KUALA LUMPUR, May 20 – With uncertainties looming the local equities market due to the COVID-19 pandemic, Rakuten Trade Sdn Bhd has suggested investors be less focused on counters that involves ‘big ticket items’ such as property and motor vehicles.
In a virtual media briefing titled ‘Entering a New Normal today, head of research, Kenny Yee advised caution to investors given that the impact of this pandemic and its magnitude on the local economy is still unknown.
Commenting on banking stocks, which carries the most weight on the FTSE Bursa Malaysia KLCI (FBM KLCI), he said: “Banks are still an enigma because no one knows the exact impact of the lower interest rates and six months moratorium yet.
“As for me, I would look at banks that are traditionally steady like Maybank, Public Bank and Hong Leong Bank, hence why they are trading at a premium compared with the others.”
Yee said earnings performance of banks in the first quarter this year would not be too extreme and he expects the real impact of COVID-19 would only be reflected in the sector’s earnings performance in the next two quarters.
On the outlook, he expects the FBM KLCI to close the year at 1,400 while the ringgit would likely strengthen against the US dollar, trending between 4.20-4.25 per US dollar with gains capped by the low crude oil prices.
At midday today, the FBM KLCI edged up 1.42 points or 0.10 per cent to 1,425.39 from 1,423.97 at Tuesday’s close.
The key index opened 5.29 points firmer at 1,429.26 and hovered between 1,420.18 and 1,430.19 throughout the early session.
Market breadth was positive with gainers leading losers 435 to 377, while 378 counters were unchanged, 701 untraded and 19 others suspended.
Turnover stood at 3.81 billion worth RM1.90 billion.
Malaysia National News Agency
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