News flow may pick up in November. While our hoped-for construction contract awards in October failed to materialize, November could still be a month for news flow. The major events are Maxis’ relisting, a visit by senior Chinese leaders, a potential resolution of the Selangor water restructuring saga, a potential strategic alliance partner for Proton, potential award of the LCCT contracts and more clarity on a gas and electricity price hike. As for the upcoming 3Q results, we believe the Banking sector will be reporting solid growth given the revival of the capital market.
Opportunistic Buys. As the banks pulled up the FBM KLCI and left the rest of the pack behind, our top pick CIMB strongly outperformed while O&G picks Kencana and Alam market performed. The lack of exciting construction news led to MMC and Mudajaya underperforming.
For November, CIMB and AMMB are our top picks on expectations of good results while TNB, Proton and Puncak Niaga are chosen for the potential news flow relating to a power tariff hike, a new overseas partner and a possible Federal Government asset takeover respectively.
