Banking-led rallies kept the FBM KLCI above the key 1,400 level after the greaterthan-expected special dividend by AFFIN. However, we opine that the rebound may remain fragile as investors may weigh potential global recession concerns over the recent reporting season on Wall Street as the spike in UK inflation spooked the markets. Nevertheless, traders may look at companies with strong balance sheet to invest in the long run.

Cnergenz Bhd (CNERGEN) is principally involved as an electronic manufacturing solutions provider, specialising surface mount technology (SMT) manufacturing solutions for the electronics and semiconductor (E&S) industries. At present, CNERGEN operates on a 22,800 sqf facility in Bukit Tengah, Penang and serves more than 100 customers worldwide.

The FBM KLCI saw a comeback buoyed by buying momentum from foreign funds following a positive cue from Wall Street. Investors may shrug off some recession fear in the near term to position themselves in the ongoing third quarter reporting season on Wall Street. Meanwhile, we expect sentiment on the local bourse to stablise once the GE15 official date is announced later this week.

The FBM KLCI is attempting to find stability over the near term, ahead of the official GE15 date being announced. Meanwhile, China unexpectedly delayed the release of 3Q22 GDP that is scheduled today, may imply that the data might not meet market expectations of +3.4% YoY. Back home, we reckon that the rebound on Wall Street may see buying interest spilling over on beaten down or oversold stocks over the near term. Still, the weakening trading liquidity and the persistent selling from foreign funds (net sell RM870.1m month-to-date) will keep bigger strides of gains at bay.

Sunview Group Bhd is a local solar energy services provider that has completed 98 EPCC of rooftop solar PV facility projects and the provision of construction and installation for 6 LSS PV plants as a subcontractor. Sunview is valued by pegging its FY24f core EPS of 4.8 sen to P/E of 13.0x, leading to a FV of RM0.63.

Samaiden Group Bhd (SAMAIDEN) engages as a total solutions provider for the renewable energy and environment sectors in the Asia region.

The FBM KLCI staged a rebound on Friday following the positive cues from global markets. However, we opine that the rebound attempt may stall as Wall Street was hit by another wild swing on the back of rising inflation expectations suggested in University of Michigan consumer survey and potentially the rising concerns of the tightening monetary policies could push the US economy into a recession. Nevertheless, we still expect bargain hunting to emerge within the solid balance sheet companies and stable consumer stocks.

The FBM KLCI fell for another session as it struggled to find its footing amid broadbased selldown prior to the US CPI data. However, given the Wall Street rebounded strongly from its intraday low following the US CPI print, we believe the short-term bargain hunting activities may emerge on the local bourse and regional markets. Nevertheless, as we think the inflation remains high and still far from the 2% inflation target of the Fed, we opine that the rebound will be short-lived. Global investors should remain wary in anticipation of further interest rate hikes in the US.