, we tend to lean more heavily than usual on asset class valuations when making portfolio allocation decisions. Even after the concentrated selling pressure on growth stocks and value's relative outperformance in early 2025, value stocks look relatively more attractive than growth stocks moving forward. In a typical economic growth downturn or recession, we would expect U.S. equities to hold up better than international stocks. But we believe the underlying dynamics of this year's slump may be different, leading us to modestly favor non-U.S. shares." ABOUT T. ROWE PRICE Founded in 1937, T. Rowe Price (NASDAQ: TROW) helps people around the world achieve their long-term investment goals. As a large global asset management company known for investment excellence, retirement leadership, and independent proprietary research, the firm is built on a culture of integrity that puts client interests first. Investors rely on the award-winning firm for its retirement expertise and active management approach of equity, fixed income, alternatives, and multi-asset investment capabilities. T. Rowe Price manages USD $1.56 trillion in assets under management as of April 30, 2025, and serves millions of clients globally. News and other updates can be found on Facebook, Instagram, LinkedIn, X, YouTube, and IMPORTANT INFORMATION This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial, and tax advice before making any investment decision. The T. Rowe Price group of companies, including T. Rowe Price Associates, Inc., and/or its affiliates, receives revenue from T. Rowe Price investment products and services. Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested. T. Rowe Price Investment Services, Inc., distributor. T. Rowe Price Associates, Inc., investment adviser. T. Rowe Price Associates, Inc., and T. Rowe Price Investment Services, Inc., are affiliated companies. © 2025 T. Rowe Price. All Rights Reserved. T. ROWE PRICE, INVEST WITH CONFIDENCE, and the Bighorn Sheep design are, collectively and/or apart, trademarks of T. Rowe Price Group, Inc. View original content to download multimedia: SOURCE T. Rowe Price Group Sign in to access your portfolio
