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Tuesday, July 15, 2008

IJM falls after earnings target downgrade

IJM Corp, Malaysia’s second-largest builder, fell in Kuala Lumpur trading and was the sixth-biggest decliner on the benchmark Composite Index.

Macquarie Group Ltd cut its earnings forecast for the company on costs and political turmoil.

At 11.42am, the stock slid 15 sen, or 2.9 per cent, to RM5.05.

IJM, based in Petaling Jaya outside capital Kuala Lumpur, is down 41 per cent this year, compared with the Kuala Lumpur Composite Index’s 21 per cent decline.

IJM’s earnings per share forecast was cut by 27 per cent for fiscal 2009 and 26 per cent for 2010, according to the Macquarie report published today. It also cut the share-price estimate to RM6.30 from RM9.85 in the next 12 months.

“Recent events such as political uncertainty and inflation have caused us to reduce our estimates for the construction and property businesses,” the report said. It kept its “outperform” rating on IJM.

By Bloomberg

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