The FBM KLCI closed higher on Friday despite the mixed sentiment on regional markets. We reckon that the huge and widespread rebounds on Wall Street last week could boost investors’ confidence in both the regional and local bourses. Meanwhile, some key economic indicators which will be released this week include the US inflation rate, Malaysia’s unemployment rate, and Malaysia’s 1Q23 GDP growth rate.

Radium is a net cash (19% of market cap) high-rise property developer in KL region; backed by strong historical sales track record (80-90% take-up by 18M) focusing mostly on fast-moving property units below the RM600k price tag. Radium is valued via market-cap weighted P/E of 18.1x pegged to 3.3 sen FY24f EPS, leading to a fair value of RM0.595, with a prospective DY of 1.7-2.0%.

YoY, a decline in core net profit was mainly attributed by (i) occupancy rate of Wisma UOA II declined from 67.0% to 64.0%, leading to a 11.7% decline in gross rental income to RM3.9m, which has offset a higher gross rental income generated from other buildings of UOAR’s portfolio, and (ii) increase in total expenditure by 6.7% YoY due to an increase in electricity and borrowing cost.

Exploration and mining segment of manganese ore is undertaking engineering rectification works for the Ultra Fines Plant. OMH will be undertaking a planned CAPEX of AUD6.5m to replace the screens and upgrade both water supply and tailings pump capacities. The said rectification plan is expected to take 9 months for completion.

The FBM KLCI ended flat after erasing all its intraday losses as buying momentum emerged in the banking sector following Bank Negara Malaysia’s surprise OPR hike of 25 bps. However, the fears over the US banking crisis remained in place, and that may limit the upside potential for the near term as investors may shift their position towards a more defensive approach at least until the banking crisis is resolved. Nevertheless, traders may look at the corporate earnings season for earnings surprises trades.

Scicom (MSC) Bhd (SCICOM) is regarded as one the leading business process outsourcing player and involves in digital solutions, e-commerce solutions and gov-tech solutions. With more than 20 years of experience, SCICOM is now ranked in the global 100 outsourcing company that is supported by diverse client base.

The FBM KLCI staged a rebound after recovering from the morning session’s losses as buying momentum kicked in after investors digested the sales of First Republic Bank. Nevertheless, sentiment is likely to remain cautious amid the persisted worries over the ongoing turmoil in the US banking sector and ahead of the US Fed’s interest rate decision.

We remain cautious in view of the on-going domestic construction segment that continues to be bogged down by the timing award of the mega-infrastructure projects. Also, the sluggish property development market will continue to see new launches being held back.