affin hwang


AirAsia X on the right track as net profit jumps

KUCHING: Analysts laud AirAsia X Bhd (AirAsia X) as being on the right track as its net profit for the first quarter of its financial year 2018 (1QFY18) recorded strong growth exceeding 100 per cent year on year (y-o-y) at RM41.5 million. Stripping out exceptional items, the core net profit of RM61.8 million made up […]

KLCI tumbles 1.6% on renewed public debt worries


KUALA LUMPUR (May 23): The FBM KLCI tumbled to its lowest level in three months on renewed concerns over national debt levels, following recent statements by Prime Minister Tun Dr Mahathir Mohamad and Finance Minister Lim Guan Eng which signalled the national debt had breached RM1 trillion. At 12.30pm, the FBM KLCI tumbled 1.6% or 28.67 points to 1,816.36. Losers thumped gainers by 516 to 97, while 568 counters traded unchanged. Volume was 1.42 billion shares, valued at RM1.25 billion. Top losers included Petronas Dagangan Bhd, Panasonic Manufacturing Malaysia Bhd,Read More

Tax-free period will likely boost car sales

KUCHING: With the upcoming goods and services tax (GST) and sales and service tax (SST) tax-free window, analysts are expecting to see a temporary boost for auto sales during the period. After GST is zero-rated effective June 1, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) expects that SST to only be […]

Reintroduction of SST may create uncertainties in prepaid segment

KUCHING: The reintroduction of sales and service tax (SST), which may have a neutral or negative impact to the telco operators, has been projected by analysts to possibly create uncertainties in the prepaid segment. According to Affin Hwang Investment Bank Bhd (Affin Hwang), the details on SST are still vague, but it could negatively affect […]

Automotive to benefit from zero-rated GST


KUALA LUMPUR: The automotive segment looks set to be the first to benefit from the new Pakatan Harapan government’s plan to abolish the goods and…

Balancing minimum wage and cost of living

The cost of living is rising. As developments advance across the world, global market trends fluctuate, unpredictable movements of currencies occur in major economies and its partners, and many other inflation factors, the cost of living is undeniably on the rise. What may cost RM1 five years ago, might now amount to RM5 or even […]

‘Do not worry about credit rating cut’


KUALA LUMPUR: Malaysia should not be concerned about any potential downgrade in credit rating due to the implementation of the zero-rated goods and services tax (GST), as the increase in oil revenue for 2018 and cut in government expenditure are expected to offset the GST revenue loss, according to Prime Minister Tun Dr Mahathir. “You shouldn’t be worried, because we have reduced government expenditure, at the same time, we will earn more from petroleum because Budget 2018 was made when the petroleum price was at US$52, now it is US$70Read More

Plenty of work for biz to comply with GST

KUCHING: Businesses have about two weeks to comply with the new update from the Ministry of Finance (MoF) to reduce the Goods and Services Tax (GST) from 6 per cent to 0 per cent beginning June 1, 2018 throughout the country, for goods and services within Malaysia and those imported from abroad. Affin Hwang Investment […]

Reintroduction of SST likely to lift car prices

KUCHING: While the reintroduction of the Sales and Service Tax (SST) has been projected by Affin Hwang Investment Bank Bhd (AffinHwang Capital) to likely lift car prices marginally, it believes the impact will only be minimal. AffinHwang Capital’s market research with various auto companies suggested that the reduction of the six per cent goods and […]

Watch out for revisions in KLCI 30

PETALING JAYA: Astro Malaysia Holdings Bhd and AMMB Holdings Bhd could potentially face some near-term selling pressure ahead of the review of the KLCI constituents in June, as investors reposition their weightings on these stocks, said Affin Hwang Capital.

“Likewise, we screened our coverage of 118 companies for any risk of companies losing their syariah compliance status later this month and expect that SLP Resources Bhd could be most at risk of losing this premium status,” said the research house.

On the flip side, it said possible inclusions into the KLCI constituents are Hartalega Holdings Bhd, Dialog Group Bhd and Malaysia Airports Holdings Bhd.

Digi.Com Bhd, which was deemed non-syariah compliant in the November 2017 review, could possibly reclaim its syariah status after addressing its non-conventional gearing, it said.

Affin Hwang maintained its “overweight” call and year-end KLCI target of 1,923. It said the upcoming KLCI/syariah reviews have little bearing on its sector weighting or stock positioning.

“With likely better governance from the newly formed government and potentially improved consumer demand ahead, there could be likely upside to our earnings growth estimates (+7.1% for 2018E). Near term, with the removal of the risk of political uncertainty, improved sentiment and a still-undervalued ringgit (RM3.80 year-end target), we think that risk-reward is favourable. Key risks include a global macro slowdown, capital outflows and weak domestic demand.”

MIDF Research said the MSCI rebalancing exercises (in May) have resulted in significant increase in trading activities, both in trading volume and value of transactions.

It said the FTSE Bursa Malaysia Index Series semi-annual review is expected to be completed on May 31 as well, with announcements of the outcome to be made known afterwards. FBM KLCI as with the other indices belonging to this index series will see changes of its constituents resulting from the index review after the close of markets on June 15.

It said current constituents at risk of exclusion include Astro Malaysia, YTL Corp Bhd and KLCCP Stapled Group, Hong Leong Financial Group Bhd and RHB Bank Bhd.

Meanwhile, Dialog Group and Hartalega have the biggest potential to be included in the upcoming rebalancing exercise.

“Aside from the stocks under the reserve list, we view that Top Glove Corp Bhd and IJM Corp Bhd are strong candidates to be considered for the next FBM KLCI review due to their ranking in adjusted market cap. Note that Top Glove will also be included into the MSCI Global Standard Index.”

MIDF retained its FBM KLCI 2018 target of 1,900 points. The steps towards interest rate normalisation of major economies (US and Eurozone) is expected to be more prevalent in 2018 against a backdrop of general improvement in macro environment. This situation is likely to exert a degree of downward pressure on risk assets valuation next year.