“Highly defensive stance as equities are expected to underperform in the near term. Nevertheless, note that in theory our current top picks are mostly export-oriented and largely unaffected by potential changes to domestic policies: IOI Corporation, MISC, Sunway Bhd, Westports and Yinson Holdings, and small/mid caps Duopharma Biotech, IJM Plantations, Hume, Scientex, and VS Industry, ” UOB Kay Hian Research said.
KUALA LUMPUR: The political crisis in the Pakatan Harapan coalition government has seen UOB Kay Hian Malaysia Research lowering its FBM KLCI trough valuation to 1,480 based on 15 times 2020F price-to-earnings PE (-one standar deviation) to mean.
In its strategy report on Monday, it said it would be reviewing its current end-20 FBM KLCI target of 1,650, which pegs the market at 16.8 times 2020F PE (mean PE+0.5SD), to adequately incorporate the impact of Covid-19 on market earnings and assess the country’s political and policy landscape.
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