15 November 2010
The potential target level for next year will be at 1,691-1,780 with critical support at 1,1440-1550, says S.N Lock a market analyst at The Edge Personal Money Investment Forum on The Stock Market 2010 in KL on Saturday 13.
A Super bull run is on horizon for the KLCI with the 30-stock market benchmarl index potentially surging up to 1,780 level towards the end of next year, he added.
After reaching multi-year and historic highs, all key regional indices, including the FTSE FBM KLCI and European markets, tool a dip on Friday amid worries of a possible increase in interest rates and Ireland's debt problem.
The decline after the vigorous rally and consolidation was much needed for the FBM KLCI to continue with its uptrend after reaching historic high of 1,528.01
On a bullish note, FBM KLCI could also surge to 1,869-1,958 level if the market barometer breaches the initial target for 2011.
Among the key factors for the bullish outlook is the fact that retail participation is still very small despite the market's surge to new highs. Hence, when they come on board, the market will be boosted further. The engine growth will be the construction, property, steel & plantation sectors.
Maybank Investment Bank vice president of research Wong Chew Hann said there was potential for more equity funds to flow into Malaysia. "We expect the overnight policy rate (OPR) to be stable at least until the 2nd Half of 2011 and equities are an attractive asset class during low interest rate times."
She gave a lower end-2011 target of 1,660 for FBM KLCI. She added the risk factors were stronger growth and better employment in the US as well as possible capital control, especially in Asia.
On the outlook for China, S&P's director for equity research, Alexander Chia, helped ease some possible concerns among participants in that event, saying China may experience a soft landing.
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