Maybank IB lowers earnings growth forecasts for stocks under its coverage

KUALA LUMPUR: Maybank Investment Bank (Maybank IB) expects this year to be another year of declining earnings growth in aggregate for all the stocks under its coverage.

This is after a dismal reporting season, with core earnings of the investment bank’s research universe retracing nine per cent for the quarter ended in May/June from the same period last year.

“Our universe’s core earnings forecasts are revised lower by 3.5 per cent this year, and we expect core earnings for the year to retrace by 0.8 per cent year-onyear,” said Maybank IB in a note.

“For the FTSE Bursa Malaysia KLCI, we expect a 0.4 per cent decline in core earnings growth this year. It will thus be another year of no earnings growth, after minus growth last year.”

Maybank IB has lowered its core net profit forecasts for 39 per cent of the stocks under its coverage and upgraded 16 per cent, giving an earnings down-to-upgrade ratio of 2.4 times.

It expects core earnings growth to be low this year for banks, casino and number forecast operators, glove makers and telecommunication companies, and almost negligible growth for real estate investment trusts and utilities.

Better earnings growth is expected for media, property, shipping and port while oil and gas should be profitable versus losses last year, it added.

“Our top ‘buys’ are Tenaga Nasional Bhd, Petronas Chemicals Group Bhd, RHB Bank Bhd, Dialog Group Bhd, BIMB Holdings Bhd, Sime Darby Property Bhd and Kossan Rubber Industries Bhd in the large-cap sector.”