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.