Cautious start for Bursa as Petronas stocks weigh

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KUALA LUMPUR: Bursa Malaysia got off to a cautious start on Friday, weighed down by losses in Petronas Dagangan, Petronas Chemicals, KL Kepong and HLFG after the rebound the previous day but tech and chip stocks advanced.

At 9.32am, the FBM KLCI was down 1.82 points or 0.12% to 1,525.80. Turnover 854.47 million shares valued at RM437.15mil There were 322 gainers, 247 loser and 350 counters unchanged.

Asian stocks made a cautious start Friday after US shares edged toward an all-time high and Treasuries climbed as traders digested some mixed economic data and the latest spate of earnings, Bloomberg reported.

Equities fluctuated in South Korea and dipped in Australia. Japan is shut for a holiday. U.S. futures rose after the S&P 500’s biggest three-day advance since April took it nearer a new peak, while the Nasdaq 100 closed at a record.

Meanwhile, CGS-CIMB Equities Research expects KLCI earnings to grow 37.4% in 2021F and 1.9% in 2022F (vs. 0.5% previously).

"We lower our end-2021 KLCI target to 1,604 (from 1,709) based on lower P/E target of 14.2 times (1.5 standard deviation below three year mean) from 15.1 times (1 s.d below three-year mean).

"We advise investors to position in recovery stocks in Aug/Sep ahead of the expected full reopening of the economy in 4Q21F," it said.

The seven themes for 2H21 are: (1) laggard play; (2) M&A/value play; (3) high dividend yielders; (4) beneficiary of OPR rate hike; (5) recovery play; (6) ESG picks and (7) ESG and Shariah picks.

It replaced Inari with Unisem (new additions to top pick list) in our top three picks while maintaining Telekom and Public Bank. Our preferred sectors are banks, gaming, oil and gas, media, healthcare, EMS, technology, packaging, transport and utilities.

PetDag lost 18 sen to RM18.68, KLK 12 sen to RM19.64, HLFG 12 sen also to RM17.72, Hap Seng five sen to RM7.91 and PChem four sen lower at RM8.04.

Genetec lost 62 sen to RM18.10 and it was the top loser of the morning. However, Vitrox jumped 88 sen to RM18.46, Unisem 31 sen to RM8.06, Hightec 22 sen to RM5.15, MPI 20 sen to RM42.20 and Greatec 14 sen to RM6.28.

Industrial gases producer BIG Industries, which hit limit-up on Thursday, advanced 21 sen to RM1.86.

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