KUALA LUMPUR: RHB Research believe it is worth repeating its market views for 2010 – trading conditions are likely to remain volatile as investors anticipate policy changes.

"In our view, this is the time to position for “health” (i.e. growth) and “wealth” (i.e. dividends), ahead of the economic recovery in 2011.

"We estimate 16.4% and 14.4% growth in 2010-2011 for our stock universe, i.e. implying stronger growth for stocks outside of the FBM KLCI," it said on Wednesday, Feb 10.

RHB Research said the more attractively-valued stocks include Parkson (China growth/Vietnam expansion), Unisem (China demand growth), QL Resources (regional demand growth), Faber (India/Middle East expansion), Kossan (capacity expansion and global demand growth), Hai-O (expansion in Indonesia) and Maybank (earnings recovery).

It also likes companies that consistently pay high dividends due to robust balance sheet and free cashflow while pursuing a strategy to further strengthen their business and competitive position.

"We like the telecom sector as both a capital management play (with expected strong dividends from Maxis, Digi and TM) as well as potential growth play (for stronger-than-expected earnings growth from data services). We also highlight Public Bank, Media Prima and Daibochi for above-average yields of 6-7% p.a.," it said

However, RHB Research said “happiness” may also be determined (or undermined) by external factors including regulatory/political conditions, as well as commodity/asset reflation.

It has an Overweight call on plantations (top pick, KLK), oil & gas (top pick – Wah Seong) and TNB as a hedge against these expectations. It is also overweight on property (top pick – IJM Land).