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Upside likely to be capped

The Fed’s move to begin tapering this month is within consensus expectations and overall market conditions in the US are still positive, especially on Nasdaq. Hence, we expect the positive sentiment to spillover to tech stocks on the local front. However, broader market sentiment could have limited upside potential as investors are still digesting the impact from “Cukai Makmur” and stamp duty changes moving into 2022. Meanwhile, on the commodity markets, the CPO managed to charge above RM5k, while the Brent oil has traded in a volatile manner hitting the intra-day high of USD84.48 and declined near the USD81 at the time of writing as Saudi TV reported that Saudi Arabia's oil output may surpass 10m barrels per day following the easing of Covid-19 pandemic.
market pulse

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technical focus

Technical Focus – AEMULUS

Engages in the design and development of automated test equipment (ATE) and test and measuring instruments (TMI) for the semiconductor industry. The 40:60 joint venture with Tangren Microtelligence Co Ltd bears fruit, given that contribution from China makes up to 39.3% total revenue in FY21 as oppose to only 11.3% recorded in FY20. Counts of several institutional funds such as Kenanga Growth Fund, Manulife Investment Progress Fund, Hong Leong Balanced Fund and among others are in their top 30 shareholders list. Technically, traders may anticipate for a breakout above RM1.13, targeting next resistances at RM1.19-1.25 with long term target set at RM1.40.

market pulse

Turning point

The FBM KLCI rebounded from Omicron-induced selloff earlier, led by banking heavyweights and window dressing activities may have started. We reckon the
overnight rally at Wall Street may spill over to the local bourse amid fading concerns over the Covid-19 Omicron variant. Besides, market may keep an eye on China’s economic data (inflation and PPI) which will be releasing on Thursday. On the local front, the government will be deciding on the 5G wholesale model by Jan-2022 and aims to reach 80% of the populated areas with 5G roll-out may benefit the telecommunication sector. Commodities wise, the crude oil price advanced to close above the USD75 per barrel mark, while the CPO price extended gains.

Kelington Group Bhd – 7Dec21

Following the latest win, KGB’s year-to-date orderbook replenishment now stood at
approximately RM976.0m; exceeding our expectations of RM900.0m for the year. We gather that year-to-date contract wins represents record high orderbook replenishment for KGB, which is a testament for the group’s capability to undertake
larger number of work orders.

market pulse

Seeking for rebound

The FBM KLCI surrendered gains from the previous session as sentiment remained weak, in line with negative performances on the regional bourses. However, Wall Street has rebounded strongly overnight with the view that the Covid-19 Omicron
variant may cause milder illness than earlier strains; this may provide buying support to the local equities. Closer to home, we should expect some rebound on the key index as investors may be repositioning into value stocks or heavyweights moving into the year-end window dressing period. On commodity markets, crude oil prices settled 4.6% higher at USD73 per barrel after Saudi Arabia raised prices
for its crude sold to Asia and the US, while the CPO price saw slight rebound.

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