Good performance still seen for September. For September, we expect the market to continue on its uptrend although we note the rather limited upside to our year-end target of 1465 pts, which we will review in our 2Q results report card tomorrow. The reason for our optimism is three-pronged. We continue to see strength in the Ringgit, which may continue to attract foreign interest. The Economic Transformation Programme (ETP) to be unveiled in September may garner further confidence on the Government?s economic reforms. Finally, we note that some local institutional investors have been taking profit on the market since its low in May. As the market has appreciated some 170 pts since then, we believe that the current strength in the market will mean these investors would have to return to the market to avoid underperforming the KLCI for their index-linked funds. All 3 factors lead us to forecast a still positive September.


Top Buys still Big Caps. 3 out of our Top 5 Buys in August outperformed the index, with the exception of Smaller caps Supermax and KPJ Healthcare. For September, we maintain our Big Cap Buys of CIMB, Maybank and Axiata and add in TNB, which has announced a bonus issue. We also add SP Setia, our Top Property Sector Buy, as one of our top picks for the month. Our target price for SP Setia reflects an upcoming upgrade on the sector, which will be released shortly.