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=MARKET BUZZ: Nestle (Malaysia) Falls; May Hit MYR120-MYR130 In A Week-Kenanga

KUALA LUMPUR (Mar 14) -- Nestle (Malaysia) drops 8.5% to MYR143.80, on track for biggest one-day drop since at least 2012. Shares had hit record high of MYR163.00 earlier in the day, up more than 60% since Nestle was included in KLCI index on Dec. 18. “This is a correction that I’ve been expecting,” Kenanga Investment Bank analyst Clement Chew tells Nikkei Markets. “Relative to its peers like Fraser & Neave Holdings and Dutch Lady Milk Industries, Nestle is the best in terms of capital gain and dividend yield. But at current levels, the attractiveness of its yields has diminished, so retail investors are likely to move their funds into other stocks,” says Chew. Views stock could hit MYR120-MYR130/share in a week, with “market looking at below 40x price-to-earnings” valuation for Nestle. Nestle now trades at over 50x price-to-earnings. House has Market Perform call on stock with target price of MYR114.30.

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