OSK Research is maintaining the year-end KLCI target of 1,680 points as the ruling Barisan Nasional's (BN) two thirds majority victory in Sarawak was within expectations.

With the BN still firmly in power in Sarawak, OSK continued to expect a general election to be held by year-end, with the popular vote somewhat swinging back to the ruling coalition in the polls.

'This will be good for market sentiment as a whole. As such, we continue to see the government sustaining its efforts at stimulating the economy via the ETP and keep our year-end KLCI target,' it said in a research note today.

OSK also said that the Sarawak election panned out as it expected, with the BN keeping its two thirds majority but losing ground overall, in winning 55 seats out of 71 while the opposition increased its number to 15.

OSK has maintained the 'Top 10 Buy' calls, with the broad strategy still focused on 'Buy Big Caps on Rebounds' and 'Go Defensive on Mid/Small Caps'.

'With the market having already lost 2.56 per cent from its high in April from 1,561.9 to 1,521.9, we may see a limited downside this week.

'Any further drop in the market can be well contained and may see the KLCI rebound towards month-end,' the research house said.
-- Bernama