Analysts View on the Market for 2013

from THE SUN

Market experts' advice for 2013


Vincent Khoo (Head of research, UOB Kay Hian (M) Holdings Sdn Bhd)

- Bullish on US equities, particularly on US banks, which is reflective of a stable economy

- Indicative 2013 year-end FBM KLCI targets is 1,750 points, based on around 13.8 times prospective PE

- Expect the FBM KLCI to underperform regional bourses in Q1 2013

- Top large cap picks include a blend of defensive companies like capital management play DiGi.Com Bhd, ETP beneficiary Gamuda Bhd and Malaysia Airports Holdings Bhd

- Among small caps : oil & gas beneficiary Perisai Petroleum Teknologi Bhd

- Advocate holdings on to a defensive stance in Q1 2013 ahead of GE13, with high-yielding defensive companies and laggards with visible catalysts

- Position for recovery in Q2 2013, with post-election beneficiaries and ETP plays


Chris Eng (Head of research, Etiqa Insurance & Takaful's investment management division)

- Believe there are some signs of recovery in China with its recovering house prices and expanding manufacturing sector

- As for the US, barring the economy falling over the fiscal cliff, the recovery of house prices and consumer confidence after 5 years of doldrums is a positive signs

- Most economists are seeing reasonable growth of at least 4.5% in Malaysia

Kenny Yee ( Head of research, BIMB Securities Sdn Bhd)

- Believe the US, Eurozone and China are on their road to recovery

- Target 1,730 for 2013 based on a market PE of 15 times with calender 2013 earnings growth if 6%

- Based on analysis, the plantation sector after a disappointing 2012 is envisaged to register double-digit growth for 2013 as average CPO price is expected to trend around RM3,050 per tonne from around RM2,950 per tonne in 2012

- Sector such as finance, rubber gloves & telecommunuication are also expected to register solid double-digit growth

- Top buys are Nestle (M) Bhd, Uzma Bhd, Maxis Bhd, QL Resources Bhd, and Top Glove Corp Bhd

- Expect market volatility to heighten in H1 2013


Wong Ming Tek ( Head of research, HwangDBS Vickers Research Sdn Bhd)

- 2013 year end target is 1,690 points based on 14 times forward earnings

- Top picks:

RHBCap : cheapest large cap bank in our universe

Pos Malaysia : robust growth prospects from courier business, net cash 31% of market cap

MISC Bhd : poised for stronger earnings in quarters ahead

Dayang Enterprise Holdings Bhd : strong contender for Petroliam Nasional Bhd's RM10 billion awards

Multi-Purpose : potential re-rating catalyst in listing of non-gaming business unit MPHB Capital

- Stocks with the most downside: Petronas Dagangan, Bumi Armada Bhd, Kuala Lumpur Kepong Bhd


Bernard Ching (Head of research, Alliance Rsearch Sdn Bhd)

- Eurozone will continue to be weak without being severely affected by an disorderly breakup of a peripheral economy due to the sovereign debt crisis

- Believe that with the US presidential election well past, both side if the political divide will now sit down and do the right thing

- Expect China to grow at a faster clip in 2013

- FBM KLCI is expected to end 2013 around 1,670 points

- Expect 2013 to be a year of two-halves
1st half - expect fundamental to be weak as the trend of corporate earnings downgrade in 2012 may continue into H1 2013

- believe there is downside risk to the earnings of domestic banks

- market may tumble to the 1,470 level, based on 13 times PE (GE13)
2nd half - optimistic that fundamental play will return post-GE13 as believe investors will look past beyond politics and focus on macro and micro

fundamentals going forward

- believe investor will switch from defensive stocks to cyclical stocks post GE13, though timing depends on the GE13 results
- Top picks: SapuraKencana Petroleum Bhd, Perisai Petroleum, RHB Capital Bhd, Gamuda, Kossan Rubber Industries Bhd, AirAsia Bhd and Multi-Purpose Holdings Bhd

- Top sells: FGVH, BAT, Malaysie Marine Heavy Engineering Holdings Bhd, MAS