Daily Commentaries 11th Jan 07

The KLCI traded in negative territory for the day, along with the regional bourses due to the spill-effect of Thailand’s decision to tighten overseas investment rule. As expected, palm oil production slumped 26% QoQ to 1.14MT in December as heavy rainfall exacerbated a seasonal decline in output. TNB share price should react positively today to news that Perwaja Steel may settle its RM90m outstanding debt by October, eight months earlier than planned. Meanwhile, the death of two construction workers at the Pavillion shopping complex construction site should have a negative impact on Putrajaya Perdana as it is requested to stop work immediately. The KLCI may rebound today following the Dow’s 26 pts gained last night. Crude oil prices continue to slipped, closing at US$54pb and this is positive for the airlines and transportation sectors, as well as inflation and the economy as a whole. The KLCI’s near term support remains at the 1,110 level with immediate resistance pegged at 1,138 level.