The FBM KLCI booked marginal gains amid lacklustre trading as cautious undertone remained in place ahead of the US inflation data that will be released later tonight. With the Wall Street overnight ended negative, we opine that the investors may stay sidelines for the session. Upside potential might be capped by the elevating global risks such as China-Taiwan tension and heightened inflationary pressures environment. However, traders are likely to position themselves selectively ahead of the August reporting month as foreign buying remains positive over the past few days.

Blended ASP continues to decline, falling -12.6% QoQ. Moving forward, we were guided the stiff competition that resulted in the oversupply condition and inventories from previous stockpiling activities have yet to tapered. Thus, we expect this would continue to depress ASP, and we expect prices to remain soft throughout FY23f.

Kerjaya Prospek Group Bhd (KERJAYA) is regarded as one of Malaysia’s leading construction players, involving in the construction of high-end commercial and high-rise residential buildings, property development and manufacturing of lighting and kitchen solutions. Notable completed projects include St. Mary Residences, The Shore Mixed Commercial Development, EcoSky Condominum and Vista Residences.

The FBM KLCI finished lower on the back of cautious undertone ahead of the US inflation data that will be released on the 10th of August. Given the market has rallied over the past two months, investors will be staying sidelines and monitor closely on the CPI data in order to decide on the market directions as well as the FOMC’s interest rate decision moving forward. Also, the development of China’s aggressive drills near Taiwan, may pose downside risk to the stock markets.

Local sales recovery will be anchored by the improvement in economic activities towards the year-end festive seasons. At the same time, SLP remains active in the adoption of automation and digitalisation process in bid tackle the shortage of workers issue and improve production efficiency. Nevertheless, the challenging operations scenario may keep margins in check in subsequent quarters ahead.

Guan Chong Bhd (GCB) engaged in the manufacturing and trading of cocoa-derived food ingredients and cocoa related products. To-date, GCB’s total capacity stands at 270,000MT per annum, ranking the group as the fourth largest cocoa grinder in the world.

The FBM KLCI retreated mildly on the back of elevated tension between China and Taiwan. Also, with the market expecting a more hawkish tone from the FOMC meeting going forward after the better-than-expected jobs data on Friday, we expect the near-term volatility to persist. However, we believe the downside risk might be limited if the economy is on the recovery tone; short term upward move could be seen. Similarly, on the local front, we are heading into the August reporting month, investors may position themselves ahead of the period within sectors with higher earnings certainty.

Major semiconductor players are expected to ramp up their expansion plans to meet the sturdy demand, particularly within the cloud computing, data servers, sensors, and automated solutions business segments. This bodes well for KGB as a proxy to ride along the expansion of wafer fabrication plants.