Malaysian banks such as CIMB Group Holdings Bhd and government-linked companies including Sime Darby Bhd may gain as faster-than-expected economic growth this year underpins earnings, JPMorgan Chase and Co said. Fourth-quarter earnings last year "have been robust, setting the stage for a strong 2010," Chris Oh, an analyst at JPMorgan, said in a report yesterday. Corporate profits may increase 20.7 per cent this year after growth of 3.3 per cent in 2009 as the Southeast Asian nation emerged from its first recession in a decade in the last quarter. Prime Minister Datuk Seri Najib Razak has unveiled RM67 billion of stimulus measures and accelerated efforts to open up the economy to attract more foreign investors. JPMorgan, which covers 35 companies in Malaysia, said other top picks include Public Bank Bhd, AMMB Holdings Bhd, energy utility Tenaga Nasional Bhd, Genting Bhd, Asia's largest listed casino operator, and builder IJM Corp. The FTSE Bursa Malaysia KLCI Index, which rallied 45 per cent last year, advanced 0.5 per cent to 1,290.33 as of 10:54 am local time, set for the highest close since January 25. The government has eased rules governing overseas investors, initial public offerings and property purchases in a bid to lure more foreign money and shore up the economy. and#8216;Some Traction' With "some traction on Prime Minister Najib Razak's reform agenda, coupled with the take-off of some large infrastructure spending, the risk to 2010 earnings growth remains to the upside," Oh wrote. Malaysia emerged from recession last quarter with gross domestic product rising 4.5 per cent from a year earlier. Malaysia's exports may rise 6 per cent to 7 per cent this year, International Trade and Industry Minister Mustapa Mohamed said near Kuala Lumpur today. Higher export growth is needed for Malaysia to achieve economic expansion of 5 per cent to 6 per cent this year, he said. Economic expansion is now "likely" to exceed 5 per cent this year after growth was better than expected in the fourth quarter, Oh said in the report. -- Bloomberg
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