No significant changes in syariah-compliant securities list review

KUCHING: The recent review on listed syariahcompliant securities appears to be subdued with only 12 inclusions and nine exclusions compared with 38 inclusions and 29 exclusions for November 2019 review, across the Main and ACE Markets, analysts observed.

“Exclusions this time will have less fanfare as none appear (as per most recent Annual Reports) to have syariah-based/Islamic institutional fund holdings amongst its listing of top 30 shareholders,” said Public Investment Bank Bhd’s research team (PublicInvest Research).

However, it cautioned that while there is still no compulsion for anyone to sell should investments be out-of-money, past instances have suggested compliance (immediate disposals) by funds regardless.

Sector-wise, inclusions were evenly spread out amongst industrials (four), consumer (three) and telecommunications (three), though six of which were in the ACE Market. As for exclusions, industrials (four) dominated, followed by consumer (two).

On a wider view on the market, PublicInvest Research said consumer confidence and business sentiment has taken a severe hit from the Coronavirus Disease 2019 (Covid-19) pandemic with disruptions in demandsupply dynamics and break down in economic activities threatening a global recession, to which governments and central banks worldwide have unveiled massive fiscal and monetary measures to avert.

“While market sentiment appears decidedly positive at this juncture, global outlook remains shaky as major consuming economies, the US and the European Union, may struggle to tackle business closures, job losses and wage declines,” it highlighted.

Nevertheless, it pointed out that China’s apparent earlierthan-expected economic recovery is a boon. However, it would likely be insufficient to drive global growth.

“Fresh US-China tensions is also not helpful. 2020 will be another wash-out year, similar to 2019.

“Sector-wise, healthcare and gloves have shone amid this health crisis, both already on our Overweight calls since the end of last year.

“A temporarily-weak ringgit should be good for the manufacturing sector (particularly exporters) though Covid-19-related concerns and its impact on global demand may impede upsides,” it added.

It noted that the construction sector could be a hidden star.

“Optimistically, we still see the FBM KLCI closing at around the 1,480 point level by year-end,” it opined.