Thursday 28 January 2010

Maybank IB: Market should be 'fundamentals bullish' this year

Maybank IB: Market should be 'fundamentals bullish' this year

Tags: Maybank Investment Bank | Mohammed Rashdan Mohd Yusof

Written by Loong Tse Min
Thursday, 28 January 2010 16:37

KUALA LUMPUR: Maybank Investment Bank is positive on the outlook for the Malaysian equity market, which is underpinned by improving fundamentals including earnings growth and the FBM KLCI should be at about 1,400 by year-end.

Maybank IB chief executive officer Mohammed Rashdan Mohd Yusof said “we are fundamentals bullish".

"There is now clearly a earnings momentum, growth for quite a lot of our corporate sector and that in turn will reflect in a re-rating of the PEs (price-to-earnings) for the broader market area,” he told reporters on Thursday, Jan 28 at the pre-event for this year’s Invest Malaysia scheduled for March 30-31.

Mohammed Rashdan said Maybank IB’s house view was the FBM KLCI level to be about 1,400 at the year-end. The estimate is based on earnings momentum and a re-rating of the market on a broad level slightly higher to trade at about 16 times to 17 times PE.

As for the regional market selldown due led by the China government’s tightening liquidity to cool down its overheating economy, he said, “I also believe that Malaysia has shown its resilience in its fiscal and monetary policy management being shown that we were different in the previous round of tightening in 2007 when everybody else was increasing interest rates, we were not.

“We were proven right when there was a crash. Everybody else had interest rate volatility, we did not have interest rate volatility," he said.

Underscoring corporate earnings growth momentum in Malaysia this year, he said, was “a great deal of” domestic investment as well as foreign direct investment. “That is in essence, why we are fundamentals bullish,” he said.

The Edge

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