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Why is S Korea performing badly tahun ini?

Menurut beberapa market experts: "Korea's economic structural vulnerability, combined with looming protectionism under the incoming Trump administration and weak domestic demand, are concerns for investors."

Apakah economic structural vulnerability? Antaranya ialah:
• Ageing population: S Korea's population dalam era menua, In 2023, 19% of the population in S Korea was 65 or older. By 2050, the percentage of people aged 65 and older is projected to increase to 44%. Fertility rate paling rendah dalam dunia hanya 0.72 kelahiran.
• Household debt: South Korea household debt to GDP antara tertinggi dunia akibat mortgage loans.
• Competition: Saingan dari China in beberapa industries, antaranya, steel, shipbuilding, electronics, automotive.
• Weak Economy: GDP S Korea hanya 1.5% in 3Q 2024. IMF forecasts a low growth of 2.2% this year and 2.0% in 2025.

The worst Asian currency tahun ini?

The S Korea won easily is the worst performing currency tahun ini berbanding USD jatuh 8.7%. Ia lebih terok dari Yen (-6.1%) dan Taiwan $ (-5.2%).

The won jatuh banyak dalam tempoh 3 bulan due mainly to political (both domestic and US).
Ringgit is the only currency that’s still positive against the USD.

It’s a good time to go to S Korea.

Gamuda has doubled

Share price closed at new record of RM9.25 today. In 1 year Gamuda has gained 105% on the back of huge contract wins catapulting its core earnings to all time high. It will be included in the KLCI in the next index review this month. Earnings for first quarter FY2025 scheduled for release next week.

Consumer Power

Great & Productive event hari ini organised by Maybank IB. Appreciation to the Consumer team for walking thru their strategy & plans moving forward, plus for fielding the Q&A.

Maybank’s View on Bank Islam 3Q Profit

“Bank Islam’s 2Q24 results were below expectations, and we lower our
FY24-26E earnings by 3% respectively. We maintain a HOLD call with a
marginally lower TP of MYR2.65 (MYR2.75 previously)”

This is line with what I have posted earlier that profit appears below analysts’ estimates.

Since results released Friday noon, share price fell 3%. It’s down to RM2.62 today. Another disappointment is there was no dividend declared compared to 12.59 sen last year after 3Q announcement.

https://www.tiktok.com/live/event/7443415319059628050?enter_from=share_link&share_from_user_id=7213999138760623105

Hope to see you all and have a fruitful discussion with everyone 📉📈

We’re discussing which are some of the sectors that had good/bad 3rd quarter.

And stock price Winners & Losers post-earnings announcements.

Hi. I’m having another “live” session tomorrow. See you

B Islam share price this year has done well, up by 22% to RM2.70 compared to Bursa Finance Index higher by 18%. But B Islam's performance is well below Alliance, CIMB and Affin each up by 40-45% this year.

Bank Islam 3Q Latest (noon announcement).
Net Profit: RM130.4m, -5% quarterly & -7% annually.
9M2024: RM397m (9M2023: RM395m).

Slightly disappointing. Sebab total 9M2024 of RM397m is only 70% dari analysts forecast of RM571m for 2024. And no dividen announced this quarter. Same quarter last year ada 12.59 sen. Net profit margin flat at 2.15% for 9M2024, compared to 2.11% in 9M2023.

Major shareholders: LTH 48.9% & EPF 17.1%

KPJ achieve record quarterly revenue, amid claims by insurance providers saying medical costs higher and pending 40-70% rise in premiums.
Do you agree?

KPJ continues to do extremely well as they are expected to improve margins, profitably and ROE this year and in 2025. They even payout higher dividends to shareholders. Based on analysts reports, no discussion about costs.

In Kuching, Sarawak for another presentation. It's a cool-cat city, and I hope to be back here again.

The event was exceptionally well-organized. Made some new acquaintances.

My heartfelt thanks to the organizers for their outstanding efforts in making it a great occasion.

Maybank the first listed Co to achieve RM10 bil Net Profit?

Latest Maybank 3rd quarter earnings announced today.

•Net profit=RM2.54 bil, up 8% annually.
•Total 9 months 2024=RM7.56 bil.
•The 9th straight increase in qtr net profit.

Maybank is on track to achieve RM10 bill net profit for full 2024, if they can sustain current quarterly performance.

MALAYSIA & ASEAN GDP 3Q

3Q GDP (Annual chg & date announced):
MALAYSIA 5.3% (2Q: 5.9%) 15 Nov
Indo 4.95% (2Q:5.05%). 5 Nov
Phil 5.2% (2Q: 6.4%). 5 Nov
Thai 3.0% (2Q: 2.0%). 18 Nov
Spore 4.1% (2Q: 2.9%). Advance est. final 25 Nov

Growth is SLOWING. And there could possibly be higher risks of slowing in 2025.

For 2025, BNM has flagged the following risks for Malaysia which was written in its 3Q outlook recently:

“The economic growth outlook faces downside risks from slower-than-expected external demand, further escalations in geopolitical tensions and PROTECTIONIST MEASURES as well as weaker-than-expected commodity production.”

What’s the potential highest risk? The new US president is imposing 60% new tariffs on imports from China and 10-20% tariffs on other countries.

Adakah Malaysia akan mendapat impak yang negative?

Hard to beat Sarawak hospitality. This “Lalapan Bawal” is excellent.

I’m in Miri for the first time. Doing an economic presentation.
Surprisingly a pleasant town with plenty of food choices.

Gamuda continues bullish trend

Gamuda closed above RM9 for the first time ever. In 1 year the stock almost doubled, rising 95%.

Mkt capitalisation Gamuda hari ini naik lagi kepada RM25.6 billion. Ini menjadikan Gamuda berada di ranking #17 di pasaran saham Bursa Malaysia. Ranking ini means Gamuda will surely be included in the KLCI at the cut off date of 25 Nov. Unless something unexpected happens, it will replace Genting Malaysia currently at #37. KLCI only has 30 stocks.

https://www.tiktok.com/live/event/7438212531551731730?enter_from=share_link&share_from_user_id=7213999138760623105

See you all tonight

GDP Q3 Grew 5.3% as Estimated

BNM and DOSM reaffirmed Malaysia GDP grew by 5.3% in the third quarter of 2024. This is the second highest growth rate in almost 2 years, below 5.9% recorded in Q2.

The growth in GDP is attributed to 3 factors:
1. Higher investments
2. Improvement in exports
3. Increase in household spending

The GDP is forecast to expand by 5% this year and 4.5% to 5.0% in 2025.

Ringgit -dan USD- masih main news

Ringgit kembali hampir level 4.50 hari ini. Di Asean ringgit is among the weakest performers since October bersama dengan Thai baht.

KLCI pun sedang bertahan paras 1,600, jatuh 10 points today.

Being an open trade country ada pros and cons, and then China is our trading partner.

Challenging days for ringgit

Not a good day for Asean currencies incl ringgit hitting almost 4.44 to the USD and lowest in 2 months. Since October it has fallen by ~7% against USD.

Among reason is US treasury yield continues to rise. Hari ini yield 10 tahun ke paras 4.4% compared to 3.9% in mid August.

The sentiment is clearly positive on the USD after Trump winning the US presidential elections last week.

Plantation sector upgrade by IB

RHB hari ini upgrade the sector to overweight recommendation. Some of their recommendations include Srawak Oil Palm, Johor Plant, SD Guthrie. Output level di Indonesia to continue in 2025 according to RHB.

Let’s discuss the US elections impact and where the smart money is going.

Sunday 9pm the usual time.

Harga CPO Futures crossed RM5,000 for the first time since June 2022. Today many plantation stocks reacting positively.

And we saw AM Invest upgrading sector kepada Overweight, report issued 6 Nov.

Malam ini US Fed Open Market Committee akan buat keputusan interest rate. Majority menjangkakan turun 0.25%.

Apa yang ironic ialah semenjak US turunkan rate sebanyak 0.5% pada 18 Sept lalu, bond yield 10 tahun telah naik sebanyak 0.7% kepada 4.45% latest. During this time USD telah mengukuh. Latest ringgit ialah 4.40.

Earlier tonight, Bank Of England turunkan rate sebanyak 0.25% kepada 4.75%. This is the second reduction following August’s move.

As for BNM, no changes in OPR expected as per statement that rate is currently at an accomodative level.

https://www.bnm.gov.my/documents/20124/16179534/MPS_Snapshot_2024_11_bm.pdf

OPR KEKAL 3.0% TAHUN 2024

Next meeting is 22 Jan 2025.

OPR has stayed at 3% since early 2023. It’s already back at the 2019 level as growth and inflation are both showing good numbers.

BNM Interest Rate Decision 6 Nov

Esok 3pm, BNM akan umum keputusan mesyuarat dasar monetari yang terakhir untuk tahun 2024. The next meeting will be in January 2025.

BNM likely to maintain OPR at 3% for the 9th consecutive meeting on 6 Nov 2024, amid increasing optimism over growth, inflation, and currency outlook. At the moment monetary policy stance remains supportive of the economy and is consistent with the current assessment of inflation and growth prospects. Malaysia’s GDP is expected to grow by 5% this year while inflation is at 2%.

Seperti yang kita bincang dulu, BNM tidak perlu adjust policy kerana OPR kini berada di paras “normal”.

Let’s see what BNM statement says tomorrow.

Komoditi yang resilient: CPO

Harga Crude Palm Oil atau CPO naik 21% dalam tempoh 1 bulan terakhir ini.

Menurut CPO expert “CPO Hits 28-Month High! CPO futures surged 3.6% to 4,865 on Bursa Malaysia amid high demand, tight supplies, and strong crude oil prices. Thai export halt & gains in Chinese vegoil futures added to the momentum.”

CPO bukan sahaja naik, malah naik lebih tinggi dari Soy Oil dan other edible oils the last 1 year. Not many people are aware of this.

Tapi kenaikkan ini tidak pun memberi kesan positif kepada saham plantation. Hanya beberapa sahaja terutama Jaya Tiasa yang naik tahun ini similar to CPO uptrend.

How will other stocks react if CPO continues to rise? Will be interesting to see how this turns out.

Esok live discussion tentang isu semasa ringgit, ekonomi dan yang berkaitan. Pls join me. Thanks

Ringgit is October’s Worst Performer

Hari terakhir October data menunjukkan ringgit paling terok di Asia berbanding USD, jatuh 6%. Tapi untuk tempoh Jan- Oct, ringgit masih lagi positive hampir 4%. At one point in early September, ringgit naik 10% for the year against the USD as expectation rose that US would cut interest rates aggressively.

Namun ringgit bukan sahaja negatif dgn USD, tapi hampir semua matawang trade partners termasuk Philippines Peso, Thai Baht dan Indonesia Rupiah. Ringgit hanya positif dengan Japanese Yen, itu pun barely 0.6%.

What’s causing this sudden turn in negative sentiment? Maybe sebab investors taking profit kerana ringgit yang paling perform?

Entering final stretch of 2024

Esok hari terakhir working day Oktober. That means we only have kurang dari 50 hari bekerja sebelum kita masuk tahun baru.

It’s actually only 40 days untuk kita stay productive samada dalam bidang pekerjaan atau pelaburan atau personal development based on our 2024 targets.

Pernah saya bincang ini dulu: Untuk saya 4 quadrant kehidupan (or Life Quadrant) ialah, family, personal development, personal interest & career.

Kita hanya boleh achieve “kejayaan” jika kita bijak membahagikan masa dan smart enough to focus on improving ourselves in areas that are relevant and needed for our future—and this requires periodic review of both our financial and life goals.

Here’s hoping 2 bulan yang akan datang beri lebih positivity dan motivation to work harder, smarter.

Action-packed US next 2 weeks
Next 2 weeks US will dictate market directions. Among important data and events are:
PCE, Unemployment, GDP.
Kemudian diikuti oleh US Presidential Elections on 5th Nov. Then Fed’s meeting on 7th Nov to decide on interest rate.

Investors are currently concerned about what new policies might mean for global trade post-US Elections. Key issues, like potential increases in tariffs on imports from China, have created extra uncertainty.

The best options for many global investors pada masa sekarang ialah memilih investment yg "selamat" iaitu USD & gold. Kedua assets ini sedang berada didalam uptrend, USD naik kerana mungkin interest rate akan diturunkan 0.25% sahaja tidak seperti jangkaan awal 0.5% sebelum ini. Atau mungkin tiada cut langsung? Gold pula berada direkod high.

MIDF: "Domestic sales are anticipated to remain soft as consumers exercise caution in their spending, prioritizing essential items. Additionally, we assume the ongoing Israel-Gaza conflict to still persists, further influencing consumer preferences and dampening Nestle's sales performance."

Kenanga: "Not helping either, was the lingering boycott of certain Western products due to the Middle East tensions. Its net profit dived by a steeper 27%, which we believe, due to its inability to fully pass on higher input costs, particularly from elevated commodity prices such as cocoa and coffee."

Nestlé Profit Q3 Worsens

Nestle petang semalam umum kewangan third quarter (Q3) 2024. It recorded net profit of RM85million, the worst quarterly net profit performance since 2016 and also 9% lower than quarter 2 (Q2). Revenue of RM1.45 billion is lowest since 2021.

Saham jatuh 2.2% hari ini kepada RM100.20 and testing the lowest level on 28 August of RM99.74.

Beberapa research analysts IBs turunkan target price mereka, antaranya RHB RM103, MIDF RM109.

Mereka juga menulis BOIKOT antara sebab profit jatuh. Looks like it will be challenging for Nestle.

Delighted to be on the same stage with Financial Faiz and Datuk Yasmin sharing our personal finance and investment journey with MBSB staff as well as students.

Thank you MBSB for the invite.

Another big win by Gamuda. Closed at record high yesterday up 4% to RM8.54. Looks like Gamuda can’t do wrong 😑

“Gamuda announced that its unincorporated JV with two Taiwan companies (MiTAC Information Technology Corp and Dong Pi Co) clinched the job to design and build the Xizhi Donghu Mass Rapid Transit (MRT) turnkey project in Taiwan from the Department of Rapid Transit Systems of the New Taipei City Government worth MYR4.3bn (GAM’s 75% effective share: MYR3.2bn). The job entails 5.8km of elevated viaducts and trackwork, six elevated stations and system works for a seven-year period with a c.8% PBT margin.” Report by RHB

Yield US Treasury bulan October consistently above yield Malaysia Government Securities.
Hari ini US 10 yr Treasury yield at 4.19%, highest since July 2024. Since the US cut interest rates by 0.5% in Sept, yield already up also by 0.5%.
This may have impact on ringgit performance going forward. US next policy meeting and decision is on 7 Nov, after the US presidential elections

TERKINI. Hebat GDP SUKU 3 berkembang 5.3%. Ini adalah advance estimate.

Foreign fund Flow Stock Market

Foreigners masuk semula saham Malaysia minggu lepas. Ini setelah 3 minggu berturut mereka negatif iaitu dalam position net sellers

Daily Net Foreign Flows last week:
Friday: +RM117m
Thursday: +RM226m
Wednesday : +RM38m
Tuesday: +RM88
Monday: -RM65m
Total week 18 Oct: +RM404m

Meanwhile local institutional funds net sellers begitu juga retail investors. Local institution ialah sebanyak -RM384m. Retail pula -RM20m net sellers.

KLCI naik 13 points or +0.7% last week hasil net buying by foreign funds.

Report dari Maybank IB Budget 2025.

“We are positive on Budget 2025’s fiscal and growth measures. As fiscal
consolidation continues, Budget 2025 measures are pro-growth with no
new major taxes.”

Forecast 🔥 🔥
GDP 2024: 5.2%
GDP 2025: 5.1%

KLCI end 2024: 1,720
KLCI end 2025: 1,840

Walaupun overall neutral pasaran saham, RHB expects positive impact ke atas saham di sektor Construction, Consumer, Property.

RHB stock recommendation post-Budget. No changes. Ada beberapa saham di rekomen di sektor Construction, Consumer, Property.

Esok kita bincang post-Budget. Thank you

*3. MOVING FORWARD*
- As expected, there are no material surprises at headline level.
- The construction sector is an obvious beneficiary from the DE. Despite the reduction in DE, the most obvious beneficiary of Budget 2025 will be the construction sector.
- Consumer sector another possible beneficiary. RON95 subsidy rationalisation will only be implemented in mid-2025. The combination of financial aid and cash assistance is expected to create a positive environment for both staple and discretionary goods, enhancing overall consumer demand and sector growth.

From MIDF

*1. DOMESTIC ECONOMY*
- Malaysia’s GDP to grow at +4.5-5.5% in 2025. The government released its latest economic forecast, predicting Malaysia’s economy will growth at +4.5-5.5% next year (2024e: +4.8-5.3%). In comparison, we predict Malaysia’s economy will grow at more normalised pace at +4.6%, partly due to absence of technical boost from low base effect.
- Inflation is projected to be between 2%~ 3.5% in 2025. One primary reason for the expected rise in inflation is the government's plan to rationalize subsidies, particularly for RON95 petrol.

*2. PUBLIC SECTOR FINANCE*
- RM86b for development expenditure (DE). Public investment is projected to continue growing by +4.9% while construction sector is expected to expand by +9.4% among others attributed to public infrastructure projects.
- Fiscal deficit declined to -3.8% of GDP in 2025. Fiscal deficit expected lower to -3.8% of GDP next year (2024e: -4.3%).
- The government projected that the collection of direct tax will increase further +6.6% to RM188.8b in 2025.
- The government’s Operating Expenditure (OE) is estimated to increase by +4.2% to RM335b in 2024.

🇲🇾 *Beyond 2025*
- Medium-Term Fiscal Framework (2025-2027) has been revised with total revenue is projected at RM1,055 billion or 15.7% of GDP, mainly contributed by non-petroleum revenue which is forecast at RM901.3 billion or 13.4% of GDP. Petroleum-related revenue is estimated at RM153.7bn, 14.6% of revenue or 2.3% of GDP. In 2024, the share of petroleum-related revenue is projected at 19.6% of revenue or 3.2% of GDP. Average crude oil price is $82.5pbd for 9M 2024. Despite of slightly lower crude oil price than 2024’s, the government is indicating a lower share of petroleum-related revenue in the next three years.
- The path for a new consumption tax still wide open. We anticipate the potential increase of non-petroleum revenue could be thru further tax reforms and widening tax base including a new consumption tax in the medium terms.
- Looking ahead, the fiscal deficit is predicted to go further south as per target in the PFFRA 2023. Subsidy rationalisation for OPEX, potential widening of tax base for revenue and shifting towards public-private partnership (PPP) model for big infra and non-infra projects as per mentioned in PIKAS 2030 are the moving forward fiscal strategies.

Above commentaries by
Zafri Zulkeffeli, Deputy Chief Economist, BIMB Securities.

🇲🇾 *Fiscal Policy*
- Fiscal deficit on downward trajectory. The deficit ratio is predicted to reach *3.8% for 2025* from 4.3% in 2024.
- The reduction of fiscal deficit is a combination of higher revenue, prudent spending on OPEX and slightly lower DEVEX.
- Revenue +5.5% to RM339.7 billion or 16.3% of GDP.
- ⁠ 🏦With optimism on domestic demand, MOF is projecting a stronger revenue growth of 5.5% for next year. Personal income tax is expected to generate RM44 billion which is 7.8% higher than the previous year. SST collection remains in double-digit expansion rate with 14.2% in 2025.
- ⁠🏦 Corporate income tax (CITA) is set to rise by 8.1% in 2025 following potential robust domestic demand and steady expansion of external sectors.
- ⁠Operating expenditure +4.2% to RM335.0 billion or 16.1% of GDP.
- ⁠💰Emoluments hit above RM100 billion mark as the civil servants to enjoy 7.0-15% salary hike staring this December 2024. The emoluments make up more than one-third of OPEX. Retirement charges to record 11-year high growth rate at 17.7%, thanks pension adjustments on the final salary adjustment of retirees will be implemented also by end of this year.
- Net Development expenditure RM84.7 billion or 4.1% of GDP
- ⁠DEVEX shifted towards social sectors. Excluding 2021, the ratio of development expenditure on social sector to DEVEX will be the highest since 2011. RM15 billion allocated for education & training which represent 17.5% of DEVEX, the highest rate since 2011. Excluding 2021, allocation for health sector about 8.0% of DEVEX is the highest since 2005.
- ⁠🛣️ For economic sectors, only transport to record a higher DEVEX of RM1.3 billion or 8.0%. One-fifth of the DEVEX is allocated for transport sector which mostly related to public railway and highway infrastructure projects

Budget 2025 - Macro Commentary

🇲🇾 *Economic Outlook*
- MOF forecasts 4.8-5.3% GDP growth for 2024, 4.5%-5.5% in 2025.
- 🛍️ Domestic demand continues to anchor growth as private consumption to expand at faster pace of 9.1% (2024: 7.5%) and Services sector to record faster growth rate of 5.5% (2024: 5.3%) .
- 💰 Salary adjustment for civil servants, full-employment condition, stable inflationary pressure, recovery of tourist arrivals, and accommodative monetary & fiscal policies are underlying factors supporting the domestic spending.
- 🚧 MOF also optimistic on construction sector which expected to expand by 9.4% in 2025 (2024: 14.1%) underpin by infra projects and private-led projects including data centre, residential and non-residential.
- 🌍 MOF foresee moderation on the external front as real exports to increase by 5.1% (2024: 10.7%) amid potential brewing global trade war, persistent geopolitical conflicts, and normalising commodity prices.
- ⛽️ Inflation seen at 2.0%-3.5% in 2025 as RON95 retargeting subsidy to roll-out by middle of 2025. As of 8M 2024, average headline inflation rate is 1.8%. This is way lower than the government’s initial CPI forecast 2.1-3.6% for 2024 as per mentioned in the Budget 2024.
- However, the wide gap of inflation forecast for 2025 indicate uncertainty on the size of RON95 subsidy cut size and price level mechanism.
- 🏛️From political point of view, 2025 is a critical and sensitive year to go on full fuel subsidy cuts as Sabah 17th Election is due by 4Q 2025 and potentially Sarawak 13th Election by early 2026.

I sold Kerjaya ni. But since jual stock ini naik 7% 😆. It is what it is…

Gold price di record high. Tahun ini gold sudah pun naik sebanyak 30%. Silver is up almost same, 32%.
Policy easing outlook and central banks buying are aiding the price higher.

Monetary Decision Week Completed

Singapore: maintained
Indonesia : maintained
Thailand: cut 0.25%
Philippines: cut 0.25%
ECB: cut 0.25%

Euro inflation bulan September turun lowest in more than 3 years to 1.7% and falling within the ECB target of 2.0%.

In general, most countries berada dalam trend “easing” dasar monetari.

Malaysia dijangka tidak akan merubah polisi dan OPR kekal 3.0%. Mesyuarat polisi terakhir BNM untuk tahun 2024 ialah 5 November.