The FBM KLCI took a breather from earlier winning streak as profit-taking activities emerged in Petronas-related and selected banking heavyweights. However, we believe the buying interest could spillover from Wall Street to stocks on the local front, coupled with the foreign investors turning net buyers (5-day net buy valued at RM37.1m). Meanwhile, traders might be attuning towards GE15 theme or re-tabling of Budget 2023 after the GE15.

Trip to the East. We recently took a trip to East Malaysia and came away feeling fruitful of the journey after being equipped with better insights of the operating landscapes at Sabah and Samalaju Industrial Park, Sarawak. We were briefed on the current operations, future plans and undertook site visits over 4 companies, namely; Suria Capital Holdings Bhd (SURIA), OM Holdings Ltd (OMH), Cahya Mata Sarawak Bhd (CMSB) and Bintulu Port Holdings Bhd (BIPORT).

Texchem Resources Bhd (TEXCHEM) started off as a textile chemical trader and has now evolved into the (i) sales and distribution of industrial raw materials and additives, (ii) polymer engineering, (iii), seafood processing, (iv) food & beverage and (v) corporate services.

The FBM KLCI advanced on Friday, outperforming the mixed regional stock markets prior to the long weekend break as the official GE15 date was announced. However, investors should remain cautious as persisted worries over possible recession in major economies, which may cap the upside potential over the near term. Meanwhile, traders may focus on the European Central Bank’s interest rate decision which will be released by end of the week.

The FBM KLCI closed at intraday high spurred by persisted buying momentum in PCHEM and selected banking heavyweight after the announcement on the GE15 polling date. Nevertheless, we opine that the local bourse may trade sideways amid prevailing global and local headwinds, such as the political turmoil in the UK following the Prime Minister’s resignation and the still-hawkish Federal Reserve tone on the US interest rate direction. Meanwhile, investors are waiting for the outcome of the GE15.

Banking-led rallies kept the FBM KLCI above the key 1,400 level after the greaterthan-expected special dividend by AFFIN. However, we opine that the rebound may remain fragile as investors may weigh potential global recession concerns over the recent reporting season on Wall Street as the spike in UK inflation spooked the markets. Nevertheless, traders may look at companies with strong balance sheet to invest in the long run.

Cnergenz Bhd (CNERGEN) is principally involved as an electronic manufacturing solutions provider, specialising surface mount technology (SMT) manufacturing solutions for the electronics and semiconductor (E&S) industries. At present, CNERGEN operates on a 22,800 sqf facility in Bukit Tengah, Penang and serves more than 100 customers worldwide.

The FBM KLCI saw a comeback buoyed by buying momentum from foreign funds following a positive cue from Wall Street. Investors may shrug off some recession fear in the near term to position themselves in the ongoing third quarter reporting season on Wall Street. Meanwhile, we expect sentiment on the local bourse to stablise once the GE15 official date is announced later this week.