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KUALA LUMPUR: Maybank Investment Bank Bhd (Maybank IB) has named Gamuda Bhd, Hartalega Holdings Bhd, Tenaga Nasional Bhd (TNB) and Axiata Group Bhd among its top picks for 2015 as it advocates a defensive portfolio for the year.

Its “overweight” sectors are power, construction, telecommunications, ports and glove sectors.

Maybank Kim Eng Research executive director Ong Seng Yeow said main themes in 2015 include  infrastructure projects under the 11th Malaysia Plan and the strengthening US dollar.

“In terms of the 11th Malaysia Plan, the stock I would like to run through is Gamuda (target price [TP]: RM6). The KVMRT2 (Klang Valley mass rapid transit) works are expected to be tendered in the third quarter of this year — this will be a strong earnings catalyst for the company,” he said at the Maybank IB Market Outlook 2015 seminar on Saturday.

He said Hartalega (TP: RM8.50) could benefit from the strengthening greenback as the company is involved in exports, while its expanded capacity, coupled with the lower latex prices could improve its margins.

Maybank IB director and head of equities CK Lim said stocks with higher yields will be another theme for 2015.

“That basically means utilities and telecommunications as well. What we like is the consistency in revenue, which brings about a stable set of results and obviously, in a tough market, investors don’t really like surprises,” he said.

Lim also noted that there has been a shift to dividend stocks from oil and gas stocks after the recent plunge in oil prices.

The research house named TNB (TP: RM16), Axiata (TP: RM7.80) and Star Publications (Malaysia) Bhd (RM2.65) as its stock picks based on yield.

Besides that, Ong said mergers and acquisitions would be another talking point for the year, with stocks in focus including WCT Holdings Bhd, which could see the listing of its retail assets in the fourth quarter of 2015, S P Setia Bhd on a potential property asset injection by Permodalan Nasional Bhd, and NCB Holdings Bhd, also on a possible injection by MMC Corp Bhd.

He added that Sarawak stocks such as Cahya Mata Sarawak Bhd (CMS) (TP: RM4.80) and Hock Seng Lee Bhd (HSL) (TP: RM2.15) are also closely monitored in view of the Sarawak Corridor of Renewable Energy (Score).

“CMS is very strong on the Score theme and there will be robust and predictable demand for cement and construction materials,” he said, adding that HSL could also see the momentum of its order book continue.

Maybank IB’s other stock picks for 2015 include Alliance Financial Group Bhd (TP: RM5.50) and Westports Holdings Bhd (TP: RM3.60).

For the benchmark FBM KLCI, the research house maintains a year-end target of 1,830 points, which gives a 5.6% upside from last Friday’s closing of 1,732.44 points.


This article first appeared in The Edge Financial Daily, on January 12, 2015.

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