The FBM KLCI ended flat on the back of mixed sentiment across regional markets. Sentiment however, turned positive in the US despite the accelerated inflation as investors focused on the upcoming earnings season. On the local bourse, we believe the elevated crude oil and CPO prices will continue to bode well for the energy and plantation counters, while the increasing demand for traveling following the reopening of travel borders will support the economic recovery going forward.

OSK Holdings Bhd (OSK) operations history dated back since 1963 as a smallscale local stockbroking company and has now evolved into a well diversified mini-conglomerate with 5 major business segments. Stable loan portfolio expansion and gradual property development launches will continue to anchor growth. We initiate coverage on OSK with a BUY call and fair value of RM1.41, based on sum-of-parts model by valuing its capital financing and property business with 0.8x of BV, while the construction, industries and hospitality segment are pegged at 9.0x PE to FY23f earnings contribution.

Ajiya Bhd (AJIYA) started as a metal roll forming company in 1990 and subsequently diversified into production of high value-added safety glass products in 1996. To date, Ajiya has a network of 18 factories or warehouses with offices throughout Malaysia and Thailand.

The FBM KLCI skidded below 1,600 in tandem with the negative sentiment across the regional markets after Wall Street overnight’s movements and foreign investors turned net seller for the session. Given the higher-than-expected US CPI data, we expect volatility to persist and investors may focus on the accelerated inflation rate which may trigger a more hawkish tone from the Fed going forward on its monetary policies.

The FBM KLCI slumped alongside regional peers on the back of broad-based selling pressure. We expect investors to trade in a risk-off mood following the negative sentiment on Wall Street, especially the selldown in technology stocks triggered by rising bond yields ahead of the US inflation data may spillover on our local technology stocks. Nevertheless, the daily Covid-19 cases dropped below 10,000 in Malaysia should support economic recovery, thereby benefiting the recovery-themed.

Tune Protect Group Bhd (TUNEPRO) started off since 2011, offering a wide range of tailored non-life insurance coverage products to cater for individual, SMEs and corporate requirements. TUNEPRO currently underwrites 50 markets including Malaysia and its regional countries.

The FBM KLCI wrapped up the week above the key 1,600 level, building up a positive sentiment on the local bourse as Malaysia could be viewed as a defensive market under this uncertain environment. In view of the mixed performances on Wall Street overnight, we believe investors should favour stocks under the recovery-theme, while avoiding the technology sector. Meanwhile, several economic releases for this week include the US inflation rate and the European Central Bank interest rate decision which will be released on 12th and 14th April 2022 respectively.

The FBM KLCI shed gains in tandem with regional peers after the US Federal Reserve meeting minutes put investors’ focus on the possibility of more aggressive US interest rate hikes. Still, we expect the local bourse to trade in a consolidation mode as investors mulled over the US hawkish stance as well as the Russia sanction. Nevertheless, we believe the downside risk may be cushioned by the recovery in business activities.