MIDF Research places end-2015 KLCI target of 1,970 points under review

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KUALA LUMPUR (Dec 19): MIDF Research has placed its end-2015 target of 1,970 points for the FBM KLCI under review and said the FBM KLCI broke decisively beneath the 1,800 points level at the start of December.

In a strategy note Friday, the research house said the breakdown was in reaction to the drop in international benchmark Brent crude oil prices below the critical US$70 per barrel which was triggered by an OPEC decision in a late November meeting to keep its production level unchanged.

MIDF Research said the top 3 outperformers among the market heavyweights thus far this month were (i) Petronas Dagangan Bhd, (ii) YTL Corporation Bhd, and (iii) KLCC Property Holdings Bhd.

“On the other hand, the top 3 underperformers were (i) Felda Global Ventures Holdings Bhd, (ii) SapuraKencana Petroleum Bhd, and (iii) Astro Malaysia Holdings Bhd,” it said.

MIDF Research said as observed in prior months since July this year, the price of crude oil generally weakened in the first half while buying support mostly appeared in the second half of each month

“Basing on the crude oil trading pattern, there is a fair chance that crude oil price may undergo a period of consolidation going forward until the year is out.

“Therefore, we can expect the selling pressure on FBM KLCI to equally subside. Thus we may see an end, or at least a respite, to the equity market drubbing of the past few weeks,” it said.