Tuesday, 5 January 2009.

DAILY MARKET REPORTS.

Monday Markets Closing Prices.

KLCI 884.45 closed on Monday.
DJIA 7,936.83 down 64.03 or 0.83%.
Crude Oil US$40.23.
April FCPO RM1,779.
Ringgit 3.6130.

LOCAL NEWS.

Political uncertainties in Perak heightened.

Fitch Ratings has affirmed Malaysia long term local currency issuer default rating at A+ and revised the outlook for the Ringgit to "negative" from "stable".

Government to revise the electricity tariff and gas prices soon.

Analysis - The tariff can be implemented considering the current world gas prices at US$4.50. Government should allow the TNB to take over all the existing independent power producers in the country to solve the payment or tariff issue to the IPP's.

IOI Corp Bhd RM3.92, SELL ( Est. 2009 EPS 16 sen, Net Asset RM1.29, Dividend Yield 2.55%, PER 24.5X). and IOI Property Bhd RM2.22 (NOT RATED) suspended pending announcement.

Cabinet has revised the approval of KLIA East@Labu given to Sime Darby Bhd RM5.50, SELL, (Est. 2009 EPS 31.61 sen, Net Assets RM3.83, Dividend Yield 4.5%, PER 17.4X) and Air Asia Bhd RM0.875 (Est. 2009 EPS 9 sen, Net assets 76 sen, Dividend Yield 2.28%, PER 9.7X).


WORLD NEWS.

U.S. GDP shrank to -3.8% in the 4Q of 2008 helped by the build up in inventories but exports down 20% on strong dollar.

U.S. Economy - Manufacturing shrank again last month and consumer spending recorded an unprecedented sixth monthly decline in December, offering no sign the economy has hit bottom.

Analysis - The US$819 billion stimulus package mainly will deal with social safety net such as on food stamp and health insurance for the jobless. The recapitalization of the banking system still hanging in the air. So it is highly unlikely for the U.S economy to recover this year or even next year.

20 million migrant workers out of job in China.

South Korean exports in record plunge, a year on year drop of 32.8% and imports down by 32.1%.

Asia stocks slide yesterday as company outlook darken.


STOCK MARKET OUTLOOK.

SELL or ACCUMULATE SLOWLY (Ringgit Averaging) and buy back lower possibly around 500 to 600 level after the CI testing the Oct. 2008 low of 801 level because of too much political and economic uncertainties coupled with deepening global recession and a possible depression as the DJIA will be heading lower toward 4000 to 5000 level after testing recent low of 7500 level.


Sincerely by:-
KAMEL BIN MOHD YUSOH.
KENANGA INVESTMENT BANK BHD.
013-6306544 or 03-21634549/50.