Saturday, June 26, 2010

#Stocks to watch:* Linear, Petra Perdana, Subur Tiasa, Stamford

KUALA LUMPUR: Key Asian markets are expected to start the new week Monday, June 28, on a cautious note, with the external factors continuing to dictate investors' sentiment.

On Wall Street, the tech-heavy Nasdaq and broader S&P 500 rose modestly on Friday, as investors were relieved the financial regulation bill wouldn't crimp Wall Street profits as badly as feared.

The Dow Jones industrial average fell 8.99 points, or 0.09%, to 10,143.81. The S&P was up 3.07 points, or 0.29%, at 1,076.76. The Nasdaq Composite Index inched up 6.06 points, or 0.27%, at 2,223.48.

For the week, the Dow fell 2.9% for the week, the S&P 500 was off 3.6% and the Nasdaq Composite fell 3.7%.

At Bursa Malaysia, stocks are expected to see some downside pressure despite the late buying interest in selected heavyweights in the 30-stock FBM KLCI last Friday.

Concerns about the overseas impact, particularly in the US had affected local market sentiment.

Stocks to watch on Monday are Linear Corp Bhd, PETRA PERDANA BHD [], SUBUR TIASA HOLDINGS BHD [] and STAMFORD COLLEGE BHD [].

Bursa Malaysia Securities Bhd directed Linear Corp Bhd to immediately appoint a special auditor (SA) to undertake an investigation into the affairs of the company and in particular its financials.

Linear said it had received the directive from the regulator to have an SA to identify any potential irregularities, 'including but not limited to the operations and maintenance of the Prime Savings & Trust accounts in Sweden where the RM36 million was purportedly paid out'.

Linear had to revert to Bursa Securities within two market days on the proposed scope of work and candidates of the SA for their concurrence.

Meanwhile, Petra Perdana received Bursa Securities' approval to place out 10% of its paid-up share capital to Nam Cheong Dockyard Sdn Bhd. It would still need shareholders' approval at the June 28 AGM.

Petra Perdana's said Nam Cheong was a potential strategic investor which could benefit the company in the long-term.

Subur Tiasa Holdings Bhd posted stronger earnings with net profit for the third quarter ended April 30, 2010 (3QFY10) surging 84% to RM10.43 million from RM5.68 million a year ago.

Revenue rose 4.8% to RM164.12 million from RM156.69 million previously while earnings per share (EPS) stood at 5.55 sen versus 3.01 sen. The board did not declare any dividend for 3QFY10.

Stamford College, whose shares surged last Friday in line with SEG INTERNATIONAL BHD [] and other education providers, could see some profit taking.

The Practice Note 17 company and is awaiting Bursa Malaysia Securities' approval for its proposed diversification into the manufacturing of low alloyed, alloyed and long steel products.

In the first quarter ended March 31, 2010, it reported net profit of RM1.61 million on the back of RM9.65 million in revenue. Its net assets per share were 56 sen.

Linear board gets Bursa order to appoint special auditor

KUALA LUMPUR: Bursa Malaysia Securities Bhd has ordered Linear Corp Bhd to immediately appoint a special auditor (SA) to undertake an investigation into the affairs of the company and in particular its financials.

In a late statement issued on Friday, June 25, Linear said it had at 7.58pm received the directive from the regulator to have an SA to identify any potential irregularities, 'including but not limited to the operations and maintenance of the Prime Savings & Trust accounts in Sweden where the RM36 million was purportedly paid out'.

Linear said it was required to revert to Bursa Securities within two market days on the proposed scope of work and candidates of the SA for their concurrence.

Linear said the company was also required to update Bursa Securities on any development with regard to the special audit including the findings and course of action to be taken following the results/findings of the special audit.

Uncertainty to keep investors cautious

NEW YORK: Unanswered questions about the U.S. economy, China's exchange rate and Europe's debt woes are likely to keep currency traders cautious next week, starting Monday June 28, a development that should favor the dollar over the euro.

For investors able to take a longer view, however, the best buying opportunities are likely to involve currencies such as those of Australia and Canada, which boast commodity riches, low debt burdens, policy flexibility and close links with fast-growing developing markets.

Analysts expect the euro, which neared $1.25 this week after plumbing a multi-year low beneath $1.19 in early June, to retreat toward $1.20 in the days ahead as central bank buying fades and worries about euro zone debt burdens linger.

"We think the euro relief rally has come and gone. There's no momentum left," said BNY Mellon strategist Michael Woolfolk. "Frankly, it demonstrates how few people want to remain long euros. It's just a question of how short one wants to be."

Investors will also keep one eye on China's yuan a week after Beijing said it would loosen the currency's peg against the dollar and allow more exchange rate flexibility.

The yuan's moves since the announcement have been minor, but Chinese authorities did set the yuan's daily reference rate -- the mid-point of its daily trading range -- at 6.7896 on Friday, the highest level since its July 2005 revaluation.

"It's an issue that's going to percolate for some time, as a policy announcement is simply insufficient for rapidly changing a grossly undervalued exchange rate," said Lawrence Goodman, president of the New York-based Center for Financial Stability, a non-profit financial think tank.


Runaway deficits in several euro zone countries and the severe spending cuts needed to rein them in have hurt the euro on the view that the euro zone will grow much more slowly than the U.S. economy.

But U.S. data has raised some questions about the strength of recovery across the Atlantic, with labor and housing in particular causing concern. The Federal Reserve unnerved markets this week with dovish remarks on the economic outlook, which were interpreted by some as meaning record low interest rates could stay on hold until well into 2011.

To that end, analysts said next week's U.S. employment, manufacturing and consumer confidence data would be important. Economics polled by Reuters expect employers cut 100,000 jobs in June, reflecting the end of temporary census hiring.

The immediate impact of soft data would likely be dollar positive, as anxious investors sell higher-risk currencies and assets and take refuge in the dollar.

Uncertainty about the strength of U.S. recovery, though, may start nipping at the dollar's heels if investors ditch expectations of tighter U.S. monetary and fiscal policy.


Debate about how quickly countries should move away from emergency stimulus spending and toward fiscal and monetary belt-tightening was also dominating a G20 summit in Toronto.

The United States has warned against implementing austerity plans too quickly, while Germany says such moves are needed urgently.

"The divergence in opinion is not entirely irrelevant to foreign exchange markets," said Credit Agricole strategist Daragh Maher. He noted that sterling rallied sharply against the euro and dollar this week after Britain's government announced its most austere budget in a generation, convincing investors it was serious about cutting its deficit.

It is in this area, some analysts say, that smaller currencies like the Canadian and Australian dollars look especially attractive, as both those economies are growing and have much more favorable fiscal positions than do the larger U.S. euro zone and Japanese economies.

Goodman said countries with "fiscal space," or the ability to expand public spending efforts if needed, should prove the most attractive buying opportunities. These include currencies from Australia, Canada, Russia, Chile and Singapore.

Countries already laboring under high debt burdens and with less room to increase spending are less attractive.

"Now more than ever," he said, "balance sheets matter for currencies." - Reuters

Oracle lifts Nasdaq while S&P rises on banks

NEW YORK: The Nasdaq and S&P 500 rose modestly on Friday, June 25 on relief that the financial regulation bill wouldn't crimp Wall Street profits as badly as feared and as tech company Oracle's strong results revived hopes about business spending.

Despite the day's gains, the main stock indexes fell for the week after two straight weeks of gains and recorded their weakest performance in five weeks.

Banks climbed after lawmakers agreed on rules that did not make dramatic changes to derivatives and proprietary trading, two highly profitable businesses in lawmakers' crosshairs. The bill must still be approved by both chambers of Congress before it can be signed into law.

JPMorgan Chase & Co (JPM.N) rose 3.7 percent at $39.44 while Bank of America Corp (BAC.N) gained 2.7 percent to$15.42.

The S&P financial sector .GSPF, which is down 8.4 percent over the past quarter, rose 2.8 percent.

"Regulation is less onerous than people's fears, so you're seeing a bit of a relief rally in the financials today, which obviously is helping," said Michael James, senior trader at Wedbush Morgan in Los Angeles.

Oracle Corp (ORCL.O) gained 1.7 percent to $22.60 a day after it posted a stronger-than-expected quarterly profit on solid sales of new software.

"This could be a sign of a pick-up in tech spending, which may mean other tech firms are going to report strong numbers," said Andy Fitzpatrick, director of investments at Hinsdale Associates in Hinsdale Illinois.

The Dow Jones industrial average .DJI was down 8.99 points, or 0.09 percent, at 10,143.81. The Standard & Poor's 500 Index .SPX was up 3.07 points, or 0.29 percent, at 1,076.76. The Nasdaq Composite Index .IXIC was up 6.06 points, or 0.27 percent, at 2,223.48.

The Dow fell 2.9 percent for the week, the S&P 500 was off 3.6 percent and the Nasdaq Composite fell 3.7 percent.

The Dow edged lower on Wal-Mart Stores Inc (WMT.N), which fell 2.5 percent to $48.80.

The week's high and low points covered a wider span than last week's. Closing below the previous week's low in an "outside week" is seen as a technical bearish signal.

"It looks like we're stuck in this trading range, with the downside (on the S&P) around 1,040 to 1,050 and upside capped by the 50 day moving average, which right now is around 1,127" said Michael Sheldon chief market strategist, RDM Financial, Westport, Connecticut.

In economic news, a survey showed that consumer sentiment rose more than expected while a government report showed first-quarter gross domestic product was slower than previously estimated.

"The market was already worried about a downturn, and the GDP data will highlight the idea that we should be concerned about a slowdown," said Chip Hanlon, president at Delta Global Advisors in Huntington Beach, California.

Crude oil surged 3.2 percent to $78.91 per barrel on concerns that a tropical disturbance in the Caribbean may develop into a storm and threaten Gulf of Mexico production.

At the same time, U.S.-listed shares of BP Plc (BP.N) tumbled to a 14-year low as it continued to struggle to contain its oil spill in the Gulf of Mexico and the storm threatened to disrupt the effort.

Some major companies announced disappointing earnings. BlackBerry maker Research in Motion Ltd (RIM.TO)(RIMM.O) was the biggest drag on the Nasdaq 100 .NDX, with its U.S.-traded shares down 11 percent to $52.23 a day after reporting weaker-than-expected shipments and subscribers.

KB Home (KBH.N) slumped 9 percent to $11.12 after the homebuilder reported a wider-than-expected quarterly loss. - Reuters

Friday, June 25, 2010

Bursa Securities approves Petra Perdana shares placement to Nam Cheong

KUALA LUMPUR: PETRA PERDANA BHD [] has received Bursa Malaysia Securities Bhd's approval to place out 10% of its paid-up share capital to Nam Cheong Dockyard Sdn Bhd.

It said on Friday, June 25 that it would still need shareholders' approval at the June 28 AGM.

Petra Perdana decided to place out the placement shares to Nam Cheong as it was a potential strategic investor which could benefit the company in the long-term.

The upside for the placement exercise was that Nam Cheong has access to shipyard capacity in Malaysia and in China which Petra Perdana could utilise for its current fleet requirements and future expansions.

"With Nam Cheong as a strategic investor, Petra Perdana may capitalise on the relationship to gain priority access to these shipyards," it said.

It added that it could potentially leverage on the strength of Nam Cheong to tap into more lucrative business segment of vessels of the offshore marine industry.

Atlan, DFZ Capital suspended from Monday to Wednesday

KUALA LUMPUR: ATLAN HOLDINGS BHD [] and its 74.71% subsidiary DFZ CAPITAL BHD [] have requested for the voluntary suspension in the trading of their securities from 9am on Monday, June 28 to 5pm on Wednesday.

Atlan said on Friday, June 25 the request for the suspension was for a material announcement in relation to a corporate exercise involving DFZ Capital.

Lawmakers agree on historic Wall St reform

WASHINGTON: U.S. lawmakers finalized a historic overhaul of financial regulations as dawn broke over Capitol Hill on Friday, June 25 handing President Barack Obama a major domestic victory on the eve of a global summit devoted to financial reform.

In a marathon session of more than 21 hours, legislators hammered out a rewrite of Wall Street rules that will crimp the industry's profits and saddle it with tougher oversight and tighter restrictions.

The reform must still win final approval from both chambers of Congress before Obama can sign it into law, giving Wall Street one final chance to deploy its army of lobbyists on Capitol Hill. Quick action is expected and it could go to Obama for his signature by July 4.

But the bill has actually gotten tougher in its yearlong journey through the halls of Congress. Democrats rode a wave of public disgust at an industry that awarded itself rich paydays while much of the country struggled through a deep recession caused by its actions.

"We worry about big money. I worry about big money having a corrupting influence, but it is reassuring to know that when public opinion gets engaged, it will win," said Democratic Representative Barney Frank, who headed the panel.

The most sweeping rewrite of financial rules since the 1930s aims to avoid a repeat of the 2007-2009 financial crisis, which touched off the recession and led to taxpayer bailouts of floundering financial giants. Financial institutions would have to pay $19 billion to cover its costs.

Democrats raced to complete their work before Obama traveled on Friday to Canada for the Group of 20 meeting of economic powers. Obama will be able to tout the reform as a blueprint for other countries as they try to coordinate their reform efforts.

Passage of the bill, now widely expected. will also give Democrats an important legislative victory, alongside healthcare reform, ahead of congressional elections in November.


Lawmakers munched chocolates to stay awake as regulators and administration officials hovered in the wood-paneled room, and as the night wore on they yielded the microphones to staff to debate the bill's finer points.

The panel completed its work as dawn broke just after 5:30 a.m., more than 21 hours after it sat down to work.

Along the way, they resolved several controversial sticking points that had threatened to scuttle the bill.

They agreed to water down a proposal by Democratic Senator Blanche Lincoln that would have required banks to spin off their lucrative swaps-dealing desks to a separately capitalized affiliate.

Dozens of House of Representatives Democrats said Lincoln's proposal would force trading overseas, and threatened to vote against the bill if it included the provision.

The compromise allows banks to stay involved in foreign-exchange and interest-rate swaps dealing, which account for the bulk of the $615 over-the-counter derivatives market.

They also could participate in gold and silver swaps and derivatives designed to hedge banks' own risk.

They would need to spin off dealing operations that handle agricultural, energy and metal swaps, equity swaps, and uncleared credit default swaps.

Lawmakers resolved another controversial element of the bill around midnight when they agreed that banks should face restrictions on their risky trading activities.

As with Lincoln's swaps provision, the financial industry won significant last-minute concessions in that rule, named for White House economic adviser Paul Volcker.

The final version of the Volcker rule would give regulators little wiggle room to waive the trading ban but would also allow banks to invest up to 3 percent of their tangible equity in hedge funds and private equity funds.

The panel also resolved other issues which will have far-reaching implications for the financial industry.

They agreed to tighten bank capital rules to help them ride out future crises.

Banks would have five years to meet the rules, which force them to exclude some riskier securities from core capital. Banks with less than $15 billion in assets would be exempt.

The panel also agreed to let regulators set higher standards of duty for broker-dealers who give financial advice and agreed to give investors an easier way to nominate corporate board directors.

They also watered down a provision to give shareholders a nonbinding vote on executive pay. That vote would take place once every two or three years, not annually. - Reuters

Berjaya Corp, subsidiaries bought 56.7m BToto shares for RM247.9m

KUALA LUMPUR: BERJAYA CORPORATION BHD [] (BCorp) and its unlisted indirect subsidiaries bought from the open market 56.739 million BERJAYA SPORTS TOTO BHD [] shares, or 4.24%, from June 25, 2009 to June 24, 2010.

BCorp said on Friday, June 25 the company, Inter-Pacific Capital Sdn Bhd (IPC), Inter-Pacific Securities Sdn Bhd (IPS) and Bizurai Bijak (M) Sdn Bhd bought the shares for RM247.93 million or at an average acquisition price of RM4.37 per BToto share.

"The acquisitions have enabled the BCorp group to step up its interest in BToto via purchases in the open market, in a gaming company with good financial performance and dividend track record which provides lucrative yield to investors," it said.

The acquisitions were substantially funded by bank borrowings.

As at June 24, BToto's paid-up share capital was RM135.103 billion comprising 1.35 billion BToto shares. The number of BToto Shares that have been purchased, and which have been retained as treasury shares, is 13.53 million. The number of BToto Shares with voting rights of BToto is 1.337 billion BToto Shares as at June 24.

IPS is a unit of IPC which in turn is a 91.46% subsidiary of Berjaya Capital Berhad (BCapital). BCorp via Berjaya Group Bhd holds 100% indirect stake in BCapital and in Bizurai.

In addition to the above, Berjaya Land Berhad (BLand'), a 53.82% listed subsidiary of BCorp and several of BLand's unlisted subsidiaries , also hold 581.817 million BToto shares, or 43.50% stake in BToto.

BCorp and its subsidiaries together with the BLand Group own a total of 647.68 million BToto shares representing about 48.43% interest in BToto.

Subur Tiasa 3Q profit up 84% YoY

KUALA LUMPUR: SUBUR TIASA HOLDINGS BHD [] posted stronger earnings with net profit for the third quarter ended April 30, 2010 (3QFY10) surging 84% to RM10.43 million from RM5.68 million a year ago.

It said on Friday, June 25 revenue rose 4.8% to RM164.12 million from RM156.69 million previously while earnings per share (EPS) stood at 5.55 sen versus 3.01 sen. The board did not declare any dividend for 3QFY10.

For the nine months ended April 30, 2010, Subur Tiasa's net profit jumped 161% to RM23.83 million from RM9.12 million the same period last year mainly due to higher profit derived from the forest and plywood operations resulting from increased in export sales volume for logs and average selling price for plywood respectively.

Revenue rose 25% to RM510.79 million from RM409.02 million a year ago mainly attributable to higher export sales volume for logs and particleboard. EPS was higher at 12.66 sen versus 4.83 sen previously.

On its prospects, Subur Tiasa said the market outlook for the timber market was expected to be positive with firm demand for logs in India and China in lined with the expansion in their infrastructure and housing sectors.

"The group will continue to implement appropriate measures and plans to improve efficiencies and effectiveness of its business operations, concurrent with strengthened marketing strategies," it added.

Its share price added one sen to close at RM2.03. Its net asset per share stood at RM3.19 as at April 30.

Late bargain hunting lifts FBM KLCI

KUALA LUMPUR: Share prices on Bursa Malaysia ended mixed in rangebound trading on Friday, June 25, but late bargain hunting on finance stocks lifted the FBM KLCI marginally higher despite a bearish performance in most of regional bourses, dealers said.

The FBM KLCI edged up 0.58 of a point to close at 1,326.45, off its intraday low of 1,321.72, led by gains on CIMB Group, Hong Leong Bank and YTL Corporation. The key index had opened 2.60 points lower at 1,323.27.

The FBM Emas Index, however declined 4.73 points to 8,956.05, the FBM Ace Index dipped 45.14 points to 3,866.90 and the FBM70 [] Index slipped 20.28 points to 8,955.70.

The INDUSTRIAL INDEX [] lost 6.82 points to 2,656.77 and the PLANTATION [] Index declined 5.35 points to 6,296.65. However, the Finance Index went up 19.83 points to 11,946.39.

"Sentiment was generally cautious with some investors still looking to lock in profits from the recent gains. Overall volume was relatively thin," one of the dealers said, adding that most retail investors were reluctant to take heavy positions in the market.

Speculative interest was also seen on defensive and small cap stocks.

"The local bourse is still concerned with what is happening in the overseas markets, particularly in the U.S. which is currently on a downtrend and has somewhat affected our market as well," added the dealer.

For next week, he said the market was expected to continue its downtrend amid the weaker external sentiment.

During Friday's session, decliners beat advancers 370 to 251 while 278 counters were unchanged. The market breadth was negative with 568.320 million shares worth RM922.946 million traded compared with Thursday's volume of 749.349 million shares worth RM1.077 billion. - Bernama

MAHB JV wins bid for Maldives airport

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) and its JV partner, GMR beat two other consortiums to secure the project involving the building, operating and expanding the MALE International Airport in Maldives.

It said on Friday, June 25 that three parties -- Aeroport De Paris, France-TAV, Turkey consortium; Zurich Airport-GVK consortium and the GMR-MAHB -- consortium took part in the bidding.

The concession is for 25 years. A unique feature of the MIA is it includes the Sea-Plane port also, said MAHB.

MAHB managing director Tan Sri Bashir Ahmad said the latest venture reinforces MAHB's commitment in growing its business beyond the Malaysian borders.

"This win signifies an important milestone for a Malaysian company that is leading with its expertise in the international market." ''

With this, MAHB now has four overseas airports in its portfolio. The other three are Rajiv Gandhi International Airport in Hyderabad, Indira Gandhi International Airport in Delhi, and Istanbul Sabiha G''k''en International Airport in Turkey. MAHB has been successfully partnering with the GMR group since 2002.

Alam Maritim receptive to M&A, says chairman

KUALA LUMPUR: ALAM MARITIM RESOURCES BHD [], an offshore maritime transportation service provider, is open to the idea of mergers and acquisitions (M&A) moving forward, especially with the current stiff competition in the local market.

Its chairman Datuk Ahmad Sufian Abdul Rashid said although business has been slowing down, new players were coming in and offering much lower charter rates.

"There is a need for consolidation among local players so that they can capitalise on each other's strength, especially with rising competition by new players and foreign companies," he told reporters after the company's annual general meeting here on Friday, June 25.

He said via consolidation, companies could jointly use their existing strengths and venture into potential overseas market in the future.

On whether the company was in talk with any party for M&A, he said: "No. (But) we are always open to the idea. Maybe after this, there will be companies that want to talk to us."

Moving forward, Ahmad Suffian said the company would shift its focus on niche markets like pipe-laying barge and diving support services.

Meanwhile, group managing director/chief executive officer Azmi Ahmad said the charter rate now was at an average of US$1.60 to US$1.70 (RM5.18 to RM5.51) per bhp (brake horsepower) as compared with US$2.30 to US$2.50 per bhp, two to three years ago.

On fleet expansion, he said, the company was currently reconciling its position and looking at assets that could give greater margin.

To date, it owns 36 offshore supply vessels with another four new vessels ready for delivery from now until end-2012. This year, it will receive a pipe-laying barge and anchor handling tug.

"With Petronas (Petroliam Nasional Bhd) looking at brownfield and existing wells around the region, it should bring back demand for offshore vessels. We think the demand will improve by mid-2011," said Azmi.

On the warrant of arrest and a writ of summon by MLC Barging Pte Ltd, Azmi said the company has passed the matter to its lawyer.

"As far as we know, we have fully paid for the vessels and has registered as the owner," he said.

He said this was third-party dispute involving MLC Barging and MLC Shipping about the payment, of which Alam Maritim has no control.

Azmi, however, said although there would be no direct impact on the company financially at the moment, the company would have to look at the matter closely if the matter took a longer time to resolve, resulting in the retention of the vessels and not allowing them to operate. ' Bernama

Gold slips ahead of G20 meeting, ETF strikes record

SINGAPORE: Gold dropped on Friday, June 25 as early buying linked to crumbling stock markets subsided, but a rise in ETF holdings to a record high indicated persistent worries over the global economy.

Investors were also looking to the Group of 20 (G20) summit this weekend in Toronto, where leaders from rich and developing nations will discuss how to plot the world's emergence from the worst financial crisis since the Great Depression.

But any disagreements over the best way to ensure both growth and fiscal responsibility add to global economic uncertainty, which dealers said could lift gold's safe-haven appeal. For full coverage, click:

Spot gold fell 70 US cents to US$1,243.35 (RM4,028.45) by 0549 GMT, having hit an intraday high of US$1,245.85, heading for a weekly loss of nearly 2 percent from a record US$1264.90 hit on Monday.

Gold gained nearly 1 percent towards US$1,250 on Thursday as US stocks tumbled.

"There's still a lot of uncertainty towards a recovery. That's why they are putting their bets into gold," said Wong Eng Soon, investment analyst at Phillip Futures in Singapore, referring to investor interest in exchange-traded funds.

Gold was still consolidating after hitting an all-time high this week but a correction was unlikely to send the price below US$1,225 an ounce, said Wong.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings rose to a record high at 1,316.177 tonnes as of June 24 from the previous high of 1,313.135 tonnes set on June 22.

"Despite repeated setbacks, it is not looking all that bad for investors and speculators who are betting on rising gold prices," said Heraeus Precious Metals in a weekly report.

"At least the general environment has not changed much."

US gold futures for August delivery fell US$1.80 an ounce to US$1,244.1. It had settled around US$11 higher on Thursday as lingering European credit contagion fears pressured equity markets.

But a lack of demand from the jewellery sector could weigh on gold, which has struggled to make further headway since hitting a record high at the start of the week, said dealers.

"It's obvious that gold is losing strength. A switch reversal after each attempt to break new highs confirms that a further rise may attract profit taking, although a price dip could also be limited,"'' said Pradeep Unni, senior analyst and trader at Richcomm Global Services in Dubai.

Asian stocks on Friday slid for a fourth straight session, driven by expectations of tighter financial regulation ahead of the G20 meeting, while the euro was little moved at US$1.2330, retaining gains made on Thursday.

Oil prices edged higher after a US government forecaster said that a weather system headed towards the oil-rich Gulf of Mexico may develop into a tropical cyclone. ' Reuters

Bond market conditions to remain conducive in 2010, says Cagamas Holdings

KUALA LUMPUR: Cagamas Holdings Bhd expects investor interest to increase as bond market conditions are expected to remain conducive in 2010.

Its chairman Datuk Ooi Sang Kuang said this is in line with the recovery of the Malaysian economy and ample liquidity in the market.

He also said the group will continue to play a proactive role in ensuring that competitively priced liquidity is available in the capital market through innovative and high grade bond products.

"The group will play its part in strengthening and enhancing the Malaysian financial sector by actively promoting the industry's best practices and standards," Ooi said in his statement in the Cagamas Holdings Annual Report 2009.

Amongst the company's initiatives for the industry in 2010, he highlighted, is the establishment of a framework for conforming standards for mortgage loans.

The adoption of conforming loan features in a financial institutions lending practices will facilitate a more efficient pricing and purchase mechanism under the Purchase Without Recourse (PWOR) scheme.

"Internally, we are committed to strengthening our risk management, governance and oversight functions as well as continue to upgrade infrastructure to cater for new products and markets," Ooi stated.

"I am optimistic the group will be able to seek opportunities in 2010 and respond to the needs of the capital market, by providing sound risk management solutions for financial institutions to manage their liquidity and risks.

"At the same time, we seek to also provide existing and prospective investors with innovative bonds/Sukuk instruments to meet their respective requirements," he added.

For the financial year ended Dec 31, 2009, Cagamas Holdings Bhd's Group pre-tax profit was RM559.2 million, a decrease of RM5.1 million from 2008.

Meanwhile, its wholly owned subsidiary Cagamas Bhd recorded a pre-tax profit of RM294.5 million, an increase of RM65.2 million achieved on the strength of higher loans growth. ' Bernama

Mah Sing confident of achieving RM1b sales this year

KUALA LUMPUR: Property developer MAH SING GROUP BHD [] is confident of achieving its sales target of RM1 billion this year due to strong demand and new project launches, said its group managing director and group chief executive Tan Sri Leong Hoy Kum.

He said the group had already achieved 60% of the sales target or RM601 million in the first-quarter of the year.

The prospects for the property market in Malaysia is good, given the better employment market, strong liquidity and conducive interest rates levels, he told reporters after the company's annual general meeting here on Friday, June 25.

Leong said Mah Sing also enjoyed strong earnings sustainability from the combined RM6.3 billion in remaining gross development value (GDV) and unbilled sales.

He said low net gearing of 0.05 times, as at March 31, 2010, provides the group with the capacity to gear up.

Leong said Mah Sing was also actively scouting for more land to meet market demand.

For this year, he said the group acquired three parcels of land with a GDV of RM712 million.

Leong also said the group was keen to participate in government tenders for land to be developed by the private sector.

On overseas expansion, Leong said Mah Sing was looking to venture into Vietnam, Singapore, Indonesia and Australia.

He said the group had signed a letter of intent, on a joint venture basis, to develop a mixed development project in Wujin District, Changzhou, China.

The company was also optimistic overseas projects would contribute 30% to group revenue in the next five years.

Mah Sing has wide ranging product offerings in the residential, commercial and industrial segments which enables the group to identify and roll out different products to suit different economic and property cycles.

Domestically, the group has developments in the main economic corridors of Klang Valley, Kuala Lumpur, Penang and Johor. ' Bernama

Perisai Petroleum records higher turnover for FY09

KUALA LUMPUR: PERISAI PETROLEUM TEKNOLOGI [] Bhd recorded a higher turnover of RM101.8 million for the financial year ended 2009, an increase of 39.06% from the RM72.76 million previously.

This was despite two of the company's vessels being laid up for almost a year.

Its chairman Datuk Mohamed Ariffin Aton said the group's improved bottom line is attributed mainly to earnings generated through the charter of Enterprise 3, a derrick lay barge, on long-term charter to the SAPURACREST PETROLEUM BHD [] Group of Companies.

"We also derived revenue from a two-year contract for a portable saturation diving system, used to perform underwater inspection services during pipeline CONSTRUCTION []," he added.

Going forward, he said the company would essentially leverage on the strategy partnership established with Ezra Holdings Ltd, a leading offshore support and marine services provider.

"Perisai will benefit from Ezra's expertise and experience. The latter in turn will be able to leverage on Perisai's local knowledge and exposure to tap into oil and gas prospects in Malaysia," he told a press conference after the group's 7th Annual General Meeting (AGM) here on Friday, June 25.

Mohamed Ariffin also expressed confidence that a "new Perisai" is emerging, driven by fresh investment opportunities, in the marketplace here in Malaysia and around the region.

However, Mohamed Ariffin also indicated that in the face of slumping oil prices, many industry players had adopted a "wait-and-see" stance and this has impacted negatively the level of upstream oil and gas activities. ' Bernama

Stamford College shares jump

KUALA LUMPUR: Shares of STAMFORD COLLEGE BHD [] is up 20 sen to 50 sen in late afternoon trade on Friday, June 25 on trading interest in education providers after recent run-up in SEG INTERNATIONAL BHD [] and HELP.

At 3.06pm, Stamford College is up 20 sen to 50 sen with 7.6 million shares done. The FBM KLCI is down 2.12 points to 1,323.75.

The company is a Practice Note 17 company and is awaiting Bursa Malaysia Securities' approval for its proposed diversification into steel products.

On March 4, it proposed to diversify into the manufacturing of low alloyed, alloyed and long steel products.

In the first quarter ended March 31, 2010, it reported net profit of RM1.61 million on the back of RM9.65 million in revenue. Its net assets per share was 56 sen.

Yuan hits post-revaluation high ahead of G20 summit

SHANGHAI: The yuan climbed on Friday, June 25 to its highest since its July 2005 revaluation after the central People's Bank of China (PBoC) set the daily reference rate at a post-revaluation high in an apparent goodwill gesture ahead of the Group of 20 (G20) summit.

But trade was sluggish with market players cautious over how much the yuan ' also known as the renminbi (RMB) ' could appreciate in the near term, despite a gain so far of 0.5% in the first week after China's weekend announcement of a depegging from the dollar, marking the biggest weekly gain since December 2008.

Weekly volatility in the spot yuan rate versus the dollar hit its highest since mid-2008, when China repegged the yuan to the dollar to help ease the impact of the global financial crisis on its economy.

Spot yuan's range for the week ran to 416 pips and averaged more than 200 pips per day, compared with moves of only a few pips per day during the two-year dollar peg.

Many dealers expect two-way volatility to remain the norm after China's weekend currency policy reform, although the yuan's rise will not likely be enough to satisfy US lawmakers and other critics who want the yuan to rise as much as 40%. China is not expected to accept such a demand.

"Beijing told us that any appreciation would be gradual, and that is what is happening, with the reference rate for the yuan against the dollar today set little more than half a% stronger than where it was last Friday," said Brian Jackson, strategist with Royal Bank of Canada in Hong Kong.

"But the rest of the G20 was not born yesterday, and there may be some suspicion that the move over the last week was just window-dressing to take the exchange rate issue off the top of the agenda at this weekend's summit," he said.

"To reduce the risk of trade tensions, we will need to see further yuan gains in the days and weeks ahead."

A Reuters poll of 33 economists projected that China would be true to its word and prevent a sharp rise in the newly unshackled yuan, with a median forecast of a 2.4% rise over the next year from the level before depegging.

The yuan gave up some early gains to trade at 6.7926 yuan (RM3.24) to the dollar at midday, still up from Thursday's close of 6.7997 yuan but lower than Friday's central bank mid-point of 6.7896 yuan, which was up sharply from Thursday's mid-point of 6.8100 yuan.

US administration officials and some lawmakers appear to have differing views over the initial rise in the yuan.

US President Barack Obama said in Washington on Thursday that China had made progress by announcing greater currency flexibility, but it was too early to tell if the yuan's rise would be enough to help rebalance world growth.

"We did not expect a complete 20% appreciation overnight, for example, simply because that would be extremely disruptive to world currency markets and to the Chinese economy," Obama said.

A US lawmaker said on Thursday, however, that the United States should keep open a bill that would pressure China to raise the value of its currency.

"I think we need to keep that legislation on the burner. I think whether we act on it will be affected by what China does," House of Representatives Ways and Means Committee Chairman Sander Levin told reporters.

China announced over the weekend that it would allow the yuan's exchange rate to move more freely but it has made it clear that its currency reform would be gradual and controllable.

It is widely believed in the domestic market that China will not make any further concessions and that fresh pressure from US lawmakers would very likely backfire due to more volatile market and economic conditions since the global financial crisis.

The eurozone's debt woes have cast doubt on the pace of China's economic recovery, reminding Beijing how vulnerable the world's third-largest economy is to a global slowdown.

Chinese economists often argue that Western critics underestimate that vulnerability, especially given how far China's per capita income lags developed countries.

They say it may be inappropriate to apply Western standards to the currency of a country whose per capita gross domestic product is only one-20th that of the United States.

Caution about Beijing's stance was reflected in the offshore forwards markets. Benchmark dollar/yuan one-year non-deliverable forwards (NDFs) rose to 6.6750 bid by midday from Thursday's close of 6.6670, with implied yuan appreciation over that period falling to 1.72% from 2.14% the previous day. ' Reuters

Broader market weakens

KUALA LUMPUR: Selling pressure on regional markets on concerns about weakening US consumer spending and the impact on corporate earnings weighed on sentiment at the midday break on Friday, June 25 while at Bursa, the broader market showed signs of weakening.

At 12.30pm, the FBM KLCI fell 2.51 points to 1,323.36. Turnover was 283.37 million shares valued at RM360 million. Declining stocks beat advancers two to one, with 325 losers and 172 gainers.

Light crude oil fell 29 cents to US$76.22 while crude palm oil futures fell RM8 to RM2,382.

Nikkei 225 -2.21% 9,708.43 Hang Seng Index -0.6% 20,609.82 Shanghai Composite Index -0.73% 2,548.10 Singapore Straits Times Index -0.12% 2,844.20
Berjaya Sports Toto fell the most among the 30-stocks index, down 13 sen to RM4.35. Its unit Sports Toto Malaysia Sdn Bhd would undertake a medium term notes (MTNs) programme of up to RM800 million and the proposal had received the Securities Commission's nod.

MISC four sen to RM8.65, Tenaga and GENTING BHD [] three sen each to RM8.42 and RM7.42, Maybank and Sime two sen each to RM7.56 and RM8.11. MAS shed six sen to RM2.10.

Cepco fell the most, down 65 sen to RM1.54 but with 100 shares done.'' MPI lost 23 sen to RM6.20.

PPB, which derives most of its earnings from Wilmar, fell 12 sen to RM16.34. Genting PLANTATION []s lost 12 sen to RM6.83 and IJM Plantations 10 sen to RM2.42.

But Batu Kawan rose 14 sen to RM11, UMCCA 10 sen to RM9.45 and Glenealy nine sen to RM4.44.
Gamuda-WD rose five sen to RM1.15 and it was the second most active with 14 million units done while Gamuda three sen higher to RM3.24 after an earnings upgrade.

Sinotop advanced nine sen to 58.5 sen after China-based Be Top gave a RM59 million guarantee in Sintop reverse takeover.

Top Glove rose 20 sen to RM13.20 on higher earnings projection.

RAM Ratings puts Musteq Hydro on negative Rating Watch

KUALA LUMPUR: RAM Rating Services Bhd has placed the A2 rating of Musteq Hydro Sdn Bhd's RM108 million Al-Bai Bithaman Ajil fixed-rate serial bonds on Rating Watch, with a negative outlook.

The ratings agency said on Friday, June 25 that Musteq Hydro is an independent power producer (IPP) that has been licensed to build, own and operate a 20-MW hydro power plant at Sungai Kenerong, Kelantan.

"The Rating Watch has been triggered by the company's continued interest payment on shareholder's advances, which amounted to RM1.43 million in 2009, despite the fact that Musteq Hydro's longer-term debt-servicing ability is already at risk.

"This is also contrary to the management's earlier representation to RAM Ratings that there would be no further interest payments on shareholder's advances; such outflows, along with the revision of the plant's operations and maintenance fees, had caused the rating to be put on a negative outlook on July 30, 2009," it said.

RAM Ratings said as a result of having run down its cash reserves, Musteq Hydro is now highly unlikely to be able to meet the debt service reserve account's (DSRA) balance requirement under the Trust Deed by July 30, 2010; this is for its principal and profit payment falling due on 28 January 2011.

Under the terms of the Trust Deed, Musteq Hydro must always maintain an amount equivalent to its total debt obligations due in the next 6 months. The breaching of this covenant is likely to occur in late July each year throughout the Bonds' tenure.

Meanwhile, RAM Ratings is currently conducting the annual review of Musteq Hydro's debt rating. It will make an appropriate announcement once the exercise has been completed.

Most key Asian markets fall

KUALA LUMPUR: As expected, most key Asian markets fell in early trade on Friday, June 25, tracking overnight losses on Wall Street as investors feared stricter financial regulations.

At 10am, the FBM KLCI was down 1.92 points to 1,323.95. Turnover was 105.32 million shares valued at RM103.13 million. There were 105 gainers, 169 losers and 152 stocks unchanged.

Hwang DBS Vickers Research said after putting up a relatively resilient performance on Thursday,'' with the key FBM KLCI swinging sideways before losing 3.8 points at the closing bell, it expected Malaysian stocks to pull back further today.

"On the chart, the benchmark index could be on its way to test the immediate support level of 1,305," it said in a research note.

On Wall Street, selling pressures persisted overnight, causing major U.S. equity indices to drop between 1.4% and 1.7%.

The research house said essentially, investors got worried about: (a) possible financial regulation changes that might affect investment / trading activity; and (b) disappointing economic data.

Nikkei 225 -1.45% 9,784.76 Hang Seng Index -0.4% 20,646.85 Shanghai Composite Index -0.34% 2,558.13 Singapore Straits Times Index +0.19% 2,853.01 ''

At Bursa, BAT fell the most, down 16 sen to RM44.30, DiGi 12 sen to RM22.82, BToto 11 sen to RM4.37 while Bursa shed six sen to RM8.08. Sime lost five sen to RM8.08.

United Malacca was the top gainer, adding 15 sen to RM9.50 and CI Holdings 13 sen to RM2.53 while an upbeat outlook from Top Glove saw its share price climb 10 sen to RM13.10.

Kenmark was the most active, up 1.5 sen to 13 sen with 9.7 million shares done.

Gamuda-WD added five sen to RM1.15 in active trade.'' Hwang DBS Vickers Research expected Gamuda to attract buying interest ahead after announcing a robust set of financial results and revealing more details on the proposed mega MRT transportation project (which it is likely to secure) at an analyst briefing.

Sinotop up on Be Top RM59m guarantee

KUALA LUMPUR: Shares of garment manufacturer Sinotop Holdings Bhd is up in morning trade on Friday, June 25 after China-based Be Top gave a RM59 million guarantee in Sintop reverse takeover.

At 10.26am, Sinotop is up 7.5 sen to 57 sen with 8.9 million shares.

The FBM KLCI is down 1.21 points to 1,324.66. Turnover is 136 million shares valued at RM140.53 million.

The Be Top profit guarantee is to assure current shareholders to subscribe for the renounceable rights issue of 10 new Sinotop shares for every share held.

AmResearch keeps Buy on SapuraCrest, unch FV RM3.12

KUALA LUMPUR: AmResearch reiterates BUY call on SAPURACREST PETROLEUM BHD [] (SapCrest) with unchanged fair value of RM3.12/share based on a CY10F PE of 22 times.

The research house said on Friday, June 25 SapCrest remains its top pick in the oil & gas sector.

The factors are its (i) Dominant position in the deepwater pipe-laying market; (2) Healthy balance sheet; (3) Sizeable oil & gas asset ownership; (4) Substantial Seadrill equity participation of 24% currently; and (5) Strong FY09-FY13F earnings CAGR of 23%.

AmResearch said SapCrest's 1QFY11 net profit of RM57 million came in within expectations, accounting for 25% of both its FY11F forecast of RM202 million and 23% of street estimate of RM217million.

"We caution that the group's 4Q earnings tend to be the weakest due to lower offshore CONSTRUCTION [] work during the monsoon season. Hence, we maintain FY11F-FY13F earnings. Group did not declare any quarterly dividend as expected," it said.

HDBSVR maintains Buy on Gamuda

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) is maintaining a Buy on GAMUDA BHD [] with a Target Price of RM4.35.

It said on Friday, June 25 that Gamuda is an excellent proxy to the Malaysian infrastructure story with the potential RM36 billion mass rapid transit (MRT) project doubling its RM6.5 billion orderbook.

"It is also an ideal proxy to the long term structural boom of the property market in Vietnam.

"For the first time, Gamuda has also guided for property sales in Vietnam of RM820m and RM1.25bn in FY11 and FY12, respectively, offering some upside to our forecasts," it said.

OSK Research Overweight on consumer retail sector

KUALA LUMPUR: OSK Research see brighter days ahead for the consumer retail sector and its top pick is Parkson Holdings where it has a Buy with a target price of RM6.75.

It said on Friday, June 25 Malaysia retail sales remained resilient in 2009, growing 0.8% y-o-y while companies under its coverage generally outperformed the industry.

In 1QCY10, these companies delivered positive revenue and earnings growth. More importantly, they performed better in Oct-Mar 10 versus Oct-Mar 08.

"Despite the proposed subsidy cuts, we believe that retail sales will continue to be strong fuelled by better sentiment and economic recovery. We are OVERWEIGHT on the retail sector.

"Besides the favorable outlook, the sector is one of the highest dividends yielding, which makes it a good pick in anticipation of a volatile 2H10," it said.

OSK Research's top pick is Parkson Holdings (BUY, TP 6.75), which is poised to ride on the strong recovery in China's domestic consumption and Zhulian (BUY, TP RM3.77), given its solid fundamentals compared to its peers, as well as its attractive dividend yield.

OSK Research: Proton?s mid-term outlook bullish

KUALA LUMPUR:PROTON HOLDINGS BHD []'s mid-term outlook is bullish as it continues to trend higher along the uptrend line, says OSK Research.

It said on Friday, June 25 that a breakout from the RM5 tough resistance level would see the stock continue to stretch its uptrend.

"However, there is still initial resistance at the RM4.77 level. To the downside, there is immediate support at the RM4.39 level, followed by the RM4.17 level," it said.

OSK Research said the daily RSI closed at the 52.1 pt-level on Thursday, which means that the stock is currently not overbought and the door is open for additional gains.

#Stocks to watch:* EON Cap, SapuraCrest, Gamuda, SEGi

KUALA LUMPUR: The weaker overnight close on Wall Street due to the uncertain economic prospects is expected to see investors retreating to the sidelines and taking profit on Friday, June 25.

In New York, the broader S&P 500 fell for the fourth straight day on Thursday, as fresh signs of consumer weakness and worries about stringent financial regulation provoked investors to unload positions.

The S&P 500 has lost 3.8% in four days. The Dow Jones industrial average dropped 145.64 points, or 1.41%, to 10,152.80. The Standard & Poor's 500 Index fell 18.35 points, or 1.68%, to 1,073.70. The Nasdaq Composite Index lost 36.81 points, or 1.63 percent, to 2,217.42.


The Edge FinancialDaily reports on Friday that an independent financial adviser appointed by the board of EON Capital Bhd (EONCap) recommended a "fair and reasonable" takeover offer price of RM6.18 billion, or RM8.91 per share.

This based on details in a law suit filed by Primus (M) Sdn Bhd on Monday.

SapuraCrest Petroleum's net profit for the first quarter ended April 30, 2010 (1QFY11) almost doubled to RM50.69 million from RM25.66 million a year ago, mainly due to higher contribution from activities in the installation of pipeline and facilities and the drilling division.

Revenue dropped 6.4% to RM670.35 million from RM716.18 million previously as a result of lower activities in the drilling and marine services divisions.

Earnings per share for 1QFY11 stood at 3.97 sen versus 2.03 sen in the same quarter last year.

Gamuda posted a net profit of RM73 million or 3.62 sen per share in the third quarter ended April 30, 2010 (Q3FY10), 57.7% higher than RM46.3 million in the corresponding period last year.

The higher earning was due to better contributions from all business divisions. Revenue, however, dropped 11.8% to RM511.2 million from RM579.4 million. Gamuda declared a second interim dividend of six sen per share less 25% tax payable on Aug 18.

For the nine-month period, net profit jumped 35% to RM204 million, or 10.12 sen per share, versus RM150.4 million previously while revenue came in at RM1.74 billion, down a marginal 2% from RM1.78 billion in 2009.

SEG International's share price surged to a 5 1/2 year high of RM4.75 prompting a query from Bursa Malaysia Securities Bhd over the share price movement.

It opened at RM4.49 and ended the day at RM4.59, up 10 sen on some profit taking after the recent price surge.

Bursa Securities had queried the company over the sharp rise in price in the shares recently. On Wednesday, the share price surged 42 sen to RM4.49.

Berjaya Land's share price surged to a two-year high of RM4.45 yesterday after it reported a strong set of earnings and announced a corporate exercise.

It rose 38 sen to RM4.45 with 684,100 shares done. The share price was the highest since Aug 6, 2008.

Top Glove, the world's largest rubber glove manufacturer, foresees its net profit for the financial year ending Aug 31, 2010 (FY2010) growing 70% to 80% from FY2009, said its chairman, Tan Sri Lim Wee-Chai.

US market sinks on fragile recovery fears

NEW YORK: The S&P 500 fell for the fourth straight day on Thursday, June 24'' as fresh signs of consumer weakness and worries about stringent financial regulation provoked investors to unload positions.

The S&P 500 has lost 3.8 percent in four days, with retailers among the biggest decliners a day after discouraging outlooks from Bed Bath & Beyond (BBBY.O) and athletic apparel maker Nike Inc (NKE.N).

Nike shares were down 4 percent at $69.95 while Bed Bath & Beyond slumped 5.7 percent to $39.07. The S&P Retail index .RLX slid 2.8 percent.

"People's general focus is on how fragile the recovery is, and recent data points are giving fodder to the double-dip camp," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Banks were pressured by fears Congress would pass stringent rules in an overhaul of financial regulations. Lawmakers were on the verge of adopting a bill that could restrict banks' trading and investment activities, crimping their profits.

JPMorgan Chase & Co (JPM.N) fell 2.2 percent to $38.03 while Bank of America Corp (BAC.N) was off 2.7 percent at $15.02. The KBW Bank index .BKX lost 2.2 percent.

"We don't know how oppressive the rules could be, and the market hates that uncertainty." said Rob Stein, managing partner at Astor Asset Management in Chicago.

The Dow Jones industrial average .DJI dropped 145.64 points, or 1.41 percent, to 10,152.80. The Standard & Poor's 500 Index .SPX fell 18.35 points, or 1.68 percent, to 1,073.70. The Nasdaq Composite Index .IXIC lost 36.81 points, or 1.63 percent, to 2,217.42.

A drop in initial jobless claims and a rise in a gauge of long-lasting manufactured goods failed to offset recent weak economic data, and the Federal Reserve on Wednesday gave a subdued assessment about the economy's recovery.

Chipmakers as measured by the Philadelphia semiconductor index .SOXX were off 2.9 percent. Six semiconductor companies, including Micron TECHNOLOGY [] Inc (MU.O) have agreed to pay $173 million to settle U.S. antitrust lawsuits accusing them of conspiring to keep computer chip prices artificially high. Micron shares fell 2 percent to $9.62.

Computer maker Dell Inc (DELL.O) fell 6.4 percent to $12.93. The company said it was focused on improving profitability and diversifying, but investors expressed doubts about the company's turnaround plan.

Oracle Corp (ORCL.O) rose 3.9 percent to $23.08 in extended trading on Thursday after it reported adjusted fourth-quarter earnings that beat expectations.

U.S.-listed shares of BlackBerry maker Research in Motion Ltd (RIM.TO)(RIMM.O) fell 4.7 percent to $55.80 after the closing bell as shipments and subscriber growth fell short of expectations in the first quarter.

The S&P Energy index .GSPE fell 2 percent while U.S.-listed shares of BP Plc (BP.N) dropped 3.1 percent to $28.74 and hit a 52-week low in intraday trading.

In bearish technical signs, the S&P fell below its 14-day moving average and breached the 1,083 level, a key retracement of the slide from its 2010 high in April to the year's low on May 25.

Some expected stocks to rebound after a few days in which the market fell on higher volume, a sign of institutional selling known as distribution days.

"Usually in good markets, with a few good distribution days you get a strong reversal, and we're not seeing it," said Steven Wolf, managing director of investments at Source Capital Group in Westport, Connecticut. "It's almost like the market has started to give up."

Pfizer Inc (PFE.N) fell 2.8 percent to $14.46 after it suspended clinical trials of its experimental arthritis drug.

On the upside, Hasbro Inc (HAS.N) gained 4.9 percent to $43.14 after a news report that the toy company was in negotiations for a possible leveraged buyout, a report the company denied. - Reuters

Thursday, June 24, 2010

3A: Expansion plans on track

THREE-A Resources (3A; RM1.81) is staying well on track in terms of its expansion plans. The company has earlier mapped out a very clear growth strategy, which should support strong double-digit growth over the next few years.

3A is a leading producer for food and beverage ingredient products such as caramel colour, glucose and soya protein sauce. It is the only local manufacturer for maltodextrin, widely used as fillers or bulking agent in dry beverage mixes, soups, infant milk powder, etc. In addition to holding a dominant share of the domestic market, 3A also exports its products worldwide. Exports currently account for over a quarter of the company's total sales.

The company has been enjoying robust growth in demand for its range of products. Sales grew at an annual compounded rate of over 24% over the past five years. Demand for maltodextrin, in particular, has been very strong since its inclusion into the company's product range in 2007. 3A has been gaining market share through import substitution. ''

Its 1,200 tonnes per month maltodextrin plant has been running at full capacity since last year. A second plant, with a rated capacity of 2,000 tonnes per month, is currently under CONSTRUCTION [] and is slated for completion by end-2010 or early-2011.

To support the additional maltodextrin production, 3A is also building a third, 8,000 tonnes per month glucose plant. This will boost total capacity for the product to 21,000 tonnes per month. Utilisation for the second glucose plant, which was commissioned end-2008, is already nearing full capacity. Glucose is used both as feedstock for the production of maltodextrin as well as sold externally.

Additional sales from the new glucose and maltodextrin plants will underpin growth over the next two-three years. Furthermore, we should also start to see contributions from its joint venture in China within the next year or two.

To recap, 3A is partnering Singapore-listed Wilmar International in setting up manufacturing facilities for food ingredient products in China. The first facility is to be located in Shanhaiguan, Hebei and is estimated to cost some US$12 million (RM38.8 million). If all goes to plan, the plant would be operational before end-2011. And depending on its performance, the joint venture is likely to be expanded to include another two new plants. Total investments could amount to as much as US$40 million. 3A holds a 50% stake in the venture.

Net profit estimated to grow 34% in 2010
3A reported a solid set of earnings results for the first three months of the year. Sales grew a strong 85.4% year-on-year (y-o-y) and 11.1% quarter-on-quarter (q-o-q) to RM61.3 million on the back of strong demand and a gradual increase in selling prices.

Meanwhile, net profit more than doubled from the previous corresponding quarter to RM5.9 million in 1Q10. Earnings in the latest quarter also registered improvement from the RM4.5 million reported in 4Q09.

Apart from stronger sales and improved efficiency, we believe better margins in 1Q10 were also due to the gradual selling price hikes implemented over the past few months. Raw material prices, primarily for tapioca starch, have been trending higher in line with the global economic recovery. We estimate tapioca prices to rise to an average of about US$420 per tonnes in 1Q10, compared to roughly US$260 per tonne in 1Q09.

Typically, there is a short mismatch in terms of 3A's cost of raw materials and its selling prices as the company revises its selling prices on a gradual basis. Nevertheless, it has always managed to pass on the higher costs. Indeed, 3A remains a competitive producer in both the domestic and export markets since rising raw material prices affect all producers.

The company is on track to meeting our estimated net profit of RM24.3 million this year, which is a strong 34% growth on the year. Net profit is forecast to expand further to RM29.9 million by 2011.

The stock has done remarkably well over the past 12 months, hitting a high of RM2.36 in mid-February 2010 from 41 sen this time last year. We expect 3A will continue to perform well over the longer term, tracking its earnings growth.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.

Maybank expands network in Cambodia with 8th branch

KUALA LUMPUR: MALAYAN BANKING BHD [] accelerated its network expansion in Cambodia with the opening of its eighth branch in the country as it taps into the growing demand for banking services there.

The new branch was opened in Battambang, the main commercial hub of the northwestern region of Cambodia. It is the second largest city after Phnom Penh.

Maybank's head of International Abdul Farid Alias said on Thursday, June 24 the new branch was in line with the group's strategy of accelerating its network expansion in Cambodia.

"With the Cambodian economy expected to grow by about 4% this year, arising from improved external demand and the easing of credit, we believe this is an opportune time to leverage on the strong business potential and rising demand for banking," he said.

Given the growth potential and positive economic outlook for Battambang and Cambodia as a whole, Farid said Maybank was confident that its newest branch will record profits from the second year of its operation.

"We intend to maintain our growth momentum in Cambodia with the opening of another three provincial branches by 2011, which will also reinforce our expanding regional network and leadership," said Farid.

The new branch offers a range of retail and commercial banking services, namely deposit and placement, trade finance, loans, remittances, foreign exchange and mortgages as well as an automated teller machine.

He anticipated strong demand from both the retail and business sectors there. He said there were about 100 companies operating there and they were in agro-based industries, rice millers, food processing and packaging plants as well as mining.

He added that Battambang's growth prospects were even more evident given its significant population of about 500,000 as well as the presence of agriculture and agro-based industries, trading & wholesale business enterprises and tourism.

Farid said that Maybank would not only cater to its international customers who have investments in Cambodia, but also to the local market through its range of banking services. ''

"We are currently working on a regional ATM linkage to provide greater convenience for our customers and this will enable us to also explore the setting up off -site ATMs in Cambodia".

Maybank Cambodia has added six new branches since January 2009 to date. It has six branches in and around Phnom Penh and one branch in Siem Reap apart from the latest office in Battambang.

SC charges ex-LFE director with fraud

KUALA LUMPUR: The Securities Commission has charged a former LFE Corporation Berhad (LFE) director Alan Rajendram a/l Jeya Rajendram with securities fraud and eight other offences he allegedly committed when he was the director of the company.

The charges against the 53-year-old Alan are the latest in a string of enforcement action by the SC against alleged corporate fraud and misconduct.

Alan, 53, was charged under section 87A(b) Securities Industry Act 1983 for committing an act that operated as a fraud on LFE by using RM9 million of LFE's monies to finance the purchases of LFE shares pursuant to a private placement and restricted offer of LFE shares to him.

The alleged act is said to have been committed between Jan 4, 2007 and Feb 8, 2007. If convicted, he is liable to a fine of not less than RM1 million and imprisonment for a term not exceeding 10 years.

He pleaded not guilty.

#Today's Diary* What to expect on June 25, 2010

1. HUAT LAI RESOURCES BHD [] AGM at Conference Room, PT 1678, Mukim of Serkam, Merlimau, Melaka at 9am

2. INNITY CORPORATION BHD [] AGM at Green 2, Jalan Club Tropicana, Tropicana Golf & Country Resort, Selangor at 9.30am

3. TEK SENG HOLDINGS BHD [] AGM at Evergreen Laurel Hotel, Penang at 9.30am

4. YSP Southeast Asia Holding Bhd AGM at Equatorial Bangi-Putrajaya Hotel at 9.30am

5. Lion-Parkson Foundation Scholarship award ceremony at Level 16, Office Tower, No.1 Jln Nagasari, off Jln Raja Chulan, KL at 10am

6. ABRIC BHD [] AGM and EGM at Dewan Tan Sri Hamzah, Royal Selangor Club, Kiara Sports Annex, Jalan Bukit Kiara, Off Jalan Damansara, KL at 10am

7. UBG BHD [] AGM at Sime Darby Convention Centre, KL at 10am

8. Nilai Resources Group Bhd AGM at Nilai Springs Resort Hotel, Negeri Sembilan at 10am

9. IRE-TEX CORPORATION BHD [] AGM at Salon II, Level 2, G Hotel, 168A Persiaran Gurney, Penang at 10am

10. KONSORTIUM TRANSNASIONAL BHD [] AGM at Function Room, Level 2, Kuala Lumpur International Hotel, KL at 10am

11. PERISAI PETROLEUM TEKNOLOGI [] Bhd AGM at Equatorial Hotel, KL at 10am

12. SARAWAK OIL PALMS BHD [] AGM at Imperial Hotel, Sarawak at 10am

13. WINSUN TECHNOLOGIES BHD [] AGM at Impiana KLCC Hotel & Spa, KL at 10am

14. ASDION BHD [] AGM at Sri Damansara Club Bhd, Lot 23304, Persiaran Perdana, Bandar Sri Damansara, KL at 10am

15. MAH SING GROUP BHD [] AGM at Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, KL at 10am

16. ALAM MARITIM RESOURCES BHD [] AGM at Ballroom 3, Sime Darby Convention Centre, KL at 10am

17. WTK Holdings Bhd [] AGM at Ballroom 1, Corus Hotel, KL at 10.30am

18. COUNTRY HEIGHTS HOLDINGS BHD [] AGM at Unity Room, Lower Ground Level, Palace of the Golden Horses, Jalan Kuda Emas, Mines Resort City, Seri Kembangan, Selangor at 11am

19. NPC RESOURCES BHD [] AGM at The Palace Hotel, Sabah at 11am

20. UPA CORPORATION BHD [] AGM at Hang Tuah Level II, Mines Wellness Hotel, Jalan Dulang, MINES Resort City, Selangor at 11.30am

21. MINPLY HOLDINGS (M) BHD [] AGM at The Royale Bintang Resort & Spa Seremban at 2.30pm

22. Master-Pack Group Bhd AGM at 1574, Jalan Bukit Panchor, Nibong Tebal, Penang at 3pm

23. Samsung Mobile and Maxis launch a flagship smartphone at Rootz, Rooftop, Lot 10 Shopping Centre, KL at 4pm

Share prices end easier after rangebound trade

KUALA LUMPUR: Share prices on Bursa Malaysia ended slightly lower after a rangebound trade on Thursday, June 24, with most investors reducing their
holdings, particularly in mid-and-large cap stocks which pulled the benchmark index down 0.3%.

However, some bargain hunting activities on bluechips like Public Bank, Genting and IOI Corporation helped to limit losses.

The benchmark FBM KLCI closed 3.83 points easier at 1,325.87. It had opened 2.01 points lower at 1,327.69.

It moved between 1,325.71 and 1,333.49-level today.

The FBM Emas Index fell by 20.76 points to 8,960.78 and the FBM Ace Index declined 8.66 points to 3,912.04 while the FBM70 [] Index advanced 6.86 points to 8,975.98.

The Finance Index slipped 59.76 points to 11,926.56 and the INDUSTRIAL INDEX [] lost 7.50 points to 2,663.59, but the PLANTATION [] Index rose 26.97 points to 6,302.00.

"There were not much fresh news in the market. Sentiment was generally weak and most investors looked for profits following yesterday's late gains," a
dealer said.

Advancers led decliners by 332 to 318 while 294 counters were unchanged, 418 untraded and 26 others suspended.

The market breadth meanwhile was positive with a total of 749.349 million shares worth RM1.077 billion transacted compared with Wednesday's volume of 684.400 million shares worth RM1.118 billion. -- Bernama

Work on LRT extensions to start year-end

KUALA LUMPUR: Systems works for the light rail transit (LRT) extension of the Kelana Jaya and Ampang lines are expected to commence by year-end.

Syarikat Prasarana Negara Bhd (SPNB) group managing director Datuk Idrose Mohamed said on Thursday, June 24 the system works will be divided into two packages.

A pre-bid briefing was held with the pre-qualified contractors for Packaage A on June 22 and site visit will be held on June 27.

Tenders for package B and other subcontract packages such as for the stations, escalators and lisfts, and multi-storey car packs will be called at a later date.

The system works comprises of the engineering, procurement and CONSTRUCTION [] (EPC) systems and signalling work for the Kelana Jaya'' extension. The Ampang extension package will entail EPC systems and rolling stock works.

The systems works, together with the advance and facilities works, will cover portions of the line extensions, and will collectively be known as Package A. Package A is expected to be completed three years after work has commenced, he added.

Kenmark workers in a quandary

KLANG: More than 400 workers of Kenmark Industrial Co (M) Bhd, a public listed company, are in a quandary as they have no work to do and are worried about not being paid their salaries at the end of the month.

However, the Malaysian Trades Union Congress (MTUC) has advised the workers to continue reporting for duty while it seeks clarification from the Labour Department.

MTUC vice-president A Balasubramaniam on Thursday, June 24 told Bernama that the congress would assist the workers and continue to protect their interests.

He said that during his visit to the factory in Port Klang on Thursday, the workers expressed concern about their future and were worried that their dues would not be paid by the management.

He added that there were no management personnel at the factory to give instructions to the workers and they had been on their own for the past few days.

According to the workers, there was no more work to do as the factory was completely shut down.

Two days ago, the electricity supply to the factory was disconnected by TENAGA NASIONAL BHD [].

The workers, comprising 200 locals and the rest, foreigners mainly from Bangladesh and Myanmar, found themselves suddenly locked out when they reported for duty on May 28.

However, on June 7, Selangor Labour Department Director Fong Khei Por directed them to return to work as the new management had decided to resume operation and the workers complied.

The company had been categorised as PN17 by Bursa Malaysia. A company is classified as PN17 if it is in'' "financial distress".

Meanwhile, the Senior Assistant Director of the Manpower Department at Port Klang, Shahbuddin Abu Bakar, told Bernama that the management had assured the department that electricity to the premises would be reconnected soon.

He advised the workers not to panic as their interests would be safeguarded by the department.

The company's human resources manager, Yeow Kim Sah, said the management had given an assurance that the workers would be paid their June salaries by July 7.

Yeow, who claimed that he was just a middle-level executive, could not explain the complete shutdown before the disconnection of electricity nor assure the workers of long-term employment security.

He declined to give the details of the new management, saying: "All I can say at this moment is that I am the human resources manager." ' Bernama

Petra Perdana to buy 2 vessels for RM200m

KUALA LUMPUR: PETRA PERDANA BHD [] will use the proceeds from its proposed placement to pay the deposits for two anchor handling tug/support vessels.

The company said on Thursday, June 24 said the vessels, under the sale and leaseback arrangement, would be delivered within the next two months.

"The total consideration of the vessels are approximately RM200 million," it said in reply to a query by Bursa Malaysia Securities over its corporate exercise.

Petra Perdana had proposed a private placement of up to 10% of its paid-up share capital to investor or investors to be identified and also proposed a renounceable rights issue with free detachable warrants.

Germany defends austerity measures ahead of G20

BERLIN: Finance Minister Wolfgang Schaeuble rejected criticism that Germany was endangering economic recovery with austerity measures, saying the government had a "well-conceived" exit strategy from its stimulus spending.

In a guest column for the Handelsblatt newspaper on Thursday, June 24, Schaeuble said he could not understand criticism from abroad that Germany was "wrecking the recovery with austerity measures" because Berlin was doing a lot to stimulate growth.

"There is an implicit accusation that we're not living up to our international responsibilities as far as economic policies are concerned," Schaeuble wrote in a contribution for the business daily ahead of the G20 summit this weekend in Toronto.

"I cannot understand this argument because Germany has taken sweeping measures since 2008 to stabilise the economy. We've done that on top of all the automatic stabilisers we have (such as higher social welfare spending) that play a much smaller role in countries from which we're now being criticised."

Germany recently announced plans for '80 billion (RM318.2 billion) in budget cuts over the next four years, a package it hopes will bring the structural deficit of Europe's biggest economy within European Union limits by 2013.

US Treasury Secretary Timothy Geithner and top White House economic adviser Lawrence Summers wrote in a Wall Street Journal piece on Tuesday that G20 peers should not risk undermining growth for the sake of cutting deficits, echoing a similar call from President Barack Obama.

'Well-conceived exit strategy'
Schaeuble pointed to Germany's budget deficit climbing to 5% of gross domestic product (GDP) as evidence of its commitment to growth-boosting measures.

"It's true that an abrupt and ill-conceived exit from the stabilisation measures could endanger their success," he said. "But a credit-financed stimulation of demand cannot become a permanent, drug-like fix.

"We need a well-conceived exit strategy. The German government has one. The first consolidation measures won't take effect until 2011 and amount to less than 0.5% of GDP. There's no way that can be called hitting the brakes."

Germany, Europe's largest economy, has vigorously defended its plans to pursue the '80 billion savings measures in the next four years after Obama preached patience in clamping down on public spending.

On Thursday, Chancellor Angela Merkel dismissed criticism in a separate interview with ARD TV that Germany was not doing enough to stimulate its economy.

Merkel said she had told Obama in a phone call that Germany had done much to support economic growth with stimulus measures.

"Germany is doing much more in 2010 for the worldwide economic recovery than (other countries) on average," she said. ' Reuters

AirAsia in better position to pay dividends

SEPANG: AIRASIA BHD [] is in a better position now to consider paying dividends to its shareholders.

"We have solved a lot of uncertainty within AirAsia. Now we have reached the stage where the board will actively look at it (to pay dividends)," said its group chief executive officer, Datuk Seri Tony Fernandes, after the company's AGM on Thursday, June 24.

While saying that it was premature to speculate on the quantum that would be considered for future dividend payment, he added that the low-cost carrier did the right thing in not declaring any dividend for the time being.

"We want to build on our cash, we want to grow the airline so that we are far bigger than any other competitors."

AirAsia's cash balance is approaching RM1 billion.

"The business should only grow, strength to strength, from now on," he said.

AirAsia chaked up a net profit of RM506.267 million for the financial year ended Dec 31, 2009.

Banks, Genting lift FBM KLCI

KUALA LUMPUR: Banks and GENTING BHD [] help nudge the FBM KLCI barely into the positive territory at the midday break on Thursday, June 24 while key regional markets were also trading higher despite the weaker overnight close on Wall Street.

The US Federal Reserve reiterated its pledge to keep interest rates low and issued a cautionary note about volatile financial markets in light of Europe's debt woes.

The positive sentiment in key regional markets was boosted by gain in miners on expectations Australia's government would compromise on a controversial mining tax, according to a Reuters report. The sentiment also did help the local market swing back into positive zone.

Nikkei 225 +0.71% 9,993.79 Hang Seng Index +0.05% 20,867.02 Shanghai Composite +0.38% 2,579.76 Singapore STI +0.07% 2,873.18 At 12.30pm, the FBM KLCI inched up 0.38 of a point or 0.03% to 1,330.08. Turnover was 391.91 million shares valued at RM455.89 million. There were 299 gainers, 236 losers and 266 stocks unchanged.

Light crude oil rose nine sen to US$76.44 while crude palm oil futures added RM6 to RM2,390.
Public Bank rose four sen to RM11.92, AMMB one sen higher to RM5.03 and HL Bank two sen to RM8.80, pushing the 30-stock index up merely 0.57 of a point.

Other index-linked stocks which rose were Genting Bhd, up five sen to RM7.49, MISC seven sen to RM8.70, IOI Corp two sen to RM5.11 and Genting Malaysia three sen to RM2.79.

Berjaya Land was the top gainer, surging 61 sen to RM4.68 with 406,000 shares done after it reported a strong set of earnings and announced a corporate exercise.

BLand said net profit was RM72.07 million for the fourth quarter ended April 30, 2010 compared with a net loss of RM49.53 million a year ago. Revenue was RM1.13 billion versus RM971.67 million. It also proposed a one-into-two share split and bonus issue of up to 2.51 billion new subdivided shares on a one-for-one basis.

SEGi added 13 sen to RM4.62, unfazed by the unusual market activity query by Bursa Malaysia Securities.
United PLANTATION []s added 32 sen to RM14.22 with just 100 shares done, UMCCA 16 sen to RM9.16 but Sime fell two sen to RM8.14.

Petronas Dagangan was the top loser, down 43 sen to RM9.35, DiGi 22 sen to RM22.98 and Tanjong 18 sen to RM17.92.

Malaysia curve steepens as short yields fall

HONG KONG: The Malaysian yield curve steepened on Thursday, June 24 as expectations of a stronger ringgit fueled buying on the short end of the curve while long-dated bonds came under profit-taking pressure after a recent rally.

The country's central bank governor, Zeti Akhtar Aziz, told Reuters on Wednesday said the ringgit's 6% rise this year reflected improvement in its economy and the bank did not expect to heavily intervene in the currency market.

The comments prompted active trading on the short end of the curve, which had underperformed the longer end in recent weeks, and pushed five-year yields down one basis point to 3.54%, its lowest since late May.

"Sentiment is also positive after the government said it will borrow less at next week's auction which means less of a supply concern in the market," said Nik Mukharriz, a fixed-income research analyst at CIMB Investment Bank in Kuala Lumpur.

The central bank said it would sell 3 billion ringgit of bonds on June 30 less than market expectations of 3.5 billion ringgit.

But the 10-year bond yield rose 4 bps to 4.04%, as investors booked in profits from a rally that took the yield to a one-month low on Wednesday. The 10-year yield has dropped by nearly 10 bps so far this month on expectations the government would borrow less from the local markets.

During the first four months of the year, total inflows into ringgit government bonds stood at 16 billion ringgit compared with 12 billion ringgit for all of 2009, according to the central bank's website.

The ringgit, the best performing Asian currency this year, rose on Thursday, moving towards a six-week high of 3.18 per dollar hit earlier this week.

Barclays expects the ringgit to rise to 3.05 versus the dollar over the next year, its highest since the 1997 Asian crisis, as the country's bonds and stocks draw more interest from offshore investors.

In Indonesia, the finance ministry's plans to offer investors more longer-tenor paper via a debt swap is expected to steepen the yield curve slightly as investors demand a slight premium in yield terms to hold longer-maturity debt.

Handy Yunianto, a debt strategist at Mandiri Sekuritas in Jakarta, said the curve is already quite flat compared to some of its regional counterparts like Philippines and Vietnam and the debt swap would give some investors an excuse to take profits.

Ten-year yields are trading at a record low of 8%, having dropped by more than 100 basis points this month alone.

JP Morgan's index for emerging Asian bonds is up 1% so far this quarter compared to 4% in the March quarter. ' Reuters

Wall St reform bill goes into final, frantic hours

WASHINGTON: With the historic overhaul of US financial rules nearly complete, lawmakers have waited until the final, frantic hours on Thursday, June 24 to sort out the most controversial provisions in the bill.

Democrats in charge of the process appear likely to retain tough restrictions on banks' trading and investment activities that could crimp profits for the foreseeable future.

But with a self-imposed deadline of Thursday evening, last-minute dealmaking could lead to exemptions for mutual funds, manufacturers and other business interests.

The broadest rewrite of Wall Street rules since the 1930s aims to avoid a repeat of the 2007-2009 financial crisis that plunged the economy into a deep recession and led to taxpayer bailouts of troubled banks.

Negotiators aim to resolve differences between versions of passed by the House of Representatives and the Senate in a final session that could last deep into the night.

Success would allow President Barack Obama to hold up the legislation as a model for other economic powers weighing reforms at this weekend's Group of 20 meeting in Canada.

It also would give Democrats an important legislative victory, alongside healthcare reform earlier this year, as congressional elections loom in November.

Whether they can actually get it done remains to be seen.

Negotiators on the panel must walk a tightrope as they resolve the most controversial aspects of the bill, including proposals to limit banks' lucrative swaps-dealing operations and their investments in private equity and hedge funds.

Wall Street has been unable to kill both proposals as Democrats ride a wave of public disgust at the industry over the damage from the financial crisis.

Still, the members of the committee are likely to soften their toughest proposals to retain the support of centrist lawmakers whose votes will be needed for the merged bill to clear both chambers of Congress before it is sent to Obama.

Notes in every pocket
"I dredge votes on the floor of the US Senate," said Christopher Dodd, a Democrat and the lead Senate negotiator. "I come back and I feel like a bulletin board ' I've got notes stuck in every pocket."

Moderate Republican Senator Scott Brown was at the center of efforts to weaken the "Volcker rule" ' the ban on banks' trading first proposed by White House economic adviser Paul Volcker, according to aides.

Brown has pushed to allow the large insurers and mutual funds based in his home state of Massachusetts to continue their investments in hedge and private equity funds.

The latest compromise floated on Wednesday would allow banks to invest 2% of their core capital in hedge and private equity funds. But it would also strengthen the rule by giving regulators less leeway to interpret it as they see fit.

Senate negotiators have also fought to blunt the impact of new consumer-protection rules on small businesses, a key concern of moderate Republican Senator Olympia Snowe.

Another centrist, Democratic Senator Blanche Lincoln, pushed to force banks to spin off their swaps-dealing operations as she fought a primary election challenge from the left in her home state of Arkansas.

Many analysts had expected Lincoln to quietly drop the provision afterward but she has fought to keep it in and a softened version could become part of the law.

The panel will have to work through more than 100 proposed tweaks to the derivatives crackdown, which aims to tame a US$615 trillion market that exacerbated the financial crisis and led to a $182 billion taxpayer bailout of insurance giant AIG.

Wall Street has deployed an army of lobbyists to fight the measure. With the endgame at hand in Congress, their efforts may soon shift to the regulatory agencies that will put the new rules in place.

A lengthy period of uncertainty could loom for businesses as regulators like the Commodity Futures Trading Commission decide how to proceed, said Joel Telpner, a partner with the Jones Day law firm in New York who focuses on derivatives.

"What we're going to see is another round of intensive lobbying, just as we did as the legislation has been finalised," Telpner said. ' Reuters

Mainland banks and trust firms selling risky products, Fitch says

HONG KONG: Mainland China banks and trust companies are increasingly active in packaging high-yielding risky loans and selling them to investors as wealth management products without adequate disclosure and formal guidelines, according to Fitch Ratings.

The rating agency said the growth of collateralised loans sold as wealth management or trust products had accelerated in the past two years.

The size of the collateralised loans market is unknown because disclosure is extremely poor and is getting worse, said Charlene Chu, a senior director at Fitch, who estimated that the growth of loan-backed wealth management products constituted 20% of the overall loan growth at mainland banks between 2008 and 2009.

"Our view is that this is like Lehman Brothers' minibonds," Chu said. "Although the China Banking Regulatory Commission is closely monitoring the activities, it has yet to issue any formal guidelines regulating the transactions or to demand for disclosure."

The commission has told banks to diversify the assets in which wealth management and trust products invest in from loans, and banning them from selling products built around their own loans at the end of last year.

The number of loan-backed investment products launched in the last quarter of last year was estimated at 2,000. It has since fallen to about 1,500 in the first quarter of this year, but Chu believes the number of products distributed was more than her estimates, derived from public data on wealth management products sales.

To circumvent the new regulations, the transactions have recently become more complex.

While some banks have begun to sell each other's products, the trust companies, which used to take the role of structuring the deals after buying the loans from the banks and letting the banks distribute, are now selling the products themselves directly to investors.

According to Chu, there have been several cases of defaults in the past years, some of which have been settled by banks. A few were heard in courts and the results of these were not reported.

Apart from a lack of an adequate legal framework governing securitisation, one major concern of Chu is that investors, including the banks, are taking on high credit and concentration risk.

This is because products are often structured around one borrower or just a single loan. In the event of a default, it could trigger a withdrawal of liquidity to cover losses. ' South China Morning Post

#Flash* Top Glove sees FY10 earnings up 70% on-yr

KUALA LUMPUR: Top Glove Corp Bhd sees its earnings for the financial year ending Aug 31, 2010 to be between 70% and 80% higher than FY09.

It said on Thursday, June 24 that it expected FY11 earnings to increase by 20% from FY10.

The company said the FY10 projection was based on the nine-months earnings for the period ended May 31, 2010 where it reported net profit of RM200.22 million versus RM112.32 million in the previous corresponding period.

Bursa Securities queries SEG International

KUALA LUMPUR: Bursa Malaysia Securities Bhd has queried SEG INTERNATIONAL BHD [] on Thursday, June 24 over the unusual market activity (UMA) in the trading of its shares.

Bursa Securities had queried SEGi over the sharp rise in price in the shares recently.

It said in accordance with the corporate disclosure policy on response to UMA, the company had to provide Bursa Securities with an announcement for public release after making due enquiry with the directors and major shareholders seeking the cause of the UMA in the company's shares.

At 10.33am, SEG was up 16 sen to RM4.65 with 174,000 shares traded.

FBM KLCI declines at mid-morning

KUALA LUMPUR: The FBM KLCI declined at mid-morning Thursday, June 24 on the back of the overnight slip at Wall Street, as well as being dragged by losses at blue chips including Petronas Dagangan, DiGi and Tanjong.

US stocks ended lower Wednesday after the US Federal Reserve scaled back its assessment of the pace of recovery and also issued a cautionary note about volatile financial markets in light of Europe's debt woes, according to Reuters.

Data also showed sales of new US homes fell to their lowest level ever in May, it said.

At Bursa Malaysia, the FBM KLCI shed 1.57 points at 10am to 1,328.13. Gainers led losers by 193 to 133, while 170 counters traded unchanged.

Volume was 171.52 million shares valued at RM129.68 million.

Petronas Dagangan was the top loser at mid-morning and fell 40 sen to RM9.38; DiGi lost 30 sen to RM22.90, Tanjong 10 sen to RM18 and Hong Leong Bank fell eight sen to RM8.70.

Other decliners included Parkson, Measat and Guocoland.

Berjaya Land was the top gainer and rose 65 sen to RM4.72; Kawan Food added 27 sen to RM1.56 and Panasonic rose 20 sen to RM17.80. Other gainers included KFCH, SEG International, Sinotop, UMCCA and HELP International.

Kenmark was the most actively traded stock in early trade with 18.77 million shares done. The counter fell three sen to 11.5 sen. Kenmark has'' received a'' letter of demand for RM50.98 million, which is the principal sum and interest accrued for an unsecured term loan of RM50 million.

Kenmark said on Wednesday, June 23 the letter of demand was issued by Messrs Zul Rafique & Partners acting for CapOne Bhd and Malaysian Trustees Bhd.

Other actives included Ramunia, KNM, Kumpulan Europlus and Shin Yang Shipping Corp.

At the regional markets, Japan's Nikkei 225 gained 0.17% to 9,940.37, the South Korean Kospi added 0.24% to 1,729.93, Singapore's Straits Times Index up 0.07% to 2,873.04 while Shanghai's Composite Index declined 0.14% to 2,566.21, Taiwan's TAIEX Index slipped 0.10% to 7,574.81 and Hong Kong's Hang Seng Index fell 0.3% to 20,794.21 at the opening bell on Thursday.