comment by OSK on 9.4.09

We had expected a run-up in early April (refer to our Apr 1, ’09 April outlook report), we believe the recent rally has been too much, too fast and is still very much a Bear Market Rally. We advise investors to Take Profit as the US economy does not appear to have bottomed out yet while the duration of the current Bear Market does not appear to have matched the severity of the economic recession. We advise re-entering the market in late May. The Top Sell ideas are Bumi-Commerce, IOI Corp, SP Setia, Gamuda and UMW. ..

Sabah and Sarawak should continue to be in the limelight with more infrastructure developments likely coming their way. Sarawak based construction firms Naim Holdings (BUY, TP: RM1.69) and Hock Seng Lee (NEUTRAL, TP:
RM0.49) should be among the beneficiaries. Other Sarawak companies such as Cahaya Mata Sarawak
(Not Rated) and Sarawak Energy (Not Rated) would also be beneficiaries.

Economy not out of the woods yet. With global markets rallying some 20% since March, some
parties have taken a view that the global economy is bottoming out. However, a quick look at the
indices generally regarded as leading leads us to believe that it is still too early to hold this view.

Take Profit. As mentioned in our report dated Mar 31, ‘The Psychology of Rights’, with Axiata going ex-
rights today, the market may find some support. However, more importantly, we believe global investors
will wake up to the fact that the US economy is still falling and the current Bear Market has not yet fully
panned out. We believe selling pressure internationally will have the greater bearing and recommend
investors Take Profit on the KLCI. Our Top Sell Ideas are Bumiputera-Commerce Holdings (TP:
RM5.70), IOI Corp (TP: RM4.22), SP Setia (TP: RM2.10), Gamuda (TP:RM1.39) and UMW
(TP:RM4.06). We advise re-entering the market in late May as the 1Q09 results season tapers off.