Steel Sector : Gloomy outlook for steel sector, says HLIB Research
KUALA LUMPUR (Nov 12): Hong Leong IB Research (HLIB) has maintained ite Neutral rating on the building materials sector and has painted a gloomy outlook for the local steel sector due to the persistent overcapacity issue in China (the world’s largest steel producer), which will likely cap fortunes of local steel producers.
In a note Wednesday, the research house said the Malaysian Iron and Steel Industry Federation (MISIF) projects apparent steel consumption in Malaysia to grow moderately for the next 3 years, at 3-6% per annum to 10.5m mt in 2014, 10.9m mt in 2015, and 11.3m mt in 2016.
“However, the decent growth in apparent steel consumption will unlikely improve the fortunes of local steel producers, given the persistent overcapacity in China.
“Maintain Sell call on Ann Joo Resources Bhd with target price of 97 sen and a Hold on CSC Steel Holdings Bhd with a target price of RM1.12,” it said.
http://www.theedgemarkets.com
KUALA LUMPUR (Nov 12): Hong Leong IB Research (HLIB) has maintained ite Neutral rating on the building materials sector and has painted a gloomy outlook for the local steel sector due to the persistent overcapacity issue in China (the world’s largest steel producer), which will likely cap fortunes of local steel producers.
In a note Wednesday, the research house said the Malaysian Iron and Steel Industry Federation (MISIF) projects apparent steel consumption in Malaysia to grow moderately for the next 3 years, at 3-6% per annum to 10.5m mt in 2014, 10.9m mt in 2015, and 11.3m mt in 2016.
“However, the decent growth in apparent steel consumption will unlikely improve the fortunes of local steel producers, given the persistent overcapacity in China.
“Maintain Sell call on Ann Joo Resources Bhd with target price of 97 sen and a Hold on CSC Steel Holdings Bhd with a target price of RM1.12,” it said.
http://www.theedgemarkets.com
