A rejuvenated Montgomerie, second in the defence of his Caltex Masters title in Singapore on Sunday, fired six birdies and no bogeys in a flawless 65 for a nine-under-par halfway total of 133. That was later matched by the in-form Australian Peter Lonard who recorded a 68, with South Africa's Trevor Immelman a shot behind on eight under alongside the 23-year-old Australian rookie Jarrod Lyle, who led with six holes to play, before falling to two late bogeys.
The defending champion Ernie Els was also back in contention after what he described as a "grinding 64", the world No 3 recovering from an opening 72 to finish three shots off the lead in his quest for a record-equalling fourth straight win.
Nick Faldo finished in style with birdies at the last two holes for an excellent 66, but at two over par missed the halfway cut by two shots.
Montgomerie won only once last season and needed a wild card from captain Bernhard Langer to play his starring role in the Ryder Cup. The 41-year- old Scot also went through a traumatic divorce from his wife of 14 years, Eimear, but painted a rosy picture of his new life.
"I've never been happier in my life, on or off the course, than right now," he said. "My golf is good, I'm happy at home, there is nothing that can affect me at this stage. I went to Dubai and had a great time there practising, I went to Singapore happy and finished second, and came down here and I'm leading, so you have to say that Monty's actually quite happy right now."
Els began the day one over par and in danger of missing the cut, but birdied three of the first five holes, and dropped just one shot. "I just wanted to make the cut, to be honest," he said. "I had a bit of work left to do and it was a good little pressure exercise. I just wasn't on my game [in the first round], I missed a lot of putts and was a bit out of sorts. I'm still struggling to hit the ball at the flags, I'm so used to bouncing them into the green.
"I've been coming here for five years and never seen the course so soft, it's tough to adjust to. But it was a good, grinding 64."
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