#Stocks to watch:* Sunway, Fajarbaru, oil and gas, Allianz

KUALA LUMPUR: Stocks on Bursa Malaysia are expected to trade in a tight range with some downside pressure on Monday, March 7 as investors worry about the impact of record oil prices on the economy while consumers cope with the rising costs of food.

The revolt in Libya continues as Muammar Gaddafi's forces captured part of a town in western Libya on Friday, but rebels said they had taken the coastal oil town of Ras Lanuf, extending the territory they control in the east of the country.

The fighting appeared to confirm the division of the oil-producing desert state into a western area round the capital Tripoli held by forces loyal to Gaddafi and an eastern region held by those rebelling against his four-decade rule.

CIMB Economics Research had recently estimated the federal government's fuel-related subsidies could reach RM14 billion based on the current oil price of US$90 to US$100 per barrel.

'If the oil price rises to US$130 to US$140 per barrel, the amount of subsidies could balloon to at least RM18 billion to RM20 billion,' it said in a recent report.

Under the Budget 2011, the federal government earmarked 6.3% of the total operating expenditure (opex) or RM10.3bn as subsidies for LPG, diesel and petroleum, based on an average oil price of US$85 per barrel. In 2008, subsidies for fuel and petroleum-related products amounted to RM17.6 billion or 11.4% of opex.

Meanwhile, Wall Street erased most of its weekly gains on Friday as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.

The worries overshadowed strong labour market news. U.S. unemployment fell below 9% for the first time in nearly two years, but investors quickly turned to focus on intensified fighting in Libya and simmering unrest throughout the region. Brent crude prices rose above SUS$116 a barrel and the CBOE Volatility Index VIX, Wall Street's so-called fear gauge, rose 2.7% to 19.11.

Stocks to watch on Monday include SUNWAY HOLDINGS BHD [], Fajarbaru Builder Group Bhd, oil and gas-related companies, UEM Group Bhd and ALLIANZ MALAYSIA BHD [].

Sunway's unit Sunway CONSTRUCTION [] Sdn Bhd Holdings Bhd has secured a RM257.96 million contract for the proposed construction of part of the Legoland Malaysia Theme Park in Johor. Sunway Construction had accepted the letter of award from IDR Assets Sdn Bhd to build package four of the theme park.

Fajarbaru's unit has received the letter of acceptance from the BINA PURI HOLDINGS BHD []-TIM Sekata joint venture for part of the light rail transit (LRT) extension project valued at RM62.66 million.

Its unit Fajarbaru Builder Sdn Bhd was appointed by Syarikat Prasarana Negara Bhd as the nominated sub-contractor to the joint venture.

Oil and gas related companies will continue to trading interest, underpinned by the high oil prices and Petroliam Nasional Bhd's RM250 billion plan in the next five years in exploration and asset replacement to maintain the exploration levels.

Other companies in the news are BANDAR RAYA DEVELOPMENTS BHD [], whose unit BR Property Holdings Sdn Bhd has secured a RM450 million term loan to repay inter-company loans, payment of dividend and working capital purposes.

MUTIARA GOODYEAR DEVELOPMENT [] Bhd has launched its new phase of its lifestyle homes in Nadayu 92, Kajang with a gross development value (GDV) of over RM40 million.

UEM Group Bhd is looking into investing more in India's infrastructure development projects particularly expressways, which presents tremendous growth potential. The projects would be undertaken by PLUS EXPRESSWAYS BHD [] and UEM BUILDERS BHD [].

OSK Research has initiated coverage of Allianz Malaysia with a BUY, at a target price of RM5.68, derived from a sum of parts valuation.

Riding on potentially strong growth in the life insurance industry and a re-rating of motor insurance, Allianz as the biggest general insurance player is poised to benefit from the encouraging industry outlook.

'The company is also seeking to establish a foothold in the fast growing takaful industry to diversify its business,' the research house said.

OSK Research said apart from being the No. 1 one player in Malaysia's general insurance industry with gross written premiums (GWP) totaling RM1.3bn in FY10, Allianz's life insurance business is no less a consistent performer, chalking up RM1bn in GWP on the back of a robust double digit growth of 18.5% in FY10.

China's Wen targets inflation as stability threat

BEIJING: China's Premier Wen Jiabao said on Saturday, March 5 the nation had to tame inflation that threatened social stability as the government seeks to steer the world's second-biggest economy towards more balanced, greener growth.

In China's version of a "State of the Union" address to be presented later to the annual parliament session, Wen said the government aims to contain inflation to within 4 percent this year.

Failure to rein in price rises for food, housing and other goods could become more than an economic problem for the ruling Communist Party, which is jittery about social unrest especially after the upheavals shaking the Middle East.

"Recently, prices have risen fairly quickly and inflation expectations have increased. This problem concerns the people's well-being, bears on overall interests and affects social stability. We must, therefore, make it our top priority in macroeconomic control to keep overall price levels stable," Wen said in a work report prepared for delivery before the National People's Congress.

Wen said that inflation was among the immediate worries weighing on China's efforts to unleash new sources of domestically driven growth that will spread wealth more evenly.

"Expanding domestic demand is a long-term strategic principle and basic standpoint of China's economic development as well as a fundamental means and an internal requirement for promoting balanced economic development," said the prepared text of his speech.

The Premier's annual address is given in the cavernous Great Hall of the People, crowded with thousands of delegates who are vetted by the Communist Party to acclaim and approve its policies.

But the Premier's televised speech is also aimed at hundreds of millions of ordinary citizens who the Party leaders fear could become sources of discontent unless their grievances about price rises, unaffordable housing and expensive healthcare are eased.

Wen made clear that addressing those concerns would preoccupy China's economic policy, shaping decisions on everything from farmers' incomes to the yuan exchange rate.

Wen did not mention the popular uprisings that have shattered authoritarian governments across the Middle East, and observers see scant risk of China's one-party state soon succumbing to mass unrest. But Wen's speech showed leaders in Beijing want to head off any such risks and was also wary of external economic shocks.

"This year, our country still faces an extremely complex situation for development," he said.

"The world economy will continue to recover slowly, but the foundation for recovery is not solid. Economic growth in developed economies is weak," he added, noting that "some countries are still under the threat of their sovereign debt crises."

Chinese consumer prices in January rose 4.9 percent from a year earlier, accelerating from 4.6 percent in December but lower than the 28-month high of 5.1 percent in November. Lofty home price rises have defied government cooling efforts.

Those policies also form a cornerstone of the government's efforts to generate new sources of domestic demand that will wean economic growth off its reliance on cheap exports and showcase infrastructure projects.

Wen has said these efforts will focus on China's rural population of 720 million people, including 153 million migrants who usually live and work outside their home towns, many working at building sites and factories that make cheap exports.

Stark income inequalities between urban and rural areas have stirred resentment and kept rural residents from joining the rising domestic consumption that Beijing hopes will drive growth. - Reuters

Wall St ends the week flat as oil prices weigh

NEW YORK: Wall Street erased most of its weekly gains on Friday, March 4, as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.

The worries overshadowed strong labor market news. U.S. unemployment fell below 9 percent for the first time in nearly two years, but investors quickly turned to focus on intensified fighting in Libya and simmering unrest throughout the region.

Brent crude prices rose above $116 a barrel and the CBOE Volatility Index VIX, Wall Street's so-called fear gauge, rose 2.7 percent to 19.11.

"After the kind of rally we had, the market is more vulnerable to news events and more so these days on a spike in oil prices," said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research in Austin, Texas.

Data earlier in the week had raised expectations about Friday's employment report, lifting stocks to their biggest gains in three months on Thursday.

But bank shares fell after Bank of America Merrill Lynch said first-quarter earnings could be hurt by rising oil prices as well as by reduced client activity.

The brokerage downgraded shares of Citigroup Inc and Goldman Sachs Group Inc to "neutral" from "buy.".

Goldman fell 2.1 percent to $161.00 and Citi dropped 3 percent to $4.54. The KBW bank index lost 1.5 percent.

The Dow Jones industrial average was down 88.32 points, or 0.72 percent, at 12,169.88. The Standard & Poor's 500 Index was down 9.82 points, or 0.74 percent, at 1,321.15. The Nasdaq Composite Index was down 14.07 points, or 0.50 percent, at 2,784.67.

For the week, the Dow rose 0.3 percent and the S&P and the Nasdaq both gained 0.1 percent.

About 7.73 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below last year's daily average of 8.47 billion.

The Labor Department said payrolls rose by 192,000 in February, slightly above the 185,000 gain forecast in a Reuters poll, and the unemployment rate unexpectedly dipped to 8.9 percent from 9 percent..

Among consumer-related shares, the homebuilding sector was hurt the most. The PHLX housing index fell 1.3 percent with Weyerhaeuser down 2.2 percent to $23.57. KB Home shares dropped 2.6 percent to $13.08 and MDC Holdings fell 2.6 percent to $24.99. - Reuters

COMMODITIES-Oil's rise to 2-1/2 yr high ignites inflation fears

NEW YORK: Oil jumped to 2-1/2 year highs on Friday, March 4'' on more violence in Libya, and more expensive crude sparked inflation worries that drove up gold but pressured copper and agricultural commodities on fears economic growth would slow.

Corn, wheat and soybean prices felt the weight of increased energy costs, as investors fretted that the impact of higher energy prices might filter through to other economic sectors at a time when growth was finally starting to take off.

With crude prices continuing to rise, some investors sought safety in gold as an inflation hedge, though it fell short of the record set Wednesday at $1,440.10 an ounce.

By Friday's close, the Reuters Jeffries CRB index of 19 commodities had risen rose 0.64 percent as oil and gold, cocoa strengthened, but the upside was limited by declines in base metals and agricultural components like corn and coffee.

U.S. crude oil futures rose for the third day in four, as fierce fighting between loyalists to Libya's Muammar Gaddaffi and rebels seeking to oust him from power raised more fears of supply disruptions.

On the New York Mercantile Exchange, crude for April delivery settled at $104.42 a barrel, gaining 2.46 percent to its highest since the Sept. 26, 2008 close. Brent crude futures for April delivery rose to settle at $115.97 a barrel, having reached a high of $116.49.

"Tension in the Middle East is like a runaway train," said Michael Hewson, analyst at CMC Markets in London. "Once it starts, it's very difficult to stop. If there is a danger that it impacts the supply chain, people will get nervous."

Investors feared extended supply disruptions as rebels fought Libyan security forces in Ras Lanuf, a major oil terminal, and as fighting broke out in Bahrain and Yemen and top-exporter Saudi Arabia, where Saudi Shi'ites staged protests on Thursday.

Libyan Deputy Foreign Minister Khaled Kaim said forces loyal to Muammar Gaddafi controlled the oil town of Ras Lanuf, after rebels said it was in their hands.

FLEETING PAYROLLS IMPACT

Earlier, the healthiest U.S. employment report in nine months helped oil along with copper and other commodities, but its effect was fleeting in the face of escalating violence in Middle Eastern oil producing countries.

Non-farm payrolls jumped by 192,000 in February and the two previous months were upwardly revised. The unemployment rate fell to 8.9 percent, its lowest since April 2009.

"We have moved into the expansion phase of the economic cycle and the economy is self-sustaining," said Brian Levitt, an economist at OppenheimerFunds in New York.

But the improved labor market, along with higher oil prices, added to fears of a pick up in inflation.

Investors seeking gold as both a safe haven and a guard against inflation sent prices up above $1,430 an ounce and silver up 3 percent to 31-year highs. The yellow metal notched its fifth consecutive weekly gain on fears that Libya's escalating unrest could spread across the Arab world.

"It's really all about oil, and I suspect that's going to be the pattern next week as well," said Bill O'Neill, partner of LOGIC Advisors.

Industrial metal copper backed away from a near three-week high to end lower, as rising oil prices and escalating violence in North Africa eclipsed initial euphoria from upbeat U.S. employment data.

PRICE FEARS HIT AGRICULTURALS

Increasing threat of inflation pressures triggered a round of profit taking in most agricultural futures markets. In the case of U.S. cocoa futures the selling came after it set its latest 32-year high and with coffee a 34-year peak.

Before the round of profit taking sent prices lower, a virtual civil war in top cocoa producer Ivory Coast powered cocoa futures and a shortage of high-quality beans spurred arabica coffee.

U.S. corn futures were set back on profit-taking after extending a 32-month high, but the market still posted its fifth straight weekly rise as U.S. supplies remained tight.

Soybeans were choppy, rallying late on concerns about labor unrest at ports in Argentina and harvest delays in Brazil.

Earlier, however, the market fell sharply after private analysts raised estimates for the South American soy crop.

Wheat also recovered late in the day, on concerns about tight supplies of high-quality milling wheat.'' - Reuters

UEM Group seeking more infrastructure development projects in India

KUALA LUMPUR: UEM Group Bhd is looking into investing more in India's infrastructure development projects particularly expressways, which presents tremendous growth potential.

UEM Group Bhd group MD/CEO Datuk Izzaddin Idris said on Friday, March 4 the group would remain committed in India via its investments and also the provision of CONSTRUCTION [], technical and consultancy services.

'India is a key market for us as it has tremendous growth potential. Given the pace at which the Indian economy is growing, the creation and expansion of infrastructure networks and other sectors means the opportunities are limitless,' he said in New Delhi.

The UEM Group is taking part in the India-Asean Business Fair & Business Conclave 2011 which is from March 2 to 6.

The group is undertaking several projects in India mainly involving two of its core businesses of expressways and engineering and construction.

PLUS EXPRESSWAYS BHD [] is taking the lead in the expressways core business and it has a local presence in India via PLUS BKSP Toll Ltd. It also holds controlling stake in Indu Navayuga Infra Project Private Ltd, which holds the concession to the Padalur-Trichy highway in Tamil Nadu.

PLUS' associate in India, Jetpur Somnath Tollways Ltd has a concession for a four-lane expressway at the Jetpur-Somnath section in Gujarat. It will be under the design, build, finance, operate and transfer basis.

UEM said PLUS would continue to focus on India to market its expertise and experience in technical and consultancy services, toll operation and maintenance services.

As for UEM BUILDERS BHD [], which spearheads the group's engineering and construction operations, it is looking at various infrastructure development construction projects in India. It is involved in a building construction project in Mumbai and the Sushant Hitech Golf City in Lucknow.

''

Transmile proposes scheme to ring fence Transmile Air Services, invite investors

KUALA LUMPUR: Beleaguered TRANSMILE GROUP BHD [], whose shares has been suspended since Thursday, March 3, has proposed a scheme of arrangement to ring fence its unit Transmile Air Services Sdn Bhd'' (TAS) and preserve it as a going concern.

The scheme would involve two inter-conditional schemes of arrangement by Transmile and TAS as the group looked into the possibility of inviting new potential investors into TAS, which is the main operating subsidiary in the group.

The proposed schemes are to avert the delisting of the group which has continued to suffer losses since a scandal was unearthed back in 2007 which saw inflated revenue of around RM625 million between the financial years 2004 and 2006.

Under the TAS scheme announced on Friday, March 4, the total amount outstanding was about RM680.3 million as at Dec 31, 2010. The creditors consisted of Transmile (by virtue of the debt owed by TAS to Transmile) and the financial lenders of TAS.

As for Transmile, its own creditors would comprise of the financial lenders with potential claims of up to RM426.5 million as at Dec 31, 2010.

The proposed two-stage TAS scheme would be firstly to revamp TAS' debt and inter-company debt while the second would be to invite new potential investor(s) to be identified.

The plan is to transfer the TAS debts to a special purpose vehicle (SPV) to be owned by Transmile together with the sales proceeds from the proposed disposal of the MD-11F aircraft amounting to about US$68 million (RM210.4 million).

The proceeds from the disposal of the aircraft would be retained by the SPV and shall be applied (except for Transmile) based upon the final outcome of a legal case concerning the question of whether the medium-term notes holders have priority in repayment against the other financial lenders.

Transmile said the debt restructuring also entails the waiver of inter-company debts of RM60.3 million which TAS owed to two units.

Upon completion of the debt revamp, Transmile would seek potential investors. The proceeds would be used to settle the amounts owed to the creditors of Transmile and TAS.

As for the proposed Transmile scheme, it would hinge on the TAS scheme would be assigning the potential proceeds from proposed investors and also effect the inter-company waiver.

To recap, the sale of four MD-11 aircraft to Federal Express Corporation for US$68 million (RM207 million) last month was only enough to pare down 39% of RM528.9 million in outstanding debt obligations, leaving it with a balance of around RM320.1 million in debt obligations.

As at Dec 31, 2010, the group had long-term assets of RM121.2 million, and cash equivalents of RM27.9 million. Its shareholders' fund is in deficit of RM147 million while total borrowings stood at RM531.5 million.

Last month, its managing director Liu Tai Sin told The Edge that the target for this year was to resolve all its debt woes so as to turn the company around.

KLCI ends week on firmer footing

KUALA LUMPUR: The FBM KLCI closed higher on Friday, March 4 in tandem with the gains at key regional markets, as investors went on a buying spree picking up stocks that had been battered over the past few weeks since the civil unrests began in the Middle-east region.

Asian shares rose on Friday, helped by retreating oil prices and a firmer Wall Street close while the euro perked up after the central bank signalled a rate rise as early as next month, according to Reuters.

Shares in Tokyo and Seoul rose by more than 1% following strong gains in U.S. stocks as players bet on positive data due later on Friday that will underscore a steady improvement in the world's largest economy, it said.

The FBM KLCI closed 1.04% or 15.73 points higher at 1,522.61, lifted by gains including at index-linked PLANTATION [] stocks and select blue chips.

Gainers led losers by 674 to 148, while 240 counters traded unchanged. Volume was 1.13 billion shares valued at RM1.9 billion.

At the regional markets, Japan's Nikkei 225 rose 1.02% to 10,693.66, Hong Kong's Hang Seng Index was up 1.24% to 23,408.86, the Shanghai Composite Index rose 1.35% to 2,942.31, South Korea's Kospi gained 1.73% to 2,004.68, Singapore's Straits Times Index was 0.79% to 3,061.31 and Taiwan's Taiex edged up 0.53% to 8,784.40.

MIDF Research said the local bourse has gained momentum in tandem with the Asian stocks following a combination of healthy economic data unveiled by the US, primarily drop in initial jobless claims suggesting stronger employment growth can become self-sustaining, coupled with slight retrace in oil prices.

'While the local bourse continues to register net foreign selling, upside continue to emanate from local buying, who are awash with liquidity,' it said.

BIMB Securities Research meanwhile said regional bourses ended higher today driven by bargain-hunting activities after charted a sluggish performance recently.

The sentiment also was boosted by investors' confidence towards positive US job data that is slated to be announced tonight, it said.

On Bursa Malaysia, KLK rose 60 sen to RM21.10, United Plantations 30 sen to RM17.60, PPB 20 sen to RM17.62, IOI Corp 16 sen to RM5.73 and Sime Darby nine sen to RM9.17.

Among banking stocks, AMMB added 12 sen to RM6.38, Public Bank six sen to RM13.16 and Maybak four sen to RM8.80.

DiGi gained 52 sen to RM27.62, Genting 32 sen to RM10.34, MISC 31 sen to RM8.07, Dutch Lady 24 sen to RM16.14 while KNM and Faber added 19 sen each to RM2.59 and RM1.89.

BAT was the top loser and fell 64 sen to RM48.10; Nestle lost 34 sen to RM45.10, Proton 18 sen to RM3.26, Nakamichi 10.5 sen to 87 sen, Parkson eight sen to RM5.28, while SHL and Glenealy lost seven sen each to RM1.33 and RM4.68.

SAAG was the most actively traded counter with 65.3 million shares done. The stock rose one sen to 10 sen. Other actives included Tanco, CIMB, HWGB, KNM, Karambunai and Olympia.

Fajarbaru Builder gets letter of acceptance for RM62.66m LRT contract

KUALA LUMPUR: Fajarbaru Builder Group Bhd's unit has received the letter of acceptance from the BINA PURI HOLDINGS BHD []-TIM Sekata joint venture for part of the light rail transit (LRT) extension project.

Fajarbaru said on Friday, March 4 its unit Fajarbaru Builder Sdn Bhd was appointed by Syarikat Prasarana Negara Bhd as the nominated sub-contractor to the joint venture.

The project comprised of the CONSTRUCTION [] of stations one and two, including civil works, external works of package 'A' for the Ampang line extension.

The contract period is 21 months.

Sunway Holdings gets RM257.9m contract for Legoland Malaysia theme park

KUALA LUMPUR: SUNWAY HOLDINGS BHD [] has secured a RM257.96 million contract for the proposed CONSTRUCTION [] of part of the Legoland Malaysia Theme Park in Johor.

Sunway said on Friday, March 4 its unit Sunway Construction Sdn Bhd had accepted the letter of award from IDR Assets Sdn Bhd to build package four of the theme park.

'The proposed project is targeted to be completed on June 2, 2012 with a construction period of 15 months. It is expected to contribute positively to the earnings of Sunway Group for the financial year ending Dec 31, 2011 onwards,' it said.

Sunway said while the proposed project was subject to normal construction risk of materials price fluctuation, this risk could be mitigated at this juncture.

Mutiara Goodyear launches lifestyle homes with GDV of RM40m

KUALA LUMPUR: MUTIARA GOODYEAR DEVELOPMENT [] Bhd has launched its new phase of its lifestyle homes in Nadayu 92, Kajang with a gross development value (GDV) of over RM40 million.

It said on Friday, March 4 the new phase included four bungalows priced from RM2.2 million and 24 semi-detached homes priced from RM1.3 million. The built-up of the bungalows and semi-detached homes are 6,142 sq ft and 4,579 sq ft respectively.

Its executive chairman Hamidon Abdullah said:'' 'We are encouraged by the good take up rate for Phase 1 which was fully sold within a day during its launch early this year. Hence, we expect a good take up rate for the bungalows and semi-detached homes.'

Nadayu 92, Kajang is a gated and guarded community spread over 69 acres of freehold land with total GDV of RM350 million.

BDRB unit gets RM450m term loan to repay loans, working capital

KUALA LUMPUR: BANDAR RAYA DEVELOPMENTS BHD []'s (BDRB) unit BR Property Holdings Sdn Bhd has secured a RM450 million term loan to repay inter-company loans, payment of dividend and working capital purposes.

BDRB said on Friday, March 4 the tenor of the facility was six years from the date of the first drawdown. The facility was secured by a first legal charge over Bangsar Shopping Centre and Menara BRDB; a debenture over the present and future assets of BRPH; and an assignment of all proceeds derived from Bangsar Shopping Centre and Menara BRDB.

It said BR Property had on Thursday entered into a facility agreement with CIMB Investment Bank Bhd, Alliance Investment Bank Bhd and RHB Investment Bank Bhd as joint lead arrangers, CIMB Bank Bhd, Alliance Bank Malaysia Bhd and RHB Bank Bhd as participating lenders, Alliance Investment Bank Bhd as security agent and CIMB Investment Bank Bhd as facility agent.

Lion Industries slip, high investment risk in blast furnace

KUALA LUMPUR: Shares of Lion Industries Corp Bhd (LICB) slipped on Friday, March 4 as analysts were concerned about its joint venture plan to set up a blast furnace.

At 4.28pm, it is down four sen to RM1.64, off the early high of RM1.73. There were 3.04 million shares done.

OSK Research's target price for LICB was reduced to RM1.57 from the previous RM2.07.

LCIB had on Thursday entered into a joint venture agreement with Lion Diversified (LDHB, the holding company), Lion Forest (a 73% subsidiary) and Lion Blast Furnace (LBF) to jointly undertake the CONSTRUCTION [] of a blast furnace project, which has a rated capacity of 2.1 million tonnes/annum. Under the agreement, LICB, LDHB and LFIB will invest 29%, 51% and 20% respectively in LBF.

LICB, LFIB, and LDHB would invest RM281.3 million, RM194 million and RM494.7 million respectively into the blast furnace project. LICB will also provide corporate guarantee to the project's loan facility.

OSK Research said while it was upbeat that the blast furnace project would add value to the group's flat steel segment, 'we think the direct 29% and 20% JV stakes of Lion Industries (LICB) and its subsidiary, Lion Forest (LFIB), plus the large scale investment pose a high investment risk to the JV partners and Lion Group as a whole'.

However, the research house said the share price, which had plunged since its downgrade on March 1, might have priced in this negative news.

'The stock's undemanding valuation at this price level prompts us to maintain our NEUTRAL call but with lower TP of RM1.57, derived from 5x PER and 0.43x P/NTA on CY11 figures,' it said.

Plantations among top gainers, CPO up RM30 to RM3,600

KUALA LUMPUR: PLANTATION [] stocks were among the top gainers in late afternoon trade on Friday, March 4, in line with the broader market and key regional bourses.

At 3.47pm, the KLCI was up 13.79 points to 1,520.67. Turnover was 794.98 million shares valued at RM1.28 billion. There were 595 gainers, 157 losers and 247 stocks unchanged.

Crude palm oil futures rose RM30 to RM3,600, off the intra-day high of RM3,615.

KL Kepong, which had fallen in recent weeks, rose 62 sen to Rm21.12, Kulim-WC added 30 sen to 60.5 sen and United Plantations 30 sen to RM17.60.

Other gainers were DiGi, up 50 sen to RM27.60, MISC 30 sen to RM8.06 amd Genting 26 sen to RM10.28. Faber was up 20 sen to RM1.90 after the recent selldown on its weak financial results.

AmResearch reaffirms Sell on Tanjung Offshore

KUALA LUMPUR: AmResearch has reaffirmed its SELL rating on TANJUNG OFFSHORE BHD [] with an unchanged fair value of RM1.33 per share ' pegging fully diluted FY11F PE to 16 times.

Tanjung Offshore was reprimanded by Bursa Malaysia due to a 37% deviation in the reported net profit for FY09.'' Its earnings were RM3 million versus RM4.9 million initially reported during the release of 4QFY09 numbers.

The large deviation could be due to the over recognition of earnings which were related mostly to the insurance claims made by its associate company, Cendor Mopu Producer Ltd, and post acquisition profit in respect of its subsidiaries.

'We gather it was initially recommended by its auditors for the items to be included in FY09 earnings although somehow after an audit review, these items were not deemed to be appropriate for recognition in FY09. While it does not look good on the company, we view this as a one-off event.

'However, looking forward, while the oil and gas sector is very much positive given the expected strong pick-up in E&P works, we are not too positive about Tanjung Offshore,' it said.

AmResearch said while valuation is demanding ' currently trading at FY11F PE of 17 times, it was also cautious about the company's execution.

'Elsewhere, while it makes sense for Tanjung to bid for the right to develop the marginal fields'' ' it supplies MOPU and engineering equipments ' Tanjung's balance sheet is quite highly-leveraged with a current net gearing of 1.4 times,' it said.

Proton top loser, investors ignore Nissan tie-up as Lotus woes weigh

KUALA LUMPUR: PROTON HOLDINGS BHD [] is the top loser in afternoon trade on Friday, March 4 as investors ignored its proposed collaboration with Nissan while worries about it becoming profitable weighed on sentiment.

At 2.30pm, Proton was down 22 sen to RM3.23 with 1.03 million shares done.

The FBM KLCI rose 14.62 points to 1,521.50. Turnover was 522.24 million shares done valued at RM850 million.'' There were 549 gainers, 150 losers and 242 stocks unchanged.

However, AmResearch reaffirm its contrarian BUY call on Proton with an unchanged fair value of RM5.10 a share, pegging it at 0.7 times FY12F adjusted NTA of RM7.30/share.

AmResearch said it anticipated the deal with Nissan to involve the use of Nissan Fuga as a replacement model for the Perdana and the use of Nissan March platform for Proton's EMAS model (whereby the upper body will be Lotus designed).

'We are positive about this development. We believe depressed earnings affected by Lotus' turnaround plan over the mid-term are more than priced-in,' it said.

Asian stocks rise, but Mid-east crisis remains a concern

KUALA LUMPUR:'' The FBM KLCI gave up some of its gains from early morning trade on Friday, March 4 as indications of some mild profit taking emerged, with gains also slightly tapering off at key regional markets.

At the mid-day break, the FBM KLCI was up 0.92% or 13.92 points to 1,520.80. It had earlier risen to its intra-morning high of 1,529.41. Gainers led losers by 541 to 148, while 246 counters traded unchanged. Volume was 515.22 million shares valued at RM840.75 million.

The ringgit strengthened 0.07% to 3.0293 versus the US dollar; crude palm oil for the third month delivery rose RM16 per tonne to RM3,586, crude oil added 25 cents per barrel to US$102.16, while gold rose US$3.20 per troy ounce to US$1,419.20.

''

Hang Seng Index +1.28% 23,418.59 South Korea's Kospi +1.31% 1,996.57 Straits Times Index +1.19% 3,073.45 Nikkei 225 +0.95% 10,686.40 Taiwan's Taiex +0.73% 8,801.96 Shanghai Composite Index +0.21% 2,909.11 ''

However, concerns of still high crude oil prices in the wake of the Middle-East and North African geopolitical tensions remain unabated.

Libyan rebels prepared for further attacks by forces loyal to leader Muammar Gaddafi on Friday as both sides struggled for control of a strategic coast road and oil industry facilities, according to Reuters.

Although economic data emerging from the US are encouraging, with expectations strong employment growth, investors still remain cautious with analysts advising them to liquidate on rallies and remain more in cash.

On Bursa Malaysia, banking stocks were among the major gainers with AMMB up 13 sen to RM6.39, HLFG six sen to RM8.93, RHB Capital five sen to RM8, Public Bank four sen to RM13.14, Maybank three sen to RM8.79 and CIMB two sen to RM8.02.

KLK rose 60 sen to RM21.10, DiGi 54 sen to RM27.64, BAT 46 sen to RM49.20, MISC 32 sen to RM8.08, Genting 24 sen RM10.26, Panasonic 22 sen to RM18.80, United PLANTATION []s 20 sen to RM17.50 and Petronas Dagangan 18 sen to RM14.20.

Losers this morning included Proton which fell 21 sen to RM3.24, Fima Corp and Parkson 15 sen each to RM6.05 and RM5.21, Nakamichi 11.5 sen to 86 sen, Genome 7.5 sen to 72.5 sen and Paos 5.5 sen to 74.5 sen.

Tanco was the most actively traded counter with 17.9 million shares done. The stock added one sen to 35 sen. Other actives included HWGB, Olympia, CIMB, KNM and SAAG.

SEGi in tie-up with China colleges to provide English language courses

KUALA LUMPUR: SEG INTERNATIONAL BHD [] (SEGi) is collaborating with China's Xinjiang Language Centre and Linyi Normal University to provide its expertise and syllabus in intensive English language programme and foundation courses.

SEGi said on Friday, March 4 the courses would be at Xinjiang Language Centre's 24 institutions to be set up within the next 12 months in Xinjiang and other provinces in China.

'SEGi will be able to tap into the Language Centre's 20,000 student base who are eyeing quality education beyond the shores of China after the completion of their initial studies in their home country,' it said.

Under the collaboration, students will sit for SEGi's language courses and foundation programmes in the China-based institutions for between six months and one year.

They will have to complete their foundation for another three to four months at SEGi's campuses in Malaysia. The students will be assessed before they complete their studies at each level, both in China and when they are studying at SEGi campuses in Malaysia.

The students will have the option to take up various degree programmes available at SEGi including medicine, pharmacy, optometry, engineering, computing, business, accountancy, psychology awarded by SEGi University College or twinned with its consortium of global partners.

SEGi said it is also in final stages of discussions with government-owned Linyi Normal University on a similar collaboration.

The university has six campuses and more than 30,000 full-time students on campus.

Under the collaboration with Linyi, students who have completed their diploma studies or the first part of their degrees in the Chinese university, can take up business, management and accountancy degrees at SEGi University College in Malaysia.

Label maker Ideal Jacobs to issue 30m new shares under IPO

KUALA LUMPUR: Labels maker Ideal Jacobs (M) Corp Bhd plans to issue 30 million new shares under its listing exercise of which two million will be offered to public and 28 million to be placed out.

The company said on Friday, March 4 it had recently signed an underwriting agreement for the initial public offering on the ACE Market of Bursa Malaysia Securities Bhd.

MIDF Amanah Investment Bank Bhd is the adviser, sponsor, sole underwriter and sole placement agent for Ideal Jacob's IPO involving RM12 million comprising 120.001 million shares of 10 sen each

Ideal Jacobs chairman and founder Andrew Jacobs said the IPO would provide it the access to the capital market to fund its development and expansion plans.

Ideal Jacobs was incorporated in Malaysia by a US-based holding company with local Malaysian shareholders. Ideal Jacobs' subsidiaries are Ideal Jacobs (Xiamen) Corporation and Ideal Jacobs Corporation (Thailand) Ltd.

The group manufactures industrial labels and nameplates, as well as laser/die-cut products. Their secondary business is in the fabrication of plastic parts.

FBM KLCI stays firmly higher at mid-morning

KUALA LUMPUR: The FBM KLCI opened firmly higher on Friday, March 4 in line with key regional markets following the strong overnight close at Wall Street, where US stocks jumped on upbeat economic data and expectations of strong employment growth.

At the regional markets, shares in Tokyo and Seoul rose by more than 1% following strong gains in US stocks as players bet on positive data due later on Friday that will underscore a steady improvement in the world's largest economy.

The broader MSCI index of Asia-ex Japan stocks was up more than 1% extending its weekly gains to more than 2%, it said.

The FBM KLCI made one of its strongest gains in recent weeks and was up 1.01% or 15.22 points to 1,522.10 at mid-morning, lifted by gains at blue chips including KLK, BAT, DiGi and Petronas Dagangan.

Gainers led losers by 445 to 52, while 164 counters traded unchanged. Volume was 246/4 million shares valued at RM304.56 million.

At the regional markets, Japan's Nikkei 225 rose 1.56% to 10,751.37, South Korea's Kospi gained 0.97% to 1,989.82, Singapore's Straits Times Index added 1.04% to 3,069.08, Taiwan's Taiex was up 0.75% to 8,803.58, the Shanghai Composite Index rose 0.23% to 2,909.68 while Hong Kong's Hang Seng Index opened 1.4% higher at 23,436.15.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on March 4 said he expects the index to remain in a minor rebound mode in the short term and very bearish in the medium term.

Lee suggested that clients liquidate on rallies and remain more in cash.

'Due to the DJIA's firm tone last night, we will see the FBM KLCI in an initial gap-up mode today, with subsequent profit-taking emerging before the weekend.

'As the market revisited 1,474 recently, the FBM KLCI index traced out a nasty Head & Shoulders topping pattern. Any low volume rebound moves will allow investors to sell on rallies,' he said.

Among the major gainers, Nestle was up 84 sen to RM46.28, KLK 66 sen to RM21.16, BAT 56 sen to RM49.30, DiGi 52 sen to RM27.62, PetDag and PPB 26 sen each to RM14.28 and RM17.32, YTL 24 sen to RM7.41 and MISC 22 sen to RM7.98.

Losers included Nakamichi, Genome, Parkson, Kenmark, Al-Aqar and United Malacca.

Tanco was the most actively traded counter with 12.6 million shares done. The stock rose one sen to 35 sen. Other actives included HWGB, Olympia, SAAG and CIMB.

KLCI charges ahead, up 21 points in early trade, KLK surges

KUALA LUMPUR: The stock market displayed one of its strongest performances in recent weeks since the all-time high in January, with the FBM KLCI surging more than 21 points on Friday, March 4.

The KLCI was up 21.73 points to 1,528.61, as sentiment perked up following the firmer overnight close on Wall Street.'' However, there could be some investors selling on rallies unless the Mid-east crisis is resolved and oil prices settle below US$100.

Turnover was 81.13 million shares valued at RM76.82 million. There were 304 gainers, 12 losers and 55 stocks unchanged.

PLANTATION []s led the advance, with KL Kepong surging RM1.48 to RM21.98, Kulim-WC 30 sen to 60.5 sen, PPB 24 sen to RM17.30, United Plantations 18 sen to RM17.48, Sime Darby 17 sen to RM9.25 and Rimbunan Sawit 14 sen to RM2.23.

DiGi rose 56 sen to RM27.66, BAT 40 sen to RM49.14 and Genting 16 sen to RM10.18.

RHB Research maintains Outperform on KNM, FV RM3.45

KUALA LUMPUR: RHB Research Institute is maintaining an Outperform on KNM GROUP BHD [] and retained its fair value of RM3.45 a share which is based on an unchanged target PER of 15 times.

'This implies an upside of 43.6% against the current share price,' said the research house on Friday, March 4.

On Thursday, KNM Group announced that it has secured new orders amounting to RM693m so far this year, underpinned by improved sentiments in the global oil and gas industry.

This takes the current order backlog to RM5.4bn, which is an all-time high for the group. Tender book currently stands at RM17bn.

RHB Research said KNM's continual wins and the strengthening order book indicated the recovery in KNM's business is on track.

'We previously mentioned that FY11 will be a better year for KNM given that order flows have improved since 2HFY10 on the back of rising crude oil prices and better global economic sentiment that have led to heightened spending by the global oil and gas players.

'With WTI crude oil prices hovering above US$100/barrel, we expect oil majors to gain confidence in going ahead with exploration and production spending, especially in high-end projects which require more sophisticated process equipment,' it said.

HDBSVR sees KLCI posting mild gains, underpinned by Wall St gains

KUALA LUMPUR: Continuing its recovery, the benchmark FBM KLCI, which is up 17.6-points or 1.2% over the past four days, will probably climb a bit more on Friday, March 3, rising towards the immediate resistance target of 1,530, says Hwang DBS Vickers Research (HDBSVR).

It said the local market and other regional peers could be riding on the strength of Wall Street ahead.

Overnight, major U.S. stock indices jumped between 1.6% and 1.8% following positive data reports on a drop in jobless claims and a growth in service industries.

'Possibly lifting our local stock exchange today are beaten-down big caps like Genting and CIMB.

'In terms of corporate developments, there could be interest in: (a) Lion Industries and Lion Forest Industries, which would be investing a total of RM475m for a combined 49% stake in unlisted Lion Blast Furnace (with the balance 51% to be owned by Lion Diversified); and (b) KNM, after announcing that it has secured RM693m in new orders so far this year, taking its current order book to RM6.4b,' HDBSVR said.

HDBSVR maintains PBB as fully valued, cuts TP to RM15

KUALA LUMPUR: Hwang DBS Vickers Research is maintaining PPB GROUP BHD [] as fully valued and sum-of-parts target price has been reduced to RM15.

'PPB's share price has fallen 11% since our downgrade in November 2010. We expect further downside as valuation remains uncompelling at 18-19x FY11-12F PE,' it said on Friday, March 3.

HDBSVR said it cut PPB's FY11-FY12F EPS by 15-20% after imputing lower Wilmar earnings.

This is premised on expectations the group would grow its soybean volumes less aggressively, and lower Oilseeds M&P margins would be offset by higher Palm & Lauric margins.

'Balance sheet remains strong with RM809m net cash (RM0.68/share). There are no plans to raise its stake in Wilmar, and FY11 group capex excluding expansion, should be minimal at RM120m,' it said.

On Thursday, PPB said at its analyst briefing that it faces a challenging year ahead with rising commodity prices and fuel costs affecting its flour business.

But the impact would be somewhat offset by still strong consumption patterns. Wheat prices remain high at US$9.42/bushel, albeit down from a peak of US$10.3 in mid-Feb 2011, but PPB believes it could drop further with new planting in Australia after the floods and softer US/Europe exports to the Middle East.

OSK Research initiates Buy on Allianz, TP RM5.68

KUALA LUMPUR: OSK Research has initiated coverage of Allianz Malaysia with a BUY, at a target price of RM5.68, derived from a sum of parts valuation.

It said on Friday, March 4 that riding on potentially strong growth in the life insurance industry and a re-rating of motor insurance, Allianz as the biggest general insurance player is poised to benefit from the encouraging industry outlook.

'The company is also seeking to establish a foothold in the fast growing takaful industry to diversify its business,' the research house said.

OSK Research said apart from being the No. 1 one player in Malaysia's general insurance industry with gross written premiums (GWP) totaling RM1.3bn in FY10, Allianz's life insurance business is no less a consistent performer, chalking up RM1bn in GWP on the back of a robust double digit growth of 18.5% in FY10.

Allianz is seeking opportunities to venture into the high-growth takaful industry as Malaysia aims to become the region's Islamic banking hub.

In December 2009, it began negotiating with MNRB HOLDINGS BHD [] on the proposed acquisition of equity interest in the latter's wholly-owned Takaful Ikhlas Sdn Bhd.

'We believe that if the deal goes through, it would certainly be a big plus for Allianz,' it said.

HLIB Research reduces earnings outlook for Lion Industries, cuts TP to RM1.61

KUALA LUMPUR: Hong Leong Investment Bank (HLIB) Research is reducing its FY12-13 core net profit forecasts for Lion Industries Corp Bhd (LICB) by 8.5%-9.2% to RM212 million and RM230.3 million respectively.

It said on Friday, March 4 that it reduced the target price (based on sum-of-parts) by 15.7% from RM1.91 to RM1.61.

HLIB Research said the reduction in the TP was to reflect its lower earnings assumption at the steel division (arising from higher borrowing cost to finance the blast furnace project); and'' changes to the latest market prices of LICB's stakes in the listed entities. Downgrade from Hold to Sell.

LCIB had on Thursday entered into a joint venture agreement with Lion Diversified (LDHB, the holding company), Lion Forest (a 73% subsidiary) and Lion Blast Furnace (LBF) to jointly undertake the CONSTRUCTION [] of a blast furnace project, which has a rated capacity of 2.1 million tonnes/annum. Under the agreement, LICB, LDHB and LFIB will invest 29%, 51% and 20% respectively in LBF.

LICB, LFIB, and LDHB would invest RM281.3 million, RM194 million and RM494.7 million respectively into the blast furnace project. LICB will also provide corporate guarantee to the project's loan facility.

HLIB Research said the proposed equity investment by LICB and LFIB turns LICB's net cash position into a net debt and net gearing of RM384.5 million and 0.12x respectively.

'Assuming a financing cost of 6% p.a. (before 25% corporate tax), the additional borrowing costs arising from the blast furnace project investment would bring down LICB's FY12-13 net profit forecasts by 8.5-9.2%.

'We believe the venture could likely take a while before it could yield positive results to the group, given: 1) The volatile iron ore and coal prices, which in turn affect the economic viability of the proposed blast furnace project; and 2)

'The huge investment outlay involved (despite 70% of the project cost will be funded by borrowings) that may affect LICB's near term working capital, in particularly, at the steel manufacturing division,' it said.

US stocks rally on oil's dip, job data; euro up

NEW YORK: Wall Street scored its best one-day rally in three months on Thursday, March 3 due to a pullback in oil prices and upbeat labor market data, while the euro jumped on the European Central Bank president's inflation warning.

Data showing new U.S. claims for unemployment benefits fell last week to their lowest level in more than 2-1/2 years represented the latest optimistic reading to bolster hopes for an upside surprise in Friday's key payrolls report.

"There are still concerns about high oil prices, but the bottom line is: The U.S. economy is improving. We continue to get confirmations of that, and it's a good sentiment heading into Friday's numbers," said Ryan Detrick, technical analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

ECB President Jean-Claude Trichet's comments on inflationary risks were widely expected, but he surprised investors by saying the bank may raise interest rates as soon as next month.

The heightened concerns about inflation followed months of sharp gains in oil and other commodities, with Brent crude oil up roughly 15 percent since the end of January.

The latest batch of purchasing managers' indexes (PMI) in Europe and elsewhere suggested fast-building inflationary pressures.

World stocks as measured by the MSCI Index rose 1.1 percent.

On Wall Street, both the blue-chip Dow Jones industrial average and the benchmark Standard & Poor's 500 index posted their biggest one-day gains since Dec. 1.

OIL EASES

Oil prices fell after Venezuela President Hugo Chavez made a proposal to broker a peace deal in Libya.

Some oil analysts suggested the Chavez proposal was a convenient excuse for traders to adjust their positions.

"The market was a little overstretched to the upside, and the Chavez peace proposal gave traders a reason to square positions," said Tom Bentz, broker at BNP Paribas Commodities Futures Inc in New York.

Brent crude oil fell $1.56 to settle at $114.79 a barrel. On Wednesday, crude approached 2-1/2-year highs as violence escalated in oil producer Libya.

On the New York Mercantile Exchange, April crude fell 32 cents, or 0.31 percent, to settle at $101.91 a barrel.

Investors worry if it is not halted soon, the political instability could spread to major oil producer Saudi Arabia, a central U.S. ally in the region, and other oil suppliers.

WALL ST JUMPS ON ENCOURAGING JOB DATA

Earlier this week, ADP data showed U.S. private-sector employers added more jobs than forecast last month.

In another sign of improvement in the labor market, a gauge of employment in a report on the U.S. services sector on Thursday rose to a near five-year high in February.

The non-manufacturing index rose to 59.7 in February, slightly above forecasts and higher than the January result.

A Reuters survey for Friday's February jobs report shows nonfarm payrolls probably increased by 185,000 after snowstorms held growth to a paltry 36,000 jobs in January. The survey was conducted before data on Monday showed strong factory hiring, which prompted some economists to rethink their forecasts.

Market sentiment was leaning toward a number above 200,000, traders said.

The Dow Jones industrial average gained 191.40 points, or 1.59 percent, to end at 12,258.20. The S&P 500 rose 22.53 points, or 1.72 percent, to finish at 1,330.97. The Nasdaq Composite Index jumped 50.67 points, or 1.84 percent, to close at 2,798.74.

The broad S&P 500 is down only about 1 percent from a peak in late February after falling around 3 percent due to the violence in Libya.

As stocks rose on the jobless claims data, U.S. bonds fell. The benchmark 10-year note was down 23/32, its yield rising to 3.56 percent from 3.47 percent on Wednesday.

In Europe, the pan-European FTSEurofirst 300 share index closed 0.2 percent higher at 1,155.94 points.

EURO GAINS, GOLD SLIPS

The euro gained against the U.S. dollar to a fresh four-month high. It climbed as high as $1.3976 on trading platform EBS, and and was at $1.3963 -- up 0.7 percent on the day.

Gold prices fell on Trichet's comment. Spot gold, which hit a record high this week, dropped as low as $1,411.52 an ounce on Thursday.

Trichet said the ECB will exercise "strong vigilance" over rising inflation. - Reuters

US STOCKS-Jobs data optimism fuels Wall St rally

NEW YORK: Investors betting on a big gain in U.S. payrolls pushed Wall Street to its best one-day rally in three months on Thursday, March 3, but weak volume lingers as a concern for those hoping for another leg higher.

As oil paused from its recent climb, the market's focus shifted to stronger-than-expected economic data a day before the February U.S. employment report.

The median estimate is for a gain of 185,000 jobs, according to economists polled by Reuters, but market sentiment was leaning toward a number above 200,000, traders said.

"There are still concerns about high oil prices but the bottom line is, the U.S. economy is improving. We continue to get confirmations of that, and it's a good sentiment heading into Friday's numbers," said Ryan Detrick, technical analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

The Dow Jones industrial average <.DJI> was up 191.40 points, or 1.59 percent, at 12,258.20. The Standard & Poor's 500 Index <.SPX> was up 22.53 points, or 1.72 percent, at 1,330.97. The Nasdaq Composite Index <.IXIC> was up 50.67 points, or 1.84 percent, at 2,798.74.

The Dow and S&P 500 posted their biggest one-day gains since Dec. 1.

However, volume continued to be below average on days when the market rallies, causing some traders to be skeptical about the durability of the rally. About 7.99 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below last year's daily average of 8.47 billion.

The put-to-call ratio in the options market also didn't change much despite the day's rally as traders continued to hedge against a potential drop in the market.

"As much as investors are excited about a pullback so that they can jump in, they are just as concerned about how quickly this market can turn," Detrick said.

Initial jobless claims fell last week to 368,000 -- a 2-1/2 year low -- one day after a robust report on private-sector hiring. For details, see [ID:nOAT004756]

The Institute for Supply Management's non-manufacturing index rose to 59.7 in February, slightly above forecasts and higher than the January result. [ID:nEAP101300]

Industrial stocks led the market higher, boosted by a weaker dollar and an improving outlook for global demand. The S&P INDUSTRIAL INDEX [] <.GSPI> gained 2.4 percent, with Caterpillar Inc up 3.2 percent to $104.25.

Stocks have shown resilience in the face of economic headwinds. The broad S&P 500 is down only about 1 percent from a peak in late February after falling around 3 percent due to growing violence in oil-producer Libya.

The Arab League said a peace plan for Libya was under consideration. The plan put forth by Venezuelan President Hugo Chavez, if successful, could remove a major headwind for equities. [ID:nLDE72200E]

Oil prices retreated from near 2-1/2 year highs. Brent crude futures fell $1.56 to settle at $114.79 after Venezuela's proposed plan to end Libya's crisis set off profit-taking.

Several top U.S. retailers posted bigger-than-expected sales gains for February. The S&P retail index <.RLX> rose 1.2 percent. [ID:nN03203429]

About five stocks rose for every one that fell on the New York Stock Exchange. On the Nasdaq, advancing stocks beat declining ones by a ratio of 10 to 3. - Reuters

#Stocks to watch:* Lion Group, KNM, AMMB, PPB

KUALA LUMPUR: Stocks on Bursa Malaysia could advance on Friday, March 4 following positive newsflow from Wall Street and a brief retreat in oil prices.

On Wall Street, investors betting on a big gain in US payrolls pushed Wall Street to its best one-day rally in three months on Thursday, but weak volume lingers as a concern for those hoping for another leg higher, Reuters reports.

As oil paused from its recent climb, the market's focus shifted to stronger-than-expected economic data a day before the February U.S. employment report.

Reuters reported oil prices retreated from near 2-1/2 year highs. Brent crude futures fell $1.56 to settle at $114.79 after Venezuela's proposed plan to end Libya's crisis set off profit-taking.

At Bursa Malaysia, stocks in focus would be the cash rich Lion Industries Bhd and LION FOREST INDUSTRIES BHD [], KNM GROUP BHD [], PPB GROUP BHD [], AMMB HOLDINGS BHD [], TANJUNG OFFSHORE BHD [] and RHB CAPITAL BHD [].

The Edge FinancialDaily reports Friday that cash rich Lion Industries Bhd and Lion Forest Industries Bhd have been roped in for the RM3.2 billion blast furnace project, which is currently undertaken by their sister company, LION DIVERSIFIED HOLDINGS BHD [] (LDHB).

KNM Group Bhd said it has year-to-date secured new orders amounting to RM693 million, underpinned by the bullish sentiment in the global oil and gas industry globally as crude oil surges to record highs.

The current order book of KNM stood at RM6.4 billion and the backlog at RM5.4 billion. KNM said its tender book was RM17 billion, which it said had significantly improved compared with the trough of the sub-prime crisis which was at RM10 billion.

Malaysia is open to Australia & New Zealand Banking Group doubling its stake in Malaysian lender AMMB Holdings to 49 percent in a move that could encourage more foreign investment, Prime Minister Datuk Seri Najib Tun Razak was quoted saying by Reuters in Melbourne.

PPB Group Bhd plans to double its flour production capacity in Indonesia and Vietnam within the next two years to 2,800 tonnes a day. It plans to invest RM140 million.

Meanwhile, Wilmar International , the world's largest listed palm oil company, plans to enter Indonesia's consumer flour market, possibly in 2012, which will intensify competition in the country. PPB derives a significant chunk of its earnings from Wilmar.

Bank Negara Malaysia has not allowed the Employees Provident Fund Board to hold more than 45% of the paid-up share capital of RHB Capital Bhd.

Hence, EPF's irrevocable undertaking to subscribe under the rights issue shall be for a minimum of 45% of the total rights shares.

Bursa Malaysia Securities Bhd has publicly reprimanded Tanjung Offshore Bhd and ordered it to carry out a limited review on its quarterly report submissions following a 37% deviation between the unaudited and audited earnings.

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Malaysia says open to ANZ bank doubling AMMB stake

MELBOURNE: Malaysia is open to Australia & New Zealand Banking Group doubling its stake in Malaysian lender AMMB Holdings to 49 percent in a move that could encourage more foreign investment, Malaysia's prime minister said on Friday, March 4.

Datuk Seri Najib Razak told Reuters in an interview that any request by ANZ, Australia's fourth-largest bank, to raise its stake beyond the current 30 percent cap on foreign ownership in local banks would require both central bank and government approval.

"On ANZ, our policy is really to cap the limit on foreign investment in banks to about 49 percent or so, wo within the scope of the policy we can look at what kind of request ANZ bank will make to the central bank," Najib said on a visit to Australia. - Reuters

StanChart Global Research raises crude oil forecast for 2011

KUALA LUMPUR: Standard Chartered Global Research expects regional tensions in the Middle East to persist for the next two quarters, maintaining a supply-risk premium in the oil market.

It said on Thursday, March 3 that it expected anticipated near-term shortages and this would likely to encourage further investment flows.

'We are raising our crude oil forecasts for this year. We expect ICE Brent to mostly trade in a US$110 to US$120 per barrel range, averaging US$115 until the end of 3Q (our previous forecasts were US$97 in 2Q and US$95 in 3Q), before moderating to average US$110 in 4Q as geopolitical tensions ease but fundamental market tightness persists.

'This gives a full-year average of US$111. Within these averages, volatility is likely to be high, with a strong possibility of spikes from time to time in response to geopolitical events. The key downside risk is a collapse in demand, but at these price levels we do not expect demand curbs to be sufficient to offset the supply shock,' it said.

BNM unable to consider EPF request to hold more than 45pct of RHB Capital

KUALA LUMPUR: Bank Negara Malaysia has not allowed the Employees Provident Fund Board to hold more than 45% of the paid-up share capital of RHB CAPITAL BHD [].

RHB Investment Bank Bhd and CIMB Investment Bank Bhd said on Thursday, March 3 that BNM's decision that it was not able to consider the EPF's application was contained in a letter dated Feb 25.

'Accordingly, EPF's irrevocable undertaking to subscribe under the rights issue shall be for a minimum of 45% of the total rights shares,' the investment banks said in the statement.

RHB Capital had proposed to acquire 80% of PT Bank Mestika Dharman for RM1.16 billion and also a proposed put and call option for 9% of Bank Mestika.

RHB Capital also proposed a renounceable rights issue of new shares of RM1 each in RHB Capital to raise about RM1.3 billion.

KNM Group said secured RM693m new orders in 2011

KUALA LUMPUR: KNM GROUP BHD [] said it has year-to-date secured new orders amounting to RM693 million, underpinned by the bullish sentiment in the global oil and gas industry globally as crude oil surges to record highs.

'The current order book of KNM stood at RM6.4 billion and the backlog at RM5.4 billion,' said the company, which described it as an all time for the group since it was set up,' it said on Thursday, March 3.

KNM said its tender book was RM17 billion, which it said had significantly improved compared with the trough of the sub-prime crisis which was at RM10 billion.

Executive chairman and CEO Lee Swee Eng said the group's strong order book would keep it busy for 2011 and 2012.

Lee said the current strong order win reflected a rebound of order intake and its strong TECHNOLOGY [] product line, adding that he expected demand for process equipment to be strong as new projects come on stream in Malaysia and overseas.

Brent slips below $116 on talk of Libya peace plan

LONDON: Oil prices slipped on Thursday, March 3, dropping by more than $3 briefly before recovering, after the Arab League said a peace plan for Libya was under consideration.

The uprising against Muammar Gaddafi has reduced Libya's oil production by around half, industry officials estimate, and anything that helped restore output would help calm oil markets.

But traders were sceptical over the prospect of any immediate end to fighting in Libya, where Gaddafi faces an increasingly organised and confident rebel army.

Iraqi Oil Minister Abdul-Kareem Luaibi said the Organization of the Petroleum Exporting Countries was concerned about the turmoil in Libya but had sufficient oil to cover any shortfall caused by the rebellion there.

Brent crude futures for April hit an intra-day low of $113.09 a barrel, down over $3 on the day, before recovering to around $115.80 by 1000 GMT.

U.S. crude futures were down 35 cents at $101.88 by 1000 GMT, after hitting a low of $100.37. It settled at $102.23 a barrel in the previous session, ending above $100 for the first time since September 2008.

"The 'peace plan' for Libya obviously knocked the market lower but it doesn't seem to be having more than a passing impact on prices, which will probably head higher again," said Cartsen Fritsch, analyst at Commerzbank in Frankfurt.

Arab League Secretary-General Amr Moussa said on Thursday a peace plan for Libya from Venezuela's President Hugo Chavez was "under consideration".

News network Al Jazeera said earlier the plan would involved a commission from Latin America, Europe and the Middle East trying to reach a negotiated outcome between Libyan leader Muammar Gaddafi and rebel forces for this North African oil-producing country.

But Moussa said he did not know if Gaddafi accepted the plan and, when asked if he had agreed the plan, Moussa replied: "No."

Tim Riddell, head of technical analysis at ANZ in Singapore, expressed some scepticism: "If it's coming out of Chavez, it might not have a great degree of substance," he said.

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RISK OF CONTAGION

Revolt has ripped through the world's 12th-largest oil exporter and knocked out around half of its 1.6 million barrels per day (bpd) output.

Libyan output has fallen to 700,000-750,000 barrels per day (bpd) as most foreign oil workers had taken flight, according to Shokri Ghanem, the head of the North African producer's state oil company..

Concern the conflict might disrupt more Libyan output and that protest in the region may interrupt supply from other major producers has spurred oil prices to two-and-half-year highs. Brent rose to near $120 a barrel on Feb. 24.

A drawn-out battle between rebels and pro-Gaddafi supporters in Libya could push oil prices above $130 a barrel, Ghanem said.

"The market still sees the risk of contagion to neighbouring countries like Algeria which produced 1.2 million barrels per day (bpd) in January," a BNP Paribas research note said.

"Should Algeria be affected, OPEC's spare capacity stands to be significantly curtailed if it were to meet the additional shortfall in supply." - Reuters

FBM KLCI closes higher, but gains limited

KUALA LUMPUR: The FBM KLCI closed higher on Thursday, March 3, although it pared down some its gains in line with the cautious trading sentiment at most key regional markets as still high crude oil prices underpinned investor worries of a slower global economic growth.

The FBM KLCI closed 0.51% or 7.60 points higher at 1,506.88, lifted by gains including at banking, PLANTATION [] and telecommunication stocks.'' The index had earlier risen to its intra-day high of 1,512.82.

Gainers led losers by 503 to 252, while 307 counters traded unchanged. Volume was 1.07 billion shares valued at RM1.52 billion.

At the regional markets, Japan's Nikkei 225 closed 0.89% higher at 10,586.02, Hong Kong's Hang Seng Index up 0.32% to 23,122.42, Taiwan's Taiex 1.37% up to 8,738.37, South Korea's Kospi surged 2.2% to 1,970.66, and Singapore's Straits Times Index rose 0.33% to 3,037.35. The Shanghai Composite Index, however, lost 0.37% to 2,902.98.

A proposal by Venezuela President Hugo Chavez to try to broker a peace deal in Libya, however, briefly pushed oil lower on Thursday, while recently risk-averse stock markets put in some gains, according to Reuters.

European markets were volatile ahead of a European Central Bank meeting that was expected to sharpen its anti-inflation line, it said.

Early losses of around US$3 a barrel in crude oil were pared back on reports of continued fighting in Libya, including air strikes against rebel positions.

Brent crude oil fell as low as US$113.09 a barrel but was later back up around US$116, said Reuters.

On Bursa Malaysia, among the major gainers, Maybank rose eight sen to RM8.76, Public Bank and RHB Capital six sen each to RM13.10 and RM7.95, HLFG 11 sen to RM8.87, Hong Leong Bank nine sen to RM9.39 and AMMB five sen to RM6.26.

Among plantations, United Plantations rose 30 sen to RM17.30, Genting Plantations 29 sen to RM7.99, PPB 26 sen to RM17.06, KLK 24 sen to RM20.50 and Sime Darby five sen to RM9.08.

Dutch Lady was 28 sen to RM15.90, F&N 20 sen to RM16.14, SEG International 18 sen to RM3.48, YTL Corp 17 sen to RM7.17, DiGi 24 sen to RM27.10 and Maxis six sen to RM5.51.

Decliners included Genting, PLUS, Genting Malaysia, PacificMas, C.I Holdings and BAT.

Tanco was the most actively traded counter with 41.6 million shares done. The stock added one sen to 34 sen. Other actives included HWGB, Olympia, CIMB, Karambunai, SAAG and DRB-Hicom.

Bursa Securities raps Tanjung Offshore, orders limited review of reports for 4 quarters

KUALA LUMPUR: Bursa Malaysia Securities Bhd has publicly reprimanded TANJUNG OFFSHORE BHD [] and ordered it to carry out a limited review on its quarterly report submissions following a 37% deviation between the unaudited and audited earnings.

Bursa Securities said on Thursday, March 3 the company's limited review on its quarterly report submissions must be performed by its external auditors for four quarterly reports, starting no later from the quarterly report for the financial period ended March 31, 2011.

It said Tanjung Offshore had to ensure all its directors and the relevant personnel of the company attend a training programme on compliance with the Main Market listing requirements particularly pertaining to financial statements.

Bursa Securities said the company reported an unaudited profit after taxation and minority interest of RM4.88 million in the company's fourth quarterly report for FY ended Dec 31, 2009'' compared to earnings of RM3.07 million in its annual audited accounts for FY ended Dec 31, 2009.'' The difference of RM1.808 million is a deviation of about 37%.

The deviation was due to the adjustment arising from the reversal of income recognised from claims made by an associate company, Cendor Mopu Producer Ltd and the under recognition of revenue and post acquisition profit.

Plantations keep their gains, CPO futures flat at RM3,565

KUALA LUMPUR: PLANTATION [] stocks were among the major gainers in late afternoon trade on Thursday, March 3 while crude palm oil (CPO) third month futures were unchanged at RM3,565 per tonne, off the early high of RM3,620.

At 4.24pm, the FBM KLCI is up 7.44 points to 1,506.72. Turnover is 933.66 million shares valued at RM1.24 billion. There were 448 gainers, 305 losers and 274 stocks unchanged.

PPB, which plans to double its flour production in Indonesia, Vietnam in two years to 2,800 tonnes a day, rose 26 sen to RM17.06. Indicative investment is more than RM140 million.

Kulim-WC call warrants rose 30 sen to 30.5 sen but in thin trade, giving a boost to the mother shares. Kulim, which fell recently after its share split and bonus shares went ex, rose 20 sen to RM3.41.

Genting Plantations increased 25 sen to RM7.95 and KL Kepong 22 sen to RM20.48.

Other gainers are DiGi, up 32 sen to RM27.18, Dutch Lady 30 sen to RM15.92 and Hartalega 23 sen to RM5.73.

October-December results season disappointing, says CIMB Research

KUALA LUMPUR: CIMB Equities Research is maintaining its Overweight stance on the Malaysian stock exchange and end-2011 KLCI target of 1,700 based on an unchanged price-to-earnings target of 14.5 times.

In its strategy report on Thursday, March 3, it said valuations are undemanding and there are other catalysts that will give the market a boost in the short- to medium-term including the various transformation programmes and the election effect.

However, the research house said the October-December 2010 results season was 'generally disappointing as the earnings revision ratio (upgrades/downgrades) stayed negative at 0.7 times'.

CIMB Research raised CY10-11 earnings per share (EPS) by less than 1% while shaving 0.4% off CY12 EPS.

'The past four to five results seasons have been less than sterling, which is one of the reasons why investors need to stay vigilant,' it said.

It said the February results season came in below expectations as the revision ratio stayed negative at 0.7x, same as in Nov. Some 52% of the companies in its coverage met expectations (60% previously) and a higher 28% failed to deliver (23% before) while 20% did better than expected, an improvement on the November results season's 17%.

It said for February, CY10 EPS was raised slightly by 0.5%, CY11 was unchanged while CY12 EPS was cut by 0.9%. EPS upgrades for CY10 came mostly from the gaming, property, PLANTATION []s and media companies.

CIMB Research said 2010 EPS growth ended the year at a record 35%, the strongest in more than 10 years. Although the growth was off a low base and followed two years of EPS contraction (-5% in 2008 and -7% in 2009), it was very encouraging as the growth was across the board.

Returns on equity (ROE) also improved to nearly 16% while net gearing is at its lowest at 19%.

'We are forecasting a moderation of EPS growth to 12% in CY11-12, driven by the banking, plantations, CONSTRUCTION [], oil & gas, property, gaming and transport sectors,' it said.

The research house said regional markets including Malaysia had come under selling pressure due to the twin effects of 1) the pullout of global funds from emerging markets back to developed markets, and 2) concerns over the political situation in the Middle-east and North Africa (MENA) countries which caused oil prices to shoot up.

'We believe that global funds' exodus from emerging markets into developed markets will have a temporary effect as that trend has longer-term positive implications for the global economy.

'The upheaval in MENA, on the other hand, is trickier as it is difficult to predict how far the uprisings will spread and how high oil prices will reach,' it said.

Bursa Securities raps Kenmark Industrial, 8 directors, imposes RM2.49m fine

KUALA LUMPUR: Bursa Malaysia Securities Bhd has publicly reprimanded KENMARK INDUSTRIAL CO. (M) BHD [] and eight of its directors and also fined three of these eight directors a total of RM2.49 million for various breaches of the listing rules.

The regulator said on Thursday, March 3 that enforcement proceedings were commenced against Kenmark though the company had been delisted. It said the breaches were committed while Kenmark was listed on the stock exchange.

Bursa Securities publicly reprimanded its managing director Hwang Ding Kuo @ James Hwang and fine him RM1.327 million.

Executive director Chang Chin-Chuan was reprimanded and fined RM502,400. Non-independent and non-executive director and audit committee member Chen Wen-Ling was reprimanded and fined RM667,400.

Banks, plantations lift FBM KLCI at mid-day break

KUALA LUMPUR: Buying interest in index-linked banking and PLANTATION [] stocks, as well as select blue chips lifted the FBM KLCI on Thursday, March 3 as Asian markets also made gains, albeit in a cautious trading environment.

Crude oil prices held near 2-1/2 year peaks on Thursday as worries about supply disruption persisted given ongoing unrest in Libya, but upbeat U.S. economic news and a firmer Wall Street helped Asian stocks find a steadier footing, according to Reuters.

Both US crude and Brent crude prices edged up as Libyan rebels repulsed a land and air offensive by Muammar Gaddafi's forces and the defiant leader warned foreign powers of "another Vietnam" if they intervened, it said.

Markets worry the growing instability in key Middle East oil producing countries could signal another threat to global supplies. Bank of America/Merrill Lynch analysts argue the oil shock from Libya ranks as the eighth largest supply shock since 1950, said Reuters.

The FBM KLCI rose 0.58% or 8.64 points to 1,507.92. Gainers led losers by 432 to 204, while 276 counters traded unchanged.

The ringgit strengthened 0.15% to 3.0325 versus the US dollar; crude palm oil for the third month delivery added RM35 per tonne to RM3,600, crude oil rose 32 cents per barrel to US$102.55 while gold eased 57 cents per troy ounce to US$1,433.93.

At the regional markets, Hong Kong's Hang Seng Index rose 0.94% to 23,266.23, Japan's Nikkei 225 up 0.68% to 10,563.70, South Korea's Kospi jumped 1.84% to 1,963.79, Taiwan's Taiex rose 1.49% to 8,748.14, Singapore's Straits Times Index added 1.19% to 3,063.50 and the Shanghai Composite Index was up 0.57% to 2,930.40.

Among the major gainers this morning, RHB Capital rose 11 sen RM8, Hong Leong Bank nine sen to RM9.39, Public Bank eight sen to RM13.12, Maybank six sen to RM8.74, AMMB five sen to RM6.26 and HLFG up four sen to RM8.80.

Plantation-related stocks also advanced, with PPB and Genting Plantations up 24 sen each to RM17.04 and RM7.94, KLK 22 sen to RM20.48, Kulim 17 sen to RM3.38 and Sime Darby rose three sen to RM9.06.

Other gainers included Dutch Lady, Petronas Dagangan, F&N, YTL Corp and Tenaga.

The decliners included Advanced Packaging, Fima Corp, PacificMas, C.I.Holdings and Hong Leong Industries.

Tanco was the most actively traded counter this morning with 30 million shares done. The stock rose two sen to 35 sen. Other actives included Olympia, HWGB, DRB-Hicom, SAAG and Karambunai.

Tin falls USD685 to close at USD31,620 per tonne on worries over Libyan crisis

KUALA LUMPUR: Tin price fell sharply on the Kuala Lumpur Tin Market (KLTM) to close at US$31,620 per tonne, down US$685 on Thursday, March 3 as market players refrained from buying the metal, concerned over the Libyan crisis, dealers said.

The metal also slipped on the London Metal Exchange (LME) which saw tin price drop US$700 to US$31,600 per tonne following spiralling oil prices globally.

"As the Libyan crisis continued to heighten, it will further push up global oil prices. This saw market players retreating and not willing to commit. This will likely be the main concern this week," said one dealer.

Oil prices breached US$102 per barrel yesterday for the first time since September 2008 as fighting escalated in Libya.

On the local front, the day's turnover was lower at 40 tonnes compared with Wednesday's 66 tonnes with Japanese, European and local buyers dominating activities.

At the opening bell, there was no buyers while sellers offered 100 tonnes.

The premium between the KLTM and the LME widened to US$485 a tonne from US$470 per tonne previously. ' Bernama

PPB Group to double flour production in Indonesia, Vietnam

KUALA LUMPUR: PPB GROUP BHD [] plans to double its flour production capacity in Indonesia and Vietnam within the next two years to 2,800 tonnes a day.

PPB Group managing director Tan Gee Sooi said on Thursday, March 3 the group planned to increase the Indonesia plant capacity from 1,000 tonnes a day to 2,000 tonnes.

As for the Vietnam plant, the capacity would double from 400 tonnes now to 800 tonnes a day.

"We have enough money for expansion," Tan said at an analysts and media briefing.

Libya unrest keeps oil market on edge; stocks up

SYDNEY: Crude oil prices held near 2-1/2 year peaks on Thursday, March 3 as worries about supply disruption persisted given ongoing unrest in Libya, but upbeat U.S. economic news and a firmer Wall Street helped Asian stocks find a steadier footing.

Both U.S. crude and Brent crude prices edged up as Libyan rebels repulsed a land and air offensive by Muammar Gaddafi's forces and the defiant leader warned foreign powers of "another Vietnam" if they intervened.

Markets worry the growing instability in key Middle East oil producing countries could signal another threat to global supplies. Bank of America/Merrill Lynch analysts argue the oil shock from Libya ranks as the eighth largest supply shock since 1950.

"The stability of the region has gone through a major shock and the ripples are going to be felt for a while," said Carl Larry, president of Oil Outlooks and Opinions based in Houston.

Gold, often sought in times of heightened geopolitical tensions and as an inflation hedge, traded at around $1,433 an ounce , within striking distance of a record high just above $1,440.

Tokyo's Nikkei average rose 0.5 percent, following a more than 2 percent fall on Wednesday, while stocks elsewhere in Asia gained 0.6 percent.

"It's too early to be optimistic because concerns about rising oil prices will likely persist," Masumi Yamamoto, a market analyst at Daiwa Securities Capital Markets, cautioned.

"But investors might have oversold yesterday, so they may buy back stocks with good fundamentals."

South Korea's KOSPI was among the best performers in the region, advancing 1.6 percent, a day after plumbing a three-month low.

Nomura analysts said they were turning more cautious on Korea, worried the country's policy management could leave the economy with a much higher inflation rate and more catch up to do later. They also cited relative competition from Japanese companies as the won appreciates and oil prices strengthened.

U.S. crude rose 0.2 percent to $102.47 a barrel, not far from the recent peak at $103.41, while Brent crude was also 0.2 percent higher at $116.63, closing in on the Feb. 24 high near $120.

Wall Street eked out small gains on Wednesday with the S&P 500 index ending 0.2 percent higher after the Federal Reserve's Beige Book suggested economic activity picked up in 2011 and a private survey pointed to strong private-sector hiring.

The private-sector jobs report bodes well for the influential non-farm payrolls data due on Friday.

In the currency market, the euro was a touch softer after rallying to near four-month highs against the dollar. But the single currency is expected to stay supported ahead of the European Central Bank policy meeting.

Markets are wary the ECB will sharpen its anti-inflation rhetoric, reinforcing views the ECB will raise interest rates before the U.S. Federal Reserve.

Still, some analysts warn the rally in the euro will probably fizzle after the meeting.

"There has been a lot of hype in the market on the ECB for some time, so I expect the euro to lose steam pretty much regardless of what the ECB does today," said Teppei Ino, currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

The euro last traded at $1.3857 , having climbed as high as $1.3890. The dollar index , which tracks its performance against a basket of major currencies, was little changed on the day at 76.690, hovering near the overnight low of 76.529, its lowest since early November 2010. - Reuters

CIMB Research: RGB International remains an Underperform

KUALA LUMPUR:'' CIMB Equities Research said RGB International Bhd remains an Underperform as its slow turnaround efforts and continued delays in new technical and support management (TSM) ventures.

It said on Thursday, March 3 that it was positive about the pickup of slot machine sales in the Philippines and ii) better visibility on the mobilisation plan which could lead to the writeback of FY10's RM8 million impairment loss, lifting FY11 EPS by 28.5%.

'On the flip side, we are disappointed with the machine placement projection which is 10% lower than our forecast. Factoring in lower machine placement, we cut our FY11-13 EPS by 10-27%. Accordingly, our end-CY11 target price falls from 6.1 sen to 5.3 sen, which is still based on a forward P/E of 8x or a 50% discount to its larger-cap peers,' it said.

Uzma climbs on RM200m Petronas contract, off high of RM2.29

KUALA LUMPUR: Shares of UZMA BHD [] surged to a high of RM2.29 in the morning session on Thursday, March 3 after it secured a RM200 million contract from Petroliam Nasional Bhd.

At 12.02pm, it was trading at RM2.16, up three sen with 187,700 shares done.

Uzma said the long term service contract is to provide a low pressure system (LPS) for Petronas' domestic upstream operations.

The contact will include supplying its equipment, manpower and consultancy for the LPS units for three years, with effect from Feb 18 this year to Feb 17, 2014.

Petronas has the option to further extend the contract for a further two years.

Australia and Malaysia commit to trade deal within 12 months

CANBERRA: Australia and Malaysia will kickstart stalled trade talks on and sign a bilateral free trade deal within 12 months, Prime Minister Julia Gillard said on Thursday after talks with her Malaysian counterpart Datuk Seri Najib Razak, according to Reuterts.

The two countries started trade talks in 2005, but negotiations have been stalled since 2007, when both countries focused more on a regional trade agreement between Australia, New Zealand and the 10 countries of the Association of Southeast Asian Nation.

Malaysia is Australia's 11th largest trading partner, with about $11 billion in bilateral trade each year. Australia is a major buyer of Malaysian crude petroleum, while Australia is a key supplier of education services, copper, aluminum and wheat.

"We have determined today that we will conclude this free trade agreement between our two nations within the coming year, and we want to see it concluded and signed before the anniversary of this visit next year," Gillard told reporters after talks with Najib in Parliament house.

A study into a free trade deal found Australia's gross domestic product would increase by $1.9 billion by 2027, while Malaysia's economy increase by $6.5 billion over the same period.

Najib said the two countries could boost bilateral trade under a free trade deal, and could strengthen education ties, with three Australian universities with campuses in Malaysia.

The two leaders also discussed people smuggling and security issues, and signed agreements to increase cooperation on education and sport.

FBM KLCI rises above 1,500-point level at mid-morning

KUALA LUMPUR: The FBM KLCI rebounded in early trade on Thursday, March 3, in line with key regional markets following the slightly firmer overnight close at Wall Street, as upbeat US economic data helped offset worries about surging oil prices. However, trading at the Asian markets remained cautious as crude oil prices hovered firmly above the US$100 per barrel mark, as the escalating tension in the Mid-east and African region threatens global supplies.

At mid-morning, the FBM KLCI was up 2.18 points to 1,501.46, lifted by gains including at banking stocks and select blue chips.

At the regional markets, Japan's Nikkei 225 rose 0.53% to 10,548.09, the Shanghai Composite Index added 0.32% to 2,923.22, Taiwan's Taiex added 0.89% to 8,696.61, South Korea's Kospi jumped 1.54% to 1,958.01, Singapore's Straits Times Index up 0.68% to 3,048.16 while Hong Kong's Hang Seng Index opened 0.4% higher at 23,142.02.

BIMB Securities Research said Wall Street closed marginally higher driven by encouraging new hiring in US and positive economic growth in the country.

The US Federal Reserve, in the meantime, said that 12 regions in US showed economic expansion in the last 2 months and there was an encouraging signs that retail spending in US is gaining traction, it said.

'Despite all this, we are continually concerned over the pace of crude oil price movement since the eruption of the civil unrest in Middle East and North Africa. Crude oil already surpassed US$100 per barrel yesterday and there is no sign of any weakness so far.

'Given that, we expect the local and regional equity market will continue to be under pressure and expect some selling pressure to persist for this week,' it said.

Among the gainers on Bursa Malaysia, RHB Capital was up 11 sen to RM8, Hong Leong Bank 10 sen to RM9.40, AMMB four sen to 6.25 and Maybank three sen to RM8.71.

Sime Darby rose three sen to RM9.03, MISC seven sen to RM7.67, DiGi 26 sen to RM27.12, Petronas Dagangan 14 sen to RM14.06, while SOP, Tasek, LPI Capital and KLK rose 12 sen each to RM3.60, RM8.50, RM13.80 and RM20.38 respectively.

Decliners at mid-morning included BAT, Fima Corp, C.I Holdings, Pintaras and Glenealy.

Tanco was the most actively traded stock with 17.5 million shares done. It rose 2.5 sen to 35.5 sen. Other actives included SAAG, HWGB, DRB-Hicom and ASB.

Masteel MD ups stake to 31.76pct after buying 2.85m shares

KUALA LUMPUR: Malaysia Steel Works (KL) Bhd managing director and chief executive officer Datuk Seri Tai Hean Leng saw his shareholding increase to 31.76% or 66.93 million shares after the recent acquisition of 2.85 million shares.

A filing to Bursa Malaysia showed TYY Resources Sdn Bhd, in which he is deemed interest, acquired the shares on Feb 25 at RM1.38 each.

The integrated steel manufacturer turned around to profitability in the financial year ended Dec 31, 2010 on the back of a record RM1 billion in revenue.

Masteel recorded net profit of RM28.18 million compared to net loss of RM8.09 million in FY09, while revenue rose 46.2% to RM1 billion from RM687.26 million in FY09.

The strong year-on-year growth was due to the increased demand for its products as well as higher prices.

RHB Research maintains Outperform on SP Setia

KUALA LUMPUR: RHB Research is maintaining its Outperform recommendation on SP Setia but due to the prevailing weakening equity market sentiment, it is taking a more prudent valuation.

It said on Thursday,, March 3 that it had lowered its fair value to RM7.30 based on a 15% premium to RNAV (from RM7.39 based on 30x CY11 PE).

'The upcoming private placement exercise should lend some support to the share price,' RHB Research said.

SP Setia acquired approximately 268.11 acres of freehold land in Cyberjaya from Cyberjaya's master developer, Setia Haruman Sdn Bhd for a total of RM420.4 million.

SP Setia's president and CEO, Tan Sri Liew Kee Sin said the land would be developed by Setia Eco Villa, a joint venture company between SP Setia (70%) and Setia Haruman (30%) into a mixed development with an expected gross development value (GDV) of RM3 billion.

The project to be known as Setia Eco Glades is expected to commence in FY2012 pending approvals and is expected to take about six years.

Plantations edge up in early trade

KUALA LUMPUR: Shares of PLANTATION [] stocks edged up in early trade on Thursday, March 3 underpinned by gains in heavyweight Sime Darby.

At 9.21am, the FBM KLCI was up 4.88 points to 1,504.16. Turnover was 100.81 million shares valued at RM77.22 million. There were 206 gainers, 58 losers and 146 stocks unchanged.

KL Kepong was the top gainer, up 20 sen to RM20.46, IJM Plantations 13 sen to RM2.90, SOP 12 sen to RM3.16 and Sime 11 sen higher to RM9.14.

Other gainers were DiGi, up 14 sen to RM27 while Petronas Dagangan added 15 sen to RM14.06.

Uzma to rise on RM200m contract from Petronas

KUALA LUMPUR: UZMA BHD [] will see trading interest with strong upside on Thursday, March 3 after its subsidiary, Uzma Engineering Sdn Bhd was awarded a RM200 million contract by Petroliam Nasional Bhd.

The long term service agreement is to provide a low pressure system (LPS) for its domestic upstream operations.

Uzma said on Wednesday the contact will include supplying its equipment, manpower and consultancy for the LPS units for three years, with effect fromFeb 18 this year to Feb 17, 2014.

It said Petronas has the option to further extend the contract for a further two years.

'The value of the contact is estimated at RM200 million. The contract is expected to contribute positively to the earnings of the company for the financial year ending Dec 31, 2011 and future years,' it said.

HDBSVR sees modest upward bias for KLCI

KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) said following a swift rebound from an intra-day low of 1,488.95 to close at 1,499.28 on Wednesday, March 2, it expects the key FBM KLCI to build on its recovery momentum ahead.

'The benchmark index will likely show a modest upward bias today, striving to pull away further from the immediate support level of 1,495,' it said on Thursday, March 3.

HDBSVR said there was little excitement on Wall Street last night as major U.S. equity indices finished between 0.1% and 0.4% higher at the closing bell. Although the labor market was picking up, sentiment remained weak given the still high crude oil prices (which rose 2.6% to US$102 per barrel overnight).

'Back home, against a backdrop of light news flows, Gamuda and MMC shares may attract some interest after the signing of a shareholders' agreement in the company that would be overseeing the implementation of the massive Klang Valley MRT project.

Separately, SP Setia's share price, after tumbling 6.3% in 1'' weeks, could get a lift as the property developer has just bought a piece of land measuring 268 acres in Cyberjaya for RM420m,' it said.

HLIB Research: Lafarge Cement sees higher industry volume

KUALA LUMPUR: Hong Leong Investment Bank (HLIB) Research says Lafarge (M) Cement Bhd expects total industry volume to increase by 4%-6% in 2011, underpinned by the implementation of large-scale infrastructure projects.

In its report on Thursday, March 3, it said Lafarge was bracing for higher cost of production as prices of coal (the contributor to energy cost), gypsum and paper bags have increased since last year.

'Management is working hard to improve its cost efficiency to contain the rise in production cost,' it said.

HLIB Research said export prices for cement unlikely to recover anytime soon, due to the strong ringgit and weak CONSTRUCTION [] activities in its targeted overseas markets.

However, Lafarge is expecting better performance at the Singaporean market as well as the ready-mixed concrete division.

As for its capex in FY11, it will remain around RM50m. There are no plans for further capacity expansion as current capacity will still be under-utilised despite having anticipating a pickup in demand.

'Effective tax rate will normalise from FY11 (from 15.4% in FY10) as reinvestment allowance has depleted. At RM7.37, the stock is currently trading at FY11 and FY12 P/E of 15.4x and 13.6x (based on consensus estimates), slightly higher than the 3-year historical forward P/E.

'We believe share price will likely warrant a re-rate if coal price decreases; and more projects are awarded,' said HLIB Research.

OSK Research: WCT targets RM2b in new jobs, RM400m launches

KUALA LUMPUR: OSK Research has raised the earnings outlook for WCT BHD [] which is targeting RM2 billion in new contracts and RM400 millio in launches this year.

'Our FY11-12 earnings are raised by 3%-6% and TP revised upwards to RM3.75. Maintain BUY,' it said.

OSK Research said WCT management had assured that there will be no further provisions for the Bakun dam and that the Middle East unrest had not impacted its operations.