Malaysia Market Strategy "Waiting for better value to emerge " 18-Nov-2008 Nocom
Most stocks have yet to reach attractive valuations While the KLCI is down 39% YTD and is trading at its lowest level since June 2005, we see limited investment opportunities in the market. We base our view on P/BV and EV/capital employed screens of ourstock universe. We lower our end-2008 KLCI target to 945 and set our end-2009 KLCI target at 1,000. The best-valued and conceptually best-positioned stocks In the current economic and financial market environment, we select four defensive stocks from our stock screen-Public Bank, Petronas Gas, PLUS Expressways, and BAT (Malaysia)-which we think have limited near-term earnings and dividend risk; we also highlight Resorts World and AMMB Holdings. We are negative on Sime Darby and Bursa Malaysia. Current outperformance could spell underperformance on regional rally The KLCI has outperformed the rest of the region (ex-Japan) by around 16% over the past three months and is gradually returning to its historical PE and P/BV premium to the region. Againstour forecast of an aggregate earnings decline of 20% in 2008/09, we think the KLCI might underperform other Asian markets on a rally. Politics on the back burner; it is now all about the economy Politics is now less of a risk, in our view, with a leadership transition plan in place. However, falling oil prices limit the scope for higher fiscal spending, while global deleveraging dampens private investment. Assuming an economic soft landing in 2009/10, we see limited downside to the KLCI; but assumingan economic hard landing, we think the KLCI could test its lowest trailing P/BV of 0.9x (KLCI: 587).
I don't think year end-2008 KLCI target 945 and end-2009 KLCI target at 1,000 is achievable. Most of the negative news still yet to materialize in our real economy. We only could see to true picture when company release their result Q4 and 2009 onwards
In today volatile market, there is still pretty of time to bargain any value stock, preserve captial and buy on dip and realize profit as soon as possible.
It is part of analyst or fund manager job to instill brighter picture and set arbitrary target. There is no KPI to evaluate whether or not they can meet target. Just as reference for those who known their strategy, but it may blindly follow for unknown layman if this kind of report publish widely in newspaper.
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Malaysia Market Strategy "Waiting for better value to emerge " 18-Nov-2008 Nocom
Most stocks have yet to reach attractive valuations While the KLCI is down 39% YTD and is trading at its lowest level since June 2005, we see limited investment opportunities in the market. We base our view on P/BV and EV/capital employed screens of ourstock universe. We lower our end-2008 KLCI target to 945 and set our end-2009 KLCI target at 1,000. The best-valued and conceptually best-positioned stocks In the current economic and financial market environment, we select four defensive stocks from our stock screen-Public Bank, Petronas Gas, PLUS Expressways, and BAT (Malaysia)-which we think have limited near-term earnings and dividend risk; we also highlight Resorts World and AMMB Holdings. We are negative on Sime Darby and Bursa Malaysia. Current outperformance could spell underperformance on regional rally The KLCI has outperformed the rest of the region (ex-Japan) by around 16% over the past three months and is gradually returning to its historical PE and P/BV premium to the region. Againstour forecast of an aggregate earnings decline of 20% in 2008/09, we think the KLCI might underperform other Asian markets on a rally. Politics on the back burner; it is now all about the economy Politics is now less of a risk, in our view, with a leadership transition plan in place. However, falling oil prices limit the scope for higher fiscal spending, while global deleveraging dampens private investment. Assuming an economic soft landing in 2009/10, we see limited downside to the KLCI; but assumingan economic hard landing, we think the KLCI could test its lowest trailing P/BV of 0.9x (KLCI: 587).
Sold IGB at 1.22; Resorts at 2.69. Market volume low and lack of fresh lead.
I don't think year end-2008 KLCI target 945 and end-2009 KLCI target at 1,000 is achievable. Most of the negative news still yet to materialize in our real economy. We only could see to true picture when company release their result Q4 and 2009 onwards
Place Hektar @ 0.77sen not match......
Analyst normally good in predicting and usually never come true. This kind of news is meant for reference, don't blindly accepting it.
hng, not bad, traded some shares today...considering buying Maybank & HLBank when it touches RM5.
In today volatile market, there is still pretty of time to bargain any value stock, preserve captial and buy on dip and realize profit as soon as possible.
It is part of analyst or fund manager job to instill brighter picture and set arbitrary target. There is no KPI to evaluate whether or not they can meet target. Just as reference for those who known their strategy, but it may blindly follow for unknown layman if this kind of report publish widely in newspaper.
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