Daily Commentaries 8th Dec 06

After taking a breather yesterday when profit taking emerged on lower liners, the market is poised to march ahead today on news of mergers and acquisitions. The main acquisition news would be IOI’s proposed acquisition of Pan Century Edible Oils and Pan Century Oleochemicals from Trapti Trading and Investments Private Ltd. for RM423m while Allianz General Insurance’s minor announcement that Bank Negara has no objection to it negotiating to buy BCHB’s stake in Commerce Assurance should also be positive. Carlsberg has also announced a 45% owned JV to build a Greenfield brewery in India. In other news, Dialog was awarded another EPCC contract for Petronas’ methanol plant worth RM50m while WCT Engineering secured a RM435m contract for satellite works related to the Universiti Teknologi Mara campus in Selangor and another RM331m subcontract works related to the Kajang-Seremban highway. Coastal Contracts has also secured 2 MOA for the sale of offshore supply vessels for RM76.5m. With all this good news flowing in, the market should attempt the 1100 pts resistance level again. Should that be broken, the next resistance level is at 1138 pts. As for US markets retracing overnight, we feel the impact will be muted on our local market.