KUALA LUMPUR (June 5): Hong Leong IB Research has lowered its end-2018 FBM KLCI target to 1,770 (from 1,880) and said for the 1Q18 results season, 47% came in below expectations, 42% inline and 11% above.

In a strategy note today, the research house said this proportion of results disappointment was the highest since 2Q15 with cost being the key reason.

It explained that sectorial wise, the disappointments came from plantation, construction, O&G and wood based manufacturers.

“Post GE14, May witnessed net foreign selling of RM5.6 billion, the highest since Aug 2013.

“In the short term, investors are expected to stay out of Malaysian equities until more concrete policy clarity is unveiled by the new administration.

“We cut our FBM KLCI 2018 earnings growth from 7.8% to 6.6% and also lower our P/E target from 16.5x to 15.5x. Our FBM KLCI target is reduced from 1,880 to 1,770,” it said.