It appears that there were bouts of bargain hunting activities emerging on the FBM KLCI yesterday and we think that the key index may continue to see some nibbling to build onto its recovery trend over the near term. Meanwhile, rotational play may continue to keep the trading interest afloat amongst the lower liners. However, we are cautious that the overbought condition (both FBM Small Cap and FBM ACE) may present limited upsides, in our view. Meanwhile, key focus remains on the on-going batch of corporate earnings in the US, coupled with the retail sales data in the UK that may dictate the direction of the stock markets.

Established in 1989, MST Golf Group Berhad (MST) is principally engaged in the specialty retail and wholesale of golf equipment comprising golf clubs, golf balls and accessories and golf apparel in Malaysia and Singapore.

PWF Corporation Bhd (PWF) is regarded as an integrated poultry player with business activities spanning across feed manufacturing, broiler, breeder and layer farming, poultry processing, and trading of raw material.

Further pullback took place as investors retreated to the sidelines prior to the mid-week break. After 2-days of pullback, bargain hunting activities may return to the fore as the key index may play catch-up with the positive developments on Wall Street in the recent days. Meanwhile, the lower liners may remain upbeat in view of the improved market sentiment. Meanwhile, the corporate earnings releases in both the US and Hong Kong will remain in focus.

Mild profit taking emerged and the key index took a step back after delivering a strong performance last week. For now, we expect the key index to consolidate as investors could be taking this opportunity, retreating to the sidelines ahead of the mid-week break. Nevertheless, rotational play and the improved market sentiment may ensure the upward momentum on the lower liners to sustain overtime. Elsewhere, the on-going batch of corporate earnings in the US as well as several key economic data such as retail sales, industrial production and manufacturing production numbers will be in focus.

Sunny Optical Technology (Group) Company Ltd (Sunny Optical) was founded in 1984 and has grown into one of the leading manufacturers of integrated optical components and products manufacturer in the world. The group products were used in mobile phones, automobile, cctv, robot, industrial inspection, VR/AR, microscopic instrument and medical inspection.

With the key index re-claiming the 1,400 psychological level, we reckon that the recovery trend has turned more solid. We noticed that foreign funds have stepped up to purchase Malaysian equities (net buying of RM468.9m last Friday) and that could sustain the recovery trend, moving forward. Meanwhile, the lower liners may continue to capitalise onto the jubilant market sentiment as the calmer market conditions present an opportunity to nibble onto beaten down stocks. Looking ahead, the barrage of corporate earnings releases in the US will be in focus. Meanwhile, investors will also be keeping a close watch on the impending release of China’s 2Q23 GDP data today.

Signs of quick profit taking activities emerged within the local bourse as the key index was not able to climb and close above the 1,400 psychological level. We expect further recovery to be in store as foreign funds have turned into a net buying position in recent 2 days. On the other hand, the lower liners may continue to build onto their recovery momentum, taking advantage of the positive market sentiment. With inflationary pressure cooling off in the US, upward movements could sustain over the near term.