As the market has turned cautious in the US stock markets, we expect Bursa exchange to reciprocate and trading momentum may decline throughout the session. Nevertheless, we opine that the downside risk could be limited with the uplifting of Covid-19 restrictions in selected region in China.

YoY, the decline in core net profit was due primarily to the weakening of both GBP and EURO which has affected the group’s bottom line. GBP/MYR contracted from 5.65 to 5.17 while EURO/MYR dropped from 4.85 to 4.55 YoY. Besides, the significant decline in GBP/USD and EURO/USD of more than 15.0% for the past one year has put additional pressure on ASIAFLE’s margin as majority of its export proceeds are denominated in GBP and EURO while imports are mainly denominated in USD.

SURIA stands as of the biggest beneficiaries under the previous tabling of Budget 2023. Recall that the Federal Government has allocated RM250.0m to fund the expansion of the Sapangar Bay Container Port (SBCP). Upon completion tentatively in February 2025, the aforementioned port will be able to handle 1,250,000 twentyfoot equivalent units, from 500,000 at present. Meanwhile, the construction of a new jetty at Sapangar Bay Oil Terminal is on track for completion in 4Q22.

The FBM KLCI rebounded in tandem with the regional bourses as bargain hunting activities emerged in the mid-day trade. With the strong surge on Wall Street, the positive sentiment may spillover to stocks on the local exchange; buying interest has returned following the US Fed Chair’s speech on scaling back the pace of interest rate hikes as well as the easing restrictions in selected region in China. Meanwhile, on the local front, investors may monitor the formation of the Cabinet and the re-tabling of Budget 2023.

Following the conclusive GE15 outcome, we continued to observe that the FBM KLCI taking a mild breather amid profit taking activities from selected glove heavyweights. Also, with the Wall Street ended mixed, the uncertain sentiment may spillover towards the local front. Nevertheless, traders could focus on the ongoing reporting season to uncover undervalued gems. Meanwhile, the market is still waiting for the formation of the Cabinet and it may provide clues for Malaysia’s growth going forward.

Moving forward, AME is equipped with an outstanding construction orderbook of RM304.2m to sustain earnings visibility over the next 2 years. For 1HFY23, new property sales of RM124.0m makes up to 49.6% of our projection at RM250.0m. This brings unbilled property sales to RM122.9m (up from RM120.4m in 1QFY23) to sustain the property development segment earnings for 2 years.

ECONBHD has secured some RM108.0m worth of contracts year-to-date. This makes up to 43.2% of our orderbook replenishment target of RM250.0m for FY23f. Future job wins may continue to skew towards the piling and foundation works for property sector, given that the newly elected government will take some time to settle in before the focus shifting towards mega-infrastructure related projects.

Outlook wise, as all the countries that the group operates in have resumed economic activities with minimal restrictions, demand have improved in both the poultry and feedmill segments, leading to the revenue expansion. Nevertheless, the high cost of materials and the attempts by governments to manage inflation may continue to create uncertainties on the group’s performance.