US: Rajaratnam got information leaked by MS banker

NEW YORK: U.S. prosecutors said a Morgan Stanley banker leaked information regarding an upcoming takeover that ultimately was passed on to Galleon Group LLC founder Raj Rajaratnam, who faces insider trading charges.

Prosecutors also unveiled on Friday, Jan 21 a new indictment against Rajaratnam, which added a new securities fraud count and named seven additional stocks that were part of an alleged conspiracy involving Rajaratnam to commit securities fraud.

Among the newly named stocks is Goldman Sachs Group Inc, about which the government said Rajaratnam leaked information in October 2008 to a co-conspirator.

Jim McCarthy, a spokesman for Rajaratnam, declined to comment.

Prosecutors accuse the Sri Lankan-born Rajaratnam of being involved in a series of illegal trades that let him reap $45 million in proceeds. He is the central figure in a widening government probe into insider trading, including hedge funds such as Galleon. Rajaratnam has denied wrongdoing.

MORGAN STANLEY BANKER PUT ON LEAVE

According to a Jan. 20 letter from prosecutors to Rajaratnam's lawyers, the Morgan Stanley banker around May 2006 leaked details to someone of Advanced Micro Devices Inc's interest in buying ATI Technologies Inc, and that news of a pending takeover was later funneled to Rajaratnam.

The letter blacks out the identities of the banker and the person who allegedly tipped Rajaratnam.

AMD, the world's second-largest computer chipmaker, on July 24, 2006 announced it would buy ATI, a Canadian graphics chipmaker, for about $5.4 billion. That valued ATI at a roughly 24 percent premium over its closing price the previous Friday.

Morgan Stanley spokesman Pen Pendleton said the banker has been put on leave, and that the company is cooperating with the government's investigation.

Prosecutors in Manhattan previously alleged that Anil Kumar, a former McKinsey & Co. consultant, also leaked details of AMD's interest in ATI to Rajaratnam.

Kumar pleaded guilty last January to fraud and conspiracy charges and agreed to cooperate with prosecutors. He said at the time that Rajaratnam paid him $1.75 million for tips.

TRIAL APPROACHES

Rajaratnam's lawyers attached the letter referring to the Morgan Stanley banker as an exhibit to a request to stop a government subpoena of documents and other information from Galleon.

Prosecutors had asked U.S. District Judge Richard Holwell on Jan. 13 for permission to serve the subpoena.

Holwell also oversees the government's fraud and conspiracy case against Rajaratnam, expected to go to trial on Feb. 28.

A U.S. Securities and Exchange Commission civil case against Rajaratnam is slated for trial in April.

The new securities fraud count in the indictment concerns Rajaratnam's alleged purchase of shares of PeopleSupport Inc on the basis of inside information in July 2008, one week before the outsourcing company agreed to be acquired.

In a move that could add pressure to delay the criminal trial, Rajaratnam's lawyers said they "will move forthwith" to exclude evidence relating to stocks they believe prosecutors only recently decided to add to the case.

They cited "the extreme lateness of these disclosures and the severe prejudice caused to the defense's trial preparations" to justify the exclusion.

The amended indictment reflects Wednesday's guilty plea by former co-defendant Danielle Chiesi, who once worked for New Castle Funds LLC. She admitted to conspiracy charges.

The case is U.S. v. Rajaratnam, U.S. District Court, Southern District of New York, No. 09-01184. - Reuters

Citigroup raises CEO Vikram Pandit's salary to US$1.75m

SAN FRANCISCO:'' Citigroup Inc. has raised the salary of its chief executive Vikram Pandit's annual base salary to $1.75 million from $1 previously after he steered the company back to profitability.

Citi chairman Richard Parsons said Pandit deserved the pay raise because the CEO has "worked tirelessly to put Citi back on the right track, spearheading a restructuring that has returned the company to profitability and positioning the company for future growth'.

According to wire reports, the pay hike takes effect immediately. Pandit, 54, has led Citi since December 2007 and oversaw its $45 billion bailout by taxpayers the next year.

In February 2009, he said his salary would be capped at $1 until the firm returned to profitability, and earlier this week it reported a $10.6 billion profit for 2010.

According to Bloomberg,Citi also announced 2010 bonuses of almost $50 million for 15 other senior executives. Six of them, including newly promoted Chief Operating Officer John Havens, also shared 'stock salary' last year worth more than $37 million on an annualised basis, according to a Sep. 24 filing. Pandit declined a bonus for the year.

Vikram held about 2.2 million Citigroup shares as of Dec. 11. The stake has a value of $10.8 million based on Friday's closing price.

GE lifts Dow, S&P 500 but S&P's 7-week streak ends

NEW YORK: The Dow and S&P 500 rose on Friday, Jan 21 as General Electric Co's earnings put a positive tone on the economic recovery, snapping a two-day losing skid for the benchmark index.

The Nasdaq was pulled lower by Google, ending a week marked by investors pulling back from outperforming TECHNOLOGY [] shares.

Shares of General Electric, considered a bellwether for the economy and corporate America, rose 7.1 percent to $19.74 and hit their highest intraday level since November 2008. The stock, the top positive in the Dow, also scored its biggest daily percentage jump since March 2009.

GE reported stronger-than-expected earnings, helped by the recovery of its finance arm and a rise in revenue at its industrial units, including a sharp pickup in sales of locomotives.

"Look at the two stocks, where they've been and where they are. GE has been under a tremendous amount of pressure before all this started," said Doreen Mogavero, CEO of Mogavero, Lee & Co. in New York.

"Google has acted very well throughout, so there may be a little bit more room for growth in GE, might be the thought."

The Dow Jones industrial average rose 49.04 points, or 0.41 percent, to end at 11,871.84. The Standard & Poor's 500 Index added 3.09 points, or 0.24 percent, to 1,283.35. The Nasdaq Composite Index shed 14.75 points, or 0.55 percent, to close at 2,689.54.

For the week, the Dow rose 0.7 percent, the S&P lost 0.8 percent and the Nasdaq dropped 2.4 percent.

Even with Friday's advance, the S&P snapped a seven-week streak of gains. But the Dow managed its eighth consecutive weekly gain, its longest streak since the March through April run in 2010, in which the index hit a high that stood for six months.

The S&P 500 is up 8.7 percent since the start of December, but the index lost more than 1 percent over the past two days. Many technical and other analysts see the up trend continuing through at least the first half of the year, but some have forecast a pullback for the near term.

It could be that the pullback is limited to stocks that have far outperformed the major indexes, such as the cloud computing stocks. CSFB analysts noted that high correlation between stocks in the S&P 500 is starting to decline, in comparison to recent periods when most of the market has gone up in tandem, and higher-valued names could remain under pressure."

Google Inc shares were down 2.4 percent at $611.83 after hitting an intraday high of $641.73 as confidence that CEO Larry Page would rejuvenate the No. 1 Internet search company wavered. Late Thursday, Google reported earnings that beat Wall Street's expectations.

The action in Google shares is "not so much Google earnings, but a factor of the market itself," said Robert Francello, head of equity trading at Apex Capital in San Francisco.

"We had such a massive run in the end of December and early this month, we might be seeing selling into good earnings," he said. "The long, fast money (is) paring gains and preparing themselves for some type of consolidation short term."

Investors also contended with options expiration, with January options on individual stocks set to expire after the close. The expiry sometimes adds to market volatility.

Tempering some of the earnings optimism were results from Bank of America Corp, the latest bank to disappoint investors.

Bank of America shares fell 2 percent to $14.25 after the largest U.S. bank by assets reported a second straight quarterly loss, driven by a $2 billion write-down in its mortgage business.

The results follow disappointing results earlier this week from Goldman Sachs and Wells Fargo. An index of bank shares, KBW Banks, was up 1.6 percent, however. - Reuters

Facebook to unveil financials, raises $1.5 bln

SEATTLE: Facebook is preparing to open its books this year or early in 2012 to give investors a glimpse into the financial workings of the world's No. 1 social network, after it sealed an oversubscribed $1.5 billion round of financing led by Goldman Sachs, according to a Reuters report on Friday, Jan 21.

The financing, $1 billion of which is from Goldman Sachs' overseas clients and $500 million from Goldman itself and Russian investment firm Digital Sky Technologies, gives the company a projected value of $50 billion, setting the stage for what could be one of the largest initial public offerings next year.

Facebook, founded in a Harvard dorm room in 2004, said it would begin to file public financial reports no later than April 30, 2012, in a statement detailing the new investment.

United States securities regulations require companies with more than 499 shareholders to disclose financial information. Facebook expects to exceed that number some time this year.

The new funding was organized by investment bank Goldman Sachs , which raised $1 billion from non-U.S. investors in a fund that Facebook said was oversubscribed.

Initial projections from Goldman in documents circulated to potential investors earlier this month indicated it was looking to raise up to $1.5 billion.

Facebook said it made a "business decision" to limit the offering to $1 billion, without explaining further. It said it had no immediate plans for using the money raised.

Facebook earned $355 million in net income in the first nine months of 2010 on revenue of $1.2 billion, according to a document distributed by Goldman Sachs to potential investors earlier this month, the only source of financial data on the company.

In December, Digital Sky Technologies, Goldman Sachs and some funds managed by Goldman invested $500 million in Facebook.

Facebook 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.

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

GE earnings climb on strengthening global economy

BOSTON: General Electric Co posted a better-than-expected profit, helped by strong emerging-market demand for heavy equipment and setting the stage for what could be a wave of strong manufacturing earnings reports.

U.S. President Barack Obama tapped GE Chief Executive Jeffrey Immelt on Friday, Jan 21 to head a new economic advisory panel in a strong sign of how investor and public opinion has changed about a company that became one of the dogs of Wall Street during the recession.

Shares of the world's largest maker of jet engines and electric turbines rose 7 percent on Friday, hitting their highest level since the thick of the financial crisis in November 2008, and making GE the biggest lift to the blue-chip Dow Jones industrial average.

Investors called the results a sign that the economy was strengthening.

"It's the economy at large," said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group in Traverse City, Michigan, which owns GE shares. "That reflects a growing economy and GE is well positioned for that."

A rebound in demand for railroad locomotives and a rise in sales of medical imaging devices helped GE notch a 12 percent rise in orders in the quarter, driving its order backlog -- a key indicator of future revenue -- to $175 billion.

"The environment continues to improve," Immelt told analysts during a conference call. "The economy can get a little bit stronger every day."

RAISING THE BAR

The results may raise expectations for a wave of earnings reports coming next week from fellow blue-chip industrials Caterpillar Inc, United Technologies Corp, Boeing Co and 3M Co.

"GE turning the corner does raise the bar for where you would expect global revenue to come in for any diversified firm," said Morningstar analyst Daniel Holland. "I'm a little bit more optimistic than I was coming into the cycle."

Obama toured the company's Schenectady, New York, electric turbine factory, and praised Immelt's leadership.

"We think GE has something to teach businesses all across America," Obama told a crowd of about 500 GE workers.

Investors and fellow executives said they were glad to see Immelt tapped by the administration.

"What's good for the economic advisory panel might be good for the economy and for GE," said Ryan Allen, a portfolio manager at AMBS Investment Counsel in Grand Rapids, Michigan.

REVENUE REBOUND

GE's fourth-quarter net income rose to $4.5 billion, or 42 cents per share, from $3 billion, or 28 cents per share, a year earlier.

Profit from continuing operations came to 36 cents per share, above the 32 cents analysts had expected, according to Thomson Reuters I/B/E/S.

Revenue rose 1 percent to $41.38 billion, above the $39.9 billion analysts had expected.

"The most exciting thing is the return to organic revenue growth," said Jack De Gan, chief investment officer, at Harbor Advisory Corp in Portsmouth, New Hampshire.

GE's industrial organic revenue, which excludes the impact of acquisitions and foreign exchange, rose 6 percent.

Deutsche Bank analyst Nigel Coe called the results "arguably their best quarter since 2007."

Fairfield, Connecticut-based GE recorded 10 cents per share in one-time charges, including $500 million set aside to cover the cost of cleaning up chemicals it had dumped into New York's Hudson River more than three decades ago. That charge was offset by 10 cents per share of one-time gains, including a tax settlement.

After a few years where profits declined at GE and trouble at its finance arm had management on the defensive -- pushing the shares as low as $5.87 in March 2009 -- Immelt is back on the offensive, twice raising the dividend in the past year, resuming share buybacks and returning to the takeover trail.

GE shares closed up $1.31 at $19.74 on the New York Stock Exchange on Friday, adding almost $14 billion to its market capitalization, which reached $210.32 billion.

GE shares have risen almost 11 percent over the past year, roughly in line with the Dow. - Reuters

Century Logistics repays RM20m loan, a year ahead of due date

KUALA LUMPUR: Century Logistics Bhd has fully repaid a term loan facility amounting to RM20 million, which was due on Jan 21, 2012.

The company said on Friday, Jan 21, the early repayment of the term loan facility was fully funded by its own funds and would result in substantial interest savings to the group.

The facility was granted under a primary collateralised loan obligation programme. It was signed by Century with RHB Investment Bank Bhd and Prima Uno Bhd on Jan 8, 2007. The original tenor of the facility was for five years and due on Jan 21, 2012

Hua Yang 3Q net profit up 180pct to RM7.68m

KUALA LUMPUR: Property developer HUA YANG BHD [] posted net profit of RM7.68 million in the third quarter ended Dec 31, 2010, up 180% from RM2.74 million a year ago, boosted by better sales and improved profit margins.

It said on Friday, Jan 21, revenue rose 81% to RM49.30 million from RM27.27 million a year ago. Earnings per share were 7.11 sen versus3.05 sen.

"The positive third quarter results were due to better sales for phases under development and from the improved profit margin," it said. ''
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Time Engineering to sell 626m Time dotcom stake to shareholders

KUALA LUMPUR: TIME ENGINEERING BHD [] (TEB) has proposed to undertake a renounceable offer for sale its 626.18 million shares in TIME DOTCOM BHD [] (TdC) to TEB shareholders.

TEB said on Friday, Jan 21 the offer would be on the basis of eight offer shares for every 10 shares held in TEB. It said for illustrative purposes, based on its paid-up as at Jan 15, it would offer for sale 620.19 million shares, representing 24.51% equity interest in TdC.

TEB added the offer price would be not'' less than 20% to the five-day volume weighted average market price up to the day prior to the price-fixing date. However, it shall not be less than 48 sen per offer share.

To recap, TEB's investment in TdC was on Dec 26, 2000 where the TEB and its subsidiaries and TdC and its subsidiaries were restructured.'' The debt owed by the TdC droup to TEB was settled via the issuance of TdC shares by TdC to TEB on the basis of one new TdC share issued for every RM3 debt owing by TdC to TEB.

With the adoption of FRS139 Financial Instruments: Recognition and Measurement with effective from Jan 1, 2010, the carrying amount of TEB's stake in TdC was marked to its market value. The current written down cost of investment of the remaining TdC shares was 38 sen per share.

On July 30, 2009, TEB shareholders had an EGM given a mandate to TEB to dispose of its shares held in TdC at a price not lower than 48 sen per TdC share.

TEB said the proposed offer for sale would enable TEB to divest its stake in TdC and enable entitled shareholders to have a direct participation in the prospects and future performance of TdC at a discount to the market price.

"Further, the divestment will allow TEB to fully or substantially early redeem its outstanding redeemable secured loan stock (RSLS) issued to Bank Pembangunan Malaysia Bhd," it said.

TEB added the exercise would enable it to raise funds for working capital purposes, expansion of existing businesses and for investments.

TEB would realise a gain before tax of about RM36.43 million from the offer for sale after accounting for the current written-down cost of investment of 38 sen per TdC share;'' the accelerated RSLS interest costs of approximately RM26.19 million (unaudited as at Sept 30, 2010); and assuming full take-up of the offer shares at an illustrative offer price of 48 sen per offer Share.

"These gains, which exclude the estimated expenses for the proposed offer for sale, will increase the consolidated earnings per share of TEB by approximately 4.7 sen based on the issued and paid-up share capital of TEB of 775,244,683 TEB Shares.

"Further, TEB will be able to realise a minimum interest cost savings of approximately RM6.84 million per annum upon early redemption of the RSLS, in full," it said.

RAM Ratings maintains BBB3 ratings of water players, but on Rating Watch, negative

KUALA LUMPUR: RAM Rating Services Bhd has maintained the BBB3 ratings of the respective debt issues of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (SPLASH), Destinasi Teguh Sdn Bhd and Sungai Harmoni Sdn Bhd.

"However, the ratings remain on Rating Watch with a negative outlook, pending the resolution of the Selangor water industry's restructuring exercise," it said on Friday, Jan 21.

RAM Ratings said the BBB3 rating of SPLASH's BaIDS was based on the expected support from the Federal Government, the Selangor State Government and/or its shareholders to help allay SPLASH's liquidity crunch.

The ratings agency said SPLASH had on Wednesday, Jan 19, failed to meet the minimum balance for its finance service reserve account (FSRA), as required by the BaIDS's financing documents, on account of insufficient cash.

"To demonstrate their support, all of SPLASH's shareholders have provided a written undertaking to fund any shortfall on the RM226 million of profit and principal payments due under the BaIDS on July 19, 2011," it said.

It said via an extraordinary resolution, the bondholders waived the FSRA requirement for Jan 19.

RAM Ratings said it believed the federal and state governments remained committed to resolving the restructuring exercise given the strategic importance of the water sector.

As for Destinasi Teguh and Sungai Harmoni, it said the ratings of the respective proposed bonds and redeemable loan stocks (RLS) were underpinned by the credit profile of their main counterparty, SPLASH (via a 30-year operations and maintenance agreement with Sungai Harmoni).

"Given the transaction structure, the credit profile of SPLASH is directly linked to the ability of Destinasi Teguh and Sungai Harmoni to service their debts. On this score, we understand that the Securities Commission has extended the approval period for the proposed bonds and RLS until May 25, 2011," it said.

Company Principal activities Issue SPLASH Operator of Phases 1 and 3 of the Sungai Selangor water-treatment plants. Syarikat Bekalan Air Selangor Sdn Bhd is the sole off-taker for its treated water. RM1,407 million Al-Bai Bithaman Ajil Debt Securities Issuance Facility (BaIDS) (2000/2016) Destinasi Teguh

Funding conduit and unit of Taliworks Corporation Berhad. Destinasi Teguh relies on interest and dividend payments from Sungai Harmoni to pay its dues. Proposed RM395 million Secured Bonds Sungai Harmoni

Operations and maintenance service provider for SPLASH, and a 100%-owned subsidiary of Taliworks. Proposed RM90 million Redeemable Loan Stocks

Bank Negara foreign reserves up RM1.3b to RM329.9b at Jan 14

KUALA LUMPUR: Bank Negara Malaysia's international reserves rose RM1.3 billion to RM329.9 billion or US$106.9 billion as at Jan 14 from Dec 31, 2010 which was also in line with the inflow of funds into the equities markets.

The central bank said on Friday, Jan 21 the reserves position is sufficient to finance 8.8 months of retained imports and is 4.1 times the short-term external debt. The reserves showed an increase of RM1.3 billion or US$400 million from the US$106.5 billion on Dec 31.

The reserves level as at Dec 31, took into account the quarterly adjustment of foreign exchange revaluation gain, following the strengthening of most major currencies against the ringgit during the quarter.

During the period, the 30-stock FBM KUALA LUMPUR COMPOSITE INDEX [] (KLCI) advanced 36.47 points from 1,533.42 on Jan 3 to 1,569.89 on Jan 14, during which the KLCI hit several fresh record highs. The highest during the two-week period was 1,572.21

According to Bursa Malaysia data, within the period, the stock market capitalisation increased by RM42 billion from RM1.289 trillion to RM1.331 trillion.

FBM KLCI closes at 3wk low as funds take profit

KUALA LUMPUR: The FBM KLCI closed at a three-week low on Friday, Jan 21, the worst performance since this year as some funds took money off the table, in line with key regional markets on concerns about more monetary tightening policies by China's government.

At 5pm, the KLCI was down 19.08 points or 1.22% to 1,547.43, the lowest since Jan 3 when trading started for the year. Turnover was 1.89 billion shares valued at RM3.16 billion. Declining counters battered advancers 717 to 185 while 224 stocks were unchanged.

Most regional markets also ended in the red, with losses ranging from 0.5% to 2.16%. South Korea's Kospi skidded 1.74% to 2,069.92 -- retreating from an all-time high of 2,119.24 on Wednesday.-- as investors took profits after the main index hit record highs earlier this week, and as concerns about further Chinese monetary policy tightening weighed on shares of big exporters.

Japan's Nikkei 225 1.56% to 10,274.52, Hong Kong's Hang Seng Index 0.53% to 23,876.86 and Singapore's Straits Times Index 0.68% at 3,183.81.

Jakarta's Composite Index was the worst, down 2.16% to 3,379.54. However, China's markets managed to recover part of Thursday's losses, with the Shanghai Composite Index up 1.4% to 2,715.29.

Analysts said foreign funds were taking some money from the regional markets, which was evident from the selling of Jakarta blue chips.

At Bursa Malaysia, KL Kepong fell the most, down 52 sen to RM22.34, PPB and Kulim 30 sen each to RM17.20 and RM13.28 while Batu Kawan shed 26 sen to RM16.92 and IOI Corp six sen to Rm5.89

CIMB fell 30 sen to RM8.34, dragging the KLCI down by 5.28 points while Genting's 32 sen decline to RM11.36 pushed the index down by another 2.8 points. Other banks also fell, with Maybank down 10 sen to RM8.81 and AMMB 14 sen to RM6.76.

Petronas Chemicals fell 15 sen to RM6.20 after a news wire said was due to a downgrade at Macquarie Group Research from "Outperform" to "Neutral".

Queensland coal exports from Dec-March may be 15m tonnes lower

KUALA LUMPUR: Queensland's coal exports between December 2010 and March 2011 could be around 15 million tonnes lower than previously anticipated, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.

'This represents a reduction in export earnings of around A$2 billion to A$2.5 billion. However, it is anticipated that coal prices could be settled at higher levels, partially offsetting the adverse impact on coal industry revenues,' it said on Friday, Jan 21.

In its report on the impact of recent flood events on commodities, the bureau said the recent flooding in eastern Australia is estimated to have reduced agricultural production by at least A$500 million to A$600 million in 2010 to 2011.

It added there would be significant impact on the production of fruit and vegetables, cotton, grain sorghum and some winter crops.

The bureau said losses of livestock reported to date have been small in relation to the national herd and flock. However the bureau noted the main impact for livestock appeared to have been associated with disruptions to transport and other infrastructure support.

'These costs do not take into account the cost of lost farm infrastructure and assets which may amount to much more,' it said.

POLL-Sukuk market seen reviving in 2011, issuance to rise 60 pct

KUALA LUMPUR/MANAMA: Global sales of Islamic bonds are forecast to rise nearly 60 percent this year to more than $22 billion this year as economic recoveries and high crude oil prices revive the market, a Reuters quarterly poll showed on Friday, Jan 21.

An upswing in corporate spending, an increase in issuers seeking to diversify their sources of funding and improving investor sentiment in the Gulf are also expected to fuel fund-raising activities, according to the 15 respondents surveyed.

Issuance fell 26 percent to $14 billion in 2010 in the aftermath of Dubai's debt restructuring and high profile sukuk defaults that exposed legal uncertainties surrounding these instruments, according to Thomson Reuters data.

That estimate excludes issues which are callable under a year, those which are not rank eligible or underwritten and self-funded ineligible issues.

"On the part of financial institutions, they will need to strengthen their balance sheets. Corporates will need funding for expansion," said Simon Eedle, Credit Agricole CIB's Islamic finance head.

"Sovereigns will push sukuk as part of fulfilling their national agenda."

Qatar Islamic Bank and National Bank of Abu Dhabi have launched sukuk sales in recent months, with the Dubai government, Saudi Arabia's civil aviation authority, Gulf Investment Corp and Saudi International Petrochemical Co are expected to tap the market too.

''

But some experts have said global issuance of Islamic bonds would take another year to fully recover with new markets in Europe and Asia yet to offset the fall in Gulf issuance.

"Obstacles are pricing and liquidity versus conventional bond issuance (and) potential tax implications for the Western countries surrounding assets in special purpose vehicles for structuring purposes," said Nida Raza, capital markets senior vice president at Unicorn Investment Bank.

Sukuk issuance can be more costly than conventional bonds as they tend to involve the transfer of assets which attract tax. Countries which see a heavy volume of sukuk issuance such as Malaysia have altered regulations to address this.

The bulk of sukuk in 2011 are expected to emerge from issuers in Malaysia and the Middle East, although some issuance could also come from the United States, Singapore and Indonesia, according to the survey.

Banks, governments and companies in the infrastructure, real estate and energy businesses are expected to be the main issuers, the poll showed.

Following are the forecasts for expected global new sukuk issuance in 2011 (in billion dollars). ABC Islamic Bank between $17 billion-$19 billion Algebra Capital less than $14 billion Bank Muamalat Malaysia between $20 billion-$22 billion Bank of London and Middle East between $20 billion-$22 billion CIMB Islamic above $22 billion Credit Agricole CIB between $20-$22 billion HSBC Amanah between $14 billion-$16 billion John Sandwick (Islamic asset manager) above $22 billion Malaysian Rating Corp above $22 billion Maybank Investment Bank above $22 billion MIDF Amanah Investment Bank between $20 billion-$22 billion OCBC Al-Amin Bank between $20 billion-$22 billion Rasameel Structured Finance above $22 billion Royal Bank of Scotland above $22 billion Unicorn Investment Bank between $17 billion-$19 billion - Reuters

#Flash* Selling picks up pace, KLK leads losers

KUALA LUMPUR: Selling picked up pace in the afternoon session on Friday, Jan 21, with selling focusing on CIMB and also PLANTATION [] counters and there are concerns about some foreign funds taking money out of equities.

At 3.08pm, the FBM KLCI is down 18.98 points to 1,547.53. Turnover is 1.13 billion shares valued at RM1.8 billion.'' Losers beat gainers 683 to 137.

The head of institutional dealing at a bank-backed brokerage said local funds were staying on the sidelines but there could be some buying towards close.

An analyst said judging from the profit taking, there could be some foreign funds taking money off the table, based on the decline in share prices of blue chips.

KL Kepong fell the most, down 60 sen to RM22.60, PPB 30 sen to RM17.20 and that of its major shareholder, Batu Kawan 22 sen to RM16.96.

Nestle shed 50 sento RM45, Tradewinds and CIMB 27 sen each to Rm7.42 and RM8.37 while MHB fell 22 sen to RM6.17.

MSC public offer for SGX listing at SGD1.75 or RM4.17 a share

KUALA LUMPUR: MALAYSIA SMELTING CORPORATION [] Bhd's public offers shares for secondary listing on Singapore Exchange Securities Trading Ltd (SGX) has been fixed at at S$1.75 or RM4.17 a share.

The company said on Friday, Jan 21 the issue price was a discount of about 12.21% to the five-day volume weighted average price up to and including Jan 19 of RM4.75 per share.

'The issue price is arrived at after book-building process whereby the issue price was determined based on the demand by institutional and selected investors in Singapore and after taking into consideration the market price of MSC shares,' it said.

The public issue will consist of a public offer of one shares in Singapore and a placement of 24 million shares to investors, including institutional and other investors in Singapore.

MSC said it had executed a management agreement with CIMB Bank Bhd (Singapore branch) where the latter was appointed issue manager for the public issue.

An underwriting and placement agreement was also executed between MSC and CIMB Securities (Singapore) Pte Ltd and the latter would be the underwriter and placement agent for the entire portion of the public offer and the placement respectively.

The public offer opened on Friday and its closing date is Tuesday, Jan 25 at 12 noon.

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Indonesia may up palm oil export tax to 25pct

JAKARTA: Indonesia may increase its palm oil export tax for February to 25% from 20% in January, after a rally in international prices, industry sources familiar with the matter said on Friday, Jan 21.

The base export price for crude palm oil (CPO) is likely to be set at $1,194 a tonne in February, up from $1,112 per tonne in January, said one source in the industry ministry.

"It is not surprising -- they always revise up these taxes in order to control the outflow, so the domestic side can keep some for themselves," said one palm oil analyst.

"Whenever they hike up export taxes, you see prices moving up because it constrains supplies."

Market talk that Indonesia, the world's largest palm oil producer, would lift the export tax to a maximum level of 25% in February, has swirled in the industry for weeks.

The export tax is intended to ensure that domestic requirements are met in Southeast Asia's biggest economy, and to reduce volatility in domestic cooking oil prices.

An export tax for cocoa beans will be unchanged at 10% from January with the base export price likely to be set at $2,671 per tonne, sources added.'' - Reuters

CIMB Thai FY10 net profit surges to RM83.19m

KUALA LUMPUR: CIMB Thai Bank PCL posted net profit of 829 million baht (RM83.19 million) in the financial year ended Dec 31, 2010 underpinned by higher net interest income, gain from derivatives trading and lower loan loss provision.

CIMB Thai, a 93.15% subsidiary of CIMB Bank Bhd said on Friday, Jan 21 that total income increased by 8% or 522.8 million baht from 6.3 billion baht to 6.8 billion baht.

'The higher income was attributed to both the improvement in net interest income and non-interest income,' said its chief executive officer Subhak Siwaraksa.

He said the consolidated net profit of 829 million baht was a notable improvement of 827 million baht from a net profit of only 2 million baht in 2009.

As for net interest income, the improvement of 213.2 million baht, or 5% in 2010 was due to loan expansion as well as lower interest expenses. In addition, loan loss provisioning was lowered by 367.7 million baht, or 31%.

On non-interest income, the increase of 309.6 million bath, or 19% was mainly due to the gain from derivatives trading, arising from the redemption of the structured deposits in the second quarter of 2010, one-off gains from the disposal of the Sathorn building and three subsidiaries as well as the divestment of minority interests in Worldclass Rent a Car Co., Ltd.

It had divested in the three subsidiaries -- BT Asset Management Co. Ltd, BT Insurance Co. Ltd, and Sathorn Asset Management Co. Ltd (STAMC).

''

Net interest margin (NIM) over earning assets improved to 4.1% from 3.3%, supported by rightsizing the deposit book and improved management of deposit costs.

Subhak said the 2010 results mark CIMB Thai's continued growth momentum and reflected its underlined strengths, both from the on-going business transformation and greater synergy with its parent, the CIMB Group.

'Our strategic undertaking of diversifying our loan portfolio as well as our revenue base, while remaining very effective in managing the cost of funds, has propelled CIMB Thai to double digit growth in loans and deposits, and record high financial results.

'As for the asset quality, CIMB Thai's prudent risk management practices coupled with our strategic intent and undertaking to separate the good bank from the bad bank have enabled us to close 2010 with an NPL ratio of 3.1% ' a marked progress from 14.9% at the end of 2009," he said.

KLCI falls to more than 2-wk low, CIMB, PChem, KLK down

KUALA LUMPUR: Blue chips fell to a more than two-week low on Friday, Jan 21 on sustained selling of CIMB while Petronas Chemicals declined after its outlook was cut to Neutral from Outperform.

Worries about rising inflation spurring aggressive policy tightening and its impact on reining in growth in major markets including China saw key regional markets declining for the second day, with losses up to 3.25% in Jakarta. Year-to-date, Jakarta is down 9.77% after being among the best performers in the region in 2010.

At 12.30pm, the KLCI was down 14.49 points or 0.93% to 1,552.02, the lowest since Jan 4 when it closed at 1,551.8. Turnover was 895.73 million shares valued at RM1.32 billion. Declining stocks beat advancers 597 to 149 while 256 counters were unchanged.

Hong Kong's Hang Seng Index, Japan's Nikkei 225, South Korea's Kospi, Singapore's Straits Times Index and Jakarta's Composite Index extended their losses from Thursday but China stocks managed to regain part of the previous day's losses.

Nikkei 225 -1.31% 10,300.67 Hang Seng Index -0.19% 23,957.82 Taiwan Taiex -0.59%
8,969.27 Kospi -1.43% 2,076.53 Jakarata -3.25%
3,341.69 STI -0.24% 3,197.84 Thailand SETI -1.02% 1,011.72 Shanghai Composite +1.85% 2,727.17 ''

At Bursa Malaysia, CIMB fell 21 sen to RM8.43, dragging the 30-stock index down by a massive 3.69 points while Genting's 20 sen decline to RM11.48 pulled the index down by 1.75 points. Maybank's nine sen decline to RM8.82 and Axiata's loss of six sen to RM4.83 saw the index losing a combined 2.7 points.

Petronas Chemical fell 15 sen to RM6.20 which a news wire said was due to a downgrade at Macquarie Group Research from 'Outperform' to 'Neutral'. A Petronas-related company, MMHE shed 21 sen to RM6.18.

Nestle'' was the top loser, down 50 sen to RM45 and Genting 20 sen to RM11.49. While crude palm oil futures rose RM48 to RM3,780, it was insufficient to stop the profit taking on KL Kepong, which fell 36 sen top RM22.50 and Batu Kawan and PPB gave up 20 sen each to RM16.98 amd RM17.30.

Jerneh was the top gainer, up 29 sen to Rm3.11 and the warrants 17 sen to RM1.43 while Borneo Oil-WA added 19 sen to 42.5 sen and the shares eight sen to 81.5 sen.

Resorts World Prop in talks to buy SingTech's office block for S$150m

KUALA LUMPUR: Genting Singapore PLC unit Resorts World PROPERTIES [] Pte Ltd is in talks to acquire Singapore Technologies' office block for nearly S$150 million.

Genting Singapore president and chief operating officer Tan Hee Teck said on Thursday, Jan 20 the sale and purchase of the office block was still the subject of negotiations.

The company had issued the statement to clarify a Singapore Business Times report that Resorts World at Sentosa Pte. Ltd was in negotiations to acquire the building.

Tenaga advances, off early low of RM6.43

KUALA LUMPUR: Shares of TENAGA NASIONAL BHD [] advanced in early trade on Friday, Jan 21 as it managed to rebound after falling to as low of RM6.43.

At 10.05am, it was up three sen to RM6.52. There were 1.94 million shares done at prices ranging from RM6.43 to RM6.52.

However, the FBM KLCI was down 13.02 points to 1,553.49. Turnover 2qw 400.51 million shares done valued at RM497.31 million. Declining counters battered advancers more than four to one, with 466 losers to 104 gainers.

OSK Research said Tenaga's 1QFY11 core net profit came in above its forecast and consensus as it expected the subsequent quarters to be poorer due to rising coal prices.

'While demand growth still looks reasonable at above 4.5% and coal prices may retreat after February, the lack of transparency in terms of a tariff hike to cover the high coal prices may likely dampen demand for Tenaga's shares despite the 98% q-o-q profit jump,' it said on Friday, Jan 21.

OSK Research said nonetheless, based on its longer term valuation and view, Tenaga remains a Buy at RM6.47, with longer term expectations for an 8% tariff hike and its sensitivity of a 9.5% profit jump for every 1% increase in tariff.

GLOBAL MARKETS-Asian stocks slide as policy worries intensify

HONG KONG: Asian stocks tumbled and commodities paused on Friday, Jan 21 fter a recent selloff on worries that rising inflation may invite aggressive policy tightening and hurt growth in the world's growth engines like China and India.

Investors have been reluctant to add positions in emerging markets so far this year, even rotating funds out of high inflation risk economies such as Indonesia and into developed markets such as Japan, on concerns that policy inertia may place authorities behind the curve in fighting price pressures.

The MSCI index of Asia and Pacific shares excluding Japan extended its drop to 0.5 percent, after falling more than 1.8 percent on Wednesday, weighed down by selling in sectors such as materials which in turn have buckled due to a selloff in commodities this week.

"The market's pretty skittish when it comes to the risk of policy tightening," said Pengana Capital portfolio manager Tim Schroeders.

"I think there's some sector rotation out of those better performing materials and energy stocks back into financials."

Commodities took a breather after a sharp selloff this week, though sentiment remained fragile, on concerns that tighter policy may cool growth and sap demand from resource-hungry Asia.

The February contract settled at $89.59 per barrel, after plunging 2.2 percent overnight while three-month copper stabilised after shedding 2.3 percent in the previous session.

Chinese consumer prices in December rose 4.6 percent from a year earlier, staying above forecasts of 4.4 percent and raising concerns of more rate hikes in the near term, Thursday's data showed. .

Headline inflation in India accelerated to 8.43 pecent in December from a year earlier, compared with 7.48 percent in November and analysts expect a quarter point rate increase at a review next week. .

But the broad wave of risk aversion and upbeat U.S. data gave a lift to the dollar, which hit one-week highs versus the yen amd the Swiss franc .

The euro , too, held its ground due to combination of factors including successful bond sales from highly indebted countries, including Portugal and Spain, and hopes that officials will agree to beef up a euro zone rescue fund.

Bids from Asian central banks have also helped the single currency all this week, traders said.

Gold steadied after a near two percent drop in the previous session. It paused at $1,346.91 an ounce after sliding to a two-month low of $1,342.65 in the previous session. - Reuters

HDBSVR: Malaysian market may come under profit-taking pressures

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) said the Malaysian bourse will probably come under profit-taking pressures when it resumes trading on Friday, Jan 21.

'The benchmark FBM KLCI is expected to gap down, possibly falling to its immediate support level of 1,550,' it said.

HDBSVR said this comes as many Asian stock exchanges plunged when Bursa Malaysia was closed on Thursday.

The key losers were Indonesia (-2.3%), China shares listed in Hong Kong (-2.2%) and Hong Kong (-1.7%) as investors got worried that China might impose further tightening measures after reporting a stronger-than-expected 4Q10 economic performance.

HDBSVR said on the corporate front, there could be share price actions in stocks like: (a) OSK Holdings, after saying that it is negotiating to acquire a broking firm in Thailand; (b) Air Asia following a news article which stated that it is exploring a secondary listing in either U.S. or Hong Kong; and (c) MTD Capital, in response to a media report that an ongoing takeover exercise may see a twist since the current share price of RM9.61 is above the offer price of RM9.50.

#Flash* KLCI skids in early trade, dn 8 pts

KUALA LUMPUR: The market fell at the start of the trade on Friday, Jan 21 with Genting stocks the main losers in a knee-jerk reaction to the sharp falls in key regional markets on Thursday and also weaker Wall Street.

At 9.01am, the KLCI was down 8.14 points to 1,558.37. Turnover was 29.56 million shares valued at RM33.51 million. There were 142 losers against 47gainers.

GENTING BHD [] fell the most, down 18 sen to RM11.50 and Genting Malaysia eight sen to RM3.42. Batu Kawan lost 16 sen and KL Kepong eight sen to RM22.78.

UMW shed nine sen to RM7.41 while YTL, Bursa and Petronas Chemicals eased seven sen each to RM8.26, RM8.68 and RM6.28 respectively.

PChem, Axiata, banks drag KLCI down 14pts

KUALA LUMPUR: Selling pressure sent the FBM KLCI down more than 14 points to near the 1,550 level in early trade on Friday, Jan 21 in a knee-jerk reaction to the sharp falls in key regional markets on Thursday and also weaker Wall Street.

At 9.19am, the 30-stock KLCI was down 14.06 points to 1,552.45. Turnover was 167.16 million shares valued at RM175.4 million. Losers overwhelmed gainers 365 to 62.

Allianz fell the most, down 42 sen to RM4.83 but with only 1,000 shares done. Genting fell 22 sen to RM11.46, SP Setia 14 sen to RM6.41 while Bursa and Petronas Chemicals gave up 13 sen each to RM8.62 and RM6.22 and Axiata 11 sen to RM4.78.

Public Bank and CIMB shed 10 sen each to RM13.34 and RM8.54.

Hwang DBS Vickers Research (HDBSVR) said the Malaysian bourse would probably come under profit-taking pressures when it resumes trading on Friday.

'The benchmark FBM KLCI is expected to gap down, possibly falling to its immediate support level of 1,550,' it said.

HDBSVR said this comes as many Asian stock exchanges plunged when Bursa Malaysia was closed on Thursday.

Malaysia Smelting Corp suspended for announcement

KUALA LUMPUR: Trading in the shares of Malaysia Smelting Corp Bhd (MSC) is voluntarily suspended from 9am to 5pm on Friday, 21 ahead of an announcement.

The request for the suspension was that MSC intends to make a material announcement on the secondary listing of its shares on the Main Board of the Singapore Exchange Securities Trading Ltd (SGX-ST).

The company had earlier said the secondary listing would act as a catalyst to improve its presence amongst investors in the region.

OSK Research: Tenaga 1QFY11 core net profit above forecast

KUALA LUMPUR: OSK Research said TENAGA NASIONAL BHD []'s 1QFY11 core net profit came in above its forecast and consensus as it expected the subsequent quarters to be poorer due to rising coal prices.

'While demand growth still looks reasonable at above 4.5% and coal prices may retreat after February, the lack of transparency in terms of a tariff hike to cover the high coal prices may likely dampen demand for TNB's shares despite the 98% q-o-q profit jump,' it said on Friday, Jan 21.

OSK Research said nonetheless, based on its longer term valuation and view, TNB remains a Buy at RM6.47, with longer term expectations for an 8% tariff hike and its sensitivity of a 9.5% profit jump for every 1% increase in tariff.

In the shorter term, the coal prices may have been fully factored in and TNB may stage a mild rebound. Its target price is RM7.74.

OSK Research maintains Overweight on oil and gas sector

KUALA LUMPUR: OSK Research said the share prices of oil and gas stocks are undergoing a re-rating, largely fuelled by positive market sentiment and strong news flow.

It said on Friday, Jan 21 that going forward, it thinks that partnerships or actual contract awards will be the main 'push' factor for further share price upside and the lucky companies will continue to outperform those which lack news flow.

'Our average sector PER valuation is raised from 13.2x to 16.6x. Maintain Overweight on the sector, with our top picks being Kencana Petroleum, Alam Maritim, Petra Perdana and Petra Energy,' it said.

AMD quarterly earnings beat estimates

SAN FRANCISCO (Reuters) - PC chipmaker Advanced Micro Devices Inc reported better-than-expected fourth-quarter earnings and said on Thursday, Jan 20 its revenue in the current quarter would be flat to slightly down sequentially.

On a non-GAAP basis, AMD said its earnings were 14 cents a share, higher than the 11 cents per share that analysts on average expected, according to Thomson Reuters I/B/E/S. Non-GAAP earnings in the fourth quarter of 2009 were 11 cents per share.

"It's a pretty decent report," said Wedbush analyst Patrick Wang. "The bigger question in my mind is when will they start to see the benefits of Fusion," he said, referring to AMD's new chip lineup.

AMD said its net income fell to $375 million, or 50 cents a share from $1.18 billion or $1.52 a share in the year-ago period.

AMD said its revenue in the fourth-quarter of 2010 was $1.65 billion, the same as the company pre-reported last week. The figure was flat with the year ago.

Analysts on average had forecast AMD's revenue in the current first quarter would be $1.54 billion.

Shares of AMD rose 0.75 percent in after hours trade after closing up 1.13 percent at $8.02. - Reuters

US STOCKS-Dow, S&P dip as F5 view hits Nasdaq, Google up late

NEW YORK : Stocks fell on Thursday, Jan 20 as lackluster tech and materials earnings failed to live up to heightened expectations, threatening to short-circuit a seven-week run.

Declines were milder than on Wednesday, when a sharp drop pulled the market off two-year highs. Morgan Stanley posted stronger-than-expected revenue to help the banking sector rise modestly. Morgan Stanley rose 4.6 percent to $29.02.

But F5 Networks plunged 21.4 percent to $109.15 and pulled the Nasdaq lower after the leader in the network optimization market forecast weak second-quarter revenue.

"The tug of war continued during the course of the day with techs and financials -- the two big behemoths in terms of bellwethers for the market -- slugging it out all day," said Joseph Benanti, managing director of Rosenblatt Securities in New York.

"We had a lot of movement on hot news that will subside. Cloud stocks are important, but they are not going to drive all TECHNOLOGY []. And the financials are a bigger sector to follow and are starting to hold their own."

Google Inc rose 2.2 percent to $640.79 in extended trade after the company reported better-than-expected net revenue for its fourth quarter. The world's No. 1 Internet search engine, whose stock is among the most closely watched, also said co-founder Larry Page will replace Eric Schmidt in April as chief executive.

Freeport-McMoRan Copper & Gold Inc lost 3.7 percent to $110.90 after the copper producer trimmed its sales forecast and said costs would rise. Natural resources stocks also came under pressure after data showing high growth in China stoked fears the country may need to tighten credit in order to check inflation.

The Dow Jones industrial average dipped 2.49 points, or 0.02 percent, to 11,822.80. The Standard & Poor's 500 Index fell 1.66 points, or 0.13 percent, to 1,280.26. The Nasdaq Composite Index lost 21.07 points, or 0.77 percent, to 2,704.29.

BLOWING OFF POSITIVE DATA

Underscoring how overbought the market has become in recent weeks, stocks failed to react to positive jobs and housing market data that pointed to a strengthening recovery.

U.S. crude oil futures posted a third consecutive lower settlement. The expiring February crude contract settled at $88.86 per barrel, down 2.2 percent, which was the biggest percentage slide since prices fell 2.37 percent on Jan. 4.

Alcoa Inc shed 0.5 percent to $15.98, while Exxon Mobil Corp slipped 0.6 percent to $77.75.

In another example of how investors reacted to the market's elevated earnings expectations, Parker Hannifin Corp shares fell 6.1 percent to $85.51. The company, which makes industrial control systems, beat earnings forecasts, but the stock slid as investors faulted the size of the beat.

The latest data indicated that two weak spots in the U.S. economy -- housing and jobs -- appear to be on the mend. U.S. existing home sales jumped more than expected in December despite bad weather as the housing sector struggled to recover from a severe slump, according to a report from the National Association of Realtors.

Earlier in the day, the Labor Department reported that U.S. initial jobless claims posted their biggest weekly decline in nearly a year. - Reuters

Google co-founder Page takes over, shares climb

SAN FRANCISCO: Google Inc CEO Eric Schmidt will step aside and make way for co-founder Larry Page to take the reins, in a surprise announcement that came as the company reported better-than-expected quarterly results on Thursday, Jan 20.

Shares in the Internet search and advertising leader rose about 2 percent to $639 in extended trading.

Page, who co-founded Google with Sergey Brin, will take charge of day-to-day operations as chief executive. Schmidt, who became CEO in 2001 to bring more management experience to the young company, will assume the role of executive chairman, focusing on deals and government outreach, among other things. Brin will concentrate on strategic projects.

"Day-to-day adult supervision no longer needed!" Schmidt tweeted after the announcement.

The abrupt shift comes days after Apple Inc CEO Steve Jobs announced a leave of absence, leaving lieutenant Tim Cook in charge of day-to-day operations. Like Google, Apple also announced results this week that blew past Wall Street's estimates.

"The Street will think it's a negative, that there is probably some issue going on. Google is trying to get more efficient and trying to get a tech guy in the seat to compete with Facebook," said UBS analyst Brian Pitz. "I don't think it changes anything strategically where the company is headed."

Google said the management change was made as part of a plan to "streamline" decision making and create clearer lines of responsibility and accountability at the top.

It said Schmidt plans to sell about 534,000 shares of Class A common stock. Based on Google's closing share price of $626.77 on Thursday, he would earn about $334.7 million on the stock sale. He would still own about 2.7 percent of Google's outstanding capital stock, down from 2.9 percent before selling the shares.

"As Google has grown, managing the business has become more complicated. So Larry, Sergey and I have been talking for a long time about how best to simplify our management structure and speed up decision making," Schmidt said in a posting on the company's official blog.

"And over the holidays we decided now was the right moment to make some changes to the way we are structured."

Google also reported fourth-quarter financial results, beating Wall Street's net revenue expectations. - Reuters

Net revenue, excluding fees paid to partner websites, was $6.37 billion. Analysts polled by Thomson Reuters I/B/E/S, on average, were expecting net revenue of $6.06 billion.

Google posted net income, excluding items, of $8.75 a share, outstripping Wall Street's average forecast of $8.10.

Schmidt said on his blogpost that Page will now lead product development and TECHNOLOGY [] strategy, areas that are "his greatest strengths."

"It will be interesting to see what he'll do that's different, what he could not have done in his prior role," said BGC Partners analyst Colin Gillis. - Reuters

Hewlett-Packard shakes up board, four to leave

SAN FRANCISCO: Hewlett-Packard Co is shaking up its board, bringing in five new directors including former eBay chief Meg Whitman, as new CEO Leo Apotheker remakes the company, according to Reuters on Thursday Jan 20.

HP's board had been criticized by analysts, shareholders and other business leaders after it forced out Mark Hurd as CEO in a controversial fashion.

HP said the new directors will bring fresh thinking to the world's largest TECHNOLOGY [] company by revenue, including much-needed expertise in areas such as telecommunications, as well as international experience.

In addition to Whitman, HP named as directors Shumeet Banerji, CEO of Booz & Co; Gary Reiner, former chief information officer of General Electric Co; Patricia Russo, former CEO of Alcatel-Lucent; and Dominique Senequier, CEO of AXA Private Equity.

The technology giant said directors Joel Hyatt, John Joyce, Robert Ryan and Lucille Salhany will not stand for reelection by shareholders.

The four are all leaving voluntarily, HP said. Hyatt and Joyce have been directors since 2007, Ryan since 2004, and Salhany since 2002.

The changes will leave HP with 13 board members.

"With Leo coming in as CEO, we both thought it was appropriate to look at the board," said HP Chairman Ray Lane in an interview.

Gleacher & Co analyst Brian Marshall said investors should welcome the move.

"Net-net I think this is a big positive. To shake it up a little bit and get some of the old-school guys out of there and get some new -school blood in there, highlighted by Meg Whitman, this is a positive development," he said.

Apotheker, the former CEO of SAP AG, took over as chief of HP in November.

"This change was two things -- the handling of the Mark Hurd situation, which was very controversial, and that with a new CEO it makes sense to have someone new," said Kaufman Bros anlayst Shaw Wu.

Hurd's departure in August stunned investors and sent shares tumbling 8 percent in the first trading day after the announcement. Now an Oracle co-president, Hurd left under a cloud of sexual harassment accusations, although the board found no evidence to back up that allegation.

HP instead accused Hurd of filing inaccurate expense reports to conceal a "close personal relationship" with a former contractor, although Hurd's representatives have disputed that.

Shares of Palo Alto, California-based HP were down 4 cents at $46.74 following announcement of the board changes, which came after the stock closed down 0.9 percent at $46.78 on the New York Stock Exchange. - Reuters

GLOBAL MARKETS-China rate concerns roil stocks, commodities fall

NEW YORK: Global equities and commodity prices fell on Thursday, Jan 20 after robust Chinese economic growth prompted fears the world's second-largest economy would try to choke off excessive demand that is fueling inflation.

Fears China would tighten monetary policy were felt across multiple asset classes after the country's fourth-quarter gross domestic product soared past forecasts, rising to 9.8 percent.

A rise in U.S. financial shares, led by Morgan Stanley, helped cut Wall Street's losses, although all three major indexes fell. A disappointing outlook for F5 Networks -- a leader in so-called cloud computing to move information away from desktops and into remote centers -- contributed a negative counterweight that dragged the Nasdaq market lower.

"The tug of war continued during the course of the day with techs and financials -- the two big behemoths in terms of bellwethers for the market -- slugging it out," Joseph Benanti, managing director of Rosenblatt Securities in New York said about the U.S. stock market moves.

"We had a lot of movement on hot news that will subside. Cloud stocks are important, but they are not going to drive all TECHNOLOGY []. And the financials are a bigger sector to follow and are starting to hold their own."

The losses, while minor, extended Wednesday's intraday decline for the broad S&P 500 stock index, the worst in nearly two months.

At the close, the Dow Jones industrial average fell 2.49 points, or 0.02 percent, to 11,822.80. The Standard & Poor's 500 Index lost 1.66 points, or 0.13 percent, at 1,280.26. The Nasdaq Composite Index dropped 21.07 points, or 0.77 percent, at 2,704.29.

On the plus side, shares in No. 2 U.S. investment bank Morgan Stanley, which posted a 60 percent increase in quarterly profit, rose 4.57 percent to $29.02 a share.

Among the U.S. networking/cloud stocks, F5 Networks fell 21.35 percent to $109.15 on weaker-than-expected quarterly revenue and a gloomy forecast.

Hit hard however by expectations China will ramp up anti-inflationary measures were emerging market equities, down 1.55 percent. Materials, mining and car companies fell on concern demand from China's factories may slacken.

Freeport-McMoRan Copper & Gold Inc lost 3.7 percent to $110.90 after the copper producer trimmed its sales forecast and said costs would rise. Ford Motor fell 0.67 percent

The pan-European FTSEurofirst 300 index of top shares closed down 1.11 percent at 1,139.63 points - its lowest since Jan. 11.

Japan's Nikkei closed 1.1 percent lower on Thursday. However, futures trading in Chicago pointed to a stronger open in Tokyo on Friday, up 15.00 at 10,500.

Oil prices fell $2 to settle at $88.86 a barrel in New York. Copper had its worst day in two months.

Spot gold fell $24.41, or 1.78 percent, to a two-month low of $1,345.40.

DOLLAR GAINS

A stronger-than-expected rise in existing home sales and a fall in new claims for jobless benefits could not boost U.S. stocks but did help lift the U.S. dollar.

The euro managed to grab the edge back from the U.S. dollar in late day trade, but the greenback advanced against a broad basket of currencies made up of its major trading partners, including the yen.

Earlier on Thursday, the euro was supported by expectations the European Union would come up with a comprehensive plan to help debt-laden countries finance their overwhelming obligations.

The euro rose 0.04 percent at $1.3471.

"We are finally seeing some growth and we have to at least think about when the Federal Reserve will (tighten) policy, even though it won't happen soon," said Jens Nordvig, global head of G10 FX strategy at Nomura.

As such, "it's possible to make money from a broad-based dollar exposure through a basket including yen, the Aussie and Canadian dollars and sterling," he said. The greenback has struggled against all those currencies in recent months.

The U.S. dollar index climbed 0.22 percent, while the greenback rose 1.16 percent to 83.1 yen.

Against the Swiss franc, the dollar gained more than 1 percent to 0.9673 francs.

The benchmark 10-year U.S. Treasuries fell 28/32, pushing the yield up to 3.45 percent. The price decline accelerated after a poorly received $13 billion sale of inflation-protected Treasuries. - Reuters

#Stocks to watch:* Tenaga, Puncak, F&N, Masteel

KUALA LUMPUR: Stocks on Bursa Malaysia may see some downside pressure on Friday, Jan 21 after China key stocks index fell 2.9% on Thursday on concerns of more monetary tightening.

At Bursa, the FBM KLCI fell on Wednesday, weighed down by losses in CIMB but the losses were relatively limited across the broader market, despite the firmer regional markets.

Companies with fresh corporate news including TENAGA NASIONAL BHD [], Fraser & Neave Holdings Bhd, Malaysia Steel Works (KL) Bhd (Masteel) and KUB MALAYSIA BHD [] (KUB) and PUNCAK NIAGA HOLDINGS BHD [] could see trading interest.

TNB's board of directors expects the group's prospects to be very challenging for the current financial year due to the rising coal prices in the absence of a tariff review.

It reported earnings of RM712.9 million in the first quarter ended Nov 30, 2010, just a marginal 1% increase from the RM706.3 million a year ago as it was impacted by higher coal prices. The power giant said on Wednesday, Jan 19 there was an increase in forex translation loss of RM104.8 million as compared to RM45.4 million a year ago due to the strengthening of the yen and US dollar against the ringgit.

Puncak Niaga could see some selling pressure after the company and its joint venture partner have failed in their tenders for the two water supply and drainage projects in India. Puncak said that its partner P&C CONSTRUCTION []s (P) Ltd had dissolved the joint venture agreements following the unsuccessful bids.

Fraser & Neave will allocate up to RM500 million as it seeks to take on a more regional and full fledged group from its current form as a tightly controlled food and beverage firm into a more regional and full fledged group.

It has also received the approval to market its isotonic drink 100PLUS and carbonated soft drinks in Thailand and Brunei, a move which will enhance its beverages business in Thailand especially.

Masteel and KUB have proposed to build and operate a 100km inter-city rail transit system in Iskandar Malaysia, which will connect to the MRT line from Singapore. The companies said the project could cost over RM1 billion, and consists of up to 25 commuter stations in major towns in the Iskandar Malaysia region in the initial stage.

Other stocks in the news would be OSK HOLDINGS BHD [] after its investment bank, which is seeking opportunities to expand into Thailand, has received the go-ahead from the potential securities company for a due diligence to be carried out.

In UMW HOLDINGS BHD [], the automotive and oil and gas player is allocating about RM800 million for expansion, of which RM500 million would to be expand its local operations including the automotive business.

GLOBAL MARKETS-Fiery China growth worries stock investors

LONDON: Stronger-than-expected Chinese growth data spurred concern on Thursday, Jan 20 about tighter monetary policy, prompting a sell-off in equities led by emerging markets.

The euro dipped on profit-taking after reaching two-month highs in the previous session but then trimmed losses as speculation grew that the euro zone's rescue mechanism for fiscally troubled peripheral states might be strengthened.

Chinese growth soared past forecasts and inflation slowed less than expected in the fourth quarter, prompting worries that the government may intensify tightening. Disappointing U.S. earnings added to the mix.

The potential for measures to slow Chinese growth ending up as a hard landing is one of the major risks cited by investors heading into 2011.

"A lot of Asian economies, and especially China, (are) overheating. People have invested heavily in commodity shares and any disappointing news might provoke a ... correction," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

Emerging market stocks were the main victim, with MSCI's benchmark index losing more than 1 percent and slipping into negative territory for the year.

Overall, global stocks as measured by MSCI lost half a percent.

In Europe, the FTSEurofirst 300 was down 0.4 percent, adding to 1.3 percent losses on Wednesday. Mining stocks were among the biggest losers on the assumption that demand for basic resources would fall if China's growth is reined in.

Earlier, Japan's Nikkei closed 1.1. percent lower.

Overnight, the U.S. S&P 500 suffered its biggest decline in nearly two months as Goldman Sachs posted a 53 percent drop in profit on a tumble in trading revenue and Wells Fargo came in below some analysts' estimates.

''

EURO SLIPS, THEN RECOVERS

The euro slipped against the dollar with investors booking profits on the single currency's rally to a two-month high.

The single currency slipped as much as 0.2 percent to $1.3420, retreating from $1.3539 hit on Wednesday, its strongest since late November.

It later recovered to trade around $1.3470, unchanged on the day, amid optimism over the shape of possible reforms to the euro zone rescue fund which also kept debt from the euro zone's lower-rated issuers steady after outperformance in the previous session. German debt prices slipped.

The Financial Times Deutschland on Thursday said euro area finance ministers had discussed a plan on Monday at a regular meeting in Brussels to allow Athens to buy back its own debt using credits from the euro zone's rescue fund.

"This has the potential to really get the uncertainty out of the air ... but so far we just lack the facts which hinders further (debt) spread tightening," said David Schnautz, rate strategist at Commerzbank. - Reuters

China shares end down on liquidity crunch, data

SHANGHAI: China's key stock index ended down 2.9 percent on Thursday, Jan 20, weighed by banking and commodity stocks, as the latest economic data pointed to the need for a continuation of monetary tightening while a liquidity crunch in the money market capped trading flows.

The benchmark Shanghai Composite Index fell to 2,677.7 points after 2010 economic data was published on Thursday, with the latest figures showing growth soaring past expectations while inflation slowed just a touch.

The People's Bank of China has taken a slew of steps since October to dampen inflation, including raising official rates twice and bank reserve requirement ratios four times, which have severely curbed liquidity in the money market. ($1 = 6.6 yuan) - Reuters

Japan corp mood up, seen steady ahead-Reuters Tankan

TOKYO: Japanese manufacturing confidence improved in January for the first time in three months, a Reuters poll showed, in a sign the economy is likely to start picking up after a small contraction expected in the final quarter of 2010.

The yen's slight pullback from 15-year highs and expectations for recovery in the United States helped ease some concerns about business conditions, with the mood of manufacturers seen remaining firm over the next three months, the monthly Reuters Tankan showed on Thursday, Jan 20.

Service-sector firms became the least pessimistic since June 2008 and their sentiment is seen edging up further in April, according to the poll of 400 large firms, of which 230 responded, taken Jan. 4-17.

The monthly poll, which has a 95 percent correlation with the Bank of Japan's closely watched quarterly tankan survey, showed a turnaround in corporate mood from last month when manufacturers were increasingly wary about the outlook due to a strong yen and slowing exports.

The reading from the Reuters Tankan chimes with the view shared by the central bank and private-sector economists that the Japanese economy will resume a moderate recovery this year on the back of exports, particularly to emerging markets.

But companies also voiced concerns about rising commodity prices, sluggish demand at home, stubborn deflation and a strong yen, which squeeze their profits.

In the Reuters Tankan, the manufacturing sentiment index, derived by subtracting the percentage of pessimistic respondents from optimistic ones, rose four points from December to plus 11 -- half a recent peak of plus 22 hit in August -- and is seen remaining unchanged over the next three months.

The mood of non-manufacturers grew 10 points to minus 2, its highest reading since June 2008 and is seen climbing to minus 1, although this is still below zero, meaning pessimists have outnumbered optimists since 2008.

"In Japan we face a decline in demand in reaction to the expiry of government subsidies for low-emission auto purchases, but we are doing relatively well in emerging economies," a transport equipment producer said in the survey.

An electric machinery maker said: "We can expect growth in Asia, but the economic outlook in developed countries remains unclear. On top of this, a strong yen is taking root."

In the last BOJ tankan in December, manufacturers' business sentiment worsened for the first time in nearly two years and they expected the situation to deteriorate further over the next three months.

While the Reuters Tankan has a close correlation with the BOJ tankan, the two surveys target different types and numbers of sample firms.

The BOJ last year cut interest rates effectively to zero and set up a 5 trillion yen ($60 billion) pool of funds to buy assets ranging from government bonds to private debt, aiming to support a fragile economy and pull Japan out of deflation.

At its next rate review on Jan. 24-25, the central bank is expected to make minor tweaks to its growth forecasts but will stick to its view that the economy will resume a moderate recovery later this year, according to sources familiar with the BOJ's thinking. - Reuters

China Q4 GDP growth speeds up, Dec inflation eases

BEIJING: China's annual gross domestic product growth sped up in the fourth quarter to 9.8 percent from 9.6 percent in the third quarter, the National Bureau of Statistics (NBS) said on Thursday, Jan 20, defying expectations for a slowdown.

Consumer prices rose 4.6 percent in December from a year earlier, slowing from a 28-month high of 5.1 percent in November.

Economists had forecast fourth-quarter growth of 9.2 percent and 4.4 percent inflation in December.

The CPI rose 0.5 percent in December from the previous month after a 1.1 percent month-on-month rise in November. This figure is not seasonally adjusted.

Giving a breakdown of CPI, the NBS said food prices rose 9.6 percent in the year to December, while non-food prices were up 2.1 percent from a year earlier.

The Producer Price Index rose 0.7 percent between December and November after a 1.4 percent rise in November.

GDP in 2010 totalled 39.798 trillion yuan ($6.045 trillion).

Urban per-capita disposable incomes were up 7.8 percent from a year earlier in real terms in 2010; real rural per-capita cash incomes were up 10.9 percent. - Reuters

Templeton's Mobius says considering hedge fund

HONG KONG: Templeton's Mark Mobius is considering a plan to set up a hedge fund, the emerging market guru said in an e-mail to Reuters on Thursday, Jan 20, a move that would mark a major shift from traditional money managers into the $1.9 trillion alternative asset management industry.

"Yes, we are considering it," said Mobius who oversees more than $40 billion as chairman of Franklin Templeton's Emerging Markets Group.

He did not divulge details of the fund as the plan was not final yet.

The star manager enjoys a strong success in Asia, where his flagship $15.5 billion Templeton Asian Growth Fund has given investors an over-five-fold return in the past decade, making it the second best Asia ex-Japan equities fund over 10 years ending December 2010, according to data from Thomson Reuters Lipper.

Singapore-based Mobius' move comes at a time when large American hedge funds are looking to set up shop in Asia as more and more institutional investors aim to boost exposure to the fast-growing region in search of higher yield.

Assets under management of Asia ex-Japan hedge funds are expected to surge to about $140 billion by the end of 2011 from just over $110 billion now. - Reuters

US STOCKS-Banks, techs trigger Wall St's worst drop in 2 months

NEW YORK: The S&P 500 suffered its biggest decline in nearly two months on Wednesday, Jan 19 as disappointing results from Goldman Sachs and Wells Fargo put a damper on the rally.

The Nasdaq fell more than 1 percent, its biggest daily percentage loss since Nov. 16, as more disappointment in earnings came from chipmaker Cree Inc. Its stock tumbled 14.5 percent to $53.63.

After the close, F5 Networks Inc shares plummeted 20.7 percent to $110.08 after the network equipment maker posted weaker-than-expected quarterly revenue and forecast second-quarter revenue below Wall Street's estimates. The stock has been one of the big momentum plays during the past year and could serve to extend the sell-off on Thursday.

Financial and TECHNOLOGY [] stocks have been driving the surge that has pushed the benchmark index up nearly 10 percent since the start of December, which some investors believe has stocks primed for a pullback.

"Even stocks here that are beating expectations are not acting favorably so (for) the market, it may be time for a pause, and that may be what we are seeing here." said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

A prime example was Apple Inc, which slipped 0.5 percent to $338.84 after the company reported a quarterly profit that blew past Wall Street's expectations on strong sales of iPhones, iPads and Mac computers.

Goldman Sachs Group Inc's stock fell 4.7 percent to $166.49, its biggest daily percentage decline since April 30, after the Wall Street firm posted a 53 percent drop in profit as trading revenue tumbled. Shares of Wells Fargo & Co lost 2 percent to $31.81 after the company posted a fourth-quarter profit that missed some analysts' estimates.

"You are having a lot of people coming into this sector over the last couple of weeks for more longer-range investment planning. You've got some people that came into the trade behind them that now see their short-term trade isn't going to work," Mendelsohn said.

Optimism about financial-sector earnings increased after JPMorgan Chase's results on Friday beat targets.

The Dow's loss was limited by International Business Machines Corp , which climbed 3.4 percent to $155.69 on strong earnings after the close on Tuesday.

The Dow Jones industrial average fell 12.64 points, or 0.11 percent, to 11,825.29. The Standard & Poor's 500 Index lost 13.10 points, or 1.01 percent, to 1,281.92. The Nasdaq Composite Index dropped 40.49 points, or 1.46 percent, to 2,725.36.

CROSSING THE RUBICON

Shares of Cree and its rival LED lighting makers fell after it reported weaker-then-expected sales, profit and a current quarter outlook late on Tuesday.

The PHLX semiconductor index also dropped 2.4 percent, its worst percentage decline since Aug. 30.

Rubicon Technology Inc slumped 7.7 percent to $$20.75 and circuit maker Linear Technology Corp fell 4.4 percent to $34.56.

American Express Co lost 2.4 percent at $45.24 after it said restructuring charges would reduce fourth-quarter earnings.

Volume was slightly below average with about 8.35 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, just short of last year's estimated daily average of 8.47 billion.

Declining stocks far outnumbered advancing ones on the NYSE by a ratio of more than 3 to 1, while on the Nasdaq, nearly five stocks fell for every one that rose. - Reuters

GLOBAL MARKETS-Euro gains as debt fears wane, S&P 500 tumbles

NEW YORK: The euro rose to an eight-week high on Wednesday, Jan 19 on increasing optimism that Europe can defuse its debt crisis, but equities fell on poor U.S. housing data and bank earnings, while a rally in commodities faded.

Traders said Asian sovereigns were again big buyers of the euro, forcing enough short-covering to help it outperform the U.S. dollar for the seventh session in the last eight.

The euro climbed more than 1 percent to hit a session high of $1.3538 after slumping last week to a four-month low of less than $1.30 on worries that a debt crisis that had engulfed Greece and Ireland in 2010 would spread.

But solid bond auctions in Spain and Portugal have boosted spirits and talk that German officials were drafting contingency plans in case Greece defaults suggested they were working to prevent a deeper crisis.

"There is a growing sense of optimism that European leaders are finally getting their act together and working in a unified manner," said Samarjit Shankar, managing director of global foreign exchange strategy at BNY Mellon in Boston.

MSCI's all-country world index for stocks fell 0.5 percent, paring gains that had lifted the index earlier in the session to highs last seen in August 2008.

Stocks in Tokyo were poised to open lower, with the March futures contract that trades in Chicago for the Nikkei 225 down slightly by 10 points at 10,475.

The Standard & Poor's 500 Index suffered its biggest decline in nearly two months after disappointing results at Goldman Sachs Group Inc and Wells Fargo & Co.

Financials and TECHNOLOGY [] stocks have fueled a surge that has pushed the benchmark index up nearly 10 percent since the start of December, leading some investors to say stocks are primed for a pullback.

"Even stocks here that are beating expectations are not acting favorably, so (for) the market it may be time for a pause, and that may be what we are seeing here," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

Groundbreaking for new U.S. homes fell more than expected in December to the lowest in over a year, the Commerce Department said.

The Dow Jones industrial average closed down 12.64 points, or 0.11 percent, at 11,825.29. The Standard & Poor's 500 Index fell 13.10 points, or 1.01 percent, at 1,281.92. The Nasdaq Composite Index slid 40.49 points, or 1.46 percent, at 2,725.36.

The Dow's decline was limited by International Business Machines Corp, which climbed 3.4 percent following the release of strong earnings after the close on Tuesday.

Brent oil futures rose above $98 a barrel on supply concerns in the North Sea, but worries in the equity market about the economic recovery kept prices off the key $100 level and saw U.S. crude ease for a second day.

ICE Brent crude for delivery in March rose 36 cents to settle at $98.16 a barrel.

U.S. crude oil futures for February delivery fell 52 cents to settle at $90.86 a barrel, one day ahead of the contract's expiry, in relatively thin trade.

Copper retreated from a fresh record high in London, as profit-taking pressures mounted in response to weak U.S. equities and another large build in London inventories.

Gold rose for a third straight day on a weaker dollar and strong Asian physical demand, while an improving global economic outlook took platinum and palladium to multiyear highs.

U.S. gold futures rose $2 to settle at $1,370.20.

The dollar was down against a basket of major currencies, with the U.S. Dollar Index off 0.48 percent at 78.586.

U.S. Treasuries rose as corporate deal pricings fueled buying, while President Barack Obama and Chinese President Hu Jintao avoided a public clash on currency differences that might have rattled the bond market.

The benchmark 10-year U.S. Treasury note was up 8/32, with the yield at 3.337 percent. - Reuters

Feng shui says Hong Kong stocks to hop out a rabbit hole

HONG KONG: Now playing: A rabbit in the tiger's shadow.

That is not the latest Hong Kong hard-boiled kung-fu flick but the theme for Hong Kong's stock market this year, CLSA Asia-Pacific Markets said its light-hearted annual outlook based on the ancient Chinese practice of feng shui.

The year of the rabbit, according to the Chinese zodiac, will begin on February 3 when the year of the tiger comes to a close.

CLSA forecast that the new year will be rewarding for investors in Hong Kong-listed shares as long as they are willing to ride out the early volatilty.

"A reputedly placid, personable and prescient white rabbit will wrest the reins from the decidedly unpleasant and erratic tiger that's been tossing and turning the markets over the past 12 months," CLSA said in its colourful report on Wednesday, jan 19.

Philip Chow, who in his usual day job as a CLSA analyst tracks east Asian shipping companies, donned the mantle of feng shui master for this year's outlook and forecast that conditions are going to be choppy in the near term.

"The rabbit will stay in its hole as the tiger prepares to leave," said Chow.

The second half gets easier as China finally manages to getinflation under control, he said.

Gaming stocks will do well as tourist flock to Macau. Gold will shine. And financials will break out of the funk they've been in through much of 2010.

Those forecasts, while meant to be taken with a pinch of salt, do gel well with CLSA's more serious, traditional forecast which calls for Hang Seng index <.HSI> rising to 29,000, more than 18 percent above current levels. - Reuters

Puncak Niaga JV fails in bid for India water supply projects

KUALA LUMPUR: PUNCAK NIAGA HOLDINGS BHD [] and its joint venture partner have failed in their tenders for the two water supply and drainage projects in India.

Puncak said on Wednesday, Jan 19 that its partner P&C CONSTRUCTION []s (P) Ltd had dissolved the joint venture agreements following the unsuccessful bids.

On Oct 20 last year, Puncak and P&C Constructions had signed two JV agreements to bid for package III and package V of the Hogenakkal water supply and fluorosis mitigation projects for the Dharmapuri and Krishnagiri districts.

Tenaga 1Q earnings flat at RM712.9m

KUALA LUMPUR: TENAGA NASIONAL BHD [] reported earnings of RM712.9 million in the first quarter ended Nov 30, 2010, just a marginal 1% increase from the RM706.3 million a year ago as it was impacted by higher coal prices.

The power giant said on Wednesday, Jan 19 there was an increase in forex translation loss of RM104.8 million as compared to RM45.4 million a year ago due to the strengthening of the yen and US dollar against the ringgit.

Tenaga said revenue rose 5.3% or RM388.10 million to RM7.726 billion from RM7.338 billion. Earnings per share were 16.38 sen versus 16.28 sen. The 5.3% increase in revenue was maninly due to an increase in sales of electrcity in the peninsula and Sabah Electricity Sdn Bhd (SESB).

"The electricity demand has shown a growth of 5% in the peninsula and 6.4% in SESB as compared to the previous corresponding period last financial year," it said.

Operating expenses roase at a faster rate mainly due to higher generation costs as the average contracted coal price was US$95.5 per tonne compared with US$79.5 a tonne a year ago.

When compared to the fourth quarter ended Nov 30, 2010, revenue declined by 1.8% from RM7.869 billion.

"Despite the lower revenue, operating profit recorded an increase of 75%, amounting to RM537 million," it said, attributing this to lower oeprating expenses in the current quarter.

"This resulted in a net profit after tax (attributable to owners of the company) of RM712.9 million, an increase of 83.5% as compared to RM388.4 million reported in the previous quarter," it said.

Tenaga said the lower operating expenses were mainly due to lower fuel costs, down 6.8%, from the fourth quarter.

However, on the prospects for the current financial year ending Aug 31,2011, "the board of directors expects the group's prospects... to be very challenging".

Masteel, KUB in RM1b plan for inter-city rail transit infra in Iskandar Malaysia

KUALA LUMPUR: Malaysia Steel Works (KL) Bhd (Masteel) and KUB MALAYSIA BHD [] (KUB) have proposed to build and operate a 100km inter-city rail transit system in Iskandar Malaysia which will connect to the MRT line from Singapore.

The companies said in a joint statement on Wednesday, Jan 19, 2011, the project could cost over RM1 billion and consists of up to 25 commuter stations in major towns in the Iskandar Malaysia region in the initial stage.

"The operation of the inter-city rail transit shall be based on a 25-year concession," they said in the statement after the signing of the head of joint venture agreement to undertake the project.

Masteel and KUB would hold 60% and 40% equity stakes respectively in the JV company, Metropolitan Commuter Network Sdn Bhd. The project would be undertaken in three phases and completed within 24 months from project commencement.

The building of the rail transit infrastructure would also be funded by project financing under the public-private Partnership scheme (PPP).

Masteel managing director and chief executive officer Datuk Seri Tai Hean Leng said this would be a major infrastructure project in Johor as it would greatly boost its connectivity and economy.

"The upcoming inter-city rail transit is a reflection of Johor's continued progress thus far, and I believe that it would serve to bring the state to the next level of growth and vibrancy," he said.

The project will ease traffic congestion, estimated to grow at 4.2% every year along Johor and Singapore.

F&N allocates RM500m to transform into regional player

KUALA LUMPUR: Fraser & Neave Holdings Bhd will be allocating up to RM500 million to transform itself from a tightly controlled food and beverage firm into a more regional and full fledged group between three and five years, its chief executive officer Datuk Ng Jui Sia said.

"Under the transition agreement signed with Coca Cola, we are free to pursue exciting growth opportunities via the introduction of new brands or categories from Jan 27, 2010 for both domestic and export markets," he told reporters after the company's AGM here on Wednesday, Jan 19.

F&N had in 2009 said its Coca Cola buinsess will end in September 2011.

Jui added the investment in COCOALAND HOLDINGS BHD [] will serve as a pillar for the company to tap into and expand in the food business, which is also part of the group's transformation plan.

Last year, F&N bought a 23.08% stake in Cocoaland at RM1.38 per share.

CIMB weighs on market

KUALA LUMPUR: Selling of CIMB weighed on blue chips on Wednesday, Jan 19, sending the FBM KLCI lower for the second day as investors decided to take profit ahead of the holidays on Thursday.

At 5pm, the FBM KLCI was down 3.53 points to 1,566.51.Turnover was 1.63 billion shares valued at RM2.20 billion. Decliners led advancers 545 to 293 while 270 counters were unchanged.

However, several counters advanced on fresh positive corporate news including Pos Malaysia, DiGi and Mitrajaya.

World stocks hit their highest in nearly 2-1/2 years on Wednesday and the dollar dipped to eight-week troughs as strong fourth-quarter corporate earnings boosted confidence the world economic recovery would keep its momentum, according to Reuters.

Apple Inc released strong results and an upbeat outlook on dazzling sales of the iPhone and iPad, while International Business Machines Corp reported better than expected quarterly profit.

At Bursa Malaysia, CIMB fell 14 sen to RM8.64 with 28.643 million shares done while MMHE shed 11 sen to RM6.39.
Other decliners were UEM Land-CD, down 13 sen to 74 sen and GAB 12 sen to RM10.58 while among PLANTATION []s, United Plantations and Sarawak Plantations lost 10 sen each to RM16.58 and RM2.62.

Benalec, which was listed on Monday, climbed 14 sen to RM1.47 with 48 million shares done. KSSC, which was listed on Wednesday, added 4.5 sen to 61.5 sen in active trade.

DiGi rose 28 sen to RM25.58 after it signed a network collaboration agreement with Celcom which would enable both parties to save up to RM2.2 billion over 10 years.

Pos Malaysia added 25 sen to RM3.64 after Khazanah Nasional Bhd said it would call bids this week for the sale of its 32.21% stake. Its call warrants POS-CA added 5.5 sen to 23 sen.

Mitrajaya rallied 17 sen to RM2 after it proposed a corporate exercise which includes a one-into-two share split, proposed bonus issue of 139.85 million new shares and also the issuance of 52.44 million free warrants.

KUB added 6.5 sen to 93.5 sen after the company and Malaysia Steel Works'' announced their intention'' to'' build and operate a 100km inter-city rail transit system in Iskandar Malaysia, which will connect to the MRT line from Singapore.

The project could cost over RM1 billion and consists of up to 25 commuter stations in major towns in the Iskandar Malaysia region in the initial stage.

F&N to gets nod to distribute 100PLUS, soft drinks in Thailand, Brunei

KUALA LUMPUR: Fraser and Neave Holdings Bhd has received the approval to market its isotonic drink 100PLUS and carbonated soft drinks in Thailand and Brunei, a move which will enhance its beverages business in Thailand especially.

The company said on Wednesday, Jan 19 it was granted the additional territories of Thailand and Brunei under its existing distribution licensing arrangement with Fraser and Neave, Ltd.

F&N said the range of products included 100PLUS, F&N fruit flavoured carbonated soft drinks, SEASONS and Fruit Tree range of products.

"The Thailand market represents a new frontier for F&N beverages," it said, adding the group was drawing up its market entry plan for its beverages business in Thailand and would initially focus on southern Thailand using its iconic "100PLUS" brand as the launching pad.

"The group has identified a potential distribution partner with an established distribution network in Thailand and will commence discussions shortly to formalise the distribution arrangement," it said.

F&N said it expected the Thailand market to "offer significant growth potential for the group over the medium to long term time frame".

As for the Brunei market, it would be integrated into the existing F&N East Malaysian operations for operating efficiency.
F&N said it would launch the "F&N" range of products and "100PLUS" in Brunei after current licensing arrangements between F&NL and The Coca-Cola Company end.

OSK gets nod for due diligence of Thailand's BFIT Securities plc

KUALA LUMPUR: OSK Investment Bank Bhd (OSKIB), which is seeking opportunities to expand into Thailand, has received the go-ahead from the potential securities company for a due diligence to be carried out.

OSKIB said on Wednesday, Jan 19 it had received the approval from BFIT Securities Public Company Ltd on Tuesday for OSKIB to undertake a due diligence review.

It added the exercise was prior to commencing negotiations for the prospective acquisition.