Saturday, July 31, 2010

#Stocks to watch:* Tanjong, IJM, Zelan, Ngiu Kee

KUALA LUMPUR: After notching gains for the sixth-straight day and pushing the FBM KLCI past the 1,360 level on Friday, July 30, the market may take a breather before attempting to climb further. The cautious sentiment could be due to the lacklustre close on Wall Street on Friday.

Last Friday, the 30-stock FBM KLCI closed at 1,360.92, another new high since February 2008.'' For July, it chalked up 46.90 points or 3.57%.

Global stocks and the U.S. dollar slid on Friday, July 30 as investors trimmed risk exposure on data showing the U.S. economy slowing a bit more than expected even as other news suggested a slow, steady recovery.

Reuters reported Wall Street closed little changed to wrap up its best month in a year after another week of strong corporate results that offset the impact of lackluster economic data.

The 7% gain in July for the S&P 500 and Dow was on low volume and followed an almost 14% decline through May and June.

The Dow Jones industrial average closed down 1.22 points, or 0.01%, at 10,465.94. The Standard & Poor's 500 Index gained 0.07 point, or 0.01%, at 1,101.60. The Nasdaq Composite Index rose 3.01 points, or 0.13%, to 2,254.70.

Stocks to watch on Monday include Tanjong plc, ZELAN BHD [] and Ngiu Kee Corp (M) Bhd.

Billionaire T. Ananda Krishnan's Usaha Tegas Sdn Bhd, which controls 46.96% of Tanjong plc, has served a take-over on the power-gaming company at RM21.80 per share or for RM4.7 billion. The offer price is RM4.22 or 24% above its pre-suspension price of RM17.58.

Zelan has proposed to dispose of 30 million shares in IJM Corp Bhd, or 2.23% on IJM Corp at an assumed price of RMM5.80 each.

'The proposed disposal would raise gross proceeds of up to RM152.4 million,' Zelan said, as it seeks to obtain the shareholders' mandate for the disposal.

As at July 15, Zelan's total borrowings were RM291.98 million. Possible annual savings in interest payment arising from part repayment of about RM50 million of such borrowings (estimated based on the average interests cost of the said borrowings of about 7% per annum) could be about RM3.50 million per annum.

In Ngiu Kee, the company said there was a deviation of 109% between the unaudited net profit for the year ended March 31, 2010 of RM2.48 million and the audited net loss of RM5.93 million. The bigger losses followed an impairment review in accordance with FRS 136, the company said.

Meanwhile HIROTAKO HOLDINGS BHD [] has emerged as a major shareholder in PA Resources Bhd with a 15.99% stake or 30.65 million shares after it subscribed'' for the shares to rights issue and allotment of excess shares.

The investment in PA Resources could be a bid to enter the aluminium industry at low cost, according to a report by The Edge weekly.

BP to try well kill Tuesday, House passes reforms

BILOXI, Miss.: BP Plc said on Friday, July 30 it could seal its ruptured Gulf of Mexico oil well by next week as the U.S. House of Representatives voted to toughen regulation of offshore energy drilling.

Incoming BP Chief Executive Bob Dudley said the British energy giant would attempt a "static kill" operation on Tuesday to try to plug the blown-out deep-sea well that caused the worst offshore oil spill in U.S. history.

This marks a slight delay. The U.S. official overseeing the spill response, retired Coast Guard Admiral Thad Allen, had said on Thursday he hoped the operation to pump mud and cement into the well could be performed as early as this weekend.

As BP moved ahead with its plans, U.S. government scientists said South Florida, the Florida Keys and the U.S. East Coast likely will be spared from oil pollution from the spill despite earlier dire warnings.

The House, by a vote of 209-193, passed reforms to offshore drilling practices in response to the spill, which caused an economic and environmental disaster along the U.S. Gulf Coast. President Barack Obama supports the bill.

Gulf Coast Democrats secured an amendment to the legislation to end Obama's moratorium on deepwater drilling for oil companies that meet new federal safety requirements. The current moratorium runs through the end of November.

By the time the full Congress completes action on the offshore drilling bill -- and it is uncertain that it will -- it could be November or later. The Senate has not yet acted on its version of the legislation.

Obama's fellow Democrats in the House rejected Republican warnings that the bill would slash U.S. oil and gas production in the Gulf of Mexico, a major supplier of domestic energy, and cut high-paying drilling jobs.

The "static kill" process will involve pumping drilling mud and cement into the well from the top to plug it. A relief well is intended to intersect the ruptured well deep under the seabed to allow mud and cement to be pumped from the bottom to provide a permanent fix.

No new oil has leaked since BP installed a tight-fitting containment cap atop the well on July 15 as a temporary fix.

"We want to absolutely kill this well. The static kill will be attempted on Tuesday. The relief well by the end of the month (August)," said Dudley, BP's top executive on the Gulf oil spill who will replace Tony Hayward as CEO on Oct. 1.

At a briefing on Friday, Allen said "static kill" would be delayed until Tuesday to clean out debris and sediment found in the relief well, which has bored deep into the earth and is intended to plug the leak from the bottom.

Once cleaned out, BP can finish cementing the pipe into the relief well and move forward with a static kill, Allen said.

In his first news conference on the Gulf since being named to replace the much-criticized Hayward, Dudley stressed BP's commitment to restoring the coast.

"We are scaling back the number of vessels offshore but we are not stopping cleanup operations by any means," he said. "We are not complacent about this at all."

Millions of gallons (litres) of oil have poured into the Gulf since April, when a rig exploded and sank, killing 11 workers and triggering the leak from the BP-owned well.

Officials have expressed cautious optimism the oil already spilled into the ocean is dissipating. The spill has hurt the livelihoods of fishermen and other business owners along the Gulf Coast and presented a challenge to BP and to Obama.


The legislation passed by the House would eliminate the current $75 million liability cap for offshore operations. It also would prohibit oil companies with poor safety records from bidding for new offshore drilling leases, effectively barring BP from starting new U.S. offshore operations.

The measure would impose tighter requirements for well design and well cementing for offshore projects and on equipment known as blowout preventers intended to prevent well ruptures like the one that occurred at BP's well in April.

The Senate is considering a similar bill, but senators are unlikely to pass it before their summer recess on Aug. 6. If the Senate passes a bill, the two chambers would have to resolve any differences between their versions and pass a compromise one before Obama could sign it into law.

Democrats said the bill would make offshore drilling safer for workers and protect the environment from future spills.

"If you want to apologize for Big Oil, go right ahead, but the American people are not on your side on this one," Democratic Representative Jim McGovern told his Republican colleagues.

Scientists had issued dire warnings that oil from the spill would float into the loop current in the gulf and ride the powerful Gulf Stream current around the fragile islands at the southern tip of Florida and up the Atlantic Coast as far as North Carolina. But the U.S. National Oceanic and Atmospheric Administration said that was now unlikely.

The oil that remains in the Gulf is hundreds of miles (km) from the loop current. That oil is in the process of breaking down and will not travel far, NOAA said. - Reuters

Stocks, dollar ease as soft U.S. economic data

NEW YORK: Global stocks and the U.S. dollar slid on Friday, July 30 ''as investors trimmed risk exposure on data showing the U.S. economy slowing a bit more than expected even as other news suggested a slow, steady recovery. The dollar hit its lowest since November against the Japanese yen as data showing U.S. gross domestic product slowed in the second quarter reinforced expectations for low U.S. interest rates well into next year.

The dollar's weakness helped crude oil to rebound and drive strong rallies in wheat and sugar, which lifted the Reuters-Jefferies CRB index, a global commodities benchmark, to its biggest monthly gain in July in 14 months.

The U.S. Commerce Department said GDP expanded at a 2.4 percent annual rate in the second quarter, less than the 2.5 percent pace analysts polled by Reuters had expected.

But European stocks recovered from a sharp fall to close only slightly lower and U.S. stocks pared losses on separate, mixed signals from U.S. data to close flat.

A jump in the Chicago Purchasing Managers Index to 62.3 in July suggested a slow but steady economic recovery was spurring buying. Analysts expected a reading of 56.5.

A separate report showed consumer sentiment slumped to an 8-month low, emblematic of a fragile economy.

Global stocks as measured by MSCI's all-country world index and its emerging market index both pared losses to fall about 0.2 percent.

Wall Street closed little changed to wrap up its best month in a year after another week of strong corporate results that offset the impact of lackluster economic data.

The 7 percent gain in July for the S&P 500 and Dow was on low volume and followed an almost 14 percent decline through May and June.

The Dow Jones industrial average closed down 1.22 points, or 0.01 percent, at 10,465.94. The Standard & Poor's 500 Index gained 0.07 point, or 0.01 percent, at 1,101.60. The Nasdaq Composite Index rose 3.01 points, or 0.13 percent, to 2,254.70.

"The market kind of stalled up the last couple of days," said Nick Kalivas, an analyst MF Global. "On the surface earnings numbers have been pretty strong but underneath there was a loss of momentum," he said.

The dollar fell 2.2 percent against the yen in July, the third straight month of declines, while the euro rose 6.7 percent against the dollar, its best month since May 2009.

"It's going to be very difficult for a (dollar) rally and people are going to get more risk averse. You could see euro go below $1.30 and the dollar fall below 86 yen," said Boris Schlossberg, director of FX research at GFT Forex in New York.

Copper led industrial commodities in July with a gain of 12.4 percent, its biggest in a year.

Money managers more than doubled their long, or bullish exposure, in U.S. copper futures this week as prices hit peaks last seen in May, trade data released on Friday showed.

Gold lost about 5 percent in July, its biggest monthly loss since December, as safe-haven demand fizzled on lessening fears over a euro zone sovereign debt crisis.

U.S. gold futures for December delivery settled up $12.70, or 1.1 percent, at $1,183.90 on Friday.

Oil rebounded from losses that pushed benchmark crude below $77 a barrel.

U.S. crude for September delivery rose 59 cents to settle at $78.95 a barrel. ICE Brent also rose 59 cents to settle at $78.18 a barrel.

U.S. Treasuries rose on growing expectations for more accommodative monetary policy, with the benchmark 10-year note yield falling within roughly two basis points of a 15-month low and the two-year yield setting a new record low.

Bond prices move inversely to their yield.

The 2-year Treasury note fell to a record low of 0.559 percent. The benchmark 10-year U.S. Treasury note was up 21/32 in price to yield 2.91 percent. - Reuters

Li Ka-shing team trumps Macquarie after week of wrangling

LONDON: Deutsche Bank, RBS, Barclays Capital and BNP Paribas will share in fees estimated at nearly $100 million after helping shepherd EDF's $9 billion sale of British power networks to Hong Kong billionaire Li Ka-shing.

Late on Thursday, July 29 the world's second-biggest utility reached a deal to sell its UK electricity distribution networks to Li's Cheung Kong Infrastructure <1038.HK (CKI) and Hongkong Electric (HKE).

Agreement on a sale -- the largest utility deal since February 2009 and one of the largest-ever Asian buys into Europe -- came hours before EDF was due to report its quarterly results.

It followed days of wrangling in London, with EDF and its advisers locked in parallel negotiations with CKI and a rival bidding group led by Macquarie, the Australian bank whose name is synonymous with infrastructure dealmaking. Both teams had submitted binding bids on Monday.

People familiar with the matter said Nigel Robinson, a former Goldman Sachs banker who focuses on natural resources deals, and sector specialist Alan Brown, led a Deutsche Bank team that was EDF's key financial adviser.

A Herbert Smith team under veteran energy lawyer Henry Davey provided legal advice. EDF finance chief Thomas Piquemal, the former Lazard banker brought in by new chief executive Henri Proglio, supervised the sale.

EDF was also advised by Barclays Capital and BNP Paribas, with BarCap's Paul Jeffery helping re-shape the financing of EDF's UK units ahead of the sale.

Leading the internal deal team for Li were CKI Deputy Managing Director Andrew Hunter and Basil Scarsella, the chief executive of Northern Gas Networks (NGN), the British utility bought by CKI in 2005.

CKI turned to Royal Bank of Scotland (RBS), which had helped finance the 2005 NGN takeover. It tapped utilities specialist Simon Wilde and merger expert Charles Roast, a former Merrill Lynch banker who helped oversee the sale of London's Gatwick airport last year.

The deal represents part-nationalised RBS's biggest-ever sole mandate, Thomson Reuters data shows, and is a boost to one of Europe's mergers and acquisitions (M&A) minnows.

Excluding EDF, RBS ranks just 18th for M&A announced this year with a European target, with $14.3 billion of deals, Thomson Reuters data shows. It has worked on barely a fifth of the deals by number or dollar value that market leader Morgan Stanley can claim.

Freeman & Co, a merger consultancy, estimates EDF's three advisers will earn $40 to $50 million in fees, while CKI's bank will make $30 to $40 million.

The four banks, plus units of Lloyds Banking Group, Mizuho and Santander, are also providing 665 million pounds of loans to help fund the acquisition, people familiar with the matter said. Freeman says those loans could garner another $5 to $8 million in fees.

The rival group -- Macquarie, Canada Pension Plan (CPP) and the Abu Dhabi Investment Authority (ADIA) -- had been working with Macquarie's own investment bankers, led by European utilities head Daniel Wong, and advisers from Goldman Sachs and boutique Lexicon Partners. - Reuters

US economic growth slowed in 2Q

WASHINGTON: U.S. economic growth slowed in the second quarter as companies invested heavily in equipment from abroad and the pace of consumer spending eased, raising concerns about the recovery in the rest of 2010, according to Reuters on Friday, July 30.

Gross domestic product expanded at a 2.4 percent annual rate, the Commerce Department said in its first estimate on Friday, after an upwardly revised 3.7 percent growth pace in the January-March quarter.

Financial markets had forecast GDP, which measures total goods and services output within U.S. borders, growing at a 2.5 percent rate in the second quarter from a previously estimated a 2.7 percent rate for the first three months of this year.

"The anticipated slowdown in the economy is happening. Will business investment fall off a cliff next quarter if domestic consumer spending continues to flag?" said Lee Olver, managing director of financial strategies at Madison Williams & Co. in Houston.

A second report showed business activity in the nation's Midwest region expanded more than expected this month on strong orders. The Institute for Supply Management-Chicago business barometer rose to 62.3 from 59.1 in June and above market forecasts for reading of 56.5.

Separately, consumer sentiment dropped this month to a nine-month low, according to Thomson Reuters/University of Michigan's Surveys of Consumers.

U.S. stocks fell on the growth and confidence data, while prices for safe have government bonds rose. The U.S. dollar fell against the yen.

The economy, which is digging out of its longest and deepest recession since the 1930s, has now grown for four straight quarters. However, growth has been too tepid, making little impact on a high unemployment rate.

The sluggish economy and a 9.5 percent unemployment rate are eroding President Barack Obama's popularity and dimming Democrats' prospects in November's mid-term elections.

A Reuters-Ipsos poll this week showed only a 34 percent approval of Obama's handling of the economy and jobs compared to 46 percent who deemed it unsatisfactory.

This is a sharp decline from early 2009, shortly after he took office, when more than half of those surveyed approved of Obama's handling of the worst financial crisis in decades.


Growth in the last quarter was held back by a 28.8 percent surge in imports, the fastest increase in 26 years, which eclipsed a 10.3 percent rise in exports. The widening trade deficit lopped off 2.78 percentage points from growth, the largest subtraction since the third quarter of 1982.

Outside the trade sector, however, there were some encouraging details in the report. Business investment rose at a 17 percent rate, the largest increase since the first quarter of 2006, after a 7.8 percent pace during the prior period.

Spending on equipment and software posted its strongest growth since the third quarter of 1997, while investment on structures rose for the first time since the third quarter of 2008, likely boosted by a rise in oil and gas drilling.

Economists worried businesses might have taken an overly optimistic view of the the recovery, given the pull back in consumer spending. They expect spending to slow down in the coming quarters.

"It's good to see they are putting their money into the economy, but just how sustainable are those numbers," said Joel Naroff of Naroff Economic Advisors in Holland, Pennsylvania.

"Businesses are making up for lost ground right now. Once they have made up for it and if they are looking at a more sluggish expansion, I think they will slow their investment activity."

Growth during the second quarter was also supported by new home CONSTRUCTION [], which surged at a 27.9 percent rate after being a drag on GDP in the first quarter, reflecting a spurt in building activity spurred by a popular home-buyer tax credit that has since expired.

The rate of increase was the biggest since the third quarter of 1983. Residential investment had contracted at a 12.3 percent rate in the first quarter.

But there were some areas of concern. The report showed consumer spending was not robust. Consumer spending grew at a 1.6 percent rate in the second quarter after increasing at a revised 1.9 percent pace in the first quarter.

Consumer spending, which normally accounts for 70 percent of U.S. economic activity, had previously been estimated to have grown at a 3 percent rate in the first quarter. Spending added 1.15 percentage points to GDP last quarter.

With so much domestic demand sated by overseas production, U.S. businesses found stocks piling up on their shelves. Inventories increased $75.7 billion in the second quarter after a $44.1 billion rise in the first three months of the year.

Stripping out the rise in inventories, which could dampen future production, the economy would have expanded at only a 1.3 percent rate in the second quarter.

Separate reports showed current business conditions in New York City fell in July to its lowest level in 11 months, while employment costs in the second quarter rose a mild 0.5 percent as the soft economy kept a lid on wages and benefit costs slowed.

Usaha Tegas to take Tanjong private at RM21.80 per share

KUALA LUMPUR: Billionaire T. Ananda Krishnan's Usaha Tegas Sdn Bhd, which controls 46.96% of Tanjong plc, has served a take-over on the power-gaming company at RM21.80 per share or for RM4.7 billion.

This is the second company which Ananda Khrishan is taking private this week. Earlier ,MEASAT Global Network Systems Sdn Bhd (MGNS) launched a takeover of MEASAT GLOBAL BHD [] to acquire all the ordinary shares of 78 sen each not already held by MGNS at RM4.20 per share.

Tanjong Capital Sdn Bhd (TCSB), a special purpose vehicle set up by Usaha Tegas, and its concert parties, said on Friday, July 30 that based on the offer price of RM21.80 per Tanjong share, Tanjong is valued at RM8.8 billion. The minorities' shares are valued at RM4.7 billion.

The consortium collectively holds 46.96% of the total shares in Tanjong. The consortium has given irrevocable undertakings to TCSB to accept the offer.

"The offer price represents a premium of 21.92% over the closing price of Tanjong shares of RM17.88 per share on July 27 -- this being the last traded price prior to the announcement by TCSB of the conditional take-over offer of Tanjong," TCSB said.

Based on the 12-month rolling earnings before interest, tax, depreciation and amortisation (EBITDA) up to Jan 31, 2010 of Tanjong, the offer price of RM21.80 per Tanjong a share represents an implied enterprise value over EBITDA of 8.0 times.

TCSB said Tanjong's subsidiaries are involved in the power generation, gaming, leisure and property investment. The Tanjong Group has ambitions of being a global player in the power generation industry, by pursuing development opportunities in the Middle East and North Africa, South and South East Asia regions.


Tanjong as currently structured, will not have sufficient capacity to achieve these ambitions, and therefore will need to be restructured and recapitalised in order to meet the prospective long term investment and debt profile, which will result in higher borrowing costs and translate into medium term earnings volatility.

Additionally, TCSB said it believed that Tanjong which has a vast range of businesses including power and gaming, suffers from conglomerate discount valuation.

"Furthermore, Syariah-compliant and many Malaysia based institutional investors are not able to invest in the Tanjong Group's growing power assets, given the gaming business of the Tanjong Group.

"A privatised Tanjong will enable the business to seek out long-term capital providers, and where it serves the corporate objective, allow the introduction of strategic partners or undertaking of broader partnerships," it said.

TCSB said it was offering the minority shareholders of Tanjong the opportunity to exit at an attractive premium whilst not subjecting them to the associated risks of the company's next growth phase. The premium to be paid will represent a significant upfront cash yield to the shareholders.


CIMB Investment Bank Berhad and RHB Investment Bank Berhad have been appointed as joint financial advisers, whilst Standard Chartered Bank and RBS Asia Advisers (Malaysia) Sdn Bhd have been appointed as joint international financial advisers, to TCSB for the Offer.

Friday, July 30, 2010

F&N appoints new CEO

KUALA LUMPUR: Fraser & Neave Holdings Bhd (F&N) has appointed Datuk Ng Jui Sia as its chief executive officer with effect from Aug 1, 2010.

The group said on Friday, July 30 that Ng, 58, joined the F&N Group in 1995 and led a management team in F&N Coca-Cola Singapore and Malaysia in brand marketing, manufacturing, sales and distribution.

F&N said that prior to Ng's secondment to Times Publishing Limited as chief executive officer, he was responsible for a massive restructuring of the Malaysian soft drinks business over a six-year period.

The company said Ng, a Singaporean, holds a Bachelors degree in Business Administration from the University of Singapore and is an Associate of the Institute of the Chartered Accountants in England & Wales.

K-One Technology 2Q net profit jumps to RM2.2m on higher sales, cost reduction

KUALA LUMPUR: K-ONE TECHNOLOGY [] BHD [] net profit for the second quarter ended June 30, 2010 jumped significantly to RM2.2 million from RM315,000 a year earlier due to increase in sales and cost reduction exercises.

Revenue rose to RM33.77 million from RM15.34 million a year ago, while earnings per share was 1.99 sen.

For the six months ended June 30, K-One's registered net profit RM3.88 million compared to net loss RM1.19 million last year.

In a filing to Bursa on Friday, July 30, the company said its sales revenue increased by 121% comparing the current quarter and the same quarter last year.

The increase in sales was expected and attributed to the continuing momentum generated from the mass production of new network cameras, new electronic sports headlamps and new USB cables, it said.

'In fact, mobile phone accessories sales picked up substantially and contributed significantly in overall sales for this current quarter.

'The significant improvement in profit is attributable to the increased sales, the benefits of economies of scale, vigilant on-going cost reduction exercises and last but not least, the elimination of foreign exchange risks caused by foreign hedging contracts, which the group has replaced with natural hedging ie paying key suppliers in the same inward remittance currency, thus markedly reducing foreign exchange risks,' it said.

On its prospects, the company said it was optimistic that the group would continue to show escalating sales growth in the second half of 2010.

It said the demand for its products, which were categorised as mobile phone accessories, computer peripherals and consumer technology products looks vibrant because consumers its global OEM customers seemed to still have an appetite for consumer electronic products.

'The recent launch of the iPad is a reflection of this insatiable appetite for innovative consumer electronic products.

'Furthermore, our second half sales as in the past many years have always been much higher than the first. We therefore expect the sales and profit performance for the full year to be especially strong,' it said.

Chin Teck posts lower 3Q net profit, declares 24 sen 2nd interim dividend

KUALA LUMPUR: CHIN TECK PLANTATION []S BHD []'s net profit for the third quarter ended May 31, 2010 (3Q10) fell 23.8 % to RM10.89 million from RM14.29 million a year ago on the back of a higher revenue of RM29.62 million versus RM28.37 million.

In a filing to Bursa Malaysia, on Friday, July 30, the company's revenue increased 4.4% mainly due to a substantial increase in the average selling prices of fresh fruit bunches (FFB) and palm kernel (PK) even though the production of FFB, crude palm oil (CPO), and PK were significantly lower, resulting in reduced sales volume.

"Overall share in profits of associates were lower due mainly to a decrease in contribution from the joint ventures engaged in oil palm plantation in Indonesia," it said.

Chin Teck posted earnings per share of 11.92 sen for 3Q10 as against 15.65 sen in the same quarter last year. Its net asset per share stood at RM6.02 as at May 31.

Th company declared a second interim dividend of 24 sen per stock less tax for the financial year ending Aug 31, 2010 (FY10) which would be payable on Aug 30, 2010.

For the nine months ended May 31, 2010, Chin Teck's net profit rose 13% to RM35.43 million from RM31.37 million in the same period last year. Revenue increased marginally to RM82.24 million from RM82.19 million.

On its prospect, the group said the average selling price of CPO for the remaining financial quarter in respect of the year ending Aug 31, 2010 was expected to remain strong and should have a positive impact on the plantation profit.

The stock today added one sen to close at RM7.91 with 14,600 shares traded.

Suria's 2Q net profit up 52% y-o-y

KUALA LUMPUR: SURIA CAPITAL HOLDINGS BHD []'s net profit for the second quarter ended June 30, 2010 (2Q10) rose 52% to RM18.74 million from RM12.29 million a year ago due to higher revenue and lower operating expenditures in the current quarter.

The company said on Friday, July 30, that the group's revenue climbed 3% to RM62.78 million from RM60.95 million a year ago, thanks to higher contribution by the core business of port operations. It registered earnings per share of 6.62 sen for 2Q10 versus 4.34 sen in the same quarter last year.

The directors did not recommend any dividend for the current financial quarter ended June 30, 2010. Suria posted net asset per share of RM2.50 as at June 30.

For the six months ended June 30, 2010, Suria's net profit surged 81% to RM37.56 million from RM20.76 million in the same half last year, while revenue grew 7% to RM122.49 million from RM114.51 million.

On its prospects, Suria said port operations would continue to be the main contributor to the group's earnings and the board was optimistic of achieving satisfactory performance for the financial year.

The stock today added 2 sen to close at RM1.60 with turnover of 509,100 shares.

Mutiara's unit in RM38 m property disposal

KUALA LUMPUR: MUTIARA GOODYEAR DEVELOPMENT [] Bhd announced that its wholly owned subsidiary, Potensi Naga Sdn Bhd (PNSB), has entered into a sale and purchase agreement (SPA) with Prosper Palm Oil Mill Sdn Bhd (PPOM) to dispose a property for RM38 million cash.

The company said on Friday, July 30 that the property involved a 13-storey office building together with 230 car park bays in Kelana Centre Point, Petaling Jaya.

The group said the property was acquired by PNSB on May 15, 1999 for a consideration of RM31.9 million, adding that it was a leasehold property with the lease expiring on Jan 23, 2094.

"The property is currently leased to a mixed group of tenants for office use and has a tenancy rate of 77%," said Mutiara, adding that the approximate age of the property is 11 years.

It noted the fair book value of the property based on PNSB's latest audited financial statements for the year ended April 30, 2009 was RM32 million.

Mutiara said the the disposal represented an opportunity for the Mutiara Group to unlock the value of assets that did not contribute towards its core business of property development.

It added that the disposal would also free the group from future holding and maintenance costs of the property.

The proceeds from the disposal would provide future cashflow for the group's working capital purposes, reduce its borrowings and/or contribute towards expansion of its core business.

CMSB and Rio Tinto mutually agree to extend HOA to be terminable from Aug 1

KUALA LUMPUR: CAHYA MATA SARAWAK BHD [] (CMSB) announced that the company and Rio Tinto Aluminium (M) Sdn Bhd have mutually agreed to further extend the Heads of Agreement (HOA) from Aug 1, 2010 to be terminable by either party giving the other a one-month notice of termination.

In a filing to Bursa Malaysia, July 30, CMSB said the HOA involved the proposed design, engineering, CONSTRUCTION [] and commissioning and operation of an aluminium shelter in Sarawak.

The company had earlier announced in May that both parties have mutually agreed to extend the HOA to July 31, 2010.

KLCI hits new two-year high

KUALA LUMPUR: The FBM KLCI closed higher for the sixth straight day on Friday, July 30, helped by last minute buying in selected heavyweights and rotational plays on lower liners, dealers said.

At 5pm, the FBM KLCI rose 2.51 points or 0.19% to close at a new two-year high of 1,360.92.

The benchmark index opened 0.90 of a point lower at 1,357.51 in the morning and traded within 1,354.76 and 1,360.92 .

A dealer said the local market started the day in a negative note as players took cue from the overnight slip on Wall Street.

However, continued buying in selected blue chips such as Sime Darby in the afternoon session helped the key index to finish the day in positive territory.

OSK Research said the FBM KLCI this week had continued to inch higher after surpassing the psychological level of 1,350, something it failed to do in the previous 2009-2010 rally.

Although the index experienced great indecisiveness two days ago, the market is now trading at another new peak for the 2009-2010 rally, it said.

"The immediate technical outlook of the FBM KLCI remains bullish," it added.

At close, the Finance Index shed 2.96 points to 12,331.62, the PLANTATION [] Index declined 11.26 points to 6,399.38 but the Industrial Index gained 17.84 points to 2,667.67.

The FBM Emas Index rose 11.12 points to 9,212.77 but the FBM70 [] Index declined 18.97 points to 9,184.01 and the FBM Ace Index slipped 8.96 points to 3,794.77.

Losers led gainers 378 to 348 while 274 counters were unchanged, 364 untraded and 25 others suspended.

Volume declined to 918.318 million shares valued at RM1.422 billion from 999.630 million shares valued at RM1.481 billion yesterday.

Topping most active stocks were SAAG Consolidated which shed half sen to 7.5 sen and Time dotCom which inched up 1.5 sen to 62.0 sen.

Sinotop Holdings lost seven sen to 24.0 sen while Malton increased 8.5 sen to 50.0 sen.

Among top gainers, British American Tobacco rose RM1.02 to RM44.90 and Petronas Gas increased 45.0 sen to RM10.

As for the heavyweights, Maybank rose four sen to RM7.74 while CIMB Group declined five sen to RM7.40.

Sime Darby gained 11 sen to RM7.80 while Maxis shed two sen to RM5.29.

The Main Market volume declined to 857.246 million shares worth RM1.408 billion from 904.895 million shares valued at RM1.461 billion yesterday.

The volume of warrants eased to 28.204 million units worth RM4.293 million versus 50.583 million units worth RM7.924 million previously.

Turnover on the ACE Market also dropped to 27.826 million shares valued at RM5.207 million compared with 33.708 million shares worth RM5.529 million yesterday.

Consumer products accounted for 91.836 million shares traded on the Main Market, industrial products 118.880 million, CONSTRUCTION [] 50.161 million, trade and services 258.705 million, TECHNOLOGY [] 42.228 million, infrastructure 58.900 million, finance 63.620 million, hotels 10.671 million, PROPERTIES [] 139.207 million, plantations 14.018 million, mining nil, REITs 8.915 million, and closed/fund 105,400. -- Bernama

Unisem 2Q net profit surges 102% to RM48m

KUALA LUMPUR: UNISEM (M) BHD [] net profit for the second quarter ended June 30, 2010 surged 102.2% to RM48.05 million from RM23.98 million a year ago on the back of a 40.8% increase in revenue to RM359.5 million.

In a filing to Bursa Malaysia on Friday, July 30, Unisem attributed the significant increase in revenue and net profit to improved sales volume due to strong demand for its products and services.

Earnings per share was 9.27 sen, while net assets per share rose to RM1.94 from 1.83.

BNM: Net financing to private sector up at annual rate of 11.3%

KUALA LUMPUR: Net financing to the private sector through the banking system and the capital market expanded at a higher annual rate of 11.3%, according to Bank Negara.

All major loan indicators across both business and household sectors increased during the month, said the central bank.

Following the increase in the OPR to 2.75% on July 8, the daily weighted average overnight interbank rate trended higher and interbank rates of other maturities also rose accordingly, it said in a statement July 30.

In terms of the commercial banks' lending rates, both the average base lending rate and the average lending rate were higher as at end-June, it said, adding that the average fixed deposit rates have also increased.

Bank Negara said that from June 1 to July 29, 2010, the ringgit appreciated by 1.7% against the US dollar as further signs of regional economic recovery contributed to favourable investor sentiments towards the regional financial markets.

Against other major currencies, the ringgit depreciated against the pound sterling (-5.8%), euro (-3.7%) and the Japanese yen (-2.9%).

Against regional currencies, the ringgit appreciated against the Chinese renminbi (1%), Thai baht (1%), Philippine peso (0.7%) and Korean won (0.6%) but depreciated against the Singapore dollar (-0.8%) and Indonesian rupiah (-0.4%).

Headline inflation was higher at 1.7% in June, said Bank Negara.

The increase in headline inflation was largely the result of price increases in the food and non-alcoholic beverages category, it said.

Broad money (M3) rose at a faster annual rate of 8.8%. M3 also increased on a month-on-month basis, reflecting mainly higher credit extension by the banking system to the private sector, it said.

The banking system's capitalisation remained strong with the risk-weighted capital ratio and core capital ratio at 14.8% and 12.9% respectively, it said.

KUB subsidiary gets RM13.87 million phone contract

KUALA LUMPUR: KUB MALAYSIA BHD [] announced that its 70%-owned joint-venture subsidiary, KUB-Fujitsu Telecommunications (M) Sdn Bhd has accepted a RM13.87 million telephone equipment contract from Telekom Malaysia Bhd.

In a filing to Bursa Malaysia on Friday, July 30, KUB said the contract involved the supply and delivery of DECT cordless telephone''involving a''three-year period.

It said the contract would contribute positively to the group's earnings and earnings per share for the financial year ending Dec 31, 2010.

"There are minimal risks as the contract is based on current and immediate requirement of Telekom for the supply and delivery of telephone equipment," noted KUB.

Nihon Garter: infrastructure and competent governance among reasons for Penang expansion

GEORGE TOWN: The tri-lingual ability of Malaysians, the world-class workforce, infrastructure, facilities and competent governance were the reasons why Japan-based NGC Garter (M) Sdn Bhd (Nihon Garter) expanded its operations here from just a sales office six years ago to a full-fledged manufacturing plant today.

Its managing director CY Tan, a Penangite who migrated to Japan 28 years ago said the decision for the company to invest RM40 million in the Penang plant was based on the tremendous potential for growth in the country.

"I was sent here six years ago to set up the sales office and the business has expanded at a rapid pace which is why we decided to set up the plant here instead of Thailand and Singapore or even other states in Malaysia.

"With multi-lingual engineers, we are able to serve our customers worldwide effectively and this is something we can never achieve elsewhere," Tan added.

Nihon Garter is the world leader in the industry controlling 72% of the world market for the manufacturing and assembling of industrial equipment and carrier tape that is widely use in the semiconductor & LED market.

Among Nihon Garter's customers are leading LED multi-national companies namely OSRAM, Agilent, Philips Lumined, Panasonic and Renesas, among others.

It has manufacturing facilities in China, Taiwan, Korea, Philippines and Japan, aside from their presence in Russia, India, Vietnam and Thailand.

Leveraging on Nihon Garter Japan's core competencies, Malaysia Garter provides total solutions to its customers in the region, including those in Malaysia with a broad range taping and sorting handlers, and a wide variety of carrier tapes & cover tapes.

"We are well positioned to service targeted markets and be a preferred supplier to our customers, offering one stop packaging solutions," Tan added.

Tan said from a staff force of four, Nihon Garter now has 26 personnel, mostly engineers for its fully automated 22,000 sq ft facility in Bayan Lepas, which was only utilising two-thirds of its capacity.

Tan said Nihon Garter Malaysia target was to contribute 30% of Nihon Garter's worldwide revenue by 2011.

"We are still looking to hire more engineers in the years to come to help us grow 40% to 50% annually," he added.

Airbus boosts single-aisle aircraft production to rate 40 per month by 2012

KUALA LUMPUR: Airbus will increase the monthly production rate of its A320 Family aircraft to 38 per month in August 2011, and to 40 per month in first quarter 2012.

Currently Airbus turns out 34 A320 Family aircraft per month, rising to 36 from December 2010.

For the time being the A330/A340 Family production remains at rate 8.5 per month.

In a statement July 30, Airbus said the decision to raise its single-aisle production rate was driven by the continuing strong demand for its eco-efficient single-aisle aircraft and a record backlog in excess of more than 2,200 A320 Family aircraft.

Airbus executive vice president programmes Tom Williams said the recent Farnborough International Airshow -- where Airbus garnered orders worth US$28 billion (RM89.6 billion) in total and the leasing companies made a strong return to the market -- was clear evidence of a strong and positive trend towards recovery.

'The low operating costs and high dispatch reliability offered by the A320 Family make it the market's best-seller. Increased demand for the aircraft and a healthy backlog lead us to decide to further ramp up our production rate to 40 aircraft per month by 2012,' said Williams.

Airbus said it delivered a total of 498 aircraft in 2009, including 402 A320 Family aircraft, both new company records for a single year.

The company has delivered 250 aircraft by the end of June and is on track to set another delivery record in 2010, it said.

The A320 Family, which includes the A318, A319, A320 and A321, is recognised as the benchmark for the single-aisle aircraft family.

More than 6,500 Airbus A320 Family aircraft have been sold and over 4,300 delivered to more than 310 customers and operators worldwide, it said.

Tech stocks decline on gloomy outlook

KUALA LUMPUR: TECHNOLOGY []-related stocks on Bursa Malaysia fell on Friday, July 30 after US technology companies had issued glum outlooks.

The stocks also suffered on news that Japanese manufacturing activity expanded in July at its slowest pace in four months, as overseas demand slackened following a rapid recovery earlier this year.

The Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 52.8 in July from 53.9 in June, the lowest level since 52.7 in March.

At the mid-day break on Bursa Malaysia, Unisem and Notion Vtec fell six sen each to RM2.29 and RM2.62, MPI and AIC down one sen each to RM6.16 and 64 sen respectively, and Industronics down 3.5 sen to 40 sen.

Vitrox fell two sen to 77 sen, while Green Packet and Pentamaster shed 0.5 sen each to 97.5 and 31 sen respectively.

Regional markets dip after Japanese manufacturing slows down

KUALA LUMPUR: Regional markets, including Bursa Malaysia sagged on Friday, July 30 after Japanese manufacturing activity expanded in July at its slowest pace in four months, as overseas demand slackens following a rapid recovery earlier this year.

The Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) fell to a seasonally adjusted 52.8 in July from 53.9 in June, the lowest level since 52.7 in March, according to Reuters.

The index remained above the 50 threshold that separates contraction from expansion for the 13th consecutive month.

The output component of the PMI index declined to 53.8 from 55.9 in June, which is the slowest pace of growth in output in 13 months as some companies tried to sell down their inventories due to uncertainty about the strength of the global economy, said Reuters.

At the regional markets, Japan's Nikkei 225 fell 1.77% to 9,524.13, the Shanghai Composite Index lost 1.16% to 2,617.48, Hong Kong's Hang Seng Index down 0.52% to 20,983.93, the South Korean Kospi 0.75% to 1,757.60, Taiwan's Taiex 0.42% to 7,766.04 and Singapore's Straits Times Index down 0.48% to 2,983.30.

On Bursa Malaysia, the FBM KLCI dipped 1.03 points to 1,357.38 at the mid-day break. Losers beat gainers by 377 to 232, while 268 counters traded unchanged. Volume was 435.90 million shares valued at RM519.17 million.

Crude palm oil for the third month delivery rose RM10 per tonne to RM2,524; crude oil fell 22 US cents per barrel to US$78.14 (RM249.27) while gold added 43 cents to US$1,168.68 per ounce.

F&N was the top loser this morning and fell 20 sen to RM14.50; Bursa lost 16 sen to RM7.02, Suiwah 13 sen to RM1.46, while Perstima, Cycle & Carriage, and PPB Group fell 12 sen each to RM4.98, RM5.85 and RM17.28, respectively.

Tenaga, Telekom and IJM Corp fell three sen each to RM8.57, RM3.36 and RM5.04, respectively, while MAS, RHB Capital, YTL Corp and KLK lost two sen each to RM2.13, RM6.50, RM7.55 and RM16.88, respectively.

Among the major gainers, Tasek jumped 69 sen to RM7.88, Petronas Gas up 40 sen to RM9.95, Nestle 18 sen to RM38.98 while Hong Leong Industries and PLUS added 12 sen each to RM5.02 and RM3.87, respectively.

Sinotop was the most actively traded counter with 32.8 million shares done. The stock fell 6.5 sen to 24.5 sen.

Other actives included Timecom, SAAG, JCY International, Scomi, E&O and Malton.

Shell secures 14-year lease to LBT terminal at Westports

KUALA LUMPUR: Shell Malaysia Trading Sdn Bhd has signed a long-term sublease agreement with Westports Malaysia Sdn Bhd at Port Klang for storing, supplying and distributing petroleum products.

The 14-year agreement enables Shell to operate and manage liquid bulk cargo at Westports Liquid Bulk Terminal (LBT).

Products to be stored initially are diesel and petrol.

"Westports is proud to have one of the largest companies in the world operating at the Westports LBT terminal," said Westports' executive director Ruben Emir Gnanalingam in the statement released here, on Friday, July 30.

He added that Shell, emerging as a conventional client, certainly speaks volume of Westports' strength, especially its strategic location to attract leading industries to undertake commercial activities at the port.

The terminal spans 9.71 hectares and includes access to Westports' jetty that is medium range/long range vessel capable, cargo lines, fuel and chemical tanks and gantry facilities. ' Bernama

BMW Group Malaysia begins local production of the New BMW 5 Series

KUALA LUMPUR: BMW Group Malaysia on Friday, July 30 rolled out its the first locally assembled production model of the new BMW 523i at the BMW assembly plant in Kulim, Kedah.

The retail price (on the road, without insurance, with BMW Service Inclusive + Repair) for the locally assembled BMW 523i is RM383,800.

BMW Group Malaysia managing director Geoffrey Briscoe said the BMW 5 Series plays an iconic role in the history and success of the BMW Group.

"Time and time again, the car has proven itself to be the superior choice in its segment and with the introduction of the all-new BMW 5 Series, we at BMW Group Malaysia are confident that the legacy of the BMW 5 Series will be one that continues to grow from strength to strength in Malaysia," he said in a statement July 30.

Briscoe said the introduction of local assembly for the new BMW 5 Series would lead to significant benefits to Malaysian customers by reducing total cost of ownership, waiting time for complete units and spare parts while maintaining the same premium standards and offering that are expected of a BMW car.

"With an iconic legacy to live up to, the sixth generation BMW 5 Series features all the latest innovations that have set BMW apart as the worlds most valued brand in the automotive segment the world over," he said.

The BMW assembly plant in Kulim has been operational since 2008, and has produced more than 4,900 units to date.

With a workforce of over 400 employees and equipped with the latest in manufacturing technologies, the plant generates variants of the BMW 5 Series and BMW 3 Series in Malaysia.

The BMW Assembly Plant is operated in partnership with Inokom Corporation, a subsidiary of SIME DARBY BHD [] at the Inokom factory in Kulim, Kedah. Both BMW and Inokom share factory space but operate separate and independent assembly lines in the facility.

BMW Group Malaysia also confirmed that the organisation will be introducing the much anticipated locally assembled BMW 528i later in the year.

Kia Motors global sales grow 49.2% in 1H 2010

KUALA LUMPUR: Kia Motors Corporation's global sales grew 49.2% in the first half of 2010, based on shipment volume of 990,000 units, compared to the same period last year.

In a statement on Friday, July 30, Kia said export market sales, as well as domestic sales, increased significantly due to the continuous launch of new models onto the global marketplace, including Kia Cadenza, Forte (Cerato), all-new Sorento and all-new Sportage.

Global sales of Kia Motors on a retail basis totaled one million units during the first half of 2010, an increase of 34.1%, compared to the previous year, it said.

US market sales increased by 15.4% thanks to the successful launch of the all-new Sorento, it said.

"Although the European market continues to be affected by the economic recession and the end of the government tax support in many countries, Kia has increased sales and market share with the introduction of the new Europe-only MPV, Venga, and the strong sales of its flagship models Picanto and cee'd.

"China market sales increased dramatically with 76.8% growth due to the market's booming automobile market and high sales of new Kia models," said Kia.

FBM KLCI claws back into the black at mid-morning

KUALA LUMPUR:'' The FBM KLCI clawed back into the black at mid-morning on Friday, July 30 after having declined at the opening bell when it fell in line with the retreat at key regional markets following the overnight slip on Wall Street.

At 10am, the FBM KLCI rose 1.16 points to 1,359.57, lifted by gains including at CIMB, Sime Darby, RHB Capital, Petronas Gas and PLUS Expressways.

Gainers trailed losers by 190 to 222, while 179 counters traded unchanged. Volume was 155.33 million valued at RM151.78 million shares.

RHB Research Institute Sdn Bhd said the FBM KLCI's medium-term view has turned more bullish following another positive candle recorded on Thursday, hence confirming the recent breakout of the 1,350 tough resistance level.

It said that compounded with a fresh year-high on the back of robust daily turnover (800 million-one billion shares), the bulls are ready to take the market even higher in coming sessions.

"Encouragingly, Thursday's gain spread evenly across the board, as both blue chips and lower liners enjoyed strong rotational interests throughout the day. This also strongly indicates that the current uptrend is sustainable.

"While we do not discount the possibility of mild profit-taking activities ahead of the weekend and the US 2Q GDP report that is due later tonight, we believe any profit-taking pressure will be well-absorbed," it said.

Given the upbeat technical readings as well as the steady overseas performance of late, the FBM KLCI could gear up for an extended rally to the next upside target at 1,390, said RHB Research.

On the downside, the major resistance-turned-support of 1,350 would continue to protect the current uptrend, it said.

Among the major gainers on Bursa Malaysia, Petgas rose 39 sen to RM9.94, Nestle 18 sen to RM38.98, PLUS 13 sen to RM3.88, Goh Ban Huat 12 sen to RM1.20, Lafarge Malayan Cement and MNRB added eight sen each RM6.78 and RM2.82, while P I E and New Hoong Fatt gained seven sen each to RM4.17 and RM2.36.

CIMB and RHB Capital rose three sen each to RM7.48 and RM6.55, while Sime Darby added two sen to RM7.71.

Suiwah was the top loser and fell 13 sen to RM1.46, YTL lost 11 sen to RM7.46, Tomypak down 10 sen to RM3.59 while Parkson, BAT and Hong Leong Bank lost eight sen each to RM5.50, RM43.80 and RM8.81, respectively.

Sinotop was the most actively traded counter with 18.63 million shares done. The stock fell 5.5 sen to 25.5 sen.

Other actives included Timecom, Scomi, Tanco, JCY International, E&O, Ranhill, Landmarks and Scomi Marine.

Tanjong announces cancellation of listing in London

KUALA LUMPUR: Tanjong Public Ltd Company has announced the cancellation of its standard listing of ordinary shares of 7.5 pence (37 sen) each on the London Stock Exchange.

Notice of the cancellation was provided on Friday, July 30 to the UK Listing Authority (UKLA), said the company in a filing to Bursa Malaysia on Friday.

The cancellation will take effect at 8am (London time) on Friday Aug 27, which is 20 business days from the notification to the UKLA.

Tanjong shares were suspended on Tuesday, and the stock was last quoted at RM17.88. ' Bernama

FBM KLCI opens in the red

KUALA LUMPUR: The FBM KLCI fell 1.26 points to 1,357.15 at 9.05am on Friday, July 30 dragged by losses including at Tenaga and Telekom Malaysia.

The decline at Bursa Malaysia was also in line with the negative sentiment at most regional markets following weak outlooks from US TECHNOLOGY [] companies and downbeat comments by a Federal Reserve official underlined concerns about the U.S. economic recovery.

On Bursa Malaysia, among the top losers in early trade, Tenaga fell three sen to RM8.57 while TM lost two sen to RM3.37. TSH fell eight sen to RM1.80, Notion Vtec, Bursa and Suiwah Corp down five sen each to RM2.63, RM7.13 and RM1.54, while M3nergy fell four sen to RM1.79.

Sinotop was the most actively traded counter with 8.49 million shares done. The stock fell 4.5 sen to 26.5 sen. Other actives included Ranhill, E&O, Scomi, Timecom, Nylex and Landmarks.

Petronas Gas was the top gainer and added 35 sen to RM9.90. Lafarge was up eight sen to RM6.78, while C I Holdings six sen to RM3.04. Asia File, Boustead, Kulim and Jerneh up five sen each to RM4.38, RM3.94, RM7.95 and RM3.21 respectively, while Ranhill was up 4.5 sen to 81 sen.

New Hoong Fatt rises after OSK Research ups target price

KUALA LUMPUR: The share price of NEW HOONG FATT HOLDINGS BHD [] (NHF) rose on Friday, July 30 after OSK Research maintained its buy call and raised its target price for the stock to RM2.85. At 9.22am, New Hoong Fatt was up seven to RM2.36 with 8,000 shares done. OSK Research said the company's 2QFY10 revenue and net profit for the quarter were in line within its forecasts.

The company's revenue continued to scale new highs, growing organically by double digits, it said.

"We continue to like NHF's stable organic growth. Rolling over our valuation to FY11 EPS and pegging it at a lower PE multiple of 6 times (from 7 times), we derive a target price of RM2.85 (previously RM2.62), with our buy call maintained," it said in a note July 30.

Ranhill up in early trade

KUALA LUMPUR: RANHILL BHD []'s share price rose in early trade on Friday, July after the company and its partner STS Educational Group Ltd were pre-qualified by the Bangladesh Power Development Board to undertake a power plant project.

At 9.30am, Ranhill was up 4.5 sen to 81 sen with 2.62 shares done.

They were prequalified to bid for the development of a 150MW to 225 MW combined power plant project at Bhola, Bangladesh, Ranhill said in a filing to Bursa Malaysia on July 29.

"The total project cost is estimated at US$200 million (RM638 million). The closing date for the bid is by the last quarter of 2010," it said.

OSK Research raises target price for New Hoong Fatt to RM2.85

KUALA LUMPUR: OSK Research has maintained its buy call on NEW HOONG FATT HOLDINGS BHD [] at RM2.29 with a higher target price of RM2.85 (from RM2.62) and said the company's 2QFY10 revenue and net profit for the quarter were in line within its forecasts.

The company's revenue continued to scale new highs, growing organically by double digits, it said.

"We continue to like NHF's stable organic growth. Rolling over our valuation to FY11 EPS and pegging it at a lower PE multiple of 6 times (from 7 times), we derive a target price of RM2.85 (previously RM2.62), with our buy call maintained," it said.

Thursday, July 29, 2010

Focus Point cooperating with regulators to address allegations

KUALA LUMPUR: Focus Point Holdings Bhd, which deferred its listing at the 11th hour on Tuesday, July 26, said it is cooperating with the regulatory authorities to address the malicious allegations against the company.

It said on Thursday, July 29 that it believes in transparency and the cooperation with the regulators and believed that everything will be sorted out in just a matter of time.

Focus Point said the last minute deferment notice made on Tuesday morning was unavoidable as matters had only evolved past midnight.

'Prior to that, the listing ceremony was on schedule. The company wishes to take the opportunity to thank all its investors for their unwavering support and confidence towards the company,' it said.

Focus Point said the company takes priority in updating the investing public and the media on the current status of its listing as soon as it can.

'The company also wishes to assure investors that its president/CEO, Datuk Liaw Choon Liang, together with all its management staff are at work as usual, and are tending to day-to-day matters as business carries on as usual.

'All monies of the investing public are currently securely held by both the placement agent, OSK Investment Bank Bhd, as well as Malaysian Issuing House Sdn. Bhd,' it said.

Business as usual for Motorola

GEORGE TOWN: It will be business as usual for Motorola in Malaysia despite the announcement last week by its parent, Motorola Inc, that Nokia Siemens is buying Motorola's wireless network equipment unit for US$1.2 billion (RM3.8 billion).

Motorola Malaysia communications and public affairs manager Tham Mei Ling said there were no specific details pertaining to the impact on each country where Motorola has a presence including in Malaysia.

It was announced recently by Motorola Inc and Nokia Siemens in a joint statement that Motorola's 7,500 employees in the US, India and China could be transfered to Nokia Siemens and no layoffs were planned.

"As for the Malaysian operations, it is business as usual for Motorola and we will continue to focus on engineering and TECHNOLOGY [] development.

"Malaysia remains a key strategic market for Motorola and we plan to continue our role as technology partner of choice to our customers in the government and public safety, enterprise and wireless communications space," Tham said in an email reply to The Edge Financial Daily.

The deal between both companies is to be completed by year-end with Nokia Siemens acquiring at least 50 new customers.

Motorola has a presence in Penang for more than 36 years, where it is now a major site for its operations in Asia Pacific. Penang is also home to the company's largest research and development and manufacturing facility of two-way radio products in Asia.

It is also the only full-fledged design centre for two-way radios in the world.

Ranhill pre-qualified for US$200m Bangladesh power project

KUALA LUMPUR: RANHILL BHD [] and its partner STS Educational Group Ltd have been pre-qualified by the Bangladesh Power Development Board to undertake a power plant project.

It said on Thursday, July 29 they were pre-qualified to for the Development of a 150MW to 225 MW combined power plant project at Bhola, Bangladesh.

'The total project cost is estimated at US$200 million. The closing date for the bid is by the last quarter of 2010,' it said.

#Today's Diary* What to expect on July 30, 2010

KEY WEST GLOBAL TELECOMM []unications Bhd AGM at Meranti Ballroom, Level 22, Pacific Regency Hotel Suites, Menara Pan Global, Jalan Punchak, Off Jalan P Ramlee, KL at 8.30am.

TECK GUAN PERDANA BHD [] AGM at Theobroma Conference Room , First Floor, Hotel Emas, Jalan Utara, Tawau, Sabah at 9am.

CRESCENDO CORPORATION BHD [] AGM at Jasmine Junior Ball Room, Level C of One World Hotel, PJ, Selangor at 9.30am.

Penang Chief Minister Lim Guan Eng officiates new LED factory opening in Bayan Lepas at 9.30am.

MCIS Zurich Insurance Bhd launches its new branch office at 9 & 11, Jln Molek 1/29, Taman Molek, Johor Bahru at 9.45am.

Empire Shopping Gallery grand opening at Concourse Area, Upper Ground Flr, Empire Shopping Gallery, Subang Jaya, Selangor at 10am.

Official opening ceremony of FemmeCity 2010, Street's Ahead For Women at Hall 5, KL Convention Centre at 10.30am.

KIM LOONG RESOURCES BHD [] AGM at Jasmine Junior Ball Room, Level C of One World Hotel, PJ, Selangor at 2.30pm.

Opening ceremony of the 4th AGM of the Water Association of Selangor, Kuala Lumpur and Putrajaya at SACC, at 3pm.

Dato' Sri Nazir Razak to speak on Growing Beyond Borders at the 15th Malaysian Law Conference at KL Convention Centre at 4pm.

Press conference on MBAM dialogue with affiliate members at Cancun Room, Level 10, Sunway Resort Hotel & Spa, Selangor at 4.30pm.

56th MBAM Anniversary Dinner 2010 at Grand Ballroom, 15th Flr, Sunway Resort Hotel & Spa, Selangor at 7pm. Minister of Housing & Local Government to deliver speech.

Fotronics external auditors unable to ascertain recoverability of RM12.7m

KUALA LUMPUR: Fotronics Corp Bhd's external auditors Messrs. CroweHorwath have expressed concern over the recoverability of trade receivables totaling RM12.7 million due to the company.

It said on Thursday, July 29 Messrs. CroweHorwath had expressed a qualified opinion in their auditors' report for the audited financial statements for the financial year March 31, 2010.

'The auditors have been unable to ascertain the recoverability of the carrying amount due from a trade receivable of the group, namely Futek Incorporated (Japan), amounting to RM12.67 million as March 31, 2010 as disclosed in Note 12 to the financial statements,' it said.

Fotronics said this amount has been long overdue since the financial year ended March 31, 2008.

Share prices close higher, CI up for fifth straight day

KUALA LUMPUR: Share prices on Bursa Malaysia closed higher on Thursday, July 29, boosted by continued buying in selected blue chips as well as
lower liners, dealers said.

At 5pm, the FBM KLCI rose 3.22 points or 0.24% to close at 1,358.41, to stay high for the fifth straight day.

It had opened 0.59 of a point higher at 1,355.78 in the morning and traded at between an intra-day high of 1,359.27 and a low of 1,353.16 during the

A dealer said late gains in most regional markets had prompted buying interest in the local market.

He also said the local market traded mixed in the early session today on some profit-taking activities as investors took cue from a weaker overnight Wall

However, persistent buying in selected heavyweights, especially in afternoon session helped the key index stay above the 1,350-point level.

At close, the Finance Index eased 6.64 points to 12,334.58, the PLANTATION [] Index declined 6.30 points to 6,410.64 and the INDUSTRIAL INDEX [] slipped 23.35 points to 2,649.83.

The FBM Emas Index gained 23.28 points to 9,201.65, the FBM70 [] Index increased 28.64 points to 9,202.98 and the FBM Ace Index added 4.55 points to 3,803.73.

Advancers led decliners by 386 to 345 while 279 counters were unchanged, 358 untraded and 27 others suspended.

Volume increased to 999.630 million shares valued at RM1.481 billion from 847.160 million shares worth RM1.251 billion yesterday. -- Bernama

TSMC hikes capex after record profit; glut fears loom

TAIPEI: Top contract chipmaker TSMC sharply raised its 2010 capital spending forecast after posting a record quarterly profit, likely leading to oversupply that could hurt chip prices and the firm's bottomline.

TSMC and cross-town rival UMC are ramping up production to meet growing demand for electronics products, with stockpiles likely forming in late 2010 or early 2011 if Europe's debt problem persists and demand weakens.

The two firms' earnings are seen peaking in the third quarter, the busiest sales season, before they start to fall in the fourth quarter. TECHNOLOGY [] demand typically slows after the pre-Christmas buying boom.

"Some of their clients might have started adjusting their inventories because we are seeing some double bookings," said John Chiu, a fund manager at Taiwan's Fuh Hwa Securities Investment Trust.

"The third quarter could be a peak and weakness in the fourth quarter is inevitable," said Chiu, who has no TSMC and UMC shares in his portfolios now.

TSMC said on Thursday, July 29 it is raising total capital expenditure for this year to $5.9 billion from the previous estimate of $4.8 billion to boost capacity and widen its technology gap with smaller rivals, including UMC and China's SMIC.

TSMC, which counts Texas Instruments and Nvidia among major clients, said it expected third-quarter sales to reach T$109-T$111 billion from the second quarter's T$105 billion and higher than market expectations of about T$104.6 billion.

TSMC said its third-quarter gross profit margin should be 48-50 percent, compared with the 49.5 percent in the previous three months. It expects an operating profit margin of 36-38 percent, versus the second quarter's 38.6 percent.

By churning out more chips with more advanced technology to meet rising demand for new PCs and other high-tech gadgets, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) earned a net profit of T$40.3 billion ($1.3 billion) in April-June.

That was higher than T$24.44 billion in the same period a year ago and compared with a consensus forecast of T$35.2 billion from Thomson Reuters I/B/E/S.


Sales in the global semiconductor market would rise about 30 percent this year, with sales in the foundry market growing by a larger 40 percent, TSMC Chairman and CEO Morris Chang forecast at its quarterly investor conference on Thursday.

Chang said foundry sales growth would be higher next year, but did not give numbers.

"It is our responsibilty to do our most to meet demand (from our customers)," Chang said, adding that inventory in the whole semiconductor supply chain is rising but will still be below seasonal levels at the end of the third quarter.

Sales of microchips made by 65 nanometre process technology, or 65 billionths of a metre, accounted for 27 percent of TSMC's total sales in the second quarter, while 16 percent of its sales were from more advanced 40-nano technology in the quarter.

Intel Corp, Qualcomm Inc and Apple Inc have reported stellar quarterly results, helping to kick off the tech sector's earnings on a strong note.

Investors, however, are focused on oversupply and weaker chip prices as they look beyond the strong second quarter.

TSMC announced the results after the Taipei stock market closed on Thursday. The stock ended unchanged on the day while the main TAIEX edged up 0.2 percent.

TSMC shares have fallen 2 percent so far this year while UMC shares are down 16 percent, against a 5 percent rise on the big board. UMC's quarterly results are scheduled for August 4. - Reuters

Axiata at highest since Sept 2008

KUALA LUMPUR: Axiata Group Bhd's share price rose to its highest since September 2008 in late afternoon on Thursday, July 29 after analysts upgraded the telco on expectations of further earnings surprises.

At 3.18pm, it was up 20 sen to RM4.35 in active trade with 26.74 million shares done.

CIMB Equities Research had maintained its OUTPERFORM call and sum-of-parts based target price of RM4.95 for Axiata.

"A likely catalyst for the stock is further earnings surprises. Our forecasts are 21-23% higher than consensus although the gap is down from 30-34% two months ago," it said.

CIMB Research said falling competitive risks in India should buoy the stock. Axiata remains its top Malaysian telco pick but XL Axiata remains its favourite regional play.

JCY hits lowest since listing

KUALA LUMPUR: Shares of JCY International Bhd fell to its lowest since listing to RM1.32 in late afternoon on Thursday, July 29 in very active trade.

At 3.35pm, it was down four sen to RM1.32 with 13.2 million shares done. Its highest was RM1.98.

In a report issued on July 20, CIMB Equities Research had a Sell on JCY at RM1.48, based on its technical charts.

"The stock has fallen back to its debut price after hitting a high of RM1.98. The pullback has been severe and does not look like a correction. We expect further price weakness in the medium term as it is now forming a bearish flag pattern," it said on July 20.

CIMB Research said a break below the RM1.44 would signal that prices are heading lower towards RM1.30, based on the height of the flag. There is also a good chance that it could even drop below RM1.30.

JCY'' manufactures hard disk drive mechanical components.

Shell 2Q earnings nearly doubled to US$4.5b

KUALA LUMPUR: Royal Dutch Shell's second quarter 2010 (2QFY10) earnings, on a current cost of supplies (CCS) basis, rose 95.6% to US$4.5 billion from US$2.3 billion a year ago.

It announced in London on Thursday, July 29 that basic CCS earnings per share increased by 95% versus the same quarter a year ago.

Main highlights of the earnings: Second quarter 2010 CCS earnings, excluding identified items, were US$4.2 billion compared to US$3.1 billion in the second quarter 2009.

Cash flow from operating activities for the second quarter 2010 was US$8.1 billion.

Net capital investment for the quarter was US$5.6 billion. Total dividends paid to shareholders during the second quarter 2010 were US$2.4 billion.

Gearing at the end of the second quarter 2010 was 16.9%.

A second quarter 2010 dividend has been announced of 42 cents per ordinary share.

KBB Resources MD sees 1.54m shares force sold

KUALA LUMPUR: KBB RESOURCES BHD [] managing director and founder Datuk Ang Cho Teing saw 1.54 million of his shares force sold on Wednesday, July 28.

A filing with Bursa Malaysia showed 880,800 shares were disposed of at 18c each and another 662,100 shares also at the same price that day. The share price closed at 15.5 sen that day, off its 52-week low of 14.5 sen in intra-day day trade.

Ang remains the single largest shareholder in KBB Resources with 33.2 million shares or 39.83%.

KBB Resources markets rice and vermicelli. Its shares hit a 52-week high of 68 sen on April 14 while its 52-week low of 14.5 sen on July 28.

Market shrugs off early caution, Axiata lifts

KUALA LUMPUR: Blue chips on Bursa Malaysia shrugged off the early cautious sentiment, as some buying emerged in Axiata and Petronas Dagangan, enabling the FBM KLCI to extend its gains for the fifth straight day at the midday break on Thursday, July 29.

At 12.30 pm, the FBM KLCI was up 2.75 points to 1,357.94 as the 30-stock index, enabling the index to hold above the highest level since February 2008. Turnover was 528.83 million shares valued at RM660 million. There were 304 gainers, 313 losers and 284 stocks unchanged.

Earlier, market sentiment was'' subdued due to the slightly negative overnight close in the US markets with the Dow Jones Industrial Average ending Wednesday down 0.38% to 10,497.88. The similarly subdued performance of major regional markets'' also had a role in the trading sentiment, said a senior chartist.

However, he said that volume on the Malaysian market in the morning had improved from Wednesday's full day trading of 78.1 million shares.

"This means that there could be some bargain hunting taking place," he said. He expects short-term sentiment "should be quite supportive as long as the FBM KLCI stays above the 1,350 resistance turned support level".

Nikkei 225 -0.45% 9,709.16 Hang Seng Index -0.11% 21,067.52 Singapore's Straits Times Index -0.01% 2,985.05 Shanghai Composite Index +0.51% 2,647.17
At Bursa, Petronas Dagangan was the top gainer, up 33 sen to RM10.30, Axiata added 21 sen to RM4.36, pushing up the FBM KLCI by 4.32 points.'' Measat jumped 27 sen to RM4.07 on the takeover offer by its major shareholder.

Glove makers Hartalega added 17 sen to RM8.30 and Top Glove 15 sen to RM6.17 on a positive outlook for the sector.

Mudajaya, managed to halt its recent selling pressure, with the shares rising 11 sen to RM5.20.

Nestle, which was the top performer on Wednesday, slipped 40 sen to RM38.80. Sime Darby fell seven sen to RM7.69, CIMB three sen to RM7.46 and Maxis also three sen to RM5.29. TransOcean slumped 29.5 sen to 60.5 sen but with 300 shares done only.

Panasonic to buy out Sanyo, other unit, say sources

TOKYO: Japan's Panasonic Corp plans to buy the shares it does not already own in Sanyo Electric and another unit, four sources said, in a deal that could top US$10 billion (RM32 billion) and strengthen its push into greener businesses.

Panasonic plans to raise up to ''500 billion (RM18.29 billion) in a new share issue to help it finance the buyouts, two sources said, weighing on the company's share price.

As the world's No 4 flat TV maker speeds up a restructuring, four sources with knowledge of the matter said Panasonic would buy the remaining shares in Sanyo Electric Co and Panasonic Electric Works Co Ltd.

The move is key to Panasonic's strategy of shifting focus to energy and environment-related businesses as it struggles to boost profits in overseas markets amid tough price competition from South Korea's Samsung Electronics and LG Electronics. It has said it would withdraw from overlapping business with Sanyo.

A deal would also make it easier for Panasonic to put more resources into its promising businesses such as solar power and lithium ion batteries.

"The cost may not be small, but I think investors will welcome the deal as Panasonic can boost its rapidly growing environment-related business," said Okasan Securities analyst Kazumasa Kubota.

"With only its audio and visual business, the firm could not expect to grow dramatically."

Panasonic bought a 50% stake in Sanyo in December for about US$4 billion, gaining control of the world's top maker of rechargeable batteries and a producer of solar cells. It owns 51% of Panasonic Electric Works, which makes housing materials and lighting equipment.

Based on current market prices, acquiring the shares it does not own would cost Panasonic about ''720 billion. A typical premium could push the value of the deal to above ''900 billion.

Panasonic is considering a public cash offering and share swap to complete the transaction and could make an official announcement of its plans this week, according to the sources, who were not authorised to speak publicly about the deal.

It is looking at raising funds to finance the deal, and a new share issue is seen as one option, sources said.

"The move will be good for Panasonic's long-term strategy, but investors are worried about how many new shares it will issue. We anticipated the deal but thought it would be done by a share swap," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

At 0401 GMT, Panasonic shares were down 8.6% at ''1,067, underperforming a 0.3% fall in the benchmark Nikkei average.

Sanyo shares soared 24% to ''146 while Panasonic Electric Works was untraded amid a rush of buy orders.

Under president Fumio Ohtsubo, Panasonic has been shifting away from low-margin home electronics products and investing more aggressively in solar cells, batteries and other energy-related areas with promising growth prospects.

Ohtsubo unveiled a new three-year business plan in May under which Panasonic is aiming to roughly double its operating profit margin to 5% or more by March 2013, while boosting sales by a third to ''10 trillion.

Panasonic and Sanyo have planned to withdraw from overlapping businesses that would account for ''300 billion in annual revenue and merge the development and production of white goods. ' Reuters

Fitch downgrades Vietnam to 'B+'; Outlook Stable

KUALA LUMPUR: Fitch Ratings has downgraded Vietnam's Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'B+' from 'BB-' respectively and removed them from Rating Watch Negative. The Outlooks on the ratings are Stable.

At the same time, Fitch downgraded the Country Ceiling to 'B+' from 'BB-' and affirmed the Short-term foreign currency IDR at 'B'.

"Vietnam's sovereign creditworthiness has deteriorated on the back of weaker external finances and rising external financing requirements amid an inconsistent macroeconomic policy framework, a highly dollarized economy and a weak banking system," said Ngiam Ai Ling Ngiam, Director in Fitch's Asia Sovereign team, in a report issued on Wednesday, July 28.

During Q210, the State Bank of Vietnam (SBV) accumulated additional foreign assets from the banking system, marginally adding on to the USD13.8bn trough in official foreign exchange reserves (FXR) in March 2010. However, Fitch does not believe that Vietnam's external finance position has stabilized as yet.

For the third successive year, more stable, net long-term capital flows (direct and portfolio investments) may fall short of covering the current account deficit (CAD), which is expected to stay wide at over 10% of GDP in 2010.

Repatriation of external assets by state-owned enterprises also suggests that the rise in FXR so far this year may not be sustainable.

Fitch forecasts Vietnam's gross external financing requirements (GXFR) to rise to 79% of FXR in 2010 from 37% in 2009, higher than the 'B' median of 55%. This would increase Vietnam's vulnerability to changing external financing conditions.

"Vietnam's track record of stop-go policy tightening and easing has been ad-hoc, reactive and inconsistent," adds Ngiam. There is a risk that policies may ease towards a pro-growth stance in the run-up to the January 2011 national congress of the ruling Communist Party. Premature easing increases the risk of macroeconomic and financial instability.

Fitch notes that prolonged double-digit credit extension to state and private entities underlines rising sovereign contingent liability risks posed by the banking sector. Fitch forecasts the stock of private credit to reach 116% of GDP in 2010, the highest stock of private credit relative to output in the 'B' rated category.

Vietnam has a "twin deficit" problem: the general government deficit widened to 8.7% of GDP in 2009 and Fitch expects the deficit to remain high at 7.6% in 2010. Financing deficits of this size has proved difficult, with the government resorting to domestically-issued foreign currency instruments, raising exposure to exchange rate risk.

Public debt has risen to 45% of GDP in 2009, eroding what had traditionally been a key rating strength, while the risk of contingent liabilities migrating to the public sector's balance sheet is high.

According to Fitch's Macro Prudential Risk Monitor, Vietnam's banking system's vulnerability to potential systemic stress has increased to "high" from "moderate" and now ranks E3, the lowest point on the matrix.

A preliminary Fitch analysis -- based on Vietnamese accounting standards (VAS) -- estimates a possible banking sector recapitalisation bill of the top six systemically important banks (which represent 51% of total banking sector assets) to be at least 12% of GDP, should systemic risks materialise.

Uncertainty surrounding the banking system's asset quality is underscored by the fact that VAS-based non-performing loans (NPLs) often fall short of that of international accounting standards by 3x-5x.

Furthermore, domestic confidence remains sensitive to shocks, leaving the Vietnamese dong (VND) vulnerable to renewed switches into foreign exchange and gold. Further rounds of currency pressure would be negative for financial stability given the highly dollarized banking system.

At the 'B' rating category, Vietnam's sovereign fundamentals remain supported by strong support received from multilateral and bilateral creditors as well as significant gains in income per capita following the introduction of the "doi moi" policy in 1986.

Sime Darby slips, CIMB lowers TP to RM8.15

KUALA LUMPUR: Sime Darby slipped in late morning trade on Thursday, July 29 which could be linked to near-term uncertainty over the probe into the energy and utilities division.

At 11.11am, it was down seven sen to RM7.69 with 636,100 shares done.

CIMB Equities Research had maintained a NEUTRAL recommendation on Sime with a lower target price of RM8.15. It said with the earnings downgrade, it is lowering its sum-of-parts (SOP) based target price from RM8.40 to RM8.15.

'There is no change to our valuation basis of 10% discount to SOP. The discount essentially factors in ongoing concern and uncertainty over corporate governance and the group's direction,' it said.

CIMB Equities Research said there is no change to its NEUTRAL call on the stock. We are positive on the appointment of a new CEO which could bring positive changes to the group.

'However, this is clouded by near-term uncertainty over the probe into the E&U division, a possible management reshuffle and changes in the group's strategy,' it said.

Asia shares retreat from highs, dollar dips

TOKYO: Asian stocks edged down from a three-month high and the dollar eased towards three-month lows on Thursday, July 29 hit by soft U.S. data that underlined the patchy nature of the U.S. economic recovery.

Mixed data on June durable goods orders and a downbeat Federal Reserve take on the economy became the latest in a string of lacklustre indicators to suggest the momentum of the U.S. economic recovery is slowing, broadly dampening investor sentiment.

Traders said a move back into riskier assets had cooled a bit after the Fed's Beige Book of anecdotal reports pointed to a less-than-booming recovery, with sluggish housing markets and sales of costly items such as new cars weakening.

"Profit-taking is coming to the fore because coupled with worries about the uncertain outlook for the U.S. and European economies, U.S. stocks seem to be peaking," said Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.

Asian shares fell after hitting their highest level since May 5 on Wednesday, buoyed by robust corporate earnings in the U.S. and Europe that helped ease, albeit temporarily, concerns that the global economy may stall in the second half.

The MSCI index of Asia Pacific shares ex-Japan edged down 0.2 percent.

Information TECHNOLOGY [] shares were the biggest losers across the region, a reflection of renewed concern over U.S. demand, while healthcare stocks edged higher as investors turned defensive, seeking out shares seen as resilient in the face of economic volatility overseas.

Japan's Nikkei average lost 0.5 percent to 9,700.42 as investors took profits after a rally that lifted the benchmark to a two-week closing high on Wednesday

Panasonic Corp tumbled over 5 percent after sources told Reuters it plans to acquire the shares it does not already own in Sanyo Electric Co and Panasonic Electric Works Co Ltd Sanyo shares soared more than 26 percent.

A slew of companies, including Panasonic, Sony Corp and Nissan Motor Co, all report earnings later in the day as Japan's earnings season peaks.

Australian shares fell 0.4 percent, dragged down by banks as confidence took a hit from the downbeat Beige Book, while shares in Hong Kong slipped 0.2 percent, shrugging off modest gains in Shanghai.

Attention is now turning to U.S. jobless claims later in the day and U.S. second quarter GDP on Friday.

A Reuters poll showed annual U.S. growth in the quarter was expected to slow to 2.5 percent from 2.7 percent in the first quarter amid a cooling in consumer demand, but a recent flurry of weak data suggest it lost some momentum heading into summer.


The New Zealand dollar fell sharply after the Reserve Bank of Zealand signalled the pace of further interest rate hikes would be less than earlier thought, though it later staged a mild recovery.

The central bank lifted interest rates by a quarter point on Thursday, as widely expected, but said further hikes would probably be more gradual because of a deteriorating outlook for the country's main trading partners and subdued domestic demand.

The kiwi fell to as low as $0.7207, from $0.7280 before the announcement, before staging a mild recovery.

"The neutral statement and revised market expectations for future rate decisions will help in taking upside pressure off the kiwi," said Josh Williamson, an analyst at Citi.

The dollar index against a basket of major currencies was down 0.1 percent at 82.11 after the weak U.S. data, with near-term support at 81.44, the 50 percent retracement of the index's move from a low of 74.17 in December 2009 to a high of 88.71 on June 7.

The greenback also lost ground against the yen edging down 0.2 percent to 87.28 yen.

The euro consolidated below $1.30, but held near 11-week highs against the dollar as concerns shifted from Europe's debt crisis to the uneven U.S. economy.

But gold rebounded, although gains could be limited after holdings in the world's largest gold-backed ETF (exchange-traded fund) SPDR Gold Trust dropped to their weakest since June.

Spot gold rose to $1,165.25 an ounce by 0206 GMT after falling as low as $1,156.90 on Wednesday, its weakest since late April.

U.S. crude futures were littled changed at around $77 a barrel after falling for a second session overnight on a suprise build in U.S. crude oil inventories. - Reuters

AgBank exercises HK over-allotment, IPO at $20.8 bln

HONG KONG: The Agricultural Bank of China Ltd, came a step closer to becoming the world's top IPO after China's No. 3 lender released extra shares in Hong Kong, increasing the amount raised so far to $20.8 billion.

Analysts now expect AgBank to exercise the over-allotment of the Shanghai portion of its IPO as well, which will take total proceeds from the IPO to a record $22.1 billion, surpassing the $21.9 billion raised by Industrial and Commercial Bank of China Ltd in 2007.

After lacklustre debut in mid-July, AgBank's Hong Kong shares have risen about 11 percent to trade at HK$3.55 by 0210 GMT. The strong performance over the past two weeks has encouraged AgBank exercise the over-allotment to raise and extra HK$11.96 billion ($1.5 billion).

"Because of the mega size of AgBank IPO, the stock will be added to benchmark indices, making it mandatory for fund managers to include the stock in their portfolios. That has created demand for the stock," said Ben Kwong, chief operating officer at KGI Asia.

A high proportion of the AgBank IPO went to cornerstone investors, also limiting selling pressure, he said.

"(But) based on the current price of AgBank, its valuation is not very attractive compared with the other state banks. The upsize of AgBank shares price is limited," he added.

The news of AgBank's overallotment comes as China's banks continue to tap stock market to replenish their capital base.

Late on Wednesday, ICBC said it would raise $6.64 billion through a rights offer, while China CONSTRUCTION [] Bank Bank has announced plans to raise about $11 billion..

Over-allotments, known as greenshoes, are released when demand for the shares in the after market is heavy. Underwriters release the shares, set aside at the original IPO price, to the allocated holders who then become public stockholders.

That extra chunk of stock sold is added to the total proceeds of the IPO. Underwriters typically have 30 days to release or dissolve the greenshoe, depending on demand.

AgBank sold 25.4 billion shares at HK$3.20 in the Hong Kong portion of its IPO and 22.2 billion shares at 2.68 yuan in Shanghai.

Its Shanghai shares are up about 6 percent form its offer price and analysts now expect AgBank to release $1.32 billion of additional shares there.

The lead underwriters of the A Share Offering may exercise the over-allotment option in the 30 days following its July 15 debut. - Reuters

Top Glove up on positive outlook for sector

KUALA LUMPUR: Top Glove advanced in early trade on Thursday, July 29 as Citi Group global markets research sees more upside for the glove manufacturing sector.

At 9.32am, Top Glove was up 12 sen to RM6.68 with 253,900 shares done.

Citi Research had initiate Kossan and Supermax at Buy/Low Risk with target prices of RM4.95 and RM7.40 respectively, underpinned by earnings growth of 15-24% and ROE of 31%.

'Top Glove is rated Hold/Low Risk given its lower earnings growth of 10.5% and ROE of 25%,' it said.

The research house said its RM7.25 target price values the stock at 16x FY11E EPS, or 1SD above its historical P/E of 13.5x.

Citi Research said while it believes the stock to continue to command premium valuations given its larger earnings base and excellent track record, 'we expect the premium gap to narrow as earnings growth momentum moderates and growing market share becomes increasingly challenging'.

CIMB Research retains Outperform on Daibochi

KUALA LUMPUR: CIMB Equities Research reiterated its Outperform call on Daibochi Plastic and Packaging Bhd.

It said on Thursday, July 29 that factors that could catalyse the stock include i) margin expansion over the next few quarters, ii) contracts from major non-F&B companies and, iii) attractive dividend yields of around 7%.

CIMB Research said Daibochi's 1H10 results met its and market expectations. Although annualised 1H10 core net profit worked out to only 80% of its forecast, it considered it to be in line as 2H should be a stronger half.

The 2.5 sen interim tax-exempt DPS took YTD DPS to 6.0 sen, within market and its expectations.

'We maintain our earnings forecasts and RM4.60 target price, which we continue to base on 12x CY11 P/E, a 20% discount to our 15x target P/E for the market.

'Daibochi's medium-term prospects look promising given the positive initial feedback on its anti-static packaging for electronic products which was finally certified last month,' it said.

CIMB Research maintains Neutral on Sime Darby

KUALA LUMPUR: CIMB Equities Research is maintaining a NEUTRAL recommendation on SIME DARBY BHD [] with a lower target price of RM8.15.

It said on Thursday, July 29 that in line with the earnings downgrade, it is lowering its sum-of-parts (SOP) based target price from RM8.40 to RM8.15.

'There is no change to our valuation basis of 10% discount to SOP. The discount essentially factors in ongoing concern and uncertainty over corporate governance and the group's direction,' it said.

CIMB Equities Research said there is no change to its NEUTRAL call on the stock. We are positive on the appointment of a new CEO which could bring positive changes to the group.

'However, this is clouded by near-term uncertainty over the probe into the E&U division, a possible management reshuffle and changes in the group's strategy,' it said.

CIMB Research: Sell on HPI at RM1.84

KUALA LUMPUR: CIMB Retail Research has a Sell on HPI Resources at RM1.84, which pegs its price-to-earnings for FY11 at 5.6 times and price-to-book value of 0.7 times.

It said on Thursday, July 29 that Wednesday's pullback confirmed the bearish engulfing pattern formed on Tuesday. Next downleg would likely drag HPI towards its 38.2% FR at RM1.75, and possibly even the 50% Retracement level at RM1.68.

'Technical indicators are also showing signs of exhaustion. MACD is about to turn south while its histograms also show an easing trend. Meanwhile, RSI is diving towards the neutral zone,' it said.

CIMB Retail Research said it appears that the RM2 high would likely be its near term peak. Hence, any rebound towards this level is an opportunity to sell into strength. Only a break above RM2.02 would cancel out the negative momentum.

HPI Resources manufactures corrugated boards, carton boxes, and plastic film packaging products.