Malayan Flour Mills Bhd (MFLOUR) is regarded as the pioneer in the flour milling industry in Malaysia. The group operations located at Lumut and Pasir Gudang has a combined milling capacity of 1,810 tonnes of wheat per day. MFLOUR also involves in poultry operations, aquatic breeding and feeds as well as trading of grains.

To play catchup in 2H23. While 1HFY23 figures are expected to remain soft (similar with 4QFY22), we believe that improvement in 2HFY23 will be backed by the (i) potentially higher contribution from IHS syringe infusion system and introduction of new medical products and devices progressively towards end of the year, (ii) resumption of delivery to Ambu A/S post-inventory adjustment and (iii) higher contribution from Stellantis for the supply of fuel tank (commencing February 2023) and wire harness (targeting to commence in 2Q23) for the Peugeot 5008, 3008 and 2008 models.

The FBM KLCI succumbed to broad-based selling pressure amidst intensified selldown across regional markets due to persisted worries over interest rate hikes and concerns over the Silvergate and SVB events last week. We believe the risk will remain tilted to the downside given the potential contagion effect within the banking sector in the near term as New York Signature Bank is being shut down, but there is a glimpse of hope on the potential bailout situation at this juncture; the US futures are rising. Meanwhile, the US inflation rate will be in focus this week.

New launches in pipeline. OSK aims to rollout approximately RM1.33bn worth of gross development value (GDV) new launches in 2023 in Malaysia, subject to the market conditions. This comprises a healthy mixture from their existing 2 townships located at Sg. Petani, Kedah and Seremban, Negeri Sembilan as well as several highrise residential projects across Klang Valley and Penang. Elsewhere, Phase 2 of Melbourne Square comprising 614 units with c. AUD$600.0m in GDV is expected to launch in 2023.

The FBM KLCI declined further into the negative territory as the Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate were within expectation, while the focus was shifted towards the concerns of bigger rate hikes in the US and weakness in the regional markets; 5-day foreign net selling stood at RM427.3m. Global sentiment shall remain on edge while awaiting key payroll reports from the US later today. Given the negative sentiment abroad, we believe the local stock market may trade cautiously amid intensifying global risk.

The FBM KLCI surrendered yesterday’s gains in line with the regional markets’ movements as investors digested the hawkish comments from the US Fed Chair during the congressional testimony. On Wall Street, we believe it might consolidate over the near term ahead of the CPI data that will be released next week, as this might dictate the interest rate direction going forward. The local bourse may remain sideways amid growing selling pressure from the foreign funds, while awaiting the OPR decision by BNM today.

Infoline Tec Group Bhd (INFOTEC) is principally involved in providing IT infrastructure solutions, cybersecurity solutions, managed IT services, and trading of ancillary hardware/software. Over the years, the group has marked their presence across Malaysia, China and other countries across Asia Pacific region and is supported by key partners such as VMware, Dell, HP and Huawei.

The FBM KLCI bounced higher as banking and commodities related stocks gained momentum. On the global front, worries over interest rate hikes resurfaced following the hawkish remarks from the US Fed Chair Jerome Powell. Closer to home, investors may turn their focus towards more defensive sectors amid intensifying volatility in the market, while eyeing the Bank Negara Malaysia’s interest rate decision tomorrow.