KUALA LUMPUR (Dec 18): Conditions are ripe for steadier market performances going forward, short-term volatilities aside, and especially with more domestic-based sentiment-related issues being resolved resolutely, said Public IB Research.
In a strategy note today, the research house said it sees any market weaknesses as accumulation opportunities.
Public IB Research said its year-end target was 1,800 points on a bottom-up approach, which implies a 15.3x forward earnings multiple.
"We are 'overweight' on properties, plantation and power in 2016.
"The property sector is from a valuation standpoint while we also see some recovery in demand 2H2016 onwards. The plantation sector is on basis of stronger earnings recovery next year on the back of higher crude palm oil price expectations while we like the power sector for its defensive earnings qualities," it said.
The research house said it would also suggest selective exposure into the oil and gas and banking sectors, as it sees valuations of some as increasingly attractive at current levels.
"Our top picks for 2016 in the large-cap space are CIMB Group Holdings Bhd and Genting Plantations Bhd.
"For the smaller-caps, we like SKP Resources Bhd, TSH Resources Bhd, Ta Ann Holdings Bhd, Cypark Resources Bhd, Prestariang Bhd, TDM Bhd and Uzma Bhd," it said.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)