Saturday, September 18, 2010

Dr M: Proton in no hurry to merge

KUALA LUMPUR: PROTON HOLDINGS BHD [] is financially stable and sees no hurry in merging with other car manufactures, according to its adviser Tun Dr Mahathir Mohamad.

"Financially, Proton is still okay. We too are not very anxious to merge at this moment,' the former premier told reporters after launching First Sovereign Advisory Sdn Bhd on Friday, Sept 17.

Dr Mahathir was asked to comment on the national carmaker's possible plan for merger after recent news report stated that DRB-Hicom was not actively looking to acquire a stake in Proton.

It was reported in late 2009 that DRB-Hicom had put in a bid to acquire 32% stake in Proton.

Dr Mahathir also said the national carmaker was in the midst of restructuring and would only be to''assess the value of its assets later on.

Last month, Perusahaan Otomobil Kedua Sdn Bhd (Perodua) said any merger with Proton was premature as Perodua has never been officially notified of such talks. However, Perodua stressed it welcomed any form of collaboration with Proton.

Prime Minister Datuk Seri Najib Tun Razak had mooted the idea of consolidation in the local automotive industry in July if there was overcapacity in the industry.

China bank regulator says no fresh property tightening

BEIJING: Chinese authorities are closely monitoring trends in the real estate market and are not yet planning fresh tightening steps, a banking regulatory official said in remarks published on Saturday, Sept 18.

Worries about further measures to curb speculation and rein in the red-hot property industry have weighed heavily on the domestic stock market, especially as there have been signs of a rebound in both transactions and prices recently.

China rolled out a slew of measures in April to make it harder for people to buy second or third homes, such as raising minimum down payments on mortgage loans.

"Up until now, our main efforts are focused on increasing oversight and strengthening credit policies for the property sector. We do not have any plans to issue new regulatory steps at the moment," the China Business News cited Jiang Dingzhi, deputy chairman of the China Banking Regulatory Commission, as saying.

Home buyers are "playing games" with property firms and some developers are confronted with slow sales and difficulties in quickly replenishing their cash flows, Jiang told reporters on the sideline of a forum in Shanghai, without elaborating. - Reuters

U.S. core CPI flat, deflation fears linger

WASHINGTON: Underlying U.S. inflation pressures were muted in August and consumer morale hit a 13-month low this month, keeping fears of deflation alive and spurring bets on further monetary easing.

Consumer prices rose 0.3 percent last month as food prices rebounded and energy costs marched higher, the Labor Department said on Friday, Sept 17. But core prices, which ignore volatile food and energy costs, were unexpectedly flat.

Bond traders pushed up prices for U.S. government debt on speculation the Federal Reserve would eventually have to resume large-scale debt purchases to spur the economy and keep the risk of a downward spiral in prices at bay.

The data was not so weak, however, to build a case for a surprise easing when the U.S. central bank meets on Tuesday.

"It keeps alive the possibility that the (inflation) trend could turn negative over the next year or two, but the numbers are not weak enough to encourage them to start a new purchasing program next week," said Jim O'Sullivan, chief economist at MF Global in New York.

Financial markets had expected the core Consumer Price Index to edge up 0.1 percent, with the overall index posting a 0.2 percent gain.

Another report showed consumer sentiment deteriorated in early September. The Thomson Reuters/University of Michigan's preliminary September reading on consumer sentiment moved down to 66.6, the weakest reading since August 2009, from 68.9 in August.

The data helped keep a lid on stock prices, which ended flat, despite solid earning from TECHNOLOGY [] bellwether Oracle Corp and Research in Motion .

The U.S. dollar rose against the euro as investors turned more risk averse and fears of intervention by Japanese authorities kept it near a one-month high versus the yen.


Although recent data have pointed to some improvement in domestic demand, it remains tepid. Weak demand and a 9.6 percent unemployment rate are expected to keep inflation pressures under wraps, with some economists continuing to worry prices could eventually begin a troubling downward slide.

Jobs scarcity helped to push household wealth down $1.5 trillion in the second quarter to $53.5 trillion, well below the $64.2 trillion reached at the end of 2007 just as the U.S. economy began tumbling into recession, Fed data showed. [ID:nN17159910]

Many analysts believe the Fed will resume large-scale purchases of longer-term U.S. government bonds in coming months in an effort to keep borrowing costs low, but the policymakers who gather on Tuesday differ on the wisdom of a further easing in monetary policy and what threshold should be met before taking action.

The central bank already has cut overnight interest rates to near zero and pumped more than $1.7 trillion into the economy with purchases of Treasury and mortgage-related debt.

"We expect the Fed to formalize the bias toward easing, but they will probably wait until November to initiate balance sheet expansion," said Yelena Shulyatyeva, an economist at BNP Paribas in New York.

In the 12 months to August, the overall CPI rose 1.1 percent, a touch less than the 1.2 percent increase through July. The year-on-year core rate was up only 0.9 percent for a fifth straight month.

Flat housing costs and weak prices for apparel dampened the core CPI in August. Some economists said a decline in rental costs was surprising, given that vacancies were no longer rising, and said deflation fears were overdone.

"The period of disinflation in core consumer prices has largely run its course," said Peter Newland, an economist at Barclays Capital in New York.

"We doubt that the declines in rents, lodging away from home and apparel, which tipped the balance toward a flat core will persist. The chances of outright deflation in the core CPI remain small."

Despite lackluster demand, the auto sector is still managing to push through more price increases. New vehicle prices increased 0.3 percent last month, the largest gain since November. Prices for used cars and trucks increased 0.7 percent. - Reuters

Oracle lifts Nasdaq as options expiration arrives

NEW YORK: The Nasdaq rose on Friday, Sept 17 after reassuring earnings and an upbeat outlook from Oracle, with the broader market flat as the traditional trading volatility expected by the expiration of options failed to materialize.

Oracle Corp, the world's No. 3 software maker, jumped 8.3 pct to $27.46, and led the Nasdaq higher after it posted better-than-expected results and gave an outlook that topped Wall Street's forecasts.

The close of trading on Friday marked the quarterly expiration of September equity futures and option contracts, a convergence known as "quadruple witching," which tends to increase volume and swings in trades. Strategists said trading was relatively subdued, however, heading into the close.

"A lot of folks were surprised -- they were hoping they might get a little more volatility due to the quadruple witching and maybe that might create some trading opportunities, but they've been disappointed," said Bernie McSherry, director of strategic initiatives at Cuttone & Company in New York.

"The market has been fairly flat and volume has not really been up to levels that people were hoping for."

The S&P 500 managed to overcome briefly key technical resistance around 1,130, pushing through intraday highs from June and August. A decisive move above that level on solid volume would be a bullish sign.

The Dow Jones industrial average gained 13.02 points, or 0.12 percent, to 10,607.85. The Standard & Poor's 500 Index added 0.93 points, or 0.08 percent, to 1,125.59. The Nasdaq Composite Index climbed 12.36 points, or 0.54 percent, to 2,315.61.

For the week, the Dow rose 1.4 percent, the S&P 500 gained 1.5 percent and the Nasdaq gained 3.3 percent.

Support for the S&P 500's 200-day moving average remains around 1,116, a level it vaulted on Monday.

Texas Instruments Inc gained 3 percent to $25.73 after the chipmaker increased its stock repurchase program and boosted its quarterly dividend by 8 percent.

Research in Motion Ltd advanced 0.3 percent to $46.64, giving up most of its early gains as analysts mostly cut share price targets for the BlackBerry maker, focusing on tough competition and a weak U.S. performance rather than RIM's robust results.

The option expirations meant options trading had its busiest day in a year on Thursday, led by a surge in call trades. The total put-to-call ratio, often used to gauge market sentiment, fell to its lowest level since Dec. 24, 2009, according to Scott Fullman, director of derivative investment strategy at WJB Capital Group.

Volume was light with about 8.3 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE by three to two, while on the Nasdaq, advancers beat decliners about four to three. - Reuters

Gold sets new all-time peak as stocks waver

NEW YORK: Global stocks wavered and oil prices sank on Friday, Sept 17 after a worse-than-expected reading of U.S. consumer sentiment pricked optimism over upbeat earnings from Oracle, while gold prices hit a third high for the week.

Gold surged to an all-time peak of $1,282.75 an ounce in European trading on speculation the U.S. Federal Reserve may move to increase the money supply in an effort to boost growth and stave off a possible slide back into recession.

The weak U.S. consumer data and fresh worries over European debt hurt the euro and enhanced the dollar's safe-haven appeal. The yen fell near a one-month low against the U.S. dollar on worries that Japan will again intervene in currency markets after its first entry in six years on Wednesday.

Although other data showed muted U.S. inflation in August, the slide in consumer sentiment to a 13-month low in the first part of September kept fears of deflation alive and supported safe-haven assets such as U.S. Treasuries.

"I'm not surprised to see the market struggling a bit on this," Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto, said of the consumer sentiment report. "It plays into the uncertainties about what a sustainable recovery would look like."

Major stock indexes meandered around break-even for much of the day, with MSCI's all-country world index ending flat for the day.

Wall Street opened sharply higher, with the benchmark S&P 500 Index breaking through a June 21 intraday high after bellwether Oracle Corp reported better-than-expected results and an upbeat outlook late Thursday.

The benchmark S&P 500 briefly overcame technical resistance around 1,130 to push through intraday highs set in June and August. But a decisive move above that level, which on solid volume would be a bullish sign, did not happen.

"We're in a period right now where the market is correcting down from its highs," said Marty Mitchell, head of government bond trading at Stifel Nicolaus in Baltimore. "And absent this type of external European events, the market feels like it wants to try to correct a little bit lower."

The Dow Jones industrial average closed up 13.02 points, or 0.12 percent, at 10,607.85. The Standard & Poor's 500 Index added 0.93 point, or 0.08 percent, to 1,125.59. The Nasdaq Composite Index climbed 12.36 points, or 0.54 percent, to 2,315.61.

U.S. crude oil futures ended with their worst weekly percentage loss in five weeks after being pummeled earlier in the week by the expected restart of a major crude pipeline from Canada into the United States.

U.S. crude for October delivery fell 91 cents, or 1.22 percent, to settle at $73.66 per barrel. The contract expires on Tuesday.

U.S. November crude fell 82 cents, or 1.08 percent, to settle at $74.63 a barrel and ICE Brent for November fell 37 cents to $78.11 at 2:43 p.m. EDT (1843 GMT).

U.S. government debt prices rose.

The benchmark 10-year U.S. Treasury note was last up 5/32 in price to yield 2.74 percent.

The dollar, which fell to a 15-year low beneath 83 yen before Japan intervened on Wednesday, was up 1.8 percent against the yen for the week, its best week since late April.

On Friday, it was unchanged at 85.78 yen, while the euro was down 0.2 percent at $1.3041, well off a session peak of $1.3159.

U.S. December gold futures settled up $3.70 at $1,277.50 an ounce.

Copper rose to a 4-1/2 month high as falling inventories and reassuring comments from China's central bank on monetary policy boosted industrial metals.

Overnight in Asia, the Nikkei share average rose 1.2 percent, capping a 4.2 percent gain for the week that was the biggest weekly advance since December 2009, after intervention in the yen brightened the prospects of exporters.

MSCI's index of Asia-Pacific shares outside Japan rose 1.0 percent. - Reuters

Wall St critic Warren to shape consumer watchdog

WASHINGTON: President Barack Obama named Wall Street critic Elizabeth Warren on Friday, Sept 17 to oversee creation of a new consumer financial protection agency, drawing praise from liberals and an outcry from Republicans and the financial industry.

Obama announced Warren as a special adviser to steer the new agency's establishment, not as its director, allowing him to avoid a bitter Senate confirmation fight. Republicans accused him of circumventing congressional oversight.

Calling Warren "one of the country's fiercest advocates for the middle class," Obama made clear the outspoken Harvard University professor would take the lead in shaping the powerful new watchdog, a centerpiece of the sweeping regulatory overhaul he signed into law in July.

"From now on, consumers will ... have a tough, independent watchdog whose job it is to stand up for their financial interests, for their families' future," Obama said in the White House Rose Garden with Warren at his side, as he highlighted her working-class roots as a janitor's daughter.

With congressional elections looming in November, the White House hopes Warren's appointment will have populist appeal to voters resentful of Wall Street excesses, seen as a key cause of the deepest U.S. economic downturn since the Great Depression.

But the financial industry and many Republicans opposed Warren's selection, worried that she will bring a heavy-handed regulatory approach that could crimp business profits and global competitiveness.

The Consumer Financial Protection Bureau, which is Warren's brainchild, will have broad powers to write and enforce rules covering mortgages, credit cards and other consumer financial products.

She has until July 2011 to get the agency up and running, according to a federal government notice.

Warren, 61, becomes an assistant to the president and special adviser to Treasury Secretary Timothy Geithner. Obama said she would have direct access to him.

"She will also play a pivotal role in helping me determine who the best choice is for director of the bureau," Obama said. The White House said Obama hopes to name the agency's chief in the next several months but declined to say whether Warren would be a candidate.


Warren, whose grandmother drove a wagon in the Oklahoma land rush, said in a White House blog post that the new agency would act as a "tough cop on the beat" and declared that the time for financial "tricks and traps" was over. She did not speak at the Rose Garden ceremony.

Supporters hailed her appointment.

"I would like to congratulate American consumers, because nothing could be better news for them in terms of being protected in financial matters like home mortgages, bank accounts, and credit cards," said Representative Barney Frank, Democratic chairman of the House Financial Services Committee.

Warren's critics saw her appointment differently.

"The Obama administration's first priority should be ensuring that our financial institutions are operated in a safe and sound manner," Republican Congressman Spencer Bachus said. "Instead they resort to a calculated political ploy to appoint a passionate, but inexperienced, advocate to run a new agency with unprecedented power."

Matt McCormick, a portfolio manager and banking analyst with Bahl & Gaynor, said Warren's appointment was more political than focused on correcting financial industry ills.

"I really doubt she will have the ability to bring people together considering the political nature of her appointment. It is troubling," said McCormick.

There is also potential for friction with Geithner, whom Warren clashed with when she headed the watchdog agency overseeing the government's $700 billion financial bailout program.

But Geithner attended her appointment ceremony and, in a statement issued later by the White House, praised her as a consumer protection pioneer.

While she may have the president's ear, there are questions about whether bypassing the confirmation process will put legal constraints on what she can accomplish.

The U.S. Chamber of Commerce slammed the method of her appointment "an affront to the pledge of transparency and consumer protection."

Obama used Friday's announcement to underscore financial reform -- an effort Republicans and Wall Street largely opposed and voters have mostly ignored as they fret over a rough economy saddled with near double-digit unemployment.

The White House hopes Warren's appointment will not only appeal to the middle class but also help energize the president's liberal base before the Nov. 2 election, when his Democratic Party faces the threat of big losses in both chambers of Congress.

Friday, September 17, 2010

SE Asia Stocks-Jakarta at all-time high; Manila slips from peak

BANGKOK: Indonesian stocks hit an all-time high on Friday, Sept 17 on strong blue chips and commodity shares, while the rest of Southeat Asia ended mixed after a strong week marked by brisk foreign buying.

Indonesia's benchmark index, Asia's second-best performer this year, rose 1.3 percent, setting a record high for a seventh straight session.

Foreign investors bought for a sixth straight session, bringing total foreign inflows to nearly $2 billion -- double the total for all of last year. Indonesia was Southeast Asia's best performer in the holiday-shortened week.

"Sentiment was positive, especially for commodity stocks, as the dollar weakened against the rupiah. Foreign inflows are likely to continue next week, which will support stock prices," said John Teja, director of Ciptadana Securities.

Gainers included PT Aneka Tambang Tbk, a diversified mining and metals company, which rose 2.2 percent, and PT Indocement Tunggal Prakasa, the second-biggest cement producer by capacity, which gained 5.8 percent.

Singapore fell 0.4 percent but still hovered near a two-year high. Malaysia edged 0.13 percent lower but at one point touched its highest in 2-'' years. Thailand lost 0.13 percent and the Phillippines shed 0.7 percent after an early rise to a record high.

Vietnam rose 1.8 percent, adding to a 0.2 percent gain the previous session.

Foreign investors bought $111.4 million in Philippine shares this week, but just $1.27 million of Thai stocks, which saw outflows of $33.16 million on Friday, exchange data showed.

In Bangkok, shares in the top three telecom firms plunged after a court froze an auction for third-generation mobile phone licences, threatening a big delay to reforms that were expected to lure more foreign players.

Shares in True Corp Pcl, which owns third-largest mobile operator True Move, fell 25 percent, market leader Advanced Info Service Pcl (AIS) fell 8.7 percent and second-ranked Total Access Communication Pcl lost 14.3 percent.
Singapore-listed Total Access fell 2.8 percent. - Reuters

Malaysian Trustees seeks meeting of Selangor water industry players, bondholders

KUALA LUMPUR: Malaysian Trustees Bhd is convening a meeting for the Selangor water industry players and bondholders on Sept 24 in a move to resolve the'' impasse in the sector and concerns of operating environment uncertainties.

Such a resolution has become more urgent after the Selangor water players recently saw their debt issuances downgraded by both Malaysian Rating Corp Bhd (MARC) and RAM Rating Services Bhd who also warned further multiple-notch downgrades.

PUNCAK NIAGA HOLDINGS BHD [] (PNHB) said on Friday, Sept 17, it was informed by Malaysian Trustees the meeting was for all the Selangor water concessionaire holders, operators and bond issuers.

Also included in the meeting would be the term loan borrowers -- Syarikat Bekalan Air Selangor Sdn Bhd (Syabas), Puncak Niaga Holdings Bhd (PNHB), Konsortium ABASS Sdn Bhd and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH)

The meeting is scheduled to be held at Menara Prudential, Jalan Sultan Ismail, on Sept 24 at 3pm.

Malaysian Trustees, which is the trustee for the holders of PNHB's RM546.87 million debt notes and 109.37 million warrants, issued a notice of collective bondholders' informal meeting on Wednesday, Sept 15.

The agenda sought by Malaysian Trustees include 'the impact of the current situation in the water sector on water treatment operators' cash flow; and the course of action or actions to be taken by the bondholders/lenders to resolve the situations'.

On Sept 8, the Selangor water players yesterday saw their debt issuances downgraded by both Malaysian Rating Corp Bhd (MARC) and RAM Ratings on the back of operating environment uncertainties.

Syabas, Puncak Niaga (M) Sdn Bhd (PNSB), PNHB, RUN Holding SPV Bhd (RUNH), SPLASH, Viable Chip (M) Sdn Bhd (VCSB) and Titisan Modal (M) Sdn Bhd (TMSB) were downgraded by MARC, while RAM downgraded SPLASH and Taliworks Corp Bhd's subsidiaries Destinasi Teguh Sdn Bhd and Sungai Harmoni Sdn Bhd.

Both rating agencies had cautioned that in the absence of meaningful progress in the industry's restructuring and negotiations, further multiple-notch downgrades were likely by end-2010.

MARC said urgent intervention on the part of the federal and the Selangor state governments was required to prevent a freefall of the current ratings in the following months.

The Edge Financial Daily had reported on Sept 6 that bondholders of Selangor water companies had met in a closed-door session with Pengurusan Aset Air Bhd (PAAB) to discuss issues relating to the consolidation of the state's water industry.

The bondholders were feeling jittery as some of the bonds issued by the water concessionaires in Selangor were undergoing technical defaults, as witnessed by yesterday's downgrading by both MARC and RAM.

The main issue faced by them is that Syabas' 37% tariff hike was not implemented as agreed upon. This has affected the cash flow of the water companies in the state.

First Sovereign Advisory to ink more strategic agreements soon

KUALA LUMPUR: First Sovereign Advisory Sdn Bhd (FSA) is geared to ink a host of strategic partnership agreements with selected financial institutions in the next 12 months to provide a platform for financial planning products and services with Islamic values.

Its chief executive officer Anuar Shuib said FSA had partnership agreements in the pipeline and as it sought to provide the financial planning services for various sectors and cater for different clients' needs.

'There will be many more agreements. We will have a few with the trustees, a few with the insurance companies and also takaful,' he told a press conference after the official launch of FSA by former prime minister Tun Dr Mahathir Mohamad on Friday, Sept 17.

FSA is the first Islamic values based financial adviser licensed by Bank Negara and the Securities Commission.

Anuar said the company's strategic agreements with Hong Leong Tokio Marine Takaful Bhd (HLTM Takaful) and iFast Capital Sdn Bhd would enable HLTM Takaful to offer FSA's clients takaful products while iFast Capital was setting up the unit trusts platform.

FSA's primary role, he said, was to provide an efficient platform for its financial advisor representatives (FARs) and Capital Markets Services Representative Licence (CMSRL) by providing a 'plethora of unique products and services' via strategic partnerships.

A bumiputera company, Anuar said FSA's business model was based on a fair sharing formula between FSA and the FAR and/or CMSRL which would translate into a 'win-win' formula that was proven worldwide in bringing financial planning to the community.

He noted FSA was taking a step forward by using Islamic values in its practice to ensure clients were served 'fairly and equitably' in their financial affairs, adding ethics and conduct were among the important principles in Islamic values.

At the retail level, he said FSA could have specialised financial plans for their clients.

'As an Islamic values based financial adviser, we also give Muslim clients financial advice from a Shariah perspective, which is an FSA unique selling proposition,' Anuar pointed out.

"We offer prudent financial planning with an array of other related services like portfolio management and tax planning to our clients," he said.

At the corporate level, Anuar said there was a renewed focus on the importance of company financial planning. He said there were lessons to be learned from the recent global financial crisis and that companies were more aware of prudent financial management.

'Corporations now realise that there is more to be achieved when practising sound financial planning rather than avoiding it,' he added.

MHC raises stake in Cepatwawasan to 37.01%

KUALA LUMPUR: MHC PLANTATION []S BHD [] has increased its stake in CEPATWAWASAN GROUP BHD [] to 37.01% after it acquired 4.2 million shares or 1.99%.

MHC said on Friday, Sept 18 that iit had acquired the shares on Sept 15 for a total of RM4.59 million.

Cepatwawasan's share price closed at 96.5 sen that day.

DHL to lease Atrium Puchong until 2014, says Atrium REIT

KUALA LUMPUR: Atrium REIT's manager Atrium REIT Managers Sdn Bhd said DHL has confirmed that it would renew the lease of Atrium Puchong for four years until September 2014.

It said on Friday, Sept 18 DHL's current agreement was expiring the next day.

The relevant documentation for the renewal of lease would be signed by both parties in due course, said Atrium REIT Managers.

Naim Holdings MoU for Gaddafi Tower construction lapses

KUALA LUMPUR: NAIM HOLDINGS BHD []'s plans to set up a joint venture to design and build a 50-storey tower known the Gaddafi Tower in Tripoli, Libya has come to a halt after the memorandum of understanding (MoU) lapsed.

Its unit NCSB Engineering Sdn Bhd and Al-Waatasemu Charity Foundation (WCF) had signed the MoU on July 16 this year.

CONSTRUCTION [] of Gaddafi Tower was to have been on a 11,200 sq metre site in the Tripoli City Centre, Libya, which is owned by WCF.

Under the terms of the MoU, it would lapse upon the execution of a formal contract of joint venture for the project proposed to be signed on or before Sept 1, 2010.

'After detailed investigations and feasibility studies and further negotiations with WCF, the company now wishes to inform that the MoU which expired on Sept 1, 2010 has not been extended and both parties have mutually agreed to treat the MoU as terminated,' Naim said on Friday, Sept 17.

Late profit taking on Tenaga, Sime

KUALA LUMPUR: Late profit taking on key heavyweights including TENAGA NASIONAL BHD [] and Sime Darby pushed the key index into the red on Friday, Sept 17 despite the firmer broader market and key regional markets.

The FBM KLCI closed 5.98 points down at 1,466.97. Turnover was 967.54 million shares done valued at RM1.91 billion. Advancing counters beat decliners 446 to 296 while 268 counters were unchanged.

Market sentiment remained firm despite the intermittent profit taking on stocks which had a strong run-up in recent weeks.

The 30-stock KLCI is up 15.26% year-to-date, making it the fourth best performer in Asia. Over the past week, the KLCI had risen 29.19 points, underpinned by the strengthening ringgit and it is above analysts' earlier forecast of 1,450.

A foreign research house said with market up 15.26% year-to-date (27.79% in US dollar terms), and valuations are no longer a bargain.

'But for investors who are looking for another reason to stay positive, the upcoming Budget 2011, which will be unveiled on Oct 15, 2010, offers reasons to cheer. Our pre-and-post Budget performance suggest that the market usually generates positive returns, albeit anaemic, averaging 3% before budget and 1% after. Infrastructure and property sectors tend to perform better ahead of Budgets,' it said.

At the close on Friday, Japan's Nikkei 225 rose 1.23% to 9,626.09; Hong Kong's Hang Seng Index added 1.29% to 21,970.86, Singapore's Straits Times Index advanced 0.3% to 3,076.37 but Shanghai's Composite Index fell 0.15% to 2,598.69.

At Bursa Malaysia, Tenaga fell 22 sen to RM8.22, dragging the KLCI down 2.32 points while Sime Darby shed 14 sen to RM8.15, weighing down the index by another 2.05 points. IOI Corp lost 11 sen to RM5.60 and MISC 20 sen to RM8.80, pushing the index down another 2.95 points.

Kulim fell the most, down 28 sen to RM8.22, KLK and HL Bank 18 sen each to RM17.10 and RM9.02 while IJM surged 17 sen to RM5 and SP Setia 13 sen lower at RM4.37.

F&N was the top gainer, adding 60 sen to RM14.90, Nestle 44 sen to RM42.44 and BAT 40 sen to RM47.60.

Dataprep subsidiary gets RM34.99m Rapid KL bus ticketing job

KUALA LUMPUR: DATAPREP HOLDINGS BHD []'s subsidiary has accepted the letter of award (LOA) from Syarikat Prasarana Negara Bhd for the implementation of a cashless bus ticketing system for Rapid KL Buses.

The company said on Friday, Sept 17, that its 55% owned Solsis (M) Sdn Bhd, had received the LOA dated Sept 7 for a contract value not exceeding RM34.99 million.

Dataprep said the scope of works include to design, installation and commissioning of the cashless bus ticketing system for Rapid KL Buses.

It said the duration for the job was six months from the date of the LOA, and that the project would contribute positively to its earnings.

Earlier Friday, Bernama quoted Dataprep chief executive officer, Cheam Tat Inn as saying he was optimistic the company, which posted pre-tax losses for two consecutive years, would return to the black in the financial year ending March, 31, 2011.

Cheam said his optimism was underpinned by the company's diversification into more segments in the IT business and secured many high-margin projects.

"Dataprep expects a revenue growth of between 35% and 45% in the current financial year," he said after the AGM.

Its pre-tax loss for FY ended March 31, 2010 rose to RM5.683 million from RM5.456 million in FY2009.'' For FY2008, it suffered a pre-tax loss of RM3.202 million.'' Revenue fell by 18 per cent to RM44.595 million for FY2010 from RM54.164 million in FY2009.

Cheam said Dataprep has seen in upward trend in revenue for the past three quarters, growing by 10% to 12% and based on the performance, it would return to the pre-crisis level or even higher.

"Our recent transformation efforts had allowed us to focus on high value-added projects and we have managed to secure many projects compared to our focus on low-margin projects a few years back," he said.

Its new projects are network integration, managed services, security, TECHNOLOGY [] integration areas, he said.

He said currently, the company has an order book of over RM90 million mostly from projects received in the first six months this year.

"New projects, cost-cutting measures and increasing demand in the IT industry point to a recovery in profit," he said.

On international projects, Cheam said, the company was actively looking for merger and acquisitions abroad, along with continuous focus on the domestic market going forward.

"We have the structure in place to explore. Currently, we are in talks with several companies. However, we have not identified any potential candidates or concluded any agreements," he said.

ixmation expects US$30m sales boost over 2-3 years

BUKIT MERTAJAM: ixmation (Asia) Sdn Bhd, formerly known as Excel Precision Sdn Bhd, expects to grow its business from the present US$70 million (RM217 million) in sales to US$100 million over the next two to three years.

One of the world's leading provider of automated assembly and testing solutions, ixmation has five entities worldwide and is headquartered in Switzerland with production sites in the US, China (Tianjin and Suzhou) and in Penang.

ixmation is an independent business unit of the Conzzeta AG, which is listed at the Swiss stock exchange with a group turnover of US$1 billion.

The company provides reliable solutions for assembly tasks in the automotive, medical, alternative energies, consumer good and electronics sectors.

At the official launching of the new 42,000 sq ft plant at the Bukit Minyak Science Park by Chief Minister Lim Guan Eng, ixmation Group CEO Dr Martin Pfister said the company, which currently employed 110 people at the new plant, will increase its workforce to 250 over the next two to three years.

Although Pfister declined to reveal the investment figures for the plant and equipment, he said US$1.7 million had been spent on the building rooftop state-of-the-art third-generation solar tube collector system.

He said imxation has obtained all the skills and experience from its entities around the world to support projects in the future industries like photovoltaic solar fuel cells and wind turbines and has experience in building energies storages for a continuous power supply to the common electric power supply system.

"The new building offers highly skilled engineers the opportunity to take in more demanding projects to provide sophisticated high-tech solutions to global and local customers.

"Depending on the business environment, we have land reserves to grow up to 100,000 sq ft and employ upto 400 workers in the next few years," he added.

Pfister said ixmation Malaysia was no longer a local automation solution provider but was now recognised as one of the leading automation companies.

"Our industrial focus has changed over the last three years, and big projects with solar companies mainly out of California brought us a lot of new know-how and out of one of these partnerships, we were able to invest in the solar rooftops here in Penang, which translates to a saving of 130 tonnes of carbon dioxide per year, which is our contribution towards the new initiative by the Malaysian government's "First Malaysia green and clean," Pfister said.

Taiwan bourse set to be new funding hub in Asia

TAIPEI: Taiwan's stock exchange looks set to become a sought-after destination for share listings by overseas and Chinese firms and notch up its ranking in Asia after rising popularity of Taiwan depositary receipts (TDRs) listings, according to a Reuters report on Friday, Sept 17.

Singapore-listed Chinese shipbuilder Yangzijiang's TDRs made a strong debut last Wednesday and have risen nearly 30 percent since then, boosting confidence among other companies to go public in Taiwan.

Several other Chinese firms, including Singapore-listed Ziwo Holdings, are in the pipeline to capitalise on higher valuations in Taiwan, where many companies price TDRs at a premium to their Hong Kong or Singapore shares.

A landmark trade deal with China that will deepen economic ties, along with a deep local pool of cash-rich institutions and individuals and the premium that China-related shares attract, make the bourse attractive for either primary or TDRs listings.

"Liquidity in the market is ample and investors can participate in China growth. That's a very good selling point," said Andrew Deng, assistant vice president at Taiwan International Securities.

"The TDR effect will be seen and if sizeable companies, especially state-owned enterprises, can come to Taiwan, chances are high Taiwan's bourse can overtake South Korea's in size in the next three to five years."


Taiwan's bourse has a market capitalisation of some $679 billion, ahead of Singapore's $668 billion and just below the $797 billion of South Korea. But it is well behind the $3 trillion of Hong Kong and the $2.7 trillion of Shanghai.

With China taking the global No.1 spot this year for IPOs, Hong Kong still pre-eminent as a fund-raising centre and the Singapore exchange looking to grow by allowing trading of American Depositary Receipts (ADRs), Taiwan's bourse is seeking to ensure it does not fall behind.

"Our strategy is doing things step by step," said Stanley Chu, a vice president at the Taiwan stock exchange. "We've seen TDRs from Singapore and China, but we will target Japan, and even the United States.

"TDRs are the first leg and overseas primary listings are the second. They will support and boost the visibility of our market."

The number of TDRs will double to 20 this year, helping the total number of IPOs to 50 in 2010 from 36 last year, the exchange said.

Valuation differentials are attracting companies to Taiwan and investors to the firms.

Among other TDR issuers, Solargiga Energy's TDRs have a premium of 71 percent and Ju Teng International's about 20 percent, respectively, over their Hong Kong shares.

U.S.-based chip designer Integrated Memory Logic (IML) said it was attracted by Taiwan investors' interest in hi-tech firms for making a primary listing in Taipei. It surged 22 percent on its debut on May 18, though it has fallen 96 percent since then.

Total capital raised from TDRs was T$11.1 billion ($344 million) in January-August, compared with T$33.7 billion in the whole of 2009, when there were two big TDR issues by Want Want China and Tingyi.

Its scale, however, is still far smaller than Hong Kong, which saw the record-breaking $22 billion IPO of Agricultural Bank of China Ltd in July, and is readying for AIA Group's planned $15 billion IPO..

Some 59 companies are preparing to list in Hong Kong this year, according to Reuters data.

The key for Taiwan, analysts say, will be to attract big-name Chinese firms such as China Mobile or TCL.

"If the relationship between Taiwan and China gets closer and closer, Taiwan's capital market will definitely be a major beneficiary," said Janet Tseng, a vice president at Taiwan's Yuanta Securities, which managed IML's IPO.

But one cloud on the horizon is any tightening by China, which could hurt sentiment for TDRs.

"We really have to keep a closer eye on what China will do next," said John Chiu, a vice president and fund manager at Taiwan's Fuh Hwa Securities Investment Trust. "If the overall stock market does not do well, (TDRs) will suffer." (US$1=T$32) - Reuters

HK stocks rise 1.3% to 5-month high

HONG KONG: Hong Kong's benchmark index rose 1.3 percent to finish at a five-month high on healthy volume as investors rode a rally in risk assets across Asia.

The Hang Seng Index closed at 21,970.86, higher on the year for the first time since mid-April.

The China Enterprises Index gained 1.41 percent to 12,171.19. - Reuters

MARC maintains rating on CIMB Islamic Bank's RM2b debt notes

KUALA LUMPUR: Malaysian Rating Corporation Bhd has maintained the rating of AA+IS/Stable Outlook assigned to CIMB Islamic Bank Bhd's (CIMB Islamic) RM2.0 billion junior Sukuk programme following the removal of step-up profit payment provisions under the programme.

The rating agency said on Friday, Sept 17 the proposed amendments will only affect future issuances under the programme and the legal terms of the current outstanding sukuk will remain unchanged.

MARC's last rating action on CIMB Islamic and its rated debt was on May 7, 2010 when the rating agency upgraded the bank's long-term financial institution rating to AAA from AA+ and revised its debt rating to AA+ from AA.

CIMB Islamic amended the principal terms and conditions of the programmes mainly by removing the provision of step-up periodic payment rate for the junior Sukuk programme.

The amendment takes into account the requirements for Tier 2 capital in the proposals of the Basel Committee on Banking Supervision in December 2009 which prohibit incentives to redeem or the creation of any expectation that a call will be exercised.

CIMB Islamic has implemented the changes to ensure that issuances under the programme would continue to qualify as Tier 2 capital for the computation of the risk weighted capital adequacy ratio under Bank Negara Malaysia regulations on a prospective basis.

The current rating assigned to CIMB Islamic's junior Sukuk programme is one notch lower than CIMB Islamic's financial institution rating of AAA, reflecting its position relative to deposits and senior debt.

Proceeds from the junior Sukuk programme will be used for CIMB Islamic's banking operations or any other Shariah-compliant use as approved by the Shariah adviser.

World stocks try 3rd week of gains with risk

HONG KONG: Global stock markets were on track for a third week of gains and high-yielding currencies strengthened on Friday, Sept 17 while the threat of Japanese intervention kept the yen close to its low for the month against the dollar.

European stock markets climbed at the opening, with the leading European stocks up +0.78 percent in early trade.

Japanese stocks posted the largest weekly gain of the year following Tokyo's aggressive yen selling on Wednesday, which may have totalled as much as 1.9 trillion yen, and repeated pledge to do more if necessary.

Still, that has been catch up with other advanced markets, which have also been rising in September, after underperforming during most of the current quarter.

The Nikkei share average led Asian markets, finishing 1.2 percent higher on the day and up 4.2 percent this week, the biggest weekly gain since December 2009, after yen selling intervention brightened the prospects of exporters.

"In addition to the fact that investors aren't still entirely sure about the outlook for the global economy, they are also closely watching whether there would be any comments from the United States on Japan's currency intervention," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities in Tokyo.

The MSCI index of Asia Pacific shares outside Japan rose 1.2 percent, with buying spread out across the energy, materials and TECHNOLOGY [] sectors.

The MSCI all-country world stocks index was up 1.9 percent so far this week, on track for the third week of gains. Emerging market stocks, up 2.6 percent in the week, have been a big contributor.


China also set the mid-point of the yuan's daily trading range at a new high for the sixth consecutive day. This came on the heels of U.S. Treasury Secretary Timothy Geithner's vow to the U.S. Congress to rally other world powers to push Beijing to move faster on the yuan.

China's guiding hand to lift its currency has been a signal for other Asian policymakers earlier in the year to allow their own currencies to strengthen.

However, Japan's intervention this week along with stepped up efforts by officials in Asia and Latin America to fight their own currencies from appreciating appear to have halted the trend, at least for now.

"Policy bias across Asia ex-Japan (AXJ) is still for monetary tightening. In Japan, the focus is still on the extent and means of further monetary easing," Standard Chartered currency strategists said in a note.

"We view these extremely elevated levels in yen vs AXJ currencies as a strategic buying opportunity in AXJ now that the risk-reward dynamics in USD-JPY appear to have changed."

In currency markets, the U.S. dollar was nearly unchanged on the day at 85.70 yen, still within spitting distance of its overnight high around 85.93 yen. Japanese exporters may sell dollars near 86 yen, putting a lid on dollar strength.

"The real key positioning is probably what the corporates and Japanese investors need to do and I think there are still corporates out there that need to sell," said Greg Gibbs, currency strategist at Royal Bank of Scotland in Sydney.

The euro rose 0.4 percent to $1.3132 to a one-month high, lifted by long-term investors encouraged after auctions on Thursday of 10- and 30-year Spanish government bonds produced lower yields than a previous sale in June.

Higher-yielding currencies such as the Australian dollar also rose as stock markets steadily increased during the session and commodity prices gained.

The yield on the 10-year U.S. Treasury note was largely unchanged on the day at 2.77 percent after climbing 4 basis points on Thursday after a drop in initial jobless claims.

Still, the spread of the U.S. 10-year yield over the same maturity Japanese government bond has widened 7 basis points this week, helping Japan's cause to pull down the yen.

Gold rose 0.5 percent to a record high of $1,277.75 an ounce. The precious metal usually associated with safety had advanced earlier in the week on speculation the Federal Reserve would have to ease policy further, but the persistent gains suggest the rally has taken on a life of its own. - Reuters

Nikkei hits 6-week closing high, buoyed by yen

TOKYO: Japan's Nikkei average rose 1.2 percent to a six-week closing high on Friday, Sept 17 helped by a weaker yen after Japan's massive yen-selling this week, leading the benchmark to book its best weekly performance this year.

Japan's first currency intervention in six years on Wednesday knocked the yen from a 15-year high versus the dollar and boosted the Nikkei by more than 2 percent, though analysts have said the yen's six-month uptrend does not look broken.

Even so, the Nikkei posted a weekly rise of 4.2 percent, its best week since early December 2009, with shares of high-tech exporters and automakers among the top gainers in Japanese stocks this week.

On the technical front, the Nikkei also pierced the bottom of its Ichimoku cloud this week and probed higher towards the top of the cloud, though resistance lurks there.

"A solid performance by exporters' shares continued as the yen largely kept its weakness against the dollar," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.

"Given Japan's attitude toward intervention this time, such as its large size, counter moves may be unlikely. Eyes are now on the Federal Reserve's meeting next week, at a time when U.S. yields are on the rise."

Japan sold an estimated 1.8 trillion yen ($21 billion) for dollars on Wednesday, a record for a single day, with Prime Minister Naoto Kan pointing to more potential yen selling, but Tokyo has faced international criticism for its intervention.

Since most advanced economies are grappling with slow growth at home, Japan's move has heightened concerns that countries could launch a round of competitive devaluations to support their own exports.

Japan's yen-selling intervention will likely be on the agenda when Prime Minister Naoto Kan meets U.S. President Barack Obama next week in New York, the Asahi newspaper reported on Friday.

On Friday, the benchmark Nikkei rose 116.59 points to 9,626.09, its highest finish since Aug. 6. The broader Topix added 0.9 percent to 852.09.

Japanese markets will be closed on Monday for a national holiday.

In other upbeat technical signs, the Nikkei's 25-day moving average, which is considered a proxy for a one-month moving average and is closely watched in Japan, has turned upward.

But market players said the Nikkei faced stiff selling pressure above 9,600 from investors who have waited to square large long positions built at that level.

Technical resistance is also seen around 9,660, the top of the Ichimoku cloud. Ichimoku charts are popular with Japanese traders.

The dollar traded at 85.70 yen by late afternoon in Tokyo, compared with its low of 82.87 hit on electronic trading platform EBS on Wednesday.

Market players will be watching a series of events next week, including the Federal Reserve's policy-setting meeting on Tuesday and an expected meeting between Kan and Obama.

U.S. treasuries have been hurt by fading hopes the Fed will renew quantitative easing in the form of massive debt purchases aimed at jump-starting the economy, after data this week appeared to reduce the chances of a double-dip recession.


Shares of exporters gained, with Kyocera Corp rising 1.1 percent to 8,200 yen and Honda Motor Co adding 1.9 percent to 3,015 yen.

GS Yuasa Corp charged up 3.3 percent to 619 yen after a source close to the discussions said the battery maker is in talks with Magna International Inc, the world's No.3 car parts maker, to produce lithium ion batteries for electric vehicles in Europe.

Hitachi gained 3.6 percent to 378 yen after Japan's biggest electronics conglomerate said it plans to pay a 5 yen per share dividend for the April-September first half. It paid no dividend in the same period last year, when it was mired in losses.

Thailand plans first 50-yr govt bond in 2010/11

BANGKOK: Thailand's Finance Ministry plans to issue the country's first 50-year government bond in the fiscal year starting Oct. 1, the head of its Public Debt Management Office (PDMO) said on Friday, Sept 17.

Chakrit Parapuntakul said his office was surveying market demand for the planned bond, the proceeds of which would be used to refinance shorter-term debt issued to finance fiscal deficits.

Longer-dated Thai bond yields climbed on Friday as investors reduced positions on speculation that the next fiscal year's supply of bonds would contain a larger chunk of such bonds.

The 50-year bond plan pushed swaps higher as investors geared up for a flood of paying on fixed-rate swaps as buyers hedge their cash bond portfolios.

"The 50-year bond news is just symptomatic of the fact that the government wants to extend the duration and as such there is more value on the belly of the curve than the very long end," said the head of bond trading at a European bank in Bangkok.

The spike in 10-year bond yields outpaced a rise in short-dated yields, as central bank dollar-buying aimed at holding down the baht kept investors wary of the risk that tough capital controls could be imposed, similar to those in 2006.

As a result, the curve extended a recent steepening bias with spreads between 10-year bonds and one-year debt widening to 110 basis points compared with a 20-month low of 90 bps earlier this month.


The PDMO's Chakrit told Reuters: "We are due this afternoon to conduct our annual market dialogue with potential institutional investors like insurance firms and investment funds. We will gauge their reaction to this plan."

"The meeting will help us finalise what volume of new bonds will be floated next year to finance budget deficits and restructure government debt," he said.

Finance Ministry officials said the bond issue, which they expected from the second quarter of calendar 2011, would be up to 5 billion baht ($160 million).

"The planned long bond is part of government policy to create more longer-term benchmarks to further develop the local bond market. The 5 billion baht figure is part of a total of around 500 billion baht in government bonds and debt to be issued in the 2010/11 fiscal year," one ministry source said.

The longest maturity in the Thai market at the moment is a 30-year bond currently yielding around 3.6 percent.

In early afternoon trade, 10-year bond yields were up four basis points at 3.13 percent. Ten-year swap rates rose six bps to 3.36 percent.

The fiscal year runs from October to September in Thailand. The Finance Ministry has budgeted for borrowing of 380 billion baht ($12.35 billion) in bonds until the fiscal year-end this month.

Traders said they saw quarterly issuance for the next fiscal year at about 110-130 billion baht compared with about 90-120 billion this year.

Bonds of longer maturities than 15 years accounted for about a quarter of this year's borrowing plan and traders expect this proportion to rise next year as the authorities take advantage of strong offshore demand and relatively low interest rates.

Handal sees 11m shares done off market

KUALA LUMPUR: Handal Resources Bhd saw 11 million shares done off-market on Friday at an average price of 65 sen each.

Stock market data showed on Friday, Sept 17 the shares were transacted below the market price of 80 sen. The 11 million shares represented a 12.22% stake.

As at 2.40pm, Handal was down 0.5 sen at 79.5 sen with 7,000 shares done.

Handal provides crane services for the oil and gas services industry. Its net asset per share was 72 sen as at June 30, 2010. It posted net profit of RM5.36 million on the back of RM23.56 million revenue as at June 30.

Consumers in emerging markets paying 3 times more for broadband, says Ovum

KUALA LUMPUR: Consumers living in emerging markets, including Malaysia, Russia and Saudi Arabia, are paying up to three times more for broadband than their mature market counterparts, according to Ovum.

Ovum said on Friday, Sept 17 that research by the independent telecoms analyst into broadband in 15 emerging markets showed emerging consumers -- despite earning the lowest wages -- are paying far more on average than the rest of the world.

Ovum practice leader and author of the report on 'Broadband pricing in emerging markets', Angel Dobardziev said:'' 'The cost of broadband in some emerging countries is three times as high as in mature markets, which when coupled with low wages, makes it an unaffordable luxury for all except a small group at the top of the socio-economic pyramid.

'The striking difference in broadband prices in mature and emerging markets means there is a huge divide in terms of uptake of services.'

The broadband pricing in emerging markets compares DSL, WiMax, and HSPA. Emerging markets are Asia (India, Malaysia, Pakistan, and the Philippines); Eastern Europe (Poland and Russia); Middle East and Africa (Bahrain, Jordan, Kenya, Nigeria, Saudi Arabia, and South Africa) and South and Central America (Colombia, Mexico, and Venezuela).

In the Philippines, the competitive broadband market ensured some of the lowest tariffs amongst those sampled by Ovum.

However, given the country's low GDP per capita (US$1,890), these broadband tariffs are quite unaffordable. Wi-tribe's entry-level WiMAX tariff of US$323 is amongst the lowest WiMAX tariffs as compared to other emerging countries sampled. With greater download speed, this is also competitive compared to PLDT's entry-level DSL tariff of US$400.

Dobardziev said the key to making broadband more affordable for emerging markets will be an increase in supply and competition, which is currently modest in most markets and non-existent outside the key urban areas.

'However, many markets will require concerted regulatory and policy efforts to increase competition and supply and bring affordability within reach of the mass consumer market. As yet it is unclear how quickly this will happen,' she said.

AmResearch reaffirms Buy on Ivory Properties

KUALA LUMPUR: AmResearch reaffirms its BUY rating on Ivory PROPERTIES [] Bhd (Ivory) with unchanged fair value of RM1.75 a share based on 35% discount to its net asset value (NAV) of RM2.70 a share.

Ivory had on Wednesday, Sept 15 has entered into an agreement to buy shares of Tanjong Tokong Garden Development Sdn Bhd (TTG) at RM37.6 million.'' Significance of this deal is that via TTG, Ivory would have the rights to develop prime freehold land in Tanjung Tokong, Penang measuring 2.3 acres.

'With an estimated gross development value of RM368 million, Ivory plans to develop "City Mall" comprising of 175 condominium units and a retail mall.

'We expect take-up to be strong due to its strategic location and we have initially assumed a GDV of RM250 million this into our NAV estimate. Based on an additional net profit of RM37 million, the development may boost our NAV by 17 sen a share (+6%) to RM2.87 a share,' it said.

FBM KLCI advances at mid-day break

KUALA LUMPUR: The FBM KLCI advanced at the mid-day break on Friday, Sept 17 in line with the gains at key regional markets, although it had briefly slipped into the red in the later part of the morning.

Helping to lift the local market were the gains including at the Genting group, CIMB and Maybank and other blue chip stocks amid bargain hunting activities.

At 12.30pm, the FBM KLCI was up 1.29 points to 1,474.24. Losers edged gainers by 317 to 311, while 252 counters traded unchanged. Volume was 479.07 million shares valued at RM903.99 million.

At the regional markets, Japan's Nikkei 225 rose 1.10% to 9,614.32; Hong Kong's Hang Seng Index gained 1.04% to 21,916.14; Taiwan's Taiex rose 1.09% to 8,187.97; the South Korean Kospi Index added 0.34% to 1,818.05; Singapore's Straits Times Index up 0.38% to 3,078.80; and the Shanghai Composite Index added 0.26% to 2,609.17.

Among the major gainers at Bursa Malaysia, Genting Malaysia rose 10 sen to RM3.24, Genting was up six sen to RM10.06, CIMB added eight sen to RM8.26, Maybank up four sen to RM8.76, Petronas Gas gained 12 sen to RM10.86 while UMW rose 10 sen to RM6.70.

Amway and Bonia were up 18 sen each to RM8.18 and RM1.68, Dutch Lady rose 14 sen to RM15.24, KFCH up 11 sen to RM3.28 while United PLANTATION []s and Shell advanced 10 sen each to RM15.20 and RM10.64.

Jaya Tiasa was the top loser and fell 18 sen to RM3.50; Ibraco fell 15 sen to RM1.01, Hartalega shed 11 sen to RM4.80, while DiGi.Com, MISC and Cocoaland fell 10 sen each to RM24.70, RM8.90 and RM2.74. Other decliners included Kulim, Berjaya Media, BLD Plantations and Masterskill.

KNM was the most actively traded counter with 32.6 million shares done. The stock added 3.5 sen to 44.5 sen. Other actives included Genting Malaysia, DRB-Hicom, AirAsia, Compugates, Axiata and Iris.

KCLI slips into the red, DiGi, MISC weigh

KUALA LUMPUR: The FBM KLCI slipped marginally into the red in late morning on Friday, Sept 17 on some mild profit taking of DiGi and MISC while the broader market was mixed in thin trade.

At 11.13am, the KLCI was down 0.15 point to 1,472.80, erasing earlier gains. Turnover was 328.33 million shares valued at RM595.87 million. There were 264 gainers, 270 losers and 249 stocks unchanged.

However, overall market sentiment should remain firm with some intermittent profit taking on recent gainers.

DiGi fell 10 sen to RM24.70 and MISC eight sen to RM8.92 in thin trade.'' Glove makers retreated, with Hartalega down 14 sen to RM4.77, Top Glove 13 sen to RM5.87 and Latexx-WA also down 13 sen to RM2.37.

Jaya Tiasa was the top loser, down 18 sen to RM3.50 while Kulim shed 10 sen to RM8.40.

Bonia was up 12 sen to RM1.62. The Edge FinancialDaily reported Bonia's latest acquisition of a 70% stake in Singapore-based Jeco Pte Ltd may prove to be a gem as it adds more brands and a new money-spinner to its stable.

Genting Malaysia rose seven sen to RM3.21 while Gentingm-CL added one sen to 10 sen and Genting Singapore-C8 advanced 4.5 sen to 25.5 sen.

Gamuda climbs ahead of inclusion into FBM KLCI, MRT hopes

KUALA LUMPUR:Securities of GAMUDA BHD [] rose in active trade on Friday, Sept 17 ahead of its inclusion into the 30-stock FBM KLCI next week and underpinned by the upside for the infrastructure company in the proposed mass rapid transit (MRT) for Kuala Lumpur.

At 9.20am, Gamuda was up nine sen to RM3.79 with 1.34 million shares done. Gamuda-WD added four sen to RM1.21 with 4.41 million units transacted while Gamuda-CM gained 1.5 sen to 17.5 sen.

The FBM KLCI was up 5.97 points to 1,478.92. Turnover was 88.12 million shares done valued at RM121.78 million shares done. There were 173 gainers, 52 losers and 141 stocks unchanged.

OSK Research, had in its report issued on Sept 9, said it recently met up with Gamuda to discuss the proposed MRT.

It said consultants are currently studying its feasibility and the results should be known by month-end.

'We see strong incentives for the MRT to be implemented, driven by the rakyat's needs and political will. Securing the tunneling portion would enhance Gamuda's value by 28 sen a share, which we think is likely. We continue to see the MRT generating more positive news. Upgrade to TRADING BUY,' it said.

OSK Research said while it had not factored in any earnings impact from the MRT, it revised upwards its FY11-12 forecasts by 7%-13% by incorporating higher margins for its existing jobs and stronger property sales, which were the main takeaways from our recent meeting.

'Our revised SOP based TP of RM4 implies a FY11 PER of 20.5 times, still below its historical average of 22x forward PER. Continued positive news on the MRT should serve to further rerate the stock. The year before the Double Track job was awarded, Gamuda was trading at an average forward PER of 27.1 times,' it said.

OSK Research maintains Buy on Kossan, lower TP at RM5.25

KUALA LUMPUR: OSK Research said KOSSAN RUBBER INDUSTRIES BHD [] stands out among its peers for its balanced product mix comprising 60% natural rubber and 40% nitrile gloves.

It said on Friday, Sept 17 that it believes this partly cushions the company from the negative effects of normalizing demand for examination gloves.

OSK Research said Kossan expects to venture into the production of surgical gloves.

'Maintain Buy but with a lower target price of RM5.25 (previously RM5.65), as we do not see major catalysts for the stock as well as the glove sector in the immediate term,' it said.

OSK Research: FBM KLCI near-term technical outlook firmly bullish

KUALA LUMPUR: OSK Research said the FBM KLCI's near-term technical outlook will remain firmly bullish as long as it stays above the new uptrend line as is marked in the above chart.

It said on Friday, Sept 17 that besides, the index can still go up at the current rapid pace as long as the steeper uptrend line is not violated.

'The market's immediate resistance now lies at the psychological 1,500-barrier, followed by the 1,524.69-level. To the downside, there is immediate support at the 1,457-level, followed by the 1,439-level,' the research house said.

OSK Research, in recapping Wednesday's performance, said the bulls would be very glad to see the FBM KLCI losing less than two points on Wednesday considering the index has advanced more than 30 points in the two prior sessions.

Undoubtedly, the market action that day was constructive and there were no signs of panic selling. Note that the FBM KLCI opened the day with the daily RSI at the 86.4-pt overbought level, which is the highest reached by the market since the bull market started in March 2009.

The research house said despite the market's current overbought condition, it can still stretch its gains further at around the overbought territory.

'Remember that we said that most of the 32-point gain in the KLCI recorded on Monday and Tuesday actually happened at above the 80 point RSI level. Moreover, over the last 20 trading days, the 71.7 point RSI level was the lowest closing for the daily RSI. The FBM KLCI has gained more than 100 points at above the 70 point RSI level,' it said.

Paramount extends gains

KUALA LUMPUR: Shares of Paramount Corp Bhd extended their gains on Friday, Sept 17 on expectations it would be able to pay out a special dividend from the sale of its stake in Jerneh Insurance Bhd.

At 9.13am, it was up eight sen to RM4.31 with 103,900 shares done.

The FBM KLCI rose 5.66 points to 1,478.61. Turnover was 55.2 million shares done valued at RM88 million. There were 144 gainers, 41 losers and 110 stocks unchanged.

The Edge FinancialDaily reports that Paramount will be in a position to dish out a special dividend as a result of the RM131 million proceeds raised from the sale of its 20% stake in Jerneh Insurance.

HLG Research sees more upside for Lion Industries

KUALA LUMPUR: HLG Research said LION INDUSTRIES CORPORATION [], which had undertaken massive restructuring exercises, had turned around from FY01 net loss of RM473 million to strong FY10 net profit of RM364 million.

In a research note issued on Friday, Sept 17 that Lion Industries' net gearing position also improved from 2.9 times in FY06 to below 0.2x in FY10.

Lion Industries has been trading above the uptrend line (UTL) since March 2009 but was trapped in a downtrend line (DTL) triangle consolidation from its five-year high of RM3.10.

'However, there are signs of impending breakout above DTL given its positive trend and momentum readings and building its base above the 200-day SMA (around RM1.60) for the past three months.

'We see this as a precursor of more upside ahead, with immediate resistance levels at RM2.03 (38.2% FR), followed by RM2.23 (50% FR) and RM2.44 (61.8% FR). Meanwhile, major support levels are RM1.60 and UTL of RM1.50. Cut loss below RM1.60,' it said.

HLG Research said''at RM1.71, Lion Industries is trading at cheap valuations of 4.1 times FY11 P/E (industry 6.6) and 0.3 times (industry 1.0 times).

'ACCUMULATE Lion Industries with a six month technical price target of RM2.23, implying a 5.4 times FY11 P/E (five-year average P/E is 5.5 times),' it said.

Bina Puri climbs with new projects, order book RM2.57b

KUALA LUMPUR: Shares of BINA PURI HOLDINGS BHD [] advanced in early trade on Friday, Sept 17 after it secured a RM95.69 million project which pushed its order book to RM2.57 billion to date.

At 9.05am, Bina Puri was up seven sen to RM1.26 with 274,200 shares done.

The FBM KLCI was up 2.07 points to 1,475.02. Turnover was 23.93 million shares valued at RM39.6 million. There were 86 gainers, 24 losers and 72 stocks unchanged.

Bina Puri said on Wednesday it had secured a contract to build the proposed 13-storey Plaza Merdeka commercial complex/hotel along Pearl Street, Kuching for RM95.69 million.

It had accepted a letter of award from Rakyat Elite Sdn Bhd for the project which was expected to be completed within 19 months.

The recent award saw the group's current book order stands at RM2.57 billion as at to date.'' The group had managed to secure new projects worth RM1.62 billion in 2010.

#Stocks to watch:* Telcos, Bonia, Bina Puri, Ivory

KUALA LUMPUR: Key Asian markets may rise in cautious trade on Friday, Sept 17, including Bursa Malaysia which resumes trading, after US stocks closed mostly flat on mixed data on Thursday.

The Dow Jones industrial average gained 22.10 points, or 0.21 percent, to 10,594.83. The Standard & Poor's 500 Index dropped 0.40 points, or 0.04 percent, to 1,124.67. The Nasdaq Composite Index gained 1.93 points, or 0.08 percent, to 2,303.25.

Reuters reports that investors were not keen to snap up US stocks amid mixed economic data and a cautious forecast from economic bellwether FedEx kept the market locked in its recent tight trading range.

Shares in FedEx Corp fell 3.7 percent to $82.72 after the company, seen as a proxy for economic demand because of the wide swath of industries it serves, forecast quarterly profit below Wall Street's expectations and warned the recovery may slow.

A drop in initial jobless benefit claims to a two-month low in the most recent week was not enough to lift stocks, while a gauge of business activity in the U.S. Mid-Atlantic region showed a contraction for a second straight month in September.

However, a Reuters poll of institutional investors and strategists found U.S. stocks are expected to make strong gains before year-end as worries about a second recession subside.

Stocks to watch on Friday include telco players Maxis Bhd, Telekom Malaysia and, Bonia Corp Bhd, BINA PURI HOLDINGS BHD [] and Ivory PROPERTIES [] Group Bhd.

InsiderAsia, whose report appears in The Edge FinancialDaily, said despite the cellular market's relative saturation ' with penetration rate estimated at roughly 116% ' key players continued to chalk up positive subscriber growth in 2Q10.

This saw the net increase for 1H 2010 increase to 1,515,000 subscribers for Maxis, Celcom and DiGi.

The Edge FinancialDaily also highlights fashion retailer Bonia Corp Bhd's latest acquisition of a 70% stake in Singapore-based Jeco Pte Ltd.

The report said this may prove to be quite a gem as it adds more brands and a new money-spinner to its stable.

The Edge FinancialDaily reports that Paramount Corp Bhd will be in a position to dish out a special dividend as a result of the RM131 million proceeds raised from the sale of its 20% stake in Jerneh Insurance Bhd.

Meanwhile, Bina Puri's order book increased to RM2.57 billion to date after it secured a contract to build the proposed 13-storey Plaza Merdeka commercial complex/hotel along Pearl Street, Kuching for RM95.69 million.

It had accepted a letter of award from Rakyat Elite Sdn Bhd for the project which was expected to be completed within 19 months.

The recent award saw the group's current book order stands at RM2.57 billion as at to date.'' The group had managed to secure new projects worth RM1.62 billion in 2010.

Ivory Properties plans to build residential condominiums and commercial complex with a with an estimated gross development value (GDV) of RM368 million on a proposed site in Tanjong Tokong, Penang island

Ivory intends to develop the land under a proposed project named 'City Mall' consisting of approximately 175 units residential condominiums and commercial shopping complex with an estimated GDV of RM368 million'' and estimated gross development cost of RM173 million.

The expected profit before tax to be derived from the development is RM154 million, it said.

PETRA PERDANA BHD []'s renounceable rights issue of up to 122.76 million new 50 sen shares, of the basis of three rights shares for every eight shares held, has been fixed at 59 sen.

The corporate exercise, which includes one warrant for every two rights shares, included the fixing of the exercise price of the warrants at RM1 each. The entitlement date has been fixed on Oct 1.

#Flash* N. American semicon equipment makers record US$1.82b orders

KUALA LUMPUR: North America-based manufacturers of semiconductor equipment posted US$1.82 billion in orders in August 2010, based on a three-month average basis.

According to the report published on its website on Thursday, Sept 16, the Semiconductor Equipment Manufacturers Industry (SEMI) said the book-to-bill ratio was 1.17. A book-to-bill of 1.17 means that US$117 worth of orders were received for every US$100 of product billed for the month.

'The three-month average of worldwide bookings in August 2010 was US$1.82 billion. The bookings figure is 1.1 percent lower than the final July 2010 level of US$1.84 billion, and is 195.5 percent above the US$614.5 million in orders posted in August 2009,' it said.

SEMI said the three-month average of worldwide billings in August 2010 was US$1.55 billion. The billings figure is up 3.8% from the final July 2010 level of US$1.50 billion, and is 167.6% above the August 2009 billings level of US$580.0 million.

"Overall equipment billings increased 4% in August resulting in the highest levels experienced since September 2007," said SEMI president and CEO Stanley T. Myers said.

"While bookings declined slightly in August, 2010 is still on track to be a record growth year for semiconductor equipment.'

The SEMI book-to-bill is a ratio of three-month moving averages of worldwide bookings and billings for North American-based semiconductor equipment manufacturers.

Wall St stays in tight range on mixed data

NEW YORK:'' U.S. stocks were little changed on Thursday, Sept 16 as mixed economic data and a cautious forecast from economic bellwether FedEx kept the market locked in its recent tight trading range.

Shares in FedEx Corp fell 3.7 percent to $82.72 after the company, seen as a proxy for economic demand because of the wide swath of industries it serves, forecast quarterly profit below Wall Street's expectations and warned the recovery may slow.

A drop in initial jobless benefit claims to a two-month low in the most recent week was not enough to lift stocks, while a gauge of business activity in the U.S. Mid-Atlantic region showed a contraction for a second straight month in September.

The S&P 500 has settled into a range between support at its 200-day moving average around 1,115 and resistance around 1,130. Attempts to pierce 1,130 have been thwarted several times since June, including this week.

"We are just in the same growth path we were before the double-dip fears -- that is why the market is just kind of stuck, volumes are kind of low, and there is no conviction one way or the other," said John Canally, investment strategist and economist for LPL Financial in Boston.

"Today, jobless claims were good, corporate earnings data not so good, and that's the tug of war you are in today."

The Dow Jones industrial average gained 22.10 points, or 0.21 percent, to 10,594.83. The Standard & Poor's 500 Index dropped 0.40 points, or 0.04 percent, to 1,124.67. The Nasdaq Composite Index gained 1.93 points, or 0.08 percent, to 2,303.25.

Oracle Corp, the No. 3 software maker, and BlackBerry maker Research in Motion Ltd rose in extended trade after posting quarterly results that topped Wall Street's expectations.

Oracle shares gained 4.1 percent to $26.41 and Research in Motion jumped 8.4 percent to $50.40 in extended trade.

Texas Instruments Inc shares rose 3.5 percent to $25.85 after the bell as the chip maker increased the amount of stock it would repurchase and boosted its quarterly dividend by 8 percent.

On Thursday, The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate increased 0.4 percent, the largest increase in five months, after gaining 0.2 percent in July.

Analysts polled by Reuters had expected producer prices to rise 0.3 percent last month. In the 12 months to August, producer prices increased 3.1 percent, slowing from the prior month's 4.2 percent increase.

The Philadelphia Fed's survey, expected by a Reuters poll to show growth in manufacturing, showed falling activity for the second consecutive month and was a reminder of the pressure still on the recovery.

Weakness in FedEx spilled over to the rest of the sector. Rival United Parcel Service Inc shed 1.4 percent to $66.72, and the Dow Jones Transportation average lost 1 percent.

Ford Motor Co rose 4.8 percent to $12.44 after Barclays upgraded the stock to "overweight" from "equal weight," saying the U.S. automaker's earnings power has risen, driven by its vehicles and U.S. pricing.

A Reuters poll of institutional investors and strategists found U.S. stocks are expected to make strong gains before year-end as worries about a second recession subside. - Reuters

Oracle profit beats Street forecasts

SEATTLE: Oracle Corp said on Thursday, Sept 16 fiscal first-quarter profit rose 20 percent, beating expectations, on strong sales of new software and growth of its new hardware business.

The strong results bucked the trend of recent pessimism among tech companies about the economic recovery, and investors sent Oracle shares up 4 percent in after-hours trading.

"Despite the fact that the economy is having difficulties, for Oracle it continues to show that their consolidated strategy continues to pay off," said Michael Yoshikami, chief investment strategist at YCMNET Advisors.

"The broader tech sector is showing that though the economy is struggling, TECHNOLOGY [] is probably going to be a bit more resistant to the economic downturn as companies look to become more efficient with fewer employees."

The world's No. 3 software maker, which sells business software, database systems and now server hardware through its recent purchase of Sun Microsystems, reported net profit of $1.35 billion, or 27 cents per share, compared with $1.12 billion, or 22 cents per share, in the year-ago quarter.

Excluding some items, it reported a profit of 42 cents per share. That beat Wall Street's average estimate of 37 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 50 percent to $7.6 billion on a non-GAAP basis, helped by the acquisition of Sun earlier this year. Analysts were expecting $7.27 billion, on average. GAAP revenue increased 48 percent to $7.5 billion.

New software sales -- which generate long-term maintenance contracts, signaling future profitability -- were up 25 percent at $1.3 billion. The company had forecast three months ago they would rise between 2 percent and 12 percent.

"Our software business grew strongly in all regions," Oracle President Safra Catz said in a statement. "Our hardware business also grew faster than we expected with Sun Solaris servers and Exadata leading the way."

Oracle's shares were up 4 percent at $26.40 after closing at $25.36 on Nasdaq.

The company is expected to make a forecast on sales of new software for the current quarter on a conference call later on Thursday.

Chief Executive Larry Ellison and new President Mark Hurd -- the former Hewlett-Packard Co CEO who joined Oracle earlier this month -- are expected to talk to investors on that call. - Reuters

U.S. jobless claims at two-month low, PPI rises

WASHINGTON: New U.S. claims for jobless benefits hit a two-month low last week, hinting at some stability in the labor market, while the contraction in factory activity in the Mid-Atlantic region slowed in September.

The reports on Thursday, Sept 16 further reduced the odds of a double-dip recession and suggested less of a need for the Federal Reserve to launch a fresh round of asset purchases to aid the economic recovery.

"The economy is growing at a very moderate pace, the strong elements of the upturn are unwinding, but we are not going into a new downturn," said Steven Wieting, an economist at Citigroup in New York.

Initial claims for state unemployment benefits slipped 3,000 to 450,000, the lowest since early July, the Labor Department said. Financial markets had expected a rise to 460,000.

Separately, the Philadelphia Federal Reserve Bank said its business activity index covering the mid-Atlantic moved to minus 0.7 in September from minus 7.7 in August. Markets had expected a reading of 2.0.

Any reading below zero indicates falling factory activity. The Philadelphia Fed report follows a report on Wednesday showing manufacturing growth in New York State slowed in September.

U.S. stocks ended little changed as the manufacturing report took away some of the optimism generated by the weekly jobless claims data.

Stock market players also took to the sidelines as FedEx Corp , often seen as a proxy for the U.S. economy, forecast profit for the current quarter below Wall Street's expectations and warned of a slower economic recovery. [ID:nN16235653]

U.S. Treasury debt prices fell and the dollar was little changed against the yen.

Although details of the Philadelphia Fed's report were grim, analysts cautioned the survey had consistently underperformed relative to the national manufacturing and other regional surveys.

"It seems the weakness may be regionally concentrated and not representative of national trends," said Nicholas Tenev, an economist at Barclays Capital in New York. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

U.S. jobless claims graphic:

Producer prices graphic: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>


Manufacturing has led the economy's recovery from its worst downturn since the Great Depression as businesses sought to rebuild inventories from record low levels. But growth has been too slow to reduce a 9.6 percent unemployment rate.

Frustration over a lack of jobs is eroding President Barack Obama's popularity among Americans and could see the Democratic Party severely punished in Nov. 2 congressional elections.

Many analysts predict Republicans could take control of the House of Representatives from Democrats.

But there are tentative signs of improvement in the jobs market. Claims for jobless benefits have fallen for two straight weeks, pulling them further away from the nine-month high of 504,000 touched in mid-August.

Claims are now in the upper end of a 400,000-450,000 range that analysts associate with stable job growth.

The Fed is closely watching the jobs market and the drop in claims eases pressure on it to launch a fresh round of government debt purchase at a meeting on Tuesday. Many analysts, however, continue to expect the central bank to ease monetary policy further in coming months.

The argument for the Fed to stay pat next week was also bolstered by a 0.4 percent increase in the producer price index in August, which calmed fears of deflation -- a broad-based decline in consumer prices.

"The data we have in hand don't suggest a quantitative easing restart is required. The downside economy and deflation risks look decidedly less so, for now," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York.

Prices paid by producers at the farm and factory gate were pushed up by the first increase in energy costs since March. Markets had expected the PPI to rise 0.3 percent after July's 0.2 percent gain.

Food prices, which rose in July, fell in August.

Stripping out volatile food and energy costs, core producer prices edged up 0.1 percent, matching market expectations.

This "core" index was held back by a fall in passenger car prices, which offset an increase in the cost of light motor trucks. In the 12 months to August, the core index has risen 1.3 percent, a bit of a slowdown from the 1.5 percent registered through July. - Reuters

Credit agency model may have to be changed- SEC member

WASHINGTON: Credit rating agencies' business models may have to be changed in order to mitigate their conflicts of interest, a Securities and Exchange Commission member told Reuters on Thursday, Sept 16.

"I think there are thorny issues. We have a long way to go," said SEC Commissioner Elisse Walter, one of the five officials who decides on federal securities rules.

Under the recently passed Wall Street reform law, the SEC must find a solution to conflicts at the biggest rating agencies Moody's Corp, McGraw-Hill Cos' Standard and Poor's, and Fimalac SA's Fitch Ratings.

The Big Three agencies are paid by the issuers whose bonds they rate.

"There are conflicts. The question is what you do with the conflicts. The question is once you get over the hurdle and end up with sound disclosure of what the conflicts are, how do you cure them," Walter said in an interview.

"It may be that we have to change the business model, but I am not convinced yet whether we do or we don't," she said.

The SEC may be forced to adopt a congressional proposal that would upend the rating agencies business model if it does not find a way to mitigate conflicts of interests within two years, according to the legislation.

That proposal would create a board to match rating agencies with debt issuers.

The SEC has been trying to increase competition in the industry dominated by the Big Three. It also has adopted a number of rules to improve disclosures and prevent issuers from shopping for the most favorable rating. But it has not been able to find a solution to the conflicts of interests at the issuer-paid model.

In addition to new credit agency rules, the SEC must write some 100 new rules for financial players and markets under the Wall Street reform bill.

The SEC and futures market regulator, the Commodity Futures Trading Commission, are starting to craft rules to shed light on the $615 trillion over-the-counter derivatives market.

Walter said it was imperative that the SEC and CFTC were able to cross jurisdictional lines and access information about equities and futures markets.

"We need information about the futures market. The CFTC needs information about the securities market because in today's world, strategies are executed across jurisdictional lines," she said.

"Regulators need information that goes beyond their jurisdictional line." - Reuters

Dell expands into western China, plans base by 2011

LOS ANGELES: Dell Inc plans to open a second production base in China as part of a spending spree it said could top $100 billion in 10 years, expanding into the country's less-developed but rapidly growing western region.

Dell's new manufacturing and sales base, in the major city of Chengdu, should be up and running by 2011 and house some 3,000 staff eventually, the world's third-largest PC maker said on Thursday, Sept 16.

Foreign players from Hewlett-Packard to Acer have made inroads in past years into what is now the world's second-largest personal computer market.

Dell, which said it commands 9 percent of that market, plans to support its expansion in the country by hiring 500 staff at its current operations base in the southeastern coastal city of Xiamen.

The company's revenues in China have surged 11 times from 2000 to 2010, and grew 52 percent in the last fiscal quarter, it said.

Including hiring, research, CONSTRUCTION [] and procurement from local suppliers, Dell estimates it could spend more than $100 billion over the next decade in its largest market by revenue outside of the United States.

"Our new operations there will better position Dell for additional growth opportunities in western China," said Amit Midha, Dell's China president.

The company's stock held steady at $12.30 in morning trade. - Reuters

World stocks fall on US data, dollar gains

NEW YORK: World stocks fell on Thursday, Sept 16 as data showed the U.S. economy's recovery remained tepid, while the dollar rose to a session high against the yen a day after Japan's huge intervention to weaken its currency.

U.S. government bond prices fell after Philadelphia Federal Reserve data suggested slower business contraction in the U.S. Mid-Atlantic region, while U.S. claims for unemployment benefits dropped to a two-month low but still remained high.

Gold rose to a record high above $1,275 per ounce as jitters about any further Japan yen selling and broader economic uncertainty enticed more investors to the safe-haven commodity.

"We've had a lot of negative things thrown at market this morning, and it's battling back against a lot of economic and other fundamental negative news. Volumes are extremely light," said Tom Schrader, managing director, U.S. Equity Trading at Stifel Nicolaus Capital Markets in Baltimore.

The Dow Jones industrial average was down 11.73 points, or 0.11 percent, at 10,561.00. The Standard & Poor's 500 Index was down 3.16 points, or 0.28 percent, at 1,121.91. The Nasdaq Composite Index was down 4.65 points, or 0.20 percent, at 2,296.67.

The FTSEurofirst 300 index of top European shares fell 0.8 percent as weak British retail sales data added to investor worries about the economy following disappointing U.S. numbers in the previous session. The share index is up about 5 percent in September but off about 3 percent from its April peak.

MSCI's All-Country World Index was down 0.33 percent, while Tokyo's benchmark Nikkei stock index ended down 0.07 percent.


Investors were still coming to terms with Wednesday's currency intervention by Japan, its first in six years. The Bank of Japan's money market data showed the yen-selling intervention may have totaled around 1.76 trillion to 1.86 trillion yen ($20.52-21.69 billion).

Adding to investor nerves, Japanese Prime Minister Naoto Kan pointed to more potential yen selling.

The dollar reached as high as 85.84 yen on electronic trading platform EBS. It was last up 0.1 percent at 85.79 yen.

"There's no sign of the Bank of Japan this morning yet on markets, but they were successful yesterday and we are beginning to see some funds moving in the same direction, unwinding long yen positions," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.

Wednesday's move was designed to protect Japanese exports from a too-competitive exchange rate and ward off job losses. Some market players may be willing to test Japan's resolve, but there was little indication on Thursday.

The euro rose to its highest in more than a month against the dollar to $1,3112 and the yen to 112.24 after strong demand at a Spanish bond auction reinforced confidence in Europe's sovereign issues.

The Swiss franc weakened broadly after the Swiss National Bank kept interest rates unchanged as expected and forecast a slowdown in economic growth because of strength in the currency.

Spain sold a combined 4 billion euros in 10-year and 30-year bonds, at the top of its targeted range, attracting solid demand and lower yields than its last auction in June.

The country was among those most in the limelight during the sovereign debt crisis earlier this year.


The benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 2.7645 percent after data showed slower business contraction in the U.S. Mid-Atlantic region.

The 2-year U.S. Treasury note was up /32, with the yield at 0.4796 percent. The 30-year U.S. Treasury bond was down 30/32, with the yield at 3.9293 percent.

In energy and commodities prices, crude oil fell 74 cents, or 0.97 percent, to $75.28 per barrel, and spot gold prices rose $8.90, or 0.70 percent, to $1276.40. Earlier on Thursday it hit a record $1,277.70 an ounce. U.S. December gold futures also rose to a historic high. - Reuters

Europe shares close at week-low on economy worries

LONDON: European shares closed lower on Thursday, , Sept 16 as investors worried that high U.S. jobless numbers, despite falls in weekly claims, and disappointing British retail sales could signal a slowdown in the pace of economic recovery.

The pan-European FTSEurofirst 300 index of top shares provisionally closed 0.8 percent lower at 1,076.35 points to hit its lowest closing level in a week.

New U.S. claims for unemployment benefits dropped to a two-month low last week at 450,000, while British retail sales fell unexpectedly in August for the first time in seven months, a sign the economy was on a slow growth path.

UK retailers were among the decliners, with Next, Marks & Spencer and Home Retail down 0.2 to 0.8 percent.

"Times are difficult because of the combination of high unemployment, banks not lending yet and governments starting to implement austerity measures. All these factors are not going to be resolved overnight," said Franz Weis, a fund manager at Comgest in Paris. - Reuters

Foreigners resume U.S. asset buying in July

NEW YORK: Foreigners resumed purchases of U.S. securities in July, reversing the prior month's net outflow, and China and Japan both added to holdings of U.S. government debt, the U.S. Treasury Department said Thursday, Sept 16.

Overseas investors bought a net $63.7 billion, including short-term instruments such as Treasury bills. That reversed a revised net outflow of $5.2 billion in June. Net long-term capital inflows rose to $61.2 billion from $44.4 billion.

Uncertainty about the global economic outlook and lingering concern about heavily indebted European countries and euro zone banks enhanced the appeal of U.S. assets in early summer.

China, the biggest holder of U.S. Treasury debt, increased its holdings by $3 billion to $846.7 billion. It was China's first increase in three months. Japan, the No. 2 Treasury holder, bought a net $17.4 billion in U.S. government debt, bringing its total to $821 billion.

Both countries provide crucial financing for U.S. deficits. China's purchases also keep the value of its yuan currency from appreciating too quickly against the dollar. Beijing fears a strong yuan would hurt its exports and arrest economic growth.


Overall Treasury purchases slipped to $30 billion in July from $33.3 billion, but analysts said those numbers should rise in the months ahead now that Japan has also started selling yen in currency markets for the first time in six years.

Dealers said the Bank of Japan spent more than $20 billion on Wednesday to weaken the yen and speculated that much of the dollars accumulated would find their way into U.S. Treasuries.

"It's definitely going into Treasuries, it's just a question of where in the curve," said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank in New York. "We look forward to some big numbers in the months ahead."

Most of the buying in July was in U.S. corporate debt and equities. Foreigners bought a net $13.9 billion in corporate bonds after selling a net $13.5 billion in June. They were net buyers of equities to the tune of $12.5 billion, reversing June's $4.1 billion net outflow.

"Private flows are nice and strong and, most importantly, are well-rounded," Ruskin said. "As we get past the crisis, you're seeing a broadening out of capital flows, and that's encouraging for the dollar."