Petronas to ship additional LNG supplies to Japan

KUALA LUMPUR: Petroliam Nasional Bhd is increasing its supplies of liquefied natural gas (LNG) to Japan to mitigate the shortage in that country after the earthquake and tsunami on March 11.

Expressing its sympathy over the tragedy, Petronas said on Saturday, March 19 it was committed to assist in'' mitigating the difficult situation, one of which was through LNG supplies into Japan.

'Currently Petronas is liaising with its Japanese counterparts to supply immediate additional LNG cargoes from its LNG portfolio sources.

'Petronas is also working with its buyers in the Far East, who are not affected by the quake and tsunami, on possible cargoes swaps, advancements and diversions to cater for the increase in LNG requirements,' it said.

#Stocks to watch:* Sarawak counters, banks, Notion Vtec

KUALA LUMPUR: Sarawak-based stocks could see strong trading interest in the week ahead, after Chief Minister Tan Sri Abdul Taib Mahmud announced the state legislative assembly will be dissolved on Monday, March 21 to pave the way for the 10th state election.

Other stocks which could see trading interest include banks after Bank Negara tightened the rules for the credit card industry to inculcate sound financial and debt management among credit card users.

NOTION VTEC BHD [] could also see positive interest as it expects the contribution from its new business -- both in the body mount and sub-assembly of lens -- to more than compensate for the expected reduction in orders for cam barrels due to the disruption and possible slowdown from the Japan earthquake.

On Friday, global stocks rose as traders took on riskier investments following a Libya ceasefire that reduced tension in the region, and after several central banks intervened to stabilise the yen.

Reuters reported that on Wall Street, stocks held gains but pulled back from session highs due to caution before a long weekend in Japan, where markets will be closed on Monday for a holiday.

The Dow Jones industrial average gained 85.74 points, or 0.73%, to 11,860.33. The Standard & Poor's 500 Index added 5.38 points, or 0.42%, to 1,279.10. The Nasdaq Composite Index rose 8.57 points, or 0.33%, to 2,644.62 -- well off its session high of 2,665.56.

At Bursa Malaysia, among the companies which could see trading interest following the announcement of the Sarawak polls are CAHYA MATA SARAWAK BHD [] (CMSB), NAIM HOLDINGS BHD [], TA ANN HOLDINGS BHD [], ZECON BHD [], ENCORP BHD [] and'' HOCK SENG LEE BHD [] (HSL).

The Edge FinancialDaily reported in February that CMSB surged 34% in three months leading to the dissolution of the state assembly on April 28, 2006. The report, quoting Maybank Investment Bank Research, highlighted that Naim advanced 13% while Ta Ann Holdings Bhd rose 18% during the same period. Zecon Bhd gained 10% while Encorp Bhd rose a staggering 67%.

Hock Seng Lee Bhd (HSL), meanwhile, climbed over two months to its 52-week high of 69.5 sen on March 17, 2006 ' a significant increase from its 52-week low of 51.9 sen on Jan 25, 2006.

Naim has been profitable over the last three years while CMSB is viewed to be at the forefront of Sarawak's business landscape.

Another major catalyst for the Sarawak-based counters is the Sarawak Corridor of Renewable Energy (SCORE) and the favourites being CMSB, Naim, HSL, KKB ENGINEERING BHD [], Dayang and Leader Universal Bhd.

Some of the high-profile projects planned under SCORE include an aluminium smelter expected to cost between RM7 billion and RM10 billion, Tatau pulp and paper factory (RM3 billion) and a zinc electro refinery (RM1.3 billion).

PM confident Malaysia GDP to grow 6pct this year

KUCHING:'' Datuk Seri Najib Tun Razak is confident Malaysia will achieve its target of 6% economic growth this year.

"We will get six per cent (of economic growth) (and we are) pushing as far as possible. Every week, the economic council meets (to discuss issues)" besides creating more investment and job opportunities," he said when meeting his facebook fans at the "Let's Meet and Communicate" function, at the old State Legislative Assembly buidling, here on Saturday, March 19.

This is the first of Najib's programme to meet his Facebook fans out of Putrajaya. The first two were held in Putrajaya in March, last year and February, this year.

Najib said the government was also creating more high and middle level job opportunities to ensure that the government's objective of becoming a high income nation would be achieved by 2020.

He also said the government's Economic Transformation Programme (ETP) which aimed to triple Malaysia's Gross National Income (GNI) from RM660 billion in 2009, to close to RM1.7 trillion in 2020, "is not a nightmare".

In fact, numerous efforts were being taken to create a strong momentum for economic growth in the country, he said.

For Sarawak and Sabah, he said the bulk of allocations under the six National Key Result Areas (NKRAs) had been allocated for various infrastructure projects in both states especially in ensuring road, water and electricity development projects reached the poor and rural areas.

Najib said the federal government was endeavouring to achieve balanced development between Sarawak and the peninsula, in fact for the past two years various rural development projects in the state had been progressing smoothly.

However, he said development in this biggest state in the country would take some time because of its size compared to the other states in the peninsula.

For example, the CONSTRUCTION [] of a 60km road in Sarawak only covered a small area in the state, but if it were to be carried out in Perlis, it would cover the whole state, he said.

Answering a question from the floor on the government's move to bring back highly skilled Malaysian professionals from abroad, he said the government was

not only engaging Malaysians abroad but aslo ensuring the local highly skilled professionals were being retained in the country.

He said the government was not only creating more job opportunities but also ensuring that the job offers were attractive, but this must be reciprocated with an increase in productivity by the workers. -Bernama

GLOBAL MARKETS-Stocks up, oil off on Libya, yen sags on G7 move

NEW YORK: Global stocks rose on Friday, March 18'' as traders took on riskier investments following a Libya ceasefire that reduced tension in the region, and after several central banks intervened to stabilize the yen.

Trading capped a week of extreme volatility marked by Wall Street's fear gauge, the VIX, breaking through 31 for the first time since July. Stock market volumes surged on down days and fell on up days.

Oil fell from earlier highs after Libya declared a ceasefire in the country to protect civilians and comply with a United Nations resolution passed overnight. It had surged after the U.N. Security Council endorsed a no-fly zone for Libya, and authorized "all necessary measures" to protect civilians against Gaddafi's forces.

"That (Mideast unrest) quieting down and Japan quieting down will lead to buying," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

Brent crude had jumped above $117 a barrel on worries of escalating unrest in oil-rich countries after the U.N. action to contain Libya's Muammar Gaddafi. Brent for May delivery shed 86 cents, or 0.8 percent, to $114.04 a barrel after the ceasefire. U.S. crude fell 35 cents to settle at $101.07 a barrel.

The dollar climbed 2.6 percent to 80.86 yen, retreating from a session high of around 82 yen, following the G7 announcement to intervene on the currency's sharp rise in recent days.

The show of solidarity by the G7 major developed economies to support Japan through its biggest crisis since World War Two comes a day after the yen soared to a record 76.25 per dollar in chaotic trading. It is the first coordinated currency intervention by the G7 in a decade.

The G7 "is just helping sentiment, and stocks sensitive to risk will push on. But optimism is going to be guarded as there are no firm resolutions surrounding the Japanese nuclear crisis and the Middle East, and anything can happen on the weekend," said Giles Watts, head of equities at City Index in London.

World shares as measured by MSCI advanced 0.6 percent. That gain helped the index erase some of its 5.6 percent drop over the past six trading days and brought the index near even for 2011.

WALL ST UP ON BANKS, NIKKEI'S REBOUND

On Wall Street, stocks held gains but pulled back from session highs due to caution before a long weekend in Japan, where markets will be closed on Monday for a holiday.

Friday also marked the end of the two-day quadruple witching period. Quadruple witching is the expiration and settlement of March stock-index futures, single-stock futuers, equity options and stock-index options.

The Dow Jones industrial average gained 85.74 points, or 0.73 percent, to 11,860.33. The Standard & Poor's 500 Index added 5.38 points, or 0.42 percent, to 1,279.10. The Nasdaq Composite Index rose 8.57 points, or 0.33 percent, to 2,644.62 -- well off its session high of 2,665.56.

Earlier, all three major U.S. stock indexes rose more than 1 percent to touch session highs. The Dow hit an intraday high at 11,927.09, while the S&P rose as high as 1,288.88.

Financial stocks rose after the Federal Reserve notified some of the largest U.S. banks that they passed a second round of stress tests. The central bank said it would let 19 of those banks use some of their massive capital cushions to buy back shares, repay the government and boost dividends.

JPMorgan Chase & Co and Wells Fargo & Co are among those planning dividend boosts. JPMorgan's stock gained 2.4 percent to $45.64, while Wells Fargo shares added 1.3 percent to $31.76.

Industrial shares also rose on bets they could benefit in Japan's rebuilding effort. General Electric Co rose 0.5 percent to $19.32, while Caterpillar advanced 1.9 percent to $105.07.

Before the U.S. trading open, European equities pared earlier gains after China's central bank raised lenders' required reserve ratios. The FTSEurofirst 300 added 0.2 percent to close at 1,088.82.

Japan's Nikkei share index climbed 2.7 percent, recouping some of the week's losses as Japan reeled from the aftermath of an earthquake, tsunami and nuclear power plant crisis.

YEN AND BONDS SLIP, GOLD GAINS

The euro rose 3.5 percent to 114.56 yen, after climbing to a session high of 115.56 yen earlier. Some traders noted the scale of intervention was so far a tame effort to stem the yen's surge.

The euro rose to a four-month high against the dollar of about $1.4145 after the euro/yen intervention.

Some market observers said even massive official selling might not restrain the yen for long, pointing to Japan's last intervention in September 2010 when it sold a huge 2.1 trillion yen, or around $25 billion worth, but only managed to push the dollar up to 85.77 yen from 82.85 yen.

"It would need to be concerted and aggressive ... and even then I'm skeptical," said Richard Wiltshire, a currency trader at ETX Capital in London.

A New York Federal Reserve spokesman said the U.S. central bank had joined the G7 in intervening to weaken the yen.

Demand for the safety of government debt eased.The price of the benchmark 10-year U.S. Treasury note dipped 5/32, nudging its yield up 0.02 percentage point to 3.28 percent.

Gold rose $15.00 to $1,417.40 an ounce, but was off a record high of around $1,444 reached last week. - Reuters

Notion VTec: New biz to compensate for reduction in orders

KUALA LUMPUR: NOTION VTEC BHD [] expects the contribution from its new business -- both in the body mount and sub-assembly of lens -- to more than compensate for the expected reduction in orders for cam barrels due to the disruption and possible slowdown from the Japan earthquake.

It said on Friday, March 18 that its unit Notion Venture Sdn Bhd in Klang, as a contingency plan, would be supplied with raw materials from Nikon for the production of the body mount with immediate effect.

'Notion is preparing jigs and fixtures and utilising existing CNC (computer numerical control) machines to produce these precision components. Hard chrome surface treatment will be out sourced to a surface treatment company.

'The finished body mount components will be trucked to the customer's plant in Thailand for assembly. We expect this new business to contribute between RM36 million to RM60 million in sales per year,' it said.

Notion said this is response to the article in The Edge Financial Daily dated March 18 'Japan Earthquake affects Notion VTec's camera business'.

It said there would be no additional capital expenditure for this new production, adding that the relocation would be a long-term plan.

It said cam barrel recorded sales of RM98 million in FY2010, or 44% of its revenue of RM223 million, adding that Nikon was the major contributor besides Sony and Canon as well.

Notion said its internal revenue target for RM280 million included camera sales accounting for 50% or RM140 million in sales.

'This has not factored in the new sub assembly of lens business in Notion Thailand which starts from the month of April 2011 and will contribute significantly to Notion's top and bottom line.'' The new body mount business is also not factored in,' it said.

Due to the extreme nature of the crisis in Japan, and the uncertainty of the total supply chain, it was likely that Notion's cam barrel sales would be affected by the likely slow down in SLR camera/Interchangeable lens.

On March 17, analysts had expressed concern over supply disruptions for Notion's camera components to Nikon, which has suspended operations at four plants in Japan.

ECM Libra said it was looking at a possible downgrade of its 'buy' recommendation for the stock. The research house said the downgrade was pending further clarification from management and would depend on the quantum of potential downward earnings revision for its financial year ending Dec 31, 2011.

The local research house has a current target price for the stock pegged at RM2.50.

Meanwhile, OSK Research said it was maintaining its 'neutral' call for now with an unchanged target price of RM1.85 pegged at 7 times FY11 PER. This is pending more affirmative signals from Nikon as the magnitude of damage to its core facilities and the restoration timeline are currently uncertain.

'The downside risks to earnings are likely to go up if Nikon's suspension of operations and production halt are prolonged,' it said, adding that 'prolonged disruptions in Nikon's operation and production could put a dent on our earnings forecasts although we gather from management that there is no immediate stop order on its cam barrel production for now'.

Apart from being its single largest customer, Nikon is also a substantial shareholder of Notion.

Notion said Nikon's SLR camera and Interchangeable Lens main production and assembly operations are based in Nikon Thailand plant in Ayuthaya but supply of components were from both in-house as well as external approved vendors.

Notion Thailand, Ayuthaya and Notion Venture are both supplying cam barrels and other camera parts to Nikon Thailand, it said.

It said Nikon's in-house supply vendor, Sendai Nikon Corporation's plant was affected by the earthquake, adding that it manufactured the high end SLR camera body as well as body and lens mount.

'The body and lens mount are metallic mating surfaces for the lens to be attached to the camera body and are high volume parts typically in the hundreds of thousand per month,' it said.

Prudential Assurance new business sales up 24pct to RM1.02b in 2010

KUALA LUMPUR: Prudential Assurance Malaysia Bhd (PAMB) recorded new business sales exceeding RM1 billion for the financial year ended Dec 31, 2010.

It said on Friday, March 18 that for FY10, its total new business annual premium equivalent sales ' including conventional and takaful insurance sales ' increased 24% to RM1.021 billion.

PAMB chief executive officer Charlie Oropeza said 'such a strong, record-breaking performance for 2010' demonstrated its right business strategy in Malaysia which focused on agency and partnerships distribution as well as on product innovation.

Oropeza said the high productivity of Prudential's agency force was a key factor contributing to the company's outstanding growth.

'The disciplined execution of our agency initiatives, including continuous training and development and the use of our innovative point-of-sales tools and TECHNOLOGY [], helped increase the average productivity of our wealth planners and agents,' he added.

Takaful products distributed by PAMB's agency distribution are underwritten by its sister company, Prudential BSN Takaful Bhd, which is a joint venture between Prudential and Bank Simpanan Nasional.

RAM Ratings says RM90m govt compensation to New Pantai Expressway restores cashflow profile

KUALA LUMPUR: RAM Rating Services Bhd says its concerns about potential revenue loss by New Pantai Expressway Sdn Bhd (NPESB) has been alleviated after the government recently announced a cash compensation of about RM90 million.

NPESB owns the concession rights to collect toll along the 19.6-km New Pantai Highway.

The ratings agency said NPESB's RM490 million senior Bai' Bithaman Ajil notes (2003/2014) and RM250 million junior Bai' Bithaman Ajil Notes (2003/2016) were rated AA3 and AA3(s), respectively.

It added the rating of the junior notes was enhanced by a corporate guarantee from NPESB's ultimate holding company, IJM CORPORATION BHD [], which unconditionally and irrevocably assured all payments on the junior notes while the senior notes remain outstanding.

The rating of the junior notes will be reassessed upon full redemption of the senior notes.

On Feb 17, the government announced a tariff reduction for the highway's PJS 2 toll plaza, from RM1.60 to RM1 (for Class 1 vehicles, effective Feb 18, 2011), without mentioning any accompanying compensation arrangement.

'Pursuant to the Government's latest announcement, the estimated RM90 million compensation will reinstate NPESB's cash-generating ability and also restores the debt-coverage levels of both its senior and junior notes. That said, we expect the cash to be retained by the company; any distribution to its shareholder would weaken the cash buffer for the junior notes' debt servicing,' it said.

RAM Ratings said despite the latest development, there is still uncertainty arising from the Government's recent calls for concessionaires to freeze, reduce or abolish their toll collections without any ensuing compensation.

'While RAM Ratings will maintain close monitoring of the situation and evaluate the developments on a case-by-case basis, we note that the most recent (and past) amendments to NPESB's concession terms have been equitable to all stakeholders,' it said.

KLCI surges to close above 1,500 on hopes of Sarawak polls date

KUALA LUMPUR: Buying of index-linked stocks surged towards the end of the trading hour on Friday, March 18 after Sarawak Chief Minister Tan Sri Abdul Taib Mahmud said that he would make an announcement on the state election on Saturday.

"Wait one more day," Taib told reporters when asked to comment on speculation that the state ''legislative assembly would be dissolved on Monday for the election to be held next month, according to Bernama.

Bernama reported political observers viewed the planned announcement on Saturday ''made sense because Prime Minister Datuk Seri Najib Tun Razak, and his deputy, Tan Sri Muhyiddin Yassin, will be in Sarawak for the start of a meet-the-people tour of all states over several months.

The FBM KLCI rose 11.80 points to 1,503.89, lifted by gains at key blue chips including Tenaga, CIMB, MISC, Genting Malaysia and Petronas Chemicals.'' This was the first time the 30-stock index had closed above 1,500 since March 10.

Gainers led losers by 501 to 250, while 271 counters traded unchanged. Volume was 988.92 million shares valued at RM1.5 billion.

Japan's Nikkei 225 rose 2.72% to 9,206.75, Taiwan's Taiex 1.35% to 8,394.75, South Korea's Kospi added 1.13% to 1,981.13, Hong Kong's Hang Seng Index 0.07% to 22,300.23 and Shanghai Composite Index 0.33% to 2,906.89. However, Singapore's Straits Times Index fell 0.24% to 2,935.78.

At Bursa Malaysia, IOI added 21 sen to RM5.78, Tenaga 18 sen to RM6.20, CIMB nine sen to RM7.99, Genting Malaysia 10 sen to RM3.40, Petronas Chemicals and AMMB seven sen each to RM6.70 and RM6.37, while Public Bank added four sen to RM13.02.

BAT rose 52 sen to RM45.52, Panasonic 36 sen to RM20.06, Far East 35 sen to RM7.40, MISC 32 sen to RM7.84, Quality 30 sen to RM1.32, Pharmaniaga 27 sen to RM5.67, Tradewinds and Ta Ann 25 sen each to RM7.71 and RM5.73, while Allianz added 22 sen to RM4.97.

Karambunai was the most actively traded counter with 49.8 million shares done. The stock added one sen to 21 sen.

Other actives included Mieco, Axiata, WTK, Scomi and Perisai.

Newly-listed APFT rose five to close at 55 sen with 31.2 million shares traded.

EON Capital fell 16 sen to RM6.90; Litrak lost 15 sen to RM3.30, NPC 13 sen to RM2.01, Bintulu Port and GAB 11 sen to RM6.69 and RM9.50, while Lay Hong, GoldIS and Faber fell 10 sen each to RM1.50, RM1.49 and RM1.81 respectively.

Scientex to invest RM22.5m to venture into solar energy sector

KUALA LUMPUR: Scientex Bhd is investing RM22.5 million for a 50% stake in a joint venture (JV) to manufacture and distribute encapsulating sheets for solar cells.

In a statement Friday, March 18, Scientex said it had signed a shareholder agreement with Japanese firm MCTI to as part of its plants to foray into the solar energy sector.

It said Tokyo-based MCTI, a wholly-owned subsidiary of Mitsui Chemicals, Inc. was one of the top three producers of ethylene-vinyl acetate (EVA) encapsulating materials for solar films in the world, producing EVA sheets for solar cells at its existing factory in Nagoya.

Scientex said the JV company plans to build a state-of-the-art manufacturing plant for EVA sheets for solar cells to be located in Bukit Rambai Industrial Estate, Malacca.

Commercial production is expected to begin in 2012, it said.

The JV will have an issued and paid-up capital of the JV company is RM45 million comprising 45 million ordinary shares of RM1 each.

Scientex said it would finance its investment of RM22.5 million in the JV company via internally-generated funds.

MCTI would hold the remaining 50% in the JV.

Scientex managing director Lim Peng Jin said the JV represented a strategic opportunity for the company to actively participate in the exponential growth in global demand for renewable energy, specifically solar films.

'Scientex has achieved a proven track record in becoming a highly-efficient and competitive manufacturer of volume products.

'Coupled with the cutting-edge technologies of MCTI, the JV company would thus combine the core competencies of both parties to produce global-standard EVA sheets for solar cells at affordable costs to meet burgeoning demand worldwide,' he said.

MCTI chief executive officer Tetsuo Masuda said the JV with Scientex was in line with the company's initiatives to enhance its competitive position in the global market in the long term.

Masuda said the company's aim was to make renewable energy a viable alternative to meet the world's energy requirements.

'MCTI is pleased to strengthen our collaboration with Scientex through this JV. MCI, our parent company, first collaborated with them for the manufacturing and distribution of urethane prepolymer products in 2002.

They have developed a strong and mutually-beneficial partnership since then, and we are confident that this JV would be another success story for each party,' he said Masuda.

MISC at week high, heavy engineering to underpin earnings

KUALA LUMPUR: Shares of MISC BHD [] advanced 30 sen to a week's high of RM7.82 in afternoon trade on Friday, March 18 on expectations its robust heavy engineering business would underpin its earnings despite headwinds in its liner and tanker divisions.

At 3.37pm, MISC was up 30 sen to RM7.82, the highest since last Friday, March 11. Theer were 619,700 shares done.

The FBM KLCI rose 3.52 points to 1,495.61. Turnover was 725.69 million shares valued at RM911.76 million. There were 423 gainers, 247 losers and 275 stocks unchanged.

Sentiment was boosted by recent news that its heavy engineering business was expected to buoy the company's outlook. MISC's heavy-engineering business is operated by 66.5%-owned Malaysia Marine and Heavy Engineering Holdings Bhd.

MISC also planned to work with Malaysia Shipping Corporation (MSC) to improve operational efficiency and enhance customers' shipping experience.

EON Cap at 3-wk low, 34c below HL Bank offer of RM7.30

KUALA LUMPUR: Shares of EON CAPITAL BHD [] were trading at RM6.96 in late afternoon on Friday, March 18, which was a three-week low as investors stayed mostly on the sidelines following the on-going Libyan civil war and the aftermath of the earthquake in Japan.

At 4.06pm, EON Cap was down 10 sen to RM6.96 with 1.15 million shares done. At RM6.96, it was 34 sen below Hong Leong Bank's takeover price of RM7.30.

The FBM KLCI was up 5.28 points to 1,497.37. Turnover was 791.35 million shares valued at RM1.04 billion. There were 429 gainers, 257 losers and 287 stocks unchanged.

EON Cap's net asset per share was RM5.71 as at Dec 31, 2010.

Hong Leong Bank completes inaugural issuance of USD300m bonds

KUALA LUMPUR: HONG LEONG BANK BHD [] has completed the issuance of its inaugural US dollar senior unsecured bonds of US$300 million.

The bank said on Friday, March 18 the proceeds from the issuance of the senior bonds would be used for working capital and general banking purposes. The senior bonds would be listed on the Singapore Exchange.

Hong Leong Bank said the senior bonds were rated A3 by Moody's Investors Service and BBB+ by Fitch Ratings.

The senior bonds will have a tenor of five years, maturing on March 17, 2016. The senior bonds will pay a coupon of 3.75% per annum, which is equivalent to a yield to investors of 3.803% (five-year US Treasury + 65 basis points).

Barclays Bank PLC, The Royal Bank of Scotland plc and Standard Chartered Bank were joint lead managers and bookrunners for the senior bonds. CIMB Investment Bank Bhd and Hong Leong Investment Bank Bhd were co-managers.

Credit Suisse: AirAsia can weather high oil price, keeps TP of RM4.30

KUALA LUMPUR: Credit Suisse Research remains positive on AirAsia as it believes the low-cost'' carrier'' can weather the high oil price environment.

In a research note issued on Thursday, March 17, it said AirAsia's management was not in favour of imposing a fuel surcharge, preferring instead to raise loads and ancillary income (higher baggage fees, new services, etc).

Credit Suisse Research said AirAsia management was comfortable with its margins with jet fuel at US$150 per barrel but could impose a surcharge if prices are sustainable at around these levels.

"We estimate that the company needs to raise total fares by merely RM1 to compensate for a US$1 per barrel increase in jet fuel prices. If jet fuel averages at US$120, fares would have to rise by RM10 to compensate. This is less than the price of a large McValue meal (RM11.20), thus, in our view, would not significantly impact demand,' it said.

Credit Suisse Research forecast US$110 for FY11-FY13 jet fuel (+20% on-year versus FY10). AirAsia effectively pays the market rate, as it only hedges 25% of its forward quarter requirements.

It also said AirAsia's management had been actively addressing market's various concerns over the company by improving transparency, strengthening its team and reducing aircraft rollout in an effort to contain gearing.

The research house said AirAsia had also proposed to monetise its 'other business units' including the AirAsia Academy (pilot and crew training) and 16%-owned sister-company, AirAsia X (AAX, unlisted).

The future listing of its long-haul carrier AAX, and its subsequent spin off, is the final part of the restructuring to counter the perceived dilution in AirAsia's short haul business model.

Credit Suisse Research said AirAsia was considering paying its first maiden dividend. In its view, the potential dividend would be a small but symbolic amount to signal the market that it is on a better financial footing.

'We estimate that a 10% payout ratio would result in a dividend yield of 1.2%. We believe that this move will be well received by local institutional funds in Malaysia, which could reverse the stock's low local shareholdings and provide fresh impetus to the share price,' it said.

The research house said it remained positive on AirAsia, which has the second largest airline fleet in Asia, with a combined fleet of 93 aircraft. Although Singapore Airlines has110 aircraft, the company 'only' carried 16.6 million passengers in 2010 which is 35% less than AirAsia's combined total of 25.7 million.

KLCI makes cautious recovery, Nikkei jumps

KUALA LUMPUR: ''The FBM KLCI rose at the mid-day break on Friday, March 18 as key regional markets advanced after Japan's Nikkei 225 rose nearly 3% in early trade, as investors picked up stocks battered over the past week.

At the mid-day break, the FBM KLCI rose 0.31% or 4.64 points to 1,496.73, lifted by gains including at MISC, Tenaga, IOI Corp and Public Bank. Gainers led losers by 408 to 199, while 248 counters traded unchanged. Volume was 583.98 million shares valued at RM632.19 million.

The ringgit strengthened 0.29% to 3.0445 versus the US dollar; crude palm oil for the third month delivery gained RM69 per tonne to RM3,407, crude oil rose US$1.67 per barrel to US$103.09 while gold jumped US$6.93 per troy ounce to US$1,410.66.

Exactly one week after a devastating earthquake hit the country and sparked fears of a nuclear meltdown, Japanese stocks advanced slightly in what has been a volatile week for global financial markets.

While the full extent of the economic impact of the earthquake still remains to be seen, investors found some comfort after the G7 group of rich nations agreed on joint intervention to curb the Japanese currency's rise, showing its support as the country struggles with a nuclear crisis.

Japan's Nikkei 225 +2.95% 9,227.45 Hang Seng Index +0.75% 22,451.29 Taiwan's Taiex +1.29% 8,389.40 South Korea's Kospi +1.35% 1,985.57 Shanghai Composite Index +0.56% 2,913.59 Singapore's Straits Times Index +0.32% 2,952.39 ''

''

Among the gainers on Bursa Malaysia, MISC was up 28 sen to RM7.80, IOI Corporation, Tenaga and Public Bank were up six sen each to RM5.63, RM6.08 and RM13.04 respectively, Petronas Chemicals and Genting Malaysia five sen each to RM6.68 and RM3.35, BAT 76 sen to RM45.76 and DiGi 14 sen to RM27.48.

Other gainers included Panasonic, Tradewinds, Pharmaniaga, Quality, Sungei Bagan and Shell.

Karambunai was the most active with 43.4 million shares done. The stock added 1.5 sen to 21.5 sen. ''Cambodia's China Central Asia Group (CCAG) is teaming up with Karambunai in a beachfront mixed development project in Kamabunai, Sabah which would see CCAG pumping in RM310 million and the latter providing the land.

Other actives included Mieco, Scomi, Perisai and Leweko.

Newly-listed APFT rose seven sen to 57 sen with 27 million shares done.

Among the decliners, Lay Hong fell 10 sen to RM1.50, EON Capital nine sen to RM6.97, Perduren and HPI eight sen each to 80 sen and RM3, Faber and HELP down seven sen each to RM1.84 and RM2.58, while Genome fell 6.5 sen to 70.5 sen.

#Update* EPF exposure in Japan less than 1pct of total investment assets, says CEO

KUALA LUMPUR: The Employees Provident Fund's (EPF) exposure in Japan is less than 1% of its total investment asset, its chief executive officer Tan Sri Azlan Zainol said.

'With regard to our investments in Japan, the EPF only invests in blue chip companies such as Toyota, Panasonic and other big names,' he said on Friday, March 18.

Azlan said while markets across the globe would be affected to a certain extent by the tragedy in Japan 'but we believe that it will only be temporary'.

The EPF's total investment assets totalled RM440.52 billion as at Dec 31, 2010.

The EPF had on Feb 20, 2011 declares the highest dividend payout amount ever of RM21.61 billion to members, an increase of 11.55% over the 2009 dividend payout of RM19.37 billion. This amount translates into a dividend rate of 5.80% for the financial year ended 31 December 2010.

The dividend rate, which is 15 basis points above the 5.65% paid out for the year 2009, had underscored an impressive year in which gross investment income reached a historical high of RM24.06 billion, reflecting a 39.76% cent increase over the RM17.22 billion gross investment income recorded in 2009.

FBM KLCI advances in cautious trade

KUALA LUMPUR: Asian markets advanced on Friday, March in line with the gains at the Nikkei 225 as well as the stronger overnight close at Wall Street.

Japanese shares jumped nearly 3% and the yen tumbled on Friday after the G7 group of rich nations agreed on joint intervention to curb the Japanese currency's rise, showing its support as the country struggles with a nuclear crisis, according to Reuters.

The G7 move comes a day after the yen soared to a record 76.25 in chaotic trading, and a week after Japan was struck by a 9.0 magnitude earthquake and devastating tsunami that crippled the Fukushima nuclear power plant, it said.

The FBM KLCI rose 1.52 points to 1,493.61 at mid-morning, lifted by gains including at BAT, DiGi and MISC.

Gainers led losers by 299 to 102, while 173 counters traded unchanged. Volume was 283.89 million shares valued at RM212.39 million.

At the regional markets, Japan's Nikkei 225 rose 1.77% to 9,120.93, Hong Kong's Hang Seng Index added 0.27% to 22,344.84, the Shanghai Composite Index up 0.72% to 2,918.21, Taiwan's Taiex gained 0.92% to 8,359.08, South Korea's Kospi rose 0.66% to 1,971.92 while Singapore's Straits Times Index edged up 0.31% to 2,952.15.

BIMB Securities Research in a note March 18 said Wall Street staged a rebound yesterday as investors picked up beaten down shares while at the same time trying hard to allay fears over the Japan nuclear crisis.

The market was also helped by encouraging data, with the labor Department reporting a drop in initial claims for unemployment benefits, it said.

'Above all, there is still some negative tone in the investors' sentiment as the positive momentum of the benchmark index may be temporary as the nuclear crisis in Japan is far from over and the impact from the aftermath of the recent earthquake to its economy may be bigger than expected.

'Nevertheless, as the current share prices are trading at attractive valuations, we expect the local and regional market to assume its buying momentum today albeit with cautious tone,' it said.

The main gainer at mid-morning was BAT that added 98 sen to RM45.98; Pharmaniaga added 27 sen to RM5.67, Subur Tiasa 19 sen to RM2.80, Ta Ann 18 sen to RM5.66, Kluang and DiGi up 16 sen to RM2.69 and RM27.50, MISC 13 sen to RM7.65, Bernas up 12 sen to RM2.69 and Kulim 11 sen to RM3.44.

Among the actives, Karambunai rose 1.5 sen to 21.5 sen with 30.49 million shares. Cambodia's China Central Asia Group (CCAG) is teaming up with Karambunai in a beachfront mixed development project in Kamabunai, Sabah which would see CCAG pumping in RM310 million and the latter providing the land.

Newly-listed APFT added 7.5 sen to 57.5 sen with 22.7 million shares done.

Other actives included Mieco, Leweko, Scomi and Kulim.

Meanwhile, decliners included Sungei Bagan, Faber, GAB, Aturmaju, Ann Joo, Maybank, Johore Tin and Glenealy.

China Feb new home prices in Beijing unchanged on year

BEIJING: New home prices rose 6.8 percent in Beijing in February from a year earlier, flat from an annual increase of 6.8% in January, the National Bureau of Statistics said on Friday.

In Shanghai, the prices were up 2.3% in February compared with a rise of 1.5% in January.

Chinese new home prices rose 5.7% nationwide in February from a year earlier, down from a 5.9% increase in January, according to a weighted average calculated by Reuters.

In month-on-month terms, new home prices rose 0.4% in Beijing and 0.9% in Shanghai, the NBS said.

It added that new commercial home prices rose in 68 of the 70 cities tracked by the agency in February from a year earlier.

#Flash* Bank Negara raises minimum income requirement for new credit card holders

KUALA LUMPUR: Bank Negara Malaysia has raised the minimum income requirement to RM24,000 per annum from RM18,000 a year, effective immediately for new card holders, the central bank said on Friday, March 18.

RHB Research remains positive on property sector but sees volatile market ahead

KUALA LUMPUR: RHB Research said while it remains positive on the sector, it'' is not bullish particularly in the coming 2Q11 considering the volatile market ahead.

It said on Friday, March 18 the property sector is known for its cyclical and high beta nature, and it is not a heavy weight component in the FBM KLCI.

'For sector exposure, low beta property stocks are preferred, such as Paramount and Mah Sing. REITs also could turn in favour due to their defensive yields,' it said.

RHB Research said it was appropriate for investors to go for selective high beta stocks only if there is a strong project flow.

'In 2H11, key events to watch out for is the results for the tenders by developers for the Rubber Research Institute land, MRT's 'rail plus property' that Prasarana will develop with JV partners, and the official award of the development of land parcels in Singapore,' it said.

The research house said the biggest beneficiaries include MRCB, Ekovest (for river cleaning project) and UEM Land.

The key surprise will be the JV winners in particular for the RRI land, which we think are likely to be the GLC-linked reputable developers. The best bets are SP Setia, IJM Land and Mah Sing.

'We believe the M&A catalyst for the sector still exists. Speculation will be centered on 'who is next' to merge with MRCB, after the deal to merge with IJM Land lapsed.

'Similar to ULHB/Sunrise (a property arm of Khazanah), MRCB is the 'so-called' CONSTRUCTION []/property arm of EPF, but MRCB is lagging behind in its property development and brand name. In addition, by merging with a reputable developer, its valuations are expected to normalise to a reasonable level in hopes of better fundamental grounds,' it said

RHB Research believed catalysts for the small cap property stocks are limited after a short rally in early 2011.

It lowered its fair value on Glomac and YNH. As for KSL, the stock is still largely undervalued (at 60% discount to RNAV) considering that it has just received its approval for its Bandar Bestari township project in Klang.

'Overall, as we are keeping our calls on big cap stocks, we maintain our Overweight rating on the sector. Our top pick is Mah Sing,' it said.

OSK Research maintains Trading Buy on Faber, unch TP RM3.02

KUALA LUMPUR: OSK Research is maintaining a Trading Buy on FABER GROUP BHD [] at an unchanged target price of RM3.02 based on SOP valuation.

The research house said on Friday, March 18 that it still thinks'' Faber should be able to get its existing concession renewed in view of its track record and excellent execution of the existing concession, which should provide the upward catalyst for its share price.

On Thursday, Faber announced a capital reduction by way of cancellation of 75 sen of the existing par value of each RM1 ordinary share, and ii) a share premium reduction of RM116m to reduce the accumulated losses in Faber Group.

'The proposals came in as no surprise given that we had mentioned in our last March 16 report that Faber was in the midst of finalising proposals to strengthen its balance sheet, largely with regard to 'legacy' accumulated losses at the company level.

'As we had mentioned earlier, despite the company's willingness to pay a higher dividend payout, its ability to increase the payout ratio had been constrained by its accumulated losses at the company level,' it said.

OSK Research said the main rationale for the proposed corporate exercise is to enable Faber to beef up its capacity to raise its dividend payout and provide higher dividend returns to its shareholders.

HDBSVR maintains Buy on SP Setia, TP of RM7.90

KUALA LUMPUR: Hwang DBS Vickers Research said SP Setia's 1QFY11 net profit came in at RM62m (+62% on-year, +10% on-quarter ex-exceptional), constituting 22% of its'' estimates respectively.

The research house said on Friday, March 18 that SP Setia's EBIT margin continued to improve to 17% (+2.9 percentage points on-year, +3.6 percentage points on-quarter) in spite of higher selling & marketing expenses (+158% on-year ), driven by increased ASP and more meaningful contribution from newer projects.

'We expect earnings momentum to continue to build driven by record ~RM2.2bn unbilled sales and new launches,' it said.

HDBSVR reiterated a Buy and TP of RM7.90, based on 5% premium to RNAV of RM7.55 (to factor in more earnings-accretive land acquisitions). Fully diluted RNAV post placement and one-for-two bonus issue is estimated at RM4.80.

OSK Research maintains UMW as top buy for auto sector, TP unch RM8.92

KUALA LUMPUR: OSK Research said it was positive about UMW securing'' a contract from Petronas Carigali Sdn Bhd'' for the provision of its jack-up drilling rig "Naga 3" to Petronas' domestic operations in Malaysian waters.

The contract is valued at approximately US$41.5 million for duration of one year, with a 1+1 year option for renewal. The rig will be mobilized sometime in March.

OSK Research said on Friday, March 18 with its last Naga jack-up rig finally chartered out and ready to be mobilised sometime this month, it expected UMW's oil and gas segment getting on course for a profitable year.

''

'We estimate that this division will register a net profit of RM121.8m in FY11 and reverse its FY10 losses of RM46 million. We continue to maintain UMW as our top BUY for the automotive sector, with our TP unchanged at RM8.92,' it said.

APFT opens at 56.5 sen, premium of 6.5 sen over offer price

KUALA LUMPUR: Shares of APFT Bhd opened at 56.5 sen, a premium of 6.5 sen over its offer price of 50 sen when it made its debut on the Main Market of Bursa Malaysia on Friday, March 18

At 9.01am, shares of the flight education and training academy, was up 7.5 sen to 57.5 sen with 5.85 million shares done. The offer price was 50 sen each.

The FBM KLCI shed 0.79 of a point to 1,491.3. Turnover was 54.84 million shares valued at RM27.94 million shares. There were 140 gainers, 31 losers and 69 stocks unchanged.

Under its listing exercise, APFT's 15 million shares allocated for public subscription were oversubscribed 12 times.

Faber falls in early trade, accumulated losses weigh on sentiment

KUALA LUMPUR: Shares of FABER GROUP BHD [] fell in early trade on Friday, March 18 as investors were wary of the company's plans to cancel 75 sen of the existing par value of its RM1 share in a move to reduce its accumulated losses.

At 9.13am, Faber was down eight sen to RM1.83 with 390,300 shares done.

The FBM KLCI fell 1.86 points to 1,490.23. Turnover was 126.14 million shares done valued at RM72.93 million. The broader market was firmer with gainers beating losers 189 to 62 while 103 stocks were unchanged.

Faber said on Thursday that based on its paid-up share capital as at Dec 31, 2010 of RM363.0 million, the credit arising from the reduction of the par value would be about RM272.3 million.

However, investors' concern would be its unaudited accumulated losses as at Dec 31, 2010 which totalled RM422.1 million despite it had declined from the audited losses of RM450.60 million as at Dec 31, 2009.

Wall St rebounds but light volume a worry

NEW YORK, March 17: Wall Street rebounded after three days of declines on Thursday, but the advance could be temporary as concerns about Japan's nuclear crisis persisted.

The S&P 500 recovered after giving up the year's gains on Wednesday, but options activity showed traders are increasing hedges against another decline in stocks.

"As the headlines come out of Japan, there are more nervous traders liquidating their long positions in futures put on this morning," said Steve Leuer, stock-index futures trader at X-FA Trading firm in Chicago.

The recent losses brought out investors looking for bargains. However, volume was lackluster, with just 7.95 billion shares changing hands on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 8.47 billion and down sharply from Wednesday's record for the year of 11.1 billion shares traded.

If the market is to refocus on fundamentals, more news from bellwethers like FedEx Corp will help. The world's largest cargo airline forecast improved revenue on strong demand, lifting shares 3.1 percent to $87.89.

The Dow Jones Transport average gained 1.4 percent.

At the close, a total of about 1.23 million option contracts changed hands in the S&P 500 as puts outpaced calls by a factor of 2.17:1, according to options analytics firm Trade Alert. The recent average put-to-call ratio is 1.93.

An index put option conveys the right to sell an index at a certain level.

The Dow Jones industrial average was up 161.21 points, or 1.39 percent, at 11,774.51. The Standard & Poor's 500 Index was up 16.81 points, or 1.34 percent, at 1,273.69. The Nasdaq Composite Index was up 19.23 points, or 0.73 percent, at 2,636.05.

But the S&P 500 is down 2.3 percent for the week so far.

Stocks' recent declines followed a rally of nearly six months. The rally in itself has prompted predictions of a market correction.

From a chart standpoint "I don't see anything right now that suggests that the near-term decline is over," said Chris Burba, short-term market technician at Standard & Poor's in New York.

The CBOE Volatility Index VIX, Wall Street's fear gauge, fell 10.3 percent to 26.37 as stocks rose, but the VIX was still high compared with the recent average of about 20.

The market could see greater volatility on Friday as the two-day quadruple witching period ends. Quadruple witching is the expiration and settlement of March stock index futures, single-stock futures, equity options and stock index options.

On Thursday, natural resource stocks helped lead the market as commodity prices rebounded. Tensions in the Middle East and North Africa drove oil prices up sharply. Brent crude for May delivery gained $4.40 to $115.00 a barrel.

Cliffs Natural Resources Inc rose 5.8 percent to $88.60 while Chevron Corp gained 2.7 percent to $102.24.

The S&P energy index shot up 3.1 percent to be the leading sector, even though the prospect of higher fuel costs in general have hurt investor enthusiasm.

A correction at this point could be short-lived, some analysis suggests.

Cleveland Rueckert, an analyst at Birinyi Associates Inc. in Stamford, Connecticut, said in a note: "Since 1945, 5 percent declines that occur during a broader rally last an average of 41 days and decline 8.29 percent.

"If the averages hold, the S&P 500 will bottom at 1,232" on March 31, Rueckert wrote.

Advancing stocks outpaced declining stocks on the NYSE by a ratio of about 3 to 1 while three stocks rose for every two that fell on the Nasdaq. - Reuters

Nike to raise prices sharply as costs hit gains

NEW YORK, March 17: Nike Inc plans to raise the prices on its shoes and sports clothing markedly in 2012 to cope with the rising costs of oil, cotton and transportation that are hurting its profitability.

The shares in the the world's largest athletic shoe and clothing maker plunged 7 percent on fears that already stretched margins will come under even greater pressure this year and next. It reported a lower-than-expected quarterly profit on Thursday, hurt by rising production costs.

The company expects margin pressures to persist this year, intensifying in the current quarter.

"This is evidence that rising input costs are hurting Nike's profit," said Giri Cherukuri, a portfolio manager with OakBrook Investments, which owns Nike shares. "Nike's margins will be under pressure for the rest of the year."

To contend with that, Nike executives said the company would ramp up and broaden its price increases.

Gross margins, which slipped 1.1 percentage points to 45.8 percent during the third quarter, were further hurt by the greater use of air freight to ship products and meet consumer demand. The company said there had been some product shortages and that suppliers would increase their capacity.

Nike forecast its gross margin during the current quarter will be 3 percentage points below year-earlier levels, but that pressure on margins would ease later in the year as price increases kick in.

"Beginning in spring 2012, we'll take more significant price increases across a broader range of styles," Chief Financial Officer Don Blair said on a conference call.

Blair said on the call it was too early to know how the crisis in Japan might affect its business in that country, which accounted for 3.8 percent of third-quarter sales.

FUTURE ORDERS IN LINE

Net income in the fiscal third quarter rose 5.2 percent to $523 million, or $1.08 a share, compared with $497 million, or $1.01 cents a share, in the year-earlier quarter.

That was below analysts' average expectation of $1.12 per share, according to Thomson Reuters I/B/E/S.

The company's shares fell $5.81, or 6.8 percent, to $79.60 following the earnings report, after closing at $85.41 on the New York Stock Exchange.

Revenue in the quarter ended Feb. 28 rose 7.3 percent to $5.08 billion and comparable sales at Nike stores rose 13 percent.

Future orders, excluding currency exchange rates -- a key measure of sales growth -- rose 9 percent, in line with the estimates of several Wall Street analysts.

UBS analyst Michael Binetti had expected 10 percent growth and added he believed investors were looking for an increase of 8 percent to 9 percent. McAdams Wright Ragen forecast growth of 8 percent to 9 percent, while Barclays Capital was at 7 percent to 9 percent and Citi at about 8 percent.

Orders for Nike brand shoes and apparel scheduled for delivery from March through July 2011 totaled $7.9 billion.

By region, revenue in Nike's largest market, North America, increased 9 percent to $1.84 billion, while sales in emerging markets and greater China rose 19 percent and 21 percent, respectively. Japan was the only market where sales fell, sliding 8 percent. - Reuters

#Stocks to watch:* APFT, Sime, Faber, Karambunai, Cypark

KUALA LUMPUR: Stocks which could see trading interest on Friday, March 18 include APFT Bhd which will list on the Main Market of Bursa Malaysia.

Other stocks which saw recent corporate developments are SIME DARBY BHD [], FABER GROUP BHD [], KARAMBUNAI CORP BHD [], PARKSON HOLDINGS BHD [] and CypARK RESOURCES BHD [].

Flight education and training academy APFT's15 million shares allocated for public subscription was oversubscribed by 12 times. The offer price was 50 sen each.

Emirates International Energy Services, which is involved in a dispute with Sime Darby Bhd in Abu Dhabi, has served the official suit papers and it seeking US$178.2 million in compensation.

Emirates International and Sime Darby Engineering had signed an exclusive agency agreement in September 2006 in the United Arab Emirates. Under the agency agreement, Emirates International was contracted to, amongst others, identify suitable projects for potential participation of Sime Darby Engineering.

Faber Group proposed to cancel 75 sen of the existing par value of its RM1 share in a move to reduce its accumulated losses.

Based on its paid-up share capital as at Dec 31, 2010 of RM363.0 million, it said the credit arising from the reduction of the par value would be about RM272.3 million.

Cambodia's China Central Asia Group (CCAG) is teaming up with Karambunai Corp in a beachfront mixed development project in Kamabunai, Sabah which would see CCAG pumping in RM310 million and the latter providing the land.

Karambunai Corp would provide 75 acres of land for the project valued RM270 million, which is ''the first phase of the Karambunai integrated resort city (KIRC) development.

S P Setia Bhd's net profit for the first quarter ended Jan 31, 2011 jumped 62% to 62.04 million from RM38.19 million a year ago, on the back of a 43% increase in revenue to RM518.88 million, due mainly from its property development activities in the Klang Valley, Johor Bahru and Penang.

S P Setia said its sales for the first quarter of FY2011 totalled RM737 million and were its highest ever sales recorded in a single quarter.

'As at Feb 28, 2011, the group's sales for the first four months of the financial year totalled RM953 million ' another new record and a 25% increase from the corresponding period last year. The group is therefore well on-target to achieve and deliver its FY2011 sales target of RM3 billion,' it said.

Parkson is teaming up with PT Tozy Bintang Sentosa (TBS) to expand its Parkson department stores in Indonesia. Parkson signed an exclusivity agreement with TBS Group for the proposed collaboration. The TBS Group operates six retail stores and it planned to add another two more stores.

Cypark plans to invest RM94.29 million to build a 10Mw renewable energy plant with grid connection, at the RE Park in Pajam. The project is expected to generate gross national income (GNI) of RM12.16 million each year for the next 21 years, totaling RM255.36 million.

Japan shares surge on G7 plan to help Japan stem yen's post quake rise

TOKYO:'' Japanese shares surged at the start of trade on Friday, March 18 with the U.S. dollar shooting higher after news the Group of Seven leading industrial nations had agreed to work with Japan to stem the yen's post-quake rise.

The Nikkei Stock Average climbed 2.5% to 9,186.50, and the Topix rose 2.2% to 828.40, while the U.S. dollar rose to ''80.73 from ''79.08 before the news. Exporters were among the biggest early winners. - MarketWatch

HDBSVR: KLCI could swing sideways with marginal negative bias

KUALA LUMPUR: Hwang DBS Vickers Research said as the Malaysian bourse strives to find a firmer footing, its benchmark FBM KLCI (after recouping almost all of its initial 12.2-point loss on Thursday, March 17) could swing sideways with a marginal negative bias on Friday.

'Much will also depend on the latest developments on the ongoing nuclear crisis in Japan, which seems to be under control at the moment. This contributed to an overnight rebound on Wall Street as key U.S. equity indices jumped between 0.7% and 1.4% at the closing bell,' it said.

Stocks that may come under watch include: (a) Parkson, which is exploring to expand its chain of Parkson Department Stores in Indonesia; (b) UMW, after it has been awarded a contract from Petronas Carigali worth US$42m; and (c) APFT, a flight education and training academy that will be making its listing debut on the Main Market.

FBM KLCI pares down losses at close

KUALA LUMPUR: Timber stocks were among the major gainers on Thursday, March 17 as investors expected a recovery housing story in Japan which was battered by the earthquake last Friday that sent its equities markets into a tailspin while fears of a nuclear meltdown loomed.

The FBM KLCI, which opened 9.15 points down to 1,483, managed to recoup most of the losses towards the close as sentiment improved while the broader market showed some signs of recovery

On Bursa Malaysia, the FBM KLCI shed 0.02% or 0.35 of a point to 1,492.09. Losers led gainers by 435 to 285, while 262 counters traded unchanged. Volume was 922.23 million shares valued at RM1.47 billion.

Tokyo stocks recovered from the intraday low as cheap valuations attracted foreign buyers and steadied the market, according to Reuters. Earlier this week, Japanese stocks suffered their worst two-day sell-off since 1987, it said.

The Nikkei 225 closed down 1.44% at 8,962.67, Hong Kong's Hang Seng fell 1.83% to 22,284.43, the Shanghai Composite Index lost 1.14% to 2,897.30, Singapore's Straits Times Index fell 0.95% to 2,942.88 and Taiwan's Taiex shed 0.50% to 8,282.69. However,South Korea's Kospi reversed its earlier losses and edged up 0.05% to 1,959.03.

BIMB Securities Research said the FBMKLCI closed marginally lower plagued by sluggish regional sentiment.

Among the major losers, United PLANTATION []s fell 70 sen to RM16.80, Quality lost 22 sen to RM1.02, GAB and IJM Land down 18 sen each to RM9.61 and RM2.65, F&N and MTD Capital fell 16 sen each to RM15.50 and RM10.68, MSC down 15 sen to RM3.90 while LPI Capital and BAT fell 14 sen each to RM13.16 and RM45.

Timber-related stocks advanced on expectations of an increase in demand for reCONSTRUCTION [] works in the aftermath of the devastating earthquake that hit Japan last Friday.

The top gainer was TA ANN HOLDINGS BHD [] that rose 50 sen to RM4.48. Subur Tiasa added 38 sen to RM2.61, Jaya Tiasa 32 sen to RM5.42, Lingui 18 sen to RM1.65, WTK up eight sen to RM1.62 while Leweko ''added 3.5 sen to 19.5 sen.

WTK was also the most actively traded counter with 30.7 million shares done.

Other gainers included Nestle, Panasonic, SHL, Vitrox and Mieco.

Cambodia group to invest RM310m in Karambunai beachfront mixed devt

KUALA LUMPUR: Cambodia's China Central Asia Group (CCAG) is teaming up with KARAMBUNAI CORP BHD [] in a beachfront mixed development project in Kamabunai which would see CCAG pumping in RM310 million and the latter providing the land.

Karambunai Corp Bhd said on Thursday, March 17 it would provide 75 acres of land for the project valued RM270 million, which is'' the first phase of the Karambunai integrated resort city (KIRC) development. CCAG, on its part, would'' invest RM310 million

Both parties signed a joint venture agreement to undertake the project. Under the JV, CCAG will be investor, contractor and joint developer and provide seed capital of USD$100 million (about RM310 million) as a revolving fund to carry out and undertake the development at its own costs.

'The JV is in line with the strategic implementation plan of KIRC, that is that Karambunai Corp shall provide the land and its strategic partners, in this case, CCAG shall provide the necessary funds to unlock the value of KIRC.

'This strategy shall also allow KCB to achieve its corporate objective of minimising debt in developing KIRC and the vision of creating a win-win venture with strategic partners who bring in capital and expertise,' it said.

Karambunai said most of the funding in the unincorporated joint venture is from CCAG and KCB's portion of the funding would be from its own funds.

Parkson Holdings to expand into Indonesia retail market

KUALA LUMPUR: PARKSON HOLDINGS BHD [] is teaming up with PT Tozy Bintang Sentosa (TBS) to expand its Parkson department stores in Indonesia.

Parkson said on Thursday, March 17 it signed an exclusivity agreement with TBS Group for the proposed collaboration.

The TBS Group operates six retail stores under the brand names of Centro Lifestyle Department Store and Kem Chicks in Indonesia and it planned to add another two more stores.

The eight stores were expected to generate more than US$100 million in sales turnover in 2011.

'The proposed collaboration provides Parkson with an opportunity to establish a presence in Indonesia and extend its international network into Indonesia which has a large domestic retail market given its population base of over 240 million people,' it said.

Parkson operates 89 department stores in Malaysia, China and Vietnam.

S P Setia 1Q net profit up 62% to RM62m

KUALA LUMPUR: S P Setia Bhd net profit for the first quarter ended Jan 31, 2011 jumped 62% to 62.04 million from RM38.19 million a year earlier, on the back of a 43% increase in revenue to RM518.88 million, due mainlyfrom its property development activities carried out in the Klang Valley, Johor Bahru and Penang.

Earnings per share was 6.10 sen while net assets per share was RM2.22.

S P Setia said the net profit for the period was arrived at after expensing approximately RM6 million for employee share options granted pursuant to the Company's ESOS which was launched in May 2009.

Reviewing its performance, S P Setia said the ongoing projects which contributed to the its result included Setia Alam and Setia Eco-Park at Shah Alam, Setia Walk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.

Apart from property development, the group's CONSTRUCTION [] and wood-based manufacturing activities also contributed to the earnings achieved, it said.

S P Setia said its sales for the first quarter of FY2011 totalled RM737 million represented its highest ever sales recorded in a single quarter.

'As at Feb 28, 2011, the group's sales for the 1st four months of the financial year totalled RM953 million ' another new record and a 25% increase from the corresponding period last year.

'The group is therefore well on-target to achieve and deliver its FY2011 sales target of RM3 billion,' it said.

On its prospects, the company said the KL EcoCity project (KLEC), with an estimated gross development value of RM6 billion, when launched later this year was expected to further contribute to its strong sales.

'Management is confident that the meticulous planning and preparatory steps taken so far will enable KLEC to fulfil its potential as a showcase development and act as a key catalyst that will transform and enable the group to sustain sales at a high level,' it said.

The company said it would also focus on finalising terms with the government for the land-swap deal involving the exchange of 40.22 acres of land in Bangsar for a modern new integrated health and research complex to be located on 55.33 acres of land in the Group's flagship Setia Alam development.

S P Setia said that barring unforeseen external shocks, it was optimistic that its prospects remained positive in FY2011.

Faber to cancel 75c from each RM1 share, credit arising to offset losses

KUALA LUMPUR: FABER GROUP BHD [] has proposed to cancel 75 sen of the existing par value of its RM1 share in a move to reduce its accumulated losses.

The company said on Thursday, March 17 based on its paid-up share capital as at Dec 31, 2010 of RM363.0 million, the credit arising from the reduction of the par value would be about RM272.3 million.

'The proposed share premium reduction will involve the reduction of the entire balance of about RM116.0 million in the company's share premium account. The credit arising from the said reduction in share premium of the same amount will be used to set-off the accumulated losses of Faber Group,' it said.

Its unaudited accumulated losses as at Dec 31, 2010 totalled RM422.1 million, which had declined from the audited losses of RM450.60 million as at Dec 31, 2009.

#Flash* Emirates International serves suit on Sime Eng, seeks US$178.2m

KUALA LUMPUR: Emirates International Energy Services, which is involved in a dispute with SIME DARBY BHD [] in Abu Dhabi, has served the official suit papers and it seeking US$178.2 million in compensation.

Sime Darby said on Thursday, March 17 the amount claimed by Emirates International comprised a payment of US$128.20 million and US$50 million for 'commissions' and 'moral compensation' respectively.

Sime Darby said the official suit papers filed into the Judicial Department of Abu Dhabi by Emirates International was served on its unit Sime Darby Engineering Sdn Bhd, through the Federal Court of Malaysia, on Wednesday.

To recap, Emirates International and Sime Darby Engineering had signed an exclusive agency agreement in September 2006 in the United Arab Emirates.

Under the agency agreement, Emirates International was contracted to, amongst others, identify suitable projects for potential participation of Sime Darby Engineering.

Emirates International was taking action against Sime Darby Engineering for compensation for not participating in the projects that the former had identified for the latter.

'Based on preliminary knowledge of the facts, Sime Darby Engineering's external solicitors have advised that the claims set out in the suit have no merits.

'Sime Darby Engineering is currently appointing local counsel in UAE to represent its interest and defend the suit accordingly,' it said.

AmResearch retains Neutral on auto sector, rising yen worries assemblers

KUALA LUMPUR: AmResearch is maintaining its Neutral recommendation on the automobile sector as the strengthening yen as a result of the Japanese earthquake is a rising concern for local assemblers.

The research house said on Thursday, March 17 the assemblers' margins will be crimped by potentially higher completely knocked-down (CKD)'' kit price and a weaker ringgit versus yen.

AmResearch said the impact on local assemblers could come in two forms. The first is that their Japanese principals may decide to raise CKD kit prices in order to cushion the impact of the rising Yen. Toyota still builds 38% of its vehicles in Japan, while Nissan and Honda's local plants make up 24% and 22% of total production, respectively.

Secondly, local assemblers could be hit by higher raw material costs. Tan Chong Motors and UMW import 30%-40% of raw materials in yen, with the remaining in US$ (these are mainly imports from Thailand and Indonesia).

'On the contrary, ringgit trends against the US$ seem to be flattening out. We estimate that every 1% strengthening of the yen will hit Tan Chong Motors and UMW's bottomline by 2%-3%,' it said.

'We re-iterate our HOLD calls on Tan Chong Motors (FV: RM5.00/share) and UMW (FV: RM7.40/share). Our top pick in the sector remains to be APM (BUY, FV: RM7.00/share) as a play on Tan Chong group's regional expansion, increasing localisation domestically and influx of foreign marques into the country,' it said.

''

Credit Suisse maintains underperform on IOI, Sime on lower palm oil prices

KUALA LUMPUR: Credit Suisse Research said palm oil spot prices have fallen 14%, from 2011 peak of RM3,910 to RM3,375, and is trading at a four-month low.

It said on Wednesday, March 16 that it believes palm oil prices have peaked and will weaken especially in 2H11 for the following reasons: (1) La Nina is fading; (2) record-high net long speculative positions in soy and corn are vulnerable to profit taking; and (3) Palm oil supply could surprise on the upside in 2H11.

Year-to-date, palm oil spot prices have averaged RM3,708 per tonne. 'We have assumed a 2011 palm oil price average of RM2,950/tonne,' it said.

It said investors should watch out for the US Planting Intentions Report on March 31.

'Among our coverage, companies which are most vulnerable to a fall in palm oil prices are Genting PLANTATION []s, KLK, Sime and IndoFood Agri. We maintain our UNDERPERFORM ratings on IOI and Sime. Wilmar is the only stock with an OUTPERFORM rating in the palm oil space,' it said.

FACTBOX: Japan quake impact on auto makers, electronics firms

TOKYO: The following is a roundup of the effect on auto makers and electronics makers following the March 11 devastating earthquake and tsunami.

Crippled reactors at a nuclear power complex has raised fears of an uncontrolled radiation leak.

AUTO MAKERS

Toyota Motor Co said it will halt operations at its 12 main assembly plants in Japan, extending the suspension until March 22. The closure of the factories, since Monday, will result in lost production of 95,000 vehicles.

But it will restart production of spare parts on Thursday at seven plants near its base in Toyota City, central Japan, to be shipped to service centres for repairs to Toyota vehicles already on the road. From March 21, Toyota will also begin making car parts at the same plant for assembly factories overseas.

Honda Motor Co is suspending all production in Japan until at least Sunday. Honda manufactured 69,170 cars in January in Japan, where it made 24 percent of its cars.

Nissan Motor Co said output has been stopped at three out of four of its car assembly factories in Japan. Nissan made 81,851 cars in January in Japan, where it manufactured 23 percent of its vehicles.

It will resume production on March 17 and March 18 at its Kyushu plant while supply inventory lasted. Operations after Saturday March 19 were yet to be decided.

Goldman Sachs said in a report that rough calculations indicated the profit impact of stopping production for one day would be about 6 billion yen ($74.3 million) for Toyota and 2 billion yen for Honda and Nissan.

Mazda Motor Corp said it still plans to suspend production at two plants in southwestern Japan to March 20, but has not decided on how to proceed after that.

Fuji Heavy Industries Co said all five of its car and car parts-related plants for its Subaru-brand vehicles in Gunma prefecture, north of Tokyo, will be closed until at least Sunday.

ELECTRONICS MAKERS:

Sony Corp opened one factory, which makes optical films, used in LCDs and also manufactures adhesives, on Wednesday. Seven plants, which make an array of devices from IC cards to blu ray discs to lithium batteries, remain closed.

Sony is not sure when the plans will resume operations. Some of the plants' output is supplied to other manufacturers, including customers overseas.

Toshiba said output was still halted at a factory in Iwate prefecture making system LSI chips used in microprocessors and image sensors. It has begun work to bring the factory back on line but has no time frame to resume output.

Toshiba said on Thursday an assembly line in a plant in Japan making small liquid crystal displays for smartphones and other devices will be closed for a month to repair damaged machinery.

Canon said it may not be able to resume production this week at three plants that sustained serious damage in the quake. One manufactures lenses, another makes ink jet printers and the third produces equipment for manufacturing LCD screens.

Canon said it was also forced to suspend production until Friday at one of its main plants in Oita, on the southern island of Kyushu, where it makes cameras, lenses and compact photo printers. The world's largest maker of digital cameras said it was having difficulty securing necessary parts.

Nikon Corp said four of its production facilities were closed, including two out of its precision equipment plants, but the effect on cameras and lenses is seen as minor, since almost all output for those devices is done in Thailand.

Nikon does not have a timetable to re-open the plants.

Panasonic said none of its manufacturing northern Japan facilities, including those making optical pick-ups and other electronic parts, digital cameras and audio equipment were badly damaged but it would take time to resume operations as infrastructure needed to be restored.

Renesas , the world's No. 5 chipmaker, said it has halted operations at eight of its facilities and was unsure when it would restart production at the locations.

OTHERS

Shin-Etsu Chemical , the world's leading maker of silicon wafers, said two of its plants near the worst-hit areas remain offline. The firm is unable to say when it will restart operations.

A portion of the silicon wafer production at these plants is shipped to chip companies overseas. The company is trying to boost production elsewhere, particularly of 300-millimetre wafers, to make up the shortfall. - Reuters

Nikon closes 4 plants in Japan, OSK Research Neutral on Notion VTec

KUALA LUMPUR: OSK Research is maintaining its Neutral call on Notion VTec for now with an unchanged target price of RM1.85 at 7.0 times FY11 PER after Nikon Corp said four of its production plants in Japan were closed.

Reuters reported on Thursday, March 17 the facilities included two out of its precision equipment plants, but the effect on cameras and lenses is seen as minor, since almost all output for those devices is done in Thailand.

Nikon does not have a timetable to re-open the plants.

Shares of Notion VTec fell three sen to RM1.71 at 4.23pm with 316,500 shares done.

OSK Research said it was maintaining its'' NEUTRAL call for now at an unchanged TP of RM1.85 at 7x FY11 PER pending more affirmative signals from Nikon as the magnitude of damage to its core facilities and the restoration timeline are currently uncertain.

'The downside risks to earnings are likely to go up if Nikon's suspension of operations and production halt are prolonged,' it said.

Notion's camera division contributed more than 50% of its consolidated revenue as of 1QFY11, with Nikon as its key customer.

'Prolonged disruption in Nikon's operation and production could put a dent on our earnings forecasts although we gather from management that there is no immediate stop order on its cam barrel production for now,' it said.

OSK Research also said it understood the company wasactively discussing with Nikon on possible relocation of all machining works previously handled at the Sendai Nikon factory to Notion's Factory 3 in Klang, which has clean room facilities and ample room for such contingencies.

The research house said Factory 3 has a built-up of 190,000 sq ft and was previously meant for 2.5-inch baseplate production.

'Nonetheless, we gather that the agreement has yet to be finalised at this point of time,' it said.

Mukhriz: Japan quake may impact auto, L&G, electronics sectors

KUALA LUMPUR: The automotive, liquefied natural gas (LNG) and, electrical and electronics sectors are expected to feel the impact of the earthquake and tsunami that hit Japan last week, said International Trade and Industry Deputy Minister Datuk Mukhriz Tun Mahathir.

He said on Thursday, March 17 several Japanese automotive parts factories and suppliers were located in the areas affected by the natural disasters.

Mukhriz anticipated some Japanese companies operating in Malaysia to face difficulties in obtaining electric and electronic components from Japan.

"Japan is a big economy, the third largest economy after the US and China, what happens in Japan will have some ripple effect on the world," he told reporters after addressing a seminar on "Asean Economic Community and Malaysia's FTA Initiatives".

Mukhriz said the LNG sector was likely be affected by Japan's nuclear energy crisis which could force the country to dig into its reserves.

The ministry is adopting a "wait and see" approach before deciding on revising total trade on the back of a short-term trade slowdown in the coming months, he said.

"It's too early, we are looking at the implications. That's beyond anyone's control and it is also driven by industry," he said.'' - Bernama

Shanghai Composite closes down 1.1pct, Nikkei ends 1.4pct lower

SHANGHAI: China's main stock index closed down 1.1% on Thursday, March 17, hit by losses in nuclear power equipment makers, on growing concerns over radiation leaks in Japan and after China suspended nuclear approvals.

The benchmark Shanghai Composite Index ended at 2,897.3 points. The index hovered above the key 125-day moving average, now at 2,853 points, after a 1.2% drop on Wednesday.

In Tokyo, Japanese stocks fell on Thursday and domestic investors said they were posed to keep selling on rising yen volatility and a nuclear power plant crisis. Foreign buyers, drawn to valuations a cheap as Lebanon's, steadied the market after an early tumble.

The benchmark Nikkei average ended 1.4 percent lower at 8,962.67, recovering from the intraday low of 8,639.56. The yen dominated the session.

The Japanese currency slid after surging past a record peak against the dollar in white-knuckle trading that could have been linked to a stock market slump after an earthquake and tsunami hit Japan on Friday, damaging a nuclear power plant in Fukushima, north of Tokyo.

The rebound in dollar/yen helped short-covering in the stock market, said Yutaka Miura, senior technical analyst at Mizuho Securities.

CONSTRUCTION []-related stocks, expected to benefit from rebuilding efforts, were among the biggest gainers. Elsewhere funds were unsure how to take positions for the longer term.

TEPCO TRADES

Tokyo Electric Power Co , the operator of the stricken nuclear plant leaking radioactive material , plunged 62% from its last traded price on Friday. It was the most actively traded share on the Tokyo Stock Exchange's first section.

Nikkei futures listed in Osaka were down 0.8 percent to 8,930 , trimming some losses after falling as far as 8,400 at the start of trade.

The broader TOPIX was down 0.8 percent to 810.80 after briefly rising to positive territory.

The Bank of Japan offered on Thursday to inject a further 5 trillion yen ($61 billion) into the banking system, trying to calm markets in the wake of the yen's spike to a record high against the dollar. - Reuters

Ho Hup sees 1m shares done off-market at 59.5 sen each

KUALA LUMPUR: Ho Hup CONSTRUCTION [] saw one million shares transacted in an off-market deal at 59.5 sen each in the morning session on Thursday, March 17.

This was 15.5 sen above the last transacted price of the shares at 44 sen in regular trade.

Ho Hup fell two sen to 44 sen at 12.30pm.

CapitaMalls Malaysia REIT fixes placement shares at RM1.06 each

KUALA LUMPUR: CapitaMalls Malaysia REIT Management Sdn. Bhd has fixed the issue price of 144,859 million new units at RM1.06 per unit.

It said on Thursday, March 17 that it had successfully identified placees for the proposed placement to raise gross proceeds of RM153.55 million.

CIMB and JPMorgan Securities (Malaysia) Sdn Bhd acted as joint placement agents for the placement exercise.

FBM KLCI back in the red as Japan weighs

KUALA LUMPUR: Asian markets extended their losses at mid-day after falling in early trade on Thursday, March 17 as Japan struggled to battle the aftermath of a devastating earthquake that has triggered what could possibly become the worst nuclear disaster since the Chernobyl incident in 1986.

Japan's economy seems to be in a state of almost suspended animation as its nuclear crisis shows no sign of ending, sorely testing analysts' hopes for a swift rebound led by reCONSTRUCTION [] efforts, according to Reuters.

Indeed, with trillions of yen wiped off share markets and a surging yen currency squeezing the all-important export sector, economists fear an extended slump is inevitable, it said.

The FBM KLCI fell 0.35% or 5.22 points to 1,487.22, weighed by losses at banking and blue chip stocks.

Losers led gainers by 491 to 141, while 199 counters traded unchanged. Volume was 474.92 million shares valued at RM666.08 million.

The ringgit weakened 0.41% to 3.0645 versus the US dollar; crude palm oil for the third month delivery fell RM23 per tonne to RM3,324, crude oil shed 11 cents per barrel to US$97.87 while gold fell US$6.18 per troy ounce to US$1,392.70.

At the regional markets, Japan's Nikkei 225 fell 2.17% to 8,896.76, Hong Kong's Hang Seng Index lost 1.79% to 22,294.31, Singapore's Straits Times Index fell 0.96% to 2,942.42, Taiwan's Taiex was down 0.83% to 8,255.85, South Korea's Kospi fell 0.62% to 1,945.92 and the Shanghai Composite Index gave up 0.51% to 2,915.98.

United PLANTATION []s was the top loser this morning and fell 64 sen to RM16.86; MTD Capital fell 32 sen to RM10.52, MSC and IJM Land 18 sen each to RM3.87 and RM2.65, Turiya 16.5 sen to 53.5 sen, LPI Capital and F&N 18 sen each to RM13.14 and RM15.50, HELP 13 sen to RM2.55 and BAT 12 sen to RM45.02.

Among banks, CIMB fell nine sen to RM7.91, RHB Capital and AMMB seven sen each to RM7.93 and RM6.22, Hong Leong Bank five sen to RM9.34 and Maybank four sen to RM8.66.

TECHNOLOGY []-related stocks also declined, with MPI down four sen to RM5.26, Unisem two sen to RM1.84, JCY International one sen to 59.5 sen and Notion Vtec down six sen to RM1.68.

Timber-related stocks were among the major gainers this morning on expectations of an increase in demand in the aftermath of Japan's earthquake.

Meanwhile, MIDF Research in a note March 17 said local timber companies will be the main beneficiary when Japans starts to rebuild the earthquake disaster areas as Malaysia is their largest plywood exporter accounting for 48% of Japan's total plywood.

Japan imports more than 50% of the total plywood for its consumption, it said.

Ta Ann surged 33 sen to RM5.31, Jaya Tiasa 30 sen to RM5.40, Lingui 13 sen to RM1.59, while WTK, which was the most actively traded counter with 18.5 million shares done, added 11 sen to RM1.65.

Other gainers included Subur Tiasa, Nestle, PPB, Kulim and MMSV.

SEGi warrants done off-market at RM2.08

KUALA LUMPUR: SEG INTERNATIONAL BHD [] saw four million warrants transacted at RM2.08 each in an off-market deal on Thursday, March 17.

At 12.30pm, the warrants were down six sen to RM2.33. The mother share fell two sen to RM3.46.

The exercise price of the warrants was RM1, which shows the warrants are still in the money.

On April 21, 2010, SEGi announced the exercise price per warrants at RM1 was then a premium of six sen over the adjusted closing price of the shares of 94 sen on April 20, 2010 after the share split.

Under the corporate exercise, up to 89.09 million warrants were issued at five sen per warrant with a tenure of five years from the date of issuance.

OCI to be removed from Bursa Securities from March 21

KUALA LUMPUR: OCI Bhd will be removed from the Official List of Bursa Securities with effect from 9am, Monday, March 21.

The company said on Thursday, March 17 it had received a letter from the regulator, dated March 16 about the removal of the entire issued and paid up capital of OCI.

Short-lived rebound at Asian markets

KUALA LUMPUR: Asian markets retreated on Thursday, March 17 as Japan's nuclear crisis deepened and Wall Street tanked overnight on the back of weak new housing starts.

Operators of a quake-crippled nuclear plant in Japan again deployed military helicopters on Thursday in a bid to douse overheating reactors, as US officials warned of the rising risk of a catastrophic radiation leak from spent fuel rods, according to Reuters.

Japan's Nikkei 225 fell more than 4% at one point in early trade, dragging most key regional markets with it as investors spooked by the uncertainties of the Japan's quake and nuclear crisis on the global economy started avoiding risky assets.

The FBM KLCI fell 0.34% or 5.11 points to 1,487.33 at mid-morning.

Market breadth was weaker with 371 losers against 67 gainers, while 133 counters traded unchanged. Volume was 169.12 million shares valued at RM200.77 million.

At the regional markets, Japan's Nikkei 225 fell 2.09% to 8,903.86, Hong Kong's Hang Seng Index lost 2.05% to 22,235.53, the Shanghai Composite Index was down 1.07% to 2,899.42, South Korea's Kospi fell 1.17% to 1,935.15, Taiwan's Taiex down 0.98% to 8,243.37 while Singapore's Straits Times Index lost 1.06% to 2,939.49.

BIMB Securities Research in a note March 17 said the situation at the Japan nuclear plant was at best uncertain and its emergency plan so far looked trembling, with investors fearing that this may lead to one of the world's worst nuclear crisis since Chernobyl in 1986.

'Elsewhere, US reported a weak new home CONSTRUCTION [] figure in February, hammered by weak demand.

'Given the breadth of the selling of the selling momentum on Wall Street, we foresee the selling pressure in the local and regional markets to be inevitable today,' it said.

Meanwhile, MIDF Research chief economist Anthony Dass said he believed it was premature to sum-up that'' the worst from the Sendai disaster'' would actually come to pass despite perception that the disaster was less consequential in economic'' terms than Kobe quake due to where it occurred, a lesser of a manufacturing hub.

He said the setback would come from the electrical grid, from which the country may have lost about 7% of its generating capacity.

Nonetheless, he said the setback was temporary and ruled out neither an overly pessimistic outlook nor a 'V' recovery for Japan.

'We expect the economy to rebound in 2HCY2011 benefitting from the reconstruction work.

'We reiterate Malaysia's 5.3% real GDP outlook for CY2011 as we expect the blip to be temporary. The domestic economy is poised to benefit from exports when reconstruction work commences and will augur well for our timber sector in particular,' he said.

On Bursa Malaysia, United PLANTATION []s was the top loser at mid-morning and fell 90 sen to RM16.60; GAB lost 25 sen to RM9.54, LPI Capital 20 sen to RM13.10, IJM Land 18 sen to RM2.65, MSC 15 sen to RM3.90, KESM 11 sen to RM2.15, CIMB 10 sen to RM7.90 while RHB Capital and IJM Plantations fell nine sen each to RM7.91 and RM2.83.

Gainers included MTD Capital, Nestle, PPB, Ireka, Subur, KLK and TexChem.

Meanwhile, timber-related Ta Ann and Jaya Tiasa advanced on hopes of higher demand for their products as a result of the Japan earthquake. Ta Ann added 16 sen to RM5.14 while Jaya Tiasa rose nine sen to RM5.19.

IRCB was the most actively traded counter with 10.42 million shares. The stock shed half a sen to 27.5 sen.

''

Timber-related stocks advance at mid-morning

KUALA LUMPUR: Timber-related stocks advanced on Thursday, March 17 on expectations of an increase in demand for products following the earthquake in Japan last Friday.

At 11.10am, Ta Ann jumped 26 sen to RM5.24, Jaya Tiasa up 10 sen to RM5.20 and WTK added four sent to RM1.58.

AmResearch has maintained its overweight rating on the timber sector and its buy call on Ta Ann and Jaya Tiasa, with fair values of RM6.30 and RM6 respectively.

The research house said that the Ta Ann management informed it that there had been no supply disruption so far to Japan.

'Orders are placed once or twice in a month. Its shipments go through Osaka, south of Tokyo in the central-southern region, which was not affected by the tsunami,' it said.

Meanwhile, MIDF Research in a note March 17 said local timber companies will be the main beneficiary when Japans starts to rebuild the earthquake disaster areas as Malaysia is their largest plywood exporter accounting for 48% of Japan's total plywood.

Japan imports more than 50% of the total plywood for its consumption, it said.

'We believe the main beneficiary will be WTK and Ta Ann since these companies exposure to the Japan market is about 80-90% of their plywood sales.

'Between them, WTK has greater ''leverage since it is a pure timber company compared to Ta Ann whose earnings mainly ''comes from CPO with its plywood division registering loss due to the usage of more ''costly eco-friendly raw material sourced from its Tasmanian operation.

Lingui is the other beneficiary as it has close to 50% exposure to Japan's plywood sales, it said.

Securities Commission: Malaysian capital market at RM2 trillion end-2010

KUALA LUMPUR: The Securities Commission said the Malaysian capital market reached RM2 trillion at end-2010, recording an annual compounded growth of 11% from RM717 billion in 2000.

SC chairman Tan Sri Zarinah Anwar said on Thursday, March 17 the growth was boosted by rapid industry expansion and strong regulatory oversight that underpinned investor confidence in the Malaysian capital market.

In its Annual Report 2010, she said the equity market capitalisation grew by 27% from RM979 billion in 2009 to RM1.2 trillion in 2010 as market sentiment improved on the back of the launch of the new economic programmes.

'The initial public offering (IPO) market was also buoyant with 29 new listings in 2010. This was double the 14 listings recorded in 2009. The new listings raised RM19.79 billion with Petronas Chemicals Group Bhd having the distinction of being the largest IPO in Malaysia and South East Asia and successfully raising RM12.8 billion in November 2010,' she said.

As for the bond market, outstanding debt securities rose by 16.2% from RM653.2 billion in 2009 to RM758.7 billion in 2010.

In 2010, the SC approved 52 private debt securities for issuance with a value of RM63.6 billion as compared with 34 approved issues with a value of RM57.5 billion in 2009.

''

OSK Research keeps Buy call on Evergreen, lowers TP to RM1.73

KUALA LUMPUR: OSK Research said it recently received an update on Evergreen Fibreboard (EFB)'s business operations and found that a spate of increases in the prices of raw materials had chipped away the company's profits.

The research house said on Thursday, March 17 that Evergreen was also hit by a shortage of raw material and was unable to sell as much timber products, which in turn also affected its topline.

'These factors prompt us to lower our earnings estimates and arrive at a lower target price of RM1.73 from RM2.02 previously. The stock remains a BUY,' it said.

HDBSVR upgrades Top Glove to Hold, ups TP to RM5.30

KUALA LUMPUR: Hwang DBS Vickers Research upgraded Top Glove to Hold (from Fully Valued) and raised its target price to RM5.30 (from RM4.60) based on 13 times PE, after rolling forward our valuation base to CY12.

The research house said on Thursday, March 17 the key re-rating catalyst for the stock is a recovery in margins and earnings.

HDBSVR said the glove maker's 2QFY11 net profit of RM25.4m (-30% qoq; -64% yoy) was below its and market expectations.

'1HFY11 net profit of RM61.5m is only 31% of our full year forecast. The weak result was mainly due to (i) high latex prices (+29% qoq); (ii) continued weakening of USD vs the ringgit (-2% qoq); and (iii) flat demand.

'The company also took a longer time to pass on the higher costs to customers. Revenue edged down 1% qoq vs 9% drop in 1QFY11, while EBIT margin fell to 6.4% against 1Q's 9%. No dividend was declared for the quarter,' it said.

HDBSVR said post-2QFY11 results, it cut FY11F earnings by 10% and raised FY12-13F earnings marginally.

'We expect margins and earnings to recover in 2H FY11,' it said.

''

Firstly, restocking activities should pick up pace, following minimum orders in the last two quarters.

''

Secondly, margin pressure should ease as latex prices fall. Latex prices had tumbled from RM10.90/kg on 22 Feb to RM8.56 (-21%) on March 15.

''

Thirdly, a more balanced product mix would enable the company to weather volatile raw material costs.

''

'Top Glove has effectively raised nitrile gloves production share from 7% in 1Q to 11% in 2Q, and is targeting 15% by end 2011,' it said.

HDBSVR ups fuel price outlook to US$125 per barrel, cuts airlines earnings

KUALA LUMPUR:'' Hwang DBS Vickers Research said amidst the on-going uncertainties in the Middle East and North Africa region, fuel prices have soared substantially in the last 4 weeks

'We raise our average FY11 jet fuel assumptions from US$105 per barrel to US$125 per barrel and cut FY11 earnings by 10%-46% for the various regional airlines,' it said on Thursday, March 17.

HDBSVR said strong demand and fuel surcharges help to offset some but not all of the increase in fuel costs, with premium network airlines being better positioned than others to deal with higher jet fuel costs.

'We have downgraded MAS and AirAsia but still like SIA, Cathay Pacific, Thai Airways, Air China as well as China Southern Airlines, primarily as we believe share prices have declined beyond what is still a fairly sanguine outlook for these carriers,' it said.

OSK Research: Worst over for rubber gloves sector

KUALA LUMPUR: OSK Research said on Thursday, March 17 it believes the worst is over for the rubber gloves sector.

It said that one of the sector's two re-rating catalysts, that is latex price, has crashed, although the USD has not significantly changed against the MYR.

'Going forward, we expect latex price to fall further, which we think will support an earnings re-rating for the rubber glove manufacturers.

'We are upgrading the sector to Overweight, with our top picks being Top Glove, Supermax and Kossan,' it said.

Blue chips fall in early trade, CIMB weighs

KUALA LUMPUR: Blue chips on Bursa Malaysia fell at the start of trade on Thursday, March 17 as investors stayed cautious following the overnight fall on Wall Street and the earlier plunge of Japan stocks.

At 9.16am, the FBM KLCI was down 7.99 points to 1,484.45. Turnover was 72.34 million shares valued at RM72.23 million. Losers hammered gainers 263 to 38 while 80 stocks were unchanged.

MSC was the top loser, down 16 sen to RM3.89, F&N 14 sen to RM15.52, CIMB 12 sen to RM7.88 and MISC shed 10 sen to RM7.45. Mudajaya lost nine sen to RM4.51.