For May, OSK see the risk of a global pullback increasing, following a strong performance by global markets in the past 4 months.
Coupled with the poor track record of markets during the period of May–Sept, OSK advise investors to heed the old maxim of “Sell in May and Go Away”. If markets do take an early tumble, then those with longer investment horizons should consider stocks in the Construction, O&G and Banking sectors which will benefit from the ETP.
For May, OSK recommend defensive stock such as Telcos and consumption related stocks which might benefit from a drop in commodity prices such as AirAsia (jet fuel) and Media Chinese (newsprint).
The table below is the target price for OSK’s May 2012 top picks.
2011 advertising expenditure (adex) grew less than expected, largely due to softer growth on the TV segment. However, other media platforms performed well. The newspaper segment enjoyed robust advertising spending by retailers, hypermarkets, telcos and property developers, driven by improving consumer sentiment.
OSK maintains OVERWEIGHT on the sector as they belief that 2012 will be an exciting year for media players in light of the upcoming 2012 Olympics and Euro 2012, as well as the impending General Election. Hence, OSK is keeping their adex growth forecast at 2x of GDP growth forecast of 5.2% with Media Chinese as top pick.
OSK also continues to believe that domestic consumer spending will remain healthy given the Government’s ongoing initiatives to turn the country into a highincome nation by 2020.
Below are target price and rating for selected stocks in Media Sector.
OSK has a Neutral outlook on the Malaysian market going into 2012 as the combination of uncertain growth outlook in the US and Asia coupled with a possible recession in Europe cloud the prospects for strong earnings growth locally.
OSK advises investors to stay cautious into mid 2012 and focus on Defensive sectors such as Consumer, Telco, Healthcare and Media with KLCI fair value of 1466 pts.
Investors are advised to Trade on Cyclical sectors such as Banks, Oil & Gas and Construction as the market dips or rallies strongly. The trading strategy to adopt is, buy when the KLCI falls towards the 1300 pts and sells when the KLCI rises towards the 1500 pts.
The tables below are OSK’s top Big/Mid/Small Caps Stocks with the target price & rating for 2012.
The global sell-off in equities has definitely raised the risk of an early recession. While it’s still early days yet to say that a bear market is taking hold, OSK feel that it is prudent to highlight a list of alternative defensive stocks for the longer run that would benefit in the event a recession does set in early.
These stocks will benefit from a drop in incomes and commodity prices and are generally more inward looking as OSK believe domestic incomes should be more resilient.
The tables below are OSK’s alternative stocks which contains, target price, rating & the reason for the selection.
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