Latest news with #TASecurities
Focus Malaysia
12 hours ago
- Business
- Focus Malaysia
Oil prices spike on Iran-Israel tensions, but sustained rally unlikely: TA
THE escalating confrontation between Iran and Israel has reintroduced volatility to global oil markets. Brent crude surged over 8% following Israel's targeted strikes on Iran's nuclear and military infrastructure. While initial reactions have been strong, TA Securities (TA) believe oil prices could stabilise unless critical assets, such as the Strait of Hormuz, face direct threats. 'We view the geopolitical premium as transient rather than transformative. The sector's risk-reward profile remains balanced, justifying a Neutral call,' said TA. TA reiterates their preference for oil and gas players with strong export linkages and robust cash generation, such as PANTECH and MISC. The global oil supply backdrop remains relatively resilient despite the geopolitical turmoil. OPEC+, led by Saudi Arabia, holds sufficient spare production capacity to offset most short term disruptions from Iran. According to EIA, global spare production capacity stood at approximately 4.55mn barrels per day (bpd) as of May 2025—primarily held by Saudi Arabia, the UAE, and Iraq. This aligns with widely cited estimates suggesting that Saudi Arabia alone contributes about 3 mil bpd, while the UAE and Iraq collectively account for an additional 1–1.5 mil bpd. This spare capacity, defined as oil that can be brought online within 30 days and sustained for at least 90 days, serves as a vital buffer in stabilising markets should Iranian exports (currently ~2 mil bpd) be curtailed. In parallel, US shale producers continue to deliver robust output levels. Despite a decline in rig counts, production has held steady at 13.4 mil bpd, underscoring the productivity gains from technological efficiency and capital discipline. Other non-OPEC contributors like Brazil, Canada, and Guyana are also ramping up supply, contributing to a broader narrative of a well-supplied global market. As such, while the war may add volatility, the probability of a sustained supply shock remains relatively low unless additional producers or infrastructure become targets. Even amid heightened geopolitical risks, the global demand outlook for oil remains underwhelming. Structural headwinds, including muted industrial activity in Europe, China's tepid post-COVID recovery, and persistent inflationary pressures across major economies, are weighing on overall energy consumption. Airlines, a key post-pandemic recovery driver for jet fuel, are also seeing mixed signals. Ticket bookings are strong but jet fuel efficiency gains continue to limit actual oil consumption growth. Furthermore, the stronger-for-longer interest rate narrative in Western economies has delayed business investment and capped industrial output, particularly in energy-intensive sectors such as manufacturing, construction, and transport. Overall, while supply-side fears can generate temporary price rallies, the demand picture remains insufficiently supportive for a sustained oil bull cycle without further macroeconomic improvement. 'We retain our Neutral view on the Oil & Gas sector, as we believe the risk-reward balance remains evenly poised,' said TA. While geopolitical tensions could intermittently support prices, the presence of ample global spare capacity, resilient non-OPEC supply, and muted demand growth limit the probability of a sustained price rally. In this environment, TA favour stock-specific opportunities over a broad sector call.—June 20 2025 Main image: Metro Holding
The Star
16 hours ago
- Business
- The Star
FBM KLCI hovers near 1,500 as uncertainty mounts
KUALA LUMPUR: Malaysia's main stock index came closer to dipping below the 1,500-point psychological level on Friday as investors fretted over the escalating Middle East conflict. The FBM KLCI dropped 0.5 points to 1,500.94, grazing the support amid worries the US will mount an attack on Iran over the coming weeks. Meanwhile, Malaysian policymakers are meeting their US counterparts to negotiate the level of tariffs imposed on Malaysian exports. TA Securities said the market sentiment will likely remain muted ahead of the weekend, with investors awaiting the outcome of the negotiations, which will determine future trade relations. "Immediate index support stays at 1,490, with stronger supports found at 1,465 followed by 1,444. Immediate resistance is maintained at 1,564 with next upside hurdles seen at the recent high of 1,586, followed by 1,610 ahead," it said in its market commentary. Rakuten Trade said it believes the market weakness is owing to persistent foreign selling. "Nonetheless, we would advocate our clients to accumulate on the blue chips if and when the index dips below the 1,500 mark at around the 1,480 thresholds," it said in its outlook. On the domestic market, Nestle shaved 21 sen to RM71.28, Petron dropped seven sen to RM3.82 and British American Tobacco fell six sen to RM4.50. Notable gainers included Allianz up 20 sen to RM19.20, Apollo gaining eight sen to RM6.58 and Yinson eising seven sen to RM2.39. Top actives were Magma up one sen to 47.5 sen, Velesto unchanged at 18.5 sen and Pavilion REIT down four sen to RM1.50.
Borneo Post
2 days ago
- Business
- Borneo Post
Bina Puri eyes first profit since 2019, pins hopes on Sarawak jobs
Bina Puri says it has since focused its efforts on completing these loss-making jobs to ease the burden on future profits. KUCHING (June 19): Bina Puri Holdings Berhad (Bina Puri) is banking on a string of infrastructure jobs in Sarawak to stage its first financial turnaround since 2019. According to TA Securities Bhd (TA Securities) in a note, the pandemic and movement control orders had severely impacted the company's operations especially legacy low-margin infrastructure and building contracts, of which many were forced to halt. Management said it has since focused its efforts on completing these loss-making jobs to ease the burden on future profits. To note, the company posted core losses of RM95 million and RM11 million in FY23 and FY24 respectively. For the first nine months of FY25, its core loss narrowed to just RM38,000. According to management, the company did not secure any new local contracts between 2019 and late 2022. That changed after Chai Chan Tong joined the company in December 2022, acquiring a 20.4 per cent stake and injecting RM14.8 million in fresh capital. He later raised his stake to 23.7 per cent by subscribing to rights shares in April 2023 and took full control of the board following his redesignation as managing director in October 2023. Under Chai, turnaround momentum picked up, with the company securing two road projects in Sarawak in 2023, in Dalat and Samarahan with a combined value of RM176.5 million. In November 2024, it won another Sarawak contract worth RM113.3 million involving water pipeline construction, civil, and structural works. 'From these job wins, it is suffice to say that the company is a strong contender in Sarawak, especially on those small public infrastructure jobs like road, bridge and waterpipe project valued at less than RM200 million,' said TA Securities. The house added that the company is optimistic about securing RM500 million worth of new contracts each year on the back of Chai's strong network and experience in the state. Management guided that competition for sub-contract works in Sarawak remains mild that allows the company to maintain its operating margin at a reasonable five per cent. 'Currently, the company is actively negotiating and tendering for new jobs worth RM3.8 billion in Sarawak,' added the house. As of the first quarter of FY25, Bina Puri's outstanding order book stood at RM551 million with nearly RM230 million of that secured under the current management. These newer jobs are expected to carry higher margins compared to the RM325 million backlog from before Chai's leadership. Importantly, the completion of several unprofitable projects such as the Malaysian Embassy in Moscow, a dual-lane road in Southern Iraq, and the near-completion of the Nepal Supreme Court building, is expected to ease pressure on the company's earnings. The Bangkok high-speed rail project, though far from completion, has already been sub-contracted on a fixed-sum basis to China Railway Engineering Corporation (CREC) thus reducing financial exposure. Looking ahead, TA Securities projects a turnaround in FY25 with a core profit of RM7.8 million. This is expected to grow by 69.2 per cent to RM13.2 million in FY26 and by 11.4 per cent to RM14.7 million in FY27. All told, FY25 is seen as a critical year for Bina Puri's new management to prove its ability to complete legacy projects while securing new, higher-margin jobs especially in Sarawak to support long-term prospect. It also advises risk-averse investors to adopt a wait-and-see approach as the company transitions under its new leadership. Bina Puri construction corporate news
The Star
2 days ago
- Business
- The Star
FBM KLCI opens sideways after US rate hold
KUALA LUMPUR: There was little to move the Malaysian market barometer on Thursday after the US Federal Reserve announced its widely expected decision to keep the interest rate unchanged, followed by a flat performance on Wall Street. The domestic benchmark index eked out a 1.05-point gain to 1,512.94 at the start of trading, suggesting investors remained stolidly in wait for catalysts. TA Securities maintained its view that the local market will continue to consolidate with a downside bias. "Investors are likely to hold back from taking significant positions, as they await greater clarity regarding US trade deals and potential American involvement in the Israel-Iran conflict," it said in its market commentary. "Immediate index support stays at 1,490, with stronger supports found at 1,465 followed by 1,444. Immediate resistance is maintained at 1,564 with next upside hurdles seen at the recent high of 1,586, followed by 1,610 ahead." Commenting on the market's low trading volume, Rakuten Trade said it was reflective of investor caution as they avoided long positions due to persistent global risks and volatile market conditions. "We foresee trading will remain muted due to lack of catalysts and heightened market risks. Hence, we anticipate the benchmark index to trend within the range of 1,500-1,520 for today," it said in its daily note. Leading blue-chip laggards included PETRONAS Gas down 14 sen ot RM18.02, PETRONAS Chemicals shaving four sen to RM3.24 and Public Bank down three sne to RM4.21. Of actives, HLT was down 0.5 sen to five sen, Magma rise 1.5 sen to 47.5 sen and SNS gained 1.5 sen ot 55 sen.
New Straits Times
6 days ago
- Business
- New Straits Times
Analysts: Labour market to stay stable in 2025
KUALA LUMPUR: Malaysia's labour market is expected to remain stable throughout 2025, supported by resilient domestic demand, said economists. TA Securities economist Faris Burhanuddin said that despite persistent global geopolitical tensions, the labour market remains resilient, backed by a stable unemployment rate and strong growth in the services and technology sectors, as well as increasing investments in digitalisation and automation. "We also believe that Malaysia's labour market continues to demonstrate resilience, supported by the country's emergence as a prominent global hub for electrical and electronics (E&E) products, particularly semiconductors," he said in a note. Farid said the government's effort to position Malaysia as a leading hub for energy and semiconductor manufacturing has attracted substantial foreign investment. This includes a recent move by a Japanese company, which opened a manufacturing facility in Pasir Gudang, Johor, creating 460 high-skilled jobs with competitive salaries. In April 2025, the employment rate rose by 2.8 per cent year-on-year to 16.82 million persons, according to the Department of Statistics Malaysia. Meanwhile, the labour force participation rate increased to 70.8 per cent and the employment-to-population ratio sustained at 68.6 per cent. Farid said that structural initiatives such as preparations for Visit Malaysia 2026 are also expected to boost tourism-related employment starting this year. He pointed out that tourism data reinforces this positive outlook, with tourist arrivals reaching 13.38 million in the first four months of 2025, an increase of 21 per cent from 11.07 million last year and 12.4 per cent higher than the pre-pandemic level at 11.90 million in 2019. MIDF Research said rising employment and wage growth in domestic-orientated sectors will provide support to household spending. The firm said expansion in job creation and a healthy labour demand will be fuelled by robust domestic demand and sustained investment activities. "Steady employment growth coupled with a lower unemployment rate suggests more job seekers are successfully securing employment, though youth employment remains a persistent challenge. "Looking ahead, favourable labour market conditions are expected to support domestic demand and underpin economic growth despite external trade uncertainties," it said. Meanwhile, Hong Leong Investment Bank Bhd (HLIB Research) chief economist Felicia Ling said sustained domestic demand and supportive government policies will support the labour market. She said the continued realisation of RM89.8 billion in approved investments in the first quarter of this year is also expected to fuel job creation. TA Securities upgrades its full-year 2025 unemployment rate forecast to an average of 3.0 per cent, while MIDF Research expects it to average around 3.1 per cent. Despite the positive outlook, the economists remain cautious of potential external and domestic headwinds. Ling said the downside risks remain, as ongoing global policy uncertainty may worsen domestic business sentiment. "While we anticipate minimal impact from the Sales and Service Tax expansion taking effect on July 1, the potential pass-through of higher operational costs may prompt employers to be cautious," she added. Farid pointed out that the escalating trade tensions, particularly between the US and China, pose downside risks to Malaysia's trade-reliant sectors such as electronics, machinery and intermediate goods. He said this may lead to employment volatility in key export-oriented regions like Penang and Johor. He added that Petronas' intention to right-size its workforce in response to a more challenging global operating environment adds further uncertainty. "While the full details of the restructuring have not been disclosed, and the new organisational structure is only expected in the second half of the year, we currently view this as a limited downside risk to our labour force projections," he added.
