Standard & Poor’s Stock Picks For The Year Of The Tiger
In a recent Standard & Poor’s (S&P) report, the equity research firm maintained its target for the Malaysian stock market, the FTSE Bursa Malaysia KL Composite Index (FBM KLCI), at 1,400 points in 2010 for an 11% return, pricing the index at 16 times market consensus earnings for this year.

Based on valuation grounds and growth prospects, S&P is “overweight” on the banking and healthcare sectors in Malaysia. S&P is neutral on the energy sector as it might face possible margin pressure.

It is “underweight” on the telecoms sector, while “market weight” on the consumer staples as valuations have built in higher palm oil prices.

S&P’s top picks in descending order are as follows, with extracts for the top 3 (full extracts here):

1. Genting
Offers exposure to the integrated resort in Singapore, which will be a significant contributor to earnings over the medium term, while domestic casino operation will provide relatively stable earnings.

2. HELP International
Expects double-digit trend in revenue and earnings in the past three years to continue, underpinned by a steady increase in local and international student intake as well as overseas expansions via franchising and licensing arrangements.

3. QSR Brands
Believes profit growth will emanate from the opening of 30 KFC stores and 16 to 18 new Pizza Hut outlets in Malaysia, while operations in Indochina and India will provide an additional kick to profits.

4. Carlsberg Brewery (M)
5. KL Kepong
6. United Plantations
7. Alam Maritim Resources
8. Wah Seong Corp
9. Allianz Malaysia
10. AMMB Holdings
11. CIMB Group
12. SP Setia
13. Kossan Rubber Industries
14. Supermax Corp
15. AirAsia
16. Mudajaya Group
17. Sime Darby
18. Sunway Holdings
19. Notion VTec
20. Unisem (M)
21. Malaysia Steel Works (KL)
22. Sino Hua-An International
23. Subur Tiasa Holdings
24. Axiata Group
25. Tenaga Nasional