BUSINESS

MIDF MAINTAINS 1,700 BASELINE TARGET FOR FBM KLCI BY END-2021

02/03/2021 12:48 PM

KUALA LUMPUR, March 2  -- MIDF Amanah Investment Bank Bhd (MIDF) has maintained its projected end-2021 baseline target for the FTSE Bursa Malaysia KLCI (FBM KLCI) at 1,700 points.

The upward revision in the aggregate forward earnings of FBM KLCI constituents (under its coverage) is almost entirely contributed by the healthcare sector, while plantation is seen to provide marginal extra boost, it said in a note today.

“However, four sectors, namely consumer products and services, financial, telco and media, as well as utilities are expected to show lower earnings growth, while the forward expectations for the remaining three sectors -- energy, industrial, as well as transport and logistics -- are unchanged.

“With the rather mixed overall verdict, we maintain our FBM KLCI end-2021 baseline target at 1,700 points,” MIDF said.

The research firm said the aggregate reported earnings of the FBM KLCI 30 constituents had rebounded further to RM15.25 billion in the fourth quarter of calendar year 2020 (Q4CY20).

It registered positive growth both sequentially at 14.5 per cent quarter-on-quarter (q-o-q) and 21.4 per cent year-on-year (y-o-y).

“On adjusted basis, the aggregate normalized earnings of FBM KLCI 30 constituents in Q4CY20 grew sequentially at 13.5 per cent q-o-q and 21.6 per cent y-o-y to RM15.38 billion - the highest since Q2CY17 - mainly due to stellar performance by healthcare (glove) counters which collectively posted 822.3 per cent y-o-y earnings growth,” it said.

As for stocks under MIDF’s coverage, the percentage of companies (only 37 per cent already announced their results) that registered earnings below the research house’s expectations dropped to 21 per cent in Q4CY20 as compared to 23 per cent in the prior quarter.

Conversely, the percentage of positive surprises increased to 37 per cent in Q4CY20 from 22 per cent in the prior quarter, it added.

-- BERNAMA

 

 


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