By DANNY YAP
PETALING JAYA: The Bursa Malaysia stock has turned unattractive based on reports by 19 research houses (local and foreign), which mostly have a “sell” or “neutral” call on the counter, while a few had “in line” or “hold” recommendations.
According to Bloomberg, the stock has a target price of as low as RM3.40 and a high of RM8.35, with RM3.76 being the overall average target price.
The 19 research houses’ reports were dated from July to August.
An analyst with Citi Investment Research, who has a “sell” call, said Bursa Malaysia had ranked poorly and was grouped together with other stocks in the Asia-Pacific region, such as AXA Asia Pacific Holdings Ltd (Australia) and top South Korean Internet gaming company NHN Corp (Korea) based on Citi’s Radar Model.
The Radar Model divides companies into four quadrants and tries to explain how the market perception may change over time and how this often affects valuations and stock prices.
According to the model, the top sectors in the Asia-Pacific that have managed to beat the global economic downturn were metals and mining, motor vehicle, energy and banking, while hotel and retailing have overtaken insurance as the least attractive to invest in this month.
Corporations in the region that had performed well (termed Asian idols) included the China National Offshore Oil Corp, Link Real Estate Investment Trust of Hong Kong, and Tata Steel Ltd, a unit controlled by India’s Tata Group.
The analyst said the Asian idols were among the quandrant stars that also had a high “buy” rating.
Another local analyst said Malaysian companies, including Bursa Malaysia, were “weighed down” by political uncertainties affecting investor confidence as well as the global economic downturn.
“The double-whammy effect has taken a toll on most stocks and Bursa Malaysia is no exception, especially since it’s the local stock exchange for listing.”
He said market sentiment remained low and that even company listings had dwindled significatly this year compared with 2007.
“But we choose to remain optimistic that things will change for the better for the economy as well as Bursa Malaysia in the longer term,” he said.
No comments:
Post a Comment