Daily Commentaries 28th Mar 07

The KLCI stayed well above its closing on Tuesday to end the day with 2 points higher yesterday. Top corporate news for today: foreigners are allowed to own 100% stake in Islamic financial institutions in the country while FIC has relaxed some rules to account for this, IJM has signed a RM530mn agreement to jointly develop an integrated township in India, while Muhibbah and Nam Fatt have secured a combined RM1.01bn of the RM1.4bn petroleum hub and bunkering facility near Tanjung Pelepas. The government has clarified that it is still considering YTL’s proposal to build the KL-Singapore high-speed rail and no decision has been made. Two corporate results today are Gamuda and I&P. Despite the continued strengthening of Ringgit, Dow’s tumbled overnight due to worries that the nation’s weak housing market would seep into the broader economy and crimp consumer spending, may hamper sentiment on the local and regional bourses. The next resistance is pegged at 1,250 with immediate support at the 1,220 level.

Daily Commentaries 27th Mar 07

Despite the overall mixed trading, the KLCI still managed to eke a respectable 8.67 points gain to close slightly off the high of 1246.75. A key market sweetener was the Ringgit which crept to a new 10 year high of RM3.452. Major headlines today includes DiGi's new prepaid plan targeting youths, WCT Engineering clinching a drainage and sewerage construction job for the Dubai airport and Latitude Tree receiving a new substantial shareholder in the form of Konsortium Kontrek. Also, shareholders accepting Wilmar’ VGO for shares in PPB Oil are required to repatriate all dividends, profits and proceeds from the disposal of their investments once they are paid or when they dispose off their investments according to a BNM ruling. There appears to be enough notable newsflows to see the extension of the upside today although the market could well take a breather with oil high oil prices reining on sentiment and the lower overnight close on the Dow. Next resistance is pegged at 1250 while immediate support is now at 1220 level.

Daily Commentaries 22nd Mar 07

The local bourse gained 4 points in thin trading. Top volume movers were the call warrants and second liners. Among notable headlines today: KFH has indicated its interest in a 49% stake in RHB Islamic; Maybank plans to set up a stand-alone Islamic bank; assurance from Khazanah that Proton’s shareholders are still in talks with VW and GM on a possible strategic alliance; MMC considering a bond issue to finance construction of Ipoh-Padang Besar double-track rail project; and the possibility of Maxis joining Usaha Tegas to buy a stake in Sri Lanka Telecom. KLCI may extend its gains today with two positive news on the macro front: BNM announced sweeping measures to further liberalise the forex policy while Ringgit closed at RM3.47 against the US$. Meanwhile, The Dow rallied last night investors embraced further evidence that the Fed continues to do a good job of engineering the expected soft landing. Immediate resistance and support for KLCI remains at 1,214 and 1,200 level, respectively.

Daily Commentaries 12th Mar 07

The KLCI stayed well above its previous closing level yesterday in a widely range bound trading. Among top corporate news today are IJM Corp’s idea to raise RM200mn from an IPO of its Indian contracting and property business, Maybank’s plans widen its overseas operations to make it account for at least a third of group revenue by 2010, and QSR may buy the A&W franchise. EPIC has confirmed that it is not in negotiation with the shareholders of Samudra while KUB clarified that it is identifying opportunities in O&G companies. The local bourse is expected to continue its range bound trend, supported by the strengthening of the Ringgit and strong economic fundamentals. News flow on blue chip companies can be expected over the three-day Invest Malaysia event, which will begin today. The Dow ended positive on good overall housing data, more M&A news, and relief in the troubled sub-prime mortgage space. Immediate resistance and support for KLCI stand at 1,214 and 1,200 level, respectively.

Daily Commentaries 20th Mar 07

Despite the 10 points rise on the KLCI, the broader market was generally weak with trading volume hitting another low of 937m shares. Among key corporate headlines today are Samudra's contract from Petronas Carigali for turbular handling equipment, IOICorp's 1-into-5 share split and TM's revelation of its FY07 and medium-term KPIs. Meanwhile, expectations are running high for the government to scrap the Real Property Gains Tax (RPGT) that may be announced at the Invest Malaysia conference tomorrow. Given the strong rebound on the Dow last night, we do expect the KLCI to trend higher today with the immediate resistance at 1200 level. Support is now seen at the 1159 level followed by 1150.

Daily Commentaries 19th Mar 07

Trading volume on the market dwindled further last Friday to under 1bn with most investors staying on the sidelines. However, there were no short of newsflows beginning with the much touted award of the WiMAX spectrums to 4 companies, Genting's disposal of its paper and packaging business, Genting Sanyen, Proton is likely to see the emergence of a local partner again in the form of DRB-Hicom while the stalled double-tracking project is back into play. KUB has also aborted the deal to acquire Samudra while MAS is likely to cancel the order for A380s. The rumour mill has been awashed with news of a probable lifting of the Real Property Gains Tax (RPGT) that could fuel further interest on property counters. While external concerns should still cap sentiment on the local bourse, the emergence of fresh leads including upcoming major IPOs- JCY and Bright Focus- should mitigate the downside pressure on the KLCI. Support is at the 1159 level with strong resistance at the 1200 mark.

Daily Commentaries 16th Mar 07

Uncertainty still reigned in the market yesterday with wide swings in the KLCI. Nonetheless, it did manage to close in the black, up 13.93 pts. Industry watchers will be keenly awaiting the Government’s announcement on the winners of the WiMax licence recipients today. Corporate news includes Telekom Malaysia exploring opportunities to acquire wireless operators in Vietnam and Laos, Ingress announcing that it had received LOIs from TNB to supply electrical equipment and civil works at substations worth RM36.2m as well as Bina Puri securing construction contracts for condominiums in Bangkok worth RM63.8m. With regards to the EPF-RHB deal, EPF is open to Kuwait Finance House as a strategic partner for RHB but its top priority will be to dispose of non-core assets and reduce debts. Bursa Malaysia is also in early talks to buy strategic stakes in the stock exchanges of Vietnam and Indonesia. With overseas markets looking positive, we expect the KLCI to continue creeping up today. The technical view now points to a continuous resistance range from here up to the 1200 pts level while support will likely kick in at the 1159 pts level.

Daily Commentaries 15th Mar 07

The KLCI’s performance showed that investors are still jittery with the market closing sharply down at 1166.38 pts. Still volume was not significant showing that selling pressure was weakening. Today’s news comes in the form of MAS announcing a new turboprop airline named Firefly, OSK’s offer to buy MBF Corp’s 49% stake in QBE Insurance. We are hopeful that the 1165 pts support level will hold for today.

Daily Commentaries 14th Mar 07

The KLCI closed at the 1,200 level after it succumbed to profit taking in the second session, wiping-out the 10 points gain in the morning session, while regional markets closed mix. Topping corporate news today are Alam Maritim’s LOI from Murphy for a RM19.2mn contract to supply a fast crew boat, IOI Properties and a Singapore company winning a tender for a 1.46ha leasehold land on Sentosa Island while DiGi has also denied a tie-up with Time dotCom. Meanwhile, the successful recipients of the WiMAX spectrum could well be announced later today. With the Dow plunging 242.66 points overnight following the revelation of weaker than expected retail sales and concerns on the sub-prime mortgage contagion effect enveloping the financial sector, there is further downside on the market today. Immediate support is pegged at 1187 followed by 1150.

Daily Commentaries 13th Mar 07

The market cruised past the 1,200 level yesterday with strong buying of Genting and Resorts providing the lift. Retailers were also seen snapping- up few Mesdaq and second liners deemed situational beneficiaries. Tanjong Offshore is in the news today with a RM430m contract from Murphy Oil for offshore drilling. PNB is also looking to take MIDF private while Kuwait Finance House (KFH) which lost the bid to take over RHB Group has indicated that it is still keen to have equity participation in the entity. With the firmer overnight close in the US market, oil price staying below US$60 per barrel coupled with the certainty provided by PM’s statement that an election will only be called when the feel good factor improves further, we do expect a continuum of the upside today with the resistance zone at between 1189-1240.

Daily Commentaries 12th Mar 07

The KLCI did sustain its upward momentum in early trade Friday although much of the gains were pared ahead of the weekend. The Board of EPF has come out to defend the acquisition of RHB whilst revealing plans are afoot to bring in few strategic partners into the banking group. Other key news out of the weekend are the likely success of Melewars's bid for the RM1.2bn Penang monorail project and Scomi's disposal of its oil field subsidiary to Standard Chartered Private Equity. Also, Sapura Crest is reported to have secured a major offshore oil deal worth US$3bn. US markets closed slightly firmer nudged by better unemployment data last Friday. External developments will continue to dictate the patchy recovery in sentiment but there is upside bias for the KLCI given talks of the potential award of construction/9MP contracts. Support is seen at 1150 while resistance zones are eyed at 1190-1240.

Daily Commentaries 9th Mar 07

Judging from yesterday’s rise in the KLCI of 30.48 pts on a volume of 2bn shares, it would appear that optimism is returning to the Malaysian market. News today includes Utama Group accepting EPF’s revised offer for its stake in RHB, the potential delay of AirAsia X on the lack of suitable planes and CBIP announcing new contracts worth a total of RM29.2m in relation to the construction of palm oil mills. Johan Holdings announced a management agreement to supervise development of a retail project in China with a gross project value of RMB500m while KPJ will manage 2 private hospitals in Jeddah. Leader Universal entered into a JV to build and operate a 200MW power plant in Pakistan. With US and European markets rising overnight, we do see the market sustaining its uptrend. The technical view for today sees a big resistance range from 1190 to 1240 pts. Immediate support is at 1150 pts.

Daily Commentaries 8th Mar 07

The KLCI yesterday saw another day of active bargain hunting activities on blue chips with the index moving up 27.6 points or 2.7% on decidedly strong volume of 2.7b shares. In today’s headlines, EON Cap has raised its offer for RHB shares to RM1.97 per share from RM1.80 previously and similarly for RHB Cap shares from RM4.80 to RM5.00 per share. Also in the news is the revision of Protasco’s associate’s Libyan road maintenance contract to a higher value, the Sarawak State Government’s revision of electricity tariffs which will benefit Sarawak Enterprise Corporation, Lien Hoe’s proposed sale of the Atria shopping complex to OSK Property for RM75m and APB Resources canceling its HOA with PSC Petroleum. Despite the bullish sentiment yesterday, the overnight drop in US markets may still put a dampener on the mood today. Still, we believe the KLCI may edge higher towards the 1165 pts resistance level.

Daily Commentaries 7th Mar 07

The market finally clawed back some of the losses chalked over the past week to close 20.2 points higher as bargain hunters returned to snap-up battered blue chips. EPF makes headlines today with a fresh bid made for RHB Capital, competing with the likes of Kuwait Finance House and EON Capital. The rebound on the KLCI following successive declines is a welcoming respite- drawing some semblance of stability- although we remain cautiously optimistic until a more meaningful upside is established. Immediate support and resistance are pegged at 1130 and 1150 respectively.

Daily Commentaries 6th Mar 07

It was another nerve wrecking start to the week with the KLCI plunging 74 points at one point before recovering slightly to close 53.9 points down. At the close, Malaysia was the worst performing market in the region, shedding 4.6%. In the new today, Peugeot Citroen has ended talks with Proton for an alliance while M3nergy securing an oil and gas block off West Java. Both Putra Perdana and Crest Builder have also secured contracts for mixed developments projects in Kuala Lumpur and Damansara respectively. US markets closed weaker with bargain hunting short-lived by heavy profit-taking driven by continued fears of a global economic slowdown. With the 1136 support broken with relative ease, the next crucial support for the market now rests at 1096. We would expect the market to drift further on its strenuous path before making a recovery attempt.

Daily Commentaries 5th Mar 07

The market extended its losing streak, closing in negative territory for the 5th consecutive trading day last Friday as selling pressure continued. M&A developments within the banking fold made headlines over the weekend with DRB-Hicom confirming the intention to dispose-off its 20% stake in EON Cap for between RM9-10 a share, EON Cap has extended the deadline for RHB's board to consider its bid for another week until March 9 while ANZ and AMMB have formalized the strategic partnership. Other notable news includes Star Cruises withdrawing from the Singapore IR development, London AIMS- listed Peninsular Gold Ltd. investment in a RM60m high tech gold processing plant in Raub, Pahang while Lim Kok Wing University is headed for a listing. Following the disposal of the Four Seasons Resort in Langkawi, MAS is also now looking to sell its 10% stake in Seri Pacific Corp which owns the Best Western Premier Seri Pacific Hotel in Kuala Lumpur. Given the still fragile investor sentiment amid another weaker close on the Dow last Friday, the KLCI is expected to range-bound at best with the underlying support of 1136 as the critical level to watch.

Daily Commentaries 2nd Mar 07

As expected, selling pressure continued yesterday although it seemed to have eased slightly with volume dropping to only 2.4bn shares and the 1170 pts support level holding up. For today, corporate news is in the form of Genting International saying that it will ensure that it met all the requirements for a casino license in Singapore including reviewing its Macau deal. Banks are in the news with Bank Negara approving ANZ Banking Group’s proposed equity participation in AMMB Holdings while rumours surfaced that DRB-HICOM has received BNM approval for talks to dispose its 20.2% stake in EON Capital to Newbridge Capital. Bursa Malaysia’s link up with the Singapore Exchange may be delayed to next year while MAS is selling its hotel and land in Langkawi to a Saudi group for RM435m. For today, despite selling pressure likely to be easing, the overnight fall in US markets may mean that the KLCI may at best be rangebound. The 1170 pts support level has to continue to hold for the market to stage a rebound in the short term. Resistance is at 1196 pts.