MIDF Research expects mixed growth among major sectors

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KUALA LUMPUR (May 13): MIDF Research has maintained its end-2015 FBM KLCI target of 1,900 points and said it was expecting mixed earnings performance among the FBM KLCI’s Big 5 sectors, namely banking, utility, telecommunication, plantation and oil & gas.

In a strategy note today, MIDF Research head of equity Syed Muhammed Kifni said that of the Big 5 sectors, only banking and utility were expected to report positive on-year earnings growth.

“We also expect positive on-quarter growth for all Big 5 sectors excepting utility and oil & gas.

“We maintain our FBM KLCI 2015 year-end target of 1,900 points, which is equivalent to (i) 5.6% gain from current level, and (ii) 17.3x PER multiple of 2015 earnings.

“However, as highlighted in our previous Strategy reports, we expect the 2015 earnings revisions going forward to be generally flat or even upward-biased. Hence the resultant PER valuation of our 2015 year-end target may turn out to be lower than 17.3x,” he said.