With approximately RM266.0m worth of property sales recorded during the quarter, 9MFY22 sales at RM744.0m is largely on track to meet our expectations of RM1.00bn for FY22f. Moving forward, OSK’s property development unbilled sales of approximately RM1.04bn (slightly up from RM976.0m recorded as at end-2QFY22) will sustain earnings visibility over the next 18-24 months.

Hibiscus Petroleum Bhd (HIBISCS) is the Malaysia’s first public listed independent O&G E&P firm, focusing on the development and production of oilfield assets in United Kingdom, Malaysia and Australia. In 1QFY23, net oil, condensate and gas production rate stood at an average 16,775 barrels per day (bpd).

We reckon that the construction segment may continue to bleed, given that the balance EPC works at Vietnam is expected to be recognised only in 2HFY23. Moving forward, outstanding orderbook of more than RM200.0m will provide revenue visibility over the next 2 years.

FoundPac Group Bhd (FPG) engages in the design development, manufacture, marketing and sale of precision engineering parts. Some of the group’s key business associates include multinational semiconductor companies such as Broadcom, Synergie - CAD, Bece Pte Ltd, U4Global Solutions and GFMI.

The FBM KLCI retreated on Friday as broad-based profit taking activities emerged ahead of the long weekend. The global stock markets started the week largely in a weaker note as protest over China’s strict Covid-19 restriction stoked worries over the global financial recovery. The local bourse may follow suit as buying momentum may slow down moving, while focusing on the ongoing earnings season. Meanwhile, investors may watch the formation of the cabinet in the near future as well as the re-tabling of Budget 2023.

Albeit a potential recovery could take shape, we reckon that challenges may persist from the rising operational costs environment which may dampen the margins. Going forward, the outstanding construction orderbook of approximately RM435.0m (as at end-3QFY22) will provide earnings visibility over the next 2-3 years.

The FBM KLCI witnessed a strong rally after the unity government is formed with PH being the largest party in the alliance and PH’s Chairman Datuk Seri Anwar Ibrahim is being appointed as Malaysia’s 10th Prime Minister. Following the conclusive outcome of the GE15, foreign investors turned net buyer, snapping a 6-day outflow streak and a stronger MYR, we believe the local bourse will continue its uptrend move amid rising investors’ confidence. Besides, the FOMC meeting minutes that saw some of the Fed’s official turning less hawkish may be perceived as positive to the stock markets.

The FBM KLCI eked out small gains in a volatile session amid mixed sentiment due to the fluid situation on the political scene. Optimism surrounding the slowdown in rate hikes indicated in the FOMC minutes may spread across the regional markets. Given the UMNO Supreme Council has given the support to a unity government ensuring the stability of the country, we believe the market may turn more positive. Meanwhile, investors could shift their focus from politics to Malaysia’s inflation rate and the on-going reporting season.