KUALA LUMPUR: Short-term uncertainties surrounding the United States (U.S.) election and its influence on U.S. and global macroeconomics are currently weighing on markets, according to RHB Investment Bank Bhd (RHB Research).
Geopolitical risks, particularly in the Middle East, may also keep investor sentiment cautious until there is greater clarity, the firm noted in a recent report.
"Key investment themes include adding defensive colour to portfolios to guard against near-term volatility and protect realized gains achieved year-to-date.
"Other themes are staying nimble to build positions on broad-based market weakness and focusing on stocks with a Johor angle, along with a bottom-fishing strategy on small to mid-caps," it said in a note today.
RHB Research has maintained an "Overweight" rating on the banking, property, Malaysian real estate investment trust (REIT), construction, technology, healthcare, basic materials, oil & gas, utilities, and rubber product sectors.
The firm noted that the semi-annual review of the FBM KLCI component stocks is expected on December 5, with rankings based on market capitalisation as of November 25, and changes taking effect on December 23.
RHB Research expects Gamuda Bhd, currently ranked 20th, to be added to the FBM KLCI component list, while 99 Speed Mart Retail Holdings Bhd, in 27th position, is still RM2 billion short of qualifying.
The two lowest-ranked stocks, Genting Malaysia Bhd and Genting Bhd, may face exclusion, though 99 Speedmart could qualify if its share price reaches RM2.50.
Should Gamuda and 99 Speedmart meet requirements, they would replace Genting Malaysia and Genting.
Additionally, RHB Research stated that the reserve list will include the top five highest-ranking eligible non-constituents by market capitalisation, which would be used if any components are removed before the next review.
This list could consist of 99 Speedmart (if it does not enter the top 25), Malaysia Airports Holdings Bhd (MAHB), AmBank Group, Westports Holdings Bhd, and Genting Malaysia, or Genting if 99 Speedmart joins the index.