KUALA LUMPUR: Hong Leong Investment Bank Bhd (HLIB Research) has cut its year-end target for the FBM Kuala Lumpur Composite Index (FBM KLCI) to 1,610 based on lower price earnings (PE) of 14 times 2012 earnings.
“The second quarter CY11 reporting season showed disappointing results for the second consecutive quarter,” the bank said in a research note yesterday.
It said, 13 sectors were below expectations including banking, transport, building material and technology, while seven sectors showed surprise on the upside.
The research unit of Hong Leong Investment Bank believed there were still ample domestically driven factors that would sustain corporate earnings.
They were the Economic Transformation Programme (ETP) gaining traction, wealth creation culminating in continued consumption amidst rising consumerism and Petronas contract awards, it said.
HLIB’s 2011 and 2011 earnings per share (EPS) growth forecast had been cut to 11.3 per cent and 11.4 per cent respectively from 12.1 per cent to 12.3 per cent. — Bernama