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BusinessToday
13 hours ago
- Business
- BusinessToday
Commentary: Growing Foreign Reserves And What it All Means
Malaysia's central bank, Bank Negara Malaysia (BNM), recently reported an increase in its international reserves, reaching USD119.6 billion as of May 30, 2025, up from USD119.1 billion just two weeks earlier. This modest growth in foreign reserves signals positive developments in Malaysia's economy, reflecting its resilience in navigating global economic challenges. It highlights the country's ability to manage external pressures and provides a buffer against potential financial shocks. However, the key question remains: what does this mean for the everyday citizens? How can we interpret this trend as a sign of a strengthening economy, and how does it translate into tangible benefits for the people? Why Our Money Pile is Growing? One main reason our reserves are increasing is that Malaysia is selling more goods to other countries than it buys. For example, in April 2025, Malaysia sold RM10.5 billion more in goods than it bought, especially in electronics and gas. When we export a lot, more foreign money comes into the country. This extra foreign currency is then kept by BNM as part of its reserves. This shows Malaysia's strength in making and selling important products worldwide. Another big factor is that foreign investors are putting their money into Malaysian government bonds. These bonds offer better returns compared to those in countries like the U.S. or Japan, where interest rates might not be as good anymore. In May 2025 alone, foreign investors brought in RM2.6 billion. When these investors bring in foreign money and convert it to Ringgit to buy our bonds, it directly adds to BNM's foreign currency reserves. This trend highlights that investors trust Malaysia's economy. What This Extra Money Means for Malaysia? Having USD119.6 billion in reserves is a big deal. It means Malaysia has enough foreign money to pay for about 5 months of imported goods and services. This is well above the recommended 3 months by the IMF, a global financial body. This cushion helps Malaysia if import prices go up or if global trade faces problems. Also, these reserves are almost equal to our short-term foreign debts (0.9 times), showing that we don't rely too much on quick foreign loans to run our economy. This strong position makes us less vulnerable to sudden money outflows. Our reserves are also made up of different types of assets, which gives BNM more flexibility. Most of it, USD106.4 billion, is in foreign currencies. We also have USD5.8 billion in Special Drawing Rights (a type of international money from the IMF) and USD3.8 billion in gold. Having this mix of assets helps BNM act fast if there's a global money crisis or if a lot of foreign money suddenly leaves the country. It means BNM has many options to handle financial pressures. Impact on the Ringgit and Economic Policy This steady increase in our foreign reserves suggests that the Malaysian Ringgit might become more stable after being a bit weak. When investors worldwide see Malaysia has strong reserves and can attract foreign money, it makes them see Malaysia as a safe and attractive place among growing economies. This improved perception could boost confidence in the Ringgit, making its value more steady and potentially stronger against other major currencies. If our reserves keep growing, it means BNM will have more room to make decisions about our economy. For instance, BNM might be able to slightly lower interest rates if needed, without worrying too much about the Ringgit losing value or losing trust from investors. This flexibility is very important in today's uncertain global economy, allowing BNM to support Malaysia's economic growth without risking financial stability. Our 'Economic Shield' in a Shaky World Essentially, this rise in Malaysia's international reserves is more than just a number. It's a vital 'economic shield' that gives Malaysia significant power and freedom in managing its money and economy. In a world full of unclear interest rates, political tensions, and unpredictable supply chains, having a big financial buffer is extremely important. This 'shield' helps Malaysia handle unexpected global problems, like a sudden economic slowdown or a quick exit of foreign money, by lessening their impact. It also keeps investors confident, as they know BNM has the resources to protect the Ringgit and keep the financial system stable. Plus, strong reserves allow BNM to support economic growth when necessary, without being held back by a weak financial position. Overall, these strong reserves show Malaysia's smart economic planning and its ability to deal with global financial challenges. Conclusion As a conclusion, the growth in Malaysia's international reserves to USD119.6 billion is unequivocally a positive signal, extending beyond mere financial figures. For the average Malaysian, this translates into tangible benefits, a more stable Ringgit means greater purchasing power for imports and overseas travel, while reduced inflation helps stretch household budgets. Furthermore, these robust reserves act as a crucial national safety net, safeguarding jobs and businesses during global uncertainties and bolstering confidence in our financial system. Ultimately, this increased 'economic shield' empowers BNM to maintain stability and foster sustainable growth, directly enhancing the economic well-being and security of all Malaysians in a volatile global landscape. By Dr. Shahrul Azman Abd Razak Researcher and Islamic Finance Consultant Kuala Nerang, Kedah Related
The Star
5 days ago
- Business
- The Star
Felda dispatches offer documents for FGV privatisation plan, closing july 7
KUALA LUMPUR: The Federal Land Development Authority (Felda) today said it has dispatched the offer documents for its plan to privatise FGV Holdings Bhd , with the offer closing at 5 pm on Monday, July 7, 2025, unless extended. In a filing with Bursa Malaysia, Felda said the offer, made via Maybank Investment Bank, will remain open for acceptance until the first closing date or such later date as may be determined and announced by Maybank on its behalf. The offer forms part of Felda's unconditional voluntary takeover bid to acquire all remaining FGV shares at RM1.30 each. Despite holding a collective 82.34 per cent stake through Felda and its subsidiary, Felda Holdings Company Sdn Bhd, the agency said it has limited influence over FGV's management as it does not control the board. "Upon successful privatisation, Felda will be better positioned to enhance FGV Group's operational and financial efficiencies by streamlining its upstream and downstream plantation operations. "Accordingly, Felda is offering holders the opportunity to realise their investment in the offer shares for cash at the offer price, representing a 9.91 per cent premium over the six-month volume-weighted average market price of RM1.1828 as at the latest practicable date (LPD),' it added. The latest bid, launched on May 26 at RM1.30 per share, mirrors Felda's earlier, unsuccessful attempt to privatise FGV in 2020. That year, Felda triggered a mandatory takeover offer after increasing its stake in FGV from 33.66 per cent by acquiring shares from Retirement Fund Inc (KWAP) and Urusharta Jamaah for RM658 million. FGV, which debuted in 2012 at RM4.55 a share, raised RM10.5 billion in one of Malaysia's largest initial public offerings. Its share price has since declined significantly, prompting repeated privatisation efforts. - Bernama
Daily Express
31-05-2025
- Business
- Daily Express
Life Water Berhad acquires Twinine
Published on: Friday, May 30, 2025 Published on: Fri, May 30, 2025 Text Size: Twinine recorded steady audited revenues of RM8.60 million in FY2022 and FY2023, and an unaudited RM8.50 million in FY2024, with a three-year average profit after tax (PAT) of RM0.91 million. Kota Kinabalu: Life Water Berhad, one of Sabah's leading beverage manufacturers, is taking a major leap beyond its core business with the RM10.5 million acquisition of Twinine Sdn Bhd, a seasoned player in the sauces and condiments market. Life Water Managing Director Liaw Hen Kong, said the move marks a significant milestone in Life Water's diversification strategy, while its core drinking water segment is set to grow by 40 percent with new production capacity coming online by the end of 2025. 'The acquisition was formalized via a Share Sale Agreement (SSA) to acquire 100 percent equity interest in Twinine, a company with over 35 years of experience and market presence across Sabah's West Coast, parts of Sarawak and Brunei,' he said in a statement. He said Twinine recorded steady audited revenues of RM8.60 million in FY2022 and FY2023, and an unaudited RM8.50 million in FY2024, with a three-year average profit after tax (PAT) of RM0.91 million. 'This is a strategic step forward in expanding our presence within the broader FMCG space. 'Twinine's product line complements our distribution capabilities, and we see clear potential to accelerate growth through cross-branding and tapping into shared consumer segments. We're particularly excited about bringing their products deeper into the East Coast of Sabah, where our existing network gives us a strong foothold,' he added. Advertisement As part of its integration plan, he said, the company will introduce dual-shift operations at Twinine's existing facility to boost production. 'The Group is also exploring the establishment of a new manufacturing site at the Kota Kinabalu Industrial Park to support long-term growth in the condiments category. Twinine's founder will remain on board for two years to guide the transition and help drive expansion plans,' Liaw said. The acquisition is expected to enhance group earnings and accelerate Life Water's entry into new consumer markets under its broader fast-moving consumer goods (FMCG) strategy. The company also revealed that its core drinking water operations are on track for a 40 percent capacity increase by the end of 2025. Liaw said The Group's new Keningau plant, operational since early this year, has already added 59 million liters of annual production, pushing total capacity to 448 million liters per annum. Further expansion is underway at the Sandakan Sibuga Plant 1, where a new manufacturing line is being commissioned and expected to be completed in the second half of 2025. 'This will add another 178 million liters of annual capacity, raising the Group's total production to 626 million liters—a 40 percent increase compared to current levels,' he said. The company also announced its financial performance for the third quarter ended 31 March 2025 (Q3FY25), reporting RM43.12 million in revenue—up 0.95 percent from the previous quarter—driven by seasonal demand for carbonated and fruit beverages. Liaw emphasised that the drinking water segment remained the largest contributor, accounting for 82.6 percent of revenue. The Group achieved a gross profit (GP) of RM19.52 million with a GP margin of 45.3 percent, while profit before tax (PBT) was RM8.11 million and PAT stood at RM6.48 million. Margins slightly moderated due to the implementation of the minimum wage policy and temporary inefficiencies linked to expansion. For the nine-month period ended March 31, Life Water recorded RM128.42 million in revenue and RM20.97 million in PAT, maintaining a solid PAT margin of 16.3 percent. With a two-pronged strategy of organic growth and strategic diversification, Life Water is positioning itself as a rising multi-category FMCG player in East Malaysia. The Twinine acquisition enhances its product offerings and opens new growth channels, while the expanded production footprint ensures continued leadership in the bottled water space. Liaw said, as consumer demand evolves and competition intensifies, Life Water remains optimistic about its growth trajectory for FY2025 and beyond. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
The Sun
29-05-2025
- Business
- The Sun
Life Water diversifies beyond beverages with acquisition of sauce and condiment maker Twinine
PETALING JAYA: Life Water Bhd, a Sabah-based beverage manufacturer, has signed an agreement to acquire 100% equity interest in Twinine Sdn Bhd, a well-established sauce and condiment manufacturer, for RM10.5 million. The acquisition marks Life Water's first major diversification beyond beverages, strengthening its footprint in the broader fast-moving consumer goods (FMCG) sector. Founded over 35 years ago, Twinine has established a strong presence on the west coast of Sabah, part of Sarawak and in Brunei, with a consistent financial track record. The company recorded revenues of RM8.6 million in both FY22 and FY23, as well as an unaudited revenue of RM8.5 million in FY24, alongside a three-year average net profit of RM910,000. The strategic move enables Life Water to leverage its existing logistics and distribution network, thereby accelerating market penetration for Twinine's products. 'This acquisition is a natural extension of our FMCG portfolio. With overlapping distribution touchpoints and similar consumer demographics, we see significant cross-selling opportunities and operating synergies. More importantly, our network gives us the ability to broaden Twinine's reach across Sabah, especially into the east coast region, further strengthening its market presence,' Life Water managing director Liaw Hen Kong said in a statement. Growth plans include introducing two production shifts at Twinine's facility to boost output in line with demand, as well as exploring a new manufacturing site at Kota Kinabalu Industrial Park to support long-term expansion in East Malaysia. Twinine's founder will remain with the company for a two-year transition period to ensure continuity and provide guidance on growth strategies, including the development of the new facility. The acquisition is expected to contribute positively to Life Water's earnings. The acquisition coincides with the release of Life Water's third-quarter ended March 31, 2025 (Q3'25), in which it reported a net profit of RM6.48 million. The group recorded RM43.12 million in revenue, a 0.95% increase from the preceding quarter, supported by seasonal demand for carbonated and fruit drinks. The drinking water segment remained the largest contributor, accounting for 82.6% of total revenue. Life Water posted a gross profit of RM19.52 million, with a margin of 45.3%, while profit before tax stood at RM8.11 million, reflecting a margin of 18.8%. While margins moderated quarter-on-quarter due to the implementation of the minimum wage policy and temporary operational inefficiencies from expansion initiatives, the group remains confident in its long-term earnings resilience. For the nine months, Life Water reported revenue of RM128.42 million and a net profit of RM20.97 million, translating to a 16.3% margin. The group's new Keningau plant commenced operations in early 2025, adding 59 million litres of annual production capacity and bringing total drinking water capacity to 448 million litres per annum. The Sandakan Sibuga Plant 1 is commissioning a new manufacturing line, expected to begin operations in the second half of 2025, which will add 178 million litres of capacity and increase total annual production to 626 million litres, representing a 40% increase. Life Water continues to pursue a two-pronged strategy of organic expansion and strategic diversification. With the Twinine acquisition, Life Water is now well positioned to capture synergies across multiple FMCG segments, while reinforcing its core strength in beverage manufacturing. As Sabah's consumer landscape continues to evolve, Life Water remains optimistic about its growth trajectory in the current financial year and beyond.
New Straits Times
29-05-2025
- Business
- New Straits Times
Life Water buys Sabah's Twinine for RM10.5mil in FMCG expansion
KUALA LUMPUR: Beverage manufacturer Life Water Bhd is acquiring Sabah-based sauces and condiments maker Twinnie Sdn Bhd for RM10.5 million, as it seeks to expand its portfolio in the fast-moving consumer goods (FMCG) sector. The group has entered into a share sale agreement to acquire 100 per cent equity interest in Twinine via cash. This marks its first major diversification beyond beverages and is expected to contribute positively to group earnings. Founded over 35 years ago, Twinine has a strong presence in the West Coast of Sabah, parts of Sarawak, and Brunei. It recorded audited revenue of RM8.6 million in 2022 and 2023, and unaudited revenue of RM8.5 million for 2024, with a three-year average profit after tax of RM910,000. Managing director Liaw Hen Kong said that with overlapping distribution touchpoints and similar consumer demographics, the group sees significant cross-selling opportunities and operational synergies. "This acquisition is a natural extension of our FMCG portfolio. Our network gives us the ability to broaden Twinine's reach across Sabah, especially into the East Coast region, further strengthening its market presence," he said in a statement. Life Water plans to introduce two production shifts at Twinine's facility to boost output in line with demand, and is exploring a new manufacturing site at Kota Kinabalu Industrial Park to support long-term expansion. Twinine's founder will remain with the company for a two-year transition period. For the third quarter ended March 31, 2025, Life Water recorded a net profit of RM6.48 million on revenue of RM43.12 million. Cumulatively, the group posted RM20.97 million in net profit and RM128.42 million in revenue for the nine-month period. There were no year-on-year comparisons provided, as this is the group's third interim financial report following its listing on the Main Market of Bursa Malaysia. Life Water said its production capacity expanded in early 2025 with the commissioning of its new Keningau plant, adding 59 million litres to its annual output. This brought total drinking water capacity to 448 million litres per year. Another facility, the Sandakan Sibuga Plant 1, is expected to add 178 million litres by end-2025, raising capacity to 626 million litres — a 40 per cent increase. The group said it remains optimistic about its growth prospects in the current financial year and beyond, as it continues to pursue both organic expansion and strategic diversification.
