Malaysia already one of the world’s stronger performers so far in 2011. OSK believe the good run will continue in July and hence advocate the sectors linked to the ETP, namely Banks, Construction, Property and O&G, as investment ideas for the month.
OSK also continue to see the local market climb towards year-end target of 1680 pts, although the 1600-pt psychological resistance might be difficult to break before Budget 2012 which to be unveiled on 7 Oct.
For July, OSK top picks are from Banking, Construction, Property, Oil & Gas and Steel
The table below are the target price for OSK’s July 2011 top picks.
Eversendai Corporation Berhad Initial Public Offering (IPO) received an overwhelming response with its public portion of 30.2 million shares. It was oversubscribed by 7.26 times. The IPO attract 11,994 applications or 165.2 million shares.
The institutional IPO prices was fixed at RM1.70 per share. Accordingly, the final retail price was fixed at RM1.62 per shares, represent 5 percent discount to the institutional price. For retail application, the difference of RM0.08 will be despatched to successful retail applicants within 10 market days from the final ballot.
20 million shares were allocated for Malaysian Public category. Below are the allotment summary.
While markets did not rally as much as expected in 1H2011, OSK are keeping our view of an election-fuelled rally towards year-end, bringing the KLCI to 1680-pt target.
Banks, Oil & Gas, Construction, Property & Healthcare/Media remain OSK Preferred sectors. OSK Top Buys are generally extracted from these sectors.
OSK note that their Top Buys are not cheap but they continue to promote these stocks on account of their lower risk profile and the cautious mood in the market.
Below are OSK Top Buys for 2H2011
Top Buys for Big Caps Stocks
So far, 2011 is a good year for Initial Public Offering (IPO) listing in Bursa Malaysia. At the time of writing, there were 14 new IPOs listed. Out of these figure 8 IPOs were listed in the Main Market while 6 were listed in ACE Market.
All the IPOs debuted higher than IPO price on the first day of listing. However, 3 out of the stocks close lower than IPO price at the time of writing.
If you are interested to apply for upcoming IPO, take a look at the following table which shows the upcoming IPO for 2011.
The development in Iskandar Malaysia is picking up with 2012 as the potential inflection year. Investment targets have been surpassed and foreign participation is coming in. The key sectors to benefit from Iskandar are property and construction.
For Iskandar exposure, OSK recommend UEM Land for the property side given that it is the largest land owner at Nusajaya and KimLun Corp for the construction angle as it has a strong orderbook track record in Johor.
Other names offering Iskandar exposure include SP Setia for its Setia Eco Gardens development, Gamuda for its Horizon Hills development and Sunway which is constructing Legoland and BioX-Cell.
The table below is the target price for selected stocks for Iskandar exposure.