Bank Islam Brunei Darussalam, aims to raise as much as US$500mil (RM2.13bil) in an IPO on Bursa Malaysia.
KUALA LUMPUR: CIMB Equities Research is maintaining its end-2017 FBM KLCI target of 1,790, which is still based on a three-year average price-to-earnings (P/E) of 16 times.
It said on Wednesday it continues to like the construction, utilities and small-cap sectors.
During the second quarter results season, it upgraded our ratings for 11 stocks as value emerges following share price corrections.
“We continue to advise investors to take profit on cyclical stocks that have done well and switch to more defensive sectors,” it said.
CIMB Research revised its top picks and its new top big-cap picks list are Axiata, RHB Bank and AirAsia (replacing IHH, Mah Sing and IJM).
In the mid to small cap picks list, we added Bonia
, Unisem and Inari (replacing CCK, Sasbadi and Oceancash Pacific).
“Our revised top three picks are Axiata (replacing Sime), Gamuda and Tenaga Nasional,” it said.
On the Q2FY17 financiual results, it said among the 124 companies that it actively covers, 9% reported results that were above expectations in 2Q17 vs. 11% in 1Q17. The number of companies with results that were below its expectations increased from 32% in 1Q17 to 35% in 2Q17.
CIMB Research said its revision ratio (number of forecasts upgraded vs. number of forecasts downgraded) fell further to 0.26 times in 2Q17 vs. 0.34 times in 1Q17.
“This revision ratio figure is the third-lowest attained since 1Q08. We were again disappointed by the high ratio of companies whose results came in below our expectations. These companies were mainly from the agribusiness, auto, media and healthcare sectors. Tech was the only outperformer,” it said.
The research house said the 2Q17 market earnings growth slowed to 2% on-year (1Q17: 12% on-year) due to slower earnings growth from agribusiness and banking sectors.
“However, Malaysian corporates remain on track to deliver their first year of positive earnings growth, after two consecutive years of negative growth. We project market earnings growing by 7% in 2017F and 8% in 2018F,” it said.
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