Japan says further yen gains should be stopped

TOKYO:'' Further gains in the yen should be stopped and Japan will maintain close coordination with the United States and European Union if it intervenes in the foreign exchange market to curb its currency's rise, Japan's foreign minister was quoted as saying on Saturday, Sept 25.

In an interview with the Wall Street Journal on the sidelines of a U.N. General Assembly meeting in New York, Foreign Minister Seiji Maehara said he did not expect joint intervention involving other countries.

Japan intervened in the foreign exchange market on Sept. 15 to curb the rising yen, which was at 15-year highs against the dollar. It was the first time Tokyo had stepped into the currency market in six years.

Maehara, in excerpts of the interview also published online late on Friday, said the yen had strengthened more than indicated by the actual strength of the Japanese economy.

"So with a very strong determination on the part of the Japanese government, any further appreciation of the yen should be stopped," Maehara, who has no direct responsibility for currency policy, was quoted as saying.

"Going forward, there may be a possibility for the Japanese government to show its very determined intent" to keep the currency from strengthening, Maehara was quoted as saying.

Tokyo would keep its economic partners informed of its actions, he was quoted as saying.

The dollar is trading at about 84.20 yen after falling to a 15-year low of 82.87 yen on Sept. 15, shortly before Japanese authorities intervened to stop yen strength from damaging a fragile economic recovery.

A sudden slide in the yen against the dollar on Friday stirred suspicions Japan had intervened for a second time this month.

But the yen later recovered and Japanese Prime Minister Naoto Kan said on Friday he was unaware of any new market intervention by Tokyo.

Kan, just re-elected as leader of the ruling party, faces a weak economy and a divided parliament, so is keen to be seen as proactive in efforts to curb the strength in the yen, which has hurt Japan's stock market and sparked the ire of exporters. - Reuters

#Stocks to watch:* Karambunai, MCMTech, Sunway, Vastalux

KUALA LUMPUR: Blue chips may snap its two-day of losses on Monday, Sept 27, hopefully as investors sentiment is bolstered by the firmer close on Wall Street on Friday, where the major indices rose more than 2%.

Global stocks jumped but the dollar slid on Friday, Sept 24 as economic data both raised hopes the recovery is improving and bolstered speculation the Federal Reserve will boost money supply to aid a struggling economy.

U.S. stocks advanced in a broad rally that lifted Wall Street to a fourth consecutive week of gains. The benchmark Standard & Poor's 500 Index is now up 9.5 percent so far in September.

Reuters reported that while data on U.S. durable goods orders and home sales were soft, stock traders latched on to a rise in business spending in August as the latest sign the recovery is on firmer ground.

The Dow Jones industrial average closed up 197.84 points, or 1.86%, at 10,860.26. The Standard & Poor's 500 Index gained 23.84 points, or 2.12%, at 1,148.67. The Nasdaq Composite Index rose 54.14 points, or 2.33%, at 2,381.22.

Stocks to watch on Monday are KARAMBUNAI CORP BHD [], MCM TECHNOLOGIES BHD [], SUNWAY HOLDINGS BHD [] and VASTALUX ENERGY BHD [].

Karambunai's shares may retrace after it said it had not submitted any official proposal to the government about an integrated resort in Sabah,

Its share price had surged from 5.5 sen on Wednesday, Sept 22 since a news portal reported about a possible integrated resort in Sabah, to close at 18 sen on Friday. Over the past three days, the share price is up 227% or 12.5 sen.

It closed six sen higher at 18 sen on Friday with 392 million shares, accounting for about 22% of the total trading volume on Bursa Malaysia.

Amcorp Group Bhd's unit Mezzanine Capital Sdn Bhd is taking the company''private by acquiring the remaining 37.5% stake at 13 sen per share for RM15.58 million. Mezzanine holds 62.5% stake or 199.74 million shares.

Sunway is making its foray into Sri Lanka to undertake a mixed development project with a gross development value of RM250 million. It will also launch its third property project with GDV of RM1.1 billion in Singapore next week.

MARC has downgraded its rating on Vastalux Capital Sdn Bhd's (VCSB) RM100 million Sukuk Musyarakah facility to BB+IS from A+IS and placed the rating on MARCWatch Negative.

VCSB is a special purpose company set up by Vastalux Energy to issue the Sukuk Musyarakah, largely to fund Vastalux's working capital in relation to oil and gas service contracts awarded by the Petronas group.

Stocks surge, dollar slumps on data, Fed watch

NEW YORK: Global stocks jumped but the dollar slid on Friday, Sept 24 as economic data both raised hopes the recovery is improving and bolstered speculation the Federal Reserve will boost money supply to aid a struggling economy.

U.S. stocks advanced in a broad rally that lifted Wall Street to a fourth consecutive week of gains. The benchmark Standard & Poor's 500 Index is now up 9.5 percent so far in September.

U.S. oil futures prices climbed above $76 a barrel and gold hit all-time highs above $1,300 an ounce as expectations mounted that the Fed will again pump billions of dollars into the economy to spur growth.

While data on U.S. durable goods orders and home sales were soft, stock traders latched on to a rise in business spending in August as the latest sign the recovery is on firmer ground.

Wall Street gained 2 percent and MSCI's all-country world equity index . rose 1.6 percent. Emerging markets lagged, rising 0.7 percent, according to MSCI.

U.S. Treasury debt and German Bund futures fell in volatile trading as the U.S. data supported a shift out of government bonds and into riskier assets.

Bonds have either gotten expensive or are not providing much of a return, said Jason Pride, director of investment strategy at Glenmede Investment and Wealth Management in Philadelphia, which oversees about $18 billion in assets.

"You're finally in a place now that it's not because the equity equation is so attractive that you do something, it's actually because the safe side of the equation is so unattractive that you do something," Pride said.

The Dow Jones industrial average closed up 197.84 points, or 1.86 percent, at 10,860.26. The Standard & Poor's 500 Index gained 23.84 points, or 2.12 percent, at 1,148.67. The Nasdaq Composite Index rose 54.14 points, or 2.33 percent, at 2,381.22.

The dollar tumbled against a basket of currencies to a low last seen in February on a stronger-than-expected rise in the German Ifo business climate index for September to its highest level in more than three years.

The euro was up 1.34 percent at $1.3489.

Expectations of further dollar weakness underpinned gold, as did inflation jitters on the prospect of another quantitative easing program by the Fed.

U.S. gold futures for December delivery hit a record $1,301.60 an ounce, and settled up $1.80 at $1,298.10.

"The U.S. Fed is obviously contemplating, and the market is expecting, some kind of statement on quantitative easing," said Deutsche Bank analyst Daniel Brebner. "The influx of new money in the system raises longer-term expectations for inflationary forces."

News of revived business spending drew investors away from safe-haven government debt after a week-long bond rally. U.S. traders cited talk of a very large asset allocation trade from bonds to equities.

The benchmark 10-year U.S. Treasury note fell 16/32, its yield rising to 2.61 percent.

U.S. crude oil futures rose sharply, helped by a sliding dollar and expectations the Fed would pump money into the economy.

U.S. crude for November delivery rose $1.31, or 1.74 percent, to settle at $76.49 a barrel.

ICE Brent November crude rose 76 cents to settle at $78.87 a barrel.

The U.S. Dollar Index was down 0.90 percent at 79.289, against the Japanese yen, the dollar was down 0.12 percent at 84.25.

Earlier in Asia, Japan's Nikkei share average dropped 1 percent to end at 9,471.67 after initially climbing on the yen intervention talk. The MSCI index for Asia ex-Japan stocks was up 0.5 percent. - Reuters

Citi board to raise CEO Pandit's pay in 2011

NEW YORK: Citigroup Inc said on Friday, Sept 24 its board of directors would raise Chief Executive Vikram Pandit's salary above the $1 he has earned for the past two years, in the latest sign that the bank is recovering from the financial crisis.

Pandit said in February 2009 that he would earn $1 annually until the bank returned to profitability.

"Beginning in 2011, the Board intends to compensate Vikram commensurate with the job of CEO of Citi," Chairman Richard D. Parsons said in a statement.

Pandit will earn $1 for all of 2010, the bank said in the statement.

Anton Schutz, president of Mendon Capital Advisors, which holds Citi shares, said, "Vikram has come a long way in terms of public perception ... I think his dollar compensation plays very well in Washington."

Citigroup spokeswoman Shannon Bell said, "Mr. Pandit feels very good about the substantial progress the team has made in turning around this institution, but wants to finish out the year with a $1 salary."

Other senior executives are collecting larger paychecks than Pandit, and in a regulatory filing with the U.S. Securities and Exchange Commission (SEC) on Friday the bank said they would receive incentive pay for 2010 in common shares, as high as $9 million for one senior executive.

THE ROAD BACK

Citigroup has struggled to return to profitability after racking up more than $100 billion of credit losses and write-downs starting in the third quarter of 2007. The bank received more than $45 billion of U.S. government bailout money, leaving taxpayers holding about a third of the bank.

Pandit has shed assets, laid off staff, and tried to focus Citigroup on its main businesses, including investment banking and retail banking for affluent customers globally.

Citigroup posted more than $7 billion of profit in the first two quarters of 2010.

The government's stake in Citigroup is now closer to 18 percent, after dilution and share sales. The U.S. is scheduled to finish selling off its shares by the end of 2010.

"By 2011, we should get an accurate picture of how Pandit has led this company. He has had a thankless task and has survived in a very difficult environment," said Matt McCormick, a portfolio manager and banking analyst with Bahl & Gaynor.

But, he said, "I am still not in the camp that this is clear sailing for Citi," McCormick said, adding that Pandit "should be paid fairly but not exuberantly."

On Friday, Federal Judge Ellen Segal Huvelle said she would approve a settlement agreement Citigroup made with the SEC in July once the bank made changes to ensure proper disclosures to investors in the future.

The action related to an agreement the bank made to settle SEC charges that it did not tell investors about the full extent of its subprime losses.

SHARE PAYMENTS

As long as the government holds a stake in Citigroup, the company is required under law to limit incentive pay to its top executives to one-third of their overall compensation.

The "stock salary" outlined in the filing is a holdover from the executive compensation standards set by former U.S pay czar Kenneth Feinberg.

The bank said in the filing that it would give John Havens, chief executive of Citigroup's institutional clients group, $750,000 in shares per month, or $9 million for 2010. This is the highest level of incentives among the senior executives.

Chief Financial Officer John C. Gerspach will receive $347,222 in shares for each month, or $4.6 million for the year. Vice Chairman Edward J. Kelly will get $500,000 per month, or $6 million for 2010, and North American Consumer Banking CEO Manuel Medina-Mora will receive $620,909 per month, or about $7.5 million for 2010.

Citigroup shares were closed up 2.9 percent at $3.91 on Friday. - Reuters

Bernanke hopes US not relegated to slow recovery

PRINCETON, New Jersey: Federal Reserve Chairman Ben Bernanke said on Friday, Sept 24 it was unclear whether the U.S. economy would be relegated to the type of slow recovery that typically follows a financial crisis.

Bernanke said the U.S. central bank hopes an aggressive policy response will prompt a speedier than normal economic recovery than the historic norm.

"In some episodes in the past it may be also that maybe governments and policymakers weren't aggressive enough in fixing their financial systems and using monetary and fiscal policy appropriately," he said. "And certainly the Federal Reserve has been quite aggressive ... so we're hopeful to get a better result," he said.

Bernanke, in a speech three days after the Fed said it stood ready to provide renewed stimulus if the weak recovery needed further support, offered no guideposts to the central bank's next step.

He said the recovery was so far too weak to drag down the jobless rate, but did not discuss the outlook in any further detail.

"Although financial markets are for the most part functioning normally now, a concerted policy effort has so far not produced an economic recovery of sufficient vigor to significantly reduce the high level of unemployment," he said.

The Fed after its August policy-meeting said inflation was below desirable levels and that it would step in if necessary.

Many analysts now expect the U.S. central bank to relaunch large-scale purchases of Treasury securities -- perhaps as soon as its next meeting in November -- in light of forecasts of continued high unemployment for months to come.

However, comments by two other Fed officials on Tuesday illustrate the challenges Bernanke faces in achieving consensus within the central bank if he decides the U.S. economy is weak enough to warrant further monetary easing.

One official who is among the Fed's most inflation-focused hawks, Richmond Federal Reserve Bank President Jeffrey Lacker, said the currently low U.S. inflation rate does not necessarily mean the economy is at high risk of a troubling downward price spiral.

Lacker, who is not a voter on the Fed's rate-setting panel until 2012, told reporters after a speech in Frankfort, Kentucky, he was not worried about a vicious circle in which consumers and businesses put off purchases, dragging down the economy.

"I don't see the risk of an outbreak of deflation as very high at all right now," he said. "It's quite possible for inflation to run between 1 percent and 1-1/2 percent for quite some time without us spiraling into deflation."

Most Fed officials aim for an inflation rate in the 1.7 percent to 2 percent range, although Lacker said he preferred it at a somewhat lower 1.5 percent.

The Fed's favorite core price gauge was up 1.4 percent in the 12 months through July, although the more popular underlying consumer price index has been running at just 0.9 percent. Fed officials look at core prices to get a sense of the underlying inflation trend.

Another one of the Fed's most vigilant anti-inflation hawks, Philadelphia Federal Reserve Bank President Charles Plosser, told a conference in Switzerland that he believes there should be limits to how big the Fed's balance sheet can get.

"My view is that without explicit constraints on the size of the balance sheet, the Fed runs the risk of being pressured to use its balance sheet to engage in policies whose goals have nothing to do with monetary policy," Plosser said.

The Fed's $1.7 trillion asset buying spree from 2009 into the early part of this year more than doubled its balance sheet from pre-crisis levels. Any further securities shopping aimed at easing financial conditions would bloat the balance sheet even more.

Plosser said constraints would help the Fed maintain its independence and inflation-fighting credibility. It would "give the central bank a mechanism for saying no to fiscal authorities who may want to use the central bank's balance sheet to achieve other objectives," Plosser said.

Plosser, who joins the ranks of voting Fed policy makers next year, did not address the outlook for monetary policy or the economy. - Reuters

Karambunai: No official proposal to govt for casino

KUALA LUMPUR: KARAMBUNAI CORP BHD [], whose share price has rallied over the past three days, on a news portal report about an integrated resort in Sabah, said it had not submitted any official proposal to the government.

'Karambunai has not up to date submitted any official proposal to the Malaysian government, nor has it penned any written documents with any other third parties in respect of any plan to build a casino in Karambunai,' it said in response to a query from Bursa Malaysia Securities Bhd on Friday, Sept 24.

Its share price had surged from 5.5 sen on Wednesday, Sept 22 since a news portal reported about a possible integrated resort in Sabah, to close at 18 sen on Friday. Over the past three days, the share price is up 227% or 12.5 sen.

It closed six sen higher at 18 sen on Friday with 392 million shares, accounting for about 22% of the total trading volume on Bursa Malaysia.

Karambunai is linked to NagaCorp Ltd which is listed in Hong Kong and operates a casino in Cambodia. Their common shareholder is Tan Sri Dr Chen Lip Keong, who founded NagaCorp Ltd. and serves as its chief executive officer.'' Chen is president of Karambunai Corp.

However, analysts had said they were skeptical about the proposed integrated resort project in Sabah.

Malaysian Insider said on Wednesday that Malaysia appeared to have jumped on the integrated resort (IR) bandwagon with the unveiling today of a proposed 500-acre 'eco-nature' resort in Sabah by the Performance Management and Delivery Unit (Pemandu) at the Economic Transformation Plan (ETP) open day here.

Karambunai said on Friday that since it is a key player of tourism in Sabah, its general manager of the Nexus Karambunai Hotel had been officially invited as a member of the Pemandu-driven New Key Economic Areas tourism lab.

The discussions, which included other members of the private and public sector, were to assist in governmental efforts to identify high-growth tourism potential to propel the country towards achieving Vision 2020.

'During the lab sessions, Karambunai's representative has been discussing and disclosing drawings in Karambunai with members of the private & public sectors as to the manner in which Karambunai as a member of private sector may assist in this direction,' it said.

The company also said Pemandu was free to use any drawings conducted in the lab sessions, but chooses drawings from Karambunai which has copyrights source and status.

'To Karambunai, these chosen drawings are merely meant as a plan. However, Karambunai is honoured that Pemandu uses these plans discussed in the tourism lab and disclosed to demonstrate as a tourism initiative to assist Pemandu attaining national objective. The recent public information simply mentions the existence of an integrated resort in Kota Kinabalu Sabah and has not disclosed and named specifically Karambunai as a party,' it said.

The company also said, up to date, it had not received any official communication from any governmental source.

Banks sell $2 bln China Mobile stake -IFR

SINGAPORE: Joint bookrunners Goldman Sachs, Morgan Stanley and UBS have sold about $2 billion worth of their remaining positions in China Mobile Ltd after a $6.5 billion block sale failed to clear the market at the first attempt, IFR reported on Friday, Sept 24.

The three banks were involved in a couple of clean-up trades in the days after they arranged and underwrote the sale of British telecoms company Vodafone's plc 3.2 percent stake in China Mobile in a block trade on Sept. 7.

Bankers involved in the deal declined to comment, but other banking sources said the lead banks had offloaded about $2 billion of stock at below the HK$79.20 placement price.

The sources said the stock sales were handled in a fairly coordinated manner to minimise any further impact on the stock price. With that overhang on the stock now cleared, China Mobile has recovered to trade back above the block sale price.

The stock closed up 0.4 percent at HK$80.15 on Friday, having recovered from a three-month low of HK$76.20 on Sept. 13.

Vodafone's sale of its entire stake in China Mobile was Asia's biggest-ever block trade, and the decision to underwrite the deal at an aggressive price highlights the confidence in Asia's equity markets.

However, investors have also shown that they are not prepared to buy at any price.

The three lead banks marketed 642.87 million China Mobile shares at an indicative price range of HK$79.20-$80.00 each, representing a tight discount of 2.4-3.4 percent to the stock's Sept. 7 close of HK$82.00.

The discount was much wider than the 1.2 percent to Newbridge Asia offered for its sale of a HK$9.08 billion stake in Ping An Insurance on Sept. 2.

However, the size of Vodafone's selldown, at almost six times that of the Ping An disposal, meant many investors needed a wider discount. Fund managers said they were looking for HK$78.

"It was a very aggressive trade, so not many investors were keen," said one banker. In other words, they said the deal should have been marketed at a discount of at least 4.88 percent. The tight discount was, however, the result of keen competition for the mandate.

Banking sources said one of the banks that won the deal was particularly aggressive during the pitching process and promised to hard underwrite the entire transaction at a tight discount range of 2.4-3.4 percent.

The other successful firms, also with close relationships with Vodafone, were given opportunities to match that offer, and they did. - Reuters

Negeri Sembilan state to buy Menang Corp's subsidiary land for UiTM project

KUALA LUMPUR:'' MENANG CORPORATION (M) BHD []'s 71% subsidiary Inovatif Mewah Sdn Bhd has accepted an offer by the Negeri Sembilan state government to compulsorily acquire its three pieces of land totaling 21.12ha for RM35.47 million.

Menang Corp said on Friday, Sept 24 the compulsory land acquisitions by the state government was for the development and CONSTRUCTION [] of a new campus for Universiti Teknologi Mara.

The company said the three pieces of land were situated within the Seremban 3 Township currently being developed by Menang Corp, and that the net book value of the land as at Aug 21, 2010 was about RM28.61 million.

It said the gross proceeds of the RM35.47 million received for the land acquisition would be largely utilised to pay down outstanding bank borrowings and other debts, and the balance for working capital.

Share prices close mixed

KUALA LUMPUR: Share prices closed mixed on Friday, Sept 24 on continued profit-taking and losses among heavyweights, dealers said.

The FTSE Bursa Malaysia KUALA LUMPUR COMPOSITE INDEX [] (FBM KLCI) lost 6.89 points to 1,451.19 after opening 6.50 points lower at 1,451.58.

However, the market managed to pare some of its earlier losses, in the late afternoon session on bargain hunting activities.

The INDUSTRIAL INDEX [] gained 1.32 points to 2,781.96, the Finance Index eased 61.71 points to 13,175.47 and the PLANTATION [] Index fell 8.58 points to 6,734.87.

The FBM Emas Index meanwhile, eased 24.80 points to 9,725.00, but the FBM70 [] rose 12.81 points to 9,585.51. The FBM Ace Index, gained 66.57 points to 3,848.66

Turnover was higher at 1.727 billion shares worth RM1.531 billion from the 999.443 million shares worth RM1.416 billion on Thursday.

Advancers led decliners 408 to 307, while 289 counters were unchanged, 347 untraded and 36 others suspended.

Shares of Karambunai gained on expectations that the company would benefit from the government's Economic Transformation Plan (ETP) for its tourism industry business in Sabah.

Of the active stocks, Karambunai rose six sen to 18 sen, SAAG Consolidated gained 2.5 sen to nine sen, Asian Pac Holdings increased three sen to 12 sen and Talam Corp rose half sen to 10 sen.

Among heavyweights, Maybank lost four sen to RM8.58, CIMB slipped 10 sen to RM8.09, Tenaga Nasional eased eight sen to RM8.92 and Sime Darby rose four sen to RM8.37. ' Bernama

YTL Cement buying remaining 35.16% stake in Perak-Hanjoong for RM200m cash

KUALA LUMPUR: YTL CEMENT BHD [] is acquiring the remaining 35.16% or 117.74 million shares of RM1 each in Perak-Hanjoong Simen Sdn Bhd from GOPENG BHD [] for RM200 million cash.

The company said on Friday, Sept 24 Gopeng accepted its offer to acquire the stake in Perak-Hanjoong and that a formal sale and purchase agreement would be signed in due course.

YTL Cement owns 217.16 million shares or 64.85% of Perak-Hanjoong, the second largest integrated cement producer in the country.

'The acquisition will enable YTL Cement to have full ownership of Perak-Hanjoong and fully integrate the operations of Perak-Hanjoong.

'This will further allow YTL Cement to have full control on the business direction of Perak-Hanjoong,' it said.

Perak-Hanjoong, which is in Padang Rengas, Perak, has a plant capacity of three million tonnes per annum for clinker and 3.4 million tonnes per annum for cement, both of which are manufactured for local and export markets.

Perak-Hanjoong also has a cement depot and packing plant near Batu Caves in Selangor, with an annual capacity of 600,000 tonnes.

Global financial regulatory reforms need Asian perspective, say bankers

KUALA LUMPUR: The global financial regulatory reforms should include an Asian perspective as the Asian economies have a lot of experience and views to contribute to global policy discussions, according to a meeting of Asia's senior bankers.

The Institute of International Finance (IFF) annual Asian meeting of chief executive officers, voiced concerns that the proposed global financial regulatory reform was heavily designed to address weaknesses in Western financial centres.

'We need a stronger Asian voice in international financial matters, both in the public and private sectors as the Asian economies have a lot of experience and views to contribute to global policy discussions,' said IIF managing director Charles Dallara at a media briefing on Friday, Sept 24.

He said Asia has a resilient, well capitalised and well regulated banking system. The Asian crisis was painful, and fortunately lessons were learnt by the Asian bankers.

'Poor risk management, poor governance structure and inappropriate compensation in the European and US banks, were some of the problems experienced by Asia a decade ago. As we reform the global framework, be mindful of the different circumstances faced by Asian banks,' he said.

The two-day meeting, attended by senior bankers, government leaders and financial experts, was organised by CIMB Group. It was held in Kuala Lumpur.

The conference provided senior bankers with the opportunity to exchange views on key economic and financial issues facing the region, with their peers, leading officials and financial experts.

Dallara said it was incumbent for leaders in the region to recognise that not all developments in Basel is applicable.

'While the US and Europe's capital standards need to be raised, it is (unclear) that it needs to be implemented in Asian banks,' he added.

In a statement released at the media briefing, IFF said the participants raised the unwarranted constraints on the availability of bank credit could be highly detrimental to economic growth and development in Asia.

'Regulation and supervision need to be strong enough to contain risk in the financial system, but not so restrictive that they stifle financial development and needed credit growth,' said the IFF.

Just a few weeks ahead of the upcoming first Group of 20 (G20) in Asia, Dallara added some of the themes discussed here would be presented at the G20 summit in Seoul.

The group chief executive of CIMB Group, Datuk Seri Nazir Razak added that balance between stability and growth was important.

'In general, Asian banks would not have any problem complying with the minimum standard set by Basel. We did express that the acceleration of compliance by banks would slow down the global economy.

'We were concerned about the potential amplified role of rating agencies in derivations of capital within banks. In that regard, we felt there was a certain bias towards Western countries. We had discussed the need for Asian credit ratings for a more balanced view,' he said.

Nazir also said the meeting discussed the acceleration of the Asian Banking Framework that would support economic and financial integration in the region.

'As the local economies integrate, it is important that we look at the banking framework so banks can capitalise on it. At the same time, we need to deal with cross-border banking supervision upfront rather than when it is needed. We are urging central bankers in Asia to look into this,' he said, adding that it would be put forth to the ASEAN countries first before expanding it to the wider Asian region.

Sunway to make foray into Sri Lanka with RM250m project

KUALA LUMPUR: SUNWAY HOLDINGS BHD [] is making its foray into Sri Lanka to undertake a mixed development project with a gross development value of RM250 million.

Sunway said on Friday, Sept 24 it was teaming up with Dasa Tourist Complex Pte Ltd for the project in Colombo which will involve the CONSTRUCTION [] of residential and commercial units

Its unit, SunwayMas Sdn Bhd will have a 65% stake in the JV company and Dasa Tourist 35%.

The mixed development will comprise of at least 318,000 sq ft of net saleable areas of residential units and 60,000 sq ft of net saleable areas of commercial units in Colombo city.

'Sunway is constantly on the lookout for new investments. The Group has been in India for more than 10 years and the opening of the Sri Lanka economy to foreign investment and expertise allows expansion of Sunway's geographical footprint to Sri Lanka which has a higher foreign currency rating as compared to India,' it said.

Sunway said the proposed development enables Sunway to expand into an exciting new market and increase the size of its landbank for the purpose of property development.

Amcorp Group proposes take-over for remaining 37.5% stake in MCM Tech

KUALA LUMPUR: Amcorp Group Bhd's unit Mezzanine Capital Sdn Bhd has served a notice of conditional voluntary take-over of MCM TECHNOLOGIES BHD [] to acquire the remaining 37.5% stake at 13 sen per share.

Mezzanine Capital, which owns 62.5% or 199.74 million shares in MCM Tech, had on Friday, Sept 24 said it'' does not intend to maintain the'' listing status if it holds more than 75% of the shares.

MCM Tech said the board had deliberated on the notice and 'does not intend to seek an alternative person to make a take-over offer for the offer shares'.

In accordance with the Malaysian Code on Take-overs and Mergers 1998, the board appointed Hong Leong Investment Bank Bhd as the independent adviser to advice the independent directors and holders of MCM Tech shares on the reasonableness of the offer. The appointment of Hong Leong Investment Bank is subject to the approval of the Securities Commission.

FBM KLCI stays in the red at mid-day

KUALA LUMPUR: The FBM KLCI remained in the red at the mid-day break on Friday, Sept 24, weighed down by losses at key blue chips including Genting, Tenaga and banking stocks.

At the break, the 30-stock index fell 0.56% or 8.16 points to 1,449.92.

However, trading improved in the broader market with some bargain hunting that saw gainers overtaking losers by 300 to 292, while 274 counters traded unchanged. Volume was 1.1 billion shares valued at RM716.34 million.

Investors were also encouraged as several key regional markets clawed back into the black on reports that Japanese stocks, which had taken a beating earlier in the morning, turned positive after the dollar spiked higher against the yen on rumours of intervention in the currency markets by Japanese authorities.

Japan's Nikkei 225 reversed much of its losses and was down a marginal 0.01% to 9,565.43 while Taiwan's Taiex was down 0.56% to 8,156.90.

Hong Kong's Hang Seng Index rose 0.26% to 22,105.37, the South Korean Kospi up 0.25% to 1,837.14 while Singapore's Straits Times Index added 0.11% to 3,086.60.

On Bursa Malaysia, the top loser Friday morning was DFZ Capital, which fell 23 sen to RM3.49. Genting lost 19 sen to RM9.74, Petronas Gas fell 18 sen to RM10.70, K-Star Sports lost 15 sen to RM1.84, Tan Chong Fell 12 sen to RM5.65, CIMB and Tenaga fell 11 sen each to RM8.08 and RM8.89, while AMMB lost 10 sen to RM5.66.

Other losers were Public Bank that fell six sen to RM12.56, Maybank down four sen to RM8.58 and RHB Capital lost three to RM7.01.

BAT was the top gainer, chalking up 62 sen to RM47.60; among glove makers, Top Glove rose 17 sen to RM5.27 and Hartalega added 10 sen to RM4.20, YTL gained 13 sen to RM7.70, DiGi.Com rose 12 sen to RM24.02 while DXN, Hong Leong Financial Group, Hap Seng and Masterskill rose eight sen each to RM1.13, RM8.90, RM2.83 and RM3.04 respectively.

Karambunai was the most actively traded stock with 296 million shares traded. The stock added 6.5 sen to 18.5 sen.

Other actives included SAAG, Talam, Compugates, KNM and Genting Malaysia.

Karambunai reaches highest level since April 2007

KUALA LUMPUR: Shares of KARAMBUNAI CORP BHD [] continued to climb amidst active trade on Friday, Sept 24 after a news portal had two days ago reported about an integrated resort in Sabah.

At the 12.30pm, the stock surged 54.17% or 6.5 sen to 18.5 sen with 296 million shares done.

It had earlier risen as much as eight sen to 20 earlier in the morning, its highest level since April 11, 2007 when it had closed at 20 sen.

Karambunai is linked to NagaCorp Ltd, which is listed in Hong Kong and operates a casino in Cambodia. Their common shareholder is Tan Sri Dr Chen Lip Keong, who founded NagaCorp and serves as its chief executive officer. Chen is president of Karambunai Corp.

On Sept 22, The Malaysian Insider said Malaysia appears to have jumped on the integrated resort (IR) bandwagon with the unveiling today of a proposed 500-acre "eco-nature" resort in Sabah by Pemandu at the Economic Transformation Plan (ETP) open day here.

Sources told The Malaysian Insider that the option to build a casino is on the table for the Karambunai IR ' alongside a mangrove centre, water theme park and waterfront PROPERTIES [] ' to ensure a higher return on investment (ROI).

"Although the presentation panels for the development made no mention of any casino, they repeatedly referenced Singapore's highly successful Marina Bay Sands as well as Resort World Manila in the Philippines and Vietnam's Ho Tram Strip ' all of which are casino-anchored IRs," said The Malaysian Insider.

Stocks hit by profit-taking, dollar shaky

TOKYO: Asian stocks fell back from recent five-month highs on Friday, Sept 24, hit by profit-taking fed by renewed worries over the global recovery, while the yen clung close to its highest since Japan's currency intervention last week.

The spectre of more monetary easing by the Federal Reserve and falling U.S. yields put renewed pressure on the dollar, while the euro also slipped as fresh worries about Ireland's economy and banks raised more doubts about the euro zone's prospects.

But Asian shares ex-Japan appeared poised for their strongest monthly performance in roughly a year, while even Japan's Nikkei average -- a global laggard -- is seen likely to have its best monthly performance in six months, bolstered by a renewed interest in the region that has sent funds flowing its way.

"I think many market players are looking for chances to book profits if there is any rebound," said Kiyoshi Noda, chief fund manager for MU Investments in Tokyo.

"There are persistent concerns about the U.S. economy, and unless that situation improves it is hard to think that there will be a big shift in the overall trend."

U.S. shares slumped on Thursday, hit by a worse-than-expected rise in initial unemployment claims and a sluggish rise in sales of previously owned homes, with the S&P 500 falling below a key technical level to support the views of those who had thought the recent rally was flimsy.

The malaise continued in Asia, with the MSCI index of Asia-Pacific shares ex-Japan down 0.4 percent, falling back from a five-month high touched earlier this week, with materials and tech shares taking some of the biggest hits.

Markets in China, Japan, Hong Kong and South Korea were closed on Thursday. Japan's benchmark Nikkei shed 1.3 percent to 9,446.71.

Shares of Japanese companies with strong exposure to China, such as Komatsu and Hitachi CONSTRUCTION [] Machinery, remained under pressure as a row between Japan and China over ownership of islets in the East China Sea dragged on.

Australian shares lost 0.8 percent.

But according to EPFR Global data, Asia ex-Japan Equity Funds had their best week in over 15 months in the week ending Sept. 22, while Japan Equity Funds snapped a 12-week outflow streak.

The run was due, it said, to strong regional growth and the generally good fiscal profile of key markets.

YEN WARINESS REIGNS

The MSCI world stock index slipped 0.2 percent.

The dollar traded at 84.52 yen, up 0.2 percent from late U.S. levels, but not far from the post-intervention low of 84.26 hit on Thursday, and market players remained on guard about the chance of more such action.

"There hasn't been any intervention even after the dollar fell below 85 yen, which some in the market have thought could be the line in the sand. That may lead to speculation that Japan's real defence line is around 82-83 yen," said Keiji Matsumoto, a strategist at Nikko Cordial Securities.

"Nonetheless, many market players will remain wary of intervention for now after their huge intervention."

Japan intervened on Sept. 15 minutes after the dollar hit a 15-year low of 82.87 yen, selling an estimated 2 trillion yen ($23.70 billion), its largest single-day yen selling intervention. Also pressuring the dollar are shrinking yield gaps between the dollar and the yen.

The two-year bond yield spread fell to around 29 basis points, the lowest in nearly two years, as expectations that the Federal Reserve will adopt quantitative easing brought U.S. bond yields closer to Japanese yields.

Spot gold held steady and was heading for a 1.5 percent rise from a week earlier. ($1=84.37 Yen) - Reuters

Tan Chong slips on MIDF downgrade

KUALA LUMPUR: TAN CHONG MOTOR HOLDINGS BHD []'s share price took a dip on Friday, Sept 24 after MIDF Research had downgraded the stock to a sell a day earlier.

At 9.41am, the stock fell nine sen to RM5.68 with 210,100 shares traded.

MIDF Research kept its fair value on the counter at RM4.60 based on 12 times FY11 earnings, which the research house said was in-line with its five-year average.

"At the current level, the counter is trading at almost 20 times FY11 earnings, which is at a significant premium to its peers at an average of 11 times.

"Hence, the run up in the share price could provide opportunities for profit taking," it said in report on Thursday.

Nikkei falls 1.3 percent, exporters falter

TOKYO: Japan's Nikkei stock average fell 1.3 percent on Friday, Sept 24 after a weak reading on the U.S. job market pushed down shares on Wall Street, with exporters hurt by the yen's resilience versus the dollar.

The Nikkei hit a seven-week high just above 9,700 earlier this week, getting a boost as the yen retreated against the dollar after Japan conducted its first yen-selling intervention in six years last week.

But the benchmark index has since trimmed its gains, with the yen having clawed back up from lows near 85.95 yen to the dollar struck after last week's intervention. The yen was trading at 84.52 yen to the dollar on Friday.

Sony Corp and other exporters slipped after an unexpected rise in weekly first-time jobless claims, a rise that also sent the yen higher against the dollar.

While the potential for further yen-selling intervention is a supportive factor for Tokyo shares, investors are reluctant to chase shares higher, said Kiyoshi Noda, chief fund manager for MU Investments.

"I think many market players are looking for chances to book profits if there is any rebound," Noda said.

"There are persistent concerns about the U.S. economy, and unless that situation improves, it is hard to think that there will be a big shift in the overall trend," he added.

The benchmark Nikkei dropped 124.13 points to 9,442.19. The broader Topix index declined 0.9 percent to 838.92.

The Nikkei has support near 9,400, which is right around the bottom of the cloud on daily Ichimoku charts.

Even with Friday's decline, the Nikkei is up about 7 percent for the month, on track for its biggest monthly percentage gain in six months.

Sony lost 0.4 percent to 2,577 yen, Honda Motor Co shed 1 percent to 2,924 yen and chip tester maker Advantest fell 2.8 percent to 1,686 yen.

Shares of companies with strong exposure to China, such as Komatsu and Hitachi CONSTRUCTION [] Machinery, remained under pressure as a row between Japan and China over ownership of islets in the East China Sea dragged on.

"There has been a negative reaction and there have been signs of selling pressure on China-related shares," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

Komatsu shed 0.5 percent to 1,866 yen and Hitachi Construction Machinery fell 1.8 percent to 1,782 yen.

HSBC shares open 1.36 pct down on top management change

HONG KONG: Hong Kong-listed shares of HSBC Holdings Plc opened down 1.36 percent on Friday, Sept 24 as Europe's largest bank got set for a major management change.

HSBC shares opened at HK$80, versus a previous close of HK$81.10, when trading began in Hong Kong.

The company is set to replace Chief Executive Michael Geoghegan with Stuart Gulliver, head of its investment bank, and name its finance director as chairman, a person familiar with the matter told Reuters on Thursday. - Reuters

Petrobras raises $70 bln in largest offering ever

SAO PAULO:'' Brazilian state oil company Petrobras raised $70 billion on Thursday, Sept 23 in the world's biggest share offering, giving the company the financial muscle it needs to tap vast offshore oil reserves.

The Rio de Janeiro-based company sold 1.87 billion new preferred shares at 26.30 reais each, the company said in a regulatory filing. It sold 2.4 billion new common -- or voting -- shares at 29.65 reais each.

The cash will help fund the world's largest oil exploration plan, which aims to turn Brazil into a major energy exporter. Uncertainty that the offering might not come off had brought a prolonged sell-off of Petrobras shares that shaved more than $70 billion off its market value.

But the optimism displayed by investors seeking exposure to one of the world's largest oil finds in recent decades outweighed worries about growing state involvement in the company's affairs.

"It priced at a very tight discount, which is comforting to know because the market expected it to price lower," said Marcio Macedo, who manages about $40 million of stocks for Sao Paulo-based Humaita Investimentos.

"After this very successful deal, markets will be in a good tone tomorrow." Macedo said the deal priced at a 2 percent discount to Thursday's closing price, much smaller than what investors expected.

The record-setting stock offering had total demand of $140 billion, with bids of $98 billion from existing shareholders and $42 billion from institutional investors, a source with knowledge of the transaction said.

Sovereign wealth funds from the Middle East and Asia were among the investors buying into the offering, the source said on condition of anonymity. The offering had "tremendous demand" from U.S. mutual funds, the source added.

Petrobras preferred shares, the company's most widely traded class of stock, rose 3.2 percent to 26.80 reais, outpacing a 0.7 percent rise by the Brazil's benchmark Bovespa stock index. That was the shares' largest single-day gain since Sept. 3.

The deal, comprising a $43 billion oil-for-shares swap with the government and the cash offer that investors settled, topped Japanese telecommunications firm NTT's $36.8 billion 1987 share sale and Agricultural Bank of China's $22.1 billion initial public offering earlier this year.

The share sale is a boon to the wildly popular President Luiz Inacio Lula da Silva as he seeks to usher his anointed successor, former chief of staff Dilma Rousseff, into office in a presidential vote on Oct. 3.

Lula, who leaves office on Jan. 1, campaigned in favor of the offering with an eye on capitalizing Petrobras, whose growing stature is a source of pride for many Brazilians and mirrors Brazil's rise on the global stage.

The capital plan was devised by the government to give Petrobras exclusive rights to develop 5 billion barrels of oil in one of the world's most promising energy prospects -- the deep waters off Brazil's southern coast that are believed to hold more than 50 billion barrels of crude. Banco Bradesco BBI, the investment banking arm of Banco Bradesco, was the lead manager of the offering.

Bank of America Merrill Lynch, Citigroup, Santander, Morgan Stanley and Itau BBA, the wholesale banking arm of Itau Unibanco, acted as global bookrunners of the deal.

Regional markets dip on weak US data

KUALA LUMPUR: Regional markets, including Bursa Malaysia fell on Friday, Sept 24 after weak US employment and housing data stoked further unease on the pace of the global economic recovery.

US initial claims for state unemployment benefits rose 12,000 to 465,000, breaking two straight weeks of declines, while sales of existing home sales rose at the second lowest pace in 13 years.

At 10am, the FBM KLCI fell 10.37 points to 1,447.71, weighed by losses at key blue chips including Genting, CIMB and IOI Corp. Losers led gainers by 217 to 163, while 191 counters traded unchanged. Volume was 439.83 million shares valued at RM206.94 million.

At the regional markets, Japan's Nikkei 225 fell 1.25% to 9,446.71, Taiwan's Taiex lost 0.82% to 8,135.15, Singapore's Straits Times Index shed 0.40% to 3,070.77, the South Korean Kospi declined 0.08% to 1,831.25 while Hong Kong's Hang Seng Index opened 0.4% lower at 21,964.07.

At Bursa Malaysia, Genting fell 16 sen to RM9.77, K-Star Sports down 15 sen to RM1.84, Tan Chong lost 14 sen to RM5.63, CIMB down 13 sen to RM8.06 while IOI Corp, AMMB and Bursa fell nine sen each to RM5.40, RM5.67 and RM8.03, respectively.

Karambunai, which has been in focus since report of a possible integrated resort in East Malaysia after the Economic Transformation Programme open day, continued to be actively traded with 122.4 million shares done. The counter gained four sen to 16 sen.

Other actives included SAAG, Talam, KNM, Sinotop and Hubline.

BAT was the top gainer and rose 22 sen to RM47.20; glove makers also recouped some of their losses from recent weeks, with Top Glove adding 17 sen to RM5.27 and Hartalega rising 10 sen to RM4.20.

Hong Leong Financial Group added 13 sen to RM8.95, Favelle Favco, Naim, Aeon and DXN added seven each to 87 sen, RM3.48, RM5.80 and RM1.12, respectively, while HELP rose six sen to RM4.49.

FBM KLCI falls below 1.450-point level in early trade

KUALA LUMPUR: The FBM KLCI fell below the 1,450-point level in line with the overnight dip at Wall Street and lower opening at key Asian markets after a weak reading on the US labour market dropped stocks through a key technical level, validating the worries of those who thought the recent rally was flimsy.

At 9.05am, the benchmark FBM KLCI fell 9.08 points to 1,449.00, dragged by losses at key blue chips including CIMB, Genting, Public Bank and KLK.

Losers led gainers by 88 to 43, while 75 counters traded unchanged. Volume was 37.03 million shares valued at RM20.13 million.

Among the major losers, BAT fell 16 sen to RM46.82, CIMB lost 14 sen to RM8.05, PPB Group fell 10 sen to RM16.90, KLK down eight sen to RM16.88 while Faber, Genting, Bursa and Masterskill fell seven sen each to RM3.20, RM9.86, RM8.05 and RM2.89, respectively.

Public Bank and YTL, meanwhile, fell six sen each to RM12.56 and RM7.51.

HELP advances in early trade

KUALA LUMPUR: HELP International Corp Bhd's share price rose in early trade on Friday, Sept after the company posted a strong set of earnings for the third quarter ended July 31 with net profit of RM3.23 million versus RM2.92 million a year ago.

Revenue was RM23.38 million compared with RM21.59 million. Earnings per share was 3.6 sen versus 3.3 sen.

At 9.21am, HELP was up six sen to RM4.49 with 2,000 shares done.

DXN up on 50% dividend policy

KUALA LUMPUR: DXN HOLDINGS BHD [] shares advanced on Friday, Sept 24 after the company set a dividend policy of distributing at least 50% of the group's net profit to shareholders with immediate effect.

The dividend is to be paid on a quarterly basis.

At 9.20am, DXN was up five sen to RM1.10 with 1.31 million shares done.

HK bosses rule out debate on labour reforms

HONG KONG: Hong Kong factory bosses have rejected appeals by the China Labour Bulletin activist group to debate a controversial plan that would allow Guangdong workers to collectively negotiate wages and benefits.

The CLB, a non-government body headed by democracy advocate Han Dongfang, wants a public debate with industrial organisations over the controversial plan. Nearly 60 employer groups have opposed the proposal so strongly that the Standing Committee of the Guangdong People's Congress decided not to submit the draft rule to next week's congress meeting.

Han, in a publicly released letter, said that he regretted the legislature's decision and warned that postponing the submission would do nothing to reduce industrial tensions in the province.

Representatives of the Federation of Hong Kong Industries and the Hong Kong Young Industrialists Council said on Thursday, Sept 23 that they were not interested in debating the draft legislation.

"As employers, we look at the long-term interests and investment desires of Hong Kong investors across the border whereas the [CLB] looks from the workers' perspective and fights for the bargaining power of migrant workers," the federation's deputy chairman Stanley Lau Chin-ho said.

Hong Kong Young Industrialists Council president Jack Tsui Ming-cheong said there was little to gain from a debate. "We are speaking two different languages and unlikely to reach any consensus," he said.

Influential trade unions in the city also declined to debate the plan.

Controversy flared last month when the Guangdong provincial government revealed details of proposed rules that would allow workers to elect representatives to sit on the board of a company and negotiate over wages, bonuses, paid leave, work hours, insurance, work conditions and safety standards.

The proposals call for one in every three directors to be a worker representative, and for them to have access to all corporate information other than that involving technological secrets or personal privacy.

By setting up a negotiation mechanism, the Guangdong provincial government aimed to minimise labour disputes following a wave of strikes and protests in July that hit big corporate names such as Honda and Foxconn.

Han pointed out that China's economic growth hinged on spurring domestic consumption, and that raising workers' wages was the best way to meet the goal.

However, the proposals drew fire from an alliance of Hong Kong's four largest employer groups ' the Federation of Hong Kong Industries, the Chinese Manufacturers' Association of Hong Kong, the Hong Kong General Chamber of Commerce and the Chinese General Chamber of Commerce ' and 53 smaller trade bodies.

Hong Kong factory owners employ about 10 million migrant workers in Guangdong but have faced rising labour and other costs over the past few years. They were concerned that participation by workers in company decision-making would ignite more disputes and risked leaking commercial secrets.

They warned that the planned legislation would spark an investment flight. Guangdong raised the minimum wage by about 20% in May while severe labour shortages forced employers to improve working conditions, salaries and other benefits.

However, Han argued that many smaller firms, particularly Hong Kong enterprises, had countered higher wages by raising workloads and work hours. "How many among you in the past 30 years have violated workers' rights and interests by ignoring national labour laws and regulations?" Han asked Hong Kong businessmen.

CLB spokesman Geoffrey Crothall said the group wanted a dialogue with the trade bodies. ' South China Morning Post

Nikkei set to track U.S. shares lower; eyes on yen

TOKYO: The Nikkei average is likely to fall on Friday, Sept 24 after a weak reading on the U.S. job market pushed down shares on Wall Street, with market players keeping an eye on the yen after Japan's intervention last week.

The benchmark Nikkei is likely to trade between 9,400 and 9,550, said Monex Inc market analyst Toshiyuki Kanayama, after falling 0.4 percent to 9,566.32 on Wednesday. Japan's stock market was closed on Thursday for a national holiday.

"The market will probably stay weak throughout the day," Kanayama said, due to the fall in U.S. shares and as the yen has edged higher against the dollar over the past couple of days.

The S&P 500 lost 0.8 percent on Thursday and broke below a key support level, after data showed U.S. jobless claims had risen unexpectedly in the latest week, a sign the labor market still faces headwinds.

The dollar stood at 84.51 yen, up 0.1 percent from late U.S. trading on Thursday. That was not far from Thursday's low of 84.26 yen on trading platform EBS, the dollar's lowest against the yen since Wednesday last week, the day of Japan's yen-selling intervention.

The Nikkei had hit a seven-week intraday high earlier this week, building on gains made since Japan intervened last week to weaken the yen in its first currency intervention in six years.

Japan sold an estimated 1.8 trillion yen on Sept. 15, a record for a single day, to help its exporters and to counter deflation, with Prime Minister Naoto Kan pointing to more potential yen selling. - Reuters

#Stocks to watch:* SP Setia, DXN, Talam, HELP

KUALA LUMPUR: Stocks on Bursa Malaysia are expected to open on a cautious note on Friday, Sept 24 after the market staged a pullback on Thursday, sending the FBM KLCI down 16.67 points to 1,458.08.

The pullback, which analysts said was not unexpected due to weaker external factors including the decline on European markets, saw the Malaysian market capitalization reduced to RM1.152 trillion from RM1.163 trillion on Thursday.

Year-to-date, the FBM KLCI is up 14.56% while in US dollars term, it is up 27.09%.

In Tokyo, Japan's Nikkei average fell 1.5 percent on Friday after a weak reading on the U.S. job market pushed down shares on Wall Street.

The benchmark Nikkei dropped 145.96 points to 9,420.36. The broader Topix index declined 1.3 percent to 835.88.

On Wall Street, U.S. stocks fell on Thursday after a weak reading on the labor market dropped stocks through a key technical level, validating the worries of those who thought the recent rally was flimsy, according to Reuters.

The Dow Jones industrial average was down 76.89 points, or 0.72 percent, at 10,662.42. The Standard & Poor's 500 Index was down 9.45 points, or 0.83 percent, at 1,124.83. The Nasdaq Composite Index was down 7.47 points, or 0.32 percent, at 2,327.08.

Adding to investor concerns, European data showed the pace of growth in the euro zone's services and manufacturing sector slowing more than expected. Existing-home sales rose in August by 7.6 percent from a 13-year low recorded in July, Reuters reported.

Stocks to watch on Bursa Malaysia are SP Setia, DXN HOLDINGS BHD [], Talam Corp Bhd and HELP International Bhd.

Also in focus would be cigarette companies including BRITISH AMERICAN TOBACCO (M) [] Bhd and JT INTERNATIONAL BHD [].

InsiderAsia reports cigarette companies are likely to be waiting for the upcoming Budget 2011 with some anxiety.

'This is typically the time the government announces additional taxes to be levied on the industry, and it has raised taxes every year since 2003,' according to the report which appears in The Edge FinancialDaily.

SP SETIA BHD [] posted a strong set of results, with earnings at RM87.25 million for the third quarter ended July 31, 2010 versus RM42.68 million a year ago.

It said revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.

SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.

DXN Holdings Bhd has set a dividend policy of distributing at least 50% of the group's net profit to shareholders with immediate effect. The dividend is to be paid on a quarterly basis.

Kumpulan Euro Bhd disposed of 100 million shares of Talam Corp Bhd, or 3.36%, for RM9.94 million on Sept 22 and 23.

The shares arose from the recent conversion of redeemable convertible secured loan stock-D which were acquired on June 25.

ZELAN BHD [] disposed of 7.03 million IJM Corp Bhd shares in the open market on Sept 21 and 23 for a total consideration of RM35.97 million.

It said the shares, or 0.52% of IJM's paid-up capital, were disposed in the open market at an average price of RM5.13 per share.

The original cost of investment of the sale shares was approximately RM4.14 per share at group level and RM3.50 per share at company level.

HELP International Corp Bhd posted a strong set of earnings for the third quarter ended July 31 with net profit of RM3.23 million versus RM2.92 million a year ago. Revenue was RM23.38 million compared with RM21.59 million. Earnings per share was 3.6 sen versus 3.3 sen.

HLG Research: More downside volatility ahead

KUALA LUMPUR: HLG Research said on the back of sluggish Wall Street and Europe markets, coupled with the expanding profit taking momentum on the local core blue chips on Thursday, Sept 23, it expects to see more downside volatility ahead.

'As the 1st support of 10-day SMA was broken yesterday due to fierce selldown, this could send the index to the steeper support levels of 1,442 (20-day SMA), 1,420 (30-day SMA) and 1,407 (40-day SMA),' it said.

HLG Research cautioned that if these support levels failed, it may even test the immediate uptrend line support around 1,385-90.

'Thus, until signs of a rebound emerge, investors should treat this market with caution,' it said.

As for the Dow Jones Industrial Average, it said there could be more profit taking consolidation ahead as it has formed a Bearish Engulfing Line as well as trend and momentum indicators are losing steam.

Immediate resistance levels are 10,900-11,000 whilst support level falls around 10,462 (200-day SMA), followed by 10,338 (100-day SMA).

AmResearch reaffirms Buy on Cocoaland

KUALA LUMPUR: AmResearch reaffirmed its BUY rating on Cocoaland Holdings (Cocoaland) with higher fair value of RM3.70/share (previously RM3.60/share).

It said on Friday, Sept 24 the higher fair value was based on target PE of 16 times FY11F earnings.

'We tweaked our FY11F and FY12F earnings forecast higher by 6%, taking into account the group's accelerated PET bottling expansion plan - as revealed during a company visit recently,' it said.

At more than 2.0 times the rate as initially planned, plans are afoot for installation of three additional lines, bringing total installed capacity from 120 million to 480 million bottles per annum by F12F.

'More importantly, our positive view of the group's growth trajectory has been reinforced, as secured high off-take rates by Fraser & Neave Holdings (F&N) from existing and upcoming second production line will truncate downside risks of idle capacity,' it said.

OSK Research maintains Neutral on HELP

KUALA LUMPUR: OSK Research said although HELP International Corp Bhd's nine-months net profit of RM12.62 million only made up about 68% of its forecast for the financial year ending Oct 31, 2010, 'we deem the results in line with our estimates'.

It said on Friday, Sept 24, this was after taking into account seasonal factors as the 9M earnings historically only comprised about 65% of the company's full-year earnings.

As expected, due to the summer break for courses from institutions in the northern hemisphere, 3Q10 revenue and net profit were significantly lower on-quarter.

'We maintain our forecast and NEUTRAL recommendation at an unchanged TP of RM4.30, based on 14 times PER on FY11 EPS plus a net cash value per share of 68 sen,' it said.

Markets end down, S&P under key level

NEW YORK: U.S. stocks fell on Thursday, Sept 23 after a weak reading on the labor market dropped stocks through a key technical level, validating the worries of those who thought the recent rally was flimsy.

Major indexes were little changed for most of the day before the S&P 500 broke below 1,130, the high end of the summer's trading range. Investors had hoped that the level would hold despite low trading volume, which raised questions about the rally's stamina. Thursday's volume was very light, with 7.21 billion shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, far below last year's estimated daily average of 9.65 billion shares.

"Market technicians had been very positive on our breaking out of that range, so falling back under it added to the decline we saw and accelerated our losses," said John Stoltzfus, senior market strategist at Ticonderoga Securities in New York. "I think there's a good chance we'll regain that level, but right now the glass appears half-empty."

Jobless claims unexpectedly rose in the latest week, a sign that headwinds still face the labor market. Existing-home sales rose in August, but from still-depressed levels.

"Weakness in housing and the labor market continues to create overhead for stocks and suggests that the size of the rally we've seen this month was probably unwarranted," said Len Blum, managing partner at Westwood Capital LLC in New York.

The S&P 500, coming into Thursday, had gained 8.1 percent for the month, and some traders noted potential profit-taking as the quarter-end approached.

The day's biggest losses came in the financial sector, with the S&P financial index off 2 percent. Insurance companies were the top two percentage decliners among the index's components, with MetLife Inc down 3.9 percent at $37.86 and Principal Financial Group Inc off 3.7 percent to $24.80.

Big TECHNOLOGY [] companies offset some of the losses on the Nasdaq, with Nvidia Corp up 2 percent to $11.62 and U.S.-listed shares of Baidu Inc up 3.5 percent to $95.03.

The Dow Jones industrial average was down 76.89 points, or 0.72 percent, at 10,662.42. The Standard & Poor's 500 Index was down 9.45 points, or 0.83 percent, at 1,124.83. The Nasdaq Composite Index was down 7.47 points, or 0.32 percent, at 2,327.08.

Adding to investor concerns, European data showed the pace of growth in the euro zone's services and manufacturing sector slowing more than expected. Existing-home sales rose in August by 7.6 percent from a 13-year low recorded in July.

Software maker Red Hat Inc jumped 9 percent to $40.07 after posting earnings that beat Wall Street's estimates, while Bed Bath & Beyond rose 3.2 percent to $43.40 a day after its earnings also topped forecasts.

McDonald's Corp fell 0.7 percent to $74.64 after it raised its quarterly cash dividend by 11 percent to 61 cents. The move comes a day after fellow Dow component Microsoft Corp raised its dividend but sold off as investors had been looking for a higher yield.

Bionovo Inc soared 57 percent to $1.91 after the U.S. health regulators accepted the chemistry, manufacturing and controls plan for its lead drug candidate, Menerba, an experimental treatment for hot flashes related to menopause.

Bespoke Investment Group wrote that the top-performing stocks of the quarter should continue to outperform in the final week because of window dressing.

The theory is that "fund managers want to have these names on their books for clients to see," the firm wrote to clients. - Reuters

Nike profit, future orders stronger than expected

DETROIT: Nike Inc posted a far stronger than expected quarterly profit on Thursday, Sept 23 due to strong demand in markets like North America and China, sending its shares up 5 percent.

The largest global player in the athletic shoe and clothing market also said future orders, excluding currency exchange rates, were up 13 percent, better than analysts had expected.

Net income in its fiscal first quarter rose 9 percent to $559 million, or $1.14 a share, compared with $513 million, or $1.04 a share, in the year-earlier period.

Analysts had expected $1.01 a share, according to Thomson Reuters I/B/E/S.

Sales in the quarter ended Aug. 31 rose 8 percent to $5.18 billion. Analysts had expected $5.22 billion.

Excluding currency fluctuations, revenue rose 10 percent.

Orders for Nike brand shoes and apparel scheduled for delivery from September 2010 through January 2011 totaled $7.1 billion and were up 10 percent from a year earlier. Excluding currency changes, those future orders rose 13 percent, better than analysts had expected.

Orders are a key gauge of demand and the company in the fourth quarter saw them rise 7 percent.

Nike shares rose 5.3 percent in after-hours trading after closing at $77.67. - Reuters

Liow: Board liberalises medical ads guidelines

PUTRAJAYA: The Medicine Advertisement Board (MAB) has liberalised requirements and guidelines pertaining to medical advertisements to keep up with the changing healthcare scenario and current needs of all stakeholders, Health Minister Datuk Seri Liow Tiong Lai said on Sept 23.

"Under the liberalisation, some changes and inclusions have been made, such as expansion of the media available for publishing healthcare facilities and services.

"All print media and broadcast media are now allowed, including newspapers and all types of magazines, as well as electronic media such as the Internet, radio and television," he told a news conference here.

Previously, such advertisements were confined to health magazines, directories, leaflets and billboards, whereas press advertisements were limited to congratulatory messages only, he said.

Under the new rules, the use of banners for a limited period to announce the opening of a new healthcare facility was also permitted.

He said advertisements in other countries should comply with the relevant requirements of those countries.

"However, where such advertisements are also available to the general public in Malaysia (for example, through the Internet), then such advertisements should also conform to Malaysian guidelines," he said.

Liow said the information contained in the advertisement should be factually accurate and capable of substantiation and there should not be any laudatory promotion of individual practitioners' skills or experience.

"Misleading claims, with the intention of encouraging the public to procure unnecessary medical services, should not be published. For instance, the use of superlatives, patient testimonials, financial inducements and downplaying of risks are not allowed," he added.

Liow said the regulations on medical advertising were not to dampen medical advertising, but to ensure responsible dissemination about the type and nature of healthcare services available.

"This is because the basic premise of healthcare facilities is to provide quality healthcare services rather than give more emphasis on promotional or marketing activities," he said.

To further facilitate medical advertising, Liow said, MAB would issue approvals within three to five working days instead of the six weeks previously.

"But the fast-track approval procedure is only for applications which are complete and comply with the requirements set by the MAB," he said.

Speaking to reporters after attending an Aidilfitri celebration at the ministry, Liow said the discovery of mosquitoes breeding in the compound of the Penang Hospital was a serious matter.

"Although the mosquitoes were not Aedes, carrier of the dengue virus, we regard the matter as serious because the hospital should set a good example in the eradication of mosquitoes," he told reporters.

He said a compound fine of RM500 had been imposed on the hospital and a warning had been issued to the director. -- Bernama

Kumpulan Euro sells 100m Talam shares

KUALA LUMPUR: Kumpulan Euro Bhd disposed of 100 million shares of Talam Corp Bhd, or 3.36%, for RM9.94 million.

KEuro said on Thursday, Sept 24, the shares were disposed of on Sept 22 and 23.

The shares arose from the recent conversion of redeemable convertible secured loan stock-D which were acquired on June 25.

'The disposal gave rise to a net profit of RM3.24 million or 0.68 sen per ordinary share. The net assets of KEuro also increased by 0.68 sen to RM0.191 per ordinary share,' it said.

It added the disposal of the Talam shares had reduced its gearing ratio from 2.95 times to 2.81 times, based on the audited financial statement as at Jan 31, 2010.KEuro said the book cost of the shares was RM6.70 million.

The sale proceeds from the disposal will be used to pay the creditors.

Zelan disposes of 7.03m IJM shares

KUALA LUMPUR: ZELAN BHD [] disposed of 7.03 million IJM Corp Bhd shares in the open market on Sept 21 and 23 for a total consideration of RM35.97 million.

It said on Thursday, Sept 23 the shares, which represented 0.52% of IJM's paid-up capital, were disposed in the open market at an average price of RM5.13 per share.

'The original cost of investment of the sale shares was approximately RM4.14 per share at group level and RM3.50 per share at company level,' it said. As at Aug 31, the book value of the sale shares was about RM4.99 per share at group level.

Zelan said the proceeds would be used to pare down bank borrowings and to provide working capital for the group's operating requirements.

'The gain on the disposal at group level was approximately RM6.82 million''while at''the company level was approximately RM11.37 million,' it said

The disposal of the shares was part of the resolutions approved at Zelan's extraordinary general meeting held on Sept 7 to dispose of 30 million IJM shares.

SP Setia 3Q net profit jumps 104% to RM87.25m

KUALA LUMPUR: SP SETIA BHD [] posted a strong set of results, with earnings at RM87.25 million for the third quarter ended July 31, 2010 versus RM42.68 million a year ago.

It said on Thursday, Sept 23 revenue increased 13.5% to RM414.90 million from RM365.57 million. Earnings per share were 8.58 sen versus 4.2 sen.

SP Setia also said the group has achieved sales of RM1.95 billion as at Aug 31, achieving its full year FY2010 sales target of RM2 billion, two months ahead of its financial year ending Oct 31.

'The 10-months sales value has already exceeded the group's highest ever sales value over one financial year of RM1.65 billion recorded in FY2009 by 18%,' it said.

SP Setia said sales had remained strong since the start of the year, with RM590 million achieved in the third quarter and cumulative nine-months sales of RM1.8 billion.

Projects that contributed to these numbers include Setia Alam and Setia Eco-Park at Shah Alam, SetiaWalk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.

SP Setia president and CEO Tan Sri Liew Kee Sin said the group's proactive moves in 2009, aimed at capturing market share in the luxury high rise and integrated commercial sector, whilst further consolidating its lead in the landed residential segment, had borne much fruit.

DXN sets dividend policy of at least 50% of net profit

KUALA LUMPUR: DXN HOLDINGS BHD [] has set a dividend policy of distributing at least 50% of the group's net profit to shareholders with immediate effect. The dividend is to be paid on a quarterly basis.

The company said on Thursday, Sept 23 that based on the group's performance,'' especially the sturdy growth of its multi-level marketing business in the overseas markets, 'the company is of the opinion that it has the financial capability to meet the dividend policy'.

DXN said the dividend policy was to set a clear profit distribution to reward existing shareholders for their support, as well as to attract long-term investors, and enable shareholders to enjoy higher returns.

Its product lines include dietary supplements, food and beverages, personal care products, household products and water treatment system.

For the first quarter ended May 31, 2010, it posted net profit of RM10.07 million versus RM5.02 million a year ago. Its revenue was RM67.80 million compared with RM64.78 million a year ago.

It had then declared a first Interim dividend of 4% less 25% tax and 4% tax exempt per ordinary share of 25 sen each. It had RM43.46 million cash and cash equivalents as at May 31.

RAM Ratings reaffirms ratings of Penang Bridge's RM1.48b debt notes

KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the ratings of Penang Bridge Sdn Bhd's (PBSB) debt notes totaling RM1.48 billion and the long-term ratings have a stable outlook.

RAM Ratings said on Thursday, Sept 23 that it has reaffirmed the AA2 ratings of PBSB's RM785 million Al-Bai' Bithaman Ajil facility (2000/2013) (BaIDS) and RM695 million redeemable zero-coupon serial Sukuk Istisna' (2006/2019) (Sukuk). The long-term ratings have a stable outlook.

UEM Group Bhd is the parent company of PBSB, which is the concessionaire of the 13.5-km Penang Bridge and is responsible for managing, operating, upgrading and collecting bridge toll under a 25-year concession that ends on May 31, 2018.

The ratings agency said given the bridge's status as the only road link between the mainland and the island of Penang, it has been consistently posting traffic-volume growth since its opening in 1985.

Despite the challenging economic environment in 2009, traffic flow on the bridge rose 2.5% year-on-year to 23.08 million passenger-car-units (PCU). The growth momentum continued into 2010, as evidenced by the Bridge's 11.7% on-year traffic-volume increase for the first seven months of the year.

It believed this was due to the low base in early 2009 and more upbeat economic sentiment; Malaysia's gross domestic product (GDP) expanded 8.9% on-year in 2Q 2010.

Second Penang Bridge

Based on the management's traffic projections, the opening of the Second Penang Bridge (Second Bridge) - expected by 4Q 2013 - is expected to reduce the bridge's traffic volume by about 16%.

However, RAM Ratings said it was difficult to gauge the exact impact at this juncture, as commuters' decision to use the competing route will depend on factors like traffic-dispersal systems, travelling distance, convenience and toll rates.

Nonetheless, RAM Ratings' cashflow analysis assumes a 20% reduction in the Bridge's traffic volume upon the completion of the Second Bridge, followed by a 1% growth thereafter.

It highlighted that a greater-than-expected traffic leakage will strain the company's cashflow.

Based on RAM Ratings' cashflow analysis, PBSB is expected to register respective minimum and average finance service cover ratios (FSCRs) (with all cash balances, post-distribution) of 2.26 times and 3.02 times throughout the tenures of the facilities (excluding the final year of the Sukuk repayment), underpinned by an average pre-financing cashflow of about RM127 million per annum.

Notably, the PBSB's FSCRs (without cash balances) will dip below 1.0 time from 2015 onwards due to the Sukuk's increasing repayments.

During that period, PBSB will have to partially rely on its cash reserves to meet its debt obligations.

'We therefore remain cautious about the company's future distributions to its shareholder, as sustained distributions ' while still adhering to the distribution covenant of 2.5 times ' may weaken its future FSCRs beyond its existing profile. We also note that the company has not declared or paid any dividend since fiscal 2001,' it said.

Economy worries push European shares lower

LONDON: European shares fell on Thursday, Sept 23, extending their decline for a third day, as fresh euro zone data added to existing worries about the strength of the global economic recovery.

The pace of growth in the euro zone's services and manufacturing sectors slowed much more than expected this month.

At 0916 GMT the FTSEurofirst 300 index of top European shares was 0.7 percent lower at 1,058.70 points, having been as high as 1,074.48 earlier in the session.

On Wednesday the index fell 1.5 percent to its lowest close in two weeks. The index has gained 3 percent in September, but is more than 5 percent off an April peak.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC40 fell between 0.7 and 0.9 percent. In a broad market decline, heavyweight banks extended their declines from the previous session, with Barclays, Credit Suisse and UBS between 1.6 and 3.2 percent lower.

U.S. DATA

Later in the session market attention is expected to turn to U.S. weekly jobless and existing homes sales data for the latest reading on the state of the world's biggest economy following the Federal Reserve's downbeat assessment on Wednesday.

"There's a fair bit to say indexes will stay in the range for now," said Bernard McAlinden, investment strategist NCB Stockbrokers in Dublin. "Of all the data, the existing home sales is the most important. We need to see a significant bounce there to give markets any assurance."

McAlinden also said the euro zone's debt problems haven't gone away. "Spain, Portugal, Greece, Ireland are under significant pressure in the coming months to put forward retrenchment measures in their budgets for 2011," he said.

''

BASF UP

However, chemicals giant BASF was up 2 percent on Thursday, extending gains from the previous session, when it raised its 2010 sales outlook and said business in the third quarter was set to beat market expectations.

With gold hovering near a record high, Randgold Resources rose 0.7 percent, and had earlier hit a record.

But other miners were lower, on worries about the demand outlook. Anglo American, Rio Tinto and Lonmin fell between 1 and 1.3 percent.

Meanwhile Mitchells & Butlers gained 1.1 percent, after the UK's biggest pub group reported a 4.4 percent increase in sales at outlets open for more than a year, driven by food. - Reuters

Malaysia promoted to advanced emerging market status in FTSE Global Equity Index Series

KUALA LUMPUR: Malaysia has been promoted to Advanced Emerging market status from the current Secondary Emerging market status in the FTSE Global Equity Index Series.

Global index provider FTSE Group (FTSE) said on Thursday, Sept 23 the promotion to the Advanced Emerging status demonstrates that Malaysia has met FTSE's 'Quality of Markets Assessment' criteria in that category.

'Malaysia will be moved from the FTSE Secondary Emerging Market Indices into the FTSE Advanced Emerging Market Indices, and all parent and sub-indices of these benchmarks, from June 2011,' said FTSE Group.

In the joint statement, BURSA MALAYSIA BHD [] chief executive officer Datuk Yusli Mohamed Yusoff said the promotion of Malaysia into the Advanced Emerging category by FTSE marked another milestone in the development of the market.

'This is testament to the efforts taken to build an efficient and quality market and we are now ready to take on a new level of challenge in this upgraded classification of our capital market,' he said.

Yusli said this recognition belonged to the whole nation following the 'untiring effort and support' given by the government, the regulators, market participants and investors keen to build a market of international quality.

Malaysia joined the FTSE Watch List for possible inclusion in the Advanced Emerging market status a year ago when FTSE announced the results of its Country Classification Annual Review in September 2009.

Malaysia hoped the reclassification of the Malaysian capital market would result in an improvement of the weightage of Malaysia in international indices and increasing foreign investment inflow.

#Flash* DiGi falls to 2-month low

KUALA LUMPUR: DIGI.COM BHD [] shares fell to RM23.88 in late afternoon trade on Thursday, Sept 23, the lowest since July 21 on expectations the new iPhone 4, to be launched later in the day, would impact its profitability.

At 4.28pm, DiGi is down 70 sen to RM23.88. Turnover was thin with 88,500 shares done.

Maxis Communications Bhd will launch the iPhone on Friday.

The Edge FinancialDaily quoted analysts as saying that they expect DiGi to subsidise the new iPhone which would have an impact on its profitability.

Analysts said the introduction of the fourth-generation smartphone from Apple Inc is expected to impact DiGi's earnings before interest, taxation, depreciation and amortisation (Ebitda) margins, which have suffered over the last few quarters because of handset subsidies.

The overall market was also down, with the FBM KLCI down 17.39 points to 1,457.36. Turnover was 879 million shares valued at RM1.2 billion. There are 186 gainers versus 558 losers.

Other decliners weighing on the 30-stock FBM KLCI are BAT, down 80 sen to RM47, Genting 47 sen to RM9.91.

August vehicle sales hit 55,208 units, to slow down in September

KUALA LUMPUR: Vehicle sales in August, 2010 rose to 50,208 units, which was 12.8% higher than the 48,937 units a year ago, according to the Malaysian Automotive Association (MAA).

It said the strong sales were underpinned by deliveries for the Hari Raya celebrations while rush for deliveries was supported by higher production in July.

On the outlook for September, it forecast sales to be lower after the rush of deliveries and clearing of back orders in August. Another factor would be the lower production in August.

FTSE upgrades Turkey, Czech, Malaysia stock markets

ATHENS: Index compiler FTSE on Thursday, Sept 23 promoted the stock markets of Turkey, the Czech Republic and Malaysia to advanced emerging status and kept Greece on watch for a possible demotion after an annual country review.

"Global markets are constantly changing and more countries are opening their markets to international investment," FTSE Group chief executive Mark Makepeace said in a statement.

"The Czech Republic, Malaysia and Turkey were promoted (from secondary emerging)... following significant changes to their regulations and investment procedures," he said.

FTSE classifies global equity markets as developed, advanced emerging, secondary emerging or frontier within its equity index series. The indices are tracked by institutional investors.

Markets are assessed against criteria covering custody and settlement, the dealing landscape, derivatives and the regulatory environment.

"China A shares, Colombia, Greece, Kazakhstan, Kuwait and Taiwan will remain on the watch list and will be reviewed again in September 2011," FTSE said.

Greece's stock market kept its developed-market status but remained on FTSE's watchlist for a possible downgrade to advanced emerging for another year, as expected.

Greece gained mature market status in 2001 after joining the euro zone. It was first placed on watch for possible demotion in 2006. If implemented, the move could prompt an exodus by index funds that track mature markets.

Greece has addressed most of the issues raised by FTSE, such as off-exchange transactions which have been enabled by MiFID and stock lending which has been liberalised. One remaining issue relates to omnibus accounts.

The Greek exchange requires data on the final investor-owner of shares, while FTSE's clients desire information that stops at the level of broker. ' Reuters

Share prices end sharply lower, FBM KLCI below 1,460-point level

KUALA LUMPUR: Share prices here ended sharply lower on Thursday, Sept 23, dragged by losses in major heavyweights, dealers said.

The FTSE Bursa Malaysia KUALA LUMPUR COMPOSITE INDEX [] (FBM KLCI) lost 16.67 points to 1,458.08 after opening 0.95 points higher at 1,475.7.

Dealers said there was a correction after the bourse touched a two-and-a-half-year high on Tuesday with investors tracking losses on Wall Street amid pessimistic assessment by the US Federal Reserve's Federal Open Market Committee on Tuesday that the US economic recovery had slowed.

"I think economic problems are beginning to surface in Europe & US. That is why the market is down today. US economy is still shaky ' that is why the US Fedearal Reserve is ready to do their 'quantitative easing' measures if economy slides," said Maybank Investment Bank head of retail research Lee Cheng Hooi.

He said resistance for the FBM KLCI would be seen at 1,480 and market was pressurizing its support of 1,460.

The INDUSTRIAL INDEX [] shed 17.70 points to 2,780.64, Finance Index slipped 95.681 points to 13,237.18 and the PLANTATION [] Index declined 134.3 points to 6,743.45.

The FBM Emas Index eased 101.37 points to 9,749.8, FBM Ace Index slid 24.63 points to 3,782.09 and the FBM70 [] dropped 67.62 points to 9,572.70.

Turnover was lower at 999.443 million shares worth RM1.416 billion from 1.332 billion shares worth RM2.021 billion on Wednesday.

Decliners led advancers by 523 to 221 while 254 counters were unchanged, 354 untraded and 36 others suspended.

Gamuda lost four sen to RM3.84 on profit taking after its recent advances in line with the easier market sentiment.

Of the active stocks, Karambunai rose four sen to 12 sen, KNM Group gained half a sen to 47 sen, Compugates Holdings declined half a sen to 6.5 sen and Tiger Synergy was flat at 12.5 sen.

Among heavyweights, Maybank lost six sen to RM8.62, CIMB slipped 10 sen to RM8.19, Tenaga Nasional lost four sen to RM9.00 and Sime Darby eased one sen to RM8.33. ' Bernama

Euro zone PMIs show slowing growth, rising optimism

LONDON: The pace of growth in the euro zone's services and manufacturing sectors slowed much more than expected this month, but surveys published on Thursday, Sept 23 showed businesses were more optimistic about the future.

Markit's Eurozone Flash Services Purchasing Managers' Index, made up of surveys of around 2,000 businesses ranging from banks to restaurants, slumped to 53.6 in September from 55.9 in August, its lowest reading since February.

The index has now been above the 50.0 mark that divides growth in business activity from contraction for just over a year but was well below the consensus forecast in a Reuters poll for 55.5.

"Quite a dramatic easing since September, but the third quarter as whole is not looking too bad. It's still a strong pace of growth ... we think we are looking at growth in the region of 0.6 percent," said Chris Williamson at data provider Markit.

The pace of growth in the euro zone manufacturing sector, which drove a large part of the economy's return to growth in the third quarter of last year, saw its pace of growth ease off to its slowest since January.

The flash manufacturing index fell to 53.6 in September from 55.1 in August, missing forecasts for 54.5, while the output index sank to 54.4 this month, from 57.1 in August.

The composite index, made up from the services and manufacturing sectors and often used to predict overall growth, sank to 53.8 this month from 56.2 in August, well short of expectations for 55.7.

The euro zone escaped from its deepest recession in post-war history in the third quarter of last year, having pumped billions of euros into recovery measures, and relatively strong second-quarter growth of 1.0 percent announced last month surprised markets.

Still, economists in a Reuters poll expect economic growth to slow to a crawl over coming quarters as austerity packages begin to bite, though the chances of the bloc slipping back into recession remain slim.

Median forecasts from the poll of around 70 economists predict the 16-nation bloc will grow by 0.2 to 0.4 percent each quarter through to the end of next year.

The manufacturers' new orders index slumped from 55.3 in August to 52.8 in September, its lowest in a year, on the back of a slowdown in global trade in recent months.

The service sector saw its new business index fall by a similar margin.

Data released on Wednesday showed industrial new orders fell more than twice as much as expected month-on-month in July, pulled down by a slump in demand for capital and durable consumer goods.

In addition, the euro has made steady gains against the dollar as fears about a slowdown in United States weigh on the greenback, making the bloc's exports less attractive financially.

CONFIDENT COMPANIES

The service sector's business expectations index -- which gives an indication of how firms think the situation will be in a year's time -- rose to 68.1 this month from August's 67.1, its highest reading since April.

That is in sharp contrast to Germany's ZEW economic think tank's monthly poll which showed economic sentiment fell much more than forecast in September, suggesting the recovery in Europe's largest economy will lose momentum.

Earlier data from Germany showed its pace of growth slowed much faster than expected with the service sector expanding at its slowest pace since February and the factory sector at its slowest since January.

Neighbouring France's service sector also grew slightly slower than expected, but its manufacturing sector surprised markets by growing at a faster pace than had been predicted.

Worryingly for policymakers, the composite employment index, which dropped to 51.3 this month from 51.7, suggests that firms took on fewer workers than they did in August.

Unemployment held at 10 percent of the workforce for the fifth month running in July, near a 12-year high, and undermining household demand.

"We have had five months of employment growth in the euro area but nothing spectacular. It suggests that job creation is remaining very lacklustre, and it will be hard to shift that unemployment number from 10 percent," Williamson said. - Reuters

Electrolux CEO to step down, R&D head to replace

STOCKHOLM: Electrolux, the world's second biggest home appliances maker, said on Thursday, Sept 23 chief executive Hans Straberg is to step down at the end of the year to pursue new interests after nearly a decade at the helm.

Electrolux said Straberg, 53, would be replaced by Keith McLoughlin, who is currently head of R&D, manufacturing and purchasing at the group, the second largest in the sector globally behind US company Whirlpool.

The changing of the guard was unexpected in the light of the acclaim Straberg had received for reshaping the group in recent years but analysts said McLoughlin, 54, a former North America head, was the obvious choice as his successor.

"We feel Keith McLoughlin is a good, dedicated person, and his track record from his three years in North America speak in his favour," Nordea analyst Johan Trocme said.

"Of course there is always a measure of uncertainty related to changing CEO in a large organisation, but in this case they are keeping a good measure of continuity."

Straberg said in a statement that he wanted to do something new after spending 27 years working at the company, which makes appliances under brands including Frigidaire, Zanussi and AEG-Electrolux.

"This was not an easy decision to make, but I consider my mission accomplished," he said.

Electrolux shares edged 0.1% lower to 161.8 Swedish kroner (RM72.93) at 0757 GMT, exactly in line with the Stockholm bourse's blue chip index.

Straberg spent much of the past decade restructuring a group squeezed by cutthroat competition from lower-cost rivals, shifting a growing slice of Electrolux's production to emerging markets to tap into lower labour costs.

A new focus on premium white goods helped Electrolux boost its profitability despite a sharp fall in demand due to US housing market woes and ensuing global financial crisis, winning Straberg acclaim from industry analysts.

In July, Electrolux just missed earnings forecasts in the second quarter but repeated its outlook for demand to grow this year in its main markets though Europe was expected to see a slow recovery.

Chairman Marcus Wallenberg said he was sorry to see Straberg go and noted the market value of the company had doubled under his nine years as top executive.

"The Board is pleased that Keith McLoughlin will take the baton," Wallenberg said.

"His focus will be to continue executing the Electrolux strategy. Keith has been deeply involved in developing and implementing the strategy, has turned around the Electrolux North American major appliances operations and has already today a major global responsibility." ' Reuters