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 slipped into the negative territory as investors pocketed profit from the recent uptrend. Meanwhile, the global stock markets may remain shaky as investors turned cautious while assessing the impact of the resilient crude oil price. Meanwhile, the latest job openings report in the US that suggested the labour market is slowing becomes another source of uncertainties.

Following the banking crisis in the US and Europe, we believe the sentiment will turn better in 2Q23, underpinned by (i) reopening of China’s borders, (ii) higher crude oil prices, (iii) strong growth in tourists’ arrival and (iv) well supported demand in the technology sector due to rising adoption of AI applications. However, we understand there are several concerns if (i) the Fed remains hawkish and the economy enters a recession and (ii) the BTFP has ended. Under this setup, we favour a few sectors, namely the (i) O&G, (ii) Technology, (iii) Medical, (iv) Utilities, (v) Telco and (vi) Shipping, and (vii) Poultry.

The FBM KLCI rebounded as rallies on Wall Street coupled with China’s future investment in Malaysia boosted sentiment. Although sentiment appeared to improve on the global front, risk may not abate yet as rising crude oil price may again trigger fears over inflation in the US and Europe. Nevertheless, buying interest on the local bourse should be supported by climbing crude oil prices as well as a better economic outlook following the reopening of China borders.

Power Root Bhd (PWROOT) is regarded as one of the leading beverage manufacturers and is a specialist distributor coffee, tea, chocolate malt drinks and herbal energy drinks. Some of their key household brands include Alicafé, Per’l Café, Ah Huat White Coffee, Frenché Roast, Oligo and Extra Power Root.

The FBM KLCI ended 1Q23 on a negative note as profit taking activities emerged after the noon trading break last Friday. Nevertheless, we foresee a comeback on the local bourse following the further breakout on Wall Street overnight, coupled with an anticipation of a brighter outlook after Malaysia securing RM170bn worth of investment commitments from China. Sectors that will benefit from the investment are likely to hog the limelight.

The FBM KLCI notched a three-day winning streak, taking cue from the positive environment across regional markets. On the global front, stocks were on track to book further gains amid the quarter-end rebalancing period with easing fears over the global banking crisis. We believe the local bourse will see further upside, supported by the China visit by our 10th Prime Minister, which may anticipate further investments to emerge going forward.

In 4QFY23, KMLOONG’s FFB production climbed 23.1% YoY to 83,119 tonnes, bringing FY23 total FFB production to 286,987 tonnes (slightly exceeds our projection at 280,000 tonnes), while CPO production added 14.5% YoY to 90,139 tonnes. Meanwhile, CPO extraction rate stood at 21.0%; continues to outperform Malaysia’s average CPO extraction rate of 19.7% over the same period highlighting the group’s production efficiency.