KUALA LUMPUR: Trading on Bursa Malaysia will resume today after the Prophet Muhammad and Thaipusam public holidays, and analysts are mixed on the prospects for the FBM KLCI going forward.
Investor sentiment for the local market this month would no doubt be influenced by the 4Q11 corporate earnings, which would be announced over the next fortnight.
MIDF Research’s Syed Muhammed Kifni in his 4Q11 earnings preview report said that early gauges supported the likelihood of slower growth in the final quarter of last year.
He said Public Bank Bhd, which released its 4Q11 results recently, recorded a stark reduction in on-year quarterly earnings growth of 3.6%.
“Moreover, other index heavyweights such as Sime Darby Bhd and IOI Corp Bhd are expected to report lower core earnings in 4Q11 as average CPO prices declined by 8.4% year-on-year to RM3,018 per tonne during the corresponding period.
“It is noteworthy that both the banking and plantation sectors represent more than half of FBM KLCI total weightage,” he said.
Nevertheless, Syed Muhammed said both MIDF Research’s and consensus FBM KLCI earnings growth for 2011 remained well within positive territory, supported by its good earnings growth performance in the first half of 2011.
“Furthermore, we expect KLCI earnings growth for 2012 to remain positive albeit only in single digit.
“While the current liquidity-driven rally may boost the market to up to 1,600 in the near term, at this juncture, we retain our year-end 2012 KLCI base case target at 1,530 points,” he said.
Meanwhile, Affin Investment Bank Bhd vice-president and head of retail research Dr Nazri Khan said that despite the holiday shortened session, the FBM KLCI would trend higher this week on continuous fund inflow, the stronger ringgit, good progress made in the eurozone, continuous US economic recovery and stronger global manufacturing data.
Given the solid January gains for the local equities (FBM100, FBM Fledgling, FBM SmallCap and FBM Ace gaining 1%, 5%, 8% and 10% respectively with smaller-caps outperforming larger-caps stocks), the FBM KLCI was likely to get more momentum and follow through into February, he said.
Nazri said punters would also likely continue churning penny stocks last week (with 90% of the top 40 active volume below RM1 including DBE, Focus, Tebrau, Nicorp and Compugates) even after the Chinese New Year celebration.
“We also expect growing hype on the upcoming flotation of Felda and Integrated Healthcare Holding IPO in 2Q12 (with estimated market cap of RM20 billion and RM8 billion respectively) to raise interest in the local plantation and healthcare stocks.
“Overall, we expect the market to continue rising with the 1,560-level as the near-term target,” he said.
Among the stocks that could be in focus this week are Genting Bhd, JCY International Bhd, AirAsia Bhd, Fraser & Neave Holdings Bhd and Naim Indah Corp Bhd.
Genting shares could come under some pressure after a bill that would have ushered in the largest gambling expansion in Florida history was withdrawn by its legislative sponsor last Friday.
The bill, which proponents said could lead to 100,000 new jobs for the state, faced a probable defeat at its first stop — the House Business and Consumer Affairs Subcommittee, according to Reuters.
Rules in the Florida House of Representatives prohibit the chamber from taking further action on a bill that has failed to pass at least one committee; so the measure is dead for 2012, it said.
Genting announced in May last year it was buying a 14 acre (5.7 ha) waterfront property in downtown Miami for US$236 million (RM710.4 million) and would build a mega-resort on the site, which currently houses the Miami Herald newspaper.
Shares of hard-disk drive (HDD) maker JCY extended their gains last Friday ahead of the release of the company’s earnings for the 1Q ended Dec 31, 2011 this week.
JCY in early January stated the group was likely to record a surge in earnings for the quarter ended Dec 31, 2011.
AirAsia’s joint venture with All Nippon Airways Co Ltd has obtained an air operators certificate (AOC) from the Japanese Civil Aviation Bureau.
“The AOC shall enable AirAsia Japan to operate aircraft in its fleet for commercial flights to international and domestic destinations,” AirAsia said last Friday.
F&N’s 1Q earnings fell 61% to RM41.74 million from RM107.08 million a year ago, due to the absence of contribution from the Coca-Cola business.
It said last Friday the earnings were also impacted by the different timing in the accounting of operating losses in Thailand due to the severe floods last year and the recovery under its business interruption insurance policy.
F&N said other factors were higher raw material costs, particularly for skimmed milk powder and sugar, and lower sales in Dairies Malaysia.
Meanwhile, Naim Indah Corp’s major shareholder Crest Energy Sdn Bhd is said to be in discussions with various parties to dispose of its shares. Naim Indah, however, said last Friday that no details of the proposed disposal, including the price, had been finalised.
This article appeared in The Edge Financial Daily, February 8, 2012.
Investor sentiment for the local market this month would no doubt be influenced by the 4Q11 corporate earnings, which would be announced over the next fortnight.
MIDF Research’s Syed Muhammed Kifni in his 4Q11 earnings preview report said that early gauges supported the likelihood of slower growth in the final quarter of last year.
He said Public Bank Bhd, which released its 4Q11 results recently, recorded a stark reduction in on-year quarterly earnings growth of 3.6%.
“Moreover, other index heavyweights such as Sime Darby Bhd and IOI Corp Bhd are expected to report lower core earnings in 4Q11 as average CPO prices declined by 8.4% year-on-year to RM3,018 per tonne during the corresponding period.
“It is noteworthy that both the banking and plantation sectors represent more than half of FBM KLCI total weightage,” he said.
Nevertheless, Syed Muhammed said both MIDF Research’s and consensus FBM KLCI earnings growth for 2011 remained well within positive territory, supported by its good earnings growth performance in the first half of 2011.
“Furthermore, we expect KLCI earnings growth for 2012 to remain positive albeit only in single digit.
“While the current liquidity-driven rally may boost the market to up to 1,600 in the near term, at this juncture, we retain our year-end 2012 KLCI base case target at 1,530 points,” he said.
Meanwhile, Affin Investment Bank Bhd vice-president and head of retail research Dr Nazri Khan said that despite the holiday shortened session, the FBM KLCI would trend higher this week on continuous fund inflow, the stronger ringgit, good progress made in the eurozone, continuous US economic recovery and stronger global manufacturing data.
Given the solid January gains for the local equities (FBM100, FBM Fledgling, FBM SmallCap and FBM Ace gaining 1%, 5%, 8% and 10% respectively with smaller-caps outperforming larger-caps stocks), the FBM KLCI was likely to get more momentum and follow through into February, he said.
Nazri said punters would also likely continue churning penny stocks last week (with 90% of the top 40 active volume below RM1 including DBE, Focus, Tebrau, Nicorp and Compugates) even after the Chinese New Year celebration.
“We also expect growing hype on the upcoming flotation of Felda and Integrated Healthcare Holding IPO in 2Q12 (with estimated market cap of RM20 billion and RM8 billion respectively) to raise interest in the local plantation and healthcare stocks.
“Overall, we expect the market to continue rising with the 1,560-level as the near-term target,” he said.
Among the stocks that could be in focus this week are Genting Bhd, JCY International Bhd, AirAsia Bhd, Fraser & Neave Holdings Bhd and Naim Indah Corp Bhd.
Genting shares could come under some pressure after a bill that would have ushered in the largest gambling expansion in Florida history was withdrawn by its legislative sponsor last Friday.
The bill, which proponents said could lead to 100,000 new jobs for the state, faced a probable defeat at its first stop — the House Business and Consumer Affairs Subcommittee, according to Reuters.
Rules in the Florida House of Representatives prohibit the chamber from taking further action on a bill that has failed to pass at least one committee; so the measure is dead for 2012, it said.
Genting announced in May last year it was buying a 14 acre (5.7 ha) waterfront property in downtown Miami for US$236 million (RM710.4 million) and would build a mega-resort on the site, which currently houses the Miami Herald newspaper.
Shares of hard-disk drive (HDD) maker JCY extended their gains last Friday ahead of the release of the company’s earnings for the 1Q ended Dec 31, 2011 this week.
JCY in early January stated the group was likely to record a surge in earnings for the quarter ended Dec 31, 2011.
AirAsia’s joint venture with All Nippon Airways Co Ltd has obtained an air operators certificate (AOC) from the Japanese Civil Aviation Bureau.
“The AOC shall enable AirAsia Japan to operate aircraft in its fleet for commercial flights to international and domestic destinations,” AirAsia said last Friday.
F&N’s 1Q earnings fell 61% to RM41.74 million from RM107.08 million a year ago, due to the absence of contribution from the Coca-Cola business.
It said last Friday the earnings were also impacted by the different timing in the accounting of operating losses in Thailand due to the severe floods last year and the recovery under its business interruption insurance policy.
F&N said other factors were higher raw material costs, particularly for skimmed milk powder and sugar, and lower sales in Dairies Malaysia.
Meanwhile, Naim Indah Corp’s major shareholder Crest Energy Sdn Bhd is said to be in discussions with various parties to dispose of its shares. Naim Indah, however, said last Friday that no details of the proposed disposal, including the price, had been finalised.
This article appeared in The Edge Financial Daily, February 8, 2012.
