Daily Commentaries 31st Oct 06

As expected, profit-taking did set-in with heavyweights such as Maybank, Telekom and Tenaga fervently sold-down. Weaker GDP data from the US were partly to blame with regional markets reacting in unison. Volume hit a meteoric 1.03bn shares, above the daily average of 856m last week, reflecting the short-term sentiment risk. Sugar Bun became the latest victim of Bursa’s heightened vigilance on speculative activities despite announcing a fund raising exercise in the form of a special share issue and renounceable warrants. A Malakoff consortium secured a contract for the construction of a seawater desalination plant costing RM881m. Meanwhile, MTD Capital and IOI Properties have denied rumors of the companies being taken private by major shareholders. Results-wise, Star reported 3Q06 numbers that came in broadly in line with expectations while Redtone disappointed. Given the mixed newsflow today and the weaker close on the Dow last night, the KLCI looks more likely to rangebound within the immediate support and resistance thresholds of 980 and 990.