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PETALING JAYA: After days of losses in the midst of foreign capital outflows over the past month, the local stock market could recover.
Some market commentators also say that Bursa Malaysia is expected to stabilize in the next two months. months, because the appetite for risk comes back from the clarity of the new policies in the country.
This indicates that the worst sales at the local stock exchange could be over and that a surprise could occur in the days or months ahead.
Danny Wong, chief executive officer of Areca Capital, said the new government's policies stimulate sentiment in the market, attracting foreign direct investment into the country over the next two years.
"The bad news has been announced, and the clarity of the policies will be there.The stock market likes clarity and does not like uncertainty," he said.
The KLCI FBM closed yesterday at 1,688.45 points and has recently fallen below the psychological level of 1700 for the first time since February 2017.
Wong said investors should remain cautious over the next six months over the next few months. policy and construction-related actions due to mega-project re-evaluation.
In the long run, it focuses on the consumer, technology, tourism and banking sectors, as the new Government will attract more tourists, exporters and industry players to the country.
"A favorable business environment with business-friendly policies and more governance and accountability. transparency is what investors like ", he said.
However, Wong said that external factors such as rising interest rates in the United States as well as the trade war between the United States and China would result in volatility. in emerging markets, including Bursa Malaysia.
"People will get used to it, there will be no more surprises for them.But if the trade war goes on, then our fundamentals will be affected.So it had to extend for more of two quarters, then you can see the impact and this will be reflected in the profits of the companies because the consumption and the flow of money will be less important, "he said.
Despite the external shocks, several research houses are slightly positive on Bursa Malaysia, noting that profits are expected to increase further for the remainder of the second half of this year thanks to valuations that will range more or less between 15 and 15.7. Research, the prospects for the local stock market are positive over the next 12 to 18 months and it is expected that the profits of the KLCI FBM will increase by 5.8% and 7.0% in 2018 and 2019 respectively
This is supported by product growth gross domestic product (GDP) of 5.5% and 5.3%, respectively.
It maintained its year-end targets of 1,900 and 2,040 points in 2018F and 2019F, respectively, for KLCI FBM, based on 18.5 times earnings before 2018 and 2019, respectively .
TA Research said yesterday in its report that the weighted adjusted earnings of FBM KLCI components will increase by 4.1% and 6.1% from consensus of 5.0% and 6.0%. % and a comparable regional average of 11.6% and 11.2% in 2018 and 2019 respectively.
"Our KBC target at the end of February 2018 of 1,750 points is based on the PER 2019 of 15.8 times, a slight premium of 4% compared to the long-term average of 15.2 times and a gap of +0.3 type compared to the average. We believe that the premium given in terms of PER is reasonable because of its huge peer valuation premiums in the past due to the active participation of government-related funds in the stock market, "said TA Research
]. qualities, abundant natural resources, sound financial system and improvement of the political dynamic, "she added.
TA stated that on the basis of the forecast valuation (P / B), the target translates into an attractive P / B Maybank Bhd Investment Bank (Maybank IB) said Malaysia's near-term growth prospects were fluid, as domestic policy. "We are reducing the 2018 real GDP growth forecast. at 5.1% versus 5.3%, as we adjust the growth forecasts of the supply and demand components of GDP to account for the year-to-date data. impact of the measures announced so far by the new government, "said Maybank IB.
The research firm also revised down its KLCI FBM target at the end of 2018 to 1,750 (versus 1,840), as it reduced the valuation to its long-term average of 15.6 times the PER term over 12 months.
"We expect that range trading for most of the second half of the year and the optimism of Budget 2019 (our baseline scenario) will drive KLCI FBM up over the last two years. month". Managing Director Peter Cheng also expects positive market prospects next year due to the willingness of small and medium-sized enterprises to expand and the gradual steps taken by the company. government to mitigate the debt dilemma.
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