• Corporate Malaysia delivered a set of 3Q 2017 results (Exhibit 1) that was generally still lacklustre, but seeing an improved percentage of companies surprising to the upside – with 18%, 51% and 31% beating, meeting and missing our projections respectively. This compares with 11%, 57% and 32% for "above", "within" and "below" respectively in 2Q 2017.

• Against the market consensus, similar observations held true – with "above", "within" and "below" at 14%, 43% and 43% respectively, as compared with 6%, 54% and 40% in 2Q 2017.

• A number of FBM KLCI Index-linked heavyweights surprised to the upside, they were: Astro (lower content costs due to discounts from programme suppliers and the strengthening ringgit), Maxis (loss of data roaming revenues from U Mobile yet to be felt) and MISC (better-than-expected performance from the LNG segment).

• On the other hand, Sime Darby disappointed due to weaker-than-expected performance from the downstream plantation and motor segments, while IJM Corp was hit by earnings misses from its plantation and building material divisions. Meanwhile, both Genting Malaysia and Genting Bhd missed expectations due to unfavourable luck factors and escalating operating cost at Genting Malaysia.

FBM KLCI 2017 earnings growth lowered to 3.8% from 4.3%

• After factoring in the earnings changes, we tweak our FBM KLCI earnings growth forecasts for 2017F and 2018F down to 3.8% and 8.2% respectively (Exhibit 2), from 4.3% and 8.7% previously.

• Meanwhile, in terms of earnings growth forecasts of "all sectors" – a broader but slightly more volatile earnings gauge encompassing the entire universe of our stock coverage – the numbers for 2017F and 2018F have been adjusted to 2.2% and 17.6%, from 6.4% and 15.1% previously (also see Exhibit 2).

Source: AmInvest Research - 4 Dec 2017