The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
2144 ET - Malaysia's semiconductor sector could witness an uneven recovery amid a cautiously optimistic outlook despite robust global semiconductor sales growth driven by strong AI demand, TA Securities analyst Chan Mun Chun says in a note. Growth is expected to be led by companies exposed to AI and data-center infrastructure. Players with significant exposure to traditional end markets such as computers and smartphones may face a more challenging environment due to rising memory costs, he reckons. Geopolitical tensions and potential ringgit appreciation are also key risks to the sector's growth outlook, he adds. TA Securities maintains a neutral rating on Malaysia's semiconductor sector. It pegs Dagang NeXchange as its top pick, as its semiconductor unit, SilTerra, is seen benefiting from strong silicon-photonics orders amid growing AI and data-center demand.(yingxian.wong@wsj.com)
2137 ET - Malaysia's technology sector could see several near-term rerating catalysts in 2H, including an earnings upgrade cycle and potential inclusion of technology stocks if the KLCI expands to 50 constituents from 30, CIMB Securities analyst Mohd Shanaz Noor Azam says in a note. Ringgit depreciation against the dollar and election-related developments could also support investor sentiment and further P/E multiple expansion, he says. Artificial-intelligence infrastructure demand remains a key growth driver, with Vitrox, Malaysian Pacific Industries, Inari Amertron and Nationgate seen as beneficiaries. The Wolfspeed-Liteon partnership also reinforces AI-driven silicon carbide adoption, benefiting Malaysian power-management players such as Malaysian Pacific Industries, he adds. He prefers companies converting AI demand into orders and recurring revenue. CIMB maintains an overweight rating on Malaysia's tech sector. (yingxian.wong@wsj.com)
2129 ET - ResMed's bull at Macquarie thinks the breathing-tech provider's five-year outlook remains intact despite its June-quarter gross margin missing expectations. The dual-listed CPAP maker's 4Q 62.3% gross margin was 36 basis points short of the investment bank's expectations, and 46 basis points softer than consensus. However, Macquarie's analysts reminds clients that ResMed continues to expect a double-digit basis-point improvement to gross margin through 2030. Macquarie expects gross margin to widen to 62.9% by fiscal 2029, with EPS growth for the next three fiscal years of 9%, 6% and 10%, respectively. Macquarie raises its target price on ResMed's ASX-listed stock by 0.4% to 46.80 Australian dollars, and maintains an outperform rating. Shares are up 3.4% at A$31.11. (stuart.condie@wsj.com)
2125 ET - Coronado Global Resources posts a deeper-than-anticipated 1H loss due to higher net interest costs, lower-than-expected tax benefits, and an additional impairment related to its Logan mine sale, says Barrenjoey. Coronado's net loss of US$418 million compares with a consensus estimate of US$305 million. Revenue and Ebitda are in line with the bank's expectations, although Ebitda misses consensus, it says. The coal miner hasn't provided any commentary regarding 2026 volume and mining-cost guidance. Two Glencore off-take/prepayment agreements provide additional liquidity lever, it adds. Barrenjoey has a neutral rating and target of 30 Australian cents/share on the stock. Shares are down 13% at 16.5 Australian cents. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2112 ET - CAR Group's strong profit outlook looks priced in to Macquarie analysts. With an unchanged neutral rating on the Australia-listed vehicle advertiser, Macquarie's analysts tell clients in a note that CAR is well-placed to report annual adjusted net profit growth of between 9% and 12% through fiscal 2029, on a constant-currency basis. However, they point out that the 11% growth reported for the last fiscal year was in line with consensus. The investment bank's view is that the stock is trading at 25 times earnings on a one-year forward basis, with its price-to-earnings-growth ratio at the midpoint of its recent range. Macquarie raises its target price 4.6% to 29.80 Australian dollars. Shares are down 3.1% at A$28.79. (stuart.condie@wsj.com)
2103 ET - Crude palm oil prices could trade between 4,400 ringgit and 4,600 ringgit a ton in the near term, supported by rising geopolitical risks, strengthening El Nino conditions and higher biodiesel demand in Indonesia, says Ivy Ng Lee Fang of CIMB Securities. Stronger El Nino conditions could weigh on Southeast Asian yields with a lag, posing downside risks to supply from 2027 onwards, the analyst says. Disruptions in sunflower-oil exports from Russia and Ukraine could also boost palm oil substitution demand ahead of India's festival season. CIMB raises its CPO price forecasts for 2026 and 2027 by 50 ringgit a ton each to 4,450 ringgit and 4,550 ringgit a ton, respectively. It remains overweight on Malaysia's plantation sector, and pegs IOI, Kuala Lumpur Kepong and Hap Seng Plantations as its top picks. (yingxian.wong@wsj.com)
2052 ET - Life360's bull at Citi sees a number of positives from its latest quarterly update despite the disappointing lack of an earnings guidance upgrade. Analyst Siraj Ahmed flags strong growth in paying subscribers, a pickup in international user growth, a better-than-expected Ebitda margin, and U.S. price rises linked to the location-app developer's launch of its pet tracker product. However, June-quarter advertising gross margin fell short of Ahmed's forecast. He tells clients in a note that Life360's unchanged Ebitda guidance means that its 3Q earnings could miss consensus by a distance. Citi has a last-published buy rating on Life360's U.S.-listed stock. Its ASX-listed stock is down 14% at 25.38 Australian dollars. (stuart.condie@wsj.com)
2051 ET - Malaysia's August palm oil stockpile increase should be limited as seasonally higher production is expected to be partly offset by resilient exports, Hong Leong IB analyst Chye Wen Fei says in a note. Exports are expected to be helped by India's festive-season restocking and palm oil's price competitiveness against soybean oil, she says. Chye expects elevated crude palm oil prices to persist through 2H amid tightening supply and resilient demand. She favors planters with predominantly upstream operations and greater exposure to Malaysia, given their higher earnings leverage to CPO price strength and lower exposure to foreign regulatory risks. Hong Leong maintains an overweight rating on Malaysian plantation sector, pegging Hap Seng Plantations as top pick. (yingxian.wong@wsj.com)
2041 ET - Jarden pares its medium-term dividend outlook for Contact Energy as it adjusts to it possibly becoming involved in data centers. Contact has agreed with CDC Data Centres to assess a potential data center at Stratford, New Zealand. The companies plan to seek resource consent for a 250-megawatt data center near the site of Contact's closed Taranaki Combined Cycle gas power plant. Jarden notes Contact's FY 2027 dividend guidance of NZ$0.42/share represents a 101% payout on a trailing cash flow basis. "To account for potential equity co-investment in large-scale digital infrastructure, we have prudently reduced our dividend payout assumption from FY28 onwards to 80% of four-year trailing per-share cash flow, at the bottom end of Contact's 80-100% target range," analyst Grant Swanepoel says. (david.winning@wsj.com; @dwinningWSJ)
1941 ET - Bank of Queensland's plan for returning capital following its whole-of-loan equipment finance portfolio sale to Challenger doesn't change Jefferies's bearish view of the stock. Bank of Queensland intends to pay a special dividend of A$0.15/share. It also plans to buy back shares worth up to A$196 million on market. "While the capital return provides clarity on surplus capital deployment, we remain cautious on the medium-term outlook," says analyst Andrew Lyons. "Housing balances continue to decline, with growth increasingly reliant on (late-cycle) commercial real estate." Jefferies retains an underperform call on Bank of Queensland and lifts its price target by 0.7% to A$5.68/share. Bank of Queensland ended Monday at A$6.83. (david.winning@wsj.com; @dwinningWSJ)
1930 ET - Shares in SGH are likely to fall after lower-than-expected FY27 guidance, Barrenjoey says. ASX-listed industrial conglomerate SGH issued FY27 guidance for flat to low-single-digit EBIT growth. That is below consensus for 3% growth--or 5% growth versus the new FY26 base--says the Australian investment bank. SGH reported FY26 EBIT growth of 1%, at the bottom end of guidance. Coates is the driver of the slightly softer result, Barrenjoey says. "On the positive side, operating cash flow was better" than expected--up 7% versus consensus--resulting in net debt of A$3.7 billion coming in lower than expected, it says. Barrenjoey has an "overweight" rating and A$55.00 target on SGH. Shares ended Monday at A$46.34. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
1903 ET [Dow Jones]--Australian stocks look set for an uncertain start to a session that will straddle the Reserve Bank's latest interest-rate decision. Local stock futures are down by less than 0.1% ahead of Tuesday's session, suggesting that the S&P/ASX 200 will barely move at the open. Many economists expect the RBA to hold the cash rate for a second straight meeting, but to talk up the potential to resume increases if inflation remains stubbornly high. Ahead of the open, industrial conglomerate SGH reported a 32% increase in annual profit and raised its dividend. Life360 raised its annual subscription revenue guidance. U.S. indexes finished modestly lower as Iran refused to reopen the Strait of Hormuz.
Comments