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KLCI tumbles 1.6% on renewed public debt worries

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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 […]


Automotive to benefit from zero-rated GST

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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…


‘Do not worry about credit rating cut’

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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


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.


Stocks to watch ahead of FBM KLCI review next month

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.


Select blue chips lift KLCI by 0.26%

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KUALA LUMPUR (May 17): The FBM KLCI rose 0.26% at midday break today, lifted by select blue chips, as well as as s firmer economic performance by the country. The Malaysian economy, measured by the indicator gross domestic product (GDP), has grown by 5.4% year-on-year in the first quarter (1Q) of 2018, underpinned by continued expansion in private sector activity and strong support from net exports, according to Bank Negara Malaysia At 12.30pm, the FBM KLCI gained 4.91 points to 1,863.17. Gainers and losers were tied at 296 each, whileRead More


New govt likely to re-prioritise implementation of infra projects

KUCHING: The new Pakatan Harapan (PH) government is expected by analysts to re-prioritise the implementation of infrastructure projects to reduce the foreign borrowings and contingent liabilities. Affin Hwang Investment Bank Bhd (AffinHwang Capital) believed the projects that will likely be affected include the RM55 billion East Coast Rail Link (ECRL), RM60 billion Kuala Lumpur-Singapore High […]


Consumers, construction among sectors heavily impacted post-GE14

KUCHING: Consumer and construction are likely to be the most largely impacted sectors following the 14th General Election (GE14) pending updates of the new government’s policies moving forward. MIDF Amanah Investment Bank Bhd (MIDF Research) anticipated a mixed sectoral impact as the Pakatan Harapan manifesto affects sectors in different ways. “The move to review mega […]