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Thursday, June 9, 2011

Investment summary (CIMB)

Reform, reinvent, re-rating. Transformation remains the watchword and re-rating catalyst for Malaysia, which is reinventing itself through reforms that kicked off in 2004 with the GLC transformation and widened to the government and economic spheres in 2009. This set in motion a re-rating of the market over the past 1-2 years and will remain the key catalyst for the market in the near term. The monthly announcements of entry point projects have had a positive impact on tourism, construction, property, oil & gas and technology companies. We should continue to see newsflow on this front for the next six months. Meanwhile, another transformation is quietly taking place in the political arena, which is timely as the general elections must be held by 2Q2013. We continue to OVERWEIGHT Malaysia and maintain our end-2011 KLCI target of 1,700 points, based on 14.5x CY12 P/E.

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