MIDF: Opportunities to score in first half of next year

Investors will find better opportunities to score in the Malaysian stock market in the first half of next year compared with the second half, says a local research house.


"Opportunities to score will be more ample in the first half as investment risks are expected to heighten in the latter half," MIDF Research said in a recent report on its outlook for Malaysian equities next year.

As Asian currencies are seen as undervalued against the greenback, investing in Asian assets - especially equity - will appear to be a natural choice for the dollar carry trade.

However, the prospect of an interest rate hike in the US - which has a greater risk of happening in the second half of 2010 - would be a "death knell" for the dollar carry trade, it said.

MIDF noted that with the shift in global funds to Asia in the second half of this year, it would be unlikely for this trend to reverse so soon, especially in the first half of 2010.



Markets, which were jittery following the Dubai debt crisis, have since seen a swift recovery.

"We do not see any looming crisis over the next 12 months of the scale seen in 2008," it said.

Its target of 1,450 points for the FBM KLCI next year may be met in the first half itself, it said.

It expects the FBM KLCI to close this year up by more than 40 per cent, which would be its best annual performance since the superbull run in 1993 when the index gained 98 per cent.

MIDF kept an "overweight" recommendation on the media, construction, oil and gas, banking sectors.

It also has an "overweight" on smaller sectors like toll concessionaires (which was previously "neutral"), glovemakers and healthcare service providers.

Its top buys include Century Logistics as a small-capitalised stock idea, KPJ Healthcare as an alternative defensive play and Proton, as a turnaround story.

Its other stock picks for next year include AMMB Holding, RHB Capital, Gamuda, IJM Corp, Dialog Group, Pelikan International and Kencana Petroleum.