KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
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.
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