Daily Commentaries 26th Oct 06

Market volume last Friday was still reasonable although as expected gains were capped due to the festivities this week. With only 2 trading days this week, we expect the volume to be lacklustre. Last Friday, companies that reported results included Digi with good growth numbers and BAT with earnings that were flat. A surprise announcement was Sime Darby selling off its associate stake in Singapore’s Jaya Holdings at SGD1.35 per share. Other news includes Landmarks calling off its REITs exercise, Ranhill issuing RM808m of debts and M3nergy buying a 26.5% stake in a gas power plant project in Thailand. Cahya Mata Sarawak is also rumoured to be in a leading position to win a potential multi-billion dollar contract to develop an industrial park in Brunei. With the US market continuing to hit record highs after the US Fed maintained its interest rates and good corporate earnings announcements, the feel good factor may trickle down to the KLCI. Oil rose back above US$61 per barrel as US inventories were down and Opec proceeded with its production cuts. Despite thin volumes expected, the overseas news may bolster the KLCI towards the 984 pts resistance level.