By the edge
THE Kuala Lumpur Composite Index (KLCI) may hit the 1,500 points level in first quarter of 2008, supported mainly by buying of heavyweights, particularly plantation stocks, CitiGroup Global Markets Malaysia Sdn Bhd director Choong Wai Kee said today.
“Looking at crude palm oil prices and the current positive sentiment towards the market, particularly election speculation, we cannot rule out that the KLCI may hit 1,500 this quarter,” he told a media briefing on Malaysia’ economic and equity markets outlook for 2008.
The benchmark Composite Index reached 1,487.39 points at 9.34 am today, a fresh all time high to date, beating yesterday’s record high of 1,473.74.
Choong, who is the company’s head of Malaysia Research, said apart from plantation, telecommunication was also a sector driving the gains of Bursa Malaysia shares at present.
Since the listing of Sime Darby in November 2007, the plantation and telecommunication counters had accounted for more than 25 per cent of the CI, he said.
Besides the plantation and telecommunication sectors, the banking sector is also favourable as it will be a beneficiary of the government’s efforts to drive consumer spending, Choong said.
Maybank and Public Bank are among the banking stocks expected to be in the forefront because the banking groups are likely to give good visible dividend yields, he said.
However, the potential of rising inflation might impact private consumption, raising concerns among public, especially on the back of slowdown of the US economy and higher cost of living, he added.
Despite assumption that the US economy is going for soft landing and not recession, which will benefit the Asian economy including Malaysia, investors have continued to adopt a defensive approach towards the local bourse, according to Choong.
“We want investors to continue being cautious and be very defensive. Go for stocks with very high earnings visibility and strong dividend yields and cashflow,” he said.
He also said that more than 80 percent of the stocks are considered as
“very defensive”.
Defensive stocks referred to those that remain stable under difficult economic conditions and provide a greater degree of certainty to investors.
Choong said Citigroup has projected the KLCI to be around the 1,600-point level by year-end.
THE Kuala Lumpur Composite Index (KLCI) may hit the 1,500 points level in first quarter of 2008, supported mainly by buying of heavyweights, particularly plantation stocks, CitiGroup Global Markets Malaysia Sdn Bhd director Choong Wai Kee said today.
“Looking at crude palm oil prices and the current positive sentiment towards the market, particularly election speculation, we cannot rule out that the KLCI may hit 1,500 this quarter,” he told a media briefing on Malaysia’ economic and equity markets outlook for 2008.
The benchmark Composite Index reached 1,487.39 points at 9.34 am today, a fresh all time high to date, beating yesterday’s record high of 1,473.74.
Choong, who is the company’s head of Malaysia Research, said apart from plantation, telecommunication was also a sector driving the gains of Bursa Malaysia shares at present.
Since the listing of Sime Darby in November 2007, the plantation and telecommunication counters had accounted for more than 25 per cent of the CI, he said.
Besides the plantation and telecommunication sectors, the banking sector is also favourable as it will be a beneficiary of the government’s efforts to drive consumer spending, Choong said.
Maybank and Public Bank are among the banking stocks expected to be in the forefront because the banking groups are likely to give good visible dividend yields, he said.
However, the potential of rising inflation might impact private consumption, raising concerns among public, especially on the back of slowdown of the US economy and higher cost of living, he added.
Despite assumption that the US economy is going for soft landing and not recession, which will benefit the Asian economy including Malaysia, investors have continued to adopt a defensive approach towards the local bourse, according to Choong.
“We want investors to continue being cautious and be very defensive. Go for stocks with very high earnings visibility and strong dividend yields and cashflow,” he said.
He also said that more than 80 percent of the stocks are considered as
“very defensive”.
Defensive stocks referred to those that remain stable under difficult economic conditions and provide a greater degree of certainty to investors.
Choong said Citigroup has projected the KLCI to be around the 1,600-point level by year-end.
