Saturday, July 24, 2010

#Stocks to watch:* MISC, Tanjung Offshore, M3Nergy, Mudajaya

KUALA LUMPUR: Stocks are expected to kick off the new week, starting July 26 on a firmer note after global stocks rose, underpinned by solid corporate earnings.

On Wall Street, the Dow Jones industrial average climbed 102.32 points, or 1%, to end at 10,424.62 -- just about 4 points shy of its close at the end of 2009.

The Standard & Poor's 500 Index rose 8.99 points, or 0.82%, to finish at 1,102.66 -- or about 13 points below its year-end 2009 close. The Nasdaq Composite Index gained 23.58 points, or 1.05%, to close at 2,269.47.

Reuters reported global stocks rose after fewer-than-expected European banks failed stress tests. Under the worst stress scenario, the seven weaker banks -- five of them from Spain -- would face a capital shortfall of 3.5 billion euros ($4.5 billion).

Market expectations were 10 bank failures -- two from Germany, one from Greece and about six from Spain -- and capital shortfalls totaling at least 100 billion euros.

Stocks to watch on Monday include MISC BHD [], TANJUNG OFFSHORE BHD [] (Tanjung Offshore), M3NERGY BHD [], MUDAJAYA GROUP BHD [] and Tanjong plc.

MISC's proposed listing of its unit Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) will involve offering 25% or 408 million shares of the enlarged paid-up of 1.6 billion shares.

The listing exercise will see MHB declaring a cash dividend payout of RM300 million to MISC via dividend income received from MMHE. MISC has cash of RM7.85 billion in the fourth quarter ended March 31, 2010.

MISC said the listing vehicle would be MSE Holdings Bhd (MHB), which holds 100% of MMHE. It said the listing exercise would involve the sub-division of the MHB's existing paid-up of RM16.22 million, comprising of 16.22 million RM1 shares, into 50 sen shares of 32.44 million.

Ekuiti Nasional Bhd, which is investing RM73.4 million in Tanjung Offshore Bhd (Tanjung Offshore), hopes to see the latter's revenue double in the mid-to-long term. Ekuinas' investment horizon as a strategic investor was between three and five years.

The board of directors of M3nergy Bhd has concurred with its financial adviser Hwang DBS Investment Bank Berhad (HDBS) that the conditional take-over offer from Adamus Avenue Sdn Bhd is not fair and not compelling.

M3nergy said the offer did not seem to reflect the underlying value of the company as well as the prospects.

Mudajaya could see trading interest on news report the Securities Commission is 'looking into the affairs' of the company following a complaint.

The SC was reportedly to be looking into Mudajaya's affairs, which was part of its continuing vigilance and proactive surveillance of corporate development of listed companies.

In power-gaming Tanjong plc, it plans to double its power generation capacity from the current 4,000 megawatt (MW) in the next four to five years. ''It plans to expand its power generation assets in the Middle-east, North Africa and Asia.

Seven banks fail Europe test, credibility questioned

LONDON/MADRID: Seven European banks are not strong enough to withstand another recession and would face a capital shortfall of 3.5 billion euros ($4.5 billion), far less than expected, stoking fears the keenly-awaited stress tests were too soft.

While the modest findings cast doubt on the credibility of the bank tests -- released on Friday in a bid to restore investor confidence -- with the European economy apparently improving fast, some analysts said that may not matter.

Five of Spain's smaller regional lenders, known as cajas, failed the test and their recapitalisation will almost complete a state-funded drive to consolidate the country's network of its unlisted savings banks.

They need 1.8 billion euros, the Bank of Spain said.

Banks in Germany and Greece were also seen as weak spots and in need of restructuring, but state-owned Hypo Real Estate was the only German lender to flunk and state-controlled ATEbank was the only Greek bank to fail.

Analysts had expected five to 10 banks to fail the test, but estimated the capital shortfall could be over 30 billion euros. As expected, no big banks failed the health check.

"Arguably the failure here is not the banks concerned, but the test itself. There is little evidence that the tests have been applied consistently and there is a distinct lack of credibility, making this a wasted opportunity," said Richard Cranfield, Chairman Global Corporate Group at Allen & Overy.

The Committee of European Bank Supervisors (CEBS), a previously little known group with 25 staff at a small London office that coordinated the process, said its test was more severe than the U.S. process.

Europe tested how 91 banks would cope with another recession and losses on government debt after the Greek crisis hit markets and raised fears the euro zone could unravel.

It aimed to repeat a health check on U.S. banks last year that helped restore investor confidence and underpinned a recovery by bank shares.

With latest data showing signs of a strengthening recovery in Europe, banks could find themselves in a healthier position than expected, perhaps explaining the muted market reaction.

The euro fell against the dollar as some investors cast doubt on whether stress tests were tough enough but German government bond futures fell on relief that they threw up no nasty surprises.

European bank shares ended up on the week, before the results were announced, and the cost of insuring the debt of most European banks fell afterwards.

"Despite questions about transparency and how the Euro stress tests don't measure up to the U.S. tests last year, I think these tests will start to put these euro zone concerns behind us," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York.

"There might be some initial disappointment leading to some selling on Monday when European markets reopen, but the market will soon get over it."


Under the most severe scenario banks were tested on how they would cope with a moderate recession this year and next, with additional losses on government bonds thrown in.

As part of the process many of the banks revealed all of their sovereign debt holdings, but some dodged full disclosure, raising further question marks.

Any bank whose Tier 1 capital ratio falls below 6 percent by the end of 2011 failed the test, and would be expected to raise funds to make up the capital shortfall.

Of most concern to investors was that government bond losses were only applied to trading books, and not hold to maturity bonds, as the test did not consider there was a risk of any sovereign default.

Banks' holdings of government bonds were subjected to a 23.1 percent loss on their Greek debt, a 12.3 percent loss on Spanish bonds and a 4.7 percent loss on German debt, all based on 5-year bonds and their value at the end of 2009.


The hunt for weak spots in European banking has focused on Spain's regional savings banks, as well as regional German lenders, known as landesbanks.

Spain and Germany have set up funds to help weak banks recapitalise and Spain wants more cajas to merge.

The Spanish banks to flunk were Banca Civica, Diada, Espiga, Unnim and Cajasur. The worst case scenario included a 28 percent fall in Spanish house prices during 2010-11.

Banks that came close to failing with a Tier 1 ratio of less than 7 percent under the most stressed scenario included Germany's Deutsche Postbank, Greece's Piraeus, Allied Irish Banks, Italy's UBI Banca and Spain's Bankinter.

"The banks that have scraped through may have more of a challenge on their hands and they may be the ones the market focuses on," said Cranfield.

Last year's U.S. bank test helped draw a line under worries about the sector there and Europe's attempt to match it has faced splits in the 27-nation EU about how to model the test and how much to divulge.

European banks have also already raised about 300 billion euros since the start of the crisis, whereas the U.S. tests kick-started the fundraising.

Banks in Ireland, Greece, Spain and Germany have also already received funds or are in the process of doing so, possibly pre-emptively to help them pass the test. - Reuters

US trims '10 deficit forecast, economy faces headwinds

WASHINGTON:'' The Obama administration warned on Friday the U.S. economy had encountered "strong headwinds" and the country's fiscal challenge remained grim, but it lowered an estimate for the budget deficit this year.

Outlining the country's fiscal path over the next decade, the White House said the numbers were moving in the right direction but the deficit and debt were too high.

"The economy is still struggling; too many Americans are still out of work; and the nation's long-term fiscal trajectory is unsustainable," the White House said in the annual midsession review of President Barack Obama's budget.

Polls show Americans are anxious about the economy and could punish Obama's Democrats in Nov. 2 midterm congressional elections for perceptions of big government spending and high unemployment after a severe U.S. recession.

Investors are also eying U.S. debt at a time when European governments are stressing fiscal consolidation. The White House said the country was on track to meet its June commitment to the Group of 20 in Toronto to halve the deficit by 2013.

The administration trimmed an expected funding gap in the current fiscal year by $84 billion to $1.47 trillion versus the estimate released in February. This gap was seen narrowing to $1.42 trillion in 2011.

Republicans jumped on the numbers as proof "Obamanomics" was not working.

"This report confirms that our national debt will double in five years and triple in 10 years. It confirms that our deficits are not sustainable," U.S. House of Representatives Republican Leader John Boehner said in a statement.

The review also tweaked White House assumptions about the economy, which have been criticized as overly optimistic in the past. The White House forecast growth at 3.2 percent this year, 3.6 percent in 2011 and 4.2 percent in 2012. Unemployment will only decline slowly, staying above 6 percent until 2015.

The forecasts were based on data available through May and finalised in early June.

"The most pressing danger we now face is unacceptably weak growth and persistent unemployment, rather than outright economic collapse, and that is a very substantial difference," White House budget director Peter Orszag told reporters.

Job creation is a vital goal for Obama, and will loom large in the November poll, but unemployment has lagged growth and remains at a lofty 9.5 percent.


"The U.S. economy still faces strong headwinds," the White House said, citing a weak housing market and doubts about the recovery in Europe, which could sap demand for exports.

"The European recovery is at risk because of increased uncertainty while government stimulus is withdrawn, and a further slowdown in Europe would pose problems for the rest of the world whose exports to Europe may be reduced," it said.

Britain and Germany have announced austerity plans to reassure investors, contrasting with the U.S. preference of phasing in budget controls going forward.

European Central Bank President Jean-Claude Trichet, in an article in the Financial Times on Friday, urged countries using the common euro currency to "implement a credible medium-term fiscal consolidation strategy."

In contrast, Federal Reserve Chairman Ben Bernanke argued this week the economy still needed fiscal support and it did not make sense to try to rein in this year's deficit.

But he stressed the country needs to curb the deficit over the next 2 to 3 years.

Obama signed a $862 billion emergency stimulus last year, which the White House says helped restore U.S. growth. But his subsequent efforts to increase aid to cash-strapped states and small businesses have been thwarted in Congress, mainly by Republicans in the Senate objecting to more deficit spending.

U.S. government debt held by the public is projected to rise above 70 percent of gross domestic product in 2012 and reach 77 percent by 2020.

Critics warn adding to the deficit could sap investor faith in the administration's commitment to phase in budget controls, risking a sovereign debt crisis here that unnerved European markets earlier this year.

Long-term U.S. interest rates have stayed low despite the grim U.S. budget outlook, supporting the recovery by holding down borrowing costs on things like mortgages and auto loans. But that could quickly change if bond investors took fright.

Obama vows to halve the deficit by 2013, a promise the larger Group of 20 rich and emerging nations also adopted at a meeting in Toronto last month, and the president has appointed a bipartisan commission to suggest how to tackle the fiscal challenge.

Obama's 18-strong panel is expected to recommend a mixture of spending cuts and tax increases when it reports findings by the end of December, well after the congressional vote. - Reuters

Global stocks jump on earnings; euro up on stress tests

NEW YORK: Global stocks rose on Friday, July 23 on solid corporate earnings while the euro gained against the dollar after fewer-than-expected European banks failed stress tests.

Safe-haven assets such as gold and U.S. Treasuries dropped after European regulators reported that only seven of 91 banks failed the tests, which were designed to show the impact of Europe's sovereign debt crisis on its financial institutions.

The market recovery seemed fragile, however. Some analysts questioned the credibility of the tests after regulators revealed they were applied only to the bank's trading books -- not their banking books.

Under the worst stress scenario, the seven weaker banks -- five of them from Spain -- would face a capital shortfall of 3.5 billion euros ($4.5 billion).

"The market expectation was that you were going to have about 10 bank failures -- two from Germany, one from Greece and about six from Spain -- and capital shortfalls totaling at least 100 billion euros," said Cary Leahey, an economist at Decision Economics in New York.

A larger number of failures, Leahey added, would have added credibility to the tests.

Other analysts bet the positive results will calm down investors and let them focus on some recent positive economic and corporate data.

"Despite questions about transparency and how the Euro stress tests don't measure up to the U.S. tests last year, I think these tests will start to put these Euro-zone concerns behind us," said Chris Rupkey, chief financial economist with the Bank of Tokyo-Mitsubishi in New York.

Investors' optimism increased following solid second-quarter results from major U.S. companies, including Microsoft and Ford. Data showing Germany's business sentiment jumped in July to its highest level in three years also supported markets.

World stocks measured by the MSCI All-Country World Index advanced 0.69 percent in late trading on Friday.

Before the stress test results were announced, the FTSEurofirst 300 index of top European shares rose 0.48 percent to close at 1,044.31.

On Wall Street, each of the three major U.S. stock indexes finished Friday's session about 1 percent higher with the Nasdaq edging back into the black for the year. At the close, the Nasdaq had erased its 2010 losses.

In early afternoon, the Dow industrials briefly turned positive for the year and then gave up some of those gains.

The Dow Jones industrial average climbed 102.32 points, or 0.99 percent, to end at 10,424.62 -- just about 4 points shy of its close at the end of 2009. The Standard & Poor's 500 Index rose 8.99 points, or 0.82 percent, to finish at 1,102.66 -- or about 13 points below its year-end 2009 close.

The Nasdaq Composite Index gained 23.58 points, or 1.05 percent, to close at 2,269.47.

Shares of General Electric Co climbed 3.29 percent to $15.71 after the company raised its dividend by 20 percent and resumed a share-buyback program it had halted in September, 2008.

Shares of Microsoft dipped 0.12 percent to close at $25.81 even after the company's stronger-than-expected results. Ford's stock jumped 5.2 percent to $12.72.


The euro gained 0.19 percent to $1.2913 late in the afternoon, after a very volatile session. Initially, the euro had fallen as the results of the stress tests came out.

Investors remained cautious however, taking the results of the stress tests with a grain of salt.

"There's definitely suspicion out there about these tests, but the euro is coming off a very good week, thanks to solid economic data, and that's lending support," said Brian Dolan, chief strategist at in Bedminster, New Jersey.

Against the Japanese yen, the greenback gained 0.54 percent to 87.38.

The dollar, which had lured investors earlier in the session with its safe-haven appeal, gave up some of those gains against a basket of major currencies late in the afternoon. By the end of the day, the U.S. Dollar Index was down 0.10 percent at 82.516 -- off its session high at 83.028.

U.S. crude oil futures fell 32 cents, or 0.4 percent, to settle at $78.98 a barrel. Earlier, U.S. oil futures reached an 11-week high at $79.60. Oil's decline from that high tracked the release of the stress test results, but the market found support in the temporary loss of some Gulf of Mexico oil production as Tropical Storm Bonnie made its way across south Florida.

As stocks gained, the 10-year U.S. Treasury note fell 17/32 in price, with the yield rising to 3 percent.

U.S. August gold futures fell $7.80 to settle at $1,187.80 an ounce as global risk aversion declined. - Reuters

Friday, July 23, 2010

M3Nergy board: Adamus Avenue offer not fair, not compelling

KUALA LUMPUR: The board of directors of M3NERGY BHD [] has concurred with its financial adviser Hwang DBS Investment Bank Berhad (HDBS) that the conditional take-over offer from Adamus Avenue Sdn Bhd is not fair and not compelling.

M3nergy said on Friday, July 23 that after considering the key factors and from a financial perspective, it viewed the offer "not fair and therefore not compelling".

It added the offer did not seem to reflect the underlying value of the company as well as the prospects of the business of the company.

It also explained the board's decision not to pursue other offers was independent of the appointment of HDBS and it was primarily driven by the fact that there were no other offers being presented to the board at the material time.

M3nergy also said TA Securities Holdings Bhd, which was appointed by the board as the independent adviser to advise the non-interested directors and the non-interested shareholders, had stated the offer "is not fair and not reasonable".

"The board wishes to reiterate that the board (with the exception of Datuk Shahrazi Sha'ari) had concurred with the opinions of both HDBS and TA that the offer is not fair and not reasonable," it said.

Markets rebound

KUALA LUMPUR: Asian markets including Bursa Malaysia closed higher on Friday, July 23, as sentiment was underpinned by the firm overnight close on Wall Street, though there was a wary eye cast on the European bank stress tests results due later in the day.

The FBM KLCI closed 9.63 points higher at 1,345.68. Turnover neared the one billion units done, at 993.351 million shares worth RM1.430 billion. Gainers beat losers 491 to 268 while 285 counters were unchanged.

"Renewed investor confidence outweighed concerns over the gloomy US economy," said a dealer, adding that blue chips like Sime Darby and CIMB helped the FBM KLCI notch nearly 10 points.

The overnight Wall Street rally perked appetite for risk despite concerns over the outcome of the stress tests on 91 European banks which would reveal loan losses. Nearly all counters gained, with the finance counter being the biggest winner followed by PLANTATION [] and industrial stocks.

The FBM Emas Index surged 60.02 points to 9,126.57, the FBM Ace Index gained 19.27 points to 3,816.01 and the FBM70 [] increased 36.48 points to 9,162.94.

The Finance Index shot up 60.50 points to 12,187.12, the INDUSTRIAL INDEX [] rose 28.07 points to 2,667.72 and the Plantation Index moved up 43.48 points to 6,380.09.

Asian stocks rose, underpinned by strong earnings from US economic bellwethers such as Caterpillar which tempered fears that the global economic recovery may be stalling.

The MSCI index of Asia-Pacific stocks outside Japan jumped about 1.5 percent. The index has shed nearly 3 percent so far this year.

A string of weak U.S. economic data in recent weeks and worries that Europe's debt crisis could derail its already fragile recovery have put heavy pressure on markets, but there are signs that investors are slowly returning to riskier assets.

Japan's Nikkei rose 2.3 percent to snap a five-day losing streak as worries about the results of European bank stress tests eased and U.S. corporate earnings boosted.

Shares in Hong Kong gained for a fourth consecutive session, rising 1.1 percent to close at a one-month high of 20,815.33.

"This looks like a sustainable rally to me now," said Conita Hung, head of equity research at Delta Asia. "We're seeing some very strong support at about 20,000, and I don't see things falling below it right now."

Hong Kong's stock market has risen almost 10 percent from a low of 18,971 hit in May. The market had been hit by worries about potential moves by Beijing to cool the Chinese economy and concern about fresh fundraising plans by the country's banks.

Agricultural Bank of China ended up 5.5 percent after Morgan Stanley raised its H-share holding by about 1 percentage point.

AgBank's Shanghai-listed shares also climbed 3 percent.

Shanghai stocks ended up 0.4 percent, a fifth session of gains to its biggest weekly increase since last December, amid signs that institutional investors remain interested in banking shares.

Gains were aided by improving liquidity in China's money market and expectations for an easing of government curbs on the property market.

Guo Yanling, analyst at Shanghai Securities, said expectations for large IPOs after AgBank had been very low, but recent new share issues had clouded the picture.

"Next week the market may show more concern; optimism from macro policy is likely to weaken," she said. - Agencies

Sinotop raises RM60.6m from rights issue

KUALA LUMPUR: Sinotop Holdings Bhd (the new-look JOHN MASTER INDUSTRIES BHD []) has raised RM60.6 million from its'' renounceable rights issue exercise.

It said on Friday, July 23 that at the close of acceptance, 98.72% of the 307.08 million rights shares offered had been subscribed. The total number of rights shares accepted and excess rights shares applied for totalled 303.16 million.

Sinotop said the rights issue was the final stage in transforming Sinotop into a high-growth China-based textile fabric manufacturing business, via its operating units under the Be Top Group.

The new rights shares, together with the shares issued to the vendors of Be Top, will be listed on Bursa Malaysia on Aug 3.

Its group managing director Pan Ding said the funds raised from the rights issue would enable Sinotop to expand its China textile manufacturing business significantly.

"Most of the rights issue proceeds will be utilised to increase our production capacity, thus allowing us to meet the rising demand for our products and also exploit future growth opportunities. We are on the right track for strong growth in 2010 and beyond," he said.

#Flash* MISC to offer 25% of MMHE shares for sale under IPO

KUALA LUMPUR: MISC BHD []'s proposed listing of its unit Malaysia Marine and Heavy Engineering Holdings Bhd will involve offering 25% or 408 million of the enlarged paid-up of 1.6 billion shares.

Citibank launches multi-currency gold products

KUALA LUMPUR: Citibank's industry's first multi-currency gold products launched on Friday, July 23 allow investors to invest electronically into gold, as part of the bank's move to expand its innovative financial products and services.

The bank said these accounts, which are denominated and held in gold, can be converted to US dollars, Australian dollars and euros.

Customers now have the opportunity to either invest directly into gold or choose to pair currencies with gold to earn interest. All other gold accounts currently offered in the market are denominated only in US dollars or ringgit.

"Positioned as an alternative asset class, these offerings give customers the opportunity to diversify their investment portfolio. Gold is often used as a hedge against inflation and a safe haven in times of economic uncertainty," it said.

Citibank customers can now open a gold account, allowing them to invest directly in the precious metal without actually taking possession of the physical item.

Head of retail bank for Citibank Bhd, Paul Hodes said gold is a viable option as it is an asset class, which historically has been less correlated with other asset classes.

He said it would enable clients to diversify existing investment portfolio. Malaysian customers can opt to pair their gold investment with three currencies - US dollars, Australian dollars and euros - the most currencies currently offered in the market against gold.

"The launch is timely as it is in line with the Citibank strategy of providing a full range of innovative financial products and services to our over 100,000 Citigold and Citibanking customers. This type of investment gives investors options to further diversify their portfolios," he said.'' ''

With a minimum investment of US$5,000 or its equivalent, Citibank expects to attract investors who are familia
r with gold as a commodity and want to invest into Gold as a means of diversification and for potential capital appreciation.

Head of consumer markets, Citibank Bank, Fabio Fontainha said the local wealth management industry was experiencing exciting growth both in terms of escalating numbers of knowledgeable investors and the number of new innovative investment products.

Fontainha said with easy access to facts, figures and news reports, more investors are taking a "hands-on" approach in their investments.

Hubline buys warehouse, land for RM15m

KUALA LUMPUR: HUBLINE BHD []'s unit Hubline Logistics Sdn Bhd is acquiring two parcels of land with buildings in Miri for a total of RM15 million from Many Plus Realty Sdn Bhd.

Hubline said on Friday, July 23 the PROPERTIES [] were rented and occupied by its subsidiaries Highline Shipping Sdn Bhd, Many Plus Engineering Sdn Bhd and Many Plus Enterprise Sdn Bhd.

The buildings are being used as workshop/warehouse, storage and repair centre for the repairs and maintenance operation of most of Hubline group of companies' fleet of vessels, it said.

Hubline said the acquisition would ensure continuity of land use, favourable location and avoid circumstances like inability to renew lease agreements if the properties are sold to a third party.

KWAP substantial shareholder in Gamuda

KUALA LUMPUR: Infrastructure company GAMUDA BHD [], which has attracted investors' interest in recent weeks over the proposed massive Klang Valley Mass Rapid Transit (MRT), saw Kumpulan Wang Persaraan (KWAP) emerging as a substantial shareholder with a 5.16% stake.

A filing with Bursa Malaysia showed KWAP had bought the stake, representing 104.279 million shares from the open market.

Gamuda is expected to be the frontrunner in the massive MRT worth RM36 billion. The MRT project forms part of the Federal Government's overall plan to upgrade Klang Valley public transportation system worth RM50 billion.

AmResearch said a joint venture between Gamuda and MMC Corp Bhd had submitted an unsolicited proposal for this massive project. The JV had indicated its interest in the tunnelling portion of the project worth an estimated RM13 billion or 30% of overall project value.

Tanjong to double power generation capacity

KUALA LUMPUR: Tanjong plc plans to double its power generation capacity from the current 4,000 megawatt (MW) in the next four to five years.

Its chairman, Datuk Robert Cheim, said the group planned to expand its power generation assets in Middle East, North Africa and Asia.

"The Middle East has a huge power generation project with the capacity from 1,000 MW while South-East Asia and North Africa offer capacities from 400 to 500 MW," he said after the AGM on Friday, July 23.

The group's power generation segment spreads across Malaysia, Egypt, Bangladesh, Pakistan, Sri Lanka and the United Arab Emirates with some 13 power plants to date in its portfolio.

"We are looking at projects that are available. Our strategy is merger and acquisitions and also greenfield," he said.

Cheim said the power generation industry has recovered from the global financial crisis, where a lot of projects were delayed.

"Now is the time where there are a lot of greenfield projects," he said.

On whether the group was interested to acquire Mudajaya Bhd, which was also involved in the power sector, he said: "No at the moment."

He said the group's outlook for the coming financial year ending Jan 31, 2011 would likely to be positive.

For the financial year ended Jan 31, 2010, Tanjong's pre-tax profit rose to RM953.3 million from RM748.8 million in the previous corresponding period.

Meanwhile, chief executive officer of Entertaiment Division, Goh Seow Eng, said the group was looking at options to mitigate the impact of the increase in betting tax on its gaming division.

"We are talking to the Ministry of Finance and other operators to mitigate the impact," he told reporters after the AGM.

Goh said the tax increase may cost the group RM15 million for the rest of this year. -- Bernama

Ekuinas sees Tanjung Offshore revenue doubling

KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas), which is investing RM73.4 million in TANJUNG OFFSHORE BHD [] (Tanjung Offshore), hopes to see the latter's revenue double in the mid-to-long term.

Ekuinas CEO Datuk Abdul Rahman Ahmad said on Friday, July 23 that its investment horizon as a strategic investor was between three and five years.

On the plans for Ekuinas, he added Ekuinas hoped to announce its next investment project by the end of the year.

"We are talking to a number of parties and will not rule anybody out, but we hope that our next announcement will be in line with a buyout of non-core assets," he said at a press conference after Tanjung Offshore shareholders approved Ekuinas' investment.

Abdul Rahman said Ekuinas would be looking at GLCs, MNCs and PLCs that operated within any of the six core sectors Ekuinas was interested in -- health-care, education, retail, leisure, services and fast-moving consumer goods.

On the Tanjung Offshore investment, it involved Ekuinas subscribing for 26 million new shares under a special share placement exercise and the acquisition of another 30.5 million existing shares from former executive director Abdullah Hashim and his affiliates. The shares would be acquired at RM1.30 per share.

"We are pleased by the outcome of this EGM and that the shareholders of Tanjung Offshore gave full support to our entry," he said.

Asked whether Ekuinas would raise its stake in Tanjung Offshore, Abdul Rahman said that they would welcome further opportunities to invest, but that for the time being "we are happy with what we have."

Tanjung Offshore managing director Omar Khalid said that he looked forward to the new partnership with Ekuinas and to taking business to the next level.'' Omar is the largest shareholder with 40.8% stake.

Of the RM73.4 million investment, RM33 million would be used for Tanjung Offshore to expand.

Tanjung Offshore currently owns 16 vessels and the expansion plans did not involve more acquisitions as its gearing was still high.

The private placement will reduce the company's gearing from 1.8 times to 1.7 times.

Omar said the company was bidding for more than RM1 billion in projects, of which its bidding success rate is about 30%.

Analysts said Tanjung Offshore was set to see a strong earnings recovery in FY2010 and FY2011, driven by cash flow from its vessels and the cessation of losses from its UK subsidiary Citech Energy Recovery Systems UK Ltd.

Danajamin makes headway in financial guarantee insurance for sukuk

KUALA LUMPUR: Danajamin Nasional Bhd has made headway to become the first financial guarantee insurer to provide an Islamic guarantee (or Al-Kafalah) for sukuk, with the issuance of the first Danajamin guaranteed sukuk programme.

It said on Friday, July 23 the RM75 million sukuk issued by LBS BINA GROUP BHD [], comprises of two tranches. The first tranche is a RM35 million four-year sukuk and the second a RM40 million five-year sukuk.

Its chief executive officer Ahmad Zulqarnain Onn said Danajamin is the first financial guarantee insurer to provide an Al-Kafalah guarantee for a sukuk programme.

"This achievement will further reinforce Malaysia's position as an Islamic Financing hub and we are proud to be able to contribute towards the development of this key industry,' he said.

LBS Bina, the issuer of the sukuk, is a property developer. The RM75 million issuance is part of a RM135 million seven-year Islamic commercial paper/Islamic medium term note programme.

The funds raised from the sukuk issuance will be used primarily for financing the CONSTRUCTION [] of several residential property development projects which are located in Puchong, Cameron Highlands and Batu Pahat respectively.

This is the second private debt securities guaranteed by Danajamin that have been issued to-date. The sukuk, issued at AAA (fg) rating, was fully subscribed.

'The positive reception towards LBS Bina's sukuk further reinforces investors' confidence towards Danajamin's guarantee. Our guarantee structure enables companies from a wide range of sectors to raise long-term fixed rate financing from the bond/sukuk market,' he said.

Ten banks to fail European stress tests: Goldman

LONDON: Ten out of the 91 banks subjected to Europe's stress tests are expected to fail, according to a survey of investors conducted by Goldman Sachs.

In an effort to calm investors' jitters over the potential impact of the euro zone debt crisis on Europe's banking system, banking regulators are assessing how 91 banks across Europe would cope with another economic downturn, and the results are set to be published at 1600 GMT on Friday, July 23.

The Goldman Sachs poll of 376 respondents, including hedge funds and long-only investors, showed European banks were on average expected to raise 37.6 billion euros ($48.4 billion) in extra capital following the tests, Goldman said in a note dated July 22.

Goldman said 9 percent of respondents expected a capital hike of less than 10 billion euros, 33 percent expect a hike of 10 to 25 billion euros, 35 percent expect a hike of 25 to 50 billion euros, 18 percent expect a capital increase of 50 to 100 billion euros and 5 percent expect a hike of more than 100 billion euros.

Banks domiciled in Spain, Germany and Greece were expected to raise the most fresh capital, and the source of capital was expected to be split between the public and private sector, Goldman said.

More than 60 percent of the respondents believed the amount of capital raised would leave banks adequately capitalized, while the rest saw a capital deficit remaining.

However, opinions were split on the performance of the sector in the three months following the test, with 38 percent expecting outperformance, 26 percent underperformance and 36 percent in-line performance, it said.

The Stoxx Europe 600 banking sector index was down 0.4 percent by 0724 GMT (3:24 a.m. EDT), when the pan-European FTSEurofirst 300 index was down 0.1 percent. - Reuters

MAHB sees 12% growth in passenger volume this year

SEPANG: Malaysia Airports Holdings Bhd (MAHB) expects an average growth of 12% in passenger traffic volume this year in line with the global economic recovery.

The projection was based on positive numbers in the first half which included a 17% growth in passenger volume, managing director Tan Sri Bashir Ahmad said on Friday, July 23.

"At the moment, it is a good time for the industry. The market and the economy in the whole region are recovering," he told reporters at the launch of Indulge Till You Fly campaign by MAHB chairman Tan Sri Dr Aris Othman here.

Last year, MAHB recorded an average passenger volume growth of 8% with the international sector growing 9% while domestic sector 7%.

Bashir said MAHB handled 51 million passengers last year with KL International Airport (KLIA) and the Low-Cost Carrier Terminal (LCCT) alone carrying about 30 million passengers.

Meanwhile, MAHB senior general manager for commercial services Faizah Khairuddin said the company also expected a 20 to 30% growth in retail sales this year from RM1 billion in 2009.

"This is a double bonus for MAHB because of passenger growth and better spending especially in LCCT," she said.

The Indulge Till You Fly campaign is one of MAHB's growth strategies for its commercial development, serving and underscoring the two-pronged aim of revolutionising the retail experience and driving new income streams.

The six-month campaign from July 24, 2010 to Jan 6, 2011 involves five international airports under MAHB, namely KLIA and LCCT in Sepang, Penang International Airport, Langkawi International Airport, Kuching International Airport and Kota Kinabalu International Airport.

Prizes worth RM2 million are up for grabs during the campaign. They include first-class air tickets and holiday packages worth more than RM80,000 to London, Sydney and Cape Town. ' Bernama

London's Harrods plans Shanghai store, says paper

HONG KONG: London-based luxury department store Harrods is in talks with Shanghai's municipal government on opening its first store outside the United Kingdom, China Daily reported.

Harrods is keen to open a department store in one of the buildings where British banks and merchant houses once traded, the newspaper said, citing a real estate agent familiar with the plan of the British emporium.

Choices are seen limited to a few locations that are big enough for Harrods, which operates one of London's biggest department stores, the newspaper said.

The newspaper cited an executive from Harrods as saying no plans had been confirmed to open a Shanghai store, and it could take a long time before any lease agreement can be concluded. It gave no further details.

Marks & Spencer opened its second store in Shanghai last month and is scouting for premises for its third store, the paper said.

Lifestyle International, Hong Kong's top department store operator by market value, is also in talks to build a multi-billion-yuan high-end department store in Shanghai in a bid to tap China's fastest-growing retail market. ' Reuters

Asian markets extend gains

KUALA LUMPUR: Asian markets, buoyed by some of the US earnings reports, advanced on Friday, July 23 ahead of the European bank stress results scheduled for later in the day.

Results of the tests on 91 European lenders are eagerly awaited by markets whose scepticism about the sector has driven up funding costs and weighed on share prices since Greece's debt crisis triggered fears that the euro zone could unravel, according to Reuters.

The euro jumped more than 1% against the dollar on Thursday to around $1.29 and European bank stocks rose across the board in a sign that investors are starting to hope the worst is behind the region's financial industry, it said.

But a lack of details about the terms of the tests and earlier divisions among European Union members over how much information will be made public has made investors wonder if the assessments would be tough or transparent enough, said Reuters.

Nikkei 225 +2.42% 9,444.47 Hang Seng Index +1.09% 20,814.60 Taiex +1.42% 7,775.19 Kospi Index +0.97% 1,752.32 Straits Times Index +0.60% 2,973.28 Shanghai Composite Index +0.38% 2,572.26 ''

At Bursa Malaysia, the FBM KLCI rose 7.18 points to 1,343.23 at 12.30pm, lifted by gains including at Sime Darby, CIMB, MMC Corp, IOI Corp and Genting.

Gainers beat losers by 440 to 216, while 263 counters traded unchanged. Volume was 552.43 million shares valued at RM660.46 million.

Crude palm oil for the third month delivery fell RM5 per tonne to RM2,514; crude oil shed 27 cents per barrel to US79.03 while gold added 70 cents per ounce to US$1,195.65.

Among the major gainers on Bursa Malaysia, Sime Darby rose 21 sen to RM7.80, CIMB and Petronas Gas up eight sen each to RM7.28 and RM10.32, MMC Corp 13 sen to RM2.58, while IOI Corp, Genting and Genting Malaysia added four sen each to RM5.11, RM7.62 and RM2.68, respectively.

Meanwhile, Axiata, AMMB and Maxis gained two sen each to RM4.09, RM5.11 and RM5.30, respectively.
Southern Acids jumped 37 sen to RM1.63 following the resolution in the status of appointment of interim receivers and managers.

Other gainers included Tan Chong, BHIC, Panasonic, Goh Ban Huat and APM Automotive.

Cycle & Carriage was the top loser and fell RM1.22 to RM6.24 on disappointing dividends. It declared an interim dividend of 5 sen a share compared with RM1.25 a year ago.

Bintulu Port lost 17 sen to RM6.33, DFZ Capital 14 sen to RM3.39, Uzma and HELP down eight sen to RM1.53 and RM4.36, while KPJ lost seven sen to RM3.72.

Tebrau was the most actively traded stock with 24.6 million shares done. The counter rose 4.5 sen to 72.5 sen. Other actives included Berjaya Corp, MTD ACPI Engineering, UEM Land, Zelan and Mulpha.

Murphy Oil to exit refining businesses

EL DORADO (Arkansas):Murphy Oil Corporation, which is actively involved in oil exploration off Malaysia, has received its board's approval for its plans to exit the company's refining businesses as it focuses on upstream and US retail businesses.

The refineries at Superior, Wisconsin; Meraux, Louisiana and Milford Haven, Wales along with the retail system in the United Kingdom will be placed for sale. The Company anticipates a transaction being completed in the first quarter of 2011.

President and CEO David Wood said in a statement on Thursday, July 22 Murphy's upstream and US retail businesses have demonstrated marked growth and financial performance over the last several years.

"By exiting the refining business, we can fully focus our attention and resources on continuing that growth, developing a premier international upstream business and a top quartile U.S. retail franchise,' he said.

Goldman, Sachs & Co. is serving as exclusive financial advisor to Murphy during this process.

According to Murphy's websire, the most significant impact project Murphy has lies in deepwater Malaysia offshore Sabah.

CPO extends gains, at 2-month high

KUALA LUMPUR: Crude palm oil (CPO) futures extended their gains in the morning session on Friday, July 23, rising another RM11 to RM2,530 on expectations PLANTATION [] stocks may be re-rated.

At 11.15am, the CPO for third-month delivery rose to a high of. extending gains of RM62 from Thursday.

The Edge FinancialDaily reported that prices of the primary commodities have been rising due to unusual weather conditions, which are creating havoc for the global agriculture production.

CPO may be given a boost if the prices of soybean oil extend their gains as production contracts due to the hot weather in the US.

Adventa MD's mother disposes of 5m shares

KUALA LUMPUR: The mother of ADVENTA BHD []'s managing director Low Chin Guan was seen reducing her shareholding in the glove maker with the disposal of five million shares on July 21.

A filing with Bursa Malaysia showed Wong Koon Mei @ Wong Kwan Mooi had reduced her direct interest to 3.46 million shares or 2.29%.

Low is still the major shareholder in Adventa with 41.56% or 66.19 million shares.

Adventa share price closed at RM3.18 on July 21.

ICBC becomes 23rd member of ABM

KUALA LUMPUR: The Industrial and Commercial Bank of China (M) Bhd (ICBC) has become the twenty-third member of the Association of Banks in Malaysia (ABM).

In a statement Friday, July 23, the ABM said the inclusion of ICBC makes it the fourteenth locally incorporated international bank operating in Malaysia under ABM's list of member banks.

It said the establishment of ICBC in Malaysia represented an important development in forging stronger business and financial ties between The People's Republic of China and Malaysia.

ABM executive director Chuah Mei Lin welcomed ICBC as ABM's newest member and said it looked forward to collaboration on various industry projects and issues.

"We believe that ICBC's foray into the Malaysian market is timely and will add value to the commercial banking sector," said Chuah.

FBM KLCI extends gains at mid-morning

KUALA LUMPUR: The FBM KLCI rose on Friday, July 23 in line with the gains at key regional markets following the overnight higher closing at Wall Street. The healthy earnings from US economic bellwethers such as 3M and UPS also boosted sentiment across the Asian region.

At Bursa Malaysia, the FBM KLCI rose 6.46 points to 1,342.51 at 10am, lifted by gains including at Sime Darby, CIMB, IOI Corp and Genting Malaysia.

Gainers thumped losers by 356 to 99, while 171 counters traded unchanged. Volume was 229.65 million shares valued at RM237.52 million.

At the regional markets, Japan's Nikkei 225 snapped a five-day losing streak and jumped 1.75% to 9,381.79; Taiwan's Taiex Index rose 1.22% to 7,759.51, the South Korean Kospi 0.91% to 1,751.28, Singapore's Straits Times Index up 0.55% to 2,971.92 and the Shanghai Composite Index up 0.53% to 2,575.89.

Meanwhile, Hong Kong's Hang Seng Index opened 1% higher at 20,802.34.

At Bursa Malaysia, Southern Acids was the top gainer at mid-morning and jumped 37 sen to RM1.63 after it resumed trade following resolution in status of appointment of interim receivers and managers.

Sime Darby rose 17 sen to RM7.76, CIMB nine sen '' ''to RM7.29, IOI Corp, Genting Malaysia and MISC up four sen each to RM5.11, RM2.68 and RM8.78, respectively, while Genting added three sen to RM7.61.

Other gainers included Tan Chong Motors, Hong Leong Industries, Goh Ban Huat, Ireka and UEM Land.

Cycle & Carriage was the top loser, and fell RM1.11 to RM6.35 on disappointing dividends. It declared an interim dividend of 5.0 sen a share compared with RM1.25 a year ago. Other decliners included Tafi Industries, Merge, Krisassets, Pensonic and Apollo.

Tebrau was the most actively traded counter with 18.9 million shares done. The stock added 4.5 sen to 72.5 sen. Other actives included Muplha, Zelan, EA Holdings, Berjaya Corp, MK Land and Hovid.

Sarawak showcasing SCORE in UK to woo British investors

LONDON: The Sarawak state government is making efforts to showcase the Sarawak Corridor of Renewable Energy (SCORE) as an investor-friendly destination in the United Kingdom (UK) to woo investors.

As of May, SCORE has attracted investments totalling RM87.61 billion across sectors, making it one of the most enviable investment destinations in the country since its launch in 2006.

The corridor is located within the Central Region of Sarawak, stretching 320km along the coast from Tanjung Manis to Samalaju. It covers 70,000 sq km with a population of 607, 800 people.

The Tanjung Manis Halal Park is the first one-stop Halal Park in East Malaysia for upstream and downstream halal food and manufacturing activities under the corridor.

A high-level trade delegation of the state government led by Sarawak Chief Minister Tan Sri Abdul Taib Mahmud will attend several major events in the UK.

Taib will be accompanied by Special Advisor in the Chief Minister's Office Tan Sri Adenan Satem, Tanjung Manis Halal Hub Development executive chairman Datuk Norah Abd Rahman, State Financial Secretary Datuk Seri Ahmad Tarmizi Sulaiman, State Economic Planning Unit director Datu Ismawi Ismuni and Regional Economic Development Authority director Datuk Amar Wilson Baya Dandot.

Meanwhile, at the Sarawak Investment Symposium on Thursday, July 22, Ismawi gave a presentation on strategic investment opportunities in Sarawak in oil-based industries, aluminium, metal, glass, tourism, palm oil, timber-based, steel, nickel and zinc, livestock, fishing and aquaculture and marine engineering industries.

"We received a lot of enquiries during business matching not just for halal hub but also on SCORE, a lot of participants plan to look into renewable energy and oil and gas," he told Bernama in an interview.

Ismawi said investors in strategic industries would enjoy attractive financial incentives offered by the Federal Government through the Malaysian Investment Development Authority (Mida) like pioneer status, investment tax allowance and reinvestment allowance.

"We now have some serious marketing to do in UK to create awareness on the halal industry," said Norah.

She said Tanjung Manis would continue to work closely with Mida and Malaysia External Trade Development Corporation (Matrade) to promote the industry further.

Developments within the corridor would not only generate vast economic, business and employment opportunities but also lead to opgrading of infrastructures, utilities and social amenities, she said.

The symposium was supported by the Malaysian High Commission in London, the Commonwealth Business Council and the Muslim Council of Britain. ' Bernama

OSK Research maintains Buy on Alam Maritim

KUALA LUMPUR: OSK Research is maintaining its Buy on Alam Maritim, with an unchanged price of RM1.99 based on the existing PER of 12x FY10 earnings.

It said on Friday, July 23 that judging from the uptrend in its share price, having moved up from its recent low of RM1.05 on May 26, it did not expect a material negative financial impact on the company arising from the court case.

'Going forward, we continue to like the company's sound strategy in penetrating new businesses (such as its pipe-laying barge) and new geographical markets (Middle East and India), and its solid financial strategy (using the JV option to finance its new vessels), which will not only safeguard its gearing but also instill investor confidence in the company,' it said.

Alam Maritim announced its two vessels -- MV Setia Aman and Setia Ulung ' were released after a court order. The release was made after MLC Barging Pte Ltd had discontinued the main admiralty suits in rem.

Auto-related stocks continue to rise on MAA forecast

KUALA LUMPUR: Automotive-related stocks continued to rise on Friday, July 23 after on the bullish auto forecast by the Malaysian Automotive Association (MAA) on auto sales, in which it expects sales to hit an all-time high of 570,000 units this year.

At 9.28am, Tan Chong gained 17 sen to RM4.66, APM Automotive was up 8 sen to RM4.68 while Proton and MBM Resources added one sen each to RM4.42 and RM3.01.

CIMB Research: Sell Jetson on rebound

KUALA LUMPUR: CIMB Retail Research advises investors to use any rebound in Kumpulan Jetson's shares to unload on strength as it believes there is still room to the downside. Put a buy stop at RM1.60, just in case.

It a technical outlook report issued on Friday, July 23 that an earlier rebound lifted prices close to its 38.2% Fibonacci Retracement level but momentum seems to be losing pace.

'At present, the candles have dwindled below its key SMAs and medium term outlook is turning bearish. Unless it can swing back above RM1.58, otherwise prices could retest the previous low of RM1.11 again,' it said.

CIMB Research said despite the recent rebound, MACD stays in the negative territory. This implies that price action still favour the bears. With its RSI also staying below the 50pts mark, it said it should see a short term reversal in price.

CIMB Research: Upside for Pos Malaysia capped at RM3.36

KUALA LUMPUR: CIMB Equities Research said the upside for Pos Malaysia's share price is capped at RM3.66 and that traders may want to take profit.

In its technical outlook for Pos issued on Friday, July 23, it said even if prices push past this high, sustainability remains a key concern here. Pos is trading at FY11 price-to-earnings of 10.1 times and price-to-book value of 2.1 times.

'Pos Malaysia appears to be forming a double top pattern. If prices fall below its 30-day SMA (now at RM2.98), it would likely signal that the uptrend from May has ended,' it said.

CIMB Research said if the share price falls further below its 50-day SMA at RM2.87, this would likely confirm that prices are heading lower to test its 200-day SMA at RM2.47, which is also its neckline support.

It said the bearish divergence in MACD suggests that momentum has waned while RSI has also hooked downward.

AmResearch: Gamuda biggest winner in MRT

KUALA LUMPUR: AmResearch maintains its conviction that Gamuda would be biggest winner arising from the Klang Valley Mass Rapid Transit (MRT) worth RM36 billion.

The research house said on Friday, July 23 that its ground checks indicate that the project could receive Federal-endorsement by 4Q10 following completion of feasibility studies.

'Based on a 50% share of the tunnelling works and net margin of 10% - this contract could potentially lift Gamuda's fair value by 67 sen a share (or 18%) to RM4.50/share and double its outstanding order book to RM13 billion,' it said.

AmResearch also reckons that the Scomi group should be among the leading contender for sub-contracting works for the MRT project.

The Scomi Group is currently partnering India's Larson & Toubro as main contractors for the prestigious RM1.8bil Mumbai Monorail project.

On Thursday, the UEM group has indicated that they are prepared to bid for the MRT if the jobs were to be tendered out on an open tender basis.

The MRT project forms part of the Federal Government's overall plan to upgrade Klang Valley public transportation system worth a whooping RM50bil. UEM was among the main contractors for the original Kelana Jaya Light Rail Transit (LRT) line.

AmResearch said so far, the Gamuda-MMC JV has submitted an unsolicited proposal for this massive project. The JV had indicated its interest secure the tunnelling portion of the project worth an estimated RM13bil or 30% of overall project value ' in addition to being the overall project manager.

Last month, press reports indicated that the Federal Government had appointed two independent consultants - Minconsult Sdn Bhd and Andercon Technologies Ltd ' to carry out the study. The study is to be completed and presented to the Federal Government in three months' time.

?At this juncture, the Federal Government has yet to make a formal decision on this project that would include the tender procurement process. Our channel checks indicate that one such option would be to have the project being tendered out under a 'Swiss Challenge' approach. In other words, other parties are allowed to come out with competing bids although the Gamuda-MMC JV is likely to have the first right or refusal for the job,' it said.'' AmResearch thinks the Gamuda-MMC JV would still hold a competitive advantage on two counts. First, the JV has a head start as it is the first party to come up with a comprehensive plan to integrate all the rail links within the Klang Valley.


Secondly, it believes the Gamuda-MMC JV is a strong contender for the tunnelling works package worth RM13 billion ' given its prior track record in undertaking the STORM. Gamuda is also the sole Malaysian contractor to-date to have delivered an MRT system (in Kaohsiung, Taiwan).

Thirdly, part of the Gamuda-MMC JV's proposal is to the Federal Government is to have the first right of refusal for the project

HDBSVR: FBM KLCI to advance 1,340

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) says a strong performance over at Wall Street on Thursday, July 22'' may just be the catalyst needed to jolt Asian equity markets into positive territory on the last trading day of the week.

At the closing bell, key U.S. equity indices were up between 2.0-2.7%, boosted by encouraging home prices data as well as better-than-estimated corporate earnings.

'Back home, we reckon our local benchmark FBM KLCI would advance closer to its first resistance level of 1,340 today,' it said.

In terms of corporate news flow, HDBSVR said there should be some share price reaction to Hong Leong Bank and EON Capital after a news report that EON Capital would be seeking to obtain shareholders' approval for the proposed takeover offer from Hong Leong Bank on Aug 19.

#Stocks to watch:* UEM stocks, Alam Maritim, Southern Acids, Sarawak Cable

KUALA LUMPUR: Stocks are expected to advance on Friday, July 23, hopefully recoup their losses from the previous day as sentiment may have turned positive after the firmer overnight close on Wall Street.

The major indices on Wall Street closed between 2% and 2.7% higher, reversing losses from a day earlier after testimony by Federal Reserve Chairman Ben Bernanke soured investors on the economic outlook.

The Dow Jones industrial average gained 201.77 points, or 1.99%, to 10,322.30. The Standard & Poor's 500 added 24.08 points, or 2.25, to 1,093.67. The Nasdaq Composite rose 58.56 points, or 2.68%, to 2,245.89.

Reuters reported earnings from economic bellwethers 3M, UPS and Caterpillar catapulted U.S. stocks on Thursday as investors shed some of their fears about the strength of the recovery.

The parade of prominent names reporting profits continued after the market's close. Microsoft Corp reported a 48 percent rise in quarterly profit late on Thursday. In regular trading its shares rose 2.9 percent to $25.84, but they were down 0.2 percent after hours.

Stocks to watch at Bursa Malaysia include companies in the UEM Group, SOUTHERN ACIDS (M) BHD [], Sarawak Cable, Cycle & Carriage Bintang Bhd and BRITISH AMERICAN TOBACCO (M) [] Bhd.

UEM Group Bhd, a government-linked group, has aggressively set 'stretch' targets of RM30 billion in revenue and RM3 billion in net profit in 2015.

Managing director and CEO Datuk Izzaddin Idris said the group would look to achieving its targets via organic growth and acquisitions.

He also said that the government-linked conglomerate would bid on the Kuala Lumpur mass rapid transit (MRT) project, if it were open to tender.

The favourite for the MRT contract is currently the joint venture (JV) entity of MMC-Gamuda. Other possible contenders may include IJM Corp Bhd, SUNWAY HOLDINGS BHD [] and WCT Engineering Bhd.

Analysts said MMC-Gamuda are aiming for the role of chief contractor and also for the tunneling works, which are valued at an estimated value of RM14 billion, out of the total contract sum of RM36 million.

The JV entity submitted the proposal for development of a RM36 billion MRT system within the city centre, which was announced by Prime Minister Datuk Seri Najib Razak as part of the 10th Malaysia Plan (10MP).

MMC-Gamuda also looks to be a strong contender for the tunneling works through their prior experience in undertaking the works for the STORM water tunnel project and the Kaohsiung MRT system in Taiwan.

Alam Maritim can heave a sigh of relief over its two vessels -- MV Setia Aman and Setia Ulung ' which were released after a court order. MLC Barging Pte Ltd had discontinued the main admiralty suits in rem.

Southern Acids will resume trading from Friday following resolution in status of appointment of interim receivers and managers.

Sarawak Cable entered into a MoU with Sarawak Energy Bhd and Syarikat SESCO Bhd to acquire Sarwaja Timur Sdn Bhd from SEB and Sesco.

Sarwaja Timur manufactures, fabricates, galvanizes and sells steel structures and wants to expand into new businesses, amongst others, the fabrication of tower for power transmission line.

The move will complement the company's existing core business in the manufacturing and trading of power cables and wires; and enable the Company to become a one-stop supply centre for power cables, wires and transmission tower, being the key components in power transmission line projects.

Cycle & Carriage Bintang Bhd, which sells Mercedes-Benz cars, reported net profit of RM5.88 million in the'' the second quarter ended June 30, 2010, down 46% to RM5.88 million from the RM10.89 million a year ago where there was a one-off refund on duties. It declared an interim dividend of 5.0 sen a share compared with RM1.25 a year ago.

BAT posted net profit of RM185.84 million in the second quarter ended June 30, 2010, a decline of 21% from RM201.24 million a year ago.

Revenue was RM993.87 million versus RM977.65 million a year ago. Earnings per share were 65.10 sen versus 70.5 sen. BAT declared an interim dividend of RM1.13 a share, which was the same as a year ago. The RM1.13 dividend a share totalled a payout of RM322 million.

#Flash* Nikkei up 2.1%, poised to snap 5-day losing run

TOKYO: Japan's Nikkei average rose 2.1% on Friday, July 23, poised to snap a five-day losing streak, as stocks rose broadly after earnings from economic bellwethers including Caterpillar Inc boosted Wall Street.

The benchmark Nikkei gained 189.11 points to 9,409.99, after having shed nearly 6 percent in the past five days. It fell 0.6 percent the previous day to its lowest close since July 2.

The broader Topix added 1.6 percent to 838.38.

In Seoul, shares rose on Friday led by blue chip TECHNOLOGY [] stocks such as Samsung Electronics, with investor confidence restored after strong earnings by U.S. companies.

The Korea Composite Stock Price Index <.KS11> (KOSPI) was up 1.12 percent at 1,756.86 points as of 0003 GMT. - Reuters

Earnings lift Wall St, but plunges

NEW YORK: Earnings from economic bellwethers 3M, UPS and Caterpillar catapulted U.S. stocks on Thursday, July 22'' as investors shed some of their fears about the strength of the recovery.

The parade of prominent names reporting profits continued after the market's close. Microsoft Corp reported a 48 percent rise in quarterly profit late on Thursday. In regular trading its shares rose 2.9 percent to $25.84, but they were down 0.2 percent after hours.

In other after-hours action, online retailer Inc's earnings fell far short of Wall Street's estimates, sending its shares 13.5 percent lower to $103.88.

During the regular session, the major indexes posted their largest daily gains in more than two weeks, led by United Parcel Service Inc, which rose 5.2 percent after it raised its profit outlook. The world's largest package delivery company is viewed as a barometer of consumer and business demand.

"UPS guiding higher is a very good sign since the amount of shipping volume is directly correlated to the strength of the economy," said Peter Jankovskis, co-chief investment officer of OakBrook Investments LLC in Lisle, Illinois.


Caterpillar Inc, up 1.7 percent to $68, and 3M, up 3 percent to $84.75, were among multinationals that raised their outlooks, suggesting the global economy may also be on a stronger footing.

"The companies that are doing well generally are the ones that have significant overseas revenues or some kind of unique product," said Kim Caughey, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

The Dow Jones industrial average gained 201.77 points, or 1.99 percent, to 10,322.30. The Standard & Poor's 500 added 24.08 points, or 2.25 percent, to 1,093.67. The Nasdaq Composite rose 58.56 points, or 2.68 percent, to 2,245.89.

Thursday's rally reversed losses from a day earlier after testimony by Federal Reserve Chairman Ben Bernanke soured investors on the economic outlook.

But for the fourth time this month the S&P 500 came close but failed to break through 1,100, a level that is proving to be a tough hurdle and could be in the way of further gains.

Earlier on Thursday, data showed weekly applications for unemployment insurance rose. Job growth has slowed after strong gains early in the year, cutting into household spending and holding back the economy's recovery from the toughest recession since the 1930s.

"We can't find a story that's going to convince us unemployment is going to materially get better any time soon and that weighs on the consumer, who controls a lot of the economy," Caughey said. "That's a prevailing negative force investors think about."

Home resales declined less than expected but still hit a three-month low in June, while the median home sale price rose by 1 percent from the previous year..

KB Home rose 3.9 percent to $11.06 and Lennar Corp added 3.1 percent to $14.76. The PHLX Housing index jumped 4.2 percent. - Reuters

Microsoft profit beats Street, stock unmoved

SEATTLE: Microsoft Corp easily beat Wall Street forecasts with a 48 percent rise in quarterly profit, but its shares were unmoved in the absence of any powerful new signs of a rebound in global tech spending.

The world's largest software company said business customers are continuing to come back to the market for new personal computers, most of which run on Microsoft's software, but it failed to match chipmaker Intel Corp's strongly optimistic tone last week.

"It's a great quarter -- but does that matter?" said Colin Gillis, analyst at BGC Partners. "We all knew the business refresh cycle was in place. This is the dilemma for Microsoft -- how do they get the stock moving again?"

Microsoft on Thursday, July 22 reported fiscal fourth-quarter profit of $4.52 billion, or 51 cents per share, up from $3.04 billion, or 34 cents per share, in the year-ago quarter.

That beat analysts' average expectation of 46 cents per share, according to Thomson Reuters I/B/E/S.

Sales rose 22 percent to $16.04 billion, beating analysts' $15.27 billion estimate, reflecting the continuing recovery in tech spending this year. Microsoft said it had sold 175 million licenses for its new Windows 7 operating system since its launch last year.

Global PC sales surged 22.4 percent last quarter, industry tracker IDC said this week, helped by strong demand from businesses, signaling a strong outlook for Microsoft.

"We still believe in the business PC refresh, which is the single biggest thing ongoing throughout this year," Chief Financial Officer Peter Klein said in a telephone interview.

He said the new Office 2010 suite of applications, launched earlier this year, was off to a strong start but it was too early to judge the financial impact. He said the current "back to school" quarter should show how well sales are faring.

Microsoft shares were little changed at $25.80 after closing at $25.84 on Nasdaq.

The stock -- which is still hovering around the same level it was five years ago -- is down 15 percent this year, compared with a 1 percent fall in the Nasdaq composite index. - Reuters

Thursday, July 22, 2010

#Today's Diary* What to expect on July 23, 2010

Public Works Department DG launches the 2nd IA BIMARC Conference on Building Information Modeling & Sustainable Architecture at Foyer area at Manhattan 1, Level 14, Berjaya Times Square, KL at 9am.

Citibank launches multi-currency gold product at Grand Salon, Level 8, Le Meridien Hotel, KL at 10am.

GAB hosts post World Cup media briefing at Viva Boardroom, Ground Flr, GAB Sungei Way Brewery, Lot 1135, Batu 9, Jln Klang Lama, PJ at 10am.

Press launch of UNCTAD World Investment Report 2010, Wisma UN, Block C, Kompleks Pejabat Damansara, Damansara Heights, KL, 10am.

Malaysia Airports to launch key commercial campaign Indulge Till You Fly by Chairman of MAHB at View Gallery, Level 5, Departure Hall, KLIA Main Terminal Building at 10am.

Tanjung Offshore and Ekuinas to host joint press conference at Melati Room, Kelab Darul Ehsan, Taman TAR, Ampang Jaya, KL at 10.45am.

Tanjong plc AGM at Conference Halls 2 & 3, Level 3, KL Convention Centre at 11am.

Dubai World ready to use tribunal for debt deal

DUBAI: Struggling state firm Dubai World is ready to use a special tribunal to force rebel lenders into line on plans to delay repayment of $14.4 billion in debts, according to a source familiar with the matter.

The source spoke ahead of a key meeting on Thursday for creditors of the ambitious Gulf Arab emirate, which is labouring under more than $100 billion of debt including those of its flagship conglomerate.

"It's unlikely all 73 banks will accept terms, which means it will likely go to a tribunal," the source said, adding that if the majority support the plan, the tribunal can compel holdouts to get in line so the restructuring can proceed.

Dubai set up the special tribunal to be arbiter of disputes between lenders and the stricken state company.

A deal has already been agreed with core lenders representing 60 percent of the loans.

The company, whose operations include real estate, ports and private equity investments, needs two-thirds acceptance to be able to take the deal to the tribunal in the event of a rebellion. Any lender can use the tribunal, but none has yet.

Bankers at the closed-door meeting said terms presented were unchanged from those agreed by the core group. Some are unhappy but saw little alternative.

"We definitely have to go (with the plan), we don't want to be left out," said a Bahrain banker. "We're not happy, the pricing is low."

According to a source who attended, one banker complained that lenders to Dubai World subsidiary Nakheel were getting a better deal.

A Dubai World statement said it expected to complete the restructuring in coming months.


Thursday's meeting took place in a lavish pink resort hotel at the tip of a man-made palm tree-shaped peninsula -- one of the ambitious projects that left Dubai gasping for cash after the global real estate bubble burst in 2008.

Bankers picked their way to the meeting past holidaymakers enjoying cut-price deals at the resort, which boasts a huge aquarium in one air-conditioned lobby protecting guests from the searing summer heat outside.

"We're at the end game now," said one. Another was "hopeful something good will come of this".

Accountancy firm Deloitte's Aidan Birkett has become the public face of Dubai World. Chairman Sultan Ahmed bin Sulayem, a childhood friend of Dubai's ruler Sheikh Mohammed bin Rashid al-Maktoum, is rarely seen in connection with the company since the debt crisis unfolded.

The Dubai government is the ultimate owner of Dubai World, part of the network of state firms known locally as "Dubai Inc". Oil-rich Abu Dhabi, another of the United Arab Emirates, stepped in last year to help its neighbour with its debt burden.

The seven-strong core group of Dubai World lenders has agreed to reschedule repayment of loans due in the next few years into a five to eight year package paid at between 1 and 3.5 percent.

Investors in the region hoped the meeting, the first all-bank gathering since December, would pass off without any negative publicity.

"As terms stand at the moment it's already priced in, but there's downside risk if some banks refuse to sign or hold out for better terms," said Matthew Wakeman, EFG-Hermes managing director for cash and equity-linked trading in Dubai. The seven-member coordinating committee of banks comprises HSBC, Lloyds, Royal Bank of Scotland, Standard Chartered, Bank of Tokyo Mitsubishi, and local lenders Emirates NBD and Abu Dhabi Commercial Bank. - Reuters

Euro zone starts 3Q on strong footing

LONDON: The euro zone's private sector surged in July, data showed on Thursday, July 22 confounding forecasts and contrasting with renewed concern about the U.S. economy after Federal Reserve Chairman Ben Bernanke said the economic outlook was "unusually uncertain".

European purchasing managers' indexes showed private sector business activity accelerated in July, surprising economists who had expected a slowdown and indicating third-quarter euro zone growth of around 0.6-0.7 percent, analysts said. That would be double forecasts in a Reuters poll last week for 0.3 percent growth.

The data came a day after Bernanke warned the U.S. economic outlook was "unusually uncertain" and indicated further monetary easing might be necessary to support the world's biggest economy. It also came on the heels of news last week of a slight moderation in China's runaway economic growth in the second quarter.

Ken Wattret at BNP Paribas, however, warned that while the euro zone data was bullish, mainly due to Germany and France, final purchasing managers' surveys at the end of the month, which will include euro zone peripheral economies, would not be as upbeat.

"My big issue is whether there will be a slowdown in the second half of the year and on the basis of what we are hearing from the U.S. economy and signs of a cooling off in China, I think it is very likely we will see a slowdown," Wattret said.

A Reuters poll of more than 600 economists published last week suggested the world economy will cool a bit in the next few months as China and the United States gear down.

While many major central banks have started looking at exit strategies from their loose monetary policies -- Canada, Australia and India have already raised interest rates -- Bernanke said on Wednesday the Fed stood ready to ease monetary policy further if the recovery falters.

The U.S. economy resumed growth about a year ago, but stubbornly high unemployment, a fresh drop in housing activity and a slowdown in manufacturing have raised fears of a "double-dip" recession there. A Reuters poll last week said the chance of a dip back into recession was 15 percent.

U.S. existing home sales and jobless claims data, all due on Thursday, will give further clues about the health of the U.S. economy.

CHINA SLOWDOWN China's growth moderated to 10.3 percent in the second quarter from 11.9 percent in the first quarter and a Reuters poll of economists this month forecast 10 percent growth overall this year.

The slowdown in China has fuelled market expectations that Beijing might also hold off tightening policy or even announce new stimulus measures.

And the Bank of England, which has slashed rates to record lows and injected billions of pounds into the money supply, discussed further easing as well as tightening at its last policy-setting meeting, according to minutes released on Wednesday.

"The traditional balancing act has become much more acute," the Bank of England's chief economist, Spencer Dale, was quoted as saying in the Independent newspaper on Thursday.

"It has the flavour of the challenges we faced in 2008 -- substantial downside risks to growth but also upside risks to inflation staying above target and feeding through into wages and price setting."


Markit's Eurozone Flash Services PMI, made up of surveys of 2,000 businesses ranging from hotels to banks, jumped to 56.0 in July from 55.5 in June, easily outpacing expectations for 55.0 and beating out even the most optimistic forecast polled by Reuters for 55.5.

The euro zone's manufacturing sector, which drove a large part of the economy's return to growth in the third quarter of last year, also accelerated.

"Overall, some encouragement that the recovery in Germany and the core euro zone has momentum. But concerns about the (euro zone) periphery are set to linger, if not deepen," said Ben May at Capital Economics.

While the euro zone economy has emerged from its worst post-war recession it grew only 0.2 percent between January and March, after a paltry 0.1 percent expansion in the final three months of 2009.

It is expected to have grown 0.6 percent in the second quarter but growth is seen slowing to 0.3 percent later in the year. - Reuters

Cycle & Carriage earnings at RM5.88m

KUALA LUMPUR: Cycle & Carriage Bintang Bhd, which sells Mercedes-Benz cars, reported net profit of RM5.88 million in'' the second quarter ended June 30, 2010, down 46% from the RM10.89 million a year ago where there was a one-off refund on duties.

It said on Thursday, July 22 revenue rose 30% to RM161.02 million from the RM123.8 million a year ago. Earnings per share were 5.84 sen versus 10.82 sen.

It declared an interim dividend of 5.0 sen a share compared with RM1.25 a year ago.

For the first half, net profit declined 19% to RM12.63 million from RM15.51 million in the previous corresponding period. Revenue rose 29% to RM307.67 million from RM239.12 million a year ago.

Commenting on the results,'' its chairman Ben Keswick said net profit from underlying operations was 15% up on the previous year mainly due to higher sales.

He said the 2009 results were enhanced by a refund of RM4.5 million of duties previously written off.

"Sales of Mercedes-Benz passenger cars rose by 29% benefiting from the improved market conditions and the strong demand for the new E-Class, which had been launched in the last quarter of 2009. The results from the group's after-sales operations were in line with the previous year," he said.

Heavy selling drags share prices lower

KUALA LUMPUR: Heavy selling of heavyweight finance and PLANTATION [] counters saw share prices closing lower on Bursa Malaysia on Thursday, July 22.

Investors turned jittery as they were cautious over Federal Reserve chairman Ben Bernanke's congressional testimony on Wednesday that the US economy faced "unusually uncertain" prospects.

His comments came at a time when investors were already pre-occupied with the stalled US economic recovery coupled with the release of the "stress test" results for 91 European banks on Friday," a dealer said.

At 5pm, the benchmark KUALA LUMPUR COMPOSITE INDEX [] (KLCI) ended the day 4.97 points easier at 1,336.05, after trading between a narrow range of between 1,332.92 and 1,339.98 points.

The losses were registered across the board except for mild gains in several consumer and PROPERTIES [] counters.

The FBM Emas Index lost 29.36 points to 9,066.55, the FBM Ace Index dipped 6.77 points to 3,796.74 and the FBM70 [] decreased 18.98 points to 9,126.46.

The Finance Index declined 34.49 points to 12,126.62, the INDUSTRIAL INDEX [] was 17.91 points lower at 2,657.56 and the Plantation Index erased 9.24 points to 6,336.61. Losers outnumbered gainers 388 to 318 while 251 counters were unchanged, 410 untraded and 27 others were suspended.

Turnover was lower at 872.860 million shares, worth RM1.145 billion, from 874.875 million shares, worth RM1.268 billion, registered on Wednesday. ' Bernama

BAT 2Q net profit dn 21% to RM185.8m from yr ago

KUALA LUMPUR: BRITISH AMERICAN TOBACCO (M) [] Bhd posted net profit of RM185.84 million in the second quarter ended June 30, 2010, a decline of 21% from RM201.24 million a year ago.

It reported on Thursday, July 22 that revenue was RM993.87 million versus RM977.65 million a year ago. Earnings per share were 65.10 sen versus 70.5 sen.

BAT declared an interim dividend of RM1.13 a share, which was the same as a year ago. The RM1.13 dividend a share totalled a payout of RM322 million.

Dollar down after Bernanke, stocks stabilise

LONDON: The dollar fell towards a seven-month low against the yen but world stocks recovered earlier losses on Thursday, July 22 after Federal Reserve chairman Ben Bernanke painted a gloomy outlook for the U.S. economy.

Bernanke said the Fed stood ready to ease monetary policy further if the budding U.S. economy recovery withers, describing the outlook as "unusually uncertain".

The publication of European bank stress tests, due on Friday, also kept investors cautious. Europe is testing how 91 banks would cope with another economic slump and losses on government debt in the wake of the euro zone sovereign debt crisis.

"The yen is gaining after Bernanke on risk aversion and as an interest rate play in reaction to U.S. yields falling further and rate differentials moving in favour of the yen," said Niels Christensen, currency strategist at Nordea in Copenhagen.

The dollar fell 0.4 percent to 86.59 yen, close to last week's seven-month low of 86.25. The dollar was down 0.4 percent against a basket of major currencies.

Two-year U.S. Treasury yields briefly matched a record low of 0.556 percent hit the previous day, while the benchmark 10-year yield held near a 15-month low of 2.855 percent. The MSCI world equity index and the Thomson Reuters global stock index were virtually unchanged on the day. The FTSEurofirst 300 index ticked slightly higher.

Japan's Nikkei index had earlier closed down 0.6 percent at its lowest close since July 2.

Uncertainty over the detail of the bank stress tests persists. Major listed banks, which face constant investor scrutiny, are expected to pass the tests, but the results may show the worst problems lie with smaller players such as Spanish cajas and German landesbanks, which are mainly unlisted.

"No one is wanting to put on any big positions ahead of the outcome of the bank stress tests tomorrow," said Justin Urquhart-Stewart, investment director at Seven Investment Management.

Emerging stocks fell 0.3 percent on the day.

U.S. crude oil rose a quarter percent to $76.75 a barrel, supported by forecasts for a fourth consecutive weekly drop in U.S. crude inventories.

The bund futures rose 30 ticks.

The euro rose 0.3 percent to $1.2794 after better-than-expected German purchasing managers' surveys on manufacturing and services. - Reuters

#Flash* No plans to dispose of TIME Eng stake, says UEM

KUALA LUMPUR: UEM Group Bhd has no plans yet to dispose of its 45% stake in TIME ENGINEERING BHD [], but will do so if there are interested parties with substantial game plan.

Its group managing director/chief executive officer Datuk Izzadin Idris said the stake did not fit well with the company's four core businesses.

"At this point, we don't have plans to sell it. (But) Anybody will a good plan can approach us," he told a media briefing after unveiling the group's five-year strategic plan for its core businesses.

He said UEM Group would want to extract value and recover its investment in the information, communication and TECHNOLOGY [] (ICT) flagship outfit of the group.

Izzadin, however, declined to confirm or deny reports of four bidders for the TIME stake.

TIME recently exited its Practice Note 17 status.

He said the board was working out a strategy to pursue new business opportunities.

However, he was unable to elaborate on what was in store for TIME.

"ICT is not an easy sector in Malaysia or Indochina," he said, when pressed for details of the plans for TIME.

Earlier, Izzadin said UEM was not only keen to grow TIME's business but would go for acquisition to restore value.

He did not indicate if the company was in talks with any party.

"No time period just yet. We are working on the strategy. We want to pin down the strategy. There are plenty of opportunities," he said.

Izzadin said UEM would be supportive of TIME if it were to acquire a business that made sense.

Time made a pre-tax profit of RM30.65 million on revenue of RM123.9 million for the year to Dec 31, 2009.

It recorded a loss of RM15.12 million in 2008.

Its main asset is its 27.1% stake in TIME DOTCOM BHD [] (TDC), an Internet service provider.

Interestingly, its associate stake in TDC is worth more than TIME's entire market value.

On Bursa Malaysia, TIME slipped half sen to 45 sen and TDC drop one sen to 56.5 sen at at 12.30pm. ' Bernama

Credit Suisse posts net profit of US$1.52b

ZURICH: Credit Suisse Group posted net profit of 1.6 billion Swiss francs (US$1.52 billion) in the second quarter and core net revenues of 8.4 billion francs.

The return on equity attributable to shareholders was 17.8% in 2Q10 and diluted earnings per share were 1.15 francs. The tier 1 ratio was 16.3% at the end of 2Q10.

Analysts polled by Reuters had expected the bank to turn in net profit of 1.229 billion Swiss francs. Some had revised their expectations downwards after a sharp drop in profit at major U.S. banks.

Its chief executive officer Brady W. Dougan described it as a resilient performance during a difficult second quarter for the banking sector.

"The continued strong flow of net new assets we achieved in Private Banking and our market share momentum, particularly in Investment Banking and in our Swiss institutional business, reflect the strength of our franchise,' he said.

In a statement posted on its website, he said 'Despite the continuing macroeconomic uncertainty, in the first half of 2010 we achieved a return on equity of 20% while making further substantial progress developing our businesses. We remain confident that our strategy is appropriate and resilient in the face of an uncertain and challenging economic and market environment

He added: 'Our strong capital and liquidity base positions us well to meet changing regulatory requirements. We are actively contributing to industry efforts to build a more robust and stable financial system by helping clients in adverse market conditions and engaging in an open and constructive dialog with regulators to promote a coordinated global approach to banking supervision.'

Khazanah still owns 36.78% stake in Telekom Malaysia

KUALA LUMPUR: Khazanah Nasional Bhd remains a major shareholder in TELEKOM MALAYSIA BHD [] with a 36.78% stake after the disposal of 178.87 million shares.

A filing by Telekom Malaysia on Thursday, July 22 showed Khazanah had 1.31 billion shares of the telecommunications company after the disposal of 178.87 million shares on Wednesday.

Maybank Investment Bank Bhd (Maybank IB) and Nomura Singapore Ltd had on Wednesday completed the private placement of 5% stake in TM on behalf of Khazanah.

The private placement was signed on Tuesday but was executed on Wednesday.

Sime, banks weigh on blue chips

KUALA LUMPUR:'' Key Asian markets were mixed in the morning session on Thursday, July 22 as investors stayed on the sidelines on concerns about the US economy.

At Bursa Malaysia, some selling of Sime Darby, Tenaga and GENTING BHD [] weighed on the 30-stock FBM KLCI. Concerns about the outlook for the market also saw some investors taking profit on banking stocks.

At 12.30pm, the FBM KLCI fell 5.82 points, the most this week, to 1,335.2. Turnover was 459.74 million shares valued at RM455.60 million. There were 216 gainers, 375 losers and 236 stocks unchanged.

Light crude oil fell 14 sen to US$76.42 but crude palm oil futures rose RM28 to a near two-month high of RM2,485 per tonne.

Nikkei 225 -07% 9,213.87 Hang Seng Index -0.18% 20,449.94 Shanghai Composite Index +0.22% 2,541.07 Singapore Straits Times Index +0.58% 2,943.08
Sime Darby fell 14 sen to RM7.60, dragging the key index down by 2.04 points. Tenaga lost eight sen to RM8.57 and Genting six sen to RM7.59, pushing the index down by nearly 1.4 points. Tanjong gave up 10 sen to RM17.80 .

Among the banks, RHB Cap fell 10 sen to RM6.15 and HL Bank nine sen to RM8.64 while CIMB and AMMB gave up three sen each to RM7.20 and RM5.09 while Public bank shed two sen to RM12.12.

Among glove makers, Supermax was down 12 sen to RM6.23 and Top Glove six sen lower at RM6.74.
KPower was the top loser, down 20 sen to 45 sen with only2,700'' shares done while consumer stocks Dutch lady fell 18 sen to RM14.64 and MFlour 15 sen to RM4.30.

However, QSR'' jumped 28c to RM4.53 and the warrants QSR-WB added 15 sen to RM1.63 noon.

Nomura Research forecast 12% to 14% earnings growth over the next three years. The research house was upbeat on QSR, which is the most diversified KFC franchise owner in the region, with 830 KFC and Pizza Hut stores across Asean and India.

Mudajaya extended its gains, rising 29 sen to RM6. Market speculation of a potential change in a substantial shareholding of ha sent shares of the CONSTRUCTION []-cum-independent power (IPP) player surging on Wednesday where it recorded a 55 sen gain.
SEGI rose 22 sen to RM2.26, driven by the corporate development.

#Flash* UEM Group sets RM30b revenue target in 2015

KUALA LUMPUR: UEM Group has set a "stretch" target of RM30 billion in revenue and profit after tax and minority interest of RM3 billion in 2015.

Announcing its growth strategy on Thursday, July 22, it said its four core business are expressways, township and property development, asset and facility management, engineering and CONSTRUCTION [].

UEM Group added that TIME ENGINEERING BHD [] is the only operations which is not fitting into the four core businesses. The objective would be grow the business to restore its value.

Bank Rakyat's profit up 24% in 1H

KUALA LUMPUR: Bank Rakyat has recorded a profit before tax and zakat of RM828.6 million for the first half (1H) ended June 30, 2010, an increase of 24.0% or RM160.2 million compared to RM668.5 million in the same period last year.

Managing director Datuk Kamaruzaman Che Mat said the improved profit was mainly contributed by the increase in financing income in line with the strong growth in financing balance in all business segments of the bank.

The bank's gross income rose by 18.5% or RM350.1 million to RM2.24 billion from RM1.89 billion previously, he said in a statement on Thursday, July 22.

Income from financing increased to RM1.95 billion compared with RM1.61 billion previously while net income after profit distribution to depositors grew by 19.4% or RM267.6 million to RM1.65 billion, despite an increase in Overnight Policy Rate by 0.25% in May.

The bank also recorded a fee based income of RM55.3 million, an increase of RM13.8 million or 33.1% compared to RM41.5 million in the previous corresponding year, of which 85.4% were contributed from income on wasiat, commission on Takaful and ATM service fee.

Kamaruzaman said total assets grew by 19.2% or RM8.98 billion to RM55.81 billion as at first half of the year compared to RM46.84 billion in the previous year.

In the meantime, he said, return on asset remained at 3.1%.

Meanwhile, net financing balance rose by 23.9% or RM8.16 billion to RM42.27 billion as at the first half of the year from RM34.11 billion in the previous year.

Its consumer net financing balance increased by 21.7% or RM6.86 billion to RM38.42 billion in the first half of the year, he said.

He said consumer financing was the major segment of Bank Rakyat's business which accounted for 89.1% of the bank's total financing in the first half year.

The bank's total deposits grew by 13.5% or RM5.26 billion to RM44.20 billion at the end of June 2010 compared to RM38.93 billion previously while liquidity position remained strong at 25.0% from 24.5% previously. ' Bernama

QSR advances, Nomura sees more upside

KUALA LUMPUR: QSR saw its shares and warrants buck the cautious overall market at the midday break on Thursday, July 22 after an upbeat report from Nomura Research which forecast 12% to 14% earnings growth over the next three years.

At 12.30pm, QSR was up 28 sen to RM4.53 with 889,300 shares while the warrants, QSR-WB added 15 sen to RM1.63.

Nomura Research said it was upbeat on QSR, which is the most diversified KFC franchise owner in the region, with 830 KFC and Pizza Hut stores across Asean and India.

'We see 12-40% earnings growth over the next three years, driven by a young and high poultry-consuming population. Strong catalysts also exist via its start-up India presence. Its single-digit FY11F P/E compares favourably historically and versus its peers. We initiate on QSR with a BUY rating and PT of RM5.47,' it said.

The catalysts include continued store openings in Malaysia and India; 2) sustained positive consumer sentiment; and 3) confidence in robust economic recoveries across the region.