Daily Commentaries 3rd Oct 06

The market treaded within a narrow trading range yesterday but managed to close a tick of the 970 level, helped by buying support on IOICorp and DiGi. The latter decorates headlines today with renewed speculation on a marriage with Timedotcom. DRB-Hicom is said to be exiting its loss-making waste management activities in Bharain while VADS delivered a major coup in the form of a RM255m contract from TM Retail. Aside from that, TM’s Sri Lankan subsidiary, Dialog has acquired a 90% stake in a television broadcasting company to enhance its triple play offerings. Tanjong Offshore also bagged a RM10m contract for a switchgear package. While the listless trading is expected to persist, we would expect the 970 level to be taken-out on an intermittent basis despite the slightly weaker close on the Dow. Note however that the KLCI still needs to overcome the previous intraday high of 971 to vindicate our view of a more sustainable upside.