Daily Commentaries 21st May 2008

Global inflationary woes, continued domestic political uncertainty and lackluster regional sentiments finally took a toll on the KLCI’s performance, which retraced by more than 1% or 13.04 points yesterday. Renewed consumer concerns in the US following a set of weaker then expected results and guidance from Home Depot and SAKS, coupled with surging oil prices added to the already weakening global economic sentiment. Dow Jones 1.5% overnight decline could weigh on the KLCI’s performance today. Domestic corporate news today includes: Ramunia losing the Indian oil contract after it failed to provide necessary project financing guarantee, Kulim plans to takeover Sindora suffered a setback after its independent adviser advised shareholders to reject the offer of RM1.72/share, MMM has signed an agreement to charter four new chemical tankers in a RM280m deal and Transmile defaulting on its bond repayment of RM213m. Technical wise, look for an immediate resistance at the 1305 pts level followed by the 1313 pts level, while support remains at the 1270 pts level followed by the 1240 pts level.