We forecast KLCI earnings to contract again in 2022 after the rebound in 2021 (2020/2021F/2022F: -13.9%/+39.7%/-7.4%; if ex-glove stocks, adjusted 2021F/2022F: +36.8/+5.6% YoY). End-2022 KLCI target is 1,710 (15x fwd. earnings, -0.5 SD vs. mean), reflecting expected double-digit earnings rebound in 2023E. We are overweight Financials (HLBK, RHB), Oil & Gas (Yinson), Renewables (Solarvest), Tech (Inari, CTOS), Auto (Bermaz), Gaming (GENT(M)), Plantations (KLK, BPlant), Petrochems (PChem) and Hospitals (IHH). Selective on Telcos (Telekom, Axiata), REITs (Axis), Consumer (Mr DIY, Heineken) and Logistics (MISC). Underweight Gloves |