#Stocks to watch:* Hap Seng, Guan Chong, PLUS, MMC

KUALA LUMPUR: As the FBM KLCI posted 3.51% in gains for the first week of 2011 to close at a fresh high of 1,572.21 , investors' thoughts are whether the market can extend its gains for the week starting Monday, Jan 10.

Profit taking was well absorbed last Friday, with banks giving up some gains as interest shifted to other blue chips. External events would also help provide the direction for the local bourse.

For the week,the index was up 53.3 points or 3.51% from 1,518.91 on Dec 30 to 1,572.21''last Friday. Market capitalisation increased by RM49.87 billion during the period to RM1.324 trillion.

On Wall Street, US stocks fell on Friday after a court ruling in a key foreclosure case prompted investors to pull out of bank stocks, adding to weakness after a lacklustre jobs report.

Despite the weaker close, the broader Standard & Poor's 500 Index and Dow Jones industrial average recorded their sixth straight week of advances. The market has proved resilient despite expectations that stocks were due for a pullback.

The Dow slipped 22.55 points, or 0.19%, to 11,674.76. The S&P was off 2.35 points, or 0.18%, to 1,271.50. The Nasdaq Composite Index declined 6.72 points, or 0.25% to 2,703.17. For the week, the S&P 500 rose 1.1%, the Dow gained 0.8% and the Nasdaq climbed 1.9%.

Stocks to watch on Bursa Malaysia would be HAP SENG CONSOLIDATED BHD [], GUAN CHONG BHD [], PLUS EXPRESSWAYS BHD [] and MMC Corp Bhd.

Hap Seng plans to raise up to RM1.46 billion from a corporate exercise which includes RM808.21 million from a private placement and another RM654.54 million from a rights issue. The move would also build its war chest to undertake acquisitions.

It had proposed to place out up to 124.53 million new shares at an issue price of RM6.49 per placement share which would raise RM808.21 million.

It would also undertake a renounceable rights issue of up to 448.31 million new shares together with up to 448.31 million new free detachable warrants to raise RM654.54 million.

Meanwhile, Guan Chong plans to raise up to RM120 million from the expected exercise price of RM2 for the 60 million free warrants. It had fixed the exercise price for the warrants at RM2, which was 9.29% or 17 sen over the theoretical ex-price after the proposed bonus issue of RM1.83 per share, based on the five-day volume weighted average price of RM2.44.

Of the RM120 million, the proceeds would be used'' for the day-to-day working capital requirements of the group.

Monday is the deadline for interested bidders to deposit their RM50 million to take over PLUS Expressways. Reports state MMC Corp Bhd may be the third party to put in its bid on Monday.

The first joint offer by UEM Group Bhd and the Employees Provident Fund Board was RM4.60 per share or RM23 billion while the second offer is from Jelas Ulung Sdn Bhd which is offering RM26 billion ot RM5.20 per share.

Meanwhile,'' Johor Corporation (JCorp) has stated it has 70% of the required sum needed to repay its debts from plans about to be executed.

Its new president/chief executive officer, Kamaruzzaman Abu Kassim said last Friday that the group had RM3.6 billion debt in July 2012 and it was taking steps to reduce it to a more sustainable level of between RM1 billion and RM1.5 billion.

"To pay off the difference, which would amount to about RM2.6 billion, 70% of the required sum, or about RM1.8 billion, would be derived from plans which would be executed at a suitable time. The balance will be raised from sellable assets and land," he said.

Meanwhile, KFC Holdings (Malaysia) Bhd (KFCH) plans to invest RM25 million to open 25 new outlets nationwide this year.

Managing director Jamaludin Md Ali said out of the 15 of the KFC fast food restaurants will be drive-through outlets to provide more convenience to customers, he said. Currently, there were 520 KFC outlets including 40 drive-through outlets.

Market slips on bank worries, lacklustre jobs data

NEW YORK: Stocks fell on Friday, Jan7'' after a court ruling in a key foreclosure case prompted investors to pull out of bank stocks, adding to weakness after a lacklustre jobs report.

Even with the decline, however, the S&P 500 and Dow recorded their sixth straight week of advances. The market has proved resilient despite expectations that stocks were due for a pullback.

Wells Fargo & Co (WFC.N) and US Bancorp (USB.N) lost a ruling by Massachusetts' top court, which said the banks failed to show they held the mortgages at the time they foreclosed.

The court decision is the latest on the validity of foreclosures conducted without full documentation, and the ongoing mortgage fiasco could prove costly for the banks. The news turned the market lower but some said the reaction was overdone.

"Financials have really been a leader in the market in recent weeks -- this could close that sector out," said Nick Kalivas, senior equity index analyst at MF Global in Chicago.

Wells Fargo shares gave up 2 percent at $31.50 and US Bancorp eased 0.8 percent to $25.09. The KBW Bank index .BKX lost 0.9 percent.

The S&P financial index .GSPF rallied more than 10 percent in December as investors searched for bargains at the end of the year.

On Friday the Dow Jones industrial average .DJI slipped 22.55 points, or 0.19 percent, to 11,674.76. The Standard & Poor's 500 Index .SPX was off 2.35 points, or 0.18 percent, to 1,271.50. The Nasdaq Composite Index .IXIC declined 6.72 points, or 0.25 percent, to 2,703.17.

For the week, the S&P 500 rose 1.1 percent, the Dow gained 0.8 percent and the Nasdaq climbed 1.9 percent.

Investors treaded lightly after the employment report, which showed non-farm payrolls rose a less-than-expected 103,000. But overall employment for October and November was revised upward to show 70,000 more job gains than previously reported.

The Labor Department report showed a surprisingly large number of people gave up searching for work, tempering the positive news of a big drop in the unemployment rate.

Analysts said that while the data showed steady, if slow, progress, it did not meet expectations that had risen through the week.

The mortgage issue has been overhanging banks, prompting an uproar last year that led lenders such as Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N) and Ally Financial Inc to temporarily stop seizing homes.

On the upside, the energy sector capped declines as Diamond Offshore (DO.N) rose 4.9 percent to $70.57 after Goldman Sachs upgraded the driller. Goldman also upgraded Baker Hughes Inc (BHI.N) , sending its shares up 3.2 percent at $56.60.

The S&P 500 found support at its 14-day moving average, which is around 1,262. The index briefly broke below that before popping back up. - Reuters

GLOBAL MARKETS-US jobs report can't lift stocks; euro suffers

NEW YORK: The euro fell to a nearly four-month low against the dollar on Friday, Jan 7 after the United States reported a surprisingly strong decline in its unemployment rate, but disappointment over the number of jobs added drove Treasuries higher and weighed on stocks.

Worries about sovereign debt in the euro zone also weighed on the single currency and European equity markets ahead of debt auctions next week.

Oil prices fell, closing the first week of the new year with the biggest weekly percentage loss in nearly five months, stung by the stronger dollar.

U.S. non-farm payrolls increased by 103,000 in December, the government said, below economists' expectations for 175,000. The jobless rate, however, fell to 9.4 percent, the lowest rate in more than 1-1/2 years, and the United States revised up the payroll numbers for October and November.

"You can't ignore the fact that, regardless of a disappointing payrolls outcome, U.S. growth is still looking better than Europe, and the euro sovereign stress is still there," said Richard Franulovich, senior currency strategist at Westpac in New York.

The euro zone debt crisis "will surface as an investor concern this quarter," said Colin McLean, managing director at SVM Asset Management in Edinburgh. "Portugal will have to access the stability fund."

On Wall Street, stocks were led lower by bank shares after a court ruling voided some foreclosures, the latest court decision on the validity of foreclosures conducted without full documentation. The ruling may set a dangerous precedent for the sector and slow the recovery in housing if the processing of delinquent loans keeps hitting snags.

The Dow Jones industrial average fell 22.55 points, or 0.19 percent, to 11,674.76. The Standard & Poor's 500 Index slipped 2.35 points, or 0.18 percent, to 1,271.50 and the Nasdaq Composite Index declined 6.72 points, or 0.25 percent, to 2,703.17.

Shares of Wells Fargo & Co., a defendant in the foreclosure case in the Massachusetts ruling, fell 2 percent to $31.50.

Europe's FTSEurofirst 300 dropped 0.25 percent, with selling accelerating after the U.S. data. Banks were among the top decliners

World stocks measured by MSCI All-Country World Index edged down 0.4 percent in a third straight decline. Japan's Nikkei average edged up 0.1 percent to an eight-month high.

The euro closed out the week with its worst weekly loss since mid-August, down 3.3 percent against the dollar.

"Worries about the restructuring among banks being built in is starting to affect the creditworthiness of these peripheral countries," said David Woo, head of global rates and currencies research at Bank of America Merrill Lynch in New York.

The dollar was buoyed by revisions in the U.S. jobs report that seemed to underscore that a broader economic recovery was intact. This compares with lingering skepticism over the ability of some euro zone nations to calm creditors, and mixed data from regional stalwart Germany.

The U.S. dollar climbed 0.37 percent against a basket of major currencies.

The euro slid 0.72 percent to $1.2908. Against the Japanese yen, the dollar fell 0.40 percent at 83.01.

Germany's trade surplus narrowed in November as imports gained more than expected, a sign of rising domestic demand in the face of other data showing declines in retail sales and industrial output.

Earlier, investors sold bonds of the most indebted euro zone governments before a series of issues next week. A European Union proposal that could force those who lend to banks to bear big losses if they fail also helped knock the single currency lower across the board.

Portugal, widely seen as the next euro zone state that could need a bailout after Greece and Ireland, will lead debt auctions from European nations next week. Talk that the Swiss National Bank excluded Portugal bonds from bank loan collateral weighed on the euro even after the central bank's denial.

Risk premiums on Portugal's 10-year government bonds over benchmark German Bunds rose 19 basis points to 4.40 percentage points, while those on 10-year Spanish bonds over Bunds widened. The five-year cost of insuring Portugal's debt against default rose by 15 basis points to 540 basis points.

"The rising yields at debt auctions in the euro zone will continue to spook investors for a while, and it's best to stay away from peripheral stocks such as Spanish and Portuguese banks until mid-year, when the crisis should ease," said Arnaud Scarpaci, fund manager at Agilis Gestion in Paris.

Many analysts said markets had become so upbeat on the payrolls that there was room for disappointment. Some pointed to a note of caution from new U.S. claims for jobless benefits, which rose more than expected last week.

U.S. Treasury debt gained after the employment report fanned hopes the U.S. Federal Reserve will stick to an ultra-easy monetary policy.

Benchmark 10-year Treasury note yields declined 0.08 percentage point to 3.32 percent, erasing some of the increase that followed signs of economic recovery since October.

In commodities, copper fell for a fourth consecutive session on Friday after the U.S. jobs data capped the growth outlooks that have been behind the metal's rise to record highs earlier this month.

Prices of the industrial metal pulled further away from record peaks at $9,754 per tonne in London and $4.4980 per pound in New York, falling to their lowest in two weeks.

U.S. light sweet crude oil settled down 35 cents, or 0.35 percent, to $88.03 per barrel, and gold fell $1.71, or 0.12 percent, to $1369.20. - Reuters

US payrolls rise 103,000 in Dec, jobless rate falls

WASHINGTON: The U.S. economy created far fewer jobs that expected in December, suggesting the Federal Reserve will complete its asset buying program, but the unemployment rate dropped to its lowest in more than 1-1/2 years.

Non-farm payrolls increased 103,000, the Labor Department said on Friday, Jan 7, below economists' expectations for 175,000. Private hiring rose 113,000, while government employment fell 10,000.

However, overall employment for October and November was revised to show 70,000 more job gains than previously reported. The unemployment rate fell to 9.4 percent, the lowest since May 2009, from 9.8 percent in November.

Economists raised their employment forecasts after payrolls processing company ADP Employer Services said on Wednesday private employers added 297,000 in December -- the largest gain on ADP records dating to 2000.

"The labor market improvement is still way slower than what everybody would hope for," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.

Federal Reserve officials will weigh the jobs report when they meet on Jan. 25-26. Signs of strength in the economic recovery had led to calls for the U.S. central bank to scale back its widely criticized $600 billion government bond-purchasing program aimed at keeping interest rates low to boost demand.

Some policymakers indicated in December they had a "fairly high" threshold for curtailing the stimulus program.

FED TO STAY THE COURSE

Fed Chairman Ben Bernanke speaks on the economic outlook before the Senate Budget Committee at 9:30 a.m. (1430 GMT).

Analysts say the Fed's focus is on unemployment and expect it to complete the bond-buying plan.

"Gains in payrolls won't be enough to spark a change in Fed policy until the gains either accumulate for many, many months or are accompanied by gains in inflation expectations," said Tony Crescenzi, a strategist at bond fund PIMCO.

The economy usually needs to create at least 125,000 jobs a month to keep the unemployment rate from rising, but a faster pace might be needed now since so many discouraged workers are sitting on the sidelines. As job growth picks up, these workers could re-enter the labor force, keeping upward pressure on the jobless rate.

Employment gains in December were led by the private services sector, which saw payrolls rising 115,000 after gaining 84,000 in November. Retail jobs increased 12,000 after a surprise 19,400 slump in November when retailers reported their best sales in years.

Temporary hiring, seen as a harbinger of permanent employment, increased 15,900 after 31,100 in November.

The goods-producing sector shed 2,000 jobs in December after losing 5,000 in November, but manufacturing payrolls rose 10,000. CONSTRUCTION [] employment fell 16,000 after slipping 2,000 in November.

The average work week was steady at 34.3 hours. Average hourly earnings increased three cents in December. - Reuters

Hap Seng to raise RM1.46b from private placement, rights issue

KUALA LUMPUR: HAP SENG CONSOLIDATED BHD [] plans to raise up to RM1.46 billion for a corporate exercise which includes RM808.21 million from a private placement and another RM654.54 million from a rights issue.

The company said on Friday, Jan 7 it had proposed to place out up to 124.53 million new shares at an issue price of RM6.49 per placement share, which was a 10% discount to the five-day volume weighted average price up to and including Jan 6 of RM7.21.

"The proposed placement is expected to raise gross proceeds of approximately RM808.21 million," it said.

Of the RM808.21 million to be raised from the private placement, it said RM240 million would be for capital expenditure, RM300 million for repaying the borrowings and the remaining RM268.21 million as general working capital, corporate purposes and estimated expenses.

Hap Seng said it planned to place out the shares via a bookbuilding exercise to third party investors to be identified. CIMB and UBS AG have been appointed as the joint global coordinators for the proposed placement.

It also proposed a bonus issue of up to 1.494 billion new shares on the basis of two bonus shares for every one share held after the proposed placement.

It would also undertake a renounceable rights issue of up to 448.31 million new shares together with up to 448.31 million new free detachable warrants. This would be on the basis of one rights share with one warrant for every five shares held after the proposed bonus issue.

Hap Seng said based on the proposed rights issue with warrants of up to 448.315 million rights shares together with up to 448.315 million new warrants at an issue price of RM1.46 per rights share, the exercise was expected to raise up to RM654.54 million.

Of the RM654.54 million, it said RM220 million would be used to expand its business operations and acquire potental land for development, RM200 million to repay borrowings, RM234.54 million as general working capital.

Puncak Niaga says to review Selangor govt RM9b offer

KUALA LUMPUR: PUNCAK NIAGA HOLDINGS BHD [] management will review the offer documents from the Selangor State Government over the latter's new offer to the four beleaguered water concessionaires in Selangor for RM9 billion.

Puncak Niaga said on Friday, Jan 7 that its unit Puncak Niaga (M) Sdn Bhd (PNSB)'' and 70% owned Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) had just received the formal offer from the state government on Friday evening.

"For the record, PNSB and Syabas only received a two-page fax transmission from the Selangor State Government late evening on Thursday, Jan 6, containing the cover letter and the list of recipients who were copied with the letter," it said.

Puncak Niaga said details of the formal offers to PNSB and Syabas would be announced to Bursa Malaysia Securities Bhd in due course after the management have reviewed the offer documents.

On Thursday, the Selangor government had made the fresh offer to the four concessionaires in the state.

Apart from PNSB and Syabas, the other two were Konsortium Abass Sdn Bhd and Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash). The state had offered to acquire 100% of all their shares, which would indicate that the state would also absorbing all their liabilities.

Selangor has offered RM64.62 for each PNSB share, RM20.78 for each Syabas share, RM5.95 for each Splash share and RM9.39 for each share in Konsortium Abass.

The Edge FinancialDaily reported Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim as saying: 'In total, over RM9 billion will be offered to own the equities of water operations in Selangor.'

Khalid added that a due diligence from an audit firm was in the pipeline. The offer to the water concessionaires lapses at the end of this month.

However, there are insufficient details about how the RM9 billion price tag came about or what exactly were the salient features of the takeover.

Guan Chong to raise RM120m from corporate exercise

KUALA LUMPUR: GUAN CHONG BHD [] is expected to raise up to RM120 million from its corporate exercise based on the expected exercise price of RM2 for the 60 million free warrants.

The company said on Friday, Jan 7 that it had fixed the exercise price for the warrants at RM2, which was 9.29% or 17 sen over the theoretical ex-price after the proposed bonus issue of RM1.83 per share, based on the five-day volume weighted average price of RM2.44.

"Based on the exercise price of the warrants of RM2 per new share, the company stands to potentially raise up to RM120 million during the tenure of the warrants upon full exercise of the warrants. Such proceeds will be utilised for the day-to-day working capital requirements of the group," it said.

The 60 million warrants were issued on the basis of one free warrant for every four existing shares held on the same entitlement date for the proposed bonus issue.

The corporate exercise also involved the proposed bonus issue of 80 million new shares of 25 sen on a one-for-three basis.

Winning week for FBM KLCI

KUALA LUMPUR: Stocks on Bursa Malaysia climbed on Friday, Jan 7, with rotational interest seen in glove makers while there was some mild profit taking in PLANTATION []s.

Whatever selling there was, it was well absorbed with the FBM KLCI charting its five-straight days of gains in the first week of 2011 to end 3.84 points higher at a another record close of 1,572.21.'' For the week, it was up 53.3 points or 3.51% from 1,518.91 on Dec 30.

Again, it was another record high for the 30-stock index, despite some mild pullback in intra-day trading. But investors' sentiment was underpinned by the firmer external data and also the entry of foreign funds into the market.

Volume surged to 2.54 billion shares on Friday valued at RM3.45 billion. Advancing counters beat decliners 526 to 324 while 301 counters were unchanged.

Commodities slipped as the US dollar strengthened. Light crude oil was at US$88.46 per barrel while crude palm oil (CPO) futures retreated RM93 to RM3,740.

The US dollar strengthened to 3.0710 to the ringgit. The greenback also strengthened against the basket of six major world major currencies and the index was at 81, indicating the international value of the US dollar.

Key regional markets were mixed. Japan's Nikkei 225 rose 0.11% to 10,541.04, Shanghai's Composite Index added 0.52% to 2,838.80 and South Korea's Kospi 0.41% higher at 2,086.20. However, Hong Kong's Hang Seng Index fell 0.42% to 23,686.63 on profit taking, Taiwan's Taiex shed 1.13% to 8,782.72 and Singapore's Straits Times Index 0.74% lower at 3,255.53.

At Bursa Malaysia, Nestle climbed the most, up 40 sen to RM44.48 and Guinness Anchor 20 sen to RM10.36.

Glove makers showed some recovery, with Hartalega adding 31 sen to RM5.73, Supermax 22 sen tp RM4.46 and Adventa 17 sen to RM2.65. Kossan rose 10 sen to RM3.35 and the world's top glove maker Top Glove two sen to RM5.42.

Among the index-linked stocks, TM rose 17 sen to RM3.73, and pushing up the FBM KLCI by 1.44 points. Axiata added seven sen to RM4.91 while Maxis eased one sen to RM5.35. Among infrastructure stocks MMC advanced 18 sen to RM3.10 and Gamuda five sen to RM4.25.

Among the banks, Public Bank added eight sen to RM13.54 and AMMB four sen to RM7.07 but Hong Leong Bank shed five sen to RM9.30 and Maybank one sen to RM9.

Notion surged 30 sen to RM2 in relatively active trade despite a somber outlook for the semiconductor sector especially the hard-disk drive makers. JCY International added 1.5 sen to 85 sen.

Plantation stocks, which had rallied in tandem with record high CPO prices, saw some profit taking. KL Kepong shed 24 sen to RM22.38, Batu Kawan 18 sent to RM17.04, Far East 15 sen to RM7.35 while Kulim eased 12 sen to RM13.58.

Notion VTec rallies, JCY ekes out marginal gains

KUALA LUMPUR: Shares of Notion VTec and JCY International, whose shares had come under heavy selling last year over the weaker outlook for the hard disk drive market, managed to post some gains in late afternoon on Friday, Jan 7.

At 4.37pm, Notion was up 22 sen to RM1.92 while JCY added 1.5 sen to 85 sen.

The 30-stock FBM KLCI rose 1.98 points to 1,570.35. Turnover was 2.36 billion shares valued at RM3.07 billion. Gainers beat decliners 491 to 360 while 294 stocks were unchanged.

In a recent report, RHB Research said it was maintaining its underweight call on the semiconductior sector. It also kept its fair value for Notion at RM1.68 and JCY at 64 sen.

It said although November chip sales continued to rise 14.4% on-year to US$26 billion, the pace of growth continued to fall after registering 19.8% on-year in October and peaking 58.4% on-year in March.

"Nevertheless, we believe this is tandem as chip players look to cut back production to optimise stock levels as inventory levels have been rising due to combination of weaker-than-expected demand as well as post-festive seasons," RHB Research said.

Standard and Poor's: 2011 positive for China, HK,

KUALA LUMPUR: Standard and Poor's Equity Research expects 2011 to be positive for China and Hong Kong, but it was concerned about the risks of rising interest rates and inflation.

The research house said on Friday, Jan 7 that rising interest rates and inflation would remain as the main hurdles for equity markets.

In a recently published 2011 China and Hong Kong outlook report, S&P Equity Research anticipated that the relatively low valuations of China and Hong Kong equities and excess liquidity will lead to a positive performance outlook.

"Hong Kong and China equity markets are still attractive in terms of valuations with earnings per share growth estimates of 15% to 20%," said Lorraine Tan, Director of Equity Research for Asia, Standard & Poor's.

"We believe cyclical sectors should remain the preferred investment themes as global economic growth is far from peaking, and there is room for equities to gain favor from investors particularly on rotation out of fixed income into stocks."

S&P Equity Research said it was overweight on energy, bank and industrials and underweight on consumer staples, telecommunication services and utilities, given that growth plays are likely to outperform amid the global economic pick-up.

Rising global consumption is likely to drive demand for commodities and related transport services, while bank lending activities should remain accommodative.

There are however limited fresh positive drivers for defensive stocks in 2011.

Tan added the global economic recovery should enable companies to post stronger revenues and provide a buffer to rising costs and interest expenses.

"Our 2011 target for the Hang Seng Index is 29,000 and we expect investor confidence to rise gradually as the global economy recovers and risk appetite increases. However, inflation and the prospects of rising interest rates remain key concerns for investors," she said.

Mild bounce in glove makers

KUALA LUMPUR: Glove manufacturers were among the major gainers in late afternoon trade on Friday, Jan 7 as investors saw value in the counters which had been hammered down recently.

At 3.37pm, Hartalega was up 24 sen to RM5.66, Supermax 23 sen to RM4.47 and Aventa 16 sen to RM2.64.

The FBM KLCI rose 2.79 points to 1,571.16. Turnover was 2.01 billion shares valued at RM2.38 billion. Gainers beat losers 490 to 326 while 299 stocks were unchanged.

Glove makers fell sharply towards the later part of 2010 on concerns about oversupply, weaker demand and soaring latex prices.

However value has started to emerge in some of companies. Among them was Adventa, where analysts had recently rated it an OUTPERFORM given the potential re-rating catalysts of 1) higher OBM glove sales, 2) establishment of own distribution channels, and 3) better product mix from higher nitrile sales.

Samsung Elec to invest $23 bln in green tech by 2020 -official

SEOUL: Samsung Electronics Co Ltd <005930.KS>, the world's No.1 maker of memory chips and flat screens, will invest $23 billion on environmentally-friendly businesses by 2020, the company's television division chief Yoon Boo-keun said in a statement on Friday, Jan 7.

"Samsung is creating a greener future by actively seeking out greener energy sources such as solar power to replace gas and petroleum," the statement quoted Yoon as saying in a key note speech at the Consumer Electronics Show in Las Vegas.

South Korea, Asia's fourth-largest economy and heavily dependent on oil and gas imports, set a voluntary 2020 emissions target in 2009 of a 30 percent reduction from its forecast under a business-as-usual scenario.

The government said it would invest 107 trillion won ($95.27 billion), or 2 percent of annual GDP, in environment-related industries through 2013.

Samsung Electronics also said in 2009 that it would invest 5.4 trillion won in green research and development, and facilities to make itself a leading eco-friendly company by 2013.- Reuters

UMC posts weaker sales; fresh demand seen

TAIPEI: Taiwan's UMC, the world's No.2 contract chipmaker, saw its third month-on-month fall in sales on Friday, Jan 7 after a Christmas buying spree came to an end, while a stronger Taiwan dollar hurt the firm's margins.

However, analysts say UMC and sector leader TSMC are set to ride a consumer boom this year and boost output for an array of new electronics products including smartphones and tablet computers that require more powerful chips.

United Microelectronics Corp (UMC) needs to beef up efforts to churn out more microchips using advanced process TECHNOLOGY [] to catch up with TSMC and stay competitive.

"The Taiwan dollar certainly has some impact on its sales but I would say things still look alright for foundries, at least for the first half of this year," said Bevan Yeh, a fund manager at Prudential Financial Securities Investment Trust.

The Taiwan dollar hit a 13-year high recently, though analysts say big exporters who have taken hedging measures should see limited currency impact.

"Clients will place new orders for new products, so chip demand will grow but we still prefer the industry's leader," said Yeh, who owns TSMC shares in his portfolios.

UMC, which counts Taiwan's Mediatek Inc and U.S.-based Xilinx Inc among its major clients, had sales of T$10.178 billion ($347 million) in December, the company said in a statement.

That was 9.5 percent higher than the same month a year ago but down 2.5 percent from November, it said, without giving other details.

TSMC and UMC are set to post fourth-quarter earnings and give guidance for the first quarter of 2011 near the end of January. TSMC's December sales are due out on Monday.

UMC's sales came after the Taipei stock market closed on Friday. UMC shares were flat as investors have largely priced in its sales figures, which matched analysts' expectations.

TSMC rose 2.1 percent, against the main TAIEX's 1.13 percent drop. TSMC shares hit their highest level in about a decade in late December, while UMC shares reached a near eight-month high in late December.

For the whole 2010, UMC's sales totalled T$120.43 billion, up 36 percent from 2009, the company said. - Reuters

MK Land to use RM130m from land sale for infra, development costs, working capital

KUALA LUMPUR: MK LAND HOLDINGS BHD [] plans to use the RM130 million from the proposed sale of two pieces of land in Sungei Buloh, Selangor for infrastructure, development costs and general working capital.

In its reply to a query from Bursa Malaysia Securities on Friday, Jan 7, it said RM46 million would be for infrastructure costs, RM50 million as development costs for current and future projects and RM34 million as general working capital.

The property developer had on Jan 3 announced it was selling two plots of leasehold land in Sungei Buloh,'' to Foster Estate Sdn Bhd for RM130 milion cash.

The first plot of 18.54 acres would be disposed of for RM100.78 million and the second plot of 8.32 acres of land for RM29.21 million.

MK Land had then said it was disposing of the plots of land to unlock the value of the land which it had no immediate plans to develop.

FBM KLCI rebounds at mid-day

KUALA LUMPUR: The FBM KLCI reversed its losses from early trade on Friday, Jan 7 and clawed back into the black at the mid-day break, lifted by gains at key blue chips including banks and telecommunications stocks.

Regional markets also pared down their losses after the Shanghai Composite Index rose more than 1.3% on improved business confidence.

China's business confidence index rose to 137 in the fourth quarter of 2010 from 135.9 in the third quarter, the National Bureau of Statistics said on Friday, according to Reuters.

The index has been climbing steadily after hitting an eight-year low of 94.6 in the last quarter of 2008 in the wake of the global financial crisis.

The business climate index, a separate measure of the state of various industries and their outlooks, edged up to 138 in the fourth quarter from 137.9 in the previous quarter, the agency said in a statement on its website, said Reuters.

On Bursa Malaysia, the FBM KLCI gained 0.15% or 2.39 points to 1,570.76 at 12.30pm. Gainers led losers by 462 to 307, while 287 counters traded unchanged. Volume was 1.53 billion shares valued at RM1.69 billion.

The ringgit strengthened 0.02% to 3.0690 versus the US dollar; crude palm oil futures for the third month delivery fell RM72 per tonne to RM3,761, crude oil rose 40 cents per barrel to US$88.78 while gold fell 85 cents per troy ounce to US$1,370.75.

At the regional markets, the Shanghai Composite Index rose 1.37% to 2,862.86, Hong Kong's Hang Seng Index was up 0.16% to 23,824.94, Japan's Nikkei 225 edged up 0.01% to 10,531.29, and the South Korean Kospi Index added 0.21% to 2,082.06.

However, Taiwan's Taiex fell 1.19% to 8,777.75 and Singapore's Straits Times Index lost 0.42% to 3,265.98.

Among the gainers on Bursa Malaysia this morning, Nestle was up 30 sen to RM44.38, Ekovest up 23 sen to RM2.92, MMC Corp added 18 sen to RM3.10, GAB was up 16 sen to RM10.32, Parkson gained 15 sen to RM5.88, Hartalega added 14 sen to RM5.56 while Notion rose 13 sen to RM1.83.

Telecommunications stocks that rose today were Telekom that rose 19 sen to RM3.75, DiGi added 10 sen to RM25.10 and Axiata was up eight sen to RM4.92.

Among the banking stocks, Maybank rose two sen to RM9.03, while Public Bank and AMMB added four sen each to RM13.50 and RM7.07.

PLANTATION []-related stocks slipped on account of the decline in CPO prices, with Batu Kawan down 20 sen to RM17.02, Boustead down six sen to RM5.61, KLK lost two sen to RM22.60 while Sime Darby, CBIP and Kulim fell four sen each to RM9.36, RM4.45 and RM13.66 respectively.

Other decliners included Far East Corp, Sindora, LPI Capital, Tenaga and TDM.

The actives included SAAG, Talam, Hubline, Ho Wah Genting, Karambunai, IRCB, Mulpha and Ramunia.

MARC upgrades Tenaga RM3b debt notes

KUALA LUMPUR: Malaysian Rating Corporation Bhd has upgraded TENAGA NASIONAL BHD []'s (TNB) RM3 billion debt notes and the outlook is stable.

MARC said on Friday, Jan 7 the upgrade of TNB's rating reflects MARC's revised assumption of very strong government support for TNB's obligations based on its role in the national energy policy and its economic importance as the country's principal energy supplier.

The rating agency upgraded TNB' issuer and Islamic debt ratings to AAA and AAA ID respectively from AA+ and AA+ ID.

The rating action affects the following outstanding issues: i) RM1.0 billion Al-Bai Bithaman Ajil Notes Issuance Facility; and ii) RM2.0 billion Al-Bai' Bithaman Ajil Bonds.

To recap, MARC said TNB is responsible for Malaysia's transmission grid and accounts for 47.4% of the country's generation output.

TNB remains a government-controlled entity; it is publicly regulated and the government's golden share in TNB gives it veto power in major decisions of the company.

'MARC believes that the government has strong incentives to ensure the long-term financial sustainability of TNB and continues to exhibit the requisite commitment, notwithstanding the observed volatility in its financial performance stemming from fluctuations in fuel prices,' it said.

FBM KLCI slips at mid-morning

KUALA LUMPUR: The FBM KLCI slipped into negative territory in early trade on Friday, in line with the overall tepid investor sentiment at key regional markets that declined after the weaker overnight close at Wall Street.

Japan's Nikkei average dipped 0.2% on Friday after hitting an 8-'' month high the previous day, as investors held off buying ahead of key US jobs data while a drop in commodity prices weighed on Inpex and other resources shares.

Also souring sentiment was a drop in Wall Street stocks hit by soft U.S. retail sales and a sharp rise in the dollar, which left investors edgy before December's US employment report due later on Friday.

At mid-morning, the FBM KLCI shed 0.49 point to 1,567.88, weighed by losses including at CIMB, Petronas Gas and PLANTATION []-related stocks.

Gainers edged losers by 285 to 256, while 242 counters traded unchanged. Volume was 517.97 million shares valued at RM478.89 million.

At the regional markets, Japan's Nikkei 225 slipped 0.15% to 10,514.37, the Shanghai Composite Index lost 0.29% to 2,816.09, Singapore's Straits Times Index fell 0.31% to 3,269.38, Taiwan's Taiex fell 0.11% to 8,873.48, South Korea's Kospi shed 0.01% to 2,077.35 while Hong Kong's Hang Seng Index opened 0.3% lower at 23,709.47.

On Bursa Malaysia, CIMB fell seven sen to RM8.89, PetGas and LPI down six sen each to RM11.22 and RM14.12 Among the plantation-related counters, Sarawak Oil Palms and Boustead fell seven sen each to RM3.91 and RM5.60, United Malacca and Tradewinds lost six sen each to RM7.20 and RM6.75, while KLK fell four sen to RM22.58.

Water-related stocks advanced on the back of the fresh takeover offer for four water concessionaires from the Selangor state government of more than RM9 billion.

Puncak gained 13 sen to RM2.55, JAKS was up 3.5 sen to 79 sen while KHSB added three sen to 47 sen.

The top gainer in early trade was DFZ Capital that rose 29 sen to RM3.79; other gainers included Digi, Nestle, Mentiga, UEM Land and Shell.

SAAG was the most actively traded counter with 53.9 million shares done. The stock added one sen to 10 sen. Other actives included Hubline, Karambunai, JAKS, Ramunia and Time.

Facebook documents reveal strong profits-source

NEW YORK/SAN FRANCISCO: Facebook is generating profits at a faster-than-expected rate, and will likely attract so many investors this year that it will have to disclose financial data similar to a publicly traded company by April 2012, according to a document distributed by Goldman Sachs.

Reuters reported on Thursday, Jan 6 The move could set the stage for a much-anticipated Facebook initial public offering in 2012, though there is no guarantee that the social networking company would choose to sell shares to the public simply because it is required to open its books to the public.

Facebook, the world's No. 1 Internet social network, earned $355 million in net income in the first nine months of 2010 on revenue of $1.2 billion, according to a source who received the documents that Goldman Sachs provided to its clients on Thursday.

Goldman began hand-delivering copies of the 101-page private placement memorandum for a $1.5 billion Facebook offering to its wealthy customers a little after lunchtime in New York, according to the source.

The Goldman customer said he received a separate six-page financial statement containing information on the social networking company.

The document provides some of the most detailed financial information yet about Facebook, which Goldman recently valued at $50 billion in a separate, $450 million funding.

That valuation is high, but not outrageous based on the glimpse into the company's financial performance and the growth that it implies, said Ryan Jacob, of the Jacob Internet Fund.

"It just shows you that these businesses can generate 30 percent to 40 percent, potentially, operating margins," he said. "They probably did at least $500 million in net income in 2010."

Wedbush Securities analyst Lou Kerner, who owns Facebook shares, said, "The revenue kind of are in line with our expectations."

"The surprise was on the profitability. I think it highlights that Facebook is likely to have margins that are going to exceed Google's margins," he said.

The memo said Facebook is likely to have more than 500 shareholders this year, according to another person who reviewed the documents, and that the company may begin filing public reports of its financial performance by April 2012.

THE BIG 500

United States securities regulations require companies with more than 499 shareholders to disclose financial information.

Facebook, which was founded in a Harvard dorm room in 2004, has more than 500 million users and is challenging big Web businesses like Google Inc and Yahoo Inc for users' time online and for advertising dollars.

"This year you could make the case that they're probably going to be north of $800 million and probably close to a billion," said Jacob of the Jacob Internet Fund in reference to the company's net income.

The financial statements circulated on Thursday were not audited and offered little detail about how Facebook generates it revenue, said the Goldman customer, who did not want to be identified because he had signed a non-disclosure agreement.

Investors are increasingly eager to buy shares of Facebook and other fast-growing Internet social networking companies on private exchanges.

The Goldman memo notes that the firm has "received inquiries" from regulators about the private offering of Facebook shares, according to the New York Times.

Facebook declined to comment on the report.

Goldman customers seeking to buy shares in the privately held Facebook will invest money in a newly formed Delaware entity called FBDC Investors LP, according to the Goldman customer.

Corporate records show that FBDC Investors was incorporated in Delaware on Jan. 5.

Goldman customers have until Friday to commit to investing in the new entity and until next Tuesday to wire money to the Wall Street firm.

Goldman, which is investing $450 million of its own capital in Facebook, is raising at least $1.5 billion from its wealthy customers through the limited-time offering, sources have said. - Reuters

AmResearch maintains Buy on Sime Darby, FV RM10.60

KUALA LUMPUR: AmResearch reiterated its Buy call on SIME DARBY BHD [] with a higher fair value of RM10.60 ashare, pegged to a 10% discount to its sum-of-parts value of RM11.78 a share.

The research house said on Friday, Jan 7 its fair value implies a CY11F PE of 17x - at parity to its three-year average.

Devastating floods in the north-eastern Australian state of Queensland have wreaked havoc on coal and commodity producers with production losses estimated at up to A$2 billion.

Sime's equipment sales to Australia can only be delivered in mid-2011. We have halved FY11F industrial revenue for Australia to RM2.4bil and cut its EBIT margin from 12.5% to 5%.

'But we have also raised our average CPO price assumptions by RM200/tonne to RM3,000/tonne for FY11F and RM3,200/tonne for FY12F-FY13F. The stock currently trades at an attractive CY11F PE of 16x, below its three-year average of 17x,' it said.

Goldman Sachs Intl ups My EG stake

KUALA LUMPUR: Goldman Sachs International acquired two million shares of MY E.G. SERVICES BHD [] shares on Dec 30, a filing to Bursa Malaysia showed.

After the acquisition, its shareholding in the company increased to 7.09% or 42.6 million shares.

The company develops and implements e-government services and provides other related services for the e-government initiative.

My E.G. serves as a community-based information and services centre for the public to access information, execute transactions and interact with the government and government-related institutions.

The share price closed at 79.5 sen on Dec 30.

OSK Research: Selangor govt RM9b water offer may be rejected

KUALA LUMPUR: OSK Research said the Selangor government's offer price of more than RM9 billion to take over the water assets may be rejected by the water concessionaires.

It said on Friday, Jan 9 that gauging from the offer price of over RM9 billion, this pricing comes close but is still lower than SPLASH's previous offer to consolidate the state's water assets at RM10.75 billion.

'This makes the latest offer price less attractive. Although the offer did not detail the Selangor government's valuation approach, we reckon that it is likely to have been based on book value,' it said.

OSK Research said despite claims that the offer has been made, it has yet to see any official announcements on Bursa Malaysia.

'Nonetheless, should an offer be based on the above-mentioned points, we reckon that water concessionaires are likely to reject the offer on the grounds that the crucial issues are not being addressed. We expect more details to be unveiled once an official announcement is made on Bursa.

'Thus far, we maintain our OVERWEIGHT recommendation on the water sector as well as Puncak's target price at RM3.85, for exposure to the Selangor state water asset consolidation. This target price is premised on our year-end forecast for Puncak's FY10 BV per share,' it said.

HDBSVR: Bulls may digest recent gains

KUALA LUMPUR: Hwang DBS Vickers Research said the bulls may want to digest their recent gains after riding on a 49.5-point or 3.3% increase in the FBM KLCI over the past four days.

In its market outlook on Friday, Jan 7 it said if so, then the benchmark index could show a marginally downward bias performance as it faces an immediate resistance barrier of 1,575 ahead.

This was also the case on Wall Street last night. Major U.S. equity indices were listless to close broadly mixed (of between -0.2% and +0.3%) amid profit-taking activity.

Hwang DBS Vickers Research said nonetheless, there will still be plenty of action for some counters on our local bourse today. Maybank's share price may get a lift following its acquisition of Singapore-listed stockbroker Kim Eng, which would immediately expand the group's presence in the region.

It said in addition, listed companies ' such as Puncak Niaga and Gamuda ' with interest in the water business in Selangor will likely come under scrutiny too after the state government made a fresh offer to buy over the water concessionaires for a total of RM9 billion.

OSK Research has Buy on SP Setia, TP RM7.23

KUALA LUMPUR: OSK Research said SP Setia's share price looks set to surpass its target price of RM6.58 and test the post-Asian crisis high of 3.1 times P/NTA, an indication that investors concur with its robust sector outlook.

The research house said on Friday, Jan 7 if the impending boom is indeed bigger than the 2007 upcycle, and given the stock's currently low foreign shareholding of 25% vs'' molre than 40% in 2007, then its current target valuation of 2.8x CY11 P/NTA appears conservative.

'Hence, we re-peg SP Setia to a higher P/NTA multiple of 3.1x, i.e. at its peak valuation in 2007, and arrive at a higher TP of RM7.23. Maintain as top sector BUY,' it said.

HDBSVR: Maintains Buy on Maybank, TP RM10.80

KUALA LUMPUR: Hwang DBS Vickers Research is maintaining its BUY rating on MALAYAN BANKING BHD [] and a Target Price of RM10.80.

The research house said on Friday, Jan 7 that it likes Maybank's proposed acquisition of Singapore-listed stockbroking firm Kim Eng Holdings Ltd as it will accelerate Maybank's regional growth prospects in brokerage and investment advisory

HDBSVR said Maybank is paying S$3.10/share (1.9x BV) for Kim Eng; 100% stake would cost RM4.3bn

'Maintain Buy rating and RM10.80 TP; Maybank is our high conviction pick,' it said.

Water-related stocks advance on Selangor govt RM9b offer

KUALA LUMPUR: Water related counters advanced in early trade on Friday, Jan 7 after the Selangor state government has made a fresh offer of more than RM9 billion to take over the four water concessionaires in the state.

At 9.03am, pipe-maker JAKS Resources rose 3.5 sen to 79 sen while Selangor-government controlled KHSB added four sen to 48 sen.

Puncak was among the gainers, rising 28 sen to RM2.70 while KPS added 10 sen to RM1.48.

However, the FBM KLCI fell 1.6 points to 1,566.77 on mild profit taking after four straight days of gains. Turnover was 62.5 million shares valued at RM56.68 million.

The Selangor water concessionaires including Puncak Niaga and Gamuda would see trading interest after the Selangor state government has made a fresh offer of more than RM9 billion to take over the four water concessionaires in the state.

Maybank surges to RM9.24 on Kim Eng takeover

KUALA LUMPUR: Shares of MALAYAN BANKING BHD [] surged to a high of RM9.24 in early trade on Friday, Jan 7 when it resumed trading after its proposed acquisition of Singapore-listed stockbroking firm Kim Eng Holdings Ltd for about RM4.3 billion.

At 9.11am, it was unchanged at RM9.01 after surging to RM9.24. Its earlier low was RM9.

The FBM KLCI shed 3.54 points to 1,564.83 on mild profit taking. Turnover was 126.42 million shares valued at RM125.63 million. There were 165 gainers, 111 losers and 190 stocks unchanged.

Hwang DBS Vickers Research is maintaining its BUY rating on Maybank and a Target Price of RM10.80.

The research house said it likes Maybank's proposed acquisition of Kim Eng as it will accelerate Maybank's regional growth prospects in brokerage and investment advisory

HDBSVR said Maybank is paying S$3.10/share (1.9x BV) for Kim Eng; 100% stake would cost RM4.3 billion.

'Maintain Buy rating and RM10.80 TP; Maybank is our high conviction pick,' it said.

Retailers hold down stocks ahead of jobs data

NEW YORK: Stocks slipped on Thursday, Jan 6 as soft retail sales and a sharp rise in the dollar left investors edgy a day before December's U.S. employment report.

Given a rise of about 8 percent in the S&P 500 since the start of December, investors could be looking for an excuse to sell stocks if the jobs report falls short of forecasts that were raised after Wednesday's strong private-sector payroll report.

"If tomorrow's payroll numbers don't live up to expectations, that could create the correction that some have been predicting," said Paul Radeke, vice president at Minneapolis-based KDV Wealth Management.

Investors expect a gain of 175,000 in overall non-farm payrolls in December and a decline in the unemployment rate to 9.7 percent from 9.8 percent.

Several big retailers missed estimates in their December comparable sales, news that weighed on consumer shares. Target Corp (TGT.N) fell 6.8 percent to $54.91 and Gap Inc (GPS.N) was 6.9 percent lower at $20.70.

The S&P retail index .RLX lost 1.6 percent while the S&P consumer discretionary sector .GSPD fell 0.7 percent.

The weakness "was both surprising and disturbing," said Walter Todd, chief investment officer at Greenwood Capital Associates in Greenwood, South Carolina. "It makes me think it had more to do with weather than fundamentals."

The U.S. dollar rose 0.7 percent, helping send crude prices down 2.2 percent. Oilfield services company Halliburton Co (HAL.N) dropped 3 percent to $38.22 while U.S. Steel Corp (X.N) shed 2.5 percent to $59.06.

"Demand for commodities should continue to improve, but in the short term there's a negative correlation between the dollar and commodities," Todd said. "That's hard to escape on a day-to-day basis."

The Dow Jones industrial average .DJI was down 25.65 points, or 0.22 percent, at 11,697.24. The Standard & Poor's 500 Index .SPX was down 2.71 points, or 0.21 percent, at 1,273.85. The Nasdaq Composite Index .IXIC was up 7.69 points, or 0.28 percent, at 2,709.89.

The Nasdaq was buoyed by Nvidia (NVDA.O), which surged 14 percent to $19.33 on optimism over a new mobile chip.

Also among Nasdaq gainers was Microsoft Corp (MSFT.O), which rose 2.9 percent to $28.82 after it took a step away from its alliance with Intel Corp (INTC.O) to team up with Britain's ARM Holdings (ARM.L) in the tablet and smart phone arena. Intel fell 0.8 percent to $20.77.

Telecommunications shares were among top drags on the Dow, with AT&T (T.N) down 1.4 percent at $29.15 and Verizon Communications (VZ.N) off 2.6 percent to $36.23.

New jobless claims rose more than expected in the last week, though the four-week average dropped to its lowest in more than 2 years.

About three stocks fell for every two that rose on the New York Stock Exchange while on the Nasdaq about five stocks fell for every four that rose.

About 8.39 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 8.47 billion. - Reuters

GLOBAL MARKETS-Dollar rises, stocks slip before US jobs data

NEW YORK: The euro fell to a five-week low against the dollar on Thursday, Jan 6 on revived worries about the euro zone's sovereign debt crisis, while stocks eased on softer retail sales data before a U.S. employment report expected to give direction to markets.

Commodity prices' decline, including oil, helped the inflation-wary U.S. government bond market.

U.S. stock indices fell as major U.S. retailers missed Wall Street estimates for December sales after a post-Christmas blizzard slowed a two-month shopping spree, driving down consumer shares.

Expectations that Friday's U.S. non-farm payrolls will show a 175,000 gain in December magnified the dollar's strength against the euro but left equity investors edgy.

The Dow Jones industrial average was down 25.58 points, or 0.22 percent, at 11,697.31. The Standard & Poor's 500 Index was down 2.71 points, or 0.21 percent, at 1,273.85. The Nasdaq Composite Index was up 7.69 points, or 0.28 percent, at 2,709.89.

"The market has just been on a tear ... and a lot of investors are probably sitting on their hands waiting for the (jobs) report tomorrow," said Don Wordell, portfolio manager of RidgeWorth MidCap Value Fund in Orlando, Florida.

"After the report on Wednesday, I would say the market probably needs to see a private employment number close to 200,000 and the overall number better be up that high too. If it's materially below that, I think that would be a reason for the market to sell off."

The ADP Employer Services survey, which showed private employers added 297,000 jobs last month, raised expectations about Friday's broader employment report from the government.

Some analysts are expecting employment gains of as much as 500,000.

The front month futures contract for the Nikkei 225 stock index trading in Chicago fell 20 points to 10,520.

World stocks as measured by MSCI dipped 0.2 percent. Emerging markets stocks were down 0.5 percent on fears that record high food prices could stoke inflation, protectionism and unrest in key emerging economies.

The FTSEurofirst 300 index of top European shares finished up 0.4 percent at 1,147.23 points after touching 1,154.10, the highest since mid-September 2008.

Spreads between peripheral euro zone government bond yields and benchmark German debt widened as investors worried about fresh supply next week from the region's higher-yielding issuers.

Wider spreads were driven by a rise in Portuguese debt yields. Debt auctions in Spain and Italy are also scheduled for next week.

"It's a continuing concern about the refinancing risk for euro zone countries in the next few weeks," said Samarjit Shankar, managing director of global foreign exchange strategy at BNY Mellon in Boston.

"In general, the euro is suffering from some fundamental concerns about the sustainability of the currency itself in terms of the sovereign debt crisis."

The euro fell to $1.2997 on trading platform EBS, its weakest level in five weeks. It last traded down 0.99 percent at $1.3008.

The dollar index was up 0.71 percent at 80.826.

The dollar's rise reverberated throughout the commodities market. U.S. light sweet crude oil futures settled down 2.13 percent at $88.38 per barrel, and spot gold prices fell 0.4 percent to $1371.70.

U.S. Treasury prices gained. The benchmark 10-year U.S. Treasury note was up 16/32, with the yield at 3.401 percent. The 2-year U.S. Treasury note was up 2/32, with the yield at 0.6767 percent. The 30-year U.S. Treasury bond was up 13/32, with the yield at 4.5141 percent. - Reuters

Asia shares to fall on weak U.S. stocks

TOKYO: Asian stocks are expected to fall on Friday, Jan 7 after U.S. stocks weakened the day before as soft retail sales and a sharp rise in the dollar left investors edgy before December's U.S. employment report.

The main Wall Street indexes were mixed in a narrow range, with the Dow Jones industrial average and the Standard & Poor's 500 Index both losing 0.2 percent, while the Nasdaq Composite Index was up 0.3 percent.

Given a rise of about 8 percent in the S&P 500 since the start of December, investors could be looking for an excuse to sell stocks if the jobs report on Friday falls short of forecasts that were raised after Wednesday's strong private-sector payroll report.

Commodity stocks will likely be hit by oil prices, which tumbled more than 2 percent on Thursday to below $89 a barrel as the stronger greenback and weaker U.S. equities deterred buyers.

Gold fell for a fourth consecutive session on Thursday as the dollar rose on signs the U.S. economic outlook was improving, but technical buying lifted prices off their lows.

British shares weakened 0.4 percent, while European stocks lost 0.42 percent.

Asian stocks listed on Wall Street lost 0.24 percent.

The euro slumped to a five-week low against the dollar on Thursday, breaching a key support level, with more losses seen if the upcoming jobs data proves stronger than expected.

Japanese markets are set to drop a tad, with Nikkei futures traded in Chicago closing at 10,520, compared with 10,530 in Osaka.

Australian stocks are expected to fall hit by lower commodity prices, with share price index futures falling 0.1 percent to 4707.0, lower than the close of the underlying S&P/ASX 200 index at 4724.983. - Reuters

#Stocks to watch:* Maybank, water concessionaires, Priceworth, TM

KUALA LUMPUR: MALAYAN BANKING BHD [] (Maybank) will be in focus when it resumes trading on Friday, Jan 7 after it proposed to expand its regional footprint by acquiring Singapore-listed stockbroking firm Kim Eng Holdings Ltd. The total estimated purchase consideration for 100% of Kim Eng would be S$1.79 billion (RM4.26 billion).

Overnight, Wall Street Stocks slipped on Thursday, Jan 6 as soft retail sales and a sharp rise in the dollar left investors edgy a day before December's U.S. employment report, according to Reuters.

Given a rise of about 8 percent in the S&P 500 since the start of December, investors could be looking for an excuse to sell stocks if the jobs report falls short of forecasts that were raised after Wednesday's strong private-sector payroll report.

The Dow Jones industrial average was down 25.65 points, or 0.22 percent, at 11,697.24. The Standard & Poor's 500 Index was down 2.71 points, or 0.21 percent, at 1,273.85. The Nasdaq Composite Index was up 7.69 points, or 0.28 percent, at 2,709.89.

At Bursa Malaysia, stocks to watch include Selangor water concessionaires including Puncak Niaga and GAMUDA BHD [], Priceworth and TELEKOM MALAYSIA BHD [].

To recap, Maybank president and chief executive officer Datuk Seri Abdul

Wahid Omar states the bank has no plans for any rights issuance to fund its acquisition of Kim Eng Holdings Ltd.

He said Maybank has ample financial flexibity including sufficient capital base to absorb the transaction.

AmResearch said it believes the acquisition of Kim Eng will reduce the upside potential to Maybank's dividend payout.

'We are maintaining our HOLD rating on the stock. This is based on an unchanged fair value of RM9.60, based on our calendarised ROE estimate of 15.0%, and fair P/BV ratio is 2.08 times.

'At RM4.2 billion, this works out to a P/BV of 1.91 times based on Kim Eng's end-September 2010's shareholders' funds of S$937.6 million and 26.3 times annualised earnings based on Kim Eng's net profit of S$50.2 million for 9M10. The P/BV is within the range of investment bank/ stockbroking transactions in the past,' AmResearch said.

The Selangor water concessionaires including Puncak Niaga and Gamuda would see trading interest after the Selangor state government has made a fresh offer of more than RM9 billion to take over the four water concessionaires in the state.

Meanwhile, Priceworth said it is in final stage of negotiations to manage two timber concessions in Papua New Guinea and the Solomon Islands. The negotiations involve a combined land size of more than 100,000 hectares.

Telekom Malaysia expects the internal investigation into alleged payments received by its staff to be completed within one month.

TM said this timeframe was based on the board sub-committee (BSC) of the board audit committee's inaugural meeting on Jan 3.

Maybank acquisition of Kim Eng in line with regional strategy

KUALA LUMPUR: Standard & Poor's Ratings Services said MALAYAN BANKING BHD []'s possible acquisition of Kim Eng Holdings Ltd was in line with Maybank's plan to be a leading regional financial services provider in Southeast Asia.

The ratings agency said on Thursday, Jan 6 its its ratings on Maybank (A-/Stable/A-2) were not affected by the bank's possible acquisition of Kim Eng.

'We consider the proposed acquisition to be in line with the bank's strategy of becoming a leading regional financial services provider in Southeast Asia.

'The transaction would combine Maybank's commercial banking operations with Kim Eng's stock broking presence in the region.

However, S&P said the proposed transaction could have a material impact on Maybank's capitalisation, putting pressure on the bank's 'a-' stand-alone credit profile (SACP).

S&P said if it lowered the SACP by a notch, the counterparty credit rating would likely remain 'A-' to reflect our expectation of extraordinary government support.

'In our view, Maybank is a highly important institution to Malaysia (foreign currency A-/Stable/A-2; local-currency A+/Stable/A-1; ASEAN scale axAAA/axA-1+),' it said.

''

Fourth straight day of record highs for FBM KLCI

KUALA LUMPUR: The FBM KLCI clawed back to recover lost ground and closed at a fresh record high of 1,568.37 after slipping into negative territory on Thursday, Jan 6.

The FBM KLCI added 2.20 points to 1,568.37, lifted by gains in index-linked stocks including Sime Darby, Public Bank, Digi and Gamuda.'' PLANTATION [] and glove-makers also advanced. The index had earlier climbed to an intra-day fresh high of 1,576 in the morning before some mild profit taking capped the gains.

Advancers led decliners by 570 to 295, while 284 counters traded unchanged. Volume was 2.20 billion shares valued at RM3.14 billion.

At the regional markets, Japan's Nikkei 225 jumped 1.44% to 10,529.76, Hong Kong's Hang Seng Index added 0.12% to 23,786.30, Taiwan's Taiex rose 0.42% to 8,883/21, Singapore's Straits Times Index gained 0.78% to 3,279.70 while the Shanghai Composite Index lost 0.51% to 2,824.20 and South Korea's Kospi fell 0.24% to 2,077.61.

Among the gainers on Bursa Malaysia, Sime Darby rose two sen to RM9.40, Public Bank added four sen to RM13.46, DiGi up 10 sen to RM25, Gamuda rose 13 sen to RM4.20 while Petronas Chemicals added 12 sen to RM5.29.

Plantation-related stocks also advance, with Kulim up 46 sen to RM13.70, CBIP 29 sen to RM4.49, Batu Kawam 26 sen to RM 17.22, Hap Seng 23 sen to RM7.36 and Boustead 21 sen to RM5.67.

Other gainers included UEM Land, Affin, Masterskill while glove makers Supermax and Top Glove also advanced.

Newly-listed China-based sports shoe manufacturer Maxwell International was among the actively traded counters with 29.1 million shares done. The stock added 2.5 sen to 56.5 sen.

SAAG was the most actively traded counter with 109.2 million shares done. The stock rose half a sen to 9 sen.'' Other actives included Ramunia, Scomi, Petronas Chemicals, Time, Hubline and Olympia.

Decliners included CIMB, RHB Capital, Bintulu Port, United Plantations, AMMB, Nomad, Ekovest and PacificMas.

Meanwhile, trading in Maybank shares, which was halted from 9am-5pm, will resume at 9am on Friday, Jan 7.

The lender is acquiring a strategic 44.6% stake in Kim Eng Holdings Ltd at S$3.10 per share, amounting to S$798 million (RM1.9 billion) with a view to take over the Singapore'based broking firm.

Hap Seng Cons to be suspend Friday for major corporate exercise

KUALA LUMPUR: Trading in the securities of HAP SENG CONSOLIDATED BHD [] will be suspended on Friday, Jan 7 for one day.

A Bursa Malaysia circular said on Thursday, Jan 6 the company had sought for the suspension 'pending an announcement on Friday of a major corporate exercise'.

Hap Seng's share price closed up 23 sen to RM7.36 with 2.98 million shares done.

Telekom Malaysia: Internal probe ready in one month

KUALA LUMPUR: TELEKOM MALAYSIA BHD [] expects the internal investigation into alleged payments received by its staff to be completed within one month.

TM said on Thursday, Jan 6 this timeframe was based on the board sub-committee (BSC) of the board audit committee's inaugural meeting on Jan 3.

'Whilst the BSC endeavours to expedite the internal investigation to fulfil the requirements of transparency and public interest, full passage of time should be allowed in order to complete a proper investigation,' it said in response to a query from Bursa Malaysia Securities.

On Jan 3, TM and Axiata Group Bhd said they had jointly decided to appoint KPMG Corporate Services Sdn Bhd as forensic accountants to assist in an internal probe over alleged payments received by TM staff. Shearn Delamore & Co. was appointed the legal adviser.

TM had said the BSC would conduct an independent and comprehensive internal investigation into the alleged improper payments to TM employees.

The panel was set up following its Dec 29 announcement over the settlement case of Alcatel Lucent with the US Securities and Exchange Commission (SEC) and the Department of Justice (DoJ) that payments had been made to some TM employees.

Reliance Pacific sees 3.76m shares crossed below trading price

KUALA LUMPUR: RELIANCE PACIFIC BHD [] saw 3.76 million of its shares crossed in an off-market deal at an average price of 53 sen on Thursday, Jan 6.

However, the share price in normal market trade was up two sen to 69 sen at 4.03pm. There were 725,900 shares done at prices ranging from 67.5 sen to 70.5 sen.

Reliance Pacific provides'' travel and tour related services and it also manages and operates hotels and resorts in Malaysia and internationally.

FBM KLCI snaps winning streak, but selling well absorbed

KUALA LUMPUR: The FBM KLCI snapped its three-days of gains at the mid-day break on Thursday, Jan 6 on some mild profit taking in line with the generally mixed sentiment at the key regional markets. However, the selling was well absorbed with rotational interest shifting to other counters.

At 12.30pm, the FBM KLCI shed 0.03% or 0.53 point to 1,565.64, weighed by losses at blue chips including CIMB, Tenaga, AMMB, MISC and Petronas Dagangan. Gainers edged losers by 397 to 336, while 304 counters traded unchanged. Volume was 1.17 billion shares valued at RM1.38 billion.

The Nikkei rallied as investors snapped up shares of Japanese exporters after the dollar hit two-week highs against the yen, but markets elsewhere in Asia were more subdued ahead of the influential US non-farm payrolls report, according to Reuters.

The ringgit weakened 0.135 to 3.0735 versus the US dollar; crude palm oil for the third month delivery jumped RM63 per tonne to RM3,846, crude oil slipped two cents per barrel to US$90.28 while gold fell US$2.38 per troy ounce to US$1,375.95.

At the regional markets, Japan's Nikkei 225 rose 1.31% to 10,516.53, Singapore's Straits Times Index added 0.55% to 3,272.24, Hong Kong's Hang Seng edged up 0.02% to 23,763.59 while the Shanghai Composite Index declined 0.24% to 2,831.87, South Korea's Kospi fell 0.23% to 2,077.77 and Taiwan's Taiex lost 0.10% to 8,837.81.

On Bursa Malaysia, trading in the securities of Maybank was halted from 9am for its announcement of a RM4.2 billion bid to acquire Kim Eng Holdings Ltd of Singapore.

Among the major losers, CIMB fell five sen to RM8.95, Tenaga, AMMB and Petronas Dagangan fell 10 sen each to RM6.57, RM7.05 and RM11.90 respectively, and MISC lost seven sen to RM8.40.

Meanwhile, Bintulu Port fell 30 sen to RM6.70, IJM Corp down 14 sen to RM6.29, and United PLANTATION []s lost 12 sen to RM17.

Ramunia was the most active with 40.7 million shares done. The stock added three sen to 61 sen. Other actives included SAAG, Scomi, Olympia, Hubline and Petronas Chemicals.

Newly-listed Maxwell International was also actively traded with 24.9 million shares done. The stock gained three sen to 57 sen.

DFZ Capital, CBIP, UEM Land, Kulim, Masterskill, Batu Kawan, Affin, Cocoaland and LPI Capital were among the gainers.

DFZ rose 43 sen to RM3.89 with 200 shares done, CBIP 32 sen to RM4.52, UEM Land and Kulim 26 sen each to RM2.81 and RM13.50 while Masterskill jumped 24 sento RM2.52.

Airlines bet oil will correct; stay away from hedging

HONG KONG: Top global airlines are staying away from further hedging jet fuel purchases that account for around a third of their costs, betting that a recent surge in oil prices to two-year highs will slow.

Skimping on cover risks a squeeze in earnings for these companies, which typically have razor-thin margins and had just returned to profitability in 2010 after economic turmoil had sapped corporate and consumer demand for air travel.

Two factors are giving airlines pause: they have withstood prices far higher than current levels and the global economy now seems better placed to cope with the surge; and the industry hasn't forgotten Japan Airlines' bankruptcy, triggered by wrong bets on crude prices.

"The risk is if oil prices rise too rapidly beyond a certain level, airlines will be exposed to the price risk and the hedging portfolio will not be effective," said Kelvin Lau, an aviation analyst with Daiwa Institute of Research in Hong Kong.

While there are no available figures on the volume of options being traded, transactions in OTC swaps contracts that are sometimes used by airlines as a betting tool have been falling.

The visible volume of Asian regrade and jet fuel swaps purchased by banks in the last quarter of 2010, when oil prices crossed $90, dipped compared with the same period last year and also versus the three months to July 2008 when prices climbed to a record high of $147 a barrel, Reuters data showed.

"I am not seeing any airline coming out (to hedge) aggressively yet. Many appear quite comfortable with their positions," said Shukor Yusof, aviation analyst with Standard & Poor's Equity Research. "The current oil prices are not too acute for them to rush into the (hedging) market just yet."

''

OTC SWAPS

Some 2.85 million barrels worth of the two contracts changed hands in the October-December period last year, versus 3.55 million during May-July 2008, when Japan Airlines was disastrously betting that oil prices would keep rising.

"It is not the right time to do hedging now," said a Singapore-based distillates trader. "It is too risky unless you expect prices to keep going up." '' Airlines contacted by Reuters supported the view that most are either well covered, or are not in a rush to hedge. '' Delta Air Lines Inc , the world's second-biggest airline behind United Continental measured by passengers carried, said on Dec. 15 that its hedge position for 2011 is about 40 percent, and of that, 40 percent is capped in the low-to-mid $80 a barrel range.

Cathay Pacific , Hong Kong's flagship carrier, is hedging 35 percent to 40 percent for the 2010-11 financial year compared with 50 percent a year earlier, while Malaysia Airlines is covering 33 percent in 2011 compared with 60 percent last year.

A slowdown in hedging will reduce the volume of business of banks that sell options and other derivatives to airlines to cover their bets.

Oil prices hit a 26-month high over $92 a barrel on Dec. 31, closing the year up 15 percent. Strong growth from Asia, especially China, and a rebound in demand from recovering economies elsewhere fueled a four-month rally that pushed crude over the $70-$80 range it held for much of the year. Prices touched a peak of more than $145 a barrel in July 2008.

Jet fuel physical prices were nearly $107.00 a barrel on Tuesday, versus 2010's average at $90.27 a barrel and 2008's average at $121.73 a barrel.

''

LEARNING FROM JAPAN AIRLINES

"Fuel hedging allows airlines to forecast their expenses in the coming 6-12 months. But you can never get it 100% right," said Yusof at Standard & Poor's. "They have been very cautious, and concerned about the potential of losing money when they get it wrong, as seen previously."

Japan Airlines chalked up $441 million in hedging losses, which contributed to a $25 billion bankruptcy earlier in 2010. [ID:nSGE61A03R] [ID:nSGE60U01U].

The hefty losses, in an environment where most airlines were recovering, suggested the carrier had raised the volume of its hedges when oil was at its peak. This left it over-exposed when prices collapsed.

Apart from hedging, another tool often deployed by airlines to cope with higher jet prices is a surcharge on the fuel they levy on tickets. This levy is often adjusted when prices rise.

Singapore Airlines (SIA), the world's second-biggest carrier by market value, in early December raised its fuel surcharge by $3.00 to $25.00 per sector, its first increase since June 2008 after jet fuel prices went above $95.00 a barrel. '' "A fuel surcharge is collected to mitigate the effects of escalating fuel prices," said Nicholas Ionides, vice president of public affairs at SIA.

The airline has also reduced its hedging to about 20 percent, down from 30-40 percent, said Lau at Daiwa Institute of Research.

Thai Airways has also raised its fuel surcharge since late November.

"These actions could help cover the impact of oil prices, so we think our fourth-quarter performance shouldn't be affected by this," said Raj Tanta-Nanta, vice president for investor relations at Thai Airways. - rEUTERS

KWAP sells 4.8m Time dotCom shares

KUALA LUMPUR: Kumpulan Wang Persaraan (KWAP) disposed of 4.81 million shares of TIME DOTCOM BHD [] on Dec 29 and 30 in the open market when the share price rallied following fresh corporate developments including its tie-up with DIGI.COM BHD [] and Astro.

A filing with Bursa Malaysia showed KWAP sold two million Time dotCom shares on Dec 29, 2010 and 2.81 million shares the next day. The share price closed at 75.5 sen amd 77 sen.

The disposals reduced KWAP's shareholding to 7.62% or 192.83 million shares.

In December, DiGi.com Bhd had entered into a wavelength purchase agreement and maintenance and support agreement from Time dotCom's unit TT dotCom Sdn Bhd for RM139 million over 10 years.

TT dotCom Sdn Bhd had entered into principal terms of collaboration with MEASAT Broadcast Network Systems Sdn Bhd (Astro) for the provision of IPTV and Broadband services across the Klang Valley and Penang.

Maxwell International to launch own brand for China, international mkts

KUALA LUMPUR: China-based shoe manufacturer Maxwell International Holdings Bhd plans to launch its own brand for the China and international markets in three to five years.

Its chairman and executive director, Jenny Li Kwai Chun said on Thursday, Jan 6the company had proven its capabilities to produce high quality sports shoes and also ensure timely delivery to their customers.

Li said the company would leverage on its proven quality track record and extensive distribution network of trading houses and brand distributors to launch its own brand.

'We believe that launching our own brand of sports shoes will further strengthen our position in the sports shoe manufacturing industry in China,' she said in a statement issued'' after the listing of the company.

'To attract like-minded investors, the group intends to pay not less than 20% of our net profits in the financial years of 2010 and 2011 as dividends. We believe that this practice would create value for our shareholders,' she added.

Based in Jinjiang or the 'Shoe City' in Fujian province, China, Maxwell International is an original equipment manufacturer (OEM) and original design manufacturer (ODM) global brand names, including Yonex, Diadora, Kappa, Brooks and Fila.

Poh Kong to invest between RM9m to RM15m for 3 new stores

KUALA LUMPUR: POH KONG HOLDINGS BHD [] (PKHB), the country's largest jewellery retail chain store, will open three new outlets this year to bring its total to 100 outlets nationwide.

Its executive chairman and group managing director Datuk Eddie Choon said the group would invest between RM3 million and RM5 million for each of the three new outlets, adding the first outlet for 2011 was expected to be opened within this quarter.

'We will have one outlet in Nilai while we are finalising the location of the other two outlets,' he told a press conference after the AGM on Thursday, Jan 6.

Choon said gold jewellery would continue to be the main revenue contributor while the group also stepped up sales of diamonds and gems through its products.

PKHB posted net profit of RM32.51 million on the back of a revenue of RM561.24 million in FY10.

Maybank plans RM4.2b bid for Kim Eng, reports say

KUALA LUMPUR: MALAYAN BANKING BHD [] is planning to make a RM4.2 billion general offer for Singapore-based brokering firm Kim Eng Holdings Bhd, according to wire reports citing unnamed sources.

Maybank had on Thursday, Jan 6 morning requested for a trading halt in its securities from 9am to 5pm 'pending an announcement of a material corporate proposal'.

Meanwhile, Kim Eng had also requested for a trading suspension in the securities on the Singapore Exchange this morning.

Kim Eng said in a filing to the Singapore bourse the suspension from 9am on Thursday was 'pending release of announcement'.

Maybank plans RM4.26b acquisition of Kim Eng

KUALA LUMPUR: MALAYAN BANKING BHD [] is acquiring a strategic 44.6% stake in Kim Eng Holdings Ltd at S$3.10 per share, amounting to S$798 million (RM1.9 billion) with a view to takeover the Singapore'based broking firm.

In a statement Thursday, Jan 6, Maybank said it had via its wholly-owned subsidiary, Aseam Credit Sdn Bhd (ACSB), entered into conditional sale and purchase agreements (CSPA) with each of Kim Eng's chairman and chief executive officer Ronald Anthony Ooi Thean Yat and Yuanta Securities Asia Financial Services Ltd (Yuanta) to acquire 15.4% and 29.2% stakes in Kim Eng respectively.

The proposed acquisition will see Maybank emerge as the single largest shareholder in Kim Eng with an intention to acquire the remaining 55.4% of Kim Eng shares and delist the company, it said.

In accordance with the Singapore Code on Take-overs and Mergers, Maybank will be required, upon satisfaction of the conditions set forth in the CSPAs, to make a mandatory offer for all shares not already owned by Maybank, it said.

Maybank said the total estimated purchase consideration for 100% of Kim Eng would be S$1.79 billion (RM4.26 billion).

The lender said that as of Sept 30, 2010, Kim Eng's total assets and shareholders' equity amounted to S$2.697 billion and S$938 million, respectively.

The acquisition price represented a multiple of 1.91 times Kim Eng's reported book value as of Sept 30, 2010, and premia of 15% to the last closing price of S$2.70 and 28% respectively to the one-month volume weighted average price of S$2.42, it said.

'Kim Eng, with its regional platform and well-entrenched leadership position in various markets, represents a unique opportunity for Maybank.

'The proposed transaction is consistent with Maybank's strategy of developing its pan-Asean financial services platform, and accelerates the build-out of its investment banking and equities platform in the region,' said the bank.

Maybank chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said the move was great leap forward for Maybank so early in the new year.

'Kim Eng is a perfect complement to our existing strengths in investment banking and the equities market. It gives us the immediate platform to aggressively build up our global wholesale banking capabilities in Asean and beyond.

'Our combined synergies signal interesting times for us in the region this new year and long term. Immediately, Kim Eng gives us entry into Thailand. We are excited over the tremendous opportunity we will have to grow our business there. We welcome the Kim Eng leadership team and employees into the Maybank Group,' he said.

Maybank president and CEO Datuk Seri Abdul Wahid Omar said this transaction represented an important milestone in the expansion of Maybank's investment banking franchise, and addresses an important gap in its Asean footprint.

'Kim Eng's market leadership, complementary geographic footprint, product offerings and distribution capability, combined with our commercial banking franchise, provides immense potential for synergies,' he said.

The transaction is subject to approval from, among others, Bank Negara Malaysia and the Monetary Authority of Singapore.

Maybank Investment Bank and Nomura Singapore Ltd. are joint financial advisors to Maybank on the transaction.

Ooi, who will continue to lead Kim Eng as CEO post the transaction said the firm looked forward to being part of Maybank.

'This transaction allows us to take our business to the next level, with the support of Maybank's strong balance sheet and well-entrenched client relationships,' he said.

Bursa, TA, OSK up in active trade

KUALA LUMPUR: Shares of Bursa Malaysia, TA, OSK and PM Capital rose in active trade on Thursday, Jan 6 as the stock market rallies for the fourth straight day, with the FBM KLCI scaling again new heights.

At 9.18am, Bursa Malaysia was up 12 sen to 83 sen with 499,100 shares done, OSK added 10 sen to RM2.15, TA 4.5 sen to 13.5 sen.

Rising trading volume on the stock exchange had spurred buying interest in these brokerages and the stock exchange operator which are the primary beneficiaries of a market rally.

PM Capital rose 1.5 sen to 13.5 sen with 14.87 million shares transacted.

The FBM KLCI rose 8.86 points to 1,575.03. Turnover was 197.93 million shares valued at RM163.99 million. There were 293 gainers, 57 losers and 158 stocks unchanged.

FBM KLCI stays in positive territory, but gains limited

KUALA LUMPUR: The FBM KLCI stayed in positive territory at mid-morning on Thursday, Jan 6 but pared down its earlier gains as some mild profit taking signs emerged on the local bourse.

At 10am, the 30-stock index was up 0.91 point to 1,567.08. The index had earlier risen to a high of 1,576.95.

Gainers led losers by 338 to 187, while 256 counters traded unchanged. Volume was 487.61 million shares valued at RM448.32 million.

At the regional markets, Japan's Nikkei 225 rose 1.17% to 10,502.06, Singapore's Straits Times Index added 0.47% to 3,269.44, the Shanghai Composite Index up 0.31% to 2,847.50, Taiwan's Taiex gained 0.06% to 8,851.94, South Korea's Kospi up 0.01% to 2,082.85 while Hong Kong's Hang Seng Index opened 0.4% higher at 23,861.22.

Maybank Investment Bank Bhd head of retail research and chief chartist in a note to clients on Jan 6 said due the mixed US markets last night, the FBM KLCI could be in a solid trading mode today, with rotational buying that may see some minor profit-taking activities in the later part of the day.

'With the firm price action past its previous historical high level of 1,531.99 this year, the FBM KLCI is poised to surge into uncharted territory and head towards its targets of 1,571, 1,600 and 1,618,' he said.

On Bursa Malaysia, the top gainer at mid-morning was DFZ Capital that rose 43 sen to RM3.89; DiGi added 26 sen to RM25.16, Boustead up 23 sen to RM5.69, MPI and UEM Land gained 17 sen each to RM5.85 and RM2.72, whole Cocoaland, Batu Kawan and Kulim gained 16 sen each to RM2.78, RM17.12 and RM13.40 respectively.

Ramunia was the most actively traded counter with 27.3 million shares done. The stock added three sen to 61 sen.

Main Market debutant Maxweel International was also actively traded with 19.62 million shares done. The sportwear shoe maker added 3.5 sen to 57.5 sen.

Decliners this morning included BAT, Bintulu Port, Ekovest, United PLANTATION []s, Mudajaya, CIMB, IJM and KLK.

OSK Research Neutral on Malaysia steel sector

KUALA LUMPUR: OSK Research is maintaining its Neutral rating on Malaysia's steel sector while it is Overweight on China's steel sector.

It said on Thursday, Jan 5 floods in Queensland, Australia have brought the shipments of coking coal to a virtual standstill and major producers have declared force majeure.

South Korea and Japan steel mills, being the major customers of Australia's coal, may be marginally impacted by the supply shortage as sluggish steel demand in the past few months may suggest sufficient inventories at their yards.

OSK Research said supply is likely to return to normal level from February onwards.

China's steel industry, which is currently self reliant on coking coal supply, is not directly affected by this adverse event, which has in fact partly contributed to the higher selling prices of raw material and steel products.

OSK Research said it was reiterating its OVERWEIGHT stance on China's steel sector on the belief that the Chinese government will continue to spend on FAIs in order to keep GDP growth at 8%, while flat producers may benefit from consumption upgrading.

'Nonetheless, we expect steel and coal prices to ease in the next few weeks as the current price spiral is driven by a temporary supply shortage that is unsustainable, and thus may not benefit Malaysian steel mills that generally hold bigger stockpiles.

'Malaysia's steel mills also do not consume coking coal as they operate mainly EAFs. All said, we maintain our NEUTRAL rating on Malaysia's steel sector,' it said.

HLIB Research: FBM KLCI could hit 1,600 in near term

KUALA LUMPUR: Hong Leong Investment Bank (HLIB) Research said despite the 3.1% surge in three days and in anticipation of more profit taking ahead, it still remains optimistic the FBM KLCI could hit the 1,600 in the near term.

In its market outlook issued on Thursday, Jan 6, it said the upward trend was on the back of rising investor's participation and buoyant sentiment.

'Overall market breadth remains bullish, supported by improving technical landscape and soaring trading volume. Immediate support levels are 1,527 (10-d SMA) and 1517 (middle Bollinger band),' it said.

HLIB Research said during the current liquidity driven rally, apart from PLANTATION [] stocks, banking shares were amongst the top gainers and hogging the limelight of local and foreign institutional investors.

'Thus, we look at the technical readings of banking stocks to determine if the momentum will continue. Technically, CIMB, Maybank, Alliance Financial Group and Affin have bullish readings, suggesting that the positive momentum would continue.

'However, due to weakening technical readings and overbought positions, Public Bank, AMMB and RHBCap could see some pullback,' it said.

#Flash* Maybank suspended for announcement

KUALA LUMPUR: Trading in the securities of MALAYAN BANKING BHD [] has been suspended from 9am to 5pm on Thursday, Jan 6.

Maybank Investment Bank Bhd said on behalf of the banking group that the suspension was 'pending an announcement of a material corporate proposal'.

The request for suspension was made under subparagraph 3.1(b) of Practice Note 2 on requests for suspension of the Main Market Listing Requirements of Bursa Malaysia Securities.

Maxwell opens higher

KUALA LUMPUR: Shares of Maxwell International Holdings Bhd were traded higher on its debut on Bursa Malaysia on Thursday, Jan 6.

At 9am, the share price of the China-based sports footwear manufacturer was up two sen to 56 sen with 4.44 million shares done.

InterPacific Research valued Maxwell International at 54 sen based on an average peer PER of 3.0 times and EPS of 18.1 sen FY11.

Maxwell's offer of 20 million new shares was undersubscribed, with applications for 18.015 million shares.

The IPO consisted of a public issue of 63.75 million new 40 sen shares at an offer price of 54 sen each.

Kim Eng suspended on SGX

KUALA LUMPUR: Kim Eng Holdings Bhd has requested for a trading suspension in the securities on the Singapore Exchange on Thursday, Jan 6.

Kim Eng said in a filing to the Singapore bourse the suspension from 9am on Thursday was 'pending release of announcement'.

Meanwhile, trading in the securities of MALAYAN BANKING BHD [] has been suspended from 9am to 5pm on Thursday.

Maybank Investment Bank Bhd said on behalf of the banking group that the suspension was 'pending an announcement of a material corporate proposal'.

The request for suspension was made under subparagraph 3.1(b) of Practice Note 2 on requests for suspension of the Main Market Listing Requirements of Bursa Malaysia Securities.

#Stocks to watch:* Maxwell, MTD Capital, Tenaga, banks

KUALA LUMPUR: After three straight days of gains on Bursa Malaysia which sent the FBM KLCI surging to fresh record highs, investors could be taking some profit, especially it being settlement day on Thursday, Jan 5 after the huge increase in trading volume.

However, the firmer overnight close on Wall Street and the strong foreign buying of banks and key blue chips on Bursa Malaysia could absorb the profit taking activities.

The FBM KLCI displayed its resilience on Wednesday when it managed to snap out of the earlier losses to close at a fresh historic high of 1,566.17, up 14.28 points or 0.92%. The intra-day high was 1,571.85

On Wall Street, the creation of three times as many private-sector jobs as expected turned Wall Street's early losses into gains on Wednesday, Jan 5, extending a rally investors worried had come too far too fast.

U.S. private employers added 297,000 jobs in December, a report by the ADP Employer Services showed, which was nearly three times what economists forecast and the biggest jump on record for ADP, which has data going back to 2000.

The Dow Jones industrial average gained 31.71 points, or 0.27 percent, to 11,722.89. The Standard & Poor's 500 Index rose 6.36 points, or 0.50 percent, to 1,276.56. The Nasdaq Composite Index added 20.95 points, or 0.78 percent, to 2,702.20.

Stocks to watch on Thursday include Maxwell International Holdings Bhd, MTD CAPITAL BHD [], TENAGA NASIONAL BHD [] and banks.

The Edge FinancialDaily reports a meeting between the various investors who had parked their money with financially troubled SJ Asset Management Sdn Bhd (SJAM) is likely to be held in the afternoon.

Maxwell International Holdings ' a China-based sports footwear manufacturer ' will be listed on Thursday. Its offer of 20 million new shares was undersubscribed, with applications for 18.015 million shares.'' The IPO consisted of a public issue of 63.75 million new 40 sen shares at an offer price of 54 sen each.

MTD Capital Bhd's subsidiary MTD Manila Expressways Inc imposition of the 290% toll rate hike along the South Luzon Expressway in the Philippines faces a legal suit.

MTD Manila Expressways had received a petition for the issuance of a temporary restraining order and/or status quo to restrain the implementation of the toll rate hike of 3.024 pesos or 22 sen per km initial toll rate hike.

The suit was filed by Ernesto B. Francisco, Jr in the Supreme Court Philippines against the Toll Regulatory Board of Philippines, MTD Manila Expressways, Manila Toll Expressways System, Inc and the South Luzon Tollway Corp.

The Edge FinancialDaily also reports that the severe flooding in Australia has resulted in a dip in Tenaga Nasional Bhd's (TNB) share price on the back of rising coal prices following a supply disruption, although this could represent an opportunity to accumulate shares in the national utility company, say some analysts.

Banks including CIMB, Maybank and Public Bank could continue to be in focus after foreign funds snapped up their shares on expectations of a firm recovery of the economy and a stronger ringgit.

Auto sales in Malaysia are forecast to inch up 4.1% to 623,000 units from a year ago, supported by the launch of new models and a stable economic outlook, said global consulting outfit Frost & Sullivan.

CHUAN HUAT RESOURCES BHD []'s rights issue of 41.79 million warrants was oversubscribed by 16.45 times.

The total acceptances and excess applications received for the rights issue was for 729.26 million, or 1,745.10% of the 41.79 million warrants available.