Daily Commentaries 6th Dec 06

The KLCI staged a strong rally yesterday, closing 11.52 points, with continued buying on blue chip counters. MIER’s upgrade of 2006 and 2007 GDP forecasts added further confidence on the market. Top corporate news today is the likelihood of an increase in the cost for the controlling stake in RHB as a bidding war looms, while Genting is confident of winning the bid to operate Singapore's second casino resort. Meanwhile, Tronoh expects new and existing overseas projects to be the group's main revenue driver for the next financial year while UEM Group has shown interest in the construction of a transaction highway in Cebu, Philippines. Follow through buying may continue today on the back of strong economic fundamentals (strengthening Ringgit, increase in GDP projections), companies’ commendable financial performance in the last financial results quarter as well as M&A theme, which spur interest in many GLC stocks. The Dow Jones closed higher on upbeat data on inflation and the services sector of the economy. Support is still pegged at the 1,080 level with resistance at 1,100.