Saturday, July 3, 2010

#Stocks to watch:* Three-A, Lafarge, GentingM, gaming

KUALA LUMPUR: With Bursa Malaysia posting its fifth day of losses on Friday, July 2, market sentiment is expected to continue to stay cautious in the week ahead, further dampened by the weak Wall Street.

On Wall Street, US stocks fell on Friday, July 2 to close out their worst week in two months as disappointing jobs data joined other recent evidence pointing to a tepid economic recovery.

The Dow Jones industrial average dropped 46.05 points, or 0.47 percent, to 9,686.48. The Standard & Poor's 500 Index lost 4.79 points, or 0.47 percent, to 1,022.58. The Nasdaq Composite Index fell 9.57 points, or 0.46 percent, to 2,091.79.

At Bursa Malaysia, stocks to watch include THREE-A RESOURCES BHD [], LAFARGE MALAYAN CEMENT BHD [] (LMC) and Genting Malaysia Bhd and PETRONAS DAGANGAN BHD [].

Companies whose subsidiaries are involved in pool betting like Multipurpose Holdings Bhd (MPHB), Tanjong plc and'' OLYMPIA INDUSTRIES BHD [] are affected by the hike in betting duties to 8% from 6% previously by the Ministry of Finance.

Three-A plans to raise up to RM62.09 million from a proposed share placement exercise of which the proceeds would be used to finance its investments and/or working capital requirements.

The share placement would involve up to 36.96 million new shares, representing 10% of its paid-up. As at June 24, its paid-up is RM73.92 million comprising of 36.96 million shares.

Lafarge SA, which owns 62.2% of LMC, plans to dispose of up to 11.2% in the latter. Lafarge SA presently holds the 62.2% stake in LMC via its subsidiaries, Lafarge Cement UK PLC and Associated International Cement Ltd.

Genting Malaysia's shares fell after it proposed to acquire Genting Singapore's under-performing UK operations, which analysts said was at the higher-end of peers' valuation. The stock may continue to see more downside pressure.

Power-gaming Tanjong declined after the Ministry of Finance raised the pool betting duty. Its unit Pan Malaysian Pools Sdn Bhd has been notified by the MoF of a revision in betting duties to 8% from 6% previously.

MPHB's subsidiary Magnum Corp Bhd has also been affected by the hike while Olympia's unit Diriwan Corporation Sdn Bhd had received a letter from the MoF on the increase in pool betting duty from 6% to 8%.

Petronas Dagangan announced a special dividend of 15 sen per ordinary share for the financial year ended March 31, 2010. It had earlier proposed the final dividend of 30 sen per share which will go ex on Aug 3.

Five world markets themes next week

LONDON: Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.


Full details of what European bank stress tests will assess are not yet clear but the European Commission's push for a "sovereign debt shock" to be among the scenarios and the larger number of banks that will be tested go some way to addressing markets' initial concern about the robustness of the conclusions that will be reached. Results for some of the biggest banks will be given to EU finance ministers on July 13 but leaks or announcements before then, especially on German landesbanks or the Spanish cajas, will have scope to rattle markets at a time when volatility has risen. Given that banks which are in good health have a strong incentive to make that known, market pressure to publish more results will only grow.


Equity markets are heading into the earnings season with more ambivalence than might seem warranted given the prospect of fairly good second quarter results. Corporate guidance will be important as will the impact of planned fiscal austerity and increases in VAT or personal/corporate taxes in determining which sectors and firms to pick. But the strong outperformance of gold and Treasuries in the first half is signaling concern about the economic outlook which may not yet be fully embedded in equity markets. While the latest Reuters asset management poll showed investors cut equity holding in June, they are still somewhat overweight stocks relative to their benchmarks, leaving scope for exposure to stocks to be cut further.


Moody's may be playing catch up with other ratings firms by putting Spain on review for a potential downgrade from its triple-A rating but it has nevertheless refocused investors' attention firmly on the euro zone's sovereign debt risks. If peripheral euro zone yield spreads resume their rise, it will raise the stakes (and the cost of funding) for Greece, which plans to tiptoe back into the market with a Treasury-bill sale later in July. Any hiccups will make it even more important that outstanding wrinkles are ironed out regarding the European Financial Stability Facility that was set up to help any euro zone member that was cut off from market financing.


Euro Libor rates are rising, and the resulting tightening of money market conditions may be happening too rapidly for the liking of some. Whether the ECB is in this camp will become clear at its post-policy meeting news conference on Thursday, its first opportunity to show how comfortable it is with the (reduced) amount of excess liquidity in the system. The amount of money rolled over from 2009's first one-year tender into three-month and six-day tenders reflects the premium that some banks are having to pay to raise funds in the open market given the ECB is charging more than the average cost for top-rated names. But it was also a function of carry trades that were in favor a year ago -- borrow money from the ECB at 1 percent and buy euro zone peripheral debt for a pickup of several percentage points -- becoming far less attractive now that peripheral euro zone sovereign credit risk has to be taken into account.


While the push up in euro Libor rates will make it more expensive to use the euro as a funding currency for carry trades, this may not be the most important consideration for euro bears if bank stress tests and/or money market signals exert renewed pressure on the financial sector. Which currency is the easiest to push the euro down against may come down to a test of official tolerance thresholds in a couple of other major currencies -- traders are pushing the Swiss franc ever higher to see when the SNB steps back into the fray and may start doing the same with the yen. - Reuters

Dollar may fall on weak economic data

NEW YORK: The U.S. dollar may fall next week as recent weaker-than-expected economic data reinforces the view U.S. interest rates will stay near zero for some time, undermining the currency's yield appeal.

The euro, which rallied sharply this week, may extend gains above $1.27 in the near term, analysts said on Friday, July 2, as pessimism over European debt and funding problems eased with a break of key technical levels adding to bullish momentum.

After rising on risk aversion as a result of Europe's debt troubles in recent months, the dollar fell this week in tandem with losses in U.S. stocks, sparking speculation investors' focus may be shifting from the euro zone crisis to the possibility of a stalled recovery in the U.S.

"We are going to see further modest pullbacks in the U.S. dollar, but the euro is going to set the tone," said Ashraf Laidi, chief market strategist at CMC Markets in London.

"We may not be far from reaching a stage of concerted dollar decline because of the potential for the Federal Reserve prolonging (low) interest rates for a longer period of time."

On Friday, the dollar fell against the euro after a report showed a larger-than-expected drop in U.S. non-farm payrolls to 125,000 for June, even as the unemployment rate unexpectedly fell to 9.5 percent.

The U.S. jobs report follows weak housing, manufacturing and consumer confidence data earlier in the week.

On the week, the ICE futures U.S. dollar index .DXY, which tracks the greenback against a basket of six currencies, fell 1.1 percent, the fourth week of declines.

The euro gained 1.5 percent against the dollar this week reversing a loss from the prior week.

The dollar fell for the fourth straight week against the yen, losing an additional 1.8 percent and bringing the total loss over the four weeks to 4.5 percent.

"The market's emphasis on the European debt crisis eased and the macroeconomic concerns grew," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York. "In the near-term the focus on macroeconomic challenges is dollar negative."

The inverse relationship between the dollar and equities showed signs of breaking down this week, as both Wall Street and the greenback fell. For the past several weeks, the dollar has tended to rise when stocks fell on safe haven bids.

The 25-day correlation coefficient between the S&P 500 index and the U.S. dollar index .DXY was positive 0.04 on Friday, Reuters data showed, showing almost no relationship. In mid-May, the correlation was a strong negative 0.91.


Chart analysis points to further gains in the euro above $1.27 in the near term, with $1.2770 seen as resistance. A break of that level may push the euro/dollar toward $1.2950 and $1.30, analysts said.

Strategists at Citigroup said a close above $1.2490 in euro/dollar on Friday will "complete the bullish outside week" and a close above the 55-day moving average at 1.2550 will "confirm the bullish break."

"If achieved, these patterns would strongly suggest that the next significant directional move in euro/dollar will be up to $1.31," they wrote in a note.

Despite the potential for a near-term bounce, analysts remain bearish on the currency, saying the economic outlook for Europe remains fragile.

Three-month euro/dollar risk reversal was at -1.8 after the jobs data, according to Reuters data, from -1.85 before, with a bias to euro puts and dollar calls. A negative risk reversal shows greater demand for put options relative to calls or that put volatility is greater than call volatility, implying more investors are betting the currency will fall than rise.

Calls are options granting the right to buy an asset, and puts give the right to sell.

But volatility in three-month euro/dollar options fell to 13.61 percent on Friday after the data from 14 percent before the report. That indicates investors lowered their expectations for volatility in the single currency over the coming 90 days from prior to the jobs report.

Jack Iles, a portfolio manager at MFC Global Investment Management in Boston, expects the euro/dollar to trade in a range between $1.20 and $1.25.

"Until there's more clarity with respect to what's going on with the European banking community and stress tests, you'll see this type of (range-trading) action," he said. "If the euro spiked to $1.28, I would probably consider selling it."

Also next week, central banks in Australia, euro zone and UK are all scheduled to hold interest-rate meetings. - Reuters

Wall St falls to close out worst week in two months

NEW YORK: U.S. stocks fell on Friday, July 2 to close out their worst week in two months as disappointing jobs data joined other recent evidence pointing to a tepid economic recovery.

Adding to stocks' weaker tone was a technical move that indicated more selling pressure may be ahead. The S&P 500's 50-day moving average broke below its 200-day moving average, a break known as the "death cross."

Non-farm payrolls fell in June for the first time this year, adding to a slew of economic reports signaling the U.S. recovery is slowing.

"It's not really possible to be bullish about the jobs report," said Linda Duessel, market strategist at Federated Investors in Pittsburgh.

"The people that are bidding down this market are looking at the many economic statistics we've had throughout this month of June, which were disappointing to slightly disappointing."

Financials and economically sensitive sectors were the biggest decliners. The S&P 500 financial index shed 1.1 percent, while consumer discretionary stocks were down 1.2 percent.

Volume on Friday was among the five lightest days of the year, with many participants leaving early for the long Fourth of July holiday weekend.

The Dow Jones industrial average dropped 46.05 points, or 0.47 percent, to 9,686.48. The Standard & Poor's 500 Index lost 4.79 points, or 0.47 percent, to 1,022.58. The Nasdaq Composite Index fell 9.57 points, or 0.46 percent, to 2,091.79.

Earlier in the week, the S&P fell below the 1,040 level, viewed by many analysts as a critical support level which it had successfully held several times in the past five months.

For the week, the Dow fell 4.5 percent, the S&P lost 5 percent and the Nasdaq shed 5.9 percent.

According to technical analysts, a "death cross" occurs when a shorter-term average falls below a longer-term average.

The phenomenon last occurred between the 50- and 200-day moving averages in December 2007, soon after the market began a decline that eventually took the S&P 500 to 12-year lows.

The Labor Department reported non-farm payrolls dropped by 125,000, the largest decline since October and affected by the loss of temporary government census jobs.

The unemployment rate fell to 9.5 percent, the lowest level since July, but only because a flood of jobless workers gave up their employment search. Private hiring rose 83,000, the department said, up from the previous month.

Other weak data on Friday came in new orders for U.S. factories, which showed the sharpest drop since the depth of the recession and the first decline in nine months.

U.S. pharmaceutical stocks advanced after a source familiar with the situation said French drugmaker Sanofi-Aventis was preparing an acquisition of $20 billion or more in the United States. Genzyme Corp rose 5.9 percent to $52.80 and Biogen Idec Inc gained 5.8 percent to $49.42. - Reuters


Friday, July 2, 2010

Formula One puts focus back on track

LONDON: Martin Whitmarsh has had a spring in his step of late, and not just because his McLaren team are leading both Formula One championships into next week's British Grand Prix.

After a tough 2009, the battle-hardened Formula One Teams' Association (FOTA) chairman is enjoying a season where the main focus is the contest on the track rather than the fighting in the grand prix paddock.

A year ago, the teams were split and the threat of a breakaway series hung over the sport but that seems like ancient history now, even if some participants are still wary of tempting fate.

The departure of Max Mosley as International Automobile Federation (FIA) president, replaced by former Ferrari boss Jean Todt last October, has changed the landscape as has a new commercial deal with F1 supremo Bernie Ecclestone.

The result, so far, has been a season where the racing -- thrilling and with five different championship leaders already after nine rounds -- has taken centre stage.

"This could go down as one of the greatest championships," Whitmarsh told Reuters at the European Grand Prix in Valencia last weekend.

"For all of us, and I think you sense it, it's just so much more enjoyable when our energies are expended on trying to beat each other fairly and squarely on the other side of the pit wall (rather) than get pummelled over here in some political maelstrom," added the Briton.

"That (the paddock politics) may create some headlines and speculation but is deeply depressing to be involved in for months on end, I can assure you."


Mosley's reign was always controversial, even if measures he rammed through have made the sport safe enough for drivers such as Red Bull's Mark Webber to walk away from the huge crash he had in Valencia on Sunday.

Adept at wielding both carrot and stick, he branded some of the team bosses 'loonies' at Silverstone last year as relations plunged into crisis.

Todt, who has been a low-key presence and attended just two races this year, has started off with a very different approach.

The Frenchman has appeared hands-off, delegating to others and setting up a system of former drivers assisting the stewards on race weekends, while there has also been an absence of evident political spin.

"It's good news," Mercedes motorsport vice-president Norbert Haug told Reuters. "People know they need to behave, they need to work together and that's how it should be; work together and have a fair fight on the racetrack."

The teams, through FOTA, have appeared united as never before and are working together to reach a consensus on issues such as the new tyre supplier and affordable TECHNOLOGY [].

"I think there is starting to be a much better working relationship between FOTA and FOM (Ecclestone's Formula One Management) and the FIA," said Whitmarsh, who took over from Ron Dennis at McLaren last year.

"I think Jean has had a style which is thought not to be generally confrontational, recognising that all of the parties need to work together.

"I also think that Jean's introduction of a driver amongst the stewards has actually given quite a good calming effect on the stewarding system and it's brought an understanding to racing."

Problems thrown up by the deployment of the safety car, in Monaco and Valencia, have had the immediate sting drawn by the governing body agreeing to revisit the regulations.


Last year was poisoned by scandal and controversy, as well as a standoff over cost cuts and direction of the sport.

Whitmarsh was involved in one row when he had to apologise unreservedly to the FIA for McLaren and 2008 world champion Lewis Hamilton misleading stewards to gain an advantage in the season-opening Australian race.

Renault were then given a suspended permanent ban after a plot to rig the 2008 Singapore Grand Prix.

This season's flare-ups have so far been nothing unusual for the intensely competitive sport -- Renault's unhappiness with McLaren's 'F-duct' before everyone decided to copy it, Ferrari's fury at the stewards' tardiness in punishing Hamilton for overtaking the safety car in Valencia.

"I think there's been a gradual process over a number of years of people learning to work together a lot better," said Mercedes GP chief executive Nick Fry.

"From a team point of view we all get on remarkably well. I think the change in some of the characters in the teams has probably helped that," he told Reuters.

"Jean has started off with a much more communicative and conciliatory attitude than his predecessor and I think that's helped the situation. I think all you are seeing is probably a maturing of Formula One."

Whitmarsh said the recent debate over the 2011 tyre contract was an example of everyone pulling together and the big teams helping the smaller ones, in contrast to the past.

"The greater good won out," he said. "There was a compromise on the part of the teams, the FIA and the commercial rights holder to get us to a solution which is what the sport needs." - Reuters

Internal auditors' role in drafting writing guide for directors

KUALA LUMPUR: The Securities Commission and Bursa Malaysia want a task force to draft a new guide for writing directors' statements which is in dire need of reforms.

Institute of Internal Auditors Malaysia (IIA Malaysia) president Hashim Mohammed suggested the IIA be the secretariat to facilitate the drafting of the statement until completion.

"The rest of the task-force members should include key professional bodies as well as accounting firms and senior management of various industries," he said on Friday, July 2 at the Corporate Governance (CG) Week 2010.

The guide will be part of the rules under the new corporate governance blueprint announced by the SC on Monday.

"The directors' statement should not merely be a cut-and-paste job, but one that provides holistic assurance which involves an objective examination of evidence to provide independent assessment on governance systems, risk management and internal control," said Hashim.

IIA Malaysia vice president, Josephine Low Suet Moi said while the directors' statement may be under the responsibility of the board and senior management, "external auditors also have a role to play."

Hashim said four important changes should be implemented in internal audit functions. They are:

One is that all activities and audit engagements should be based on risk priorities. Secondly, internal auditors should coordinate all sources of assurance, including liaisons with external auditors at least once annually. Thirdly, internal auditors should implement two written assessments each year: one on the effectiveness of internal control systems and another on the effectiveness of the board. Finally, the chief audit executive should have a standing invitation to executive committee meetings."
Directors are expected to facilitate this move towards better corporate governance by becoming more business-savvy and risk-literate.

"They must ensure that the management performs an adequate level of due diligence pertaining to the decisions that they take in addressing exposure to risks," he said.

Emulating Bank Negara bank inspections

KUALA LUMPUR: Bank Negara's inspections of banks should be emulated to ensure companies promote higher standards of corporate governance, the Securities Commission-Bursa Malaysia Corporate Governance Week 2010 was told.

The chairman of the Columbus Circle Group Navin Pasricha said on Friday, July 2 that Bank Negara's focus on banks in terms of financial regulation should be the benchmark applied for corporations.

This was to ensure better standards of compliance nationwide. Corporate governance inspections and enforcement represented by a national body would "stoke the fire of corporate governance", he said at one of the sessions

"At the same time, we must not forget that ongoing education is a big issue. There needs to be a bigger focus on the training for companies," he added.

Abdul Kadir bin Md Kassim, a practising lawyer, and vice president of the Malaysian Institute of Corporate Governance David W. Berry, agreed with Pasricha's proposal.

Berry said Malaysia was "very patchy on the education front" when it came to corporate governance.

"Banks have a comprehensive training programme run by Bank Negara, which lasts eight days and deals with four modules. The programme previously lasted 10 days, and may be increased to that length again soon," he said.

"This sort of training is not available for public-listed companies. We need to get the essence of this programme out there to them. The overlay of the Bank Negara programme is relevant to all company directors.

"Right now, the 11/2 day training sessions they receive are not sufficient as they are only primers. There must be an opportunity for a more consistent education. We must move away from the short-term to the long-term," Berry said.

He also urged company directors be more proactive and not merely abiding by the law in practising corporate governance.

"Conforming and performing is not the same thing. Companies who comply with corporate governance regulations are sometimes more concerned with doing what's legal than what's right," he said.

"We have to away from compliance and towards delivery. There needs to be a set of deliverables for directors. It is far easier for them to fulfil what their job requires of them if they have a set of expectations to fulfil in the first place."

Blue chips close lower for 5th day

KUALA LUMPUR: Blue chips closed weaker on Friday, July 2, the fifth straight day of losses for the FBM KLCI as investors stayed on the sidelines following the batch of negative international economic data and corporate developments.

The FBM KLCI closed 1.32 points lower at 1,307.44. Turnover was 626.19 million shares valued at RM974 million. Losers beat gainers 300 to 186 while 263 stocks were unchanged.

Genting Malaysia was in focus, down 12 sen to RM2.62, the lowest since May 27 as investors reacted negatively to its proposal to acquire Genting Singapore's under-performing UK operations, which analysts said was at the higher-end of peers' valuation.

Genting Malaysia was the second most active counter with 83 million shares done. Genting-CN lost 10 sen to 80 sen.

Tanjong fell 24 sen to RM17.06 after the Ministry of Finance raised the pool betting duty.'' MPHB managed to rebound to close three sen higher to RM1.99, off the intra-day low of RM1.90. Berjaya Sports Toto lost 10 sen to RM4.12.

Other decliners among the 30-stock FBM KLCI were CIMB, down four sen to RM7.04, Axiata two sen to RM3.88 and HLFG six sen to RM8.30.

However, GENTING BHD [] rose nine sen to RM7.25, Maybank three sen to RM7.57 after it was upgraded to a Buy from Hold by AmResearch while Tenaga added four sen to RM8.40 and YTL five sne to RM7.40.

DFZ was the top loser, down 25 sen to RM3.44.'' IRCB fell 14 sen to 64 sen with 33.5 million shares done after proposing a share capital reduction and rights issue.

Carotech lost 4.5 sen to nine sen in very active trade after defaulting on the principal amd interest servicing for certain loans. Hovid, which owns 58% of Carotech, lost 3.5 sen to 17 sen.

Among the gainers were Nestle, up 18 sen to RM34.86, Proton 15 sen to RM4.57 and EON Cap 11 sen to RM6.98.

Massive $453b fled safe-haven funds 1H

LONDON: A massive $453 billion fled safe-haven money funds in the first half of 2010, heading for bonds and emerging stocks as investors fretted over the global economy but seemed more confident about the developing world's outlook.

Data from fund tracker EPFR Global shows that investors, despite their risk-averse mood, are reluctant to keep cash in low-yielding money market funds but the stuttering global recovery means they largely favour fixed income to equities.

The outflows come on top of the $320 billion money market funds lost in the last six months of 2009.

However emerging markets are continuing to power ahead, adding to the inflows seen last year, with emerging bond as well as stock funds pulling in more fresh cash.

"The numbers that catch the eye... are the massive outflows from money market funds and the money committed to emerging markets bond and equity funds," EPFR's senior analyst Cameron Brandt said in a statement released late on Thursday.

"They suggest there is still a real desire to put money preserved from the 2008 downturn back to work and a belief emerging markets offer the best combination of risk and reward," Brandt said, adding some investors seem to perceive emerging bonds as a "safe haven".


Bond funds were the main beneficiaries of the half year, receiving a total $112.7 billion, showing investors' preference at this time for fixed income over equity.

U.S. bond funds pulled in $48.36 billion while Global bond funds saw inflows of $38.28 billion. Emerging bond funds absorbed $17.06 billion, with more than half going to local currency debt funds, EPFR said.

Emerging bond funds ended the first half of 2010, having absorbed 176 percent of the total absorbed in 2005, to date the record-setting year for this fund group.


EPFR said emerging stock funds had pulled in a total $17.39 billion between January-June, though this was down from $47.73 in the last six months of 2009. Inflows to EMEA rose a touch, compared with the second half of 2009, rising to $2.46 billion.

But Latin American stock funds lost ground as Brazil's October election and monetary tighting saw investors pull out $2.3 billion. Overall, flows to BRIC stocks were 5 percent of the total taken by emerging equity funds, versus 12 percent in 2009.

Flows to Asia ex-Japan funds were in the black but fell by two-thirds to $3.91 billion.


Developed equities saw net outflows of $15.67 billion in the first half, losing the $12.99 billion received in the second half of 2009, EPFR said. Western Europe lost $12 billion, reflecting the euro crisis and the bloc's weak growth outlook.

But German and UK equity funds ended the half-year with inflows of $493 million and $693 million respectively, showing investors are differentiating between strong and weak markets.

U.S. stock funds shed $11.55 billion but EPFR noted this was the smallest outflow over six months since the period spanning the the last 2006 quarter and the first 2007 quarter.

Japanese equity funds took in $1.9 billion.


Commodity funds took in $10.7 billion and energy funds absorbed $1.5 billion, though inflows slowed a bit from second half 2009 levels. Most of the commodity inflows came in the second quarter when investors scrambled to boost exposure to precious metals, EPFR noted.

Financials extended their losing streak from last year, shedding $693 million, EPFR said, adding investors were fretting about new regulations and the amount of Greek sovereign debt lurking on the books of major banks. - Reuters

BOC plan for $6 bln share issue to hurt markets, AgBank

HONG KONG/SHANGHAI: Bank of China could announce a $6 billion share issue soon, sources said, in a move that may undermine the confidence of an already jittery stock market and make life tough for rival Agricultural Bank of China's mega IPO.

Bank of China's move, together with what could be the world's largest-ever IPO from AgBank, will aim to garner $30 billion in the weeks ahead, severely testing the appetite of investors in Hong Kong and Shanghai, where stocks have fared poorly amid a broader global sell-off.

"Bank of China's fund-raising plan would be another blow to an already fragile market, and could also sap demand for AgBank shares and drive down valuations of banking stocks," said Jin Lin, a Shanghai-based analyst at Orient Securities.

"For mainland investors, it triggers fears that Bank of China may also announce share sale plans in the domestic market."

Bank of China, the country's fourth-largest lender, plans to tap its shareholders for about $6 billion via a rights issue, complementing a plan announced last month to raise $5.9 billion through a convertible bond sale in Shanghai, three sources who are familiar with the matter said on Friday.

They said the rights issue would occur in Hong Kong. But another source said the dual-listed bank could also be considering a rights issue for its shareholders in Shanghai, as domestic media reported the two issues could raise up to 60 billion yuan ($8.85 billion) combined.

Underwriters for the bank, whose Hong Kong and Shanghai listed shares were both suspended pending an announcement, were set to hold a meeting on Friday on the matter, said one of the sources.

A Bank of China spokeswoman had no comment on the suspension.

Bank of China had said in March it aimed to offer more Hong Kong-listed H-shares for subscription, which could be 20 percent of its H-share capital, potentially strengthening its balance sheet by about $7.7 billion.


The latest BOC plan would come as AgBank, China's third-largest lender, prepares for a $20 billion-plus initial public offering via a dual listing in Hong Kong and Shanghai, in what could become the world's largest-ever IPO.

AgBank's offer to institutional investors for the Shanghai portion met with strong demand when it launched on Thursday, drawing 30 billion yuan in bids from potential strategic investors, a source with direct knowledge of the situation said.

Markets were unimpressed. Hong Kong shares closed at a three-week low on Friday, following a 5.2 percent decline in the second quarter. And Shanghai shares hit a 15-month low on Friday before reversing course to end up for the day. Still, they are down 27 percent so far this year.

Bank of China, AgBank and most other major Chinese lenders have announced plans to raise billions of dollars this year to bolster capital adequacy ratios that fell following a lending binge as part of China's 4 trillion yuan economic stimulus plan at the height of the global downturn.

The banking regulator is strongly pushing for the fund-raising, concerned about weakened balance sheets that could further deteriorate if many of the loans made during the lending boom start to go bad.

Others who have announced potential fund-raising plans include the nation's top two lenders, ICBC and China CONSTRUCTION [] Bank, although both of those plans could be delayed until markets improve, according to officials and media reports.

Chinese media also reported in May that the state council, or cabinet, has approved a combined 287 billion yuan fund-raising quota for the country's four biggest lenders.

"The market, whose liquidity is already weakened, is sure to be pressured if a 60 billion yuan fund-raising is being carried out," said Sheng Nan, an analyst with UOB Kay Hian, in reference to talk of Bank of China's plans. - Reuters

Three-A Resources to raise RM62.09m from share placement

KUALA LUMPUR: THREE-A RESOURCES BHD [] plans to raise up to RM62.09 million from a proposed share placement exercise of which the proceeds would be used to finance its investments and/or working capital requirements.

The company said on Friday, July 2 the share placement would involve up to 36.96 million new shares, representing 10% of its paid-up.

As at June 24, its paid-up is RM73.92 million comprising of 36.96 million shares.

"The company proposes to place out the placement shares to third party investors. At this juncture, the placees have yet to be identified," it said.

Three-A said the raising funds via a private placement would be most appropriate to raise funds as it would enable the group to raise funds without incurring interest cost as compared to bank borrowings.

Lafarge SA looking to sell 11.2pct stake in local subsidiary

KUALA LUMPUR: Lafarge SA, the single largest shareholder of LAFARGE MALAYAN CEMENT BHD [] (LMC) is looking to dispose of up to 11.2% in the latter.

Lafarge SA, which presently holds 62.2% of LMC, said on Friday, July 2 it had decided to explore the potential sale of a minority interest of up to 11.2%.

Lafarge SA presently holds 62.2% shareholding in LMC via its subsidiaries, Lafarge Cement UK PLC and Associated International Cement Ltd.

"Lafarge SA would remain the majority shareholder, with a minimum 51% shareholding and management control of the company.
This transaction would contribute to Lafarge SA's divestment programme for year 2010," it said.

Putrajaya Perdana secures RM321.5m contract

KUALA LUMPUR: PUTRAJAYA PERDANA BHD [] has secured a RM321.5 million contract to construct a commercial, retail and hotel building along Jalan Tun Razak here.

The company said on Friday, July 2 it had accepted the contract from The Intermark Sdn Bhd to undertake the CONSTRUCTION [] of the new Intermark retail podium and tower.

"The contract period for the project is 23 months, that is to commence on July 14, 2010 and to complete by June 15, 2012," it said.

Putrajaya Perdana said the project was expected to contribute positively to the earnings and net assets of the group for the financial years ending Dec 31, 2010 to 2012.

Bank Islam to venture into Islamic pawn-broking biz

KUALA LUMPUR: BIMB Holding's Bhd's 51%-owned Bank Islam Malaysia Bhd has entered into a share subscription and shareholders' agreement (SSA) with Farihan Corporation Sdn Bhd and Rakit Induk Sdn Bhd to venture into the Islamic pawn-broking business.

Under the agreement signed on Friday, July 2, Bank islam will subscribe for two million new ordinary shares of RM1 each in Farihan at an issue price of RM1. Upon completion of the proposed subscription, it will hold 80% stake in Farihan.

BIMB said under the SSA, Rakit Induk would work with Bank Islam to develop the Islamic pawn-broking business in Malaysia.

For the duration of the agreement and for five years after completion of the allotment and issue of the two million shares to Bank Islam, Rakit Induk and its related corporations (other than Farihan) and employees must not engage in any Islamic pawn-broking or any other business undertaken by Farihan.

Bank Islam was also granted a call option whereby it may at any time from Jan 1, 2012 to Dec 31, 2012 give written notice to Rakit Induk requiring the latter to sell all shares held by Rakit Induk to Bank Islam at a price equivalent to the net tangible asset per share together with a premium of 20% or RM1, whichever is higher.

IRCB hits 6-month low

KUALA LUMPUR: Shares of Integrated Rubber Corp Bhd fell to a six-month low of 64 sen on Friday, July 2 after it proposed a share capital reduction and rights issue.

At 4.29pm, it was down 13.5 sen to 64.5 sen with 31 million shares done.

The share price rose to a high of RM1.61 on Jan 18.

IRCB, a small rubber glove maker, had proposed to cancel 30 sen of the par value of every 50 sen each in IRCB to be set-off against the accumulated losses.

It also proposed a proposed renounceable rights issue of 355.21 million new 20 sen shares in IRCB together with 236.81 million free detachable new warrants on the basis of three rights shares together with two warrants for every two ordinary shares of 20 sen each in IRCB from the proposed capital reduction.

Maybank Islamic sees strong growth in deposits, financing

KUALA LUMPUR: Maybank Islamic Bhd expects strong growth of between 20% and 30% for both deposits and financing for financial year ending June 30, 2011 in line with an improved economic environment.

Its chief executive officer, Ibrahim Hassan, said for the last financial year, its deposits grew by 32% to RM7.9 billion.

For the first six months of financial year ended 2010, the bank posted a growth of 18% for financing and 15% for deposits compared with the previous corresponding period, he said.

"The bank expects to see a double-digit growth for deposits and financing for this year," he told a media briefing after the signing of a memorandum of understanding with Yayasan Waqaf Malaysia (YWM) to launch the waqf service here on Friday, July 2.

Waqf is a structured community-giving initiative that allows customers to place deposits as waqf contribution.'' ''

Also present were Maybank Islamic chairman, Datuk Seri Ismail Shahudin and YWM vice chairman, Datuk Dr Sohaimi Mohd Salleh and chief executive officer, Azri Ahmad.

Ibrahim said the bank expected to record between RM2 million and RM3 million in contributions from its waqf service for the first year.'' Currently, the bank has three million customers, he said.

He said Maybank Islamic was the first financial institution in the country to offer such an integrated waqf solution to customers.

"With waqf, our institutional and retail customers would have the opportunity to participate in a structured community-giving programme as part of their wealth distribution strategy.

"This service is part of the bank's ongoing strategy to develop innovative products and services that will not only benefit its customers but also reinforce Malaysia's leadership in Islamic banking services," he said.'' ''

Maybank Islamic has 12 full-fledged Islamic branches as well as through over 380 Maybank branches nationwide.

It plans to open another two branches to be located in I-City Shah Alam and Melaka this year.

Maybank Islamic has assets exceeding RM40 billion. - Bernama

AmResearch ups Maybank to Buy from Hold

KUALA LUMPUR: AmResearch has upgraded its rating on Malayan Banking to BUY from HOLD with new fair value of RM8.60 a share share (from RM7.20) or fairprice to book/BV of 2.05x (from 1.8x previously).

It said on Friday, July 2 that based on latest guidance from management, it came to understand that Maybank was unlikely to report large clean-up loan loss provisions or impairment loss on investments, in its upcoming final quarter for FY10.

AmResearch also said asset quality data was not expected to vary much when the company switches over to the new FRS139 provisions by its September 2010 quarter.

Maybank, it said, was relatively more confident, hinting that it is likely to be able to meet consensus net earnings of RM3.639 billion FY10F.

"We believe the four major catalysts for Maybank would be (1) Absence of large provisions in 4QFY10; (2) Ability to achieve consensus net earnings forecasts of RM3.639 billion for FY10F; (3) Relatively better-than-expected impaired loans data arising from FRS139, which will be reported by November 2010; and (4) Achieving its targeted net earnings of RM4.2 billion FY11F," it said.

RAM Ratings reaffirms ratings of MRCB Southern Link?s RM1.04b sukuk

KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the respective AA3 and A2 ratings of MRCB Southern Link Berhad's (MRCB Southern Link or the Company) RM845 million Secured Senior Sukuk (Senior Sukuk) and RM199 million Junior Sukuk (Junior Sukuk), with a stable outlook. The Senior and Junior Sukuk will collectively be referred to as 'the Sukuk'.

Below is the report issued by RAM Ratings on Thursday, July 1.

MRCB Southern Link is wholly owned by MRCB Lingkaran Selatan Sdn Bhd (MRCB Lingkaran Selatan or the Concessionaire) - the concessionaire for the proposed Eastern Dispersal Link Expressway (EDL or the Project) in Johor Bahru.

The Company has raised funds via the Sukuk and a syndicated transferable term loan of up to RM220 million for the development of the toll-road project, with financial commitments on these instruments to be supported by back-to-back payments from the Concessionaire once tolling operations start.

Meanwhile, the security package ensures that the sukuk holders have full and direct recourse to the Concessionaire. In this regard, RAM Ratings duly recognises the strong credit link between MRCB Southern Link and MRCB Lingkaran Selatan; as such, we view both companies in tandem from a credit standpoint.

Meanwhile, the Project has a unique tolling concept, where all vehicles entering and exiting Malaysia via the Johor-Singapore Causeway (the Causeway) will be funnelled through the EDL.

This ready source of traffic flow ' last recorded at 82,628 vehicles per day in September 2008 ' negates, to a large extent, concerns over the potential volatility of actual traffic volume once tolling begins.

In spite of the encouraging traffic flow along the Causeway, RAM Ratings has opted to maintain an average daily tollable traffic volume forecast of roughly 62,000 vehicles in 2012, based on the recent announcement of a 30% reduction in toll rates for the Malaysia-Singapore Second Crossing and potential competition from a proposed rail link with Singapore.

At the same time, the ratings are also supported by MRCB Southern Link's projected debt-servicing ability, well-structured debt-repayment profile and relatively tight financing covenants.

On the other hand, the greenfield nature of the Project remains a risk factor. As at 25 December 2009, the Project was 19.32%-completed under the revised work plan. Land acquisition has been completed and is likely to be within budget, although squatter families are preventing access to certain parcels of land.

While we understand that the Concessionaire fully intends to take the necessary steps to ensure that this does not jeopardise the timely completion of the Project, we will continue monitoring the relevant developments on this front. At present, the EDL remains on track towards commencing toll collection on 1 July 2012, as per RAM Ratings' expectations.

Parkway shares surge on expected bidding war

SINGAPORE: Shares of Parkway Holdings rose as much as 8.4 percent on Friday, July 2 slightly above the price offered by two rival bids for the Singapore-based hospital operator, as investors expected a bidding war to ensue.

India's Fortis Healthcare and its founding family launched a S$3.80-a-share bid for Parkway on Thursday, valuing Asia's biggest hospital group at $3.1 billion topping a rival S$3.78-a-share offer by Malaysian state fund Khazanah.

By the midday break, Parkway shares were at S$3.85, with nearly 4.4 million shares changing hands, 60 percent higher than the 90-day average volume. The shares hit an intra-day high of S$3.87. The stock was suspended on Thursday.

"Parkway's shares have surged as investors are hoping that Khazanah will make another offer now," Lynette Tan, an analyst at DMG & Partners Securities said.

"Khazanah and Fortis have pretty good synergistic opportunities with Parkway as both Malaysia and India have growing medical tourism and healthcare markets," Tan added.

Both Fortis and Khazanah want to use Parkway, which runs 16 hospitals in Singapore, Malaysia, India and China, to spearhead their regional expansion in the booming healthcare market.

Parkway's prized assets are Singapore hospitals Gleneagles and Mount Elizabeth, whose patients include business leaders and politicians from the region.

Fortis, which controls just over 25 percent of Parkway, had intended to build a controlling stake in the firm before Khazanah made a surprise $835 million partial offer in May to lift its stake to 51.5 percent from around 24 percent.

Moh Tze Yang, an analyst at SIAS Research said he is cautious about Fortis' ability to secure the necessary funding if it manages to win the bid for Parkway.

Fortis has lined up a one-year bridge loan of $1.5 billion to back its open offer, according to a banking source. The loan, to be backed by shares of Parkway, is spearheaded by Axis Bank. Royal Bank of Scotland and ING Bank are also working on separate financing for Fortis.

Last week, Fortis said the Government of Singapore Investment Corp (GIC) had decided to defer a preferential investment but the sovereign wealth fund would evaluate participating in broader fund raising by Fortis. GIC holds Fortis convertible bonds.

Fortis shares were off 0.3 percent on Friday on the Bombay exchange. - Reuters

Doraley Assets cuts SAAG stake

KUALA LUMPUR: Doraley Assets Management Ltd has ceased to be a substantial shareholder in SAAG CONSOLIDATED (M) BHD [] after the disposal of 50.5 million shares from June 18 to 24.

Filings to Bursa Malaysia showed the British Virgin Islands-registered fund still has 82.18 million shares after the recent disposals.

Doraley sold 3.4 million shares on June 16 and 10 million shares on June 21 and it continued to reduce its stake with the disposals of seven million units and 10.5 million units on June 22 and 23.

The latest disposal saw it selling 19.5 million shares on June 24.

Based on SAAG's paid-up of 1.809 billion shares, the 82.18 million units represent 4.54%.

SAAG share price was trading betweem 8.5 sen and nine sen during the period. For the year-to-date, it is down from a high of 18.5 sen on Jan 4 this year and the average price is 12.3 sen.

Genting Malaysia, gaming stocks fall

KUALA LUMPUR:'' Asian markets were mixed at midday on Friday, July 2 as frayed nerves awaited US employment data amid multiple concerns over the health of the global economy, including the eurozone debt crisis, a slowdown in China's growth and weak US economy.

Investors are now awaiting the US employment report later in the day which is expected to show a decline of 110,000 in non-farm payrolls, the first fall this year, according to a Reuters poll.

A better-than-expected jobs report could spark a bout of short-covering and provide a bounce for stocks ahead of the long US weekend, it said.

At Bursa Malaysia, Genting Malaysia and gaming counters fell on higher duties imposed with effect from June.
At 12.30pm, the FBM KLCI lost 1.23 points to 1,307.53. There were 200 gainers and 238 losers, while 238 counters traded unchanged. Volume was 337.92 million shares valued at RM425.29 million.

Nikkei 225 +0.32% 9,221.11 Singapore's Straits Times Index +0.52% 2,835.09 Hang Seng Index -1.46% 19,834.45 Shanghai Composite Index -0.69% 2,357.31 ''

Among the major losers, Genting Malaysia fell 12 sen to RM2.62, Tanjong 26 sen to RM17.04, CIMB five sen to RM7.03, PLUS and Axiata two sen each to RM3.37 and RM3.88, while Sime Darby fell one sen to RM7.78.

Genting Malaysia's shares fell after it proposed to acquire Genting Singapore's under-performing UK operations, which analysts said was at the higher-end of peers' valuation.

Power-gaming Tanjong declined after the Ministry of Finance raised the pool betting duty. Its unit Pan Malaysian PoolsSdn Bhd has been notified by the MoF of a revision in betting duties to 8% from 6% previously.

Other losers were DFZ Capital, APM Automotive, Hartalega, Shell and MBM Resources.

MISC added 12 sen to RM8.612, KLK six sen to RM16.46, Genting and Petronas Gas five sen each to RM7.21 and RM9.90, Tenaga four sen to RM8.40, MAS three sen to RM2.04 and Maybank two sen to RM7.56.

The other gainers included Nestle, Mamee, KKB Engineering, MPI and Latitude Tree.

Sinotop's rights entitlement (Sinotop-OR) were most actively traded this morning with 64.6 million units. It declined half a sen to 4.5 sen.

Other actives included Genting Malaysia, Carotech, Talam, Hovid, Compugates and Key Asic.

Global economy worries weigh on Asian markets

KUALA LUMPUR: Asian stocks fluctuated on Friday, July 2, on the back of the overnight dip at Wall Street and as concern about the strength of the global economic recovery mounted ahead of US jobs data.

Worries about the health of the global economic recovery were underscored by weak US manufacturing and employment data, causing investors to pull back ahead of a long holiday weekend in the United States, according to Reuters.

At Bursa Malaysia, the FBM KLCI declined 3.84 points to 1,304.92 at 10am, weighed down by losses including at Tanjong, Genting Malaysia and MISC. Gainers trailed losers by 93 to 137, while 139 counters traded unchanged. Volume was 131.85 million shares valued at RM142.06 million.

At the regional markets, Japan's Nikkei 225 added 0.47% to 9,235.05, Taiwan's Taiex Index up 0.99% to 7,235.93, the Singapore Straits Times Index rose 0.81% to 2,843.30 and the South Korean Kospi Index edged up 0.05% to 1,687.04.
Meanwhile, Hong Kong's Hang Seng Index fell 0.34% to 20,059.56 and the Shanghai Composite Index slipped 0.18% to 2,369.55.

At Bursa Malaysia, gaming-related counters fell on the government's move to raise duties and the counters which fell included power-to-gaming Tanjong.

Caortech and Ngiu Kee fell on concerns about their debts repayments ability.

Genting Malaysia was the most actively traded stock with 28.22 million shares done. The counter fell 19 sen to RM2.55.
The company's shares fell after it proposed to acquire Genting Singapore's under-performing UK operations, which analysts said was at the higher-end of peers' valuation.

Tanjong fell 30 sen to RM17, BAT and MISC 12 sen each to RM43.98 and RM8.37, while DFZ Capital lost 35 sen to RM3.34.

Other decliners included CIMB, YTL, PLUS, Dutch Lady and Parkson.

Among the gainers, Nestle added 22 sen to RM34.90, Top Glove up 14 sen to RM13.70, Ta Ann and Mamee gained 10 sen each to RM5.07 and RM3.14, while Latitude Tree rose seven sen to RM1.70.

The active stocks included Key Asic, Talam, Hovid and Carotech.

Carotech, Hovid down in active trade

KUALA LUMPUR: Share prices of CAROTECH BHD [] and its main shareholder HOVID BHD [] fell in active trade on Friday, July 2 on negative news about Carotech's defaulting on the principal and interest servicing for certain loans.

At 9.31am, Carotech was down four sen to 9.5 sen while Hovid lost 2.5 sen to 18 sen.

The FBM KLCI fell 2.96 points to 1,305.80.

Carotech said on Thursday the Corporate Debt Restructuring Committee (CDRC) had accepted its application to mediate between the company and its financial creditors on its proposed debt revamp. The CDRC has allowed the company six months to complete the scheme.

Hovid, which owns 58% of Carotech, said the latter had defaulted on its principal and interest servicing in respect of certain banking facilities from financial institutions.

Hovid said the default arose mainly due to over expansion of capacity, significant rise in working capital and inability to clear stocks due to curtailed demand arising from poor economic conditions in Europe and US. Nevertheless, Carotech's underlying business model and products remain sound and well received in the markets, it added.

Hovid said it did not have any obligation on the defaulted loans by Carotech.

Ngiu Kee tumbles on unit's failed debt repayment

KUALA LUMPUR: Ngiu Kee Corp Bhd's shares fell in early trade on Friday, July 2 after its unit failed to pay RM13.95 million due on June 30.

At 9.43am, it was down four sen to 7.5 sen with 1.32 million shares done.

Ngui Kee announced to Bursa Malaysia on Thursday that its unit Ngiu Kee Sdn Bhd failed to meet the payment of RM13.95 million due and payable on June 30 to Bank Islam Malaysia Bhd.

Itsaid that it did not have sufficient funds to meet the payment due amounting to RM13.95 million as at July 1.

"Prior to the default in payment, the company has been in regular negotiations with the financial institution to reschedule the loan. The company will continue to engage the financial institution for their consideration to agree to our proposal," it said.

Yuan at post-revaluation peak vs dlr, eases vs euro

SHANGHAI: The Chinese yuan jumped against the dollar on Friday to its highest since its 2005 landmark revaluation after China's central bank appeared to condone the climb by setting its reference rate sharply higher.

The yuan climbed as far as 6.7700 to the dollar within minutes after the start of trade, up 0.16 percent from Thursday's close of 6.7810.

The yuan's intraday high surpassed the Friday reference rate against the dollar of 6.7720, the highest set by the Chinese central bank since the 2005 revaluation.

But against the euro, which had rallied overnight by three cents on a bout of short-covering, the Chinese central bank set the yuan's reference rate markedly lower at 8.4741, down 2.2 percent from Thursday's rate.

The settings of the reference rates against the dollar and the euro suggested that China's central bank was giving significant weight to overnight movements in the euro in managing the yuan's overall value.

"The market was surprised that the yuan's reference rate against the dollar was so high. Perhaps that was because of the rise in the euro," said a yuan trader at a European bank in Shanghai.

That would indicate a change in the way the Chinese central bank manages the yuan. In the past, the yuan had always tracked the dollar very closely even though the central bank said it was managed against a basket of currencies.

In early Friday trade, the yuan fell against the euro in line with the sharp drop in the reference rate. It traded at 8.4777, down from Thursday's close of 8.4333.

China's central bank manages the yuan's daily movements by setting a series of reference rates every day before the start of trade. Against the dollar, the yuan can rise or fall 0.5 percent each day from its reference rate, also known in the market as the mid-point.

Against other currencies, including the euro, the yuan can move 3.0 percent. - Reuters

HwangDBS cautious outlook for Bursa

KUALA LUMPUR: Hwang DBS Vickers Research said there is a possibility that our Malaysian bourse would tumble on Friday, July 2 with its benchmark FBM KLCI sliding below 1,305 (its first support level) towards 1,280 (its second support level) on the chart.

The external mood remains nervous for now. Major U.S. equity indices were down overnight by between 0.3% and 0.4% at the closing bell (after slumping as much as 1.6%-2.3% intra-day) hit by poor manufacturing and home sales data.

Probably weighing down our local stock market performance on Friday are the gaming companies, particularly: (a) Genting Malaysia, in response to its announcement on a related-party transaction to acquire the UK casino operations from Genting Singapore for 340m pounds; and (b) number forecast operators, namely Berjaya Sports Toto, Tanjong and Multi-Purpose Holdings, following the government's move to raise the pool betting duty by 2% effective 1 Jun.

Separately, the external trade statistics for May will be out later on Friday. One media survey estimated an annual growth rate of 25.8% for exports and 32.2% for imports.

Genting Malaysia slides on UK ops acquisition

KUALA LUMPUR: Genting Malaysia's shares fell in early trade on Friday, July 2 after proposing to acquire Genting Singapore's under-performing UK operations, which analysts said was at the higher-end of peers' valuation.

At 9.16am, the share price was down 15 sen to RM2.59 with 10.34 million shares done.

The FBM KLCI was down 2.22 points to 1,306.54. Turnover was 46.62 million shares valued at RM47.65 million.

Hwang DBS Vickers Research said Genting Malaysia was acquiring Genting Singapore's under-performing UK operations at higher-end of peers' valuation.

It said the transaction was positive for Genting Singapore as it could focus more on Singapore, less pressure on balance sheet, room to explore other integrated resorts.

"But negative for Genting Malaysia. Expensive for risky market, minimal synergy, less efficient use of cashpile," it said.

"Maintain Buy on Genting Singapore (TP raised to S$1.25), but downgrade Genting Malaysia to Fully Valued (TP cut to RM2.30). GENTING BHD [] remains a Buy, TP adjusted to RM8.20," it said.

Gaming stocks down

KUALA LUMPUR: Gaming related counters fell in early trade on Friday, on July 2 after the Ministry of Finance raised the pool betting duty.

At 9.02am, Tanjong fell six sen to RM7.10, MPHB lost five sen'' RM1.91 and Berjaya Sports Toto three sen to RM4.11.

The FBM KLCI lost 4.10 points to 1,304.66. Turnover was 12.97 million shares valued at RM10.47 million.

MPHB said its subsidiary Magnum Corporation Sdn Bhd has received a letter about the higher pool betting duty. The MoF had informed it that that the pool betting duty imposed on Magnum has been increased to 8% from 6% previously. The higher tax takes effect from June.

Also affected by the higher tax rate is power to gaming company Tanjong. Its unit Pan Malaysian Pools Sdn. Bhd. was also notified by the MoF of a revision in betting duties to 8% from 6% previously.

Tanjong had said betting duties are based on gross sales proceeds after deducting gaming tax of 8%. Hence, the effective rate of betting duties will be 7.36% from 5.52% previously.

"This revision is not expected to have a material impact on the results of the Tanjong Group," it said.

Wall Street falls on weak data

NEW YORK: U.S. stocks fell on Thursday, July 1 as manufacturing and labor market data heightened fears of a double-dip recession before Friday's key employment report.

Major indexes were lower for a fourth straight day after suffering their worst quarter since late 2008, but losses eased near the end of the session.

"Right now everyone is so concerned about a major 'potential depression' or deflation taking place -- it's really roiling the market," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

The Dow Jones industrial average .DJI dropped 41.49 points, or 0.42 percent, to 9,732.53. The Standard & Poor's 500 Index .SPX shed 3.33 points, or 0.32 percent, to 1,027.38. The Nasdaq Composite Index .IXIC lost 7.88 points, or 0.37 percent, to 2,101.36.

Investor attention appeared to move away from euro-zone debt concerns to U.S. economic data pointing to a slowing recovery as the euro rose over 2 percent against the dollar.

"The focus is shifting back to us and, depending on what happens tomorrow, will have a tremendous impact on whether that focus stays on us or goes back to Europe," added Mendelsohn.

A Reuters survey found economists expect Friday's Labor Department report on June non-farm payrolls to show a decline of 110,000.

Gold mining company stocks were among the hardest hit on Thursday after being one the few strong sectors in the second quarter as the price of gold fell.

U.S.-listed shares of Barrick Gold (ABX.TO)(ABX.N) dropped 5.2 percent to $43.06 and Newmont Mining Corp (NEM.N) slid 4.5 percent to $59.99. The PHLX Gold/Silver Sector index .XAU fell 4.4 percent.

Indicators suggested markets were oversold, but fears of a worse-than-expected jobs report, exacerbated by Thursday's jobless claims data, kept buyers on the sidelines.

Thursday's data also included the Institute for Supply Management's barometer of U.S. manufacturing activity, which fell to its lowest level since December and pending home sales, which dropped a record 30 percent in May.

Other data showed unemployment claims rose unexpectedly last week, heightening fears a labor market recovery was stalling.

Ford Motor (F.N), up 4.9 percent to $10.57, was one of the bright spots after the automaker reported June sales gained 15 percent. - Reuters

#Today's Diary* What to expect on July 2, 2010

SC-Bursa Malaysia Corporate Governance Week at 9am.

Maybank Islamic to launch nation's first Waqf service at Level 51, Menara Maybank, Jln Tun Perak, KL at 9.45am.

QUALITY CONCRETE HOLDINGS BHD [] AGM at Room 209, Level 2, Wisma Bukit Mata Kuching, Jln Tunku Abdul Rahman, Kuching, Sarawak at 10.30am.

ZHULIAN CORPORATION BHD [] EGM at Salon V, Level 2, G Hotel, Persiaran Gurney, Penang at 2.30pm.

TM expands Unifi High Speed Broadband (HSBB) services to 18 more areas at La Bodega @ BSC, Ground Flr, Bangsar Shopping Centre, KL at 3.30pm.

Launch of McMillan Woods Global to be graced by the Minister of Finance II at Nikko Hotel, KL at 7pm

Thursday, July 1, 2010

CDRC to mediate Carotech debt revamp scheme

KUALA LUMPUR: The Corporate Debt Restructuring Committee (CDRC) has accepted CAROTECH BHD []'s application to mediate between the company and its financial creditors on its proposed debt revamp.

Carotech said on Thursday, July 1 the CDRC had accepted the application to be the mediator and "the CDRC has allowed the company a period of six months to complete the scheme".

The company will make the necessary announcement once the scheme has been finalised.

Meanwhile, HOVID BHD [], which owns 58% of Carotech, said the latter had defaulted on its principal and interest servicing in respect of certain banking facilities from financial institutions.

"The default arose mainly due to over expansion of capacity, significant rise in working capital and inability to clear stocks due to curtailed demand arising from poor economic conditions in Europe and US. Nevertheless, Carotech's underlying business model and products remain sound and well received in the markets," it said.

Hovid said it did not have any obligation on the defaulted loans by Carotech.

"Carotech is currently working directly with the financial institutions with the assistance of the CDRC to construct and implement a Debt Restructuring Plan," it said.

Hovid also said it would be able to continue with its existing business. Hovid manufactures and distributes pharmaceutical products.

"The business is independent of Carotech," it said.

Ho Hup lodges 2 police reports

KUALA LUMPUR: Ho Hup CONSTRUCTION [] Company Bhd has lodged two separate police reports against certain former employees on suspected cheating and irregularities totaling RM3 million.

It said on July 1 the first report, lodged on April 15, 2010 related to suspected cheating of termination benefits paid to certain ex-employees of the company amounting to RM1.4 million.

The second report was lodged on June 11 and it related to suspected cheating by certain ex-employees based on suspected irregular documents for purported commissions amounting to RM1.6 million.

Bursa shares end lower

KUALA LUMPUR: Share prices on Bursa Malaysia extended their losses on Thursday, July 1, closing lower as concerns over a slowing economy continued to weigh on investor sentiment, dealers said.

At 5pm, the key FTSE Bursa Malaysia Composite Index (FBM KLCI) fell 0.40% or 5.26 points to 1,308.76 points after opening 1.05 points lower at 1,312.97 points.

The key index was well supported at 1,300-point level due to interest in heavyweights including CIMB, Genting, British American Tobacco and Hong Leong Bank.

The market was in the red for most of trading on Thursday with the key index moving
between 1,306.67 points and 1,315.87 points.

"Sentiment remained weak because of numerous uncertainties on Wall Street and even in China. Investors will continue to sideline unless fresh leads emerge," a dealer said.

China reported a slower pace for its manufacturing activity in June, the lowest since February.

On the local front, the PLANTATION [] Index declined 25.94 points to 6,198.45 points, the INDUSTRIAL INDEX [] fell 35.46 points to 2,591.99 points while the Finance Index gained 0.10 of a point to 11,868.57 points.

The FBM Emas Index dropped 40.22 points to 8,823.16 points, the FBM70 [] slipped 56.54 points to 8,804.62 points and the FBM Ace Index was down 1.16 points to 3,800.20 points.

Losers outpaced gainers by 413 to 206 while 238 counters were unchanged, 506 untraded and 25 others suspended.

Volume eased to 557.823 million shares valued at RM1.022 billion from yesterday's 563.544 million shares worth RM987.655 million. ' Bernama

#Flash* MoF ups pool betting duty on Magnum Corp

KUALA LUMPUR: MULTI-PURPOSE HOLDINGS BHD [] says the Ministry of Finance has raised the pool betting duty imposed on its subsidiary Magnum Corporation Sdn Bhd.

MPHB said on Thursday, July 1 that Magnum had received a letter dated June 29 from the MoF that the pool betting duty imposed on on Magnum has been increased to 8% from 6% previously. The higher duty takes effect from June.

Sime slips, weighs on KLCI

KUALA LUMPUR: SIME DARBY BHD [] shares slipped in late afternoon trade on Thursday, July 1 in the absence of any adverse news.

At 4.30pm, it is down 21 sen to RM7.79 with 7.4 million units done. The FBM KLCI is down 6.48 points to 1,307.54.

The Edge FinancialDaily reported Permodalan Nasional Bhd (PNB) has raised its stake in the country's largest conglomerate Sime Darby Bhd with the acquisition of 170 million shares, or a 2.8% stake, on June 23.

According to Sime Darby's filing on shareholding changes to Bursa Malaysia, PNB had 880.98 million shares, or a 14.66% stake, in Sime. It had a 11.83% stake in the group just a week earlier, on June 16.

In a recent statement, Sime said it had set up a China unit -- Sime Darby CEL Machinery (Xinjiang) Co. Lt -- to manufacture machinery for electricity generators sets, engines, agricultural machinery, special transportation machinery and relevant spare parts.

MAA Assurance eyes RM25m in premiums from new protection plans

KUALA LUMPUR: Malaysian Assurance Alliance Bhd (MAA) expects its new comprehensive protection plans, MAXXCOMBO and MedicaLife 210, to bring in RM25 million in premiums within the next six months.

Its chief executive officer Muhamad Umar Swift said the plans had unique features and advantages compared to other products in the market.

"The customers can enjoy better coverage at a cheaper premium without compromising the quality of coverage and protection," he said at the launch of the new protection plans here today.

He said under the MAAXCOMBO plan, policyholders could now also opt to enjoy the benefits of MAAXMedic, a medical card designed to complement the existing MAA investment-linked plans.

Muhamad Umar said the MAAXMedic would come with an affordable costing and this would not only result in lower premium, but has far-reaching benefits as well.

"The plan not only offers affordable premiums with high medical coverage and provide cash value accumulating feature in its investment," he said.

Meanwhile, MedicaLife 210 is an enhanced version of the earlier MedicaLife series and the latest cashless Guaranteed Renewable Medical Policy up till the age of 80. ' Bernama

Japan's Ikeda: weak yen generally good for Japan

TOKYO: Japan deputy finance minister Motohisa Ikeda said on Thursday, July 1 that a weak yen is generally beneficial to Japan as it has a high concentration of companies that export goods.

Ikeda, speaking to reporters, also said he would not comment on specific currency levels.

He added that he wasn't overly optimistic about the outlook for business sentiment after the Bank of Japan's tankan survey showed on Thursday that Japanese business confidence was at its best in two years in the three months to June and that big firms revised up capital spending plans. ' Reuters

Kenmark audit probe to be completed in 2-3 months

KUALA LUMPUR: UHY, a top-ranking international audit, tax and corporate advisory practice, hopes to complete the audit investigation on Kenmark Industrial Co (M) Bhd in two to three months.

UHY senior partner in Malaysia, Alvin Tee, said on Thursday, July 1 UHY was recently appointed special auditor of Kenmark under a directive from Bursa Malaysia.

"We are conducting an investigative audit to determine if there have been any accounting irregularities, potential breaches of rules and regulations that contributed to the RM150 million in losses," Tee said.

"We are also determining if there are any further losses that the new management has to deal with," he said at a press conference to introduce UHY forensic, litigation and valuation services in Malaysia.

Tee said the scope of examination will cover the past five years and special attention will be given to cross-border and related party transactions.

Reports on the recent disappearance of Kenmark managing director James Hwang Ding Kuo and other top management figures, coupled with sudden changes in shareholdings, have dominated business headlines over the past few weeks.

According to Tee, this was not the first time that Malaysia has seen top management of public-listed companies absconding from their businesses and obligations.

Interestingly, he said, all these companies, including Kenmark, were under Taiwanese management.

Asked to elaborate, Tee said "the investigative audit is underway so we can only comment on any findings at a future date, provided this is allowed for release to the public".

"However, what I can say is that the relaxation of exchange controls by Bank Negara Malaysia five years ago allows for far greater mobility of assets and funds than ever before. Unfortunately, some utilise this for improper transactions," he said.

Tee said potential investors, bankers and suppliers should exercise greater caution when dealing with cross-border deals and transactions.

He said some of his partners at UHY have served as bank examiners at Bank Negara Malaysia and as former regulators themselves, they will be focused over the next few weeks on using their investigative expertise to find out what brought about the Kenmark debacle.

UHY, formerly known as UHY Diong, currently handles 10 PN17 companies, out of a total of 37 in the country. UHY in Malaysia offices are currently located in Penang, Kuala Lumpur and Johor Baharu.

At the international level, UHY has presence in 242 major business centres in over 76 countries.

UHY International chairman John Wolfgang, who is also managing director of UHY Advisors in the United States, pledged to support the Malaysian forensic, litigation and valuation services division through the sharing of expertise, sophisticated methodologies and technologies.

"Our US offices handle major corporate debacles like Enron, conducting extremely sophisticated forensic, legal and valuation work," he said during the press conference. - Bernama

Seven & I 1Q operating profit down, outlook kept

TOKYO: Japan's largest retailer Seven & I posted a 10.6% fall in first-quarter (1Q) operating profit on Thursday, July 1 as sales continued to slide, and kept a full-year forecast for moderate growth.

Japanese retailers were hit by sharp falls in sales in the wake of a global economic downturn. While many of them have said the worst was over in the last year, few expect a strong recovery in the near future as deflation persists.

Japan's retail sales rose 2.8% in May from a year earlier, the slowest pace in four months in a sign that stimulus-driven consumer spending may be losing momentum.

Seven & I, which has more than 12,000 Seven-Eleven convenience stores in Japan and licenses out thousands more overseas, has been stepping up cost-cutting at its operations, including supermarkets and department stores.

The company said its March-May operating profit was ''52.4 billion (RM1.93 billion), down from ''58.6 billion in the same period a year earlier.

Same-store sales at Seven-Eleven stores in Japan fell 2.5% during the quarter from a year earlier, while those at Ito-Yokado supermarkets declined 5.3%.

For the full year to February, Seven & I kept its forecast for an operating profit of ''240 billion, up 5.9% from a year earlier, in line with a mean estimate in a poll of 13 analysts by Thomson Reuters I/B/E/S.

Seven & I shares have fallen about 11% in the past 12 months, underperforming a decline of around 6% in the benchmark Nikkei average. ' Reuters

Healthcare sector to grow 8%-10% per annum

KUALA LUMPUR: RHB Research expects Malaysia's healthcare sector to grow at a resilient 8% to 10% per annum despite overall solwer growth in consumer spending.

It said on Thursday, July 1 the healthsector's growth will be underpinned by 2% steady population growth; ageing population; and greater affluence.

"We anticipate higher allocations from the Government for public healthcare to benefit Faber (OP; FV = RM3.54). Recent news reports that UEM Group is looking to dispose of its 34% stake in Faber could provide trading opportunities for the stock," it said.

On consumer spending, RHB Research expected it to grow at a slower pace of 4.6% YoY in the 2H versus +5.4% YoY in the 1H, with more downside risk arising from uncertainty in government policies.

The uncertainties could especially on the cut in consumer subsidies, which could further dampen consumer spending particularly on big-ticket items.

"Expect retailers and MLM players to be most affected, while healthcare and F&B sectors would be least affected," it said.

RHB Research said higher uptake in insurance policies would benefit the private healthcare sector, such as KPJ (OP; FV = RM4.25). Together with news flow on M&A in the regional healthcare sector, we believe that KPJ deserves to be trading at a higher valuation, further narrowing its discount to regional peers' PER of 18x.

The research house's top pick for the sector is KPJ. It is keeping its Neutral stance on the sector given its Underperform call on BAT; and slower increase in consumer spending outlook coupled with uncertainties arising from the cut in consumer subsidy issue.

Kurnia Insurans gets new CEO

KUALA LUMPUR: Kurnia Insurans (Malaysia) Bhd (KIMB) has appointed Wong Kim Teck as its new chief executive officer effective Thursday, July 1.

In a statement on Thursday, Kurnia said Wong who serves as a member of the Executive Committee in Persatuan Insurans Am Malaysia, brings with him over 26 years of experience in the insurance industry.

In his new role, Wong has been tasked to drive KIMB to the next level of growth, besides building on the turnaround momentum achieved by the company under its Transformation of Operations and Performance (TOP) to achieve higher productivity and profitability.

KIMB chairman Tan Sri Kua Sian Kooi said he was confident of Wong's capabilities to spearhead the company's progress.

"He brings a valuable mix of leadership, operational experience and passion for excellent customer service.

"His depth and breadth of the local insurance industry knowledge will certainly place the company in a strong position to move forward," Kua said. ' Bernama

Gold ticks down, but global economic worries support

SINGAPORE: Gold edged down on Thursday, June 1 as investors waited for more clues on the state of the global economy after prices rallied towards a record this week, but falling shares could spur another round of safe haven buying.

The Nikkei dropped more than 2% to a seven-month low on Thursday after US stocks tumbled, as investors dumped riskier assets on the back growing fears of a "double-dip" recession for the global economy.

Spot gold fell US$1.35 to US$1,240 (RM4,030) an ounce by 0503 GMT, having hit a high of US$1,262.45 on Monday ' within sight of a lifetime high above US$1,264 struck last week.

"Gold is increasingly vulnerable to profit taking by investors," said Ong Yi Ling, investment analyst at Phillip Futures.

"On the mid-term to long-term basis, the uptrend for gold is definitely still there. Economic worries will continue to support the gold price, so on the long-term, definitely the uptrend for gold still remains," she said.

Bullion gained than 11% in the second quarter as investors seeking safety from turmoil in the financial markets lifted the metal to its best quarterly performance since the fourth quarter of 2007.

But investors who had bet the price would rally to US$1,250 were closing off their positions to book profits, capping gold on the upside.

US gold futures for August delivery fell US$5.1 an ounce to US$1,240.8.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings were unchanged at a record of 1,320.436 tonnes.

Gold shrugged off data that showed China's official purchasing managers' index (PMI) fell to 52.1 in June from 53.9 in May, weaker than the median forecast of 53.1.

"Maybe if you see the numbers are better-than-expected, it can also potentially exert some downward pressure for gold prices because it encourages a bit of risk taking," said Ong at Phillip Futures.

Silver was barely moved, while platinum and palladium dropped because of sagging equities markets.

The euro hit a lifetime low against the Swiss franc on Thursday, as weaker-then-expected Chinese data added to doubts about the strength of the global recovery, while jitters about funding strains in the eurozone lingered.

Crude prices fell for a fourth consecutive day on Thursday to below US$75 on signs that China's economic growth is slowing, while the dollar strengthened as Europe's debt woes kept simmering across financial markets. ' Reuters

BP oil spill cleanup work hampered by hurricane

VENICE (Louisiana): Hurricane Alex is slowing cleanup and oil containment efforts at the site of BP Plc's Gulf of Mexico oil spill even as a potential permanent fix for the leak remains weeks away.

Rough seas and winds spawned by the hurricane, which made landfall over northeastern Mexico late on Wednesday, June 30 and moved inland, delayed the British energy giant's plans to expand the amount of oil it siphons from the ruptured deep-sea well.

Alex is forecast to dissipate over Mexico in one to two days.

The bad weather also threatened to push more oil-polluted water onto the shoreline of the US Gulf Coast and forced the halting of skimming, spraying of dispersant chemicals and controlled burns of oil on the ocean surface, officials said.

The worst oil spill in US history is in its 73rd day. It has caused an environmental and economic disaster along the US Gulf Coast, hurting fishing and tourism industries, soiling shorelines and killing wildlife.

President Barack Obama was scheduled to meet with senior US officials on Thursday to review the spill situation and oil containment plans, the US Coast Guard said.

Interior Secretary Ken Salazar said on Wednesday one of two relief wells being drilled by BP in a bid to stop the leak from the ruptured well will take several weeks to reach the spewing oil pipe. The relief wells are intended to intersect and then plug the leak.

BP kept oil-capture and relief well drilling operations going at the leak site through the bad weather.

BP's market capitalisation has shrunk by about US$100 billion (RM325 billion) and its shares have lost more than half their value since the spill began on April 20 but are showing signs of stabilising. The shares rose for a third straight day in New York trading on Wednesday, rallying 4% following sharp gains in London.

Alex, a Category 2 hurricane when it made landfall late on Wednesday, packed maximum sustained winds near 105 miles (169km) per hour. It hit the coast of Tamaulipas state in northeastern Mexico, about 100 miles (160km) south of Brownsville, Texas, the US National Hurricane Centre said.

In Washington, the Senate Environment and Public Works Committee voted on Wednesday to eliminate limits on liability that oil companies would face for oil spill damages.

The measure, which would apply retroactively to the BP spill, must be passed by the full Senate and the House of Representatives before going to President Barack Obama to sign into law. Oil companies currently have a US$75 million cap for compensating local communities for economic losses and cleaning up environmental damage.

BP already has agreed to set up a US$20 billion independently administered fund to compensate victims of the spill.

The Interior Department, focused on the BP spill, said on Wednesday it was postponing until later this year planned public hearings on a proposal from Obama ' made before the BP spill began ' to expand offshore oil drilling.

Florida Governor Charlie Crist on Wednesday asked BP for US$50 million to fund a tourism advertising campaign, on top of a US$25 million grant already received.

"Every dollar spent allows Florida businesses to stay open, Floridians to keep their jobs, and families to worry less about how to pay their bills," Crist wrote in a letter to Doug Suttles, BP's chief operating officer.

Some clean-up workers along the coast expressed anxiety about the time lost to the storm.

"If you have to move all this equipment out and then back in again, how much time is lost there?" said Phil Ramon, a disaster management consultant in Belle Chasse, Louisiana.

In Mississippi, clean up crews contracted by BP were forced to temporarily pack up their gear, taking time away from cleaning the oil off tourist beaches.

"We are getting out of the storm right now but we will be back," said Bill Sigler, working to clean up the oil.

The weather delayed BP's plans to boost containment capacity at the undersea well.

US government officials estimate 35,000 barrels (1.47 million gallons/5.56 million liters) to 60,000 barrels (2.5 million gallons/9.5 million liters) are gushing from the blown-out well each day. BP's current containment systems can handle up to 28,000 barrels daily and its planned addition could raise that to 53,000.

The Deepwater Horizon drilling rig sank in 5,000 feet (1,525 metres) of water after an April 20 explosion and fire killed 11 workers. ' Reuters

Australia govt, miners on brink of tax deal-report

SYDNEY: Australia's government and key mining companies are on the brink of a framework agreement on a mining tax compromise, the Sydney Morning Herald reported, quoting sources with knowledge of the talks.

Based on the proposed deal, the government has given ground on the headline 40% tax rate and the new trigger point for the tax would be around 12% up from an initial proposal for about 5%, the paper said on its website.

The tax deal would also give miners a break on retrospective projects, enabling them to roll lucrative iron ore operations in the Pilbara and coal mines on the east coast, into the new tax regime at market value.

"It's understood that BHP Billiton, Rio Tinto and Xstrata have agreed with the government now on the key elements of a new resources tax structure...," the Herald report said, citing sources close to talks between the government and miners.

The government and global miners Rio Tinto, BHP Billiton and Xstrata Plc, are locked in a second day of talks on Thursday, July 1 over the tax.

"We're not commenting," a BHP spokesman said of the report.

Government officials were not immediately available for comment.

The Australian dollar rose around 1/3% to US$0.8366 (RM2.72) from around US$0.08335 before the report.

An agreement would remove uncertainty in the market and any watering down of the tax proposal is considered positive for investments and hence the Aussie dollar, traders say.

The stock market also came off its lows off the day, as did global miners BHP Billiton and Rio Tinto, on news of the report.

The proposed mining tax threatens more than US$20 billion in investment, according to mining companies, but no major project has yet been scrapped and several have actually been advanced since the tax was unveiled on May 2.

The Australian MINING INDEX [] has underperformed the global mining sector by about 4% since the mining tax was first announced on May 2, despite a weakening in the Australian dollar over that time.

Analysts say that any firm deal would be a positive for mining shares as it removes a key risk factor while any easing in terms of the tax would be a clear positive as investor have already priced in the worst-case scenario.

"This would signal the first major development in the debate between the government and the mining industry over the tax," said Grant Craighead, a mining analyst for Stock Resource in Sydney. ' Reuters

#Update* Petronas FY10 net profit falls 23.2% to RM40.3b

KUALA LUMPUR: Despite positive contributions from higher sales volume, Petroliam Nasional Bhd's (Petronas) revenue for the year ended Mar 31, 2010 (FY10) fell 18.1% to RM216.4 billion from RM264.2 billion due to lower sales prices.

Similarly, its net profit for FY10 dropped 23.2% to RM40.3 billion from RM52.5 billion a year ago.

The group's revenue continued to be led by petroleum products which contributed 37% to total revenue, followed by crude oil (23%) and liquified natural gas (LNG, 17%).

Petronas said the decline in the group's revenue for the year proved to be broad-based, reflected in lower revenue streams from "virtually" all products.

The group's payment to the federal and state governments in FY10 amounted to RM57.6 billion, a decline of 22.2% from the previous year.

This it said comprised a dividend payment of RM30 billion, taxes of RM18.7 billion, petroleum proceeds of RM8.3 billion and export duties of RM600 million to the federal government. The group's petroleum proceeds to the state governments totalled RM4.1 billion.

However, Petronas' balance sheet items for the year under review continued to strengthen as total assets climbed RM21.1 billion to RM410.9 billion while shareholder's fund increased RM10.8 billion to RM242.9 billion.

Fortis offers S$3.80 cash per Parkway share

KUALA LUMPUR: India-based Fortis Healthcare Ltd is offering S$3.80 (RM8.82) cash per share to acquire the remaining shares it does not already own in Parkway Holdings Ltd, according to a filing to the Singapore Stock Exchange on Thursday, July 1.

The move is a counterbid by Fortis to block Khazanah Nasional Bhd's plan to acquire a controlling stake in the Singapore-listed health entity.

Fortis Healthcare Ltd is Parkway's single largest shareholder with a 25.3% stake, while Khazanah has 23.8%.

On May 27, Khazanah's unit Integrated Healthcare Holdings Ltd offered to acquire 313 million shares in Parkway for S$1.18 billion, or S$3.78 per share.

Asian markets fall on China slowdown, possible downgrade of Spain's credit rating

KUALA LUMPUR: Asian markets, including Bursa Malaysia, began the second half of the year in the red, dragged by concerns that of a slowdown in China's growth after manufacturing data showed activity had slowed.

While China's growth had been expected to cool from double-digit levels, the reports underscored investors' fears that the global economic recovery may be losing momentum amid Europe's debt crisis and persistent weakness in the US housing and labour markets, according to Reuters.

An official survey showed the pace of Chinese manufacturing activity slowed in June to the lowest since February, while HSBC's separate purchasing managers' index dropped to a 14-month low, with outright drops in output and new orders, it said.

Also weighing on Asian investor sentiment about the global growth prospects was Moody's statement that it may downgrade Spain's credit rating. Spain will hold an auction for 5-year bonds later on July 1.

At the regional markets today, Japan's Nikkei 225 fell 2.12% to 9,183.54 points, the South Korean Kospi down 1.35% to 1,675.43 points, Taiwan's Taiex Index 0.90% to 7,263.65 points, Singapore's Straits Times Index down 0.55% to 2,819.91 points and Shanghai's Composite Index declined 0.06% to 2,396.82 points. Hong Kong's Hang Seng Index is closed for a national holiday.

At Bursa Malaysia, the FBM KLCI fell 4.84 points to 1,309.18 points at 12.30pm. Gainers trailed losers by 143 to 316, while 240 counters traded unchanged. Volume was 214.87 million shares valued at RM441.19 million.

Among the major losers this morning, Tanjong fell 26 sen to RM17.18, Sime Darby down 10 sen to RM7.90, MISC five sen to RM8.55, MAS and RHB Capital down four sen each to RM2.03 and RM5.84, while Nestle fell 50 sen to RM34.50.

Tenaga fell three sen to RM8.38; Maybank, KLK, IOI Corp and PLUS lost two sen each to RM7.54, RM16.40, RM4.99 and RM3.39, respectively.

Other decliners this morning included Berjaya Sports Toto, Lafarge Malayan Cement, Kencana and Malaysian Mosaics.

Gainers this morning included Amway, MTD, KPJ Healthcare, SEG International, Top Glove, K-Star Sports, Parkson and KLCC Property.

Time was the most actively traded counter with 11.8 million shares traded. The stock fell 1.5 sen to 37.5 sen. Other actives this morning included Kumpulan Europlus, Maybank, AWC, Axiata, BJToto, Kencana and AMMB.

Honda launches 3S campaign

PETALING JAYA: Honda Malaysia on Thursday, July 1 announced the start of its 3S Campaign to reward existing Honda vehicle owners and potential customers in routine maintenance, test-drive, sales and after-sales services.

According to a statement on Thursday, the Honda 3S Campaign is available at all authorised dealers for a period of three months from July 1.

During the campaign period, those buying the Honda Accord 2.0 VTi and 2.4 VTi-L, can choose between a choice of two package options of either a free extended service and maintenance for the first 30,000km or 18 months ' whichever comes first ' or a free Garmin GPS navigation system.

Existing customers will enjoy a 25% savings on spare parts, while those spending RM300 and above in a single bill at the service centre, will be given service vouchers.

Throughout the campaign, exclusive Honda merchandise will be given away to those who test drive or service their vehicles at any authorised Honda dealer.

Honda Malaysia Managing director and chief executive officer Toru Takahashi said the Honda 3S Campaign is to reward Honda customers and enhance their experience while visiting any authorised dealer.

Meanwhile, Honda City, Civic, CR-V and Accord owners who install their cars with the Connex Stolen Vehicle Recovery (SVR) System during the campaign period, will be given a waiver on the first year subscription fee of RM360. ' Bernama

Tokio Marine Life, RHB Bank target RM4 billion in new biz premiums from 10-yr deal

KUALA LUMPUR: Tokio Marine Life Insurance Malaysia Bhd and RHB Bank Bhd are targeting RM4 billion in insurance premiums via an exclusive bancassurance distribution agreement inked by the two parties, said RHB Bank retail director Renzo Viegas.

This will be underpinned largely by their bancassurance business as well as other ancillary businesses within their area of cooperation, he said on Thursday, July 1.

In the medium term, Tokio Marine Life is targeting RM890 million in new business premiums within three years, said Tokio Marine Life chief executive officer Kenneth Wong.

Tokio Marine Life expects to secure RM270 million in the first year, RM300 million in the second year and RM320 million in the third year, he said before the signing ceremony between Tokio Marine Life and RHB Bank.

The agreement, which was signed by Wong and RHB group managing director Datuk Tajuddin Atan, is valued at RM100 million and will last for 10 years from today, he said.

To kick-start the partnership, Tokio Marine Life is launching Guaranteed Income Endowment Plus (GIE Plus), a capital protected single-premium participation endowment plan solely distributed by RHB Bank's network in Malaysia.

Tokio Marine Life and RHB Bank expect to attract 3,000 new customers and increase its fund size to RM100 million within a month.

Also present at the ceremony were Tokio Marine Life chairman Tan Sri Dr Yahya Awang and RHB CAPITAL BHD [] chairman Datuk Mohamed Khadar Merican.