In recent months, external uncertainties continued to lead the market. More often than not, investors ignore the potential domestic catalyst to join the selling bandwagon. Recently, the Hungarian economic scare as well as disappointing US jobs data weighed on the local bourse. This is in spite of the upcoming announcement of 10th Malaysia Plan (this Thursday). In view of this, we re-look at our stock universe and highlight companies with BUY calls which offer a gross yield of more than 6%, slightly higher than what EPF paid (5.65%) for 2009. Despite the defensive quality, we think these companies may also come under some selling pressure if the market falls further. Therefore, we have identified companies with earnings which are more resilient, i.e. from defensive industries like F&B, gaming and power to minimize the potential earnings disappointment.
All in all, we like
Daibochi Plastic & Packaging (Buy,TP: RM4.60),
Cocoaland (Buy, TP: RM1.78),
YTL Power International (Buy, TP: RM2.65),
Berjaya Sports Toto (Buy, TP: RM5.45), and
Tomypak Holdings (Buy, TP: 4.96).