Moving forward, we believe the improved economic environment, driven by pent-up demand should drive consumer consumption. Despite the recent resurgence in Covid-19 infections on the back of Omicron variant, the demand for essential goods should remain robust amid the high vaccination rate above 90% among the adult populations in Malaysia. Meanwhile, the end of the pricing control scheme by the Malaysia’s government bodes well for the industry players.

Choo Bee Metal Industries Bhd (CHOOBEE) started off since 1940s and has now evolved into one of the leading steel tube and pipe manufacturer and distributor of steel products in Malaysia. CHOOBEE now owns a manufacturing plant in Ipoh, situated in Pengkalan Industrial Estates with a total production of 200,000MT/pa.

With the negative sentiment persisted across the regional markets on the back of escalating tensions from Ukraine and Russia, the FBM KLCI continued to trend lower reversing the rally in the past week. We believe market will trade in heightened volatility and may persist at least for the near term following another selloff on Wall Street overnight, due to fears over Russia’s decision to move troops into eastern Ukraine.

Production capacity currently stood at 10kMT per month or 120kMT p.a. following the commissioning of the 9th Cast Stretch Film machine in December 2021. BPPLAS remained committed in the capacity expansion plan, targeting to commission the 10th Cast Stretch Film machine in FY22 and lift the production capacity to 11kMT per month or 132 kMT p.a. Meanwhile, product mix remained largely consistent as compared to 3Q21.

The FBM KLCI extended loses along with the regional peers amid escalating geopolitical tensions between Ukraine and Russian; plantation sector tumbled after its 10-session rally, while the technology counters noticed further selling pressure. With the ongoing geopolitical tension, we believe the negative sentiment will persist. However, given the recent inflow of foreign funds, coupled with the firm commodity prices in crude oil and crude palm oil, these will support the plantation and O&G sectors over the near term.

We believe the operating outlook is gradually turning brighter for the hire purchase segment, as the impairment allowance in 9M22 decreased 22.0% to RM15.6m as compared to 9M21, leading to a drop in credit loss charge to 2.9% from 3.4%. This was due to the hirers’ continuous repayment trend during the period.

Samchem Holdings Bhd (SAMCHEM) involved in the distribution of chemicals and blending of customised products that are used across various industries. Some of SAMCHEM’s key clientele includes well established oil & gas players such as ExxonMobil Chemical, Shell, Petronas and BASF.

Buying momentum fizzled on the FBM KLCI, in line with most of the regional peers last Friday following the slump on Wall Street amid the ongoing tension between Ukraine and Russia. Hence, with the negative sentiment that took place on Wall Street, we expect the local technology counters are likely to continue underperforming the broader market. Investors may turn their heads to commodities related or consumer stocks over the near term as commodity prices remains elevated at this juncture.