Education stocks decline as optimism wanes
KUALA LUMPUR: Education-related stocks on Bursa Malaysia declined in the morning session on Thursday, Sept 29 as the outlook for the sector turned weaker.
At 12.30pm, HELP fell 25 sen to RM1.62, SEG International down two sen to RM1.70 and Masterskill shed one sen to RM1.08.
HELP yesterday when announcing its third quarter results said it was impacted by lower enrolment and higher cost, and also indicated that its students from China were likely to pursue their studies directly in the US and UK due to the weakening dollar and sterling pound.
RHB Research meanwhile downgraded the education sector from Overweight to Neutral, and said that it was cautious on the sector this quarter given rising macroeconomics headwinds, illiquid factor of the stocks and the small market capitalisation of the education stocks (less than RM1 billion).
In addition, high foreign shareholdings for HELP (12.5%) and Masterskill (49%) also increased their susceptibility to volatile portfolio flows, it said on Sept 29.
RHB Research cut its target FY12 PER by one to two times given the bearish macroeconomic outlook and few re-rating catalysts for the sector.
The research house downgraded HELP and Masterskill from Outperform to Underperform, while maintaining SEG an Outperform.