KUALA LUMPUR: Market conditions in Malaysia are still “Good Enough” to warrant continued investments in the local bourse, said PublicInvest Research.
The research house said on Friday that while foreign investors may be less of a factor in the coming year, this may be inconsequential given the ample domestic liquidity.
It said the country’s finances were not “in too bad of a shape” particularly with crude oil prices hovering steadily above the US$55 per barrel mark, a boon to national income and investment sentiment.
“External trade is improving steadily, with GDP growth expected to remain above the 5% level next year.
“While the ringgit has strengthened sharply in recent months, we think there is still some room to improve, albeit muted and not in the manner seen in 2017,” it said in its market strategy report.
The research house noted that Malaysia had emerged relatively unscathed from several debilitating headwinds such as Brexit and the global commodity price collapse, thanks to its resilient fundamentals.
“With a projected growth rate of 5.2% in 2018, Malaysia, by all accounts, may become the second fastest growing economy in the region, behind only the Philippines.
“Although the downside risks to growth are muted but we remain cautious as the external environment is still sensitive to variety of factors, amongst which are geopolitical negativities,” it said.
Being an open economy, the research house noted that Malaysia would still be at risk.
PublicInvest Research remains Overweight on the Oil and Gas and Construction sectors for the on-going positive news flows and probable earnings uplifts, and the broad-based Manufacturing sector for demand growth on account of strong global trade.
For stocks, it likes AMMB Holdings
, Hibiscus Petroleum, SKP Resources, Chin Hin Group, Mega First Corporation, N2N Connect, Yong Tai and TRC Synergy.
