The FBM KLCI traded unchanged at the start of holiday-shortened week amid worries over the worsening Covid-19 situation in China. While quick profit-taking activities on Wall Street could imply that the outlook remained gloomy on the global front, we believe the local bourse may poised for further recovery on the back of bargain-hunting activities as China’s loosening of Covid-19 quarantine measures should boost tourism activities going forward.

Petra Energy Bhd (PENERGY) provides a comprehensive range of activities that span the upstream segment of the oil and gas industry specialising in operations and maintenance of oilfields, integrated brown field maintenance & engineering, marine offshore support; design, fabrication supply & installation and engineering & project management services. PENERGY is the sole operator of the Banang oilfield offshore Terengganu under a Technical Services Agreement (TSA) with PETRONAS.

The FBM KLCI extended gains on Friday amid improving sentiment, with foreign funds extending its buying activities (5-day net foreign buying stood at RM51.2m). Also, the improvement on Wall Street overnight may spill over to the local front, but upside might be capped amid worries over the impact of fresh Covid-19 outbreaks in China. Commodities wise, the Brent crude oil price surged above USD83 per barrel mark, fuelled by tight US supplies. We believe the crude oil price could remain positive above the support of USD80 over the near term given the production cut from OPEC+ and Russia.

The FBM KLCI recovered from three-session losses amid improved sentiment on Wall Street. However, we believe the global sentiment may remain weak as selling pressure returned on Wall Street with the recession worries returned in the expectation of further monetary tightening from global central banks. Meanwhile, investors might be eyeing the quarantine cutting measure for overseas travellers from next month in China, but having cautious tone given the Covid-19 pandemic is still not resolved. Nevertheless, we expect the downside risk shall be cushioned by the return of foreign funds.

The FBM KLCI fell amid subdued trading as lingering worries over the recession concerns persisted. However, foreign investors have turned net buyer following the recent selldown. Given the strong rebound on Wall Street overnight, we believe the buying interest may spill over to the regional markets as well as the local bourse amid improving consumer confidence environment in the US.

Total packaging solutions provider with established track record that is underpinned by its manufacturing capabilities of corrugated paper packaging products as well as fast and lean inventory management system. We project core earnings to be driven by normalising economy in FY24, as well as the group’s strategies to penetrate the northern region of Peninsular Malaysia within the solar PV and medical devices industries. DS Sigma is valued by pegging its FY24f core EPS of 5.0 sen to P/E of 16.0x, leading to a FV of RM0.80.

Padini Holdings Bhd (PADINI) engages in the distribution and retail of garments, ladies’ shoes, bags, belts and other accessories through the multi-brand Padini Concept Stores and Brands Outlet stores under several household brands such as Vincci, Vincci+, Vincci Accessories, Tizio, Padini Authentics, PDI, Padini, Seed, Miki and P&Co. To-date, Padini operates more than 100 retail stores, covering 1.5m sqf of gross floor area.

The FBM KLCI was in line with the regional markets’ slump after Bank of Japan widened the allowable band for long-term yields to 50 basis points from 25 basis points previously. Nevertheless, we believe the key index is poised for a rebound amid reducing selldown from foreign investors, as well as the rebound move on Wall Street overnight. Also, window dressing activities may kick in towards year end.