Thursday 28 Mar 2024
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KUALA LUMPUR (Sept 4): The FBM KLCI pared gains for a 1.04-point or 0.1% rise at Bursa Malaysia's afternoon break today amid persistent US-China trade war and Brexit concerns and after analysts cut their KLCI targets.

At 12:30pm, the KLCI settled up at 1,592.56 after rising to its intraday high of 1,594.93. Bursa Malaysia top gainers included Kuala Lumpur Kepong Bhd and Petronas Gas Bhd while leading decliners included British American Tobacco (M) Bhd and Telekom Malaysia Bhd.

"Persistent worries over the US-China trade war, no-deal Brexit possibilities and weak (Malaysian) corporate earnings trend should continue to dampen near-term sentiment," TA Securities Holdings Bhd wrote in a note today.

AllianceDBS Research Sdn Bhd analyst Quah He Wei said the research firm trimmed its KLCI target to 1,610 points after revising its KLCI earnings growth.

"Incorporating our latest earnings revision, we trim our KLCI target to 1,610, pegged to an unchanged 16x CY20 earnings. Our 2019/2020 KLCI earnings growth stands at -5.5% and 6.4%, respectively.

"We believe economic outlook will remain uninspiring in the near term due to heightened uncertainties in the global and domestic environments, trade tensions and prolonged weakness in commodity-related sectors. All in, we believe there will be limited upside potential for our index bellwether in view of the lack of earnings growth," Quah said.

Affin Hwang Investment Bank Bhd's research team wrote in a note today the firm cut its KLCI 2019 year-end target to 1,650 from 1,679 after reducing its 2019 KLCI EPS on-year growth forecast to 0.2% from 1% previously.

"On the surface, the 2Q19 reporting season seemed better with more companies beating expectations. However, there was also a corresponding increase in disappointments which resulted in a further cut to our 2019E KLCI EPS growth, which is now down to +0.2% y-o-y (from +1% previously)," the research team said.

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