Friday, January 22, 2010

AmInvestment upbeat on plantation, construction, property stocks

AMINVESTMENT Bank Group is upbeat on growth prospects of equities in sectors such as plantation, construction, properties and consumer products.

"At this moment, every indication seems to suggest that the global recession is ending (or about to end) and a recovery is under way. Even the export sector will probably see some rebound as evident from the rising US Institute for Supply Management manufacturing new order index," AmIslamic Funds Management Sdn Bhd executive director Mohd Fauzi Mohd Tahir said in a statement.

He said the situation will provide some help for the export-driven economies in Asia, which will take time to restructure their economies to be more consumer-driven.

"All these imply that the market uptrend will continue. We maintain our medium-term positive view, but believe that the near-term rally is capped until better macro clarity unfolds for the second half of 2010 and year 2011.


"We will accumulate stock on weakness and continue to trade on market volatility," Mohd Fauzi said, referring to AmIttikal, a fund that invests in syariah-compliant equities or debt securities.

The plantation sector is expected to gain from the overall bullish stance on commodities, while the construction sector is expected to benefit from the government's stimulus package and moves to boost the economy.

"We expect the weaker prices of crude palm oil to be short-lived. The prices are likely to hold above current RM2,100 per tonne and strengthen in the medium term due to low output season that will start from December 2009 up to the first quarter of 2010." He said tight soyabean supply until the first quarter of 2010 will spur demand for CPO.

The property sector is seen as a prime beneficiary of the wealth creation effect, resulting from the recovery in the economy and the stock market. The consumers sector will continue to pick up in line with higher demand from the economic rebound, while telecommunications firm are also attractive due to their strong free cash flow to pay out dividends.

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