Daily Commentaries 1st Mar 07

With the global fall in stock markets, the KLCI was no exception, down over 100 pts at its lowest before recovering to post a 40.6 pts drop. For today, we continue to advise caution on the market as the high volume yesterday, close to 4bn shares, would seem to indicate that selling pressure may not be completed exhausted. Nonetheless, we believe that selling by foreign institutions has resulted in some key blue chip companies becoming attractive bargains at current prices and investors should monitor these closely to determine the right entry price. For corporate news today, the Transport Minister said that Malaysia wants a more liberal aviation agreement with Singapore although the open skies policy does not appear up for discussion. Mobile Number Portability may be introduced by next year. On a broader arena, Malaysia’s GDP figures came in within expectations while Chinese Government officials denied plans to levy capital gains tax on stocks. With the US markets rebounding as the US Federal Reserve Chairman reassured investors that the economy will continue growing, it will be crucial to monitor the key support level of 1170-1190 pts to decide whether or not to bargain hunt.