The FBM KLCI reversed lower as investors await the formation of the new government; foreign investors remained as net seller for the fourth session. The local bourse may stay in the consolidation mode with the focus on the political scene while eyeing the nomination of the next PM candidate. Meanwhile, the global sentiment was dampened by worries over global growth slowdown after China imposed a stricter Covid-19 curbs.

Unisem (M) Bhd (UNISEM) is regarded as a global provider of semiconductor assembly and test services, supported by approximately 7,000 employees worldwide with factory located in Ipoh, Malaysia and Chengdu, China.

Overall, occupancy rate has been gradually showing a mild uptrend move QoQ for majority of the buildings. As at 3Q22, the occupancy rate for older buildings aged more than 20 years which include UOA Centre, Wisma UOA II, and Wisma UOA Damansara I stood around 68.0-73.0%. For newer buildings such as Menara UOA Bangsar and UOA Corporate Tower, occupancy rate remained above 90.0%. Meanwhile, rental revision rate for 3Q22 remained flattish.

We gather that orderbook replenishment now stood at RM1.62bn, largely surpassing RM1.28bn recorded in FY21. Given that demand for from big data centers, electric vehicles, IoT and 5G applications are still in the picture, there is no slowdown in global wafer fabrication plant expansion plans. We believe that KGB is well positioned to ride onto the aforementioned growth and we made no changes to our orderbook replenishment assumption of RM1.20bn for FY23f.

Hung parliament is likely to contribute to the knee jerk sell down. The market may stabilise after the PM candidate is sent in at 2pm, but with some side effects. PN coalition – the market may avoid sin sectors, while focusing on shariah related. PH government – the market could focus on construction, telco and renewable energy, but may not be corporation-friendly. Traders may pick up apolitical sectors such as telco, utilities, O&G and consumer. Also, high net cash, low gearing and high dividend yield companies could be seen as good to accumulate during the knee jerk sell down.

The FBM KLCI eked out marginal gains on Thursday as buying interest emerged in the final hour ahead of the GE15. As Malaysia faced with a hung Parliament scenario after none of the coalitions won enough seats to form a majority, key focus is now on the outcome of the negotiations among various parties in today’s afternoon. Market sentiment may remain tepid and trade negatively before the submission of PM candidate name to Istana Negara at 2pm.

Following an increase of number of distributors from 806 in FY21 to 960 in FY22, NOVA remained committed to increase the number to 1,200 by FY25. With the construction of Phase 2 of its new plant well underway, we believe the upcoming additional capacity will allow the group to meet rising demand for nutraceutical products from distribution network expansion.

In view of a sustained repayment trend, ELKDESA raised its hire purchase receivables by 10.9% YoY and 3.8% QoQ to RM521.1m to capture a stronger demand for used-car hire purchase financing amid normalising economy. Contributing factors driving the demand include the popularity of online trading platforms for used car, as well as the revision of minimum wages to RM1,500.