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.

The FBM KLCI ended flat, while more focus was seen in small cap and lower liners. As prospect of ending the Russia-Ukraine war remained uncertain following the little progress made on the peace talks earlier, we opine that the market will remain in a consolidation phase at least over the near term. However, investors may focus on the reopening of borders in April and the declining Covid-19 cases on the local front; these could provide potential trading opportunities within the recovery-themed stocks.

Moving forward, we expect CPO prices to remain elevated above RM4,500/MT throughout 1H22, supported by the sustainable demand and production constraints (mainly due to the persistent labour shortage in Malaysia and Indonesia’s move to hike palm oil export levy).

Hextar Global Bhd (HEXTAR) engaged in product distribution of agrochemicals and fertilizers. With well over 500 products, Hextar’s products are exported to countries like Vietnam, Hong Kong, the Philippines, Cambodia and Singapore through established distributors, hypermarkets, supermarkets and dealer network.

Without significant fresh catalysts, the local market traded lower with as 12 out of 13 sub-indices joined the FBM KLCI in the negative territories. Nevertheless, we opine that the buying interest may return, taking cues from the overnight Wall Street performance as investors cheered the positive developments from the peace talks between Russia and Ukraine. We expect a broad based recovery in our local exchange.

OM Holdings Ltd (OMH) started off since 1994 and has now evolved into one of the largest vertically integrated manganese ore and ferroalloy player in South East Asia market. Greenfield of expansion of Samalaju Smelting Complex is bearing fruit, placing OMH in the pole position against its peers in terms of competitive production cost over the long term. We initiate coverage on OMH with a BUY call and fair value of RM3.65, based on 9.0x P/E pegged to its forward FY23f EPS of 40.5 sen.

The FBM KLCI fell below the key 1,600 level amid lacklustre trading as investors stayed cautious amid the lack of fresh catalyst environment. The key index may see mild consolidation over the near term with trading focus on the banking and consumer sectors as crude oil prices tumbled to trade around USD112 on the back of growing concerns over weaker fuel demand in China after several lockdown measures taken to curb Covid-19 infections.

The FBM KLCI finished higher for the second week as investors brushed off some concerns over the Russia-Ukraine conflict while looking forward to the reopening of border on 1st April 2022. We expect the recovery-themed sector to remain resilient prior to this event. Meanwhile, commodity prices are likely to remain volatile on the back of the unresolved conflict between Russia-Ukraine and the Covid-19 related restriction in China where Shanghai will be on a lockdown mode in few stages for 9 days.