Strategy for KLCI above 1600 – Defensive

The current KLCI level is not really supported by real fundamental. Some may say is election, some say local fund is buying up, some say it is foreign hot funds. But who care!?

We do not like the current index level unless we see a good EPS ratio across the board between 8-12 times. As at 1500 level we are cautiously optimistic. At 1600 level we will turn bias to defensive play. We start to build cash position and severely reduce speculative stocks involvement.

Beside of the top 5 new picks, we will mostly concentrate on REITs and cash.

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