DBS: Any Malaysia market selldown will offer buying opportunities

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Malaysia’s shock election outcome may lead to a market correction, but it will be brief and offer buying opportunities, DBS said in a note on Thursday.

While Mahathir Mohamed’s surprise election win will bring near-term policy uncertainties, “Mahathir was a prime minister for 22 years and has the experience in governing the country,” DBS noted. “Over the medium term, structural reforms will be a catalyst to watch out for.”

DBS added that the construction sector would likely see headwinds.

“Pakatan Harapan (PH)  has vowed to review all mega projects which have been awarded to foreign parties to ensure that it is done in the best interest of the nation,” DBS noted, adding that meant projects such as the East Coast Rail Link and High Speed Rail could face delays or cancellations.

It dropped CIMB, Gamuda and Sunway Construction from its top picks. But it reiterated its remaining top picks of Maybank, Hong Leong Bank, Bumi Armada, Sapura Energy, SKP Resources, Hibiscus, Unisem, Wah Seong, Globetronics and Yong Tai.

It kept its KLCI end-year target of 1950 unchanged “for now.”

The index ended Tuesday at 1846.51.