Moving forward, AME is equipped with an outstanding construction orderbook of c. RM300.0m to sustain earnings visibility over the next 2 years. For 9MFY23, new property sales of c.RM200.0m make up to 80.0% of our projection at RM250.0m. As a result, unbilled property sales at c. RM130.0m (up from RM122.9m in 2QFY23) will sustain the property development segment earnings for 2 years. Following the disposal of 10 plots of land to AME REIT, the group is equipped with a sizeable war chest with a net cash position at RM189.3m.

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 2QFY23, net oil, condensate and gas production rate stood at an average 13,513 barrels per day (bpd).

The FBM KLCI logged marginal losses after hovering mostly in the negative territory, taking cue from the negative biased regional markets. Following a sharp selldown on Wall Street in the previous week, we reckon the regional markets and the local bourse may stay rocky while investors could be looking out for fresh catalysts. Meanwhile, we believe the downside risk could be limited following the revised Budget 2023 as investors may trade in sectors that will benefit from it.

Government proposed to allocate RM386.1bn under the revised budget to boost the economy by 4.5% in 2023. Overall, the budget targets to lower down the living costs while ensuring the smooth recovery on the economy. Key highlights include the (i) higher DE of RM97bn, (ii) changes in selected personal tax structure and (iii) extension of the green energy policies. Fairly positive to the stock market given no Capital Gain Tax on listed companies was being implemented. Sectors that we favour include the construction, building material, automotive, consumer, telecommunication, tourism, plantation and healthcare sectors.

Going forward, the outstanding construction orderbook of approximately RM400.0m (as at end-FY22) will provide earnings visibility over the next 2-3 years. We gather that road upgrading works at Kulim valued at RM229.2m is at still infant stage (4% completion), while the Prihatin housing project valued at RM442.7m is expected to commence this year. This may boost contribution from the construction segment that was inactive over the past 3 financial years.

Moving forward, the normalising of steel prices in recent months should bode well for the general construction industry. Still, the elevated concrete price that rose 2.6% MoM in January 2023 will keep margins recovery in check. Hence, we expect ECONBHD may return to the black only towards end-2023.

Intensified selling pressure dragged the FBM KLCI into the negative territory yesterday, taking cues from the regional losses. While the Wall Street staged a rebound overnight signalled the emergence of the positive sentiment, volatility might not abate over the near term without slowing down the interest rate upcycle. Back home, the re-tabling of Malaysia Budget 2023 will be taking the centre stage and investors may also keep an eye on Malaysia’s inflation rate today.

The FBM KLCI retreated from a rebound-attempt yesterday, taking cue from the bearish regional markets following the negative performance on Wall Street. As broad-based selldown persisted on Wall Street, investors may remain cautious while eyeing the inflation data for more clues on the interest rate directions going forward. On the local front, all eyes shall be on the re-tabling of Budget 2023 tomorrow as well as Malaysia’s inflation rate.