KUALA LUMPUR: Maybank Investment Bank Bhd believes the FTSE Bursa Malaysia KLCI (FBM KLCI) could still reach the 1,700 level by year's end, provided there is positive price movement in the banking sector and certain counters.
In a note today, the investment bank said this includes positive price movement in Tenaga Nasional Bhd
(TNB), Gamuda Bhd, IHH Healthcare Bhd and Press Metal Aluminium Holdings Bhd.
"The FBM KLCI index has been hovering around 1,610-1,630 in recent weeks, and interest in the large caps appears to have returned, although we have noted that these were mainly from local institutions.
"Banks’ share prices have been lagging on a year-to-date basis and a recovery is crucial to lead the FBM KLCI higher, given that its collective weight in the index is about 30 per cent,” it said.
Additionally, Maybank Investment Bank said every five per cent rise in the share prices of the top three banks collectively could lift the FBM KLCI index by 25 points.
"The other laggard is TNB. We believe investors view its financial impact concerns resulting from tax issues as a continuing overhang,” it said.
Its year-end FBM KLCI target is 1,660, with just another four per cent to reach 1,700.
It is adding Press Metal Aluminium and Nestle to its top picks, replacing KPJ Healthcare and Farm Fresh Bhd, it said.
According to Maybank Investment Bank, the Malaysian market remains a net foreign sell on a year-to-date basis. It has a marginal net outflow on a month-to-date basis in November, with Genting Malaysia Bhd, SD Guthrie Bhd and Maybank as top net buys, and TNB, YTL Power International Bhd and Maxis Bhd as top net sells.
As of 9.06 am this morning, the FBM KLCI rose 2.91 points to 1,620.48 from Friday’s close of 1,617.57. - Bernama
