Wednesday, August 28, 2013

Malaysia Hide And Seek (UOBKH)

Strategy – Malaysia
Hide And Seek

Persistent market sell-off has created some modest buying opportunities, although we still expect the market to consolidate through 3Q13. Nevertheless, expect improving macro indicators to emerge, particularly in 4Q13, which should allow the ringgit to firm up. While a defensive strategy is appropriate – ie hiding in low beta and high dividend yield stock – we also advocate seeking opportunities for sold down large caps. However, avoid small caps for now.

What’s New
• Mini capitulation in the making? The market was again sold down yesterday, as many local investors joined foreign investors in the selling spree. The FBMKLCI has fallen 93.85 pts (-5.2%) in the last 10 trading days. The benchmark index is down 6.0% from this year’s peak, and in US dollar terms, it is down 7.6% ytd. Concerns of a potential twin deficit and the US Quantitative Easing tapering have undermined the ringgit and continued to dog the equity market.

• Downside to YE FBMKLCI target… We will review our YE FBMKLCI after this reporting season, as we foresee a period of subdued trend in foreign ownership. Nevertheless, ample domestic trading liquidity should ensure a neutral (mean PE) valuation, which suggests a YE FBMKLCI target of around 1,770.

• … but no crisis in the making... Our preliminary stress tests suggest that Malaysia’s economy and stock market should be relatively resilient to concerns of twin deficits and outflow, based on the country’s ample foreign reserves, and our expectations for improved exports in 2H13, a current account surplus and a more fiscally-prudent 2014 Budget. Compared with the Asian Financial Crisis (AFC) period, the country’s international reserves are ample relative to its foreign debt obligations. While household debt-to-GDP is at a record high, it is buffered by adequate household financial assets and ample liquidity at the central bank. These trends should allay the present concerns and allow the ringgit to regain firmer footing vs the greenback.

• … although corporate growth outlook and valuation are dampened. However, the current conditions have weakened the ringgit, which leads to higher imported inflation, and exerts pressure for fiscal (a tighter 2014 Budget) and monetary (rise in domestic interest rate) discipline. The direct implications are slower growth in domestic consumption, postponement or deferral of mega project implementation, and downgrade in corporate earnings growth expectations.

• ‘Hide and Seek’ Strategy. While current market conditions justify a more defensive strategy, ie hiding in some weak-ringgit beneficiaries and high dividend domestic-oriented companies, we still seek trading opportunities ahead of an expected market recovery in 4Q13. Focus should be on large caps, but generally avoid small-mid caps. We like the defensive Telco and Gaming sectors, and the O&G drilling & production subsector, while the Glove and laggard Plantation sectors
also feature resilient qualities.

• Top BUYs: DiGi, Gamuda (replacing IJM Corp), Magnum (reinstated) and Maybank. Other notable Buy calls are IJM Corp and IOI Corp. While rated HOLD, heavily sold down Sapura Kencana and Top Glove promise some upside. SELL calls include the fundamentally challenged MISC, MMHE, and pricey Air Asia, Hartalega and UMW Holdings.

• ‘Stress test’: Assessing the country’s fiscal health. A quick look at the key financial indicators show that Malaysia should be far more resilient to capital outflows this time around vs the AFC, as tabularized below. We expect the country’s current account (CA) outlook to improve in 2H13 due to a) improved export value following the ringgit’s weakness, b) revelation of a tighter 2014 Budget, and c) improved crude oil production. Moreover, the country’s private investment has recently crossed 15% of GDP (it was hovering at 11.5-13.5% of GDP in recent years), signaling a potential improvement in production output in subsequent quarters that could possibly improve the country’s CA.


Source/Extract/Excerpts/来源/转贴/摘录: UOBKH-Research,
Publish date: 28/08/13

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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