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.

The FBM KLCI ended marginally lower amidst the mixed regional markets sentiment, paring most of its intraday losses as bargain hunting activities emerged. We believe the jump on Wall Street on Friday, coupled with the reopening of China’s border could spark a rally on the regional markets as well as on the local bourse. We believe the market is more positive-biased on the inflationary pressure as the US December 2022 payroll came in greater than expected, but the slowdown in wage growth could indicate that the Fed’s battle against inflation may have an impact.

The FBM KLCI rebounded into the positive territory as foreign funds turned into net buyer after 4-day outflow streak. While the reopening of China borders may continue to stimulate economic activities, the stock markets may remain volatile as recessionary concerns could still remain as top agenda following the release of US job data overnight, which may signalled further increase in interest rate outlook.

The FBM KLCI wobbled into the negative territory as lack of fresh catalyst coupled with the persisted fears over global recession prompted the cautious trading environment. We believe the subdued trading tone could be temporary as the local bourse should poised for recovery on bargain hunting activities as Malaysia government re iterated that it will only tighten the Covid-19 SOP without discriminating against any nation; this should provide a boost towards our economic activities.

The long-awaited recovery is likely to emerge with the reopening of China’s travel borders. We believe this will be able to offset the recession risk under the (i) elevated interest rate environment, (ii) ongoing tension between the Ukraine and Russia and (iii) overheated inflationary pressure at least for 1H2023. We are feeling cautiously optimistic on the local front after (i) a solid GDP growth in 2022, (ii) stable political environment and (iii) the reopening of China’s borders. Hence, we have a few themes under our 1Q23 outlook and strategy, namely the (i) Recovery, (ii) Renewables, (iii) Commodities and (iv) Resilient.

The FBM KLCI kicked off the first trading day in 2023 in the negative territory as market digested recent gains buoyed by year-end window dressing activities. We believe the pullback could be deemed as a healthy pullback and bargain hunting activities should pick up in undervalued stocks despite worries over the Covid-19 sub-variants may continue to weigh on investors’ sentiment. Still, we believe the reopening of China’s travel borders may provide decent growth for most of the global economies with another round of pent-up demand.