Maybank IB expects FBM KLCI at 1,710 pts by year-end

Interview with regional retail research head Ong Seng Yeow during the Maybank Investment Bank first-half 2016 market outlook at Securities Commission. AZMAN GHANI / The Star

PETALING JAYA: Maybank Investment Bank (Maybank IB) expects Bursa Malaysia to be flattish this year with the FTSE Bursa Malaysia KLCI (FBM KLCI) pegged at the 1,710 points level at end-2016.

Head of retail equities, CK Lim, said the local market currently lacked a catalyst and the FBM KLCI’s near-term direction would be very much driven by external developments.

“External developments that investors are monitoring include uncertainties in the timing of an US interest rate hike and outcome of the US presidential election on Nov 8,” he told reporters on the sidelines of Maybank IB’s Market Outlook 2H 2016 in Petaling Jaya on Saturday.

The FBM KLCI closed at 1,671.79 on Friday.

Meanwhile, Maybank Kim Eng Research Pte Ltd executive director for research, Ong Seng Yeow, said another round of an overnight policy rate (OPR) cut by Bank Negara Malaysia would be possible next year.

He said the first milestone to watch would be the outcome of the US election as this would set the tone for the global trade environment and security of regional markets.

He also said the Government was doing well in keeping the local economy steady considering external volatilities, but should the outcome of the US election unleash a worst case scenario, it would increase the likelihood of an OPR cut. 

During his presentation earlier, Ong said Maybank Kim Eng favoured sectors such as real estate investment trust (REITs) as the weak consumer sentiment has bottomed and spending should improve ahead, as well as, construction.