Maybank IB maintains FBM KLCI target of 1,820 points by year-end
KUALA LUMPUR: Maybank Investment Bank Bhd (Maybank IB) remained cautiously constructive of Malaysian equities for the second half of 2017, with a slightly neutral bias after gains recorded in the first half of the year and retained the FBM KLCI target of 1,820 points by year-end.
For Malaysian equities, the investment bank noted that the key positives were the domestic macros, which should remain positive throughout 2017 while market/corporate earnings growth looked set to resume.
“That said, we stay mindful of the prevailing external policy and geopolitical headwinds, amid an extended period of market calm and low volatility (for most of 2017 yearto-date),” it said in a research note yesterday.
In August, the country would enter into a ‘festive’ mode as the 29th SEA Games will be held between Aug 19 and Aug 30, followed by 60th National Day celebration on Aug 31.
“Consumption spending should receive a boost with the third 1Malaysia People’s Aid (BRIM) payment and Felda settlers’ payment, also due in August, besides higher tourism spending,” said Maybank IB.
It also said volatility continued to stay at low levels and retreated in the other asset classes with the exception of crude oil.
Maybank IB was overweight on construction, cement, oil and gas, gaming and utilities stocks and also maintained its top buy list which included Tenaga Nasional Bhd, Genting Bhd, IJM Corp Bhd and Sapura Energy Bhd.
It also reiterated that the market would trade rangebound before ending the year on a more positive note and added that the upside risk to its view was the continuous inflow of strong foreign funds.
Foreign investors continued to be net buyers of Malaysian equities in July but at a tapered pace of RM400 million.
“Foreign net buy since early2010, a figure which we track closely, has climbed to RM15.3 billion, as at end-July 2017,” added the investment bank. — Bernama