Since early December, the fall in crude oil prices has triggered a major sell-off in Malaysia equity. However, with crude oil prices start to stabilise and probably year-end window dressing activities have been seen, Malaysia equity has staged a strong rebound from its 52-week low of 1,671.82.

Nonetheless, in view of the high market volatility, Naga Warrants will concentrate on resilient counter from various sectors such as Telecommunication, Healthcare, Construction, Plantation and Utilities. These 8 structured call warrants are DIGI-C2, IHH-CV, GAMUDA-C17, KPJ-CO, MAXIS-CP, MMCCX, TM-C5 and TSH-CI.

Kenanga Research have an OUTPERFORM call on MMCCORP (OP, TP: RM 3.21) and GAMUDA (OP, TP: RM 5.29), as both company are the biggest beneficiary of MRT2 news flows. For MMC Corporation, the Equities Derivatives Structured Products (EDSP) team believes the proposed listing of Malakoff in 2Q15 will enable MMCCORP to focus more on its growing construction segment in MRT2 project.

Despite Kenanga Research have a MARKET PERFORM call on DIGI (MP, TP: RM 6.03), MAXIS (MP, TP: RM 7.20) and TM (MP: TP: RM6.92), the EDSP team reckon that telecommunication sectors will continue to attract investors due to its defensive play and good dividend yield especially in this uncertain time. In addition, mobile operators like MAXIS and DIGI also will benefit from the implementation of GST in next year April 2015, as they would be able to pass on the services tax to customers that they currently absorb in the prepaid segment. As for the remaining underlying counters, the research team are calling MARKET PERFORM on TSH (MP, TP: Under Review) and UNDERPERFORM call on IHH (UP, TP: RM 4.20) and KPJ (UP, TP: RM 3.31).

Source: Kenanga