#Stocks to watch:* Kencana, KYM, BToto, MISC

KUALA LUMPUR: After the sharp sell-off late Friday, Dec 10, as investors turned cautious over China's move to tighten its monetary policy further, sentiment on Bursa Malaysia may show some recovery.

The late selling could be viewed as overdone while the firmer close on Wall Street could lend some support to some mild bargain hunting on Monday, Dec 13.

U.S. stocks rose on Friday, with the S&P 500 at its highest level since the week Lehman Brothers collapsed in 2008, and breaching technical levels that suggest the year-end rally will persist, according to Reuters.

The Dow Jones industrial average added 40.26 points, or 0.35%, to 11,410.32. The Standard & Poor's 500 gained 7.40 points, or 0.60%, to 1,240.40. The Nasdaq Composite rose 20.87 points, or 0.80%, to 2,637.54.

Stocks to watch on Monday include KENCANA PETROLEUM BHD [], KYM HOLDINGS BHD [], BERJAYA SPORTS TOTO BHD [] and MISC BHD []. Also in focus could be SAPURACREST PETROLEUM BHD [].

Kencana is expected to announce its 1QFY11 results on'' Monday. OSK Research forecasts better quarter-on-quarter performance and forecast earnings of RM191.9 million for FY11.

The research house is maintaining a Buy on Kencana with a higher target price of RM2.93. Kencana remains its top pick for the oil and gas sector.

KYM Holdings Bhd is going big on the development of an industrial park with the Perak State Economic Development Corporation. Plans are already under way to bring in downstream iron and steel players that are clients of Brazilian mining giant Vale International SA.

BToto saw its earnings fall 36% to 65.08 million for the second quarter ended Oct 31 from RM102.54 million a year ago as it bore the brunt of higher pool betting duty and higher prize payout.

Revenue slipped 1.3% to RM845.79 million from RM857.10 million a year ago. Earnings per share were 4.87 sen versus 7.62 sen. It declared a dividend of four sen a share.

However, the recent move by the Finance Ministry to allow numbers forecast operators to reduce their payout could help shore up BToto's bottomline. The prizes for the games would be reduced from RM200 per RM1 bet to RM180 per RM1 bet. The revised prize structure, which would take effect from Dec 15, would have a positive impact on their earnings.

MISC could continue to see some selling pressure after a research house lowered its outlook for the company on concerns about weakening petroleum tanker rates in 2011.

MISC closed down 31 sen to RM8.14 with 2.07 million shares done on Friday. Hwang DBS Vickers Research (HDBSVR) said in its research note that petroleum tanker rates may weaken in 2011, although narrower container losses might cushion the impact. It cut the FY12F-13F earnings by 13%-17% but expected stable income from LNG and non-shipping units should support earnings.

SapuraCrest posted profit attributable to the parent of RM54.84 million for the third quarter ended Oct 31, up a marginal 2.6% from RM53.44 million ago. The lower earnings were mainly due to a weaker US dollar which impacted its drilling division's financial performance and the lower activities in marine services division but mitigated by the higher activities in the installation of pipeline and facilities (IPF) division.

Wall St rises on upbeat data, S&P holds key level

NEW YORK: U.S. stocks rose on Friday, Dec 10, with the S&P 500 at its highest level since the week Lehman Brothers collapsed in 2008, and breaching technical levels that suggest the year-end rally will persist.

Indexes closed near session highs with the Nasdaq Composite up for its eighth consecutive daily gain; in that time, the tech-heavy index is up 5.5 percent. The Nasdaq finished at its highest level since Dec. 31, 2007. Volume was below average as is typical for this time of the year.

Industrial shares led the pack, with General Electric up more than 3 percent after it raised its dividend for a second time this year. The S&P industrial sector index rose 1.03 percent.

After the S&P 500 ended on Thursday above 1,228, the closely watched 61.8 percent retracement of its drop from late 2007 to March 2009, the benchmark index managed to hold above that key level for a second day.

"That met some significant resistance so closing above there and staying above there is a pretty good sign," said Art Hogan, chief market analyst at Jefferies & Co in Boston.

The S&P 500 tried and failed to breach 1,228 back in April and later in early November, with both attempts followed by steep declines.

The Dow Jones industrial average added 40.26 points, or 0.35 percent, to 11,410.32. The Standard & Poor's 500 gained 7.40 points, or 0.60 percent, to 1,240.40. The Nasdaq Composite rose 20.87 points, or 0.80 percent, to 2,637.54.

For the week, the indexes also posted gains. The Dow rose 0.2 percent, the S&P 500 was up 1.3 percent and the Nasdaq added 1.8 percent.

The Nasdaq Composite, boosted by a 2.3 percent gain in shares of Oracle Corp, hit its highest level since December 2007. Oracle shares closed at $29.95.

In the latest signs of improvement in the U.S. economic recovery, data showed consumer sentiment rose more than expected in early December, according to the Thomson Reuters/University of Michigan survey, while import prices in November climbed at their fastest pace in a year.

Another positive signal came from the Commerce Department, which said the U.S. trade deficit narrowed much more than expected in October.

Overseas news helped boost equities, after a slew of data showed China's imports and exports jumped in November, bank lending topped forecasts and property investment powered ahead. China increased reserve requirements for banks but kept interest rates on hold.

GE jumped 3.4 percent to $17.72 after the company said quarterly payments to shareholders will increase by 2 cents to 14 cents per share.

Lifting the S&P health care index, Tenet Healthcare Inc shares jumped 55 percent to $6.65, easily surpassing the $6-per-share bid from Community Health Systems Inc and likely forcing the potential buyer to raise its offer for the rival hospital company. The S&P health care index was up 0.9 percent.

Community Health shares rose 13.4 percent to $35.89.

Shares of Netflix Inc rose after Standard & Poor's said the company, along with F5 Networks Inc, Newfield Exploration Co and Cablevision Systems Corp, will be added to the S&P 500 index after trading closes next Friday.

Netflix added 1.9 percent to $194.63, Cablevision jumped 4.1 percent to $34.72, Newfield gained 3.3 percent to $72.37 and F5 Networks rose 3 percent to $143.09.

Oil slips on China rate hike worry, gasoline slide

NEW YORK: Oil prices fell on Friday, Dec 10'' in choppy trading, finishing with a weekly loss as concerns that China's moves to cool inflation will curb energy demand, while slumping gasoline futures hit crude futures which had risen on news of surging Chinese imports.

For the third time in one month, China's central bank increased the amount of money lenders must keep on reserve, another move to rein in inflation.

U.S. gasoline futures gave back most gains from the previous session when news of Hovensa LCC's shut gasoline-making unit at its St. Croix, U.S. Virgin Islands refinery lifted prices.

U.S. crude for January delivery fell 58 cents to settle at $87.79 a barrel, having seesawed between $87.10 and an early $89.00 peak.

Despite reaching a 26-month high of $90.76 on Tuesday, for the week U.S. crude oil futures fell 1.57 percent. Oil rose 6.48 percent last week, its second straight weekly gain.

In the week to Tuesday, money managers raised net long crude oil positions on the New York Mercantile Exchange to a record, the Commodity Futures Trading Commission said.

That move above $90 just topped the $70-$90 a barrel price range that Saudi Arabia and OPEC last month deemed acceptable to consumers and came as OPEC prepared to meet on Saturday, with oil ministers expected to retain existing supply targets.

Total U.S. crude trading volume was tepid, 518,771 lots, 22 percent below the 30-day average.

ICE Brent crude for January delivery fell 51 cents to settle at $90.48 a barrel, slipping 1.03 percent for the week.

"The market just continues to struggle in the high $80s," said Tom Bentz, broker at BNP Paribas Commodity Futures in New York.

"The Chinese rise in November imports and exports is supportive but being offset by the China central bank raising reserves as well as the potential for an interest rate hike over the weekend."

China's crude oil imports jumped 22.1 percent last month from a year earlier to 5.09 million barrels per day, the fourth-highest monthly average on record.

The euro trimmed losses against the U.S. dollar, drawing support from comments by European Central Bank President Jean-Claude Trichet saying the euro zone recovery was on track.

Earlier the dollar firmed against the euro as better-than-expected U.S. economic data increased the allure of the greenback, with gains expected to continue if Treasury yields keep rising.

U.S. Treasury prices fell, capping a week of relatively aggressive selling spurred by rising growth outlooks and deficit worries.

U.S. stocks rose on upbeat data on consumer sentiment and trade, while bulls were encouraged as the S&P 500 held above a key technical level, the closely watched 61.8 percent retracement of its drop from late 2007 to March 2009.

IEA, OPEC VIEWS DIFFER

OPEC and the International Energy Agency had different demand outlooks for 2011 on Friday, as the IEA anticipated robust demand while producer group OPEC said supply was plentiful.

The IEA, an adviser to 28 industrialized countries, in a monthly report lifted its 2011 oil demand growth forecast by 130,000 barrels per day to 1.32 million bpd.

OPEC forecast 2011 global oil demand growth would increase to 1.18 million bpd, only 10,000 bpd more than predicted last month and making the case for no change in supply policy when oil ministers meet on Saturday in Quito.

OPEC's secretary-general has said it wanted an improvement in oil market fundamentals before increasing crude supplies, even if prices go to $100 a barrel.

In addition to mulling supply and market share policy, OPEC ministers will be reacting to news that Saudi Arabia is considering candidates to succeed long-standing oil minister Ali al-Naimi in a ministerial reshuffle that could happen in late February or early March next year. - Reuters

OPEC set for no change despite $90 oil

QUITO: OPEC will not raise oil supplies at a meeting on Saturday, Dec 11 Saudi Oil Minister Ali al-Naimi said, leaving traders to ask what price the group requires to open the taps and prevent fuel inflation hurting global economic recovery.

"Absolutely not," Naimi told reporters on Friday, Dec 10 when asked if the Organization of the Petroleum Exporting Countries needed to raise production.

Oil prices are just short of the top end of the $70-$90 a barrel range flagged recently by Naimi as the level consumer nations can cope with, but concern about the potential damage of rising fuel costs on a convalescent world economy is mounting.

Naimi, OPEC's most influential voice, would not say whether or not Saudi was comfortable with prices that set a two-year high of over $90 for U.S. crude this week.

But some analysts think Riyadh is unlikely to let prices rise much above $90 without stepping in, for fear that economic growth will suffer and hurt fuel demand growth.

The cartel cut output sharply two years ago after a recessionary slump in crude prices and has not changed policy since.

"I don't believe the Saudis will embrace $90 oil with the economic minefield ahead of us," said Gary Ross, CEO of leading energy consultancy PIRA Energy Group.

"There would be a lot of pressure on the Saudis and OPEC in general to raise production as $100 oil would be viewed as injurious to economy," said Phil Flynn, analyst at PFG Best Research in Chicago.

Naimi said that under current circumstances he saw need for OPEC to meet again before its next scheduled gathering in June.

OPEC Secretary-General Abdullah al-Badri said on Thursday ministers wanted to see real evidence of extra demand and would not raise output, even at $100, if they felt price rises were led by speculation.

OPEC's reading of the strength of supply-demand fundamentals is conservative compared to that of consumer advisory body the International Energy Agency.

The two groups on Friday released widely divergent views of global demand growth and the requirement for extra OPEC supply.

OPEC's report estimated demand will grow this year at 1.47 million barrels per day (bpd) on the 86 million-bpd world market.

The IEA said it expects global demand growth to average 2.47 million bpd for 2010 and said consumption in the third quarter surged by 3.3 million bpd.

"Against a backdrop of much stronger-than-expected global oil demand growth and oil prices above two-year highs, OPEC may come under pressure to increase supplies to the market in the new year," the IEA. - Reuters

SapuraCrest Petroleum 3Q earnings almost flat

KUALA LUMPUR: SAPURACREST PETROLEUM BHD [] posted profit attributable to the parent of RM54.84 million for the third quarter ended Oct 31, up a marginal 2.6% from RM53.44 million ago.

It said on Friday, Dec 10 the lower earnings were mainly due to a weaker US dollar which impacted its drilling division's financial performance and the lower activities in marine services division but mitigated by the higher activities in the installation of pipeline and facilities (IPF) division.

SapuraCrest said pre-tax profit declined 13.4% to RM100.07 million from RM115.55 million while revenue was marginally lower at RM1.015 billion compared with RM1.024 billion. Earnings per share were 4.3 sen verus 4.22 sen.

When compared to the second quarter's revenue of RM898.10 million, the increase in the third quarter was boosted by the IPF division. Its profit before tax fell11.2% to RM100.10 million from RM112.8 million mainly due to lower contribution from drilling and lower activities in the marine services division.

The company reported higher inventories of RM72.86 million at Oct 31 compared with RM54.27 million as at Jan 31 this year. There was an increase in trade and other receivables of RM1.868 billion crom RM1.163 billion.

For the financial year ending Jan 31, 2011, it said expected the group to achieve satisfactory results barring unforeseen circumstances.

KLCI slumps on late sell-down, China policy tightening fears

KUALA LUMPUR:'' Profit-taking activities ahead of the weekend on Friday, Dec 10 saw the FBM KLCI succumbing to its steepest single-day loss since Nov 23 while investors braced for more policy tightening by China to stem its two-year high inflation rate.

The FBM KLCI fell sharply by 0.92% or 14.01 points to 1,507.28, weighed by losses at key blue chips including Petronas Dagangan, KLK, MISC, Tenaga and CIMB. Gainers trailed losers by 354 to 428, while 280 counters traded unchanged. Volume was 1.53 billion shares valued at RM2.73 billion.

Sentiment turned cautious in late afternoon trade, impacted by weaker regional markets and expectations of more policy tightening by China and persistent worries about Europe's debt crisis,

Investors' concerns proved to be true when China's central bank upped the amount of money that lenders must keep on reserve for the third time in one month, a move to mop up excess cash in the economy and rein in inflation, according to a Reuters report.The 50 basis point increase, which takes effect on Dec 20, lifts required reserve ratios to 19% for the country's biggest banks, a record high.

The decision to raise banks' required reserves rather than interest rates means that officials have opted for a milder form of monetary tightening for the time being, suggesting that they believe price pressures are still well within their ability to control.

Japan's Nikkei 225 fell 0.72% to 10,211.95, Singapore's Straits Times Index lost 0.77% to 3,185.42, Taiwan's Taiex fell 0.40% to 8,718.83, South Korea's Kospi shed 0.14% to 1,986.14, Hong Kong's Hang Seng Index slipped 0.04% to 23,162.91 while the Shanghai Composite Index rose 1.07% to 2,841.04.

The Shanghai Composite Index jumped on the back of rising Chinese imports and exports.

The Shanghai Composite climbed 1.1% on the day as strong trade data encouraged some investors to take on a little more risk heading into the weekend, but low volumes suggested market players were avoiding building large positions, according to Reuters.

The index ended the week marginally lower, it said.

China's imports and exports were much stronger than expected in November, robust numbers that could clear the way for the central bank to raise interest rates again as soon as this weekend, said Reuters.

On Bursa Malaysia, among the major losers were BAT that fell RM1.26 to RM46.06, PetDag down 40 sen to RM11.50, KLK lost 38 sen to RM21.50, Tasek fell 29 sen to RM7.30, PPB fell 28 sen to RM17.10, RHB Capital down 27 sen to RM8.20, Genting PLANTATION []s lost 20 sen to RM8.46, Nestle down 18 sen to 18 sen to RM43.34 and CIMB lost 14 sen to RM8.76.

MISC tumbled 31 sen to RM8.14 after HwangDBS Vickers Research downgraded the stock to hold and cut its target price to RM8.90.

It cut the FY12F-13F earnings by 13%-17% but expected stable income from LNG and non-shipping units should support earnings.

'Container losses may narrow, but we are concerned about MISC's crude tanker and chemical shipping units, which present downside risks to earnings,' it said.

Meanwhile, Tenaga fell 19 sen to RM8.60 over the delay in a tariff hike at a time of rising coal prices.

Among the gainers, Landmarks surged 27 sen to RM1.64 after CIMB Research said the property company was trading at a hefty discount of more than 70% to its estimated RNAV of RM4.81.

Other gainers included Cepco, Kwantas, Glenealy, Panasonic, DRB-Hicom and MAHB.

Petronas Chemicals was the most actively traded counter with 148.1 million shares done. The stock added four sen to RM5.58. Other actives included Talam, DRB-Hicom shares and warrants, Landmarks, Olympia and Axiata.

Great Eastern expects RM1bln from takaful business by 2015

KUALA LUMPUR: Great Eastern Holdings Ltd expects RM1 billion in contributions by 2015 from its new takaful business via its new joint venture company, Great Eastern Takaful Sdn Bhd.

"We aim to achieve RM180 million annualised premium in the first year of operations and we hope to have RM1 billion by 2015, which translates to roughly 3,000 policies a month," Great Eastern Takaful executive director and CEO Mohamad Salihuddin Ahmad said at the launch on Friday, Dec 10.

The company is a joint venture between Great Eastern Holdings' subsidiary, I Green Capital Holdings Sdn Bhd and Koperasi Angkatan Tentera (M) Bhd, with an initial capital set up of RM100 million.

I Green Capital Holdings will own 70% of the company and Koperasi Angkatan Tentera the remaining 30 per cent.

Mohamad Salihuddin said the market penetration rate for takaful business or Islamic insurance in Malaysia was still relatively low and about 8% of the population had takaful policies.

"The low penetration rate represents a large untapped market which correspondingly translates into a strong potential for growth for us," he said.

He also anticipates the local takaful industry to grow by 15%-20% with more developments from the Islamic finance sector.

The company is the first to launch its takaful product lineup after receiving its licence for family takaful from Bank Negara.

It is among four joint venture entities led by foreign and local insurance companies that had received their licenses in September.

Meanwhile at the event, Great Eastern Holdings chairman Fang Ai Lian presented a mock cheque worth RM1 million to be donated to the International Centre for Education in Islamic Finance (INCEIF), to fund its talent development and research programmes. - Bernama

#Flash* Berjaya Sports Toto 2Q earnings fall 36% on higher duties, payout

KUALA LUMPUR: BERJAYA SPORTS TOTO BHD [] saw its earnings fall 36% to 65.08 million for the second quarter ended Oct 31 from RM102.54 million a year ago as it bore the brunt of higher pool betting duty and higher prize payout.

It said on Friday, Dec 10 revenue slipped 1.3% to RM845.79 million from RM857.10 million a year ago. Earnings per share were 4.87 sen versus 7.62 sen. It declared a dividend of four sen a share.

'Sports Toto, the principal subsidiary, recorded a decrease in revenue and pre-tax profit of 2.1% and 39.2% respectively as compared to previous year corresponding quarter,' it said.

The decline in revenue was due to a lower number of draws while the drop in pre-tax profit was mainly due to the increase in pool betting duty from 6% to 8% with effect from June 1, 2010 coupled with higher prize payout compared to a year ago, BToto said.

It said for the first half, the group recorded a marginal drop in revenue of 0.1% and a decrease in pre-tax profit of 32.2% when compared to the previous corresponding period.

BToto said the decline was due to higher pool betting duty and higher prize payout and also higher finance cost.

Ulti Resources seeks RM15.9m from Ramunia for alleged unlawful land possession

KUALA LUMPUR: Ulti Resources Sdn Bhd is seeking RM15.90 million from RAMUNIA HOLDINGS BHD [] for alleged unlawful possession of the former's land in Kota Tinggi, Johor since July 2008.

Ramunia said on Friday, Dec 10 its unit Ramunia Fabricators Sdn Bhd had received a copy of the writ of summon and order from Ulti Resources.

Ulti claimed Ramunia had unlawfully entered and took possession of the land and was liable to pay it'' RM741,400 a month from July 30, 2008 to May 14 this year totalling RM15.90 million.

Ramunia said there was no immediate financial and operational impact on Ramunia arising from the legal suit.

China raises banks' reserve ratios again

BEIJING: China's central bank on Friday, Dec 10 increased the amount of money that lenders must keep on reserve for the third time in one month, a move to mop up excess cash in the economy and rein in inflation.

But the decision to raise banks' required reserves rather than interest rates means that officials have opted for a milder form of monetary tightening for the time being, suggesting that they believe price pressures are still well within their ability to control.

The 50 basis point increase, which takes effect on Dec 20, lifts required reserve ratios to 19 percent for the country's biggest banks, a record high.

The People's Bank of China offered no explanation.

"We expected the RRR rise this time, and I think it is perfectly timed to help manage excessive liquidity," said Lu Zhengwei, chief economist at Industrial Bank in Shanghai.

"There is still much scope for the central bank to raise reserve ratios next year. We expect several increases in the first quarter of next year and the ratio could reach as high as 23 percent in 2011," he added.

The move came just one week after China's top leaders announced a shift to a "prudent" monetary policy from the previous "moderately loose" stance.

Analysts said the change of wording could pave the way for more interest rate increases and lending controls.

Chinese stock markets have shed more than 10 percent over the past month on concerns that the government would ratchet up its monetary policy tightening in face of rising inflation.

Chinese consumer price inflation may have hit 5.1 percent in the year to November, a 28-month high, state media reported on Friday. The figure is due to be published on Saturday.

Along with playing a key role in the fight against inflation, policy tightening also signals the government's confidence that the world's second-largest economy is on solid ground, even as the U.S. and European recoveries remain fragile. - Reuters

SE Asia Stocks-Mostly down on concerns over China, Europe debt

COLOMBO: Most Southeast Asian stock markets closed lower on Friday, Dec 10 on concerns over further policy tightening by China and persistent worries about Europe's debt crisis, but Indonesia and the Philippines continued to see significant inflows.

Indonesia , the region's best performer in 2010, saw foreign inflows of $327.9 million foreign inflow, the highest daily net offshore buying this year, Reuters data showed.

But the overall Jakarta market fell 1 percent from a record high led by banking shares, which were volatile throughout the week, which analysts attributed to heavy local buying in small cap banks. The bourse has gained 48 percent so far this year.

"The long term picture is stable and clear," said Harry Su, head of research at Jakarta-based Bahana Securities.

"Everybody was in a selling idea due to concerns over Chinese officials raising interest rates and rating cut in Ireland. But I think those are short-term reactions," he said, referring to news that Fitch had become the first ratings agency to strip debt-stricken Ireland of its 'A' credit status. [ID:nLDE6B81AH]

After most Asian markets closed, China raised banks' required reserve requirements by another 50 basis points, which was widely expected. Some traders were also bracing for a possible interest rate rise as early as this weekend.

Bank Internasional Indonesia , which was heavily traded in terms turnover, fell 3.6 percent, while small cap Bank CIMB Niaga lost 5.8 percent.

The Philippines , which fell 1.8 percent to hit its lowest since Dec. 1, enjoyed this year's highest daily foreign inflow of $406 million, Reuters data showed.

Investors have been generally upbeat on the region and analysts expect the outlook for Southeast Asian stock markets to remain positive for 2011, barring any global setbacks, though foreigners have been growing more cautious about valuations.

Indonesia is trading at 15.4 times this year projected earnings the highest in the region and compared to all-Asia's 13.2. Thailand, is trading at 12.5, lower than 14 of Singapore and Malaysia and 13.6 of the Philippines, Thomson Reuters StarMine data show.

Singapore fell 0.8 percent on profit taking and Malaysia closed 0.9 percent weaker on concerns over possible rate hikes in China over the weekend.

"The market is preparing itself for more tightening measures from China," said Ng Kian Teck, an analyst at SIAS Research.

Singapore and Indonesia saw low volumes of trade compared to their 90-day average. Vietnam bucked the trend with 2.7 percent rise to hit a four month high.

Thailand was closed for a holiday. - Reuters

RHB Investment Mgmt inks partnership with Goldman Sachs

KUALA LUMPUR: RHB Investment Management Sdn Bhd (RHBIM) and Goldman Sachs Asset Management have inked an exclusive partnership to jointly develop fund management products for distribution to investors in Malaysia.

In a joint statement Friday, Dec 10, RHBIM and Goldman Sachs said the partnership was the first of its kind in the country and would enhance the range of investment products and asset classes available to RHB customers.

The two firms said they would work closely together and share their knowledge of global and local capital markets, product development and client servicing, as well as develop joint marketing initiatives

Head of Goldman Sachs Asset Management in Asia, Oliver Bolitho said Malaysia was a very exciting new market for the firm.

'I cannot think of a better way of launching our business here than partnering with a firm of RHB's strength, experience and wide distribution reach. Together with RHBIM, we will bring a broad range of new ideas to investors in Malaysia,' he said.

RHBIM managing director Sharifatul Hanizah Said Ali said Goldman Sachs Asset Management was a highly regarded global firm.

'We are delighted to be partnering with them and delivering their significant expertise exclusively to Malaysian investors.

'The key rationale behind this agreement is to leverage the strengths of both firms to create value for private and institutional investors' said Sharifatul Hanizah.

Earlier this year, the Securities Commission granted fund management and corporate finance licenses to Goldman Sachs.

Profit taking picks up pace, Tenaga weighs

KUALA LUMPUR: Profit taking picked up pace in the late afternoon on Friday, Dec 10, with selling seen in Tenaga, MISC, KLK and PPB.

At 3.43pm, the FBM KLCI was down 7.08 points to 1,514.21. Turnover was 1.09 billion shares valued at RM1.59 billion. Decliners beat advancers 415 to 304 while 287 stocks were unchanged.

Most key regional markets were in the red except for China.

BAT fell the most, down RM1.26 to RM46.04 with 85,500 shares done while Petronas Dagangan shed 28 sen to RM11.62 and Nestle 22 sen to RM43.30.

Tenaga fell 19 sen to RM8.60 as investors were disappointed over the absence of a tariff hike amid rising coal prices.

MISC fell 18 sen to RM8.27, KL Kepong and PPB 16 sen each to RM21.72 and RM17.22 while HL Bank shed 15 sen to RM9.21. Profit taking saw Sunrise giving up 18 sen to RM3.12.

Southern Acids earnings surge to nearly RM8m

KUALA LUMPUR: SOUTHERN ACIDS (M) BHD []'s earnings surged to RM7.91 million for the second quarter ended Oct 31, 2010 from only RM408,000 a year ago, boosted by the higher average selling price of fatty acids.

It said on Friday, Dec 10 revenue rose 15.7% to RM128.59 million from RM111.13 million a year ago, earnings per share were 5.78 sen compared with 0.3 sen.

'The higher revenue in the 2Q is attributable to the higher average selling price of fatty acids achieved by the oleochemical division and crude palm oil prices recorded by the PLANTATION [] division.

'Correspondingly, the improved group revenue has resulted in a group pre-tax profit of RM14.9 million as compared to a pre-tax profit of RM2.0 million recorded in the corresponding second quarter last year,' it said.

Southern Acids said its revenue of RM128.6 million was marginally lower compared to RM129.2 million in the first quarter mainly due to lower volume of fatty acids sold.

It said pre-tax profit of RM14.9 million in the second quarter rose RM3.2 million or 28% from'' RM11.7 million in the first quarter. It explained this was mainly contributed by the plantation division on the back of higher CPO prices during the second quarter.

Nikkei falls 0.7 pct, strong settlement for futures and options prompts profit-taking

TOKYO: Japan's Nikkei average fell 0.7% on Friday, Dec 10 as a higher-than-expected estimated settlement for futures and options prices encouraged investors to take profits on a 12% rally for benchmark since the start of November.

While sentiment for the Nikkei, which still lags other global indexes for the year to date, remains robust, analysts say technical signs that the market is overbought and the approach of the year-end would keep a lid on potential near-term gains.

The benchmark Nikkei closed the day down 73.93 points at 10,211.95. In the morning, it rose to a new seven-month high of 10,373.70, but profit-taking hit the market as Nikkei futures and options contracts expiring in December were estimated to have settled at 10,420.74, slightly stronger than expected.

The broader Topix index fell 0.4 percent to 888.22.

In Seoul, shares dipped on Friday after touching a three-year high in the previous session, with falls in auto issues including Hyundai Motor weighing. The Korea Composite Stock Price Index (KOSPI) finished down 0.14% at 1,986.14.

Sapura Resources 3Q net profit surges on land sale

KUALA LUMPUR: SAPURA RESOURCES BHD []'s earnings surged more than 400% to RM13.06 million in the third quarter ended Oct 30, 2010 from RM2.55 million a year ago, boosted by the sale of a piece of freehold land with the automobile showroom.

It said on Friday, Dec 10, revenue fell 43.8% to RM34.73 million from RM61.87 million a year ago. Earnings per share were 9.36 sen versus 1.83 sen.

It made an operating loss of RM1.15 million compared with operating profit of RM4.97 million a year ago.'' However, there was a gain of RM13.86 million from the sale of discontinued operations.

Sapura Resources said the 3Q net profit was higher than in 2Q mainly due to the net gain arising from the disposal of the property.

Investors sell into strength, DRB-Hicom in focus

KUALA LUMPUR: The FBM KLCI succumbed to some mild profit taking in line with the dip at most key regional markets after the recent rally on Friday, Dec 10, as local investors appeared to have adopted a 'sell into strength' strategy.

The FBM KLCI shed 0.26% or 4.02 points to 1,517.27 at the mid-day break, weighed by losses at key blue chips including Tenaga, Petronas Dagangan, PPB, BAT, MISC, RHB Capital, Hong Leong Bank, DiGi and KLK.

Gainers trailed losers by 263 to 384 while 274 counters traded unchanged. Volume was 759.8 million shares valued at RM1.12 billion.

The ringgit gained 0.11% to 3.1355 versus the US dollar; crude palm oil for the third month delivery fell RM5 per tonne RM3,545, oil added eight cents to US$88.45 and gold rose US$2.60 per troy ounce to US$1,389.70.

Hang Seng Index -0.68% 23,014.04 Nikkei 225 -0.49% 10,235.73 Taiwan's Taiex -0.72% 8,690.40 Straits Times Index -0.75% 3,186.21 Kospi -0.29% 1,983.17 Shanghai Composite Index +0.14% 2,814.89 ''

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Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Dec 10 said that due to the steady US markets last night, the FBM KLCI in a range trading mode today too, with some buying activities that may see later pre-weekend profit-taking.

'Global market trends may have become somewhat volatile recently but we have turned a corner at the 1,474-low.

'The FBM KLCI remains trapped between the low of 1,474 and the high of 1,531 for now, with good upside potential,' he said.

BAT fell RM1.28 to RM46.02, PetDag fell 30 sen to RM11.60, PPB down 26 sen to RM17.12, Nestle and Kulim fell 20 sen each to RM43.32 and RM12.28.

MISC and RHB Capital shed 15 sen each to RM8.30 and RM8.32, Hong Leong Bank and DiGi down 14 sen each to RM9.22 and RM24.40, while Tenaga and KLK lost 12 sen each to RM8.67 and RM21.76.

Landmarks rose 24 sen to RM1.61 after CIMB Research said the property company was trading a hefty discount of more than 70% to its estimated RNAV of RM4.18.

DRB-Hicom shares and warrants rose in active trade after HwangDBS Vickers Research initiated coverage on the stock with a buy call and target price RM3.55.

DRB-Hicom jumped 18 sen to RM1.83 with 49.9 million shares trade while its warrants added seven sen to 44.5 sen with 54.7 million units done.

Other gainers included Glenealy, MPI, AMMB and Petronas Chemicals.

Kulim slips to 8-day low, limited upside after takeover rejected

KUALA LUMPUR: Shares of KULIM (M) BHD [] fell in late morning on Friday, Dec 10 as the euphoria of the takeover of its subsidiary QSR BRANDS BHD [] fizzled out following the outright rejection by Kulim and QSR board.

At 11.46am, Kulim was down 22 sen to RM12.26, but off the earlier low of RM12.22.'' It is at its lowest since Nov 30's RM12.14.

QSR was unchanged at RM5.64 and KFC Holdings Bhd also flat at RM3.81.

The FBM KLCI shed 3.81 points to 1,518.01. Turnover was 629.79 million shares valued at RM896.58 million. Losers led gainers 359 to 247 while 262 counters were unchanged.

Shares of Kulim had rallied from RM9.70 on Oct 29 on expectations of a takeover.

On Nov 29, QSR Brands rejected a revised offer of RM6.70 proposed by KUB MALAYSIA BHD [] in collaboration with Idaman Saga Sdn Bhd and CVC Capital Partners Asia III Ltd.

QSR had then said it had decided to reject the offer, though it was higher than Idaman's original offer of RM5.61.

KUB had collaborated with Idaman Saga ' the vehicle of Tan Sri Halim Saad ' and CVC Capital Partners Asia III Ltd to extend a revised proposal to acquire all the business and undertakings of QSR and its subsidiaries at an indicative offer price of RM6.70 per share.

KUB holds the Yum! franchise for A&W in Malaysia and Thailand. CVC Asia III is affiliated to CVC Capital Partners, a leading global private equity firm with over US$43 billion in funds.

US-based private equity fund Carlyle had last week upped Idaman's offer to RM6.70 to take QSR private.

Asian markets down at mid-morning

KUALA LUMPUR: The FBM KLCI slipped into negative territory in early trade on Friday, Dec 10 in line with most key regional markets that succumbed to some mild profit taking and unloading of positions by foreign investors ahead of the year-end break.

Regional investors also remained sidelined ahead of Chinese inflation data, expected over the weekend, according to Reuters.

On Bursa Malaysia, losses at key blue chips including BAT, DiGi, Hong Leong Bank, Tenaga and Genting dragged the FBM KLCI down 1.78 points to 1,519.51 at 10am. Losers edged gainers by 216 to 204, while 224 counters traded unchanged. Volume was 302.51 million shares valued at RM403.77 million.

At the regional markets, Japan's Nikkei 225 fell 0.43% to 10,241.70, Taiwan's Taiex down 0.35%t to 8,723.47, Singapore's Straits Times Index lost 0.54% to 3,192.80, South Korea's Kospi slipped 0.25% to 1,983.89, the Shanghai Composite Index down 0.15% to 2,806.67 while Hong Kong's Hang Seng Index opened 0.4% lower at 23,091.52.

Commenting on the FBM KLCI, RHB Research Institute Sdn Bhd said admittedly, the recovery in recent sessions has silenced the previous negative readings on the chart, and turned the market sentiment into a more favourable state.

The research house said in a note Dec 10 that if the buying support persists, the market will stand a good chance to retake the strong resistance level at 1,524 and the all-time high level of 1,531.99 soon.

That will also lift the 10-day Simple Moving Average (SMA) to cut across the 40-day SMA and move the medium-term technical outlook to the positive territory, it said.

'Thus, lifting the FBM KLCI back onto its previous bullish track and heading towards our 1.618 times Fibonacci Projection target at 1,668.

'Nevertheless, as we have warned earlier, the FBM KLCI must remove the all-time high level of 1,531.99, before it can secure a fresh breakout signal, to lure in more buying support.'' For now, we maintain our strategy of 'selling into strength' on the current rally,' it said.

On Bursa Malaysia at mid-morning, BAT fell RM1.26 to RM46.04, Nestle was down 22 sen to RM43.30, DiGi lost 14 sen to RM24.40, Hong Leong Bank fell 12 sen to RM9.24, Panasonic and Carlsberg down 10 sen each to RM18.70 and RM6.32, Genting fell eight sen to RM10.98, while Dutch Lady and Kulim lost six sen each to RM18.60 and RM12.42.
Tenaga lost 11 sen to RM8.68 over the delay in getting a tariff hike.

Gainers this morning included Landmark, Golsta, Melati, Maybank, Bintulu Port, Mah Sing, AMMB and YTL Land, while the actively traded stocks included Petronas Chemicals, Careplus, Hovid and DRB-Hicom.

Selected property related stocks up

KUALA LUMPUR: Property and CONSTRUCTION [] related counters, which had been off the radar screen of investors, advanced in early trade on Friday, Dec 10, riding on the positive sentiment of the property sector.

At 9.51am, KYM was up 18 sen to RM2.60 while its warrants, KYM-WA added 20 sen to RM2.04. Landmarks gained 14 sen to RM1.51, Melati Ehsan added seven sen to 77 sen while YTL Land advanced seven sen to RM1.31.

The 30-stock FBM KLCI fell 1.92 points to 1,519.37, dragged by losses in Tenaga. Turnover was 265.52 million shares valued at RM353.93 million. There were 197 gainers, 193 losers and 220 stocks unchanged.

Landmarks advances on CIMB report

KUALA LUMPUR: Shares of Landmarks'' Bhd climbed in morning trade on Friday, Dec 10 after CIMB Research said the property company was trading at a hefty discount of more than 70% to its estimated RNAV of RM4.81.

At 10.06am, Landmarks was up 14 sen to RM1.51 with 13.60 million shares done.

The FBM KLCI fell 1.37 points to 1,519.92. Turnover was 323.81 million shares valued at RM429.18 million shares. Losers led gainers 233 to 208 while 229 stocks were unchanged.

CIMB Research said Landmarks was trading at a hefty discount of more than 70% to its estimated RNAV of RM4.81. Investors are currently valuing the Bintan landbank at only slightly more than S$3.00 (RM7.20) psf.

'At 50% discount to its RNAV, the stock would be worth RM2.41. Landmarks has been a laggard this year, trading sideways since September 2009. YTD, the stock has eked out a mere 5% gain compared to 18.8% for the KLCI.

'We expect the stock to catch up soon. Furthermore, Landmarks' current share price is way below Genting's entry cost, which we estimate to be RM1.70-RM2 a share,' it said.

HDBSVR reaffirms Buy rating on Gamuda, TP RM4.90

KUALA LUMPUR: Hwang DBS Vickers Research reaffirms its Buy rating and sum-of-parts derived target price of RM4.90 for GAMUDA BHD [], which remains on its high conviction list. Its last traded price was RM3.79.

The research house said on Friday, Dec 10 Gamuda is looking to bid for the Qatar MRT project next year worth US$45bn (RM141bn). This target completion date is 2021, ahead of the FIFA World Cup in 2022.

HDBSVR said within the Middle East, Gamuda already has two projects in Qatar ' the New Doha International Airport (88% completed) and Durkhan Highway (100% completed). It is also bidding for the second phase of Durkhan Highway worth at least RM1bn together with WCT where a result should be known soon.

Gamuda's Group MD Datuk Lin Yun Ling was quoted saying he believed the company will be able to garner enough resources for both the KL MRT and Qatar MRT should it be successful in bagging both.

'While not made official, we understand the MMC-Gamuda JV will be appointed project delivery partner (PDP) for the RM36bn MRT project. This will allow it full control over the project while also bearing execution risk.

'However, what remains unclear for now is the RM14bn tunneling works which the JV is eyeing. In our view, the JV is also frontrunner to clinch this given its past expertise which is a scarcity among the local contractors,' said HDBSVR.

The research house also noted that it was not in the government's interest to delay this project by opening up the tender to foreign contractors given the MRT is an vital component of the ETP programme.

Gamuda advances on higher TP, earnings outlook

KUALA LUMPUR: Shares of GAMUDA BHD [] advanced in early trade on Friday, Dec 10 after fresh positive corporate news and Hwang DBS Vickers Research's reaffirmation of its target price RM4.90.

At 9.10am, it was up 10 sen to RM3.89 while the call warrants, Gamuda-CD climbed five sen to RM1.67.

However, the FBM KLCI slipped 1.96 points to 1,519.33. Turnover was 65.65 million shares valued at RM67.25 million. Gainers led losers 116 to 67 while 116 counters were unchanged.

HDBSVR said Gamuda remains on its high conviction list. Gamuda is looking to bid for the Qatar MRT project next year worth US$45bn (RM141 billion). This target completion date is 2021, ahead of the FIFA World Cup in 2022.

Tenaga slips on tariff hike disappointment

KUALA LUMPUR: Shares of TENAGA NASIONAL BHD [] fell in early trade on Friday, Dec 10 following investors' disappointment over a delay in the tariff hike.

At 9.19am, it was down seven sen to RM8.72 with 62,400 shares done.

The decline in the power giant's shares also weighed on the FBM KLCI, which dipped 0.32 of a point to 1,520.97. Turnover was 124.31 million shares valued at RM158.66 million. There were 148 gainers, 104 losers and 141 stocks unchanged.

Tenaga president and chief executive officer Datuk Sri Che Khalib Mohamad Nor said on Thursday he was confident it could maintain its profitability for the financial year ending Aug 31 2010 barring higher coal prices continues to climb higher and breach US$110 a tonne.

On the postponement of the tariff hike, as announced by the Energy, Green TECHNOLOGY [] and Water Minister Datuk Seri Peter Chin Fah Kui, Che Khalib had said it is the government's prerogative.

RHB Research initiates coverage on TH Plantations, FV RM2.30

KUALA LUMPUR: RHB Research Institute is initiating an Outperform call on TH PLANTATION []s and assigned it a PE of 11 times FY11 and fair value of RM2.30.

The research house said on Friday, Dec 10 TH Plantations is the plantation arm of Lembaga Tabung Haji and it has plantation land bank of about 39,159 hectares and five palm oil mills with a total milling capacity of 702,000 tonnes per annum.

'We project TH Plantations THP to record a three-year earnings CAGR of 25% to FY12, on the back of a three-year revenue CAGR of 14%.

'The reason for the stronger profit growth is the higher CPO prices as well as an expectation of improved FFB yields, which translate to better margins. We project net dividend payouts at a consistent 55-60% p.a., which translate to attractive net yields of 5.6% for FY10, rising to 7-8% for FY11-12,' it said.

RHB Research said TH Plantations' earnings are very sensitive to CPO price movements and every RM100/tonne change in CPO price would impact earnings by 10%-12% per annum.

'Assigning it a PE of 11 times FY11, which is the mid-point of its historical average, we arrive at a fair value of RM2.30. Initiate with Outperform,' it said.

Dell's CEO: transformation is on the way

ROUND ROCK, Texas: Dell Inc's billionaire chief executive, arguing that his efforts to transform his company have gone unnoticed by some on Wall Street, wants to drive the acquisitions that will prove crucial to its long-term future.

But he is also starting to see warning signs of increasingly frothy TECHNOLOGY [] valuations, and said firmly he will not pay unreasonable prices to acquire new pieces.

Nearly four years into Michael Dell's second stint as chief executive, the company finds itself lagging larger rivals like Hewlett Packard Co and International Business Machines in the race to become one-stop shops for corporate IT needs.

In a major move to expand its presence in the hot area of cloud computing, Dell announced it is bidding for storage specialists Compellent Technologies Inc in a deal valued at close to $1 billion.

Dell says the company is indeed becoming more diversified, and wants to be a major player in both data center equipment and the fast-growing mobile market.

"Five or 10 years ago people would say Dell is a PC company. Well, news flash -- most of our margin and profit doesn't come from PCs. I don't think people get that," Dell said in a rare, exclusive interview on Thursday, Dec 9.

"Margins are going in the right direction, the mix of the business is shifting in a pretty considerable way, the picture is starting to emerge more clearly what Dell is becoming."

Asked what the Dell of the future might look like, he downplayed the role of individual product categories, which he called "ingredients" in a broader IT menu.

RIGHTING THE SHIP

Once the world's top PC maker and a mainstay of business-school case studies, Dell has shed market share and now vies with Acer Inc for second place.

More than half its business still comes from selling low-margin, commodity PCs. But Michael Dell has made no secret he is determined to diversify the company into more profitable areas -- such as software, services and storage.

The CEO who started out upgrading PCs from his college dorm room acknowledged that plenty of work still lay ahead to compete with rivals like IBM, HP and Apple Inc.

"It takes time, but clearly the company is changing," he said.

Dell was presiding over an event at corporate headquarters to promote what he sees as a major opportunity selling equipment and services to small- and medium-sized businesses, a segment often overlooked by investors but which makes up roughly a quarter of sales and a third of operating income.

"Dell has an enormous channel that can sell to these customers, and this is also where all the growth is," said Dell, who founded the company in the 1980s while still a college student.

Steve Felice, who leads Dell's mid-market business, said such companies are the largest group of spenders on IT.

"They're often ignored from a technology standpoint," he said.

NEEDS MORE CONVINCING?

Michael Dell stepped down as CEO in 2004, but returned in early 2007 to try to revive his company, which remained too dependent on PC sales as the market matured.

Dell raised its yearly profit outlook last month, but investors will need more convincing before they grant the company a higher multiple.

Since Michael Dell reassumed the helm, the company has had its ups and downs, amid deep job cuts and restructuring. But Dell pointed to the strong third-quarter results and said the company is now hiring thousands, though he expressed surprise it cannot find enough qualified people to fill vacancies.

To help drive growth, it has also launched a major push into mobile devices, introducing both a smartphone and a tablet, although analysts say that effort has failed to gain traction thus far.

"It's early stages for us. We've got a lot more products planned next year, particularly as the tablet comes into the mainstream here," he said.

He noted that the company has been acquiring around eight companies a year, a big change from a decade ago, when the company did not engage in M&A.

"We're absolutely changing our role in the industry," he said. "At the extreme, you could have said Dell started out as more of distributor, and now you see Dell as an IP owner," he said, referring to intellectual property.

The company's purchase of storage company EqualLogic in 2008 is widely deemed successful. But the jury is still out on last year's acquisition of services company Perot Systems, its biggest-ever purchase. Dell lost out to HP this year in a dramatic bidding war for storage company 3Par.

With roughly $14 billion in cash and investments, Dell has a considerable war chest at its disposal, and still plans to be aggressive in adding pieces to its business. But Michael Dell saw some froth in valuations, and the company will be disciplined.

"We don't have to go buy companies, and if the valuations aren't reasonable, we're not going to buy them," he said.

Shares of Round Rock, Texas-based Dell slipped 0.2 percent to close at $13.65 on Thursday. - Reuters

Dell offers nearly $1 bln to buy Compellent

NEW YORK: Dell Inc offered to buy data storage company Compellent Technologies Inc for nearly $1 billion to expand beyond PCs and catch up with rivals Hewlett-Packard Co and IBM in new technologies like cloud computing.

Three months after losing out to HP in a bidding war for another storage firm, 3Par, Dell said on Thursday, Dec 9 it is bidding $27.50 a share for Compellent.

That was an 18 percent discount from Compellent's closing Nasdaq price on Wednesday, although the shares had already risen 90 percent since late October when Reuters reported that a deal was being discussed.

Speculation also heated up earlier this week after the company backed out of a Barclays TECHNOLOGY [] conference.

Compellent shares closed Thursday down 13.7 percent at $29.04, but were still above Dell's bid, indicating some investors expect a higher bid could emerge. Dell shares were little changed, ending down 3 cents at $13.65.

Dell entered an exclusive agreement with Compellent to negotiate a merger, and the companies said they were holding "advanced discussions." They added there could be no assurance that they would reach a deal.

But a source familiar with the matter said both parties were pleased with the price. "The deal was inked at $27.50 and both parties wanted a deal at that price," the source said.

Dell, HP, and International Business Machines have all been pursuing acquisitions in the past year in an attempt to position themselves for an economic recovery and become "one stop shops" for corporate clients' technology needs.

Dell founder and chief executive Michael Dell told Reuters in an interview on Thursday that his company's efforts to transform from its roots as a computer maker have gone unnoticed by some on Wall Street.

He said most of Dell's margin and profit now comes from areas other than PCs. "I don't think people get that."

But some analysts say that even with a successful Compellent deal, Dell has far to go in catching up with HP and IBM in areas like cloud computing.

Data storage plays a crucial role in cloud computing, the accessing of remote computing power and data over the Internet. Dell entered this market in 2008 with its purchase of EqualLogic.

Eden Prairie, Minnesota-based Compellent specializes in storage and recovery of data for small and medium-sized businesses, compared to the high end business targeted by 3PAR.

CHEAPER THAN 3PAR

The Compellent deal appears to be a consolation prize for Dell, which lost 3PAR to HP in September. Some analysts had said HP's final offer of over $2 billion for 3PAR was excessive, driven by the heated bidding war.

The source said the bid valued Compellent at $946 million, around five times sales, compared to multiples of over eight that HP offered for 3PAR and EMC offered for Isilon.

While some analysts said Dell did well to settle for the more affordable option, others said Compellent, unlike 3PAR, was not capable of addressing the needs of customers with large data centers.

"For Dell, it does nothing to help answer some of the big questions that investors have about its strategy in cloud computing," said Canaccord Genuity analyst Paul Mansky, whose target price of $27.50 was matched exactly by Dell's offer.

"Dell's going to have to do one of two things. It's either going to have to look at private companies which are by definition not as big in terms of an installed base, or you're going to have to seriously consider new partnerships."

The recent data storage deals have left few potential acquisition targets in the sector, although CommVault Systems Inc as well as privately held Pillar Data Systems and DataDirect Networks are also seen as potential targets.

Some analysts and bankers say NetApp Inc could also be a target, but at a market capitalization of nearly $20 billion, they say it could be too big and the major technology companies have already bought storage technologies.

IBM in September announced a deal to buy data analytics company Netezza for $1.7 billion.

Morgan Stanley and Blackstone Group advised Compellent, while UBS advised Dell, the source said. Compellent held preliminary meetings with Frank Quattrone's Qatalyst Partners, which advised 3Par when it was courted by HP and Dell, but did not retain them, said the source.

Dell and Compellent said they do not plan to comment further until an agreement is reached or discussions are ended. - Reuters

#Stocks to watch:* SP Setia, Gamuda, Sunrise, Tenaga

KUALA LUMPUR: Blue chips are expected to advance on Friday, Dec 10 as investors' sentiment is galvanized by the extended gains on Wall Street while at Bursa Malaysia, the FBM KLCI moved closer towards its all-time high of 1,531.

However, the run-up could also see some profit taking ahead of the weekend. External concerns include the downgrade to Ireland which kept the euro zone debt problems fresh in the minds of investors.

US stocks edged up on Thursday with the benchmark S&P 500 closing at a two-year high, a trend investors expect to continue through the rest of the year.

The Dow Jones industrial average dipped 2.42 points, or 0.02 percent, to 11,370.06. The Standard & Poor's 500 Index gained 4.72 points, or 0.38 percent, to 1,233.00. The Nasdaq Composite Index rose 7.51 points, or 0.29 percent, to 2,616.67.

Stocks to watch include SP SETIA BHD [], GAMUDA BHD [], SUNRISE BHD [] and TENAGA NASIONAL BHD []. Also in focus would be DRB-HICOM BHD [] and Bolton'' Bhd.

SP Setia Bhd's CEO Tan Sri Liew Kee Sin said the company will not be content with remaining at No 3 in terms of market capitalisation of listed Malaysian property companies, following the recent spate of mega mergers in the sector.

SP Setia's earnings rose 47% to RM251.81 million in the financial year ended Oct 31, 2010 from RM171.23 million in FY09, underpinned by from its property development activities carried out in the Klang Valley, Johor Bahru and Penang.

Revenue rose 24% to RM1.745 billion from RM1.408 billion a year ago while earnings per share were 24.77 sen versus 16.84 sen.

CONSTRUCTION [] and infrastructure giant Gamuda Bhd is eyeing Qatar's mass rail transit (MRT) project next year, ahead of the 2022 FIFA World Cup, said group managing director Datuk Lin Yun Ling.

Gamuda is also targeting RM5 billion in property sales over the next two years driven by two projects namely Gamuda City and Celadon City, both in Vietnam.

"We are expecting RM2 billion in sales from local projects and RM3 billion from the two projects in Vietnam.'' For us, this is a giant leap and we are busy trying to make sure we achieve the RM5 billion sales," said Lin.

He said Gamuda expected RM1 billion in sales from its property division in the financial year ending July 31, 2011.'' Currently, Gamuda's unbilled sales stood at RM800 million.

Shares of Sunrise Bhd and UEM LAND HOLDINGS BHD [] (ULHB) rose in active trade yesterday following rising optimism of the merger and ahead of the Dec 22 deadline for minority shareholders to accept the offer.

The merger would create Malaysia's largest property company with a market capitalisation of nearly RM10 billion and a 12,000-acre landbank.

Tenaga Nasional is confident that it could maintain its profitability for the financial year ending Aug 31 2010 barring higher coal prices continues to climb higher and breach US$110 a tonne.

Bolton is selling its 100% stake in Lim Thiam Leong Realty Sdn Bhd, which owns Campbell Complex in Jalan Dang Wangi here for RM50 million.

Bolton said on Thursday, Dec 9 it was disposing of the realty company to Shapadu Resources Sdn Bhd. Lim Thiam Leong Realty owns 70 retail lots in the podium, all the office suites and 286 parking bays in the 20-storey Campbell Complex.

Meanwhile, DRB-Hicom Bhd said it was unaware of any plans by Tan Sri Syed Mokhtar Al Bukhary to take the auto-banking group private.

It said it was not aware of a plan by the tycoon to offer between RM2.20 and RM2.70 per share which he does not own.

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HDBSVR: FBM KLCI could see temporary breather

KUALA LUMPUR: Hwang DBS Vickers Research said after chalking up a cumulative gain of 20.3-point or 1.4% in the past three days the key FBM KLCI would probably pause for a temporary breather on Friday, Dec 10.

In its market outlook, it said technically, the benchmark index could face an intermittent resistance at the 1,525 level.

On Wall Street last night, major U.S. equity indices showed a fairly firm performance, closing between flat and +0.4% as sentiment was lifted by a drop in jobless claims.

Individual stocks on Bursa Malaysia which may see continuous trading interest include: (a) Gamuda and MMC, following comments made by Gamuda's managing director that he is confident the government would likely appoint the Gamuda-MMC JV to be the project delivery partner soon to undertake the MRT transportation system; and (b) Tenaga as the share price (up 21 sen yesterday) may retreat a bit after the Prime Minister said a hike in electricity tariffs is not imminent.

OSK Research: SP Setia remains top sector Buy

KUALA LUMPUR: OSK Research said SP SETIA BHD []'s FY10 core earnings came in 10% above its estimates but within consensus numbers.

It said on Friday, Dec 10 that SP Setia's FY10 turnover and core net profit, after stripping out an estimated exceptional gain of RM44 million'' from the disposal of property,, improved by 24% (+35% q-o-q) and 28% (+47% q-o-q) respectively. New property sales in FY10 totaled RM2.3 billion while unbilled sales stood at RM1.8 billion.

'Although we are leaving our earnings forecast largely unchanged for now, some changes to the balance sheet items prompt us to adjust our CY11 target price to RM6.58 (from RM6.38), based on 2.8x CY11 P/NTA. SP Setia remains our top sector BUY,' it said.

Renewable energy legislation up for 1st reading in Parliament next week

KUALA LUMPUR: The legislation on renewable energy has been prepared and it could be up for first reading in Parliament next week.

Minister of Energy, Green TECHNOLOGY [] and Water Datuk Seri Peter Chin said on Thursday, Dec 9 the legislation included the feed-in tariff scheme that enables consumers to sell renewable energy to utility companies.

He was speaking at the launch of a joint venture between Khazanah Nasional Bhd and Camco International to set up Camco South East Asia, which will be involved in carbon emission reduction projects.

Bernama reports Khazanah will have a 40% stake in the joint venture while Camco International will hold the other 60% stake.

Khazanah managing director Tan Sri Azman Mokhtar said Camco South East Asia will have a paid-up of US$30 million.

Currently, Khazanah holds 23.6 per cent stake in Camco International, which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

Camco International has a 20-year track record in carbon project development, technical delivery and policy development.

EPF records RM67m in returns from real estate investments

KUANTAN: The Employees Provident Fund (EPF) recorded RM67.29 million in returns in the third quarter of this year from its investment in real estate.

EPF chairman Tan Sri Samsudin Osman said EPF had now invested RM1.89 billion or 0.44% in real estate out of its total investment of over RM420 billion.

He said on Thursday, Dec 9 the EPF's objective was to provide financial security for its contributors upon retirement, hence, the investments were made carefully by EPF to avoid losses in the long run.

"The main objective of EPF is to give reasonable returns from its investments which will be translated into good dividend rates for contributors' savings," he said at the official opening of the Pahang EPF building by the Sultan of Pahang, Sultan Ahmad Shah.

The building, in Indera Mahkota, cost RM12.85 million to build. Work on a 1.6 ha site began in 2004 and it became operational in July 2006, housing a number of government departments including the Pahang Survey and Mapping Department, State Health Department and State Works Department.

Samsudin said Pahang EPF now served 168,000 contributors with savings amounting to RM5.27 billion. - Bernama

Bolton to dispose of property company for RM50m cash

KUALA LUMPUR: BOLTON BHD [] is selling its 100% stake in Lim Thiam Leong Realty Sdn Bhd, which owns Campbell Complex in Jalan Dang Wangi here for RM50 million.

Bolton said on Thursday, Dec 9 it was disposing of the realty company to Shapadu Resources Sdn Bhd.

Lim Thiam Leong Realty owns 70 retail lots in the podium, all the office suites and 286 parking bays in the 20-storey Campbell Complex.

Campbell Complex has 197 retail lots'' and it has a total net lettable area of approximately 255,160 sq ft and has an occupancy rate of 70%.

Lim Thiam Leong Realty acquired the land in year 1971 for RM6 million and the CONSTRUCTION [] of Campbell Complex was completed in 1973 at a cost of RM15.32 million.

The net book value of the land and the property, as at March 31, 2010, was RM46.63 million.

The property is about 37 years old and has rented out 179,783 sq ft, which generated revenue and pre-tax profit of RM6.25 million and RM1.78 million respectively for the financial year ended March 31, 2010.

The 88 strata titles in the property are currently charged in favour of a financial institution under a first legal charge as security for banking facilities granted to Bolton.

KLCI nears all-time high

KUALA LUMPUR:'' Blue chips extended their gains for the second day, on Thursday, Dec 9 in line the key regional markets with the FBM KLCI closing 0.74% higher and approaching the all-time historic high of 1,531.99 exactly one month ago.

The 30-stock index rose 0.74% or 11.23 points to 1,521.29, powered by gains in CIMB, Genting, Tenaga and Petronas Chemicals. Volume was 1.53 billion valued at RM2.48 billion. Gainers beat losers by 494 to 307, while 267 counters traded unchanged.

Japan's Nikkei 225 rose 0.52% to 10,285.88, Hong Kong's Hang Seng Index added 0.34% to 23,171.80, Taiwan's Taiex rose 0.58% to 8,753.84, Singapore's Straits Times Index up 0.3% to 3,210.20 while South Korea's Kospi jumped 1.7% to 1,988.96 after the country's central bank held interest rates steady at 2.5% following the increase the previous month.

At Bursa Malaysia, encouraging data on manufacturing and employment released by the Statistics Department lifted investor confidence.

The industrial production index (IPI) rose 3% in October 2010 from a year ago and increased 3.4% from September, the Statistics Department said. The increase in October was underpinned by a 4.5% increase in manufacturing and a 5% increase in the electricity index.

Workers employed in the manufacturing sector rose 6.1% on-year in October to 996,078 and up 0.6% from September.

CIMB added 20 sen to RM8.90, Genting rose 26 sen to RM11.06, Petronas Chemicals was up 13 sen to RM5.54, PPB up 38 sen to RM17.38, BAT jumped RM1.44 to RM47.30, Hong Leong Bank up nine sen to RM9.36, AMMB added eight sen to RM6.50 while Maybank and Axiata rose three sen each to RM8.43 and RM4.76.

Tenaga pared down some of its gains after Energy, Green TECHNOLOGY [] and Water Minister Datuk Seri Peter Chin Fah Kui said there would not be any tariff hike for now.

The stock closed 21 sen higher at RM8.79 after having hit an intra-day high of RM8.82.

Other gainers included LPI Capital, Batu Kawan, Petronas Dagangan, Sunrise, Paramount Corp and S P Setia.

The actives included Petronas Chemicals, Karambunai, DRB-Hicom shares and warrants, Careplus, Petra Perdana, Kencana and Ramunia.

Decliners today included MAHB, Panasonic, Ta Ann, MTD Capital, Shell, QSR and DiGi.

DRB-Hicom shares closed five sen lower at RM1.65, off its intra-day high of RM1.77 while the call warrants, DRB-Hicom-CC slipped four sen to 37.5 sen, off its early high of 46 sen.

Tenaga president: FY2011 earnings sustainable barring coal price hike

KUALA LUMPUR: TENAGA NASIONAL BHD [] is confident that it could maintain its profitability for the financial year ending Aug 31 2010 barring higher coal prices continues to climb higher and breach US$110 a tonne.

Tenaga president and chief executive officer Datuk Sri Che Khalib Mohamad Nor said on Dec 9, Thursday that the demand for electricity was able to mitigate against the increasing coal prices.

'At the current coal price, we can hopefully maintain our profitability for the rest of the financial year. However, we might have to seek a review of electricity tariff if the coal prices continue to climb,' he said at the signing of an MoU between Tenaga and the energy division of Tyco Electronics.

As for the postponement of the tariff hike, as announced by the Energy, Green TECHNOLOGY [] and Water Minister Datuk Seri Peter Chin Fah Kui, he said it is the government's prerogative.

Che Khalib said Tenaga would make an appeal for a tariff revision if it could not sustain the rising coal prices.

DRB-Hicom unaware of privatisation plan by Syed Mokhtar

KUALA LUMPUR: DRB-HICOM BHD [], whose securities saw very active trade on Thursday, Dec 9, said it was unaware of any plans by Tan Sri Syed Mokhtar Al Bukhary to take the auto-banking group private.

It told Bursa Malaysia it was not aware of a plan by the tycoon to offer between RM2.20 and RM2.70 per share which he does not own.

'DRB-Hicom wishes to state that the company is not aware of such proposal nor have we received any notice whatsoever to that effect from our holding company, Etika Strategi Sdn Bhd,' it said.

DRB-Hicom shares closed five sen lower at RM1.65, off its intra-day high of RM1.77 while the call warrants, DRB-Hicom-CC slipped four sen to 37.5 sen, off its early high of 46 sen.

QSR slumps after recent rejection of takeover offers

KUALA LUMPUR: Shares of QSR BRANDS BHD [] slumped on Thursday, Dec 9, amid a resurging market after the recent rejection of two takeover offers at RM6.70 per share.

At 3.07pm, the shares fell 12 sen to RM5.63 while its warrants lost nine sen to RM2.53.

However, the broader market was firmer with the benchmark FBM KLCI up 6.59 points to 1,516.65. Turnover was 984.47 million shares done valued at RM1.48 billion. Advancers led gainers 386 to 302 while 283 stocks were unchanged.

On Nov 29, QSR Brands rejected a revised offer of RM6.70 proposed by KUB MALAYSIA BHD [] in collaboration with Idaman Saga Sdn Bhd and CVC Capital Partners Asia III Ltd.

QSR had then said it had decided to reject the offer, though it was higher than Idaman's original offer of RM5.61.

KUB had collaborated with Idaman Saga ' the vehicle of Tan Sri Halim Saad ' and CVC Capital Partners Asia III Ltd to extend a revised proposal to acquire all the business and undertakings of QSR and its subsidiaries at an indicative offer price of RM6.70 per share.

KUB holds the Yum! franchise for A&W in Malaysia and Thailand. CVC Asia III is affiliated to CVC Capital Partners, a leading global private equity firm with over US$43 billion in funds.

US-based private equity fund Carlyle had last week upped Idaman's offer to RM6.70 to take QSR private.

SP Setia FY10 earnings up 47% to RM251.8m

KUALA LUMPUR: SP SETIA BHD []'s earnings rose 47% to RM251.81 million in the financial year ended Oct 31, 2010 from RM171.23 million in FY09, underpinned by from its property development activities carried out in the Klang Valley, Johor Bahru and Penang.

It said on Thursday, Dec 9 revenue rose 24% to RM1.745 billion from RM1.408 billion a year ago while earnings per share were 24.77 sen versus 16.84 sen.

'The current year profit after taxation was arrived at after expensing approximately RM17 million for employee share options granted pursuant to the company's ESOS which was launched in May 2009.

'Selling and marketing expenses include the cost of financial incentives of RM33 million borne by the Group pursuant to its successful 5/95, Best for the Best and Invest Setiahomes campaigns,' it said.

SP Setia said the group's profit and revenue were principally derived from its property development activities carried out in the Klang Valley, Johor Bahru and Penang.

Ongoing projects which contributed to the group's profit and revenue include Setia Alam and Setia Eco-Park at Shah Alam, Setia Walk 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.

For the fourth quarter, earnings rose 32% to RM75.15 million from RM56.86 million, boosted by gain from the disposal of Tesco Hypermarket in Bukit Indah Johor, an investment property of the group.

Revenue rose 42% to RM557.99 million from RM393.61 million while EPS were 7.37 sen compared with 5.59 sen.

October industrial output up 3% on-yr, up 3.4% on-month

KUALA LUMPUR: The Industrial production index (IPI) rose 3% in October 2010 from a year ago and increased 3.4% from September, the Statistics Department said.

It said on Thursday, Dec 9 the increase in October was underpinned by a 4.5% increase in manufacturing and a 5% increase in the electricity index. However, the index of mining declined 1.1%.

'The cumulative index for the period of January-October 2010 increased 8.1% as compared with the same period of 2009,' it said.

More jobs created in manufacturing sector

KUALA LUMPUR: The manufacturing sector reported an increase in the total number of employees, with the workforce rising to 996,078 in October 2010, up 6.1% from a year ago.

The Statistics Department said on Thursday, Dec 9 the number of employees in October also showed an increase of 5,976 persons or 0.6% from September.

'Year-on-year, the number of workers employed also increased by 57,298 persons or 6.1%, as compared to 938,780 persons in October 2009.

'Total employees in September 2010 were a revised positive 5.6% year-on-year to record 990,102 workers,' it said.

IPI, employment numbers lift investors' confidence

KUALA LUMPUR: The FBM KLCI stayed in positive territory at the mid-day break on Thursday, Dec 9 after encouraging manufacturing and employment data were released by the Statistics Department, boosting investors' confidence.

The industrial production index (IPI) rose 3% in October 2010 from a year ago and increased 3.4% from September, the Statistics Department said. The increase in October was underpinned by a 4.5% increase in manufacturing and a 5% increase in the electricity index.

Workers employed in the manufacturing sector rose 6.1% on-year in October to 996,078 and up 0.6% from September.

At the mid-day break, the FBM KLCI rose 0.24% or 3.65 points to 1,513.71, lifted by gains including at Tenaga, Petronas Chemicals, PPB and Petronas Dagangan.

Gainers led losers by 355 to 284, while 287 counters traded unchanged. Volume was 803.04 million shares valued at RM1.19 billion.

The ringgit strengthened 0.24% to 3.1380 versus the US dollar; crude palm oil futures for the third month delivery rose RM21 per tonne to RM3,576, crude oil added 54 cents per barrel to US$88.82 and gold gained US$5.73 per troy ounce to US$1,387.80.

At the regional markets, Japan's Nikkei 225 rose 0.26% to 10,259.18, South Korea's Kospi up 0.90% to 1,973.26, Taiwan's Taiex gained 0.53% to 8,750.34, Hong Kong's Hang Seng Index added 0.35% to 23,174.13, Singapore's Straits Times Index was up 0.18% to 3,208.57 while the Shanghai Composite Index lost 0.74% to 2,827.39.

On Bursa Malaysia, Tenaga came off its intra-morning high of RM8.82 after Energy, Green TECHNOLOGY [] and Water Minister Datuk Seri Peter Chin Fah Kui said there would not be a tariff hike for now.

The stock was up 13 sen to RM8.71 at the mid-day break.

PLANTATION [] stocks advanced on the back of improving CPO prices after the delivery for February to a 29-month high of RM3,640, with Glenealy up 60 sen to RM5.60, Batu Kawan up 40 sen to RM17.20 and PPB up 20 sen to RM17.20.

LPI Capital was up 46 sen to RM12.60, Sunrise rose 21 sen to RM3.22, Petronas Dagangan up 20 sen to RM11.70, Paramount added 20 sen to RM4.98, Pos Malaysia and S P Setia added 18 sen each to RM3.30 and RM5.54, while Tradewinds was up 17 sen to RM5.32.

Gamuda keen on Qatar MRT project

KUALA LUMPUR: GAMUDA BHD [] is keen to bid for Qatar's mass rapid transit project following its successful bid to host the FIFA World Cup finals in 2022.

Its group CEO Datuk Lin Yun Ling said on Thursday, Dec 9 that he expects the Qatari government to come up with the delivery programme for the MRT in 2011.

Tenaga up on expectations of rate hike

KUALA LUMPUR: Shares of TENAGA NASIONAL BHD [] advanced in late morning trade on Thursday, Dec 9 on reports the Cabinet had agreed in agreed in principle to a revision of electricity tariff but the implementation date has not been decided yet.

At 11.40am, Tenaga was up 23 sen to RM8.81 with 712,000 shares done.

The FBM KLCI rose 5.07 points to 1,515.13. Turnover was 637 million shares valued at RM963 million. Advancers beat decliners 317 to 258 while 279 counters were unchanged.

On Wednesday, Energy, Green TECHNOLOGY [] and Water Minister Datuk Seri Peter Chin Fah Kui was reported as saying an electricty tariff revision was on the cards but the government had not decided the date.

He said there were many issues that the Government needed to address before a time could be set for the revision.

#Flash* Tenaga off highs, Minister says no hike for now

KUALA LUMPUR: Shares of TENAGA NASIONAL BHD [] were off their earlier high of RM8.82 on Thursday, Dec 9 after Energy, Green TECHNOLOGY [] and Water Minister Datuk Seri Peter Chin Fah Kui said there would not be a tariff hike for now.

At 12.14pm, Tenaga was up 15 sen to RM8.73, but off the intra-morning high of RM8.82.

Chin said it would be up to the Economic Council chaired by the Prime Minister, to decide.

Earlier, Tenaga shares jumped on a news report the Cabinet had agreed in agreed in principle to a revision of electricity tariff but the implementation date has not been decided yet.

S P Setia advances after RAM Ratings reaffirms AA3 rating

KUALA LUMPUR: S P Setia Bhd's shares advanced on Thursday, Dec 9 after RAM Ratings eaffirmed the AA3 rating of the company's RM500 million Nominal Value of 2% Redeemable Serial Bonds (Bonds) with 168,151,302 Detachable Warrants (2007/2012).

The long-term rating has a stable outlook.

S P Setia gained 24 sen to RM5.60 with 854,400 shares done at 10.43am.

In a statement Dec 9, RAM Ratings said the rating reflected S P Setia's strong business profile as a leading property developer in Malaysia.

For the first 11 months of FYE 31 October 2010, the Group's sales reached RM2.11 billion, exceeding its targeted RM2 billion for the full fiscal year.

RAM Ratings head of real estate and CONSTRUCTION [] ratings Shahina Azura Halip said that with its strong branding and innovation, S P Setia was expected to continue churning impressive sales based on its track record of annual sales growth over the past decade, irrespective of economic cycles.

Meanwhile, the Group's RM1.81 billion of unbilled sales as at end-September 2010 is expected to generate an assured stream of earnings over the next few years, she said.

RAM Ratings said aside from its large stable of ongoing projects, S P Setia had over 3,800 acres of undeveloped land in various prime locations within the Klang Valley, Penang and Johor, which are expected to keep it busy for at least another decade.

'The group also has a healthy liquidity profile; as at end-July 2010, its coffers contained RM685.23 million of cash against RM401.36 million of short-term debt obligations,' it said.
The rating agency said on the flip side, the rating was moderated by the uncertainties of S P Setia's foreign ventures.

Meanwhile, its debt level is expected to increase from RM1.29 billion (as at end-July 2010) to around RM2.1 billion, some RM400 million higher than RAM Ratings' earlier projection, it said.

It said S P Setia had however, redeemed RM250 million of the Bonds on Nov 23, 2010.

Elsewhere, heftier start-up and construction costs as well as marketing expenses are expected to keep its margin operating profit before depreciation, interest and tax (OPBDIT) in the mid-teens, it said.

'As a result, its near-term OPBDIT debt cover is expected to hover around 0.15 times while its operating cashflow is anticipated to stay in the red as more funds are deployed for working capital and land payments.

'Overall, S P Setia's credit-protection measures are considered weak for its rating. As such, further deterioration of its financial metrics beyond the projected numbers would add pressure to its credit profile, it said.

FBM KLCI extends gains in early trade

KUALA LUMPUR: Asian markets, including Bursa Malaysia, mostly rose in early traded on Thursday, Dec 9 in line with the slightly higher overnight close at Wall Street.

However, while the FBM KLCI rose 3.45 points to 1,513.51 at 10am, lifted by gains including at Petronas Chemicals, Petronas Dagangan, Petronas Gas, Maybank and Genting, analysts cautioned that regional investor sentiment could dictate the direction of the local market.

Gainers led losers by 256 to 152, while 202 counters traded unchanged. Volume was 308.10 million shares valued at RM465.68 million.

At the regional markets, Japan's Nikkei 225 was up 0.21% to 10,253.72, the Singapore Straits Times Index added 0.26% to 3,211.16, Taiwan's Taiex gained 0.79% to 8,772.53, South Korea's Kospi rose 0.69% to 1,969.22 and Hong Kong's Hang Seng Index opened 0.4% higher at 23,195.24.

Meanwhile, the Shanghai Composite Index slipped 0.37% to 2,838.05.

RHB Research Institute Sdn Bhd said yesterday's surprise jump on the bargain-hunting activities had led the FBM KLCI to close more positive, compared to the previous closings.

It said the buying momentum, if it continues, was likely to spur more buying, hence leading the index to retest the key resistance at 1,525 and the record level of 1,531.99 soon.

'However, we place much concerns on the regional markets sentiment that we think could still dampen the local trading behavior should the regional markets fall rapidly in the near term,' it said in a note on Thursday.

The research house said that chart wise, the index will turn swiftly negative again if it breaches the 10-day and 40-day Simple Moving Averages near 1,496 and 1,499.

It also said the selling momentum would accelerate if the FBM KLCI eases to below the recent low of 1,474.

'As a result, we maintain that long-term investors should capitalise on the recent gains to 'sell into strength' on their medium- to longer-term holdings.

'We reckon the market sentiment will turn positive only if it moves into a higher trading zone from 1,531.99,' it said.

On Bursa Malaysia, Dutch Lady was the top gainer at mid-morning and was up 28 sen to RM18.78. Paramount Corp added 27 sen to RM5.05 after it declared a special dividend of 40 sen per share.

PetDag rose 26 sen to RM11.76, Batu Kawan added 18 sen to RM16.98, Tradewinds up 17 sen to RM5.32, MTD Capital and LPI Capital added 14 sen each to RM8.05 and RM12.28, Top Glove and Pos Malaysia were up 12 sen each to RM5.50 and RM3.24, Tasek up 11 sen to RM7.70, PetGas added six sen to RM11.36, Maybank rose three sen to RM8.43 and Genting gained two sen to RM10.82.

Petronas Chemicals was the most actively traded counter with 32.7 million shares done. The stock gained 10 sen to RM5.51. Other actives included DRB-Hicom, Petra, Careplus and Karambunai.

OSK Research: Kencana remains top pick for O&G sector

KUALA LUMPUR: OSK Research said KENCANA PETROLEUM BHD [], which is expected to announce its 1QFY11 results next Monday, Dec 13 will unveil numbers that are better on-quarter.

The research house said on Thursday, Dec 9 the better on-quarter performance would be underpinned by contributions from the MKR-1, recognition of a portion of fabrication works secured since April 2010, better yard utilisation on-quarter, as well as improved cost management and production efficiency.

'We believe the company's recently proposed fund raising exercise will also provide the stock with growth upside in the coming months. Kencana remains our top pick for the O&G sector. Maintain Buy with a higher target price of RM2.93 (previously RM2.57),' it said.

HDBSVR: KLCI to see marginal upward bias

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) said the FBM KLCI, after showing a positive performance on Wednesday, Dec 8, it would probably continue to range-bound with a marginal upward bias on Thursday.

The research house said technically, the immediate resistance level stands at 1,525 while the downside will be supported at 1,495 level.

Meanwhile, major U.S. equity barometers ended in the positive territory -- up between 0.1% and 0.4% at the closing bell ' lifted by optimism on a potential extension of tax cuts and AIG's planned repayment of the Fed's credit facilities extended in 2008 to bail out the insurer.

In terms of individual company developments, investors are expected to focus on: (a) DRB-HICOM as media reported that Tan Sri Syed Mokhtar is contemplating a privatization of the conglomerate with a potential offer price comparable to its net tangible asset of RM2.50 as at Sept 10; (b) Dayang following the announcement of the disposal of its 40% stake in Borcos for RM135 million cash.

HDBSVR: Maintain Buy on Dayang, RM3.40 target price

KUALA LUMPUR: Hwang DBS Vickers Research in maintaining its Buy call on Dayang Enterprise Bhd as it expects maintenance and hook-up & commissioning (HUC) jobs to remain the earnings drivers going forward.

'We reiterate our Buy call and RM3.40 target price based on sector's 12.5x CY11F PE,' it said on Thursday, Dec 9.

Hwang DBS Vickers Research said its target price and earnings will be adjusted accordingly, closer to the completion of the disposal of its 40% stake in Borcos for RM135 million cash.

The proceeds would be used for working capital and capex.

'We believe Dayang is positioning itself to take on a possible maintenance contract that may be awarded in 1Q11. The loss in HUC was a let down but will not have significant impact,' it said.

Paramount rises on special dividend

KUALA LUMPUR: Shares of property-education based Paramount Corp Bhd climbed in early trade after it declared a special dividend of 40 sen per share.

At 9.01am, it was up 25 sen to RM5.03 with 12,500 shares done.

The FBM KLCI rose 3.83 points to 1,513.89. Turnover was 21.94 million shares valued at RM29.88 million. There were 77 gainers, 30 losers and 63 stocks unchanged.

Paramount said the dividend of 40 sen per share would go ex on Dec 21 and the entitlement date would be Dec 23.

Paramount, had on Dec 1, completed the sake of its 20% stake in Jerneh Insurance Bhd to ACE INA International Holdings Ltd for RM130.8 million cash.

DRB-Hicom up in active trade, privatisation talk

KUALA LUMPUR: Shares of DRB-HICOM BHD [] extended their gains in active trade on Thursday, Dec 9 on talk of a proposed privatisation at RM2.50 a share.

At 9.10am, DRB-Hicom was up three sen to RM1.73 with 7.97 million shares done while the call warrants, DRB-Hicom-CC added three sen to 44.5 sen with 6.43 million units done.

The FBM KLCI rose 5.33 points to 1,515.39. Turnover was 65.53 million shares done valued at RM93.27 million. There were 137 gainers, 54 losers and 101 stocks unchanged.

Media reports said tycoon that Tan Sri Syed Mokhtar is contemplating a privatisation of the conglomerate with a potential offer price comparable to its net tangible asset of RM2.50 as at Sept 10.

#Stocks to watch:* Paramount, Bina Puri, Key West, BIG

KUALA LUMPUR: Stocks on Bursa Malaysia could inch up on Thursday, Dec 9, underpinned by firmer investor confidence which saw the FBM KLCI close near a month's high on Wednesday.

However, external factors would have a significant impact on sentiment, with key Asian markets set for a mixed start.

Reuters reports US stocks edged higher on Wednesday, as gains in financial and TECHNOLOGY [] stocks offset declines caused by a recent surge in bond yields.

The Dow Jones industrial average gained 13.32 points, or 0.12 percent, to 11,372.48. The Standard & Poor's 500 Index gained 4.53 points, or 0.37 percent, to 1,228.28. The Nasdaq Composite Index gained 10.67 points, or 0.41 percent, to 2,609.16.

At Bursa Malaysia, stocks to watch are Paramount Corp Bhd, BINA PURI HOLDINGS BHD [], semiconductor-related companies and KEY WEST GLOBAL TELECOMM []unications Bhd.

Paramount Corp Bhd has declared a special dividend of 40 sen per share.

The dividend would go ex on Dec 21 and the entitlement date would be Dec 23

Paramount, had on Dec 1, completed the sake of its 20% stake in Jerneh Insurance Bhd to ACE INA International Holdings Ltd for RM130.8 million cash.

The Edge FinancialDaily reports the share price gyrations seen in Key West of late could just be the tip of the iceberg.

In response to a query from Bursa Malaysia Securities over the sharp fall in price and high volume of trading of the company's shares, it said it was unaware of the factors.

It had on Nov 26, announced a proposed private placement of up to 10% of the issued and paid-up share capital.

Key West suffered two years of consecutive losses and the board had proposed several options to increase sales and profit margin coupled with effective costs management.

'The board will also look into various other options, which may include but not limited to possible disposal of loss-making subsidiaries or diversifying into new viable business,' it said.

Semicon-related stocks could benefit from the firmer close on Nasdaq after solid outlooks from Texas Instruments Inc and Novellus Systems Inc.

BIG Industries Bhd plans to cancel 80 sen from the par value of each RM1 shares under its corporate exercise which includes a two-call rights issue of RM76.95 million in loan stocks.

The cancellation of 80 sen from each share would give rise to a credit of RM38.47 million which would be credited to the capital reserves account of the company.

Most importantly, investors should be aware the company is not undertaking a share consolidation, hence the number of shares would be reduced.

BIG also proposed a renounceable two-call rights issue of up to RM76.94 million nominal value of 4% five-year irredeemable convertible unsecured loan stocks (ICULS) at 100% of the nominal amount of 20 sen each.

Tenaga Nasional Berhad is venturing to Yemen after it inked a Letter of Understanding with National Trading Company (Natco) to cooperate on identified and specialized activities in various areas of the power industry in Yemen.

NATCO is a unit of the Hayel Saeed Anam group, involved in industrial, trading, services and contracting works in areas of power utility and manufacturing.

Underwriters made $42.3 mln in Citi share sale

NEW YORK: Underwriters led by Morgan Stanley made $42.3 million in fees from the U.S. Treasury Department's sale of its remaining 2.4 billion common shares in Citigroup, a regulatory filing showed.

Morgan Stanley sold 87 percent of the shares, with Loop Capital Markets LLC handling the second-largest amount at 2.7 percent of the total. UBS AG, Wells Fargo & Co and Merrill Lynch, which is owned by Bank of America Corp, each sold 2 percent, according to the Wednesday, Dec 8 filing with the U.S. Securities and Exchange Commission.

The Treasury sold its remaining Citigroup shares at $4.35 each on Monday and booked a $12 billion gross profit for taxpayers. The Treasury invested a total of $45 billion to bail out Citigroup in 2008 and 2009 during the financial crisis.

Citigroup repaid $20 billion in preferred stock, while another $25 billion was converted to 7.7 billion common shares.

Over the past year, the Treasury pared its investment to less than 7 percent from 27 percent. - Reuters

Financials, semiconductors help Wall Street advance

NEW YORK: U.S. stocks edged higher on Wednesday, Dec 8 as gains in financial and TECHNOLOGY [] stocks offset declines caused by a recent surge in bond yields.

Bank stocks have risen 10 percent since the start of the month as benchmark yields have climbed enough to make lending and trading more profitable.

"What's giving the financials a little boost is a more positively sloped yield curve, which means better profit for them," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.

Yields reached a six-month high this week after the initial deal reached in Washington to extend tax cuts fueled concern about inflation and the government's debt burden.

JP Morgan Chase & Co gained 2.6 percent to $40.27. The KBW Bank index .BKX climbed 2.9 percent.

By the same token, the higher bond yields capped gains on the major stock indexes as they make it more expensive for consumers and businesses to borrow, while stocks and the dollar have moved in opposite directions of late. A rise in yields and the dollar could also draw money away from equities.

Technology shares helped lift the Nasdaq, led by semiconductor stocks after solid outlooks from Texas Instruments Inc and Novellus Systems Inc (NVLS.O).

Texas Instruments gained 1 percent to $33.75 while Novellus climbed 2 percent to $32.40. The PHLX Semiconductor index .SOX rose 1 percent.

On the Dow, McDonald's Corp was the biggest drag, falling 2 percent to $78.74 after reporting weaker-than-expected global sales for November.

The Dow Jones industrial average gained 13.32 points, or 0.12 percent, to 11,372.48. The Standard & Poor's 500 Index gained 4.53 points, or 0.37 percent, to 1,228.28. The Nasdaq Composite Index gained 10.67 points, or 0.41 percent, to 2,609.16.

The S&P faces resistance at the 1,228 level, which represents the 61.8 percent Fibonacci retracement of the 2007-2009 bear market slide, a key technical indicator. The level was confirmed as strong resistance Tuesday after the index broke through during the session but closed below it.

Some analysts expect the market to trade sideways for a few days before mounting an upward move heading into the year's end.

Bob Doll, chief investment strategist at BlackRock, told the Reuters 2011 Investment Outlook Summit Wednesday the deal to extend the Bush-era tax cuts should accelerate the move of cash into equities and out of fixed income.

Steady economic improvement should fuel stock gains through 2011, according to a Reuters poll of investors and strategists, but international concerns could limit advances in the second half of the year.

The median forecast from 50 respondents in the U.S. poll was for the S&P 500 to end 2011 at 1,325. - Reuters