Daily Commentaries 26th Sep 06

As expected, Puncak was among the pack of losers among blue-chips yesterday that included Genting and Tenaga, weighing on the KLCI. Overall market breadth was negative with external concerns reflected on the number of losers outpacing gainers at the close. VADS, one of our top small cap picks for ICT exposure extended its brilliant run reaching a new high. Worries of lower oil prices affecting the viability of bio-diesel projects decorate headlines today. Other key news includes the setting-up of an internet exchange for the country, Genting’s oil and gas subsidiary discovering gas reserves in the West Natunia field and Brem receiving up to four offers for its Kelana Brem Towers from individuals as well as REIT-based funds. Results from property developers, I&P and Merge Housing showed a respectable performance this quarter following higher progress billings from on-going projects. We expect the market to continue drifting in the absence of fresh leads albeit a slight positive bias is not unexpected given the stronger overnight close on the Dow and continuing soft oil prices. The market is also pricing in no change in interest rate when BNM meets this evening.