#Stocks to watch:* Banks, plantations, Rimbunan Sawit, REDtone

KUALA LUMPUR: The Malaysian stock market saw a total of RM28.10 billion erased from its market capitalisation during the Feb 7-11 period, aggravated by foreign selling of mostly banks and PLANTATION [] stocks with high foreign shareholdings as they shifted part of their funds to developed markets including the US.

Market capitalisation was reduced from RM1,302.61 billion to RM1,274.51 billion while the 30-stock FBM KLCI fell 2.67% or 41.08 points from 1,535.60 to 1,494.52. The FBM 100 fell 2.42% or 250.05 points from 10,300.05 to 10,050.00 while the broader FM Emas shed 2.34% or 248.44 points from 10,601.25 to 10,352.81.

According to Credit Suisse Research, global emerging markets recorded US$11.5 billion of outflows in funds, of which almost half were from China and Brazil, in the past three weeks,

MIDF Research head Zulkifli Hamzah told theedgemalaysia.com that as expected, the selldown by foreign investors continued on Friday and it will probably take a couple more days for the selling to unwind before price stabilises.

'On some technical angle, such as the RSI, the market is already in the oversold territory. However, this can persist for a while which is a good opportunity to accumulate in our opinion. There was strong buying by local institutions on Friday and that should mitigate further downside in the market,' he said.

'We do not think that it is a case of foreigners cashing out of Malaysia en bloc. Amidst the selling, some foreign investors have been picking up good stocks at depressed prices. Indeed, gross purchases by foreigners had been evenly matched until Wednesday, and peaked on Thursday. These came after China's decision to raise interest rates. Foreign investors dumped Malaysian banking stocks fearing that the local authority may follow suit and tighten monetary condition via the SRR (statutory reserve ratio), rather than the OPR (Overnight Policy Rate) route,' he said.

Stocks to watch include banks and plantations which had been oversold in the recent weeks. CIMB Equities Research said it was downgrading the regional plantation sector from Trading Buy to Neutral.

The downgrade was because most of the planters have outperformed the market since its sector upgrade; spot CPO price has done better than expected, is close to its peak and should head south in the second half. CIMB Research also said the sector valuations are broadly in line with market price-to-earnings. But this is balanced by the bright earnings outlook in the current year and M&A potential.

'We raise our CPO price forecasts by 16% to US$1,100 (RM3,200) for 2011 and by 5% to US$1,000 (RM2,900) for 2012 given the smaller-than-expected supply.

Meanwhile, AmResearch remained positive on the banking sector and it sees minimal impact of any possible increase in the statutory reserve requirement (SRR) by Bank Negara.

It said'' the SRR is currently at a historically low level of 1%. Its sensitivity analysis indicates a '0.3% to '2.2% downgrade to net earnings, based on an SRR rate hike of 1%.

'The ones which may be affected the most would be EON Cap (-2.2%), Alliance Financial Group (-2.1%), Maybank (-2.1%) and Public Bank (-1.4%).

'We estimate every one percentage points'' increase in SRR rate to reduce the amount available for lending by RM7.65 billion just for eight local banks alone. Nonetheless, we remain positive about the banking sector. Our buys are CIMB, Maybank, Hong Leong Bank and RHB Cap,' it said.

Other stocks to watch include RIMBUNAN SAWIT BHD [], REDTONE INTERNATIONAL BHD [], LATEXX PARTNERS BHD [] and RHB CAPITAL BHD [].

Rimbunan Sawit Bhd's subsidiary, R.H. Plantation Sdn Bhd is buying 4,857 hectares of oil palm plantation in Niah for RM118 million.'' It had entered into a memorandum of understanding with Sheba Resources Sdn Bhd to purchase the land. Sheba Resources is the registered owner of the land which has been charged to Agro Bank Malaysia Bhd for RM145.69 million.

The Edge weekly reports that with REDtone's Malaysian operations in the red, the telco is looking to prepaid shopping cards in China to innovate its way to profitability.

In Latexx Partners Bhd, Lembaga Tabung Haji acquired 2.69 million sahres on Feb 7 to 9, raising its shareholding to 6.97% or 15.38 million shares.

On Jan 31, fund management company Navis Asia VI Management Company Ltd has offered RM852.03 million to acquire all the assets and liabilities of Latexx Partners or RM3.10 per share. At Friday's closing price of RM2.83, there is upside for investors to pick up the shares.

In RHB Capital Bhd, its single largest shareholder, the Employees Provident Fund disposed of 5.88 million shares on Feb 7 and 8, reducing its stake to 46.6% or 1.003 billion shares.

Network Guidance Sdn Bhd (NGSB) has withdrawn claims for damages totaling RM400 million and loss of profit of RM500 million against TELEKOM MALAYSIA BHD [] and TM Net Sdn Bhd over an alleged breach of contract.

In the re-amended claim, NGSB sought a declaration that both parties had entered into an agreement for a joint-venture project but TM breached the agreement.

As a result of the breach of agreement, NGSB suffered loss and damages. NGSB said it is now claiming special damages totalling RM23.95 million.

AIRASIA BHD [] has signed an agreement with Airbus S.A.S to revise the delivery dates of 10 Airbus A320 aircraft from 2012 to 2015. The move was to allow some flexibility to switch from its current order of the classic A320 to a new generation A320 aircraft which is more fuel efficient when such aircraft come into production in the near future.

With the deferment, the delivery of 24 aircraft in 2012 would be reduced to 14 aircraft, while the number of deliveries in 2015 will be increased from nine aircraft to 19 aircraft, it said.

Investors see opportunity in post-Mubarak Egypt

NEW YORK: The end of Hosni Mubarak's rule in Egypt on Friday, Feb 11 should bring opportunities for investors as freer markets and increased commerce gradually take root in a country with 80 million people hungry to become part of the global economy.

Mubarak relinquished power to the military 18 days after an uprising led by a technologically savvy young population demanding jobs, freedoms and transparency.

Despite the political uncertainty of what lies ahead in the short-term, investors see the Egyptian "White Revolution," as many citizens are calling it, an opportunity to grab market-share in the region's most populous country.

"There will be democracy and transparency and these changes will lead to more economic growth," said Larry Seruma, managing principal at Nile Capital Management. "It's a great opportunity to invest in Egypt."

Prior to the revolution, Nile Capital's exposure to Egypt was 5 to 10 percent of its $4.79 million portfolio.

Under the 30-year rule of Mubarak, Egypt had been a critical ally of the United States and the main stability force in the Middle East. But now that his rule is over, many worry that a power vacuum could lead to a new regime that will oppose Western capitalism and be antagonistic toward Israel, the main U.S. ally in the region.

The outcome is yet to be seen. But government officials and investors in general, as well as the majority of Egyptians, are hopeful for a more open government and market.

"I think investment in Egypt itself could increase, say, a year from now as a new government comes in. If that government ends up being democratic in nature, then you could certainly see some improvement," said Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management, in Champaign, Illinois.

Even the most powerful and wealthy businessmen in Egypt have been beating the drums of democracy and free markets as the best form of insurance for their investments.

"When you have less than, say, 10 percent of the population with checking accounts, there is potential for growth," said Karim Baghdady, managing director of Egyptian-based investment bank Beltone in New York.

"When you have a gray economy that is almost as large as the official GDP, if you are able to institutionalize that economy, then people will start securitizing their debts, able to borrow more, buy more. So there is a big domino effect."

'NOTHING HAS CHANGED MY VIEW'

Egyptian assets make up just a fraction of global emerging market funds, and the economy accounts for just about 0.3 percent of the MSCI emerging market index.

The Van Eck Market Vectors Egypt index exchange-traded fund rallied after Mubarak's resignation and set a daily volume record. It was last up 4.8 percent at $18.66.

Overall, emerging market equities have come under selling pressure due not only to Egypt's political ructions, but also on profit-taking from 2-1/2 year high benchmark indices.

Investors have pulled a net $6.27 billion from emerging market equity funds in the last three weeks, according to data from Lipper, a Thomson Reuters service.

However, when factoring the market price movements on the stocks, the assets under management in U.S.-domiciled funds are down $10.92 billion, or 5.6 percent since the week ended Jan. 26. Yet this is seen by some dedicated investors as an opportunity.

"I have kept my 'hold' on Egypt. I didn't have a 'sell' through this crisis. Nothing that happened today has changed my fundamental view that the outcome will be a good one," said Gabriel Sterne, senior economist at London-based Exotix, a brokerage catering to frontier market investors.

In the fixed income space, one fund manager said Egypt's U.S. dollar-denominated sovereign bonds have recovered a good portion of lost ground, but is still not convinced the debt issues are a bargain.

"I think people realize there was a panic in the bonds and short positions had to be covered, while a potentially more peaceful resolution to the protests, with limited escalation of violence, added to some relief buying," said Jeff Grills, co-head of emerging market debt portfolios at hedge fund Gramercy in Greenwich, Connecticut.

EXPECTANT MARKETS

The Egyptian pound had been falling steadily since political protests broke out on Jan 25. By Thursday, it traded at 5.887 to the U.S. dollar, marginally lower than Wednesday's close of 5.8775 but stronger than the six-year low of 5.960 reached before the central bank intervention on Tuesday.

The stock exchange has been shut after countrywide political protests caused the benchmark index to plunge 16 percent in two days, and analysts have warned of a renewed sell-off when trading resumes, most likely on Sunday.

The regulator said on Tuesday the exchange would suspend trade for a half hour if its broad 100-share index declined by 5 percent, and for longer if it fell by 10 percent.

The cost of insuring Egyptian sovereign debt against default or restructuring for five years fell 25 basis to 315 bps after Mubarak's Friday announcement, compared with 380 bps earlier in the day and 340 bps at Thursday's close, data monitor Markit said. They traded around 240 basis points before the start of the year.

Meanwhile, the euphoria on the streets of Cairo is fresh, the uncertainty high and the excitement for a better future palpable.

"The new government, whatever shape it takes, will be incentivized to provide work for a greater portion of the population to get them above the poverty line. There has been a lot of foreign investment to give it up. If anything, the economy will grow," said David Grayson, managing director of emerging markets brokerage firm Auerbach Grayson in New York. - Reuters

GLOBAL MARKETS-Stocks rally, oil falls as Mubarak cedes power

NEW YORK: World stocks surged while oil prices fell on Friday, Feb 11 after the resignation of President Hosni Mubarak in Egypt bolstered sentiment among investors who feared regional unrest could disrupt Middle East crude supplies.

U.S. stocks closed out their second straight week of gains, and emerging market stocks rose for the first time in the past seven sessions, as measured by MSCI's index.

"Now that the risk of a violent transition in Egypt has abated, this gives room for the global economy to continue to expand," said Ralph Preston, a futures analyst with HeritageWestFutures.com in San Diego.

"The markets are saying Egypt may not be as big a risk at this point."

Market Vectors Egypt Index ETF, a basket of major currencies, rose 0.23 percent at 78.432, while the euro slid 0.35 percent at $1.3593.

Mubarak handed power to the army after 18 days of relentless protests caused support from the armed forces to evaporate. He was the second Arab leader to be overthrown by a popular uprising in a month.

The Dow Jones industrial average closed up 43.97 points, or 0.36 percent, at 12,273.26. The Standard & Poor's 500 Index gained 7.28 points, or 0.55 percent, at 1,329.15. The Nasdaq Composite Index added 18.99 points, or 0.68 percent, at 2,809.44.

MSCI's all-country world stock index rose 0.2 percent, as did its emerging market component.

"It looks like the stock market is taking the news well," said Gary Thayer, chief macro strategist with Wells Fargo in St. Louis.

U.S. oil prices fell to a 10-week low. Although Egypt is not a major oil producer, the protests had stirred concerns about the flow of crude oil along a strategic pipeline and potential disruptions to the Suez Canal.

"There's still a lot of uncertainty, along with some cautious optimism," said Jay Suskind, senior vice president at money management firm Duncan-Williams in Jersey City, New Jersey. "If there's a sense that Egypt won't go in a semi-democratic (direction), and that the new power is unfriendly to the West, we could see some nerves on that."

Fears that the Egyptian uprising could spread turmoil to major oil producers in the region helped push ICE Brent crude futures above $100 a barrel for the first time since 2008.

U.S. crude futures for March delivery fell $1.15 to settle at $85.58 a barrel.

March ICE Brent crude pared gains to settle up 56 cents at $101.43 a barrel.

U.S. gold futures for April delivery settled down $2.10 at $1,360.40 an ounce.

U.S. Treasury debt prices rallied as Mubarak's resignation spurred safety bids for bonds and technical signals rekindled some appetite among inflation-wary investors.

The benchmark 10-year U.S. Treasury note was up 17/32 in price to yield 3.64 percent.

Despite a slight return in risk appetite, the dollar kept its gains and was up 0.23 percent at 83.45 against the Japanese yen.

"Egypt is now seen as a regional political drama and the market seems to think the risk of a fundamentalist takeover there is overblown," said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, New Jersey. - Reuters

US STOCKS-Markets end second week of gains after Mubarak resigns

NEW YORK: U.S. stocks closed out their second straight week of gains on Friday, Feb 11'' with a rally sparked after Egyptian President Hosni Mubarak resigned, easing tension around the region for now.

The S&P's five-month surge, which has taken it up almost 27 percent, has confounded those calling for a correction, but weak volume recently has been undercutting the unfailingly bullish direction in equities. Only 7.7 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 8.47 billion.

The volume "suggests that maybe we're getting waning interest and a narrowing of the market," said James Gaul,portfolio manager at Boston Advisors LLC in Boston, which manages $1.7 billion.

Financials led on the back of the reduced uncertainty, rising throughout the trading day. Bank of America Corp gained 1.9 percent to $14.77 and the KBW Banks index added 1.8 percent.

Market Vectors Egypt Index ETF rallied on record volume the news, climbing 4.5 percent to $18.60.

Two weeks of anti-government protests in Egypt sparked concerns the unrest could spread across the Middle East, contributing to volatility in markets and commodity prices worldwide.

"If things deteriorated in Egypt that would have created a risk for U.S. markets, especially if the Suez Canal was closed," Gaul said. "We've removed a short-term uncertainty and are seeing a positive reaction as a result."

He added that some uncertainty persisted. Vice President Omar Suleiman said a military council would run Egyptian affairs, but some have questioned the army's appetite for real democracy.

The Dow Jones industrial average was up 43.97 points, or 0.36 percent, at 12,273.26. The Standard & Poor's 500 Index was up 7.28 points, or 0.55 percent, at 1,329.15. The Nasdaq Composite Index was up 18.99 points, or 0.68 percent, at 2,809.44.

For the week, the Dow is up 1.5 percent and both the S&P and Nasdaq are up 1.4 percent.

Kraft Foods Inc limited gains in the Dow on Friday a day after it cut its 2011 profit growth forecast, sending the stock down 1.4 percent to $30.66, the biggest percentage decliner on the blue-chip index.

Shares of mortgage insurers rose after the Obama administration presented options for overhauling the wrecked U.S. housing finance system. It pledged to continue backing existing obligations of government-controlled mortgage finance sources Fannie Mae and Freddie Mac.

PMI Group shares rose 2.8 percent to $3.34 and Radian Group gained 13.4 percent to $8.03.

A drought in Northern China has hit 7.7 million hectares of winter wheat growing areas, which, coupled with strong demand, is lifting some agricultural processor stocks, according to optionMonster co-founder Jon Najarian.

Agribusiness Bunge Ltd rose 3.4 percent to $71.36 and Archer-Daniels Midland Co gained 2.2 percent to $36.22.

Commodities were a weak spot as crude oil prices declined in parallel with a falling-off of worries of possible oil supply problems in the Middle East. March crude futures dropped 1.5 percent.

Nokia, the world's largest cellphone maker, and Microsoft teamed up to build an iPhone challenger in an attempt to take on Google and Apple in the fast-growing smartphone market.

U.S.-listed shares of Nokia slumped 14 percent to $9.36. Dow component Microsoft was 0.9 percent lower at $27.25. - Reuters

Vietnam devalues dong again in step to mend economy

HANOI: Vietnam devalued its beleaguered currency on Friday, Feb 11 for the third time in a year, as authorities started to try to address festering economic problems that critics say have been brushed aside in the pursuit of growth.

The State Bank of Vietnam dropped the dong's reference rate to 20,693 dong per dollar from 18,932, an 8.5 percent devaluation, and narrowed the currency's trading band to 1 percent from 3 percent on either side of that mid-point rate.

The reference rate adjustment gave the dollar a 9.3 percent boost against the dong.

The combined effect of the lower mid-point and the wider band pulled the weak limit of the band down about 7 percent to 20,900 from 19,500, and brought official and black market exchange rates closer to alignment.

The International Monetary Fund welcomed the changes, but said authorities needed a "broader set of policies" to restore macroeconomic stability.

The dong, unlike nearly all other Asian currencies, has been weakening against the U.S. dollar. Confidence in the local currency is low in Vietnam, where dollars and gold are widely used for major purchases and as a hedge against inflation.

Friday's devaluation was the sixth -- and by far the biggest -- in nearly three years. One year ago, the dong was devalued by 3.2 percent, and in August there was a 2.0 percent devaluation.

The currency's slide has come during a turbulent period in which authorities have grappled with volatile inflation, wide trade and fiscal deficits, rising global gold prices along with sinking confidence in the dong. For a timeline click.

Economists applauded the move but said it would not be a panacea and the central bank now needed to target double-digit inflation, which the devaluation could exacerbate.

"This is a bold and decisive step by the central bank," said economist and former government advisor Le Dang Doanh. "But the devaluation should be just part of a package of measures that the government should take."

Many economists and international organisations, including the IMF, had said authorities were overly focused last year on attaining high gross domestic product growth before a January meeting, held once every five years, of the Communist leadership. Inflation soared to near two-year highs.

Fitch, Moody's and Standard & Poor's all downgraded Vietnam's sovereign ratings last year, citing macroeconomic imbalances.

After the devaluation traders said the dong was being quoted about 40-60 dong beyond the band on the interbank market.

LOW RESERVES, HIGH INFLATION

Going forward, the central bank would monitor the midpoint rate proactively and flexibly and keep it "relatively closely linked to the situation in the market", Nguyen Quang Huy, head of the foreign exchange department, said on the bank's website.

Since June 2008 the dong reference rate has been devalued by more than 20 percent and foreign exchange reserves have fallen sharply, making it increasingly difficult for the government to break a cycle of devaluation expectations. Most other currencies in the region gained ground against the weak dollar.

Minister of Planning and Investment Vo Hong Phuc was quoted in state media earlier this week as saying foreign exchange reserves were "more than $10 billion" at the end of 2010. Reserves were nearly $24 billion at the end of 2008. In December 2009, the central bank estimated reserves at $16 billion.

Doanh said the low reserves had left the central bank little choice but take a big enough step to realign exchange rates.

Economists at Standard Chartered said the devaluation should ease downward pressure on reserves and help exports, but inflation would remain a problem.

"The latest devaluation could also lead to higher imported inflation in the months ahead, especially when combined with rising global commodity prices. While the central bank remains comfortable with the current level of interest rates, we see a need for higher rates in order to pre-empt economic overheating risks," the bank wrote on Friday.

Australia and New Zealand Banking Group (ANZ) also said the devaluation underscored the need for rate hikes.

The consumer price index rose to a near two-year high of more than 12 percent in January.

The central bank raised the base rate in early November by 100 basis points to 9 percent. Between then and January, while the base rate has stayed flat, it hiked the reverse repo rate on 7-day open market operations by 400 basis points to 11 percent in a tightening move.

Still, businesses in Vietnam have been complaining that lending rates are too high at up to 20 percent, and officials say they hope to eventually bring rates down.

EXPECTED MOVE

The dong has languished outside its band for more than four months on unofficial markets, hovering in recent weeks about 6-7 percent beyond the weak limit.

On Friday morning the dong was quoted at 21,300/21,400 per dollar on the unofficial market in Hanoi, according to two major gold shops that double as a foreign exchange dealers.

Stocks dipped slightly after the news, but recovered with the benchmark Vietnam Index closing down just 0.05 percent and the Hanoi Index gaining 0.13 percent.

"For the short term (the devaluation) is bad, but after a week I expect more foreigners will come into the stock market to trade, so it'll be good for the market," said Quach Manh Hao, Deputy Director of Thang Long Securities.

"This is a message to the market that the government will focus on stabilising foreign exchange for the whole year."

Currency traders and economists had widely expected the SBV to make a move around this time after a senior official in early November ruled out a devaluation before Tet, the lunar new year festival, saying that authorities would instead tap foreign exchange reserves to try to meet dollar demand.

The Tet holiday ended on Monday and market activity resumed on Tuesday. - Reuters

Network Guidance withdraws claims for RM900m damages against Telekom Malaysia

KUALA LUMPUR: Network Guidance Sdn Bhd (NGSB) has withdrawn claims for damages totaling RM400 million and loss of profit of RM500 million against TELEKOM MALAYSIA BHD [] and TM Net Sdn Bhd over an alleged breach of contract.

TM said on Friday, Feb 11 NGSB withdrew its claims for aggravated damages of RM200 million and exemplary damages of RM200 million and also abandoned the claim for loss of profit of RM500 million.

In the re-amended claim, NGSB sought a declaration that both parties had entered into an agreement for a joint-venture project but TM breached the agreement.

As a result of the breach of agreement, NGSB suffered loss and damages. NGSB was now claiming special damages totalling RM23.95 million.

The damages including equipment, licence fees for use of software and content, overheads and cost of tests and also interest of 8% per annum on the special damages.

In the re-amended claim, NGSB stated it had changed its name to Fine TV Network Sdn Bhd.

KrisAssets says Mid Valley Megamall market value RM1.92b

KUALA LUMPUR:'' The Mid Valley Megamall, which is owned by KRISASSETS HOLDINGS BHD []'s unit Mid Valley Megamall, has a market value of RM1.92 billion as at Dec 31, 2010 following a revaluation. The company said on Feb 11, 2011, this was a 3.78% increase over the RM1.85 billion when it was revalued on Sept 30.

KrisAssets said the net surplus of RM52.5 million (deferred tax at 25%) was recognised in statement of comprehensive income of KrisAssets group for the three months ended Dec 31, 2010.

'The total net surplus for the financial year ended Dec 31, 2010 is RM90 million, an increase of 6.67% compared with the preceding year. Based on the ordinary share capital and treasury shares as at Dec 31, 2010, the consolidated net assets per share of KrisAssets is RM3.52 per share,' it said.

It announced for the quarter ended Dec 31, 2010, the company recorded a 5.4% increase in revenue to RM61.79 million from RM58.63 million mainly due to higher total rental income.

Net profit rose 61.7% to RM80.11 million from RM49.54 million. It proposed a dividend of 7.5 sen a share, similar to a year ago.

Pre-tax profit rose 72.6% to RM107.4 million compared with RM62.2 million a year ago. This was mainly due to recognition of revaluation surplus of RM70 million as fair value gain on investment property in the current quarter compared with RM30 million in the corresponding quarter in 2009.

'Excluding the fair value gains on investment property, the group recorded pre-tax profit of RM37.4 million, representing 16.15% increase, compared with pre-tax profit of RM32.2 million in the corresponding period in 2009. This was mainly due to higher total rental income and lower maintenance and utility costs in the current quarter,' it said.

For the financial year ended Dec 31, 2010, earnings rose 47% to RM200.01 million from RM136.02 million while revenue increased by 5% to RM239.39 million from RM227.88 million.

AirAsia defers delivery of 10 Airbus A320 from 2012 to 2015, opts for fuel-efficient planes

KUALA LUMPUR:'' AIRASIA BHD [] has signed an agreement with Airbus S.A.S to revise the delivery dates of 10 Airbus A320 aircraft from 2012 to 2015.

It said on Friday, Feb 11'' the move was to allow some flexibility to switch from its current order of the classic A320 to a new generation A320 aircraft which is more fuel efficient when such aircraft come into production in the near future.

With the deferment, the delivery of 24 aircraft in 2012 would be reduced to 14 aircraft, while the number of deliveries in 2015 will be increased from nine aircraft to 19 aircraft, it said.

'No penalties are payable by AirAsia in revising the delivery schedule of the 2012 aircraft,' it said, adding the deferral would also have a positive impact from the balance sheet perspective, as it would help to maintain the company's net gearing position to below two.

AirAsia said it would take delivery of 14 aircraft in 2012, which would enable the company to support the growth of its joint ventures in the Philippines as well as Vietnam while continuing to support existing affiliate airlines.

'On the back of AirAsia very encouraging financial results in the last quarter, the focus of the company is to consolidate its growth while creating growth in other regions.

'The deferment is expected to create a greater optimisation of aircraft utilisation in tandem with the growth in passenger capacity,' it said.

Rimbunan Sawit buying 4,857 ha of oil palm plantation for RM118m

KUALA LUMPUR: RIMBUNAN SAWIT BHD []'s subsidiary, R.H. PLANTATION [] Sdn Bhd is buying 4,857 hectares of oil palm plantation in Niah for RM118 million.

It said on Friday, Feb 11, it had entered into a memorandum of understanding with Sheba Resources Sdn Bhd to purchase the land.

Sheba Resources is the registered owner of the land which has been charged to Agro Bank Malaysia Bhd for RM145.69 million.

KLCI falls nearly 10 pts to lowest since Dec 20 on selling of banks

KUALA LUMPUR:'' The FBM KLCI fell for the third consecutive day on Friday, Feb 11 and was at its lowest level since Dec 20 last year, weighed by losses at banking and index-linked PLANTATION [] stocks as foreign investors continued to sell down stocks.

The decline of the FBM KLCI was in tandem with the losses at most key regional markets, where Taiwan's Taiex slumped 2.6% and South Korea's Kospi fell 1.6%.

The FBM KLCI fell 0.63% or 9.47 points to close at 1,494.52. Losers trounced gainers by 635 to 206, while 271 counters traded unchanged. Volume declined to 1.68 billion valued at RM2.41 billion.

MIDF Research head Zulkifli Hamzah said as expected, the selldown by foreign investors continued on Friday and that it would probably take a few more days for the selling to unwind before price stabilise.

'On some technical angle, such as the RSI, the market is already in the oversold territory. However, this can persist for a while which is a good opportunity to accumulate in our opinion,' he said.

Zulkiflli said there was strong buying by local institutions on Friday and that should mitigate further downside in the market.

'Next week's 4Q10 GDP growth will be announced on Friday, and that should show a deceleration of growth rate in the last quarter.

'If that is a cue that the authority will let easy monetary condition to prevail, the equity market should rebound,' he said.

At the regional markets, Taiwan's Taiex fell 2.57% to 8,609.86, South Korea's Kospi lost 1.56 to 1,977.19 and Singapore's Straits Times Index was down 0.60% to 3,084.92.

Hong Kong shares eked out gains on Friday but posted their worst weekly decline in nine months as investors took profits in Greater China markets that have outperformed the region so far this year, according to Reuters.

The Hang Seng added 0.53% to 22,828.92 and the Shanghai Composite Index closed 0.33% higher at 2,827.33.

In China, economic data for January due next week is expected to show that lending surged and inflation accelerated, prompting concerns among some investors that the central bank could take more steps to control money supply and tighten policy, after raising interest rates this week, according to Reuters.

At Bursa Malaysia, among banking stocks, RHB Capital fell 38 sen to RM7.89, CIMB and HLFG lost eight sen each to RM8.10 and RM8.75, Maybank and AMMB three sen each to RM8.53 and RM6.15, while Public Bank and Hong Leong Bank fell two sen each to RM13.04 and RM9.21.

Among plantations, PPB fell 38 sen to RM16.30, KLK 34 sen to RM21.74, Batu Kawan 26 sen to RM16.52, Sime Darby six sen to RM9.24, Boustead five sen to RM5.74 and IOI Corp three sen to RM5.53.

Other decliners included Nestle, F&N, LPI Capital, Tradewinds and S P Setia.

Gainers included Panasonic, YNH PROPERTIES [], Asia File, Malayan Flour Mills, Supermax and Delloyd.

Karambunai was the most actively traded counter with 61.4 million shares done. The stock slipped one sen to 24 sen. Other actives included Ho Wah Genting, Iris Corp, SAAG, Olympia, Ramunia, Palette and Petronas Chemicals.

Credit Suisse: USD11.5 bln flowed out of global emerging markets in 3 wks

KUALA LUMPUR: Global emerging markets recorded US$11.5 billion of outflows in funds, of which almost half were from China and Brazil, in the past three weeks, according to Credit Suisse.

It said on Friday, Feb 11, the amount exceeded the US$4.85 billion of outflows in January-February 2010 and the US$5 billion of outflows during the May 2010 correction. However, the cumulative inflows into the emerging markets were still US$71 billion since January 2010.

It said of the US$11.5 billion of outflows from the emerging markets, China recorded an outflow of US$2.8 billion and Brazil (US$2.2 billion).

Credit Suisse noted that in both cases, the outflows are much larger than their MSCI weights. For China, outflows of US$2.8 billion were 24% of the total versus China's MSCI weight of 17.4% in the global emerging markets.

For Brazil, the outflows were 19% of the total versus Brazil's MSCI global emerging market weight of 15.3%.

It said Taiwan and South Korea were the most under-owned on EPFR data, which also showed Taiwan and South Korea to be the most under-owned markets within the global emerging markets.

On a rolling 12-month basis, inflows into Taiwan were 7.2% of the total versus Taiwan's MSCI weight of 12.1%. Similarly, inflows into Korea were 11.2% of the total, versus Korea's MSCI weighting of 14.6%.

The research house said India continued to be the crowded trade with inflows over the past 12 months accounting for 9.1% of the emerging market total versus a MSCI weight of 6.9%.

Maxis to broaden mobile internet service, eyes healthcare, education

KUALA LUMPUR: Maxis Bhd, which has evolved into an integrated communications provider, plans to broaden the range of services offered on mobile internet and is looking into the healthcare and education segments.

Its chief operating officer Jean-Pascal van Overbeke said on Friday, Feb 11'' that 'we want to aggregate these different industries and content for a single customer base'.

'The timing of this launch is perfect with the increasing number of mobile internet users in Malaysia. Half of Maxis; 13.5 million subscribers are mobile internet users,' he said at the launch of Maxis' mobile application that enables their subscribers to book movie tickets on-line from their mobile phones.

Maxis had tied up with Western Union last year to launch a mobile money transfer service, allowing its subscribers to send money to any of 200 locations worldwide.

'This is the start of more exciting things to come in relation to Maxis' lifestyle offering. Out ultimate aim is to deliver enriching life experiences to our customers on a seamless high-speed network,' Overbeke'' added.

Maxis vice president and head of products, devices and innovation T. Kugan said: 'We want to give the customers the best choice, by delivering exactly what they want. This is done by forming the relevant partnerships.'

The Maxis Movies Application was done in collaboration with Paypal, and is downloadable for iPhone, iPad and Android users.

Maxis had tied up Golden Screen Cinemas Sdn Bhd and TGV Cinemas Sdn Bhd to enable Maxis subscribers to book their cinema tickets on line and use PayPal as the payment gateway.

#Flash* IGB, KrisAssets suspended for corporate exercise

KUALA LUMPUR: Trading in the securities of IGB Corp Bhd and KrisAssets Bhd has been suspended from 2.30pm on Friday, Feb 11 until 5pm on Feb 14.

The companies said the suspension was 'pending the announcement of a proposed material transaction'.

Selling pressure resumes, KLCI fall more than 10pts, weighed by plantations

KUALA LUMPUR: Selling pressure picked up pace in the afternoon session on Friday, Feb 11, with PLANTATION []s under profit taking while the FBM KLCI fell more than 10 points.

At 3.07pm, the FBM KLCI fell 10.07 points to 1,493.92. Turnover was 1.1 billion shares valued at RM1.47 billion. Declining stocks hammered advancers 721 to 118 while 208 stocks were unchanged.

PPB fell the most, down 58 sen to RM16.10 with 764,000 shares done. KL Kepong, which reported a decline in its CPO and fresh fruit bunches in January, came under more selling, sliding 50 sen to RM21.58. United Plantations and Batu Kawan lost 26 sen each to RM16.44 and RM16.52.

CIMB Equities Research is downgrading the regional plantation sector from Trading Buy to Neutral.

The research house said on Friday, Feb 11 the downgrade was because most of the planters have outperformed the market since its sector upgrade; spot CPO price has done better than expected, is close to its peak and should head south in the second half.

Other decliners were Nestle, down 54 sen to RM45.36, Sycal-WA 30 sen to 9.5 sen, Tradewinds and RHB Cap 24 sen each to RM7.51 and RM8.03.

AmResearch sees minimal impact from possible SRR rate hike, Overweight on banks

KUALA LUMPUR: AmResearch remains positive on the banking sector and it sees minimal impact of any possible increase in the statutory reserve requirement (SRR) by Bank Negara.

It said on Friday, Feb 11 that the SRR is currently at a historically low level of 1%. Its sensitivity analysis indicates a '0.3% to '2.2% downgrade to net earnings, based on an SRR rate hike of 1%.

'The ones which may be affected the most would be EON Cap (-2.2%), Alliance Financial Group (-2.1%), Maybank (-2.1%) and Public Bank (-1.4%).

'We estimate every 1ppt increase in SRR rate to reduce the amount available for lending by RM7.65bil, just for eight local banks alone. Nonetheless, we remain positive about the banking sector. Our buys are CIMB, Maybank, Hong Leong Bank and RHB Cap,' it said.

The central bank, in the recent monetary policy statement, said the large and volatile shift in global liquidity are leading to a build-up of liquidity in the domestic financial system.

While the liquidity has been manageable, going forward, Bank Negara had said additional policy tools such as the SRR and macroprudential lending measures may be considered to avoid the risks of macroeconomic and financial imbalances.

CIMB Research downgrades regional plantation sector from Trading Buy to Neutral

KUALA LUMPUR: CIMB Equities Research is downgrading the regional PLANTATION [] sector from Trading Buy to Neutral.

The research house said on Friday, Feb 11 the downgrade was because most of the planters have outperformed the market since its sector upgrade; spot CPO price has done better than expected, is close to its peak and should head south in the second half.

CIMB Research also said the sector valuations are broadly in line with market price-to-earnings. But this is balanced by the bright earnings outlook in the current year and M&A potential.

'We raise our CPO price forecasts by 16% to US$1,100 (RM3,200) for 2011 and by 5% to US$1,000 (RM2,900) for 2012 given the smaller-than-expected supply.

'But our target prices for most planters for most planters is reduced as we scale back our target forward P/Es by 2-3 multiple points,' it said.

The research house also lowered its ratings for four stocks to Neutral and IOI Corp to Underperform. Golden Agri remains its top pick.

It favoured stocks that offer stock-specific catalysts on top of attractive valuations. Golden Agri was appealing due to its recovering output, M&A potential and sustainable initiatives to improve its brand value.

CIMB Research said it also liked Sime Darby for the newsflow on its plans to enhance shareholders' value. London Sumatra is a pick for its exposure to rubber and higher FFB yields from infrastructure put in by management two years ago.

'Following our downgrade of regional plantations, our strategist advocates a switch into coal, tin and nickel plays in Indonesia within the commodity space,' it said.

Maxis ties up with GSC, TGV for mobile booking of cinema tickets

KUALA LUMPUR: Maxis Bhd has tied up Golden Screen Cinemas Sdn Bhd and TGV Cinemas Sdn Bhd to enable Maxis subscribers to book their cinema tickets on line and use PayPal as the payment gateway.

Maxis, which evolved into an integrated communications provider, had on Friday, Feb 11 officially launched its Maxis Movie application that allows moviegoers to buy their tickets and book their seats with the smartphones.

Maxis said the Maxis Movie application integrated into GSC and TGV's electronic booking systems while PayPal's mobile payment services ensured that all movie tickets payments were made simple and secure in just two clicks.

Maxis also launched a 'Buy-1, Get-1 Free'movie ticket offer every Maxis movie day (every Tuesday) on movies screened after 6pm. Under this offer, Maxis customers had to purchase their tickets using the Maxis Movies application.

Maxis chief operating officer Jean-Pascal van Overbeke said this initiative would help the group establish its presence within the entertainment space, specifically in the area of movies.

'The timing of this launch is perfect with the increasing number of mobile internet users in Malaysia. Half of Maxis; 13.5 million subscribers are mobile internet users; 57%of Malaysian internet consumers have purchase movie tickets online; and since we soft launched the Maxis Movie iPhone application three months ago there have been 50,000 downloads, making it the most popular Maxis iPhone application to date,' he said.

'This is the start of more exciting things to come in relation to Maxis' lifestyle offering. Out ultimate aim is to deliver enriching life experiences to our customers on a seamless high-speed network,' he added.

Banks weigh on market as profit taking continues, Asian mkts down

KUALA LUMPUR: The FBM KLCI extended its losses at the mid-day break on Friday, Feb 11 in line with the overall tepid sentiment that saw investors selling down stocks across key regional markets.

Asian stocks fell and were on course for their biggest weekly loss in nine months, as investors shunned risk on concerns about the pace of policy tightening within the region and escalating tensions in Egypt, according to Reuters.

A broad sell-off in Asia since the start of 2011 on inflationary worries has shown no signs of abating, as worries about the scale of monetary tightening has encouraged the continuing rotation out of emerging and into developed markets, it said.

The FBM KLCI fell 0.44% or 6.59 points to 1,497.40, remaining below the psychologically crucial 1,500-point level, weighed by banking and index-linked PLANTATION [] stocks.

Losers thumped gainers by 621 to 134, while 246 counters traded unchanged. Volume was 860.90 million shares valued at RM1.14 billion.

The ringgit weakened 0.04% to 3.0455 versus the US dollar; crude palm oil futures for the third month delivery slipped RM21 per tonne to RM3,867, crude oil rose 40 cents per barrel to US$87.13 while gold fell 18 cents per troy ounce to US$1,363.63.

Taiwan's Taiex -1.46% 8,707.76 Singapore's Straits Times Index -0.79% 3,078.89 Hang Seng Index -0.39% 22,621.06 Kospi -0.14% 2,005.59 Shanghai Composite Index -0.09% 2,815.61 Japan's Nikkei 225 closed ''

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Maybank Investment Bank Bhd Research in a strategy note said Malaysian equities had showd signs of weakness in the run-up to Chinese New Year (on Feb 3-4).

The research house said it had forewarned of profit-taking activities ahead of the festivity after the KLCI hit a high of 1,574 pts on Jan 17.

Average daily trading value on Bursa surged to RM2.67 billion in January, the highest since Apr 2007, it said.

'Recently released equities trading data show that foreign net buying narrowed to just RM100 million in January, versus RM2.6 billion in Dec 2010.

'Preliminary data shows that foreigners have turned net sellers this week, with a total net selling of RM1.18 billion. With net foreign buying totaling RM16 billion since early-2010, this suggests that the market could remain weak for awhile,' it said.

On Bursa Malaysia, banking stocks were among the major losers, with RHB Capital falling 26 sen to RM8.01, AMMB down 12 sen to RM6.06, Hong Leong Financial Group three sen to RM8.80 while Maybank and Hong Leong Bank shed two sen each to RM8.54 and RM9.21.

Among plantations, PPB fell 48 sen to RM16.20, KLK 38 sen to RM21.70, United Plantations 28 sen to RM16.42, and Batu Kawan down 22 sen to RM16.56.

Other losers included Nestle, DiGi, DFZ Capital and Tradewinds.

Gainers this morning included Tasek, Panasonic, Supermax, Asia File, Petronas Chemicals, Southern steel and EPIC.

SAAG was the most actively traded stock with 31.6 million shares done. The counter was unchanged at 24.5 sen. Other actives included Karambunai, Ho Wah Genting, Iris Corp, Olympia, Mulpha and Ramunia.

FBM KLCI extends losses in early trade

KUALA LUMPUR: The FBM KLCI clawed back to pare down its losses at mid-morning on Friday, Feb 11 after having fallen more than 13 points in early trade in line with the cautious sentiment at regional markets.

At 10am, the FBM KLCI was down 1.09 points to 1,502.90. It had earlier fallen to a low of 1,490.44 before some buying support pushed the index back above the psychologically crucial 1,500-point level.

Losers led gainers by 418 to 134, while 222 counters traded unchanged. Volume was 450.53 million shares valued at RM496.92 million.

At the regional markets, Taiwan's Taiex fell 0.67% to 8,777.53, Singapore's Straits Times Index lost 0.57% to 3,085.66, the Australian S&P/ASX 200 Index fell 0.32% to 4,898.60, South Korea's Kospi down 0.25% to 2,003.44, the Shanghai Composite Index shed 0.16% to 2,813.62 while Hong Kong's Hang Seng Index opened 0.3% higher at 22,766.05.

Japan's stock markets are closed today for a national holiday.

BIMB Securities Research said Wall Street closed flat yesterday impacted by disappointing quarterly results announcement by the benchmark index key component stocks.

It said TECHNOLOGY [] stocks led by Cisco and Akamai Technology Incorporated both issued weak earnings forecast at its results announcement, raising concern about business and technology spending.

This is despite the lower number of first time claim on unemployment benefit that dropped to 383,000, the lowest recorded in the last 3 years, it said.

'Although lower but it may not affect the unemployment rate that currently stands at 9% as it has to dip below the 375,000 level before it can make any impact.

'Given the less-than-encouraging momentum in Wall Street and added with the regional market heavy sell off yesterday, we expect the regional and local market will continue with its selling mode today,' it said in a note Feb 11.

On Bursa Malaysia, Nestle was the top loser at mid-morning and fell 56 sen to RM45.34; RHB Capital lost 23 sen to RM8.04, KLK 22 sen to RM21.86, Aeon 17 sen to RM6, Batu Kawan 16 sen to RM16.62, Widetech and Affin 11 sen each to 89 sen and RM3.49, while Carlsberg fell 10 sen to RM6.33.

Gainers included Southern Steel, Ekovest, Petronas Chemicals, Melati Ehsan, Petronas Gas and Atlan.

Karambunai was the most actively traded stock with with 21.82 million shares done. The counter was unchanged at 25 sen. Other actives included SAAG, Ho Wah Genting, Olympia, Iris, Ramunia and NV Multi Corp.

Plantation stocks slide

KUALA LUMPUR: PLANTATION []-related stocks dipped on Friday, Feb 11 in line with the overall weaker sentiment at the local stock market as well as declining crude palm oil (CPO) futures.

At 11.10am, KLK fell 52 sen to RM21.56, United Plantations 28 sen to RM16.42, Batu Kawan 18 sen to RM16.60, Chin Teck 17 sen to RM8.72, PPB 12 sen to RM16.56, IOI Corp five sen to RM5.51 and Sime Darby four sen to RM9.26.

CPO futures on the Bursa Malaysia derivatives market slipped RM8 per tonne to RM3,880.

The FBM KLCI, meanwhile, was down 4.59 points to 1,499.40.

FBM KLCI falls below crucial 1,500 level in early trade, banks weigh

KUALA LUMPUR: The FBM KLCI fell below the psychological important 1,500 level in early trade on Friday, Feb 11 on extended selling pressure on banking stocks after the overnight tumble which dragged the index down more than 2%.

At 9.20am, the KLCI was down 7.77 points to 1,496.22. Turnover was 150.52 million shares valued at RM162.41 million. Loses hammered gainers 296 to 76 while 150 stocks were unchanged.

RHB Cap and Public Bank fell 18 sen each to RM8.09 and RM12.88 while Affin gave up 12 sen to RM3.48.

Petronas Dagangan fell 24 sen to RM12.02, making it the top loser in the early trade. PLANTATION [] stocks Batu Kawan lost 18 sen to RM16.60, PPB and KL Kepong 10 sen each to RM16.58 and RM21.98.

OSK research said in itstechnical outlook for the KLCI, said the index, which was now trading at below the uptrend line, was looking weak in the near-term.

'Should the 1,505 level be violated too, it will write off the possibility of building a sideways trend. If that happens, we will shift our near-term view to neutral. Immediate support lies at the 1,500 psychological mark while immediate resistance is seen at the 1,505 -level, followed by the 1,524-1,536 area,' it said.

OSK Research advocates investors buy into weakness after sharp fall of KLCI

KUALA LUMPUR: OSK Research said with Thursday, Feb 10's drop wiping out the FBM KLCI's year-to-date gains, by applying a 1 std deviation below mean for the KLCI PER would give it'' a KLCI level of 1,378 although it feels this would be unjustified given the still strong GDP growth projected for 2011.

'Thus we maintain our KLCI fair value of 1,648 based on a PER of 16x and advocate Buying into Weakness given the almost equal upside and downside potential,' it said on Friday, Feb 11.

Its recommended sectors are for Banks with the CONSTRUCTION [], Oil & Gas and Property sectors remaining good trades.

HDBSVR raises Dayang target price to RM2.70 per share from RM2.20 after RM802m contract

KUALA LUMPUR: Hwang DBS Vickers Research has raised the target price for Dayang Enterprise Bhd to RM2.70 per share (previously RM2.20 ex-bonus and rights) based on 15.5 times FY11F EPS.

'Our PE multiple is based on valuations for comparable size peers, excluding larger caps that are trading at large premiums to the sector,' it said on Friday, Feb 11.

Dayang had on Thursday announced it has secured the RM802 million five-year TSM contract from Petronas Carigali.

'The contract win was within our expectation - we had said Dayang was in a strong position to secure it given it is the incumbent operator. The contract would be on a 'call-up' basis, and we believe the overall contract value is likely to be higher than the original value because there is almost always additional work required,' it said.

HDBSVR said the latest win puts Dayang's order book at RM1.8 billion, giving five years of earnings visibility. The contract win reaffirmed its view that Dayang will be one of the companies with the strongest earnings growth in the oil & gas space.

The research house said the order book was also in line with its RM1.0 billion contract win estimate for 2011, and hence, it is retaining its forecast.

'We expect sustainable c.24% EBIT margin from the contract on the back of quality asset ownership,' said HDBSVR.

'Valuation undemanding, maintain Buy. Dayang is still trading at attractive 13x FY11F PE against the sector's 17x, despite stronger earnings growth of 46.2% CAGR over FY09-11F on superior margins against 13.5% growth for the sector,' it said.

RHB Research maintains overweight on plantations, sees CPO trading RM3,100

KUALA LUMPUR:'' RHB Research Institute reiterates its view that its crude palm oil (CPO) price assumptions of RM3,100/tonne for 2011 and RM2,900/tonne for 2012 would be maintained as long as the weather normalises and La Ni''a ends within the next few months, resulting in 'normal' production levels in 2H2011.

However, if La Ni''a persists, CPO prices could potentially remain high at above RM3,500/tonne for the entire year, it said on Friday, Feb 11.

RHB Research said CPO production fell in Jan by 14.2% on-month, while exports fell by 6.2% on-month.'' Although part of the fall in production was offset by the fall in exports, in January, CPO imports rose by 49% on-month and 13.6% on-year likely due to insufficient local CPO supply for refiners in the country.

As a result, closing CPO stock levels fell 12.2% on-month and 29.2% on-year in January. Stock/usage ratio in Jan thus fell again to 8.37% (from 8.68% in Dec), dropping further below the 9-year average of 9.1%, although this is still relatively far from the lowest historical level of 6.4%. Note that the fall in exports in Jan was mostly due to demand rebalancing from price sensitive countries like China, India and Pakistan.

Despite recent positive weather news flow in South America, soybean and other vegetable oil prices continue to rise, likely due to other weather-related crises caused by La Ni''a that has affected oilseed and grain crops from other countries.

'In addition, we believe the continued fight for acreage between oilseeds and grains particularly in US will be a recurring theme which will result in prices moving upwards, in anticipation of future supply risks. The USDA has been revising its crop acreage and production estimates repeatedly, as farmers vacillate between wanting to plant more corn or more soybean, depending on which crop gives the best profit margin at the time,' it said.

US STOCKS-Mubarak speech sparks late gain; Dow hit by Cisco

NEW YORK: The S&P and Nasdaq eked out gains in the final minutes of trading on Thursday, Feb 10'' as Egyptian President Hosni Mubarak said he would delegate powers to the vice president, though he stopped short of resigning.

The Dow ended slightly lower, breaking an eight-day rally after network equipment maker Cisco Systems Inc gave a weak outlook.

The S&P and Nasdaq wavered in volatile late-day action as Mubarak began a speech in response to the weeks of civilian protests. Earlier in the day, as media reports spread that Mubarak might resign, equities rebounded off early lows sparked by the disappointment over Cisco.

"The moment Mubarak said he would be giving up duties to his vice president, the market said it was a good thing and rose," said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co in New York.

"There was an initial reaction that things would be better, but that doesn't seem to be the case," Holland added. Mubarak's speech enraged protesters, who reacted with chants of "Down, down Hosni Mubarak."

More than two weeks of civilian unrest in Egypt have created some uneasiness among global investors on fears that political instability could spread through the region and impact commodities.

The Van Eck Market Vectors exchange-traded fund ended up 0.45 percent, cutting gains late when it appeared that Mubarak was not stepping down. Previously, the fund had risen as much as 5.8 percent.

Volume on Wall Street was stronger than in recent days, which had seen some of the thinnest trade of the year. But with a total of about 8.15 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, volume was still below last year's daily average of 8.47 billion.

"Egypt stopped us from dropping lower, but the low volume means that people are skeptical of the climb we've had," said Michael Nasto, senior trader at U.S. Global Investors Inc in San Antonio, Texas. The Dow and S&P are both up more than 5 percent since the start of 2011.

Cisco shares tumbled 14 percent to $18.92 on heavy volume a day after the outlook, but chief competitors surged as investors see Cisco losing market share. Juniper Networks rose 7.6 percent to $43.40 and the Networking Index surged 3.5 percent.

The Dow Jones industrial average was down 10.60 points, or 0.09 percent, at 12,229.29. The Standard & Poor's 500 Index was up 0.99 points, or 0.07 percent, at 1,321.87. The Nasdaq Composite Index was up 1.38 points, or 0.05 percent, at 2,790.45.

Also weighing on the Dow was Wal-Mart Stores Inc, which fell 2 percent to $55.59 after UBS downgraded the stock to "neutral" from "buy." UBS said a sales recovery at the retail giant could take longer than expected.

New U.S. claims for unemployment benefits dropped to their lowest level in 2-1/2 years, the government said on Thursday, in a sign the labor market was improving.

Kraft Foods Inc fell in extended trading after it reported fourth-quarter results. The stock, a Dow component, was off 1.3 percent to $30.72.

Disappointing earnings overseas hurt sentiment as Credit Suisse missed profit expectations. The bank's U.S.-traded shares dropped 7.2 percent to $43.27 while peer Deutsche Bank fell 2.6 percent to $62.61 on the New York Stock Exchange.

Soft drink and snacks maker PepsiCo Inc cut its full-year earnings growth target, sending shares down 1.6 percent to $63.36. - Reuters

Wynn Resorts profit beats Street, shares dip

LOS ANGELES:'' Wynn Resorts Ltd posted a better-than-expected fourth-quarter net profit, compared with a loss a year earlier, as revenue at its Wynn Macau <1128.HK> unit climbed 79 percent, according to Reuters on Thursday, Feb 10.

But some of the Macau gain was attributed to luck and the company's shares fell about 1 percent after-hours.

"I think they put up a very big Macau number, but if you look at the hold percentage it was up quite a bit," said Hudson Securities analyst Robert LaFleur, referring to the amount of money the casinos won from gamblers.

Gambling revenue has soared over the past several months in Macau, the only place in China where gambling is legal, while the Las Vegas Strip has just begun to emerge from the cycle of lackluster demand driven by the recession and a glut of new hotel rooms and casinos.

Wynn operates two casino-resorts in Macau and two in Las Vegas.

Chief Executive Officer Steve Wynn said the government of Macau has given verbal approval to plans for a third Wynn casino in the Chinese gambling enclave.

"I am hoping that we can get started in March or April at the latest," he told analysts on a conference call, adding that the new resort could open in late 2014 or early 2015. "But I have to wait for the government to give us a green light."

He put the cost of the new Macau property at $2.5 billion.

Wynn Resorts reported a fourth-quarter net profit $114.2 million, or 91 cents per share, compared with a net loss of $5.2 million, or a loss of 4 cents per share, a year earlier.

Adjusting for one-time items, the company earned 91 cents a share, soundly beating the 66 cents a share forecast by analysts, according to Thomson Reuters I/B/E/S.

Quarterly net revenue rose 53 percent to $1.24 billion. Analysts had expected $1.13 billion.

Wynn's revenue in Las Vegas rose 8 percent, while adjusted property earnings rose 25 percent to $68.3 million, due mainly to higher gambling revenue.

Steve Wynn said trends in Las Vegas have continued to move upward in early 2011.

The company's property earnings in Macau more than doubled to $296.8 million.

Wynn said it kept 3.15 percent of the $27.7 billion gambled by its VIP customers in Macau, compared with a normal hold range of 2.7 to 3 percent.

Shares of Wynn, which have more than doubled over the past 12 months to close at $120.15 on Thursday, were trading at $118.55 after-hours. - Reuters

GLOBAL MARKETS-Stocks flat, dollar up, Mubarak sticks around

NEW YORK: Wall Street stocks ended flat after a late buying surge as Egyptian President Hosni Mubarak said he would relinquish powers but not step down, while upbeat weekly U.S. jobless claims data boosted the U.S. dollar, according to Reuters on Thursday, Feb 10.

The greenback gained after the U.S. Labor Department reported an unexpected drop in initial claims for unemployment benefits to the lowest level in 2-1/2 years.

Weak results from computer networking giant Cisco Systems Inc helped end an eight-day win streak for the Dow industrials. Disappointing results for Swiss bank Credit Suisse and Diageo, the world's largest spirits maker, weighed on European shares.

Oil prices rose in anticipation of Mubarak stepping aside and extended those gains in post-settlement trade.

Gold recovered lost ground as the immediate reaction to Mubarak's announcement alleviated some investor anxiety, although the political upheaval appears far from over as Egypt's streets erupted in rage when he did not resign after two weeks of deadly protests.

The Van Eck Market Vectors exchange-traded fund ended up 0.45 percent, cutting gains late when it appeared that Mubarak was not stepping down. Previously, the fund had risen as much as 5.8 percent.

Mubarak said he is delegating powers to newly appointed Vice President and trusted former intelligence chief, Omar Suleiman.

"Egypt stopped us from dropping lower, but the low volume means that people are skeptical of the climb we've had," Michael Nasto, senior trader at U.S. Global Investors Inc in San Antonio, Texas, said of the stock markets' movement.

By the close of trade the Dow Jones industrial average fell 10.60 points, or 0.09 percent, to 12,229.29. The Standard & Poor's 500 Index climbed 0.99 point, or 0.07 percent, to 1,321.87. The Nasdaq Composite Index edged up 1.38 points, or 0.05 percent, to 2,790.45.

Cisco's stock fell 14.16 percent to $18.92 a day after warning about dwindling public spending and weaker margins. In Europe, Credit Suisse missed profit expectations because of debt charges, and Diageo missed expectations with a 9 percent rise in half-year earnings.

While earnings from Cisco disappointed, benchmark indexes are still hovering near 2-1/2 year highs on generally positive corporate news and economic data.

The latest reading of U.S. earnings, for instance, showed that of the companies listed on the Standard & Poor's 500 index, 72 percent of those reporting have beaten analysts' mean quarterly estimates, according to Thomson Reuters data.

MSCI's all-country world index fell 0.53 percent, pressured in particular by emerging markets. The EM sub-index lost 1.89 percent.

Europe's FTSEurofirst 300 closed off 0.18 percent, a third consecutive down day, although it pared its losses on then-speculative news reports of a potential exit of Mubarak.

Japan's Nikkei index closed down 0.1 percent.

Heading into Friday's trading activity in Tokyo, March Nikkei stock futures pointed to a weaker open, with contracts traded in Chicago down 20 points to 10,655.

DOLLAR SURGE

The dollar's rise accelerated after the U.S. weekly jobless claims report showed a drop in the latest week to a seasonally adjusted 383,000, the lowest since July 2008.

While the data underpinned the greenback's gains, investors remain worried about Europe's lack of progress in tackling a sovereign debt crisis which undermined the euro.

"Higher yields have benefited the dollar, while Portuguese 10-year bond yields are uncomfortably above 7 percent, which is reminding investors that the stress in the euro zone periphery has not disappeared," said Win Thin, global head of emerging markets strategy at Brown Brothers Harriman in New York.

The euro, which hit a 12-week high above $1.38 this month, struggled as investors drove Portuguese bond yields to their highest since the currency was introduced in 1999.

Portugal is considered at risk of becoming the next euro zone country to need a bailout. The European Central Bank stepped in to buy Portuguese bonds to help stabilize the fragile market.

The euro fell 0.93 percent to $1.3602. The dollar rose 1.17 percent against the Swiss franc to 0.9686 francs and rose 0.93 percent against the yen to 83.15.

U.S. Treasury debt prices fell, renewing their recent sell-off, as traders sold older issues to make room for $16 billion in 30-year bonds in this week's quarterly refunding.

On the New York Mercantile Exchange, March crude was up 85 cents to $87.56 a barrel, after settling up only 2 cents, or 0.02 percent, at $86.73 a barrel.

Spot gold dropped 0.2 percent to $1,360.05 an ounce. - Reuters

#Stocks to watch:* Dayang Enterprise, Lion Corp, EPIC, Integrax

KUALA LUMPUR: Stocks on Bursa Malaysia may stage a mild rebound on Friday, Feb 11 as the heavy selling the previous day would be viewed as overdone as the firm economic fundamentals continue to underpin the economy. However, investors would also seek direction from the regional markets which skidded the previous day.

Analysts said foreign funds used the excuse of worries'' about an expected rise in the statutory reserve requirement to take profit in Malaysian banking stocks which had a strong run-up in recent months.

The FBM KLCI's year-to-date (YTD) gains were wiped out on Thursday, Feb 10 after it fell more than 2%, the biggest single day loss since November 2008, in tandem with most key regional markets.

European markets fell as disappointing corporate earnings weighed on global stock markets on Thursday, pushing major indexes lower, while shifting interest rate expectations lifted the dollar and put Britain's pound on edge.

On Wall Street, the S&P and Nasdaq eked out gains in the final minutes of trading on Thursday, Feb 10'' as Egyptian President Hosni Mubarak said he would delegate powers to the vice president, though he stopped short of resigning.

The Dow Jones industrial average was down 10.60 points, or 0.09 percent, at 12,229.29. The Standard & Poor's 500 Index was up 0.99 points, or 0.07 percent, at 1,321.87. The Nasdaq Composite Index was up 1.38 points, or 0.05 percent, at 2,790.45.

Stocks to watch include DAYANG ENTERPRISE HOLDINGS BHD [], Lion Corp Bhd, Eastern Pacific Industrial Corp Bhd (EPIC) and INTEGRAX BHD [].

Dayang secured a contract valued at RM802 million from Petronas Carigali Sdn Bhd to provide topside structural maintenance services.

Dayang said the contract shall be effective from Feb 2, 2011 until Feb 1, 2016 and estimated the total value of the contract to be about RM802 million over the duration.

'However, the contract is a 'call-up contract' made up of work orders, which will be awarded at the discretion of Petronas Carigali during the duration of the contract and the values of the work orders are based on the contract schedule of rates,' it said.

Lion Corp's unit Megasteel Sdn Bhd has proposed to issue preference shares with a total value of US$17 million to LION FOREST INDUSTRIES BHD [] (LFIB).

Lion Corp had entered into a conditional subscription agreement with Jadeford International Ltd ' a unit of LFIB --'' for the issuance of 17 million three-year redeemable cumulative preference shares (RCPS) of US$1 each for US$17 million cash.

'The proceeds from the proposed Issuance of RCPS amounting to USD17 million will be utilised for the repayment of Megasteel's existing US dollar and ringgit syndicated term loans,' it said.

EPIC reported earnings of RM14.87 million in the fourth quarter ended Dec 31, 2011, a 55.4% increase from the RM9.56 million a year ago underpinned by an increase in port operations and oil and gas activities.

Revenue rose 7.6% to RM53.31 million from RM49.54 million a year ago. Earnings per share were 8.77 sen compared with 5.65 sen a year ago.

For the financial year ended Dec 31, 2010, EPIC's earnings rose 25% to RM52.84 million from RM42.14 million while revenue climbed 28% to RM235.136 million from RM183.46 million. It has cash of RM98.58 million as at Dec 31, 2010 but its trade and other receivables were RM57.56 million.

Integrax'' is selling the entire 70.31% stake in its Indonesian subsidiary PT Indoexchange Tbk to Equatorex Sdn Bhd, a company controlled by Integrax's chairman and joint CEO Harun Halim Rasip.

Meanwhile, the High Court here has dismissed an application by Puncak Niaga (M) Sdn Bhd founder Tan Sri Rozali Ismail and two others to get a stay on making a RM35 million payment to a corporate advisor over breach of contract involving a water project.

Judicial Commssioner Rosilah Yop ruled as such after hearing submissions from counsel Datuk N.Vijay Kumar who acted for the plaintiff and counsel Tan Sri Datuk Cecil Abraham representing the defendant, in her chambers on Thursday, Feb 10.

On Dec 8, 2010, Rosilah had ordered Rozali and the two others to make the RM35 million payment to the plaintiff.

Malaysian Rating Corporation Bhd affirmed the rating of Perwaja Steel Sdn Bhd's RM400 million murabahah medium term notes at AID but the rating outlook was revised to negative from stable.

It said the outlook revision incorporates the recent deterioration in Perwaja's operating performance, and continuing pressure from lower volumes and rising input costs.

MARC said it was concerned about Perwaja's capacity to manage its liquidity position through its industry cyclical trough, given its high debt leverage and significant annual debt maturities.

Rozali Ismail, 2 others fail in bid to stop suit seeking RM35m payment

KUALA LUMPUR: The High Court here has dismissed an application by Puncak Niaga (M) Sdn Bhd founder Tan Sri Rozali Ismail and two others to get a stay on making a RM35 million payment to a corporate advisor over breach of contract involving a water project.

Judicial Commssioner Rosilah Yop ruled as such after hearing submissions from counsel Datuk N.Vijay Kumar who acted for the plaintiff and counsel Tan Sri Datuk Cecil Abraham representing the defendant, in her chambers on Thursday, Feb 10.

On Dec 8, 2010, Rosilah had ordered Rozali and the two others to make the RM35 million payment to the plaintiff.

In the writ of summons filed on Sept 26, 2005, Lim Pang Cheong @ George Lim as the plaintiff had demanded the payment from Rozali, 54, who is also the executive chairman of WWE Holdings Berhad, and was named the first defendant.

Lim had named Mat Hairi Ismail, 49, who is also the younger brother of'' Rozali and managing director of WWE Holdings Berhad and the company (WWE) itself, as the second and third defendants.

In his statement of claim, Lim had alleged that in the first quarter of 2004, the first defendant had asked the plaintiff to procure a project known as Jelutong Sewage Treatment Plant and Central Sludge'' Facility for the three defendants and that a commission would be paid to him if it was successful.

On Oct 14 2004, the three defendants notified Bursa Malaysia that the company had succeeded in securing the project from the Government of Malaysia on Sept 23, 2004 and its value was RM468.3 million.

Lim further claimed that as per their agreement, he was entitled to a commission of RM23.4 million but it was not forthcoming with the defendants giving excuses that the government had deferred payments to the company and that it (company) was facing financial constraints.

Lim had sought payment of the RM23.4 milion commission and other relief deemed fit by the court besides costs and interest.

The three defendants, in their statement of defence, had claimed that they had never entered into such an agreement with Lim. - Bernama

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Dayang Enterprise secures RM802m maintenance contract from Petronas Carigali

KUALA LUMPUR: DAYANG ENTERPRISE HOLDINGS BHD [] has secured a contract valued at RM802 million from Petronas Carigali Sdn Bhd to provide topside structural maintenance services.

Dayang said on Thursday, Feb 10 it had received a letter of award to provide the services for Petronas Carigali's operations in the country.

'The contract shall be effective from Feb 2, 2011 until 1 February 2016,' it said, adding it estimated the total value of the contract to be about RM802 million over the duration.

'However, the contract is a 'call-up contract' made up of work orders, which will be awarded at the discretion of Petronas Carigali during the duration of the contract and the values of the work orders are based on the contract schedule of rates,' it said.

Megasteel unit to issue RCPS to Lion Forest for USD17m

KUALA LUMPUR: Lion Corp Bhd's unit Megasteel Sdn Bhd has proposed to issue preference shares with a total value of US$17 million to LION FOREST INDUSTRIES BHD [] (LFIB).

Lion Corp said on Thursday, Feb 10 it had entered into a conditional subscription agreement with Jadeford International Ltd ' a unit of LFIB --'' for the issuance of 17 million three-year redeemable cumulative preference shares (RCPS) of US$1 each for US$17 million cash.

'The proceeds from the proposed Issuance of RCPS amounting to USD17 million will be utilised for the repayment of Megasteel's existing US dollar and ringgit syndicated term loans,' it said.

Lion Corp said the proposed issuance of RCPS was deemed a related party transaction. OSK Investment Bank Bhd was appointed by the company to act as the independent adviser to advise the non-interested directors and minority shareholders of on the fairness and reasonableness of the proposed Issuance of RCPS and whether it is detrimental to the minority shareholders of the company.

It added the proposed Issuance of RCPS was not expected to have any material effect on the earnings and earnings per share of the Lion Corp group for the financial year ending June 30, 2011.

'The company intends to submit the application to the relevant authorities within one month from the date of this announcement. The proposed issuance of RCPS is expected to be completed by March 2011,' it said.

EPIC 4Q earnings up 55pct to RM14.87m, boost from port, oil and gas ops

KUALA LUMPUR: Eastern Pacific Industrial Corp Bhd reported earnings of RM14.87 million in the fourth quarter ended Dec 31, 2011, a 55.4% increase from the RM9.56 million a year ago underpinned by an increase in port operations and oil and gas activities.

It said on Thursday, Feb 10 that revenue rose 7.6% to RM53.31 million from RM49.54 million a year ago. Earnings per share were 8.77 sen compared with 5.65 sen a year ago.

For the financial year ended Dec 31, 2010, its earnings rose 25% to RM52.84 million from RM42.14 million while revenue climbed 28% to RM235.136 million from RM183.46 million.

It has cash of RM98.58 million as at Dec 31, 2010 but its trade and other receivables were RM57.56 million.

KLCI skids more than 2pct, wipes out gains for the year

KUALA LUMPUR: The FBM KLCI's year-to-date (YTD) gains were wiped out on Thursday, Feb 10 after it fell more than 2%, the biggest single day loss since November 2008, in tandem with most key regional markets.

European markets fell as disappointing corporate earnings weighed on global stock markets on Thursday, pushing major indexes lower, while shifting interest rate expectations lifted the dollar and put Britain's pound on edge, according to Reuters.

Investors were also cautious about a Bank of England meeting later in the day, wary in case it makes its first move to tighten policy since the start of the financial crisis, it said.

The FBM KLCI was the worst performer among the key regional markets as the YTD gains of the markets in Hong Kong, Taiwan, South Korea and Singapore were also erased in frenzy of selling, while the Shanghai Composite Index rebounded after having slipped on Wednesday following an interest rate hike in China.

The FBM KLCI fell 2.09% or 32.08 points to 1,503.99, the steepest fall since it lost 2.11% on Nov 6, 2008. YTD, the FBM KLCI lost 0.98%. Losers thumped gainers by 750 to 160, while 223 counters traded unchanged. Volume was 2.23 billion shares valued at RM3.13 billion.

Hong Kong's Hang Seng Index fell 1.97% to 22,708.62, Taiwan's Taiex lost 1.89% to 8,836.56, South Korea's Kospi fell 1.81% to 2,008.50 and Singapore's Straits Times Index lost 1.5% to 3,103.39.

However, the Shanghai Composite Index rose 1.59% to 2,818.16 and Australia's S&P/ASX 200 Index added 0.20% to 4,914.40

MIDF Research head Zulkifli Hamzah said the weakness in the market partly reflected apprehension over China's inflation data due out next week.

He said MIDF Research expects the number to be more than 5%, which was why the decision by the authority there to increase interest rate on Tuesday was a preemptive move with the possibility of more hikes to come.

'The local market was practically dragged by banking and PLANTATION [] sectors. Banking stocks suffered given heightened fears that Bank Negara may raise statutory reserve ratio instead of the OPR, although we believe the risk is overplayed.

'There was profit taking on plantation stocks as CPO price traded at a premium to soyoil lately, which is an unsustainable phenomenon. These concerns are transient in nature. We expect investment sentiment to rebound,' he said.'' Banking stocks weighed down on the 30-stock index, with profit taking also erasing gains at key blue chips.

On Bursa Malaysia, banking stocks were among the major losers with AMMB down 27 sen to RM6.18, Maybank 22 sen to RM8.56, CIMB 19 sen to RM8.18, RHB Capital 12 sen to RM8.27, Public Bank eight sen to RM13.06, Hong Leong Financial Group seven sen to RM8.83 and Hong Leong Bank down two sen to RM9.23.

Other blue chips that fell included IOI Corporation that fell 22 sen to RM5.56, Axiata 14 sen to RM4.99, Tenaga 20 sen to RM5.95, Petronas Chemicals 29 sen to RM5.96, Genting 18 sen to RM10.22 and Sime Darby eight sen to RM9.30.

Iris Corp was the most active with 75.96 million shares done. The stock was unchanged at 21.5 sen. Other actives included SAAG, Karambunai, Talam, Ho Wah Genting and KUB.

MTD Cap rose 42 sen to RM10.94 after the takeover offer was raised from RM9.50 to RM11. Nestle added 52 sen to RM45.90 and F&N rose 20 sen to RM15.70.

KLCI skids 23 pts, AMMB down in heavy trade

KUALA LUMPUR: Selling pressure accelerated in late afternoon trade on Thursday, Feb 10, in line with the key regional markets, with selling seen in bank stocks and PLANTATION []s.

At 4.32pm, the FBM KLCI fell 23.29 points to 1,512.78. Turnover was 2.0 billion shares valued at Rm2.58 billion. Decliners hammered advancers 767 to 148 while 204 stocks were unchanged.

BAT fell the most, down RM1.30 to RM46.26 with 172,700 units done.

AMMB fell 25 sen to RM6.20 with 16.47 million shares done. AIRB-LA lost 47 sen to RM1.30, PetDag 30 sen to RM12.26, United Plantations and Guan Chong 20 sen each to RM16.60 and RM2.27.

MARC affirms rating for Perwaja Steel RM400m debt notes but outlook revised to negative

KUALA LUMPUR: Malaysian Rating Corporation Bhd affirmed the rating of Perwaja Steel Sdn Bhd's RM400 million murabahah medium term notes at A ID but the rating outlook was revised to negative from stable.

'The outlook revision incorporates the recent deterioration in Perwaja's operating performance, and continuing pressure from lower volumes and rising input costs,' it said on Thursday, Feb 10.

MARC said it was concerned about Perwaja's capacity to manage its liquidity position through its industry cyclical trough, given its high debt leverage and significant annual debt maturities.

The rating agency said the rating also incorporated the importance of Perwaja's upstream steel operations to its parent company, KINSTEEL BHD [] and assumed continued commitment of Kinsteel to Perwaja.

Perwaja is a major domestic producer of direct-reduced iron (DRI) and semi-finished steel products such as billets

However, the company had been affected by declining demand in line with the government's stimulus spending programme in fiscal 2010 tapering off, exacerbated by rising raw material costs.

MARC highlighted concerns about Perwaja's weak financial performance and its persistent operating cash flow deficits.

For nine months to Sept 30, 2010 (9MFY2010), Perwaja registered lower revenue of RM1,108.8 million (9MFY2009: RM1,160.4 million) and a pre-tax loss of RM3.6 million (9MFY2009: -RM155.2 million). Perwaja has been beset by low capacity utilisation rates, which averaged at 55.4% for its 1.5 million tonnes DRI plant capacity and 67.7% for its 1.3 million tonne billet production capacity in 9MFY2010.

'The slowdown in demand has also contributed to the company's significant build-up in inventory to RM874.3 million during the period (FY2009: RM623.5 million), or 205 days of inventory (FY2009: 153 days),' it said.

MARC pointed out that for the third quarter ended Sept 30, 2010 (3QFY2010), the company recorded'' revenue of RM270.6 million versus RM373 million 1QFY2010 and RM465.1 million in 2QFY2010 respectively, marking its third consecutive quarter of decline.

Meanwhile, the price of iron ore has been on an uptrend, rising from US$132.50 tonne in January 2010 to US$169.50 tonne end-November 2010, exerting downward pressure on its operating margins.

''

'MARC does not envisage Perwaja's performance to improve in 4QFY2010. While MARC believes that improvement in financial performance could be driven by a recovery in domestic steel consumption, this is only likely to occur in the second half of 2011 when the projects under the government's Economic Transformation Plan are rolled out,' it said.

MTD Cap surges to RM10.92 on revised offer

KUALA LUMPUR: Shares of MTD CAPITAL BHD [] jumped at the start of afternoon trade on Thursday, Feb 10 after Nikvest Sdn Bhd and parties acting in concert raised their offer price to RM11.

At 2.31pm, it was up 40 sen to RM10.92 with 170,000 shares done.

Trading in MTD was suspended in the morning session for the announcement by Nikvest, Alloy Consolidated Sdn Bhd, Alloy Concrete Engineering Sdn Bhd and Alloy Capital Sdn Bhd on the revised proposal.

On Jan 31, they had informed investors who had accepted their joint offer before or on Jan 28, could withdraw the acceptances.

Nikvest and the parties acting on concert had earlier made an unconditional take-over offer to acquire MTD Capital shares not already owned for a cash offer of RM9.50.

Malaysian palm oil output falls 14.18pct in January

KUALA LUMPUR: Malaysian palm oil output fell 14.18% to 1.057 million tonnes in January from 1.232 million tonnes in December, according to the Malaysian Palm Oil Board (MPOB).

It said on Thursday, Feb 10, the output declined by 174,791 tonnes from 1.232 million tonnes in December.

In Peninsular Malaysia, the output fell 11.49% to 572,795 tonnes, Sabah recorded a 19.08% decline to 400,876 tonnes and Sarawak 12.94% lower at 184,691 tonnes.

MPOB said the stockpile fell to 1.418 million tonnes, down 12.17% from 1.615 million tonnes in December.

CPO futures for the third month delivery rose RM4 to RM3.935 per tonne.

Rio Tinto payout tops forecasts, plans $5 bln buyback

MELBOURNE: Global miner Rio Tinto surprised investors by more than doubling its full-year dividend and promising to return $5 billion to shareholders by 2012, looking to soak up bumper cashflows after it reported a record second-half profit.

After whittling down a $40 billion mountain of debt the company said on Thursday, Feb 10 it was in strong shape to take advantage of any other opportunities that might arise, even after returning all that cash to shareholders.

"I was pleasantly surprised by the share buyback. It was definitely in the top end of what I thought they would do. It was a good result," said Brendan James, portfolio manager at Perennial Growth.

Rio Tinto Chief Executive Tom Albanese said economic growth in emerging markets combined with supply constraints meant the market and pricing outlook for commodities remained positive, but warned that the risks were "elevated".

"In particular, the timing and speed at which post-global financial crisis stimulus packages are removed have the potential to generate both volatility and substantial swings in commodity prices," he said.

Rio Tinto said it would continue to focus on its expansion projects, after approving $12 billion worth of work in 2010.

"Rio Tinto is reinvigorated, running strong and benefiting from favourable markets," Albanese said.

Rio Tinto and its peers are all flush with cash, producing at full steam with copper prices at record highs, spot iron ore prices up nearly 50 percent from a year ago, and thermal coal prices up nearly 40 percent.

Smaller rival Xstrata set the pace earlier this week topping forecasts with an 86 percent jump in full-year profit and a dividend that was nearly double market expectations.

Two key headwinds face the miners, a slow recovery of Australian coal production, after devastating floods shut mines and knocked out export rail lines in Queensland, and rising operating and project costs as labour and energy prices rocket.

But soaring coal prices are expected to more than offset the impact of lower production.

Burned by its top-of-the-market takeover of Alcan in 2007, Rio Tinto has said it is only looking for acquisitions worth less than about $5 billion.

It is chasing Mozambique-focused coal miner Riversdale Mining with a $3.9 billion bid, and extended the offer to March 4 on Thursday as it has yet to win support from Riversdale's two biggest shareholders, India's Tata Steel and Brazil's CSN .

It is under pressure to possibly raise its offer after CSN increased its stake this week to 19.9 percent, just below the threshold for making a full takeover offer.

Underlying earnings before one-offs rose to $8.22 billion for the six months to December, based on Reuters calculations, from $3.73 billion a year earlier and against analysts' forecasts of around $8.29 billion.

The company stepped up its dividend to 108 cents a share for the year, up from 45 cents a share a year ago. Analysts had said anything more than 100 cents a share would be a big surprise.

Its shares have jumped 29 percent over the past year, far outstripping an 8 percent gain in the broader market as commodity prices have taken off. - Reuters

Fragile US economy, possible China rate hikes weigh on Asian markets

KUALA LUMPUR: Blue chips extended their losses at midday on Thursday, Feb 10 in line with most of its regional peers with banks, which had a strong run-up, bearing the brunt of the profit-taking.

Investors turned cautious on renewed concern the global economic conditions remained fragile with unemployment still high in the US and possibility of further rate hikes in China.

At 12.30pm, the FBM KLCI fell 1% or 15.35 points to 1,520.72 at the mid-day break, weighed by losses at banking stocks and blue chips. Losers beat gainers 506 to 212, while 271 counters traded unchanged. Volume was 1.15 billion shares valued at RM1.24 billion.

The ringgit weakened 0.15% to 3.0420 versus the US dollar; crude palm oil for the third month delivery rose RM5 per tonne to RM3,895, crude oil added 24 cents per barrel to US$86.95 and gold gained 17 cents per troy ounce to US$1,363.82.

Asian stocks failed to make much headway after US Federal Reserve chairman Ben Bernanke signalled the recovery in the world's biggest economy was still fragile and warned against sharp spending cuts, according to Reuters.

Bernanke had suggested US economic conditions were still too weak for the central bank to pull back on its vast monetary stimulus, despite a welcome drop in the jobless rate, it said.

China will announce its inflation data on Friday, and analysts said they were bracing for further tightening measures from the Republic in the near future.

Investors in Japan also remained very much on the sidelines, ahead of a three-day weekend as Friday is a national holiday.

Singapore's Straits Times Index -0.90% 3,122.28 South Korea's Kospi -0.86% 2,027.91 Taiwan's Taiex -0.76% 8,938.41 Hang Seng Index -0.74% 22,993.01 Nikkei 225 0.06% 10,611.00 Shanghai Composite Index +0.78% 2,795.80 ''

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Among the major losers, AMMB fell 17 sen to RM6.28, CIMB and Maybank down 10 sen each to RM8.27 and RM8.68, RHB Capital nine sen to RM8.30 and Public Bank eight sen to RM13.06.

BAT fell RM1.30 to RM46.26, Petronas Dagangan 36 sen to RM12.20, SapuraCrest 13 sen to RM3.45, New Hoong Fatt 11 sen to 2.35.

Among PLANTATION []s, United Plantation fell 20 sen to RM16.60 and PPB 16 sen to RM16.68.

Gainers included F&N and DiGi that rose 22 sen each to RM15.72 and RM25.84. Other gainers included Ekovest, Kunsford, IGB, S P Setia, Century Software and Hartalega.

Iris Corp was the most actively traded counter with 57.6 million shares done. The stock added one sen to 22.5 sen. Other actives included Karambunai, SAAG, Talam and KUB.

Trading in the shares of MTD Capital was suspended from 9am and will resume at 2.30pm today. The company said it had received a revised takeover offer of RM11 per share by Nikvest Sdn Bhd and parties acting in concert in the takeover exercise. The group had earlier offered RM9.50 per share.

December industrial output up 4.2pct on-yr, up 2.1pct on-month

KUALA LUMPUR: The manufacturing sector grew at a faster pace in December 2010, pushing the industrial production index (IPI) up by 4.2% from a year ago.

The Statistics Department said on Thursday, Feb 10 the IPI increased by 2.1% from November. The increase in December 2010 was due to the manufacturing sector (up 7.8%) and electricity (2.4%). However, the MINING INDEX [] fell 3.4%.

'The IPI for the fourth quarter of 2010 increased 4.2% as compared with the same period of 2009. The index for the year of 2010 increased 7.5% as against the same period in 2009,' it said.

The department said the IPI in November 2010 was revised 5.4% year-on-year.

Meanwhile, the manufacturing sector recorded sales value of RM48.1 billion in December 2010, up 11.4% from the RM43.2 billion in December 2009.

'Month-on-month, the sales value also increased by 7.7% or RM3.4 billion as compared with the preceding month. The sales value in November 2010 was a revised positive 8.5% year-on-year to record RM44.7 billion,' it said.

The manufacturing sector also hired more workers in December 2010, with the total employees hired at 99,682, an increase of 3,738 persons or 0.4% from November.

Year- on- year, the number of workers employed increased 56,096 persons or 5.9%, as compared to 943,586 persons in December 2009.

Total employees in November 2010 was a revised positive 5.8% year-on-year to record 995,944 workers.

FBM KLCI dips more than 1% in early trade

KUALA LUMPUR: The FBM KLCI fell more than 1% in early trade on Thursday, Feb 10 and was the worst performer among the key regional bourses as Asian markets extended their losses following the interest rate hike by China on Tuesday.

The sentiment at the regional markets was also affected by the overnight mixed closing at Wall Street following US Federal Reserve chairman Ben Bernanke's statement that the US unemployment level may remain high for the next several years.

At mid-morning, the FBM KLCI fell 15.68 points to 1,520.39, weighed by losses at banking stocks and select blue chips.

Losers led gainers by 411 to 110, while 209 counters traded unchanged. Volume was 461.69 million shares valued at RM398.32 million.

At the regional markets, Taiwan's Taiex fell 0.78% to 8,936.21, Singapore's Straits Times Index lost 0.61% to 3,131.41, the Shanghai Composite Index down 0.47% to 2,760.89, South Korea's Kospi fell 0.44% to 2,036.50, Japan's Nikkei 225 shed 0.04% to 10,613.77 while Hong Kong's Hang Seng Index opened 0.4% lower at 23,069.42.

BIMB Securities Research in a note Feb 10 said based on Bernanke's statement, it continued to indicate that US employers were reluctant to hire new employee despite many signs that the economy is recovering.

'Hence, the current unemployment level of 9% may stay the same for an extended period of time.

'Given this latest negative development and the prolong impact from China upward revision in interest rate the day before, we are of the view that the local market may continue with its correction mode especially at the back of the benchmark index sterling run in the last few days,' it said.

Meanwhile, a dealer said the on-going underlying fear for now was the increasing speculation that policy makers will take further steps to curb inflation after China raised its borrowing costs.

'Thus far in the region, we have seen S.Korea, India, Indonesia, Thailand and China to have pushed up rates. This has primarily affected our market too, and the banking stocks,' he said.

On Bursa Malaysia, the top loser at mid-morning was BAT that fell RM1.36 to RM46.20.

Among banking stocks, AMMB fell 17 sen to RM6.28, Maybank 12 sen to RM8.66, CIMB 10 sen to RM8.27, RHB Capital nine sen to RM8.30 and Public Bank four sen to RM13.10.
United PLANTATION []s fell 20 sen to RM16.60, PPB 14 sen to RM16.70, MPHB 13 sen to RM2.55, Petronas Dagangan down 12 sen to RM12.44 while Guan Chong lost 11 sen to RM2.36.

Gainers included APM Automotive, MRCB, Century Software, DiGi, KLK, Coastal Contracts and IGB.

Iris was the most actively traded counter with 24.4 million shares done. The stock added half a sen to 22 sen.

Other actives included Karambunai, Talam, SAAG, Ho Wah Genting and KUB.