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PETALING JAYA: Hong Leong Investment Bank (HLIB) Research said its strategy to seek high dividend yielders remains unchanged and the recent market sell-down further solidifies the need to stay defensive.
The FBM KLCI has skidded to its lowest level since late-2016 to close at 1,622.07 points last Friday following news of Malaysia’s possible removal from the World Government Bond Index (WGBI).
Besides high yielders, the research house said, investors can look out for selective exporters (weakening ringgit), while those looking for rebound plays can consider “beta oversold” stocks.
“For the yield angle, we like selective REITs (IGB REIT and MQ REIT), Maybank for large cap liquid yield, BAuto (strong earnings growth), Taliworks (resolution of Splash water deal) and LiiHen (export play).
“Also, our earlier view for a sequentially weaker ringgit in Q2 vs Q1 remains unchanged (-1.4% thus far into Q2). In this regard, we like Top Glove and recently also upgraded our rating on Hartalega to buy.”
HLIB Research said the only slight change to its second quarter 2019 (Q2’19) strategy is that it is turning warmer on construction in view of pump-priming resumption.
“While the sector remains a neutral (albeit with a positive bias), we think there could be plays on laggards such as Kim Lun and Hock Seng Lee.”
In light of the market weakness, the research house screened its coverage to identify which socks have been oversold year-to-date versus the FBM KLCI on a beta adjusted basis for possible bottom nibbling ideas.
“Stocks that have been oversold by more than 5% on a beta adjusted basis that we have buy ratings include Hartalega (oversold by -18.5%), Pharmaniaga (-17.8%), Top Glove (-17.6%), IOIPG (-10.2%), AirAsia (-8.8%) and Homeritz (-5.6%).”
HLIB Research is maintaining the FBM KLCI earnings growth forecast of 2.1% for 2019 and 4.5% for 2020, while the FBM KLCI target is 1,710 points.
Meanwhile, the research house said the emphasis by the government on pump priming the country’s economy is welcome news.
“While economic expectations have been lowered, the silver lining is that pump priming is being resuscitated.”
After renegotiations, major infrastructure projects, MRT valued at RM30 billion, LRT3 at RM16 billion are expected to resume construction by the middle of this year and, most recently, the East Coast Rail Linkhas been resuscitated at a lower price of RM44 billion and a higher local content of 40%, it noted.
PUTRAJAYA: IOI Properties Group Bhd, which is launching The Clio 2 Residences next month, is confident that the market will recover soon.
Chief sales and marketing officer Jason Tie said the group has seen sales picking up following its participation in the Malaysia Property Expo (Mapex) held last month, in conjunction with the Home Ownership Campaign 2019.
Tie said the group is fully supportive of the government’s initiative and is also running its own IOI F.R.E.E. Ownership campaign.
“The market is responding. It is slow, but encouraging. We are confident that the market will recover. We are positive on the market and confident with our product range,“ he told reporters at the media preview of The Clio 2 Residences today.
He said the group’s inventory level is at a manageable level and it has planned at least three launches this year including The Clio 2 Residences.
KUALA LUMPUR: Bursa Malaysia ended today’s volatile trading on a positive note, supported by last minutes buying interest.
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.54 points to 1,644.35 from Friday’s close of 1,641.81, led mainly by Maxis, Axiata, PPB Group, IOI Corp, Dialog Group and Maybank.
The index, which opened 1.86 points higher at 1,643.67, fluctuated between a high of 1,645.72 and low 1,640.38, throughout the day’s session.
Market breadth was positive with gainers outnumbering decliners 499 to 386, while 383 counters remained unchanged, 578 were untraded and 21 others were suspended.
Volume was higher at 3.87 billion units worth RM2.40 billion from 3.18 billion units worth RM2.13 billion recorded last Friday.
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said oil and gas stocks appeared to be dominating the actively traded stocks in Bursa Malaysia.
This is very much in line with higher Brent crude prices which has surpassed the US$70 per barrel.
“Geopolitical development in Libya, Venezuela and Iran has been supportive to crude oil. Beyond oil, the latest Non-Farm Payroll showed that the US economy is still healthy with 196,000 new jobs created in March, higher than 177,000 estimates among the consensus.
“Apart from that, the US-China trade discussion has been constructive. So talks of a potential recession in the US following the recent yield curve inversion recently has been gradually dies off,” he told Bernama.
However, he sees the UK Brexit remained a wildcard as it near to the supposedly new dateline on April 12, 2019.
In addition, the market was also watching closely the US’s Consumer Price Index (CPI) to be released on Wednesday.
“Consensus is looking for a 1.8% rise in March from 1.5% increases in February.
“So headline inflation could be slowly increasing,” he added.
Hence, Mohd Afzanizam said the current resistance level of 1,653 seems to be quite far-fetched in view of the market uncertainties.
Among the heavyweights, Maybank rose two sen to RM9.28, PetChem was one sen higher at RM9.11 but Public Bank declined 26 sen to RM22.62 and Tenaga, IHH and CIMB each dropped two sen to RM12.60, RM5.58 and RM5.09, respectively.
Maxis inched up 21 sen to RM5.70, PPB Group gained 28 sen to RM18.78 and Axiata and IOI Corp each rose five sen to RM4.23 and RM4.53, respectively.
Among actives, Sapura Energy dropped half a sen to 35 sen, Priceworth International added half a sen to 7.5 sen and Dayang Enterprise went up 17 sen to RM1.54.
The FBM Emas Index increased 44.62 points to 11,645.48, the FBM Emas Shariah Index rose 89.31 points to 11,876.77 and the FBMT 100 was higher by 40.40 points to 11,478.03.
The FBM 70 was 142.69 firmer at 14,567.23 but the FBM Ace Index slid 42.51 points to 4,773.10.
Sector-wise, the Industrial Products and Services Index added 0.55 of a point to 170.09, the Plantation Index jumped 49.68 points to 7,286.23 while the Financial Services Index lost 41.70 points to 16,847.02.
Main Market volume grew to 2.87 billion shares worth RM2.17 billion from 2.15 billion shares worth RM1.56 billion recorded last Friday.
Warrants turnover jumped to 588.3 million units valued at RM147.8 million compared to the 195.19 million units valued at RM24.56 million, previously.
Volume on the ACE Market rose to 406.8 million shares worth RM87.2 million versus the 303.62 million shares worth RM49.18 million.
Consumer products and services accounted for 316.3 million shares traded on the Main Market, industrial products and services (454.8 million), construction (307.2 million), technology (144.9 million), SPAC (nil), financial services (32.5 million), property (292.3 million), plantation (39.4 million), REITs (12.6 million), closed/fund (11,000), energy (1.13 billion), healthcare (19.4 million), telecommunications and media (23.78 million), transportation and logistics (41.3 million), and utilities (58.6 million). — Bernama
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PETALING JAYA: Tan Sri Robert Kuok remains the richest man in Malaysia with a net worth of US$12.8 billion (RM52.2 billion) despite a fall in his wealth by US$2 billion, according to Forbes Asia.
Overall, 30 tycoons on the 2019 Forbes Malaysia Rich List saw their wealth shrink while only 11 enjoyed gains.
Tan Sri Quek Leng Chan of Hong Leong (Malaysia) added US$2.2 billion to his wealth and remains at the second spot with a net worth of US$9.4 billion.
Tan Sri Teh Hong Piow of Public Bank Bhd gained US$700 million, rising one spot to No. 3 this year with a net worth of US$6.7 billion.
Ananda Krishnan, who comes in at at No. 4 with US$6.2 billion, saw his net worth down by US$900 million after shares in Bumi Armada Bhd fell 78% in the year to March 1.
Tan Sri Lee Shin Cheng of IOI Corp Bhd and IOI Properties Bhd takes the fifth spot on the list, as his wealth fell US$200 million to US$5.4 billion.
Wong Thean Soon (No. 48) suffered the biggest loss on the list in percentage terms as his net worth plunged 63% to US$280 million as shares of his company MyEG Services Bhd, which provides online access to government services, were hit after last year’s general election on the perception that it was linked too closely to the outgoing government.
Other tycoons who saw their wealth fall include Tan Sri Syed Mokhtar AlBukhary who maintains his ranking at No. 12 despite a US$200 million decline in wealth to US$1.7 billion. Shares of his infrastructure-linked firms fell amid an ongoing review of Malaysia’s mega infrastructure projects.
Another tycoon who suffered a setback was Genting Bhd chairman Tan Sri Lim Kok Thay (No. 7, US$4.4 billion) as his fortune fell US$300 million.
Worth noting is that Serba Dinamik Holdings Bhd director Abdul Kadier Sahib enters the list for the first time at No. 49 with a net worth of US$275 million.
The minimum net worth to make the list this year is US$250 million, down from US$300 million last year.
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