Local Bourse: RM1.6 Billion in Foreign Buying

The FBM KLCI‘s target for end-2023 remains at 1,515, balancing slightly lower index earnings with a moderated 2024F P/E of 14.6x, close to its 5-year median.

As the ringgit recovered slightly by 2.3% MoM to MYR4.66=US$1 and US 10-year treasury yields moderated slightly to 4.34% 58bps to 4.92%, foreigners reverted to buying RM1.6bil equities in November from RM2.2bil net sales in October.

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Local Bourse: Local Net Selling

Conversely, local institutions reversed to a net selling position, disposing RM1.4bil of domestic equities last month.

Corporate results in 3Q2023 were disappointing, with 32% of stocks underperforming. However, outperformers improved to 19%.

FBMKLCI earnings projections were reduced by 1% for 2023F and 0.6% for 2024F. This led to a faster decline in 2023F FBMKLCI core net profit, but a relatively stronger 2024F earnings growth of 13%.

Lower projections

“Our FBMKLCI earnings projections have been lowered by 1% for 2023F and 0.6% for 2024F. This caused 2023F FBMKLCI core net profit to decline by a slightly faster pace to -7.8% from -6.6% last month.

“As 2024F earnings was moderated by a lower degree, the lower 2023F earnings base effect translates to a mildly stronger 2024F earnings growth of 13% from 12.5% previously,” says AmBank.

The report suggests an overweight stance on specific sectors, including top picks like CIMB, RHB Bank, Tenaga Nasional, and others.