Market conditions in 1H17 to remain challenging, says CIMB IB Research

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KUALA LUMPUR (Dec 22): CIMB IB Research said the domestic and external headwinds proved more challenging than predicted, pushing the FBM KLCI lower in 2016 for the third consecutive year of declines.

In a strategy report released yesterday, the research predicts market conditions in 1H17 to remain challenging but some of the dark clouds hanging over the market will clear leading to a better 2H17.

“We identify seven themes for 2017: 1) beneficiaries of US dollar strength; (2) pump priming; (3) dividend yield play; (4) tourism play; (5) PNB transformation; (6) small-Mid cap fund and research scheme; and (7) general election (GE14) play.

“We maintain our 1,820 KLCI index target for end-2017, based on 16x forward P/E (in line with its 3-year mean).

“Our preferred sectors for 1H17 are construction, utilities and small cap. Top three picks for 2017 are Sime Darby Bhd, Tenaga Nasional Bhd and IJM Corporation Bhd,” it said.