KUALA LUMPUR: Public Investment Bank Bhd (PIVB) has maintained its Kuala Lumpur Composite Index (KLCI) end-year forecast of 1,580 points despite the likelihood of the target being missed due to the shift in the market sentiment.
The investment bank said the projection is based on a 15.5 multiple to calendar year 2022 earnings while the market is currently trading at one standard deviation below its very long-term average since 1993.
“While the coming year is expected to be another challenging one for Malaysian equities, the downside is appearing to be increasingly limited unless there is a global meltdown of epic proportions,” it said in a research note on Nov 21.
It said investors are suggested to buy into significant market weakness especially if there are shocked reactions to the current election results.
Going forward, it said market reactions should be neutral at best to negative, which is more likely the case, with the current uncertainty and the possibly market-unfriendly and more Islamic-centric PAS playing a dominant role in the PN coalition.
“This is by virtue of its greater number of seats won this time round, if it does form the government,” it said.
It said the “sin sectors” like gaming, tobacco and alcohol might come under some pressure but the immediate focus for the new government, nonetheless, would still be the forthcoming economic challenges brought about by elevated inflationary pressures and global monetary tightening. - Bernama
