Nomura ups Malaysia’s banks, construction, gaming sectors
KUALA LUMPUR, May 30 — Nomura Asia-Pacific Research raised its call on Malaysia's banks, construction and gaming sectors to "bullish," saying political risks from upcoming elections had been factored in to prices and that earnings were primed to rebound.
"Our upgrades are premised on the idea that the earnings of these sectors have bottomed and are likely to surprise on the upside," Nomura said in a research note today.
Nomura said after a 14-month downward trend, consensus earnings measured by Institutional Brokers' Estimate System (IBES) finally turned positive on Malaysia's earnings in February 2012.
The upgrade cycle could continue for at least 12 months, boosting the country's stock market on a 6-9 month upward trend, it said.
"After more than six months of discounting, most of the market risks associated with the 13th General Election should have dissipated, in our view," said Nomura.
Nomura kept its bullish rating on the plantation sector despite recent weakness, and lowered the telecoms sector to neutral. — Reuters