Wednesday, 4 February 2009.

DAILY MARKET REPORT.

Tuesday Markets Closing Prices.

KLCI 879.7 down 4.78.
DJIA 8,078.36 up 141.53 or 1.78%.
Crude Oil US$40.85.
April FCPO RM1,788.
Ringgit 3.6170.

LOCAL NEWS.

EC ruled no by election in Perak.

CIMB Bank a subsidiary of BCHB Bhd, RM6.45, sees slower loan growth and rising bad loans but no job cuts for now.

Stock Recommendation - Sell BCHB Bhd RM6.45. (Est. 2009 EPS 50 sen, Net Tangible Assets RM3.30, Dividend Yield 3.1% or 20 sen, PER 12.9X).

Fair value of RM5.55 at 1.68X Price to Tangible Book Value as the interest rate outlook will provide further erosion of the net interest income margin, slower loan growth and rising bad loans amid worldwide recession and possible depression.

Meanwhile, Nazir of CIMB Group want the Government to provide economic leadership besides the fiscal and monetary stimulus as a temporary boost to the economy. He laid down five strategies, with the first being the need to re-examine the New Economic Policy.

Comment - As I said before, the Government have to implement the right policy and right measure in facing the possible worldwide depression. The government should get rid of the old economic model such as toll concencessionaire for the cronies, FDI that end up hiring unskill foreign workers, wasteful new bumiputera share issues such as being proposed recently by a bumiputera company AMMB Holdings Bhd and a lot more.

More attention should be given on how to prevent a companies from laying off workers and a social safety net such as lowering our costs of living and the costs of doing business.

As I see it, 5.95% in Base Lending Rate is still way too high for business and individual, and the fuel pump prices can still be reduce even further. Moreover, credit card rate and utilities rate such as electricity, telephone and water bill too should be reduce further to ease the burden of the 'rakyat'.

For the long term solutions to the current world economic problems, please read my research paper on "The Year 2009 Stock Market Outlook".

WORLD NEWS.

IMF said the Asian economies can recover next year provided their trading partners in the West are to recover first.

US January car sales plunges.

Japan to buy US$11.2 worth of shares from their banks.

Australia unveiled US$26.5 billion second stimulus package and cut interest rate.


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