Published: 2009/06/02
MALAYSIA'S key stock index may rise to a 12-month high by year-end, said CIMB Investment Bank Bhd, which recommended investors buy “bombed-out cyclical” stocks in construction, building materials and property. Companies reported better-than-expected earnings in the first quarter, CIMB said in a report today.
Earnings will grow a “stronger” 19 per cent in 2010 after shrinking 5.7 per cent this year, it said. CIMB raised the year-end Kuala Lumpur Composite Index target to 1,220 from 1,060, the highest since June 18. The gauge, up 21 per cent this year, gained 0.2 per cent to 1,063.76 as of 11:53 am local time. “There is a good chance we are past the worst,” said Terence Wong, an analyst at CIMB. “The gradual reinvestment of institutional funds’ spare cash will sustain the market rebound in the second half” of 2009, it said.
More than RM20 billion (US$5.7 billion) of spending on infrastructure will help spur a recovery in the economy with “pump priming” to intensify in the second half, CIMB said. The government is betting on two stimulus plans totaling RM67 billion to reinvigorate Southeast Asia’s third-largest economy as it heads for its first recession in a decade.
The central bank has said previous interest-rate cuts and the stimulus plans will help revive growth in the second quarter. “Domestic catalysts” and “huge pools of liquidity not yet deployed by local and foreign funds should keep the medium- term momentum strong, at least” in the second half, it said.
Market Rebound Property stocks including SP Setia Bhd “should outperform” in this market rebound as they tend to move in tandem with the stock market. Further, they were the worst performers last year, CIMB said. Oil and gas-related stocks will also gain as rising crude oil prices spur more exploration contracts, increasing the demand for service providers such as SapuraCrest Petroleum Bhd, it said.
Malaysian stocks have become cheaper, it added. The “resurgence” of regional markets has lowered Malaysia’s price- to-earnings multiple premium over the region from up to 45 per cent earlier in the year to as low as 14 per cent, the report said. -- Bloomberg
June 2, 2009
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About Me
- Nuang
- Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;
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