KUALA LUMPUR (July 23): Kenanga Investors Bhd, a wholly-owned subsidiary of Kenanga Investment Bank Bhd, is cautiously optimistic the local stock market still has room to grow, maintaining its FBM KLCI year-end 2018 target of 1,800 points amid uncertainties in the global and domestic markets.
Its chief executive officer cum executive director Ismitz Matthew De Alwis sees the 1,780-point level as the immediate resistance for the benchmark index by October or November, before breaching the 1,800-point level by year end.
"We are more concerned about the global spillover effects from the geopolitical and geo-regional issues such as the trade war (between the US and China), which not only will affect Malaysia but the global economy,” he told reporters after delivering his opening address at the Annual Signature Financial Planning Symposium 2018 today. Themed "Raising the Bar for Financial Professionals", the event is organised by the Financial Planning Association of Malaysia.
De Alwis said other factors that could influence the KLCI include the upcoming Budget 2019, the buying opportunities seen as fund managers return from their summer holidays and bargain hunting ahead of Brexit.
“We have Brexit and the US-China trade war concern, which I think will continue and somehow will have some effect on the global market (including Malaysia)," he added.
On his stock picks, De Alwis likes small and mid-cap stocks.
“I believe there are still many undervalued gems in the small and mid-cap stocks. For example, some of our home-grown technology counters are doing well and stable while some of the manufacturing stocks have come off their high and their price-to-earnings ratio is looking pretty decent at the moment,” he said.
“So, if you are (in short-term) trading, I would say look at the small and mid-cap counters. But if you are looking to invest in a stock for the long-term, you obviously should go for blue chip counters particularly in banking,” he added.
On the proposed Malaysia-Singapore stock market trading link, De Alwis said it is a good idea if Malaysia can link with other Asean community instead of Singapore only.
He added that it is important to ensure that the local stock market is vibrant before going abroad.
“Malaysian companies also go across the causeway to list their company and raise capital. To me, people got the right to list their companies anywhere.
“However, if we want to deepen our capital market and create vibrancy, Malaysia companies should list here first to support the economy before they do a sublisting in other countries,” said De Alwis.