Investment Highlights

• We maintain HOLD call on EQ8 DJ Islamic 25 with a highe fair value (FV) of RM1.16 (from RM1.12 previously) base on our FVs (for stocks under our coverage) and consensu FVs (for stocks not under our coverage). Our FV current offers a 9% upside to the ETF’s market price.

• The second review of the benchmark index was effectiv on 21 June 2024. During this review, there were no change to the constituents while weightage adjustments are a follows:
  
  i. Increased weightage in: Dagang Nexchange, Dialo F&N, Frontken, Hartalega, Inari, MR DIY, MYEG, Pres Metal, Telekom Malaysia, Top Glove and Westports.
  
  ii. Decreased weightage in: CTOS, CelcomDigi, IH Healthcare, IOI Corp, KL Kepong, Maxis, Nestl Petronas Chemicals, Petronas Dagangan, Petrona Gas, QL Resources, SD Guthrie and Time Dotcom.

• The oil and gas (O&G) sector remains the larges component of NAV, which account for 21% NAV weightag We maintain OVERWEIGHT on this sector mainly attribute by resilient crude oil prices which underpin the earning prospects of upstream operators and support a robus project pipeline for service providers. Therefore, we lik constituent stocks such as Petronas Gas and Dialog.

• We remain NEUTRAL on the telecommunication an plantation sectors which individually account for 16% o NAV. Our NEUTRAL stance on telecommunication main stems from likely higher operating costs from 5G wholesa charges from Digital Nasional. We are also NEUTRAL o plantation on limited upside to CPO prices fro expectations of higher 2H2024 palm oil production.

• Our in-house economist projects a stronger ringgit a RM4.50=US$1, underpinned by a 2024F GDP growth o 4.5% in tandem with resilient domestic spending and a expected export recovery. Notwithstanding ongoing geopolitical risks, the ringgit is expected to be supported by Malaysia’s improving economic outlook and narrowing interest rate differential between US Federal funds rate and OPR later this year amid probable US rate cuts.

Source: AmInvest Research - 25 Jun 2024