KUALA LUMPUR (April 4): Hong Leong IB Research expects foreigners to slow down their pace of buying in 2Q after a frenzy buying in March (net buy of RM6.1 billion).
In a strategy note today, the research house said the strength of oil price recovery (oil producers meeting on 17 Apr) and FOMC rate hike path are key determinants of the market.
It said that outgoing Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz’z successor (by end-April) will have implication on monetary policy while it sees Malaysia GDP growth bottoming at 4.0% in 1Q16 (13 May).
The research house said the upcoming semi-annual review of FBM KLCI (June 2) could potentially see exclusion of KLCCSS, SapuraKencana Petroleum Bhd & UMW Holdings Bhd and inclusion of Gamuda Bhd, IJM Corporation Bhd and Hap Seng Consolidated Bhd.
“Maintain our end-2016 FBM KLCI target at 1,760.
“Our larger-cap and construction-centric picks have served us well in 1Q. Our top picks for 2Q remain unchanged. Big cap: Digi.Com Bhd, Gamuda, IJM Corp, Malayan Banking Bhd, Tenaga Nasional Bhd & Westports Holdings Bhd. Small/mid cap: AirAsia Bhd, UEM Edgenta Bhd, Mitrajaya Holdings Bhd, Sunway Construction Group Bhd,” it said.