20/01/06 : Morning Call : CNY Rally?
This is an article courtesy of OSK Research Sdn. Bhd.
By : OSK Research Sdn. Bhd published in OSK188.com on – 20 Jan, 2006
CNY Rally? In line with a recovery across Asia, the KLCI bounced up in morning trade only to give up most of its gains in afternoon trading, closing only 1.38 pts higher. Volume weakened as compared to the past week. Counters that recovered after the recent sell down include Proton and Shell Refining that gained 25 sen each. Companies within the Lion group including Lion Industries and Lion Diversified also continued their rise and were up 5.08% and 5.43% respectively. For today, the market will be digesting the implications of the Avenue – ECM Libra merger in that it may indicate further mergers and acquisitions for the rest of the Malaysian corporate scene. The market will also be looking for any indication with regards to interest rate hikes coming out from the Bank Negara meeting today. Crude oil prices jumped more than a US$1 per barrel to break the US$67 per barrel mark on further threats from Osama bin Laden and France’s nuclear rhetoric that was a veiled warning towards Iran. Nonetheless, markets in the U.S. shrugged off the higher oil price due to estimate beating earnings announcements from Advanced Micro Devices, Merrill Lynch and Pfizer. With futures trading at an almost 7 pts premium, the possibility of a CNY rally remains. Barring any negative news, we expect that the market may test the 907 pts resistance level while the 900 pts level remains the crucial support.