Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
In the second quarter of 2024 (2Q2024), the technology sector underperformed investor expectations, with most companies delivering lackluster results, according to CIMB Securities. Conversely, the banking sector emerged as a bright spot, with most banks reporting earnings that exceeded forecasts.
Key Takeaways:
Underperformance in the Technology Sector: All technology companies under CIMB Securities’ coverage — including Inari Amertron Bhd, Malaysian Pacific Industries Bhd, Unisem (M) Bhd, and ViTrox Corporation Bhd — reported results below expectations for 2Q2024. The sector struggled due to lower utilization rates, declining profit margins, and a stronger ringgit. The technology index, which tracks 48 stocks, fell by 10.4% since August 22, closing at 62.11 points on Thursday, though it showed a slight rebound to 62.6 points on Friday.
Mixed Results in Telecommunications and Automotive Sectors: The telecommunications sector saw 40% of its companies, including CelcomDigi Bhd and Telekom Malaysia Bhd, miss earnings expectations due to higher costs and lower revenue. Meanwhile, 33% of companies in the automotive sector also underperformed, with Sime Darby Bhd particularly impacted by wider losses in its China motors segment and weaker contributions from UMW.
Banking Sector Outperforms: In contrast, the banking sector performed strongly, with 80% of the banks covered by CIMB Securities exceeding expectations. Four out of five banks — Malayan Banking Bhd, RHB Bank Bhd, AMMB Holdings Bhd, and Public Bank Bhd — reported better-than-expected results driven by higher non-interest income and lower loan loss provisions. As a result, CIMB Securities has raised its earnings forecasts for the banks.
Market Outlook and KLCI Targets: CIMB Securities maintained its year-end target for the FBM KLCI at 1,728 points, based on a 16 times price-earnings ratio, with earnings growth forecasts of 11.2% for 2024 and 8.2% for 2025. The firm noted that it will review its valuation model after the results season to account for the stronger performance in the banking sector, which could positively impact overall earnings growth.
Overall, while the technology sector faced challenges in 2Q2024, the banking sector's robust performance provided a counterbalance, supporting a stable outlook for the Malaysian stock market.
Comments
Post a Comment