Buy for 2011. For December, we would advise investors to return to the market to position for a potential rally in 1H2011. We note that December had indeed been a good month since 1996, posting positive returns 86% of the time. We are, for December, inclined towards the Big Caps, with our Top Banking and Telco sector Buys again being CIMB, Maybank and Axiata. Our Top Buys for December include stocks from the Property and O&G sectors.
We are buyers for December. Given our bullish outlook on 1H2011 with our KLCI fair value unchanged at 1648 pts, we advise investors to position themselves in key Banking and Telcos blue chips as well as a number of Property and O&G situational plays to capitalize on the rally we see for next year. Nonetheless, while December has returned a positive gain some 86% in the years since 1996, the actual monthly gain has tapered down over the years. The upside to our 2010 year-end target of 1496 pts is less than 1% although we do not discount the possibility of the market ending the year above 1500 pts.
Top Buys in line with 2011 Buys. For December, we choose 3 Big Caps from the Banking and Telcos sectors as well as 1 Property and 1 Oil & Gas stock as situational buys. All 5 are part of our 2011 Top Buys for the Malaysian market.
| Stocks | Price (RM) | Target (RM) | Rating |
|---|---|---|---|
| CIMB Group | 8.44 | 9.77 | Buy |
| Malayan Banking | 8.51 | 10.07 | Buy |
| Axiata | 4.58 | 5.80 | Buy |
| SP Setia | 5.24 | 6.38 | Buy |
| Kencana | 2.02 | 2.57 | Buy |
Source : OSK Research