Daily Commentaries 22nd Feb 07

On the first trading day after the CNY holiday, the market rallied ahead with gainers outnumbering losers by more than 7 to 1 and volume breaking the 4bn shares mark. News for today is in the form of Linde’s takeover offer for the remainder 55% stake of MOX which it does not own at RM15 per share. Maybank’s results were below expectations although it did report a modest growth for 1HFY07. IJM has been awarded a contract for the development of airside infrastructure at the Senai airport for RM145m, PSCI announced 3 ship building contracts worth US$42m while Leader Universal has also won a contract, jointly with MKCSS Holdings, to develop a 200MW power plant in Sihanoukville, Cambodia. January vehicle sales also dropped from a year ago. Finally, MTouche is proposing a 4-for-1 bonus issue and a private placement exercise. The mixed bag of news coupled with the overnight fall in European and US markets on renewed fears of inflation may mean that further gains on the local bourse may be hard to come by. The 1278 pts support level will be crucial to determine if the market can sustain its current momentum in the short term although the longer term uptrend looks intact. Below 1278, the next support level would be at 1265 pts while the next resistance would be the 1300 pts resistance level.