KUALA LUMPUR: OSK Research said it remains overweight on Malaysia and looks forward to a strong 1H2011, with its 2011 fair value for the FBM KLCI remaining at 1,648.

"News that the PM will be making a Cabinet reshuffle next month ahead of the general election simply reinforces our view of a early polls in 2011. Remain Overweight on Malaysia," it said in its strategy outlook issued on Monday, 22.

OSK Research said Petronas Chemicals Group (PCG) will replace Berjaya Sports Toto as a KLCI member effective Nov 29. PCG, which will be the 12th largest index member, will have an investability weighting of 30% and index weightage of 2.55% based on its RM5.04 reference price.

The research house has  Buy call with a fair value of RM5.51 on PCG.

"Following this, we see no further review to the KLCI members until next year when UEM Land (Not Rated) possibly replaces PLUS Expressways after the latter is privatized and the former merges with Sunrise," it said.

On the broader market, as we had correctly predicted this month's profit taking in our November Market Outlook, we now look forward to a strong 1H2011, with its 2011 fair value for the KLCI remaining at 1,648.