The FBM KLCI closed marginally higher as final hour buying interest lifted the key index. Nevertheless, we believe sentiment could remain tepid amid downtrend move on Wall Street and regional markets. Meanwhile, concerns over recession persisted against the backdrop of rising global interest rate setting. Commodities wise, crude oil price sank below USD100 per barrel amid concern over weaker demand following China’s stringent move to curb the Covid-19 spread.

Local integrated healthcare supply chain player that markets and distributes their products offering to over 400 customers across more than 30 countries worldwide and is embarking into expansion of new factory building. We project core earnings to grow from stronger sales in medical devices, particularly ventilators, patient monitors, defibrillators and ultrasound machines, in line with the upgrade of healthcare facilities in both public and private hospitals. UMC is valued by pegging its FY23f core EPS of 2.2 sen to PE of 17.0x, leading to a FV of RM0.38.

Kawan Food Bhd (KAWAN) is regarded as one of Malaysia’s leading exporters and largest manufacturer of frozen Asian food delicacies worldwide, under the brands Kawan, KG Pastry, Passion Bake, Veat and Aman. The group operates 3 factories, of which products are exported to 37 countries globally that are sold in local groceries and supermarkets.

The FBM KLCI rebounded on Friday following the back-to-back losing sessions, led by selected banking and industrial products heavyweights; rising regional markets added to the positive sentiment. Nevertheless, we deem the rebound may be shortlived amid rebound in Covid-19 cases in Malaysia, reintroduction of lockdowns in China, as well profit taking activities on Wall Street overnight.

Rexit Berhad (REXIT) started off since 1998 and has evolved into one of the leading solutions providers to the general insurance industry. Ongoing expansion in both local and oversea markets leveraging on its reputation and expertise helps REXIT to capture the growing demand in the insurance industry. We initiate coverage on REXIT with a BUY call and fair value of RM0.83, based on 14.0x P/E pegged to its forward FY23f EPS of 6.0 sen.

The FBM KLCI extended its decline as the key index was dragged by selling pressure in the banking and industrial products heavyweights. Nevertheless, we believe the overnight rallies on Wall Street, coupled with the China’s stimulus plan should entice buyers to scoop up some shares within the beaten-down stocks at this current juncture. Still, long-term sentiment should remain cautious on the back of heightened inflationary pressure.

The FBM KLCI plummeted as selling pressure in consumer and plantation heavyweights weighed on the key index. Traders should watch closely on the Brent crude oil amid sliding commodity markets as market could be pricing in recession worries and the Brent oil is trading around the USD100 psychological level. While we think the local bourse is set for bargain hunting activities following mildly higher movement from Wall Street, we opine that the upside could be capped amid the falling commodities environment.

The FBM KLCI staged a late-day rebound on the back of mild bargain hunting activities. Nevertheless, we expect investors to stay sidelines amid the heightened inflationary pressure and lack of fresh catalysts environment. Meanwhile, all eyes will be on the monetary policy meeting and BNM’s interest rate decision today.