Daily Commentaries 1st September 06

The build up to today’s market action looks promising enough with the 5.9% 2Q GDP growth higher than expected, a seeming turnaround at MAS boding well for future GLC performance and strong results from Media Prima. Nonetheless, the risk remains that much anticipation has been built into the 2007 Budget which will be released today and given our house view that not many surprises remain to be announced in the budget, disappointed investors may turn bearish. Aside from the budget, major news includes the approval of 40,000 foreign workers to assist in construction works during the 9MP, talks on a partnership between Volkswagen and Cycle & Carriage ending and the first draft of the South Johor Economic Region masterplan being completed by Khazanah. US markets closed flat yesterday on unexciting corporate earnings forecasts. As such, we expect the market to trade rangebound or today between its support at 953 and resistance at 958 pts.