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New Straits Times
16-07-2025
- Business
- New Straits Times
Rising regulatory risks may force planters to scale back in Indonesia
KUALA LUMPUR: Rising regulatory risks in Indonesia could prompt some plantation companies to scale down or exit their operations over the longer term following a wave of large-scale land seizures, Public Investment Bank Bhd (PublicInvest) said in a recent note. Last week, Indonesian authorities confiscated 394,547 hectares of plantation land spanning Central Kalimantan and Riau, as well as North and South Sumatra. The land, previously controlled by 232 companies, has been transferred to Agrinas, a state-owned company established in early 2025 under the administration of President Prabowo Subianto. The operations were carried out jointly by the Ministry of Environment and Forestry, Ministry of Defence, and the Attorney General's Office. The task force has set a target to reclaim up to three million hectares of plantations deemed illegally operating within forest areas by August. With the latest seizures, Agrinas now controls approximately 833,000 hectares of plantation land, making it one of the largest plantation operators globally. With this latest addition, the total plantation area under the Agrinas Group now stands at 833,000 hectares, making the company one of the largest plantation firms in the world. Based on PublicInvest's channel checks, several local plantation companies have surrendered a small portion of their plantation land to the Indonesian authorities. "We understand that the impact on their earnings is largely muted. However, this development raises regulatory risks for industry players with significant exposure in Indonesia, which could weigh on their valuations over the long term," it noted. The firm also views this as a potential long-term environmental, social and governance risk. Furthermore, PublicInvest said investment in replanting activities is expected to be more cautious, as it may compromise the companies' interests. The firm added that it is also concerned the military-led enforcement in plantations could exacerbate the declining trend in Indonesian palm production, as there are doubts over the state's ability to manage these plantations effectively. "Based on our rough forecast, if 50 per cent of the entire seized 833,000 hectares plantation remains unproductive, the annual palm oil production could decline by about four per cent or 1.7 million metric tonnes," it said. Meanwhile, PublicInvest said the recent surge in crude palm oil prices to over RM4,200 per metric tonne may reignite investor interest in plantation counters. The firm has maintained a neutral outlook with a full-year crude palm oil price forecast of RM4,200 per metric tonne.
Borneo Post
15-07-2025
- Business
- Borneo Post
Analysis: Tightening AI chip export control demonstrates Malaysia's firm stance
The new restriction may help close regulatory loopholes and prevent stricter legal action from the US government, which is considering new export restrictions on AI chips to Malaysia and Thailand. – AFP photo KUCHING (July 15, 2025): Malaysia will now require trade permits for the exports of high-performance US-origin artificial intelligence (AI) chips, which analysts perceive to be part of the government's aim to curb potential transhipment of these chips. The move follows growing pressure from the US, which has effectively banned the sale of advanced AI chips to China since 2022. Analysts with Public Investment Bank Bhd (PublicInvest Research) believed the new restriction may help close regulatory loopholes and prevent stricter legal action from the US government, which is considering new export restrictions on AI chips to Malaysia and Thailand. 'In our view, the enforcement of trade permits demonstrates Malaysia's firm stance against attempts to circumvent export controls or engage in illicit trade,' it said in its analysis yesterday, adding that this could ease the US concerns about the possible diversion of AI chips through intermediaries in Malaysia. 'Furthermore, it may reduce the risk of a US imposed AI chip export ban on Malaysia and Thailand. However, it could increase compliance burden on companies handling US-origin AI chips as well as the risk of delays.' To note, Malaysia's Ministry of Investment, Trade and Industry announced that, effective immediately, any export, transhipment, or transit of high-performance US-origin AI chips will now require a government-issued trade permit. The Ministry further emphasised that companies must notify the authorities at least 30 days in advance before the exporting or shipping of such items. Additionally, companies must inform the authorities if they know or have reasonable grounds to suspect that the items will be misused or involved in illicit trading activities. It is worth noting that Malaysia exported US$16.2 billion worth of chips to the US in 2024, making up nearly 20 per cent of all US semiconductor imports. 'Generally, Malaysia does not fabricate these AI chips but these chips usually enter Malaysia for testing, packaging, assembling and re exported as part of the sub-systems like AI servers or AI hardware,' PublicInvest Research highlighted. 'Following this latest initiative, we believe there is a low risk of a US chip export restriction being imposed on Malaysia, which is positioned to become a data centre hub in Southeast Asia. 'Our channel checks indicate that five multi billion-ringgit data centre contract tenders from a US-based hyperscaler are expected to be launched in the coming months.' AI chips export Semiconductor
The Sun
10-07-2025
- Business
- The Sun
BNM expected to keep OPR steady through 2025 after rate cut
KUALA LUMPUR: Public Investment Bank Bhd expects Bank Negara Malaysia (BNM) to maintain the overnight policy rate (OPR) at 2.75 per cent through 2025 after the recent 25-basis-point cut. The central bank reduced the OPR yesterday for the first time since July 2020, but analysts do not foresee further cuts this year. Public IB noted that the Monetary Policy Committee's statement did not indicate a prolonged easing cycle. The bank described BNM's stance as conditionally accommodative, with future adjustments dependent on worsening global or domestic conditions. 'With two policy meetings left this year, BNM retains flexibility but will likely adopt a cautious approach amid global trade uncertainties,' it said. Maybank Investment Bank Bhd also projected no additional rate cuts in 2025, maintaining its earnings forecasts for Malaysian banks. The bank had already factored in a single rate cut, adjusting net interest margin (NIM) expectations slightly. 'We expect a modest NIM compression of two basis points in 2025, averaging 2.06 per cent, with stable margins in 2026,' it said. CIMB Investment Bank Bhd suggested that further OPR adjustments would hinge on economic data, particularly growth and trade trends. The bank highlighted Malaysia's stable labour market, with unemployment at three per cent, and controlled inflation at 2.2 per cent. 'The ringgit's 5.2 per cent appreciation this year has eased import costs, providing policy room if growth risks escalate,' it added. - Bernama
New Straits Times
07-07-2025
- Automotive
- New Straits Times
WCT's PLUS contract to add up to 4pct to annual earnings
KUALA LUMPUR: WCT Holdings Bhd's new contract to build additional lanes along the Sedenak–Simpang Renggam stretch of the North-South Expressway is expected to add 2–4 per cent to its annual earnings over the 36-month project period. Public Investment Bank Bhd (PublicInvest) said this is WCT's first win of the year and makes up 36.5 per cent of its RM1 billion job replenishment target for financial year 2025 (FY25). "With this job win, WCT's outstanding construction order book is estimated to increase by 14.6 per cent to RM2.8 billion," it said. However, it maintained its current forecasts, as the job win falls within its FY25 order book replenishment assumptions. The RM365.2 million contract, awarded by Projek Lebuhraya Usahasama Bhd, covers the construction of additional lanes along the Yong Peng (North) to Senai (North) stretch, specifically Phase 2 from Sedenak to Simpang Renggam in Johor. The scope of work includes site clearing, demolition, earthworks, drainage, pavement construction, road markings, installation of road furniture, geotechnical works, bridge building, environmental protection measures, utility relocation, road lighting systems, and the extension of vehicular box culverts. This second phase of the highway expansion was announced under Budget 2024, aimed at upgrading the Simpang Renggam-Machap section from four to six lanes to alleviate traffic congestion in the southern corridor.
New Straits Times
24-06-2025
- Business
- New Straits Times
FBM KLCI marginally lower at midday
KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) continued to ease at the end of the morning trading session today, weighed down by persistent selling in selected heavyweights, coupled with declining oil prices amidst the ongoing tension in the Middle East. At 12.30 pm, the benchmark index inched down 0.37 of-a-point, or 0.02 per cent, to 1,516.24, compared with Monday's close of 1,516.61. The FBM KLCI, which opened 2.36 points lower at 1,514.25, moved between 1,511.09 and 1,519.06 during the session. The broader market was positive with gainers surpassing decliners 528 to 327, while 393 counters were unchanged, 1,190 untraded and 41 suspended. Turnover stood at 1.56 billion units worth RM865.60 million. At the time of writing, the benchmark Brent crude oil price fell 2.42 per cent to US$69.75 per barrel. Public Investment Bank Bhd said the oil price has dropped nearly all the way back to where it was before the Iran-Israel escalation began over a week ago, after it initially jumped six per cent at the beginning of the tension. "The losses accelerated sharply after Iran announced a missile attack on Al Udeid Air Base in Qatar, which the United States military uses," it said in a note today. Among the heavyweights, Maybank edged up 15 sen to RM9.82, Tenaga Nasional gained four sen to RM14.34, while Public Bank shed 14 sen to RM4.28, CIMB lost four sen to RM6.76, and IHH Healthcare fell nine sen to RM6.76. As for the most active stocks, Cuckoo and Dnonce Technology remained unchanged at RM1.08 and three sen, respectively, NexG added one sen to 36 sen, and Tanco improved 1.5 sen to 93.5 sen. Meanwhile, oil and gas-related stocks were also in active trading, with Reservoir Link sliding 10 sen to 33 sen, Hibiscus Petroleum declining 15 sen to RM1.68, and Velesto Energy staying unchanged at 18.5 sen. On the index board, the FBM Emas Index notched up 9.94 points to 11,299.12, the FBMT 100 Index increased 4.90 points to 11,088.80, and the FBM Emas Shariah Index improved 46.39 points to 11,258.30. The FBM 70 Index gained 40.49 points to 16,112.58 and the FBM ACE Index garnered 23.27 points to 4,401.12. Sector-wise, the Financial Services Index declined by 30.32 points to 17,642.47 and the Energy Index dropped 17.90 points to 728.05, while the Industrial Products and Services Index notched up 1.34 points to 148.72 and the Plantation Index added 0.64 of-a-point to 7,231.19.
