OSK Stock Picks for May 2011

The KLCI lagged the region in April as it suffered from the fallout ahead of the Sarawak state elections. With that behind us, OSK see the market recovering in May as they believe the 1Q2011 will at least meet downbeat expectations after the past 4 quarters of disappointments. With the potential for reasonable results, we believe the market will shift back to fundamentals and look back at Big Caps.

KLCI was a laggard
With the KLCI recording a total return of -0.25% in April, Malaysia's standing YTD slipped significantly to being the 4th worst performing market from being the 4th best. As mentioned earlier, the key drag on the Malaysian market was the Sarawak state elections. While the market had put in some gains ahead of the Invest Malaysia conference on 12 and 13 March, by these dates concerns that the incumbent Barisan Nasional would fare below expectations in the state elections led to significant profit taking in the Malaysian market. Towards month end, with the BN retaining its two thirds majority in Sarawak, there was a modest recovery given continued strength in global markets.

OSK: Total Returns year-to-date
For April, no sector strongly outperformed or underperformed with the biggest gainers being the Gaming and Consumer sectors driven by Genting and F&N, while the biggest losers were the sectors hardest hit by the Japanese calamities namely Autos and Technology with drops seen in UMW Holdings and JCY International.

OSK: FBM100 gainers and losers in April 2011
Strategy - BUY Big Caps, Trade property
After October 2010 which saw a jump in investors sentiment on property counters spurred by the 3 M&A proposals of UEM Land-Sunrise, IJM Land-MRCB and Sunway-Suncity, news flow on property counters has generally tapered down. We believe this is set to change soon with the likelihood of more announcements on Government land developments around the Klang Valley such as Sungai Buloh land, the Sungai Besi airport and others as well as annoucements relating to developments in Iskandar Malaysia. As such, we would advise investors consider trading in property counters with good Government ties such as SP Setia, UEM Land and Glomac.

OSK: Top Picks for May 2011
Inline with the view that Big Caps could do better in May with the focus back on earnings, we shift our Top Buy calls for May all on Big Caps. We pick our Top 2 banking buys CIMB and Maybank coupled with our Top Telco Buy Axiata. We include our Top Transport buy call AirAsia which just completed an analyst corporate visit in Bangkok and Jakarta in preparation for the upcoming listing of its Thai and Indonesia associates. And round it all off with UEM Land which is an excellent proxy to the upcoming potential news flow in the property sector and also as recognition to its likely inclusion into the FBM KLCI in June. Do note that aside from AirAsia, all the other 4 stocks have been laggards or market performers over the past 3 months.

Source: OSK Research report

Comments

Post a Comment

Popular posts from this blog

A Malaysian Guide to Home Buying Fees & Charges

Image
Like any other country, buying a house and taking a  home loan  / mortgage in Malaysia involve legal  fees & charges  - which many people fail to take into consideration especially when they’re buying a property for the very first time. So to all Malaysians buying your dream houses right now, allow iMoney to show you ALL the fees and charges involved when you buy a house or apply for a home loan.
Read more

How Can A Profit-Guaranteed Investment Be Risky?

Image
Investment professionals love complicating things. Trust me on that. I was once like that. You don’t believe me? The next time you meet people from the investment industry, try asking them to give you a definition of the word “risk”. Investopedia defines “risk” as “the chance that an investment’s actual return will be different than expected...risk is usually measured by the standard deviation of the historical/average return of a specific investment.”   Don’t get me wrong. This is actually a pretty good definition of "risk”... that is if you speak finance. But most people don’t, and if you are like most people, you probably struggled to understand even the first sentence (actual return vs expected return...huh?). Good luck attempting to measure risk! Then, what does RISK mean? Complicated definitions aside, many investment professionals define “risks” consistent with the above definition i.e. in terms of “ uncertainty ” (or “volatility...
Read more

Interviewing Catwalk Guru Benjamin Toong

Image
After interviewing Amber Chia, the Malaysia born international supermodel, this is the second episode. For those who missed the interview, please read " Interviewing International Supermodel Amber Chia " dated 11 April 2011. In conjunction with this, Finance Malaysia Blog continue to highlight some of those successful Malaysian. We strive to bring out the hidden success story of Malaysian, and we are proud to present to you Catwalk guru - Benjamin Toong. Some profile of Benjamin Toong: Founder of Runway Productions Crowned as the catwalk guru of Malaysia in year 2010 3 years experience in runway training, fashion stylist and runway choreographers Fashion stylist for local and international fashion magazines Judge and Professional Runway Trainer for Ford model Supermodel of the world Malaysia 2009 Official stylist of Jiayu Astro CH304 Co-founder of AmberChia Academy The Interview In Malaysia, many people perceived that modelling is of western culture. Can you tell us HOW and...
Read more