What does 2012 hold for equity markets? After a volatile 2011 that saw financial markets tumble and investor sentiment rattled by the debt crisis in the US and eurozone, geopolitical upheavals and natural disasters, how will the local stock market fare in the New Year? BIMB Securities head of research Kenny Yee shares insights with The Edge Financial Daily’s Surin Murugiah.
What is your outlook for the Malaysian stock market and economy for 2012?
We are cautiously optimistic for 2012. Though the Asian region remains solid, like others our concerns stem on the progress in the eurozone and how it is going to pan out following numerous fund injections into the region.
What is your target for the FBM KLCI for 2012?
We have 1,600 as our preliminary target for 2012 at par to our market’s average PE of around 15.5 times.
How do you think the euro debt crisis will play out, and what impact will it have on Malaysia?
Judging from the more proactive approach by the policymakers, we believe a full-blown crisis can be averted. Nonetheless, our concerns stem from the intensity of the crisis and the aftermath on the global financial entities. With regards to the impact on Malaysia, though our economy is more domestically driven, nonetheless we are not insulated on the export front.
The years 2010 and 2011 were seen as years of M&A (merger and acquisition) activities, and the government’s economic transformation programme. What do you see as the domestic theme for 2012?
We believe the M&As as initiated by the GLICs (government-linked investment companies) to continue as part of the process to rationalise the shareholdings in GLCs (government-linked companies) and would have positive implications on the stock market.
As for the themes for 2012, our focus remains on the construction and oil and gas sectors. The plantation sector could offer an interesting proposition as well.
If the general elections are held in 2012, as widely expected, how do you expect the market to react, pre and post elections?
We have done some analysis on the past five GEs and there are no correlation between the general election on the stock market.
What sectors do you like for 2012?
Consumer, construction, oil & gas and possibly plantation.
What are your top stock picks and why?
Construction: Benalec Holdings Bhd (Rather insulated from external vagaries, most projects are domestic centric and strong order book.)
Oil & gas: Uzma Bhd (An up- and-coming oil & gas player. With expertise in the upstream segment).
Dialog Group Bhd (Strong orderbook backed by higher recurring income.)
Plantation: TH Plantations Bhd (improving prospects from recent land acquisitions)
Your wish list for the year?
Eurozone soft landing and flow of foreign funds back to Asia.
What is your outlook for the Malaysian stock market and economy for 2012?
We are cautiously optimistic for 2012. Though the Asian region remains solid, like others our concerns stem on the progress in the eurozone and how it is going to pan out following numerous fund injections into the region.
What is your target for the FBM KLCI for 2012?
We have 1,600 as our preliminary target for 2012 at par to our market’s average PE of around 15.5 times.
Yee believes a full-blown crisis can be averted with regards to the euro-debt crisis.
How do you think the euro debt crisis will play out, and what impact will it have on Malaysia?
Judging from the more proactive approach by the policymakers, we believe a full-blown crisis can be averted. Nonetheless, our concerns stem from the intensity of the crisis and the aftermath on the global financial entities. With regards to the impact on Malaysia, though our economy is more domestically driven, nonetheless we are not insulated on the export front.
The years 2010 and 2011 were seen as years of M&A (merger and acquisition) activities, and the government’s economic transformation programme. What do you see as the domestic theme for 2012?
We believe the M&As as initiated by the GLICs (government-linked investment companies) to continue as part of the process to rationalise the shareholdings in GLCs (government-linked companies) and would have positive implications on the stock market.
As for the themes for 2012, our focus remains on the construction and oil and gas sectors. The plantation sector could offer an interesting proposition as well.
If the general elections are held in 2012, as widely expected, how do you expect the market to react, pre and post elections?
We have done some analysis on the past five GEs and there are no correlation between the general election on the stock market.
What sectors do you like for 2012?
Consumer, construction, oil & gas and possibly plantation.
What are your top stock picks and why?
Construction: Benalec Holdings Bhd (Rather insulated from external vagaries, most projects are domestic centric and strong order book.)
Oil & gas: Uzma Bhd (An up- and-coming oil & gas player. With expertise in the upstream segment).
Dialog Group Bhd (Strong orderbook backed by higher recurring income.)
Plantation: TH Plantations Bhd (improving prospects from recent land acquisitions)
Your wish list for the year?
Eurozone soft landing and flow of foreign funds back to Asia.
