KL stock rally may ‘peak’ in Apr, May: OSK

WEALTH CREATION

MALAYSIA’S stock market rally may end in April or May as risk aversion sets in, OSK Research Sdn. said.

There is a “good four to five months of a bullish uptrend left before the market turns south,” OSK analysts Chris Eng and Lim Mei Ching said in a report today.

“We advocate a gradual repositioning towards dividend yielding stocks.”

State-controlled fixed-line telephone operator Telekom Malaysia Bhd, Yi-Lai Bhd, a ceramic tile maker, and lottery company Berjaya Sports Toto Bhd are among OSK’s list of stocks that have estimated dividend yields of 8 per cent to 9 per cent for 2010.

The benchmark FTSE Bursa Malaysia KLCI Index rose 45 per cent last year on investor optimism Malaysian Prime Minister Datuk Seri Najib Razak’s stimulus plans valued at RM67 billion will pull the economy out of recession.

The index may rise to 1,345 and “hit a peak some time in April or May,” OSK said. The index gained 0.2 per cent to 1,274.77 as of 11.44 am local time.

Institutional investors attending a presentation in December on OSK’s 2010 strategy outlook signaled that they were “less bullish” this year, and made remarks such as “the easy money has been made,” OSK said in the report. More than 30 Malaysian and Singaporean investors attended the briefing, it said.

OSK said Malaysia’s stock market may still “fare well” this month. Its top picks for January include banking stock CIMB Group Holdings Bhd, KPJ Healthcare Bhd, Mudajaya Group Bhd, Supermax Corp and Tenaga Nasional Bhd. - Bloomberg