Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 21): MIDF Research has maintain our FBM KLCI baseline 2015 year-end target at 1,900 points, with the upper and lower bounds at 1,950 points and 1,850 points respectively.

In a note Wednesday, the research house said the year-end target equates to PER of circa 16.4x or +¾ standard deviation (SD) over its long-term mean (since 2006 to present).

MIDF Research said the Budget review speech clearly stated the revised key budget assumptions and parameters with regard to (i) crude oil prices with average Dated Brent of US$55 per barrel, (ii) GDP output growth range of between 4.5-5.5% (from 5.0-6.0%), and (iii) fiscal deficit target at 3.2% (from 3.0%) of GDP for 2015.

It said the announcements were positive as the key budget assumptions and parameters are now more realistic and attainable.

“Furthermore, the decision to “reprioritising [operating] expenditure” to the tune of RM 5.5 billion, in lieu of taking an easier way by axing the development budget, with the aim of helping to reduce the fiscal deficit is commendable.

“In addition, assurances on the status of the country’s external position this year will help to allay market’s lingering fears against the possibility of it turning into a twin deficit situation,” it said.

 

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