KUALA LUMPUR, Aug 15 — Maybank Investment Bank (Maybank IB) says it sees bright prospects in 2021 for mid-capitalised stocks in the financial/banking, glove, healthcare, oil and gas as well as technology sectors.
Retail research head Tee Sze Chiah said as it is four months before the end of the year, it would be to late to join the glove rally this year, though there are opportunities next year for some sectors.
“The first is mid-capitalised financial or banking stocks, because financial stocks behave or react positively to economic growth.
“This year I think economic growth and gross domestic product (GDP) growth is definitely not positive, but next year we do expect recovery, so during the time, you do expect banks to pick up as businesses and consumers start to spend, and basically demand for financial products will increase hence the profitability of banks will also pick up,” he told reporters at the Market Outlook Second Half of 2020 (2H2020) Webinar here today.
Secondly, he said, the glove and healthcare sectors would continue to do well in the first half of 2021.
“The first half and the upcoming quarterly results should continue to stay strong, because this basically reflects the current backlog that they have in hand right now.
“So for the next few quarters it will stay strong and hence the share price rally momentum will continue until the first half of 2021, but coming into the second half, you need to be wary, (as) this is where you need to see (whether) Covid-19 vaccines are there and we do expect demand to normalise,” said Tee.
Thirdly would be the oil and gas sector, he said, adding that Maybank IB analysts are expecting higher oil prices and the momentum should be there.
Another sector to look at is technology as 5G adoption is a long-term prospect, but in this case, stock-specific moves are very important, he noted.
It (5G) will not benefit the whole semi-conductor industry in Malaysia, Tee said, pointing out that Malaysia is one of the low-cost, lower-value chains among the semiconductor sector and there could be one or two that could benefit.
Meanwhile, senior chartist Nik Mohd Ihsan Raja Abdullah said during the last few years, the oil and gas sector saw a lot of under-investment, with capital expenditure for global oil production actually being quite low.
“When the demand starts to come in, supply can’t keep up with the demand, and that would lift oil prices higher,” he said, adding that in 2021 quite a number of oil and gas stocks would be up for trade. — Bernama