Thursday 28 Mar 2024
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KUALA LUMPUR (Sept 30): Hong Leong IB Research has maintained its 2019 GDP growth forecast at 4.5% and expect a 25 basis points OPR cut within the next 6 months amid external uncertainties.

In a strategy note today, the research house said despite KLCI falling 5.3% in 3Q, it was hopeful for positive 4Q returns given a mildly expansionary Budget 2020 (unlike its austerity sounding predecessor) and year e nd windowdressing (90% probability of positive Dec returns).

“Risk of WGBI exclusion has also abated, at least for the next 6 months.

“ Maintain KLCI target at 1,670 (16.6x PE; -1SD).

“Bottom nibble at current levels as P/B at -1SD has in the past, been quite a gauge of bottomed valuations,” it said.

The research house said while it may still be too premature to speculate about year-end window dressing, the KLCI ended in positive territory for Dec in 9 out of the past 10 years (while 2014 was the exception) with returns ranging between 1.1% and 4.8%.

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