Tan Chong Motor to venture into luxury cars manufacturing

KUALA LUMPUR: TAN CHONG MOTOR HOLDINGS BHD [] will invest RM285.0 million to manufacture and assemble luxury passenger cars at the Kota Kinabalu Industrial Park in Sabah.

Tan Chong said on Friday, Nov 12 it had received an approval from the Ministry of International Trade and Industry for a manufacturing licence at the industrial park to manufacture and assemble luxury passenger vehicles and commercial vehicles.

'The approval letter is subject to, among others, the condition that the manufacturing and assembly activities shall be for luxury passenger cars with engine capacities of 1,800cc and above, at on the road price of not less than RM150,000,' it said.

Tan Chong said the project would focus on the CONSTRUCTION [] of a manufacturing facility for 4-wheel drive vehicles with an initial planned production capacity of 3,000 units per annum.

'The group plans to invest up to RM285 million for the project (including purchase of 50 acres of land in the industrial park), which will be implemented over several phases,' it said.

The Sabah-owned industrial estate is 25 km north of Kota Kinabalu and occupies 8,320 acres, and it is set to be the next major centre of growth for the state.

Tan Chong said the state government's plan was to establish Sabah as the gateway to the Brunei-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA).

#Stocks to watch:* BDRB, Tan Chong, P&O, Maybank

KUALA LUMPUR: ''Investors are expected to stay cautious this week, starting Nov 15 after the sharp falls in the past two trading days as fears of rising interest rates in China accelerated profit taking.

Wall Street ended a five-week winning steak on Friday, Nov 12 as investors booked profits and reassessed their bullish positions in equities.

Reuters reported investors worried tighter credit in China would curb demand for commodities, driving down energy and natural resource stocks. The two sectors were the biggest drag on the S&P.

A string of global worries, including debt problems in Ireland, have prompted investors to reassess their positions.

The Dow Jones industrial average fell 90.52 points, or 0.80%, to end at 11,192.58. The Standard & Poor's 500 Index slid 14.33 points, or 1.18%, to 1,199.21. The Nasdaq Composite Index dropped 37.31 points, or 1.46%, to 2,518.21.

At Bursa Malaysia, the FBM KLCI fell below the crucial 1,500 level, which is now the resistance level as investors took profit on Thursday and Friday. On Wednesday, the KLCI had hit an all-time intra-day high of 1,531.

Stocks to watch on Monday are companies with fresh corporate news including BANDAR RAYA DEVELOPMENTS BHD [] (BDRB), TAN CHONG MOTOR HOLDINGS BHD [], Pacific & Orient Bhd and MALAYAN BANKING BHD [].

BDRB is teaming up with Country Heights Land Sdn Bhd (CHLSB) to undertake a housing project costing RM481 million in Pekan Baru Sungai Besi, Selangor.

Its projected gross development value (GDV) would be RM652 million and the projected gross development profit at RM170 million.

Meanwhile, Tan Chong Motor will invest RM285.0 million to manufacture and assemble luxury passenger cars at the Kota Kinabalu Industrial Park in Sabah.

It had received a government approval to manufacture and assemble luxury passenger vehicles and commercial vehicles. The approval is for luxury passenger cars with engine capacities of 1,800cc and above, at on the road price of not less than RM150,000.

Meanwhile, Pacific & Orient called off the preliminary negotiations for the proposed divestment of an equity interest in Pacific & Orient Insurance Co. Bhd to Prudential Holdings Ltd. It had informed Bank Negara Malaysia the proposed divestment discussions had been discontinued.

Maybank earnings were RM1.028 billion in the first quarter ended Sept 30, 2010, up 16.6% from RM881.80 million a year ago, underpinned by improvements in all the divisions, including its Indonesian operations.

Its revenue rose to RM5 billion from RM4.56 billion. Earnings per share were 14.53 sen versus 12.46 sen.

Maybank's ''net interest income increased by 9% or 146.9 million in the first quarter ended Sept 30, due to improvements in the group's operations from higher net interest income margins in Malaysia arising from increases in the overnight policy rate and expansion of market in Indonesia.

Income from Islamic Banking operations decreased by RM43.3 million or 11.3% to RM338.2 million due to higher provision for profit equalisation reserves in the Islamic business but mitigated by increase in growth in assets which increased gross income in Islamic business.

Maybank expects its performance for the financial year ending June 30, 2011 to be better than the last financial year and on track to meet the targeted 14% return on equity.

Wall St slips on China inflation worries; fear rises

NEW YORK: Wall Street ended a five-week winning steak on Friday, Nov 12 as the threat of rising interest rates in China prompted investors to book profits and reassess bullish positions in equities.

Investors worried tighter credit in China would curb demand for commodities, driving down energy and natural resource stocks. The two sectors were the biggest drag on the S&P.

A string of global worries, including debt problems in Ireland, have prompted investors to reassess their positions or at least buy protective options so they can define their risk, said TD Ameritrade chief derivatives strategist Joe Kinahan in Chicago.

Reflecting the concerns, the CBOE Volatility Index jumped 10.6 percent to 20.61, the first time the index has closed above 20 since late October. The CBOE Nasdaq 100 Volatility Index also surged 16.4 percent to 22.55.

"Whenever you see volatility indexes rising like this, that indicates that people are searching for protection in the options market either in the indexes, exchange-traded funds or individual equities," Kinahan said.

The Dow Jones industrial average fell 90.52 points, or 0.80 percent, to end at 11,192.58. The Standard & Poor's 500 Index slid 14.33 points, or 1.18 percent, to 1,199.21. The Nasdaq Composite Index dropped 37.31 points, or 1.46 percent, to 2,518.21.

The S&P 500 dipped below its 20-day moving average on Friday for the first time since Sept. 1 but managed to close above it, in a sign that that level, currently just above 1,194, could provide strong technical support.

Stocks have stalled in recent sessions after a two-month rally that climaxed last week, when the Dow and Nasdaq hit levels not seen since the collapse of Lehman Brothers in September 2008.

For the week, the Dow and the S&P 500 each lost 2.2 percent and the Nasdaq fell 2.4 percent. The two sectors that did the worst were financial stocks, down 4 percent for the week, and information TECHNOLOGY [] stocks, off 3.2 percent.

U.S. December crude oil futures fell 3.3 percent on Friday and copper was off nearly 3 percent. That weighed on cyclical stocks, with aluminum producer Alcoa Inc , the Dow's second-largest percentage loser, slumping 2.3 percent to $13.49.

Among the Dow's other major decliners, Exxon Mobil Corp was off 1.2 percent at $70.99, while heavy machinery maker Caterpillar Inc was down 1.7 percent at $81.04. The S&P energy index<.GSPE> slid 1.4 percent, while the S&P materials index< lost 2.2 percent.

This is the second time that the S&P 500 shied away from the 1,228 area, and its chart could be drawing a bearish "double top" formation. After the last retreat from that level in April, the S&P 500 started a correction that took it down to its July lows.

The Shanghai Composite Index tumbled 5.16 percent, notching its biggest percentage loss in over a year on the likelihood China's central bank was set to raise rates to tackle inflation, a move that could pressure future growth.

"The whole commodity complex is exceptionally weak after the overnight action in China, and we need to see how it all plays out," said Tom Samuels, managing partner at Palantir Capital Management in Houston. "This may be the first seed of doubt about the healing power of (quantitative easing)."

In the last hour of trading, options traders were busy making short-term hedges as the market declined. Put trading surged in the SPDR S&P 500 fund weekly options that expired after the close, said Scott Fullman, director of derivatives investment strategy at WJB Capital Group, in New York.

Boeing Co was the Dow's top percentage loser, shedding 3.5 percent to $63.09 after Sanford C. Bernstein cut its rating on the stock to "market perform," citing more potential delays for its 787 Dreamliner.

Worries that Ireland may default on its debt as well as declines in commodity prices and an unexpectedly weak outlook from Cisco Systems Inc helped cloud the market's outlook, though some investors said the underlying trend is strong.

On the upside, Intel Corp rose 1.5 percent to $21.53 after the chipmaker boosted its dividend. - Reuters

India cbank says looking to ease liquidity crunch

MUMBAI:The deputy governor of India's central bank said on Saturday, Nov 13 the bank was looking at additional ways to ease the liquidity crunch such as rescheduling or restructuring bond auctions and open market purchases of bonds.

The central bank had reintroduced measures on Tuesday to provide liquidity comfort to banks and relaxed statutory liquidity ratio (SLR) norms to avail additional funds of up to 1 percent of deposits.

Such initial measures did not work to convince the market that liquidity would ease. Government bond yields and swaps rose sharply this week due to the cash crunch and the market wants more steps to infuse liquidity.

The central bank said after its last policy review at the start of November it would work to ease the liquidity crunch.

But it said any steps it would take to do so should be seen as distinct from policy tightening measures that have been implemented to tame high inflation.

"We are looking at ways such as the relaxation of SLR limits, open market opportunities, government rescheduling or restructuring of auctions or buyback," Subir Gokarn said at an industry conference on Saturday.

"All of these are ways by which short-term liquidity problems can be handled without giving the wrong signals about our inflation stance," Gokarn said.

Banks have been borrowing on an average 1 trillion rupees ($22.3 billion) daily from the central bank repo window in the last week compared to around 600-700 billion rupees in October, indicating the increased cash tightness.

The central bank has raised its key policy rates six times since March and said it was unlikely to adjust rates again in the near future.

Gokarn said inflation remained a "critical problem" and that high commodity prices were exacerbating price rises.

He also said there was a mixed growth outlook for the economy, with overall growth accelerating, but industrial output growth slowing in the last two months.

India's economy is seen growing at around 8.5 percent or more this fiscal year. Industrial output growth slowed in September, weighed down by a decline in capital goods production.

"IIP (industrial production) is a cause for concern on account of the sharpness of decline but (the) economy is not slowing as other indicators are still strong," he said. - Reuters

U.S. China stick to guns on global balancing at APEC

YOKOHAMA, Japan: Cracks between advanced and emerging economies that were papered over by the G20 resurfaced at an Asia-Pacific summit on Saturday, Nov 13, with Washington and Beijing returning to their positions on trade and currencies.

U.S. President Barack Obama warned countries such as China against relying too much on exports for growth, and Chinese President Hu Jintao reiterated Beijing's commitment to a gradual reform of its exchange rate regime.

"One of the important lessons the economic crisis taught us is the limits of depending primarily on American consumers and Asian exports to drive economic growth," Obama told a forum of Asia-Pacific business leaders.

"Going forward, no nation should assume that their path to prosperity is simply paved with exports to America," he said on the final leg of a 10-day tour that has also taken him to India, Indonesia and South Korea.

The United States and China blame each other for doing more damage to international trade. Washington contends the yuan is undervalued, giving it an export advantage, while Beijing argues the U.S. Federal Reserve's easy-money policy is aimed at weakening the dollar to boost exports.

Hu, taking the podium shortly after Obama, told the business executives China wanted to expand domestic demand growth, and remained committed to reforming its exchange rate "on the basis of retaining initiative, controllability and gradualness".

"China will continue making encouraging a balanced international balance of payments an important task in ensuring macroeconomic stability," Hu said.

Obama's national security adviser, Tom Donilon, later told a news briefing China needed to show progress on reforming the exchange rate by the time Hu visits Washington in January.

"President Hu Jintao's visit in January would be an important time to look at exactly what the quantum of progress has been on this," Donilon said.

"The United States ... would like to see China proceed apace on these reforms, because it's important, we think, to China, but it's important to the world in terms of a stable economic path forward."

Obama and Hu joined other leaders of the Asia-Pacific Economic Cooperation (APEC) group for a weekend summit that is focusing on policies to ensure balanced growth and taking concrete steps toward setting up a vast free-trade area in the world's fastest-growing economic region.

They ended their first day with a dinner and cultural kabuki theatre show but, breaking with the "funny shirts" tradition of APEC summits, this year the leaders wore business suits instead of the host country's native attire for their "family photo".

SOVEREIGN DEBT RISKS

The APEC leaders agreed after a first round of talks the world economy was improving but still fragile, a Japanese government official said. Sovereign debt problems remain a risk, while unemployment and the financial sector continue to be of concern, the official said.

Ireland was a reminder of those risks and the financial contagion they potentially pose.

Irish borrowing costs shot to record highs this week because of concern about the country's ability to reduce a public debt burden swollen by bank bailouts, and worries that private bond holders could be forced to shoulder part of the costs of any bailout by taking "haircuts" on their holdings.

But International Monetary Fund chief Dominique Strauss-Kahn told reporters at the APEC summit that "Ireland can manage well" and did not need a bailout at this time.

The G20 countries are trying to find ways of bringing down overly large current account surpluses and deficits among major economies. The group's leaders agreed in Seoul to set "indicative guidelines" for imbalances, but offerred investors little proof that the world was any safer from economic catastrophes.

REGIONAL TENSIONS

The leaders of China and Japan met on the sidelines to cool bilateral tensions, while Beijing offered Japan reassurances over its concerns about a drying-up of rare earth exports and a dispute over gas fields.

A Japanese government official said the 22-minute meeting between Prime Minister Naoto Kan and Chinese President Hu Jintao at an Asia-Pacific summit in the Japanese city of Yokahama was a big step towards improving ties.

"I recognise that ties between Japan and China have taken a big step towards improvement," Japanese Deputy Chief Cabinet Secretary Tetsuro Fukuyama told reporters.

Hours earlier, thousands of Japanese took to the streets of Yokahama, a port city near Tokyo known for having Japan's biggest Chinatown, to protest what they see as an imperialistic China.

Sino-Japanese ties have chilled since September after Japan detained a Chinese trawler captain whose boat collided with Japanese coast guard ships near a chain of islands claimed by both countries, called Senkaku in Japan and Diaoyu in China.

Japan was also trying to defuse another territorial spat, this one with Russia over an island claimed by both countries.

Russian President Dmitry Medvedev urged Japanese Prime Minister Naoto Kana at a meeting on the APEC sidelines to stop diplomatic gesturing, after the Russian leader recently visited islands claimed by Japan, Russia's foreign minister said.

"Our president said that it is better to abandon emotional statements and diplomatic gestures because they do not help, but he proposed to change the approach and prioritise the economy," Russian Foreign Minister Sergei Lavrov told reporters.

APEC is for the first time championing a collective growth strategy, emphasising balanced and sustainable growth, an elusive goal when the global economy is split between cash-rich exporters and debt-burdened importers.

The leaders will pledge to take steps to create a vast Free Trade Area of the Asia-Pacific (FTAAP) in the region, home to 40 percent of the world's population and 53 percent of global economic output, by building on existing pacts. - Reuters

Bandar Raya Devt in RM481m JV project

KUALA LUMPUR: BANDAR RAYA DEVELOPMENTS BHD [] (BDRB) is teaming up with Country Heights Land Sdn Bhd (CHLSB) to undertake a housing project costing RM481 million in Pekan Baru Sungai Besi, Selangor.

BDRB said on Friday, Nov 12'' the projected gross development value (GDV) would be RM652 million and the projected gross development profit at RM170 million. BDRB said the proposed development comprised of 310 semi-detached houses and 13 bungalows.

'Gross development profit margin 26.10%. CONSTRUCTION [] for the proposed development is expected to commence in the last quarter of 2011 and completed within five years,' it said.

''

P&O proposed divestment of insurer called off

KUALA LUMPUR: Pacific & Orient Bhd has called off the preliminary negotiations for the proposed divestment of an equity interest in Pacific & Orient Insurance Co. Bhd to Prudential Holdings Ltd.

The company said on Friday, Nov 12 it had informed Bank Negara Malaysia the proposed divestment discussions had been discontinued.

On Aug 11, P&O announced it had received the central bank's approval to begin preliminary negotiations for the proposed divestment of an equity interest in the insurer to Prudential Holdings.

#Update* BNM keeps OPR unch 2.75%, vigilant of large, volatile capital flows

KUALA LUMPUR: Bank Negara Malaysia maintained the overnight policy rate (OPR) at 2.75% and said monetary policy would continue to remain accommodative and supportive of economic growth.

In a statement issued after the monetary policy committee (MPC) meeting on Friday, Nov 12, it said the 'current level of OPR as appropriate and consistent with the latest assessment of the economic growth and inflation prospects'.

BNM added the monetary policy would continue to remain accommodative and supportive of economic growth.

Domestic financial conditions remain orderly, the central bank said, but cautioned there would be greater vigilance on potential risks arising from large and volatile capital flows.

BNM said growth in the global economy has moderated in the third quarter, with a sustained divergence in the growth performance of the advanced and emerging economies.

In the region, the recovery continues, although the pace of economic growth has moderated arising from a weakening of external demand.

'International financial market conditions have become more volatile with increased capital flows to emerging markets. This shift in global liquidity has brought with it risks to macroeconomic and financial stability in the emerging market economies,' the central bank said.

On the Malaysian economy, it said recent indicators on exports and external-related sectors affirmed the earlier expectations for growth to moderate in the third quarter. Nevertheless, domestic demand has provided strong support to growth.

'Going forward, overall growth will continue to be well supported by domestic economic activity. Private consumption will benefit from the favourable employment conditions, firm commodity prices and accommodative financing environment, while the expansion in private investment is expected to be driven by increased capital spending in the domestic-oriented sectors,' it said.

BNM said while domestic headline inflation moderated in September to 1.8%, it expected prices are expected to rise at a modest pace in the coming months in view of the rising global commodity and food prices.

Inflation was however expected to remain moderate going into 2011.

Nikkei slides as Shanghai, commods tumble

TOKYO:'' Japan's Nikkei dropped 1.4 percent on Friday, Nov 12 from a 4-'' month closing high marked the day before, with profit-taking intensifying as Chinese shares fell sharply and as oil and other commodity prices plunged.

Shares came under pressure due to growing wariness over possible further monetary tightening in China, forcing fund operators to lock in profits from risk assets.

Profit-takers also sold on rekindled fears about some euro zone countries' debt problems, including Ireland.

But market participants in Tokyo were not overly pessimistic on Japanese stocks as they believe the recent bullish trend is still in place due to generally strong corporate results and recent falls in the yen against the dollar, traders said.

"The Nikkei was pressured after seeing Shanghai shares drop more than 3 percent. Profit-taking emerged as the market could be a bit concerned about the recent rapid rise in share prices," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

The Nikkei ended the day down 1.4 percent, or 136.65 points, at 9,724.81. That marked its biggest daily percentage loss since October 29.

Up until Thursday, the Nikkei had posted strong gains since the start of the month, advancing nearly 8 percent. It closed at 9,861.46 the previous day, booking its highest close since June 24, when it last traded above 10,000.

The broader Topix index closed down 1.1 percent, or 9.39 points, at 846.98.

Japanese shares came under strong profit-taking pressure as Chinese share and commodities prices tumbled due to speculation over a possible new round of Chinese tightening measures.

The Shanghai Composite Index dropped 5.3 percent to 2,979.68, while Hong Kong's Hang Seng Index fell 1.6 percent to 2,4302.55.

China's official Securities Times reported that Beijing plans to limit foreigners from investing in its already speculative real estate sector.

"The Nikkei could come under further profit-taking pressure if commodities prices extend their losses. But there is likely to be a limit on selling the Nikkei too strongly from here," Kuramochi said, adding that it would find support at 9,500.

Spot gold lost more than one percent in a broad retreat triggered by a stronger dollar.

Oil prices dropped as much as 1.8 percent, erasing this week's gain to two-year highs.

NIKKEI MAY TEST 10,000

Still, many analysts said potential gains in Japanese shares were in store as the outlook for the global economy brightens and as the dollar regained some ground against the yen.

The greenback rose above 82 yen this week for the first time since early October. By late Asian trade, the dollar was down 0.2 percent at 82.30 yen.

Many equities traders still expect the Nikkei to eventually rise to the closely watched 10,000 level. After reaching that point, analysts see this year's high of 11,408.17, hit in April, as its next target.

"The Nikkei could regain strength towards 10,000 depending on the yen. The Nikkei will target that level if the yen weakens towards 85 (against the dollar)," said Masaru Hamaski, a senior strategist at Toyota Asset Management.

Analysts said the market was closely watching the outcome of the G20 summit in South Korea, where discussion was expected to include exchange rate policies and global economic imbalances.

Shares of exporters that had led gains in recent sessions lost steam, with Advantest down 2.9 percent and TDK slipping 2.3 percent.

Bank shares that had strengthened after the Financial Times reported this week that most major Asian banks could be exempt from planned global regulations also fell.

Mitsubishi UFJ Financial Group closed down 1.8 percent at 392 yen and Sumitomo Mitsui Financial Group declined 1.8 percent to 2,509 yen.

Mizuho Financial Group dropped 2.3 percent to 127 yen, after the Nikkei business daily reported that the bank would buy a stake of about 2 percent in BlackRock Inc, the world's largest money manager, for $500 million.

Shares of Disco Corp plunged 13.6 percent to 4,510 yen after the maker of semiconductors lowered its full-year earnings and dividend forecasts.

Disco lowered its full-year sales forecast to 98 billion yen ($11.88 million) from the previous estimate of 102 billion yen. It also slashed its full-year operating profit forecast to 14.5 billion yen from 18.8 billion yen.

Trade slowed on the Tokyo exchange's first section, with 1.8 billion shares changing hands, down from a one-month high hit this week above 2.2 billion shares. Declining stocks outnumbered advancing ones by more than 3 to 1. - Reuters

Petronas Chemicals institutional offering RM5.20, retail RM5.04

KUALA LUMPUR: Petronas Chemicals Group Bhd's initial public offer of RM41.6 billion (US$13.4 billion) is the largest in Malaysia and Southeast Asia based on the institutional price of RM5.20 per share which was fixed on Friday, Nov 12 after the completion of the book-building exercise.

Petronas Chemicals, in announcing the final pricing of its landmark initial public offering, said there was strong demand from both Malaysian and international investors.

'The institutional offering (excluding the offering to cornerstone investors and Bumiputera investors approved by Ministry of International Trade and Industry) attracted orders of approximately RM92.6 billion (US$29.7 billion),' it said.

The shares offered under the institutional offering through the bookbuilding exercise, MITI and cornerstone tranches will raise RM11.4 billion (US$3.7 billion).

Petronas Chemicals said the retail offering of 293.0 million existing shares attracted applications with a value of RM3.7 billion (US$1.2 billion) for 729.0 million shares, which represents a subscription rate of 2.5 times.

It said the institutional, cornerstone and Ministry of International Trade and Industry tranches were priced at RM5.20 per share while the retail tranche price has been fixed at RM5.04 per share.

The company, a subsidiary of Petroliam Nasional Bhd, will be included as a component of the FTSE Bursa Malaysia KLCI. 'The IPO of Petronas Chemicals is the largest IPO ever in Malaysia and in South East Asia and will add further depth to the Malaysian equity market,' it said.

The IPO comprised of 2.48 billion shares, or 31% of Petronas Chemicals, of which 700 million are new shares and 1.78 billion are existing shares being offered by Petronas. There is an over-allotment option of up to 372 million shares representing up to 15% of the total number of IPO shares.

Subject to any exercise of over-allotment option, the total amount of funds raised is expected to be RM12.8 billion (US$4.1 billion), of which RM3.6 billion and RM9.2 billion will accrue to the company and Petronas respectively.

'The institutional offering book received overwhelming demand from global institutional investors.

'Two cornerstone investors (Employees Provident Fund and Kumpulan Wang Persaraan (Diperbadankan)) have subscribed for an aggregate of 445 million shares representing approximately 5.6% paid up capital of Petronas Chemicals,' it said.

Petronas Chemicals chairman Datuk Wan Zulkiflee Wan Ariffin said the announcement marked an important milestone for the company.

'We are delighted with the investors' response to the offering. We have had very engaging interactions with investors and the bookbuilding exercise has attracted significant interest from various types of investors globally,' he said.

The company is due to list its shares on the Main Market of Bursa Malaysia on Nov 26.

CIMB Investment Bank Bhd acted as the principal adviser for the IPO. CIMB, together with Deutsche Bank AG, Hong Kong Branch and Morgan Stanley & Co. International plc., acted as joint global coordinators and joint bookrunners for the institutional offering.

Europe, Asia markets in sea of red

KUALA LUMPUR: European and Asian markets were in a sea of red on Friday, Nov 12 as investors took money off the table, spooked by speculation China would hike interest rates, worries about Ireland's debt crisis and imposition of capital controls.

At the close, the FBM KLCI was below 1,500. It skidded 0.92% or 13.89 points to 1,499.81. Turnover was 1.72 billion shares valued at RM2.39 billion. Losers hammered gainers 771 to 155.

Shanghai's Composite Index -5.16% 2,985.43 Shenzen Composite Index -6.12% 1,296.95 Hang Seng Index -1.93% 24,222.58 Nikkei 225 -1.39% 9,724.81 Singapore Straits Times Index -1.33% 3,249.62 Jakarta Composite Index -2.1% 3,665.85 ''

''

European markets posted losses of between 1% and 1.58%.

The plunge in Shanghai was due to worries about China hiking interest rates'' while on the currency front, there were expectations that expect some countries would follow the example of Brazil and Thailand and resort to capital controls to slow unwanted capital inflows.

At Bursa Malaysia, Genting fell 44 sen to RM10.16, Petronas Dagangan 42 sen to RM10.88, Nestle and KLK 40 sen each to RM43.40 and RM19.80 while Gamuda and CIMB gave up 22 sen each to RM3.46 and RM8.30.

Time Engineering was the most active with 128 million shares done, up eight sen to 52.5 sen.

CICB was the top gainer, up 28 sen to 80 sen, Supermax managed to recover after the recent selling rising 18 sen to RM4.53, Hong Leong Bank added 13 sen to RM9.68 and Maybank 10 sen higher at RM9.20.

FTSE tumbles on Irish debt woes and China hike fear

LONDON: Britain's top share index fell sharply on Friday, Nov 12 as Ireland's debt troubles and concerns over China's overheating economy weighed on investor sentiment, with financials and commodity-linked stocks leading the fallers.

By 0858 GMT, the FTSE 100 was down 57.81 points, or 1.0 percent at 5,757.42, extending falls into a third session after losses overnight on Wall Street and across Asia.

Financials were among the hardest hit as investors fretted over potential exposure to Europe's debt problems, with Barclays down 1.5 percent.

Royal Bank of Scotland, however, rebounded 1.6 percent, after falling 2.7 percent on Thursday on concerns over its exposure to Ireland. BofA Merrill Lynch said the sell-off was overdone and was an opportunity to buy into the stock.

At the G20 summit in Seoul, European Union leaders sought to reassure investors unnerved by Ireland's fiscal problems they would not be forced to take a writedown.

Ireland's prime minister said recent French and German comments had aggravated the problem.

"The conclusion of the G20 was more work in progress and now that is out the way the market is looking for focus," Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London said. "Markets have been technically over-bought for some time and are vulnerable to profit taking. It could result in a couple of hundred points coming off the FTSE."

Mid-cap company Tullett Prebon dropped 3.9 percent, down for the second day in a row after the interdealer broker reported a drop in quarterly revenue.

''

COMMODS RETREAT

Mining and energy stocks fell sharply along with commodities as investors focused on spiralling inflation in China and steps the government might take to cool an overheating economy.

On Thursday, China said its inflation hit a 25-month high in October and bank lending blew past expectations, leaving little doubt about why the central bank raised reserve requirements this week and pointed to further tightening.

"The figures yesterday on Chinese inflation took a bit of time to gel, but our view is that the authorities are really going to have to accelerate the tightening," Lenhoff said.

Global miner Xstrata was the top FTSE faller down 4.2 percent, while oil major BG Group shed 1.7 percent.

On the upside, Rolls-Royce was the top FTSE 100 riser, up 2.2 percent, after an update said the A380 engine failure was confined to one component in the company's Trent 900's turbine. Investec said the "clarity is a positive".

Rolls-Royce shares had fallen as much as 10.8 percent since Nov. 3 when Qantas Airways suspended flights of its Airbus A380 planes after the failure of a Trent 900 caused one of its flight to make an emergency landing.

The enginemaker said it now expected underlying profit growth for the full year to be slightly lower than previously guided because of costs associated with the blowout. - Reuters

#Flash* Bank Negara keeps OPR unch at 2.75%

KUALA LUMPUR: Bank Negara Malaysia decided to maintain the overnight policy rate (OPR) at 2.75% at the monetary policy committee (MPC) meeting on Friday, Nov 12.

'The MPC considers the current level of OPR as appropriate and consistent with the latest assessment of the economic growth and inflation prospects,' it said.

BNM said the monetary policy would continue to remain accommodative and supportive of economic growth.

However, it said while domestic financial conditions remain orderly, greater vigilance will be accorded to the potential risks arising from large and volatile capital flows.

On domestic headline inflation it moderated in September to 1.8%.

BNM, however, said prices are expected to rise at a modest pace in the coming months in view of the rising global commodity and food prices. Inflation is however expected to remain moderate going into 2011.

Europe, Asia markets in sea of red

KUALA LUMPUR: European and Asian markets were in a sea of red on Friday, Nov 12 as investors took money off the table, spooked by speculation China would hike interest rates, worries about Ireland's debt crisis and imposition of capital controls.

At the close, the FBM KLCI was below 1,500. It skidded 0.92% or 13.89 points to 1,499.81. Turnover was 1.72 billion shares valued at RM2.39 billion. Losers hammered gainers 771 to 155.

Shanghai's Composite Index -5.16% 2,985.43 Shenzen Composite Index -6.12% 1,296.95 Hang Seng Index -1.93% 24,222.58 Nikkei 225 -1.39% 9,724.81 Singapore Straits Times Index -1.33% 3,249.62 Jakarta Composite Index -2.1% 3,665.85 ''

''

European markets posted losses of between 1% and 1.58%.

The plunge in Shanghai was due to worries about China hiking interest rates'' while on the currency front, there were expectations that expect some countries would follow the example of Brazil and Thailand and resort to capital controls to slow unwanted capital inflows.

At Bursa Malaysia, Genting fell 44 sen to RM10.16, Petronas Dagangan 42 sen to RM10.88, Nestle and KLK 40 sen each to RM43.40 and RM19.80 while Gamuda and CIMB gave up 22 sen each to RM3.46 and RM8.30.

Time Engineering was the most active with 128 million shares done, up eight sen to 52.5 sen.

CICB was the top gainer, up 28 sen to 80 sen, Supermax managed to recover after the recent selling rising 18 sen to RM4.53, Hong Leong Bank added 13 sen to RM9.68 and Maybank 10 sen higher at RM9.20.

FTSE tumbles on Irish debt woes and China hike fear

LONDON: Britain's top share index fell sharply on Friday, Nov 12 as Ireland's debt troubles and concerns over China's overheating economy weighed on investor sentiment, with financials and commodity-linked stocks leading the fallers.

By 0858 GMT, the FTSE 100 was down 57.81 points, or 1.0 percent at 5,757.42, extending falls into a third session after losses overnight on Wall Street and across Asia.

Financials were among the hardest hit as investors fretted over potential exposure to Europe's debt problems, with Barclays down 1.5 percent.

Royal Bank of Scotland, however, rebounded 1.6 percent, after falling 2.7 percent on Thursday on concerns over its exposure to Ireland. BofA Merrill Lynch said the sell-off was overdone and was an opportunity to buy into the stock.

At the G20 summit in Seoul, European Union leaders sought to reassure investors unnerved by Ireland's fiscal problems they would not be forced to take a writedown.

Ireland's prime minister said recent French and German comments had aggravated the problem.

"The conclusion of the G20 was more work in progress and now that is out the way the market is looking for focus," Mike Lenhoff, chief strategist at Brewin Dolphin Securities in London said. "Markets have been technically over-bought for some time and are vulnerable to profit taking. It could result in a couple of hundred points coming off the FTSE."

Mid-cap company Tullett Prebon dropped 3.9 percent, down for the second day in a row after the interdealer broker reported a drop in quarterly revenue.

''

COMMODS RETREAT

Mining and energy stocks fell sharply along with commodities as investors focused on spiralling inflation in China and steps the government might take to cool an overheating economy.

On Thursday, China said its inflation hit a 25-month high in October and bank lending blew past expectations, leaving little doubt about why the central bank raised reserve requirements this week and pointed to further tightening.

"The figures yesterday on Chinese inflation took a bit of time to gel, but our view is that the authorities are really going to have to accelerate the tightening," Lenhoff said.

Global miner Xstrata was the top FTSE faller down 4.2 percent, while oil major BG Group shed 1.7 percent.

On the upside, Rolls-Royce was the top FTSE 100 riser, up 2.2 percent, after an update said the A380 engine failure was confined to one component in the company's Trent 900's turbine. Investec said the "clarity is a positive".

Rolls-Royce shares had fallen as much as 10.8 percent since Nov. 3 when Qantas Airways suspended flights of its Airbus A380 planes after the failure of a Trent 900 caused one of its flight to make an emergency landing.

The enginemaker said it now expected underlying profit growth for the full year to be slightly lower than previously guided because of costs associated with the blowout. - Reuters

Petronas Chemicals institutional offering RM5.20, retail RM5.04

KUALA LUMPUR: Petronas Chemicals Group Bhd's initial public offer of RM41.6 billion (US$13.4 billion) is the largest in Malaysia and Southeast Asia based on the institutional price of RM5.20 per share which was fixed on Friday, Nov 12 after the completion of the book-building exercise.

Petronas Chemicals, in announcing the final pricing of its landmark initial public offering, said there was strong demand from both Malaysian and international investors.

'The institutional offering (excluding the offering to cornerstone investors and Bumiputera investors approved by Ministry of International Trade and Industry) attracted orders of approximately RM92.6 billion (US$29.7 billion),' it said.

The shares offered under the institutional offering through the bookbuilding exercise, MITI and cornerstone tranches will raise RM11.4 billion (US$3.7 billion).

Petronas Chemicals said the retail offering of 293.0 million existing shares attracted applications with a value of RM3.7 billion (US$1.2 billion) for 729.0 million shares, which represents a subscription rate of 2.5 times.

It said the institutional, cornerstone and Ministry of International Trade and Industry tranches were priced at RM5.20 per share while the retail tranche price has been fixed at RM5.04 per share.

The company, a subsidiary of Petroliam Nasional Bhd, will be included as a component of the FTSE Bursa Malaysia KLCI. 'The IPO of Petronas Chemicals is the largest IPO ever in Malaysia and in South East Asia and will add further depth to the Malaysian equity market,' it said.

The IPO comprised of 2.48 billion shares, or 31% of Petronas Chemicals, of which 700 million are new shares and 1.78 billion are existing shares being offered by Petronas. There is an over-allotment option of up to 372 million shares representing up to 15% of the total number of IPO shares.

Subject to any exercise of over-allotment option, the total amount of funds raised is expected to be RM12.8 billion (US$4.1 billion), of which RM3.6 billion and RM9.2 billion will accrue to the company and Petronas respectively.

'The institutional offering book received overwhelming demand from global institutional investors.

'Two cornerstone investors (Employees Provident Fund and Kumpulan Wang Persaraan (Diperbadankan)) have subscribed for an aggregate of 445 million shares representing approximately 5.6% paid up capital of Petronas Chemicals,' it said.

Petronas Chemicals chairman Datuk Wan Zulkiflee Wan Ariffin said the announcement marked an important milestone for the company.

'We are delighted with the investors' response to the offering. We have had very engaging interactions with investors and the bookbuilding exercise has attracted significant interest from various types of investors globally,' he said.

The company is due to list its shares on the Main Market of Bursa Malaysia on Nov 26.

CIMB Investment Bank Bhd acted as the principal adviser for the IPO. CIMB, together with Deutsche Bank AG, Hong Kong Branch and Morgan Stanley & Co. International plc., acted as joint global coordinators and joint bookrunners for the institutional offering.

Nikkei slides as Shanghai, commods tumble

TOKYO:'' Japan's Nikkei dropped 1.4 percent on Friday, Nov 12 from a 4-'' month closing high marked the day before, with profit-taking intensifying as Chinese shares fell sharply and as oil and other commodity prices plunged.

Shares came under pressure due to growing wariness over possible further monetary tightening in China, forcing fund operators to lock in profits from risk assets.

Profit-takers also sold on rekindled fears about some euro zone countries' debt problems, including Ireland.

But market participants in Tokyo were not overly pessimistic on Japanese stocks as they believe the recent bullish trend is still in place due to generally strong corporate results and recent falls in the yen against the dollar, traders said.

"The Nikkei was pressured after seeing Shanghai shares drop more than 3 percent. Profit-taking emerged as the market could be a bit concerned about the recent rapid rise in share prices," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

The Nikkei ended the day down 1.4 percent, or 136.65 points, at 9,724.81. That marked its biggest daily percentage loss since October 29.

Up until Thursday, the Nikkei had posted strong gains since the start of the month, advancing nearly 8 percent. It closed at 9,861.46 the previous day, booking its highest close since June 24, when it last traded above 10,000.

The broader Topix index closed down 1.1 percent, or 9.39 points, at 846.98.

Japanese shares came under strong profit-taking pressure as Chinese share and commodities prices tumbled due to speculation over a possible new round of Chinese tightening measures.

The Shanghai Composite Index dropped 5.3 percent to 2,979.68, while Hong Kong's Hang Seng Index fell 1.6 percent to 2,4302.55.

China's official Securities Times reported that Beijing plans to limit foreigners from investing in its already speculative real estate sector.

"The Nikkei could come under further profit-taking pressure if commodities prices extend their losses. But there is likely to be a limit on selling the Nikkei too strongly from here," Kuramochi said, adding that it would find support at 9,500.

Spot gold lost more than one percent in a broad retreat triggered by a stronger dollar.

Oil prices dropped as much as 1.8 percent, erasing this week's gain to two-year highs.

NIKKEI MAY TEST 10,000

Still, many analysts said potential gains in Japanese shares were in store as the outlook for the global economy brightens and as the dollar regained some ground against the yen.

The greenback rose above 82 yen this week for the first time since early October. By late Asian trade, the dollar was down 0.2 percent at 82.30 yen.

Many equities traders still expect the Nikkei to eventually rise to the closely watched 10,000 level. After reaching that point, analysts see this year's high of 11,408.17, hit in April, as its next target.

"The Nikkei could regain strength towards 10,000 depending on the yen. The Nikkei will target that level if the yen weakens towards 85 (against the dollar)," said Masaru Hamaski, a senior strategist at Toyota Asset Management.

Analysts said the market was closely watching the outcome of the G20 summit in South Korea, where discussion was expected to include exchange rate policies and global economic imbalances.

Shares of exporters that had led gains in recent sessions lost steam, with Advantest down 2.9 percent and TDK slipping 2.3 percent.

Bank shares that had strengthened after the Financial Times reported this week that most major Asian banks could be exempt from planned global regulations also fell.

Mitsubishi UFJ Financial Group closed down 1.8 percent at 392 yen and Sumitomo Mitsui Financial Group declined 1.8 percent to 2,509 yen.

Mizuho Financial Group dropped 2.3 percent to 127 yen, after the Nikkei business daily reported that the bank would buy a stake of about 2 percent in BlackRock Inc, the world's largest money manager, for $500 million.

Shares of Disco Corp plunged 13.6 percent to 4,510 yen after the maker of semiconductors lowered its full-year earnings and dividend forecasts.

Disco lowered its full-year sales forecast to 98 billion yen ($11.88 million) from the previous estimate of 102 billion yen. It also slashed its full-year operating profit forecast to 14.5 billion yen from 18.8 billion yen.

Trade slowed on the Tokyo exchange's first section, with 1.8 billion shares changing hands, down from a one-month high hit this week above 2.2 billion shares. Declining stocks outnumbered advancing ones by more than 3 to 1. - Reuters

#Update* KLCI falls below 1,500, Asian mkts down

KUALA LUMPUR:'' Selling pressure accelerated across Asia on lingering talk of more interest rate increases and a scramble out of resource-related shares, with the FBM KLCI falling below the 1,500 level in the afternoon trade on Friday, Nov 12.

At 2.52pm, the FBM KLCI fell 20.20 points to 1,493.50. Turnover was 1.04 billion shares valued at RM1.23 billion. Losers hammered gainers 705 to 140.

KL Kepong was the top loser, down 90 sen to RM19.30, Genting 40 sen to RM10.20, KFCH 25 sen to RM4.04, Kulim 22 sen to RM13.20 while Sime and DiGi shed 20 sen each to RM8.74 and RM24.26.

Reuters reported the South Korean won suffered its biggest daily percentage loss in almost five months on Friday, pressured by mounting cautions that the financial authorities may announce measures after the G20 summit to curb hot money inflows.

The euro fell on Friday on fears that Ireland may need a bailout just like Greece, while a sharp decline in commodities and stock prices hastened a broad retreat from risky assets.

Asian stocks were broadly lower, led by a 5 percent drop in the Shanghai composite index -- its biggest single-day decline since May.

Plain old profit taking was also the culprit after a months'-long rally in many markets.

This year has been difficult for many investors because of the sudden shifts in risk taking on everything from the sovereign debt crisis in Europe, fears of both a slowdown and overheating in China and worries about the U.S. double dipping back into recession, causing havoc to trading strategies.As a result, many investors may be prone to take profits -- or losses -- and wait for 2011.

#Flash* Maybank's 1Q earnings at RM1b

KUALA LUMPUR: MALAYAN BANKING BHD []'s earnings were RM1.028 billion in the first quarter ended Sept 30, 2010, up 16.6% from RM881.80 million a year ago.

It said on Friday, Nov 12 revenue rose to RM5 billion from RM4.56 billion. Earnings per share were 14.53 sen versus 12.46 sen.

Maybank said the net interest income increased by 9% or 146.9 million due to improvements in the group's operations from higher net interest income margins in Malaysia arising from increases in the overnight policy rate and expansion of market in Indonesia.

It said income from Islamic Banking operations decreased by RM43.3 million or 11.3% to RM338.2 million due to higher provision for profit equalization reserves in the Islamic business but mitigated by increase in growth in assets which increased gross income in Islamic business.

#Flash* AMMB 2Q earnings up 38.6% to RM332.8m

KUALA LUMPUR: AMMB HOLDINGS BHD [] posted a strong set of earnings in the second quarter, with net profit at RM332.87 million, up 38.6% from RM240.15 million a year ago, boosted by an increase in interest income.

It said on Friday, Nov 12 that for the quarter ended Sept 30, revenue rose to RM1.77 billion from RM1.584 billion. Earnings per share were 11.09 sen compared with 8.29 sen. It declared an interim dividend of six sen per share.

AMMB said 2Q pre-tax profit improved to RM981.4 million from RM691.1 million reported for the corresponding period last year. The improvement in earnings for the reporting quarter was mainly attributed by increase in interest income by RM108.8 million and increase in other operating income by RM49.9 million.

Gross loans and advances expanded to RM69.0 billion to register an annual growth of 8.3%. The growth was mainly attributed to financing of finance, insurance, real estate and business activities, education and health, residential PROPERTIES [], manufacturing and CONSTRUCTION [].

Financing for purchase of transport vehicles accounted for 34.3% of total loans, followed by loans for residential properties which accounted for 16.7% of total loans.

EPF, KWAP make first purchase in London

HONG KONG: Malaysia's two main government pension funds have made their first purchase in Britain, acquiring an office building as part of plans to invest up to ''1 billion (RM5 billion) in the British property market.

The Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (KWAP) acquired the office building in London for ''156.7 million, translating into a yield of 5.75% and a capital value of ''802 per sq ft, Jones Lang LaSalle Inc said on Friday, Nov 12.

The two funds purchased the building from a consortium includes Aviva Plc, Invista SA, Henderson Global Investors and Liquid Realty Partners, said property services firm Jones Lang LaSalle, which advised on the deal.

Asian investors have been flocking to London to purchase property, taking advantage of their strong currencies and a relatively weak sterling. ' Reuters

Asian stockmarkets fall at midday

KUALA'' LUMPUR : Asian stock indices including Malaysia's FBM KLCI fell at midday on Friday, Nov 12 as investors perceived a lack of consensus among Group of 20'' policymakers to tackle on-going global economic woes.

Key concerns include the effects of the US' quantitaitve easing which raises concerns about escalating inflation and strengthening currencies in Asian countries. Europe's economic woes have also not escaped the market limelight.

At midday, the FBM KLCI fell 0.7% or 10.41 points to 1503.29, dragged down PLANTATION [] stocks. About 853 million shares worth RM953 million changed hands, while decliners beat gainers 568 to 191.

China's equities were the biggest decliners across Asia. The CSI 300 fell 3.1% to 3401.44 while the Shanghai SE dropped 2.3% to 3076.28. Hong Kong's Hang Seng was down 1.1% to 24,426.15 while Taiwan's Taiex fell 1.2% to 8335.64.

South Korea's Kospi fell 0.6% to 1,903.91, down 0.6%. Japan's Nikkei 225 declined 1% to 9,763.64 while Australia's S&P / ASX 200 was down 0.8% to 4,692.4.'' Singapore's Straits Times dipped 0.9% to 3265.36 while Indonesia's Jakarta Composite lost 0.9% to 3709.82.

GENTING BHD [] fell after Genting Singapore's third quarter financials came in below market'' expectations.

Most active was TIME ENGINEERING BHD [] after trading of shares in its associate Timr dotCom was suspended since 10.42am today, pending a material announcement.

Genting fell 34 sen to RM10.26 while TIME Engineering rose eight sen to 52.5 sen with some 99 million shares done.

Nestle fell 40c to RM43.40, KLK shed 28 sen to RM19.92, BAT 26c to RM46.42, Tenaga 17 sen to RM8.46 and QSR 16 sen to RM5.60.

On China's outlook, Nomura International (HK) Ltd strategist Sean Darby said while recent macroeconomic data underscored a strong'' economy, inflationary pressures were building there. This, in turn, lends credence to expectations that real interest rates were going deeper into negative territory.

"The biggest risk for equities, in our view, is not formal monetary tightening but the adoption of price controls to cool domestic inflation. This arbitrary way of controlling prices is very much in line with a command-style economy, but is certainly not equity market friendly," Darby wrote in a note today.

In Malaysia, MIMB Investment Bank expects a short-term correction in the FBM KLCI as technical indicators have weakened in tandem with the index.

"Nonetheless, the underlying up-trend remains intact so long as the lower immediate up-trend channel line remains intact," MIMB said. The research house said the FBM KLCI's correction could see the gauge testing the 1,501.77 level.

Petronas Chemicals raises RM12.8b from IPO

KUALA LUMPUR: Petroliam Nasiona Bhd (Petronas), which is listing is unit Petronas Chemical Group Bhd, is reported to have raised RM12.8 billion from the listing exercise.

Wire reports said on Friday, Nov 12 the shares were priced at RM5.20 to institutions.

Petronas Chemicals is a leading integrated petrochemicals producer in Malaysia and one of the largest in Southeast Asia with a production capacity of over 11 million tonnes per annum.

It offered 2.48 billion shares equivalent to a 31% stake of the enlarged group. This consists of 1.78 billion existing shares and the remaining 700 million new shares. The retail shares were offered at RM5.05 per share or 97% of the final institutional price.

Trading in Time dotCom suspended pending announcement

KUALA LUMPUR: Trading in the shares of TIME DOTCOM BHD [] was voluntarily suspended from 10.42am on Friday, Nov 12.

A Bursa Malaysia circular said the suspension was pending a material announcement.

It share price rose 3.5 sen to 77 sen with 24 million shares done before it was suspended.

S.Korea probes Deutsche over massive stock sale

SEOUL (Reuters) - South Korean regulators have launched an investigation into potential irregular trades by Deutsche Bank AG's brokerage unit after a record foreign net sale pushed the stock market down by almost 3 percent in late trading on Thursday.

"(We) have confirmed that most foreign selling yesterday came from Deutsche accounts and totalled about 1.6 trillion won ($1.4 billion). As such, the FSS has started investigating the issue along with the Korea Exchange," the Financial Supervisory Service said in a statement on Friday, Nov 12.

A Deutsche Bank spokesman in Singapore declined to comment.

Foreign investors dumped a record net 1.3 trillion won worth of shares on Thursday, causing the benchmark KOSPI index <.KS11> to fall nearly 3 percent at the last minute. [ID:nSGE6AA0IY]

The bank was a top seller in most large-cap shares, including Samsung Electronics Co Ltd <005930.KS>, POSCO <005490.KS>, Hyundai Motor Co <005380.KS> and KB Financial Group Inc <105560.KS> on Thursday, according to data from the Korea Exchange.

The expiry of KOSPI options on Thursday and massive foreign selling propelled overall market turnover to 9.3 trillion won - the most in 18 months.

According to the Thomson Reuters trade log of exchange data, a single trade made up about 14 percent of total KOSPI volume for the day and went through in the last minute of activity. That single transaction caused the index to drop 2.4 percent to 1,916.57.

Some traders suspected an index arbitrage trade between futures and the cash market was behind the transaction, and it may have been a rollover of such a position.

The index has since stabilised and was trading almost unchanged at 1,911.77 points by 0320 GMT on Friday.

Genting weighs on market

KUALA LUMPUR: The FBM KLCI opened on a cautious note on Friday, Nov 12, weighed down by the overnight decline on Wall Street while GENTING BHD [] was in focus.

At 9.10am, the FBM KLCI was down 3.21 points to 1,510.49. Turnover was 75.24 million shares valued at RM61.63 million. There were 111 gainers, 101 losers and 134 stocks unchanged.

Genting fell the most, down 32 sen to RM10.28'' as it is expected to see lower contribution for 3QFY10 ended Sept 30 from Singapore compared with the preceding quarter.

Genting Singapore call warrants (GenS-C5) and GenS-J1 fell 7.5 sen each to 48 sen and 36 sen while GenS-C8 shed four sen to 29 sen and GenS-C& down four sen also to RM1.10.

Public Bank shed 12 sen to RM12.68 with only 1,600 shares done while Public Bank-F eased four sen to RM12.72.

KKB Eng top gainer on strong earnings, OSK FV RM2.76

KUALA LUMPUR: Shares of KKB ENGINEERING BHD [] climbed in early trade on Friday, Nov 12 after it registered a strong set of earnings in the third quarter.

At 9.28am, it was up 14 sen to RM2.05 with 2.21 million shares done.

The FBM KLCI shed 3.32 points to 1,510.38. Turnover was 168.35 million shares valued at RM143.45 million. There were 140 gainers, 204 losers and 177 stocks unchanged.

OSK Research had a fair value of RM2.76, derived from 10 times FY11 EPS.

'We are amazed with KKB Engineering (KKB) striking a 3Q net profit of RM23.3 million that was more than double that in 3QFY09 and 73.4% higher q-o-q,' it said.

The research house said the astounding quarter, during which its nine-months bottomline marginally surpassed its full-year estimate, was mainly attributed to the 16% revenue increase in the engineering and CONSTRUCTION [] division, which also recorded an exceptionally strong EBIT margin of 49.1%.

'We understand that the company secured a fast track construction job that offered an attractive margin in 3Q. Apart from that, the manufacturing division's EBIT margin of 44.6% was extraordinary although sales dropped q-o-q,' it said.

Blue chips fall, Genting in the spotlight

KUALA LUMPUR: Malaysian blue chip stocks continue their decline Friday morning, Nov 12 as investors locked in profits following a recent high in the primary barometer.

Analysts said the correction in the FBM KLCI was healthy. Hong Leong Investment Bank head of research Low Yee Huap said given the liquidity-driven market, further consolidation in the benchmark should be well absorbed unless there was a major reversal in foreign money flows.

"We would only turn negative if the FBM KLCI convincingly breaks below the uptrend line at 1,453 on high volume," Low wrote in a note Friday morning.

At 9.59am, the FBM KLCI fell 5.9 points to 1,507.8. Across the bourse, some 280 million shares worth RM294 million changed hands. There were 175 gainers versus 281 decliners.

GENTING BHD [] shares stole the spotlight as the top decliner Friday morning after its Singapore unit's third quarter financials came in below market expectations.

MBM RESOURCES BHD [] also caught market interest after the company announced better third quarter numbers

Genting fell 32 sen to RM10.28, while MBM added 14 sen to RM3.16.

Shares of oil and gas support services companies are also worth watching on Friday, following updates that Malaysian policymakers would provide tax incentives to encourage exploration of hydrocarbon reserves in marginal fields.

Across Asia, South Korea's Kospi ran ahead of its peers with a close to 2% jump to1952.66, amid the on-going Group of 20 meeting in Seoul.

Japan's Nikkei 225 fell 0.3% to 9,828.08 while Australia's S&P/ASX 200 was down 0.1% to 4,722.5. China's Shanghai Composite declined 1% to 3,114.91 , Taiwan's Taiex fell 0.6% to 8,383.3, while Singapore's Straits Times was down 0.4% to 3,281.82.

The ringgit was traded weaker at 3.1010 against the US dollar. Crude oil futures fell 56 sen to US$87.25 (RM270.34) a barrel while spot prices for gold was down US$5.05 to US$1,403.60 an ounce.

US markets fell in overnight trade, as investors anticipate the outcome of the Groups of 20 (G20) meeting. G20 countries lawmakers' decisions at the event could be indicative of the global economy's direction.

The Dow Jones Industrial Average fell 0.7% to close at 11,283.10 , Nasdaq dipped 0.9% to 2,555.52 while the S&P 500 was down 0.4% to 1,213.54.

AmResearch 2011 FV for KLCI at 1,620

KUALA LUMPUR: AmResearch is introducing its 2011's fair value for the FBM KLCI at 1,620 ' pegged to a forward PE of 15 times.

'We forecast corporate earnings to expand by a slower 14% in 2011 (2010: 25%). Our fair value implies a modest 7% upside from the current level,' it said in its market strategy issued on Thursday, Nov 11.

AmResearch said this reflected its cautious stance on the broader market in an extended liquidity-driven rally, which going by precedents has already turned out to be the longest trough-to-peak re-rating cycle since 1998.

Hence, there is admittedly some nervousness in the market. Corporate earnings momentum has stalled as evident from IBES consensus estimates. Nonetheless, liquidity is in abundance and the weakness in the US$ should sustain indiscriminate portfolio flows in the aftermath of QE II.

AmResearch said the US Fed plans for an additional US$600bil of quantitative easing till end 2Q11 with the commitment to engage in further asset purchases until the recovery is entrenched.

The research house said sure, there is no certainty that QEII will be effective in reviving growth but its implementation would drive down long term funding costs and accentuate the decline in the US$.

'QEII will be the most important macro parameter influencing the direction of our market in the coming quarters because liquidity creation is very significant. It may also trigger a rebalancing of the global economy, leading to further appreciation of Asian currencies, including the ringgit,' it pointed out.

AmResearch said the key risks to its bullish view are the potential administrative and capital controls to contain the influx of 'hot' money. Taiwan recently imposed limits on bond holdings by foreigners, while Thailand increased taxes on foreign purchases of local bonds. South Korea and Indonesia have imposed similar restrictions on foreign flows.

Thus far, Bank Negara Malaysia has yet to impose any policy restrictions to rein in any potentially disruptive capital inflows.

'With QEII leading to a disconnect between the real economy and financial markets, the reflation trade is our key theme. The debasement of the US$ will sustain the rally in commodities due to robust liquidity flows as opposed to genuine demand,' it said.

AmResearch continued to OVERWEIGHT the PLANTATION [], steel and oil & gas sectors. In particular, the market has underestimated the swift and steep rise in CPO prices to RM3,420/mt currently. Earnings upgrades appear imminent.

Its top picks are IOI Corp, KLK and IJM Plantations, in that order of preference.

On the oil & gas front, it likes Malaysian Marine and Heavy Engineering, given its ownership of the country's strategic fabrication yard for deepwater structures. But, valuation looks rich at a forward PE of 18x. Kencana is a cheaper and equally attractive liquid proxy with a good earnings track record and potential M&As to move up the value chain.

On the flipside, rising feedstock prices and input costs may hurt profit margins of consumer stocks ' F&N, KFCH, brewers and other consumer staples, where selling prices may not rise fast enough to offset escalating cost pressure.

Exporters namely the gloves companies are also net losers. The weakness in the US$ would exacerbate margin compression, delaying a bottoming in its earnings cycle. It remains UNDERWEIGHT.

Property equities should re-rate in tandem with rising inflation expectations from a rampant built-up in domestic liquidity and a cheap ringgit. Policy concern is already behind us post the recent 70% cap on loan-to-value for the purchase of third property. Buying interests should be driven by several catalytic presales, prolific land deals and earnings delivery particularly for IJM Land and SP Setia.

That aside, AmResearch expects the REIT sector to be boosted by yield compression with falling real interest rates, lifting unit prices. CMMT offers the best exposure to the REIT sector.

'We are NEUTRAL on the banking sector but bottom-up, we are Buyers of CIMB and Maybank as liquidity proxies to the rising market. We are Buyers of IJM and Gamuda, as share prices have retraced from the recent peaks. 2011 will see the government rolling out large infrastructure projects, underpinning newsflow momentum on the sector. AirAsia remains a BUY because of its entrenched franchise value in Asia and compelling valuations,' it said.

The research house said its high conviction mid-cap BUY is Press Metal, the leading aluminium smelter in the region.

With first mover access to 'cheap'' power for its flagship plant in Mukah, Sarawak, Press Metal is emerging as one of the most competitive aluminium producers in Asia-Pacific. It is on track to deliver exponential earnings growth from capacity expansion. Press Metal is also under-researched and under-owned. It is a direct beneficiary of the commissioning of Bakun.

OSK Research upgrades earnings estimates for 5 banks

KUALA LUMPUR: OSK Research has upgraded its earnings estimates for five out of seven banks under its coverage.

In its research note on Friday, Nov 12, it said the upgrades were largely premised on stronger loans growth and lower loan loss provision.

'We also note that the likes of CIMB, RHB Capital and AMMB could provide more earnings upside surprises on the back of a stronger than expected capital market earnings rebound in the upcoming quarters with the strong pick up in bond origination flows.

'We are maintaining our overweight recommendations and deem any market correction as an opportunity to accumulate. Our large cap banking top picks are CIMB (BUY, TP: RM9.77), MAYBANK (BUY, TP: RM10.07) and mid-cap stock RHB Cap (BUY, TP: RM9.56). We also upgrade AMMB to a BUY with TP of RM6.90,' it said.

HDBSVR: Investors may take profit

KUALA LUMPUR: Hwang DBS Vickers Research said with Wall Street coming under pressure on Thursday night, it expects sentiment on Malaysian bourse to be affected too.

US key equity bellwethers were down between 0.4% and 0.9% at the closing bell due to concerns over the Europe debt crisis.

'Most likely, investors will be in the mood to take profit following the recent run-up, though any market pullback is expected to be relatively shallow. On the chart, the immediate support level for the benchmark FBM KLCI currently stands at 1,495,' it said on Friday, Nov 12

Hwang DBS Vickers Research said in terms of news flows, Bank Negara Malaysia's monetary policy committee will meet this evening, which will probably decide to leave the overnight policy rate unchanged.

'Meanwhile, Masterskill's share price may see a technical rebound from an oversold position after a media report said that PTPTN (the National Higher Education Fund Corporation, which is a primary funding source for Masterskill) is confident to raise its loans recovery rate to 70% by beefing up its internal controls,' it said.

AmResearch: Press Metal transforming into integrated aluminium giant

KUALA LUMPUR: AmResearch has initiated coverage on PRESS METAL BHD [] with a BUY call and a fair value of RM3.30/share. This pegs the stock to a target PE of 11 times ' at a steep 28% discount to its larger pure integrated global aluminium peers.

In its research note on Thursday, Nov 11, it said Press Metal is on the cusp of a structural transformation into an integrated aluminium giant within Asean, following the successful rollout of its smelter in Mukah, Sarawak.

Press Metal's Mukah plant will crucially have unencumbered access to cheap hydro power and the first mover advantage as the country's first smelter.

Press Metal's Mukah smelter is one of only two operating within Asean' which together with China ' has a base consumption of 20 million tonnes (or circa half of global aluminium demand).

AmResearch said the recent emergence of Japan's Sumitomo as a cornerstone investor in the smelter (20% stake plus option for another 5%) has further enhanced the stock's value proposition.

'Additionally, Press Metal is in a strong position to secure an additional power of 510MW from Sarawak Energy Bhd at attractive rates against the spectre of an insufficient off-take in the state when Bakun comes on stream by end-1H11,' it said.

The research house said Press Metal is a direct play on the debasement of the US dollar and its associated reflationary pressure on base metal prices. London Metal Exchange aluminium prices have surged 10% YTD to US$2,389/tonne, amid an extended commodity rally since September.

Earnings are at an inflexion point ' with a robust FY10F-12F EPS CAGR of 64%. Core earnings surged six-fold to RM30mil just from a six-month contribution from Phase 1A (70% of group profits).

With capex for the entire Phase 1 (US$300mil) already frontloaded, AmResearch expects sequential earnings momentum to gain traction along with rapid expansion in margins.

Total capacity should double to 120,000 tonnes in FY11 with the commissioning of Phase 1B by year-end.

AmResearch has conservatively assumed average LME-based selling prices of US$2,400/tonne-US$2,425/tonne for FY11F-12F (FY10F:US$2,200/tonne) against the backdrop of an improving global aluminium imbalance.

'Valuations are exceedingly compelling, at FY10F-12F PEs of only 6x-14x against EPS CAGR of 62%. We believe Press Metal deserves to trade at a scarcity premium given its deepening progression as an integrated regional aluminium player ' with a further capacity kicker stemming from Phase 2 of its Mukah expansion (US$600 mil),' it said.

Genting slips at open

KUALA LUMPUR: GENTING BHD [] shares fell at the start of trade on Friday, Nov 12 as it is expected to see lower contribution for 3QFY10 ended Sept 30 from Singapore compared with the preceding quarter.

At 9am, it was the top loser, down 22 sen to RM10.38 with 32,700 shares done. The FBM KLCI opened down 1.3 points to 1,512.4.

Genting Singapore, which operates one of the two casinos, reported slightly lower earnings. Its EBITDA for the third quarter was S$347.6 million, down from S$731.8 million in the three months ended in June.

The Singapore casino reported revenue of S$731.8 million in 3Q, down from S$860.8 million in 2Q.

Genting Singapore, which operates one of the two casinos, reported slightly lower earnings. Its EBITDA for the third quarter was S$347.6 million, down from S$731.8 million in the three months ended in June.

The Singapore casino reported revenue of S$731.8 million in 3Q, down from S$860.8 million in 2Q.

#Stocks to watch:* Maybank, PPB, Genting, MBM Resources

KUALA LUMPUR: Stocks on Bursa Malaysia may be range bound on Friday, Nov 12 after the FBM KLCI snapped its recent gains on Thursday, as investors took some money off the table in key index-linked stocks while Wall Street closed on a softer note.

Local economic data to watch is Bank Negara Malaysia's monetary policy committee meeting and its decision on interest rates later on Friday.

At the Sept 2 meeting, the central bank maintained the overnight policy rate at 2.75%. Economists say the central bank will only raise the OPR next year and expectations are an increase of 50 to 75 basis points to ensure inflation remains well contained.

On Wall Street, the Dow Jones industrial average fell 73.94 points, or 0.65%, to 11,283.10. The Standard & Poor's 500 Index shed 5.17 points, or 0.42%, to 1,213.54. The Nasdaq Composite Index lost 23.26 points, or 0.90%, to 2,555.52.

Reuters reported Cisco's discouraging outlook dragged Wall Street lower on Thursday, but the market fought back in a sign the bullish trend remains intact

Stocks to watch include MALAYAN BANKING BHD [], GENTING BHD [], PPB GROUP BHD [] and MBM RESOURCES BHD [].

For a purchase that spurred so much criticism back in 2008 for its high price, Maybank's acquisition of PT Bank Internasional Indonesia Tbk (BII) may prove critics wrong as BII's share price rallied to record highs with investors continuing to warm up to Indonesia's exciting growth story.

Genting Bhd is expected to see lower contribution for 3QFY10 ended Sept 30 from across the causeway compared with the preceding quarter.

Genting Singapore, which operates one of the two casinos, reported slightly lower earnings. Its EBITDA for the third quarter was S$347.6 million, down from S$731.8 million in the three months ended in June.

The Singapore casino reported revenue of S$731.8 million in 3Q, down from S$860.8 million in 2Q.

PPB Group's third quarter (3Q) earnings are expected to come in below analysts' forecasts given the plunge in the net profit of Wilmar International Ltd, a key revenue contributor to the group.

PPB's share price fell to the lowest since Oct 22 after the disappointing results from Wilmar.

MBM Resources' earnings rose 52% to RM34.2 million from a year ago, underpinned by stronger vehicle sales. Revenue rose 30.3% to RM388.7 million on-year.

Cisco's rout dents Wall St but bullish trend rules

NEW YORK: Cisco's discouraging outlook dragged Wall Street lower on Thursday, Nov 11, but the market fought back in a sign the bullish trend remains intact.

Cisco lost 16.2 percent to $20.52 after its earnings report. Major indexes plunged shortly after the open, with Nasdaq falling more than 2 percent, but slowly came back as investors viewed Cisco's problems as company-specific.

"This is a recipe for disaster but the fact is, the market is doing pretty well," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

"The market is exhibiting considerable strength here, considering the run we've had in the past few weeks, negative news out of Cisco, and the dollar doing well."

In the past, major averages have taken a bigger beating the day after Cisco's earnings disappoint.

Short-term technical indicators suggest the stock market is still in an uptrend, and options action in Cisco reversed earlier bearishness as traders moved to rebuild bullish positions.

"There was a panic sell-off initially (on Cisco's outlook) but people are starting to realize that maybe this is just a Cisco-specific story," Massocca said.

Cisco stock suffered its worst one-day percentage drop since July 14, 1994, when it slid 17.71 percent, according to Thomson Reuters Datastream. However, Cisco's decline accounted for more than half of the losses in the Nasdaq 100 Index.

The Dow Jones industrial average fell 73.94 points, or 0.65 percent, to 11,283.10. The Standard & Poor's 500 Index shed 5.17 points, or 0.42 percent, to 1,213.54. The Nasdaq Composite Index lost 23.26 points, or 0.90 percent, to 2,555.52.

Cisco's warning dragged down shares of other tech heavyweights. Microsoft Corp lost 1 percent to $26.68, and Hewlett-Packard Co dropped 2.5 percent to $43.06.

More than 531 million shares had traded in Cisco, the fourth busiest day in the stock's history, according to Thomson Reuters Datastream.

On Wednesday, Cisco's Chief Executive John Chambers cited weak public spending as well as service providers, namely cable companies that have been losing customers, but said he saw the slowdown as "a couple of air pockets."

Cisco's disappointing outlook came as the market's recent rally lost steam. Tech shares have led that rally, with the S&P information tech index up about 21 percent from the end of August, compared with the S&P 500's gain of about 16 percent.

The day's decline has helped the market recover from an overbought condition, with the smoothed relative strength index (RSI) at about 63, off a recent high of 78.

Technical indicators showed that Cisco's stock was oversold, but the moving average convergence-divergence (MACD) triggered a "sell" signal. Momentum dropped to its lowest in 2-1/2 months.

Thursday's tumble took Cisco's stock below its 14-, 50- and 200-day moving averages. The stock stayed above the year low, which could provide some technical support. On a closing basis, the year low stands at $19.99 on Aug. 31.

Cisco's and the broader tech sector's sell-off pointed to the need for diversification, said Kevin Mahn, chief investment officer at Hennion & Walsh Asset Management in Parsippany, New Jersey, which has about $300 million in assets under management.

"Investors should look to build more diversification in their portfolios, relying not just on normal bellwethers like tech," Mahn said. "I'd recommend people look to places like small-caps, emerging markets and different kinds of bonds."

In the options market, many investors took positions betting on the recovery in Cisco's shares.

"It seems a number of options traders see the new value of the shares as attractive and ripe for harvest," said Caitlin Duffy, options strategist at Interactive Brokers Group.

More than 1.03 million option contracts have changed hands on Cisco Systems, with investors favoring calls over puts in afternoon trade.

Trading volume was about 7.8 billion shares on the New York Stock Exchange, the American Stock Exchange and Nasdaq, compared with the year-to-date daily average of 8.72 billion.

In spite of the major stock indexes ending Thursday's session off the day's lows, the market's breadth was decidedly negative. - Reuters

GLOBAL MARKETS-Euro hit by debt worry, tech stocks hit Wall St.

NEW YORK: The euro fell to a five-week low on Thursday, Nov 11 on concerns about Ireland's ability to repay its debt while earnings fears knocked U.S. stocks lower after a TECHNOLOGY [] bellwether Cisco Systems gave a dismal outlook.

Gold prices rose on escalating concerns about debt in some euro zone economies, overcoming a stronger U.S. dollar which makes the metal more expensive to trade. Oil prices were unchanged, with news of strong Chinese demand offset by the rise of the greenback.

Equities in Tokyo were poised on Friday to mirror weak U.S. trade. The December futures contract for the Nikkei 225 stock index trading in Chicago fell 30 points to 9840.

Yields on 10-year Irish bonds rose to a record high over comparable German debt as investors speculated Ireland will soon need financial help to service its debt.

Ireland's Finance Minister Brian Lenihan admitted the surge in borrowing costs had become "very serious," but European officials denied for a second day that Dublin was seeking financial aid -- echoing the denials heard six months ago when Greece needed an EU/IMF bailout.

"The market has gone back to focusing on Europe rather than the U.S., where rates are currently very low," said Greg Anderson, G10 FX strategist at Citigroup in New York. "It has become a game of 'Which currency do you dislike the most?' and right now that currency is the euro."

The euro fell as low as $1.3637, a five-week nadir, and was last down 0.9 percent at $1.3655. It also posted losses against the yen and hit a seven-week low against sterling.

The dollar strengthened against major currencies, with the U.S. Dollar Index up 0.64 percent. Also supporting the greenback was a U.S. think tank report saying the Federal Reserve may scale back its latest plan to buy government bonds.

Against the Japanese yen, the dollar was up 0.3 percent at 82.51 yen.

Europe's woes diverted attention from a G20 summit in South Korea, where major rich and developing countries tried to hammer out an agreement to reduce global economic imbalances and avoid competitive currency devaluations.

TECH WEIGHS ON WALL ST

Technology shares led a slide on Wall Street after a disappointing outlook from Cisco Systems Inc, the world's top manufacturer of computer routers and switches.

The Dow Jones industrial average fell 73.94 points, or 0.65 percent, to 11,283.10. The Standard & Poor's 500 Index lost 5.17 points, or 0.42 percent, at 1,213.54. The Nasdaq Composite Index dropped 23.26 points, or 0.90 percent, to 2,555.52.

Cisco's shares fell more than 16 percent to close at $20.52 after Chief Executive John Chambers cautioned about short-term challenges in Europe and purchases by public-sector customers.

European stocks ended little changed, with investors uneasy about the situation in Ireland. The FTSEurofirst 300 index of top European shares lost 0.07 percent after falling 0.7 percent on Wednesday. The index is up 71 percent since a record low in March 2009 but only 6 percent higher in 2010.

"It's time to book profits, that's what we're doing. The market is ripe for a correction," said Jean-Yves Dumont, head of asset allocation strategy and funds at Dexia Asset Management, which turned "underweight" on equities on Wednesday.

U.S. gold futures for December delivery settled up $4 at $1,403.30 an ounce, however spot prices fell 65 cents, or 0.05 percent, to $1408.20.

Trade was volatile as the strength of the greenback took off some of its shine.

"Gold is resuming its role as a safe haven in times of crisis as the situations in Ireland and some European countries are getting worse. So, it has also been separating itself from the euro lately because of the safe-haven play," said Donald Selkin, chief market strategist at National Securities Corp.

U.S. crude oil prices settled unchanged at $87.81 a barrel.

The U.S. bond market was closed for Veterans Day. - Reuters

Khazanah's 66m MAHB shares placed out at RM6 each

KUALA LUMPUR: Khazanah Nasional Bhd's 66 million shares of Malaysia Airports Holdings Bhd (MAHB) were placed out at RM6 each.

The share placement of the 6% stake raised gross proceeds of RM396 million for Khazanah, said RHB Investment Bank Bhd.

'There was strong demand from both foreign and domestic institutional investors for the placement,' said the investment bank.

RHB Investment Bank, HSBC and Nomura Singapore Limited were the joint placement agents.

'This placement will reduce Khazanah's shareholding from 60% to 54%.'' The placement price represents a 2.9% discount to the 3-day VWAP of RM6.18. MAHB's share price has gained 54.2% year-to-end, outperforming the benchmark FBM KLCI Index which is up 20.1%,' it said.

Blue chips snap 6-days of gains, PPB weighs

KUALA LUMPUR: Blue chips snapped their six-days of gains on Thursday, Nov 11 as investors took some money off the table, with PLANTATION []s and banks among the major decliners.

At the close, the FBM KLCI was down 14.31 points to 1,513.70 after hitting a fresh intra-day high of 1,531.99 the previous day. Turnover was 1.58 billion shares valued at RM2.28 billion. Declining stocks beat advancers 447 to 381 while 287 stocks were unchanged.

Nikkei 225 +0.31% 9,861.46 Hang Seng Index +0.82% 24,700.30 Shanghai Composite Index +1.04% 3,147.74 Singapore Straits Times Index +0.3% 3,299.18 ''

Key regional markets closed higher. Nikkei 225 +0.31% to 9,861.46, Hang Seng Index +0.82% to 24,700.30, Shanghai Composite Index +1.04% to 3,147.74, Singapore Straits Times Index +0.3% to 3,299.18.

At Bursa Malaysia, PPB fell the most, down 86 sen to RM18.50, the lowest since Oct 22 after its major earnings contributor Wilmar International posted a set of disappointing results. The fall dragged the KLCI down by 1.65 points.

Maybank fell 17 sen to RM9.10 and it was the main drag on the index, down 2.91 points while Tenaga shed 15 sen to RM8.63.'' Hong Leong Bank fell 25 sen to RM9.55, HLFG 21 sen to RM8.90.

KFC lost 18 sen to RM4.29 and KFC-WB 17 sen to RM2.22.

Among plantations, Chin Teik Plantations lost 20 sen to RM8.70 and KL Kepong 18 sen to RM20.20. Kulim,'' which has interest in plantations, rallied, up 40 sen to RM13.42 while Hap Seng Plantations added 17 sen to RM3.02 and NSOP 15 sen to RM5.45.

Scomi was the most active with 44.13 million shares done, shedding three sen to 42.5 sen.

Muhibbah climbed 14 sen to RM1.39 and it saw 41.9 million shares after CIMB Research initiated coverage with a target price of RM2.

#Flash* MAS, MASkargo cleared over EC air freight probe

KUALA LUMUR: The European Commission has terminated proceedings against MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and MASkargo over its air freight investigation under Article 101 of the EU Treaty.

'Neither MAS nor MASkargo has been found to have infringed European competition laws,' MAS senior vice president, corporate services, Dr Wafi Nazrin Abdul Hamid said on Thursday, Nov 11.

The EC did not impose any fine on MAS or MASkargo. However, the EC had imposed substantial fines totalling 799 million euros on many other airlines.

Perodua focuses on five-year plan despite merger reports

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) remains focused on boosting exports under its five-year plan despite rumours of a possible merger with PROTON HOLDINGS BHD [].

Perodua managing director Datuk Aminar Rashid Salleh confirmed on Thursday, Nov 11 the Malaysian Automotive Institute (MAI) met industry players over a possible consolidation of the automotive industry.

However, he declined to comment on the possibility of a merger between Proton and Perodua.

'MAI has talked to the players including Perodua, and it is at the tail end of the study. We do not know the conclusion but we trust that MAI and the consultants will make the right decision,' he told reporters at the launch of ViVa Elite Exclusive Edition.

'At the same time, we are still committed to and will present a five year roadmap to the government soon. This includes our plan to increase exports to 20,000 cars or 10% of our domestic sales, from 2% to 3% at the moment,' said Aminar.

CIMB Research maintains Trading Buy on Malaysian plantations

KUALA LUMPUR: CIMB Equities Research is maintaining its Trading Buy call on the Malaysian PLANTATION [] sector due to its bullish view for the crude palm oil (CPO) price prospects in the near term.

It said on Thursday, Nov 11 it favoured Kuala Lumpur Kepong for its strong fresh fruit bunches (FFB) output growth prospects and exposure to rubber prices.

'We also like Sime Darby for the potential improvement in the subpar yields from its existing estates as well as the potential sale of assets due to the group's ongoing restructuring following the appointment of a new acting CEO,' it said.

CIMB Research said Hap Seng Plantations remains a Trading Buy for its cheap valuations and strong dividend yields.

However, it remained Neutral on IOI Corp due to its slower FFB output growth prospects stemming from its ageing estates.

As for Genting Plantations which had outperformed its peers, it believed the market has priced in the favourable CPO price prospects.

'Given the stronger-than-expected surge in CPO prices, we are likely to upgrade our target prices for all the Malaysian planters when they release their results,' it said.

China's ICBC to raise $6.8 bln through rights issue

SHANGHA: Industrial and Commercial Bank of China (ICBC) plans to raise 45 billion yuan ($6.8 billion) through a rights share offering this month, capping an $80 billion fundraising boom by Chinese lenders to replenish capital depleted by last year's lending spree, according to a Reuters report on Thursday, Nov 11.

ICBC, which first unveiled its rights issue plan in July, will now be selling fewer rights shares in Hong Kong and Shanghai because of a rise in their stock market value since then.

Investors will be entitled to 0.45 shares for every 10 held, meaning it could issue up to 15.03 billion new shares, compared with its earlier plan to issue up to 0.6 shares for every 10 held, or 20.04 billion shares. ICBC's Shanghai shares are up 8 percent since July and its Hong Kong shares are up 15 percent.

The world's most valuable lender priced the issue at 2.99 yuan per share in Shanghai, and the equivalent price of HK$3.49 in Hong Kong, representing a discount to the market price of 37 percent and 47 percent, respectively.

The discounts are more-or-less in line with those offered by smaller rivals China CONSTRUCTION [] Bank Ltd (CCB) and Bank of China (BOC), which are raising a combined $18.2 billion.

CCB priced its offer at a 27-43 percent discount to market price, while BOC priced it a 34-41 percent discount.

The steep discount to market prices would give ICBC shareholders more of an incentive to participate in the rights issue, according to Jin Lin, analyst at Orient Securities.

"It will give investors the impression that participating in the rights issue would be a bargain," Jin said, adding that eventually, the overall wealth of investors would not change as the new issuance should drag down ICBC's share prices.

Investors generally welcomed the move, but ICBC's shares were overshadowed to some extent by the central bank's increasing banks' required reserves amid inflation worries.

ICBC's Hong Kong-listed shares rose 2.3 percent as of 0350 GMT to HK$6.78, while its Shanghai shares fell 1.7 percent to 4.66 yuan on the potential impact of the reserve requirement hike.

ENOUGH CASH FOR NOW

Most other listed banks in China, such as Bank of Communications and China Merchants Bank, completed fundraisings earlier this year, as regulators toughened capital rules after 2009's record $1.4 trillion lending threatened banks' asset quality.

ICBC has previously said the rights issue would fulfil its capital needs over the next three years, and Alexander Lee, analyst at DBS Vickers in Hong Kong, said he thought that was a reasonable estimate.

"Bear in mind that loan growth was exceptionally fast in 2009 and this year. I think loan growth will normalise going forward, so demand for capital will not be as great as before," he said.

ICBC's state parent, Central Huijin, a unit of China's sovereign wealth fund, has said it would fully participate in the rights issue.

Goldman Sachs, which owns about a 3 percent stake in ICBC, declined to comment on whether it would participate.

MORE TIGHTENING AHEAD

ICBC is the last among China's "Big Four" state lenders to detail fundraising plans.

CCB, China's second-biggest lender, announced earlier this month that it would raise up to $9.2 billion in Asia's biggest rights issue outside Japan.

Singapore state investor Temasek said on Thursday it will take up Bank of America's entire entitlement in CCB's rights issue.

Bank of China, the country's fourth-largest lender, said on Thursday that its $9 billion rights issue had been 99.57 percent subscribed.

In July, Agricultural Bank of China, the No. 3 lender, raised $22.1 billion in the world's biggest initial public offering.

ICBC's rights issue comes after the bank reported a 27 percent jump in third-quarter earnings, and unveiled plans to expand into the insurance business by buying control of French insurer AXA's Chinese joint venture.

However, a government tightening campaign could cloud the horizon.

ICBC Chairman Jiang Jianqing told Reuters on Thursday that the central bank was likely to tighten policy further to fight a flood of liquidity.

Asked whether monetary policy would be tightened further in 2011, Jiang said on the sidelines of a business summit organised in conjunction with this week's Group of 20 Summit: "Looking at things as they are now, there is a problem of abundant liquidity, or excess liquidity.

"If this trend continues, I'm afraid the central bank will have to keep taking corresponding measures." - Reuters