Daily Commentaries 6th June 2008

While yesterday’s fall in the KLCI was expected, it may have been overdone. With US markets rebounding on better than expected retail figures and the relisting of TNB today, we may see a rebound on the market although upside will be limited. Initial resistance will be at the 1235 pts level. Corporate newsflow was thin as most companies chose to digest the news of the subsidy reduction announcements made by the Government yesterday. Petronas announced that it will pay about RM88bn less in gas subsidies over the next 22 years due to lower subsidies while Ramunia is on course to complete its MMHE deal. PanGlobal plans to sell its insurance business to Tokio Marine for RM15m while Ho Wah Genting has secured a 10 year tin mining certificate in Hulu Perak. The fuel rebates of RM625 and RM150 offered to car and motorcycle owners are a one-off rebate pending further deliberation. Finally, Mudajaya has secured a RM958m expressway contract.