KUALA LUMPUR: Public Investment Bank Bhd (PIVB) has kept its end of 2023 benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) target unchanged at 1,650 points, as no major revisions to earnings of index-component stocks were seen in the fourth quarter (4Q) of 2022.

In a research note today, PIVB said earnings of heavily-weighted banks and plantations were largely unchanged in 4Q, with tweaks in telecommunications (positive) and chemical/consumer (negative) largely negating each other.

"The 2023 and 2024 earnings baskets are anticipated to expand by 9.6 per cent and 5.8 per cent (respectively), the slightly more pronounced 2023 growth a result of base effects," it said.

On the broader market, the investment bank said it remained cautious but not overly pessimistic for the remainder of the year.

"Though the FBM KLCI continues to struggle to break out of its range-bound trading band, sufficient reasons warrant continued exposure in the market. However, uncertainties and resultant volatilities will be an ongoing feature.

"Fundamentally, macro conditions in 2023 are not too dissimilar to that of 2022," it said.

Moving forward, PIVB cautioned that the first half (1H) of 2023 would remain uncertain as global economies work through the full effects of aggressive rate hikes over the last six months.

"Sentiment is weak, understandably, but the market is also relatively undervalued (now more so) with the earnings picture not having been despite this quarter's apparent wobble.

"We wouldn't be in a hurry to get into the market at this juncture, but retain sufficient optimism to suggest buying into market weakness to ride on the upside going into 2H of 2023," it said.

Going into 2024, it said Malaysia's economic growth direction and earnings picture would depend on the severity or wear-off of the downside risks, which, at this point, is not expected to be severe.

The FBM KLCI finished 3.99 points lower at 1,450.20 on Wednesday from Tuesday's closing of 1,454.19 on tepid buying interest.

 -BERNAMA