While uncertainties in the market are certain, this has not stopped investors and fund managers from attempting the absurd in order to hit a “home run” in their stock picks. One of the key themes that will come into play in 2017 will be the US President-elect Donald Trump’s policies as well as a possible increase in the pace of rate hikes by the US Federal Reserve. This would lead to a stronger US dollar that could benefit some of the export players.
Thematic investing continues to include construction plays with the rollout of new major infrastructure projects in the country. There has also been a rising earnings prospect for the plantation sector as crude palm oil price remains high and output is expected to improve moving into the second half of 2017.
The oil and gas sector also sees a gradual improvement in sentiment following the gradual recovery in oil prices after the deal on production cut between the Opec and non-Opec members.
Higher tourist arrivals with 2017 being Asean@50 Year and as Malaysia plays host to the 2017 Southeast Asian Games and Asean Para Games could also benefit airlines, gaming and leisure sectors
a list of stock picks based on these investment themes.
Inari Amertron Bhd
Inari Amertron Bhd is expected to return to double-digit growth as analysts are positive about the impact from the iPhone’s 10th anniversary that is expected to see something major planned by Apple Inc for the device.
Magni-Tech Industries Bhd
Magni-Tech Industries Bhd, the largest original equipment manufacturer for Nike in Malaysia for apparel products, could ride on the sportswear giant’s impressive growth story as Nike’s latest second quarter for fiscal year 2017 beat estimates on both sales and earnings per share.
CLASSIC Scenic Bhd
CLASSIC Scenic Bhd, the wooden picture frame manufacturer, is the classic dividend play for 2017 with its above market average dividend yield of about 7%, and might be the right defensive strategy amid the uncertain external environment.
Gamuda Bhd
Gamuda Bhd has significant upside due to its strong outstanding order book of RM9 billion, supported by the MMC-Gamuda joint venture which secured the RM15.5 billion mass rapid transit (MRT) Line 2 underground works package in March 2016, according to TA Securities.
Sime Darby Bhd
Sime Darby Bhd, which recently saw Tan Sri Abdul Wahid Omar take up the helm of its controlling shareholder, Permodalan Nasional Bhd (PNB), is set to benefit from a proposed corporate restructuring exercises.
Genting Malaysia Bhd
Genting Malaysia Bhd has been touted as a darling of the gaming industry for 2017 on expectations that the Genting Integrated Tourism Plan (GITP) will boost its earnings and improve market sentiment due to the legalisation of casino operations in Japan.
Ta Ann Holdings Bhd
After a year of lacklustre performance, Sarawak-based Ta Ann Holdings Bhd is set to benefit from the improved demand for timber as well as the turnaround in the plantation sector. The company has been chosen by Kenanga Research, AffinHwang Capital and Public Investment Bank Research as their stock picks for 2017 in their latest strategy reports.
SapuraKencana Petroleum Bhd
Integrated oil and gas (O&G) services provider SapuraKencana Petroleum Bhd is one of the biggest beneficiaries of the oil production cut pledge between Opec and non-Opec members.
Bumi Armada Bhd
Bumi Armada Bhd, which saw its share price fall more than 40%, may provide another opportunity for investors in anticipation of improving sentiment and operating outlook of the oil and gas sector.
Protasco Bhd
Protasco Bhd is one of the construction players that are expected to benefit from an early general election in 2017. The well-established player in the construction industry is focused on road maintenance works, where most of them are based on concessions awarded by state and federal governments, providing the company with a steady income stream.
Source: http://www.theedgemarkets.com
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