KLCI lone market in SEA with positive returns in October, says BIMB Securities

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KUALA LUMPUR (Nov 6): The relentless sell-down on Wall Street early October spooked investors worldwide as global indices mostly touched their year low before the emergence of bargain hunting activities, according to BIMB Securities.

Research head Kenny Yee in a strategy note Thursday said that domestically, at the height of the market retracement there was a net foreign outflow of about RM500 million which he said was not massive, but more glaringly sentiments were dented with investors sidelined.

“As such the FBM KLCI declined to a low of 1,766 before buying support predominantly from local institutions propped the index to current level, a rebound of around 80 points,” sayd Yee.

He said despite the sell-down in early October, performance of the local bourse ended the month on a firm note.

Yee said bargain hunting coupled with window dressing activities helped the FBMKLCI to post a 0.48% gain for October amid some net outflows of foreign funds amounting RM493 million.

He said that regionally, sentiments were largely affected by the sharp decline on Wall Street plus concerns over the economic health in Eurozone.

“All in all, the FBM KLCI stood tall as the lone market with positive returns within the Southeast Asia region.

“Meanwhile, as we prepare for the 3Q2014 results season we do not expect any more drastic earnings downgrade therefore maintaining our 2014 earnings growth forecast at 3.9% with our 2015 estimate at 10.0%.

“Based on our and consensus latest figures, our year-end “fair” valuation for the FBM KLCI remains at 1,830 with our liquidity induced target at 1,900,” he said.