Friday, August 27, 2010

BRDB's 2Q net profit doubles to RM84.1m

KUALA LUMPUR: BANDAR RAYA DEVELOPMENTS BHD []'s (BRDB) net profit for the second quarter (2Q) ended June 30, 2010 doubled to RM84.15 million from RM40.61 million a year earlier despite posting a lower revenue of RM151.36 million.

Earnings per share was 17.7 sen, while net assets per share was RM3.59.

For the six months ended June 30, net profit surged to RM106.31 million from RM57.59 million a year ago.

In a filing to Bursa Malaysia on Friday, Aug 27, BRDB said its 2Q revenue declined 35% due to lower revenue from both its property and manufacturing divisions.

Revenue during this quarter under review was mainly derived from progress recognition of CONSTRUCTION [] of CapSquare Office Tower 2 and Troika with fewer property sales in Kuala Lumpur and reduced construction contract revenue from Lahore, Pakistan, it said. ''

BRDB said the lower revenue in the property division was partially mitigated by higher property investment income from Bangsar Shopping Centre (BSC).

Revenue from the manufacturing division under Mieco Chipboard Berhad (MIECO) in this second quarter fell 3% to RM44.6 million from RM46 million a year ago due to lower sales volume of particleboard, although sales of value-added products have improved, it said.

'Despite the lower revenue, the group's pre-tax profit rose to RM94.1 million for the quarter under review, up 86% when compared to RM50.5 million a year ago due mainly to a RM82.7 million gain arising from adjustment to fair value of the BSC based on an independent professional valuation.

'MIECO reported higher pretax profit of RM1 million as compared to RM200,000 a year ago despite lower revenue, as its margins improved and its operational costs decreased,' it said.

On its prospects going forward, BRDB said despite the economic expansion during the first half of this year, the outlook remains challenging with anticipation of a slower global recovery in the second half.

Nevertheless, the company said it was optimistic that the property division will achieve satisfactory results in the current financial year, given the earlier mentioned fair value gain on its investment property.

BRDB said that in August it had offered for sale its latest project in Kuala Lumpur -- 6 CapSquare, which offers freehold luxury condominiums, for which the initial response has been encouraging.

'The manufacturing division has achieved higher margins through value-added products whilst managing costs and productivity.

'In view of strengthening of demand for particleboard, MIECO is preparing to recommence operations at its Kuala Lipis plant as soon as possible,' it said.

UEM Land 2Q profit jumps 583% to RM40.3m

KUALA LUMPUR: UEM LAND HOLDINGS BHD []'s net profit for the second quarter ended June 30, 2010, (2Q10) jumped an impressive 583% to RM40.34 million from RM5.90 million a year ago in line with higher revenue and gain of RM25.6 million on the disposal of an associate, Touch 'N Go Sdn Bhd to PLUS Expressway Bhd.

Its revenue for the quarter rose 28.1% to RM88 million from RM68.68 million previously due to higher revenue from sales of industrial land in Southern Industrial Logistics Clusters, developed land sales in Puteri Harbour and higher sales of development PROPERTIES [] in Nusa Idaman.
Earnings''per share was''1.23 sen in 1Q10 versus 0.21 sen in the same quarter last year, while''net assets per share was 70 sen.
For the six months ended June 30, 2010 (1H10), UEM Land''net profit was RM43.48 million versus RM8.53 million a year ago,''on the back of a revenue of RM127.7 million.
On its prospect for the current financial year, UEM Land said it was confident that the property market would continue its recovery in line with the encouraging Gross Domestic Product (GDP) growth achieved by the country for the first half of 2010.
"The property market in Johor generally, and Iskandar Malaysia specifically is expected to further benefit from the recent increase in interest from Singapore,'' it said in a filing to Bursa Malaysia Securities on Friday, Aug 27.
The group said it would continue to launch new residential projects in Nusajaya as well as launch new phases of its existing residential projects in Nusajaya and Cyberjaya in the coming months.
"The group will continue to evaluate opportunities to acquire strategic land parcels outside Nusajaya to further expand and grow our business to create sustainable return on investment for our shareholders," it said.

Kinsteel posts RM8.18m net profit in 2Q

KUALA LUMPUR: KINSTEEL BHD [] reported a net profit of RM8.18 million for its second quarter ended June 30, 2010 from a net loss of RM7.87 million a year ago.

Its revenue for the quarter, however, fell to RM374.69 million from RM639.12 million a year earlier. Earnings per share was 0.87 sen compared loss per share of 0.86 sen last year.

For the six months ended June 30, net profit was RM30.73 million versus net loss RM42.64 million in 2009. Revenue for the period, however, declined to RM915.09 million from RM1.08 billion.

In a filing to Bursa Malaysia on Friday, Aug 27, Kinsteel said the increase in its profits was due mainly to higher steel prices.

On its current year prospects, Kinsteel said its financial performance during the first half of the year had been satisfactory due to the healthy increase of steel prices and demand from local and surrounding region, though hampered by increasing cost of raw materials.

'The group however remains cautious of price volatility and will continue to be vigilant on its inventory stocking strategy to achieve reasonable margin for the year,' it said.

Share prices end mixed

KUALA LUMPUR: Share prices ended mixed on Friday, Aug 27, as continued gains in selected heavyweights such as Sime Darby and Maybank helped to boost major indices, dealers said.

The FBM KLCI advanced 3.05 points to 1,411.05.

Dealers said that market breath remained cautious overall amid overnight losses on Wall Street and lingering fears of a global economic slowdown.

They said investors will also be paying attention to a speech later today to be delivered by Federal Reserve Chairman Ben Bernanke to gauge the extent of the pace of the US economic recovery.

The Finance Index lost 41.119 points to 12,701.69, the PLANTATION [] Index declined 0.33 of a point to 6,553.13 and the INDUSTRIAL INDEX [] rose 22.35 points to 2,705.83.

The FBM Emas Index increased 2.25 points to 9,418.48, the FBM70 [] Index decreased 38.13 points to 9,148.08 and the FBM ACE Index went down 20.95 points to 3,720.14.

Turnover increased to 762.501 million shares worth RM1.532 billion from 684.902 million shares worth RM1.292 billion.

Decliners outnumbered advancers by 405 to 286 while 285 counters were unchanged, 388 untraded and 27 suspended.

Among active stocks, Carotech was flat at 8.5 sen, Time Dotcom decreased 1.5 sen to 49.5 sen, Talam Corporation was flat at 10 sen and Axiata Group declined two sen to RM4.45.

Sime Darby which announced plans to revamp its business into six flagship subsidiaries, rose to a near two-month high to RM8.10 with the counter surging 22 sen. ''

CIMB declined 18 sen to RM7.74, Maybank rose four sen to RM8.26, Proton was down seven sen to RM4.53 and Genting rose four sen to RM9.04.-- Bernama

Celcom Axiata PATAMI up 30% to RM476m in 2Q10

KUALA LUMPUR: Axiata Group Bhd's unit Celcom Axiata Bhd's profit after tax and minority interest (PATAMI) for the second quarter ended June 30, 2010 rose 30% to RM476 million, on the back of an 11% increase in revenue to RM1.7 billion.

In a statement Friday, Aug 27, Celcom said effective costs management and ongoing focus on operational efficiency saw earnings before interest, tax, depreciation and amortisation rose by 6% with margins improving by 2.5 percentage points quarter-on-quarter whilst PATAMI showed a robust increase of 8%.

Celcom said its mobile broadband maintained its position as the leading mobile broadband provider, with subscribers surpassing the 700,000 mark, it said.

The company said the overall broadband revenue growth of 89% year-on-year, contributed to 9% of total revenue, up from 5% in the same quarter last year.

As compared to the previous quarter, broadband revenue grew by 13%.

Celcom chief executive officer Datuk Seri Shazalli Ramly said the quarterly PATAMI and EBITDA growth was a testament of the excellent execution of segmented marketing strategy on top of ongoing cost management through implementation of smart spending measures.

'These achievements, as well as that of 17 consecutive quarters of revenue growth would not be possible without the Celcom employees and the best management team, a pool of talented individuals who persevere and believe in the company's transformation goals,' he said.

PetGas 1Q net profit up 43% to 382.79m

KUALA LUMPUR: PETRONAS GAS BHD [] (PetGas) net profit for the first quarter (1Q) ended June 30, 2010 jumped 43% to RM382.79 million from RM268.94 million a year ago, on the back of an 11% increase in revenue to RM872.65 million.

The increase in revenue was attributed to higher gas processing and gas transportation revenue, while the jump in net profit was due mainly to higher revenue and lower cost of revenue.

Earnings per share was 19.35 sen, while net assets per share was RM4.24.

On its prospects going forward, PetGas said revenue from the new fee structure under the Gas Processing and Transmission Agreement (GPTA) was dependent on the volume of the gas processed at the Gas Processing Plants as well as volume of gas delivered directly into the PGU pipeline network.

It said the performance based structure would continue to provide PetGas with earnings potential which is dependent on the level of production of by-products and its price.

As internal gas consumption is provided by Petroliam Nasional Bhd, PetGas's exposure to fuel gas price fluctuation is eliminated, it said.

"The revised terms do not introduce new operating risks to PetGas; it better defines the obligations of the parties to the GPTA.

"Prospects for the utilities business will depend on the pace of economic recovery. Any variation in gas price will be reflected in the pricing to customers," it said.

Tradewinds 2Q net profit up 23% to RM11.33m

KUALA LUMPUR: Tradewinds Corp Bhd's net profit for the second quarter ended June 30, 2010 (2Q10) rose 23.3% to RM11.33 million from RM9.18 million a year ago, due to a 3.3% increase in revenue.

Its revenue rose 3.3% to RM122.81 million from RM118.85 million mainly contributed by the financial services division, the hotel division and the inclusion of a new subsidiary. Earnings per share was 1.03 sen versus 0.83 sen a year ago, while net assets per share was RM1.64.

For the six months ended June 30, 2010 (1H10), Tradewinds' net profit more than doubled to RM28.14 million from RM13.16 million in the previous comparable half. Revenue year-to-date rose 8.1% to RM247.08 million from RM228.56 million.

On its prospect, the company said the financial performance of its hotel division in 2010 was expected to be better than 2009 with signs of improvement in leisure and corporate travel market.

However, it noted growing competition from existing market players has resulted in price competitiveness.

Tradewinds said that the property investment operation, while stable, was facing increasing competition from newer, modern and well designed office buildings that would result in erosion of the company's competitive position impacting future yields.

"To stay ahead of the competition, the company would be embarking on the refurbishment of the existing Menara Tun Razak and development of a new 40-storey tower block on the same site," Tradewinds added.

The company's share price at midday was unchanged at 77.5 sen with 497,000 shares traded.

Bintulu Port 2Q net profit surges 71.7% to RM33.34m

KUALA LUMPUR: BINTULU PORT HOLDINGS BHD []'s net profit for the second quarter ended June 30, 2010 jumped 71.7% to RM33.34 million from RM19.42 million a year ago, on the back of lower expenditure during the period.

Earnings per share was 8.34 sen, while net assets per share was RM2.07.

The company declared at second interim single tier dividend of 7.50 sen per share, amounting to RM30 million in respect of the financial year ending Dec 31, 2010.

For the six months ended June 30, Bintulu Port's net profit rose to RM74.08 million from RM67.48 million a year earlier, while revenue rose to RM225.42 million from RM218.99 million.

In a filing to Bursa Malaysia Securities, the company said revenue from the handling of LNG vessel calls and cargoes will continue to be the main contributor to its earnings in 2010.

"A positive growth is also expected from the bulking services operations and from the handling of cargoes and vessel calls for palm oil, palm kernel, alumina, general cargo and container.

"Barring unforeseen circumstances, the board expects the performance of the group for the year 2010 to be better than 2009," it said.

FBM KLCI claws back into the black

KUALA LUMPUR: The FBM KLCI reversed its losses and clawed back into positive territory at the mid-day break on Friday, Aug 27, lifted by gains including at Sime Darby, Public Bank, Maybank, Tenaga and UMW.

At 12.30pm, the benchmark index was 0.99 of a point higher at 1,408.99. Volume was 360.22 million shares valued at RM657.77 million.

However, trading was cautious with losers outpacing gainers by 364 to 204, while 260 counters traded unchanged.

RHB Research Institute in a note Aug 27 said Thursday's sudden reversal took it by surprise as it had reduced the possibility of triggering a technical correction on the short-term uptrend of the FBM KLCI.

With the huge positive candle registered on the board plus a record of a fresh 30-month high for the index suggest a possible resumption of its previous bullish momentum, it said.

However, given the mixed momentum readings and the poorer daily turnover (below the 800 million-one billion shares mark), the research house said it preferred'' to wait for more signs of confirmation signals today before jumping on the bandwagon for an extended rally on the FBM KLCI in sessions ahead.

The next upside target is at 1,450, it said.

Should the selling resume on Friday, forcing the index to fall to below 1,400 again, it will restore the corrective mode and press the index to the short-term correction trigger point near 1,390 and the 10-day SMA again.

Further support is seen at 1,350, near the 40-day SMA of 1,354, said the research house.

"In our view, investors are likely to wait for the second reading of the US 2Q GDP and a key speech by the Federal Reserve chairman Ben Bernanke tonight, before deciding their next course of action next week," it said.

On Bursa Malaysia, Sime Darby was among the major gainers and rose 15 sen to RM8.03 after several research houses, including OSK Research, raised their respective target prices and calls on the stock.

OSK Researrch said Sime Darby's 4QFY10 results continued to suffer as it had expected from provisions for the Energy & Utilities (E&U) division although this was at a smaller quantum.

"Measures put in place by the new CEO to drive performance going forward should bring cheer to investors.

"We have raised our target PE from 15 times to 18 times to reflect the optimism that Sime is past its darkest hour. Our target price is raised from RM6.74 to RM8.09. Upgrade Sime darby from Sell to Neutral," it said in a note on Friday.

Other major gainers were Public Bank that added 12 sen to RM12.14, Maybank, Tenaga and UMW up five sen each to RM8.27, RM8.80 and RM6.55, respectively, while BAT was up 26 sen to RM45.10.

Lay Hong gained 18 sen to RM2.11, Padini was up 15 sen to RM4.23, Nestle added 12 sen to RM39.60 while Huat Lai rose 10 sen to RM1.35.

Among the major decliners, CIMB fell 20 sen to RM7.70, Cycle & Carriage down 14 sen to RM5.24, Ralco fell 10.5 sen to 76 sen, PacificMas down 10 sen to RM4.60, Goldis and JT International fell nine sen each to RM1.40 and RM5.80, while Petronas Dagangan lost eight sen to RM10.42.

Timecom was the most actively traded stock Friday morning with 31.9 million shares done. The counter slipped 1.5 sen to 49.5 sen. Other actives included Carotech, Silver Bird Group, Maybank, Axiata, CIMB and Sime Darby.

At the regional markets, Japan's Nikkei 225 erased its earlier losses and rose 0.34% to 8,936.90, Taiwan's Taiex added 0.13% to 7,699.57 and Singapore's Straits Times Index was up 0.51% to 2,940.90.

The Shanghai Composite Index fell 0.34% to 2,594.75, South Korea's Kospi Index was down 0.12% to 1,727.60 and Hong Kong's Hang Seng Index shed 0.08% to 20,594.89.

Unico-Desa 1Q net profit up 68.5% y-o-y

KUALA LUMPUR: Unico-Desa PLANTATION []s Bhd's net profit for the first quarter ended June 30, 2010 (1Q11) rose 68.5% to RM7.93 million from RM4.70 million a year ago underpinned by improved contribution from its plantation and hire purchase divisions.

Its revenue dipped 12.2% to RM49.77 million from RM56.71 million previously while posting basic earnings per share of 0.92 sen versus 0.54 sen.

Unico-Desa registered a profit before tax (PBT) of RM10.45 million for 1Q11 as against RM6.03 million in the same quarter last year.

In a filing to Bursa Malaysia Securities on Friday, Aug 27,the group said PBT for its plantation division increased year-on-year (y-o-y) by 168% to RM5.1 million from RM1.9 million due to higher internal fresh fruit bunches (FFB) production and lower production cost.

It also said PBT for its hire purchase division improved 29% y-o-y to RM5.3 million from RM4.1 million mainly due to increase in hire purchase revenue.

No interim dividend was declared for the current financial quarter ended June 30, 2010. Unico-Desa's net asset per share stood at 88.19 sen as at June 30.

On its prospect, Unico-Desa said ongoing replanting programme would inevitably impact the group's future profit. It said based on the current crude palm oil and palm kernel prices as well as the positive contribution from hire purchase segment, the group's performance for the current financial year was expected to be reasonable.

Its share price at midday Friday added half a sen to 97 sen with turnover of 620,700 shares.

Lenovo to develop game consoles in China

HONG KONG: Lenovo, the world's No 4 PC maker, has set up a unit to develop a video game console for the China market, a newspaper reported on Friday, Aug 27, pitting it against rivals such as Microsoft and Sony.

Some 40 Lenovo software engineers have been spun off from the company to work for Beijing eedoo TECHNOLOGY [], which will be tasked with developing and marketing the "eBox" game console, the China Daily reported.

Lenovo, its unlisted parent Legend Holdings, and its private equity arm Legend Capital co-invested in the new company, but did not disclose investment figures, the newspaper said.

Lenovo and eedoo officials were not immediately available for comment.

The Chinese PC maker has been trying to diversify away from selling only the heavily commoditised personal computer, having launched in the past year a smartphone in its home market and announcing plans to roll out a tablet PC.

China has been a notoriously difficult market for video console makers, which make most of their money from game sales, due to rampant piracy in the country. ' Reuters

Asian markets dip ahead of US data

KUALA LUMPUR: The FBM KLCI retreated on Friday, Aug 27 in line with key regional markets that fell on nervous trading ahead of economic data due out in the US later on Friday.

Asian markets slipped, with Japan's Nikkei 225 down 0.87% to 8,829.10, the Shanghai Composite Index down 0.46% to 2,591.44, the South Korean Kospi Index down 0.27% to 1,725.16, and Taiwan's Taiex down 0.13% to 7,680.03.

Singapore's Straits Times Index, however, was up 0.29% to 2,934.44.

At 10am, the FBM KLCI declined 1.53 points to 1,406.47, weighed by losses including at Digi, CIMB and Petronas Dagangan.

Losers beat gainers by 239 to 99, while 195 counters traded unchanged. Volume was 114.59 million shares valued at RM181.02 million.

HLG Research said that despite the decoupling effects lately, persistent bearish economic data emerging from the US, deteriorating technical indicators and the lack of catalysts after the reporting season would dampen investors' risks appetite.

"With the Dow closing below 10,000 overnight and ahead of the crucial 2Q10 GDP revision and August consumer sentiment announcements tonight, the FBM KLCI will likely encounter stiff resistance to buck the Wall St and regional downtrends.

"This is despite anticipation of short term funds inflow due to the strengthening RM against the greenback and the safe haven status of Bursa Malaysia," it said on Aug 27.

HLG Research said that for the FBM KLCI, immediate resistance levels are 1412 (50% FR from top 1524 and low of 1300) and 1438 (61.8% FR). Immediate support levels are at 1400, 1390 (10-d SMA) and 1375 (20-d SMA).

Among the major losers on Bursa Malaysia at mid-morning Friday, DiGi fell 60 sen to RM24.20, Cycle & Carriage lost 22 sen to RM5.16, Genting PLANTATION []s and CIMB fell 13 sen each to RM7.16 and RM7.79, Petronas Dagangan fell 10 sen to RM10.40 and Genting lost one sen to RM8.99.

Meanwhile, Goldis, Lafarge Malayan Cement and JT International fell nine sen each to RM1.40, RM7 and RM5.80, respectively, and Bursa lost seven sen to RM7.07.

Fima Corp was the top gainer at mid-morning and was 15 sen to RM4.85; Sime Darby, Nestle and Padini rose 12 sen each to RM8, RM39.60 and RM4.20 respectively, Maybank up six sen to RM8.28, Sungei Bagan added 11 sen to RM2.41 while Pintaras and Lay Hong added seven sen each to RM RM1.74 and RM2.

Carotech was the most actively traded stock with 13.8 million shares done. The counter fell half a sen to 8 sen. Other actives included CIMB, Maybank, Genting and Berjaya Retail.

Affin, BEA in MoU to establish strategic partnership

KUALA LUMPUR: AFFIN HOLDINGS BHD [] (AHB) and The Bank of East Asia Ltd (BEA) have signed a memorandum of understanding (MoU) to establish a strategic partnership to jointly develop their business potential in Mainland China, Hong Kong, Malaysia, and other key markets where they both operate.

In a filing to Bursa Malaysia on Friday, Aug 27, Affin said the MoU signed on Thursday signified the beginning of of long-term collaboration between Affin and BEA, and outlined the framework for the mutually beneficial co-development of businesses between itself and BEA.

Affin chairman Gen (R) Tan Sri Mohd Zahidi Zainuddin said the strategic partnership would enhance Affin's ability to support its customers with businesses or intending to have business presence in Mainland China and Hong Kong by leveraging on BEA's strong presence and extensive branch network there.

"We are confident that this strategic alliance will place both AHB and BEA in a better position in many important Asian markets, and enable us to tap an even wider range of business opportunities.

"Furthermore, our alliance is just the starting point from which we intend to explore co-operation in other areas that will bring benefits to both AHB and BEA," he said in a statement.

Mohd Zahidi said the partnership would create a unique growth opportunity for both Affin and BEA and will also provide a strong foundation for advancing its strategy to be one of the Malaysia's premier consumer and business focused banking group.

"With the signing of the MoU, there will be a mutually beneficial and long-term business relationship for AFFIN and BEA to explore the possibilities of further cooperation and participation in other areas of business such as treasury, islamic banking, investment banking, asset management, factoring, transactional banking, corporate and investor advisory service, corporate business referrals, trade risk participation and staff training," he said.

OSK Research ups target price for Nestle to RM38.53

KUALA LUMPUR: OSK Research has raised its target price for NESTLE (M) BHD [] to RM38.53 from RM31.49 previously, and maintained its neutral recommendation on the stock.

In a note on Friday, Aug 27, OSK Research said Nestle's 1HFY10 earnings were above its own and consensus estimates, making up 61.8% of the research house's full-year forecast.

It said Nestle's year-on-year earnings swelled 28.6% on the back of improving export sales, mainly from its new coffee and non-dairy creamer lines in Shah Alam.

"Earnings before interest and tax margins rose from 12.9% to 14.5%. Meanwhile, quarter-on-quarter earnings declined 27.8% as marketing expenses rose during the quarter, with new products such as Nescaf'' Ipoh White Coffee and Maggi whole wheat noodles being launched.

"We revise upwards our earnings forecasts for FY11 and target price to RM38.53 from RM31.49. Maintain Neutral," it said.

Nestlé rises after OSK Research ups target price

KUALA LUMPUR: Nestl'' (M) Bhd share price rose on Friday, Aug 27 after OSK Research raised its target price for the stock to RM38.53 from RM31.49 previously, and maintained its neutral recommendation on the stock.

At 9.15am, Nestl'' was up 40 sen to RM39.88.

In a note on Friday, Aug 27, OSK Research said Nestl'''s 1HFY10 earnings were above its own and consensus estimates, making up 61.8% of the research house's full-year forecast.

It said Nestl'''s year-on-year earnings swelled 28.6% on the back of improving export sales, mainly from its new coffee and non-dairy creamer lines in Shah Alam.

"Earnings before interest and tax margins rose from 12.9% to 14.5%. Meanwhile, quarter-on-quarter earnings declined 27.8% as marketing expenses rose during the quarter, with new products such as Nescafe Ipoh White Coffee and Maggi whole wheat noodles being launched.

"We revise upwards our earnings forecasts for FY11 and target price to RM38.53 from RM31.49. Maintain Neutral," it said.

MIDF downgrades CIMB to neutral, raises target price to RM8.50

KUALA LUMPUR: MIDF Research downgraded CIMB Group Holdings Bhd to neutral from buy previously after the banking group posted net profit RM889.5 million in its second quarter ended June 30, 2010 compared to RM838.1 million in 1Q.

MIDF Research said the higher net profit was contributed by i) higher net interest income from increase in NIM, ii) higher non interest income and iii) lower loan impairment expenses.

"We adjust our target price for the stock to RM8.50 (from RM8), based on 16 times PER on FY11 EPS.

"We continue to peg the stock to a forward PER of 16 times which is higher than its average 5 years historical PER due the Group's stronger position as a regional bank," it said on Friday, Aug 27.

MIDF Research said that as CIMB's share price had surged strongly (+23.4% YTD) beating the KLCI and KLFIN's gain of 10.6% YTD and 15.3% YTD respectively, total return expected (based on the revised target price and dividend yield) is less than 15%.

"Hence, we downgrade our call on the stock from Buy to Neutral," it said.

FBM KLCI retreats in early trade

KUALA LUMPUR: The FBM KLCI retreated in early trade on Friday, Aug 27 in line with the negative sentiment at regional markets following the overnight dip at Wall Street.

At 9.05am, the benchmark index fell 2.71 points to 1,405.29, weighed by losses including at DiGi, IJM, CIMB and Sime Darby.

Among the early decliners, DiGi fell 60 sen to RM24.20, IJM and CIMB fell eight sen each to RM4.92 and RM7.84, Lingui and Melewar shed six sen each to RM1.06 and 71 sen, while Notion and Sime darby fell four sen each to RM1.70 and RM7.84.

Among the gainers, KFCH added 10 sen to RM10.58, BHIC up nine sen to RM4.48, PPB gained eight sen to RM17.08 while Pintaras was up seven sen to RM1.74. Other gainers included MBM Resources and Supermax.

Dow ends below 10,000 on economic worries

NEW YORK: The Dow closed below 10,000 on Thursday, Aug 26 a day ahead of an expected downward revision in US second-quarter economic growth and a major speech by Federal Reserve chairman Ben Bernanke.

Major TECHNOLOGY [] shares were among the biggest losers, with the Nasdaq falling more than the Dow and S&P 500. Tech shares have been seen as a proxy for economic growth. Cisco Systems fell 2.4% to US$20.70 (RM65.21), while Intel gave up 1.6% at US$18.18.

Stocks initially rose on data showing first-time claims for jobless benefits fell more than expected last week, but the number was still too high to signal a shift in the weak labor market. The four-week average of new claims, regarded as a better gauge of trends, rose to the highest since late November.

"The best the bull can say is that the recovery is evening itself out now, it's not accelerating any more," said Linda Duessel, market strategist at Federated Investors in Pittsburgh.

"We think it's a soft patch and not a double dip, but the market is pricing more and more for a double dip, so you're vulnerable to the upside."

The Dow Jones industrial average fell 74.25 points, or 0.74%, to 9,985.81. The Standard & Poor's 500 Index shed 8.11 points, or 0.77%, to 1,047.22. The Nasdaq Composite Index lost 22.85 points, or 1.07%, to 2,118.69.

It was the first time the Dow has closed below the psychologically important 10,000 level since July 6. The market then began a rebound and logged seven straight days of gains.

In his speech on Friday, Bernanke is likely to discuss the uncertain prospects for the economy but isn't expected to give many clues about whether the US central bank will pump more cash into the economy to keep the recovery going.

Bernanke and central bankers from around the world are gathering for their annual meeting in Jackson Hole, Wyoming, with the agenda expected to include a discussion of printing yet more money to spur growth.

After a recent spate of poor economic numbers, there were jitters the GDP data could show the economy is weaker than originally thought. The government's preliminary reading is expected to come in at 1.4%, down from 2.4% estimated a month ago. Estimates range broadly from 0.9% to 2.2%, according to a Reuters poll.

On the technical picture, investors were still looking for the 1,040 level on the S&P to act as support. Some consider a dip below that level to be a buying opportunity, as was seen on Wednesday when the index briefly fell below it.

In deal news, Dell Inc raised its bid for data storage company 3PAR Inc to US$1.6 billion.

But Hewlett-Packard Co (HP) came back with a revised offer of US$1.8 billion after the closing bell, sending 3PAR's shares up 7.2% to US$27.90 in extended-hours trading. Shares of 3PAR closed at US$26.76. HP closed down 0.1% at US$38.22, while Dell ended down 0.3% to US$11.75.

In after-hours trade, Dell lost 0.9% to US$11.65 and HP slipped 0.4% to US$38.05.

A drop in shares of coal companies weighed on the energy sector for a second day as the price of natural gas fell, raising concerns that power plants would switch to gas from coal. Massey Energy fell 4.2% to US$27.93, while the S&P energy sector fell 1%.

About 7 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's estimated daily average of 9.65 billion.

Declining stocks outnumbered advancing ones on the NYSE by 1,928 to 1,064, while on the Nasdaq, decliners beat advancers 1,770 to 861. ' Reuters

SC names members of CGCC, led by Zarinah

KUALA LUMPUR: The Securities Commission (SC) on Thursday, Aug 26 announced the members of the new International Corporate Governance Consultative Committee (CGCC), led by SC chairman Tan Sri Zarinah Anwar.

The 11-member committee was formed to provide strategic direction, views and advice to SC in the development of a new five-year corporate governance blueprint to further raise the standards of corporate governance in Malaysia.

'The development of the new blueprint is critical given the significant changes to the corporate landscape as well as new corporate governance-related issues that has surfaced in Malaysia and internationally,' said Zarinah.'' ''

The blueprint will outline various initiatives and recommendations to be implemented from 2011 to 2015, SC said.

Members of the committee include Ministry of Finance secretary-general Tan Sri Dr Wan Abdul Aziz Wan Abdullah, BURSA MALAYSIA BHD [] chairman Tun Mohamed Dzaiddin Abdullah, Employees Provident Fund CEO Tan Sri Azlan Zainol, CIMB group managing director and CEO Datuk Seri Nazir Razak, and PricewaterhouseCoopers Malaysia executive chairman Datuk Johan Raslan.

It also includes Federation of Public Listed Companies Malaysia president Tan Sri Megat Najmuddin Khas, Companies Commission of Malaysia CEO Datuk Azmi Ariffin, Thai Institute of Directors Association president and CEO Charnchai Charuvastr, Organisation for Economic Co-operation and Development senior policy manager Fianna Jesover and Aberdeen Asset Management Asia Limited Strategist Peter Elston.

The committee will be supported by the Corporate Governance Working Group (CGWG) comprising senior regulators and market professionals, said SC.

"A holistic review of the Malaysian corporate governance is timely since most of the recommendations made in the Finance Committee Report have been implemented over the past 10 years," it said.

The development of the new blueprint was first announced by Zarinah at the SC-Bursa Malaysia Corporate Governance Week 2010 in June.

#Today's Diary* What to expect on Aug 27, 2010

Celcom to announce its 2010 second quarter financial results at Multipurpose Hall, Level 5, Menara Celcom, Jln Raja Muda Abd Aziz, KL at 11am.

TA ANN HOLDINGS BHD [] EGM at Tanahmas Hotel, Sarawak at 2.30pm.

Strong ringgit to hurt palm oil refiners?

KUALA LUMPUR: Palm oil refining margins in No 2 producer Malaysia could turn negative after the ringgit hit a 13-year high last week ' a scenario that might see refineries cut back on output.

The ringgit, Asia's second-best performer, has rallied 8.9% so far this year thanks to recent moves to allow the currency to be used more widely, interest rate hikes and an inflow of funds into local bonds.

But the appreciating currency hastened a sell-off in benchmark Malaysian palm oil futures last week, triggering concerns that refiners may take up less crude palm oil (CPO) priced in the ringgit for processing and export in US dollars.

Here are some questions and answers on the currency's impact on Malaysia's US$25 billion (RM78.5 billion) palm oil industry:

Can further ringgit rise hurt refining margins?
Refiners say the ringgit hitting 3.0 per dollar from 3.1370 now will erase the current US$38-US$45 a tonne margin made from producing refined, bleached and deodorised palm olein, which is widely used as a cooking oil.

That level for the ringgit may not be far off. Analysts say the ringgit may rise to 3-3.05 per dollar in the medium term as the Bank Negara Malaysia is expected to release forex controls with other nations in trade settlements.

Any 0.3% increase in the ringgit will erode refining margins by US$3 a tonne, refiners and traders said.

Does the ringgit largely determine margins?
To some extent, but margins are also determined by availability of CPO and its end-products as well as demand.

Refined palm oil products rallied over the past two months due to tight supplies after refiners trimmed production in the second quarter to below 70% of the 22.8 million tonnes of total capacity versus 74% in the first quarter.

Improving CPO output from September or October may lead to a stock buildup and weigh on feedstock prices, prompting refineries to process more.

But aiming for margins above the breakeven point of US$40-US$50 a tonne will depend on securing big orders from top consumers, India and China.

In these two Asian giants, demand has slowed and buyers are relying on domestic oilseeds or importing more soyoil that has narrowed its premium to RBD palm olein.

What is the impact on the palm oil industry?
Palm oil firms with refineries and estates could focus more on selling CPO rather than refined products to avoid further costs.

Profits could get dented for planters with extensive refineries such as Singapore's Wilmar if the ringgit strengthens. The firm posted its first quarterly decline in four years due to tight edible oil supply.

Winners are more likely to be firms focusing solely on oil palm estates such as IJM PLANTATION []S BHD [] and Genting Plantations Bhd. Their profits may grow as they focus on selling CPO priced in ringgit. ' Reuters

Tenaga proposes 1-for-4 bonus issue of up to 1.12b shares

KUALA LUMPUR: TENAGA NASIONAL BHD [] has proposed a one-for-four bonus issue of up to 1.12 billion shares of RM1 each with the entitlement date to be announced later.

As at May 31, 2010, its paid-up capital stood at RM4.35 billion, comprising 4.35 billion shares, while there were 129.85 million outstanding ESOS options.

In a statement to Bursa Malaysia Securities yesterday, Tenaga said the bonus issue would be carried out by capitalising up to RM1.12 billion from its share premium account, which amounted to RM5.27 billion as at Aug 31, 2009.

It said the proposal would reward existing shareholders and increase its capital base that would better reflect its size of operations, as well as improve the liquidity of its shares in the market. AmInvestment Bank Bhd has been appointed as the adviser to the proposal, which is expected to be completed by first quarter next year.

Thursday, August 26, 2010

KLCI surges 11 pts to close above 1,400

KUALA LUMPUR:'' Share prices closed mostly higher on Thursday, Aug 26 with the FBM KLCI surpassing the 1,400 level buoyed by continued buying momentum for heavyweights, dealers said.

The FBM KLCI advanced 11.03 points to close at 1,408. Dealers said sentiment improved following overnight gains on Wall Street and positive corporate earnings.

External factors and concerns over a possible double-dip global recession, due to bearish data emerging from the US, would continue to influence performance on the local bourse, said Maybank Investment Bank Head of Retail Research Lee Cheng Hooi.

He said although good corporate results reported by Maybank and Axiata lent positive support to the market, more correction was expected after the recent rally.

The Finance Index surged 100.5 points to 12,742.81, the PLANTATION [] index advanced 53.19 points to 6,553.46 and the INDUSTRIAL INDEX [] rose 24.63 points to 2,683.48.

The FBM Emas Index climbed 57.49 points to 9,416.23, the FBM70 [] Index increased 20.69 points to 9,186.21 and the FBM ACE Index went up 2.39 points to 3,741.09.

Turnover declined to 684.902 million shares, worth RM1.292 billion, from 873.099 million shares worth RM1.73 billion on Wednesday. The broader market was mixed with advancers outnumbering decliners 353 to 333 while 294 counters were unchanged, 386 untraded and 31 suspended.

Among actives, Time Dotcom declined four sen to 51 sen, Axiata Group rose five sen to RM4.47, Tejari Technologies declined one sen to 24.5 sen and Carotech rose half-a-sen to 8.5 sen.

CIMB gained seven sen to RM7.92, Maybank rose nine sen to RM8.22, Proton added three sen to RM4.60, Genting gained one sen to RM9.00 and Sime Darby rose 12 sen to RM7.88. - Bernama

Sunrise remains bullish, to launch 2 new projects by year-end

KUALA LUMPUR: SUNRISE BHD [] remains bullish on its prospects going forward, after reporting a small 3% decline in underlying pre-tax profit for the full year ended June 30, 2010 (FY10).

The property developer had on Thursday, Aug 26 proposed a first and final gross dividend of five sen per share amounting to RM18.77 million in respect of FY10.

Pre-tax profit declined 2.5% to RM52.26 million in its fourth quarter ended June 30, 2010 (4QFY10) from RM53.62 million a year earlier.

Quarter-on-quarter, pre-tax profit rose 67% or RM21.1 million, mainly due to CONSTRUCTION [] progress from on-going projects like Solaris Dutamas and 11 Mont'Kiara, and further sales from Mont'Kiara Residence and 28 Mont'Kiara.

Due to higher taxes, however, 4QFY10 net profit dipped by a higher margin at 10.4% to RM38.65 million, or 7.8 sen per share, on the back of a 45.2% decline in revenue to RM129.99 million.

Pre-tax profit for FY10 fell 12.1% from RM205.76 million to RM180.88 million. Excluding one-off gains of RM19.4 million from the sale of office space in Plaza Mont'Kiara and an Australian asset in the preceding year, FY10's pre-tax profit decreased by a small margin of 3%.

Axiata group CFO to join Goldman Sachs

KUALA LUMPUR:'' Axiata Group Bhd's executive director and group chief financial officer, Datuk Yusof Annuar Yaacob will be leaving the telecommunications group at the end of November 2010.

Axiata said on Thursday, Aug 26 that Yusof will be joining Goldman Sachs as the managing director, chairman Goldman Sachs corporate finance Malaysia.

Of his five-year tenure, three years were with TM International Bhd prior to the de-merger from TELEKOM MALAYSIA BHD [].

#Flash* Tenaga Nasional plans 1-for-4 bonus issue

KUALA LUMPUR: TENAGA NASIONAL BHD [] has proposed a bonus issue of 1.119 billion bonus shares on a one-for-four basis.

The power giant said on Thursday, Aug 26 the bonus share would be implemented at an entitlement date to be determined by the board and announced later by the company.

It also proposed to increase the authorised share capital of the company from RM5 billion comprising five billion shares to RM10 billion comprising of 10 billion shares.

CIMB Group posts highest ever performance

KUALA LUMPUR:'' CIMB Group Holdings Bhd posted a strong set of financial results for the second quarter ended June 30, 2010 with net profit of RM889.46 million, which was 34.1% above the RM663.15 million a year ago, supported by a strong rebound in corporate and investment banking, surge in contribution from CIMB Niaga and drop in loan loss provisions.

It said on Thursday, Aug 26 that revenue was RM3.018 billion compared with RM2.589 billion a year ago. Earnings per share were 12.59 sen compared with 9.40 sen.

For 2Q10, the group's net profit of RM889.46 million was 6.1% higher than the first quarter earnings.

CIMB Group said for the first half, net profit was RM1.727 billion, up 35.2% on-year growth and equivalent to net EPS of 24.5 sen.

The financial services group said the annualised net return on equity (ROE) of 17% remained ahead of the group's full-year target of 16%. The group declared an interim dividend of 4.625 sen (single tier) amounting to a net payment of RM339 million.

Its group chief executive Datuk Seri Nazir Razak said: 'We posted our highest ever three and six months performance. The highlights were the strong rebound in corporate and investment banking, surge in contribution from CIMB Niaga and drop in loan loss provisions.'

CIMB Group's 1H10 revenue increased by 14.9% on-year to RM5.861 billion while the Group's profit before tax was 34.8% higher at RM2.314 billion.

For 1H10, the group's Malaysian consumer bank pre-tax profit grew 23.5% on-year from a combination of sustained improvements in retail banking and credit cards as well as better recoveries at group special assets management.

It said pre-tax profit at treasury & investments slipped 25.3% on-year to RM605 million mainly due to lower net gains from investments during the period. Corporate & investment banking pre-tax profit was higher by 72.9% on-year to RM498 million as regional capital markets were significantly better than 1H09.

On its overseas operations, CIMB Group said CIMB Niaga's contribution surged 171.1% on-year to RM828 million from RM305 million previously owing to continued operational improvements as well as very favourable operating conditions.

CIMB Thai made a RM26 million pre-tax profit contribution in 1H10 compared to a RM29 million loss in 1H09. Asset management and insurance pre-tax profit was 55.4% lower on-year at RM36 million largely due to the non recurrence of gains on change in accounting standards at CIMB Aviva last year.

#Flash* Sime Darby posts RM77.35m net loss in 4Q

KUALA LUMPUR: SIME DARBY BHD [] posted net loss of RM77.35 million for the fourth quarter ended June 30, 2010, a contrast from its net profit of RM984.04 million a year ago, following additional provisions for the loss-making energy and utilities (E&U) division.

For the financial year ended June 30, it posted net profit of RM726.85 million compared with RM2.28 billion in net profit for FY09, it said on Thursday, Aug 26.

Sime Darby said the E&U division reported an operating loss of RM.75 billion for FY2010 after making additional provisions of RM777.3 million for 4QFY2010.

'Including the RM1.308 billion provisions up to 3QFY2010, the total provisions for foreseeable losses and impairments for the full year amounted to RM2,085.7 million.

'The additional provisions totalling RM777.3 million relate to the three oil & gas projects namely, Qatar Petroleum (QP), Maersk Oil Qatar (MOQ) and Marine, and include provisions and impairment of other assets,' it said.

Zelan to see RM900m from Gombak Integrated Transport Terminal project

KUALA LUMPUR: Engineering and CONSTRUCTION [] group ZELAN BHD [] will focus on the Gombak Integrated Transport Terminal (GITT) project which is expected to provide an income stream of RM900 million over 25 years.

"The offer has been given by the government and we are in the process to negotiate on the terms and conditions of the concession," said its non-executive chairman Datuk Anwar Aji.

To be concluded in the next couple of months, the project would provide an additional RM220 million to the company's orderbook, he told reporters after the group's annual general meeting here on Thursday, Aug 26.

Besides the GITT, Zelan, which is an engineering, procurement and construction contractor specialising in power plant projects, has also participated in the bids for other projects.

It is bidding for a teaching hospital project from an international university as well as projects at Westports and Johor Port.

Anwar said the group would also participate in some projects secured by MMC CORPORATION BHD [], which owned 60% of a joint venture with Zelan.

"MMC will consider Zelan as one of the contractors but pricing-wise it will still be competitive because of related party transactions," he said.

Despite being faced with problems, Anwar said the company was working hard to turn around and scouting for new projects.

"We are still working hard to turn around the company to make us stay relevant in the market. We have been bogged down with a lot of problems for current projects like cost overrun and cash flow, so we spend a lot of time to address all these issues," he said.

Asked when a new chief executive officer will be coming on board, Anwar said the company, which was now being run by four exco members, has a list of candidates but yet to decide on the right one.

On another development, he said the company would be holding its extraordinary general meeting on Sept 7, 2010, to get a mandate from shareholders to sell 30 million shares in IJM Corp Bhd.

The company has a 7.12% stake in IJM and this would be reduced to slightly above five% after the sale. ' Bernama

Wah Seong falls to more than 11-week low

KUALA LUMPUR: Shares of pipe-coating specialist Wah Seong Corp Bhd fell to an 11-week low low of RM2.14 in late afternoon as selling pressure picked up following the disappointing 2Q ended June 30 results.

At 3.30pm, it was down 16 sen to RM2.14 with 1.6 million shares done, the lowest since June 8.

However, the 30-stock FBM KLCI was higher, up 4.19 points to 1,401.26.

Wah Seong recorded operating losses of RM6.44 million as it was affected by a decline in contracts in 2009 compared with operating profit of RM55.27 million in the previous corresponding quarter ended June 30, 2009,

Its revenue fell 33% to RM369.74 million from RM551.84 million.'' Pre-tax loss was RM3.74 million compared with pre-tax profit of RM47.37 million. But at net profit level it posted earnings of RM1.7 million, a contrast from the RM29.73 million a year ago

OSK Research said Wah Seong's 1HFY10 results were below expectations due to the slower revenue generation across all its division and the delay in the commencement of some of the pipe coating jobs.

However, the research house expected a better 2H10 for the company, coming mainly from its pipe coating division as well as engineering division to some extent.

OSK Research had downgraded the stock to Neutral. Its target price was reduced to RM2.40 (previously RM2.71) based on the existing PER of 14 times FY11 earnings following our FY11 earnings downgrade. To-date, the company is still supported by its orderbook of RM1.2 billion.

Mah Sing 2Q earnings up 26.5% at RM29.6m, ups sales target to RM1.5b

KUALA LUMPUR: MAH SING GROUP BHD [] posted net profit of RM29.16 million in the second quarter ended June 30, 2010, up 26.5% fromRM23.04 million a year ago.

It said on Thursday, Aug 26 that revenue jumped 72.8% to RM289.05 million from RM157.23 million. Earnings per share were 3.55 sen versus 3.67 sen.

'We have exceeded our full year sales target of RM1 billion within seven months and have revised our sales target to RM1.5 billion for 2010,' it said.

For the first half ended June 30, it said revenue rose 66% to RM527.36 million and net profit 25% to RM57.04 million.

Projects that contribute to solid revenue and profit for the current financial period include Southgate Commercial Centre, StarParc Point , i-Parc@Bukit Jelutong , Perdana Residence 2 , Aman Perdana, Hijauan Residence and Kemuning Residence in Klang Valley; Residence@Southbay in Penang and Sierra Perdana , Sri Pulai Perdana 2 , and Austin Perdana in Johor Bahru.

The plastics division also recorded improved revenue and profit over the corresponding period in the previous year.

'The remarkable property sales recorded in the first half continue to provide steady cash flows and liquidity. The group's balance sheets remain healthy with low net gearing ratio at 0.05 as at June 30, 2010,' it said.

CIMB Research retains KLCI target of 1,450

KUALA LUMPUR: CIMB Equities Research is maintaining its Overweight recommendation on Malaysia and is retaining its FBM KLCI target of 1,450, based on a price-to-earnings (P/E) target of around 15 times.

It said on Thursday, Aug 26 that it was pleasantly surprised by the massive net buying by foreign funds in July as net value rose 5.4% to US$6.35 billion as Malaysia had a strong month in July, during which the KLCI gained 3.6% to close at 1,361, its high for the year.

'Statistics from Emerging Portfolio Fund Research (EPFR) revealed a huge net inflow of US$308 million, which pushes year-to-date net flows into positive territory. The net inflow in July is the highest since September 2007 and is on par with total outflows seen in January-May.

'The last time that inflows were so strong was in end-2006, which heralded the start of the 2007 bull market,' it said.

The country's US$308 million net inflow in July beat its peers such as Singapore (US$215 million), Thailand (US$161 million), Indonesia (US$143 million) and Hong Kong (US$117 million).

FBM KLCI climbs above 1,400, Maybank boost

KUALA LUMPUR: The FBM KLCI staged a mild rebound on Thursday, Aug 26 and managed to cross the psychologically crucial 1,400-level at midday, in line with bargain hunting in key regional markets.

At 12.30pm, the FBM KLCI was up 0.3% or 4.46 points to 1,401.43, lifted by Maybank, CIMB, Sime Darby and PPB. Gainers trailed losers by 262 to 278, while 280 counters traded unchanged. Volume was 295.66 million shares valued at RM501.6 million.

Crude palm oil futures for the third month delivery rose RM10 per tonne to RM2,496 after falling to a one-month low on Wednesday; crude oil was up 41 cents per barrel to US$72.93 while gold was up 60 cents per ounce to US$1,240.65.

Key regional markets rose ahead of the US jobless claims data scheduled to be released today and second quarter GDP numbers due out on Friday.

Japan's Nikkei 225 was up 0.36% to 8,877.02, Hong Kong's Hang Seng Index added 0.11% to 20,658.46, the Shanghai Composite Index rose 0.58% to 2,611.69 and South Korea's Kospi Index added 0.30% to 1,740.02.

However, Taiwan's Taiex fell 0.28% to 7,715.64 and Singapore's Straits Times Index shed 0.04% to 2,925.28.

Concern about exposure to riskier assets continued to weigh on markets after US data on Wednesday heightened fears that the world's biggest economy may be at risk of sliding back into recession, according to Reuters.

US new home sales slumped to the slowest pace on record in July and durable goods orders were weaker than expected, suggesting growth could slow sharply without more government or central bank support, it said.

On Bursa Malaysia, the major gainers were Maybank that rose 12 sen to RM8.25, Sime Darby up 10 sen to RM7.86, PPB Group and Axiata up eight sen each to RM16.98 and RM4.50, while CIMB was up seven sen to RM7.92.

BAT rose 58 sen to RM44.40, Tradewinds up 20 sen to RM3.73, HELP gained 16 sen to RM4.01, Hartalega up 15 sen to RM7.78 and Hap Seng up 12 sen to RM2.77.

Putrajaya Perdana was the top loser this morning and fell 39 sen to RM3.81; LPI Capital fell 32 sen to RM17.88, Nestle down 28 sen to RM39.20, Wah Seong lost 14 sen to RM2.16, BHIC fell 13 sen to RM4.40 while Genting lost 11 sen to RM8.88.

Other losers included Cycle & Carriage, KFCH, DFZ Capital and Mamee.

Supermax 2Q earnings jump 77.9% to RM45.8m

KUALA LUMPUR: Supermax Corp Bhd posted RM45.85 million in earnings in the second quarter ended'' June 30, up 77.9%'' from RM25.78 million a year ago, underpinned by strong revenue growth, cost savings and productivity.

The glove maker said on Thursday, Aug 26 group revenue rose by 24.6% or RM46.34 million to RM234.82 million from RM188.48 million a year ago, on the back of strong global demand for rubber gloves as well as higher selling prices.

'However, despite a challenging operating environment, the group did well to record profitability growth over the corresponding quarter a year ago,' it said.

Supermax said profit before tax and profit after tax rose by 55.8% (RM17.5 million) and 77.9% (RM20.1 million) respectively. The improvement in profitability is attributed to the revenue growth as well as cost savings from higher efficiency and productivity from improved processes and refurbished lines.

It declared dividend of 2.5 sen a share.

#Update* F&N to subscribe 23.08% new Cocoaland shares at RM1.38 each

KUALA LUMPUR: Fraser & Neave Holdings Bhd will subscribe for 39.5 million new COCOALAND HOLDINGS BHD [] shares or 23.08% at RM1.38 each.

This was sharply below Cocoaland's last traded price of RM2.87, based on the announcement made by Cocoaland on Thursday, Aug 26. The acquisition of the shares would amount to RM54.64 million.

'The issue price of RM1.38 was arrived on a negotiated basis,' said Cocoaland. The issue price represents a price-to-book ratio of approximately 1.64 times and 1.57 times over the audited and unaudited consolidated net assets per share of Cocoaland of RM0.84 as at Dec 31, 2009 and 88 sen as at March 31, 2010 respectively.

'Having considered the rationale for the proposed subscription and the benefits from the entry of F&N as a key shareholder of Cocoaland, the board is of the opinion that the issue price is reasonable to Cocoaland,' it said.

Cocaland said the board believed this strategic tie-up with F&N will broaden the group's growth prospects as well as open new horizons in terms of brand building, product and market development for Cocoaland Group.

'The board opines that having F&N as a strategic shareholder will generate greater shareholder value for Cocoaland,' it said.

Nikkei claws up from 16-mth lows; economy worry weighs

TOKYO: Japan's Nikkei average clawed away from 16-month lows on Thursday, Aug 26 buoyed by short-covering after falling more than 500 points over the last week, with buying of futures by long-term domestic investors also providing support.

But gains were capped by increasing uncertainty about when the government might hammer out measures to rein in the strong yen that threatens a fragile economic recovery, after news that Japanese Prime Minister Naoto Kan faces a challenge for party leadership and hence the premiership.

Market players said growing signs of global economic malaise, including disappointing U.S. housing sales data that came out on Wednesday and sent Wall Street sharply lower before U.S. indexes managed to eke out gains, were also weighing on the market.

"There are increasing signs of a slowing global economy, and on top of that you have Japan's situation where it really isn't providing policy to deal with its economic issues," said Kenichi Hirano, operating officer at Tachibana Securities.

"Otherwise, why is the Nikkei performing so poorly? As corporate earnings showed, the economy itself is not doing badly enough to warrant the current stock weakness, but the lack of clarity on the yen's strength is not good."

The benchmark Nikkei edged up 0.3 percent or 27.13 points to 8,872.52 in choppy trade, having ventured into negative territory for part of the morning session, a day after closing at a 16-month low.

The broader Topix was flat at 807.61.

Japanese ruling party powerbroker Ichiro Ozawa is likely to run in a party leadership vote on Sept. 14 in a challenge to Kan, Japanese media said, risking a bitter battle as the government struggles with the strong yen and a slowing economy.

"The fact that Ozawa has said he'll run ... means that whatever Kan might say about policy, the markets won't listen," said Norihiro Fujito, general manager at the investment research and information division of Mitsubishi UFJ Morgan Stanley Securities.

"This also means that no new policy will be able to be enacted until after Sept. 14, which will also make it hard for stocks to rise."

After four days of falls, the Nikkei looks oversold on the technical front, suggesting it might be ready for a rebound.

Its relative strength index (RSI) stood at 33, with 30 and below considered oversold, while its slow stochastic -- a measure of how oversold the market is -- was deep in oversold territory.


But foreign investors, long a key driver of Nikkei moves, remain net sellers, limiting the longer-term outlook.

Orders placed through foreign brokerages prior to the opening showed that they were set to be net sellers of stocks to the tune of 10.3 million shares, while Ministry of Finance data showed that foreign investors sold a net 39.1 billion yen ($462 million) of Japanese stocks last week.

Market players said that long-term domestic investors appear to have bought Nikkei futures on both Wednesday and Thursday, providing an additional boost to the cash market.

Shares of exporters gained, buoyed by short-covering after recent slides and as the yen pulled back slightly from a 15-year high hit against the dollar earlier this week.

Digital camera maker Canon Inc rose 0.7 percent to 3,450 yen and electronics parts maker Kyocera Corp added 1 percent to 7,170 yen. Panasonic Corp gained 1.6 percent to 1,060 yen.

Shares of Parco Co surged 5.1 percent to 645 yen after the department store said it would raise 15 billion yen by issuing convertible bonds to the state-owned Development Bank of Japan to help fund acquisitions and find new locations.

The action prompted a protest from top shareholder and major real estate developer Mori Trust, who told Reuters it may take action to block the deal as it will dilute its stake.

FBM KLCI rebounds in early trade

KUALA LUMPUR: The FBM KLCI rebounded in early trade on Thursday, Aug 26 and briefly crossed the psychologically crucial level of 1,400-points shortly after the opening bell, in line with regional markets following the overnight gains at Wall Street.

At 9.15am, however, it was up 2.27 points at 1,399.24. Gainers led losers by 127 to 40, while 120 counters traded unchanged. Volume was 52.88 million shares valued at RM57.35 million.

Among the early gainers, TRADEWINDS (M) BHD [] added 25 sen to RM3.78, PPB was up 20 sen to RM17.10, HELP International rose 16 sen to RM4.01, Hap Seng was up 10 sen while MNRB gained nine sen to RM2.68.

Mudajaya was up eight sen to RM4.22, Huat Lai seven sen to RM1.18, while Allianz and Ibraco rose six sen each to RM4.22 and RM1.02, respectively.

Among the early decliners were KFCH, Wah Seong, Tenaga, Genting Malaysia and Tanjong. Actives included Mithril, Carotech,Axiata and Compugates.

Axiata active, up in early trade

KUALA LUMPUR: Axiata Group Bhd was among the most actively traded stocks in early trade on Thursday, Aug 26 after its net profit for the second quarter ended June 30, 2010 (2QFY10) rose 9.5% to RM576.81 million from RM526.83 million a year earlier driven by higher profit contribution from Celcom Axiata Bhd in Malaysia and Dialog Axiata PLC in Sri Lanka as well as a one-off gain on disposal of shares in PT XL Axiata Tbk in Indonesia.

At 9.30am, Axiata was up five sen to RM4.47 with 4.12 million shares traded.

PPB up on special, interim dividend

KUALA LUMPUR: PPB GROUP BHD []'s share price advanced on Thursday, Aug 26 after the company announced a special single tier dividend of 65 sen per share and an interim single tier dividend of five sen per share for the financial year ending Dec 31, 2010.

The ex-date is Sept 8.

At 9.30am, PPB was up 20 sen to RM17.10 with 212,000 shares traded.

FBM KLCI stays in positive territory at mid-morning

KUALA LUMPUR: Regional markets advanced marginally on Thursday, Aug 26 after the overnight improvement on Wall Street which saw oversold US stocks being snapped up by investors on bargain hunting.

At Bursa Malaysia, the 30-stock FBM KLCI rose 2.89 points to 1,399.86 at 10.10am. Gainers led losers by 188 to 159, while 197 counters traded unchanged. Volume was 125.09 million shares valued at RM149.02 million.

Among the top gainers, BAT was up 54 sen to RM44.40, HELP International added 16 sen to RM4.01, PPB and Tradewinds were up 14 sen each to RM17.04 and RM3.67 while Hap Seng gained 10 sen to RM2.75.

Meanwhile, Allianz and Lay Hong added nine sen each to RM4.25 and RM1.74, and Axiata up seven sen to RM4.49.

Nestle was the top loser and fell 28 sen to RM39.20, LPI Capital and KFCH lost 10 sen each to RM18.10 and RM10.48, while YTL Cement, Tenaga, Kulim and Genting fell six sen each to RM4, RM8.70, RM8.37 and RM8.93, respectively.

Carotech was the most actively traded counter this morning with 7.3 million shares done. The stock was unchanged at eight sen.

Other actives included Mithril, axiata, XDL, Timecom, Zelan and Compugates.

At the regional markets, Japan's Nikkei 225 was up 0.31% to 8,872.52, the Shanghai Composite Index added 0.39% to 2,606.69, the South Korean Kospi was up 0.45% to 1,742.56 and Singapore's Straits Times Index added 0.15% to 2,930.97.

Taiwan's Taiex fell 0.44% to 7,702.27 while Hong Kong's Hang Seng Index opened 0.2% lower at 20,603.18.

Hwang DBS Vickers Research cautious on market outlook

KUALA LUMPUR: Hwang DBS Vickers Research said although Wall Street made a mild rebound on Wednesday night, where its'' key equity indices were up between 0.2% and 0.8%,'' it suspects there could still be more downside risk for the FBM KLCI.

'On the chart, after falling 8.8-point or 0.6% to halt an eight-day winning streak yesterday, the bellwether is under threat to break below the immediate support level of 1,395 ahead,' it said on Thursday, Aug 26.

On the corporate results, it said Axiata stood out after announcing a better-than-expected performance while revealing an official dividend policy (of a minimum payout of 30%).

More financial announcements will be released on Thursday evening, including from the big cap companies such as Sime Darby, CIMB and the Genting group of companies.

CIMB Research ups CI Holdings target price to RM4.20

KUALA LUMPUR: CIMB Equities Research said CI Holdings' (CIH) record FY6/10 net profit of RM38 million exceeded its forecasts and consensus estimates by 6%.

The research house said on Thursday, Aug 26 that it had underestimated CIH's sales volume growth which kept going, even after the Chinese New Year selling campaign.'' Another pleasant surprise was the full-year DPS of 11 sen, higher than its forecast of 10 sen.

'We raise our EPS forecasts by 5.5% for FY11 and 9.5% for FY12 for higher sales assumptions. We also up our DPS forecast from 11 sen to 12 sen for FY11.

'Our target price goes up from RM3.90 to RM4.20, pegged to an unchanged 20% discount to our 15x target market P/E in view of the stock's relatively low liquidity. CIH remains firmly a BUY,' it said.

CIMB Research maintains Outperform on IJM Corp

KUALA LUMPUR: CIMB Equities Research said IJM Corp's annualised 1QFY3/11 core net profit made 95% of its forecast and 88% of consensus.

It said on Thursday, Aug 26 the performance was broadly in line as subsequent quarters should be stronger. The CONSTRUCTION [] division remained the weakest link as major contracts had been completed in FY10 and new jobs have yet to kick off in a big way.

The margin for earnings before interest and tax (EBIT) ticked up 6.6 percentage points on-year, driven by PLANTATION []s, industries and property.

CIMB Research said IJM remains optimistic that it can top up its order book by RM2 billion by end-2010.

'We think this is achievable and make no changes to our forecast, Outperform call or RM6.65 RNAV-based target price. The main potential re-rating catalyst is project awards,' it said.

OSK Research: Wah Seong 1H results below expectations

KUALA LUMPUR: OSK Research said Wah Seong Corp'' Bhd's' 1HFY10 results were below expectations due to the slower revenue generation across all its division and the delay in the commencement of some of the pipe coating jobs.

Nevertheless, the research house said on Thursday, Aug 26 that it expected a better 2H10 for the company, coming mainly from its pipe coating division as well as engineering division to some extent.

'Downgrading FY11 earnings by 11%. Since FY11 is still five months away, we will be prudent and reduce our FY11 earnings forecast until we see a turnaround of the O&G industry in the later part of 2H10,' it said.

OSK Research had downgraded the stock to Neutral. Its target price was reduced to RM2.40 (previously RM2.71) based on the existing PER of 14 times FY11 earnings following our FY11 earnings downgrade. To-date, the company is still supported by its orderbook of RM1.2 billion.

US stocks rise on bargain hunting; yen eases

NEW YORK: U.S. stocks staged a comeback on bargain hunting after suffering steep early losses on disappointing economic data on Wednesday, Aug 25 while the yen pulled back from a 15-year high on mounting speculation Japanese authorities may intervene to stem the currency's rise.

Wall Street reeled in early trade after the government reported that sales of new U.S. single-family homes fell in July to their lowest level in 47 years and orders of long-lasting manufacturing goods posted their biggest decline in July in 1-1/2 years had driven.

The data, the latest evidence that the U.S. economic recovery is stalling, stoked fears of a double-dip recession and drove down world stocks for a fifth straight day.

Positive momentum grew on Wall Street, however, after the benchmark S&P 500 index, which had sagged as much as 1 percent earlier, bounced back from a breach of the 1,040 level, which is considered a key technical support. All three major indexes rose, breaking a four-day losing streak.

But without underlying support from economic fundamentals, there was little confidence that Wall Street could sustain gains.

"Overall, this is still a very careful market," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. "Until we see a package of decidedly positive data, this market is going to be vulnerable."

Gold rose to an eight-week high as investors sought to traditional safe havens. U.S. Treasuries, which had gained earlier on fears about the economy's path, came under selling pressure as U.S. equities' turned around.

The Dow Jones industrial average was up 19.61 points, or 0.20 percent, at 10,060.06. The Standard & Poor's 500 Index was up 3.46 points, or 0.33 percent, at 1,055.33. The Nasdaq Composite Index was up 17.78 points, or 0.84 percent, at 2,141.54.

World equities measured by the MSCI All-Country World Index dropped 0.57 percent, down for a fifth straight session, and the Thomson Reuters euro zone peripheral index lost 0.29 percent.

In Europe shares declined to a five-week closing low after the Commerce Department reported that sales of U.S. new single-family homes were at the lowest since records began in 1963. And prices fell to the lowest level in more than 6-1/2 years, implying further loss of momentum in the economic recovery.

The data on new-home sales comes a day after a report that showed sales of existing homes dropped by a record rate to a 15-year low.

In addition, Standard & Poor's downgraded Ireland's credit rating, sending a sharp reminder that euro zone economies still face problems managing their debt.

S&P's one-notch cut in Ireland's rating overshadowed a better-than-expected German business morale reading for August from the Ifo think-tank.

"The Ireland downgrade was not too much of a surprise but it is still weighing on sentiment," said Raymond at City Index.

The pan-European FTSEurofirst 300 index of top shares closed 0.8 percent lower at 1,011.35 points.

Miners were among the biggest fallers. BHP Billiton fell 2 percent after it said it was cautious on the short-term outlook and that the economy in China, its biggest customer, would slow from recent highs.

Shares of Allied Irish Banks fell 2.9 percent, following the S&P ratings downgrade on Ireland. S&P cited high costs faced by the government to support ailing financial institutions..


The yen pulled back from 15-year highs against the U.S. dollar on Wednesday on mounting speculation that Japanese authorities may intervene to stem the currency's rise for the first time since March 2004.

Japan has not been immune to the deep global recession, and a strong yen will dampen demand for Japanese exports, offsetting other measures to stimulate the economy.

Japan's Nikkei business daily reported that Japan's Ministry of Finance may intervene on its own to sell yen if speculators drive up the currency. The dollar has lost nearly 9 percent against the yen this year.

Finance Minister Yoshihiko Noda told reporters that recent yen moves were one-sided and Tokyo will respond appropriately when necessary.

In late afternoon trading in New York, the dollar was up 0.8 percent on the day to 84.63 yen, though still within reach of the 15-year low touched on Tuesday, according to Reuters data.

Overall, the dollar was up against a basket of major trading-partner currencies, with the U.S. Dollar Index up 0.10 percent at 83.226 from a previous session close of 83.146. The euro was up 0.25 percent at $1.2655 from a previous session close of $1.2624.

Tokyo's Nikkei average lost 1.7 percent to hit a 16-month closing low on disappointment over the lack of policy action by the authorities to rein in the strong yen.

In the U.S. Treasuries market, the benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 2.54 percent.

The 2-year U.S. Treasury note was down 2/32, with the yield at 0.52 percent. At the longer end of the yield curve, the 30-year U.S. Treasury bond was down 4/32, with the yield at 3.57 percent.

Crude oil prices edged up from a seven-week low and settled higher than $72. U.S. light sweet crude oil rose $1.27, or 1.77 percent, to $72.90 per barrel, while spot gold prices rose $10.55, or 0.86 percent, to $1239.80.

But the Reuters/Jefferies CRB Index was down 0.66 points, or 0.25 percent, at 261.80. - Reuters

#Stocks to watch:* PPB, Sime, IJM, Lion Industries

KUALA LUMPUR: Key markets may trade cautiously on Thursday, Aug 26 despite the marginal improvement on Wall Street overnight which saw some bargain hunting emerging for oversold stocks.

US stocks staged a comeback on bargain hunting after suffering steep early losses on disappointing economic data on Wednesday, while the yen pulled back from a 15-year high on mounting speculation Japanese authorities may intervene to stem the currency's rise.

The Dow Jones industrial average was up 19.61 points, or 0.20%, at 10,060.06. The Standard & Poor's 500 Index was up 3.46 points, or 0.33%, at 1,055.33. The Nasdaq Composite Index was up 17.78 points, or 0.84%, at 2,141.54.

Stocks to watch on Thursday include PPB GROUP BHD [], SIME DARBY BHD [], IJM Corp Bhd and Lion Industries Bhd.

PPB which released its earnings on Wednesday, announced a special single tier dividend of 65 sen per share and an interim single tier dividend of five sen per share for the financial year ending Dec 31, 2010. The ex-date is Sept 8.

Sime Darby will release its fourth quarter results and CIMB Research forecast net profit for FY ended June 30, 2010 to be RM2.616 billion and maintained Neutral recommendation and target price of RM8.15 in recent report. Its forecast assumed no more provisions in 4Q.

Meanwhile, The Edge FinancialDaily reports that IJM Corporation which already has an order book of RM3.6 billion is looking to add another RM2 billion worth of jobs into its stable in the current financial year ending March 31, 2011.

IJM Corp posted a 27% increase in earnings at RM90.05 million for the first quarter ended June 30, 2010 compared with net profit of RM70.82 million a year ago, despite lower earnings from the CONSTRUCTION [] division.

Operating revenues were RM986.08 million, down 15.1% from RM 1.16 billion a year ago. Earnings per share were 6.76 sen versus 5.39 sen.

Lion Industries Bhd staged a turnaround in its financial performance for the financial year ended June 30, 2010, recording net profit of RM363.45 million compared with net loss of RM278.29 million in FY09.

Revenue rose 17% to RM5.18 billion compared with RM4.42 billion.'' Net asset per share was RM3.78.

Axiata Group Bhd's net profit for the second quarter ended June 30, 2010 (2QFY10) rose 9.5% to RM576.81 million from RM526.83 million a year earlier driven by higher profit contribution from Celcom Axiata Bhd in Malaysia and Dialog Axiata PLC in Sri Lanka as well as a one-off gain on disposal of shares in PT XL Axiata Tbk (XL) in Indonesia.

The Edge FinancialDaily also reported that in yet another move that signals more mergers and acquisitions in the food industry, Fraser and Neave Holdings Bhd (F&N) will take up a 23.08% stake in COCOALAND HOLDINGS BHD [], sources say.

Cocoaland is Southeast Asia's largest producer of fruit gummies and one of Malaysia's leading manufacturers of snacks and chocolate products.

F&N and Cocoaland shares are suspended for the announcement.

Other companies which are due to release their earnings on Thursday include CIMB Group Holdings Bhd, Nestle, Mah Sing, SUNRISE BHD [], Bintulu Port and Cocoaland.

Japan govt econ plan to call for BOJ easing - media

TOKYO: Japan's government will urge the Bank of Japan to ease monetary policy further to help salve the pain to the economy from a strong yen, as part of a package of steps to boost growth, the Asahi newspaper said on Thursday, Aug 26.

The government package, expected to be outlined by the end of this month, will stress the need to work increasingly closely with the central bank to deal with rapid rises in the yen that are harming the slowing economy, the paper said.

It will call for more action by the BOJ, saying it "hopes (the central bank) makes its utmost effort" to beat deflation, the paper quoted a draft of the package as saying.

Japanese policymakers have scrambled to talk down the yen, which rose to a fresh 15-year high against the dollar on Tuesday and threatens an export-reliant economy that is already showing signs of moderating.

Prime Minister Naoto Kan is mapping out a series of steps to support growth, such as extending the deadline for subsidies on purchases of energy-efficient electronics.

That is putting pressure on the BOJ to do its part to help the economy.

The BOJ is considering easing monetary policy further at its next rate review on Sept. 6-7 or earlier, with the most likely option an expansion of its cheap fixed-rate loan programme for banks put in place in December, sources said. - Reuters

OSK Research: Lion Industries FY10 net profit above forecast

KUALA LUMPUR: OSK Research said Lion Industries' FY10 net profit of RM363.5 million was 11.6% above its numbers but way above street estimates.

The research house said on Thursday, Aug 26 the impressive results were achieved on the back of improved contribution from its core steel operation as well as commendable performance from other sub-divisions.

'While we remain cautious on FY11, particularly for 1H, of a potential inverse position of higher iron ore pellet and scrap costs vis-''-vis lower selling prices possibly eroding margins, we think there would be a trading opportunity given the robust results plus the stock's still undemanding valuation compared to its peers,' it said.

OSK Research said as such, it maintained its Trading BUY recommendation, with its fair value unchanged at RM2.01.

Wah Seong posts 2Q operating losses of RM6.4m

KUALA LUMPUR: Wah Seong Corp Bhd posted a set of disappointing results in the second quarter ended June 30, 2010, with operating losses of RM6.44 million as it was affected by a decline in contracts in 2009.

According to the notes to the accounts issued on Wednesday, Aug 25, the operating profit of RM55.27 million in the previous corresponding quarter ended June 30, 2009,

Its revenue fell 33% to RM369.74 million from RM551.84 million.'' Pre-tax loss was RM3.74 million compared with pre-tax profit of RM47.37 million. But at net profit level it posted earnings of RM1.7 million, a contrast from the RM29.73 million a year ago.

'The group's revenue for the second quarter and six months period ended June 30, 2010 was RM369.7 million and RM779.4 million respectively, compared with RM551.8 million and RM988.5 million in the corresponding periods in 2009, representing a decrease of 33.0% and 21.2% respectively.

'The decline was mainly due to lower revenue generated in the main divisions as a result of lower number of projects awarded in the market during 2009 which affected performance in the period under review.

'The results before taxation for the second quarter and six months period ended 30 June 2010 was a loss of RM6.4 million and a profit of RM32.0 million respectively compared with a profit of RM55.3 million and RM110.3 million in the corresponding periods in 2009. This was mainly due to the lower revenue generated during the period under review,' it said.

On its outlook, Wah Seong said the general lack of or delay in award of projects experienced in the market during 2009 has affected the Group's performance during the period under review.

However, it said there was now an increase in bidding activities in the market and award of contracts are expected in the medium term. It still expected an overall positive performance for the financial year ending Dec 31, 2010.

#Today's Diary* What to expect on Aug 26, 2010

ZELAN BHD [] AGM at Istana Hotel, KL at 9.30am.

SELANGOR DREDGING BHD [] AGM at Maya Hotel, KL at 9am. Pc at 9.30am.

Cyberview Sdn Bhd hosts the 4th iGREET seminar at Kelab Komuniti Taman Tasik Cyberjaya, Jln Kelag off Persiaran Semarak Api, Cyberjaya at 9.30am.

CIMA organises a GST Dialogue session - The impact and overview of GST of Malaysia at Sime Darby Convention Centre, KL at 10am.

Fraser & Neave Holdings Bhd holds corporate announcement at Perak Room, Basement II, Shangri-La Hotel, KL at 10.30am.

PANTECH GROUP HOLDINGS BHD [] AGM at Ballroom 1, Level 2, Nikko Hotel, KL at 11am.

ALUMINIUM COMPANY OF MALAYSIA [] Bhd AGM at Armada Hotel, PJ, Selangor at 2.30pm.

CIMB Group Holdings Bhd financial results for the first half 2010 at Auditorium, Bangunan CIMB, Jln Semantan, Damansara Heights, KL at 4.30pm.

Wednesday, August 25, 2010

Lion Industries stages turnaround, net profit RM363m for FY10

KUALA LUMPUR: Lion Industries Bhd staged a turnaround in its financial performance for the financial year ended June 30, 2010, recording net profit of RM363.45 million compared with net loss of RM278.29 million in FY09.

It said on Wednesday, Aug 25 that revenue rose 17% to RM5.18 billion compared with RM4.42 billion.'' Net asset per share was RM3.78.

'Profit from operations increasing by RM443 million to RM449 million from RM6 million. The significant improved performance was mainly attributable to better demand for the steel products and the consolidation of the full year's results of the local tyre manufacturing operations as compared to seven months in the preceding year corresponding period,' it said.

Lion Industries said after accounting for higher profit'' from associated companies, lower finance costs and a gain on partial disposal of shares in an associated company of RM24 million, the group posted'' a profit before tax of RM512 million against a loss of RM375 million in the preceding year corresponding period.

For the fourth quarter ended June 30, 2010, it posted net profit of RM121.57 million compared with net loss of RM80.37 million. Revenue was RM1.39 billion compared with RM835.41 million. Earnings per share were 17.01 sen versus loss per share of 11.27 sen.

IJM Corp 1Q earnings up 27% to RM90.05m

KUALA LUMPUR: IJM Corp Bhd posted a 27% increase in earnings at RM90.05 million for the first quarter ended June 30, 2010 compared with net profit of RM70.82 million a year ago, despite lower earnings from the CONSTRUCTION [] division.

IJM Corp said on Wednesday, Aug 25 that operating revenues were RM986.08 million, down 15.1% from RM 1.16 billion a year ago. Earnings per share were 6.76 sen versus 5.39 sen.

'Whilst construction works at new major projects such as the Grand Hyatt in Kuala Lumpur and new India projects are expected to go full-swing later in the current financial year, the delays in some of the works of overseas projects and the substantial completion of major construction projects in the 4th quarter of the last financial year were the primary contributory factors towards the decline,' it said.

IJM Corp said lower selling prices and deliveries of building materials also resulted in the group's industry division reporting a 19.8% decline in revenue.

However, operating profit before tax for the current quarter rose by 44.6% to RM179.06 million compared to RM123.86 million due to higher profits posted by the group's property, PLANTATION [] and infrastructure divisions.

These divisions reported higher profits, boosted by property sales, higher crude palm oil prices and added contribution from the group's 20%-owned Gautami Power Plant in India that was commissioned in June 2009 respectively.

Dubai World eyes sale of prized assets to cut debt

DUBAI: Dubai World plans to sell its prized assets over a period of eight years to generate as much as $19.4 billion to pay off creditors burned by its overambitious expansion, according to a restructuring document obtained by Reuters on Wednesday, Aug 25.

The state-owned conglomerate told creditors at a July 22 meeting, held at Dubai's lavish Atlantis Hotel, that its capital structure was inappropriate and needed "urgent" restructuring, according to the document handed out at the meeting.

Dubai World, the conglomerate with investments in global luxury hotels to theme parks, said in the document asset disposals over an eight-year period will help generate up to a maximum of $19.4 billion, while similar sales based on current prices would be worth a maximum of $10.4 billion.

It projected mid-point disposal proceeds of $17.6 billion.

"DW (Dubai World) lender recoveries (will be) significantly enhanced if DW is given time to rebuild and realize value over a five to eight year horizon," the document said.

Also, in a sign of the deep overhaul that Dubai World has committed to, the company will appoint a new managing director and chief financial officer.

However, Aidan Birkett, the officer-in-charge of its restructuring will remain in place until December.

Dubai World is restructuring billions of dollars in debt. The government has agreed to take a hit on its claims against the firm, leaving $14.4 billion in bank debt outstanding.

The company's plans involves repayment over five to eight years, with interest of between 1 percent to 3.5 percent.

Dubai World's document shows the company proposed to dispose of its "investment assets", including its stakes in luxury retailer Barney's, Dubai-based Atlantis Hotel, a lavish pink palace perched at the seaward tip of its island development and casino operator MGM Resorts International, over a period of five years.

Dubai World's private equity arm, Istithmar which owns most of the overseas assets, is expected to raise up to $4.5 billion over a five year period.

It has identified ports operator DP World, Jebel Ali Free Zone and Dubai Maritime City (DMC) and Dry Docks World as its "strategic assets" which may generate up to $11.8 billion when put on sale over a period of eight years. - Reuters

KLCI snaps 8 straight days of gains

KUALA LUMPUR: Blue chips snapped their eight straight day of gains on Wednesday, Aug 25, as bearish external news and worries of slowing economic growth in the US weighed down sentiment.

Glove makers fell on concerns a stronger ringgit could impact their exports in the short-term.

Analysts also said the weakening broader market in recent days, despite the late buying on key stocks, had already reflected the cautious mood.

At Bursa Malaysia, the FBM KLCI fell 8.8 points on 0.63% on late selling, pushing the 30-stock index down to end the day at 1,396.97. Turnover was 873 million shares valued at RM1.73 billion. The broader market saw declining stocks beating advancers 585 to 186 while 268 stocks were unchanged.

Crude palm oil futures fell RM20 to a near one-month low of RM2,490. Light crude oil rose eight sen to US$71.71.

Among key Asian markets, Taiwan's Taiex fell the most, down 2.56% to 7,736.96 while Japan's Nikkei shed 1.66% to 8,845.39, Hong Kong's Hang Seng Index shed 0.11% to 20,634.98 but Singapore's Straits Times Index inched up 0.13% to 2,926.55.

Meanwhile, European stocks lost ground on Wednesday morning, adding to the previous session's sell-off on mounting economic fears and after Standard & Poor's cut Ireland's credit ratings.

At Bursa Malaysia, BAT fell the most, down 76 sen to RM43.86 in late selling with 22,100 shares done. Lafarge Cement lost 16 sen to RM6.95 while RHB Cap, HELP and MISC shed 15 sen each to RM6.58, RM3.85 and RM8.75 respectively.

Among glove makers, Hartalega lost 20 sen to RM7.63, Supermax and Latexx-WA 16 sen each to RM5.07 and RM2.65.

Ireland stung by S&P downgrade

DUBLIN: Ireland's financial headache worsened on Wednesday, Aug 25 after Standard & Poor's cut its credit rating in a move criticised by the country's debt management agency.

In a strongly worded statement, the National Treasury Management Agency said it disagreed with S&P's view that Ireland faced substantially higher costs to bail out its ailing banking sector.

"In terms of the specific analysis by S&P, this is largely predicated upon an extreme estimate of bank recapitalisation costs of up to 50 billion euros," the NTMA said.

"We believe this approach is flawed."

Concerns over the final bill for purging Irish banks of bad debts clocked up in a decade-long property binge have pushed Ireland back to the centre of the European debt crisis and it is viewed as the second riskiest euro zone country after Greece.

The premium investors demand to hold Ireland's 10-year bonds over German bunds'' has been steadily widening in the past few weeks and remained elevated at 327 basis points on Wednesday.

The spread finished at 330 bps on Tuesday, its highest level since the Greek financial crisis broke in May. - Reuters

#Flash* KLCI slips below 1,400, Europe, Asian mkts in the red

KUALA LUMPUR: Most key Asian markets and European bourses were in the red in late afternoon on Wednesday, Aug 25 as investors turned cautious on growing worries about an economic slowdown.

At 3.06pm, the FBM KLCI was down 8.61 points to 1,397.16. Turnover was 1,397.16. Turnover was 531 million shares valued at RM969 million. There were 104 gainers, 638 losers and 205 stocks unchanged.

The FTSE 100 was down 1.5% to 5,155.95; the CAC 40 fell 1.74% to 3,491.11 and DAX 1.25% lower at 5,935.44.

Among Asian markets, Japan's Nikkei 225 fell 1.66% to 8,845.39; Hong Kong's Hang Seng Index lost 0.66 % to 20,523.53 while Shanghai's Composite Index shed 1.92% to 2,599.53. Singapore's Straits Times Index was also in the red, down 0.27% to 2,915.08.

At Bursa, KFCH fell 28 sen to RM10.42, F&N 24 sen to RM14.30, KLK 18 sen to RM16.74, RHB Cap 16 sen to RM6.57 and MISC 15 sen to RM8.75.

Glove makers also fell, with Hartalega down 25 sen to RM7.58, Latexx-WA 22 sen to RM2.59 and Supermax 18 sen down to RM5.05.

Agribusiness equities to grow in long term

KUALA LUMPUR: Agribusiness is expected to continue on an upward trend in the long-term as growing global population and limited agricultural land lead to increase demand for commodities and consumer products, said Deutsche Asset Management (Australia) Ltd.

Its director Bill Barbour said on Wednesday, Aug 25 that the global agribusiness - which encompasses everything from agricultural commodities to consumer products - will grow in the long-term, 'even though we see some volatility in the short-term due to its cyclical nature'.

'However, inevitable factors such as the diminishing agricultural land and global would drive increasing demand for food across the chain,' he said at a briefing on 'How food scarcity makes compelling investment opportunities' organised by AmInvestment Bank Group.

#Updated* Axiata 2Q net profit up 9.5% at RM576.82m

KUALA LUMPUR: Axiata Group Bhd registered net profit attributable to ordinary equity holders of the parent of RM576.82 million, up 9.5% from RM526.84 million a year ago following improvements in all major operating companies and it also announced a dividend policy of at least 30% of its earnings.

It announced on Wednesday, Aug 25 that net profit was up 18.1%'' at RM675.51 million versus RM571.91 million a year ago. Revenue was RM3.85 billion compared with RM3.21 billion. Earnings per share were seven sen.

It said strong growth trends were seen across all major operating companies, again in almost all financial metrics. Revenue was up an impressive 20% year-on-year'' to RM3.9 billion from continuous overall performance from most operating companies (OpCos), particularly, Celcom, XL, Dialog'' and Robi.

'More substantially, earnings before interest, tax, depreciation and amortisation (EBITDA) grew by an impressive 38% in the same period to RM1.8 billion, outpacing revenue, partly due to strategic cost initiative programmes implemented early last year,' it said.

Axiata said EBITDA margin improved 6.3 percentage points to 47% on-year. Profit after tax and minority interest was up by 9% on-year to RM577 million.

Regional mobile subscribers for the group saw strong growth up 39% on-year to 138 million.

Axiata also announced its dividend policy where it 'intends to pay dividends of at least 30% of its consolidated profits after taxation attributable to shareholders'.

It added that it would endeavour to progressively increase the payout ratio over a period of time, subject to a number of factors including business prospects, capital requirements and surplus, growth/expansion strategy, considerations for non-recurring items and other factors considered relevant by the board.