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.

The FBM KLCI reversed its earlier losses and closed in the positive territory, outperforming the negative regional markets. Given the big rally on Wall Street after the release of the inflation data in the US, investors believed that the inflation numbers could have peaked and hopeful for a less aggressive interest rate hikes from the US Fed. Hence, we believe the positive momentum may spill over to the regional markets as well as the local bourse.

The FBM KLCI rose marginally as the market appeared to be on a bargain-hunting mode amid persistent inflows of foreign funds. However, we believe the downside risk could return with the selling pressure on Wall Street as the US mid-term election results are uncertain and the US CPI print may stay elevated and contribute to a selling tone in the near term.

Poh Huat Resources Bhd (Poh Huat) operates at a production space in excess of 3.5m sqf in both Malaysia (1.5m sqf) and Vietnam (2.0m sqf), supported by approximately 6,500 staff force within the group. Poh Huat products are marketed under the brand name of AT Office System and AT Home System and sold to over 60 countries in 5 continents across the globe.

We gather that blended ASP only fell -1.7% QoQ in 2QFY23. The slower magnitude of price. normalisation suggest that ASP may have bottomed. Moving forward, we expect ASP to trade around current levels, before demonstrating mild signs of revival towards mid-to-end 2023, following China’s reopening of economy and purchasers’ inventory levels from previous stockpiling activities dialed down.

The FBM KLCI ended marginally lower as investors traded cautiously prior to the US midterm elections, but inflow of foreign funds continued for the 3rd consecutive day. With the Wall Street continuing its recent gains ahead of the inflation data, we believe the market is expecting the CPI data to decline and the US Fed could pivot. However, our view is that the CPI data will remain elevated at least for the rest of 2022. Given the concerns over China’s ongoing zero-Covid policy to weigh on the economy, we believe investors will position themselves using the earnings season, as well as GE15 as the near-term catalysts.

The FBM KLCI ended a choppy session higher, mainly buoyed by the telecommunication heavyweights as foreign funds returned for the second consecutive day. While the local bourse may cheer on hopes over China’s reopening, investors may remain cautiously optimistic as the US inflation data which will due later this week may indicate a prolonged interest rate upcycle environment, adding more risk to the shaky stock market.