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=MARKET BUZZ: UOB Cuts Malaysia's KLCI End-2018 Target To 1750

KUALA LUMPUR (Jul 12) -- UOB Kay Hian Securities cuts KLCI end-2018 target to 1750 from 1830 on disappointing 1Q corporate earnings and new administration's agenda, but flags interim trading opportunities on easing domestic political risk and earnings recovery in 2Q. KLCI now +0.4% at 1696.18. " While we generally advocate a defensive and large cap-centric strategy, with thematic focus on deep values, E&E (Electrical and Electronics) and Tourism, we also advocate a trading-oriented strategy that tactically focuses on selected overly sold down large and mid caps," says house in investor note. Expect foreign outflow to slow down given the moderate estimated foreign portfolio ownership of only 16%. "Corporate earnings should improve from 2Q18 onwards. We regard the 1Q reporting season as an anomaly and linked to GE14," adds house; foresees some companies likely to exercise more prudent revenue recognition post general election.

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