source: [thestar online]
Bright 2014 for M'sian stocks?
PETALING JAYA: With blue-chip stocks trading at lofty valuations, cheaper small-sized companies with strong growth potential and mid-cap stocks with plenty of exciting newsflows could attract investors looking to outperform the benchmark FTSE Bursa Malaysia KL Composite Index (FBM KLCI) in 2014.
“We look forward to a slow-but-steady uptrend in 2014 with low trading volatility, notwithstanding occasional swings tied to the US Federal Reserve’s expected tapering,” UOBKayHian said in recent strategy note.
The firm advocates a “balanced portfolio” for investors to ride out the “occasional swing” in the market. Its attention is tuned to what is called “situational” stock plays for that extra boost on returns.
Top picks listed in the report include SapuraKencana Petroleum Bhd, Gamuda Bhd,DiGi.Com Bhd, Malayan Banking Bhd and Genting Bhd.
“Interesting small or mid-caps include Hong Leong Industries Bhd, MPHB Capital Bhdand Uzma Bhd,” the bank-backed research house opined.
The firm has an “overweight” call on oil and gas and construction as well as the defensive sectors of plantations, gaming and telecommunications. It is also maintaining its “underweight” call on cyclical sectors such as automotive.
The FBM KLCI is up 8% year-to-date, rallying to fresh highs last month before retreating this month on a lack of catalysts and renewed growth concerns in key global markets.
At the close yesterday, the benchmark gauge closed 0.2% higher to 1,806.61 points. The 30-counter strong index is currently trading at 17 times projected earnings for this year, which is relatively more expensive compared to most of its regional peers.
With the lack of domestic catalysts ever since Budget 2014 was announced on Oct 25, investors would do well to look at smaller companies which were more “exciting and have newsflows,” noted an analyst.
In the same vein, one source pointed out a company that had been under the radar of investors lately – Insas Bhd.
Amid talk that the company was a potential takeover target of its major shareholder, Datuk Thong Kok Khee, the stock had been climbing in recent days to close at 80.5 sen yesterday, up two sen.
Insas, which runs a variety of businesses including stockbroking, property and technology, and has a market capitalisation of some RM530mil, has close to RM230mil in cash.
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