All eyes on capital market as IMKL begins

PETALING JAYA: The annual Invest Malaysia Kuala Lumpur (IMKL) conference begins today and key on everybody’s mind will be where the market goes from here and what further investing opportunities lie in the Malaysian market.

While a few financial experts had predicted a negative outlook at the start of the year following the crash of the oil prices, the depreciation of the ringgit and the end of the quantitative easing, the reverse seems to have transpired.

Over the last three months, the FTSE Bursa Malaysia KL Composite Index (FBM KLCI) has performed well. The FBM KLCI is at its highest since September 2014, and is up 5.41% on a year-to-date basis to 1,856 points.

Over the last few weeks, volumes in the market have surpassed the RM3bil mark, some lower liners are back in action, oil prices have recovered by some 25% and some foreign funds have returned.

In fact, this is the fifth consecutive week of net buying of stocks in Bursa Malaysia by foreign funds.

It is against this backdrop that IMKL is taking place. There will be presentations on Mah Sing Group Bhd, SapuraKencana Petroleum Bhd and KPJ Healthcare Bhd.

Other companies featured are Felda Global Ventures Holdings Bhd, KLCC Stapled Group Bhd, Petronas Chemicals Group Bhd and YTL Corp Bhd, among many others.

MIDF Amanah Investment Bank head of equity research Syed Muhammed Kifni noted that the Finance Ministry’s Valuation and Property Services Department had issued its 2014 property market report last week.

“It is notable that transactions for residential properties worth RM200,000 to RM500,000 increased by a whopping 37.7% on a yearly basis to 102,082 units. In contrast, residential properties beyond that bracket declined markedly by 15.6% to 145,169 units.

“Hence, it is not all bleak on the property front and we believe companies with emphasis on affordable housing may continue to see good performance in 2015 and beyond,” said Syed Muhammed.

Affin HwangDBS equity capital market director Sherilyn Foong is of the opinion that new stock ideas are high on the priority list of the investing community.

“The FBM KLCI has performed surprisingly well. I personally feel the small and mid-cap space will outperform the big caps. Areas of interest will be in renewable energy and technology.”

Syed Muhammed added that commodity prices in general were showing signs of bottoming, for example, the price of Brent crude oil prices. This, in turn, may help soften the pressures on Malaysia’s fiscal position.

“In addition, the favourable tailwind could mean better days ahead for the ringgit. And by extension, the local equity market may benefit from positive flows of foreign funds.

“On this score, it must be highlighted that both plantation and oil and gas companies represent approximately a quarter of the aggregate capitalisation of the FBM KLCI constituents,” he said.

IMKL is Bursa Malaysia’s flagship event organised annually for the global investing audience.

IMKL 2015 is co-organised and co-sponsored by CIMB Investment Bank, one of Asean’s largest investment banking groups.