Daily Commentaries 16th May 2008

The KLCI remained stuck below the 1300 pts resistance level yesterday with no major market moving news. For today, the rumour mill seems to be going into overdrive with media reported rumours of Intel potentially buying a minority stake in Green Packet and Boustead Heavy Industries close to clinching a RM200m contract to build a barge. Boustead is offering RM5.50 a share to take Boustead Properties private. News that might affect Sime Darby includes the IMPSA compensation claim for Bakun being termed excessive by the Deputy Finance Minister. Other Government related news includes the Transport Minister saying he will look into the current competition between AirAsia and MAS and the Plantation Industries and Commodities Minister saying that Malaysia may consider swapping palm oil for rice. Coastal Contracts secured a RM201m contract to build 2 offshore vessels while Petra Energy secured a RM50m contract from Felda for palm oil mill boilers. We expect the market to remain rangebound for today given the long weekend ahead. The 1300 pts resistance will remain key.