Daily Commentaries 14th Dec 06

The KLCI closed off its lows although profit taking was still evident. Volume also failed to crack the 2bn shares mark. Nonetheless, we believe that the bulls will be back in play today with the potential merger of PPB Oils with Singapore’s Wilmar, another example of a major plantation merger and improving Malaysia-Singapore relations as is Muhibbah Engineering’s SGD18.7m contract in relation port works in Singapore. Major corporate developments are also in the form of UEM World confirming the RM767m contract for the completion of the Ipoh-Rawang double track rail project and the privatization of Bernas rumoured to be near to completion. Aside from PLUS, toll operators could also see a boost today with the Government likely announcing a sharp toll rate hike on Dec 14th. Lion Diversified expands in Vietnam with its second store in Hai Phong while RB Land is buying 3 parcels of commercial land in Melaka for RM55.3m. With US markets up moderately on good retail news and strong corporate newsflows, we see the market heading back towards the 1080 pts resistance level. Support is now at the 1073 pts level.