Saturday, July 10, 2010

#Stocks to watch:* Tech stocks, Mah Sing, KEuro, Hartalega

KUALA LUMPUR: Blue chips on Bursa Malaysia may extend their gains in the coming week, starting July 12, amid some intermittent profit taking after a five-day winning streak.

The FBM KLCI ended the week at 1,324.21, up 16 points on-week despite some initial hesitation and caution.

Wall Street closed out its best week in a year on Friday, snapping back from a long stretch of selling, as investors looked ahead to what many expect will be a solid earnings season.

The Dow Jones industrial average was up 59.04 points, or 0.58%, at 10,198.03. The Standard & Poor's 500 Index was up 7.70 points, or 0.72%, at 1,077.95. The Nasdaq Composite Index was up 21.05 points, or 0.97%, at 2,196.45.


Tech stocks could track the US major technology companies which are expected to announce their earnings. Some of the stocks could have viewed as oversold on worries about slowing US and euro land economies.

According to Reuters, the biggest names in technology will release quarterly results this month, starting with Intel Corp and Google Inc next week, followed by IBM, Apple Inc and Microsoft Corp the following week.

Mah Sing plans to launch several projects with a combined gross development value (GDV) of RM1.1 billion.

It had on Friday announced the acquisition of three plots of lands for a total of RM276.1 million in Kinrara, Puchong (RM178.4 million); the Damansara North-Subang-Sungai Buloh corridor (RM65.9 million); and in Bukit Jelutong, Shah Alam (RM31.8 million).

Mah Sing group managing director and group chief executive Tan Sri Leong Hoy Kum said the group is building its development pipeline for 2011 and beyond to ensure enough projects to launch and sell this year.

In Hartalega Holdings Bhd, a filing with Bursa Malaysia showed Budi Tenggara Sdn Bhd had disposed of five million shares on July 7, reducing its stake to 12.35 million shares or 5.09%.

Kumpulan Europlus Bhd holds its EGM on Monday to seek shareholders' approval to dispose of up to 14.01% stake of the enlarged paid-up capital of Talam Corporation Berhad at prevailing market prices.

KEuro now owns 624.08 million Talam shares or 24.11% after the recent disposals of 110 million Talam shares on May 17 at 13 sen to 13.5 sen.

In Tejari Technologies Bhd, KOM2 Holdings Sdn. Bhd had disposed of 16 million shares on July 8 at 29.5 sen each. It disposed of the shares in two tranches of eight million each and reduced its stake to 16.67% or 27.16 million shares.

The company provides fluid power products, system solutions, service and repair facilities for hydraulic equipment.

AirAsia goes live with New Skies reservation system

KUALA LUMPUR: AIRASIA BHD [] has successfully completed the implementation of its new state-of-the-art reservation system, New Skies ahead of schedule, providing guests with brand new experience, greater convenience and more savings.

The low-cost carrier said the system migration from Open Skies to New Skies was fully completed since 3.15pm on Saturday, July 10. The target completion date was 6pm on Sunday.

New Skies is powered by Navitaire, a subsidiary of industry-leading TECHNOLOGY [] and business solutions provider Accenture.

As the New Skies booking system takes over, AirAsia guests can carry out online bookings on as well as purchases through AirAsia sales offices, counters and the call centre.

All Self Check-In services via the web, mobile and kiosks at the airport are also functioning normally, along with self-manage options online such as adding check-in baggage weight, pre-order hot meals and seat selection.

AirAsia's regional head of commercial Kathleen Tan said completing the new reservation system successfully ahead of schedule 'only reiterates our commitment to provide the best services to our guests'.

'I am impressed with the hard work and commitment shown by the whole AirAsia team involved in ensuring the success of this brand new reservation system. We set a record of only 9 months to complete this major migration, while other major airlines usually take 18 ' 24 months,' Tan added.

Among the exciting features which guests will experience in the New Skies reservation system is the Low Fare Finder, where guests will have the convenience of viewing the lowest fare available according to their selected destination and preferred date of travel.

AirAsia guests will also now be able to book seats for multi-cities in one transaction, i.e ' guests flying from Perth to Kuala Lumpur to Hong Kong and return do not need to make two separate bookings anymore, which was a limitation with the Open Skies system.

Tan said the New Skies reservation system is able to support characters such as Mandarin, Thai, Japanese and other language characters, making it easier to include more robust content for AirAsia's multilingual guests around the globe, in a continuous effort to be relevant and stay ahead as a leading industry player. The Open Skies system was only able to support alphanumeric characters.

To add value, guests can complement their travel plans with a selection of more than 70,000 hotels and over 5,000 tours and activities on

Wall Street marks best week in a year

NEW YORK: Wall Street closed out its best week in a year on Friday, July 9 snapping back from a long stretch of selling, as investors looked ahead to what many expect will be a solid earnings season.

Stocks ended near the day's highs, but trading was thin. Just 6.197 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, making it the lowest-volume day of the year.

Google Inc (GOOG.O) helped lift the Nasdaq, rising 2.4 percent to $467.46 after Beijing gave the company the green light to continue operating its China Internet search page. U.S.-listed shares of rival Baidu Inc (BIDU.O) fell 1.7 percent to $71.20.

The major stock indexes advanced 5 percent in the holiday-shortened week, as investors put a string of dismal data behind them to focus on what is expected to be another solid quarter for corporate results.

"We expect to see good margins, very healthy balance sheets

and companies basically saying that even with the slowdown, we are very well prepared for it," said Marc Pado, U.S. strategist at Cantor Fitzgerald & Co. in San Francisco.

"We have been seeing from previous data that companies are not building inventory and not adding workers. In other words, they are very well positioned for the worst case scenario," Pado said.

The Dow Jones industrial average .DJI was up 59.04 points, or 0.58 percent, at 10,198.03. The Standard & Poor's 500 Index .SPX was up 7.70 points, or 0.72 percent, at 1,077.95. The Nasdaq Composite Index .IXIC was up 21.05 points, or 0.97 percent, at 2,196.45.

The earnings season unofficially begins with Alcoa Inc (AA.N) after the closing bell on Monday. Analysts are expecting overall second-quarter earnings to grow by 27 percent, according to Thomson Reuters data. This is up from the 22.4 percent that analysts were anticipating at the beginning of the year.

Alcoa, the first Dow component to report, is expected to swing to a second-quarter profit, though falling aluminum prices have prompted analysts to cut their estimates on the stock.

The S&P 500 rose for a fourth straight day, up 5.4 percent this week, its best week since mid-July 2009. But the index is still down about 11.7 percent from its most recent closing high in late April.

The Dow rose 5.3 percent and the Nasdaq advanced 5 percent this week.

Johnson & Johnson (JNJ.N) was the biggest drag on the Dow, falling 1.4 percent to $60.54 a day after it recalled more Tylenol and other over-the-counter drugs following consumer complaints of odors. The move expands a recall started in January.

In addition to Alcoa, companies reporting next week include JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and General Electric Co (GE.N).

Banks will be scrutinized by investors concerned about delinquencies and loan demand to gauge the sustainability of a recent improvement in credit quality.

In deal news, Air Products and Chemicals Inc (APD.N) late Thursday raised its hostile bid for rival Airgas Inc (ARG.N) by 5.8 percent to $5.3 billion, but the offer remained slightly below the company's current market value.

Air Products rose 1.4 percent to $69.74, while Airgas rose 1.6 percent to $64.90.

In economic news, U.S. wholesale sales fell unexpectedly in May, lifting inventories to their highest level in 11 months, a government report showed. Analysts said a slackening in demand could lead businesses to try to curb the inventory buildup, weighing on economic growth.

Recent U.S. data showing slowing growth in the services and manufacturing sector, weakness in housing and a stagnating jobs market also worried investors, although most say it is too early to call a double-dip recession. - Reuters

Gloom starts to lift in euro zone crisis

NEW YORK:'' Gloom over the future of the euro zone is starting to lift after months of crisis, with policy makers sounding increasingly confident that the worst is over.

There are still plenty of risks. Economic growth is fragile, governments must keep the political will to impose austerity steps for years to come, and small banks in the hardest-hit countries remain unable to borrow in the markets, making them dependent on the European Central Bank for funds.

But in the past several days financial markets have reacted positively to details of planned stress tests on European banks, while sales of Spanish and Portuguese government debt have seen strong demand. European bank shares have rallied almost 10 percent and the euro hit a seven-week high versus the dollar.

"This has been the most difficult six months in the history of the European Union," European Commission President Jose Manuel Barroso said this week. "There has been a stress test on the EU and on our ability to work together."

But he made clear that he believed Europe had come through that test, and his political rivals in the European Parliament, the European Socialists, for once appeared to agree with him.

"The speculative attack against the euro has been slowed down. The speculators are seeing the EU is protecting its currency," Socialist leader Martin Schulz told the assembly.


A major factor worrying markets in the first half of this year was the difficulty which euro zone states had in agreeing on how to stave off debt defaults by countries on the southern periphery of the region.

The political and ideological differences between governments have not all been resolved. But most aspects of an emergency mechanism to handle the crisis are now in place, and the EU has at least started efforts to address the long-term causes of its debt crisis.

A 110 billion euro ($140 billion) bailout of Greece, agreed in early May, is buying time for Athens to reform its finances. The launch of a European Financial Stability Facility, which could borrow up to 440 billion euros to help struggling countries, has been delayed by the resistance of tiny Slovakia, but strong diplomatic efforts seem likely to overcome that obstacle this month.

While there is skepticism about how accurate the EU's stress tests of its banks will be, the unprecedented decision to test 91 institutions and publish results for individual banks suggests the bloc is more serious about confronting the problem than it was just weeks ago.

The 27-country EU has also set up a task force to review its budget rules, tighten fiscal discipline and increase economic policy coordination.

ECB President Jean-Claude Trichet signaled Thursday that he felt these measures were beginning to restore markets' confidence, saying the central bank might lean toward cutting back further its emergency program of buying government bonds.

French Economy Minister Christine Lagarde told U.S. broadcaster PBS Wednesday that the worst was over.

"We are in the middle of the beginning of the end. The crisis has really hit its peak," she said.


Prices in several key markets show investors are still nervous. The Spanish 10-year government bond yield remained a very high 198 basis points above the equivalent German yield on Friday, not far from a peak of 239 bps hit in mid-June; credit default swaps for weak euro zone states, used to insure against the risk of a debt default, have not come down much.

That is because many investors still think a debt restructuring by Greece or conceivably other euro zone states is likely in the long term -- perhaps in a year or two, when policy makers judge markets have recovered enough for a restructuring to occur without destabilizing the whole region.

Another fear is that countries in the south of the euro zone could slip back into recession this year as austerity measures bite. This would weigh on the economic recovery of the whole zone, though strong German data this week suggested it might not end the recovery.

Referring to the global financial crisis, Trichet said on Friday: "Events over the past few months have made it clear that it is still too early to declare the crisis over."

Discord between France and Germany could yet stand in the way of agreement on significant changes in the EU's budget rules, enshrined in its Stability and Growth Pact.

But ahead of regular talks Monday between the 16 euro zone finance ministers, the mood in EU policy-making circles is clearly much more upbeat than it was before most of the ministers' meetings this year.

The European Policy Center think tank noted this change in mood in a report after the most recent summit of EU leaders on June 17.

"For the first time since the start of the year, there was no immediate crisis overshadowing their discussions, they were able to stick to the pre-planned agenda and finish the one-day meeting without going into overtime," it said.

"After a string of emergency meetings over the last few months...this came as a huge relief." - Reuters

Friday, July 9, 2010

Malaysia's South-South trade at RM141.7m in Jan-April

KUALA LUMPUR: Malaysia's trade with South-South countries totalled RM141.72 million January-April 2010, with Malaysia's exports amounting to RM81.97 million, according to the Malaysian Industrial Development Authority (MIDA).

MIDA deputy director-general Datuk Afifuddin Abdul Kadir said on Friday, July 9 trade and investment relations between Malaysia and South-South countries looked promising in the manufacturing and services sectors and should be encouraged.

Between January and April 2010, 37 out of the 244 projects approved in the manufacturing sector were from South-South countries with investments totalling RM2.27 billion.

Major approvals by country were from Singapore, US$559.96 million (RM1.8 billion), China, US$148.08 million (RM 473.87 million), Thailand US$4.23 million (RM13.54 million), the UAE, US$ 2.09 million (RM 6.68 million) and Pakistan US$1.96 million (RM6.28 million).

Malaysia continued to attract substantial inflows of foreign direct investment (FDI) into these sectors, with South-South countries comprising about 60% of total FDI between January and April 2010, which stood at RM 3.3 billion.

He was speaking at MIDA's familiarisation programme for 35 officials of investment promotion agencies from 17 South-South countries.

Afifuddin urged participants to tap into the country's regional trade links oil and gas industries.

"Malaysia has a strong and resilient economy that provides vast opportunities for participants in both parties to further expand their trade links.

"Malaysia, located in the heart of Asean, can be the base for foreign companies to trade and invest with other countries within the region," he said, citing Malaysia's preferential tariffs for all products originating from any of the Asean members as one major advantage for foreign investors.

Later, at a media briefing, Afifuddin said that four or five companies from South-South countries were looking to set up businesses in Malaysia by the year-end. He declined to name the companies.

He said Malaysia had to remain regionally competitive in attracting FDI by makingnitn easier to undertake business activities.

"Singapore and Thailand are looking for the same thing. We are fighting for more foreign investments. We have to create attractive packages to bring in more investors."

Historically, Malaysia's top trading partners have been Singapore, China, the US and Japan which comprised 46.7% of total exports and 48.7% of total imports in 2009.

Major traded goods being electrical electronics products, palm oil, chemicals and chemical products, crude petroleum and machinery.

Petronas shuts pipelines after spotting oil sheen

KUALA LUMPUR: Petroliam Nasional Bhd had on Friday, July 9 shut down pipelines at an oil platform off the east coast after finding an oil sheen near facilities it shared with other contractors.

The facilities are operated by its exploration unit, Petronas Carigali, and its production-sharing contractors Exxon Mobil, Production Malaysia Inc. and Newfield Peninsular Malaysia Inc.

"The contractors have cleaned up the majority of the sheen and are now monitoring the situation via aerial and marine surveillance," Petronas said in a statement.

"At the same time, efforts are on-going to identify the source of the sheen, using remotely operated underwater vehicle as well as subsea pipeline tests."

Petronas did not specify which oilfields were affected.

Several oil and gas fields including Tapis, Seligi, Guntong, Semangkok, Irong Barat, Tabu and Palas are situated off Malaysia's east coast.

Emergency response and oil spill teams such as the Petroleum Industry of Malaysia Mutual Aid Group and East Asia Response Ltd also went to the area, Petronas said.

Last week, Petronas said Malaysia's crude oil output had fallen 3.3 percent to 535,000 barrels a day in financial year ended March 2010 as ageing fields took their toll after years of steady production. - Reuters

Petra Perdana suit vs Tengku Ibrahim, others to go ahead

KUALA LUMPUR:'' PETRA PERDANA BHD [] managing director Shamsul Saad's derivative action against four former directors --'' Tengku Ibrahim Petra Tengku Indra Petra, Datin Che Nariza Hajjar Hashim, Wong Fook Heng and Tiong Young Kong -- is set to proceed to trial.

The company said on Friday, July 9 this followed the Court of Appeal's decision to turn down the appeals by Tengku Ibrahim and others against a High Court decision handed down on Feb 18 to dismiss their application to strike out the suit. The Court of Appeal also awarded costs to Shamsul.

"The allegations in the derivative action are, among others, breach of fiduciary and statutory duties by Tengku Ibrahim and others. It is taken by Shamsul in his capacity as a minority shareholder of Petra Perdana and all damages recovered will go solely to Petra Perdana and none to Shamsul," Petra Perdana said.

Among others, the action alleged that Tengku Ibrahim and others caused the divestment of 10.50 million shares in PETRA ENERGY BHD [], the then subsidiary of Petra Perdana, at RM1.53 each or a discount of 12.07% based on a five-day Petra Energy volume weighted average market price, against a pre-existing shareholders' mandate to divest at no more than 10%.

As a result, Petra Perdana suffered about RM500,000 in losses and also reduced its shareholding in Petra Energy to 54.62%.

Tengku Ibrahim and others had allegedly caused the divestment of a further 25.03% of Petra Energy shares by Petra Perdana to Shorefield Resources Sdn Bhd at RM1.91 per share.

Petra Perdana said this divestment contravened the board of directors' mandate to only divest the remaining 54.62% shareholding en bloc and by way of open tender to command a price premium due its majority controlling stake.

This 25.03% divestment resulted in Petra Energy ceasing to be a Petra Perdana subsidiary. Consequently, Petra Perdana can no longer consolidate Petra Energy's revenue into Petra Perdana's group accounts.

Petra Perdana also claimed that Tengku Ibrahim and others caused the sale of three vessels by Petra Perdana to Petra Energy at a price significantly below market value, contrary to valuations provided by four ship valuers.

Shamsul is seeking that Tengku Ibrahim and others pay damages arising from their alleged breach of fiduciary duties and all costs for the action.

Illegal fund manager jailed 4 years over RM65m investment scam

KUALA LUMPUR: Businessman Phazaluddin Abu, 49, was jailed four years after he was convicted of operating an illegal online investment scam where he had raised RM65 million from thousands of investors.

The Securities Commission said on Friday, July 9 the Kuala Lumpur Sessions Court had found him guilty of'' operating an online investment scam without a fund manager's licence.

"He is the first person in the country to be convicted of operating an illegal online investment scam, after the SC's'' investigations found that he had raised RM65 million from 52,000 investors in 2007 via the website," the SC said.

The website claimed to have been an asset management and investment group focusing on business and fund management.

Phazaluddin was also convicted of three counts under the Anti Money Laundering and Terrorism Financing Act 2001 (AMLATFA) for taking part in money laundering activities involving a sum of RM1.3 million with two years imprisonment for each charge. The Court ordered Phazaluddin to serve the imprisonment term for all the offences concurrently.

The SC, which carried out the trial jointly with the Attorney General's Chambers, has urged the court to impose a deterrent sentence as it involves a large amount of investors' fund.

Sessions Court judge SM Komathy Suppiah in her decision categorically stated that there is a compelling need to impose a deterrent custodial sentence rather than a fine.

The custodial sentence meted out by the court is a stern warning to future offenders that violation of the public trust on such a large scale will not be treated lightly by the regulators and the courts.

It also serves as a reminder to the investing public to be extremely cautious of any investment scheme which looks legitimate, professionally managed and offers attractive investment returns or opportunities.

Phazaluddin was charged on Feb 29, 2008 for an offence under section 15A(1) of the Securities Industry Act 1983 together with three charges under section 4(1) of the AMLATFA.

BC, Silver Lake to buy MultiPlan for US$3.1b

LONDON: BC Partners and Silver Lake are set to buy U.S. healthcare services firm MultiPlan, the private equity firms said on Friday, Ju;y 9 in the year's largest secondary buyout worth about US$3.1 billion.

BC Partners and Silver Lake are buying the company, which provides systems to reduce the cost of healthcare claims, from rival buyout firms Carlyle and Welsh, Carson, Anderson & Stowe.

The deal values the company at about US$3.1 billion, a source familiar with the situation said, and is another example of private equity firms buying companies from each other as they look to deploy hundreds of billions of dollars of unspent funds.

MultiPlan is the leading provider of healthcare cost management services to insurers and health plan administrators in the U.S., processing more than 100 million medical claims a year.

The healthcare industry has been a hot spot for private equity deals as firms target a sector that has proved resilient during the financial crisis. U.S. buyout firm TPG and Canada Pension Plan last November led the $4 billion buyout of prescription drug sales data provider IMS Health, the largest leveraged buyout deal of 2009.

BC and Silver Lake together own a majority of satellite services group Intelsat and previously partnered in Unitymedia, the German cable television provider.

The deal marks BC's fifteenth acquisition out of its current 5.8 billion euro ($7.36 billion) fund, raised in 2005 before the peak of the leveraged buyout (LBO) boom.

It has spent about 85 percent of the capital and aims to start a new fundraising drive later this year. - Reuters

Shares end on positive note

KUALA LUMPUR: Share prices on Bursa Malaysia finished the week on a positive note on Friday, July 9 with sentiment boosted by the uptrend on Wall Street and confidence over economic growth, dealers said.

The FTSE Bursa Malaysia (FBM) KUALA LUMPUR COMPOSITE INDEX [] rose by 8.28 points to close at 1,324.31 points. It opened 0.13 point better at 1,316.16 points.

The key index moved between 1,315.88 points and 1,327.27 points throughout the day.

Dealers said the index was lifted by gains on banking stocks following the increase in the Overnight Policy Rate by 25 basis points to 2.75% on Thursday.'' ''

Kenanga Research said the main justification for the rate increase was Bank Negara Malaysia's positive note that global recovery has continued in the second quarter, supported by robust and broad-based growth in most emerging economies, in particular Asia, and a moderate recovery in advanced economies.

"Along with the better manufacturing data in May, we reckon it would likely support a reasonably high gross domestic product growth in the second quarter," it said.

Another dealer said the rate increase would help banks boost earnings.'' ''

The INDUSTRIAL INDEX [] increased 32.58 points to 2,633.85 points, PLANTATION [] Index gained 24.16 points to 6,273.94 points and the Finance Index advanced 58.91 points to 11,951.67 points.

The FBM Emas Index rose 52.79 points to 8,930.88 points and FBM70 [] Index increased 41.239 points to 8,928.27 points. The FBM Ace Index, however, fell 8.12 points to 3,761.73 points.

Gainers outnumbered losers by 405 to 238 while 276 counters were unchanged, 444 untraded and 25 others suspended.

Volume advanced to 664.333 million shares worth RM1.44 billion from 532.634 million shares worth RM971.134 million on Thursday.

Among active stocks, Time dotCom increased five sen to 50 sen, Axiata rose two sen to RM7.58 and Scomi gained 1.5 sen to 40 sen.

In heavyweights, Maxis rose one sen to RM5.31, Tenaga increased three sen to RM8.45 and IOI Corp advanced four sen to RM5.10. Sime Darby, however, fell one sen to RM7.71.

Among banking stocks, Maybank rose two sen to RM7.58, CIMB gained four sen to RM7.09, Public Bank increased two sen to RM11.94, AMMB Holdings added five sen to RM5.07 and Hong Leong Bank rose 14 sen higher to RM8.75.

Main Market turnover increased to 604.881 million shares valued at RM1.427 billion from 489.382 million shares valued at RM963.515 million on Thursday.

Volume on the ACE Market advanced to 31.402 million units worth RM5.011 million from 26.461 million units worth RM3.996 million on Thursday.

Warrants surged to 21.921 million shares valued at RM3.107 million from 14.23 million shares valued at RM1.706 million previously.

Consumer products accounted for 62.774 million shares traded on the Main Market, industrial products 113.083 million, CONSTRUCTION [] 56.257 million, trade and services 193.692 million, TECHNOLOGY [] 20.642 million, infrastructure 34.531 million, finance 59.434 million, hotels 486,900, PROPERTIES [] 29.562 million, plantations 15.501 million, mining 45,400, REITs 18.754 million and closed/fund 118,000. ' Bernama

Double dip fears sends investors to cash-EPFR

NEW YORK: Equity funds worldwide suffered more than $11 billion of net outflows in the first week of July, while money market funds saw the biggest inflows in 18 months amid fears of a double-dip recession, EPFR Global said on Friday, July 9.

Money market funds, an equivalent of cash for many investors, had inflows of $33.5 billion, while equity funds saw $11.25 billion move out of the door, fund tracker EPFR said in a statement.

Bond funds in aggregate absorbed another $3.64 billion for the week ended July 7 and global emerging markets equity funds took in $517 million.

Investors have become increasingly concerned about faltering economic growth after a rash of weaker than expected data. Last week, a report showed U.S. employers cut far more jobs than expected in June and the unemployment rate hit 9.5 percent -- the highest in nearly 26 years.

Double dip is a term that refers to a recession followed by a short-lived recovery. The World Bank said in June that a double-dip recession could not be ruled out in some countries if investors lose faith in efforts in Europe and elsewhere to tackle rising debt levels.

"Worse than expected U.S. labor and housing market data and fear of what stress tests of major European banks will reveal continued to weigh on sentiment towards the major developed market and the funds that invest in them during the first week of July," EPFR said.


Investors regained some confidence in the fund group in the latest week, sending fresh money to Asia.

Global emerging market equity funds saw $517 million in inflows and Asia ex-Japan equity funds absorbed $124 million.

Europe, Middle East & Africa funds and Latin America focused funds had outflows, suggesting willingness to take risks is still tentative.

Latin America posted its 13th consecutive week of outflows, driven by fears of a knock-on effect if the U.S. economy slows significantly.


Funds investing in the United States, the European Union's biggest export market had a rough week, with overall redemptions from U.S. Equity Funds exceeding $10 billion for only the second time this year.

Japan equity funds also posted outflows, their seventh in the past nine weeks, as a dip in domestic capital spending, questions about the effect of the yen's appreciation on Japan's exports and uncertainty about economic policy made investors cautious.


The lure of gold and precious metals as a hedge against uncertainty helped commodity funds top the list of EPFR Global-tracked sector funds once again in early July, with investors committing $419 million to this fund group, taking year-to-date inflows past the $11 billion mark.

The consumer goods sector funds were the second biggest absorbers of fresh money, pulling in $226 million.


Emerging market bond funds continued to soak up fresh money, despite waves of risk aversion.

In the latest week, the fund group saw $740 million in inflows.

Investors pulled $113 million out of high yield bond funds. U.S. bond funds attracted over $2.3 billion for the week, with funds investing in short-term and municipal debt posting the biggest inflows.

Global bond funds took in a net $631 million as brisk demand for recent European sovereign issues alleviated concerns about their generally heavy exposure to this region. - Reuters

Mah Sing buying Damansara land for RM31.8m

KUALA LUMPUR: MAH SING GROUP BHD [] has proposed to acquire 10.95 acres of land in Damansara, Selangor for cash consideration of RM31.86 million.

The company said on Friday, July 9 its unit Mestika Bistari Sdn Bhd had entered into a sale and purchase agreement with Azeera PROPERTIES [] (M) Sdn Bhd to acquire the freehold land for RM31.86 million or about RM67 per sq ft.

"The land will be developed into an industrial development to be named i-Parc3@Bukit Jelutong with an estimated gross
development value of approximately RM82 million," it said.

The land is within the Bukit Jelutong Business and TECHNOLOGY [] Park that has double frontage onto Jalan Subang Lama and Jalan Montfort.

Asian markets rally

KUALA LUMPUR: Asian markets rallied in the morning session on Friday, July 9 after the US reported positive data and hopes were boosted of a recovery in euro zone.

At 12.30pm, the FBM KLCI rose 7.2 points to 1,323.23. Turnover was 306.44 million shares valued at RM601 million. Advancing counters beat decliners 293 to 209.

The ringgit strengthened to 3.1985 to the US dollar from 3.2035 the previous day after Bank Negara raised the overnight policy rate (OPR) by 25 basis points to 2.75%.

RHB Research Institute said it believed Bank Negara would likely hold the OPR at 2.75% for the rest of this year, "given that there is no urgency to raise interest rates rapidly and the country's economy will likely slow down in the 2H of the year, as the global economy weakens".

Light crude oil rose 37 cents to US$75.81 while crude palm oil futures rose RM25 to RM2,300.

Nikkei 225 +0.58% 9,591.24 Hang Seng Index +1.45% 20,341.61 Shanghai Composite Index +1.31% 2,446.80 Singapore's Straits Times Index +0.52% 2,912.16 ''

At Bursa Malaysia, among the key 30 stocks in the FBM KLCI, PPB rose 52 sen to RM16.78 while HLFG added 17 sen to RM8.47 and Hong Leong Bank 11 sen to RM8.72. Petronas Gas added 15 sen to RM10 and MISC 15 sen also to RM8.83. Maybank inched up four sen to RM7.60.

LPI rose 30 sen to RM16.58 after announcing a stronger set of earnings in 2Q, declared an interim dividend and proposed a bonus issue.

Kenmark fell one sen to 9.5 sen with 13.6 million shares done following the latest development in the company after Bursa Malaysia Securities Bhd'' commenced enforcement proceedings against the company, its managing director and executive director.

Scomi rose two sen to 40.5 sen and Scomi-WA one sen to 20 sen. Sunway REIT was unchanged at 88.5 sen.

Tanjong fell 20 sen to RM17.60, Allianz-PR 21 sen to 40 sen and Allianz 11 sen to RM3.68.

#Flash* Maybank to raise deposit, BLR rates

KUALA LUMPUR: MALAYAN BANKING BHD [] will raise its deposit and base lending rates effective next Tuesday, July 13 after Bank Negara increased the overnight policy rate by 25 basis points to 3.75% on Thursday.

Maybank said on Friday, July 9 the deposit rates will be revised upwards by up to 25bps while its BLR will be increased by 25bps from 6.05% to 6.3%.

Maybank Islamic Bhd's base financing rate (BFR) will also be increased by 25bps to 6.3%.

The last revision was on May 18 when the BLR and BFR were increased from 5.8% to 6.05%.

Ekuinas picks CIMB Private Equity, KFH Asset Mgmt, Navis as fund managers

KUALA LUMPUR: Ekuiti Nasional Berhad (Ekuinas)has picked CIMB Private Equity Sdn Bhd, KFH Asset Management Sdn Bhd and Navis Capital Partners as outsourced fund managers (OFMs) to invest in Malaysian companies with high-growth potential.

Ekuinas said on Friday, July 9 the appointments were under its first tranche outsourcing programme after a selection from more than 50 firms at a "request for interest" briefing in December 2009. ''

Ekuinas chief executive officer Datuk Abdul Rahman Ahmad said under this first tranche outsourcing programme, more than RM500 million will be made available for investment, with Ekuinas expanding its allocation to RM400 million and the selected OFMs committing to raise at least an additional RM100 million from private sources.

"This will enable Ekuinas to leverage from private capital in undertaking its investments in line with government's policy of encouraging public-private partnership,' he said.

He said the outsourcing programme created the opportunity for dynamic Bumiputera companies to gain access to an enlarged pool of private capital and the opportunity to work together and partner the leading private equity firms operating in Malaysia to aggressively grow their businesses.

Ekuinas said 21 companies submitted their detailed proposals and the seven were shortlisted for detailed evaluation and from which the best ranked three firms were selected.

The outsourced fund managers underwent a rigorous evaluation process to ensure the selection adhered to global best practices.

"CIMB PE, KFHAM and Navis satisfied Ekuinas' criteria based on five key dimensions: the firms' strong investment track record, longstanding investment team experience, robust investment processes, strength in fund raising ability, and their alignment to Ekuinas' investment requirements and guidelines," said Ekuinas.

Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda said these three firms "have the necessary credentials and experience in successfully managing private equity funds to ensure the best companies are selected for investments'.

'All three firms are required and committed to investing in Bumiputera companies in line with Ekuinas' objective to enhance equitable Bumiputera economic participation through the creation of the next generation of leading companies,' he added.

According to Ekuinas strategy, the outsourcing programme will complement its direct investment activities in that it will focus on growth capital minority investments with smaller deal sizes averaging between RM15 million to RM40 million to help existing entrepreneurs take their businesses to the next level.

Ekuinas aims to invest more than RM4.5 billion in qualified companies over the next five years, with RM1 billion allocated under its outsourcing programme.

This programme will be undertaken in three tranches over a three year period, with an expected seven to 10 Outsourcing Fund Managers being appointed to manage these funds.

RHB Investment Bank buys 16m SunwayREIT units

KUALA LUMPUR: RHB Investment Bank, which is the stabilising manager for the Sunway Real Estate Investment Trust (REIT), acquired 16 million units on the first day of listing on Thursday, July 8.

SunwayREIT said on Friday that RHB Investment Bank bought the units at prices ranging from 87.5 sen to 89 sen.

Scomi Marine to dispose certain subsidiaries

KUALA LUMPUR: Trading in SCOMI MARINE BHD [] shares has been suspended from 11.26am on Friday, July 9 until 5pm on July 13.

The suspension, at the request of the company, was pending an announcement, said a Bursa Malaysia Securities circular.

Another statement late said: "The suspension involved a material corporate exercise involving a very substantial transaction which will entail the disposal of certain subsidiaries of the company."

Blue chips inch up, LPI leads

KUALA LUMPUR: Blue chips inched up in early trade on Friday, July 9, led by LPI but the gains were fairly limited ahead of the weekend while banks were mostly unchanged following Bank Negara's move to raise the overnight policy rate.

At 9.35am, the FBM KLCI was up 0.12 point to 1,316.15. Turnover was 46.66 million shares done valued at RM43 million. There were 104 gainers, 78 losers and 136 stocks unchanged.

LPI was the top gainer after posting improved earnings and announcing its bonus issue plan. It chalked up 26 sen to RM16.54 with 60,100 shares done.

Motor stocks CCB added 13 sen to RM6.55 and Proton 11 sen to RM4.47.

Other gainers were Titan, up six sen to RM1.69 while Superm ax added four sen to RM5.84.

Kenmark was the most active with 7.15 million shares done, down one sen to 9.5 sen after Bursa Malaysia Securities commenced enforcement proceedings against the company, its managing director, Hwang Ding Kuo @ James Hwang and executive director, Chang Chin-Chuan for various breaches of disclosure requirements under the Listing Requirements.

Tanjong fell the most, down 32 sen to RM17.48 with 25,900 shares done.

Kenmark slips on Bursa?s enforcement action

KUALA LUMPUR: Share price of KENMARK INDUSTRIAL CO. (M) BHD [] slipped in early trade on Friday, July 9 after Bursa Malaysia Securities Bhd'' commenced enforcement proceedings against the company, its managing director and executive director.

At 9.05am, it was down one sen to 9.5 sen. It was the most active with 4.76 million shares done.

The benchmark FBM KLCI advanced 0.19 point to 1,316.22. Turnover was 13.84 million shares valued at RM8.75 million.

On Thursday, Bursa Securities said it had commenced enforcement proceedings against Kenmark, MD Hwang Ding Kuo @ James Hwang and ED Chang Chin-Chuan for various breaches of disclosure requirements under the Listing Requirements.

Kenmark and the two directors have been served with a notice to show cause by Bursa Securities to make representations to Bursa Securities in respect of various alleged breaches of the LR.

Headwinds ahead for plantations?

KUALA LUMPUR: HLG Research says PLANTATION [] counters are likely to face cyclical headwinds in coming months, as CPO production starts to recover seasonally, while exports are likely to remain weak, given the relative high inventories of oilseeds and edible oils across the world.

The research house said on Friday, July 9 that IOI Corp's valuations are relatively richer against planters listed in Singapore and Indonesia (average 13-14 FY11 P/E).'' There is a downside risk to CPO price in the event of contagion of Europe's debt crisis.

'Despite technical indicators are showing some signs of improvement, IOI is still trapped in the downtrend line (DTL) started in March with a strong overhead resistance at RM5.20 and RM5.30 (200-d SMA). Hence, any rebound towards the stipulated resistance level is an opportunity to sell into strength,' it said.

On the downside, there are key support levels at RM4.88 (61.8% FR from 52-week low of RM4.37 and 52-week high of RM5.72), RM4.80 (middle DTL) and RM4.69 (76.4% FR).

'Our 3-month technical target is RM4.88, implying a 2.8x FY11 P/B (about'' 7% discount to its 10-year average at 3x),' it said.

HBDSVR sees FBM KLCI adding more gains

KUALA LUMPUR:'' After chalking up 16.5 points or 1.3% over the past three days, HwangDBS Vickers Research sees the FBM KLCI may still be in the mood to add on further gains ahead, possibly climbing towards its immediate resistance level of 1,340 on improving sentiment.

It said on Friday, July 9 the first boost comes from the extended recovery on Wall Street, which saw its key equity barometers rising between 0.7% and 1.2% at the closing bell last night lifted by better retail sales data and a drop in jobless claims.

Providing an added boost was is Bank Negara's decision to raise the overnight policy rate by 0.25% yesterday evening, its third straight increase (of a similar magnitude) since early March.

'In a sense, this signals the policymakers' confidence in our economic strength amid the ongoing European financial crisis, which could also enhance the investment appeal of the Ringgit.

'On individual stock impacts, the potential beneficiaries include banks with a high proportion of variable rate loans (such as Maybank, RHB Cap and Hong Leong Bank) while sentiment on property companies (like SP Setia) may be affected marginally by rising mortgage rates,' it said.

HDBSVR: More upside for MRCB

KUALA LUMPUR: Hwang DBS Vickers Research says MALAYSIAN RESOURCES CORP [] Bhd (MRCB) remains on its high conviction list.

It said on Friday, July 9 that it expects MRCB to be appointed master developer of Rubber Research Institute Malaysia land together with a CONSTRUCTION [] and developer role to transform the fortunes of the company considerably.

'Another potential catalyst which could surprise is the surge in construction flows where we have only imputed a conservative RM320m in new order wins. Reiterate BUY with SOTP-derived TP of RM2.25,' it said.

LPI top gainer on earnings growth, bonus issue plan

KUALA LUMPUR: Shares of LPI CAPITAL BHD [] advanced in early trade on Friday, July 9 after it reported a stronger set of earnings and proposed a corporate exercise.

At 9.13am, it was up 22 sen to RM16.50 with 48,700 shares done.

The FBM KLCI rose 0.46 of a point to 1,316.49. Turnover was 23.3 million shares done valued at RM15 million. Gainers led losers 68 to 34 while 81 stocks were unchanged.

LPI posted net profit of RM26.44 million in the second quarter ended June 30 versus RM22.74 million a year ago. It also declared an interim dividend of 10 sen per share.

The company proposed a bonus issue of up to 69.36 million new shares on a one for two basis'' and also a proposed renounceable rights issue of up to 13.87 million'' new rights shares at an issue price of RM7 per rights share.

The rights shares will be on the basis of one rights share for every 10 existing LPI shares held.

#Stocks to watch:* Banks, KNM, Kenmark, Bandar Raya

KUALA LUMPUR: Stocks are expected to rise on Friday, May 9 as sentiment will be given a boost by the third straight day of gains on Wall Street, but the gains could be limited ahead of the weekend.

On Wall Street, stocks rose for a third straight day on Thursday as investors were encouraged to see jobless claims fall and a handful of large retailers report solid sales.

The Dow Jones industrial average was up 120.71 points, or 1.20%, at 10,138.99. The Standard & Poor's 500 Index was up 9.98 points, or 0.94%, at 1,070.25. The Nasdaq Composite Index was up 15.93 points, or 0.74%, at 2,175.40.

At Bursa Malaysia, banks would be in focus after Bank Negara raised the overnight policy rate (OPR) by 25bps to 2.75% on Thursday.

Banks which would gain include those focusing on variable mortgages instead of fixed interest rate loans.

KNM GROUP BHD [] said its units had secured orders totaling RM288.8 million for several foreign contracts.

In KENMARK INDUSTRIAL CO. (M) BHD [], Bursa Malaysia Securities Bhd has commenced enforcement proceedings against the company, its managing director, Hwang Ding Kuo @ James Hwang and executive director, Chang Chin-Chuan for various breaches of disclosure requirements under the Listing Requirements.

In''BANDAR RAYA DEVELOPMENTS BHD [], it is buying from Limitless Holdings Pte Ltd'' the latter's entire 60% stake in Haute Property Sdn Bhd for a nominal sum of RM1.

However, this hinges on the agreement to participate with UEM Land Bhd to undertake the 'Residential North' project'' in the Puteri Harbour development in Nusajaya, Johor.

Bandar Raya will reimburse Limitless RM75 million for which Limitless had advanced to Haute towards partial payment by Haute of the development rights for the proposed project.

In SEG INTERNATIONAL BHD [], it has received Bank Negara's approval for the proposed rights issue of 124.73 million five-year 2010/2015 warrants. The warrants will be issued on the basis of one new warrant for every two shares held at five sen per warrant.

LPI CAPITAL BHD [] has proposed a bonus issue of up to 69.36 million new shares on a one for two basis'' and also a proposed renounceable rights issue of up to 13.87 million'' new rights shares at an issue price of RM7 per rights share.

The rights shares will be on the basis of one rights share for every 10 existing LPI shares held.




Bursa Securities takes enforcement action against Kenmark, 2 EDs

KUALA LUMPUR: Bursa Malaysia Securities Berhad has commenced enforcement proceedings against KENMARK INDUSTRIAL CO. (M) BHD [], its managing director, Hwang Ding Kuo @ James Hwang and executive director, Chang Chin-Chuan for various breaches of disclosure requirements under the Listing Requirements.

It said on Thursday, July 8 that Kenmark and the two directors have been served with a notice to show cause by Bursa Securities to make representations to Bursa Securities in respect of various alleged breaches of the LR.

The breaches included various disclosures made by Kenmark including the announcements on May 31, and June 1 and 4.

'Due process is therefore accorded to Kenmark and the directors prior to making a decision on the alleged breaches and Bursa Securities will impose appropriate sanctions should a finding of breach be made,' it said.

Bursa Securities said it also in the midst of various stages of investigations of other possible contraventions of the LR and upon completion of and subject to the outcome of these investigations, Bursa Securities may initiate other enforcement proceedings against the relevant parties.

Wall Street up for third day on data and retail sales

NEW YORK: Wall Street rose for a third straight day on Thursday, July 8 as investors were encouraged to see jobless claims fall and a handful of large retailers report solid sales.

Stocks have regained their footing after a slew of poor data had raised fears of a double-dip recession. But low market volume suggested investors are still skeptical, and few expect to see a sustained rally.

The Dow rose more than 1 percent, bolstered by late-day buying. Consumer staples .GSPS were the S&P's best-performing sector, with Costco Wholesale Corp (COST.O) rising 2.6 percent at $55.71. The sector gained 1.5 percent.

"The data we saw today was better than what we are used to seeing ... it shed a bit of hope," said Steve Goldman, market strategist at Weeden & Co in Greenwich, Connecticut.

"But there is still so much bearishness in the market that it is causing stocks to swing in such a swift manner."

The Dow Jones industrial average .DJI was up 120.71 points, or 1.20 percent, at 10,138.99. The Standard & Poor's 500 Index .SPX was up 9.98 points, or 0.94 percent, at 1,070.25. The Nasdaq Composite Index .IXIC was up 15.93 points, or 0.74 percent, at 2,175.40.

Teen apparel retailers like Abercrombie & Fitch (ANF.N) and department store chains like JC Penney Co (JCP.N) topped expectations in their June sales. JC Penney shares rose 6.7 percent to $23.24 and Abercrombie & Fitch Co jumped 7.8 percent to $35.45.

But semiconductor shares fell after posting their best one-day gain in weeks on Wednesday.

"It's a nervous environment, and there is not a whole lot of confidence in the market for investors to jump in with both feet," said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.

Micron TECHNOLOGY [] (MU.O) fell 2.3 percent to $8.69 and the PHLX semiconductor index .SOXX slipped 0.1 percent after rising more than 5 percent on Wednesday.

Apple (AAPL.O) was down 0.2 percent at $258.09 and Intel (INTC.O) fell 0.2 percent to $20.10.

Sales at stores open at least a year rose 3.1 percent for the month, according to company reports, just shy of the 3.2 percent increase that Wall Street predicted.

Even though sales grew, retailers relied heavily on promotions to win over cautious consumers in June.

Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 454,000 in the week ended July 3, the lowest level since early May, the Labor Department said. - Reuters

Thursday, July 8, 2010

Blue chips close higher, profit taking seen

KUALA LUMPUR: Share prices on Bursa Malaysia closed slightly higher on Thursday, July 8 as investors took the cue from the strong overnight close on Wall Street, dealers said.

The FBM KLCI closed 4.28 points higher to end the day at 1,316.03 lifted by gains in heavyweights, which saw Sime Darby adding eight sen to RM7.72 and CIMB five sen to RM7.05.

Gainers outnumbered losers by 365 to 242 while 275 counters remained unchanged. Volume was 532.63 million shares valued at RM971.13 million.

"The bullish closing by US stock market, which was driven by steady buying and optimism over the coming earnings results, provided support to the local market," a dealer said.

Some profit taking, however, was seen in the market as most investors were cautious over the global economic recovery. Sunway REIT, which made its debut, ended the day at 88.5 sen, or 1.5 sen below the institutional offer price of 90 sen. The retail offer price was 88 sen.

Among the Southeast Asian markets, Singapore's benchmark stock index rose 1.3% to the highest since May 13 while the Philippines climbed 1.4% to the highest since January 2008. Thailand, Indonesia and Vietnam ended the session with smaller gains.

Oil, which rose to around US$75 per barrel on Thursday, boosted energy counters across the region. Thailand's PTT Exploration and Production was up 0.4% while Indonesian coal miner Adaro Energy rose 1.8%.

In Bangkok, banks climbed ahead of second-quarter results due later in the month. Siam Commercial Bank and Kasikornbank each gained over 1%.

Sentiment was broadly positive after a university survey showing consumer confidence rose sharply in June as calm
returned after the end of bloody political protests in May, with optimism about the economy also growing.

Bright spots in the region included Singapore-listed precision engineering firm Armstrong Industrial, which rose 4.8
percent, helped by a rally in U.S. tech names overnight.

"The overall outlook for the TECHNOLOGY [] sector is pretty bright this year, so firms in Singapore are likely to benefit
as well," said a local trader.

Shares in Indonesian provincial lender PT Bank Pembangunan Jawa Barat Banten (Bank Jabar Banten) made their debut in Jakarta and jumped as much as 50% from the initial public offering (IPO) price of 600 rupiah .

A Jakarta-based trader said buyers were mostly from foreign financial institutions that saw the bank as having a cheap
valuation and good performance. Bernama/ Reuters

Maybank targets RM10m sales at TreatsFair

KUALA LUMPUR: MALAYAN BANKING BHD [] (Maybank) expects over one billion TreatsPoints worth RM5 million to be redeemed by its cardmembers at the four-day Maybank TreatsFair 2010 Carnival, which started on Thursday, July 8.

This will be a 25% increase from last year's event which saw 750 million TreatsPoints worth about RM4 million redeemed, said the bank.

With this year's theme of "Close to You", Maybank is targeting sales to exceed RM10 million, which will be 25 per cent higher from last year.

Maybank's deputy president and head of community financial services, Lim Hong Tat, said more than 180,000 visitors were expected at the carnival as it coincided with the bank's 50th anniversary celebrations.

"The TreatsFair offers tremendous savings for customers as they do not need to spend extra but only utilise their loyalty points," Lim said at the event launch at the Mid Valley Megamall.

"For the first time, customers can use their TreatsPoints to pay for theirtraffic summons as well as use their Maybank credit or debit cards to pay formunicipal council fees, namely Dewan Bandaraya Kuala Lumpur, at the fair," he

The Maybank TreatsFair is the largest convenient shopping and cashless one-stop carnival in the cards industry.

Purchases can be made via on-the-spot redemption of reward points at participating merchants for a range of goods and

The carnival will also hold its own "Wheels of Treats" offering a total of 10 million TreatsPoints, which is worth RM50,000, and air tickets to holiday destinations like Bangkok and Jakarta. - Bernama

Fitch affirms Malaysia's currency ratings, concerns over weak public finances

KUALA LUMPUR: Fitch Ratings affirmed Malaysia's Long-term foreign currency Issuer Default Rating (IDR) at 'A-' with a Stable Outlook. However, it was concerned about the structural weaknesses in Malaysia's public finances which continued to weigh on the ratings.

At the same time, the Long-term local currency IDR is affirmed at 'A' with a Stable Outlook. The agency has also affirmed the Short-term foreign currency IDR at 'F2' and the Country Ceiling at 'A'.

Below is the Fitch statement issued on Thursday, July 8

"The deterioration in Malaysia's public finances that motivated the local-currency rating downgrade in 2009 looks unlikely to be unwound soon. However, resumed economic growth will help stabilise public debt ratios and support the Stable Outlook on the ratings," said Andrew Colquhoun, Head of Asia-Pacific Sovereigns at Fitch.

"The authorities' structural reform agenda has the potential to improve Malaysia's growth prospects, but the government's ability to overcome political obstacles to reform is not assured and it will take concrete progress to exert upward pressure on the ratings."

Fitch projects Malaysia's federal government debt to reach 54.4% of GDP by end-2010, up from 41.4% at end-2008 and well above the 'A' median of 40%. The federal deficit hit 7.6% of GDP in 2009 on the agency's measure and is projected to narrow only moderately to 6% in 2010.

The government announced extra spending worth about 1.6% of GDP in March 2010, indicating that fiscal consolidation is not the authorities' top priority.

Fitch downgraded Malaysia's local currency IDR by one notch in 2009 to reflect this fiscal deterioration, though the agency expects the debt ratio to stabilise as GDP growth resumes to a projected 6% in 2010, supporting the Stable Outlook on the ratings.

However, structural weaknesses in Malaysia's public finances continue to weigh on the ratings. The country's fiscal revenue base remains relatively weak, with federal revenues at 22.7% of GDP in 2009, against a 10-year average for the 'A' range of 34%.

Furthermore, fiscal dependence on the energy sector is high and rising, threatening higher revenue volatility in the medium-term. Energy-derived revenues were 41% of total fiscal revenues in 2009, up from 20% in 2003. T

he introduction of a goods and services tax, which could strengthen the revenue base, has been postponed into 2011.

However, the ratings remain supported by the sovereign's ongoing access to funding from a deep domestic capital market and from international markets.

Some 30% of the debt was held within the broader public sector at end-2009, diminishing scope for shifts in investor sentiment to disrupt sovereign financing.

The external finances are the key rating strength, underpinned by current account surpluses (CAS) averaging 16.2% of GDP over 2005-2009.

The sovereign's net foreign assets were worth 38% of GDP by end-2009, the third-highest ratio in the 'A' category (only behind China and Taiwan), with official foreign reserves at USD96.7bn.

However, Malaysia's persistent CAS reflects an imbalance of domestic savings over investment, pointing to broader structural weaknesses in the economy that manifest themselves in limited domestic investment opportunities.

Malaysia's average growth rate of 4.1% for 2005-2009 was only in line with the 'A' range median, despite Malaysia's lower GDP per head of USD7000 in 2009, which is well below the 'A' median of USD16,800.

The government's "New Economic Model" structural reform agenda is aimed at raising average annual growth to 6% out to 2015. While implementation of the agenda would be positive for Malaysia's economic and sovereign credit fundamentals, Fitch notes that reforms will likely encounter considerable political opposition.

A faster than expected fiscal consolidation which puts the government debt ratios on a sustainable downwards path, along with measures to strengthen the fiscal revenue base, would exert upward pressure on the ratings.

Progress with the government's structural reform agenda would tend to strengthen the economy's growth prospects and the sovereign's credit fundamentals. Conversely, renewed fiscal deterioration would see negative pressure build on the country's ratings.

#Update* Bank Negara ups OPR by 25bps to 2.75%

KUALA LUMPUR: Bank Negara raised the Overnight Policy Rate (OPR) by 25 basis points to 2.75% at the Monetary Policy Committee (MPC) meeting on Thursday, July 8.

"The floor and ceiling rates of the corridor for the OPR are correspondingly raised to 2.50% and 3% respectively," it said.

The central bank said the MPC considered the new level of the OPR to be appropriate and consistent with the current assessment of the growth and inflation prospects.

It also said the stance of monetary policy continues to remain accommodative and supportive of economic growth.

On the domestic economy, it said recent trends in industrial production, financing activity, labour market conditions and external trade indicate that economic activity has remained robust in the second quarter.

"Going forward, while external developments may result in some moderation in the pace of growth, the domestic economy is expected to remain strong with continued improvements in private consumption and investment, and augmented by public investment spending," it said.

Domestic inflation recorded modest increases in April and May, mostly on account of supply factors.

Bank Negara said prices were expected to rise at a gradual pace in the coming months, in line with the continued improvement in domestic economic conditions, and taking into account possible adjustments in administered prices.

"Overall, inflation is, however, expected to remain moderate going into 2011," it said.

Temasek says CEO Ho to stay, portfolio up 43%

SINGAPORE: Singapore's sovereign investor Temasek reported its portfolio rose an annual 43 percent to S$186 billion ($134 billion) at end-March, lagging some benchmarks and peers, and said chief executive Ho Ching was not leaving.

Temasek officials, releasing the 2010 annual report on Thursday, said the value of the portfolio had fallen since March in line with weak global markets, but declined to give a figure.

Executive Director Simon Israel emphatically told reporters the chief executive of Temasek Holdings, the world's eighth-largest sovereign wealth fund, was staying.

"Ho Ching is our CEO, she is continuing as our CEO," he said. "There is no, underline no, active, immediate search for a CEO."

Speculation on Ho's future resurfaced in May when Temasek announced former Singapore Exchange CEO Hsieh Fu Hua would join as executive director and president in August to assist her in areas such as talent development and succession planning.

Ho, the wife of Singapore Prime Minister Lee Hsien Loong and the fifth most powerful woman in the world last year, according to Forbes, had earlier planned to leave by October 2009.

But Ho's designated successor, former BHP Billiton CEO Charles Goodyear, left Temasek in July last year citing differences in strategy.

Ho, 57, has been CEO since January 2004.

Temasek also said it stepped up its focus on Asia, particularly Singapore, in the 2009/10 financial year, adding that strategy would be maintained for the forseeable future, given volatility in other world markets.

"Choppy waters lie ahead, but Asia will maintain its secular long-term growth," Chairman S. Dhanabalan said in a statement. "Our focus on Asia continues."

The company said 78 percent of its portfolio was in Asia as of end-March, up from 74 percent a year previously. Investments in developed economies dropped to 20 percent from 22 percent.

By sector, Temasek increased its investments in the financial sector to 37 percent of its portfolio from 33 percent. Exposure to telecommunications, media and tech sectors dropped to 24 percent from 27 percent, while investments in transport and industrials fell to 18 percent from 19 percent.

Temasek dismissed as "speculation" talk that it will take a strategic stake in troubled oil major BP Plc as it struggles with a devastating oil leak in the Gulf of Mexico.

But its investments in the energy and resources sector increased to 6 percent at end-March from 5 percent, representing over $1.3 billion.

Temasek has hit the headlines in recent months for aggressive buying in the sector, including convertible preferred stock in U.S. natural gas firm Chesapeake Energy and India's GMR Energy, and shares in Canadian platinum producer Platmin.

But some of those investments were not reflected in the annual report since they fall in the current financial year.


Temasek's net profit for the financial year fell to S$4.6 billion from S$6.2 billion, which it said was due to lower contributions from portfolio firms.

The value of the portfolio in March was a record for Temasek, which launched operations in 1974 with initial assets of S$354 million.

But its growth lagged the MSCI Asia ex-Japan index, which rose 63 percent in the 12 months to March in Singapore dollar terms, according to Temasek. According to Reuters' calculations, Templeton Emerging Markets Fund returned 68 percent in the same period.

"We are not a fund," Executive Director Israel said. "We are a long-term investor. We do not enter and exit markets the way a fund does."

Chief Financial Officer Leong Wai Leng added that at least 22 percent of Temasek's holdings were in unlisted assets, which were calculated at book value and therefore did not reflect the rise in valuations of listed assets as markets surged in 2009/10.

"Over two years, our valuation is broadly in line with other indices," she said.

"As a long term investor, it (Temasek) has the option to take concentrated positions. It is important to note that we do not manage our portfolio relative to the capital markets," Leong said.

Temasek is wholly owned by Singapore's Ministry of Finance, but plans to eventually allow the public to invest in it.

As a test case, officials said subsidiary investment vehicle SeaTown Holdings would look at co-investment from financial institutions in three to five years. - Reuters

Teck Guan top loser on receivables worries

KUALA LUMPUR: TECK GUAN PERDANA BHD []'s share price fell the most on Bursa Malaysia on Thursday, July 8 as investors cautious about its receivables.

At 3.48pm, it is down 13 sen to 43 sen with 5,000 shares done.

It reported that its outstanding receivables for more than 12 months as at April 30, 2010 totalled RM71.56 million. However, it expected full recovery by end of January 2012.

Teck Guan expected RM39.61 million to be settled within 12 months and the remaining RM31.95 million to be resolved within one to two years

IMF raises 2010 world GDP forecast, flags Europe risks

HONG KONG:'' The International Monetary Fund upgraded its 2010 global growth forecast on Thursday, July 8 citing robust expansion in Asia and renewed U.S. private demand, but warned the euro area's debt crisis posed a big risk to recovery.

The IMF said the euro zone's sovereign financing problems and resulting financial market turbulence were significant challenges, especially with the web of financial and trade links connecting Europe to the world. However, a double-dip world recession was highly unlikely.

The fund raised its 2010 global output forecast to 4.6 percent from 4.2 percent in April's review of the global economy, but kept its 2011 view unchanged at 4.3 percent.

The world economy shrank 0.6 percent in 2009 as a result of the global financial crisis.

"What has happened in Europe is likely to slow down the path to recovery relative to what could have happened, but I think the chances of a double dip are very small, as you know we're forecasting fairly strong growth for the world economy this year," Olivier Blanchard, the IMF's chief economist, said at a briefing in Hong Kong for the organisation's latest World Economic Outlook and Global Financial Stability reports.

It was the first time the IMF updated these reports from Hong Kong.

The euro fell 8 percent in the second quarter of 2010, the largest quarterly decline since the first quarter of 2009, on fears that some European countries in the currency group may not be able to dig themselves out of their deep debt holes.

While uncertainty about bank regulation has added to investor concerns, the IMF focused the majority of both reports on the implications of the euro zone sovereign crisis.

In the news briefing, Blanchard said the European bank stress test disclosures due on July 23 were an important step toward transparency but underscored that countries must return to a sustainable level of fiscal spending.

Under one scenario -- assuming shocks to the global financial system resulting from Europe's debt problems are as severe as those experienced in the wake of Lehman Brothers' failure in 2008 -- world GDP growth in 2011 would be reduced by 1.5 percentage points, the IMF said.


Persistent weakness in the U.S. housing and labour markets, euro zone debt problems and a slowdown in growth of manufacturing activity in Asia have made investors speculate the global economy will slow sharply for the rest of the year.

The IMF on Thursday cut its 2011 growth forecasts for Britain, Canada, the euro zone, emerging economies and Japan.

The euro area's 2010 GDP was seen expanding 1 percent, unchanged from April, although the 2011 GDP forecast was trimmed by 0.2 percentage point to 1.3 percent.

The biggest upward revisions to growth were in developing economies. Brazil's 2010 growth forecast was raised by 1.6 percentage points to 7.1 percent and its 2011 forecast was lifted by 0.1 percentage point to 4.2 percent.

The IMF also raised its 2010 forecast for China's growth to 10.5 percent from 10.0 percent.

Blanchard said Beijing's shift last month to allow more flexibility in the yuan was headed in the "right direction." The IMF has said before the yuan is significantly undervalued.

Jose Vinals, the IMF's financial counsellor and director of the monetary and capital markets department, downplayed talk of a collapse in China's real estate market.

Asked if a bubble was forming in Chinese property, he told Reuters Insider TV: "It's too early to say this is the case. I think that this is not likely to be the case if these measures are effective as we expect them to be."

Kenneth Rogoff, former chief economist at the IMF, speaking at a conference in Hong Kong on Tuesday, said China faced a property market bubble. Although officials were doing the right thing by trying to clamp down on real estate, the ultimate impact on the banking system was uncertain, he said.

Blanchard said the IMF was working with China to bring more clarity on bank lending to local governments. Official Chinese data show Chinese banks may have as much as $1 trillion in loans to local governments on their books.

"We think it is manageable but we think it has to be much more transparent. And maybe some of the loans that were made were unwise," Blanchard said. - Reuters

Sime Darby, CIMB lift FBM KLCI

KUALA LUMPUR: Key Asian markets mostly stayed in positive territory at midday on Thursday, July 8, buoyed by the higher overnight closing at Wall Street, as well as a bullish company forecast that fuelled optimism about the coming U.S. earnings season and underpinned a slow return by investors to riskier assets.

Further good news came with the release of Australian employment figures that surged well above forecasts, promising to boost household incomes and spending and pushing the Australian dollar to its highest since late June, according to Reuters.

At Bursa Malaysia, the FBM KLCI gained 1.54 points to 1,313.29, lifted by gains including Sime Darby, CIMB and PPB.'' Market breadth was positive with gainers leading losers by 295 to 188, while 257 counters traded unchanged. Volume was 278.26 million shares valued at RM396.29 million.

Crude palm oil for the third month delivery jumped RM37 per tonne to RM2,287; gold rose US$1.90 per ounce to US$1,204.65 as strong physical buying kicked in after a recent drop to a six-week low. Meanwhile, crude oil rose 66 cents per barrel to US$74.73 on plunging US inventories.

Nikkei 225 +2.65% 9,525.81 Hang Seng Index +1.43% 20,141.32 Singapore's Straits Times Index +1.25% 2,896.84. Shanghai Composite Index -0.31% 2,413.70 Taiwan's Taiex Index +1.06% 7,614.57 Kospi +1.27% 1,697.01 ''

Among the major gainers on Bursa Malaysia, Sime Darby rose eight sen to RM7.72, CIMB and PLUS four sen each to RM7.04 and RM3.44, PPB up 20 sen to RM16.30 and Tanjong added 12 sen to RM17.78.

YTL Corp gained seven sen to RM7.38; Genting, AMMB and Genting Malaysia added two sen each to RM7.47, RM5.02 and RM2.64, respectively, while Maybank and Tenaga rose one sen each to RM7.55 and RM8.42.

Other gainers included DFZ Capital, Nestle, BAT and Top Glove.

Newly-listed SunREIT was the most actively traded counter with 55.49 million units done. The counter ended the morning session at 87.5 sen, down 2.5 sen from the institutional price of 90 sen. The retail offer price was 88 sen.

Sinotop's rights shares continued sliding and fell one sen to close at one sen at the mid-day break with 8.06 million units traded.

Other actives included Titan, AirAsia, Genting Malaysia and Berjaya Corp.

Teck Guan was the top loser and fell 13 sen to 43 sen. It reported that its outstanding receivables for more than 12 months totalled RM71.56 million. It expected full recovery by end of January 2012. It expected RM39.61 million to be settled within 12 months and the remaining RM31.95 million to be resolved within one to two years.

IOI Corp and Khind lost 11 sen each to RM4.98 and RM1.11, Kim Hin Industry and UMS Holdings down nine sen each to RM1.16 and RM1.19, while Handal and Perstima lost seven sen each to 63 sen and RM4.83.

#Flash* IPI for May up 12.5% on-yr

KUALA LUMPUR: Malaysia's industrial production index (IPI) surged 12.5% in May from a year ago, underpinned by the strong growth in the manufacturing sector.

The Statistics Department said on Thursday, that May IPI was up 3.3% from April. The April IPI was revised to 10.7% growth on-year.

"The increase in May 2010 was due to the increases in the two indices -- manufacturing (18.7%) and electricity (11.5%). However, the index of mining posted a decrease of 0.2%," it said.

The department said the cumulative index for January-May 2010 increased 11.3% from the previous corresponding period.

On the manufacturing output in May this year, the department said it increased 18.7% from a year ago. The output for April'' increased by 15.1% (revised) from a year ago also.

"As compared with the preceding month, the output for May 2010 increased 3.8%. The growth for the first five months of 2010 increased by 16.0% as compared with the same period of last year," it said.

Final retail price for CapitaMalls Malaysia Trust at 98 sen

KUALA LUMPUR: The final retail price for the CapitaMalls Malaysia Trust has been fixed at 98 sen and the institutional and cornerstone price fixed at RM1. The initial offer price for retail investors was RM1.08.

In a statement to the Singapore Exchange, the manager of CapitaMalls Malaysia Trust, said on Thursday, July 8 it had received strong interest from institutional and retail investors for its initial public offering (IPO) of 786.52 million units.

"The price for institutional and cornerstone investors has been fixed at RM1 per unit, while the final retail price has been fixed at 98 sen per unit.

"At the unit price of RM1, institutional investors are expected to get distribution yields1 of 7.2% for the forecast period 2010 and 7.5% for the forecast year 2011," it said.

The institutional book for CMMT opened for subscription on June 25 June and closed on Wednesday, while the retail offering was open for application from June 28 to July 5.

CMMT will be listed on the Main Market of Bursa Malaysia Securities Bhd on July 16.

Asian markets advance

KUALA LUMPUR:'' Asian stock markets advanced on Thursday, July 8, mirroring the overnight gains at Wall Street where the Dow Jones Industrial Average surged nearly 3%.

US stocks logged their best one-day gain in about six weeks on Wednesday after a bullish forecast from financial company State Street Corp fueled optimism about the coming earnings season and helped the S&P 500 break above a major resistance level.

The Dow Jones Industrial Average climbed 274.66 points, or 2.82%, to 10,018.28 points. The Standard & Poor's 500 Index gained 32.21 points, or 3.13%, to 1,060.27 points. The Nasdaq Composite Index advanced 65.59 points, or 3.13% to 2,159.47 points.

At the regional markets, Japan's Nikkei 225 Index jumped 2.67% to 9,527.21 points, the South Korean Kospi Index 1.35% to 1,698.23 points, Singapore's Straits Times Index 1.19% to 2,895.04 points, Taiwan's Taiex Index 0.98% to 7,608.13 and the Shanghai Composite Index up 0.58% to 2,435.18 points.

Hong Kong's Hang Seng Index, meanwhile, opened 1.8% higher at 20,221.69 points.

At Bursa Malaysia, the FBM KLCI rose 2.90 points to 1,314.65 points at 10am, lifted by gains including at Sime Darby, PPB and Tanjong.

Market breadth was positive with gainers outpacing losers by 248 to 80, while 150 counters traded unchanged. Volume was 128.49 million shares valued at RM150.65 million.

Commenting on the FBM KLCI, RHB Research Institute Sdn Bhd said after retreating to the 40-day SMA near 1,304, the FBM KLCI recovered with mild bargain-hunting support in the afternoon session on Wednesday.

At the close, the FBM KLCI ended with a second positive candle, implying further upside potential on Thursday, it said.

"In fact, with a fresh 'double buy' signal on the short-term momentum indicators, it is set to rechallenge the 10-day SMA near 1,315 soon. A further clearance of the 10-day SMA will confirm a technical rebound on the index.

"However, given the lower participation level of late, the current recovery might not last, in our view. Immediate support is seen near the major psychological level at 1,300, followed by the 40-day SMA," it said on July 8.

Among the major gainers on Bursa Malaysia this morning, Nestle added 30 sen to RM35.10, PPB up 20 sen to RM16.30, Top Glove 18 sen to RM13.64, BAT 14 sen to RM43.54 and Tanjong rose 12 sen to 17.78.

Meanwhile, Berjaya Land added nine sen to RM4.30, Boustead eight sen to RM3.88, Sime Darby seven sen to RM7.71 and Berjaya Corp two sen to RM1.25.

SunREIT, which made its debut on the Main Market of Bursa Malaysia today, was the most actively traded counter with 36.64 million units done. The counter slipped 1.5 sen to 88.5 sen at 10am.

Other actives included both Sinotop's mother and rights shares, KNM, Berjaya Corp, Genting Malaysia and Kumpulan Europlus.

OSK Research: SunREIT worth 97c

KUALA LUMPUR: Sunway Real Estate Investment Trust (SunREIT) would be worth 97 sen based on 1.0 times price to net asset value (P/NAV), says OSK Research.

It said SunREIT, which is listing on Thursday, July 8, will be the largest Malaysian REIT (M-REIT), with assets worth RM3.7 billion and a free float of'' about RM1.6 billion.

With its exposure to the retail, hospitality and office sub-sectors, Sunway REIT is a defensive REIT that will offer unitholders a longer term growth catalyst.

Given its lower dividend yield of 6.9% (vs the sector's 8.5%) and the fact that it will be trading at 1.0 times P/NAV, Sunway REIT may appeal to only certain classes of investors, especially those with a defensive investment strategy.

'Based on 1.0 times P/NAV, Sunway REIT would be worth 97 sen,' it said.

F&N up in early trade

KUALA LUMPUR: Fraser and Neave Holdings' (F&N) price rose on Thursday, July 8 after it received shareholders' nod to divest its entire equity interest in Malaya Glass Products Sdn Bhd for RM738.6 million. At 9.05am, F&N added six sen to RM12.70 with 4,800 shares done.

"The completion of transaction is now subject to the Ministry of International Trade and Industry approval next week," F&N CEO Tan Ang Meng said.

F&N proposed to divest its 100% equity interest in Malaya Glass to Berli Jucker Public Company Ltd and ACI International Pty Ltd for US$221.7 million (RM738.6 million).

F&N would have a net cash of about RM1 billion after the disposal.

FBM KLCI up in early trade

KUALA LUMPUR: The FBM KLCI rose on Thursday, July 8 in line with regional markets after after the firmer overnight close on Wall Street which saw the Dow Jones industrial average surge nearly 3%.

US stocks logged their best one-day gain in about six weeks on Wednesday after a bullish forecast from financial company State Street Corp fueled optimism about the coming earnings season and helped the S&P 500 break above a major resistance level.

The Dow Jones Industrial Average climbed 274.66 points, or 2.82%, to 10,018.28 points. The Standard & Poor's 500 Index gained 32.21 points, or 3.13%, to 1,060.27 points. The Nasdaq Composite Index advanced 65.59 points, or 3.13% to 2,159.47 points.

At 9.15am, the FBM KLCI gained 4.18 points to 1,315.93. Gainers led losers by 164 to 18, while 80 counters traded unchanged. Volume was 55.36 million shares valued at RM55.16 million.

Among the gainers on Bursa Malaysia, Nestle added 30 sen to RM35.10, Top Glove 20 sen to RM13.66, and BAT 14 sen to RM43.54.
CIMB, F&N, Bursa and K-Star Sports rose six sen each to RM7.06, RM12.70, RM6.98 and RM2.40 respectively.

Newly-listed SunREIT slipped one sen to 89 sen with 19.19 million units traded. Other actives in early trade included Berjaya Corp, Scomi, KNM and Sinotop's rights shares.

SunREIT active, opens at 89c

KUALA LUMPUR: Sunway Real Estate Investment Trust (SunREIT) made its debut on the Main Market of Bursa Malaysia on Thursday, July 8 at 89 sen.

At 89 sen, this one sen below its institutional price of 90 sen. The retail price is 88 sen.

At 9.05am, it was'' the most actively traded counter with 10.85 million units done.

With an initial investment of PROPERTIES [] worth nearly RM3.73 billion, SunREIT will be the largest listed REIT on the local bourse with units in circulation totalling 2.68 billion.

Analysts said with RM3.73 billion of assets, its more than double the second biggest REIT of Starhill's at only RM1.55 billion

A positive point for SunREIT is that Suncity will only hold 38% upon listing so its free float is 62% and the hope is that it will be a lot more liquid than other Malaysian REITs.

SunREIT has assets lined up to be injected into the REIT namely Sunway Giza (shopping mall in Kota Damansara), Sunway Phase 3 and Sunway Hotel Penang as well as others. So it may appeal to some looking for a bigger defensive counter with growth prospects.

Kencana up on RM201.1m contract

KUALA LUMPUR: KENCANA PETROLEUM BHD []'s share price advanced on Thursday, July 8 after its unit secured a RM201.1 million contract from Houston-based Newfield Peninsula Malaysia Inc to provide procurement and CONSTRUCTION [] services for topsides.

At 9.25am, Kencana was up two sen to RM1.48 with 391,200 shares done.

Kencana said on Wednesday, July 7 the contract comprises of the procurement and construction wellhead platform topside, central processing platform topside, living quarters and bridge for PM329 East Piatu development project, located off Peninsular Malaysia.

Classy Spain stun Germans to reach final

JOHANNESBURG: Spain killed off Germany with a single goal in a pulsating World Cup semi on Wednesday, July 8 to set up a final with the Netherlands where a new winner of soccer's biggest prize will be crowned.

A 73rd minute flying header by defender Carles Puyol from a perfectly placed corner settled one of the best matches of the tournament, in which the ball swung from end to end and Germany mounted waves of desperate attacks in the final minutes.

The Netherlands beat Uruguay 3-2 on Tuesday to reach their first final since 1978.

The result in Durban was a repeat of Spain's 1-0 victory against Germany in the Euro 2008 final and will mean a European team will now be crowned world champions outside Europe for the first time, at Johannesburg's cavernous Soccer City stadium.

Spain and the Netherlands are two of the best sides never to have won the trophy, but that will all change ' for one of the teams ' on Sunday.

Spain, who looked less impressive earlier in the tournament than the high-scoring Germans but have gradually improved, produced their best performance to beat their young opponents.

"Players from defense to attack were extraordinary and played a great game. We have another game to play... Holland represent the values of Dutch football very well and they'll be very tough rivals," said Spain coach Vicente del Bosque.

In Spain's earlier matches, striker David Villa's killer instinct in pouncing on any chance had brought them victory but today he was frequently stifled by German defenders.

Orange fever
He was ebullient after the match, however: "We're very happy. The team played their best game yet. We've shown that in the big moments we've risen to the occasion."

German goalkeeper Manuel Neuer was gracious in defeat: "They deserved to win and we must now wish them all the best for the final," he said.

German manager Joachim Loew added: "I believe they'll (Spain) win this tournament... We played a great tournament but weren't as sharp tonight as we have been. It's unfortunate."

Back in Germany the defeat left heartbroken fans in tears. Men and women wept at a public viewing area in Berlin where 350,000 had gathered to watch on big screens. In another crowd of 50,000 in Munich, many also shed tears.

In contrast, the Dutch nation were swept up in Orange fever on Wednesday after their defeat of Uruguay, which took them to their third World Cup final after defeats in 1974 and 1978.

More than 80,000 people ' or 10 percent of Amsterdam's population ' watched on open-air screens in the city, which erupted in orange fireworks when the final whistle blew.

The speed and quality of the German side has been one of the surprises of the tournament. Up until the semi-final, the Germans had been the more impressive, with their youngest squad in 76 years scoring four goals on three occasions past Australia, England and Argentina.

But Spain's domination of possession and passing under pressure on Wednesday finally made the difference.

Octopus oracle right
While German fans were in mourning the victory vindicated yet again a supposedly psychic octopus which has correctly predicted every result in Germany's World Cup games, including Wednesday's loss.

Paul the octopus, who lives in an aquarium in western Germany, makes his prophecy by picking food from containers marked with the flags of the two teams.

Germany coach Joachim Loew kept on his lucky blue sweater for the semi-final but its magic failed to counter the mystic mollusc's prophecy.

Organizers said on Wednesday that Africa's first World Cup, which skeptics had for years predicted would be a disaster, would garner the third highest attendance ever after passing the three million mark. Only the tournaments in United States in 1994 and Germany in 2006 had bigger crowds.

Vuvuzelas have been the unique symbol of South Africa 2010, but the plastic trumpets which sound like the drone of a swarm of angry bees, are hated by many, especially television audiences.

Stadium authorities in New Zealand have banned them for next year's rugby World Cup

The vuvuzela craze has even reached Peru, but for all the wrong reasons. Two women were arrested in front of a Lima school for trying to sell marijuana stuffed into the horns. ' Reuters

#Stocks to watch:* SunREIT, F&N, Kencana, EON Cap

KUALA LUMPUR: Some optimism is expected to be seen on Thursday, July 8 after the firmer overnight close on Wall Street which saw the Dow Jones industrial average surge nearly 3%.

US stocks logged their best one-day gain in about six weeks on Wednesday after a bullish forecast from financial company State Street Corp fueled optimism about the coming earnings season and helped the S&P 500 break above a major resistance level.

The DJIA climbed 274.66 points, or 2.82%, to 10,018.28. The Standard & Poor's 500 Index gained 32.21 points, or 3.13%, to 1,060.27. The Nasdaq Composite Index advanced 65.59 points, or 3.13% to 2,159.47.

The timing is also indeed perfect for the listing of Sunway Real Estate Investment Trust (SunREIT). The final retail price is 88 sen.

With an initial investment of PROPERTIES [] worth nearly RM3.73 billion, SunREIT will be the largest listed REIT on the local bourse with units in circulation totalling 2.68 billion.

Analysts said with RM3.73 billion of assets, its more than double the second biggest REIT of Starhill's at only RM1.55 billion

A positive point for SunREIT is that Suncity will only hold 38% upon listing so its free float is 62% and the hope is that it will be a lot more liquid than other Malaysian REITs.

SunREIT has'' assets lined up to be injected into the REIT namely Sunway Giza (shopping mall in Kota Damansara), Sunway Phase 3 and Sunway Hotel Penang as well as others. So it may appeal to some looking for a bigger defensive counter with growth prospects.

Meanwhile, KENCANA PETROLEUM BHD []'s unit has secured a RM201.1 million contract from Houston-based Newfield Peninsula Malaysia Inc. to provide procurement and CONSTRUCTION [] services for topsides.

It said on Wednesday, July 7 the contract comprises of the procurement and construction wellhead platform topside, central processing platform topside, living quarters and bridge for PM329 East Piatu development project, located off Peninsular Malaysia.

Fraser and Neave Holdings (F&N) has received shareholders' nod to divest its entire equity interest in Malaya Glass Products Sdn Bhd for RM738.6 million.

"The completion of transaction is now subject to the Ministry of International Trade and Industry approval next week," F&N CEO Tan Ang Meng said.

F&N proposed to divest its 100% equity interest in Malaya Glass to Berli Jucker Public Company Ltd and ACI International Pty Ltd for US$221.7 million or about RM738.6 million.

F&N would have a net cash of about RM1 billion after the disposal.

EON CAPITAL BHD [] will go ahead and table HONG LEONG BANK BHD []'s offer to acquire the entire assets and liabilities to its shareholders an an extraordinary general meeting to decided later.

EON Cap said the decision was made by the board following consultation with its legal advisers and the board (with the exception of Ng Wing Fai).

Meanwhile, local economic data to be released on Thursday include the May industrial production index and manufacturing sales value.

Bank Negara's monetary policy meeting starts Thursday to decide on the overnight policy rate. It kept the OPR at 2.5% at its last meeting.

The central bank raised the OPR twice this year by 25bps each on March 4 and May 13 to the current level of 2.50%. Recent external developments and official comments/statements raised questions rather than answers with regards to the OPR next direction.

Maybank IB Research said regionally, there is no clear cut evidence of central banks pausing or on holding patterns.

The research house said its 2010 OPR forecast range of 50-75bps hike remains, reflecting "low conviction call" of another 25bps increase on Thursday opposed to the previous two hikes totaling 50bps when it was absolutely confident.

"In the event of BNM leaving the OPR unchanged tomorrow, whether it marks a pause before further increase later this year or an end to the OPR adjustments this year hinges a lot on the wordings of the next meeting," it said.

Wall Street rallies on earnings optimism

NEW YORK: U.S. stocks logged their best one-day gain in about six weeks on Wednesday, July 7 after a bullish forecast from financial company State Street Corp fueled optimism about the coming earnings season and helped the S&P 500 break above a major resistance level.

State Street (STT.N) shares closed 9.9 percent higher at $36.63 after the asset manager and custody firm said quarterly earnings would far exceed expectations, providing a lifeline to investors after several weeks of dismal economic reports.

Bank stocks led the way, but investors also scooped up beaten-down industrial and TECHNOLOGY [] shares.

"There is some confidence now that there will be more positive surprises than negative during the earnings season," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.

The Dow Jones industrial average .DJI rose 274.66 points, or 2.82 percent, to 10,018.28. The Standard & Poor's 500 Index .SPX gained 32.21 points, or 3.13 percent, to 1,060.27. The Nasdaq Composite Index .IXIC advanced 65.59 points, or 3.13 percent, to 2,159.47.

It was the indexes' biggest percentage advance since May 27.

The KBW bank index .BKX climbed 5.6 percent, while State Street rivals Northern Trust Corp (NTRS.O) rose 6.9 percent to $49.14 and Bank of New York Mellon Corp (BK.N) was up 6.4 percent to $26.32.

European banks also rallied on optimism most would pass the European banking stress tests, giving a boost to the wider market.

When the benchmark S&P 500 index broke through 1,040, it fueled more buying by those who had put on short positions. The 1,040 level was viewed as a resistance level to further gains, according to Todd Salamone, vice president of research at Schaeffer's Investment Research.

"That creates a very crowded position that is very vulnerable to an unwind, and I think we're seeing that today," he said.

The S&P 500 closed around 1,060, the next resistance level that could prevent the index from rising further on Thursday. The index has reached the 23.6 percent retracement of the move from its 2010 high in April to its year low hit last week.

Industrial and technology stocks were also among the day's gainers with General Electric (GE.N) up 4.7 percent at $14.62

and Cisco System (CSCO.O) up 5.3 percent at $22.48. The two stocks were the top gainers on the Dow.

Energy shares also got a boost from August crude futures that advanced 3.4 percent to $74.43 a barrel, sending the S&P energy index .GSPE up 3.2 percent.

Crude climbed on the expectation that upcoming data would show a drop in U.S. inventories, a positive sign for demand, as well as weakness in the U.S. dollar.

But analysts warned that the rally may be short-lived, considering the current economic conditions.

"We may see riskier behavior heading into the next couple of days. It's not uncommon to see a short term technical rally," said Tom Schrader, managing director at Stifel Nicolaus Capital Markets in Baltimore.

"(But) I don't think it's sustainable beyond about a week. The overall economic situation is not conducive to equities."

UBS lowered its full-year forecast on the S&P to 1,150 from 1,350. The firm said the reduced view reflected modestly weaker earnings growth and longer-term secular headwinds.

In earnings news, Family Dollar Stores Inc (FDO.N) tumbled 8 percent to $36.26 after it forecast fourth-quarter earnings below expectations.

Among its discount retailer peers, Dollar Tree Inc (DLTR.O) slipped 3.1 percent to $41.61 while BJ's Wholesale Corp (BJ.N) was off 1.1 percent at $42.72.

BP Plc (BP.L)(BP.N) Chief Executive Tony Hayward met with officials from Abu Dhabi's investment authority as speculation mounted the sovereign fund would make a fresh investment. BP's U.S.-listed shares rose 4 percent to $33.12. - Reuters