Investors should buy stocks in Taiwan, stick to Malaysian companies with stable dividends and accumulate South Korean exporter shares, UBS AG says.
Optimism following Ma Ying-jeou's (
The poor showing of Malaysia's ruling coalition in recent elections may lead to a political stand-off in the nation, the brokerage wrote, while a US recession is already priced into the South Korean market.
"Taiwan's set to outshine other markets," UBS analyst Ken Chen (陳安) wrote.
Investors are advised to "overweight" Taiwan's financial, property, retail and cements stocks, as those sectors will benefit from Ma's policies, Chen said.
Ma's plan to improve relations with China will cut political risk, luring about US$50 billion into Taiwan's markets in the next few months, Chen said.
That will raise the value of the local stock market to 16.7 times earnings from 14.2 now, he said.
Malaysia faces "near-term policy paralysis" after opposition parties won almost half of the contested states in March 8 elections and that could send the Kuala Lumpur Composite Index lower this year, UBS analyst Colbert Nocom said.
Investors should shift assets to Malaysian companies with solid dividends, such as Public Bank Bhd, Digi.Com Bhd and Bumiputra-Commerce Holdings Bhd, he said.
He also recommended IJM Corp and UEM World Bhd, two of the nation's biggest construction companies.
In South Korea, investors should "overweight" automakers, technology companies and banks, while avoiding companies that will suffer from the weakening won, such as airlines and importers, UBS' Young Chang said.
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