5 oct 2009

TA Securities Paints Bullish Outlook For Bursa Malaysia In 2010

KUALA LUMPUR, Oct 5 (Bernama) -- The FBM Kuala Lumpur Composite Index is poised to breach the 1,370 points level in 2010 as corporate earnings and price earnings ratio begin to show signs of positive recovery.

In painting a bullish outlook for the local bourse, TA Securities Holdings Bhd's Head of Research Kaladher Govindan said the market is expected to gain from the various pump priming measures put in place by the government in 2009.

"The Prime Minister has pushed the right button so far, I believe we will see the impact next year.

"I also believe there's a lot of Private Finance Initiative (PFI) schemes in the offing which is expected to have a positive impact on economic growth and the stock market next year," said Govindan.

He also expects many more PFI schemes to come on board in the oil and gas sector and down stream activities and this, coupled with a multi-billion ringgit development project, rumoured to be established in the Klang Valley, is expected to augur well for the stock market's performance.

TA Securities, a stock broking arm of TA Enterprise Bhd, also believes the market would undergo several minor corrections in the run up to the rally.

"Naturally, we are looking at a slight correction, if we look at the US Dow Jones as an indicator, in the last 12 years, the market underwent six major corrections, out of which four took place between August and October of each year.

"I believe, for this year, the month of October could be a correction period, judging from the less-than-encouraging macro numbers released the past few weeks.

"But, I believe this is just a one off thing and numbers will improve next year onwards," said Govindan, adding that the stockbroking company was attaching a price earnings ratio of 17.8 times to the basket of stocks to arrive at the target index of 1,370 points level, next year.

Source: Bernama