KUALA LUMPUR: CIMB Equities Research said the constant newsflow on the Economic Transformation Programme (ETP) over the past eight to nine months is one of the reasons for the FBM KLCI's resilience in the face of global uncertainties over the past few months.
It said on Wednesday, July 6 the KLCI even broken new records on a daily basis since last week.
Although Tuesday's ETP update did not throw up any major surprises, it considered it as yet another confidence booster, it added.
'It reinforces our preference for sectors that stand to gain most from the ETP, that is CONSTRUCTION [], oil & gas and property,' it said.
CIMB Research said the groundbreaking for the RM50 billion MRT project will take place this Friday, July 8 and newsflow on contract awards should pick up pace over the next three to six months.
'We are not concerned that the government's plan to sell down its stakes in GLCs could result in a share price overhang as Khazanah's track record in freeing up liquidity of its GLCs has mostly been positive,' it said.
The research house said the systematic plan by the government to pare down its stakes in GLCs is unlikely to lead to share price declines as the intention is to free up liquidity and boost interest in GLCs, rather than destroy value.
'We maintain our OVERWEIGHT on Malaysia and end-11 KLCI target of 1,700, which is based on the mid-cycle P/E of 14.5 times. Newsflow on the transformation programmes and the general election which we think will be held by end-2011 or early-2012 could drive a further re-rating of the market,' it said.
It said on Wednesday, July 6 the KLCI even broken new records on a daily basis since last week.
Although Tuesday's ETP update did not throw up any major surprises, it considered it as yet another confidence booster, it added.
'It reinforces our preference for sectors that stand to gain most from the ETP, that is CONSTRUCTION [], oil & gas and property,' it said.
CIMB Research said the groundbreaking for the RM50 billion MRT project will take place this Friday, July 8 and newsflow on contract awards should pick up pace over the next three to six months.
'We are not concerned that the government's plan to sell down its stakes in GLCs could result in a share price overhang as Khazanah's track record in freeing up liquidity of its GLCs has mostly been positive,' it said.
The research house said the systematic plan by the government to pare down its stakes in GLCs is unlikely to lead to share price declines as the intention is to free up liquidity and boost interest in GLCs, rather than destroy value.
'We maintain our OVERWEIGHT on Malaysia and end-11 KLCI target of 1,700, which is based on the mid-cycle P/E of 14.5 times. Newsflow on the transformation programmes and the general election which we think will be held by end-2011 or early-2012 could drive a further re-rating of the market,' it said.
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