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Focus Malaysia
11-07-2025
- Business
- Focus Malaysia
Big Three builders set to dominate DC jobs as cost pressures shift demand to Malaysia
THE KLCON index waded through a volatile first half (1H). Despite the sell-down, the sector staged a strong recovery rally of 29% from the bottom. 'We attribute the resilience to rescinded GPU restriction rules, Big Tech capex reaffirmation, healthy contract awards and good earnings performance in 1Q reporting,' said Hong Leong Investment Bank (HLIB). As at time of writing, year-to-date (YTD) contract awards have amounted to RM28.9 bil translating to a 39.5% growth year-to-year (YoY). Several notable large scale contracts that have anchored awards this year are: (i) Penang LRT Segment 1 to SRS (60% Gamuda) – RM8.3 bil (ii) KSSC redevelopment to MRCB – RM2.94 bil (iii) LRT3 VO to MRCB – RM2.47 bil. In 1H25 total DC related contracts awarded came in at RM3.3bn (-31% YoY), a slower pace when compared to a frenetic pace achieved in 1H24. Nevertheless, we attribute the temporary slow-down in 1H to timing considering that multiple hyperscale DC tenders were called during this time. Rather than seeing the impact to DC pipeline from GPU related uncertainties, from what we gather tariff induced construction costs inflation in US (CBRE: 3-5% inflation for commercial projects) led to slight reprioritisation of DC pipeline towards cheaper countries including MY. DCs aside, 2H could see more action coming from Penang LRT (subcontracts and systems package) while sizable EM road projects such as SSLR and NCH may materialise. As for the commercial segment (including residential projects sitting on commercial plots), lack of clarity on SST treatment could drag on opportunities in 3Q25 as launch plans may see deferral until SST treatment is clearer. As at time of writing, YTD contract awards have amounted to RM28.9 bil translating to a 39.5% growth YoY. Several notable large scale contracts that have anchored awards this year are: (i) Penang LRT Segment 1 to SRS (60% Gamuda) – RM8.3 bil. (ii) KSSC redevelopment to MRCB – RM2.94 bil. (iii) LRT3 VO to MRCB – RM2.47 bil. In 1H25 total DC related contracts awarded came in at RM3.3 bil (-31% YoY), a slower pace when compared to a frenetic pace achieved in 1H24. 'Nevertheless, we attribute the temporary slow-down in 1H to timing considering that multiple hyperscale DC tenders were called during this time,' said HLIB. Rather than seeing the impact to DC pipeline from GPU related uncertainties, from what we gather tariff induced construction costs inflation in US led to slight reprioritisation of DC pipeline towards cheaper countries including MY. DCs aside, 2H could see more action coming from Penang LRT while sizable EM road projects such as SSLR and NCH may materialise. As for the commercial segment, lack of clarity on SST treatment could drag on opportunities in 3Q25 as launch plans may see deferral until SST treatment is clearer. We are foreseeing a DC award cycle in 2H to be driven by multiple award decisions for DC tenders placed in 1HCY25 – this includes five multi-billion RM tenders for one US based hyperscaler. For the DC segment, we take a 'big is better' view anticipating further inroads to be made by sector's big three (Gamuda, SunCon & IJM) riding on competitive advantages such as balance sheet strength, track record (safety & execution) and integrated structure. Recent news reports of potential AI chip curb on Malaysia is concerning but remains unconfirmed, lacking actionable details. In our view, Malaysian contractors are reliant on US/Western hyperscaler names for sizable DC jobs thus mitigating uncertainties to a certain extent – to this end exemptions might be possible and remains our base case. Recent removal of SST exemption for the construction sector (from 0% to 6%) should in general be a manageable development considering most forms of contracts provide for additional costs increase as a result of changes in law (SST revision qualifies under this). Meanwhile, the continued exemption for government & residential projects will narrow range of exposed projects mainly to non-residential construction projects (28% of construction work value in 2024). Nevertheless, these projects are adequately covered by contract. Recent removal of SST exemption for the construction sector (from 0% to 6%) should in general be a manageable development considering most forms of contracts provide for additional costs increase as a result of changes in law (SST revision qualifies under this). Meanwhile, the continued exemption for government & residential projects will narrow range of exposed projects mainly to non-residential construction projects (28% of construction work value in 2024). Nevertheless, these projects are adequately covered by contract clauses, in our view. We see limited impact on DC segment considering FIDIC style contracts while insatiable demand for capacity could mitigate impact of higher build costs. We retain our OVERWEIGHT sector call anticipating sustained contract flows in 2H anchored by DCs, infra rollout and still buoyant private sector sentiments. In our view, contractors broadly can still add to orderbook from the DC segment as well as infra projects. Valuations at current levels still provide room for upside. —July 11, 2025 Main image: Linkedin
BusinessToday
08-07-2025
- Business
- BusinessToday
Stock Market In The Negative Territory As Decliners Dominate Market
The stock market ended the trading session for July 7 firmly in the red as market sentiment remained subdued, with decliners outnumbered gainers nearly three to one. A total of 754 counters fell, while 260 advanced and 466 remained unchanged. Another 944 counters were untraded and 19 were suspended. Trading activity picked up slightly, with turnover rising to 3.57 billion shares worth RM2.49 billion, up from 3.43 billion shares valued at RM2.47 billion on July 4. Despite the overall weakness, a few counters posted notable gains. Carlsberg Brewery Malaysia Bhd led the top gainers list, rising 28 sen to RM19.20, followed by Ajinomoto (M) Bhd, which added 14 sen to RM13.00. Timberwell Bhd jumped 13.5 sen to 38 sen, while Kuala Lumpur Kepong Bhd and Solarvest Holdings Bhd gained 12 sen and 7 sen to close at RM20.94 and RM2.20, respectively. On the flip side, Nestlé (M) Bhd topped the losers' list, falling 42 sen to RM77.10, while Malaysian Pacific Industries Bhd dropped 38 sen to RM22.28. Allianz Malaysia Bhd slid 30 sen to RM18.40, followed by Fraser & Neave Holdings Bhd and Tenaga Nasional Bhd, both down 26 sen to close at RM28.80 and RM13.80, respectively. Investors remained cautious amid ongoing global economic uncertainties and a lack of fresh domestic catalysts, keeping the market under pressure. Related
Focus Malaysia
07-07-2025
- Business
- Focus Malaysia
Bursa Malaysia ends lower, tracks regional losses on trade jitters
BURSA Malaysia closed lower on Monday, reversing last week's gains, as regional markets declined amid renewed investor caution ahead of the July 9 tariff deadline, analysts said. The market tracked weakness across Asia as investors awaited a final decision from United States President Donald Trump on pending trade deals. At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 12.65 points, or 0.82%, to 1,537.54, down from last Friday's close of 1,550.19. The benchmark opened 5.45 points lower at 1,544.74 and touched an intraday low of 1,534.67 in early trade. Market breadth was negative, with 754 decliners outpacing 260 gainers. A total of 466 counters were unchanged, while 944 were untraded and 19 suspended. Turnover rose to 3.57 billion shares worth RM2.49 billion, compared with 3.43 billion shares worth RM2.47 billion on Friday. – July 7, 2025
New Straits Times
07-07-2025
- Business
- New Straits Times
Bursa Malaysia ends lower, tracks regional losses on trade jitters
KUALA LUMPUR: Bursa Malaysia closed lower on Monday, reversing last week's gains, as regional markets weakened amid renewed investor caution ahead of the July 9 tariff deadline, analysts said. The local bourse tracked losses across Asia as investors awaited United States President Donald Trump's final decision on trade deals. At 5pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 12.65 points, or 0.82 per cent, to 1,537.54, down from last Friday's close of 1,550.19. The benchmark opened 5.45 points lower at 1,544.74 and touched an intraday low of 1,534.67 in early trade. Market breadth was negative, with 754 decliners outpacing 260 gainers. A total of 466 counters were unchanged, while 944 were untraded and 19 suspended. Turnover rose to 3.57 billion shares worth RM2.49 billion, compared with 3.43 billion shares worth RM2.47 billion on Friday. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said trade tensions resurfaced after Trump reaffirmed his intention to impose unilateral tariffs on a broad range of countries. "This has reignited uncertainty across global markets, dampening sentiment and triggering a risk-off tone," he told Bernama. He said all sectoral indices on Bursa Malaysia ended in negative territory. "Nonetheless, total trading volume remained elevated, surpassing the three billion shares mark — signalling sustained retail and institutional participation despite prevailing uncertainty," he added. Meanwhile, Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng described the day's profit-taking as a healthy correction, allowing the market to consolidate its recent gains and establish a firmer base for a sustainable uptrend. "We believe that as long as the benchmark index stays above the 1,530 level, the mid-term rally remains intact. As such, we expect the FBM KLCI to trend between 1,530 and 1,560 this week, marking its support and resistance levels," he said.
Barnama
07-07-2025
- Business
- Barnama
Bursa Malaysia Ends Lower, Tracks Regional Losses On Trade Jitters
By Siti Noor Afera Abu and Danni Haizal Danial Donald KUALA LUMPUR, July 7 (Bernama) -- Bursa Malaysia closed lower on Monday, reversing last week's gains, as regional markets weakened amid renewed investor caution ahead of the July 9 tariff deadline, analysts said. The local bourse tracked losses across Asia as investors awaited United States President Donald Trump's final decision on trade deals. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 12.65 points, or 0.82 per cent, to 1,537.54, down from last Friday's close of 1,550.19. The benchmark opened 5.45 points lower at 1,544.74 and touched an intraday low of 1,534.67 in early trade. Market breadth was negative, with 754 decliners outpacing 260 gainers. A total of 466 counters were unchanged, while 944 were untraded and 19 suspended. Turnover rose to 3.57 billion shares worth RM2.49 billion, compared with 3.43 billion shares worth RM2.47 billion on Friday. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said trade tensions resurfaced after Trump reaffirmed his intention to impose unilateral tariffs on a broad range of countries.
