On Heels Of Ringgit Depreciation, Analysts Scorn Malaysia

Watch the video with Andrew Stotz or read Watching the Street: Malaysia below.

Consensus Recommendations: Malaysia

If we start with consensus recommendations, we can see that the bottom-up country relative consensus recommendations (the chart on the right below) show us that Malaysia has not been a “buy” in Asia for the past five years.

Learn more: How to Benefit from Our Watching the Street Charts

Analysts are now negative again after the Ringgit has continued to depreciate.

Malaysia

Among companies with the highest recommendations, AirAsia is a low-cost airline with about 200 destinations spanning 24 countries mainly in Asia.

Among those with the most negative recommendations, Felda Global Ventures focuses on soft commodities such as palm oil and sugar, and its share price has fallen about 25% in the past three months.

Consensus Earnings Estimates: Malaysia

Analysts have been conservative with EPS growth estimates, but earnings have fallen each year from 2013 to 2015. 2016 earnings-per-share, however, are expected to grow by 11%.

Among stocks with the highest consensus EPS growth estimates, MY EG Services develops electronic government services in Malaysia and private enterprise solutions. The stock has gained more than 10x over the past 4 years and 10% YTD.

Malaysia

WCT Holdings, S P Setia, Sime Darby and Genting are all diversified investment holding companies and are expected to see earnings fall in 2016.

Consensus Target Prices: Malaysia

Analysts now expect 6% upside over the next 12 months vs 3% in August. However, Bursa Malaysia has fallen since then and is down 3% YTD.

Malaysia

AirAsia and MY EG Services are also found among companies with the highest consensus target price expected returns and share prices have gained 90% and 10% YTD, respectively.

Hartalega Holdings produces latex and nitrile gloves, and analysts expect further downside even though the share price is already down 20% YTD.

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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.