STRATEGY: Oil Output, Interest Rate Cuts - The Kindest Cut of All

Given our expectations of a rate cut by the US Fed (which was confirmed by a 0.75% to 1% cut from 1% to between 0% and 0.25%) and an upcoming oil production cut by OPEC, we had recommended stocks including TNB (given its large US$ borrowings) and IOI Corp and well as Dialog (with its exposure to oil prices) among our top Buy calls for December. We reiterate these buy calls together with Tanjong and Kossan Rubber as we believe the market may still experience a bear rally as oil prices rise and the US dollar weakens. Nonetheless, for the broader market, we still recommend a Sell into Strength strategy as the cuts are just measures from stimulus packages to shore up a declining global economy. (OSK)