Daily Commentaries 13th Feb 07

Lower liners and laggards continue to dominate trading interest with blue chips pulling back for the second day. Overall market breadth was negative with the number of losers outpacing gainers 2-to-1 as trading volume contracted to 1.5bn versus the 2.7bn record last Friday. In terms of results, Petronas Gas came in above, Amway was in line while Tek Seng disappointed. In the news today, Khazanah is in advance negotiations with UEM World to acquire some 2,000ha of land in Johor while MRCB has secured a RM282m contract to build transmission lines for TNB. MAS also said it is on track to post a second consecutive quarter of profit while Multi-Purpose revealed it is not aware of a 10% stake reported to have been acquired by tycoon, Quek Leng Chan. US markets closed weaker overnight as investors fret over disappointing deal news and uncertainty over Fed Chairmans’s speech to the Congress later during the week. We think the KLCI may drift further before attempting a recovery. Support now moves to 1218 while resistance is pegged at 1240.