EG Industries Bhd (EG) engaged as a manufacturing of Electronic Manufacturing Services (EMS) of high-end PCB assemblies, plastic injection & molding, plastic secondary processes and wire harness manufacturing for world-renowned brand names of electrical and electronic products. The group has more than 20 years of operational history, backed by more than 3,000 employees.

The FBM KLCI notched gains for the third consecutive session as investors took cue from the bullish sentiment on Wall Street following a cooler inflation data. As the market rebounded on Wall Street after better-than-expectation results were seen in banking counters, the positive trading sentiment may spillover to our local front. Meanwhile, traders may focus on China’s reopening theme, while awaiting Malaysia’s inflation rate and the Bank Negara interest rate decision this week.

The FBM KLCI eked out marginal gains as investors traded cautiously prior to the US inflation data. Following a cooling inflation print in the US, investors may anticipate a less aggressive tone from the Fed moving forward. The optimism on Wall Street overnight, coupled with the higher Brent crude oil price around USD84 per barrel could lift the sentiment on our local bourse.

The FBM KLCI attempted a modest rebound, powered by gains in selected telecommunication and banking heavyweights amid improving sentiment following the China reopening theme. As the Wall Street extended its gains amid hopes for easing US inflation, the local bourse is likely to build on yesterday’s momentum. Meanwhile, next event that the market will be watching out could be the upcoming FOMC meeting that will be held on 31-Jan to 1-Feb.

We expect the contract will be able to produce a high single-digit EBITDA margins, which is in line with similar works performed by the group historically. With KGB starting off the year on a high gear, we expect further contracts to come by for the remainder of FY23f.

Guan Chong Bhd (GCB) engaged in the manufacturing and trading of cocoa-derived food ingredients and cocoa related products. To-date, GCB’s total capacity stands at 337kMT p.a., ranking the group as the fourth largest cocoa grinder in the world.

The FBM KLCI traded lower for the session as investors took profit prior to Jerome Powell’s speech and the US CPI data later this week. While the expectations of a tighter monetary policy may continue to weigh on market, we believe the local bourse could be on track for further recovery as the reopening of China’s border will dominate investors’ sentiment over the near term.

The FBM KLCI mounted solid recovery in tandem with the regional peers, cheering the positive movements on Wall Street last Friday as reopening of China borders lifted investors’ sentiment. Should the key index sustain above the SMA200 zone, the sentiment will likely to turn more bullish over the near term. However, given the emergence of cautious sentiment on Wall Street overnight due to lingering worries over global inflation, it may cap the upside potential on the local front.