Daily Commentaries 10th Nov 06

The KLCI continues to exceed expectations and rallied to near the 1,021 resistance pts level led by strong gains across the range of blue chips. With volume also breaking the 1bn shares mark, the outlook for today still looks good particularly given the launch of the 2nd Penang Bridge this coming Sunday and UMNO’s general assembly next week. In news today, the Transport Minister clarified that the Ipoh-Padang Besar double tracking project, if revived by MMC and Gamuda, would be under a PFI scheme. More privatization news today with the focus now on H&L possibly being privatized by PNB. The story on Proton unfolds further with Volkswagen confirmed as the potential party to possibly take up a 51% controlling stake in Proton’s manufacturing operations. More automotive news is also in the form of Government approval for 35 automotive projects from January to September totalling RM368.1m and UMW relooking its strategy to export vehicles to Thailand if the Thai Government continues to refuse to lower import duties on Malaysian cars. In results announced yesterday, Supermax, VADS and Southern Steel announced a good set while JTI disappointed. The aviation industry continues to be in the limelight with MAS and Malaysia Airports winning awards at the CAPA Aviation Awards dinner yesterday. MAS may also be contemplating a rights issue next year. For today, the 1021 resistance level looks likely to be tested, although the fall in US markets on higher oil prices and weaker consumer confidence may dampen the chances to break the resistance level today. Support remains at 1,000 pts.