Daily Commentaries 18th Dec 06

The market clawed back some losses made over the past 3 trading sessions to end 13.85 points higher last Friday, spurred by positive corporate developments such as Wilmar's takeover of PPB Oil. However, broader sentiment remained somewhat cautious with volume staying shy of the 1bn mark. Headlines out of the weekend include DRB Hicom putting in its proposal to acquire a 33% stake in Proton to the Cabinet Committee on Transportation, Ranhill securing a oil & gas production sharing contract in Indonesia and Sompo Japan Insurance buying a 30% stake in Berjaya General Insurance from Berjaya Capital for RM101m. On the results front, Tanjong and Hiap Teck reported earnings that were above market expectations. Rumours also indicate that Sime Darby may be taking over the ownership of the Bakun dam project together with the associated submarine cable. The KLCI appears headed for a White Christmas and to finish the year on a positive note, supported by another record high on the Dow. We do expect trading to wind-down towards the penultimate week of 2006. Key support and resistance levels are at 1080 and 1100 respectively.