Kuala Lumpur, 30 January 2016 - Maybank Investment Bank (Maybank IB) today shared its
market insights and investment strategies for the Malaysian and US stock markets with its retail clients at its first half 2016 Market Outlook session, held at the Securities Commission in Kuala Lumpur.
Maybank IB opines that the current volatility in the stock market will persist, particularly in
1Q2016, and will be largely externally induced with headwinds revolving around US’ monetary policy normalisation, China’s structural slowdown, and the impact to emerging markets. The investment bank also opines that the bottoming process for the Asian markets has begun, and advocates a defensive core equity portfolio, focusing on telco, utility, consumer staples, selected REITs, healthcare sectors - with thematic and value stocks providing the outperformance.
Key themes that will drive the Malaysian stock market in 1H2016 are 1) construction which will be boosted by the execution of 11MP projects and Sarawak elections; 2) continued volatility in the Ringgit; 3) a strong El Nino in 1H16 and a potential La Nina at the end-2016; and 4) Shariah investing, ahead of EPF’s new Shariah fund expected to start in early-2017. For longer term, investors should strengthen their holdings of stocks which will benefit from the TPPA, and China's One Belt, One Road.
In line with the key themes, Maybank IB has overweight the construction, glove, and
semiconductor sectors, and remains neutral on plantation stocks. Its top stock picks for 2016 are Gamuda, Sunway Construction, Cahya Mata Sarawak, Harbour Link, Top Glove, Inari, BIMB, Tenaga, Genting, Hong Leong Financial Group, Malakoff, WCT, and Media Chinese (MCIL).
Maybank IB’s yearend target for FBMKLCI is 1800, and full year GDP growth forecast is 4.5%, due to slower domestic demand as consumer spending and private investment moderate. The investment bank expects the market to improve once corporate earnings show a firmer uptrend,and commodity prices recover on a sustained manner.
The 1H2016 Market Outlook roadshow kicked off simultaneously in Johor and Penang on 9
January 2016 and went on to various locations across country namely Ipoh, Kota Kinabalu,
Kuching, Sibu, Kuantan, and Kota Bahru. Held twice a year, the Maybank IB Market Outlook
sessions is an annual event where the regional investment bank shares their research ideas and investment strategies with their valued clients.