KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
With technology stocks trading near record valuations, Citi strategists argue that investors should look beyond the sector for the next leg of growth. Their “Thematic 30” Recommended List, recently updated, highlights non-tech companies in healthcare, industrials, financials, and consumer that combine earnings growth with reasonable valuations.
Why Look Beyond Tech?
Tech valuations stretched: The S&P 500 tech sector trades at 27x forward earnings, near the high end of its range since 2022.
PEG ratio elevated: At ~2x PEG (P/E-to-growth), tech leaves limited upside unless growth expectations accelerate.
Rotation opportunity: Non-tech sectors offer similar or stronger growth at lower relative valuations.
Citi’s Screening Criteria
Participation in structural themes – e.g., digital payments, medical innovation, advanced industrials, or contactless consumer trends.
Growth in line or above S&P 500 – analysts forecast ~10% EPS growth for the S&P 500 this year; selected names match or exceed that.
Valuation discipline – PEG ratio ≤ 2x ensures growth is not fully priced in.
Quality filters – high return on equity (ROE), strong margins, and improving efficiency relative to long-term averages.
Non-Tech Growth Names to Watch
Uber Technologies (UBER) – benefitting from mobility + delivery synergies.
DoorDash (DASH) – plays into digital consumption trends.
Pinterest (PINS) – monetizing digital engagement with ad-tech.
Equifax (EFX) – financial data and credit infrastructure.
Capital One Financial (COF) – fintech-driven banking model with resilient earnings.
Flowserve (FLS) – industrial pumps, environmentally friendly infrastructure play.
Medtronic (MDT) – diversified medical-device leader.
Boston Scientific (BSX) – high-growth cardiology and surgical solutions.
Case Study: Boston Scientific (BSX)
Growth outlook: Analysts project 11% sales CAGR through 2027, driven by rising global demand for cardiac care and acquisitions.
Profitability: Already strong margins, with management reinvesting in operations while controlling debt.
Capital allocation: Cash flow prioritized toward buybacks, driving projected 14% EPS growth over two years.
Valuation: Trades at 31x FY26 EPS, implying a PEG just above 2x — well below its prior peak of 3x.
Investor Takeaway
Non-tech growth opportunities exist across fintech, healthcare, and industrials. With tech’s PEG stretched, Citi suggests reallocating to quality names like BSX, MDT, and COF — companies where earnings growth is not fully reflected in valuations.
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