Nextview ATIC 2011

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ASIAN TRADER INVESTOR CONFERENCE 2011

SERIOUSLY, CAN THE REAL BULL KISS 2000 LEVEL BY 2012

BY DR. NAZRI KHAN, HEAD OF RETAIL RESEARCH, AFFIN INVESTMENT BANK

MARKET OUTLOOK AND STRATEGY

2011 - 2012


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Malaysia is currently Southeast Asias third-largest economy.

Malaysia enjoyed a below average inflation rate of 3.1 per cent and a high

gross domestic savings rate of 42.2 per cent, indicating a stable and

flourishing economy.

Malaysias gross domestic product (GDP) growth per capita also

increased by an average of 7% since 1980 and 5% per year between 2004

and 2009.

Big transformation programme to transform the country into a high-

income nation by 2020 driven by planned investments worth RM1.38

trillion over 10 years of which 60% would come from the private sector,

32% from government-linked corporations and 8% from the government.

The investment aims to double Malaysias per capita income toUSD15,000 and push the country into the ranks of developed nations by

2020, rebalancing local economy towards domestic demand and the

service sector.

FUNDAMENTALS BACKDROP IS STILL ROBUST


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Massive market-moving projects namely the RM64 billion KL mass rapid

transit (MRT) project and high-speed rail (HSR) linking Penang, RM10

billion for the Greater Kuala Lumpur, RM40 billion nuclear power plant

and hydroelectric dams, RM26 billion KL International Financial District,

RM1.2 billion six star hotel in KL Sentral and a RM500 million new

complex at the KL International Airport.

Biggest driver is RM10 billion for Talent Corporation meant to adddress

human capital development and reverse a growing brain drain problem,

where about 700,000 Malaysians are currently living abroad, with half of

them in Singapore and another half in Australia, Britain and the United

States.

Budget 2011 worth RM212b will be the super 2011 catalyst.

The budget is pro-growth and domestic-demand driven, with a clear

message of a private sector-led growth with the government acting as an

enabler and strong emphasis on private sector productivity, government

efficiency and country competitiveness.



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Strong economic focus on twelve NKEAs for new sources of growth

namely tourism, O&G, education, E&E, healthcare, palm oil, ICT,

agriculture, business services, financial services, wholesale & retail and

Greater KL.

Budget 2011 will give positive impacts on construction, infrastructure,

airlines & airport, auto, banks, consumer, healthcare, plantation, property,telco and utilities.

Fundamentals focus will be on USA economic recovery, QE2, Q4 results

(Malaysia & USA), NEM Part 2, strong Ringgit and rising funds inflow to

push bonds/equity higher.

Fundamentals valuations are reasonably undemanding at 14.6x FY11

earnings giving more rooms for the market to rise significantly higher.



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WORLD GDP 2011 = 4.2%, 2012 = 4.5%

GDP 2011 = 5%, GDP 2012 = 5.5%

GDP Q1 = 10.1% GDP Q2 = 8.9%, GDP Q3 = 5.3%, GDP Q4 = 3.2%

CPI 2011 = 3% 2012 = 3.5%, OPR 2011 = 3.25% 2012 = 3.75%

UNEMPLOYMENT 2011 = 3.5%, 2012 = 3.5%

CURRENT SURPLUS 2011 = 15% OF GDP, 2012 = 13% OF GDP

FOREIGN RESERVES 2011 = USD110b, 2012 = USD115b

USD/RINGGIT 2011 = 3.05, 2012 = 3.00

KEY ECONOMIC DATA 2011 AND 2012


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MALAYSIA HAS POSITIVE FUNDAMENTAL AND TECHNICAL

BACKDROP LAST SEEN IN 1999

BULL UPCYCLE HAS STARTEDWITH 2008 LOW UNLIKELY

TO BE BROKEN IN THE NEXT 10 YEARS


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The average length of a cyclical bull market is 3.5 years. The average length of a secular bull market is 12 years.

The average length of a bear market is 1.5 years.

The average bear market results in a decline of 36%.

The shortest bear market lasted two months such as in 1987 where Dowcorrected 36%.

A secular bear market trend is a long-term downtrend that usually lastslonger than 2 years up to 25 years.

Investors anticipating further losses are often motivated to sell, withnegative sentiment feeding on itself in a vicious circle.

STATISTICS ON BULLS AND BEARS


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GLOBAL MARKET TECHNICALS REMAIN POSITIVE


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BABY BULL HAS STARTED, DOW JONES SHOWED

A FAILED HEAD AND SHOULDER PATTERN


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S&P 500 LOOKS SET TO HIT 1500 AS AN IMMEDIATE TARGET BASED

ON BULLISH MOVING AVERAGE CROSSOVERS


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11NASDAQ IS MORE VOLATILEWITH 3000 AS THE IMMEDIATE TARGET


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SHANGHAI COMPOSITE IS EXPECTED TO TREND HIGHER

WITH 3500 AS THE NEXT TARGET


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BRAZIL IS STILL STRONGWITH 73000 TARGET

FOR THE CURRENT BULL RUN


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INDIA IS THE ONLY EMERGING MARKET

TAKING A PAUSE IN THE CURRENT UPTREND


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FBMKLCI YEARLY CHART SHOWS THAT THE SECULAR BULL

HAS STARTEDWHICH MAY LAST ANOTHER TEN YEARS


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FBMKLCI IS MAKING A SUPERB V SHAPE PATTERN

ON THE QUARTERLY CHARTWITH STEEP ANGLE


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TECHNICAL ESTIMATE FOR FBMKLCI

PEGS 1698, 1803 AND 1977 AS POTENTIAL TARGETS


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INTERSECTOR ANALYSIS SUGGEST RISK TAKINGAND MORE BULLISHNESS


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FINANCE SECTOR CONTINUES TO BE THE STRONGEST

AFTER HITTING ALL TIME HIGH PRICES


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PLANTATION SECTOR IS THE SECOND STRONGEST

WITH MORE UPSIDE TO COME


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PROPERTIES SECTOR LOOKS CONVINCINGWITH 1,200

AS THE IMMEDIATE CHECKPOINT


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CONSTRUCTION SECTOR IS BREAKING HIGHERWITH

STRONG ACCUMMULATION


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23TECH SECTOR IS THEWEAKESTWITH A FIRM DOWNTREND IN PLACE


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SELECTIVE STOCK PICKS TO MAXIMIZE UPSIDEPOTENTIALS


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KARAMBUNAI SECULAR BULL HAS JUST STARTED

FOR LONG TERM TRADERS


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26PERISAI BREAKS FROM THREE YEAR BOTTOM BASE


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PETCHEM BREAKS RM6.00 PSYCHO RESISTANCE

AND SCORES 52WEEK HIGH


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28MALAYSIA MARINE SHOWS HIGH RELATIVE STRENGTH


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29PETDAG SETS TO HIT RM20.00WITH STEEP PARABOLIC CURVE


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30HPI COMPLETES POWER CANDLE ON ALL TIME HIGH VOLUME


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31MEDIA CHINESE DRAWS AMAZING VOLUME AT BOTTOM BASE


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TAANN COMPLETES A SUPER CANDLE

WITH STRONG UPSIDE MOMENTUM


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JAYATIASA SHOWS A SOLID UPTREND PATTERN

WITH GOOD VOLUME


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34WTK HOLDING ON A SPRINT AIMING FOR RM2.20


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35CYPARK JUST STARTS A YOUNG BULL UPCYCLE


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SMPHB VIRTUALLY SCORES 12 YEAR HIGH

ON RISING INSTITUTIONAL INTEREST


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Technical evidence suggests the subprime bear market has decisivelyended with the low of 2008 unlikely to be broken in the next ten years.

Now is the best time to enter with bullish multiple time confirmation.

FBMKLCI is expected to trend higher over the next ten years.

Stocks have exhibited high resilience in the long term with many positivemarket internals from important markets.

Market is in a super V shape with stronger bulls ahead.

Expect oil and gas stocks to lead the broad market rally.

Government commitment on economic reform the domestic front andstrong showing by China and India will contribute to near termbullishness in the local market.

Ten year transformation programme and rising Asian markets are

strongest fundamental factors towards Malaysia long term bullishness. Overall, odds favour strong bulls with positive long term technical picture

for Malaysia and other emerging markets.

FINALWORD :

BABY BULL HAS STARTED, CONTINUE ACCUMMULATING


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THANK YOU AND GOOD LUCK

HOPE TO SEE AGAIN IN THE NEXT ATIC

Nextview ATIC 2011

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