KUALA LUMPUR, Jan 15 — RHB Research has maintained the “buy” call on its top pick oil and gas counter, Petronas Chemicals Group Bhd (PCG), with a new target price of RM11.23. It said PCG’s recent share weaknesses, had been largely priced in…
PETALING JAYA: Nomura Global Markets Research has downgraded Malaysian equities to “underweight” from “neutral” due to poor fundamentals and lack of major expansionary reforms.
Nomura, which downgraded Malaysia to “neutral” after the elections last year, has held a “neutral” on Malaysian equities since May 2018 based on the thesis that reforms prospects could keep the multiples elevated despite micros and macros not being very supportive.
“However, with the new government more than six months in power already, while there have been efforts to fix fiscal leakages, there has not been a significant reform push which can potentially lead to expansionary economic activity,” it said in its Asean Strategy report today.
Nomura said it was hoping for more progress in areas to improve government efficiency, reduce corruption and crony capitalism and potentially roll back or ease the government’s presence in some areas but has only seen some “easier” initiatives such as closing of several government agencies while some agencies have been put under direct parliamentary supervision.
While Budget 2019 included some long-term reform measures, labour or tax reforms or much needed reforms to ease property market bottlenecks are lacking.
Amidst a background where macro and micros continue to deteriorate, Nomura said the other major issue for Malaysia is that oil prices are no longer high (above US$70 per barrel) and have declined significantly recently, which could lead to further issues for Malaysia to plug the fiscal gap.
“Our economists believe there is a high risk of fiscal slippage and the possibility of a sovereign ratings downgrade that could trigger more capital outflows,” it said.
Nomura expects Malaysia’s 2019 gross domestic product (GDP) growth to be 4%, marking a sharper decline from 4.7% in 2018, and is below consensus forecasts of 4.6% largely due to a weak export sector. It also expects Malaysia to post a fiscal deficit of 3.9% in 2018 and 3.7% in 2019.
Nomura said Malaysia will continue to be a stock-pickers’ market and prefers select defensive banks, value plays like Gamuda Bhd, and thematic plays like Malaysia Airports Holdings Bhd and Vitrox Corp Bhd.
“We believe sustainable dividend yielding plays could be attractive, as well in an environment where local rates are expected to be cut; and the government’s fiscal constraints may lead to higher dividends from government-linked companies,” it added.
LONDON, Jan 3 — A gradual rise by the Japanese yen in recent weeks culminated in a dramatic overnight surge—firing a warning shot for world markets and the global economy in 2019. Historically, outsized yen gains in short periods, such as the…
KUALA LUMPUR: Amanah Saham Nasional Bhd (ASNB) has declared an income distribution of 6.5 sen a unit and bonus of 0.50 sen for Amanah Saham Bumiputera ( ASB) for financial year ending Dec 31, 2018 (FY18). For FY17, ASB made a distribution payout of 7.25 sen per unit comprising a dividend of seven sen a […]
KUALA LUMPUR: Permodalan Nasional Bhd (PNB), which saw a 6.8% in asset under management (AUM) to RM295.2 billion as at Nov 30, 2018, recorded proforma net income of RM15.30 billion for the first 11 months of 2018.
PNB chairman Tan Sri Zeti Aziz said at a media briefing that the strategy forward is to embark on a more robust risk management and assess investments activities taken on a case-by-case basis against the backdrop of a challenging environment due to moderate gross domestic product growth both domestically and internationally.
She noted that it is crucial to have a diverse portfolio ranging from fixed income, equity, financial and real estate, to spread the investment risk.
“We are also looking at investments with recurring income,” she added.
On paring down stakes in strategic and core companies, Zeti said assessments will be made based on the outlook of the industry and the potential of these companies being restructured with organisational transformation.
She said divestments could potentially be made in parts rather than a blanket one.
PNB plans to undertake a mid-term review of its strategic plan concentrating on the areas of strategic asset allocation, enterprise risk management and organisational transformation as well as to accelerate the diversification of its investment portfolio in higher yielding asset.
PNB’s unit trust management company Amanah Saham Nasional Bhd declared an income distribution of 6.50 sen per unit and a bonus of 0.5 sen per unit representing a total payout of 7 sen for Amanah Saham Bumiputera for the financial year ending Dec 31, 2018.
As for Amanah Saham Nasional, it announced an income distribution of 3.25 sen per unit representing a dividend yield of 5.1% based on the net asset value of the fund as at December 20, 2018.