OSK: KL bourse faces 'volatile' April (ext)

MALAYSIA'S stocks had “wild swings” in March and this month won’t be any different as the smooth government leadership transition is countered by a weaker earnings outlook, OSK Research Sdn Bhd said.

Investors should buy “defensive” stocks such as Public Bank Bhd and Tanjong Plc. Higher “beta,” companies, or shares with greater volatility, such as IJM Corp, MMC Corp and Malaysian Resources Corp, may also present opportunities to help investors ride through the “volatile” month.

April is “not a time to fool around,” Chris Eng, Lim Mei Ching and Loke Siew Ting, analysts at OSK, said in the report today. “Investors will have to pay close attention to the market as we expect some trading opportunities to re-emerge.”

Prime Minister Datuk Seri Abdullah Ahmad Badawi, 69, said on March 28 he will ask for the King’s approval on April 2 to step down under a transition plan announced last year, handing the leadership to his deputy, Datuk Seri Najib Razak.

Stocks may rise in the first half “following the smooth handover of power” and fall toward the end of the month ahead of the May earnings season, OSK said. In March, OSK said more than 50 per cent of the companies under its coverage had their earnings downgraded.

Investors should “accumulate” as the index falls to 830 and sell as it advances to 890. The measure gained 0.9 per cent to 880.71 as of 11:48 am.