KUALA LUMPUR: AmInvestment Bank Bhd has made a mild upgrade to its end-2024 target for the FTSE Bursa Malaysia KLCI (FBM KLCI), increasing it to 1,550 points from 1,545 points previously following slight adjustments to banking earnings.

       The investment bank said its FBM KLCI earnings projections have been marginally tweaked by one to two per cent for 2024-2025.

       The slightly higher base-case end-2024 FBM KLCI targets were pegged to a 2024 forecast (2024F) price-to-earnings ratio (P/E) of 14.5 times - slightly below its five-year median of 14.8 times, which is likely to decline over the next quarter, given persistently low post-pandemic valuations.

       "Our base-case target stems from rising downside risks -- including an appreciating ringgit towards the end of the year which could unravel foreign equity inflows attracted by the weak currency and slowing global economic growth prospects.

       "Additionally, our target setting is affected by shifting expectations of the timing of the United States Federal Reserve cuts, which will drive volatility across all markets, and moderating domestic consumption amid rising domestic inflation from targeted subsidy rationalisation," it said in a research note today.

       It noted that FBM KLCI’s 2024F core net profit growth slid to 13.4 per cent from 14.7 per cent last month from a slight uptick of 1.0 per cent in the 2023 earnings base.

       For 2025F, AmInvestment projects FBM KLCI’s earnings growth at 8.6 per cent, up from 7.2 per cent last month.

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       Meanwhile, the research firm maintains its "overweight" call on the oil and gas, construction, technology, manufacturing, ports, power, property, real estate investment trust (REIT), glove and transportation sectors.

       It has also named CIMB, RHB Bank, Tenaga Nasional, Telekom Malaysia, Gamuda, Dialog Group, Sunway, Yinson, Pavilion REIT and Mah Sing as its top picks.

       "For dividend plays, we like REITS such as UOA REIT, Pavilion REIT, Hektar REIT, Sunway REIT and IGB REIT as well as Maybank, MBM Resources, RHB Bank, and CIMB Bank," it said. - Bernama