The FBM KLCI ended higher on the final trading day as window dressing activities in utilities, banking and telecommunications heavyweights lifted the key index, albeit foreign funds showed an outflow of RM304.1m. After the window dressing activities, we expect local bourse to pullback in the near term, digesting the Covid-19 situation in China. Nevertheless, we believe the reopening of business activities and travel borders in China should be able to avoid the recession risk going forward.

The FBM KLCI continues to trade positively, driven by the ongoing year-end window dressing activities in the banking and telco heavyweights. Also, with the positive rebound on Wall Street, it may spillover to the local front and trading activities to stay on an upbeat manner; the FBM KLCI should revisit the 1,500 level. Traders will be focusing on the China’s borders reopening catalyst and position themselves for the recovery theme trades.

Going forward, we expect CPO prices to trade at an average RM3,500/MT for 2023. The rising inventory level that climbed to 2.3m tonnes in November 2022 highlights that demand remains relatively soft despite total CPO production was flat at 16.8m tonnes in 11M22. We expect challenges to persist from the rising labour, fertiliser and transportation costs that will keep margins in check.

The FBM KLCI outperformed the regional peers, driven by year-end window dressing activities and persisting buying from foreign funds (5-day cumulative stood at RM222.3m). Global sentiment might remain tilted to the downside in view of the overnight slump on Wall Street. Nevertheless, the local bourse should continue to be supported by year-end window dressing as well as elevated firmer commodities price.

The FBM KLCI traded unchanged at the start of holiday-shortened week amid worries over the worsening Covid-19 situation in China. While quick profit-taking activities on Wall Street could imply that the outlook remained gloomy on the global front, we believe the local bourse may poised for further recovery on the back of bargain-hunting activities as China’s loosening of Covid-19 quarantine measures should boost tourism activities going forward.

Petra Energy Bhd (PENERGY) provides a comprehensive range of activities that span the upstream segment of the oil and gas industry specialising in operations and maintenance of oilfields, integrated brown field maintenance & engineering, marine offshore support; design, fabrication supply & installation and engineering & project management services. PENERGY is the sole operator of the Banang oilfield offshore Terengganu under a Technical Services Agreement (TSA) with PETRONAS.

The FBM KLCI extended gains on Friday amid improving sentiment, with foreign funds extending its buying activities (5-day net foreign buying stood at RM51.2m). Also, the improvement on Wall Street overnight may spill over to the local front, but upside might be capped amid worries over the impact of fresh Covid-19 outbreaks in China. Commodities wise, the Brent crude oil price surged above USD83 per barrel mark, fuelled by tight US supplies. We believe the crude oil price could remain positive above the support of USD80 over the near term given the production cut from OPEC+ and Russia.

The FBM KLCI recovered from three-session losses amid improved sentiment on Wall Street. However, we believe the global sentiment may remain weak as selling pressure returned on Wall Street with the recession worries returned in the expectation of further monetary tightening from global central banks. Meanwhile, investors might be eyeing the quarantine cutting measure for overseas travellers from next month in China, but having cautious tone given the Covid-19 pandemic is still not resolved. Nevertheless, we expect the downside risk shall be cushioned by the return of foreign funds.