Citigroup upbeat on Malaysian shares

KLSE CI failed to sparked today despite the overall 2% up in Dow Jones overnight. The benchmark composite index closed up only 3 points at 1,256 with a small volume of 552 mil shares. Its intraday high was 1,266. It failed to clear this level achieved weeks ago as it attempts to closed the gap of 1,277 created on March 10; the unforgettable, indelible and eventful 1st trading day after the 12th General election. Chart wise, the daily MACD is inching slowly upwards while the weekly indicator not having turned positive yet. It seems to have difficulty clearing the 1,266 level and this is crucial before the any positive signals be seen again. Meanwhile, Citigroup came up with an upbeat KLSE CI's 2008 forecast today. Oh, so different to CLSA's gloomy year end forecast of 1,150 which I posted earlier.

Reuters: WALL Street bank Citigroup expects Malaysia’s key share index to rise 15 per cent by year-end, saying the stock market is highly unlikely to fall much further after the government’s election upset last month.In its strategy report on Malaysia, the investment bank said it is bullish on banks, plantations, telecommunications, utilities and gaming.It put the end-2008 target for the benchmark Composite Index at 1,449 points by year-end, up 14.7 per cent from the current level of 1,263.31. “Malaysia is now trading at discounts relative to the region and its historical valuation benchmarks,” Citigroup said. On top of the fear of a US-led global recession, the market had priced in the worst outcome on Malaysian politics, it said.

“A lot of bad news is already in the price. In an illiquid market like Malaysia, we urge investors to start positioning.” Citigroup said it had added property firms SP Setia, KLCC Property and UEM World to its list.“We continue to like IOI Corp, KL Kepong and IJM Plantations in the plantation space but are dropping Sime Darby,” it said.“Telcos is always on our Buy list. Small/mid stocks like SapuraCrest and TA Enterprise should deliver strong share price performance,” it said.