The FBM KLCI ended on a downbeat note amid weakness in selected banking and plantation heavyweights, as the market sentiment remained cautious ahead of the GE15. With the softer market performance on Wall Street, we reckon that the market tone may stay tepid at least for the near term, as the key focus is shifted towards the outcome of the GE15, where it is still uncertain which party is having a lead at this juncture.

The poultry industry witnessed continuous increase in demand for eggs in the domestic and overseas market amid economic recovery. However, the elevated feed price could continue to hit TEOSENG’s margin with egg being placed under price control scheme. Hence, we remained cautious on the industry’s outlook until both the price and feed costs normalise.

Duopharma Biotech Bhd (DPHARMA) started off since 1978 and is principally involved in the manufacturing, distributing, importing and exporting of pharmaceutical products and medicines. DPHARMA owns and operates 3 manufacturing plants in Klang, Bangi and Glenmarie, Selangor with a portfolio of more than 300 generic drugs.

The FBM KLCI ended lower, underperforming the regional bourses as jittery sentiment prevailed ahead of GE15 and the foreign investors have turned net seller for the session. We believe the optimism from Wall Street overnight, which sparked by a cooler-than-expected October Producer Price Index in the US that signalled a cooler inflation environment may spilled over to the global stock markets. Nevertheless, local investors may remain cautious towards the GE15.

The FBM KLCI surrendered gains and settled lower as investors took profit ahead of the GE15. Also, global investors should trade cautiously following the comments from the US Federal Reserve officials, reinforcing the view for further interest rate hikes to tame the inflation going forward. Back home, we believe the foreign buying may continue to support the local bourse, within the apolitical stocks as well as solid balance companies to weather through the inflationary environment.

We believe that the sequential growth of the industrial gases segment will take place in the foreseeable future and will provide KGB with stable recurring income. This will also be back by the commencement of new onsite supply scheme over a 10 years period for an optoelectronics semiconductor giant in Kulim, Kedah from 1Q23. The move will generate a stable recurring revenue of RM180.0m that will span over a 10-year period.

SKP Resources Bhd (SKP) is one of the largest electronic manufacturing services (EMS) providers on Malaysia with over 40 years of experience in the industry. The group is supported by over 2,500 workforce and more than 250 injection moulding machines on more than 1.0m sqf of manufacturing facilities in Johor Bahru. Some of the group’s key clients include multinational companies like Sharp, Flextronics, Dyson, Sony, Fujitsu and Panasonic.

The FBM KLCI notched higher on Friday, fuelled by optimism over Malaysia’s 3Q2022 economy growth as well as the significant global markets recovery move. We reckon that the local bourse should remain resilient, taking cue from the buoyant Wall Street over the weekend. Still, investors may pay attention to the US economic data such as the US retail sales as well as jobs data as that may provide more insights into the aggressiveness of upcoming rate hikes.