KUALA LUMPUR (Feb 25): Kenanga Research has maintained its end-2023 FBM KLCI target of 1,640 pts based on 15.5x CY23F earnings projection (+12.2%).
In a market strategy note on Saturday (Feb 25), the research house continued to advocate investors to seek refuge in sectors with strong earnings resilience amid rising external headwinds.
“These are banks, telcos, auto makers/distributors, retailers and contractors.
“These sectors have also emerged (as) clear winners of the new(ly tabled revised) Budget 2023, which is highly supportive of domestic consumption,” it said.
Kenanga said the new Budget 2023 strikes as prudent with proposed spending being mostly directed at absolute and immediate necessities, and high-impact initiatives that will help secure the nation’s future. It focuses on the well-being of the rakyat and businesses (especially, the small and medium enterprises, or SMEs).
“It also cares deeply for the environment and paves way towards carbon neutrality,” it said.
The research house said the focus on SMEs is the right move as being the backbone of the economy, helping SMEs to digitalise and automate is a crucial step toward a stronger digital and green economy.
It said the various allocations will give new impetus to digitalisation and automation efforts by SMEs, thus improving their business sustainability.
“The enhanced and additional allocations will also further drive initiatives to conserve wildlife and the environment, while keeping the momentum on sustainable and low-carbon practices.
“Nevertheless, much remains to be done if Malaysia is to achieve its net-zero aspiration by 2050.
“More incentives are needed to accelerate decarbonisation, for example reducing GHG(greenhouse gas) emissions, conserving and protecting the natural environment, and the development of carbon offset projects,” it said.