#Flash* China to further reform renminbi

KUALA LUMPUR: The People''s Bank of China has decided to proceed further with reform of the RMB or renminbi exchange rate regime and to enhance the exchange rate flexibility.

It said on its website on Saturday, June 19 the action was in view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China.

"The People''s Bank of China will further enable market to play a fundamental role in resource allocation, promote a more balanced BOP account, maintain the RMB exchange rate basically stable at an adaptive and equilibrium level, and achieve the macroeconomic and financial stability in China," it said.

Below is the statement posted on its website.

In view of the recent economic situation and financial market developments at home and abroad, and the balance of payments (BOP) situation in China, the People''s Bank of China has decided to proceed further with reform of the RMB exchange rate regime and to enhance the RMB exchange rate flexibility.

Starting from July 21, 2005, China has moved into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. Since then, the reform of the RMB exchange rate regime has been making steady progress, producing the anticipated results and playing a positive role.

When the current round of international financial crisis was at its worst, the exchange rate of a number of sovereign currencies to the U.S. dollar depreciated by varying margins.

The stability of the RMB exchange rate has played an important role in mitigating the crisis'' impact, contributing significantly to Asian and global recovery, and demonstrating China''s efforts in promoting global rebalancing.

The global economy is gradually recovering. The recovery and upturn of the Chinese economy has become more solid with the enhanced economic stability. It is desirable to proceed further with reform of the RMB exchange rate regime and increase the RMB exchange rate flexibility.

In further proceeding with reform of the RMB exchange rate regime, continued emphasis would be placed to reflecting market supply and demand with reference to a basket of currencies. The exchange rate floating bands will remain the same as previously announced in the inter-bank foreign exchange market.

China''s external trade is steadily becoming more balanced. The ratio of current account surplus to GDP, after a notable reduction in 2009, has been declining since the beginning of 2010.

With the BOP account moving closer to equilibrium, the basis for large-scale appreciation of the RMB exchange rate does not exist.

The People''s Bank of China will further enable market to play a fundamental role in resource allocation, promote a more balanced BOP account, maintain the RMB exchange rate basically stable at an adaptive and equilibrium level, and achieve the macroeconomic and financial stability in China.

#Stocks to watch:* BToto, Affin, HLFG, Tenaga

KUALA LUMPUR: Key regional markets are expected to trade in a tight range on Monday, June 21 after the higher yet cautious close on Wall Street on Friday.

On Wall Street, stocks ground higher in another lightly traded session on Friday, ending a nervous week with gains despite signs of economic weakness at home and worries about public debt in Europe, according to Reuters.

Major indices rose for the second straight week even though housing and labor market data raised concern about the fragility of the recovery.

The Dow Jones industrial average gained 16.47 points, or 0.16%, to 10,450.64. The Standard & Poor's 500 Index rose 1.47 points, or 0.13%, to 1,117.51. The Nasdaq Composite Index added 2.64 points, or 0.11%, to 2,309.80.

At Bursa Malaysia, stocks to watch include BERJAYA SPORTS TOTO BHD [] (BToto), AFFIN HOLDINGS BHD [], HONG LEONG FINANCIAL GROUP BHD [] (HLFG) and TENAGA NASIONAL BHD [].

For the financial year, BToto net profit fell 8.4% to RM386.41 million from RM422.02 million. Revenue dipped 8.2% to RM3.39 billion from RM3.69 billion in the previous financial year mainly due to Sports Toto's results as well as higher group finance cost.

In Affin, Bank Negara explained that it rejected the former's plan to take over the EON CAPITAL BHD [] as there were two issues which were not addressed.

It was reported the central bank stated there should not be any contravention of the existing regulations and to ensure the sustainability of the merged entity.

Meanwhile, HLFG is selling a 30% stake in Hong Leong Assurance Bhd (HLA) to Japanese insurer Mitsui Sumitomo Insurance Co Ltd (MSI) for RM940 million cash.

HLA is merging its entire general business to MSIG Insurance (Malaysia), the local unit of MSI. In return, HLA will get a 30% stake in the enlarged MSIG group, making it the second largest general insurer in terms of gross premium.

HLFG President and CEO Raymond Choong said he expected the enlarged entity would be more robust and resilient and poised to better compete and lead in the marketplace.

Tenaga could see some m ild profit taking after surging as much as 45 sen to RM8.80 on Friday. Tenaga chief executive officer Datuk Seri Che Khalib Mohamad Noh said the power giant would bid for a RM7 billion government project to upgrade power plants as the economic recovery boosts demand.

Phillip Capital Management Sdn Bhd had in report released earlier on Friday that it was upbeat about the prospects for Tenaga. It said the power giant, with a spare capacity of 46%, it will continue to benefit from the under-utilised capacity to ride the electricity demand growth over the next few years.

'There is little fear of gas subsidy removal as it will be reflected in tariff adjustment through a bi-annual review formula established in 2008.

'With low foreign shareholdings, the downside is limited, but when foreigners return, we see tremendous upside in the stock. The price has already taken into account most of the negative news. We recommend Buy on Tenaga as a laggard blue chip with considerable upside,' it said.

As for TANJUNG OFFSHORE BHD [], OSK Research had said while the emergence of Ekuiti Nasional Bhd (Ekuinas) as a strategic investor was positive, it remained its Sell call.

It said the Sell call would be maintained until it saw a notable strong earnings recovery. Its target price remains unchanged at RM0.78 based on a price-to-earnings ratio of 7.0 times FY11 earnings per share.

Ekuinas is a government-linked private equity fund manager and it acquired a 20% stake in Tanjung Offshore for RM73.45 million cash or RM1.30 per share.

Meanwhile, Malaysia Airline System Bhd will hold its AGM and EGM at the MAS Academy in Kelana Jaya, Petaling Jaya at 10am on Monday.

Also holding its AGM is PADIBERAS NASIONAL BHD [] at Sime Darby Convention Centre at 10am.

Wall St grinds higher in light session

NEW YORK: U.S. stocks ground higher in another lightly traded session on Friday, June 18 ending a nervous week with gains despite signs of economic weakness at home and worries about public debt in Europe, according to Reuters.

Major indexes rose for the second straight week even though housing and labor market data raised concern about the fragility of the recovery. The S&P 500 closed above its 200-day moving average for the third straight session, which suggests resilience.

"A lot of investors did get very bearish here, and that's a good sign that we had some selling. That has probably exhausted itself, so the pressures are ebbing," said Steve Goldman, market strategist, Weeden & Co. in Greenwich, Connecticut.

Energy shares helped support the Dow and S&P 500 on Friday, with some investors betting stocks beaten down due to the Gulf of Mexico oil spill had run their course. Cameron International (CAM.N) rose 1 percent to $37.98 while Halliburton Co (HAL.N) rose 2.2 percent to $26.98.

The Dow Jones industrial average .DJI gained 16.47 points, or 0.16 percent, to 10,450.64. The Standard & Poor's 500 Index .SPX rose 1.47 points, or 0.13 percent, to 1,117.51. The Nasdaq Composite Index .IXIC added 2.64 points, or 0.11 percent, to 2,309.80.

The market has struggled to make headway since Tuesday's strong run when stocks rose on positive feelings engendered from successful debt auctions in Europe.

The broad-based S&P 500 is down about 8 percent since a recent high on April 23 after having fallen around 14 percent, largely on fears on sovereign debt defaults in Europe.

For the week, the Dow and the S&P 500 gained 2.4 percent and the Nasdaq added 3 percent.

Energy shares rose with crude oil ending higher at $77.18 a barrel. Exxon Mobil Corp (XOM.N) was up 0.8 percent at $63.10, and was among top boosts to the Dow.

BP Plc's (BP.L)(BP.N) New York-traded shares edged 0.2 percent higher a day after its chief executive underwent a bruising appearance before a U.S. congressional committee over the oil spill and the company said it would establish a $20 billion compensation and clean-up fund.

Caterpillar Inc (CAT.N) reported an 11 percent rise in global dealer sales of its heavy machinery in the three months ended in May, driven by strong growth in the Asia-Pacific region. The company's shares rose 1.5 percent to $65.85 and were the top boost to the Dow.

Traders said the convergence of four key expirations, known as quadruple witching, had added to volatility. Stock options expire later Friday, while index futures expired earlier in the session.

The June SPDR S&P 500 fund (SPY.P) options, an exchange-traded fund that tracks the S&P 500 benchmark, showed a light turnover volume ahead of expiration at the close later in the day, according to Jon Najarian, founder of options information website optionMonster.com.

Declining shares included Teva's U.S.-listed shares (TEVA.O), Bayer (BAYGn.DE) said on Thursday Teva's U.S. unit admitted in court that some of the information included on packages of its oral contraceptive, Gianvi, was false and agreed to correct its labeling. Teva fell 1.9 percent to $53.21.

CVS Caremark Corp (CVS.N) rose 1.9 percent to $32.43 and Walgreen Co (WAG.N) added 2.8 percent to $30.09 after the companies patched up their fight over reimbursements for drug prescriptions, salvaging a relationship worth billions of dollars.

Although the S&P 500 held above its 200-day moving average since Tuesday, it has found resistance near 1,121, a key level that marks the halfway point between the October 2007 historic highs and the lows of March 2009. - Reuters

Well partner heaps all blame on BP

HOUSTON/SAN FRANCISCO: As BP Plc rushed to raise cash to pay for the Gulf of Mexico disaster, a partner in the out-of-control well said the British company was likely guilty of "willful misconduct" and should shoulder the financial burden for the worst U.S. oil spill.

Anadarko Petroleum Corp, owner of a quarter of the well gushing into the Gulf, broke its near-silence on the spill to squarely pin blame -- and financial responsibility for claims -- on BP.

"Frankly, we are shocked," Houston-based Anadarko Chairman and CEO Jim Hackett said in a statement.

"BP's behavior and actions likely represent gross negligence or willful misconduct," he added, driving his company's shares up 2.2 percent in after-hours trading.

BP, which has survived a tough week answering to Congress for the spill, said it "strongly disagrees" with the assessment of gross negligence.

It is scrambling to line up resources to pay for a $20 billion damage claims fund demanded by President Barack Obama.

Banking sources told Reuters the British energy giant was seeking $1 billion in loans from each of seven banks, and CNBC said it was hoping to raise $5 billion with a bond.

The financial outlook is far from clear. Moments after Anadarko's statement, credit rating agency Moody's cut BP's rating to junk level, citing potential liability from the spill, and earlier in the day it cut by three notches its rating on BP debt, which is trading around junk levels.

As the crisis entered its 60th day, the U.S. Coast Guard admiral leading the U.S. government relief effort said BP had increased the amount of oil it was siphoning off from its blown-out deep-sea well to 25,000 barrels (1.05 million gallons/3.97 million liters) on Thursday.

It was the largest pool of oil from the gusher yet collected by BP. On Wednesday, it siphoned off 18,600 barrels.

But putting that figure in context, Admiral Thad Allen said 35,000 barrels a day, and possibly as much as 60,000 barrels, were gushing from the well, which ruptured after an April 20 explosion on an offshore oil rig which killed 11 workers.

A device called a blowout preventer failed in the Gulf well, and the U.S. Interior Department on Friday changed rules for new wells, requiring drillers to submit plans for stopping blowouts and to gauge the chances of such a failure.

The spill -- actually hundreds of thousands of small oil patches -- has idled much of the U.S. Gulf Coast's multibillion dollar fishing industry and seeped into ecologically sensitive marches and wetlands despite the efforts of an army of workers to keep it at bay with oil-soaking booms.

Gulf Coast residents worried this week that BP executives' bruising encounters with Obama at the White House and lawmakers on Capitol Hill had diverted attention from the daily battle to clean up a spill that threatens their livelihoods.

Individuals and businesses have claimed an estimated $600 million in damages from BP, but the company had paid only $71 million, less than 12 percent, by early this week, the U.S. House Judiciary Committee said on Friday.

"BP is stiffing too many victims and short-changing others," Democratic Representative John Conyers, the committee chairman, said in a statement.

Kenneth Feinberg, the man picked by Obama to oversee the $20 billion compensation fund, pledged during a visit to the Gulf Coast state of Mississippi on Friday to pay legitimate claims quickly.

A senior banker told Reuters BP's outreach to banks, including Barclays, HSBC and Royal Bank of Scotland, was part of an effort to raise capital for the claims fund. BP declined to comment.

The company said on June 4 it had $5 billion in cash in addition to $5.25 billion in undrawn committed bank lines, and $5.25 billion in committed stand-by bank lines.

BP Chairman Carl-Henric Svanberg told Sky News Television on Friday that his company had "strong underlying performance -- strong cash flow, strong operations."

MORE MONEY MAY BE NEEDED

Feinberg told CBS News on Friday $20 billion may not be enough to meet all legitimate claims. "No one knows for sure yet, but the president made clear, and as I understand it BP went along, that if $20 billion is not enough, there will be additional funds provided," he said.

After falling 6.8 percent in a week of volatility driven by politics in Washington, BP's U.S.-listed shares hovered nearly unchanged on Friday. The shares are down 26 percent so far in June, their worst month since the October 1987 market crash.

Investors appeared unimpressed by BP chief executive Tony Hayward's performance at a U.S. congressional hearing on Thursday. Lawmakers accused him of being evasive and of failing to take responsibility for the spill.

"Hayward's performance wasn't great, but it could have been worse. As a shareholder, our absolute top priority is to see that all energies are being diverted to cap this wretched well," said one top 10 investor.

Investors and analysts said Hayward may cling on despite calls by some U.S. lawmakers for BP to "clean house," but the future was less certain for Svanberg, who earlier in the week described those hurt by the oil spill as "small people," for which he later apologized.

Some shareholders say changing BP's leadership now would be counterproductive when it is in the midst of a battle to cap its blown-out Macondo well.

BP hopes a pair of relief wells now being drilled will halt the leak in August. The aim is for one or both relief wells to intersect with the leaking well at its bottom to pump in heavy drilling fluids and cement to seal it.

The first relief well is within 200 feet of the side of the blown well, said Kent Wells, BP's senior vice president of exploration and production. But it must be drilled down farther before it can intersect with the blown well. - Reuters

BHIC sets up JV with German-based firm?s associate

KUALA LUMPUR: Boustead Heavy Industries Bhd's (BHIC) indirect subsidiary BHIC Defence Technologies Sdn Bhd (BHICDT) has formed a joint venture with MTU Services Malaysia Sdn Bhd (MSM) to undertake businesses related to the maintenance of the products and services of MTU Friedrichshafen GmbH (MTU) in Malaysia and Brunei.

MSM is an associate company of MTU, a Germany-based manufacturer of diesel engines for trains, ships, military vehicles, farming, mining and CONSTRUCTION [] equipment and oil and gas (O&G) applications as well as diesel-generators.

In a Bursa Malaysia filing on Tuesday, June 15, BHIC said the joint venture the parties had entered into on Tuesday was also a step towards establishing a long-term relationship.

"MSM is the only sole authorised agent of MTU in Malaysia with the exceptional know-how and the capability to offer a comprehensive range of products and services support to MTU customers in Malaysia and Brunei," it said.

BHICDT will hold a 60% stake in the JV company while MSM will hold the remaining shares. BHIC had on Monday secured a RM130.7 million deal to build, design and commission 10 Fast Interceptor craft vessels for the Malaysian Maritime Enforcement Unit.

Kenmark active, up after SC injunction vs Ishak

KUALA LUMPUR: Kenmark Industrial Co (M) Bhd shares were active on Thursday, June 17 after Securities Commission Malaysia (SC) obtained an ex-parte injunction to refrain Datuk Ishak Ismail from dealing with RM10.2 million, the proceeds from his disposal of about 58.7 million Kenmark shares.

At 9.20am, Kenmark added half a sen to 10.5 sen with 4.33 million shares traded.

In a statement Wednesday, the SC said the Kuala Lumpur High Court also ordered Ishak to furnish full and complete details of his assets, whether in Malaysia or elsewhere, within four days.

The SC said it sought the injunction following its investigations into suspected breaches of securities laws by Ishak.

FBM KLCI opens marginally higher

KUALA LUMPUR: The FBM KLCI added 2.37 points to 1,305.50 at 9.05am on Thursday, June 17 lifted by gains at DiGi, Tanjong, CIMB and AMMB in early trade.

Gainers led losers 54 to 18, while 50 counters traded unchanged. Volume was 34 million shares valued at RM17.46 million.

Dutch Lady was the top gainer in early trade and added 38 sen tp RM12.58; DiGi gained 22 sen to RM22.82, Tanjong up 16 sen to RM17.52, CIMB six sen to RM7 and AMMB five sen to RM4.95.

Other gainers included Top Glove, JT International, KKB Engineering and K-Star Sports.

Early decliners included Genting PLANTATION []s, MISC, UEM Land, Salcon and Linear.

Multico to purchase factory, office building for RM9.45m

KUALA LUMPUR: Multi-Code Electronics Industries (M) Bhd (Multico) on Wednesday, June 16 entered into a sale and purchase agreement to acquire a 2.05-acre plot of leasehold land in Selangor on which stands a one-storey factory and a three-storey office building for RM9.45 million.

The vendor is LHH & Sons Sdn Bhd, Multico said in a filing with Bursa Malaysia.

Multico said the acquisition would enable it to establish a production and assembly plant, facilitating its core activities of manufacturing and assembling automotive lamps and related parts.

The purchase will also allow it to relocate and centralise its existing business development, marketing and service office together with its warehousing, sub-assembly and logistics arm, which are currently operating from rented premises in Shah Alam.

PNB: Mohd Bakke right candidate as Sime president/group CEO

KUALA LUMPUR: Datuk Mohd Bakke Salleh is the right candidate to be appointed SIME DARBY BHD []'s new president and group chief executive officer (CEO).

President and chief executive of Permodalan Nasional Bhd (PNB), Tan Sri Hamad Kama Piah Che Othman, said Mohd Bakke has extensive experience and has worked with several government-linked and investment companies like PNB, Tabung Haji and Kumpulan Felda Holdings Bhd.'' '' '' ''

"In terms of experience, he is the right candidate," he told reporters on Tuesday, June 15 when asked to comment on Mohd Bakke's appointment.'' ''

Sime had said Mohd Bakke, 56, was chosen in view of his expertise and experience.

It said Bakke, who served as president, group CEO of Felda Global Ventures Holdings Sdn Bhd, has proven ability to manage large companies, corporate restructuring and management expertise in the PLANTATION [] and property sectors.'' ''

Meanwhile, Hamad Kama Piah said PNB was optimistic of distributing reasonable returns to its unit trust holders even though some of the companies it invested in suffered losses.'' ''

"In managing a fund like this, we will invest in many companies. Sometimes the companies perform well and sometimes not up to our expectations.'' ''

"So far we have managed to record returns as expected even though we faced problems," he said, when asked to comment on Sime's huge losses.

Sime is one of the largest companies PNB has invested in.

Hamad Kama Piah, who is also a member of the Sime's board of directors, said based on experience, the losses were only temporary.

He said the company would take appropriate action to recover the losses.

Based on Sime's 2009 annual report, PNB, thorough its unit trusts, held 41% in Sime while PNB held 15.1% direct stake. ' Bernama

RAM Ratings reaffirms AA3/P1 ratings of Naim's Islamic securities

KUALA LUMPUR: RAM Ratings has reaffirmed the respective long- and short-term ratings of AA3 and P1 for NAIM HOLDINGS BHD []'s (Naim) RM500 million Islamic Medium-Term Notes Programme (2010/2025) and RM100 million Islamic Commercial Papers Programme (2010/2017) (collectively known as the Islamic Securities) with a stable outlook.

Naim is a property-development and CONSTRUCTION [] group based in Sarawak.

It holds a 36% stake in Dayang Enterprise Holdings Berhad, a listed provider of oil and gas support services.

The ratings reflect Naim's strong track record in securing numerous federal and state government-funded construction projects in Sarawak, said RAM Ratings in a statement Tuesday, June 15.

Naim also is anticipated to win more contracts this year as more jobs are expected under Budget 2010, the Sarawak Corridor of Renewable Energy and the Tenth Malaysia Plan, it said.

RAM Ratings' head of real estate and construction ratings Shahina Azura Halip said these initiatives, coupled with Naim's healthy outstanding order book of RM1.17 billion (as at end-March 2010), were expected to sustain the group's earnings over the next few years.

"Nonetheless, Naim's margins are expected to become narrower amid more competitive contract bidding," she said.

RAM Ratings said Naim was also one of the largest and more well-known property developers in Sarawak.

However, its unbilled sales dwindled from RM175 million as at end-August 2008 to RM79 million as at end-March 2010, due to fewer launches amid the subdued property market last year, it said.

Nonetheless, the group's low holding costs vis-''-vis over 2,400 acres of undeveloped land allow it the flexibility to defer launches according to market conditions, it said.

"Meanwhile, Naim's net gearing ratio stood at a healthy 0.02 times as at end-March 2010. Moving forward, the group is expected to progressively gear up to fund land acquisitions and working capital.

"All said, its gearing and funds from operations debt coverage ratios are still expected to remain healthy at around 0.5 times and 0.2-0.3 times, respectively," it said.

On the other hand, the rating agency said Naim's strengths were moderated by the uncertainties vis-''-vis its foreign ventures, particularly its maiden venture in Fiji, due to their unfamiliar operating and regulatory environments.

Since most of Naim's operations are based in Sarawak, however, this exposes the group to geographical-concentration risk, it said.

"As its property projects are mainly limited to Miri, any upside potential for its property division will be capped by the performance of Sarawak's property market.

Asian markets up at mid-morning

KUALA LUMPUR: Asian markets advanced on Wednesday, June 16 on the back of the overnight rally at Wall Street after successful debt sales by some of the weakest euro-zone members.

US stocks climbed more than 2%, with the S&P 500 turning positive for the year as solid demand for Irish and Spanish government debt calmed investors' nerves a day after Moody's downgraded Greece's credit rating to junk status, according to Reuters.

The Dow Jones industrial average gained 213.88 points, or 2.10%, to 10,404.77. The Standard & Poor's 500 Index advanced 25.60 points, or 2.35%, to 1,115.23. The Nasdaq Composite Index climbed 61.92 points, or 2.76%, to 2,305.88.

Meanwhile, Japan's Nikkei 225 rose about 2% in early trade to top 10,000 for the first time in a month.

At mid-morning, the Nikkei 225 added 1.55% to 10,040.92, the South Korean Kospi up 0.35% to 1,695.91, Australia's ASX 200 gained 1.04% to 4.552.10 while the Singapore Straits Times Index rose 0.92% to 2,844.25.

At Bursa Malaysia, the FBM KLCI added 8,85 points to 1,307.22, lifted by gains including at CIMB, Genting, Maybank, IJM Corp and Tenaga.

Gainers outnumbered losers 251 to 64, while 133 counters traded unchanged. Volume was 107.72 million shares valued at RM127.59 million.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Wednesday advised local investors to trade on an intra-day basis only and not hold onto stocks for the longer term.

Swift profit-taking activities could set in, he said.

"A recent typical market action that we have noted is that the FBM KLCI trades with a positive (or negative) range of two points.

"Also, any large rise in the overnight American market normally yields an initial rise (gap-up) in the Malaysian bourse. The next typical intra-day action is a softer tone due to profit taking," said Lee.

Among the major gainers at mid-morning, CIMB rose 18 sen to RM7.07, Genting five sen to RM7.22, while Maybank, IJM Corp and Tenaga added three sen each to RM7.49, RM4.85 and RM8.34, respectively.

Other gainers included Genting PLANTATION []s, PLUS Expressways, Supermax, United Malacca and Shell.

DFZ Capital was the top loser and fell 32 sen, LPI Capital down 16 sen to RM15.16, Tanjong fell four sen to RM17.26 while Mah Sing lost two sen to RM1.70.

ADVANCE INFORMATION MARKETING [] was the most actively traded stock with 10.12 million shares done. The counter added half a sen to 14.5 sen.

Other actives included CIMB, Kumpulan Europlus, Talam, Kenmark, Berjaya Corp and Saag.

Asian markets mixed at mid-morning

KUALA LUMPUR: Asian markets traded mixed on Thursday, June 17 after US stocks finished flat on Wednesday after the US government said housing starts fell more than expected in May, underscoring the uneven nature of economic recovery.

The announcement also cast a shadow over better-than-expected industrial production data for the same month. In addition, investors were caught off guard after FedEx Corp, deemed an economic bellwether because it serves a wide range of industries, said higher costs would constrain 2011 earnings, according to Reuters.

On Wednesday, the Dow Jones inched up 0.05% to 10,409.46, the S&P 500 Index shed 0.06% to 1,114.61 while the Nasdaq Composite Index added just 0.05 of a point or 0.00% to 2,305.93.

At mid-morning, Japan's Nikkei 225 fell 0.42% to 10,025.02, the South Korean Kospi shed 0.04% to 1,704.66 but the Hong Kong, China and Taiwan markets that reopened after their respective holidays traded higher.

The Hang Seng Index added 0.6% to 20,182.25, the Shanghai Composite Index gained 0.37% to 2,579.57 while Taiwan's TAIEX Index advanced 0.63% to 7,500.86.

At Bursa Malaysia, the FBM KLCI rose 3.06 points to 1,306.19, lifted by gains including at Maybank, Hong Leong Bank, RHB Capital, Sime Darby and CIMB.

Gainers led losers 140 to 98, while 159 counters traded unchanged. Volume was 104.11 million shares valued at RM89.99 million.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in his daily technical report on Thursday advised local investors to trade on an intra-day basis only and not hold onto stocks for the longer term, adding that swift profit-taking activities could set in.

He said a recent typical market action was that the FBM KLCI traded with a positive (or negative) range of two points.

"Thursday is generally a quiet day on the local bourse historically. Therefore, we expect range trading today.

"On a week on week basis, we may end this week's trading positively - albeit with another narrow rise on Friday," he said.

Among the major gainers at mid-morning, Maybank added four sen to RM7.48, Hong Leong Bank five sen to RM8.38, RHB Capital and Tanjong two sen each to RM5.83 and RM17.38, Sime Darby six sen to RM7.93 while CIMB added one sen to RM6.95.

Other gainers included Dutch Lady, DiGi, Hong Leong Financial Group and Top Glove.

Meanwhile, United Malacca and Hartalega fell six sen each to RM8.55 and RM7.75, Khind and Limahsoon down five sen each to RM1.05 and 16.5 sen, while Hexagon shed 4.5 sen to 63.5 sen.

Talam was the most actively traded counter with 25.1 million shares traded. The stock gained half a sen to 13 sen.

Other actives included Kenmark, Iris, Kumpulan Europlus, CIMB and KKB Engineering.

Kumpulan Perangsang up at mid-morning

KUALA LUMPUR: KUMPULAN PERANGSANG SELANGOR [] Bhd share price advanced on Thursday, June 17 after it announced on Wednesday the appointment of Subang member of parliament (MP) R Sivarasa and Teluk Kemang MP Datuk Kamarul Baharain Abbas to its board of directors.

At 9.55am, the stock gained two sen to RM1.28 with 75,000 shares traded.

KPS is a subsidiary of the Selangor state government's Kumpulan Darul Ehsan Bhd and undertakes projects in the infrastructure and utility sectors as well as the property sector. The duo are Parti Keadilan Rakyat leaders.

KPS holds stakes in two water treatment concessions in Selangor, Konsortium Abass Sdn Bhd (Abass) and Syarikat Pengeluar Air Selangor Holdings Bhd (Splash).

MIG accepts takeover offer for M3nergy

KUALA LUMPUR: MELEWAR INDUSTRIAL GROUP BHD [] (MIG) has accepted the conditional takeover by Adamus Avenue Sdn Bhd (AASB) for the remaining shares in M3NERGY BHD [] and will dispose of its entire 22.3% stake in M3nergy for RM52.3 million, or RM1.85 per share.

In a statement on Tuesday, June 15, MIG said the proceeds from the sale of the stake comprising 28.25 million shares in M3nergy would be used as working capital and to reduce its bank borrowings within the next six months.

It said the disposal would result in a loss of RM4.7 million to the group. However, after taking into account the tax-exempt dividend of 25% or RM7 million received from M3nergy on Dec 10, 2009, a gain of about RM2.3 million will arise from the disposal.

AASB, a special purpose vehicle for the takeover offer, is directly owned by M3nergy group managing director and CEO Datuk Shahrazi Sha'ari and his spouse Datin Tinawati Nordin, who each holds a 50% interest in the company.

Aeon Credit to launch online shopping mall, prepaid card business, says MD

KUALA LUMPUR: AEON CREDIT SERVICE (M) BHD [] aims to launch two new ventures, namely their online shopping mall business in the first quarter of 2011 and their prepaid card business in the financial year ended February 2012 (FY2012), said its managing director Yasuhiro Kasai.

The overall investment to upgrade the IT systems infrastructure, necessary to set up the new ventures, will cost RM40 million, he told reporters after the group's AGM on Tuesday, June 15.

Aeon Credit will collaborate with Jusco and other merchants in its new online mall, he added.

The prepaid card business, on the other hand, will see Aeon appointing designated channels to help service consumers and "top up" their prepaid cards, said executive director of finance, legal and administration S Krishnappan.

Australia busy building homes, in boon for economy

SYDNEY: Australian new homes starts hit a six-year high last quarter thanks to stimulus spending on public housing, while work in the pipeline suggested the sector would help underpin the economy as a whole going forward.

The lift in home supply could also take some heat out of house prices, a comfort to the Reserve Bank of Australia (RBA) which has been warning against a speculative bubble.

"Having now posted three consecutive quarters of solid gains in starts, we are due for several quarters of robust completions results, which will support economic growth over the coming quarters," said Ben Jarman, an economist at JPMorgan.

Housing accounts for around a tenth of the economy and swings in activity can have a big impact, in part because the sector is very labour-intensive and new homes tend to be kitted out with new furniture.

Wednesday, June 16's data showed builders started work on 42,399 new homes in the three months to March, a rise of 4.3% from the previous quarter. The gain was modestly short of market forecasts, but followed an upwardly revised 16.8% surge in the fourth quarter and a 10.9% rise in the third.

Starts in the private-sector were roughly flat at 38,303, while those for public sector housing leaped 74% as stimulus spending to counter the global credit crisis flowed through to CONSTRUCTION []. In all, home starts were almost 35% higher than in the first quarter of 2009, the fastest annual pace in eight years.

"Overall, today's data gives us more confidence that the housing sector should contribute to economic growth ahead," said George Tharenou, an economist at UBS.

The economy grew by 2.7% in the first quarter, compared to the same period in 2009, and the central bank has forecast a pick up to 3.25% by year-end.

More homes needed
"Near-term, building approvals suggest another solid rise for home starts this quarter," said Tharenou. Approvals to build new homes surged 43% between May and December last year, leaving a big pipeline of construction still to come.

Growth in approvals has levelled off in the past few months but they still remain 37% above last year's low. Yet analysts and policy makers still reckon that far fewer homes are being built than needed to meet demand as the country's population is expanding at the fastest pace in five decades. The shortage of homes is put at anything from 110,000 to 180,000 and has been projected to reach 300,000 by 2014 if building does not pick up substantially.

The dearth of supply over the last couple of years is one reason home prices eased only slightly during the global financial crisis and speedily recovered afterwards. House prices in the major cities climbed 20% in the 12 months to March, leading the central bank to warn of the dangers of a speculative bubble.

Prices do seem to have cooled a little in the last couple of months, with the RBA pleased to note that auction clearance rates had fallen in May while demand for home loans had sagged.

Figures from property specialist Residex out Wednesday showed house prices nationally rose 0.6% in May, compared to a 1.6% jump in April and a 1.2% increase in March.

"There may be more slowing ahead," said Matthew Hassan, a senior economist at Westpac.

"Swings in finance approvals have usually been a good gauge of demand and tend to impact with a lag of about six months, while the latest auction clearance rates suggest there was a significant softening in market activity in May to June."

If house prices do moderate, it would be one less reason for the RBA to keep lifting interest rates later in the year. ' Reuters

Wall St ends flat on mixed economic data, FedEx drags

NEW YORK: US stocks finished flat on Wednesday, June 16 as cautious comments from FedEx and weak housing market data overshadowed a surge in industrial production.

Investors were caught off guard after package company FedEx Corp, deemed an economic bellwether because it serves a wide range of industries, said higher costs would constrain 2011 earnings. FedEx shares slid 6% to $78.07.

The US government said housing starts fell more than expected in May, underscoring the uneven nature of the economic recovery and casting a shadow over better-than-expected industrial production data for the same month.

The market's slow churn kept the S&P 500 above its 200-day moving average a day after the index exceeded that level for the first time in a month. Investors took that as a positive signal because they view the 200-day average as an important momentum indicator.

"Essentially, the market has held on to yesterday's gains and you have to call that encouraging," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

The Dow Jones industrial average added 4.69 points, or 0.05%, to 10,409.46. The Standard & Poor's 500 Index edged down just 0.62 of a point, or 0.06%, to 1,114.61. And the Nasdaq Composite Index inched up just 0.05 of a point, or 0.00%, to 2,305.93.

Wednesday's session left the Dow and the S&P 500 just below the break-even point for the year, while the Nasdaq is up 1.6% for 2010.

Stocks have fallen sharply since a recent closing high on April 23, mainly on fears of slower growth and unsustainable public debt in the euro zone. The S&P 500 is still down 8.4% since that date after falling nearly 14% to an intraday closing low on June 7.

BP, Apple and 3M climb
On the closely watched energy front, BP Plc agreed to US President Barack Obama's demand to place about $20 billion in a special fund to pay damage claims from the Gulf of Mexico oil spill.

The British company also said it would not pay dividends to its shareholders this year. BP also said it plans to reduce its investment program and sell $10 billion of assets for a planned fund to cover the costs related to its Gulf of Mexico oil spill.

BP's New York-traded shares rose 1.5% to close at$31.85, after earlier climbing as much as 5.1% to an intraday high at $33.

"The market expected it, and everyone was prepared for this, which is the only reason the stock is reacting the way it is," said Chip Hanlon, president of Delta Global Advisors in Huntington Beach, California.

Shares of some US drillers and other energy companies also advanced, with Halliburton Co up 3.1% at $26.25.

Strong sales from Apple Inc, which said it sold 600,000 of its iPhone 4 smartphones in a single day of pre-orders, helped cushion the Nasdaq. Apple's stock was up 2.9% at $267.25.

Before the opening bell, the Federal Reserve Board reported that industrial output surged 1.2% in May, partly due to a spike in utility production, and a solid gain of 0.9% in factory output.

Shares of 3M Co, a diversified manufacturer, rose 1.4% to $80.88 and ranked as the Dow's biggest positive influence.

"The industrial production number is saying that demand is still there, production is still there," said Marc Pado, US market strategist at Cantor Fitzgerald & Co. in San Francisco. "That's telling me there is going to be a nice little increase in profit margins, even on flat revenue."

Worries on the home front
But reflecting the housing sector's struggles, the US government said housing starts fell more than expected in May, hitting a five-month low, after a federal homebuyer tax credit expired.

The Morgan Stanley housing index fell 1.6%. The index tracks the shares of US companies in the housing sector, including home builders like PulteGroup Inc as well as lumber companies like Weyerhaeuser Co.

Pulte shares slid 1.8% to $9.75, while Weyerhaeuser lost 2% to $39.95.

About 8.40 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's estimated daily average of 9.65 billion.

Declining stocks outnumbered advancing ones on both the NYSE and the Nasdaq by a ratio of about three to two. ' Reuters

BNM appoints Muhammad Ibrahim as deputy governor

KUALA LUMPUR: Bank Negara Malaysia (BNM) has appointed former managing director of Danamodal Nasional Bhd, Datuk Muhammad Ibrahim, as deputy governor for a three-year term with effect from Wednesday, June 16, the central bank said in a statement on Tuesday.

He succeeds Datuk Ooi Sang Kuang, who will serve as special adviser for a one-year tenure following the completion of his eight-year term as deputy governor.

BNM also announced the appointment of Jessica Chew Cheng Lian as an assistant governor for the regulation sector with effect from Wednesday.

In a statement, BNM said Muhammad joined the central bank in 1984 and served in the areas of bank regulation and supervision, strategic planning, payment systems, insurance, offshore banking, and treasury and financial markets.

He was managing director of Danamodal, a bank recapitalisation agency set up during the 1997/98 Asian financial crisis, a former commissioner of the Securities Commission and served as a council member of the Malaysian Institute of Accountants (MIA).

Muhammad is currently a trustee of the Tun Ismail Ali Chair Council, a board member of Kumpulan Wang Persaraan (KWAP), a council member of the Malaysian Bankers Institute, an associate fellow of the Institute of Bankers Malaysia and a member of BNM's Monetary Policy Committee. He is also an independent director of Petroliam Nasional Bhd (Petronas).

Ooi, in his role as special adviser, will oversee areas of regional and international financial collaboration, including the development of financial infrastructure to facilitate greater regional and international integration.

Ooi, who joined the central bank in 2002, is concurrently chairman of Cagamas Bhd and Malaysian Electronic Clearing Corporation Sdn Bhd.

Meanwhile, Chew who joined the central bank in 1993, had worked to formulate prudential and strategic policies for the banking and insurance sectors, and was involved in the preparation of the Financial Sector Masterplan and the formulation of financial sector liberalisation strategies as part of the World Trade Organisation and Free Trade negotiations.

BNM said she had also participated in setting up the deposit insurance system in Malaysia and the formulation of human capital development strategies for the financial sector.

Chew is an adviser member of the Malaysian Accounting Standards Board and a member of the Governance and Compliance Subcommittee of the International Association of Insurance Supervisors.

Prior to this, she was the director of prudential financial policy department and will be succeeded by Mohd Zabidi Md Nor, who joined BNM in 1995 and had been involved in the policy formulation in the regulation sector.

Euro zone May inflation confirmed at 1.6% y-o-y

BRUSSELS: More expensive energy drove euro zone inflation higher year-on-year in May as expected despite cheaper food, data showed on Wednesday, June 16, as wage growth in the first quarter accelerated from the previous three months.

Consumer prices in the 16-country area rose 0.1% month-on-month (m-o-m) and 1.6% year-on-year (y-o-y), European Union statistics office Eurostat said. That was in line with market expectations and up from a 1.5% annual increase in April.

Fuels for transport added 0.71 percentage point to the y-o-y result and heating oil added 0.23 percentage point. Overall food prices fell 0.2% y-o-y, while prices of alcohol and tobacco jumped 4.4% y-o-y.

What the European Central Bank calls core inflation, which does not include volatile prices for energy and unprocessed food, was 0.1% m-o-m and 0.9% y-o-y.

The ECB wants to keep inflation just below 2% over the medium term and watches the core number to gauge underlying inflationary pressures.

Economists expect the bank to keep interest rates, now at a record low of 1%, on hold until 2011.

Separately, Eurostat said nominal hourly labour costs, adjusted for the number of working days, rose 2.1% y-o-y in the first quarter of 2010 after a 1.7% gain in the last three months of 2009.

Of the total, wages grew by 2.0% y-o-y after a 1.6% expansion in the previous quarter and non-wage labour costs rose 2.1%, up from 2%.

Wage growth in Germany, known for its cost restraint, was 1% in the January-March period after a 0.3% y-o-y fall in the previous three months.

Among countries whose competitiveness is under market scrutiny, Spain's wage growth continued at a brisk pace.

Data for the first quarter in Greece was not yet available, but wages there grew by 4.1% y-o-y in the last quarter of 2009. In Spain, first-quarter wages rose 2.7% in annual terms.

In Portugal, wages froze in the first quarter after a 3.1% rise in the fourth quarter of 2009. ' Reuters

Wall St bill preserves Fed's independence

WASHINGTON: After suffering sustained criticism of its role in the financial crisis, the US Federal Reserve looked set on Wednesday, June 16 to emerge from an overhaul of financial regulations with its jealously guarded independence intact.

In a big victory for the central bank, lawmakers hammering out a final version of a Wall Street reform bill agreed to drop two provisions the Fed had warned would subject its economic decision-making to outside political influence.

Lawmakers seeking to resolve differences between financial reforms passed by the House of Representatives and the Senate dropped a provision that would have opened the Fed's interest-rate policy to congressional audits, opting instead to examine less sensitive areas.

Lawmakers also agreed to abandon a plan to make the head of the New York Federal Reserve Bank a political appointee, according to a document distributed by Democratic senators on the committee, but postponed formal action until Thursday.

Despite widespread criticism on Capitol Hill the Fed is too close to the banks it regulates, the central bank appears poised to emerge as the most powerful financial regulator under the broadest rewrite of financial rules since the 1930s.

The Fed had been lambasted for failing to stem the risky lending that fueled the US housing bubble and for bailing out big financial firms after the bubble popped. It has acknowledged its oversight was too complacent before the 2007-2009 financial crisis that shook economies worldwide.

Democrats who hope to send a final financial reform bill to President Barack Obama to sign into law by early July said they did not want to compromise the Fed's political independence.

"The Fed was set up to be an independent body to set monetary policy, and we've been trying to walk this line between how independent they should be in doing that and how transparent those activities should be," said Democratic Representative Mel Watt.

The reforms under consideration would crimp financial firms' profits and saddle them with tighter regulations. They would establish new consumer protections, set up a process to dismantle troubled firms and likely limit a wide range of risky but profitable trading activities.

Goldman Sachs Group would lose the most under the new rules, followed by Morgan Stanley, J.P. Morgan Chase and Bank of America, according to a Citigroup analysis.

Fed not entirely unscathed
Fed Chairman Ben Bernanke, who endured a tense Senate confirmation vote in January, said the overhaul looked like it would be effective in preventing or at least blunting the impact of future crises.

The Fed did not escape entirely unscathed.

Lawmakers signed off on a one-time look at its emergency lending during the crisis, and ordered the Fed to disclose on an ongoing basis details on its discount window lending and open market operations, although with a three-year lag.

Democrats agreed to drop a proposal that would have made the head of the New York Fed a presidential appointee. Instead, the president of that branch ' the only one of the 12 regional Fed banks with a permanent voting seat on the central bank's policy-setting committee ' will continue to be named by the bank's board.

Although a summary paper said Senate Democrats supported that move, Senator Christopher Dodd said he needed more time to address concerns by some members.

Separately, negotiators also agreed to strengthen the Securities and Exchange Commission but remained divided on whether the agency should be able to keep all the fees it collects to fund its operations, which would greatly expand its resources.

They also disagreed on whether broker-dealers should face a higher standard of care when giving financial advice, and how to give shareholders an easier and cheaper way to nominate corporate board directors.

The committee directed the SEC to find a way to reduce the conflicts of interest that critics say led credit-rating agencies like Moody's Corp and Standard & Poor's to issue the highest ratings on toxic securities ahead of the financial crisis.

The SEC would set up a government clearinghouse to prevent agencies from soliciting business from the credit issuers whose products they are supposed to assess impartially unless the agency determines a better way to resolve the conflict of interest.

The agreement, which concludes negotiations started on Tuesday, is a win for credit rating agencies, which otherwise would have definitely seen the clearinghouse take effect.

But lawmakers agreed to allow investors to sue agencies that recklessly failed to review key information as they developed their ratings, creating additional legal risk.

Moody's stock rose 2.5% and S&P parent McGraw Hill rose 1.5%, building on Tuesday's strong gains.

Democrats have yet to resolve a number of contentious issues before they complete their work.

House negotiators agreed to give shareholders the ability to sue banks and other third parties that are not directly involved in securities fraud cases. Senators on the committee opposed that idea.

House Democrats also said they would press their Senate counterparts to accept a $150 billion fund to pay for liquidating financial firms that get into trouble and empower regulators to break up unstable large firms. The Senate's approach would cover liquidation costs by selling off the troubled firm's assets, or levying a fee on other financial firms if more funds are needed.

The committee is scheduled next week to tackle disputes about how to limit banks' risky trading activities, how to protect consumers and whether to limit fees on debit card transactions.

Banks are pressing to soften a proposal that would limit their ability to trade on their own accounts and invest in private equity and hedge funds. But their prospects appear to be dimming.

They also look likely to face limits on their lucrative swaps-trading operations as Democrats near consensus on a proposal that would require banks to spin off their operations to a separately capitalized affiliate. ' Reuters

Wall St jumps as S&P 500 breaches key level

NEW YORK: US stocks jumped on Tuesday, June 15 as investors went on a buying binge. The S&P 500 turned positive for the year and rose above its 200-day moving average for the first time in a month, suggesting the recent downtrend may be nearing an end.

Investors were motivated by successful debt auctions in Spain, Belgium and Ireland, which lifted some of the gloom over Europe's debt crisis. The euro rallied against the dollar and pushed commodity prices higher.

"You are seeing renewed confidence, and it's certainly evident in the price action in the euro," said Tom Schrader, managing director of US equity trading at Stifel Nicolaus Capital Markets in Baltimore. "There's definitely a trend towards returning to risky assets."

Semiconductor shares led the way after two large Taiwanese chip producers pointed to growing global demand. Intel Corp rose 2.8%, while the Philadelphia semiconductor index shot up 5.5%.

Stocks linked to global growth also rallied sharply, with heavy equipment maker Caterpillar Inc up 4% at $63.46. Other multinationals with heavy exposure to Europe, such as aircraft maker Boeing Co, also climbed in sync with the euro. Boeing was up 4.1% at $67.48 and contributed the most to the Dow's advance.

In a sign of a robust equity market, shares of CBOE Holdings Inc jumped as much as 16.4% in their stock market debut as investors saw bright prospects for the parent of the Chicago Board Options Exchange. The $339 million IPO was the biggest this year. CBOE's stock ended at $32.49, up 12% from its offering price of $29.

The Dow Jones industrial average gained 213.88 points, or 2.10%, to 10,404.77. The Standard & Poor's 500 Indexadvanced 25.60 points, or 2.35%, to 1,115.23. The Nasdaq Composite Index climbed 61.92 points, or 2.76%, to 2,305.88.

The S&P 500's rise lifted the index above its 200-day moving average, a level it has struggled to breach for the last month, and a milestone that could signal bullish momentum for investors. Although volume was moderate, the number of advancing stocks on NYSE ran far ahead of decliners.

The index last closed above its 200-day moving average on May 19.

Bruce Bittles, chief investment strategist at Robert W Baird & Co in Nashville, said the move signaled a new trading range for the traditionally slower summer months. But he doubted the market would see another move higher in coming weeks.

"The market was ready to break out," he said. "We are going to slip into a trading range now where 1,050 is the risk and 1,170 is the reward on the S&P 500."

The euro, used to assess risk appetite in the current climate of concern about Europe's debt situation, rose above $1.23 versus the dollar to its highest level since June 3.

The CBOE volatility index, a gauge of Wall Street's anxiety, fell 9.5% to 25.87, its lowest level since the middle of May.

Semiconductor stocks helped lift the Nasdaq after TSMC and UMC, the world's two largest contract chip makers, forecast growing demand in the coming months amid an improving global economy and rising sales of new personal computers and other consumer gadgets.

Intel Corp, the world's dominant chipmaker, added 2.8% to $21.48, while Broadcom Corp climbed 5.7% to $35.84, and Marvell TECHNOLOGY [] Group Ltd surged 8.3% to $18.94.

Buyers also snapped up beaten-down energy names as industry executives were grilled by a congressional panel, with some investors betting the stocks may have hit a bottom.

An S&P energy stock index gained 2.7%, with the US-listed shares of BP Plc up 2.4% at $31.39. Halliburton Co rose 6% to $25.46, while Cameron International Corp gained 4.4% to $37.38.

About 8.41 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, sharply below last year's estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 6 to 1, while on the Nasdaq, about four stocks rose for every one that fell. ' Reuters

Texchem scraps privatisation plan of S'pore unit

KUALA LUMPUR: TEXCHEM RESOURCES BHD [] has scrapped its plan to privatise and delist its 70.48%-owned subsidiary Texchem-Pack (S) Ltd from the Singapore Exchange (SGX).

This decision comes after the Singapore Exchange Securities Trading Ltd's (SGX-ST) independent financial adviser Partners Capital (Singapore) Pte Ltd, had opined that the financial terms of the exit offer were unreasonable.

The proposal it seems had not met the requirements of rule 1309(1) of SGX-ST's listing manual which required a "reasonable exit alternative be offered to shareholders and holders of any other classes of listed securities to be delisted".

Texchem had offered to acquire all the remaining shares representing a 29.52% stake in Texchem-Pack for an aggregate cash consideration of about S$5.5 million (RM13.4 million), or 13.5 cents apiece.

The offer price was based on its historical share price performance, and represented a 42.1% premium from the closing market price of 9.5 sen on Feb 5, which was the last day of trading prior to its exit offer announcement.

The company said it had planned to delist its subsidiary, as it did not see the necessity for Texchem-Pack to access Singapore's capital markets to raise money. Moreover the extra cost of maintaining separate listings for both companies, and a lack of its subsidiary's market liquidity in the SGX, were contributing factors.

Texchem ended trading on Tuesday, June 15 at 84 sen, inching up half a sen.

Texchem scraps privatisation plan of S'pore unit

KUALA LUMPUR: TEXCHEM RESOURCES BHD [] has scrapped its plan to privatise and delist its 70.48%-owned subsidiary Texchem-Pack (S) Ltd from the Singapore Exchange (SGX).

This decision comes after the Singapore Exchange Securities Trading Ltd's (SGX-ST) independent financial adviser Partners Capital (Singapore) Pte Ltd, had opined that the financial terms of the exit offer were unreasonable.

The proposal it seems had not met the requirements of rule 1309(1) of SGX-ST's listing manual which required a "reasonable exit alternative be offered to shareholders and holders of any other classes of listed securities to be delisted".

Texchem had offered to acquire all the remaining shares representing a 29.52% stake in Texchem-Pack for an aggregate cash consideration of about S$5.5 million (RM13.4 million), or 13.5 cents apiece.

The offer price was based on its historical share price performance, and represented a 42.1% premium from the closing market price of 9.5 sen on Feb 5, which was the last day of trading prior to its exit offer announcement.

The company said it had planned to delist its subsidiary, as it did not see the necessity for Texchem-Pack to access Singapore's capital markets to raise money. Moreover the extra cost of maintaining separate listings for both companies, and a lack of its subsidiary's market liquidity in the SGX, were contributing factors.

Texchem ended trading on Tuesday, June 15 at 84 sen, inching up half a sen.

India Fortis hires banks as Parkway battle heats up

NEW DELHI/SINGAPORE: India's Fortis Healthcare has hired Macquarie and Religare Capital to raise funds for a possible battle with Malaysian sovereign wealth fund Khazanah over Singapore's Parkway Holdings, two sources with knowledge of the matter said.

Fortis, controlled by Indian billionaire brothers Malvinder Singh and Shivinder Singh, is also in talks to hire RBS to help raise funds, said the sources, who declined to be identified as the matter is not yet public.

Fortis Healthcare, which owns roughly 25% of Parkway, had wanted to build a controlling stake in the firm before Khazanah made a surprise US$835 million offer to lift its stake to 51.5%.

Parkway operates 16 hospitals in Singapore, Brunei, Malaysia, India and China.

Under Singapore rules, Fortis will have to make a general offer for Parkway shares it does not own or a potential bid of more than $2.3 billion because it recently bought Parkway shares.

Last week, Fortis unveiled plans to raise as much as $1.2 billion in equity and debt.

"All these steps indicate Fortis is very aggressive about Parkway and is working towards arranging funds within the limited timeframe for the counterbid," said Sapna Jhawar, an analyst with Mumbai-based brokerage Sharekhan.

Fortis will have to offer a 6%-10% premium over Khazanah's offer to attract shareholders, analysts said.

Khazanah is offering S$3.78 a share to double its stake in Parkway, valuing the entire company at S$4.27 billion (US$3.06 billion).

Malvinder Singh moved from New Delhi to Singapore as chairman of Parkway, a hospital chain he planned to use as a platform for global expansion.

Citings its television channel ET Now, India's Economic Times newspaper reported on Tuesday, June 15 that a consortium of banks were willing to fund up to $1 billion.

Sources told Reuters that the banks' mandate was to arrange debt and they are not involved in Fortis' equity raising plans.

Fortis, Macquarie, RBS and Religare declined comment.

Parkway's shares, down 0.3% at midday, have weakened in the past two sessions after staying above Khazanah's offer price for the past few days on market talk of a likely counter-bid by Fortis. Fortis shares were up 0.1% by 0615 GMT.

A fund linked to Morgan Stanley recently bought Parkway shares for its clients above Khazanah's offer price, fuelling speculation about a counter offer.

Morgan Stanley is also the independent financial adviser to Parkway. Deutsche Bank is advising Khazanah.

But not everyone is convinced Fortis will make a counter bid.

"While we do not rule out a potential counter-bid offer, we maintain that Fortis would be hesitant to launch an outright general offer, given current valuation and the capital outlay involved," Su Tye Chua, a Singapore-based analyst at Credit Suisse said in a note on Tuesday.

The note said if Fortis gains control of Parkway through a potentially successful offer, it may cloud the Singapore company's long-term strategy for the Malaysian market.

Parkway's Malaysian operations, through a 40:60 stake with Khazanah in Pantai, currently generates about a quarter of Parkway's revenues and almost a-third of its earnings before interest, tax, depreciation, amortisation and rent (EBITDAR). ' Reuters

Mukhriz: GLCs should focus on core businesses

KUALA LUMPUR: Government-linked companies (GLCs) should focus on their core businesses instead of diversifying too much into other businesses which should be run by the private sector.

Deputy Minister of International Trade and Industry, Datuk Mukhriz Mahathir on Wednesday, June 16 urged GLCs to create a win-win situation and also help realise the government's aspiration of creating entrepreneurs who will enhance the country's economy.

GLCs are well capitalised and they should focus on their core business, he told reporters after his closing address at a seminar entitled "Bumiputera Entrepreneur Development In The Context of the New Economic Model".

The GLCs are better off going for collaborations with the private sector for their non-core businesses, he said.

"In some instances, we find that they (GLCs) may decide to embark on businesses that ought to be handled by SMEs (small and medium sized enterprises). Even if they want to get into the upstream or downstream activities, it may be better for them to obtain the cooperation of the private sector and support them instead," he said.

He said that was one way how the high TECHNOLOGY [] firms could contribute not only to the GLCs but also toward economic growth indirectly.

"I believe that GLCs have an important role to play in this and they have the capacity to do so."

Mukhriz also hoped that GLCs would not set too stringent rules or impose extra conditions for local companies that have yet to establish their names in the business in preference over those that are already established or from overseas.

"While acknowledging foreign firms, please give due attention also to the local firms such as not imposing extra conditions," he stressed.

Mukhriz also called on Bumiputera producers of goods to start looking at markets outside of the country.

As of 2008, only 1,430 Bumiputera companies registered with the Malaysia External Trade Development Corporation (Matrade) have shown interest and the capacity to export their products, he said.

Besides the GLCs, nongovernmental organisations, business chambers and associations should play their role in expanding to the overseas markets, he said. ' Bernama

#Today's Diary* What to expect on June 17, 2010

1. MALAYAN FLOUR MILLS BHD [] AGM at the Auditorium, 3rd Floor, Wisma MCA, Jalan Ampang, KL at 9.30am

2. Signing ceremony for the International Conference on Financial Crime and Terrorism Financing 2010 at JW Marriott Hotel, KL at 9.30am

3. ASAS DUNIA BHD [] AGM at Sri Gangsa Room, Level 2, The Bayview Hotel Georgetown Penang, Penang at 10am

4. MAGNA PRIMA BHD [] AGM at Kelab Golf Perkhidmatan Awam (KGPA), Dewan Seroja, Bukit Kiara, Off Jalan Damansara, KL at 10am

5. UMW HOLDINGS BHD [] AGM at UMW Auditorium, UMW Holdings Berhad, No. 3, Jalan Utas (15/7), Batu Tiga Industrial Estate, Shah Alam at 10am

6. CSC Steel Holdings Bhd AGM at Level 1 of the Company's office Block, 180 Kawasan Industri Ayer Keroh, Ayer Keroh, Melaka at 10am

7. MNC WIRELESS BHD [] AGM at Bukit Kiara Equestrian & Country Resort, KL at 9am

8. PULAI SPRINGS BHD [] AGM at Pulai Springs Resort, Johor at 10am

9. IRM GROUP BHD [] AGM at Kenanga Room, Sri Damansara Club Berhad, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, KL at 10am

10. DKSH Holdings (Malaysia) Bhd AGM at Conference Room, Ground Flr, 74 Jln University, PJ at 10am

11. FITTERS DIVERSIFIED BHD [] AGM and EGM at Wisma FITTERS, No 1, Jalan Tembaga SD 5/2, Bandar Sri Damansara, KL at 10am

12. DEGEM BHD [] AGM at Dewan Perdana, Bukit Kiara Equestrian & Country Resort, KL at 10.30am

13. Tradewinds PLANTATION [] AGM at Nirwana Ballroom 1, Lower Lobby, Crowne Plaza Mutiara KL at 10.30am

14. CNI HOLDINGS BHD [] AGM at Diamond Hall, First Floor, Wisma CNI, 2 Jalan U1/17, Seksyen U1, Hicom-Glenmarie Industrial Park, Shah Alam, Selangor at 11am

15. BLD PLANTATION BHD [] AGM Auditorium, Level 9, Crown Towers, 88, Jalan Pending, Kuching, Sarawak at 11am

16. LEBAR DAUN BHD [] AGM at Bilik Gasing 1 & 2, Level 2, Convention Centre, Grand Blue Wave Hotel, Shah Alam at 11am

17. ADUN Subang Jaya Hannah Yeoh officiates the 15th Subang Jaya Children's Art Competition at Skewers, Ground Flr, Lot SG 01, Subang Avenue, Persiaran Kemajuan, SS16, Subang Jaya at 11am

18. TEBRAU TEGUH BHD [] AGM at Grand Paragon Hotel Johor, Johor at 11am

19. GPRO TECHNOLOGIES BHD [] AGM at 18-36, Jalan Tujuh, Taman Delima, Kluang, Johor at 12.30pm

20. GD EXPRESS CARRIER BHD [] EGM at Bukit Kiara Resort, KL at 2pm

21. YA HORNG ELECTRONIC (M) BHD [] AGM at Room Pearl 6, Level 5, Pearl View Hotel, Jalan Baru, Seberang Prai, Perai, Penang at 2pm

22. KUMPULAN PERANGSANG SELANGOR [] Bhd AGM and EGM at Kayangan Ballroom, Quality Hotel Shah Alam, Persiaran Perbandaran, Shah Alam at 2.30pm

23. MAJUPERAK HOLDINGS BHD [] AGM at Dewan UMNO, Aras 1, Bangunan UMNO Negeri Perak, Jalan Raja Dr Nazrin Shah (Jalan Gopeng), Ipoh, Perak at 4pm

24. Lowe Council shares findings on Malaysian and Global Teens at Ground Flr, Sime Darby Convention Centre at 4.30pm

25. UCSI University holds 10th Malaysian Plan Forum at Blue Ocean Strategy Lecture Hall, North Wing, UCSI University KL Campus at 6pm

26. 25th JCI Ten Outstanding Young Malaysian appreciation night at Prince Hotel, KL at 7pm

Euro zone April trade surplus smaller than expected

BRUSSELS: The euro zone had a smaller-than-expected trade surplus in April, unadjusted data showed on Tuesday, June 15, as exports surged year-on-year but marginally less than imports.

The 16-country area had an external trade surplus of '1.8 billion (US$2.4 billion) as exports rose 18% year-on-year and imports surged 19%, the European Union statistics office said. March's surplus was '4.5 billion.

In April 2009, the surplus was '2.6 billion.

Economists polled by Reuters had on average expected a '3.7 billion unadjusted trade surplus for April this year.

The sharp rise in exports is likely to point to a rebound in global demand for euro zone goods. The increase in imports is seen signaling higher domestic demand, boding well for economic recovery.

Adjusted for seasonal swings, the trade surplus in April totaled '1.4 billion as exports dropped 2.4% month-on-month and imports fell 3.5% against March. ' Reuters

Share prices close higher

KUALA LUMPUR: Share prices on Bursa Malaysia closed higher on Wednesday, June 16, on foreign and local institutional buying, taking the cue from overnight Wall Street rally, dealers said.

The FTSE Bursa Malaysia Composite Index (FBM KLCI) rose by 4.76 points, or 0.36%, to close at 1,303.13 on active buying interests in selected heavyweights and blue-chips.

It had opened 4.77 points higher at 1,303.14.

The benchmark index moved between 1,312.1 and 1,303.13 throughout the day. In New York, the strong general economic index for production data pushed the Dow Jones Industrial Average up 213.88 points to 10,404.77.

The Nasdaq index advanced 61.92 points to 2,305.88 and the broad-market S&P 500 gained 25.60 points to 1,115.23.

A dealer said the regional market rally, except for China, Hong Kong and Taiwan, which were closed for national holidays, boosted local market sentiment.

The players also took the cue from the rally in Europe after successful debt sales by eurozone members, such as Belgium, Ireland and Spain, calmed investor concern on Moody's Investors Service's downgrade of Greece's debt rating on Tuesday, he said.

"The investors take advantage of the positive mood in the market and optimism on the global economy recovery," he said.

The Finance Index increased 39.32 points to 11,702.32, INDUSTRIAL INDEX [] rose 15.28 points to 2,613.23 and the PLANTATION [] Index went up 39.47 points to 6,175.35.

The FBM Emas Index surged 46.19 points to 8,791.7, FBM70 [] Index increased 79.98 points to 8,745.37 and the FBM Ace Index went up 17.93 points to 3,815.81.

Gainers outnumbered decliners by 494 to 174, while 240 counters were unchanged, 461 untraded and 33 others suspended.

Volume rose to 662.853 million units worth RM1.012 billion from 511.873 million units worth RM891.308 million yesterday.

Of the heavyweights, CIMB Group added five sen to RM6.94, Sime Darby rose six sen to RM7.87, MISC went up three sen to RM8.51 and Tenaga increased one sen to RM8.32.

However, Maybank fell two sen to RM7.44 and Maxis declined one sen to RM5.30.

Among the active stocks, ADVANCE INFORMATION MARKETING [] went up half sen to 14.5 sen and KNM Group rose one sen to 50 sen.

Kenmark Industrial declined one sen to 10 sen.

Talam Corp and SAAG Consolidated were flat at 12.5 sen and 8.5 sen respectively.

The major gainers included Cycle & Carriage Bintang, which rose 29 sen to RM5.45, Minho added 27.5 sen to 53.5 sen, KKB Engineering increased 26 sen to RM1.70, Magni-Tech Industries was up 21 sen to RM1.19 and Nestle rose 20 sen to RM34.50.

Turnover on the Main Market rose to 579.899 million shares valued at RM994.851 million from 452.886 million shares valued at RM879.416 million yesterday.

The ACE market volume increased to 52.032 million units worth RM7.511 million from 33.565 million units worth RM4.590 million previously.

Warrants' turnover rose to 23.224 million shares valued at RM3.044 million from 18.838 million shares valued at RM2.104 million on Tuesday.

Consumer products accounted for 51.469 million shares traded on the Main Market, industrial products 86.895 million, CONSTRUCTION [] 52.096 million, trade and services 174.367 million, TECHNOLOGY [] 25.494 million, infrastructure 5.282 million, finance 49.69 million, hotels 1.356 million, PROPERTIES [] 119.472million, plantations 12.708 million, mining 29,000, REITs 934,400 and closed/fund 105,500. -- Bernama

#Today's Diary* What to expect on June 16, 2010

1. ASIAEP BHD [] AGM at Level 3, Cempaka Room, Hotel Equatorial Bangi-Putrajaya at 9am

2. Bank Islam Islamic Pawn Broking Service launching and official opening of the new Ar-Rahnu branch by PM Datuk Seri Najib Razak at No 1155, Seksyen 11, Lorong Medan Mara, Bandar Kota Bharu, Kelantan at 9.30am

3. MULPHA LAND BHD [] AGM and EGM at Crystal Crown Hotel, PJ at 10am

4. Kurnia Asia Berhad AGM at 9th Floor, Training Auditorium, Menara Kurnia, Block B4, Leisure Commerce Square, No 9 Jalan PJS 8/9, PJ at 10am

5. Maybank to officially launch disabled-friendly branches at Maybank Taman Connaught Branch, No 1 Jln Menara Gading 1, Off Lebuhraya Timur Barat, Cheras at 10am

6. COMPUGATES HOLDINGS BHD [] AGM at Greens 1, Tropicana Golf & Country Resort, PJ at 10am

7. WOODLANDOR HOLDINGS BHD [] AGM at Conference Room, Level 3, Eastin Hotel, PJ at 10am

8. CUSCAPI BHD [] AGM at Subang 1, Grand Dorsett Subang Hotel Subang Jaya, Selangor at 10am

9. Eden Inc Bhd AGM at Hotel Singgahsana, PJ at 10am

10. ASLI hosts public dialogue Bridging the Knowledge Divide: Building the Malaysian Link at LT6, Level 4, North Building, Sunway University College at 10am

11. Handal Resources Bhd AGM at Lot PT 7358, Kawasan Perindustrian Telok Kalong, Kemaman, Terengganu at 10am

12. TRIUMPHAL ASSOCIATES BHD [] AGM at 2nd floor, Mutiara Johor Bahru, Jalan Dato Sulaiman, Taman Century, KB No 779, JB at 10.30am

13. Tan Sri Nor Mohamed Yakcop officiates the presenting Excellent Service Awards 2010, Private Public Partnership Units, Prime Minister Department at Multi Purpose Hall, Bangunan Menara Usahawan, Precinct 2, Putrajaya at 10.30am

14. IRIS CORPORATION BHD [] AGM at The Auditorium, 1st Floor, Lot 8 & 9, IRIS Smart TECHNOLOGY [] Complex, Technology Park Malaysia, Bukit Jalil at 11am

15. KBB Resources Berhad AGM at Sri Cengal II, Sunway Hotel Seberang Jaya, Prai, Penang at 11am

16. GE Foundation Scholar-Leaders Program award ceremony at Malaysian-American Commission for Education Exchange, 18th Flr, Bangunan Yayasan Tun Razak, Jln Bukit Bintang, KL at 11am

17. Official launching of SME Recognition Award 2010 at Equatorial Hotel, KL at 2pm

18. MESINIAGA BHD [] AGM at Auditorium Ismail Sulaiman, Menara Mesiniaga, 1A Jln SS16/1, Subang Jaya at 2.30pm

19. OPENSYS (M) BHD [] AGM at Nakhoda 1, Level 3, Hotel Armada, PJ at 3pm

PBAHB shareholders tackle director's record, water tariffs

GEORGE TOWN: Minority shareholders of state-owned PBA HOLDINGS BHD [] (PBAHB) raised a ruckus at the annual general meeting on Tuesday, June 15 over the re-appointment of Datuk Faiza Zulkifli as a director due to her poor attendance of board meetings.

A significant number of the shareholders objected to her re-appointment as she had only attended six out of 10 board meetings held for its financial year which ended Dec 31, 2009.

Faiza was appointed to the board on Aug 21 in her capacity as the state legal advisor.

After an appeal by Chief Minister Lim Guan Eng, who is also PBAHB's chairman, the motion to enable her re-appointment was finally allowed.

"I assured them that I will speak to the director concerned to express the views of the shareholders," Lim said.

The shareholders also proposed to raise water tariffs as PBAHB subsidises RM41 million a year for domestic water usage.

"As for the water tariff hike, we have decided that we will impose a water conservation surcharge for those using above 233 litres per day as Penangites used an average 286 litres of water per person per day, which is way above the recommended 165 litres per day by the United Nations," Lim said.

He added that PBAHB has forwarded its proposal for the surcharge to the federal government.

"We are still waiting for the nod, and so far, the feedback is favourable for the surcharge to be implemented.

"We hope to implement this as soon as we get the approval, hopefully this year," Lim said.

PBAHB reported a 10.3% increase in year-on-year revenue for the first quarter of 2010.

Lim said PBAHB posted an unaudited revenue of RM48.9 million for January to March 2010, as compared to RM44.3 million for the same period in 2009.

PBAHB recorded a profit after tax of RM5.4 million for the same period compared to RM3 million last year which Lim attributed to cost-cutting measures which resulted in a 31% drop in administrative costs.

Maybank sets aside RM16m to enhance customer service

KUALA LUMPUR: MALAYAN BANKING BHD [] (Maybank) has allocated RM16 million for its customer service transformation programme that started in April 2010, senior executive vice-president and head of consumer banking, Lim Hong Tat, said on Wednesday, June 16.

Currently, the pilot programme involves 70 branches in Kuala Lumpur, Selangor, Melaka and Negeri Sembilan, which will be expanded across all states nationwide by August, he said.

Focus of the programme is on training and development that will enhance the service performance of all Maybank frontline personnel.

"So far, about RM3 million to RM4 million has been spent on training and new uniforms," Lim said after launching the bank's disabled-friendly branches on Wednesday.

Ultimately, Maybank wants to transform into a one-stop centre where all the customers' needs can be met in a timely and friendly manner, he said.

Maybank, Lim said, has embarked on sharing of best practices for customer services with its unit Bank Internasional Indonesia (BII).

BII is ranked first in customers services in Indonesia, he said.

On the launch, Lim said Maybank had invested RM280,000 to upgrade five branches to be disabled-friendly, and these comprised those in Taman Connaught in Cheras, Sitiawan and Lumut in Perak, Senawang in Negeri Sembilan, and the Petaling Jaya main branch.

"At 11 other branches, we also have some disabled-friendly facilities such as ramps for easier access to the premises," he said.

Maybank, he added, planned to have such facilities in 12 more existing branches by the end of July 2011, with estimated cost up to RM40,000 per branch.

Lim said all new branches will now incorporate disabled-friendly facilities as allowed by the infrastructure of the premises and in accordance with the local authorities' guidelines. ' Bernama

Rating agencies dodge bullet in Wall St reform bill

WASHINGTON: Credit-rating agencies like Moody's and Standard & Poor's dodged a bullet on Tuesday, June 15 as lawmakers decided to strip out a provision in the Wall Street reform bill that would have upended their business model.

Negotiators from the House of Representatives and Senate tasked with hammering out a final version of the sweeping reforms agreed to remove a measure that would have set up a new clearinghouse to eliminate perceived conflicts of interest in the ratings industry.

Instead, they ordered regulators to study the issue and take action only if they think it is necessary.

The credit-rating industry has been widely criticized for assigning overly rosy ratings to dubious debt offerings that brought Wall Street to its knees during the 2007-2009 financial crisis.

"A hoax was perpetrated on the American public and the world public," Democratic Representative Paul Kanjorski said of inflated ratings.

Lawmakers said the need to drum up business gave the agencies an incentive to sweeten their ratings but they did not know whether the controversial proposal to separate buyers and sellers would work.

"I kind of like the idea of the study, given the complexity of how you deal with conflicts of interest ' and they are significant," said Democratic Senator Christopher Dodd.

Shares of Moody's closed 6.6% higher and those of Standard & Poor's parent McGraw-Hill gained 5.7% as investors anticipated lawmakers would remove the provision opposed by large ratings firms.

Law by early July?
Negotiators on the House-Senate committee aim to reconcile their reform bills to send a final version to President Barack Obama to sign into law by early July.

Both bills strive to avoid a repeat of the crisis that plunged the world economy into a deep recession and led to massive taxpayer bailouts of Wall Street firms.

Lawmakers plan to postpone the most contentious issues until the end of the process, which Democrats hope to wrap up on June 24.

Earlier on Tuesday, lawmakers agreed to subject private equity funds and hedge funds to greater oversight and permanently insure banking customers' deposit accounts up to US$250,000. That limit, which had been raised during the crisis, was scheduled to revert to $100,000 in 2014.

Even as they worked through relatively noncontroversial aspects of the bill, Democrats were privately approaching consensus on one of the most contentious aspects ' a proposal to curb risky trading by banks.

But action on that measure was still days away as the panel focused on the fate of ratings agencies.

The Senate bill, passed last month, would have set up a new government clearinghouse to assign structured debt offerings to ratings agencies on a semi-random basis.

But House negotiators said more information was needed to figure out how to tackle the problem and their Senate counterparts agreed to take a step back.

The new provision directs the Securities and Exchange Commission to study the clearinghouse idea then set it up if regulators deem it the best way to eliminate conflicts of interest.

Democratic Senator Al Franken, who sponsored the original proposal, said the compromise "means more time and study than I think is necessary but it also means definite action will be taken."

Ratings agencies are already likely to see their business costs rise as they deal with higher transparency and reporting standards, said Edward Atorino, analyst at The Benchmark Company in New York.

They also will face greater legal risk, as the final bill will likely make it easier for investors to sue agencies that issue misleading ratings, although House and Senate negotiators had yet to agree on the exact legal standard.

Representative Barney Frank, who heads the committee, said the final bill will knock the agencies down a peg by removing the requirement that government regulators use their ratings as they go about their work.

"We did the best we could to put people on notice that they ought to be doing their own diligence," Frank said.

The Federal Reserve, the US central bank, was poised to escape relatively unscathed after enduring more than a year of congressional criticism for its actions during the crisis.

House Democrats said they will try to strike out a Senate-approved measure that would make the head of the Fed's New York branch a political appointee, rather than one appointed by industry. The Fed has argued the Senate measure would compromise its independence.

The Fed also appeared likely to evade the most intrusive oversight as House lawmakers backed off from a plan that would have set up ongoing congressional audits that could have extended to monetary policy.

Work on derivatives
Behind the scenes, Democrats sought to resolve their most divisive issue ' how to regulate the $650 trillion derivatives market that led to the downfall of titans like insurer AIG during the crisis.

Banks looked increasingly likely to face some limits on swaps trading after Senate Agriculture Committee Chairman Blanche Lincoln softened a proposal that would require banks to spin off their lucrative swaps dealing desks.

Her new plan would require the Wall Street giants that dominate the swaps market to spin off dealing operations to a separately capitalized affiliate but would let them continue to use swaps to hedge their lending activities.

Sheila Bair, chairman of the Federal Deposit Insurance Corp, who had criticized Lincoln's original plan, told Reuters Insider she was "encouraged" by the new proposal.

Representative Collin Peterson, the House Agriculture Committee chairman, told Reuters it would probably become law in some form.

But lawmakers in the business-friendly New Democrat Coalition called for stripping Lincoln's plan, a central target for Wall Street lobbying efforts. Three members of the 69-member coalition are on the negotiating committee. ' Reuters

Nikkei up 2% on short-covering, exporters gain

TOKYO: Japan's Nikkei average rose over 2% on Wednesday, June 16 as short-covering picked up and investors grew more confident about the global economy after successful debt sales by some of the weakest euro zone members.

The market gained across the board, with blue-chip exporters such as Canon Inc in favour on easing worries about a stronger yen, while Nintendo jumped after taking the wraps off its new 3D DS portable game player.

The benchmark Nikkei rose 200.65 points to 10.088.63, while the broader Topix rose 1.7% to 893.48. ' Reuters

JPMorgan expects to double Asian revenue

HONG KONG: JPMorgan intends to double its revenue from Asian markets over the next three years on the back of what it sees as strong potential for growth in the region, an executive vice-president of the US bank says on Thursday, June 17.

"We are not new to Asia as we have been operating in many markets in this region for decades," said Heidi Miller, who is also JPMorgan's chief executive of treasury and securities services. "We will expand our business and products further on top of a good foundation."

The treasury and securities services offer global payments, trade finance, foreign exchange, and securities custody services. It provides one-stop payment, foreign exchanges and treasury management services for multinationals.

The firm has US$15.3 trillion in assets under custody and US$6.8 trillion in funds under administration. It is the world's largest US dollar clearer and can clear almost 200 different currencies for customers.

The bank has been a major player in Hong Kong for many years, while on the mainland, it has been locally incorporated and has branches in Beijing, Shanghai, Tianjin, Qingdao and Guangzhou.

"We will double our branches in mainland China in the near future," Miller said during a visit to Hong Kong last week. "We have to follow the footprint of our customers worldwide to provide trading, payment and FX services for them."

Some mainland companies were also moving towards expanding overseas and they needed a bank with a global network, presenting additional opportunities for JPMorgan, she said.

She said the bank would not directly compete with mainland domestic banks, which have thousands of branches, but instead, JPMorgan would work with these banks as partners to refer business involving domestic and overseas clients.

JPMorgan also plans to set up a joint venture with China's First Capital Securities to underwrite A-share equities in the mainland market, subject to government approval.

Besides China, the bank will expand in Singapore, Malaysia, India and Bangladesh. JPMorgan has operated in the region for 130 years, starting with its first office in Sydney. Its treasury and securities services have a presence in 17 markets across the region with the headquarters in Hong Kong.

Miller said that the pace of its Asian expansion would not be affected by the global financial crisis or the recent euro debt crisis triggered by Greece.

"We are not affected by the financial crisis. JPMorgan continues to invest through the crisis. We earn money in every quarter and we have capital for us to continue to invest globally despite the troubled times."

She said export and other key economic figures in Europe were not so bad. The euro has been volatile but the bank could offer hedging for clients to fight against currency risks.

"I am optimistic that the European debt crisis will only be a short-term one. The European countries will find a solution for the Greece problem," she said. ' South China Morning Post

New rule halts trading in Washington Post shares

NEW YORK: Shares of The Washington Post Co more than doubled on Wednesday, June 16 triggering the first use of a new circuit breaker created after last month's "flash crash" exposed potential flaws in automated trading.

Under the new pilot programme that took effect last week, circuit breakers will temporarily pause trading in any stock that is a component of the Standard & Poor's 500 Index that moves 10% in price in the previous five minutes.

A spokesman for NYSE Euronext, operator of the New York Stock Exchange, confirmed the halt in Washington Post shares was the first to occur under the new circuit breaker rules.

"The halt was triggered by an erroneous trade," said NYSE Euronext spokesman Ray Pellecchia, adding this was the first time the circuit breaker has been activated.

Three trades were canceled within 20 minutes of their occurrence, he said.

"The circuit breaker worked as it was designed to work. It was designed to prevent price volatility or an errant trade to happen at a bad price. This time it was the latter," he said.

A trade of 400 shares of the newspaper's Class B stock shot to $919.18 a share at 3:07:30 p.m. on NYSE Arca, an all-electronic trading platform of NYSE Euronext. A trade of 200 shares at the same price immediately followed.

A third trade of 166 shares at $929.18, or $10 higher than the two previous trades, registered just before the trading halt kicked in, according to Thomson Reuters data.

The trades were coded with a designator of the old Pacific Stock Exchange, which was bought by a predecessor company of NYSE Arca.

The last trade before trading paused was registered at $455.14. Trading resumed a few minutes later.

Analyst Jeffrey Rubin of Birinyi Associates said the share spike was "proof" the new circuit breaker rule would be ineffective at preventing days like May 6, when markets crashed and suddenly recovered in a span of 20 minutes.

Rubin said the flaw in the circuit breaker system is that it does not prevent erroneous trades from happening.

"The new rule is not the correct cure for the disease as the majority of erroneous trades occur immediately following allowable trades and hence the stock is still allowed to trade well in excess of the 10% threshold," Rubin said in a note to clients.

A spokeswoman for The Washington Post declined to comment. ' Reuters

Aeon Credit up on online shopping, prepaid card plans

KUALA LUMPUR: AEON CREDIT SERVICE (M) BHD [] share price rose on Wednesday, June 16 after the company said it aims to launch two new ventures, namely their online shopping mall business in the first quarter of 2011 and the prepaid card business in the financial year ended February 2012 (FY2012).

At 9.27am, the counter gained three sen to RM3.86 with 9,500 shares traded.

For its first quarter ended May 20, 2010, the company's net profit grew 8.2% to RM13.2 million on the back of revenue RM53.02 million.

Aeon Credit said its easy-payment business for financing of consumer durables and motorcycles continued to register growth in revenue on the back of growth in trade receivables over the past year.

Top Glove up in early trade

KUALA LUMPUR: Top Glove Corp Bhd shares advanced Thursday, June 17 after the company on Wednesday declared a first interim single tier dividend of 14 sen net per share in respect of financial year ending Aug 31, 2010.

At 9.15am, Top Glove added 12 sen to RM12.98 with 22,000 shares traded.

The company's net profit for the third quarter ended May 31, 2010 rose 52.9% to RM64.48 million from RM42.17 million a year ago, on the back of continued increase in demand for gloves.

Europe's economic woes to hit airlines, says IATA

GENEVA: Government spending cuts and debt worries across Europe are set to weaken demand for premium air travel originating from the continent, airlines body the International Air Transport Association (IATA) said on Wednesday, June 16.

In a snapshot of premium air traffic, the IATA described the disruption from Iceland's erupting volcano as a temporary blip in April, with demand showing signs of a rebound in May.

Overall, airline passenger numbers fell 5.9% year-on-year in April, with economy class demand hit harder than premium segments, which were up 1.1% because of continued strong demand outside of Europe.

"Provisional data for May suggests a strong rebound from the temporary disruptions of April," said IATA, which monitors cross-border traffic.

"There are risks ahead, particularly in Europe, but strong economic growth in other regions should continue to drive growth in business travel and both seat classes during the next few months," it said.

National spending cutbacks in Britain, Germany, Greece, Portugal and Spain, along with falling consumer confidence across Europe, were particularly worrisome for the European premium air market, it said.

"There are wider economic problems in Europe," IATA said. "As a result air travel originating from Europe is likely to remain relatively weak for some time."

The Geneva-based organisation, which has criticised the European air traffic authorities for lengthy closures of airspace following the Icelandic volcanic eruptions, estimated the disruption grounded 29% of global passenger capacity at its peak.

"All markets connected with Europe slumped sharply," said IATA, whose 230 carrier members include British Airways, Singapore Airlines and United Airlines.

Passenger numbers for flights within Europe fell 15.6% in April, while for flights across the North Atlantic they were down 12.7%. Between Europe and the Far East there was an 8% fall in passenger numbers, IATA said.

All of those markets had recorded growth in demand in the first quarter as a result of the recovering global economy.

"It appears as though the impact of the ash plume, substantial though it was in April, has only been a temporary interruption in the air travel upturn," IATA said. ' Reuters