CIMB Securities Sees Higher Earnings From FBM KLCI Component Stocks

KUALA LUMPUR, Sept 4 (Bernama) -- CIMB Securities Sdn Bhd has revised its FBM KLCI (component stocks) earnings forecast, projecting a 13 per cent growth for 2024 and 8.6 per cent in 2025, up from previous estimates of 11.2 per cent and 8.2 per cent respectively.

This upward revision is fuelled by higher earnings from Maybank, Tenaga Nasional, CIMB, Genting and SD Guthrie, which together account for 64 per cent of this year's FBM KLCI earnings growth projection, it said.

The stockbroking firm said in a research note today that following the revision, the FBM KLCI is currently trading at a 12-month forward price-to-earnings (P/E) ratio of 15.2 times, with a dividend yield of four per cent.

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“We have slightly raised our FBM KLCI end-2024 forecast to 1,732 points. We remain optimistic about the market due to improved political stability, increased domestic and foreign liquidity in the Malaysian market, and stronger corporate earnings and economic growth,” it said.

The stockbroking firm highlighted that key catalysts for the market include rising foreign fund inflows, increased merger and acquisition activities and a stronger ringgit.

On the other hand, key earnings risks include weaker global growth, geopolitical risks and rising operating costs due to higher taxes and the subsidy rationalisation plan in the second half of 2024.

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CIMB Securities maintained its ‘overweight’ stance on sectors such as banks, construction, building materials, gaming, express mail services, auto, utilities, telecommunications and plantation.

“Our top picks would be CelcomDigi, Gamuda, Hong Leong Bank, Farm Fresh, IHH and Maxis,” it added. 

-- BERNAMA