'Funds to move into growth sectors in 2013'
Publish date: Tue, 11 Dec 2012, 10:00 PM
JPMorgan Securities (Malaysia) Sdn Bhd expects Malaysia to experience rotational trade out of safe sectors such as telecommunications into underperforming domestically driven growth sectors including construction, oil and gas, property, gaming and media.
"Right now, a lot of funds are being crowded into the safe sectors because of the 'perceived' election risk and in my view, a majority of the market performance this year was actually influenced by the safe trade," Equity Research Executive Director Mak Hoy Kit told a media briefing on the 2013 Malaysia Equities Market Outlook.
Mak said the group does not favour externally-oriented sectors such as shipping and plantations as well as tobacco as they lack growth and involve regulatory risk.
"External issues, for example, the United States fiscal cliff, will definitely be a risk to any country, but from a regional context, Malaysia is very resilient.
"This is because of the country's good domestic consumption level, which makes up over 50 per cent of the GDP, as well as public and private investments,accounting for 25 per cent," he said. However, imbalances such as the country's narrow base of tax revenue and high personal indebtedness in the household sector need to be addressed, he said.
"Next year, post-elections, we're likely to see the introduction of the Goods and Services Tax, and this will offer more competitive tax rates going forward.
"The personal indebtedness at 77 per cent of GDP is definitely something tobe worried about, but the central bank has been very prudent in administering guidelines on responsible lending," he said.
Mak said there has already been a slowdown in property pick-up levels this year.
"We're comfortable with the results achieved by Bank Negara Malaysia," he added.
On commodity prices, he said the group expects crude palm oil (CPO) prices to be at least nine per cent lower next year on supply increase, while the coal price is expected to decline by 4.2 per at US90 per tonne.
"However, for Malaysia, the CPO margins between production cost and selling price is still fairly high, so I don't think there will be a destruction in terms of domestic demand, it's just the growth rate would be slightly slower.
"On the ringgit, we're seeing its prospects for next year to be stronger at the RM2.95 level against the US dollar," he added. -- Bernama
"Right now, a lot of funds are being crowded into the safe sectors because of the 'perceived' election risk and in my view, a majority of the market performance this year was actually influenced by the safe trade," Equity Research Executive Director Mak Hoy Kit told a media briefing on the 2013 Malaysia Equities Market Outlook.
Mak said the group does not favour externally-oriented sectors such as shipping and plantations as well as tobacco as they lack growth and involve regulatory risk.
"External issues, for example, the United States fiscal cliff, will definitely be a risk to any country, but from a regional context, Malaysia is very resilient.
"This is because of the country's good domestic consumption level, which makes up over 50 per cent of the GDP, as well as public and private investments,accounting for 25 per cent," he said. However, imbalances such as the country's narrow base of tax revenue and high personal indebtedness in the household sector need to be addressed, he said.
"Next year, post-elections, we're likely to see the introduction of the Goods and Services Tax, and this will offer more competitive tax rates going forward.
"The personal indebtedness at 77 per cent of GDP is definitely something tobe worried about, but the central bank has been very prudent in administering guidelines on responsible lending," he said.
Mak said there has already been a slowdown in property pick-up levels this year.
"We're comfortable with the results achieved by Bank Negara Malaysia," he added.
On commodity prices, he said the group expects crude palm oil (CPO) prices to be at least nine per cent lower next year on supply increase, while the coal price is expected to decline by 4.2 per at US90 per tonne.
"However, for Malaysia, the CPO margins between production cost and selling price is still fairly high, so I don't think there will be a destruction in terms of domestic demand, it's just the growth rate would be slightly slower.
"On the ringgit, we're seeing its prospects for next year to be stronger at the RM2.95 level against the US dollar," he added. -- Bernama
Discussions
Be the first to like this. Showing 29 of 29 comments
Dear Kc,
What will happen if Pakatan wins this coming election with simple majority ? Will stock market continue to go up ?
I predict 2013 will be a bull market especially Asia countries.
Please advise.
Thank you.
Ooi
2012-12-11 23:31
If pakatan win you can say good bye to your money and be prepared to live with all the problem.
But don't worry it will never happen. So your money is safe.
2012-12-11 23:37
I think market will still climb for a while until all the dirty linens starts to be hung in public! Market climb because hot money is flowing to this region but a Pakatan win will definitely cause a lot of dismantling process of BN 's work! Note that many CEOs and Chairmen aligned to BN will be removed and prior mega deals terminated. I see Malaysia will lose another two years of development and possibility of this coming bull cycle!
Like I said before, I see the finest hours of the stock market still ahead on provisio BN takes it and with bigger majority to placate foreign investors! Nobody like uncertainty and not especially if they can park their money elsewhere!
2012-12-11 23:40
I am being told the realignment of seats previously will have sabah, sarawak and johor taking about 40%+ of the parliament seats! Had PR taken Sarawak previously, it would have been a good fight in this election. BN has considered Chinese votes total loss actually! The mitigation factor for them being that Chinese are mostly concentrate on urban areas! They are going for the Malay heartland fence sitters and Indians to tilt to their favor!
sabah is a suspect now, but I think Pairin's influence will pull through for BN! All said, I never underestimated people's power that caused the last tsunami! Even the opposition didn't expect the 5 states! All people wanted was to voice their displeasure and strong opposition to the arrogant and abusive BN, taking its rakyat for granted! Will tsunami happen again? Who can say for certain?
2012-12-11 23:50
If PR wins, more investment will come in because PR is cleaner in its administration. Like Spore initially, a clean government will have the confidence of investors. PR had proven in its administration in Penang and Selangor.
What happen if Pairin retires from politic ? BN will lose in Sabah.
I was told that the statistic shows that BN will lose, hence Najib dares not call election and it will delay until the last day. It is a matter of buying time, hopefully, thing will change at the last minute.
No body knows the outcome, I just hope that stock market will go up ultimately after this election risk is disappeared. I still continue to work hard irrespective which party wins.
Thank you.
Ooi
2012-12-12 00:21
in the long run, nobody knows! but in the immediate future, i can see two years of development lost if PR takes it, definitely!
can see people are angry, that's why never discount the tsunami! i understand each vote carries a hope for a good government! so vote wisely then!
2012-12-12 00:29
lol, if bn win they will force digi,maxis, sell their business to felda lolol
2012-12-12 01:52
jokes aside, if investors believe that, then that would fall under the category of reckless allegation! something i think that has been festering for the past few years! as said, people are still angry, and especially in cyberworld, anything goes! :)
2012-12-12 01:59
nobody want bn to win except those that get benefit from it.
mega projects will be terminate?
good, because all those project is under table deal, just like recently the 4G news? puncak semangat get the biggest portion of 4G? although i dont really understand how the technology work, but the deal certainly sound fishy and dirty.
and for LRT project, gkent get the contract from under table deal, and then sub the contract to german company simens?
MSM forced sold to felda? enjoying the sugar price hike? hahaha
etc etc those cronies company probably cant survive without all this deal, so my strategy is always avoid these kind of companies.
2012-12-12 03:08
PR IS CLEANER ? ALL PROJECT GOING TO PROKSI PR . No open tender..still use direct tender..corruption still happen at penang..selangor ,also kelantan. What they do to help rakyat at PR state. Nothing's .son of mb lot cronies ....party family.. this situation is chaostic .
2012-12-12 07:35
we got free water in selangor, what do ppl at melaka got?
have to pay for using longkang water.
that right, you have to pay the state gov for using longkang water. hahahaha
2012-12-12 08:37
Suppose my vote is for BN,but currently my MAS is stuck because someone in this party is play dirty.Hopefully it bounce above RM1.20,else sorry the vote is for change.
2012-12-12 08:54
In Penang I can See PR did a very good job as a gov as compare to previous BN. They really do their job for betterment of penangites and not just talk crap. I think hard for BN to recapture this pearl of the orient.
Well, uncertainties will be there before election or after election if PR win. Investors does not like this. I believe our bursa may bite 1500 before election. After that it doesn`t matter who win, market will start to play up again slowly as reviving hope and expectation set in for futures Malaysia growth and more good feeling news will re-appear to recapture investors confident. Just my view only... :-)
2012-12-12 09:26
I understand PR practice open tender for all big projects except those emergency job like flood or fire disaster related works. They are all very transparent to all rakyat.
2012-12-12 09:35
Hustle, I think MAS will have possible for mini rebound..after that I see more downward preasure, might go below 50cts....before Strong rebound....Mmmmmmmmm....
2012-12-12 09:39
Teik Bee, open tender is already good enough...there will no money politics or cronies pocket...we can save more millions n billions and use it to help the poor, develops the countries and economy and growth our bursa...hahahhaaa
2012-12-12 09:42
dont me saying bursabulltrader but what you just said sounded communist??? that is communism right.. help the poor means distribute wealth..develop the country mean develop everything everywhere...just a thought.. what do you think???
2012-12-12 09:45
Do not forget the Hakka saying "Tiu-tiu ma lin yit yong sau"which means "Every horse"s penis smells the same". Do you think our country can prosper under Hudud law, can Guan Ing and Co. stop the unfair rulling in the country? Come visit Kedah and Kelantan then you know. At the moment, I came back for holiday in Kulim, Taman Selsih, which is the largest housing in Kulim Kedah. The biggest problem I found is thre is no bus or mini bus to travel.
2012-12-12 09:48
mangali, time for you to take your medicine la, come come , good boy. :D
helping the poor means communist? then every charity is communist? red cross? unicef?
2012-12-12 09:49
We need a reborn Zhuge Liang in Malaysia to save it. Singapore had found a reborn Zhuge Liang i.e. LKY.
2012-12-12 09:52
fat cat tim buddy..in the context of government helping the poor.. that means distribution of wealth mate..
2012-12-12 09:56
davesingh, Am I a communism? Does my sentense sound so? hahaha...i not aware..:-) what my meaning is to increase our per capita income set by gov to achieve deveLop nation by 2020. Simply say Gov need to spend more for the economy..right?
2012-12-12 09:59
When ever Malay shouted " Hidup Melayu", the country is going backward 3 times. Why? slogan very loud but how many grassroot Malay benefited from the so called transformation or DEB programme?
Projects and land given only to the cronies. Are you saying that none of the ordinary Malay can match Sharizat's husband or Syed Mokhtar that every project must be given to them? How to angkat martabat bangsa Melayu if the ordinary Malay is only needed when election is near and will be forgotten when the election is over?
Looking around, Indonesia and Thialand are even ahead of us in many aspects and people still have not waked up. Later Myanmar will take over us. Have youi waked up?
2012-12-12 10:07
politics,race, education, religion is something close to our heart. how we achieved it on a more equitable basis is something we have long talk, discuss, argued and disagreed many many times.
going forward, this country politicians need to sit up and think with their heads. being moderate and open in the best way forward. we cannot close our eyes and minds to the ever changing world. never be a ostrich ( HEAD IN THE HOLE)
2012-12-12 12:02
foreign investor have poitive on malaysian economy. dont make more
trouble. stock market still up and down. its just money game by
market wizard. most important is how foreign investor rating our
economic management. it reflect our true wealth creation. the US
stock is still climb even downgraded by rating agency since obama
in oval office. why? he manage us economy on right way. dont believe seeking alpha advice. long one country and short other
country. just remember, keep out troublemaker from from this country.
2012-12-12 13:18
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Again, its provided BN takes it and by majority vote! God forbids, not a hung Parliament this round!
2012-12-11 23:12