Daily Commentaries 12th Oct 06

The KLCI’s struggle with the 970 pts level continues with yet another unconvincing breakthrough attempt. Profit taking at Genting was evident after the recent run up. In today’s news, oil prices continued to slide with no confirmation that Saudi Arabia is cutting production and the IEA cutting its demand forecast. CPO stocks hit a record high of 1.8m tonnes in September while Telekom is in talks with the Government about deregulation of the fixed line business to give it more flexibility in determining rates. Sime Darby is again in the news with plans to assemble Hyundai SUVs locally by the middle of 2007 and also continued rumours that it would launch its takeover offer for Ramunia as early as next week. Investors will undoubtedly be keeping an eye out for Tenaga’s results due this evening. With US markets moderating as hopes for an interest rate cut ebbs, we feel there is a lack of clear fundamental factors to drive the market ahead for now though speculation on strong results for Tenaga may spur interest in the afternoon. We expect the market to remain rangebound today with stronger support remaining at the 966 pts level.