Friday 29 Mar 2024
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KUALA LUMPUR (Oct 1): MIDF Amanah Investment Bank Bhd Research has maintained its 2018 FBM KLCI target at 1,800 points, and introduced its 2019 target of 1,900 points.

In a strategy note today, the research house said the concerns over no-deal Brexit, Iran sanction and trade war between US and China have negatively impacted market sentiment across most asset classes this quarter.

"Malaysia's gross domestic product (GDP) growth expands by 4.5% year-on-year (y-o-y) in 2Q18, below our forecast of 4.9% y-o-y and market expectations of 5.2% y-o-y.

"FBM KLCI climbed 7.0% in the 3Q 2018 (2Q18: -9.0%), in line with peers in the emerging markets and Asia. Meanwhile, the domestic equities market saw a cumulative 2018 year-to-date outflow of RM8.7 billion of net foreign fund," it said.

The research house said geopolitical events will continue to influence investors' sentiment in Malaysia and also regionally impact exports, exchange rate and capital market performance.

"Thankfully, this will be mitigated by stable inflation and GDP growth. Expectation of policy reforms will also put the country on a stronger footing to face the headwinds from the external front.

"Therefore, we look forward [to the] upcoming Mid-Term Review of the 11th Malaysia Plan and 2019 Budget announcements to gather more clarity on the policy changes moving forward.

"We are forecasting the economy to expand 5.2% this year and [grow] between 4.5%-5.0% in 2019. Inflation is also expected to moderate this year and next year to 1.3% and 1.2% respectively," it said.

MIDF Research said as it forecast continuous surplus in the county's current account, it maintained its USD/MYR targets of average at 4.00 for 2018 and 2019.

"While we reiterate our 2018 FBM KLCI target at 1,800 points, we are introducing our 2019 target of 1,900 points," it said

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