The FBM KLCI bucked the regional downtrend as bargain hunting activities in selected plantation, energy, and banking stocks lifted the key index. Given the negative performance on the Wall Street, we expect some profit taking activities may emerge on the local front, especially on the technology stocks. Also, the crude oil price dipped, trading around the USD101 per barrel mark after the members of International Energy Agency (IEA) agreed to release oil from their emergency reserves.

SCGM Bhd (SCGM) is regarded as one of the largest thermoform F&B packaging manufacturers in Malaysia with extrusion capacity of 67.6m kg per annum. The Johor-based company has an extensive network distribution that includes Singapore, Australia, Vietnam, Brunei and New Zealand market.

The FBM KLCI saw another session of pullback amid further profit taking in banking and telecommunication heavyweights. Meanwhile, global sentiment may stay fragile amid concerns over more hawkish stance of the US Federal Reserve’s action to tame inflation. Also, we expect the unresolved tension between Russia and Ukraine could limit the upside potential over the near term. Nevertheless, we expect the reopening of travel borders may continue to benefit the economy, while investors could position themselves ahead of the GE15 (albeit the timeline is still uncertain).

The FBM KLCI underperformed the regional peers as the key index traded below 1,600 amid profit taking activities within selected heavyweights. We expect the market to remain volatile over the near term, while investors continue to monitor the potential move of Western countries imposing more sanctions against Russia. Nevertheless, downside risk should be cushioned by continuous foreign inflows.

EP Manufacturing Bhd (EPMB) started off since 1982 and commenced the manufacturing of moulds in 1991. Today, EPMB manufactures a wide range of products such as engineering plastic components, metal stamping parts and/or modular assemblies for both domestic and international automotive OEMs, including Proton, Perodua, Toyota, TRW, Honda and Suzuki.

The FBM KLCI surpassed the 1,600 mark on Friday as investors cheered the progress towards endemic on the first day of border reopening. We opine that the reopening of international border, coupled with the declining daily Covid-19 confirmed cases will continue to bode well for the recovery of business activities.

Malaysia will be transitioning into the endemic phase and reopening the borders should boost the economic activities going forward. Global themes include (i) tension between Ukraine-Russia, (ii) inflationary pressure, (iii) Fed’s monetary policies, and (iv) recession fears, while domestic catalysts include (i) GE15, (ii) 5G rollout, and (iii) commodity supercycle. Under this environment, we like recovery-themed stocks and GE15 catalysts may boost trading interest within the construction sector. Besides, we opine the commodity-linked sector will remain strong in 2Q22.

The FBM KLCI outperformed the regional peers on the back of improving sentiment prior to the reopening of travel borders and the positive sentiment should remain at least for today. However, uncertainties remained on the global front as Russia threatened to halt gas contracts supply and the tension between Ukraine and Russia still persisted.