OSK’s earlier suspicion that bearish view on the market may not survive February turned out correct as the KLCI took the cue from the DJIA to rally past its resistance level at 1565 pts for a 3.2% gain in the month.
Nonetheless, OSK remains unconvinced that this liquidity fueled rally is supported by strong fundamentals and still see a risk of market correction.
However, OSK set year-end KLCI target at 1620 pts and upgrade our market call to NEUTRAL. OSK recommends a more balanced portfolio that includes Defensives in the Consumer and Telco sector as well as Cyclicals in the Construction, Oil & Gas and Banking sectors as Top Buys given the improved news flow going forward.
The table below is the target price for OSK’s March 2012 top picks.
| Stocks | Price (RM) | Target price (RM) | Market Cap (RM million) | Rating |
|---|---|---|---|---|
| CIMB | 7.16 | 8.05 | 53,213.0 | Buy |
| Axiata | 5.17 | 5.80 | 43,778.2 | Buy |
| Gamuda | 3.65 | 4.46 | 7,558.8 | Buy |
| KPJ Healthcare | 4.94 | 5.84 | 2,946.4 | Buy |
| Padini | 1.39 | 1.80 | 875.0 | Buy |
Source : OSK Research