Stock market could be volatile in the months ahead, says CIMB Research

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KUALA LUMPUR (Sept 5): CIMB IB Research said August was a good month for the KLCI as the market ended on a positive note despite disappointing 2Q GDP growth and a soft corporate earnings season but said the stock market could be volatile in the months ahead.

In an August monthly wrap-up released Sept 4, the research house said the KLCI gained 2% month-on-month (m-o-m) and outperformed the MSCI Asia Pacific ex-Japan Index (MXASJ), which fell 1.2% m-o-m for the same period.

CIMB Research said the market’s historical performance tends to be negative in September.

“Key events to watch for in September are the impact of Sales & Service Tax on businesses, the minimum wage rate, which will be finalised soon, and the revised National Housing policy.

“We maintain our view that the stock market could be volatile in the months ahead due to short-term domestic policy uncertainty and external risk factors,” it said.

CIMB Research maintained its end-2018 KLCI target of 1,684 points, which is based on 15.7x 12M forward P/E, and its top three picks were Dialog Group Bhd, Genting Bhd and Westports Holdings Bhd.