2017 Market Outlook. Nigel Foo - Mar2017

Transcription

1 2017 Market Outlook Nigel Foo - nigel.foo@cimb.com Mar2017

2 Important Notice This presentation/material has been prepared by CIMB Investment Bank ( CIMB ) exclusively for your benefit and internal use in order to indicate, on a preliminary basis, the feasibility of possible transactions. Information contained in this presentation/material are intended for discussion purposes only and are subject to a definitive agreement. All information contained in this presentation/material belongs to CIMB and may not be copied, distributed or otherwise disseminated in whole or in part without the prior written consent of CIMB. This presentation/material has been prepared on the basis of information that is believed to be correct at the time the presentation/material was prepared, but that may not have been independently verified. CIMB makes no express or implied warranty as to the accuracy or completeness of any such information. This information is subject to change without notice and its accuracy is not guaranteed. Neither CIMB nor any of its affiliates, advisers or representatives make undertaking to update any such information subsequent to the date hereof. The views expressed in this presentation/material accurately reflect the personal views of the analyst(s). Investors are advised to make their own independent assessment of the contents of this presentation/material, should not treat such content as advice relating to legal, accounting, taxation, technical or investment matters and should consult their own advisers. Insofar as the performance of any transactions is contemplated, investors are to ensure that such performance will not be invalid or illegal by virtue of the laws of that jurisdiction. CIMB or its affiliates (the CIMB Group ) may from time to time do and seek to do business with the company(ies) covered in this presentation/material without further consultation with or notification to you. Nothing in this presentation/material is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither the CIMB Group nor any of their directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (express or implied) arising out of, contained in or derived from or any omission from the presentation/material, except liability under statute that cannot be excluded. 2

3 4Q16 results summary

4 4Q16 results, best in 4 quarters, 21% above exp. 80% 70% 60% 50% 40% 30% 20% 10% 0% 73% 73% 66% 59% 59% 53% 55% 54% 55% 53% 51% 51% 50% 46% 40% 40% 36% 37% 38% 35% 36% 33% 29% 30% 31% 33% 28% 29% 25% 24% 21% 19% 18% 19% 19% 18% 16% 8% 11% 13% 11% 12% 13% 14% 8% 8% 9% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Companies beating expectations Companies meeting expectations Companies coming below expectations 43% 4

5 KLCI 2017F EPS growth 9.2%, 7.9% in 2018F, KLCI end-2017 target at 1,790 FBMKLCI Statistics F 2018F 2019F Core P/E (x) 17.3x 18.1x 16.6x 15.4x 14.3x Core Net Profit Growth (%) -0.1% -4.8% 9.2% 7.9% 7.7% P/BV (x) 1.8x 1.7x 1.6x 1.5x 1.4x Dividend yield (%) 2.8% 2.9% 3.1% 3.3% 3.5% Non-bank net gearing (%) 27.6% 26.2% 24.1% 20.0% 15.3% Recurring ROE 10.5% 9.4% 9.8% 9.9% 10.1% 5

6 KLCI premium to region is only 13% As of 28 Feb Core P/E Core EPS growth F 2018F F 2018F FBMKLCI 17.3x 18.1x 16.6x 15.4x -0.1% -4.8% 9.2% 7.9% FSSTI 13.0x 14.0x 14.5x 13.8x -6.3% -7.5% 4.8% 5.5% SET 18.6x 16.4x 14.6x 12.9x 8.5% 13.1% 12.7% 13.2% JCI 16.5x 18.9x 16.6x 14.3x -5.8% 0.7% 15.8% 16.1% Simple Region x KL 16.0x 16.4x 15.2x 13.7x -1.2% 2.1% 11.1% 11.6% KLCI PER premium 7.9% 10.5% 9.2% 12.8% 6

7 Top big cap and smallcap picks Bigcaps AirAsia, Gamuda, Genting, Genting Malaysia, MAHB, RHB, Maybank, Top Glove, Sime, YTL Power Smallcaps Bioalpha, DRB, Hap Seng, GHL, Kawan, LBS, MyEG, Muhibbah, MPI and Sasbadi 7

8 Currency markets

9 Dollar Index (101) preferred wave count, to start wave 4 consolidation? Dollar Index monthly chart since

10 US$MYR to see one more up-leg first? (RM4.48) US$MYR weekly chart since

11 Yuan LT rebound in progress (6.87%) 8.28 US$-Yuan monthly chart since

12 Bonds

13 USA 10-years bond yield chart (2.43%) monthly chart since

14 M sia 10-years bond yield chart (4.23%), triangle? monthly chart since

15 Commodities

16 Crude oil weekly chart (US$53) weekly chart since

17 Commercial players shorting crude oil futures above 2014 levels Commercial shorts surpass 2014 levels Crude oil px Commercial players short surpass 2014 levels 17

18 Crude oil prices just a rebound? monthly price chart since

19 CPO bullish triangle, bull market in 2018? monthly chart since

20 Japan rubber futures, triangle formation (325yen) monthly chart since

21 Gold in trading range, watch resistance and support monthly price chart since

22 Stock markets

23 US S&P500 major wave 5 in progress? monthly chart since

24 US S&P500 rally to continue till mid-2017? weekly price chart since

25 MSCI Asia ex-japan, bullish only in end 2017? monthly chart since

26 MSCI Asia ex-japan chart (559), complex correction? weekly chart since 2014 Length of A=C 26

27 Malaysia

28 KLCI triangle breakout, target weekly chart since

29 But triangles only seen in wave 4 or wave b in an wave a-b-c correction (AUDNZD shown below) 29

30 KLCI shows bearish H&S, 1,600 support must hold monthly chart since

31 KLCI 10.5 year cycle, bottom in 1H2019? monthly chart since

32 SmallCap Index doing C rebound to ? weekly chart since

33 MESDAQ (Ace stock) Index (5301) bullish monthly chart since 2008, key support 4,770, MACD & RSI breakout 33

34 Plantation Index sideways more than 7 years monthly chart since

35 Property Index (1,200) sideways, 1,220 resistance, now 1225 Weekly chart since

36 Bursa Consumer Index (592), RTL 610, triangle? weekly chart since 2007, sideways since

37 Construction Index, RTL 345, diagonal triangle? monthly chart since

38 Stocks to watch

39 QL Resources (4.61) - bullish triangle breakout weekly chart since

40 Muhibbah Engineering weekly chart since

41 AZRB (RM0.69) triangle to be completed? Monthly chart since

42 UOA (RM2.56) backed by 6% yield Weekly chart since

43 Conclusion 4Q16 results just ended, best result in the last 4 quarters Local bourse rally still got legs till mid-2017 S&P500 rally could last for few more months before peak US$ to peak sometime 3Q17, regional currencies to strengthen after Ringgit to appreciate from 3Q17 onwards Asia equity expected to turn Bullish from early-2018 onwards 43

44 Q & A