Investment & Market Trends

Capital A Bhd is targeting an exit from Practice Note 17 (PN17) status after a substantial gain from the disposal of its aviation business, part of its completed regularisation plan, lifted the group to a positive shareholders’ equity position. The sale of the airline business generated a gain of RM9.75 billion, propelling Capital A’s net profit for the fourth quarter ended Dec 31, 2025, to RM10.2 billion, compared with a net loss of RM1.66 billion in the same period a year earlier, according to a Bursa Malaysia filing on Wednesday. Quarterly revenue increased 48.3% year-on-year to RM769.08 million from RM518.51 million. For the full year, the group reported a net profit of RM13.03 billion, swinging from a net loss of RM501.25 million in FY2024, largely due to the disposal gain. Cumulative revenue rose 16.7% to RM1.99 billion from RM1.71 billion. “The disposal has restored the group to positive equity of RM937 million, marking a clear financial reset. We now look forward to lifting our PN17 status and drawing a firm line under past challenges,” said Capital A CEO Tan Sri Tony Fernandes. Excluding its divested aviation business, Capital A’s continuing operations “largely met” internal targets. EBITDA stood at RM443 million, slightly below the guided range of RM500 million to RM600 million, while revenue of RM3.4 billion was marginally under the RM3.5 billion to RM4 billion range. The net operating profit (NOP) margin of 7% landed at the lower end of the 7% to 10% target range. No dividend has been proposed for the financial year. Capital A’s ongoing operations now consist of five key units: Asia Digital Engineering (ADE) — a maintenance, repair and operations unit, Teleport (logistics), AirAsia Move (travel platform), Santan (F&B), and AirAsia Next (brand licensing and digital IP). For the current fiscal year, the group has set internal targets of RM3.8 billion in revenue, RM600 million in EBITDA, and a 7% NOP margin of RM266 million. Fernandes noted that the group’s performance depends on each of the five business units achieving their respective objectives. He added that Capital A is ready to embark on its next phase of growth, focusing on its five tech-driven businesses. Following the announcement, Capital A shares closed 1.5 sen, or 2.54%, higher at 60.5 sen, giving the company a market capitalisation of RM2.68 billion.

Lembaga Tabung Haji has become a significant shareholder in AEON Co (M) Bhd following its latest acquisition of shares in the Malaysian retailer and shopping mall operator. The pilgrimage fund crossed the 5% disclosure threshold after purchasing 250,000 shares, equivalent to a 0.018% stake, on Tuesday, February 24. This latest transaction increased Tabung Haji’s total holding in AEON Co to 5.013%, or approximately 70.39 million shares, according to a filing with Bursa Malaysia on Wednesday. With this move, Tabung Haji joins the list of notable institutional investors in AEON Co. Another key shareholder is the Employees Provident Fund (EPF), which holds a 7.618% stake in the company. Meanwhile, AEON Co’s parent company, AEON Co Ltd, remains the largest shareholder with a majority 52.02% ownership. Tabung Haji has been actively participating in the Malaysian equities market in recent months. Last month, the fund re-emerged as a substantial shareholder in SKP Resources Bhd, taking a 5.092% stake after more than a decade, and also acquired a 5.006% stake in newly listed Orkim Bhd. AEON Co’s shares responded positively to the announcement, ending one sen, or 0.76%, higher at RM1.33, giving the company a market capitalisation of RM1.87 billion. Analysts note that Tabung Haji’s increased participation in the market reflects its continued focus on strategic investments in well-established Malaysian companies with stable operations and long-term growth potential, reinforcing its position as an influential institutional investor. This latest acquisition also highlights the growing trend of domestic funds strengthening stakes in local listed companies, potentially enhancing corporate governance and providing additional stability to the shareholder base of firms like AEON Co.

A 20% slide in Baidu Inc’s shares over the past month serves as a crucial reminder for companies in China’s rapidly intensifying artificial intelligence (AI) race: investors are demanding tangible results. The search engine specialist kicks off December-quarter earnings for China’s Big Tech on Thursday, amid growing concern that its AI investments are not translating into a meaningful growth driver quickly enough. Despite strength in the cloud business, analysts predict both revenue and profit to fall year on year, hurt by continued weakness in the core advertising business that’s closely tied to the broader economy. With markets fixated on AI, positive management commentary or evidence that capital spending is bearing fruit will be crucial to help stem an equity rout that’s eroded US$11 billion (RM42.78 billion) in market value since a three-year high on Jan 23. “In the crowded field of Chinese AI players, Baidu is viewed more as an optionality or valuation‑driven sum‑of‑the-parts story rather than a clearly defined long‑term winner,” said Gary Tan, a portfolio manager at Allspring Global Investments LLC. “Baidu must demonstrate it is leveraging its AI capabilities to build a true full stack AI platform rather than acting as a jack of all trades.” Baidu was among the first Chinese companies to embrace AI and roll out a ChatGPT-like service, but it has lost leadership in the field to larger rivals as well as newcomers like DeepSeek. The Beijing-based firm’s flagship mobile application has also seen popularity wane, with young users flocking to social apps from rivals ByteDance and Xiaohongshu for search queries. The stock has suffered also on account of a wave of new listings by pure‑play AI firms such as chip designers and large language model developers. The outsized gains in shares of companies like MiniMax Group Inc and Knowledge Atlas Technology JSC Ltd — better known as Zhipu — are luring investors away from diversified internet conglomerates such as Baidu, Alibaba Group Holding Ltd and Tencent Holdings Ltd. The Hang Seng Tech Index, which counts Alibaba, Tencent and Baidu among heavyweights, is down 9% over the past month. Shares of Alibaba and Tencent down about 12% each. Baidu’s stock has fared much worse, losing nearly 20% over the period. The downtrend has continued even after the company earlier this month announced plans to issue its first dividend and a three-year stock buy-back programme of as much as US$5 billion in a bid to reward investors. Some market watchers have expressed optimism ahead of the results. “Baidu is moving into a phase where the contours of its AI-led transition are becoming more visible, in our view, with early signs that user adoption for AI functions, AI product integration into existing mobile Internet services and operational efficiency are beginning to improve,” JPMorgan Chase & C analysts led by Alex Yao wrote in a note last month. Baidu’s 12-month forward consensus earnings estimate has also risen over 6% since reaching a more than three-year low late last month. Even so, the options market is signalling investor caution. Demand for downside protection has increased, with the cost of insuring against a 10% drop in Baidu’s US-traded stock climbing to its highest level since April relative to upside bets earlier this week, according to one-month implied volatility data. Options traders are pricing in a 5.7% swing in either direction for its American Depositary Receipts after the results. That’s more than the average 4.6% fluctuation seen following the last eight quarterly reports. “Baidu needs to convince investors of greater adoption of its ERNIE-based agents, particularly on the enterprise side,” given that agentic AI systems — which require less human supervision — are becoming “a larger and larger disruption risk”, said Felix Wang, the tech sector head of Hedgeye Risk Management.

The Ministry of Investment, Trade and Industry (MITI) has utilised RM335 million, or 89.6% of the RM374 million allocated for research and development, commercialisation and innovation (R&D&C&I) programmes as of June 30, 2025. Deputy Investment, Trade and Industry Minister Sim Tze Tzin said the total expenditure ceiling approved for MITI under the 12th Malaysia Plan (12MP) up to that date stood at RM402 million. He noted that RM55.64 million in unreturned grants remains outstanding. This consists of RM33.97 million under the High Impact Project Fund (HIF) managed by MIDA, and RM21.67 million under the High Value Added and Complex Product Development (HVAD) programme, which is a continuation initiative by the Ministry of Economy as approved in the MyProjek system. Sim explained that the unreturned RM55.64 million was retained to meet ongoing project commitments. Of the amount, RM33.97 million under HIF is being used to fund approved projects that are still under implementation. Meanwhile, the remaining HVAD allocation is financing 28 new projects approved under the 12MP through Oct 31, 2025, involving about RM20.7 million, which are also currently in progress. He was responding to a question from Mohd Hasnizan Harun (PN-Hulu Selangor) regarding the status of the outstanding grants during the winding-up session of the Auditor-General’s Report on the 2024 financial statements of federal agencies in the Dewan Rakyat. Sim added that MITI acknowledges weaknesses in approvals processed through the MyProjek system and said governance improvements are needed in line with Treasury Circular PA3.2, as recommended by the National Audit Department. To address this, MITI will seek special approval from the Ministry of Economy and the Ministry of Finance to treat the HIF and HVAD programmes as extension projects. This will allow payments for existing commitments that extend beyond the Malaysia Plan period. Any remaining allocation will be returned once the programmes are fully completed, he said.

Shares of India’s IDFC First Bank fell sharply on Monday, dropping as much as 20% after the private lender revealed a suspected fraud of 5.9 billion rupees (around US$65 million or RM252.6 million). The disclosure raised concerns about potential impacts on the bank’s earnings and investor confidence. As of 11:46 a.m. IST, the stock was down 15.8% at 70.29 rupees, marking its lowest level since October 2025, and was on track for its worst trading session in six years. The bank led losses among Indian financial stocks, while the broader benchmark index rose 0.35%. The Mumbai-based lender, which has a loan book of 2.79 trillion rupees (US$30.8 billion) and deposits totaling 2.82 trillion rupees, had previously attracted investments from Warburg Pincus and the Abu Dhabi Investment Authority. IDFC First Bank reported that the suspected fraudulent transactions occurred at a Chandigarh branch, primarily involving government-linked accounts. The irregularities were discovered when entities from the northern state of Haryana attempted to close accounts, and the balances did not match the bank’s records. The issue surfaced about a month ago, and the Reserve Bank of India (RBI) is aware of the matter. RBI governor Sanjay Malhotra confirmed there is no systemic risk to the banking system. In response, the bank has suspended four employees and engaged KPMG to carry out an independent forensic audit. Analysts estimate the potential financial impact to be significant but manageable. UBS estimated the fraud at roughly 22% of the bank’s fiscal 2026 net profit after tax, while Morgan Stanley pegged the potential hit to profit before tax at about 20%. The bank also has employee dishonesty insurance, with potential recoveries of 350 million rupees. The suspected fraud could affect the bank’s handling of government cash balances, which are considered lucrative due to their volume. Following the disclosure, the Haryana state government removed IDFC First and AU Small Finance Bank from its approved list of banks for holding government accounts. AU Small Finance clarified that preliminary reviews show no financial impact or evidence of fraud on its side, though its shares still dropped 7.74%, their steepest decline in over a year. Macquarie analysts noted that government deposits in private banks are likely to face heightened scrutiny. IDFC First’s management indicated that deposits from Haryana account for just 0.5% of total deposits, suggesting the overall impact is manageable.

Bursa Malaysia Bhd will begin providing more detailed information on investor trading activity starting April 6, 2026, in a move aimed at improving transparency and market insight. Under the new initiative, the stock exchange will differentiate nominee accounts held by institutional and retail investors. This distinction is intended to give a clearer view of trading participation across different investor segments, allowing market participants and regulators to better understand who is driving market activity. In addition, the exchange will reclassify investment flows of foreign-owned companies incorporated in Malaysia based on the source of the investment funds, rather than merely ownership. This change is designed to more accurately reflect domestic investment activity and provide a realistic picture of how local and foreign capital is moving through the market. Bursa Malaysia said the initiative responds to the growing use of nominee structures, which can sometimes obscure the true identity of investors and make market analysis more challenging. By providing enhanced data, the exchange aims to ensure information remains relevant, transparent, and reflective of current trading behaviours and market dynamics. The move also comes amid heightened scrutiny of market transparency in the region. Last month, index provider MSCI warned Indonesia that the country could face a downgrade to frontier market status as early as May due to opacity in its markets, which may have facilitated potential price manipulation. Bursa Malaysia’s initiative signals the exchange’s commitment to maintaining investor confidence and aligning with international best practices by offering greater clarity on market participation. Overall, the new reporting measures are expected to benefit a broad range of stakeholders, from individual investors and fund managers to regulators and analysts, by providing a more accurate and comprehensive view of market activity in Malaysia.

Gadang Holdings Bhd has announced that it has secured its second contract to widen a section of the Kuala Lumpur-Karak Highway, with the latest project valued at RM95.14 million. The award was granted to Gadang’s wholly owned subsidiary, Gadang Engineering (M) Sdn Bhd, by AFA Construction and Engineering Sdn Bhd (AFACE), according to a Bursa Malaysia filing on Monday. This latest contract forms part of a larger highway widening programme covering the stretch from KM19.2 to KM64.5, specifically under Package 1A. The project is scheduled to span 18 months and is expected to be completed by the second half of 2027. Gadang said the new contract is anticipated to contribute positively to the group’s earnings over the duration of the project. This follows a similar widening project awarded to Gadang in June last year, valued at RM92.5 million and set for completion in the final quarter of 2026. Together, the two projects reflect Gadang’s growing presence and expertise in infrastructure development, particularly in major highway construction and expansion works. AFACE, the awarding entity, is a subsidiary of AFA Prime Bhd (formerly Anih Bhd), the concessionaire of the Kuala Lumpur–Karak Highway. AFA Prime is wholly owned by Tan Sri Dr Azmil Khalili Khalid. Gadang shares closed unchanged at 22.5 sen on Monday, giving the group a market valuation of RM180.2 million. The stock has experienced a 25% decline over the past year, despite the steady flow of infrastructure contracts. The company said that the KL-Karak Highway projects demonstrate its capability to handle large-scale civil engineering works and strengthen its position as a key contractor in Malaysia’s infrastructure sector. With multiple ongoing projects in its order book, Gadang is positioning itself to benefit from the continued expansion of highway and transportation networks across the country.

TSR Capital Bhd, together with an undisclosed joint venture partner, has secured a RM99 million contract to widen a section of the Kuala Lumpur-Karak Highway. The contract was awarded to TSR Capital’s wholly owned subsidiary, TSR Bina Sdn Bhd, by AFA Construction and Engineering Sdn Bhd (AFACE), a unit of AFA Prime Bhd, the highway’s concessionaire wholly owned by Tan Sri Dr Azmil Khalili Khalid. The project covers Package 1B of the broader highway widening programme, spanning KM19.2 to KM64.5, and involves earthworks and related construction activities. Work is scheduled to begin in the second quarter of 2026. TSR Capital said the project will contribute positively to its order book and overall financial performance. Executive Director Lim Dian Ping described the award as a key step in the group’s expansion in Malaysia’s infrastructure construction sector. “With our expertise in earthworks and civil engineering, TSR Capital is well-positioned to take advantage of growing highway and transportation projects nationwide,” he said. Lim added that the group is committed to completing the project safely, efficiently, and professionally, reinforcing its reputation as a reliable infrastructure contractor. Shares in TSR Capital closed at 23 sen on Monday, valuing the company at RM40.12 million. The stock has remained largely flat over the past year.

Carlsberg A/S has started preparations for a potential initial public offering (IPO) of its India business, which could raise up to US$700 million (RM2.73 billion), according to sources familiar with the matter. The brewer has appointed Kotak Mahindra Capital Co and the Indian units of JPMorgan Chase & Co and Citigroup Inc as advisers for the proposed listing. A draft prospectus could be filed as early as May, the sources said, though details of the transaction, including timing, size, and structure, are still being finalised. The offering is expected to be a secondary share sale by Carlsberg’s parent company and could take place later this year. If completed, the IPO would place Carlsberg alongside several multinational companies that have recently listed Indian operations to tap into the country’s growing investor market. Hyundai Motor Co, LG Electronics Inc, and Carraro India Ltd have all listed in the last two years, and Pernod Ricard SA is reportedly considering a similar move. Carlsberg India is the country’s second-largest brewer, holding roughly a 22% share of the beer market. The unit generated around 90 billion rupees (RM3.87 billion) in revenue for the fiscal year ending March 2025. “Carlsberg is exploring options to increase shareholder value, which may include an IPO of our Indian business, but no final decision has been made,” said Kenni Leth, head of external communications at Carlsberg.

Citigroup announced on Monday that it has signed agreements to sell a 24% stake in Banamex to a group of institutional investors and family offices for approximately US$2.5 billion (RM9.74 billion). The investor group includes General Atlantic, Afore Sura (a unit of Colombia’s Sura), Brazil’s BTG Pactual, Chubb, and funds managed by Blackstone, Liberty Strategic Capital and the Qatar Investment Authority. Once the transaction is completed — expected later this year — Citi’s ownership in Banamex will be reduced to 49%. Each investor will be allowed to acquire up to a 4.9% stake. The sale follows an earlier transaction in December, when Citi sold a 25% stake in Banamex to Mexican businessman Fernando Chico Pardo, who currently chairs the bank’s board. Pardo is involved in the latest agreement with the new minority investors. Citi said it does not expect to carry out further share sales in 2026, giving the current investor group time to enhance the bank’s value. The bank also confirmed that it still plans to proceed with Banamex’s proposed initial public offering (IPO). According to Citi’s head of International, Ernesto Cantu, the timing and structure of the IPO will depend on market conditions, financial factors and regulatory approvals.