KUALA LUMPUR (Jan 3): Hong Leong IB Research expects 2023 to be a less stormy year for Bursa Malaysia (but certainly not a smooth journey), following a cumulative two-year loss of 8.2%.

In a traders’ brief on Tuesday (Jan 3), the research house said that currently, CY2023’s valuation is not especially demanding as the FBM KLCI is now trading at 13x P/E (versus 10-year mean 16.9x) and supported by bottomed out foreign shareholding (November 2022: 20.7% — versus November 2019: 20.3%), which would help contain an exodus.

“We envision KLCI to chalk up a positive month in January (resistance: 1,512-1,528-1,540) barring a decisive breakdown below the key 1,454-1,468 supports.

“Major events to watch out for in January: i) assess the 2022 cumulative impact of 4.25% Fed rate and 1% OPR hike reactions to weaker macroeconomics and corporate data; ii) the ongoing Russia-Ukraine war; iii) the Umno general assembly on Jan 13; iv) the BNM meeting on Jan 19-20; and v) opportunities and risks for the global economy and markets following China’s border reopening on Jan 8.

“Technically, Hibiscus Petroleum Bhd (HLIB: 'buy'; TP at RM1.56) should attract buyers on weakness for recovery upside towards the RM1.12-1.16-1.20 hurdles, while crucial support cushioning downside is capped at the RM1.00-1.04 levels,” it said.