MY Closing Bell Reviews｜MAINTAIN STATUS QUO, KLCI TOOLS AT 0.16 points

The dust settled in the six state elections, and investors turned their focus to Malaysia's upcoming GDP data for the next quarter, which in turn affected the overall trading performance being relatively lackluster and cautious.

Due to weak sentiment in regional stock markets, the market reversed most of its earlier decline. Today closed with mixed ups and downs, while financial services, telecommunications, and media stocks had large purchases at the end of the session, and finally ended flat.

When the market closed at 5 p.m., the Composite Index closed at 1457.00 points, down 0.16 points, or 0.01%.

The full-day turnover was 3.53 billion shares, with a turnover value of RM1.89 billion.

The FTSE Malaysia All Shares Index closed at 10712.40 points, starting at 17.28 points.

There were 575 rising stocks, 404 falling stocks, 378 with no ups and downs, and 972 with no trades.

Also, the Malaysian currency exchange rate did not perform well today. At 5:1 p.m., the ringgit was converted to the level of 4.6123.

Will maintaining the current situation 3-3 stabilize the market, or is the “green wave” expansion causing more unease among investors?

There are 2 ways to interpret the results of the six-state elections that have just ended; the only consensus is that Prime Minister Dato' Sri Anwar's “Changming Malaysia” policy must be implemented more efficiently in order to fight for the economy and maintain stability!

The results of the state election were revealed. The results of the 3 to 3 were basically in line with expectations, but with the massive expansion of the League of Nations into the urban areas of the two states of Penang Xue, the political instability that has been suppressing the trend of China's market, has come to a conclusion with this state election, various investment banks have given divided opinions.

Whether the political situation is stable also affects the direction of government administration. The Solidarity Government will focus on medium- to long-term economic reforms after stabilizing the political situation; it is also to quickly win back support and move towards populism, which has also attracted market attention.

Analysts at Dacheng Securities belong to the more pessimistic group. In the latest political situation analysis report, analysts expressed continuing concerns about China's political and economic prospects under the title “A strong 'green tide' may affect important fiscal reforms.”

“The results show that the Solidarity Government has received limited support, which has prevented the government from implementing non-populist measures; these measures are critical to improving the country's finances and long-term competitiveness.”

Analysts are therefore concerned that the government is likely to discourage the “Changming Economy” framework because it fears a further loss of support.

Da Securities is also worried that the political instability that has plagued the Chinese market for many years will not dissipate due to the end of state elections.

“This election failed to restore people's confidence in Malaysia's political stability and made investors continue to be nervous until the 16th national election.”

Societe Generale Investment Bank research analysts also have reservations about China's political prospects, adding that UMNO's big defeat this time may cause party leaders to be questioned, which in turn affects the stability of the unity government.

Of course, the more critical first battle came in the 16th National Election. In this four-year period, how the Anwar government can efficiently reform China's economy has become the key.

“We believe the results of the state elections have given the government room to carry out reforms; effective public communication, management of market expectations, and steady implementation of the reform agenda will be critical.”

However, the Hong Leong Investment Bank study gave a relatively neutral opinion on the state election results. It is believed that until the next general election, the “green wave” will not affect the stability of the federal government for the time being.

Having said that, analysts do not rule out that the Malaysian stock market, especially the criminal stocks most affected by the Green Wave, will fall briefly due to the results of the current state election.

“I'm worried that the Malaysian voters' shift from moderation to conservatism is likely to occur. The stock market may not perform well in August, but our suggestion is that it can be absorbed at a low point.”

There are still some analysts who have a more positive opinion on the results of this state election. Research analysts at Dahua Jixian Investment Bank believe that the state election results are basically in line with expectations, but now that uncertainty has been lifted, horse stocks, which have limited room to fall, believe there is more potential for improvement.

“Investors can refocus on other catalysts in the market, including the Changming Economic Framework introduced by China, the National Energy Transformation Roadmap (NETR), easing conditions for second homes, and proposing the establishment of the Malaysia New Special Economic Zone.”

“Other notable ones include the winners of the next quarter's results, and corporate profits are also expected to strengthen in the second half of the year as cost inflation slows.”

Another catalyst to shift the focus to the future market is Lianchang International Investment Bank Research. Analysts anticipate that after going through the political turmoil, many benefits will begin to surface.

“Political stability, the government has introduced the Changming economic framework, and weakening US dollar expectations can all support the improvement of horse stocks, which are at a low valuation point.”

It is worth mentioning that although the above brokerage firms have given different interpretations, they have basically maintained the target level for this year's FTSE Composite Index at the end of the year.

Only Kennagh Investment Bank research analysts believe that a better future is on the way. The investment bank raised its composite index target by 4% to 1,540 points.

Analysts believe that since last Saturday, investors are already looking forward. The next fiscal reforms, the introduction of large-scale infrastructure, and the Fed's expectation that it will gradually turn pigeons can all remove the haze in the Malaysian market.

Under the fierce offensive of the “green tide”, the Greek Allies' coalition forces held Mount Penn and were able to maintain the status quo. Gaming stocks and construction stocks may become the biggest winners in the market.

The Islamist-dominated states of Kedah and Perlis have recently banned the operation of 10,000 character tickets. Under the surging green tide, the two betting stocks have been under heavy selling pressure since this year.

As the Greek Union holds 3 states — although the advantage has shrunk, I'm sure the operations of the two 10,000 character ticket operators won't be greatly impacted for at least the next 5 years.

In fact, before the state election, Universal and Duoduo Gaming had already “rushed away” last week, and stock prices had risen sharply. At the opening of the market this morning, investors also continued to pour into the criminal sector to help the two betting stocks open higher.

However, the significant expansion of the power of the Islamic Party has also caused market unease. In addition, investors are at a high level of arbitrage, and the rise in betting stocks is unsustainable, and it has quickly turned down.

In any case, in another investment bank report, Hong Leong Investment Bank's research still suggests that once criminal stocks weaken due to the state election results, it is a good opportunity to take advantage of the slump and absorb them.

“We give a 'increase holding' rating to criminal stocks, including the gaming sector and the beer sector.”

As for construction stocks, which are expected to be favored, it is because the political chaos in our country comes to an end, the Solidarity Government is expected to focus on introducing more infrastructure under a more stable political situation to promote growth in this field.

Societe Generale Investment Bank's research predicts that progress will soon be made on MRT Line 3 (MRT3), the Penang Express Railway, the Pan-Borneo Boulevard, and the central government's water management projects.

State-level construction projects are also expected to land soon. The reconstruction project for Shah Alam Stadium in Xuzhou is believed to begin in the end of the season; the Penang Express Railway is also likely to receive funding from the federal government.

Other states won the political party coalition and made promises in the campaign declarations, including the League's promise to strengthen water supply in Kelantan and Kedah, the promise to complete highway construction in Terengganu, and the Greek Union's promise to build affordable housing in Negeri Sembilan, all benefit the construction sector.

Senami reported to the Malaysian Stock Exchange that the subsidiary will fully hold all of the shares in Cavpower Group by buying Kuxton Private Limited and Kagera Private Limited.

The group plans to raise capital through bank loans and internal financing, and the transaction is expected to be completed by the second quarter of fiscal year 2024 (ending June 31).

Dato' Jeffrey Sharin, CEO of Senami Group, said that the acquisition of Cavpower will supplement the Group's existing investment portfolio, enable the industrial sector to expand geographically and step into Australia's high-growth infrastructure and commodity sectors.

“This deal provides a rare opportunity for Senami to enter a broad range of resource industries in southern Australia and further strengthen Senami's industrial footprint in Australia and the Asia-Pacific region.”