The FBM KLCI continues to decline further below the 1,500 psychological level as foreign buying interest faded. Given the flattish performance on Wall Street we expect trading interest may stay muted on the local front, especially ahead of the Jackson Hole meeting, where traders are speculating a more hawkish tone from the Fed. However, we think some bargain hunting activities may emerge within the technology sector after the selldown, at least for today.

The construction of the second jetty at Sapangar Bay Oil Terminal (SBOT) is largely on track for completion in 4Q22 in bid to ease the current congestion and reduce vessel waiting time. Upon completion, SBOT will be able to handle 2 vessels at the time and accommodate vessels up to 60,000DWT (from 30,000DWT previously).

Moving forward, we expect the medical segment to remain as the key contributor to the overall group revenue. On the operational standpoint, SCOMNET will be undertaking multiple launches of new products within the healthcare equipment and automotive sector in line with the growing demand. We expect demand for medical devices to remains healthy in line with the rising cardiovascular diseases which is the leading cause of death globally, affecting approximately 17.9m of the global population yearly.

Wellcall Holdings Bhd (WELLCAL) is regarded as the largest original equipment manufacturer (OEM) rubber hose manufacturer in Malaysia. Approximately 90.0% of their products are exported mainly to Canada, US, Middle East and Australia with wide range of clientele ranging from wholesalers, distributors and industrial manufacturers.

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.