Following the multiple lockdowns over the past 2 years that hampered work progress, we reckon that the construction industry will be in a slightly better position in 2022 as the country transitioned into the endemic phase. Still, we remain cautious on the rising costs of labour and raw materials that could detriment the already razor thin margins within the construction sector.

The FBM KLCI rebounded from a 4-day losing streak amidst mixed regional performances as investors scooped up beaten-down shares. Despite the rebound on Wall Street, we believe the market sentiment will remain cautious on the back of concerns over global supply chain crisis which may slowdown the pace of economic recovery. Meanwhile, under the current inflationary environment, investors may favour sectors that are benefitted from the commodity boom.

Moving forward, we believe the demand for poultry products should remain robust amid recovery in economic activities supported by continued progress of booster shots rollout. However, the industry may continue to face uncertainties stemming from supply chain disruptions and government’s attempts to manage food inflation. Such measures include the price control scheme implemented on chicken and egg effective until 5th June 2022 and the chicken exports ban from 1st June 2022.

Moving forward, production has returned to the norm in 2Q22 and the move will likely to boost production beyond 600 tonnes for the quarter. Consequently, we expect MSC to deliver 12.0 tonnes/day of tin ore towards the end of FY22f (current production is approximately 11.0 tonnes/day).

Moving forward, we expect KGB to deliver improved performances particularly in 2H22, back by the relaxation of Covid-19 control measures in China, while the group remain focus onto the execution of works secured in FY21. Locally, KGB will also be kept busy with the large-scale construction work that was secured at Sarawak towards end-2021. In the meantime, the utilisation rate of liquid carbon dioxide (LCO2) plant is at 70.0%.

Kein Hing International Bhd (KEINHIN) was established since 1981 and engages in the supply of parts and metal components to various industries such as automotive, electrical & electronics, home appliances and audio-visual equipment industries. Since 2006, KEINHIN manufacture and sale of consumer products namely gas appliances under its own brand name “ZENNE”.

The FBM KLCI suffered its fourth straight session of decline, marking the longest losing streak since end of January 2022 as banking and healthcare heavyweights led losses. Given the selldown in technology stocks on Wall Street, we believe it may spillover to the tech sector on the local front. However, we still expect selected stocks in the consumer and REITs sectors to outperform the market on the back of business recovery catalyst.

Moving forward, we believe the plastic packaging demand should remain robust amid Malaysia’s transition into endemic phase and reopening of business activities. Nevertheless, challenges remain given the volatile commodity price, supply chain disruptions and labour shortage issues. BPPLAS has been putting effort in recruiting and upskilling the talents, as well as optimising its production costs.