GDP to grow 5%, FBM KLCI target 1,400, says fund manager

Written by Lam Jian Wyn

Tuesday, 01 December 2009 16:4 KUALA LUMPUR: UOB-OSK Asset Management Sdn Bhd has forecast Malaysia's economy to grow 5% next year while the target for the 30-stock FBM KUALA LUMPUR COMPOSITE INDEX [] (FBM KLCI) will be 1,400. Its chief executive officer Lim Suet Ling said on Tuesday, Dec 1 that the FBM KLCI's resistance level would range from 1,350 to 1,400. "It (FBM KLCI) will outpace the company's forecasted gross domestic product (GDP) growth of 5%," she said at the launch of the OSK-UOB Capital ASEAN Fund. The GDP growth would be underpinned by the PLANTATION [], oil and gas and services sectors, she said. Lim added the banking sector would possibly benefit from the recovery while plantations would gain from rising demand for crude palm oil (CPO). Supply of CPO was affected by the hot spell from May to July this year, she said. "If you look at international television channels, the government is trying to raise awareness on palm oil as an alternative edible oil," she said, adding that this will boost demand. On the corporate earnings for the quarter ended Sept 30, she added the corporations appeared to have learnt their lesson from the 1997 Asian Financial Crisis. As for next year, while there may be small pockets of problematic companies, Lim anticipated a largely turmoil-free year in 2010. She said the worst had passed.