BIMB Securities lowers KLCI target to 1,800

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KUALA LUMPUR (July 23): BIMB Securities Research has lowered its end-2105 FBM KLCI target to 1,800 points from 1,830 previsously and said the Americans, the Europeans and recently the Chinese had all given the global financial markets a massive jolt.

In a strategy note today, the research house said that on top of these, the local bourse has to also endure the prevailing political landscape which is not a pretty picture.

“Whilst fundamentally we are in good stead, the headwinds that we are facing may derail valuations especially from the relentless flight of foreign funds out of the country.

“Looking ahead, we expect the foreign funds to return as prevailing uncertainties began to subside.

“Over the next couple of months we perceive the Feds and interest rate would again hog the limelight as September seems to be the “indicative“ date for a revision,” it said.

BIMB Securities said notwithstanding the prevailing chaos within the political scene it remains positive on the local bourse as verified by Fitch recently.

The research house said corporate earnings due next month could be interesting with those released so far have not been encouraging.

“We noticed banking analysts have had also downgraded their 2015 estimates to 4.8% from 6.0% earlier.

“Coupled with the weaker results from Digi.Com Bhd and Maxis Bhd recently, we have tweaked our earnings forecast now to 5.4% from 6.2% previously.

“Based on a market PE of 16.5x our 2015 target for the FBM KLCI is now tagged at 1,800 from 1,830 before,” it said.