Reports » Malaysia

Malaysia stock market and companies daily report (September 07, 2010)

Contributed by Shares Investment

By Shares Investment

Ringgit Climbs To 13-year High

Malaysia’s ringgit climbed to the strongest level in 13 years as better-than-expected growth in US employment brightened the outlook for exports to the world’s biggest economy. The currency strengthened for a fourth day and benchmark stock indexes rose across Asia after a US government report showed private payrolls increased 67,000 in August, more than the 40,000 forecast in a survey of economists. Malaysia’s trade ministry last week reported a 13.5% gain in July exports, an eighth straight advance, and the market is getting back its confidence, especially if the US comes out with more fiscal or monetary stimulus. The ringgit gained 0.3% to 3.11 per dollar, taking this year’s gain to 10%.

Malaysia’s Export Growth Momentum Seen Slowing Down

Despite Malaysia’s recovery in domestic consumer spending growth, the exports growth momentum has been slowing down recently, notably with the waning base effects starting to kick-in. “This is consistent with our manufacturing output growth forecast of 5.7% in the second half of this year, down from the 16.4% recorded in the first,” OSK-DMG said in a economic research note. On average, the level of exports in the first half of the year at around RM151b, was less than the 2008 average of about RM156b and this implies that Bank Negara still believes Malaysia’s exports remain an important engine of growth, even though private consumption growth has shown a robust recovery. On the ringgit front, it is likely to see the current strengthening trend of the ringgit tapering off, going into the next two quarters following the end of policy normalisation.

Maybank IB Research Maintains Buy On Nestle

Maybank Investment Bank Research reiterated its Buy call on Nestle (M) and a discounted cashflow-based target price of RM43.9 on earnings growth of 10-14% per annum in the 2010-12 period. “Our market-contrarian pick is already 3% higher after just five working days of trading.  Allied to its high quality earnings, an upward re-rating on Nestle’s earnings growth potential is certain to excite investors who can accept the lack of trading liquidity in the shares,” it said. Maybank IB Research said both export and local sales returned to positive growth territory in the 12-month period up to 2Q10 and the generally upbeat domestic consumption indicators locally and in neighbouring countries will bode well for Nestle’s sales trends in the rest of 2010-12.

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.