Daily Commentaries 26th Jan 07

Yesterday, there was some profit taking in line with regional weakness which was well absorbed as the market underwent a healthy correction. Tenaga’s good results should help support the market today although news that the Government has not set any deadline for PPA renegotiations may limit the counter’s upside. Khazanah too is reviewing the foreign ownership limit to GLCs which will help to bolster the blue chips. Although not a surprise, Perodua confirmed its leading position in the Malaysian auto market with the announcement of the total vehicle sales in 2006 yesterday. Other market news includes ISS Consulting buying a rival in Singapore for RM17m while the IJM-Road Builder deal received shareholder’s approvals. With overseas markets undergoing a correction overnight, the KLCI could possibly see further consolidation today. Nonetheless, any consolidation should be minor given the good news flow with support at the 1170 pts level.