We introduce an end-2023 FBM KLCI target of 1,640 pts based on 15.5x our projected FBM KLCI 2023F earnings (+9.9), at a discount to its 5-year historical average of 18x to reflect valuation compression across asset classes as well as risk of the global economy slipping into a sharp slowdown, recession or stagflation on the heels of aggressive monetary tightening by major policy makers globally since 2022. We advocate investors to seek refuge in sectors and stocks with strong earnings resilience to weather headwinds globally. If history is any guide, there is a very strong likelihood that the US will slip into a recession in 2023 or 2024. Our overall top picks are MAYBANK, CIMB, DIGI, KLK, GAMUDA, ABMB, ARMADA, BAUTO, AEON and MYNEWS. Our top Shariah picks are PCHEM, DIGI, MAXIS, KLK, TM, GAMUDA, CTOS, BAUTO, AEON and OCK. |