Market Outlook (given the volatility for trading)

I would like to share with you about market outlook as summaries point as below:

• Buy below 1300 points and sell above 1533 points
• Buy on weakness and sell on strength
• Still we are not seeing a deep recession for malaysia at the moment
• U.S economy still at growth albeit weak
• Buy defensive sectors which is healthcare, consumer, telecommunications,media and others
• Consumer sector: QL Resources & Guinness Anchor because drop in raw material price will help food and beverage margin
• Telecommunications sector: Axiata & Telekom because resilient earnings, good dividend yields between 5-7%
• Healthcare sector: KPJ, Supermax & Hartalega because is recession resilient and drop in latex prices good for glove makers.
• Media sector: Media chinese because drop in new print prices good for print media player.
• Other sector: Focus on counters:Petronas Gas, AirAsia & TRC Synergy
• What sector had more trading opportunities?: Banking, oil & gas & construction
• How to buy the defensive stocks?: buy when low PER, high beta which is a good rebound counter,M & A candidates & valuation cheap
• Construction sector: good for short term of the ATP, for example, Gamuda (Fv: RM3.98),Mudajaya (Fv: RM3.94) as Gamuda should bag the MRT tunneling contract (RM4bn for its portion) which should double its order book.
• Defensive Stocks: Larger caps in general holding up
• Short term election strategy: election expected latest on march 2012. You might buy before polling day & sell 1 month later on blue chips.During the post election, invest in shares can reduced the political risks generally lead to a short term rally.