Thursday, February 24, 2011

KLCI below 1,500, broader market weaker, IJM down 3.8pct

KUALA LUMPUR: The FBM KLCI fell below the important 1,500 level in late afternoon trade on Thursday, Feb 24, weighed down by losses by big capitalised stocks.

At 3.43pm, the KLCI fell 11.28 points to 1,499.83. Turnover was 1.4 billion shares valued at RM1.68 billion. Losers beat gainers 773 to 109 while 174 stocks were unchanged.

IJM Corp was nearing the RM6 level as investors sold the stock following its lower core earnings. IJM Corp was down 24 sen to RM6.01 with 9.96 million shares done.

Maybank Investment Bank Research (Maybank IB) said IJM's nine-months earnings of RM341 million net profit (+54% on-year) included a RM99 million one-off gain of which RM68 million was recognised in 3Q.

'Excluding the gains, RM243 million nine-month core net profit (+10% on-year) was below expectations at 65% of our RM375 million FY11 core net profit forecast.

'The operational shortfall came from IJM Land and lower margins at the other businesses. We lower our FY11 core net profit forecast by 11% (to RM333 million), but raise FY12 forecast by 3% for higher CPO price assumption. We downgrade our call on the stock with share price nearing our new RM6.50 target price (+10sen),' it said.

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