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Saturday January 26, 2013

Market views from experts


Here are some expert views on the market in view of this week's selldown:

Syed Muhammed Kifni
Head of equity research
MIDF Amanah Investment Bank Bhd

1) What is your outlook on the market now?

The market might be shaken but obviously not stirred by the aggressive selling earlier this week. If the sell-off was in fact triggered by the election rumour, we reckon it is rather uncharacteristic for an equity market to react so violently to an already known and impending event.

We believe that the market overreacted, the FBM KLCI will find support at the psychological 1,600 points level, and we reiterate our FBM KLCI 2013 year-end target of 1,750 points.

2) Is it a buy or sell market?

We expect the FBM KLCI to end the year at circa 1,750 points, thus in our opinion it is currently a buy market. Furthermore, heightened short-term market volatility may also present some intermittent trading opportunities.

3) What are the stocks / sectors that look compelling?

Recently battered quality index-linked stocks. Also, some property stocks such as Faber Group Bhd, Mah Sing Group Bhd and UOA Development Bhd which were among the hardest hit.

Thomas Yong
Chief executive officer
Fortress Capital Asset Management (M) Sdn Bhd

1) What is your outlook on the market now?

As the deadline for the general election draws nearer, investors are increasingly concerned over uncertainty. We believe the Malaysian equities market has yet to reflect this additional risk premium.

Our outlook for the market this year is that at best it would be flat.

2) Is it a buy or sell market?

Malaysian equities are still more expensive in valuation compared to regional equities, and in our view this valuation adjustment process has just begun. In fact, we are more surprised that it has only started now.

3) What are the stocks/sectors that look compelling?

With that in mind, we are unlikely to add Malaysian equities into our investment portfolio before the middle of this year.

Pankaj C. Kumar
Director of investment
KSK Group Bhd

1) What is your outlook on the market now?

The little blip that we saw this week does not alter the long term positive view of the market.

Having said that and as we approach the biggest event of the year, i.e. general election 2013, it is understandable that nervousness might set in as investors dislike uncertainties. Hence, at this level of the market, I would think the downside risk is higher than the upside potential, despite relatively attractive valuations as the market is driven by sentiment and not fundamentals.

2) Is it a buy or sell market?

Different investors have differing investment objectives and hence depending on your market time horizon it could be attractive for certain groups of investors while for others it may be an opportune time to lock-in gains or reduce market exposure until any uncertainty element of the market is removed. Of course there are investors who buy on weakness but the issue here is the timing of the market and no one can perfectly time his/her entry point neither can anyone identify where is the bottom of this “weakness” point.

3) What are the stocks/sectors that look compelling?

In times of uncertain periods for the market, the defensive stocks will tend to outperform. With that view, I believe the consumer sector and real estate investment trusts or REITs will continue to do well and provide good opportunities for investors to accumulate for yields.

Vincent Khoo
Head of research
UOBKayHian Research

1) What is your outlook on the market now?

It remains the same. The Malaysian equity market is expected to be characterised by higher volatility in the first half, trailing behind liquidity-driven key regional bourses as investor caution heightens with the general election (GE) widely expected to be held in March.

2) Is it a buy or sell market?

I foresee a small window for selective buying.

3) What are the stocks / sectors that look compelling?

Construction stocks, number forecast operators and selective oil and gas are compelling.

Bharat Joshi
Assistant investment manager
Aberdeen Asset Management Sdn Bhd

1) What is your outlook on the market now?

We're not terribly good at predicting market fluctuations, but I think that the Malaysian economy should continue to remain resilient given its buoyant domestic consumption.

2) Is it a buy or sell market?

The market has turned cautious given the impending general election around the corner. Investors are being prudent and are taking some gains off the table. However, our concerns about Malaysia are a bit different from most people.

We are not keen in overpaying for stocks and avoid getting caught up in the daily noise of markets.

3) What are the stocks / sectors that look compelling?

The cyclical stocks namely those in the banking and plantation sectors that were poor performers last year have started to look compelling again.

Related Stories:
Market selldown deemed overdone

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