AmInvest Research Reports

MyETF DJ Islamic 25 - Bursa ETF Watch: 2H2023 Earnings Turned Around

Publish date: Mon, 04 Mar 2024, 11:09 AM
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Investment Highlights

  • We upgrade MyETF DJ Islamic 25 to BUY from HOLD wit a slightly higher fair value (FV) of RM1.12 (from RM1.1 based on our FVs (for stocks under our coverage) an consensus FVs (for stocks not under our coverage). Our F currently offers a 24% upside to the ETF’s market price.
  • The ETF’s 2023 net loss fell 95% YoY to RM0.9mil, main attributed to a 79% reduction in investment losses t RM4.3mil from RM20.6mil in 2022.
  • From end-Dec 2022 to 30 June 2023, the basket of stock performed unfavorable with NAV declining by 6.5% resulting in the ETF’s loss of RM8.2mil in 1H2023.
  • Subsequently, the ETF’s NAV recovered slightly in 2H202 up by 5% from 1 Jul 2023 to 31 Dec 2023. This turne around the ETF’s net profit to RM7.2mil in 2H2023.
  • Looking forward, we remain overweight on the oil and ga sector, which account for the largest 22% NAV weightag due to elevated oil prices which support companies wit direct exposure to upstream production and servic providers such as the FPSO subsector.
  • We are also overweight on the technology sector o expectations of global semiconductor demand bottomin out, rising fab expansions and recovery in consume electronic segment in 2H2024, partly offset by softening E sales impacted by price wars, subsidy reductions and hig borrowing costs.
  • However, we are neutral on the plantation sector, whic accounts for 16% of the ETF’s NAV, on anticipation tha CPO prices could be constrained by higher palm oil supp in Malaysia and Indonesia.
  • We have neutral on consumer sector, which has a 14% NA weightage, due to the impact of softer consume sentiments slower global economic growth outlook an inflationary pressures from a 2%-point increase to 8% fo sales & service tax, high-value good tax introduction an subsidy rationalisation plans.
  • Our in-house economist expects a sanguine 2024F GD growth of 4.
  • The ETF currently trades at a 10% discount to its NAV o RM1.00.

Source: AmInvest Research - 4 Mar 2024

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