US stocks end strong year and month with quiet day

NEW YORK: U.S. stocks closed out a year of double-digit gains and the S&P's best December since 1991 with a quiet and little changed session on Friday as investors found no reason to make big bets ahead of the new year,according to a Reuters report on Friday, Dec 31.

Improving economic indicators late in 2010 and stimulative measures from the U.S. Federal Reserve propelled gains in the second half of the year, overcoming headwinds from Europe's sovereign debt crisis and continued high U.S. unemployment.

The gains marked a recovery to the market's levels before the collapse of Lehman Brothers in Sept. 2008. For the year the S&P climbed 12.8 percent, the Dow added 11 percent and the Nasdaq surged 16.9 percent.

Friday's session, however, had none of the vibrancy or volatility that characterized the year. Indexes ended mostly flat on light trading volume, though profit taking slightly weighed on the Nasdaq.

"Since the volume is so low, you can't extrapolate any message that's coming from the market, especially since there's no news coming out," said Bernard Baumohl, managing director and chief global economist at the Economic Outlook Group in Princeton, New Jersey.

The Dow Jones industrial average was up 7.80 points, or 0.07 percent, at 11,577.51. The Standard & Poor's 500 Index was down 0.24 points, or 0.02 percent, at 1,257.64. The Nasdaq Composite Index was down 10.11 points, or 0.38 percent, at 2,652.87.

The Nasdaq was pressured by Netflix Inc and F5 Networks Inc, two stocks have have performed well this year. Netflix gained 226 percent in 2010 but sank 2.3 percent to $175.70 on Friday. F5 Networks Inc, up 150 percent this year, fell 1.7 percent to $130.16.

Drugstore chain CVS Caremark Corp agreed to buy Universal American Corp's Medicare prescription drug business for about $1.25 billion. Universal American surged 40 percent to $20.45, while CVS slipped 0.7 percent to $34.77.

U.S.-listed shares of IMAX Corp jumped 4.5 percent to $28.07 after Britain's Daily Mail reported that Sony Corp might bid at least $40 per share for the big-screen movie company. Sony denied the report.

A good deal of 2010's rally occurred in the first half December, after President Obama announced a deal to extend Bush-era tax rates and a number of positive economic datapoints.

The S&P 500 gained 6.5 percent in the month while the Dow climbed 5.2 percent and the Nasdaq rose 6.2 percent.

The second half of the month was marked by seasonally low trading volume that was exacerbated by a blizzard in the U.S. Northeast, resulting in anemic market movement. In the final week of the year, the Dow hardly budged while the S&P rose a mere 0.1 percent. The Nasdaq fell 0.5 percent in the week.

"That we're avoiding a sell-off today encourages the idea that we could break to the upside in January," said Keith Springer, president of Springer Financial Advisors in Sacramento, California.

Investors will closely watch a host of data next week for any incentives to take profits or extend the rally, including new reads on CONSTRUCTION [] spending, same-store sales and the services sector.

Almost four stocks rose for every three that fell on the New York Stock Exchange, while on the Nasdaq almost three stocks fell for every two that rose. - Reuters

Stocks, commodities shine in 2010 as euro suffers

LONDON/NEW YORK: World stocks ended 2010 at their highest levels in 28 months on Friday and oil touched a 26-month peak as expectations of a further recovery in the global economy supported investors' appetite for risk heading into the new year, according to a Reuters report on Friday, Dec 31.

However, recent figures pointing to stronger momentum in the United States, the world's biggest economy, failed to support the greenback, which traded on Friday at its weakest point in nearly six weeks against a basket of major currencies.

The weaker dollar further boosted commodities, with gold finishing the year nearly 30 percent higher -- its strongest annual performance since 2007 and marking its 10th annual gain. Silver, a cheaper safe-haven alternative to gold, jumped 80 percent in 2010.

U.S. crude oil topped $92 a barrel on Friday, before settling up $1.54 at $91.38 a barrel. Crude closed the year up 15 percent on expectations that the economic recovery will drive demand next year and send prices above $100.

Notwithstanding more upbeat U.S. economic prospects, the Federal Reserve is expected to keep monetary conditions ultra-loose to maintain the pace of recovery, which should keep the dollar on the back foot through the first quarter of 2011.

The weak dollar and low yields on U.S. bonds are expected to support riskier assets as 2011 opens.

"In many ways 2010 is ending on a similar note to 2009, with markets rallying on hopes of economic recovery. This is certainly in line with our view of the world economy," said Keith Wade, chief economist at Schroders.

"However, we also recognize that the U.S. is simply kicking the can down the road by avoiding fiscal consolidation. Markets are also far more cautious about the scope for policymakers to remove support than a year ago."

World stocks measured by the MSCI All-Country World Index drifted up 0.2 percent to their strongest levels since September 2008, ending the year 10 percent higher.

On Wall Street, the three main stock indexes finished little changed as a year of solid gains was ushered out with a wimper. The S&P 500 posted its best December performance in nearly two decades, up 6.5 percent for the month.

For the year the S&P climbed 12.8 percent, the Dow added 11 percent and the Nasdaq surged 16.9 percent.

For the day, the Dow Jones industrial average finished up 7.80 points, or 0.07 percent, at 11,577.51, while the Standard & Poor's 500 Index dipped 0.24 points, or 0.02 percent, at 1,257.64. The Nasdaq Composite Index lost 10.11 points, or 0.38 percent, at 2,652.87.

"We had a nice year, as far as percentage up, really good numbers for the year," said Terry Morris, senior vice president and senior equity manager for National Penn Investors Trust Company in Reading, Pennsylvania. "It's just drifting and it's entitled to a pullback."

The benchmark MSCI index was supported on Friday by emerging market gains, which offset some profit-taking in U.S., European, and Japanese markets.

Asian stocks ended the year 15 percent higher, the prime beneficiaries of record low interest rates in much of the developed world.

European shares closed 7.3 percent higher for the year even as investors pocketed part of those gains, driving the FTSEurofirst 300 index of top shares 0.6 percent lower.

Emerging markets stocks rose 0.6 percent on Friday, adding to gains of 16 percent for the year, according a benchmark MSCI index

BRUISED EURO

Investors remain fretful about the debt situation in the European Union after Italy paid higher yields on Thursday to sell new debt.

Still, the euro jumped 0.7 percent against the dollar on year-end buying by central banks and real-money accounts. For the whole of 2010, the European single currency saw losses of about 7 percent against the dollar.

Market confidence in the common currency was bruised by emergency rescues for debt-laden Ireland and Greece. Investors are now seeking the relative safety of the Swiss franc, which hovers at a record peak against the euro.

The euro did manage to recoup some losses in December and climbed above $1.34 on Friday, extending a recovery from a 2010 low beneath $1.19 -- its worst showing since early 2006.

The euro may remain under pressure early in 2011 as an estimated 150 billion to 200 billion euros in euro zone sovereign bonds come to market, and some investors worry demand may be weak.

"Everybody it seems is anticipating a very rocky road for the euro zone over the next three months," said Gareth Berry, G10 FX strategist for UBS in Singapore.

Despite a beating at year-end, the dollar managed to finish the year a bit firmer than it began. The greenback fell 0.6 percent against a basket of major currencies on Friday, but kept gains of some 1.5 percent against those currencies for the year, according to the U.S. Dollar Index.

"We're still facing a lot of uncertainty next year, but the U.S. economic data is starting to turn for the better, and I think that will spark dollar gains, particularly against the yen," said Boris Schlossberg, research director at GFT Forex.

Prices of base commodity prices remained well supported, with copper ending the year at a record high. - Reuters

Estonia joins crisis-hit euro club, others wary

TALLINN: Estonia joined the euro zone as its newest member on Saturday, Jan 1, but the currency club's deepening crisis is likely to put off bigger eastern European entrants from joining for up to a decade.

The small Baltic state of 1.3 million became the 17th euro zone country at midnight, beginning a switch from the kroon, and was the first former Soviet state to adopt the euro.

Prime Minister Andrus Ansip was the first to take euros out of a specially installed cash machine outside a theatre where a ball had been held to celebrate the switchover and the new year.

"It is a small step for the euro zone and a big step for Estonia," he said, holding the notes.

"We are proud to be a euro zone member state."

Estonia sees changing to the euro as marking the end of its struggles since a 2009 recession lopped 14 percent off its output. It hopes to entice investors by removing any fears of devaluation and make borrowing more secure for its people, many of whose mortgages are already in euros.

It also caps a drive for integration with the West, away from the influence of Russia, that began with the collapse of the Soviet Union in 1991.

With a similar history, neighbours Latvia and Lithuania hope to adopt the euro in 2014 and have also had their currencies pegged to the euro for years.

The kroon will be converted at the rate of 15.6466 at which the currency was pegged to the euro. They will circulate together as legal tender for two weeks.

An anti-euro campaign kept up its rhetoric, saying in a statement Estonia was "getting the last ticket for the Titanic".

Nobel laureate economist Paul Krugman said in a blog that the switch was a symbol of Estonia's transformation from a Soviet province to a good European citizen, but that the cost had been high for the economy.

"So, congratulations to Estonia -- but condolences too. This wasn't the glittering euro entrance you were promised," he wrote.

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EASTERN SCEPTICS

Poland, Hungary and other eastern European EU states are all sceptical towards joining the euro. They have all promised to join the euro zone one day but want to see how the debt problems of Ireland, Greece, Spain and Portugal are solved.

They also fear that losing flexibility exchange rates will make them less competitive and less able to withstand financial ructions. The debt crisis has also undermined the idea that being a euro zone member guarantees lower borrowing costs.

Polish central bank governor Marek Belka repeated his scepticism to tabloid newspaper Super Express, saying Poland would join when there was "order" in the euro zone. "In the euro zone there are dramatic things happening, so why rush?" he said.

Czech Prime Minister Petr Necas has said the euro would not be to the country's advantage for a long time. Economists say the larger eastern EU nations may now not join before 2019-2020.

Chancellor Angela Merkel, however, reiterated Germany's commitment to the single currency in a new year address.

"The euro is the foundation of our prosperity," she said. "Germany needs Europe and our common currency ... We Germans assume our responsibility, even when it is sometimes very hard."

French President Nicolas Sarkozy said: "Don't believe, dear compatriots, those who suggest that we should leave the euro ... The end of the euro would be the end of Europe," he said in a televised New Year address.

''

POOR, BUT IN GOOD SHAPE

Estonia will be the currency club's poorest member but its debt and deficit levels -- the cause of the crisis for some current euro zone members -- are among the lowest in the bloc.

Ansip's centre-right government has slashed spending and hiked some taxes to ensure the budget deficit stayed low.

Ansip told a news conference Estonia had its eye on the euro zone's woes, but was sure Greece and Ireland would cope.

In economic terms, the single currency bloc will barely notice the addition -- Estonia's GDP is just 0.2 percent of the current euro zone's 8.9 trillion euros.

Euro membership could help the Nordic banks, now the major players in the Baltic region, led by Swedbank and SEB.

All three Baltic nations went through Soviet, Nazi and then Soviet occupation again, so becoming part of Western economic and security structures has been of prime importance. They joined NATO and a self-confident European Union in 2004. - Reuters

#Stocks to watch:* IJM Land, MRCB, Dialog, Talam

KUALA LUMPUR: Shares of IJM Land and MALAYSIAN RESOURCES CORP [] Bhd (MRCB) will be the stocks to watch on Monday, Jan 3 after their shares slid ahead of the negative news that the proposed merger had fallen through.

However, AmResearch said it was maintaining its BUY rating on both IJM Corp Bhd and IJM Land Bhd with unchanged fair values of RM7.52 a share and RM3.88 a share, respectively.

'IJM Land was sold down (pre-suspension share price of RM2.86) this morning (Jan 30) prior to the announcement that the proposed merger with MRCB had been aborted. We are unfazed. The issue now is the relative investment merits of IJM Corp and IJM Land. We believe they have enough strong catalysts for them to move forward on their own,' AmResearch said in a research note after the announcement.

Other stocks which could be in focus on Monday include DIALOG GROUP BHD [], Berjaya Corp Bhd, Talam Corp Bhd, RANHILL BHD [] and SilverBird Group Bhd.

Dialog's subsidiary Dialog E&C Sdn Bhd has secured a RM64.6 million contract from Asean Bintulu Fertilizer Sdn Bhd (ABF) to build a cooling tower in Bintulu, Sarawak.

The scope of work would involve the engineering, procurement, CONSTRUCTION [], commissioning and associated works of the new tower.

Berjaya Corp net profit for the second quarter ended Oct 31, 2010 jumped 66.9% to RM86.54 million from RM51.83 million a year ago.

The better performance was due mainly to write-back of impairment in value of investment in associated companies and gain on disposal/partial disposal of subsidiary companies as well as gain arising on accretion of interest in an associated company and lower finance costs.

BJCorp's revenue for the quarter rose 6.2% to RM1.72 billion from RM1.62 billion in 2009. Earnings per share were 1.97 sen while net asset per share was RM1.39.

Talam posted net loss of RM83.29 million in the third quarter ended Oct 31, 2010 compared with net profit of RM118,000 a year ago, mainly due to losses on disposal of'' two parcels of development PROPERTIES [] totaling RM43.85 million and foresees a challenging remaining financial year for the group.

Standard & Poor's Ratings Services has placed its 'B' long-term corporate credit rating of Ranhill Bhd on CreditWatch with negative implications. It also placed its B- issue rating on US$220 million 12.5% senior unsecured notes due October 2011 issued by Ranhill (L) Ltd on CreditWatch with negative implications.

SilverBird's net profit for the fourth quarter ended Oct 31, 2010 rose 36.66% to RM835,000 from RM611,000 a year ago mainly due to the sales growth in its core business of consumer food division.

Revenue for the quarter rose 6.75% to RM153.92 million from RM144.19 million in 2009. Earnings per share were 0.22 sen while net assets per share were 53 sen.

Oil to end the year up 12 pct, averages near $80

SINGAPORE:Oil was set to close the year up more than 12 percent and average nearly $80 a barrel -- the second highest on record -- driven by a resurgence in global demand, an unusually cold winter and falling inventories.

After rallying to a 26-month high of $91.88 on Monday, U.S. crude edged lower on Friday, Dec 31, with the February contract down 14 cents at $89.70 a barrel by 0642 GMT. ICE Brent crude fell 10 cents to $92.99. Oil prices were set to average $79.60 this year, second only to 2008's record average of $99.75.

U.S. crude stocks fell for the fourth straight week last week, but the drawdown was less than expected and put pressure on prices.

Crude stocks in the world's largest economy fell 1.26 million barrels to 339.43 million barrels in the week to Dec. 24, the Energy Information Agency (EIA) said.

Gasoline supplies fell by 2.32 million barrels, almost a million barrels more than expected. Some of that may have been due to companies running down stocks ahead of the year-end, but some analysts saw the fall as indicative of rising consumption as the world's largest economy continues to recover from recession.

"The latest U.S. weekly data release show a continuation of the recent strength in oil demand," said analysts at Barclays Capital in a research note.

"December is set to be the strongest month of the year in demand terms, with particularly strong indications of gasoline demand."

''

OPEC SUPPLIES

Even with crude stocks slipping four straight weeks and prices peaking to a 26-month high of $91.88 a barrel earlier this week, OPEC output has risen only slightly in December as Nigerian supply increased, a Reuters survey found.

Supply from the 11 OPEC members with output targets has averaged 26.75 million barrels per day (bpd) this month, up from 26.70 million bpd in November, the survey of oil companies, OPEC officials and analysts showed. [ID:nLDE6BT0QG]

Core OPEC ministers have indicated they would not provide more oil supplies to arrest oil's rally, saying $100 crude was a fair price. [ID:nLDE6BN0E6]

Oil found support from a weaker dollar and positive U.S. economic data.

The dollar languished against the Swiss franc, hitting an all-time low, and fell to a seven-week trough against the yen. The dollar index was down 0.14 percent at 79.408.

The greenback declined despite supportive jobless claims and factory data that bolstered views the U.S. economy had gained momentum at year-end and was set for a stronger performance in 2011.

The positive data could cause the U.S. Federal Reserve to curb its recent initiatives to spur economic recovery, which could strengthen the dollar and limit price boosts for dollar-denominated commodities. - Reuters

Vietnam sees FDI up at $11.5 bln in 2011

HANOI: Foreign direct investment in Vietnam is expected to be between $11 billion and $11.5 billion next year, unchanged to slightly higher than in 2010, a government report said on Friday, Dec 31.

New pledges would rise to $20 billion in 2011 from $17.23 billion this year, the Planning and Investment Ministry said in the report posted on its website (www.mpi.gov.vn)

Foreign direct investment, along with overseas remittances and official development assistance, has been an important source of foreign exchange to help offset the country's trade deficit, which narrowed to $12.37 billion this year.

Remittances were estimated to rise 26 percent from last year to more than $8 billion, the central bank has said. - Reuters

HK shares ends yr below 10-yr average, Shanghai up

HONG KONG/SHANGHAI: Hong Kong and Shanghai stocks gained ground in the last trading day of 2010, with a stronger yuan fuelling demand for Chinese assets.

Hong Kong shares edged higher in a shortened session on Friday, Dec 31 for a third consecutive gaining session, ending the year up 5.32 percent but below the 10-year average gain of about 7.6 percent.

The Hong Kong market lagged its main regional competitor in Singapore, where stocks rose 11 percent in 2010.

"Too many IPOs had hit overall market performance for the year as they soaked up quite a bit of liquidity," said Ample Capital analyst William Lo.

The benchmark Hang Seng Index ended Friday up 0.16 percent at 23,035.45, its highest year-end close since 2007. The index posted a gain of 0.12 percent for the month and finished the week up 0.88 percent, its best weekly gain in five weeks.

The China Enterprises Index of top locally listed mainland Chinese companies gained 0.84 percent to 12,692.43, ending the year down 0.8 percent. The index finished the month 0.98 percent lower, but was 2 percent higher on the week, its best week in two months.

"Appetite for Chinese shares increased, with China assets looking appealing as the yuan went up," said Conita Hung, head of equity research of Delta Asia Financial. "Looking head, the market may move towards 23,600 on new year buying and as the Chinese currency appreciates further."

The yuan hit a high against the U.S. dollar on Friday, surpassing 6.60 per dollar for the first time since its was revalued in 2005.

China Communications CONSTRUCTION [] Co Ltd rose 3 percent to its highest in more than two weeks after the group said it planned to issue up to 3.5 billion A shares on the Shanghai bourse, with part of the proceeds to be used to acquire the rest of CRBC International Co Ltd.

Guangzhou Automobile Group Co Ltd rose 2.3 percent to a more than three-week high after the automaker said it would buy 50 percent of the registered capital of Wuyang-Honda Motors (Guangzhou) Co Ltd for 444.8 million yuan and the Wuyang Trademarks for use in motorcycles and auto parts for about 31 million yuan.

BANKS, INSURANCE STOCKS UP IN SHANGHAI

Chinese stocks rebounded close to 2 percent on Friday in thin trading and an upbeat holiday mood, finishing off a lacklustre year with the hope that 2011 will treat equity investors better.

The benchmark Shanghai Composite Index rose 1.76 percent on the day to 2,808.08 points as stocks rose across the board, but the index still fell by 14.3 percent on the year, making it one of the world's worst performers this year as policy uncertainty cast a shadow over the market.

"The last-day rebound could partly reflect investor optimism toward stocks in the new year as some have already started building positions," said Zhang Fan, strategist at Tebon Securities in Shanghai. "Stocks are likely to rise next year as tightening fears have been priced in."

But some worry that a slew of tightening measures that are likely to be front-loaded in the first half of 2011 could weigh on the market, with the latest Reuters fund poll showing that fund managers are cutting their suggested equity weightings over the next three months.

Still, fund managers expect the Shanghai index to rise about 6 percent during the first quarter of 2011, as they suggest more exposure to financial and energy stocks, according to the poll.

Banking stocks rose on Friday, led by a 3.1 percent jump in Agricultural Bank of China Ltd, the country's biggest rural lender. Energy shares also gained, with PetroChina Co Ltd, the country's largest oil company, up 0.6 percent.

POLICY UNCERTAINTY

China's stock market fell 0.4 percent in December and is down 12 percent from its November peak, having been knocked down by a stepped-up government campaign against inflation, including two interest rate rises, fresh real estate curbs and a slew of increases in bank required reserve ratios.

However, some argue that the market could benefit from an expected acceleration in yuan appreciation as the policy change, aimed at fighting inflation, could introduce more liquidity into equities.

"Yuan appreciation plus higher interest rates, will inevitably boost money inflows next year," said Tebon Securities' Zhang. "With China likely to maintain real estate curbs, the stock market is the most attractive place to go, especially when valuations of blue-chip stocks are near historic lows."

Insurers rose on Friday, led by China Pacific Insurance (Group) Co Ltd, which gained 2 percent after private equity investor Carlyle Group sold an $860 million stake in the company, exiting its investment and removing one of the overhangs on the stock.

Yanzhou Coal Mining Co Ltd jumped 4.4 percent after saying it would increase its investment in Yancoal Australia Pty Ltd by A$909 million ($923 million), paving the way for a planned listing of the unit in Australia. - Reuters

New MPOB rule raises concerns among oil palm traders

KUALA LUMPUR: The Malaysia Oil Palm Dealers Association (MOPDA) has expressed concern over the move by the Malaysian Palm Oil Board (MPOB) to bar dealers from buying and selling oil palm fresh fruit bunches (FFB).

MOPDA President Datuk Abdul Fattah Abdullah said the new ruling was not beneficial to the stakeholders, particularly dealers and the industry as a whole.

"We are deeply concerned about this despite objections being raised at the meeting last year with MPOB in relation to the proposed imposition of such condition in their respective licences of oil palm dealers," he told a press conference on Friday, dec 31.

The buying and selling of FFB among dealers was the norm and if small dealers were not allowed to trade among themselves, this would result in loss of employment, income and the eventual folding of the enterprises, he said.

The MPOB ruling, said to take effect from Saturday, Jan 1, was to enable estates, smallholders and dealers to sell directly to millers, prevent big players from monopolising and enhance the quality of oil palm fruits so that the oil extraction rate would exceed 25 per cent.

Abdul Fattah said the ruling would cause a lot of hardship to small enterprises due to their limited financial resources and logistics and transportation problems.

"Therefore, we propose an in depth study ought to be made by MPOB to resolve this problem of low oil extraction rate rather than imposing such ruling.

"Those millers who fail to achieve their targets will have to face the consequences including the need for mandatory takeover by the government in the interest of the industry," he said.

Abdul Fattah said MPOB must focus on the enhancement of oil yield extraction process through the introduction of new TECHNOLOGY [] and good agricultural practices with the necessary support of government schemes to replace old, low-yielding trees. - Bernama

Yuan ends 2010 with a flourish, up 3.6 pct on year

SHANGHAI: China's yuan ended 2010 on a strong note, pushing past 6.59 per dollar on Friday, Dec 31 to close the year up 3.6 percent and fanning hopes that it will see even more gains next year.

The currency closed at 6.5897 per dollar, capping nine trading days that saw it rise 1.3 percent from a recent low and giving a decisive close to the year after the currency zig-zagged from mid-October to mid-December.

The yuan's strength came after the People's Bank of China (PBOC) set its mid-point at a record high for the second straight day, signalling the central bank may be engineering a fresh leg of yuan appreciation ahead of the visit by Chinese President Hu Jintao to the United States in mid-January.

But the central bank also sent a signal that coming rises in the yuan would not be drastic, as the fixing was just two pips higher than Thursday's.

China-based traders expect the yuan to rise about 2 percent in the first quarter of 2011. For all of next year, it could gain around 6 percent as Beijing uses currency appreciation as a tool to fight consumer inflation, which hit a 28-month high in November, they said.

"There will be no linear appreciation, but zig-zags," said a senior trader at a U.S. bank in Shanghai. "But overall, you can still see significant rises by the end of certain periods, with opportunities open for those who have good understanding of the complicated Chinese currency system."

One of those opportunities could be in the first two weeks of the year, ahead of President Hu's U.S. visit, some traders say.

While the Chinese government generally tries to paint a picture of resisting U.S. pressure for yuan appreciation, in reality it often lets the currency strengthen ahead of major political events in recognition of the importance of the ties between the world's two biggest economies.

''

''

RECORD HIGH

Dealers said offshore forwards , which imply yuan appreciation of less than 1 percent against the dollar in three months, are underestimating the yuan's potential and so present a window to short dollars in contracts out to one year.

Three-month one-year non-deliverable dollar/yuan forwards (NDFs) fell to 6.5657 in late trade from Thursday's 6.5670, implying yuan appreciation in three months' time of 0.87 percent. That's up from 0.85 percent but lags by far the 2 percent rise foreseen by onshore traders in the first quarter.

Benchmark one-year NDFs were bid at 6.4318 from Thursday's close of 6.4508. Implied yuan appreciation in a year's time rose to 2.97 percent from 2.66 percent.

"I think the NDF market is going short USD into the New Year, with more confidence in Hu's visit to Washington in January," said a trader in Singapore.

"That is also part of the factor in causing other USD/Asia to head lower. One-year USD/CNY NDFs could move toward 6.41 when Hu visits the U.S.," he said, adding the tenor was lagging now because many traders were on holiday.

Woon Khien Chia, a strategist at The Royal Bank of Scotland in Singapore, said: "My suspicion is that some of the recent changes, the latest being the curbs on net open CNY positions in Hong Kong banks, might have curtailed NDF activities."

Still, the PBOC appears reluctant to let the yuan rise too fast because of the threat of speculative capital inflows seeking returns on higher interest rates and expectations of yuan appreciation, traders said.

China has seen a steady increase of fund inflows in the last decade. The latest central bank data showed capital inflows slowed in November from a near record high in October but were still at a relatively high level.

US jobless claims, factory data buoy recovery hopes

WASHINGTON:'' New U.S. claims for jobless aid hit their lowest level in more than two years last week and factory activity in the Midwest grew in December at its fast pace since 1988, evidence the recovery was gaining steam.

Views economic activity accelerated in the fourth quarter were hardened by another report on Thursday, Dec 30 showing pending sales of previously owned homes rose more than expected in November, even though the housing market remains in distress.

Initial claims for state unemployment benefits fell 34,000 to a seasonally adjusted 388,000, the lowest reading since early July 2008, the Labor Department said. That was well below economists' expectations for 415,000.

Separately, the Institute for Supply Management-Chicago's business barometer jumped to 68.6 from 62.5 in November, beating economists' expectations for a dip to 61.0. A reading above 50 indicates expansion in the regional economy.

Although analysts said the data could have been distorted by the Christmas holiday season, the reports still backed perceptions the recovery from the worst recession since the 1930s was gaining traction after a pause earlier in the year.

"There's a certain seasonal bias in some of these things ... but there's no denying that the economy is improving," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

Signs the economy was improving helped to push prices for U.S. government debt lower, while the dollar rose to a session high against the yen. Stocks on Wall street were little changed.

PENDING HOME SALES RISE

In a third report, the National Association of Realtors said its pending home sales index based on signed contracts to buy previously owned houses rose 3.5 percent last month to 92.2. The second straight month of gains beat market expectations for a 2 percent increase.

Analysts have forecast economic growth at an annual pace of between 3 and 3.5 percent in the current quarter after a 2.6 percent expansion rate in the third quarter, and there is optimism that this would encourage more hiring.

Underscoring the nascent labor market strength, the four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 12,500 to 414,000, also the lowest level since July 2008.

"This adds to the idea that the jobs picture is improving ... this is another feather in the cap of the idea of recovery," said Adam Sarhan, chief executive of Sarhan Capital in New York.

Even more encouraging, the Chicago factory report showed the employment gauge rose to 60.2 from 56.3 in November.

That and the steady decline in claims in recent weeks likely indicates the pace of job creation picked up this month, after the Labor Department's non-farm payrolls report showed employers added a paltry 39,000 jobs in November.

The December employment data is due on Jan. 7, and a preliminary Reuters survey shows economists expect non-farm payrolls increased 126,000 this month. However, that is still not enough to significantly reduce the unemployment rate.

The jobless rate is expected to have edged down to 9.7 percent from 9.8 percent in November.

The claims data also showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 57,000 to 4.13 million in the week ended Dec. 18, above market expectations for 4.10 million. The prior week's figure was revised slightly up to 4.07 million.

The so-called continuing claims data covered the survey week for the December employment report's household survey from which the unemployment rate is derived.

The jobless rate is likely to remain elevated as the improving labor market and general economic conditions lure discouraged job seekers back into the labor force. - Reuters

Talam sinks into red in 3Q, net loss RM83.29m

KUALA LUMPUR: Talam Corp Bhd posted net loss of RM83.29 million in the third quarter ended Oct 31, 2010 compared with net profit of RM118,000 a year ago, mainly due to losses on disposal of'' two parcels of development PROPERTIES []'' totaling RM43.85 million and foresees a challenging remaining financial year for the group.

The company said on Thursday, Dec 30 there was an increase in administrative expenses mainly due to allowance made on bad and doubtful debts of RM3 million.

'The higher finance cost is attributable to finance cost accounted on zero coupon convertible securities, which were issued pursuant to the regularisation plan undertaken by the group in the previous financial year,' it said.

Talam said revenue fell 32% to RM50.68 million from the RM74.72 million a year ago mainly due to lower progress billings generated from the development projects during the current quarter under review. It posted loss per share of 2.76 sen versus earnings per share of 0.01 sen a year ago.

For the nine-months period, revenue declined 30% to RM125.30 million from RM178.10 million mainly due to lower progress billings generated from the development projects.

Talam reported loss before tax of RM74.23 million for the nine months compared to profit before tax of RM9.53 million a year ago. The unfavourable results were'' mainly attributable to losses on disposal of two parcels of development properties totaling RM43.85 million, allowance made on bad and doubtful debts of RM3 million and operating loss reported by Maxcourt Hotel'' in China of RM4.7 million.

'All these factors have aggravated the results of the group despite a higher amount of other income which include, among others, income arising from waiver of obligations under a settlement agreement with creditors of RM35.8 million and gain on disposal of certain floors of a hotel building in China of RM4 million,' it said.

On the prospects, Talam said the group wass still facing a huge challenge in the low and medium end property sector. Due to its tight liquidity position, the group had during the current financial year, disposed of certain properties below cost and this may continue in the near future.

Maxbiz says no change in status of default in payments

KUALA LUMPUR: Maxbiz Corp Bhd said there were no changes in the status regarding the default in payments on the outstanding loan stocks, arrears and loans but it did provide more details about its proposed acquisition of PT Jasa Medivest in Indonesia, which it had bid for RM8.8 million.

The company -- whose shares slipped in active trade in the morning session of Thursday, Dec 30 before seeking a suspension until 5pm -- said it was still in default involving payment for the redemption of 50% of the nominal amount of the RM3.0 million two-years 5% redeemable unsecured loan stocks (RULS) from the holders.

Maxbiz also said it was in arrears of the RM5 million term loan granted by CIMB Bank Bhd to its unit'' M.K.K. Industries Sdn. Bhd amounting to RM1.72 million as at Feb 28, 2007.

Also unchanged was the demand of RM23.07 million (including principal sum of RM22.61 million) as at Oct 8, 2006 with interest on RM22.61 million at the rate of 2% per annum from Oct 9, 2006 to 2009.

In a separate statement in relation to Maxbiz's proposed acquisition of PT Jasa Medivest, the latter had informed Maxbiz it would deliberate on the bid and refer to PT Jasa Sarana (PTJS). PTJS is the investment arm of the West Jawa Provincial Government and owns the balance of 5%.

'There is a pre-emptive clause by the shareholders that consent would have to be obtained from PTJS should PMSB accepts Maxbiz's bid. The pre-emptive clause is valid for 30 days. Maxbiz expects to know the outcome of the bid by the first week of February 2011,' it said.

PTJM was granted the exclusive rights by the West Jawa Provincial Government to manage medical waste including operating an incinerator for 30 years commencing 2007.

Maxbiz said all the licensed hospitals, clinics, healthcare-centers, maternity homes and related businesses are to appoint PTJM to manage/dispose off their medical waste.

PTJM also manages transporters to remove such waste and store the medical waste in cold-rooms until incineration.

Currently, there are about 4,800 hospitals, clinics, maternity homes and health-care centers in West Jawa excluding Jakarta, PTJM charges up to 10,000 rupiah per kg for the waste removal.

Maxbiz said the bid price was RM8.8 million, out of which RM3.3 million is in cash and RM5.5 million in shares. However, it could not divulge the profit track record of PTJM since it signed a mutual confidentiality agreement.

Dialog subsidairy secures RM64.6m contract from Asean Bintulu Fertilizer

KUALA LUMPUR: DIALOG GROUP BHD []'s subsidiary has secured a RM64.6 million contract from Asean Bintulu Fertilizer Sdn Bhd (ABF) to build a cooling tower in Bintulu, Sarawak.

Dialog said on Thursday, Dec 30 Dialog E&C Sdn Bhd's scope of work would involve the engineering, procurement, CONSTRUCTION [], commissioning and associated works of the new tower.

'The project will commence immediately and is expected to be completed by September 2011,' it said.

Dialog would fund the working capital for the project from its own funds and/or bank borrowings.

It added a formal contract between Dialog E&C and ABF will be executed following the acceptance of the letter of award by Dialog E&C.

EON Bank completes issuance of RM500m debt notes

KUALA LUMPUR: EON Bank Bhd has completed its issuance of RM500 million Tier 2 subordinated medium term notes, its parent EON CAPITAL BHD [] said.

'The RM500 million subordinated MTN was issued under the RM2 billion subordinated MTN programme which was approved by the Securities Commission on Nov 19, 2008,' EON Cap said on Thursday, Dec 30.

The subordinated MTN, rated A2 by RAM Rating Services Bhd, has a maturity of 10 years and callable at the end of year five and on each subsequent coupon payment dates thereafter.

EON Cap said the redemption of the subordinated MTN on the call option dates shall be subject to Bank Negara's approval.

The coupon rate is 4.75% p.a. and the coupon is payable semi-annually in arrears from the date of issue. The coupon rate of 4.75% per annum will remain unchanged throughout the tenure of the third tranche.

Its group chief executive officer Datuk Michael Lor said EON Cap was extremely pleased with the overwhelming response and bids from both institutional and private banking clients, which resulted in orders exceeding RM1.2 billion.

'Accordingly, we decided to upsize the issue from RM300 million to RM500 million,' he said.

The RM500 million subordinated MTN will further strengthen the EON Bank Group's capital ratio.'' The issue is also part of its capital management initiatives to ensure that it has the flexibility to tap into the capital markets for the Group's continued expansion.

MIMB Investment Bank Bhd and AmInvestment Bank Bhd were the joint lead managers.

Silver Bird Group 4Q net profit up 36.6% at RM835,000

KUALA LUMPUR: SILVER BIRD GROUP BHD []'s net profit for the fourth quarter ended Oct 31, 2010 rose 36.66% to RM835,000 from RM611,000 a year ago mainly due to the sales growth in its core business of consumer food division.

Its revenue for the quarter rose 6.75% to RM153.92 million from RM144.19 million in 2009. Earnings per share were 0.22 sen while net assets per share was 53 sen.

Reviewing its performance in 4Q, Silver Bird said on Thursday, Dec 30 that its consumer food division's revenue rose by 4% year-on-year from RM46.2 million to RM48.2 million due to sales channel expansion.

Meanwhile, its telecommunication business recorded an increase in revenue as well by 8% from RM98.0 million to RM105.7 million, it said.

For the financial year ended Oct 31, Silver Bird's net profit surged to RM3.65 million from RM1.44 million a year earlier on the back of revenue RM593.51 million.

On its prospects, the company said it would continue to improve the revenue of its core business of consumer food whilst containing its costs in order to further improve its bottomline.

FBM KLCI dips on final day of trade, up 19.3pct on-year

KUALA LUMPUR: The FBM KLCI ended the final trading day of 2010 in the red, weighed by losses at key blue chips on some profit taking, in line with the limited gains at key regional markets as the year draws to an end.

Selling accelerated in the late afternoon as investors locked in their gains while the sentiment was also affected by the sharp declines in IJM Corp and IJM Land share prices after the IJM Land-MRCB merger fell through.

At 5pm, the 30-stock index was downl 0.36% or 5.43 points to 1,518.91. Year-to-date, the FBM KLCI was up 19.34%.'' Losers edged gainers by 401 to 385, while 278 counters traded unchanged. Volume was 1.12 billion shares valued at RM1.87 billion.

At the regional markets, Japan's Nikkei 225 fell 1.12% to 10,228.92 on its last day of trade this year, as Friday, Dec 31 is a public holiday in Japan. The Nikkei 225 fell 3.01% year-to-date.

Taiwan's Taiex added 0.47% to 8,907.91, South Korea's Kospi rose 0.37% to 2,051.00, the Shanghai Composite Index rose 0.29% to 2,759.58, Singapore's Straits Times Index up 0.14% to 3,212.46 while Hong Kong's Hang Seng Index added 0.13% to 22,999.34.

At Bursa Malaysia, KL Kepong, which had a stellar run in its share price, underpinned by the firm crude palm oil prices, retreated 64 sen to RM22.10.

Other decliners were DiGi, which fell 50 sen to RM24.60, BAT 48 sen to RM45, Lafarge 32 sen to RM7.67, Petronas Dagangan 28 sen to RM11.70 and Petronas Gas 18 sen to RM11.10.

As for IJM Corp, IJM Land and MRCB, the securities fell ahead of the midday announcement that IJM Land and MRCB could not agree on the terms of the merger. Before the suspension, IJM Land fell 38 sen to RM2.86, IJM Land warrants fell 28 sen to RM1.61, while IJM Corp shares and warrants fell 27 sen each to RM6.23 and RM2.76.

Other actives included Maxbiz, Tejari, IJM Land, Timecom, CIMB and Berjaya Corporation.

Cepco was the top gainer and added 60 sen to RM2.70; Tong Herr was up 26 sen to RM2.60, Nestle rose 24 sen to RM43.34, MAHB up 20 sen to RM6.28, EON Capital rose 19 sen to RM7.10, QL Resources up 16 sen to RM5.84 while TH PLANTATION []s added 15 sen to RM2.08.

Berjaya Corp 2Q net profit up 66.9% to RM86.54m

KUALA LUMPUR: BERJAYA CORPORATION BHD [] net profit for the second quarter ended Oct 31, 2010 jumped 66.9% to RM86.54 million from RM51.83 million a year ago.

The better performance was due mainly to write-back of impairment in value of investment in associated companies and gain on disposal/partial disposal of subsidiary companies as well as gain arising on accretion of interest in an associated company and lower finance costs.

BJCorp said on Thursday, Dec 30 its revenue for the quarter rose 6.2% to RM1.72 billion from RM1.62 billion in 2009. Earnings per share were 1.97 sen while net assets per share was RM1.39.

It said the increase in revenue was mainly due to higher revenue contribution from the direct selling, retail and distribution business, higher property sales reported by the property development and investment division and higher agency sales registered by the general insurance business in the current quarter.

For the six months ended Oct 31, its net profit rose 231% to RM212 million from RM91.73 million, while revenue increased to RM3.46 billion from RM3.23 billion in 2009.

BJCorp said barring unforeseen circumstances, the company's operating performance for the remaining quarters of the financial year ending April 30, would remain satisfactory.

PIDM: New deposit insurance limit of RM250,000 effective Dec 31

KUALA LUMPUR: The deposit insurance limit will be increased to RM250,000 per depositor per bank with effect from Friday, Dec 31, 2010 and this will protect 99% of retail depositors in full.

The Malaysia Deposit Insurance Corporation or better known as Perbadanan Insurans Deposit Malaysia (PIDM) said on Thursday, Dec 30 the PIDM Bill 2010 comes into operation on Friday.

The Bill was approved by the Dewan Rakyat and Dewan Negara in the recent Parliamentary sitting.

'Under the enhanced financial consumer protection package, the limit will protect 99% of retail depositors in full. Under the new Bill, foreign currency deposits will now enjoy deposit insurance protection,' it said.

On May 11, 2010, Prime Minister Datuk Seri Mohd Najib Razak, who is also Finance Minister, announced the increase of the deposit insurance limit to RM250,000 by Jan 1, 2011 and the government's intention to bring forward legislation to enable the increase to be implemented.

PIDM said the enhanced financial consumer protection package included the expansion of PIDM's mandate to include the administration of the Takaful and Insurance Benefits Protection System (TIPS).

TIPS is an explicit, limited Government protection system which covers takaful and insurance benefits and will be administered broadly along the same approach as provided for in the current deposit insurance system.

Licensed insurance companies and registered takaful operators would automatically become member institutions of PIDM.

The Bill would empower PIDM to intervene in or resolve troubled insurer members and ensure prompt'' payments to claimants under the policies or takaful certificates protected under TIPS.

The Bill, when enacted, will replace the PIDM Act 2005, and would widen PIDM's mandate, roles and responsibilities to fulfil its mandate to protect depositors in the event of a member institution failure.

PIDM is the government agency mandated by Parliament to protect depositors against the loss of their funds in the event of a member bank failure.

''

Member banks comprise all commercial and Islamic banks, including locally incorporated foreign banks, in Malaysia.

Public Mutual declares distributions for 3 funds

KUALA LUMPUR:'' Public Mutual Bhd has declared distributions for its Public Savings Fund, Public Focus Select Fund and Public Islamic Enhanced Bond Fund.

It said on Thursday, Dec 30 the total gross distributions declared for the financial year ending Dec 31, 2010 were nine sen per unit for the Public Savings Fund and two sen per unit for the'' Public Focus Select Fund. It declared a gross distribution of three sen for the Public Islamic Enhanced Bond Fund.

Public Mutual's chief executive officer Yeoh Kim Hong said all the three funds had delivered respectable returns to its investors.

'Public Savings Fund and Public Focus Select Fund have recorded one-year double-digit returns of 17.94% and 25.77% respectively for the period ended Dec 3, 2010. Both funds are open for EPF Members Investment Scheme,' she said.

Public Savings Fund, launched in 1981, is the company's maiden fund. The investment strategy of the fund is to achieve long-term capital appreciation and at the same time produce a reasonable level of income. Public Focus Select Fund, launched in 2004, targets capital growth through investments in medium-sized companies in terms of market capitalisation from diversified economic sectors.

Public Islamic Enhanced Bond Fund, launched in 2006, recorded a one-year return of 4.88% for the same period.

The Shariah-compliant bond fund targets to provide a combination of annual income and modest capital growth primarily through a portfolio allocation across Islamic debt securities and equities that comply with Shariah requirements.

Petronas Carigali awards US$280m offshore contract to Petrofac

KUALA LUMPUR: Petronas Carigali Sdn Bhd has awarded a US$280 million contact to London Stock Exchange-listed Petrofac to develop an offshore early production system on the east coast of Peninsular Malaysia.

Petrofac said on its website on Thursday, Dec 30, said the contract was awarded following a competitive tender and first oil is expected before the end of 2011.

Under the contract, Petrofac will undertake the engineering, procurement, CONSTRUCTION [], installation and commissioning (EPCIC) for the full scope of the early production system in a water depth of approximately 65 metres.

The EPCIC will comprise of a mobile offshore production unit (MOPU), a floating storage and offloading (FSO) facility for the early production of approximately 20,000 barrels of oil per day, and all interconnecting subsea pipelines.

Petrofac said these facilities would be similar to those of the Cendor phase I development,'' also undertaken by Petrofac on behalf of Petronas in record time under a production sharing contract framework.

Among the local partners supporting Petrofac in this project are Kencana HL, which will add all the processing equipment to the MOPU, and BumiArmada which will supply and install the FSO.

S&P places Ranhill 'B' rating placed on credit watch negative on liquidity pressure

KUALA LUMPUR: Standard & Poor's Ratings Services has placed its 'B' long-term corporate credit rating of RANHILL BHD [] on CreditWatch with negative implications.

The ratings agency said on Thursday, Dec 30, it also placed its 'B-' issue rating on US$220 million 12.5% senior unsecured notes due October 2011 issued by Ranhill (L) Ltd on CreditWatch with negative implications. Ranhill guarantees the notes.

'We placed the ratings on CreditWatch because Ranhill's liquidity has become constrained, in our opinion.

'We understand that the company has deferred payments to certain creditors in order to manage its working capital needs. This action could also affect Ranhill's ability to meet its sizable debt maturities in the next 12 months, including the US$220 million notes due October 2011,' it said.

S&P credit analyst Andrew Wong said the rating agency aims to resolve the CreditWatch action following its discussion with Ranhill on the measures it is taking to meet short-term liabilities without disrupting its normal operations.

"We will assess the company's near-term liquidity position, including its progress toward refinancing its US$220 million guaranteed notes and completing phase two of its Senai Desaru Expressway project," he said.

RAM Ratings reaffirms ratings of Pengurusan Air SPV RM20b sukuk

KUALA LUMPUR: RAM Ratings has reaffirmed the respective long- and short-term ratings of AAA (stable outlook) and P1 for Pengurusan Air SPV Bhd's (PASB) debt notes.

The ratings agency said on Thursday, Dec 30 the debt notes were the Islamic medium-term notes and RM20 billion Islamic commercial papers programmes (Sukuk) issued under the Shariah principles of Ijarah and/or Musharakah.

PASB is a special-purpose vehicle set up as a unit of Pengurusan Aset Air Berhad (PAAB) to undertake the financing of the latter's acquisition of water assets and their accompanying liabilities in Peninsular Malaysia and Labuan.

PAAB is responsible for the subsequent development of water infrastructure in the states involved. PAAB and PASB are collectively referred to as 'the group'.

RAM Ratings said the ratings reflected the expected extraordinary support from the government of Malaysia given the strategic importance of PAAB's role under the Water Services Industry Act 2006 - to consolidate the ownership of and responsibility for funding the water assets in Peninsular Malaysia and Labuan.

'This is aimed at helping the industry players turn around their current water-related financial woes and achieve financial sustainability.

'For these purposes, PAAB will have to rely on external funding almost exclusively, backed by the GoM's implicit and extraordinary support if or when required,' it said.

RAM Ratings said under the covenants, PAAB must be a 100%-owned (directly or indirectly) subsidiary of the government of Malaysia at all times.

Under the transaction structure, the Sukuk holders' recourse to PAAB is recognised via an irrevocable and unconditional purchase undertaking deed.

Through this document, PAAB (as the obligor) undertakes to purchase the trust assets from the Issuer upon the occurrence of certain events, at a price equal to the exercise price.

PAAB's undertaking to service PASB's debt obligations will be primarily satisfied by the rental income payable by the respective state water operators.

'The rating of the Sukuk is, therefore, a reflection of PAAB's credit risk; we therefore view the Group in aggregate from a credit perspective,' it said.

S.Korea c.bank alarmed as household savings plunge

SEOUL: South Korea's central bank on Thursday, Dec 30 expressed concern about a plunge in the country's household savings to near the lowest among the developed economies from the highest levels in less than a generation.

The Organisation for Economic Co-operation and Develoment (OECD) sees the country's household savings rate reaching 3.2 percent this year, less than half of an average 6.8 percent seen for its members, the Bank of Korea said in a report.

It was a sharp drop in the rate when compared to as high as 24.4 percent in the early 1990s and the country set the fastest decline in the savings rate among OECD members over the same period, the central bank said.

"The falling household savings rate results in putting restrictions on the stable management of the macroeconomy," it said. "It will reduce the room for expanded consumer spending and increases volatility in economic growth."

The central bank blamed the falling savings on the fact that economic growth in recent years was led by less labour-intensive industries and that interest rates had stayed relatively low compared to the strength of the economy, leaving consumers with less incentive to keep money in the bank.

It said its calculations show the country's market interest rates have been roughly 1 percentage point below what is deemed to be a equilibrium level of interest rate.

South Korea's three-year treasury bonds yield 3.37 percent and three-year corporate bonds rated AA-minus yield 4.26 percent, compared with the country's annual inflation hovering around 3.3 percent and this year's economic growth topping 6 percent.

The central bank did not link the findings with its future interest rate policy, which market participants see as skewed for tightening throughout next year, but said future economic policy should put more effort on creating jobs at home. - Reuters

China stocks up 0.3 pct as banks rebound

SHANGHAI: China's stock market rose 0.3 percent in thin trading on Thursday, Dec 30 buoyed by late afternoon rebounds in banking stocks as some investors took advantage of their battered valuations, but property developers and carmakers continued to sink on policy concerns.

The benchmark Shanghai Composite Index ended at 2,759.6, reversing an earlier loss as fears over monetary tightening eased during the last few days of trading in 2010. ($1 = 6.60 yuan).

In Tokyo, the Nikkei average fell 3% in 2010 as the yen's rise intensified wariness over the outlook for Japan's export-led economy, but shares rebounded from lows by the end of the year on buying led by foreign investors.

The Nikkei's loss for the year compared with a 19% gain in 2009, when high-tech exporters led a rebound rally.

A recovery in Japanese shares has gathered momentum since November following monetary easing by the Federal Reserve and the Bank of Japan.

Foreign investors have been major buyers during the recovery on views that Japanese shares were undervalued compared with those in other developed markets, analysts said.

On the final trading day of the year on Thursday, the Nikkei ended down 1.1 percent, pressured by profit-taking as the yen advanced to a fresh seven-week high against the dollar. The benchmark Nikkei lost 115.62 points to end the session at 10,228.92.

Still, the Nikkei gained about 9.2% in the last quarter of 2010 after slumping to the year's intraday low of 8,796.45 on Sept. 1. The broader Topix slipped 1% on Thursday to 898.80.

Key Asian markets mixed, KLCI in the red

KUALA LUMPUR: Key Asian markets were mixed at midday on Thursday, Dec 30 on some profit taking activities while at Bursa Malaysia, investors' sentiment was dampened by news that IJM Land and MRCB had called off their merger plans.

At 12.30pm, the FBM KLCI fell 1.64 points to 1,522.70. Turnover was 600.36 million shares valued at RM759.13 million. Decliners led advancers 377 to 284 while 275 stocks were unchanged.

Light crude oil rose 16 cents to US$91.28 while crude palm oil futures for third-month delivery fell RM14 to RM3.719 per tonne.

Among the key Asian markets, Japan's Nikkei 225 fell 1.1% to 10,230.99, Hong Kong's Hang Seng Index fell 0.13% to 22,938.88 amd Shanghai's Composite Index shed 0.35% to 2,741.76.

However, Taiwan's Taiex rose 0.12% to 8,876.63, Kospi 0.22% higher at 2,047.95 and Singapore's Straits Times Index edged up 0.20% to 3,214.27.

At Bursa Malaysia, speculation about the IJM Land and MRCB merger falling through weighed on the market sentiment, sending their shares lower. Trading was suspended at 12pm.

IJM Land was down 38 sen to RM2.86 with 21.53 million shares done while IJM Land-WA fell 28 sen to Rm1.61 with 44.39 million units transacted.

IJM and its warrants, IJM-WC fell 27 sen each to RM6.23 and RM2.76.

MRCB shed six sen to RM1.99 with 4.86 million shares done.

Among the index-linked stocks, CIMB fell five sen to RM8.49. Axiarta two sen to RM4.72, PLUS three sen to RM4.55 while Maybank and Sime Darby shed one sen each to RM8.54 and RM8.80.

Maxbiz fell 3.5 sen to 20 sen in active trade with 39.42 million shares done before it was suspended pending an announcement after market close.

BAT was the top gainer, up 32 sen to RM45.80, Tong Herr 28 sen to RM2.62 while F&N added 18 sen to RM15.06. Gamuda rose four sen to RM3.84 and DiGui eight sen to RM25.18.

Malaysia Smelting Corp lodges preliminary prospectus for SGX secondary listing

KUALA LUMPUR:'' Major supplier of tin globally, Malaysia Smelting Corp Bhd has lodged the preliminary prospectus for its secondary listing on the Main Board of the Singapore Exchange Securities Trading Ltd.

MSC said on Thursday, Dec 30 since the public offering of new MSC shares in conjunction with the proposed secondary listing would be made available for application by retail investors in Singapore and/or institutional and selected investors, no prospectus would be issued in Malaysia.

MSC chairman Norman Ip Ka Cheung had on Dec 28 said it was adhering to its plan to have its secondary listing on the SGX by end of January 2011.

Ip was quoted saying MSC's secondary listing was in line with its exercise to expand tin business activities such as mining and smelting. He added the group was consolidating its businesses to ensure its position as a leading integrated producer of tin metal and tin-based products.

Amtek to tap capital markets for funds to finance exansion

KUALA LUMPUR:'' AMTEK HOLDINGS BHD [] plans to raise funds through the capital markets to finance the expansion of its clothing business.

Executive chairman Syed Azmin Syed Nor said on Thursday, Dec 30'' Amtek'' which recently acquired Crocodile Sdn Bhd which owns the Crocodile branded apparels, intends to expand regionally within 5 years.

"Growth won't be organic" Syed Azmin told reporters at'' Amtek's AGM.

He said Amtek would resort to a "cocktail of instruments" from the capital markets to fund its expansion. The company does not intend to sell bonds, he said.

#Update2* IJM Land, MRCB merger called off, shares slide

KUALA LUMPUR: MALAYSIAN RESOURCES CORP [] Bhd (MRCB), IJM Land Bhd's proposed merger has been called off after both parties failed to agree on the terms of the MoU which expired on Wednesday, Dec 29.

Shares of both companies and IJM Corp fell on Thursday, Dec 30 ahead of the announcement which was made at midday. Trading in the shares of MRCB, IJM Corp and IJM Land has been suspended from 12pm and will resume trading on Monday, Jan 3 at 9am.

At 12pm, IJM Land was down 38 sen to RM2.86 with 21.53 million shares done while IJM Land-WA fell 28 sen to Rm1.61 with 44.39 million units transacted.

IJM and its warrants, IJM-WC fell 27 sen each to RM6.23 and RM2.76. MRCB shed six sen to RM1.99 with 4.86 million shares done.

MRCB said that after a series of discussions, MRCB and IJM Land have not been able to reach an agreement on the definitive terms and conditions of the proposed merger.

'As such, the memorandum of understanding in relation to the proposed merger has lapsed and ceased to have any further effect,' it said.

To recap, The Edge FinancialDaily reported the merger between MRCB and IJM Land was expected to create the country's second-largest property company with a market capitalisation of over RM7 billion and landbank of more than 9,000 acres.

The newly merged entity (newco) is expected to be listed after the second quarter of next year.

In the proposed merger, shareholders of both companies will exchange their shares for shares in the newco. Shareholders of MRCB and IJM Land will be offered a non-binding offer price for their shares at RM2.30 and RM3.65, respectively, which are at premiums of 15.6% and 18.1%, respectively, over their last traded prices last Friday.

The offer valued IJM Land at a price-to-book ratio of 2.43 times and MRCB at 2.61 times, based on their latest reported results as at Sept 30.

The newco is also expected to have combined revenues of over RM2 billion and an asset base in excess of RM3 billion.

The Employees Provident Fund (EPF) is a common shareholder in all the companies involved in the merger. The EPF owns a 19.4% equity stake in IJM Corp, while it is the single largest shareholder of MRCB with a 41.63% stake. IJM Land is in turn a 62.48%-owned unit of IJM Corp Bhd.

The property development activities of MRCB are mainly concentrated in KL Sentral, although it has a 4,000-acre township in Perak.

IJM Land's strength is in township developments with projects focused in the Klang Valley, Penang, Johor, Negri Sembilan, Sabah and Sarawak. It also has projects in Vietnam and China, and a total landbank of over 5,000 acres.

The merged company is also widely expected to gain from the development of the 3,300 acres of Rubber Research Institute (RRI) land in Sungai Buloh, which was awarded to the EPF.

Ingress subsidiaries secure RM14.5m Tenaga project

KUALA LUMPUR: INGRESS CORPORATION BHD []'s subsidiaries have received a letter of intent from TENAGA NASIONAL BHD [] for a RM14.5 million project to enhance the power giant's digital telecommunications network.

Ingress said on Thursday, Dec 30 that Tenaga had issued a letter of intent to the unincorporated joint-venture between Ramusa Engineering Sdn Bhd and Multi Discovery Sdn Bhd, both of which are subsidiaries of Ingress.

The LOI is for the enhancement of Tenaga's digital telecommunication network and teleprotection system 'Phase 4 - Mainhead A' project.

'The project is estimated to be valued at RM14.5 million and will be for a period of one year commencing in the first quarter of financial year ending Jan 31, 2012,' it said.

#Update* Trading in Maxbiz shares suspended in afternoon session

KUALA LUMPUR: Trading in Maxbiz Corp Bhd shares was suspended from 12.06pm on Thursday, Dec 30 pending an announcement.

It fell 3.5 sen to 20 sen with 39.4m shares done. The suspension will be until 5pm, it said.

On Dec 9, Maxbiz received a letter from Bursa Malaysia Securities Bhd directing it to furnish information to Messrs. Gomez & Co on the full listing of all inventories as at June 30, 2010; the anticipated cash flows of the asset cash-generating units of the group; and a letter of waiver from a creditor.

However, the company said in a recent announcement that Messrs. Gomez & Co. informed the board that they are unable to complete their assignment by Dec 17.

The board had requested from Bursa Malaysia for an extension of one week for Messrs. Gomez & Co. to complete their assignment and submission to Bursa Malaysia thereafter.

Bursa Malaysia to close on Friday for public holiday

KUALA LUMPUR: BURSA MALAYSIA BHD []'s offices will be closed on Friday, Dec 31 and will resume operations on Monday, Jan 3, 2011.

The stock exchange operator said on Thursday, Dec 30 that the closure of its offices was in view of the Prime Minister of Malaysia's declaration of a public holiday on that day.

#Update* IJM stocks slump

KUALA LUMPUR: Shares of IJM Corp and IJM Land fell the most in late morning trade on Friday, Dec 30, ahead of the merger with MALAYSIAN RESOURCES CORP [] Bhd (MRCB) as investors took profit after the recent run-up in the share price of IJM Land.

IJM Land had on Dec 15 announced the validity of the memorandum of understanding (MoU) for the merger was extended to Dec 29 as both parties are still in the midst of finalizing the terms and conditions of the definitive merger agreement for the proposed merger.

At 11.44am,'' IJM-WC was down 40 sen to RM2.63 while IJM Land fell 39 sen to R M2.85 with 18.07 million shares done.

IJM fell 30 sen to RM6.20 with 2.45 million shares done while IJM Land-WA lost 28 sen to RM1.61 with 40 million units done.

The FBM KLCI fell 0.96 of a point to 1,523.38. Turnover was 503.38 million shares done valued at RM591.22 million. There were 251 gainers, 349 losers and 281 stocks unchanged.

IJM Land and MRCB had said the extension for the validity of the MoU was because "both parties are still in the midst of finalizing the terms and conditions of the definitive merger agreement for the proposed merger".

To recap, The Edge FinancialDaily reported the merger between MRCB and IJM Land was expected to create the country's second-largest property company with a market capitalisation of over RM7 billion and landbank of more than 9,000 acres.

The newly merged entity (newco) is expected to be listed after the second quarter of next year.

In the proposed merger, shareholders of both companies will exchange their shares for shares in the newco. Shareholders of MRCB and IJM Land will be offered a non-binding offer price for their shares at RM2.30 and RM3.65, respectively, which are at premiums of 15.6% and 18.1%, respectively, over their last traded prices last Friday.

The offer valued IJM Land at a price-to-book ratio of 2.43 times and MRCB at 2.61 times, based on their latest reported results as at Sept 30.

The newco is also expected to have combined revenues of over RM2 billion and an asset base in excess of RM3 billion.

The Employees Provident Fund (EPF) is a common shareholder in all the companies involved in the merger. The EPF owns a 19.4% equity stake in IJM Corp, while it is the single largest shareholder of MRCB with a 41.63% stake. IJM Land is in turn a 62.48%-owned unit of IJM Corp Bhd.

The property development activities of MRCB are mainly concentrated in KL Sentral, although it has a 4,000-acre township in Perak.

IJM Land's strength is in township developments with projects focused in the Klang Valley, Penang, Johor, Negri Sembilan, Sabah and Sarawak. It also has projects in Vietnam and China, and a total landbank of over 5,000 acres.

The merged company is also widely expected to gain from the development of the 3,300 acres of Rubber Research Institute (RRI) land in Sungai Buloh, which was awarded to the EPF.

Profit taking setting in on final trading day of 2010

KUALA LUMPUR:'' The FBM KLCI briefly surpassed its all-time high close of 1,528.01 in early trade on Thursday, Dec 30 when it rose to 1,529.95, but eased off slightly by mid-morning in line with the generally cautious trend at regional markets.

Signs of some mild profit taking emerged in what has become a holiday-shortened week as the local stock market will be closed on Friday, Dec 31 following Prime Minister Datuk Seri Najib Razak declaring a public holiday after Malaysia won the Asean football cup final.

At 10am, the 30-stock index was up 2.25 points to 1,526.59, lifted by gains including at BAT, Digi and Petronas Gas.

Gainers led losers by 259 to 152, while 223 counters traded unchanged. Volume was 251.57 million shares valued at RM217.86 million.

At the regional markets, Japan's Nikkei 225 fell 1.24% to 10,215.81, the Shanghai Composite Index lost 0.47% to 2,738.54, and Singapore's Straits Times Index shed 0.05% to 3,206.44.

Meanwhile, Taiwan's Taiex added 0.27% to 8,890.36, South Korea's Kospi was up 0.25% to 2,048.57 and Hong Kong's Hang Seng Index opened 0.1% higher at 22,987.84.

RHB Research Institute Sdn Bhd in a note Dec 30 when reviewing the year said 2010 was one of the most disruptive in terms of natural and man-made disasters.

However, for the equity market, it was yet another productive year, with the FBM KLCI rising by 19.7%, after the 45.1% return in 2009, it said.

The research house said 2010 was a year for innovation in consumer electronics and multimedia, a year that saw more of the government in its slogans and acronyms, and it was an extraordinary year for property and resources.

In 2010, the market value of Bursa Malaysia stocks rose by 27.4%, driven by earnings growth (+24.6% year-on-year), PER expansion (+2.6 times) and new listings (which collectively added nearly RM60 billion market value) although this was also offset by privatizations, it said.

Over the next year, the research house said it expects to see more innovation (in terms of TECHNOLOGY [], communications and multimedia, energy and engineering).

'We anticipate the healthcare sector to regain attention as superbugs re-emerge, and weather disruptions and macroeconomic concerns bring commodity prices to new highs. As for corporate Malaysia, we believe the (potentially lack of) execution of Government initiatives will drive sentiment as compared to the positive anticipation built up during 2010.

'News flow will thus remain the primary catalyst in the near term, but reversal of short-term capital will cause volatility. Our top picks thus reflect a mixture of both value and growth plays within their respective industries and markets.

On Bursa Malaysia, the top gainer at mid-morning was BAT that ros e32 sen to RM45.80; Tong Herr added 25 sen to RM2.59, Hap Seng rose 18 sen to RM7.14, PacificMas added 14 sen to RM4.82, SunCity was up 12 sen to RM4.42, DiGi up 10 sen to RM25.20, United Malacca rose nine sen to RM7.05 while Genting PLANTATION []s and Petronas Gas added eight sen each to RM8.88 and RM11.36.

IJM Land shares and warrants fell 16 sen each to RM3.08 and RM1.73, Amway lost 10 sen to RM8.20, Padini fell seven sen to RM5.48, while Boxpak and Fima Corp lost five sen each to RM1.15 and RM6.47.

Maxbiz was the most actively traded counter with 24.7 million shares done. The stock fell 6.5 sen to 17 sen.

Other actives included Tejari, IJM Land warrants, Mobif, Limahsoon, Asia EP and Key West.

Mitrajaya up on RM53m Subang airport project

KUALA LUMPUR: Shares of MITRAJAYA HOLDINGS BHD [] climbed in early trade on Thursday, Dec 30 after its unit secured a RM53.5 million hangar CONSTRUCTION [] contract at Subang Airport.

At 9.13am, it was up seven sen to RM1.28 with 246,300 shares done.

The FBM KLCI rose 3.65 points to 1,527.99. Turnover was 75.36 million shares done valued at RM63.12 million. Advancers beat decliners nearly four to one, with 190 gainers and 54 losers.

Mitrajaya's unit Pembinaan Mitrajaya Sdn Bhd had accepted the contract to build five hangars, a two-storey multipurpose building, two electrical substations and one guardhouse at the Sultan Abdul Aziz Shah Airport.

It said the contract was for 10 months from Jan 1, 2011 and was expected to contribute positively to its future earnings.

IJM Land slides in early trade as investors lock in gains

KUALA LUMPUR: IJM Land Bhd and its warrants fell in early trade on Thursday, Dec 30 as investors took profit following the run-up following the proposed merger with MALAYSIAN RESOURCES CORP [] Bhd (MRCB).

At 9.23am, IJM Land fell 20 sen to RM3.04 with 365,100 shares done. Its warrants, IJM Land-WA lost 18 sen to RM1.71 with 7.25 million units transacted.

However, the FBM KLCI rose 4.41 points to 1,528.75. Turnover was 137.41 million shares done valued at RM100.66 million. There were 216 gainers, 67 losers and 167 stocks unchanged.

The shares had run up in recent weeks after the announcement of the proposed merger.

IJM Land's parent, IJM CORPORATION BHD [] is poised to transform into an integrated infrastructure and property giant, following the proposed union between IJM Land-MRCB.

Analysts had said with the backing of the Employees Provident Fund as a major shareholder, IJM Corp is anticipated to have plenty on its plate given a prolific job pipeline domestically and regionally - ranging from'' mega township development to even more toll highway projects.

Maxbiz down in heavy trade

KUALA LUMPUR: Shares of Maxbiz Corp Bhd are down in heavy trade on Thursday, Dec 30 on investors' worries about the outlook for the company and the status of the report by Messrs. Gomez & Co.

At 9.51am, it was down six sen to 17.5 sen with 21.18 million shares done.

The FBM KLCI rose 2.62 points to 1,526.96. Turnover was 229.89 million shares done valued at RM194.10 million. There were 258 gainers, 136 losers and 208 stocks unchanged.

On Dec 9, Maxbiz received a letter from Bursa Malaysia Securities Bhd directing it to furnish information to Messrs. Gomez & Co on the full listing of all inventories as at June 30, 2010; the anticipated cash flows of the asset cash-generating units of the group; and a letter of waiver from a creditor.

However, the company said in a recent announcement that Messrs. Gomez & Co. informed the board that they are unable to complete their assignment by Dec 17.

The board had requested from Bursa Malaysia for an extension of one week for Messrs. Gomez & Co. to complete their assignment and submission to Bursa Malaysia thereafter.

S.Korea Nov data eases sharp slowdown worries

SEOUL: South Korea's November factory output and service-sector activity expanded from October, data showed on Thursday, Dec 30, suggesting resilience in Asia's fourth-largest economy in the face of depressed global demand.

Analysts said the upbeat set of data indicated the economy was being powered by recovering demand at home and from emerging-market economies.

In November, industrial output rose 1.4 percent, service-sector output gained 0.8 percent and retail sales grew 2.9 percent, all on a seasonally adjusted basis from the previous month, data from the statistics agency showed.

"Given a rebound in China's leading indicator this week and signs of U.S. economic recovery, we think a soft landing will be possible in the (South Korean) economy," said So Jae-yong, economist at Hana Daetoo Securities.

"We expect the leading indicator to hit a bottom in December and the economy is likely to bottom up in the first quarter (of 2011)."

He was referring to the continued slowdown in annual growth in the composite leading indicator in South Korea, compiled from forward-looking data such as business and consumer sentiment measures.

The indicator rose 2.6 percent in November from a year earlier after a 3.4 percent rise in October, extending its losing streak in annual growth into an 11th consecutive month.

The data was released before financial markets opened.

Separately, the central bank said the current account surplus in November more than halved to $1.93 billion from a $4.89 billion surplus in October. It was the ninth month in a row that the country posted a current account surplus.

Robust exports on the back of a cheap won against rival currencies and efforts by South Korean electronics and machinery makers to strengthen marketing in emerging markets have kept the current account in surplus. - Reuters

OSK Research maintains Buy on Axiata, Neutral on TM

KUALA LUMPUR: OSK Research is maintaining a Buy on Axiata (target price: RM5.80) and NEUTRAL on Telekom Malaysia ((target price: RM3.28) as there is'' no fundamental change in its'' views on both stocks.

'Axiata remains our top pick for exposure to Malaysia and regional telecoms given its attractive regional growth prospects and undemanding valuations,' it said on Thursday, Dec 30.

TM and Axiata had on Wednesday issued statements on the potential links to Alcatel Lucent's (ALU) alleged payment of bribes to government officials and company employees in securing contracts, which reportedly took place between October 2004 and February 2006.

ALU has agreed to pay USD137 million (RM432 million) in fines and penalties to settle the charges after reaching an agreement with the US Department of Justice and Securities and Exchange Commission (SEC).

OSK Research said the developments related to the allegations and the participation of the Malaysian Anti- Corruption Agency (MACC) in the probe are lauded as these safeguard foreign perception and demonstrate that the government takes such allegations seriously in its efforts to promote foreign direct investments.

OSK Research: Tenaga an ideal post election play

KUALA LUMPUR: OSK Research continues to hold the view that TENAGA NASIONAL BHD [] is unlikely to secure a tariff hike apart from an overall subsidy reduction on gas prices.

'We also believe that such a reduction would only happen after the next General Elections, which therefore makes TNB an excellent post election play, especially since our house view is for an early General Election in 2011,' it said on Thursday, Dec 30.

OSK Research said for now, its discounted cashflow fair value remained at RM9.76 even as we raise our coal price assumption, and Tenaga remains a BUY recommendation for investors with a longer term investment horizon.

RHB Research: Telcos resilient despite a little turbulence ahead

KUALA LUMPUR: RHB Research Institute said as a defensive play, telco stocks are the best bet to ride out any unpleasant volatility that may arise amid a record-breaking FBM KLCI and global economic uncertainties.

In its research note issued on Thursday, Dec 30, it said looking ahead, despite continued subscriber growth, voice minutes are increasingly becoming commoditised and we expect tariffs would continue to be under pressure due to, e.g. competition.

'As voice comes under pressure, we expect mobile operators to increase focus on non-voice services to support further topline growth, driven by wireless broadband and value-added services such as mobile internet, messaging and content,' it said.

RHB Research believed competition should remain rational in 2011, as a price war, particularly in the broadband segment will not really benefit anyone except YTL Communications (YTL Comms). Usually a new entrant has an incentive to underprice its products, but so far YTL Comms appears to be acting quite rationally.

'Our top pick is Axiata for strong regional growth prospects and cheaper valuations against domestic peers.

'For capital management, we like TM and thus upgrade the stock from market perform to Trading Buy, for the high likelihood of significant special dividends, which may result in total dividend yield of 20.9% in 2011,' it said.

Sealink advances on RM70m contract

KUALA LUMPUR: Shares of SEALINK INTERNATIONAL BHD [] rose in early trade on Thursday, Dec 30 after it secured contracts for the sale of three offshore support vessels for RM70 million.

At 9.03am, it was up seven sen to 68 sen with 262,400 shares done.

The FBM KLCI rose 3.37 points to 1,527.71. Turnover was 19.34 million shares done valued at RM20.34 million. There were 126 gainers, 23 losers and 81 stocks unchanged.

Sealink announced on Wednesday it has secured contracts for the sale of three offshore support vessels.

The vessels were expected to be delivered within the first quarter of 2011.

Two of the vessels were sold for RM68 million to established overseas buyers whilst a 14 year old vessel was sold as part of the company's fleet modernisation plan.

US STOCKS-Markets close slightly higher, strong December seen

NEW YORK: The S&P 500 headed for its best December in nearly two decades as U.S. stocks advanced in thin trade on Wednesday, Dec 29, lifted by investor optimism about the economy in 2011.

The S&P has gained 6.8 percent so far this month and rose in 17 of the last 20 sessions. However, with volume among the lowest of the year because of the holidays and scarce economic news, some investors are waiting for January to see if the rising pattern holds.

"I don't want to dismiss the recent gains, but I'm not ready to draw a trend line," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "I'd like to see how the market responds when we have more participants and tangible news to sink our teeth into."

The S&P, which has already passed the level on Sept. 12, 2008 just before Lehman Brothers collapsed, is on course for its biggest December gain since 1991 when it rose 11.2 percent.

A number of major consumer-linked shares posted solid gains on Wednesday, with McDonald's Corp up 1.1 percent to $77.27 and Walt Disney Co up 0.9 percent to $37.69. Both companies are Dow components.

"People are hoping that the consumer is back and that will help fuel the engine and grow some earnings, so that companies will start hiring," said Frank Ingarra, a portfolio manager at Hennessy Funds in Stamford, Connecticut.

The Dow Jones industrial average was up 10.52 points, or 0.09 percent, at 11,586.06. The Standard & Poor's 500 Index was up 1.34 points, or 0.11 percent, at 1,259.85. The Nasdaq Composite Index was up 4.05 points, or 0.15 percent, at 2,666.93.

Advancing stocks outnumbered declining ones on the New York Stock Exchange by a ratio of almost two to one, while on the Nasdaq, about seven stocks rose for every six that fell.

"There's not much conviction behind any of the moves we've seen lately, though there is an upward bias because of window dressing," Ablin said, referring to money managers' year-end trading. "For the rest of the year we should see people trying to fill in around the edges to make their portfolios look better."

BJ's Wholesale Club Inc jumped 7.1 percent to $47.63 after the New York Post reported buyout firm Leonard Green & Partners remained interested in buying the warehouse club operator and that it may launch a hostile bid.

The Morgan Stanley Retail index climbed 0.8 percent while the S&P Retail index gained 0.3 percent.

Sears Holdings Corp rose 6.4 percent to $74.49 after it said it launched an on-demand video service to compete with companies like Netflix Inc.

The online movie renter's stock fell 1.9 percent to $180.27 but is up more than 200 percent this year.

Molycorp Inc, which owns a rare-earth mine in Mountain Pass, California, rose 6.8 percent to $49.34 after China reduced quotas for exporting the minerals, thus threatening to reduce already tight global supplies.

U.S.-listed shares of Brazilian oil firm Petrobras gained 4.9 percent to $25.89 after it said its reserves could rise significantly due to two deep-water oil fields.

Noble Energy Inc and its Israeli exploration partners confirmed earlier estimates that the offshore Leviathan prospect was Israel's largest natural gas find. Noble rose 2.6 percent to $87.16. - Reuters

GLOBAL MARKETS-Stocks rise as growth outlook boosts risk assets

NEW YORK: World stocks climbed to their highest levels in more than 27 months on Wednesday, Dec 29,'' and the S&P 500 headed for its best December in nearly two decades as investors seized on indications of stronger economic growth in 2011.

U.S. Treasuries rose after strong demand for an auction of $29 billion in new U.S. debt provided relief a day after dismal support for another government note sale. The decline in Treasuries yields drove the dollar down against a basket of major currencies, as lower bond yields erode the return on U.S. assets.

Investors have been turning to riskier assets as 2010 draws to a close. Views that the world economy is on the mend are driving expectations that the higher interest rates that typically follow stronger growth will hurt returns on government bonds and the other safe-haven assets that drew favor after the financial crisis erupted.

Asset allocations are seen by many analysts, including some bond pickers, as favoring stocks in the new year.

"The first few days of the new year will be good as a lot of new money will flow into the market," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels. "But people will become cautious again."

Much of stocks' gains came after Federal Reserve Chairman Ben Bernanke made it clear in August that the U.S. central bank was willing to buy more assets in order to pump liquidity into the slowing U.S. economy.

The Fed's quantitative easing and tax stimulus measures have bolstered economic forecasts for 2011.

MSCI's all-country world stock index jumped 1.9 percent, hitting the highest level since Sept. 3, 2008. The index's emerging market counterpart rose more than 1 percent.

In New York, the Dow Jones industrial average rose 9.84 points, or 0.09 percent, to 11,585.38. The Standard & Poor's 500 Index added 1.27 points, or 0.10 percent, to 1,259.78 and the Nasdaq Composite Index edged up 4.05 points, or 0.15 percent, to 2,666.93.

The S&P 500 has risen almost 7 percent this month, pushing the benchmark index above levels reached on Sept. 12, 2008, the last trading day before Lehman Brothers collapsed, as improving economic data and a changed political landscape have encouraged risk-taking.

Shares of a number of leading consumer-oriented companies posted solid gains on Wednesday, with McDonald's Corp up 1.1 percent to $77.27 and Walt Disney Co rising 0.9 percent to $37.69. Both companies are Dow components.

"People are hoping that the consumer is back and that will help fuel the engine and grow some earnings so that companies will start hiring," said Frank Ingarra, a portfolio manager at Hennessy Funds in Stamford, Connecticut.

Some analysts, however, remained cautious about the outlook for stocks, wary that thin volumes over the holiday period may not be indicative of a trend.

"I don't want to dismiss the recent gains, but I'm not ready to draw a trend line," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "I'd like to see how the market responds when we have more participants and tangible news to sink our teeth into."

The Nasdaq, copper and gold have been the big winners this year.

In Europe, the FTSEurofirst 300 rose about a quarter of a percent, extending a year-end rally and putting equities on track to post their biggest monthly gain in 17 months.

Japan's Nikkei gained 0.5 percent.

TREASURIES IN FOCUS

U.S. Treasury notes prices rose on Wednesday. The gains came after a drubbing on Tuesday, following a weak $35 billion five-year note auction, boosted value to a point where investors could feel more comfortable with the drumbeat of debt sales the government must conduct to fund its deficit.

U.S. bond yields have soared a full percentage point since October on expectations that growth will accelerate in 2011, while concerns over the U.S. deficit have raised inflation fears and sapped demand for the debt. Some investors, including Jeffrey Gundlach, the chief executive of DoubleLine Capital, have marked the sell-off as a bond buying opportunity because much higher yields would work against economic growth.

On Wednesday, the 10-year U.S. Treasury yield declined 0.14 percentage point to 3.35 percent.

In currency trading, the dollar hit a seven-week low and dropped versus the euro, after Treasury yields tumbled following the U.S. debt auction.

"The reaction in the bond markets is fairly sharp," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. "There's a broader move towards a weaker U.S. currency."

Commodity gains boosted the Australian and New Zealand dollars, while the euro edged up against the U.S. dollar after holding above its 200-day moving average.

Most analysts are bracing for more euro weakness in early 2011, but the currency's stubborn refusal to break below the 200-day moving average, now at $1.3084, has frustrated bearish investors.

The dollar fell against major currencies, with the U.S. Dollar Index off 0.7 percent at 79.799. Against the yen, the dollar dropped 1 percent to 81.64 yen. The euro rose 0.75 percent to $1.3216.

In commodities, U.S. light sweet crude oil settled down 37 cents, or 0.4 percent, to $91.12 a barrel. Gold rose $4.61, or 0.33 percent, to $1410.60. - Reuters

#Stocks to watch:* Ekovest, TM, Sealink, JAKS, Mitrajaya

KUALA LUMPUR: Key Asian markets, including Bursa Malaysia, could advance in late window dressing activities on Thursday, Dec 30, as investors sentiment is galvanized by the firm overnight close on Wall Street.

Reuters reported that the S&P 500 headed for its best December in nearly two decades as U.S. stocks advanced in thin trade on Wednesday, lifted by investor optimism about the economy in 2011.

The Dow Jones industrial average was up 10.52 points, or 0.09 percent, at 11,586.06. The Standard & Poor's 500 Index was up 1.34 points, or 0.11 percent, at 1,259.85. The Nasdaq Composite Index was up 4.05 points, or 0.15 percent, at 2,666.93.

At Bursa Malaysia, the FBM KLCI closed at a seven week high of 1,524.34 on Wednesday, Dec 29, which was just four points below its all-time closing high of 1,528.01 on Nov 10, reflecting the optimism in most key regional markets.

The 30-stock benchmark index advanced 0.45% or 6.90 points to close at 1,524.34, lifted by gains in key blue chips including Genting, DiGi as well index-linked PLANTATION [] stocks.

Stocks to watch on Thursday are EKOVEST BHD [], TELEKOM MALAYSIA BHD [], SEALINK INTERNATIONAL BHD [], JAKS Resources Bhd and MITRAJAYA HOLDINGS BHD [].

The Edge FinancialDaily reports on Thursday that Tanjong Plc has attracted another bid for its gaming business, this time from Datuk Lim Kang Hoo of CONSTRUCTION [] outfit Ekovest Bhd.

Telekom Malaysia will carry out a thorough internal investigation to safeguard the integrity of its procurement process and code of business ethics in the wake of allegations that its employees had received improper payments from Alcatel-Lucent S.A.

The company said it had a zero tolerance policy towards improprieties and would take appropriate action against any of its employees, if they had received such payments.

The US Securities and Exchange Commission had charged the Paris-based Alcatel-Lucent with violating the Foreign Corrupt Practices Act (FCPA) by paying bribes to foreign government officials to illicitly win business in Latin America and Asia.

Sealink has secured contracts for the sale of three offshore support vessels for RM70 million. It said the vessels were expected to be delivered within the first quarter of 2011.

Two of the vessels were sold for RM68 million to established overseas buyers whilst a 14 year old vessel was sold as part of the company's fleet modernisation plan.

JAKS posted net profit RM1.19 million in the fourth quarter ended Oct 31, 2010 compared to net loss RM3.13 million a year ago due to recovery in selling prices of various steel related products and better margins as compared with previous year.

Its revenue rose 38% to RM85.74 million from RM62.3 million last year, on the back of higher revenue contributed from the steel related products and recognition of works done for the projects in the construction division.

Lion Industries has accepted RM26.19 million as full settlement from Likom Computer System Sdn Bhd for rental owing. It had agreed to waive the interest of RM11.05 million as Likom had ceased operations in 2004.

Mitrajaya has secured a RM53.5 million hangar construction contract at Subang Airport.

Its unit Pembinaan Mitrajaya Sdn Bhd had accepted the contract to build five hangars, a two-storey multipurpose building, two electrical substations and one guardhouse at the Sultan Abdul Aziz Shah Airport.

It said the contract was for 10 months from Jan 1, 2011 and was expected to contribute positively to its future earnings.