FBM KLCI to touch 1,830 by end of 2019: MIDF
Publish date: Tue, 18 Dec 2018, 02:53 PM
KUALA LUMPUR: MIDF Research expects the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to rebound to 1,830 by end-2019, supported by a recovery in corporate earnings.
Head of Strategy and Quantitative Analytics Syed Muhammed Kifni Syed Kamaruddin said corporate earnings for 2019 are expected to grow by 5.8 per cent as compared with 1.96 per cent anticipated for this year.
“We also foresee that there are opportunities for investors to enter the market now, as the current composite index (CI) level is about 150 basis points lower than what we projected by end of 2019,” he told a market outlook media briefing here today.
Syed Muhammed said the market price-earnings ratio valuation is also expected to improve to 16.2 per cent from the current level of 15.8 per cent.
With that, along with no further escalation in trade tensions between the United States and China, he said the 1,830 level target should be achievable.
However, he opined that Bursa Malaysia would be trading range-bound next year with profit-taking and performance-chasing activities taking place.
As for end-2018, he said the CI support level would be at 1,600, but it would trade higher should window dressing activities kick in.
On the ringgit, he foresees the local unit to mildly strengthen to RM4 against the US dollar by end-2019 from the current level of about RM4.18.
“This would be backed by the improvement in both crude oil and crude palm oil (CPO) prices,” he said.
He said benchmark Brent Crude was anticipated to trade higher at US$75 per barrel next year from the current level of about US$60 per barrel, following the Organisation of the Petroleum Exporting Countries agreement on a production cut, with the CPO to average at RM2,200 per tonne from the current RM1,960 per tonne.
“Subsequently, this will lead to the return of foreign funds into our markets, as we have seen outflow amounting to RM11 billion as of last week for this year,” he said.
Last year, the local equity market recorded more than RM10 billion of foreign fund inflow.
Commenting on the outlook for fund flows, Head of Research Mohd Redza Abdul Rahman said it would still boil down to corporate earnings.
“If the earnings are positive, share prices will follow and entice the foreign investors to come in,” he said, adding that Bursa Malaysia is still defensive compared with regional peers.
“This would help investors find shelter here amid the uncertainty,” he added.
According to MIDF Research’s statistics, the KLCI’s gains slid 6.8 per cent between January and last Friday, while the MSCI Asia Pacific Ex-Japan Index (MXAPJ INDEX) fell 15.4 per cent and the MSCI Emerging Markets Index (MXEF) retreated 16.0 per cent in the same period.
- Bernama
Discussions
Be the first to like this. Showing 21 of 21 comments
Asked for 4d digits if the prediction is so trustable! I'm going to punt 1000 big 1000 small to try my luck.
2018-12-18 20:20
Nobody can even predict stock movement tomorrow. How can these fools predict for a year ahead?
2018-12-18 23:19
Ahh all the legendary commentors are here... rather than tp stocks. Anyone can TP for KLSE ? God gambler mari mari
2018-12-18 23:22
MIDF clever but hard to reach 1830. unless buy 1830 MKT ,the chance to hit is possible.
2018-12-19 08:04
oil price drop.
CPO price drop n facing EU ban.
Listed companies reported dropping profit.
Trade wars.
The uptrend started in 2009. MIDF thinks it will go up forever.
2018-12-19 09:27
Posted by Nicholasming91 > Dec 19, 2018 12:20 AM | Report Abuse
VIX votality index is going up... 24.60 now
Hi, Nicholas, where can we see VIX for KLCI ?
2018-12-19 09:38
aiyo...which one is true..."He is also anticipating Bank Negara Malaysia to maintain the overnight policy rate (OPR) at 3.25% next year, and expecting the ringgit to strengthen to 4.00 against the US dollar by the end of 2018."
2018-12-19 09:42
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Midf bunch of jokers haha
2018-12-18 17:34