KUALA LUMPUR (May 7): AirAsia X Bhd (AAX), Perdana Petroleum Bhd (PP), Petronas Chemicals Group Bhd (PChem) and SapuraKencana Petroleum Bhd (SKP) are potentially at risk under the May 2014 Syariah compliance review by the Securities Commission (SC), said Affin IB Research.
In a strategy note Wednesday, Affin IB acting head of research Kevin Low said kneejerk reaction on some of the stocks that lost their Shariah-compliant status in the November 2013 review raised concerns on the outcome of the latest review by the SC.
“We ran checks for potential dropouts across our universe of Shariah compliant stocks based on either the annual audited accounts or latest annual report.
“AirAsia X, Perdana Petroleum, Petronas Chemicals and Sapura Kencana are potentially at risk,” he said.
Notwithstanding this, Low said the demanding Shariah conditions and already distinct scarcity premium for Shariah compliant stocks reinforce his view that valuations for the KLCI would further trend up in the future as ample liquidity is further narrowed down on a smaller pool of investable names.
“We remain positive on the KLCI given a compelling macro outlook and maintain our yearend target of 1980 (+6% upside).
“In our Top 10 picks, IJM Plantation and SKP replaced Air Asia and Bumi Armada Bhd, respectively,” he said.
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» AirAsia X Bhd (AAX), Perdana Petroleum Bhd (PP), Petronas Chemicals Group Bhd (PChem) and SapuraKencana Petroleum Bhd (SKP) Alert
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