Focus on earnings certainty. We advocate defensive stance in stocks with earnings certainty and domestic oriented catalysts. Despite expectation of modest growth recovery and firmer commodity prices, there could be sporadic externally-induced volatility could shock the market.
Ringgit reversal could spice up sentiment. The recipes for a market rebound are almost here, i.e. growth stabilisation, firmer commodity prices, with the exception of stronger ringgit outlook.
Top Picks : Big Caps: Digi, Gamuda, Genting Bhd, Sime Darby & Tenaga; Small/Mid-Caps: HSPlant, Matrix Concepts, Pesona, SunCon & Time dotcom.
Source: Hong Leong Investment Bank Research - 5 Jan 2017