We are sanguine on the deal as the move will cement OMH position as one of the largest vertically integrated manganese ore and ferroalloy player in South East Asia market that is operating as the world’s low-cost quartile smelter. The move that would be earnings accretive over the long run would benefit OMH that is tapping into the rising demand for building material products alongside with leveraging into the soaring raw material prices.

The FBM KLCI slid below the key 1,600 level in mid-day as weakness in banking and telecommunication heavyweights weighed on the key index. We believe the market could be pricing in softer economy growth globally as China is still having lockdowns on and off in various regions. Given the violent selloff on Wall Street overnight, we believe the technology sector may continue to struggle. Nevertheless, the elevated commodity prices should continue to support the relevant sectors such as energy and plantation.

Malaysia’s first public listed independent oil and gas exploration and production firm, focusing on the development and production of oilfield assets in United Kingdom, Malaysia and Australia. The completed acquisition of Repsol Exploración SA assets will generate more than double of its daily production to 23,000 bdp. One of the prime beneficiaries under the high crude oil prices environment (Brent oil price is hovering above USD100/bbl). Technically, price has formed a flag-formation breakout above RM1.25, targeting the next resistances at RM1.30-1.38 with long term target set at RM1.50.

The FBM KLCI surpassed the 1,600 level prior to the long weekend as investors took cue from the positive performance on Wall Street. As the US Federal Chair eased the concern over a more aggressive rate hikes outlook, we foresee the big surge on Wall Street overnight may spill over to the stocks on the local front. Despite the worries of the Covid-19 lockdown in China would slowdown the economic growth, we believe the elevated commodity prices may provide support for the respective sector at least for the upcoming reporting season.

We understand that the decline in sales volumes was mainly impacted by the delay in shipments in end-March 2022. As such, a total of 405,269 MT of ores and alloys (-27.0% QoQ) were transacted during the quarter. Given that the production is touted to be within our expectations, we made no changes to our earnings forecast for now. Consequently, we maintained our BUY recommendation on OMH with an unchanged target price of RM3.65.

The FBM KLCI bounced back towards near the key 1,600 level in tandem with the positive regional markets on the back of bargain hunting activities. On Wall Street, investors piled into the technology stocks following solid earnings from major technology stocks, shrugging off concerns over interest rate hikes and weaker 1Q22 US GDP data. We expect the bargain hunting activities in the US could spill over to local technology stocks. Also, we expect digital banking license to be announced in the near term.

The FBM KCLI extended its sideways consolidation phase below the 1,600 level on the back of industrial products heavyweights-led selldown following the overnight selling activities on Wall Street. While global uncertainties may still loom, the recovery-themed sector on the local bourse may gain traction as further relaxation of Covid-19 SOPs effective 1st May 2022 could signal a greater extent of economic recovery.

Malayan Cement Bhd (MCEMENT) was incorporated since 1950 that engages in the manufacturing and sale of cement, ready-mixed concrete and other related building materials and is now positioned as one of the leading cement players in Malaysia.