Friday 29 Mar 2024
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KUALA LUMPUR (Sept 7): The FBM KLCI target for 2017 has been trimmed lower to 1,800, from 1,820 previously by Maybank IB Research, following its second quarter’s earnings results.

In a note Sept 6, the research house said the cumulative core net profit of the research house’s universe has grown at a slower pace of 1.3% year-on-year (y-o-y) in the second quarter of this year, bringing growth to 4.6% y-o-y for the first half of 2017.

Among sectors that have seen positive earnings growth on both quarter-on-quarter and y-o-y are aviation, construction, property, technology and gloves, while plantation, oil & gas, healthcare, automobile and building materials saw weaker core earnings.

“Auto and building materials tipped into losses for the quarter, while oil & gas just about break-even in sector earnings. Media (ex-Astro) sector earnings remained very weak,” Maybank IB Research said.

It also highlighted that foreign investors turned marginal net sellers of Malaysian equities in August at RM0.3 billion, leading to a slight retracement of the cumulative foreign buy of RM10.9 billion for year-to-date (until August) this year. It however noted that the net selling was consistent with the retracement seen in other ASEAN emerging markets.

The research house remains cautiously optimistic of the country’s equity market with its year-end target of 1,800, indicating an upside of 1.4% based on current valuation of about 1,775.

It noted an early 14th general election is likely to trigger a short rally in equities.  

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