Dec 2, 2013

Bursa Malaysia Year-end Window Dressing

Ending the year on a strong footing

-  December  has  always  been  a  good  month  for  the  KLCI.  On average,  the  benchmark  registered  a  2.7%  return  thanks  to window dressing activities
Top  ten  weighted  stocks  could  be  the  target  for  window dressing.
Alternatively, rotational play among the laggards within the 30 constituents may also take place.

 top10 stocks

The  KLCI has  been  registering  positive  returns  in  December  for  the past  five  years.  Hence,  we  believe  year-end  window  dressing  could take place again. The top ten weighted stocks and laggards within the 30  constituents  stand  to  benefit  from  possible  rotational  play.  We reiterate our end-2013/14 KLCI targets of 1,830/1,940.  

In the past five years (2008-2012), the KLCI, on average, registered a 2.7% return in December. The run-up, by and large, was due to window dressing of the local funds, in our view. This should  sustain  the KLCI above the 1,800 points for the current year.

Investors  may buy the top ten weighted stocks: Public Bank, Maybank, CIMB, Axiata, Tenaga, Sime, Genting, IOI Corp, PChem and Petronas Gas, to ride on the window dressing activities.

Alternatively,  one may look  at  the laggards  among  the  30  constituent stocks.  YTD,  the  KLCI  is  upped  by  7.3%.  The  underperformers  are Telekom (-14.9%), YTL Corp (-14.7%), Digi (-7.9%), Hong Leong Bank (-4.5%), Felda (-3.5%), Astro (-2.7%), RHB Cap (-1.0%), CIMB (-0.7%), Sime (1.4%), BAT (1.5%), KLK (2.5%), Axiata (3.8%), UMW Holdings (4.2%), PChem (5.5%), Maxis (5.7%) and Maybank (6.3%).

by MIB