BIMB Securities Research trims KLCI target to 1,830 after tough May

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KUALA LUMPUR (June 4): BIMB Securities Research said the month of May had been a bad month for equities as most regional markets suffered from weaker performances.

In a strategy note today, the research house said the local bourse being the worst performer in the region was down 3.9% amid strong foreign selling activities.

“For May, total net foreign outflow touched RM2.5 billion which is highest for the year.

“We suspect the sell-down may not be entirely due to market fundamentals but instead attributed to the prevailing political undercurrent coupled with the imminent re-rating by Fitch in June,” it said.  

BIMB Securities Research said there was another round of earnings revision post-1Q15 results with its latest projection for 2015 now at 6.2% from the earlier 6.7% mainly attributed to the downgrades on the Plantation sector.

“Consensus have had also tweaked their 2015 forecasts from 7.0% to now at 6.2%.

“With the latest revision, we have fine-tuned our FBM KLCI expectations slightly lower to 1,830 from 1,850 previously on a PE band circa. 16.5x.

“We remain adamant that market had already found its bottom and believe that foreign funds will be back into the market provided the above mentioned factors are ironed out,” it said.