#Stocks to watch:* Century Software, EON Cap, GAB, DiGi

KUALA LUMPUR: Stocks on Bursa Malaysia could see volatility with downside bias in the trade-shortened week, starting on Jan 31, as investors react to the overnight decline on Wall Street following the political'' instability in Egypt.

With Bursa Malaysia closing for three days, due to the Federal Territory Day on Feb 1 and Chinese New Year holidays from Feb 3 to 4, investors would be reluctant to take fresh buying positions especially due to the already weak sentiment.

Investors' hope for the rebound last Friday fizzled out on selling pressure of stocks with high foreign shareholdings and also banks. Worries about Bank Negara raising the statutory reserve requirement would weigh down interest.

On Wall Street, US socks suffered their biggest one-day loss in nearly six months on Friday, Jan 28 as anti-government'' rioting in Egypt prompted investors to flee to less risky assets to ride out the turmoil.

Increased instability in the Middle East drove up the CBOE'' Volatility Index, the stock market's fear gauge, as investors scrambled for protective positions.

The Dow Jones industrial average ended down 166.13 points, or 1.39%, at 11,823.70. The Standard & Poor's 500 Index was down 23.20 points, or 1.79%, at 1,276.34. The Nasdaq Composite Index fell 68.39 points, or 2.48%, at 2,686.89. For the week, the Dow fell 0.4%, the S&P lost 0.5% and the Nasdaq dipped 0.1%.

For the week ahead, US stocks may struggle to return to firmer footing if anti-government riots in Egypt destabilise the Middle East, keeping investors on edge.

At Bursa, stocks to watch are Century Software Holdings Bhd, EON CAPITAL BHD [], GUINNESS ANCHOR BHD [], DIGI.COM BHD [] and MTD CAPITAL BHD []. Also in focus will be PLANTATION []s and banks, which have borne the brunt of the foreign selling.

Century Software issued 23 million new shares of 10 sen each at an offer price of 93 sen each. Kenanga Research has a target price of RM1.43.

Kenanga Investment Bank Research said following a recent meeting with Century Software, it is convinced that the group is set for greater growth.

'We have upgraded our FY10, FY11 and FY12 earnings estimates to RM10.9 million, RM19.1 million and RM25.3 million, respectively. We value Century Software at 12.9 times PER to its FY11 EPS of 11.1 sen, hence we pegged our 12-month target price at RM1.43,' it said.

Meanwhile, the Kuala Lumpur High Court is set to announce its decision on suit by Primus (Malaysia) Sdn Bhd against EON Capital Bhd over the Sept 27, 2010 EGM. Primus is opposed to the HONG LEONG BANK BHD [] takeover of EON Cap.

Primus had filed an originating summons with the High Court as it sought relief from the court over several issues against the company. Primus had sought a declaration that the motion to adjourn the Sept 27 EGM was a valid motion.

To recap, on Oct 4, 2010, Primus had filed an originating summons with the High Court as it sought relief from the court over several issues against the company.

Primus had sought a declaration that the motion to adjourn the Sept 27 EGM was a valid motion. It also sought to declare the EGM chairman's decision not to put the motion for an adjournment of the EGM to a vote was unlawful. Other relief included a declaration the motion to remove the chairman as valid.

Primus had sought a declaration that the chairman's refusal to put the motion for his removal as the chairman of the EGM was unlawful; while all the proposed resolutions passed at the EGM were null and void.

On the bright side, DiGi.com posted earnings of RM332.02 million in the fourth quarter ended Dec 31, 2010 compared with RM246.5 million a year ago.

The earnings growth was underpinned by increased usage from an enlarged subscription base, inclusion of handset bundles plus rising revenue contributions from data services.

Guinness Anchor's earnings rose 47% to RM64.63 million in the second quarter ended Dec 31, 2011 from RM43.83 million a year ago as it sold more of its Tiger beer. Revenue rose 11% to RM421.41 million from RM378.13 million. Earnings per share were 21.40 sen compared with 14.51 sen. It declared a dividend of 10 sen a share.

Investors will await details how MTD Capital Bhd's two top officials will finance their RM3.25 billion cash offer to acquire the entire business and undertaking of MTD Prime Sdn Bhd and Metramac Corp Sdn Bhd including all their assets and liabilities.

Its group executive chairman Nik Hussain Abdul Rahman and the president/chief executive officer Azmil Khalili Khalid has made the offer on Friday, Jan 28 to acquire business of MTD Prime and Metramac. Details will be announced on Monday.

MTD Capital owns 100% of MTD Prime and Metramac. MTD Prime is the tolling concessionaire for the Kuala Lumpur - Karak Highway and its extension, the East Coast Expressway Phase 1.

US STOCKS-Egypt riots spark biggest drop in nearly 6 months

NEW YORK:'' Stocks suffered their biggest one-day loss in nearly six months on Friday, Jan 28 as anti-government'' rioting in Egypt prompted investors to flee to less risky assets to ride out the turmoil.

Increased instability in the Middle East drove up the CBOE'' Volatility Index, the stock market's fear gauge, as investors scrambled for protective positions.

"The market hates uncertainties, especially geopolitical ones, and based on how that shapes up throughout the weekend (in Egypt), next week's trading will be impacted," said Thomas Nyheim, portfolio manager for Christiana Bank & Trust Co in Greenville, Delaware.

Trading volume was the highest of the year at 9.97 billion shares on the New York Stock Exchange, the American Stock Exchange and Nasdaq, compared to last year's estimated daily average of 8.47 billion shares.

The market drop ended the Dow's eight-week winning streak and pushed the S&P 500 below its 14-day moving average for the first time in two months. Disappointing results from Amazon.com and Ford further added to the gloom.

Developments in the Middle East could be a trigger for investors to sell at a time when many expected a correction after a market rally of about 18 percent since September.

"I think the next two to three weeks, the crisis in Egypt and potentially across the Middle East, might be an excuse for a big selloff of 5 to 10 percent," said Keith Wirtz, president and chief investment officer at Fifth Third Asset Management in Cincinnati, Ohio.

Nasdaq quotations for its main stock indexes suffered an outage of nearly one hour at the open, causing confusion among traders. Nasdaq OMX Group blamed a glitch with its global index data service.

The Dow Jones industrial average ended down 166.13 points, or 1.39 percent, at 11,823.70. The Standard & Poor's 500 Index was down 23.20 points, or 1.79 percent, at 1,276.34. The Nasdaq Composite Index fell 68.39 points, or 2.48 percent, at 2,686.89.'' For the week, the Dow fell 0.4 percent, the S&P lost 0.5 percent and the Nasdaq dipped 0.1 percent.

Amazon.com shares slipped 7.2 percent to $171.14, a day after the online retailer recorded revenue below the consensus view.

Ford Motor Co slumped 13.4 percent to $16.27 after a steep drop in quarterly profit. Rival automaker General Motors Co also lost 5.4 percent to $36.60.

Dow component Microsoft Corp also fell 3.9 percent to $27.75 a day after its profit dipped.

In Egypt, President Hosni Mubarak sent troops and armored'' cars into cities in an attempt to quell street fighting and'' mass protests, and medical sources said at least five protesters had been killed and 870 wounded.

The VIX settled up 24.1 percent at 20.04. The percentage gain was the largest since May 20. U.S. Treasuries prices and the dollar -- assets considered safe compared to stocks --

rallied.

U.S. crude futures rose 4.4 percent to $89.43 a barrel as the protests in Egypt threatened Middle East stability. Oil companies with operations in the region were hit, including Apache Corp and Occidental Petroleum Corp.

Apache shares were down 1.3 percent at $144.84 and Occidental Petroleum fell 3.3 percent to $93.81.

Equities garnered support from data showing the U.S. economy grew at a 3.2 percent rate in the fourth quarter as consumer spending accelerated. - Reuters

SPLASH rejects Selangor govt offer, renews own RM10.75b bid

KUALA LUMPUR: Syarikat Pengeluar Air Sungai Selangor Sdn Bhd has rejected the Selangor government's offer to acquire all its share at RM5.96 each.

Instead, SPLASH had on Friday, Jan 28 renewed its own offer to the Selangor government and federal government of RM10.75 billion to consolidate the Selangor water industry with SPLASH.

In a statement issued via KUMPULAN PERANGSANG SELANGOR [] Bhd, SPLASH said it had on Friday replied to the Menteri Besar Selangor (Incorporated) that it was unable to accept the latter's offer.

'(The offer) undervalued the company and is also well below the previous offer made by the Selangor government to SPLASH dated July 15, 2009, which SPLASH had then accepted in good faith,' it said.

However, SPLASH, instead, renewed its own offer to the state and federal governments on April 20, 2010 of RM10.75 billion to consolidate the Selangor water industry with SPLASH as the 'top-to-toe' operator and consistent with the intentions of the Water Services Industry Act, 2006.

'SPLASH viewed that the main stumbling block thus far had been the inability to bridge the gap between what the water operators wanted (commercial value) and what the governments were prepared to pay,' it said.

SPLASH pointed out the critical issues which it had outlined must be addressed in order for the restructuring to proceed.

The water operator had also stated it was willing to work with any entity that may be proposed by the state and federal government to undertake the restructuring. However, if neither government had a preference, SPLASH was willing to proceed immediately with its proposal.

KPS is 60% owned by Kumpulan Darul Ehsan Bhd, which is controlled by Menteri Besar Selangor (Inc).

KPS nominated directors in SPLASH had abstained from deliberation and deciding on offer as the transaction is deemed to be a related party transaction.

Market rebound runs out of steam

KUALA LUMPUR: The local market's rebound ran out of steam as it succumbed to some mild profit taking and closed lower on Friday, Jan 28 in line with the limited gains at most key regional markets, as investors wary of a holiday-shortened period ahead of the Chinese New Year stayed on sidelines.

The FBM KLCI fell 5.07 points to 1,521.89, weighed by losses including at Tenaga, Sime Darby, AMMB and Genting.'' Losers beat gainers 462 to 310, while 280 counters traded unchanged. Volume was 1.35 billion shares valued at RM1.98 billion.

At the regional markets, Japan's Nikkei 225 fell 1.13% to 10.360.34, Hong Kong's Hang Seng Index lost 0.68% to 23,617.02, South Korea's Kospi Index lost 0.34% to 2,107.87 while Taiwan's Taiex added 0.47% to 9,145.35, Singapore's Straits Times Index gained 0.31% to 3,229.69 and the Shanghai Composite Index inched up 0.13% to 2,752.75.

Among the major laggards on Bursa Malaysia, Tenaga fell 15 sen to'' RM6.23, Sime Darby lost eight sen to RM9.16, AMMB 10 sen to RM6.60, Genting six sen to RM10.84, Petronas Gas 18 sen to RM11.20 and Hong Leong Bank 16 sen to RM9.26.

Other decliners included Dutch Lady that fell 22 sen to RM16.66, APM 21 sen to RM5.26, Glenealy 20 sen to RM4.85, Bursa 17 sen to RM8.20 and Batu Kawan 14 sen to RM16.64.

Gainers included DFZ Capital, TAHPS, Tradewinds, QSR, Far East and Eng Kah.

The actively traded stocks included Ho Wah Genting, MUI Industries, Karambunai, Tanco, SAAG and Kencana.

Guinness Anchor 2Q earnings up 47pct to RM64.63m

KUALA LUMPUR: GUINNESS ANCHOR BHD []'s earnings rose 47% to RM64.63 million in the second quarter ended Dec 31, 2011 from RM43.83 million a year ago as it sold more of its Tiger beer which recorded a double-digit growth rate.

It said on Friday, Jan 28 that revenue rose 11% to RM421.41 million from RM378.13 million. Earnings per share were 21.40 sen compared with 14.51 sen. It declared a dividend of 10 sen a share.

Its managing director Charles Ireland said: 'The group's performance is clearly reflective of the ever-increasing number of consumers choosing our brands and retailers choosing to work with GAB'.

He said the five pillar brands, namely Tiger, Guinness, Heineken, Anchor and Kilkenny have been growing steadily, with Tiger taking the lead, recording a double digit growth rate.

#Flash* MTD Cap top officials make RM3.25b takeover offer

KUALA LUMPUR: MTD CAPITAL BHD []'s two top officials have made a RM3.25 billion cash offer to acquire the entire business and undertaking of MTD Prime Sdn Bhd and Metramac, Corp Sdn Bhd including all their assets and liabilities.

Its group executive chairman Nik Hussain Abdul Rahman and the president/chief executive officer Azmil Khalili Khalid has made the offer on Friday, Jan 28 to acquire business of MTD Prime and Metramac.

#Update* PM: No toll hike for KL-Karak, East Coast for 5 yrs

KUALA LUMPUR: The Prime Minister says there will be no toll hike for the KL-Karak and East Coast highway, Phase 1 for five years, effective from May this year, following a government request for concessionaires to reduce the burden on the rakyat.

Datuk Seri Najib Razak said on Friday, Jan 28 that the concession would not be renewed and there would be no compensation for the arrears.

He said it has been the government's objective to review the cost of living including transportation costs to reduce the burden on the rakyat.

The Prime Minister said he had asked the tolled road concessionaires to review their toll structure for the respective concessions to reduce the burden on the rakyat.

In response to the government's request, two corporate figures, who are also the largest shareholder in a concessionaire, had come forward to provide a restructuring plan via the acquisition of the concession assets.

'Following this proposal, I am pleased to inform that there will be no toll hike for five years for the Kuala Lumpur-Karak Highway and also Phase One of the East Coast Highway which will be owned by the two corporate figures.

'At the same time, I requested that the concession period be not extended and more importantly there will be no compensation to be paid by the government for the arrears in the toll review,' he said.

Najib said the proposal would involve the termination of the toll concession for the East-West Highway connecting Salak and Taman Connaught, KL ahead of the scheduled closure, which is 2018.

Vehicles using the highway will no longer need to pay toll but the toll closure will take effect in May this year upon the completion of documentation.

Najib also urged other concession holders to also take similar initiatives for the rakyat's benefit.

Thai Kim Eng sees higher 2011 profit, Maybank bid

BANGKOK: Kim Eng Securities (Thailand) Pcl, Thailand's largest brokerage, expects higher turnover on the Thai stock market to lift profits this year, when it might get a takeover offer from Malaysia's Maybank.

MALAYAN BANKING BHD [] (Maybank) is buying a 44.6 percent stake in its Singaporean parent, Kim Eng Holdings, but it has not said whether it would also move for the subsidiaries dotted around Southeast Asia.

Montree Sornpaisarn, chief executive of Kim Eng Securities (Thailand), said on Friday, Jan 28he was looking forward to an "exciting year", anticipating that the effective takeover of the Singapore parent would result in a tender offer for his company.

"It really is a perfect combination," Montree said in an interview."

"Once Maybank has finished with the offer in Singapore, giving them a controlling stake of over 50 percent, they'll make a tender offer for Kim Eng here," he said. "The price might not be that much higher than the current market price."

It shares stood at 14.50 baht at the midsession break on Friday, giving it a market capitalisation of $273 million.

On Thursday, Kim Eng Securities (Thailand) posted a 13 percent rise in 2010 net profit to 806 million baht ($26 million), beating market expectations.

"With a 10-15 percent rise in average daily trade expected this year, we should see a higher profit based on that scenario," Montree said. - Reuters

China uses property tightening as monetary proxy

BEIJING: Reluctant to raise interest rates, China is instead tightening its grip on the property market, a stop-gap strategy that will dampen inflation but fail to cure the root problem of too much cash in the economy, according to a Reuters report on Friday, Jan 28..

Beijing unveiled a series of new rules this week, including a long-awaited home ownership tax, to deter real estate speculation, its third package of measures in the past year to rein in housing prices.

The vigour with which the government has implemented and refined its property clampdown contrasts with the torpor of its monetary tightening -- just two interest rate increases since October, even though inflation has put real deposit rates about 2 percentage points into negative territory.

There is a logic to Beijing's approach.

As recent comments by central bank officials indicate, the government fears that aggressive interest rate increases would inflict undue harm on the economy at a time when external demand remains shaky. Steps to cool the property market help fill in for that missing tightening.

"If China does not hike rates, it must find a way to cap asset prices to avoid asset bubbles," said Ting Lu, an economist with Bank of America-Merrill Lynch. "Part of inflation expectations is from rising property prices, so controlling home prices could help dent inflation expectations."

''

Chinese property prices rose an annual average of 10 percent last year, outpacing the 3.3 percent increase averaged by consumer prices. A rebound in month-on-month property inflation since September also helped drive a spike in broader inflation to its fastest in more than two years.

The latest property tightening campaign is a hodge-podge: a home ownership tax on a trial basis in two cities; a stricter housing sales tax; incrementally higher mandatory downpayments on second homes; and rules to prevent individuals from owning more than two homes in most major cities.

Of 10 China-based analysts polled by Reuters on Friday, six said the measures would restrict property price rises to less than 5 percent this year, while three forecast outright declines.

''

NOT ENOUGH

Yet property tightening by itself is only a band-aid solution, alleviating the symptoms of excessive liquidity in the economy, not actually draining the vast pool of cash.

"The property measures are quite tough. The market should react at least in the near term, but fundamentally it should not be a substitute for monetary measures," said Kevin Lai, an economist with Daiwa Capital Markets.

Lai predicted two interest rate increases this year, in line with the market consensus, saying these were needed to steer broad money growth, running at an annual pace of 20 percent, back to a normal level, which is about 16 percent for China.

But he also sympathised with Beijing's wariness to move more forcefully. To keep the yuan stable, the central bank already has its hands full buying up most of the foreign exchange streaming into China through the current account.

If Chinese interest rates were significantly higher than in developed markets, it would have more capital inflows and a bigger liquidity headache to deal with, Lai noted.

Yi Gang, deputy governor of the People's Bank of China, noted that dilemma in an official magazine interview earlier this month and arrived at the conclusion that the role of monetary policy was becoming more limited.

''

IMPACT OF TIGHTENING

Ironically, if the government is successful in taming property inflation, it will help deflect the capital inflows now handcuffing its monetary policy and so gain more room for conventional tightening.

"Our research shows that the rise in asset prices is the most important factor attracting overseas money inflows," said Tang Jianwei, economist at Bank of Communications in Shanghai.

The question, then, is just how successful the property clampdown will be.

Analysts say the new home ownership tax, launched by the cities of Shanghai and Chongqing, is too small and loophole-prone to be significant at first, but that it is nevertheless a step in the right direction.

More important -- even "draconian", in the estimation of research firm CEBM -- are the steps to prevent people from owning more than two homes and the stricter implementation of a 5.5 percent sales tax.

"The measures will help squeeze out some speculators," said Gong Ping, a senior manager at Centaline, a real estate agency in Beijing.

But Chen Dong, a property analyst at Bank of China International in Shanghai, warned that as a band-aid solution to inflation, the stickiness of the latest property tightening measures would wear off before long.

"No doubt, the most effective measure to curb inflation is to raise interest rates," he said. - Reuters

Nikkei falls after S&P cut, foreign sentiment eyed

TOKYO: The Nikkei average fell 1 percent on Friday , Jan 28'' after a cut to Japan's sovereign debt rating, with some analysts saying the downgrade may become a turning point for foreigners who have led a rally in the benchmark since November.

Selling of Nikkei 225 futures also contributed to weakness in the cash market, where financial stocks led declines on concerns they might be exposed to higher procurement costs. Standard & Poor's cut Japan's long-term debt rating by one notch to AA minus on concerns that the government lacked a coherent plan to tackle mounting debt.

"The rating reflects the country's current fiscal position. Therefore funds that have been overweight on Japan since last November may reconsider their position," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

With Japan earnings season having begun in earnest, companies with downbeat results or outlooks like chip equipment maker Advantest and steelmaker JFE Holdings lost ground although CONSTRUCTION [] machinery maker Komatsu Ltd climbed.

The benchmark Nikkei ended the day down 1.1 percent at 10,360.34 but rose 0.8 percent on the week. The broader Topix fell 1.1 percent to 919.69. Volume picked up from the previous day, with 2.1 billion shares changing hands on the Tokyo Stock Exchange's main board, in line with last week's average. Declining shares outpaced advancing ones by 1,318 to 263.

BANK BLUES

Banks underperformed, with Mitsubishi UFJ Financial Group falling 2.7 percent to 434 yen, Mizuho Financial Group dropping 1.2 percent to 162 yen and Sumitomo Mitsui Financial Group shedding 1.6 percent to 2,870 yen.

"It looks like investors are offloading their positions on banks because they were reminded of the dire state of Japan's public finances, but I don't think this is going to last very long," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.

"Securities stocks as well as real estate shares -- those stocks that have recently outperformed -- are also being sold as investors used the downgrade as an excuse to lock in profits."

Advantest plunged 7.4 percent to 1,709 yen after it forecast annual operating profit at 6.5 billion yen, 40 percent below the market consensus. The maker of semiconductor testing devices has a 1.4 percent weighting in the Nikkei 225.

JFE Holdings fell 3.3 percent to 2,643 yen after it slashed its annual profit forecast by 23 percent to 170 billion yen, far below a market consensus estimate of 224 billion yen.

But Komatsu Ltd jumped 2.3 percent to 2,502 yen after the construction machinery maker said its nine-month net profit surged more than five times from a year earlier on strong sales in China and other emerging markets.

Market players said THAT overall the results season was going reasonably well. "Tokyo earnings season has entered a serious phase, and with some 100 companies having reported, it looks like most firms may even beat bullish estimates made by analysts before earnings," said Hideyuki Ishiguro, a supervisor in Okasan Securities' investment strategy section.

"Stronger earnings may help the Nikkei in the long run, but in short term we will see retail investors buying shares that posted strong results, and then the next day they will be sold by domestic institutional players who are mostly lowering their holdings of Japanese equities," he said. - Reuters

#Updated* DiGi 4Q earnings up 34pct to RM332m in 4Q

KUALA LUMPUR: DIGI.COM BHD [] posted earnings of RM332.02 million in the fourth quarter ended Dec 31, 2010 compared with RM246.5 million a year ago.

It said on Friday, Jan 28 the earnings growth was underpinned by increased usage from an enlarged subscription base, inclusion of handset bundles plus rising revenue contributions from data services.

Revenue rose to RM1.43 billion from RM1.25 billion a year ago. Earnings per share was 42.7 sen.

DiGi declared a fourth interim dividend of 43 sen single-tier exempt dividend per ordinary share of 10 sen each for the financial year ended Dec 31, 2010.

For the year ended Dec 31, DiGi's net profit rose to RM1.18 billion from RM1 billion a year ago.

In a statement Friday, Jan 28, DiGi chief executive officer Henrik Clausen said the company recorded solid growth momentum from data revenue precipitated by attractive mobile broadband offerings and higher take-up of smart-phone bundles.

Clausen said DiGi tapped on the rapid increase in demand for quality internet access it saw in Malaysia during the year while at the same time continuing to make inroads into previously underserved markets.

'We anticipated the needs of our customers well by making access to smart phones easier and affordable with applications that are relevant to our customer base.

'This stimulated increased usage from the larger subscriber base of 8.8 million, which in turn improved overall revenue contributions of data services. Today, we have 4.2 million internet users and we foresee demand for internet trending up from both existing and new customers,' he said.

On the outlook for 2011, Clausen said DiGi would continue to actively address the rising demand for quality data services in Malaysia.

'We will prioritise network investments which include growing our 3G/HSPA coverage from the current 50% nationwide to accelerate our reach, and to cater for higher speed capacity, reliability and quality of service. Capital expenditure will be in line with 2010 to support this,' he said.

SC, Bursa raises threshold to 75% of shareholder nod for asset sale

KUALA LUMPUR: The Securities Commission and Bursa Malaysia announced the threshold for shareholder approval relating to a listed company selling its assets and no longer suitable for continued listing on Bursa Malaysia has been raised to 75%.

'This will apply to all new assets disposals announced on or after Jan 28, 2011,' they said on Friday, Jan 28.

The SC will provide the guidance on the interpretation of the standard of 'fair' and 'reasonable' that is applied by independent advisers in assessing the take-over offers.

Short-lived rebound for KLCI

KUALA LUMPUR:'' The FBM KLCI remained in negative territory at the mid-day break on Friday, Jan 28 in line with the general decline at key regional markets as Asian stocks fell by half a percent on Friday, succumbing to a broad bout of profit-taking, as concern about rising inflation outweighed robust earnings.

The Nikkei average fell by nearly 1%, weighed down by financial stocks, as investors worried about higher borrowing costs after Standard & Poor's cut Japan's credit rating by a notch for the first time since 2002, according to Reuters.

A combination of worries of frothy valuations and a steady drip of positive data out of Europe and the United States have encouraged investors to take profits in some Asian markets, particularly in those that are seen as slow in tackling inflation, said Reuters.

The FBM KLCI fell 0.47% or 7.12 points to 1,519.84 at the mid-day break, weighed by banking, select blue chip and index-linked PLANTATION [] stocks.

Gainers trailed losers by 207 to 442 while 259 counters traded unchanged. Volume was 685.4 million shares valued at RM848.21 million.

T he ringgit weakened 0.15% to 3.0570 versus the greenback; crude palm oil xxx, crude oil slipped 36 cents per barrel to US$85.28 and gold fell US$1.70 per troy ounce to US$1,312.22.

At the regional markets, Japan's Nikkei 225 fell 0.96% to 10,377.94, South Korea's Kospi lost 0.59% to 2,102.51, Hong Kong's Hang Seng Index slipped 0.53% to 23,654.32, the Shanghai Composite Index and Singapore's Straits Times Index each were down 0.19% to 2,743.83 and 3,213.76 respectively, while Taiwan's Taiex edged up 0.39% to 9,137.56.

Maybank Investment Bank Bhd head of retail research Lee Cheng Hooi in a note to clients on Jan 28 said there was some buying support just above 1,500 at 1,505.36.

'This rebound phase may still attract foreign selling. We see firmer support at 1,500 and 1,498, which are better buy entry levels.

'As such, a persistent bout of weakness may exist for the index ahead of the weekend and Chinese New Year (CNY) holidays. Despite the benign US markets last night, we may see the FBM KLCI in a weak technical posture today with some pre-CNY profit-taking,' he said.

On ''Bursa Malaysia, Batu Kawan was the top loser this morning and fell 42 sen to RM16.36; PPB lost 12 sen to RM16.98, Sime Darby seven sen to RM9.17 and IOI Corporation two sen to RM5.75.

Among banking stocks, Hong Leong Bank fell 14 sen to RM9.28, AMMB eight sen to RM6.62 and Maybank RM8.65.

Other decliners included Dutch Lady that fell 24 sen to RM16.64, Genting 20 sen to RM10.70, Tenaga 11 sen to RM6.27, APM automotive 17 sen to RM5.30, Petronas Gas 16 sen to RM11.22, and BAT and LPI 12 sen each to RM47/98 and RM13.06.

Gainers included DFZ Capital, Aeon, QSR Brands, Far East Corp, Hap Seng, Mah Sing and F&N.

Ho Wah Genting was the most actively traded counter with 49.3 million shares done. The stock added half a sen to 65 sen. Other actives included Karambunai, Tanco, MUI Industries, Kencana and Talam.

#Flash* PM: No toll hike for KL-Karak, East Coast for 5 yrs

KUALA LUMPUR: The Prime Minister says there will be no toll hike for the KL-Karak and East Coast highway, Phase 1 for five years, effective from May this year, following a government request for concessionaires to reduce the burden on the rakyat.

Datuk Seri Najib Razak said on Friday, Jan 28 that the concession would not be renewed and there would be no compensation for the arrears.

He said it has been the government's objective to review the cost of living including transportation costs to reduce the burden on the rakyat.

The Prime Minister said he had asked the tolled road concessionaires to review their toll structure for the respective concessions to reduce the burden on the rakyat.

In response to the government's request, two corporate figures, who are also the largest shareholder in a concessionaire, had come forward to provide a restructuring plan via the acquisition of the concession assets.

'Following this proposal, I am pleased to inform that there will be no toll hike for five years for the Kuala Lumpur-Karak Highway and also Phase One of the East Coast Highway which will be owned by the two corporate figures.

'At the same time, I requested that the concession period be not extended and more importantly there will be no compensation to be paid by the government for the arrears in the toll review,' he said.

Najib said the proposal would involve the termination of the toll concession for the East-West Highway connecting Salak and Taman Connaught, KL ahead of the scheduled closure, which is 2018.

Vehicles using the highway will no longer need to pay toll but the toll closure will take effect in May this year upon the completion of documentation.

Najib also urged other concession holders to also take similar initiatives for the rakyat's benefit.

S.Korea says inflation situation getting worse

SEOUL: South Korea's vice finance minister said on Friday the inflation situation was continuing to deteriorate due to rising farm products prices and other factors, accodring to Reuters.

Yim Jong-yong made the remark during a weekly meeting of senior officials from related government ministries to discuss inflation trends, it said.

"The environment surrounding consumer price trends is continuing to deteriorate," Yim said. "The worst thing in terms of the consumer prices is that service-sector costs rise mainly due to expectations for higher inflation."

The central bank raised interest rates a month earlier than expected by 25 basis points to 2.75 percent early this month, days after President Lee Myung-bak called on his cabinet to stage a "war on inflation".

Analysts expect the Bank of Korea to raise the benchmark 7-day repurchase agreement rate again as early as in March, which would mark its fourth rate increase since the 2007-2008 global financial crisis.

The government also unveiled a set of measures to contain mounting inflation, including a freeze on tuition fees at public colleges and a plan to delay some of the anticipated increases in public utility fares. - Reuters.

Japan vows to push fiscal reform after S&P downgrade

TOKYO: Japanese leaders vowed on Friday to push ahead with tax reforms needed to rein in bulging public debt, but doubts persisted over whether the government could succeed in the face of a divided parliament, according to Reuters.

Rating agency Standard and Poor's cut Japan's long-term debt rating on Thursday for the first time since 2002 while the International Monetary Fund had harsh words for Washington and Tokyo, saying they need to act urgently to cut their deficits, it said.

Prime Minister Naoto Kan has made tax and social security reform, including a future rise in the 5 percent sales tax, a priority given the rising costs of Japan's fast-ageing society and a public debt that is the biggest among advanced nations.

"The important thing is to maintain fiscal discipline and ensure market confidence in Japan's public finances," Kan, who took over in June as Japan's fifth premier since 2006, told parliament's upper house.

But with Kan's voter support sagging at around 30 percent, opposition parties which control the upper house have shown little inclination to compromise -- something S&P highlighted when explaining its reasons for the downgrade.

Kan's finance minister echoed his stance, saying the government must show its commitment to fiscal discipline, while Deputy Chief Cabinet Secretary Hirohisa Fujii said the government would take S&P's criticism to heart.

"The Japanese government must humbly take the rating by a leading world ratings agency and further deepen its awareness of the importance of restoring fiscal health," Fujii, a former finance minister, told a news conference.



DROPPING THE BALL?

Analysts had said the S&P downgrade could bolster Kan's campaign for fiscal reform, but the premier initially did little to sell his case, telling reporters after the downgrade was announced that he was "not very familiar with the matter".

Analysts said Kan's early response had given the opposition fresh ammunition to attack.

"People will question to what extent he is really thinking about the Japanese economy and fiscal situation," said independent political analyst Atsuo Ito.

"In a sense, the S&P downgrade is evidence of tough criticism of the (ruling) Democratic Party of Japan (DPJ), so the opposition can argue that it is time for a change in government."

The head of the second-biggest opposition party, the New Komeito, told the upper house that doubts about Kan's leadership were increasing.

"Voices saying we cannot entrust government to you are growing," Natsuo Yamaguchi said.

Kan defended his remark on Friday, telling parliament he had meant only that he had not heard about the ratings cut.

"I have been fully aware of the importance of public finances and government bonds since I served as finance minister when the Greek debt crisis hit," Kan told parliament.

The Japanese government bond market took the S&P move in stride, reflecting the fact that domestic investors hold about 95 percent of the country's debt.

"This limits any impact of selling by foreign investors, who may take a dimmer view on JGBs in the wake of the rating cut," said Jun Ishii, chief fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.

Kan's immediate challenge is to persuade opposition parties to help enact budget-related bills needed to implement a record $1 trillion budget for the 2011/12 fiscal year from April 1.

Opposition parties control the upper house, where they can block bills, although the budget itself can be enacted after approval by the lower house, where the DPJ has a majority.

Some pundits have said Kan could be forced to resign or even call a snap election if the budget-related bills get stuck.

"The opposition will decide its response based on the trends in public opinion," analyst Ito said. "Mistrust in the government is increasing, so they won't compromise easily ... They will make big demands and see how the government reacts."

The main opposition Liberal Democratic Party (LDP) has demanded Kan's Democrats abandon costly campaign promises to put more cash in consumers' hands to boost growth, but Kan's critics inside his own party are opposed to such a change. - Reuters

FBM KLCI retreats in early trade

KUALA LUMPUR: ''The FBM KLCI retreated in early trade on Friday, Jan 28 in line with the generally tepid investor sentiment at key regional markets, as well as ahead of the shorter trading period next week due to the Chinese New Year holidays.

Yesterday, Standard & Poor's cut Japan's credit rating a notch for the first time since 2002 and Moody's warned that it might turn negative on the US rating outlook if the deficit continued to swell, according to Reuters.

On Bursa Malaysia, the FBM KLCI fell 4.44 points to 1,522.52 at mid-morning, weighed by losses including at Petronas' units, banking stocks and select blue chips.

Losers led gainers by 246 to 184 while 212 counters traded unchanged. Volume was 321.79 million shares valued at RM278.22 million.

At the regional markets, Japan's Nikkei 225 fell 0.92% to 10,381.97, South Korea's Kospi lost 0.67% to 2,100.94, the Shanghai Composite Index shed 0.10% to 2,746.39, Singapore's Straits Times Index slipped 0.03% to 3,218.72 and Hong Kong's Hang Seng Index opened 0.1% lower at 23,756.59.

Meanwhile, Taiwan's Taiex added 0.16% to 9,116.44.

BIMB Securities Research in a note Jan 28 said Wall Street closed marginally higher again yesterday as the benchmark index in US struggled to close above its year best.

It said the Dow Jones Industrial Average managed to surpass the 12,000 psychological level on intra day trading but failed for the second day in a row to close above that level.

The research house said sentiment was hampered by higher-than-expected numbers of first time claim for unemployment benefit.

It rose to 454,000 week-on-week from the economist expectation of 407,000, it said.

'Note that this is the highest number recorded since last October. Given the anemic trading performance in Wall Street, expect the local market to trade in range bound with upside bias today.

'Bank Negara Malaysia's decision to retain the Overnight Policy Rate yesterday may result in lackluster trading pattern,' it said.

On Bursa Malaysia, Batu Kawan was the top loser at mid-morning and fell 28 sen to RM16.50; Petronas Gas lost 18 sen to RM11.20 and Petronas Dagangan 12 sen to RM12.02, Dutch Lady 16 sen to RM16.72, Genting 14 sen to RM10.76, BAT 12 sen to RM47.98, Hartalega nine sen to RM5.43 and MISC eight sen to RM8.22.

Among banking stocks, Hong Leong Bank fell 15 sen to RM9.27, AMMB down five sen to RM6.65 and Maybank four sen to RM8.66.

Gainers included DiGi, KLK, QSR Brands, PacificMas, YTL Corp, Hap Seng, Uzma, Tradewinds and Paramount.

Ho Wah Genting was the most actively traded stock with 28.7 million shares done. The counter added half a sen to 65 sen. Other actives included Dataprep, MUI Industries, Tanco, Kencana and Karambunai.

Gadang falls after 2Q losses

KUALA LUMPUR: Shares of Gadang Bhd fell in early trade after it posted losses of RM3.61 million in the second quarter ended Nov 30, 2010.

At 9.04am, it was down three sen to 76.5 sen with 758,300 shares done while the warrants, Gadang-WA lost two sen to 41 sen.

The FBM KLCI rose 2.35 points to 1,529.31. Turnover was 60.24 million shares valued at RM3e5.66 million. There were 137 gainers, 22 losers and 79 counters unchanged.

On Thursday, Gadang reported losses of RM3.61 million compared with net profit of RM3.42 million a year ago. Revenue was higher at RM120.56 million versus RM62.37 million.

The losses were due to lower margin recognised by the CONSTRUCTION [] division. The group also recorded non-recurrent orher operating expenses consisting of bad and doubtful detbts and impairment of goodwill of RM10.26 million.

OSK Research initiates coverage of Kimlun, TP RM2.34

KUALA LUMPUR: OSK Research has initiated coverage on Kimlun with a BUY rating and RM2.34 TP (+34% upside) based on 12x mid CY12 earnings.

It said on Friday, Jan 28 that Kimlun's orderbook comprises fast-track jobs and has a clientele of reputable developers.

'Its use of the IBS (integrated building systems) CONSTRUCTION [] method gives it an advantage over traditional construction. Our proposition for the stock centers on three themes: Iskandar exposure, Singapore MRT expansion and the KL MRT. Kimlun is our top sector pick for small cap contractors,' OSK Research said.

MTD Cap requests suspension for announcement

KUALA LUMPUR: Trading in the shares of MTD CAPITAL BHD [] has been voluntarily suspended from 9am to 5pm on Friday, Jan 28 pending an announcement of a material corporate proposal.

The company said the suspension was 'pending an announcement of a material corporate proposal to be undertaken by the executive directors of MTD to acquire certain assets and liabilities of the MTD Group'.

Latexx Partners suspended for announcement of privatisation?

KUALA LUMPUR: Trading in the securities of LATEXX PARTNERS BHD [] has been suspended on Friday, Jan 28 and Monday Jan 31.

A Bursa Malaysia circular said the two-day supsension was pending an announcement of a material transaction on Monday.

The Edge FinancialDaily reported on Thursday, Jan 28 that there was talk of privatisation of Latexx amid the continuous rise in latex price and the weakening US dollar which have hit the once-favoured rubber gloves industry.

According to Bloomberg data, BT Capital Sdn Bhd is the major shareholder of Latexx with 49.57 million shares or a 22.55% stake, followed by Latexx's executive chairman and CEO Low Bok Tek 15.47 million shares (7.04%) and Lembaga Tabung Haji with 11.68 million shares (5.32%).

#Stocks to watch:* O&G players, Benalec, Taliworks, Perisai, banks

KUALA LUMPUR: Stocks on Bursa Malaysia could trade range bound on Friday, Jan 28 despite the slightly firmer overnight close on Wall Street.

With the short trading week ahead due to the Chinese New Year holidays, investors may be reluctant to take fresh positions.

However, there could be some trading interest in oil and gas counters after Petronas Nasional Bhd said it will develop marginal oilfields to boost Malaysia's oil production.

Banks could be in focus after Bank Negara said it is maintaining the overnight policy rate at 2.75% as it considers current monetary policy stance as appropriate and consistent. However, Bank Negara said additional policy tools may be considered to avoid the risks of macroeconomic and financial imbalances.

On Wall Street, strong corporate earnings led Wall Street to a 29-month closing high for a second day on Thursday, but another run of big gains may be harder to achieve. The Dow and the S&P struggled to advance past major technical levels -- the 12,000 mark for the Dow and 1,300 for the S&P -- but investors see more gains for companies that outperform in their earnings.

Microsoft Corp surprised Wall Street with a better-than-expected profit, but its shares stayed flat as investors expressed concern about the weakness of computer sales.

The Dow Jones industrial average finished up 4.39 points, or 0.04 percent, at 11,989.83. The Standard & Poor's 500 Index closed up 2.91 points, or 0.22 percent, at 1,299.54. The Nasdaq Composite Index was up 15.78 points, or 0.58 percent, at 2,755.28.

Stocks to watch on Friday are oil and gas players after Petronas, for the first time ever, announced its decision to'' develop marginal oilfields to boost Malaysia's oil production. The development of the initial four clusters will be via service contracts and not the normal production sharing contracts (PSCs).

The Edge FinancialDaily reports interest in oil and gas stocks may spill over to the sector's laggards which have yet to catch up with the rally in the broader industry and which observers say could somehow benefit when the flow of investments accelerates in the sector.

Other stocks in focus will be Benalec Holdings Bhd, TALIWORKS CORPORATION BHD [], PERISAI PETROLEUM TEKNOLOGI [] Bhd and INTEGRAX BHD [].

Benalec is acquiring two handysize bulkcarriers for US$6.8 million (RM20.75 million) to expand its fleet to transport sand for land reclamation activities.

It said the acquisitions are to facilitate the expansion of Benalec group's fleet of vessels, in particular vessels for transporting of sand for land reclamation activities.

Taliworks will take over four municipal waste water treatment plants with recycled water facilities in Yinchuan City, China after it had failed to formalise the JV company with Beijing Puresino-Boda Environmental Engineering Co. Ltd (BODA).

The company said it would be on a takeover-operate-transfer basis for 810 renminbi or RM374.71 million.

Perisai has proposed to acquire a 51% stake in Intan Offshore Sdn Bhd for RM45.23 million via new shares. With the acquisition, Perisai Group will enhance its ability to compete in the vessel supply and chartering business while gaining access to new revenue streams around the region.

Integrax has taken legal action against Amin Halim Rasip, alleging he had breached his fiduciary duties and want the court to issue an order to restrain him from acting as a director or co-chief executive officer.

The company had filed an action at the High Court of Malaya against Amin and sought a declaration he had allegedly acted in breach of his fiduciary duties to the plaintiffs.

US STOCKS-Tech results keep Wall Street advance alive

NEW YORK: Strong corporate earnings led Wall Street to a 29-month closing high for a second day on Thursday, Jan 27, but another run of big gains may be harder to achieve.

The Dow and the S&P struggled to advance past major technical levels -- the 12,000 mark for the Dow and 1,300 for the S&P -- but investors see more gains for companies that outperform in their earnings.

Microsoft Corp surprised Wall Street with a better-than-expected profit, but its shares stayed flat as investors expressed concern about the weakness of computer sales.

Microsoft stock ended regular trading up 0.3 percent at $28.87 after the earnings were posted on the company's website. Microsoft was down slightly in after-hours trading.

Other TECHNOLOGY [] stocks, such as Netflix and Qualcomm, supported the Nasdaq, but disappointing results from blue chips AT&T and Procter & Gamble kept the Dow's advance in check.

"What's healthy is that companies that come out with good reports are being rewarded and those that are not are getting punished," said Randall Warren, president at Warren Financial Service in Philadelphia.

The Dow Jones industrial average finished up 4.39 points, or 0.04 percent, at 11,989.83. The Standard & Poor's 500 Index closed up 2.91 points, or 0.22 percent, at 1,299.54. The Nasdaq Composite Index was up 15.78 points, or 0.58 percent, at 2,755.28.

Movie-rental company Netflix Inc soared 15.2 percent to $210.87 and electronics test equipment maker Teradyne Inc jumped 11.8 percent to $16.35. Both posted results Wednesday after the close.

Dow components AT&T and P&G fell as their profits slid from the year-ago period. AT&T dropped 2.1 percent to $28.13, while P&G lost 2.9 percent to $64.18.

"The market is not viewing everything as being correlated, like it used to before," Warren said.

The technology sector, however, may start off weak on Friday, pressured by Amazon.com and Sandisk, both of which slipped after reporting after the market's close.

Amazon.com posted quarterly revenue that fell short of analysts' estimates. Its stock dropped 9.8 percent to $166.40 in extended trade.

Sandisk Corp shares also dipped 2.8 percent to $49.90 after the bell following results.

The S&P 500 faces technical resistance near 1,300, an area where closing and session highs clustered during August 2008. Technical analysts also view 12,000 on the Dow as a possible sell trigger as the blue-chip average approaches nine straight weeks of gains.

The S&P has risen 2 percent since the start of the earnings season and is up 23.7 percent since Sept. 1. Various technical measures indicate the market may be overstretched.

Qualcomm Inc also helped lift the Nasdaq, rising 5.8 percent to $54.89 a day after it raised its outlook for second-quarter and full-year revenue.

Caterpillar shares also rose 0.9 percent to $96.63 after the heavy equipment maker reported results.

Thomson Reuters data showed 71 percent of the S&P 500 companies that have reported earnings so far have beaten estimates.

Weekly initial jobless claims surged to the highest level since late October while factory orders fell unexpectedly in December, the government said. - Reuters

Moody's says U.S. credit rating risks are rising

NEW YORK: Moody's Investors Service warned on Thursday, Jan 27 of the growing likelihood that it could revise the outlook on the AAA credit rating of the United States to negative in the next two years.

Moody's had said late last year that the extension of Bush-era tax cuts for two more years would add to the likelihood of a negative outlook on the U.S. rating.

In a report issued on Thursday, the agency provided more details about the risks to U.S. ratings.

"Recent trends in and the outlook for government financial metrics in particular indicate that the level of risk, while still small, is rising and likely to continue to rise in the next several years," the ratings agency said in a report.

Prices for U.S. Treasuries were unmoved on the report, with benchmark 10-year notes remaining 6/32 higher on the day, yielding 3.39 percent.

In the thinly traded sovereign credit default swap market, the five-year cost to insure against a U.S. government default showed little change on the report.

It last traded at 50.5 basis points, off the day's earlier peak but near recent 11-month highs.

However, some traders said the report, which broke late on Thursday, could still seep into markets and pull bonds down on Friday.

"When you have punishing news like this from Moody's and other rating agencies, it will clearly leave a negative impression on Treasuries. You could see a rise on yields tomorrow," said Todd Schoenberger, managing director at LandColt Trading Inc. in Wilmington, Delaware. - Reuters

Microsoft beats Street but consumer worries linger

SEATTLE: Microsoft Corp surprised Wall Street with a better-than-expected profit, but its shares stayed flat as investors expressed concern about the weakness of computer sales amid a faltering U.S. recovery on Thursday, Jan 27.

The world's largest software maker, whose Windows operating system still runs on 90 percent of the world's computers, is heavily dependent on PC sales, which grew only 3 percent in the quarter, and is starting to feel competition from Apple Inc's iPad.

"Outstanding numbers when you take a first look at it but when you delve into them, Windows missed expectations by $300 million," said Brendan Barnicle, analyst at Pacific Crest Securities.

Sales of its core Office application rose 24 percent, indicating that U.S. businesses are starting to spend more on TECHNOLOGY [] after the recession.

But consumers are proving less resilient. U.S. initial jobless claims surged in the latest week to their highest since October, indicating that any recovery in consumer spending will come only in fits and starts.

Meanwhile, sales of smartphones and tablets are expected to grow much more quickly than PCs over the next few years, posing a threat to Microsoft's key market.

With a migration to mobile devices from desktop computers expected to accelerate over coming years, Apple overtook Microsoft to become the largest U.S. technology company by market value last May.

But some analysts said fears of tablets and other hot-selling gadgets replacing PCs were overblown -- at least for now.

"We've gotten over 300 million Windows 7 licenses sold. I mean, PCs are not disappearing. Put that into perspective with 7 million tablets sold last quarter from Apple," said BGC Financial's Colin Gillis.

"Clearly there are disruptions in the landscape, but some of the negative viewpoints are overblown."

KINECT BEST HOPE?

Microsoft's shares were down slightly in after-hours trading, after rising as much as 2 percent briefly on the Nasdaq after the earnings were posted on the company's website before the market closed.

They are down about 3 percent over the past 12 months.

It reported fiscal second-quarter profit of $6.63 billion, or 77 cents per share, compared with $6.66 billion, or 74 cents per share, a year earlier. The per share figure was higher due to a reduction in shares outstanding from last year.

Year-ago profit was boosted by a one-time deferral of revenue from the launch of its Windows 7 operating system.

Wall Street was expecting 68 cents per share profit, according to Thomson Reuters I/B/E/S.

Sales rose 5 percent to $19.95 billion, helped by strong sales of its Kinect hands-free gaming system, handily beating analysts' average estimate of $19.15 billion.

"Kinect represents the most legitimate opportunity we have seen for the Xbox to drive some profit. I do think there is a meaningful catalyst there," said Motley Fool senior analyst Tim Beyers. "The Windows phone looks good. I do think that Windows Phone 7 is proving to be an interesting alternative to the Blackberry.

"I guess the nut of it is, Microsoft is starting to do something better and they are not tripping on themselves, and that counts for something." - Reuters

Market snaps losing streak

KUALA LUMPUR: The FBM KLCI snapped its six-day losing streak on Thursday, Jan 27 on some bargain hunting activities, in tandem with the general upbeat sentiment in key regional markets

The 30-stock index closed 0.46% or 6.96 points higher at 1,526.96, lifted by gains including at PLANTATION [] stocks and select blue chips. Gainers led losers by 538 to 238, while 263 counters traded unchanged. Volume was 1.41 billion shares valued at RM2.22 billion.

The Shanghai Composite Index jumped 1.49% to 2,749.15, Japan's Nikkei 225 rose 0.74% to 10,4788.66, Taiwan's Taiex up 0.52% to 9,102.33 and South Korea's Kospi rose 0.22% to 2,115.01.

Meanwhile, Hong Kong's Hang Seng slipped 0.27% to 23,779.62 and Singapore's Straits Times Index shed 0.03% to 3,219.83.

BIMB Securities Research in its market wrap report said regional bourses remained in positive territory'' following stronger-than-expected US home sales, the US President's call for lower corporate taxes and encouraging corporate earnings reported in Japan.

However, it said the Hang Seng was dragged by declines in property and banking stocks after China raised the minimum down payment for the purchase of a second home from 50% to 60% in an effort to curb overheating in its property sector as well as in the economy as a whole.

Maybank Investment Bank Bhd head of retail research Lee Cheng Hooi said the buying on Bursa Malaysia was mainly supported by local funds, adding that the selling by foreign funds had somewhat abated.

'Rebound possibility is there, perhaps to as high as 1,540.'' But possible to head towards support and target of around 1,498 and 1,500. Volume will remain thin,' he said.

Meanwhile, MIDF Research head Zulkifli Hamzah said the rebound in the market today partly exonerated the research house's view that the market had retraced to a level that value cannot be ignored.

'We believe the market this year will be marked by one or two prominent swings, related to macro-level concerns with the current one being China and inflation.

'The uptrend should resume although we are not expecting it before the Chinese New Year. We expect the market to stabilize and consolidate at current level first before the next push,' he said.

Zulkifli also said the downgrade by Standard & Poor's in Japan's sovereign rating was long overdue as the economy was highly leveraged across all segments.

'The downgrade should impart some pressure on yen, which we believe had run ahead of its fundamentals,' he said.

Among the gainers, Batu Kawan rose 48 sen to RM16.78, KLK and BLD Plantations 40 sen each to RM21.30 and RM5.40, Kulim 34 sen to RM13.18, Latexx 22 sen to RM2.80, DiGi rose 20 sen to RM25.30, Petronas Gas 18 sen to RM11.38 while Ibraco and Hap Seng gained 17 sen each to RM1.30 and RM6.47.

Losers included Tahps, MSC, F&N, BAT, KYM and LPI Capital, while Ho Wah Genting was the most actively traded counter with 80.4 million shares done.

Three new Bank Negara assistant governors

KUALA LUMPUR: Bank Negara will have three new assistant governors -- Donald Joshua Jaganathan, Abu Hassan Alshari Yahaya and Marzunisham Omar -- with effect from Feb 1, 2011.

The central bank said on Thursday, Jan 27 Donald will be responsible for the financial conglomerates supervision, insurance and takaful supervision and banking supervision departments.

Prior to his appointment, he was the director of the finance department. He previously served in several departments in the bank including insurance and banking supervision, insurance regulation, financial surveillance and strategic management.

Donald graduated from University of Malaya and is a member of the Malaysian Institute of Accountants. He also holds an MBA from Cranfield School of Management, United Kingdom.

Assistant governor Abu Hassan will act as the secretary to the board of Bank Negara. He will also oversee several departments that include finance, strategic communications, corporate services, property management services, Bank Negara's integrated contact centre (BNMLINK) and its regional offices, the security department and the Museum and Art Gallery. ''

Abu Hassan is currently the director of the corporate communications department. His previous experiences at the bank include in the areas of supervision and regulation. He holds a degree in economics from Monash University, Australia.

Assistant Governor Marzunisham will be responsible for the bank's strategic human capital, strategic management, human capital development centre and IT services departments as well as the HR services unit.

Prior to his appointment, he served as director of the economics department and development finance and entreprise department.

Marzunisham has also served in the international department as well as bank regulation. He is a member of the Monetary Policy Committee of Bank Negara.

He graduated from the University of Cambridge, United Kingdom, with a BA and MA degree in economics.

Taliworks to take over China's 4 waste water treatment plants

KUALA LUMPUR: TALIWORKS CORPORATION BHD [] will take over four municipal waste water treatment plants with recycled water facilities in Yinchuan City, China after it had failed to formalise the JV company with Beijing Puresino-Boda Environmental Engineering Co. Ltd (BODA).

The company said on Thursday, Jan 27 it would be on a takeover-operate-transfer basis for 810 renminbi or RM374.71 million.

Under the terms of the tender requiring the JV partners to assume responsibility of the entire project and following a default by BODA to fulfil its obligation, Taliworks said it had to take over the project.

Taliworks said it accepted the offer by the Yinchuan City Waste Water Treatment Co. Committee to assume the project and it would to look for another partner to jointly participate in this project at a later date.

Benalec buying 2 ships for RM20.75m

KUALA LUMPUR: Benalec Holdings Bhd is acquiring two handysize bulkcarriers for US$6.8 million (RM20.75 million) to expand its fleet to transport sand for land reclamation activities.

The company said on Thursday, Jan 27 it had entered into two memoranda of agreement with Middlesbrough Shipping and Investment Ltd and Bolton Shipping and Investment Ltd to acquire the two vessels.

'The acquisitions are to facilitate the expansion of Benalec group's fleet of vessels, in particular vessels for transporting of sand for land reclamation activities,' it said.

Integrax files suit against Amin, allege breach of fiduciary duties

KUALA LUMPUR: INTEGRAX BHD [] has taken legal action against Amin Halim Rasip, alleging he had breached his fiduciary duties and want the court to issue an order to restrain him from acting as a director or co-chief executive officer.

The company said on Thursday, Jan 27'' it had filed an action at the High Court of Malaya against Amin and sought a declaration he had allegedly acted in breach of his fiduciary duties to the plaintiffs.

Integrax also wanted an order for him to pay damages arising out of his alleged breach of fiduciary duties.

It also sought an order to restrain him and from acting as a director and/or co-CEO.

On Tuesday, Perak Equity Sdn Bhd and Taipan Merit Sdn Bhd proposed to remove Amin's brother Harun Halim Rasip and Datuk Onn Hamzah as directors of Integrax Bhd, which does not bode well for the company.

Integrax received a special notice from Perak Equity and Taipan Meriot, which hold 24.94 million shares and 20 million shares respectively about their intention to propose the resolutions to remove Harun and Onn.

#Flash* BNM maintains OPR, mulls more policy tools

KUALA LUMPUR: Bank Negara said it is maintaining the overnight policy rate at 2.75% as it considers current monetary policy stance as appropriate and consistent but said additional policy tools may be considered to avoid the risks of macroeconomic and financial imbalances.

In its'' monetary policy statement issued on Thursday, Jan 27 it said at this stage, the current monetary policy stance was appropriate and consistent with the current assessment of the economic growth and inflation prospects.

The stance of monetary policy continues to remain accommodative and supportive of economic growth, the central bank said.

'However, the large and volatile shifts in global liquidity are leading to a build up of liquidity in the domestic financial system.

'While the liquidity in the financial system has been manageable, going forward, additional policy tools such as the statutory reserve requirement and macroprudential lending measures may be considered to avoid the risks of macroeconomic and financial imbalances,' it said.

Standard & Poor's lowers Japan's long-term ratings to AA-

KUALA LUMPUR: Standard & Poor's Ratings Services has lowered its long-term sovereign credit ratings on Japan to 'AA-' from 'AA'.

The ratings agency said on Thursday, Jan 27 that concurrently, it affirmed the 'A-1+' short-term sovereign credit ratings. The outlook on the long-term rating is stable. The transfer and convertibility (T&C) assessment remains 'AAA'.

"The downgrade reflects our appraisal that Japan's government debt ratios -- already among the highest for rated sovereigns--will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s.

"Specifically, we expect general government fiscal deficits to fall only modestly from an estimated 9.1% of GDP in fiscal 2010 (ending March 31, 2011) to 8.0% in fiscal 2013," it said.

Below is the statement issued by the ratings agency:

In the medium term, S&P does not forecast the government achieving a primary balance before 2020 unless a significant fiscal consolidation program is implemented beforehand.

Japan's debt dynamics are further depressed by persistent deflation. Falling prices have matched Japan's growth in aggregate output since 1992, meaning the size of the economy is unchanged in nominal terms.

Japan's fast-aging population challenges both its fiscal and economic outlooks. The nation's total social security related expenses now make up 31% of the government's fiscal 2011 budget, and this ratio will rise absent reforms beyond those enacted in 2004. An aging and shrinking labour force contributes to its modest medium-term growth estimate of around 1%.

In our opinion, the Democratic Party of Japan-led government lacks a coherent strategy to address these negative aspects of the country's debt dynamics, in part due to the coalition having lost its majority in the upper house of parliament last summer.

We think there is a low chance that the government's announced 2011 reviews of the nation's social security and consumption tax systems will lead to material improvements to the intertemporal solvency of the state.

We even see a risk that the Diet might not approve budget-related bills for fiscal 2011, including government financing authorization. Thus, notwithstanding the still strong domestic demand for government debt and corresponding low real interest rates, we expect Japan's fiscal flexibility to diminish.

That said, the sovereign ratings on Japan are supported at the lower 'AA-' level by the country's ample net external asset position, relatively strong financial system, and diversified economy. In addition, the yen is a key international reserve currency.

Japan is the world's largest net external creditor in absolute terms, with projected net assets of an estimated 254% of current account receipts at yearend 2010. The country's current gold and foreign exchange reserves of over US$1 trillion are second only to China's.

In addition, both the financial sector and the corporate plus household sectors are external creditors. Standard & Poor's expects continued current account surpluses to further enhance Japan's net external asset position in the coming years.

The stable outlook on our ratings on Japan balance weak public finances and anemic growth prospects with its strong external position and the flexibility afforded by the yen's international role.

Should the government be able to consolidate its finances and to enact measures to improve its growth prospects--as it did in the early part of the last decade--upward pressure on the ratings would build.'' Conversely, if we again mark down our fiscal forecasts, downward pressure on the ratings could reemerge.

Ranhill shares climb on major share in RM1.07b Petronas Gas job

KUALA LUMPUR:'' Shares of RANHILL BHD [] rose to a high of 91.5 sen in late afternoon trade on Thursday, Jan 27 after it stated its subsidiary has a 70% stake in the JV which was awarded a RM1.07 billion contract.

At 3.31pm, it was up 7.5 sen to 91 sen. There were 8.70 million shares done traded at prices ranging from 86.5 sen to 91.5 sen.

Ranhill announced to Bursa Malaysia during the midday break that its 51% owned Ranhill WorleyParsons Sdn Bhd has a 70% stake in the consortium with MUHIBBAH ENGINEERING (M) BHD [], making it the major beneficiary.

The consortium was awarded a RM1.07 billion contract from PETRONAS GAS BHD []. The project involves the engineering, procurement, CONSTRUCTION [], installation and commissioning for the LNG regasification unit, berth and subsea pipeline in Melaka.

Petronas to announce 4 marginal oil fields by April

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) expects to announce four marginal oilfield development projects by April, of which two will be revealed 'soon', according to its president Datuk Shamsul Azhar Abbas.

Shamsul said on Thursday, Jan 27 the consortiums or partnerships that are involved in the marginal field development had to have at least 30% local equity interest.

He said the development marginal oilfields would not be on production sharing contracts (PSC), which the national oil company has with several oil majors, such as ExxonMobil and Shell, since 1970s.

'It is a risk service contract (for marginal field development). Unlike the PSC, the oil & gas reserve is 100% Petronas-owned,' he said at a media briefing.

Shamsul said the consortiums that were awarded the development projects would be like 'service providers' for Petronas. They would be paid fees for the services and infrastructures plus 'performance bonus'.

He confirmed that the bidding process for the two much talked about marginal fields, namely Sepat and Berantai, had concluded.

'We are still negotiating on certain details'would be announced soon,' said Shamsul when commenting on the two clusters of marginal oilfields in Sepat and Berantai.

In addition, he disclosed that another marginal oilfields have been opened up for bid currently which are expected to announce in April.

CIMB Economics Research: Modest rise in the Fed rate by end-2011 only

KUALA LUMPUR: CIMB Economics Research expects the US Federal Reserve to stick with its monetary easing bias, at least up to 1H11.

It said on Thursday, Jan 27 the Fed continues to expect the key short-term interest rate to remain 'exceptionally low' for an 'extended period'.

'In our view, any sign of rising inflation expectations and sustained improvement in the labour market will prompt the Fed to signal a tentative review of its bond purchase programme. We expect a modest rise in the Fed funds target rate to 0.75% by end-2011,' it said.

CIMB Economics Research it was widely expected that during the meeting on Wednesday that the Fed would decide to leave its target rate at 0.0%-0.25% and reaffirm its commitment to the US$600 billion bond purchase programme.

It said the Fed continued to signal guarded optimism over the economy despite more tentative signs of a sustained pace of recovery. It noted that while the economic recovery is continuing, the rate has been insufficient to bring about a significant improvement in labour market conditions.

Other factors restraining growth, i.e. high unemployment, modest income growth, lower housing wealth and tight credit, refused to go away. Employers remain reluctant to add to payrolls and the housing sector is still depressed.

CIMB Economics Research said the Fed was not likely to signal a change in monetary policy until the labour and housing markets show a sustained recovery.

The policymakers acknowledged that commodity prices have risen but said that long-term inflation expectations remain stable and the measures of underlying inflation continue to trend downward.

''

The Fed reiterated that it will continue with the US$600 billion bond purchase programme to the end of 2Q11.

''

That said, it added that it will regularly review the pace of its securities purchases and the overall size of the asset-purchase programme with an eye on incoming information and how the outlook is changing. The Fed will adjust the programme accordingly so as to foster maximum employment and price stability.

Ranhill subsidiary has lion share of RM1.07b Petronas Gas job

KUALA LUMPUR:'' RANHILL BHD [] has said its subsidiary Ranhill WorleyParsons Sdn Bhd has a 70% stake in the consortium with MUHIBBAH ENGINEERING (M) BHD [] that secured the RM1.07 billion contract from PETRONAS GAS BHD [], making it the major beneficiary.

The consortium was awarded the engineering, procurement, CONSTRUCTION [], installation and commissioning for the LNG regasification unit, berth and subsea pipeline.

Ranhill said on Thursday, Jan 27 that Ranhill WorleyParsons is its 51%-owned subsidiary.

'The consortium is led by Ranhill, and the contract is valued at RM 1.07 billion with a 70:30 split in favour of Ranhill,' it said.

The announcement was made following Muhibbah's statement issued on Wednesday, Jan 26 about the contract.

Construction is set to start by the second quarter of 2011 and is expected to be completed by the third quarter of 2012.

The facilities near Sungai Udang Port, Melaka will have a maximum send-out gas capacity of 3.8 million tonnes per annum.

Central to the whole facilities is the LNG Regasification Plant which will regasify liquefied natural gas and once regasified, the gas will be transmitted into the Peninsular Gas Utilisation (PGU) pipeline.

Plantations buoy KLCI, regional markets up

KUALA LUMPUR: The FBM KLCI remained in positive territory at the mid-day break on Thursday, Jan 27 in line with the generally upbeat sentiment at key regional markets.

The 30-stock index was lifted by gains including at index-linked PLANTATION [] stocks on higher crude palm oil price as well as due to some bargain hunting for stocks that took a beating over the past six trading days.

Meanwhile, Asian stocks rose after US Federal Reserve policymakers voted to unanimously to maintain a US$600 billion bond-buying plan to fuel an economic recovery, according to Reuters.

While the outcome of the Fed meeting was largely expected, it backed the view that a wave of liquidity seeking higher returns would continue to flow through into riskier assets, it said.

At 12.30pm, the FBM KLCI rose 7.02 points to 1,527.02, boosted by gains including at KLK, DiGi, CIMB and Sime Darby.'' Gainers led losers by 446 to 176, while 264 counters traded unchanged. Volume was 634.76 million shares valued at RM948.79 million.

The ringgit strengthened 0.02% to 3.0510 versus the US dollar; crude palm oil xxx, crude oil gained 3 cents to US$87.36 while gold shed 42 cents per troy ounce to US$1,345.30.

At the regional markets, the Shanghai Composite Index jumped 1.08% to 2,738.14, Japan's Nikkei 225 rose 0.72% to 10,477.02, Taiwan's Taiex added 0.55% to 9,105.46, Hong Kong's Hang Seng gained 0.31% to 23,917.43, South Korea's Kospi was up 0.21% to 2,114.82 while Singapore's Straits Times Index edged up 0.10% to 3,224.00.

On Bursa Malaysia, BLD Plantations was the top gainer this morning and was up 50 sen to RM5.50; KLK was up 46 sen to RM21.36, Batu Kawan and Kulim up 14 sen each to RM16.44 and RM12.98, Sime Darby six sen to RM9.26 and IOI Corp two sen to RM5.78.

DiGi rose 20 sen to RM25.30, SapuraCrest 17 sen to RM3.60, Kencana and Latexx up 15 sen each to RM2.55 and RM2.73, Petronas Chemicals 11 sen to RM6.07, CIMB eight sen to RM8.42 while Public Bank and MISC added four sen each to RM13.40 and RM8.30.

Decliners included LPI Capital, United Plantations, Malaysia Smelting Corp, Dutch Lady, Panasonic, Perak Corp and Berjaya Sports Toto.

Ho Wah Genting was the most actively traded counter this morning with 24.5 million shares done. The'' stock added 2.5 sen to 58.5 sen. Other actives included Daya Materials, Kencana, SAAG, Hubline, Nam Fatt and AirAsia.

Bursa 4Q earnings RM29.78m, FY10 RM113m

KUALA LUMPUR: BURSA MALAYSIA BHD [] reported net profit of RM29.78 million for the fourth quarter ended Dec 31, 2010, a decline from the RM96.31 million a year ago due to the absence of exceptional gains.

The stock exchange operator said on Thursday, Jan 27 that its revenue was RM101.9 million, down 35.2% compared with RM157.39 million in 4Q2009.

Bursa Malaysia said the 4Q2010 earnings and revenue were lower in the absence of the exceptional gain of RM76 million following the disposal of 25% equity interest in Bursa Malaysia Derivatives.

Earnings per share were 15.6 sen compared with 18.2 sen a year ago. It declared a dividend of 10.5 sen per share.

For FY10, its net profit was lower at RM113.04 million when compared with RM177.58 million in FY09, while revenue was RM361.05 million versus RM402.42 million.

Multi-Code JV gets RM125m Proton contract

KUALA LUMPUR: Multi-Code Electronics (M) Bhd and its technical partner Hella Australia Pty Ltd has secured a contract valued at RM125 million from PROTON HOLDINGS BHD [].

The company said on Thursday, Jan 27 the supply contract was to develop and supply a rear combination lamp for Proton's new car model slated to be launched in 2012.

'This supply contract is estimated to be worth RM125 million over a period of 5 years and the supply is expected to commence in the third quarter of the financial year ending July 31, 2012,' Multi-Code said

The company added it had signed a technical assistance agreement with Hella on Thursday.

The agreement will enable Multi-Code to make use of the exclusive right, permission and licence in Malaysia to use the Hella TECHNOLOGY [] to develop and sell the joint products.

'The agreement also paves the way for further and future collaboration with Hella for other new products that may be identified from time to time and as such will enable the company to tap into Hella's expertise and technology to diversify and expand its product range to its customers in Malaysia,' it said.

Multi-Code said the agreement was in line with the revised National Automotive Policy which encouraged the development of local automotive parts and component manufacturer, and positioned it to market the Asean market.

RAM Ratings reaffirms Hong Leong Islamic's AA1/P1 ratings

KUALA LUMPUR: RAM Ratings has reaffirmed Hong Leong Islamic Bank Berhad's (Hong Leong Islamic or the Bank) long- and short-term financial institution ratings at a respective AA1 and P1; the long-term rating has a stable outlook.
The rating agency said Hong Leong Islamic's financial institution ratings mirror those of its parent, Hong Leong Bank Berhad (Hong Leong Bank). The bank is effectively a carve-out of its parent's Islamic banking operations, it said.
"Hong Leong Islamic is highly integrated with its parent, and benefits from leveraging on the latter's systems, infrastructure and branch network. Hong Leong Bank is expected to readily provide financial support to Hong Leong Islamic, should the need arise," it said in a statement Thursday, Jan 27.
RAM Ratings said Hong Leong Bank was an established player with a strong franchise in the domestic consumer-banking arena.
Likewise, Hong Leong Islamic's financing portfolio is focused on the consumer segment, particularly in the financing of residential PROPERTIES [] and automobiles, it said. It said the bank's asset quality had remained superior to its peers', and''its gross impaired-financing ratio stood at 0.9% as at end-September 2010. In FYE 30 June 2010, Hong Leong Islamic's pre-tax profit increased 11.4% year-on-year to RM111.4 million, backed by higher financing income and a write-back in general allowances, it said. The bank's capitalisation levels also remained robust, as reflected by its respective overall risk-weighted capital-adequacy ratio of 20.4% as at end-September 2010, it said. "Meanwhile, Hong Leong Bank has made an offer to acquire the assets and liabilities of EON Capital Berhad, at an aggregate purchase price of approximately RM5.1 billion cash (the Proposed Acquisition); the deadline for the Proposed Acquisition has been extended to 30 April 2011. "RAM Ratings is closely monitoring the developments pertaining to the Proposed Acquisition, and its impact on the credit fundamentals of both Hong Leong Bank and Hong Leong Islamic," it said.

FBM KLCI snaps losing streak

KUALA LUMPUR: The FBM KLCI snapped its losing streak since last July in early trade on Thursday, Jan 27 lifted by gains at index-linked PLANTATION [] stocks and key blue chips.

At mid-morning, the 30-stock index was up 9.07 points to 1,529.07, boosted by gains including at KLK, DiGi, CIMB and Sime Darby.

Gainers outpaced losers by 372 to 78 as investors picked up stocks battered over the last six trading days, while 179 counters traded unchanged. Volume was 290.57 million shares valued at RM301.25 million.

Regional markets were mixed despite the firmer overnight close at Wall Street.

Hong Kong stocks opened lower on Thursday, resuming their recent weak trend, as mainland banks and real estate developers were hit by another round of property curbs in China, according to Reuters. The Shanghai Composite Index lost 0.92% to 2,683.83, Singapore's Straits Times Index fell 0.32% to 3,210.63, South Korea's Kospi slipped 0.03% to 2,109.80 and Hong Kong's Hang Seng Index opened 0.3% lower at 23,784.56.

Meanwhile, Japan's Nikkei 225 was up 0.26% to 10,429.42 and Taiwan's Taiex gained 0.58% to 9,108.50.

RHB Research Institute Sdn Bhd in a note Jan 27 said the equity market had already shown some hare-like signs even though the new Lunar Year had not yet begun.

It said the FBM KLCI rose by 3.7% (+55.58 points) to an all-time high of 1,574.49 over the first 11 trading days of the calendar year, but pulled back even quicker.

'However, estimated market velocity of 38-61% during the recent pullback is still higher than the 2010 average of 35%.

'We believe the equity market will likely remain volatile, which is essentially good for traders,' it said.

The research house said it continued to expect more M&As this year, especially in the oil & gas and property sectors, as the premium valuations for sector leaders would facilitate the acquisitions of smaller players via the issue of shares.

Dialog, Kencana and SapuraCrest in oil & gas and SP Setia in property were already trading at premium valuations, it said.

'We also note that hares are very resilient and likewise for the equity market given overall valuations are not stretched and normalised EPS for the FBM KLCI stocks is expected to grow at 16.3% for 2011.

'We believe the recent outperformers will remain under pressure until risk-reward ratios become attractive again, either from lower share prices or catch up in earnings. In any case, we believe the current pullback is an opportunity to trade into fundamentally-attractive stocks,' it said.

Among the gainers in early trade, KLK rose 34 sen to RM21.24, Hap Seng 17 sen to RM6.47, Kulim 16 sen to RM13, Sime Darby nine sen to RM9.29 amd IOI Corp three sen to RM5.79.

DiGi was up 32 sen to RM25.43, S P Setia 17 sen to RM6.43, PacificMas 16 sen to RM4.90, SapuraCrest 14 sen to RM3.57, APM Automotive 13 sen to RM5.60, CIMB eight sen to RM8.42, Axiata six sen to RM4.77 and Petronas Chemicals nine sen to RM6.05.

Decliners in early trade included Dutch Lady, Amway, Maybank and Perak Corp.

Daya Materials was the most actively traded counter with 14.9 million shares done. The stock added two sen to 26 sen. Other actives included Ho Wah Genting, Hubline, Kencana and Nam Fatt.

OSK Research maintains Buy on CI Holdings at RM3.51, TP RM4.47

KUALA LUMPUR: OSK Research said CI Holdings reported a respectable on-year revenue and earnings growth of 26% and 43% to RM300.2 million and RM23.1 million respectively for 1HFY11, which were within its and consensus forecasts.

The research house said on Thursday, Jan 27 the hearty numbers were mainly attributed to the beverage division. Despite spiralling raw material prices, EBIT margin improved by 1.1 percentage points on-year due to better cost efficiency, economies of scale, higher other operating income and stronger RM against USD.

'With the results being in line, we maintain our FY11 and FY12 earnings forecasts at RM42.3 million and RM48.5 million respectively. Maintain BUY at RM3.51,' it said.

Muhibbah climbs on RM1.07b Petronas Gas contract

KUALA LUMPUR: Shares of Muhhibah Engineering Bhd advanced in early trade on Thursday, Jan 27 after the company and its consortium partner Perunding Ranhill Worley Sdn Bhd secured a RM1.07 billion contract from PETRONAS GAS BHD [].

At 9.12am, Muhibbah was up 11 sen to RM1.78 with 2.58 million shares done.

The FBM KLCI snapped its six day of losses to add 8.15 points to 1,528.15. Turnover was 74.66 million shares valued at RM65.45 million. There were 203 gainers, 22 losers and 110 stocks unchanged.

On Wednesday, Muhibbah announced they had secured a RM1.07 billion contract for the engineering, procurement, CONSTRUCTION [], installation and commissioning (EPCIC) for the LNG Regasification Project.

Under the contract, the consortium will build the LNG Regasification Unit, Island Berth and Subsea Pipeline within the vicinity of the Sungai Udang Port in Melaka.

SapuraCrest advances on US$31.5m Petronas contract

KUALA LUMPUR: Shares of SAPURACREST PETROLEUM BHD [] surged in early trade on Thursday, Jan 27 after it secured a US$31.5 million contract from Petroliam Nasional Bhd's subsidiary to install offshore facilities in the Andaman Sea.

At 9.25am, it was up 17 sen to RM3.60 with 404,700 shares done.

The FBM KLCI rose 8.08 points to 1,528.08. Turnover was 134.6 million shares valued at RM122.71 million. There were 276 gainers, 39 losers and 122 stocks unchanged.

SapuraCrest's unit TL Offshore Sdn Bhd had received a letter of award from Petronas subsidiary PC Myanmar (Hong Kong) Ltd for the transportation and installation of offshore facilities for the Yetagun Phase 4 development.

China Q1 GDP seen up 9 pct y/y, CPI up 5 pct -report

SHANGHAI: China's annual economic growth is expected to ease to about 9 percent in the first quarter while consumer inflation is projected at 5 percent, according to a government think tank report published in the official Chinese Securities Journal on Thursday, Jan 27.

The economy grew 9.8 percent in the fourth quarter from a year earlier, while annual consumer inflation eased to 4.6 percent in December from a 28-month high of 5.1 percent hit the month before, according to data published last week.

The State Information Center said in the report that China faces higher inflation risks this year from rising food price expectations, a real estate market that is getting harder to control and an investment rush by local governments.

The country's top economic planning agency has said price pressures will stay high in the first quarter due to imported inflation.

The People's Bank of China will pay more attention to stabilizing inflation, and will use various monetary tools to control liquidity, the Shanghai Securities News quoted the central bank's vice governor, Ma Delun, as saying.

China has officially raised banks' required reserves seven times since the start of last year, with its most recent increase taking effect last week.

But it has increased interest rates only twice during that time and some analysts warn that more forceful moves are needed. - Reuters

HDBSVR: Gamuda most leveraged proxy to MRT

KUALA LUMPUR: Hwang DBS Vickers Research said Gamuda remains on its high conviction list as the most leveraged proxy to the mass rapid transit (MRT) and long term structural change in Vietnam's property market.

In its research note on Thursday, Jan 27 , it said Gamuda remains an unjustified laggard against closest peer, IJM.

HDBSVR said the MMC-Gamuda JV's appointment as PDP for the RM36 billion MRT could be a prelude to the RM14 billion tunneling works. It could add RM2 a share (DCF methodology) if we factor in only 50% of value. Of the 55km initial Sg. Buloh-Kajang line, 10km is underground with a potential contract value of RM3 billion to RM4 billion.

The current time line is for some tenders to open in April and works to start in July.

'We understand there is a new consultant - Halcrow ' who will by May come up with a definitive alignment for the red and circle lines. The previous alignment was considered flawed because the circle line was centred on the KL Sentral/Bangsar area,' it said.

HDBSVR: FBM KLCI may stage gradual recovery

KUALA LUMPUR: Hwang DBS Vickers Research said the FBM KLCI may stage a gradual recovery with an immediate resistance barrier standing at 1,530 on Thursday, Jan 27.

The research house said on Thursday in its market outlook that the KLCI, following a swift rebound from an intra-day low of 1,505 to close at 1,520 on Wednesday, the index could have found a short-term bottom already.

On Wall Street, major U.S. equity indices were up between 0.1% and 0.7% after the Federal Reserve kept interest rate unchanged while reiterating its commitment to continue with the US$600b quantitative easing program.

'This will likely prompt Bank Negara Malaysia to leave the overnight policy rate unchanged too when the policy makers meet later this evening,' it said.

In terms of individual corporate developments, there could be share price reactions in stocks like: (a) Muhibbah, which is part of a consortium that has just been awarded an RM1.1b contract from Petronas Gas; (b) Puncak Niaga, after saying it would be seeking further clarification on a revised offer from the Selangor state government to take over the water concession assets; and (c) Bursa Malaysia, as its Oct ' Dec 10 quarterly result is scheduled for release during lunch hours.

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

KUALA LUMPUR: OSK Research said consistent with the general weakness in the stock market of late, SP Setia has been under heavy selling pressure, having fallen 10.7% from the peak of RM6.93 in two weeks.

The research house said on Thursday, Jan 27 as a result, SPSETIA-WB is now trading at a discount of 14 sen relative to its mother share, SP Setia.

'Hence, we believe there could be an arbitrage opportunity for the current shareholders of SP Setia. As an illustration, assuming that an existing shareholder now takes profit on the shares of SP Setia at a price of RM6.26, buys SPSETIA-WB at RM1.64 and then exercises the warrants at a conversion price of RM4.48, he/she will pocket a gross 14 sen, or 2.3% arbitrage gain.

'That notwithstanding, we maintain our BUY call on SP Setia with a price target of RM7.23 (cum), based on 3.1x CY11 P/NTA, the peak valuation it achieved in 2007,' it said.

#Stocks to watch:* Muhibbah, SapuraCrest, F&N, CI Holdings

KUALA LUMPUR: Stocks on Bursa Malaysia could snap its losing streak on Thursday, Jan 27, on expectations investors' sentiment perk up after Dow Jones industrial average rose above the psychologically important 12,000. The FBM KLCI had on Wednesday fell for the sixth day, the longest since July 5 last year on foreign selling of key stocks with high foreign shareholdings.

On Wall Street, the Dow Jones industrial average edged up 8.25 points, or 0.07 percent, to end at 11,985.44. The Standard & Poor's 500 Index advanced 5.45 points, or 0.42 percent, to 1,296.63. The Nasdaq Composite Index gained 20.25 points, or 0.74 percent, to 2,739.50.

Reuters said the Dow rose above the psychologically important 12,000 for the first time since June 2008, but ended slightly lower as the 30-stock average was held in check by Boeing Co.

The S&P 500 closed at a 29-month high on Wednesday led by gains in tech and commodity shares, as investors largely ignored the U.S. Federal Reserve's lukewarm economic assessment. The stock market had little reaction to the Fed, which said high unemployment still justifies a $600 billion bond-buying program that has helped equities rally in the last few months.

Back homes, Bank Negara is scheduled to release its monetary policy statement after market close and economists expect it to keep the overnight policy rate unchanged.

Stocks to watch on Thursday are Muhibbah Engineering Bhd, RANHILL BHD [], SAPURACREST PETROLEUM BHD [], Fraser & Neave Holdings Bhd's (F&N) and CI Holdings Bhd.

Muhibbah and its consortium partner Perunding Ranhill Worley Sdn Bhd have secured a RM1.07 billion contract from PETRONAS GAS BHD [] under the LNG Regasification Project.

The contract was for the engineering, procurement, CONSTRUCTION [], installation and commissioning (EPCIC) alliance for the LNG Regasification Unit, Island Berth and Subsea Pipeline of the LNG Regasification Project. Under the contract, the consortium will undertake the construction of the LNG Regasification Unit, Island Berth and Subsea Pipeline within the vicinity of the Sungai Udang Port in Melaka.

SapuraCrest secured a US$31.5 million contract from Petroliam Nasional Bhd's subsidiary to install offshore facilities in the Andaman Sea. Its unit TL Offshore Sdn Bhd had received a letter of award from Petronas subsidiary PC Myanmar (Hong Kong) Ltd for the transportation and installation of offshore facilities for the Yetagun Phase 4 development.

The Edge FinancialDaily reports Fraser & Neave Holdings Bhd's (F&N) foray into property development paid off well when it recently sold the second phase of Fraser Business Park in Pudu for RM63 million, which netted the group a gain of RM29.6 million.

CI Holdings Bhd posted net profit of RM11.27 million in the second quarter ended Dec 31, 2011, an increase of 42% from RM7.9 million a year ago, mainly due to further economies of scale and prudent cost management.

Revenue rose 28% to RM146.65 million from RM114.50 million a year ago while earnings per share were 7.94 sen compared with 5.57 sen. It declared dividend of five sen a share.

CI Holdings said the group's revenue increased 28% on-year, 'due mainly to the beverages division's continued growth in its non-carbonated portfolio, strong growth in isotonic beverages, successful promotional campaigns and an aggressive distribution drive'

The Edge FinancialDaily also reports the recent sharp rise in cocoa prices has brought a windfall for GUAN CHONG BHD [], which had earlier stocked up on the soft commodity at substantially lower prices. The company's profit margin has already widened substantially to 6.7 pct for the nine-month period ended Sept 30, 2010, from 1.8 pct in the previous corresponding period.