KUALA LUMPUR, Nov 7 — AmBank Research maintained its end-2020 FTSE Bursa Malaysia KLCI (FBM KLCI) target of 1,530 points, based on 16.5 times its 2021F earnings projection (+34.2 per cent, after a 17.9 per cent contraction in 2020F).

In a note today, the research house said the target was at a discount to the 5-year historical average of 18x largely to take the one-off spike in earnings of component stock Top Glove in 2021F into consideration.

"We reiterate our view that the final months of 2020 shall mark the market’s continued shift from a predominantly pandemic-themed, to a recovery-focused one.

"However, realising how grave the damage a nationwide lockdown could do to the economy, the government (at least for the time being) has decided against a new nationwide lockdown to protect livelihood,” It said.

AmBank Research said meanwhile, the market risk premium is likely to remain stable as dominant players in the market, namely local investors, seem to have come to terms with a more dynamic political landscape in Malaysia after the 14th general election.

"Sectors poised to benefit from the recovery in demand/pent-up demand post-pandemic are technology, healthcare, power, seaport, airport and auto.

"Our top picks reflect names that are likely to benefit from the recovery of the domestic economy, the export sector as well as global trade, namely, Maybank, Tenaga Nasional, Axiata Group, Dialog Group, RHB Bank, Westports, Malaysia Airports, Allianz Malaysia, MMC Corp and Kumpulan Powernet,” it said.

The FBM KLCI closed at intraday high of 1,519.64 yesterday, with the benchmark composite index rising 1.21 per cent as investors’ optimism was uplifted by the Budget 2021 announcement. — Bernama