The FBM KLCI extended its downtrend move along with most of the regional bourses as concerns persisted ahead of the Jackson Hole meeting; investors may react negatively if the Fed turned more hawkish going forward. Following another lacklustre session on Wall Street, we believe the local sentiment is likely to remain shaky. However, bargain-hunting may emerge on the broader market especially companies with solid earnings growth.

Global uncertainties arising from fears over additional interest rate hikes from the US Fed have sent the FBM KLCI below the 1,500 zone. Global sentiment should remain negative as investors braced for the US Fed Chairman’s speech in the Jackson Hole meeting which could signal further aggressive stance in taming the inflation. Nevertheless, we expect buying interest to emerge on stocks with solid results amid the ongoing reporting season on the local bourse.

That said, we do not foresee a major reversal of impairment allowance on hire purchase in the upcoming quarter. The hire purchase segment’s growth should rely on a higher hire purchase receivables as ELKDESA aims to gradually bring its hire purchase receivables portfolio towards pre-pandemic levels. Its hire purchase receivables increased 7.3% QoQ to RM502.2m.

Moving forward, we expect most branches’ performance will gradually return to pre-Covid-19 level. Meanwhile, the setup of its first satellite clinic in Taman Sutera located in Skudai, Johor, as well as the new ACC in Bahau, Negeri Sembilan is on schedule, aiming to start operation by September 2022. A surgeon who is currently based in Seremban ACC will be relocated to the new Bahau branch.

Deleum Bhd (DELEUM) history dated back to 1982 and has evolved into a major upstream oil & gas player that offers power and machinery (P&M) business through a joint venture, provision of oilfield services (OS) and integrated corrosion solutions (ICS).

The FBM KLCI drifted lower last Friday in tandem with most of the regional markets as persistent selling pressure were noticed following the elevated inflation data in the European region. With the global investors reassessing the risks of interest rate hikes by the US Feds moving forward, growth stocks may see some selling pressure. Nevertheless, we believe traders on the local bourse may remain cautiously optimistic amid the earnings season, while monitoring Malaysia’s inflation rate that will be released this Friday.

Given AME’s strong historical track record and their position as an integrated industrial property specialist, we reckon that AME will be able to replicate their success of i-Parks that are equipped with custom-built industrial properties and workers dormitories in Johor into their northern venture. This also marks the first step of AME’s geographical diversification into other states in Malaysia.

The FBM KLCI extended losses amid weaker sentiment across the regional markets as investors continued to digest recent gains. Given the US markets are still finding its direction, we believe the local bourse may take a breather amid softer inflow of foreign funds and the FBM KLCI might be resisted along its SMA200 zone. Investors will be focusing on the ongoing reporting season to position themselves in the stock markets.