#Stocks to watch:* Infra stocks, Mamee, autos, MAA

KUALA LUMPUR: Stocks could ride on the positive local news flow from the two-day Invest Malaysia conference starting Tuesday, April 12 while focus could also be on selected Sarawak-linked stocks in the run-up to the April 16 elections.

Analysts expect the government might offer a progress report and reaffirm its commitment to achieve the long-term goals under the Economic Transformation Programme.

They are expecting the government to announce more high-impact projects to generate economic activity. The sectors identified as key growth engines include oil & gas and services and among their favourites are KNM and Dayang Enterprise.

Meanwhile, JP Morgan Asia Pacific Equity Research said Malaysia was under-owned and an oil price play. It said Malaysia was the only economy that is a net beneficiary of higher oil prices, as a net exporter of oil and oil seeds.

'In our view, the market should remain resilient as it is under-owned, with average allocations of emerging markets portfolio managers well below a MSCI neutral weight of 2.9%. We like the broader ETP theme which is gradually gaining traction, whose success will have a bearing on the upcoming general election, in our view,' it said.

Other analysts are expecting an update on the Greater Kuala Lumpur / Klang Valley catalyst, one of 12 National Key Economic Areas (NKEAs) under the ETP.

They said specifically, a progress report and timetable for the massive MRT project may be revealed. They CONSTRUCTION [] proxies are Gamuda and MMC while YTL Land is a MRT-related property play.

Shares of MAMEE-DOUBLE DECKER (M) BHD [] are expected to surge when they resume trading on Monday. Its major shareholders ' who collectively hold 79.1% -- have proposed a selective capital repayment (SCR) of RM4.39 a share to the remaining shareholders under a corporate exercise to take it private.

At RM4.39, this was a premium of 79 sen or 21.94% above the last traded price of RM3.60 on Wednesday, April 6.

Perusahaan Otomobil Kedua Sdn Bhd (Perodua) retained its top position in car sales in the first quarter ended March 31, 2011 (1Q2011) with 45,700 units and a market share of 29% -- underpinned by robust sales of the popular Myvi.

However, Perodua managing director Datuk Aminar Rashid Salleh said that 'moving forward, the 2Q and 3Q will be challenging, as our operations are impacted by the earthquake and tsunami which hit Japan on March 11, 2011'.

The Edge weekly reports that while the full impact of the disaster on Malaysian auto assemblers is yet to be seen, it has amplified sector risks. Auto delivery could be affected from 3Q if component supply problems continue for a prolonged period.

Stocks related to the Melewar group could see extended trading activities through MAA Holdings has pulled back slightly after the recent week-long price surge.

Last Friday, April 8 shares of Melewar Industrial Group and MYCRON STEEL BHD [] surged to multi-year highs in active trade, riding on the recent price jump in MAA HOLDINGS BHD [].

Melewar rose 22.5 sen to RM1.13 with 35.5 million shares done, and Mycron was up 15 sen to 81 sen. MAA fell four sen to RM1.34 with 84.1 million shares traded.

MAA Holdings is the parent company of the MAA group of companies and is controlled''by the Melewar Group. Khyra Legacy Bhd owns 38.86% of Melewar Industrial and 34.75% of MAA Holdings and 55.57% of Mycron.

MAA Holdings shares have surged from last Friday, April 1's close of RM1.03 despite a denial earlier this week over the sale of a 70% stake in Malaysian Assurance Alliance Bhd (MAAB) to Zurich Insurance Co. Ltd for an estimated RM1.2 billion.

On Wednesday, MAA denied the sale but said discussions were still ongoing.

Market falls in late sell-off, volume light

NEW YORK: U.S. stocks fell late on Friday, April 8 as a spike in oil prices revived worries that inflation would derail the recovery, jolting a market that had been treading water ahead of corporate earnings.

The uncertain outcome of budget talks in Washington and the prospect of a U.S. government shutdown as a midnight deadline loomed spurred investors to buy protection ahead of the weekend. Many traders bought short-term put options on the SPDR S&P 500 Trust (SPY.P).

"The tape is heading south in light volume. People are hoping that nothing bad happens over the weekend," said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles.

The surge in oil prices drove down shares of airlines and transportation companies. The Arca Airline index .XAL shed 2.7 percent and the Dow Jones Transportation Average .DJT fell 1.7 percent.

Brent crude futures LCOK1 settled above $126 a barrel, the highest level in 32 months, as the weak dollar drove up commodities and intense fighting in Libya raised fears of prolonged supply cuts.

Trading volumes remained low, a sign that investors are holding off major new bets ahead of the release of quarterly earnings beginning next week.

The Dow Jones industrial average .DJI was down 29.59 points, or 0.24 percent, at 12,379.90. The Standard & Poor's 500 Index .SPX was down 5.36 points, or 0.40 percent, at 1,328.15. The Nasdaq Composite Index .IXIC was down 15.73 points, or 0.56 percent, at 2,780.41.

For the week, the Dow rose 0.03 percent while the S&P 500 and Nasdaq each lost 0.3 percent.

Trading volume was 6.47 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with last year's estimated daily average of 8.47 billion. - Reuters

Crude oil surges above $126, dollar slumps

NEW YORK: Oil surged to a 32-month high on Friday, April 8 above $126 a barrel on concerns about long-term supply cuts, while expectations of more interest rate hikes in Europe drove the euro to a 15-month peak against the U.S. dollar.

Gold rose to a record high for a fourth straight day as commodities gained broadly on expectations of stronger demand from the worldwide economic recovery and a weaker dollar.

European shares saw a five-week closing high, lifted by rising commodity stocks such as miners, and on optimism over the start of the first-quarter U.S. corporate earnings season next week. But Wall Street stocks ended lower on concerns about the impact of higher energy costs on the economy.

The MSCI main world equity index .MIWD00000PUS rose 0.5 percent to its highest since July 2008, and on track for its third consecutive weekly gain.

Interest rate hikes by China and the European Central Bank this week failed to contain the bullish outlook as investors eyeing heightened inflationary threats flocked to hard assets such as oil, gold and other precious metals as hedges.

"It's an across-the-board surge in all the commodities. Gold, oil ... they're all up. People are dumping the dollar and buying commodities," said MF Global senior commodity analyst Edward Meir.

Brent crude surged $3.98 to settle at $126.65 a barrel, its highest level since August 2008, as the war in Libya, unrest elsewhere in the Arab world and postponed elections in Nigeria drove bullish sentiment on oil.

U.S. crude settled up $2.49 to a 30-month high of $112.79.

The greenback was pressured by the prospect of a U.S. government shutdown as the White House and Congress struggled to break a budget impasse that threatens to shut down the U.S. government and idle hundreds of thousands of federal workers.

Boosted by Thursday's European Central Bank rate hike, the euro rose to its highest since January 2010. The currency was up more than 1 percent on the day at $1.4475 EUR=.

The ECB's move to raise its key interest rate to 1.25 percent has widened the euro zone's yield advantage over the United States, Britain and Japan, where rates remain at record lows.

"The market is ignoring all of Europe's fiscal and banking troubles and trading off a single indicator -- interest differentials," said Avery Shenfeld, chief economist at CIBC World Markets in Toronto.

Stronger-than-expected German trade data helped underscore the health of Europe's largest economy, helping investors side step resurgent doubts over the resilience of the zone following Portugal's request this week for aid.

U.S. stocks fell late in the session. The prospect of a government shutdown motivated investors to buy protection ahead of the uncertain outcome of weekend budget talks. Many traders were buying short-term put options on the SPDR S&P 500 Trust (SPY.P).

The Dow Jones industrial average .DJI was down 29.59 points, or 0.24 percent, at 12,379.90. The Standard & Poor's 500 Index .SPX was down 5.36 points, or 0.40 percent, at 1,328.15. The Nasdaq Composite Index .IXIC was down 15.73 points, or 0.56 percent, at 2,780.41. - Reuters

EU's Rehn excludes Greek debt restructuring

BERLIN/GODOLLO, Hungary: A restructuring of Greek debt is out of the question, Economic and Monetary Affairs Commissioner Olli Rehn said on Saturday, April 9.

German magazine Der Spiegel reported on Saturday that several euro zone finance ministers told European Central Bank President Jean-Claude Trichet in a conference call last week they had doubts if Greece would meet its fiscal targets and suggested Athens should restructure its debt.

"We do exclude (a Greek debt) restructuring. We have a solid plan and we are working on the basis of that plan and it is based on careful analysis of debt sustainability," Rehn told a news conference, when asked about the German magazine report.

The Der Spiegel report said several finance ministers had said Athens would be unable to meet its fiscal targets and return to the markets for funding next year and asked if a debt restructuring for Greece would be sensible in view of the situation. But Trichet blocked the idea and said he was not willing to discuss it, Der Spiegel said.

Asked to comment on the magazine report, Trichet echoed Rehn's comments:

"On Greece, I would say we have a plan, that plan has been approved by the international community and approved by the European institutions and we apply the plan."

Der Spiegel said Rehn had told the EU Commission last week that any idea of a Greek restructuring, if it were to be required, should not be discussed in public but would simply happen at some point.

Der Spiegel said Trichet feared that a restructuring could damage confidence in the entire euro zone and could hit banks holding Greek debt hard.

German Finance Minister Wolfgang Schaeuble viewed Trichet's concerns about capital markets to be exaggerated and not credible, Der Spiegel said.

In Godollo, Hungary, where EU finance ministers and central bankers met on Saturday for a second day of informal talks, Schaeuble warned against fueling speculation in financial markets. Speculation over solutions to Greece's problems when it has to return to normal debt markets next year was not helpful, he said.

"We are at any moment ready to cooperatively find solutions to new problems," Schaeuble said.

"They are not advanced by speculative remarks." - Reuters

IOI Corp invests S$114.77m in JV for Singapore property devt

KUALA LUMPUR: IOI Corp Bhd is investing S$114.77 million in a Singapore property company which will develop premium office space, luxury hotel, high-end retail outlets and prestigious city residences along Beach Road in the island republic.

IOI Corp said on Friday, April 8 the land, measuring 376,295 sq ft (8.64 acres), had a leasehold tenure of 99 years.

IOI Corp said the investment would be via its unit, IOI Consolidated (Singapore) Pte Ltd, which had subscribed for a 49% stake in Singapore's Scottsdale PROPERTIES [] Pte Ltd for cash consideration of S$114.77 million.

Scottsdale owns 66.67% of South Beach Consortium Pte Ltd (SBC), which was incorporated to take part in a design tender for the piece of land along Beach Road under the Singapore Government land sale programme in 2007.

IOI Corp said SBC was successful in the tender and acquired the land for S$1.689 billion. As at Dec 31, 2010, SBC has total assets of S$2.02 billion and net assets of S$681.8 million,' it said.

'The acquisitions present an opportunity for IOI to be involved in an iconic development in Singapore downtown area with a sizeable mix of office, hotel, residential and retail components.

'The substantial size and location of the development which is in close proximity to such landmarks as Suntec City Convention Centre and Raffles Hotel will make this development one of the most popular and prominent mixed-use developments in downtown Singapore,' said IOI Corp.

The other shareholder in Scottsdale is Ascent View Holdings Pte Ltd, a unit of City Developments Ltd, which holds 50.1%.

IOI Corp said IOI Consolidated would advance S$27,730,499 to Scottsdale as a shareholder loan which was in proportion to its shareholding in Scottsdale upon the completion of the subscription.

IOI Consolidated and Ascent View might be required to contribute further equity in proportion to their respective shareholdings in Scottsdale (about S$500 million each) to acquire/redeem existing mezzanine notes earlier issued by SBC, for working capital requirements and to part finance the CONSTRUCTION [] of South Beach.

'The acquisitions will entail a total investment of up to S$816.8 million (equivalent to RM1.96 billion) by IOI Consolidated,' it said.

South Beach is a mixed use development land parcel bounded by Beach Road, Bras Basah Road, Nicoll Highway and Middle Road.'' IOI Corp said the total land area is 376,295 square feet (8.64 acres) and has a leasehold tenure of 99 years.

The development will comprise of premium office space, luxury hotel, high-end retail outlets and prestigious city residences.

'It is preliminary to ascertain the total development cost or expected profit from the development as SBC is in the progress of refining the design plans and undergoing value-engineering reviews to enhance South Beach's development efficiency and cost effectiveness,' it said.

Parkson ventures into Indonesia

KUALA LUMPUR: PARKSON HOLDINGS BHD []'s unit East Creat International Ltd (ECI) has entered into a conditional joint-venture agreement with PT Mitra Samaya and Parkson Retail Asia Pte Ltd (Parkson Asia) to combine its Malaysian and Vietnam retail business with the Indonesian retail business of PT Tozy Bintang Sentosa (TBS).

Parkson Asia is a wholly owned subsidiary of ECI.

Parkson said on Friday, April 8 that collaboration involved the acquisition of the entire 100% shareholding of PT Tozy Sentosa, a unit of TBS by Parkson Asia for US$13 million.

Upon completion of the acquisition, Mitra Samaya will subscribe for shares in and become a 9.9% shareholder in Parkson Asia.

The collaboration also involves the injection of Parkson Corporation Sdn Bhd by ECI into Parkson Asia, it said.

Parkson said the financing for the collaboration would be sourced from internally generated funds.

'The proposed collaboration provides the company 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.

Mamee major shareholders propose RM4.39 a share capital repayment, 22pct over last traded price

KUALA LUMPUR: MAMEE-DOUBLE DECKER (M) BHD []'s major shareholders ' who collectively hold 79.1% -- have proposed a selective capital repayment (SCR) of RM4.39 a share to the remaining shareholders under a corporate exercise to take it private.

At RM4.39, this was a premium of 79 sen or 21.94% above the last traded price of RM3.60 on Wednesday, April 6.

Mamee said on Friday, April 8 that it had received a letter from Tanah Subor Sdn Bhd, acting on behalf of the non-entitled shareholders, requesting for the SCR to be made to the entitled shareholders owning the remaining 20.9%.

The non-entitled shareholders would also waive their entitlements to repayment of capital under the SCR. They include Mamee directors Datuk Pang Chin Hin, Datuk Pang Tee Chew and Datuk Pang Tee Nam, who are acting in concert with Tanah Subor and the four hold a combined 63.95% stake in Mamee. The other parties acting in concert with the four parties own another 15.15%.

Mamee said as at April 6, its paid-up share capital was RM145.66 million comprising 145.66 million shares (excluding treasury shares). The paid-up would be reduced by cancelling the shares held by all entitled shareholders. This would reduce the paid-up by RM179.81 million or 179.81 million shares.

'In view that the number of Mamee shares to be cancelled is higher than the existing issued and paid-up share capital of Mamee, a bonus issue may be proposed and undertaken by MAMEE to increase the paid-up share capital of Mamee up to a level which is sufficient for the capital reduction,' it said.

Upon completion of the exercise, the non-entitled shareholders would own 100%of Mamee.

Mamee said the proposed SCR would be funded via an advance from the non-entitled shareholders and/or financing facilities to be obtained by Mamee from financial institution(s).

'The non-entitled shareholders have indicated that they do not intend to maintain the listing status of Mamee on the Main Market of Bursa Malaysia Securities Bhd upon completion of the proposed SCR,' it said.

Mamee said the board, had in its fourth quarter results announcement for FY10,'' expressed concern about the trend of increasing raw material prices as well as the foreign exchange volatility amidst the uncertain economic environment.

To maintain the group's competitiveness in the prevailing competitive market environment, substantial capital expenditure may need to be incurred to improve productivity and to expand production capacity.

To fund the capital expenditure, the Group may need to incur higher bank borrowings and this may result in higher borrowing costs which will then affect the dividend payment capability of Mamee in the immediate term.

Mamee also said its shares have been thinly traded. The daily average trading volume of Mamee shares over the past one year up to April 6 was about 88,696 Mamee shares, representing approximately 0.22% of Mamee's total free float of 40.059 million shares.

Given the challenging market environment and low trading liquidity of Mamee shares, the poposed SCR represents an opportunity for the entitled shareholders to realise their investments in Mamee at an attractive premium above the historical trading prices of Mamee.

''

Alliance Bank's RM600m debt notes get overwhelming response

KUALA LUMPUR: Alliance Bank Malaysia Bhd's first tranche of RM600 million subordinated medium term notes (MTN) has received overwhelming response from a diverse spectrum of investors.

ALLIANCE FINANCIAL GROUP BHD [] group chief executive officer Sng Seow Wah said on Friday, April 8 said there was strong response and bids from the investors.

'The order book was more than six times the issue size and the final pricing was well within the lower band of initial price guidance,' he said. The coupon rate has been fixed at 4.82% per annum, payable semi-annually for the entire tenure.

The subordinated notes issued will have tenure of 10 years and is callable five years after the issue date and on every coupon payment date thereafter, at the option of the issuer and subject to BNM's approval.

The proceeds from the issuance of the first tranche shall be used to redeem the existing RM600 million subordinated bonds of Alliance Bank callable on May 26, 2011.

Alliance Investment Bank Bhd was the principal adviser and lead arranger for the subordinated MTN programme, whilst OCBC Bank (Malaysia) Bhd, OSK Investment Bank Bhd together with Alliance Investment were the joint lead managers for the subordinated notes.

The subordinated notes issued were part of the RM1.5 billion subordinated MTN programme. They are also eligible for inclusion as tier-2 capital of Alliance Bank under Bank Negara Malaysia's (BNM) capital adequacy regulations.

The subordinated MTN programme is rated A2 with stable outlook by RAM Rating Services Bhd. The ratings agency also reaffirmed the long- and short-term financial institution rating of Alliance Bank of A1 and P1 respectively.

Bursa Malaysia, 6 bourses launch Asean brand identity

KUALA LUMPUR: Bursa Malaysia and six other Southeast Asian stock markets have collaborated to launch the Asean brand identity, Asean Exchanges website and Asean Stars to promote the growth of the regional capital market.

Bursa Malaysia said on Friday, April 8 these initiatives were part of the collaboration of Asean Exchanges to bring more regional investment opportunities to more people.

The members of the Asean Exchanges are Bursa Malaysia, Hanoi Stock Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, The Philippine Stock Exchange Inc., Singapore Exchange and The Stock Exchange of Thailand.

Bursa Malaysia said the Asean brand identity encompassed a logo that represented the spirit of cooperation between Southeast Asian nations, based on a common element among these nations ' the colors of each nation's flags.

This launch event was announced at the 15th Asean Finance Ministers' Meeting in Bali and was attended by Asean finance ministers and Asean exchanges.

The Asean Exchanges website (www.aseanexchanges.org) feature the Asean Stars and other Asean centric products and initiatives. Investors would have an integrated single-window view into the Asean capital market with a combined market capitalisation of about US$1.8 trillion and participation of more than 3,000 companies.

Some of these companies are the largest and most dynamic companies in the world including leaders in finance and banking, telecommunications, commodities, automotive manufacturing and other industrial sectors.

ASEAN Stars comprise of 30 most exciting stocks from each exchange ranked in terms of market capitalisation and liquidity. These two initiatives are expected to serve as a tool for the promotion of ASEAN investment opportunities.

Asean Exchanges will jointly promote the development of Asean as an asset class through a collaborative framework with the intent of increasing liquidity to member exchanges.

Bursa Malaysia chief executive officer Datuk Tajuddin Atan said the Malaysian stock exchange viewed the cooperative nature of this collaboration as critical towards greater global attention to Malaysia as part of an exciting Asean investment destination.

'We hope international investors will appreciate the strong proposition of high growth and potential of Malaysia as an ASEAN asset class to drive greater intra-Asean trading and investment activity, consequentially spurring higher liquidity to this region,' he said.

Asean Exchanges' CEOs comprise of'' Tajuddin, Dr Tran Dac Sinh of Hochiminh Stock Exchange, Tran Van Dzung of Hanoi Stock Exchange, Ito Warsito of Indonesia Stock Exchange, Hans B. Sicat of Philippine Stock Exchange, Magnus Bocker of Singapore Exchange and Charamporn Jotikasthira of the Stock Exchange of Thailand.

FBM KLCI ends week on lackluster note

KUALA LUMPUR: ''The FBM KLCI ended the week on a lackluster note, as some mild profit taking chipped away the slight gains it had made a day earlier on Thursday.

The FBM KLCI fell 4.44 points to 1,557.49, weighed by losses including at IOI Corp, CIMB, Tenaga and AMMB.

Gainers edged losers by 418 to 405, while 321 counters traded unchanged. Volume was 1.67 billion shares valued at RM2.12 billion.

Meanwhile, Japan's Nikkei stock average closed at its highest since the March 11 earthquake, with short-covering encouraged by an "outperform" rating for beleaguered Tokyo Electric Power and a government plan to avoid rolling power blackouts, according to Reuters.

Commodity trading advisers in the Nikkei futures market helped lead the short-covering while gains in commodity prices and further declines in the yen against the euro helped as well, it said.

At the regional markets, Japan's Nikkei 225 rose 1.85% to 9,768.08, the Shanghai Composite Index gained 0.74% to 3,030.02, Singapore's Straits Times Index was up 0.49% to 3,187.31, Hong Kong's Hang Seng Index added 0.47% to 24,396.06, South Korea's Kospi was up 0.27% to 2,127.97 while Taiwan's Taiex shed 0.08% to 8,894.54.

Among the major losers on Bursa Malaysia, IOI Corp fell seven sen to RM5.65, CIMB six sen to RM8.26, Tenaga eight sen to RM6.11 and AMMB nine sen to RM6.57.

BAT fell 64 sen to RM47.36, Nestle lost 54 sen to RM47.96, KLK 28 sen to RM21.22, United PLANTATION []s and Huat Lai fell 12 sen each to RM17.88 and RM1.36, Orient 10 sen to RM5.30 while TSR Capital and Subur Tiasa fell nine sen each to RM1.03 and RM3.53.

Gainers included Panasonic, Cepco, BHIC, Bintulu Port, Hong Leong Bank and Paramount.

Meanwhile, shares of Melewar Industrial Group and MYCRON STEEL BHD [] surged to multi-year highs in active trade today, riding on the recent price jump in MAA HOLDINGS BHD [].

Melewar rose 22.5 sen to RM1.13 with 35.5 million shares done, and Mycron was up 15 sen to 81 sen.

Meanwhile, MAA fell four sen to RM1.34 with 84.1 million shares traded.

MAA Holdings is the parent company of the MAA group of companies and is controlled''by the Melewar Group.

Khyra Legacy Bhd owns 38.86% of Melewar Industrial and 34.75% of MAA Holdings and 55.57% of Mycron.

MAA Holdings shares have surged from last Friday, April 1's close of RM1.03 despite a denial earlier this week over the sale of a 70% stake in Malaysian Assurance Alliance Bhd (MAAB) to Zurich Insurance Co. Ltd for an estimated RM1.2 billion.

On Wednesday, MAA denied the sale but said discussions were still ongoing.

#Update* Price surge in Melewar, Mycron, riding on MAAH

KUALA LUMPUR: Shares of MELEWAR INDUSTRIAL GROUP BHD [], Mycron have surged to multi-year highs in late afternoon trade on Friday, April 7, riding on the price surge of MAA HOLDINGS BHD [].

At 3.59pm, Melewar Industrial was up 30.5 sen to RM1.21, Mycron 22.5 sen to 88.5 sen and MAA Holdings 14 sen to RM1.52.

MAA Holdings is the parent company of the MAA group of companies and is controlled''by the Melewar Group.

Melewar Industrial posted net profit of RM1.94 million in the second quarter ended Dec 31, 2010 versus RM55.65 million a year ago. Its net assets per share were RM2.31.

Khyra Legacy Bhd owns 38.86% of Melewar Industrial and 34.75% of MAA Holdings and 55.57% of Mycron.

MAA Holdings shares have surged from last Friday, April 1's close of RM1.03 despite a denial earlier this week over the sale of a 70% stake in Malaysian Assurance Alliance Bhd (MAAB) to Zurich Insurance Co. Ltd for an estimated RM1.2 billion.

On Wednesday, MAA denied the sale but said discussions were still ongoing.

Perodua maintains first spot in car sales in 1Q with 45,700 units sold

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) retained its top position in car sales in the first quarter ended March 31, 2011 (1Q2011) with 45,700 units and a market share of 29% -- underpinned by robust sales of the popular Myvi.

However, Perodua managing director Datuk Aminar Rashid Salleh said on Friday, March 8 that 'moving forward, the 2Q and 3Q will be challenging, as our operations are impacted by the earthquake and tsunami which hit Japan on March 11, 2011'.

'We believe this situation is temporary and we will bounce back strongly,' he added.

Perodua stayed on pole position despite the challenging market conditions. Compared with a year ago, sales fell 4.4% from the 47,800 units in 1Q2010 and market share of 32.4%.

Aminar said competition has heated up with new product offerings and promotions by other manufacturers.

'Despite the challenging market conditions, we recorded the best sales in March 2011 with close to 18,000 units driven by the strong demand for Myvi, ViVA and Alza.'

The Myvi continued to be the country's top selling model, registering sales of about 21,500 units in 1Q2011, which was 19% more than the 18,000 units sold a year ago.

'We are proud of the sustaining power of this model which was launched six years ago. This is testimony to the quality and value-for-money attributes of Myvi,' Aminar said.

Perodua also sold some 15,900 units of the ViVA while the Alza was also the top seller in the multipurpose vehicle segment with 8,400 units in 1Q2011.

On Perodua's after-sales operations, Aminar said Perodua managed to increase its market share of service intake to 49% in 1Q2011 with 416,500 intake or 4% higher than the 45% market share and 400,800 intake a year ago.

By revenue, sales of parts and accessories also improved by 31% during the quarter under review.

Tenaga slips, analysts see challenging outlook

KUALA LUMPUR: Shares of TENAGA NASIONAL BHD [] fell in late afternoon on Friday, April 8 as analysts maintained a Sell on the power giant due to the challenging business outlook.

At 3.07pm, Tenaga was down eight sen to RM6.11 with 699,000 shares done.

The FBM KLCI lost one point to 1,560.93. Turnover was 993.07 million shares done valued at RM1.17 billion. There were 375 gainers, 362 losers and 315 stocks unchanged.

Maybank Investment'' Bank Research had maintained Tenaga as a Sell due to the challenging business outlook stemming from high coal prices, a shortage of natural gas supply and remote possibility of a tariff hike.

'We now use the EV/EBITDA valuation metric (previously DCF) as we think it captures more accurately the true health of utility companies given their high gearing.

'Our new target price of RM5.73 is based on 5.8x FY12 EV/EBITDA ' consistent with its long-term average. This implies 12.0x FY12 earnings, which we think is fair for its multiple challenges,' it said.

Melewar Industrial at more than 2-yr high, rides on MAAH price surge

KUALA LUMPUR: Shares of MELEWAR INDUSTRIAL GROUP BHD [] surged in late afternoon trade on Friday, April 7 to a more than two-year high, riding on the price surge of MAA HOLDINGS BHD [].

At 3.32pm, Melewar Industrial was up 24.5 sen to RM1.15 with 20.26 million shares done. MAA Holdings was up 13 sen to RM1.51 with 55.49 million units transacted. Both companies have a common major shareholder in Khyra Legacy Bhd.

The FBM KLCI shed 0.85 point to 1,561.08. Turnover was 1.15 billion shares valued at RM1.34 billion. There were 398 gainers, 383 losers and 298 stocks unchanged.

MAA Holdings is the parent company of the MAA group of companies and is controlled''by the Melewar Group.

Melewar Industrial posted net profit of RM1.94 million in the second quarter ended Dec 31, 2010 versus RM55.65 million a year ago. Its net assets per share were RM2.31.

Khyra Legacy Bhd owns 38.86% of Melewar Industrial and 34.75% of MAA Holdings.

MAA Holdings shares have surged from last Friday, April 1's close of RM1.03 despite a denial earlier this week over the sale of a 70% stake in Malaysian Assurance Alliance Bhd (MAAB) to Zurich Insurance Co. Ltd for an estimated RM1.2 billion.

On Wednesday, MAA denied the sale but said discussions were still ongoing.

Integrax redesignates Amin Halim Rasip to director from joint CEO

KUALA LUMPUR: INTEGRAX BHD [] says Amin Halim Rasip, the executive director and joint chief executive officer, has been redesignated to non-independent non-executive director.

Integrax said on Friday, April 8 that 'he will cease to be the joint chief executive officer of the company with immediate effect'.

FBM KLCI slips on mid profit taking

KUALA LUMPUR: Asian markets mostly rose at mid-day on Friday, April 7 in line with Japan's Nikkei 225 that reversed its early losses, as a strong aftershock last night following the March 11 earthquake and tsunami did not further damage the nuclear plant at Fukushima.

However, oil climbed to its highest level in 2-1/2 years on Friday as supply cuts stemming from attacks on Libyan oil fields offset demand concerns spurred by a major aftershock in Japan, according to Reuters.

Brent crude surged to an intraday high of US$123.50 a barrel, the highest since August 2008. The front-month May contract traded up 74 cents at $123.41 by 0441 GMT, it said.

At the local market, the FBM KLCI bucked the trend at the regional markets and shed 0.24 point to 1,561.69, weighed by losses including at Tenaga, CIMB, IOI Corp and Maxis.

Losers edged gainers by 352 to 332, while 320 counters traded unchanged. Volume was 815.32 million shares valued at RM932.68 million.

The ringgit strengthened 0.13% to 3.0230 versus the US dollar; crude palm oil futures for the third month delivery rose RM22 per tonne to RM3,353, crude oil added 80 cents per barrel to US$111.10 and gold jumped US$8.07 per troy ounce to US$1,466.15.

At the regional markets, Japan's Nikkei 225 jumped 1.58% to 9,742.54, South Korea's Kospi Index added 0.64% to 2,135.72, Hong Kong's Hang Seng Index gained 0.57% to 24,421.19, the Shanghai Composite Index was up 0.31% to 3,107.29 while the Singapore Straits Times Index and Taiwan Taiex rose 0.08% each to 3,174.05 and 8,909.15 respectively.

Among the decliners at the mid-day break, Tenaga fell six sen to RM6.13, CIMB and Maxis four sen each to RM8.28 and RM5.36, IOI Corp five sen to RM5.67 and Gamuda three sen to RM3.89.

Nestle fell 30 sen to RM48.20, Fima Corp 15 sen to RM6.08, Aeon 11 sen to RM5.80, Jaya Tiasa eight sen to RM6.47 while Goldis and AirAsia fell seven sen each to RM1.79 and RM2.58.

MAA was the most actively traded counter with 51 million shares done. The stock added 13 sen to RM1.51.

Other actives included Ramunia, Tatt Giap, Daya Materials, Timecom, JCY International, Iris Corp, Kurnia Asia and ManagePay Systems.

Gainers this morning included Panasonic, Hong Leong Bank, BHIC, Shell, Carlsberg and Boustead.

MRCB inches up on RM110m land acquisition deal

KUALA LUMPUR: Shares of MALAYSIAN RESOURCES CORP [] Bhd (MRCB) inched up in late morning trade on Friday, April 8 following its RM110 million land acquisition deal.

At 11.37am, it was up one sen to RM2.33 with 1.44 million shares done.

Amresearch reaffirmed its HOLD rating on MRCB with its fair value unchanged at RM2.40'' a share based on a 15% discount to its sum-of-parts-derived value of RM2.80 a share.

MRCB had proposed to acquire a company, 59 iNC Sdn Bhd, which has the rights to develop 27.41 acres of land in Setapak.

MRCB planned a mixed development project, comprising commercial and residential PROPERTIES [], with a gross development value (GDV) of RM1.5 billion.

At a total development cost of approximately RM1.2 billion, the expected profits to be derived from the development would be RM300 million representing 20% of the GDV.

Amresearch said it came to understand that 59 Inc has been granted conditional approval to be rightful owner of the said parcels of land provided that the Land Office is paid RM60.8 million for the release of the land.

'We understand the land is located in Setapak Jaya and sits very close to the Duta Ulu Kelang Highway (DUKE) exit,' it said.

The research house said MRCB was looking at developing a mixed commercial/residential project on those parcels of land with an estimated GDV of RM1.5bil with CONSTRUCTION [] to start in FY12F.

'Nonetheless, details are sketchy at this juncture especially on the development mix although we suspect the target market would be a medium to medium-high segment,' it said.

Amresearch said this was positive given its landbank in KL Sentral was depleting with only about 12 acres left for development with a remaining GDV of close to RM6 billion.

'We estimate the new Setapak development would only add about 4% to our SOP ' assuming a profit margin of 23%-25% to be developed over eight years. We expect earnings to jump by about 5%-8% for FY12F-FY13F. Nonetheless, we have not factored in anything given the land deal has not been completed,' it said.

On the flipside, it said MRCB was targeting RM1 billion in order book replenishment in FY11F. MRCB has submitted its bid for civil works on the expansion of LRT lines for package A and B worth some RM1.6 billion in total. It is also expecting renewal on on-going environmental projects in Kuala Sg Pahang and Perai worth about RM1 billion.

Limited gains on FBM KLCI at mid-morning

KUALA LUMPUR: The FBM KLCI erased its earlier losses on Friday, April 8 and rose slightly at mid-morning, in line with most key regional markets that shrugged off worries of the effects of a strong aftershock in Japan last night.

The FBM KLCI was up 1.39 points to 1,563.32 at 10am.

Gainers led losers by 252 to 189, while 260 counters traded unchanged. Volume was 327.16 million shares valued at RM299.05 million.

Asian shares inched up on Friday, as it appeared a strong aftershock in Japan's earthquake-ravaged northeast that hit U.S. and European markets had not done major damage, according to Reuters.

The euro retreated from 14-month highs after the European Central Bank's widely expected interest rate rise and a broad sell-off in the yen stalled, it said.

At the regional markets, Japan's Nikkei 225 was up 0.91% to 9,678.68, Hong Kong's Hang Seng Index added 0.14% to 24,315.19, South Korea's Kospi rose 0.46% to 2,131.91 and Taiwan's Taiex edged up 0.05% to 8,906.02.

Meanwhile, the Shanghai Composite Index fell 0.17% to 3,002.65 and Singapore's Straits Times Index was 0.02% lower at 3,170.92.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on April 8 said that due to the DJIA's marginally weaker tone last night, the FBM KLCI could be in a mild profit-taking mode today.

However, there appears to be firm bargain hunting activities ahead of Invest Malaysia 2011 on April 12 and 13. A recent high of 1,565.53 (April 4, 2011) could have been seen and a minor retracement phase may emerge.

'However, it is vital to hold above 1,529.41. Failure to do so would result in further range trading between 1,474 & 1,576,' he said.

The top gainer at mid-morning was Panasonic that rose 70 sen to RM24; DiGi was up 34 sen to RM29.68, Carlsberg 17 sen to RM8, Hong Leong Bank 16 sen to RM10.56, Shell 14 sen to RM10.92, while BHIC and Hai-O added 13 sen each to RM4.70 and RM2.38.

MAA was the most actively traded counter with 23.8 million shares done. The stock added 12 sen to RM1.50.

Other actives included Tat Giap, Ramunia, Iris, JCY International and Time.

Decliners included Nestle, BAT, Goldis, Jaya Tiasa, Coastal, MPHB, CMMT, Batu Kawan and Pintaras.

MAA rallies, up 50 sen or 48% on week

KUALA LUMPUR: Shares of MAA HOLDINGS BHD [] extended their gains to RM1.53 in mid-morning trade on Friday, April 8, notching gains of 50 sen or 48% within a week.

MAA shares were actively traded with 34 million units done. At 10.33am, it was up 15 sen to RM1.53.

However, the FBM KLCI eased 0.47 of a point to 1,561.46. Turnover was 466.78 million shares valued at RM450.91 million. There were 295 gainers, 244 losers and 280 stocks unchanged.

MAA shares have risen 50 sen from last Friday, April 1's close of RM1.03 despite a denial earlier this week over the sale of a 70% stake in Malaysian Assurance Alliance Bhd (MAAB) to Zurich Insurance Co. Ltd for an estimated RM1.2 billion.

On Wednesday, MAA denied the sale but said discussions were still ongoing.

Singapore Exchange ends ASX bid after Australia govt rebuff

SYDNEY/SINGAPORE: Singapore Exchange Ltd has terminated its US$8 billion bid for Australia's ASX Ltd after the Australian government formally rejected the offer on national interest grounds and said changes to the country's financial systems were needed before the bourse could be bought by foreigners.

It was the first time the Australia government has rejected a major foreign takeover on national interest grounds since 2001 when Royal Dutch Shell's bid for Woodside Petroleum was blocked.

SGX said on Friday it would pursue other strategic growth opportunities in the region and continue talks with ASX about other forms of cooperation.

The government's rejection, partly due to fears about losing control of Australia's clearing and settlement systems, effectively closes the door on SGX or any other party making a revamped offer for ASX for the time being.

Analysts say SGX may become a target itself or look at partnerships with other bourses.

"The SGX management would continue to look for other growth initiatives, which could come in the form of cooperation on other levels with ASX, set up more cross-listing platforms with other exchanges or attract a deeper pool of regional companies to list in Singapore," said James Koh, an analyst at Kim Eng Securities in Singapore.

Australian Treasurer Wayne Swan said the deal would have diminished Australia's economic and regulatory sovereignty, presented material risks and supervisory issues due to ASX's dominance over clearing and settlement and failed to boost access to capital for Australian businesses.

"It's not the right deal for Australia if we want to enhance our links into global capital markets. It's not the right deal for Australia if we want to grow our role as a financial services hub in Asia," Swan told reporters on Friday.

Exchanges around the world are chasing cross-border deals to build scale and cut costs amid increasing competition from alternative trading platforms such as dark pools.

The Tokyo and Osaka exchanges are in talks, Deutsche Boerse is competing with a partnership of Nasdaq OMX Group and InterncontinentalExchange to buy NYSE Euronext and the London Stock Exchange is looking to combine with Canada's TMX Group .

SGX and ASX announced the deal's demise five months after the two bourses announced they were in talks.

"As Asia's most international exchange, we will continue to pursue organic as well as other strategic growth opportunities, including further dialogue with ASX on other forms of cooperation," SGX said in a statement.

SGX shares were trading more than 2 percent higher on Friday at S$8.35, while ASX shares slipped 0.4 percent to A$33.35.

With concerns focused on clearing and settlement issues, Swan flagged an overhaul of the country's financial systems that analysts said could result in ASX being forced to spin-off some systems.

"A lot of exchanges across the world do not own the clearing and settlement systems. There is a lot of speculation about the need for the Australian government to step in, in times of crisis. Apparently the government does not have that ability now," said Mark Nathan, portfolio manager at Arnhem Investment Management in Australia.

Swan said he was concerned Australian capital and jobs would move to Singapore under the deal and rejected suggestions the deal would provide a gateway to Asian capital flows.

However, he said Australia was not closed to other offers, provided reforms to clearing and settlement systems were carried out.

"I remain open to the right deal for Australia if it comes along. And that is of course why I have asked the council of Australian regulators to advise me on how we can continue to ensure the strength and stability of Australia's financial system if there was a fresh application."

Investors had considered the deal all but dead after the government said earlier in the week it was inclined to reject the bid. SGX had said it had no current plans to amend its offer, but submitted additional information to FIRB on Thursday.

ASX said in a statement it still wanted to join the stock exchange consolidation sweeping the globe and would work with the government on any reform process.

Swan defended the decision, which sparked criticism from business leaders and many commentators in Australia, saying the country was still open for business.

Financial regulators are expected to establish a working group to consider reforms to the financial markets infrastructure. Swan was concerned ASX was the sole operator of the nation's clearing and settlement systems.

Swan said he would not oppose future deals if they protected Australia's financial architecture, enhanced the country's standing as a financial services centre in Asia, boosted access to capital for Australian businesses and supported growth in high-quality financial services jobs. ' Reuters

OSK Research maintains Buy on Ajiya, FV RM2.25

KUALA LUMPUR: OSK Research said although Ajiya's management is of the view that higher operating costs and competition will erode the company's earnings performance this year, the macro fundamentals suggest otherwise.

It said on Friday, April 8 with the Government's Economic Transformation Plan adding some spark to the building materials sector, and hence benefiting the company.

'Slightly lowering our estimates on conservatism, we maintain our BUY recommendation on the stock with a revised FV of RM2.25,' it said.

Sozo Global rises in early trade

KUALA LUMPUR: Sozo Global Limited shares advanced in early trade on Friday, April 8 after it inked a memorandum of understanding (MoU) with Halal Industry Development Corporation Sdn Bhd (HDC) to co-operate towards promoting and developing the Halal market.

At 9.25am, Sozo was two sen to 84 sen with 855,200 shares traded.

It said on Thursday, April 7 that HDC is involved in coordinating the development of Halal industry including but not limited to food and non food industries and services, leading the development of Halal standard and protecting the integrity of Halal products.

'Pursuant to MoU, HDC and Sozo are desirous to co-operate with each other in certain activities towards promoting and developing Halal market for both parties in particularly to create investment opportunities, transfer knowledge and business matching,' it said.

Sozo Global said the MoU would be valid for one year.

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Tat Giap active, up on Nippon Steel's plan

KUALA LUMPUR: Tat Giap Group Bhd shares were actively traded on Friday, April 8 after Nippon Steel Corp, the world's fourth largest steelmaker, said it intends to raise its stake in Tatt Giap subsidiary Nippon EGalv Steel Sdn Bhd, which manufactures electro-galvanised steel.

At 9.40am, Tat Giap was up 9.5 sen to 67.5 sen with 17.12 million shares traded.

According to a Reuters report yesterday, Nippon Steel planned to increase its stake in Nippon EGalv to 50.1% from 10% for US$6.5 million (RM19.7 million) by end-June.

Sony: power cut from aftershock halts two Japan plants

TOKYO, April 8 (Reuters) - Sony Corp said on Friday that two of its plants in northern Japan were halted by a power cut in the region following a powerful earthquake late the previous evening.

The Miyagi prefecture plants, which make optical devices and IC cards, had resumed partial production at the end of last month after being halted by the March 11 earthquake and tsunami.

Sony said production had resumed at a semiconductor laser factory also in the northern prefecture of Miyagi, after being suspended briefly for inspections.

Thursday night's magnitude 7.4 quake shook the devastated coast of northeast Japan and Jiji news agency said two people were killed.

Rival electronics firm Panasonic Corp said it was still confirming the status of its northern Japan plants, all but one of which had resumed operations following the March disaster.

CIMB Research maintains Outperform on Eksons, TP RM1.87

KUALA LUMPUR: CIMB Equities Research said Eksons Corp Bhd is bullish on the timber industry after the recent Japan earthquake.

It said on Friday, April 8 that although it currently does not export plywood to Japan, it is likely to do so in the not-too-distant future given the tight supply situation, especially with reCONSTRUCTION [] works in the offing in Japan.

'We are raising our FY3/12-13 EPS and DPS by 20-24% for higher plywood prices. We are also switching our valuation basis from an asset-based 3-year average P/BV of 0.6x to an earnings-based CY12 P/E of 7.2x, which is a 40% discount to our 12x target P/E for the timber sector.

'The large discount reflects its small market cap and lack of timber concessions. Our target price rises from RM1.32 to RM1.87, reinforcing our OUTPERFORM call. Potential share price triggers include the strong plywood price recovery and a further sales pick-up for its property project,' it said.

CIMB Research says MMHE rally may be at tail end

KUALA LUMPUR: CIMB Retail Research said Malaysia Marine & Heavy Engineering's share price is gyrating in a bearish wedge pattern.

'If our count is right, the rally from its Jan low is probably at its tail end. A fall below its 30-day SMA would confirm that the rally is over. Next supports are RM6.74 and RM6.50,' it said in its technical outlook for the share price on Friday, April 8.

CIMB Research said although prices could still bounce back, near term gains are likely capped at RM6.99-RM7.15. Hence, its strategy here is to unload on strength.

'Our short term negative view is supported by the easing technical readings. Bearish divergence was found in its MACD indicator while RSI too has hooked downward. However, put a buy stop at RM7.20,' it said.

CIMB Research sees breakout in Hai-O Enterprise share price

KUALA LUMPUR: CIMB Retail Research said Hai-O Enterprise has been gyrating in a descending wedge pattern for months.

It said on Friday, April 8 that recently, the share price hit a low of RM2.07 before bouncing a tad higher to current levels.

On Thursday, prices went close to test its 30-day SMA. A breakout would be medium term positive for the stock.

'The bullish divergence on the MACD suggests that momentum has picked up. RSI too has turned upward.

'Risk takers may start to nibble now ahead of the breakout. Next resistance is seen at RM2.43 and RM2.59. Always put a stop at below RM2.16,' it said.

HDBSVR sees market taking a breather

KUALA LUMPUR: Hwang DBS Vickers Research said while the underlying sentiment of the Malaysian stock market remains positive, it expects it to take a temporary breather on Friday, April 8.

Its benchmark FBM KLCI could slip marginally after a rise of 47.7-point or 3.1% over the last eight days.

Meanwhile, there was no overnight lead from Wall Street. Key U.S. equity indices came off between 0.1% and 0.2% at the closing bell in the absence of fresh catalysts.

HDBSVR said stocks that could be in the limelight include: (a) Tatt Giap as one business daily reported that Nippon Steel from Japan intends to raise its stake in a subsidiary of Tatt Giap that manufactures electro-galvanised steel; (b) Sozo Global following the signing of an MOU with the Malaysian government for a proposed cooperation to promote and develop Halal market; and (c) MRCB, which has proposed to buy a 100% stake in a property-based company for RM110m cash.

#Stocks to watch:* MRCB, Tatt Giap, Boustead, Lion Corp

KUALA LUMPUR: Regional markets could start off on a cautious note on Friday, April 8 after Wall Street slipped overnight as a major aftershock in Japan reignited fears about its nuclear power crisis.

The Dow Jones industrial average was down 17.26 points, or 0.14%, at 12,409.49. The Standard & Poor's 500 Index was down 2.03 points, or 0.15%, at 1,333.51. The Nasdaq Composite Index was down 3.68 points, or 0.13%, at 2,796.14.

Reuters reported that investors' greater faith in the U.S. economy's steady path held losses in check. A rise in retail stocks after better-than-expected March chain-store sales limited broader market declines as the data added to evidence of a sustained economic recovery.

Stocks to watch on Bursa Malaysia include MALAYSIAN RESOURCES CORP [] Bhd (MRCB), Tatt Giap Group Bhd, BOUSTEAD HOLDINGS BHD [] and Lion Corp Bhd.

MRCB expects to reap about RM300 million from a proposed mixed development project in Setapak, Kuala Lumpur. It proposed to acquire a company, 59 iNC Sdn Bhd, which has the rights to develop 27.41 acres of land in Setapak here, from RM110 million.

It planned to undertake a mixed development project, comprising commercial and residential PROPERTIES [], with a gross development value (GDV) of RM1.5 billion.

'At a total development cost of approximately RM1.2 billion, the expected profits to be derived from the said development amount to about RM300 million representing 20% of the GDV,' MRCB said.

The Edge FinancialDaily reports Nippon Steel Corp, the world's fourth largest steelmaker, says it intends to raise its stake in Tatt Giap subsidiary Nippon EGalv Steel Sdn Bhd, which manufactures electro-galvanised steel.

Boustead Holdings has set aside RM1 billion in capital expenditure this year to expand the businesses it recently acquired, PHARMANIAGA BHD [] and MHS Aviation Bhd, to boost group earnings.

Lion Corp is seeking the approval from the lenders to defer the repayment of its bonds and the coupon on loan stocks from April 30 to July 31.

The deferment involved the redemption of the outstanding nominal value of the Lion Corp B(a) bonds, class B (b) bonds amounting to RM54.35 million; repayment of the outstanding nominal value of the B debts amounting to US$100,000.

Sozo Global Limited has entered into a memorandum of understanding (MoU) with Halal Industry Development Corporation Sdn Bhd (HDC) to co-operate towards promoting and developing the Halal market.

Fitch Ratings affirmed IOI Corp Bhd's long-term foreign currency issuer default rating (IDR) at 'BBB+'. The outlook is stable.

The ratings agency said the senior unsecured rating on its US$500 million notes due 2015, guaranteed by IOI Corp, had also been affirmed at 'BBB+'.

US STOCKS-Wall St dips on Japan aftershock; retailers rise

NEW YORK: Wall Street slipped on Thursday, April 7 after a major aftershock in Japan reignited fears about its nuclear power crisis, but greater faith in the U.S. economy's steady path held losses in check.

A rise in retail stocks after better-than-expected March chain-store sales limited broader market declines as the data added to evidence of a sustained economic recovery.

Investors sought protection against further market declines following the magnitude 7.4 aftershock in Japan, but a move to safer assets did not materialize.

"It made people think that this is an ongoing crisis that could further hurt stocks, but one thing we didn't see is the flight to safety," said John Canally, economist at LPL Financial in Boston, Massachusetts.

The CBOE Volatility Index VIX, Wall Street's so-called fear gauge, closed up 1.2 percent at 17.11 after rising more than 2 percent earlier.

Chris McKhann, analyst at stock and options website optionMonster.com in Chicago, said the VIX had little reaction to the earthquake news, "further supporting the fact that nothing seems to shake this market."

Stocks had been mostly flat in early trading. The S&P 500 encountered strong technical resistance that stymied gains after a larger-than-expected drop in weekly initial U.S. jobless claims and data on the surprisingly strong March retail sales.

Among retailers, Costco Wholesale Corp beat expectations, and its shares gained 3.8 percent to $77.82. Macy's Inc rose 0.8 percent to $25.40, while Target Corp fell 2.6 percent to $49.62.

The Dow Jones industrial average was down 17.26 points, or 0.14 percent, at 12,409.49. The Standard & Poor's 500 Index was down 2.03 points, or 0.15 percent, at 1,333.51. The Nasdaq Composite Index was down 3.68 points, or 0.13 percent, at 2,796.14.

Volume was 7.06 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with last year's estimated daily average of 8.47 billion.

Bed Bath and Beyond Inc surged 10.5 percent to $54.55 a day after it forecast full-year earnings growth that would beat Wall Street expectations.

U.S.-listed shares of rare-earth stocks gained sharply, including Canada's Rare Element Resources, up 16.4 percent at $15.30 in New York. Shares of Avalon Rare Metals also of Canada, gained 9.6 percent to $9.52.

The aftershock in Japan did not cause a tsunami or any detectable damage at the Fukushima Daiichi nuclear plant, crippled from a massive March 11 quake. For details, see

U.S. Treasuries, the traditional safe-haven asset, rose only marginally after the earthquake.

The iShares MSCI Japan Index ETF dropped 0.8 percent, rebounding off lows, while dollar-denominated Nikkei futures slid 1.6 percent.

New York-traded shares of Japanese stocks fell, but some strategists said they might buy on the weakness.

"I'm looking at auto manufacturers, and I'm definitely looking to buy Honda if it gets cheap enough," said Tim Hartzell, chief investment officer for Houston-based Sequent Asset Management.

Honda Motor Corp shares rose 0.1 percent to $34.20.

Declining stocks outnumbered advancing ones on the NYSE by 1,872 to 1,116, while on the Nasdaq, decliners beat advancers by 1,658 to 935. - Reuters

GLOBAL MARKETS-Stocks slip after new Japan earthquake

NEW YORK: Stocks on major world markets slipped after a second earthquake rocked Japan on Thursday, April 7 while the euro retreated against the U.S. dollar after the European Central Bank raised interest rates but signaled it was not necessarily the start of a round of hikes.

U.S. and European stocks ended lower after an earthquake measuring 7.4 shook northeast and eastern Japan. A tsunami warning was issued for the northeastern coast but later lifted. For details, see [ID:nL3E7F72Y2]

However, Wall Street stocks ended off their lows for the day as better-than-expected sales reported by major retailers and good weekly jobs data boosted optimism for a sustained economic recovery.

European stocks ended down 0.2 percent and the S&P 500 finished down 0.15 percent. U.S.-dollar denominated Nikkei futures were down 1.6 percent. Japan is the world's third-largest economy and investors feared the new quake could harm the global recovery with some manufacturers' supplies from Japan already interrupted.

"It got people thinking that maybe this is not finished yet, and this is of a bigger scale than what we had expected," said Jack DeGan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

European shares had earlier gained after Portugal's request for European aid fostered hopes the region's debt crisis may be closer to an end. The pan-European European FTSEurofirst 300 stock index <.FTEU3> was down 0.2 percent. Portugal's stock market bucked the trend, with the PSI 20 <.PSI20> index up 1.2 percent.

The Dow Jones industrial average <.DJI> slipped 17.26 points, or 0.14 percent, to 12,409.49. The Standard & Poor's 500 Index <.SPX> lost 2.03 points, or 0.15 percent, to 1,333.51. The Nasdaq Composite Index <.IXIC> eased 3.68 points, or 0.13 percent, to 2,796.14.

World stocks as measured by MSCI <.MIWD00000PUS> were off 0.3 percent.

"CLOSE TO THE VEST"

The ECB raised its benchmark interest rate by a quarter percentage point to 1.25 percent to counter rising inflation. But ECB President Jean-Claude Trichet said it was not necessarily the start of a series of rate hikes, disappointing some who had expected a more hawkish tone. [ID:nLDE7351QH]

The euro was last down 0.3 percent at $1.4292, off a more than 14-month high of $1.4350 touched on Wednesday.

Spot gold hit a new record at $1,464.80 an ounce following Trichet's comments before easing back to trade slightly higher.

"His tone is decidedly neutral right now. He's keeping things very close to his vest," said Boris Schlossberg, director of research at GFT in New York, referring to Trichet's comments. "The euro trade has been so focused on interest rate differentials, so some of the fast money might come out of the trade."

It was the first rate increase since 2008 and followed a day after Portugal's caretaker government requested European Union aid at the urging of leading bankers. They wanted a bailout to help the economy and safeguard its banking system.

Portugal said it will make the formal request for aid later on Thursday. The rescue package could reach 85 billion euros ($122 billion).

Spain vowed it would not follow Portugal in seeking a bailout. A successful Spanish bond auction suggested markets do not fear contagion at the moment.

Investors got more signs of a firming labor market as new U.S. claims for unemployment benefits fell slightly more than expected last week. Other data showed March was not as bad as expected for many U.S. retailers even in the face of higher gasoline prices and retail stocks rose.

Among commodities, spot gold was up 0.1 percent in late trade after hitting a new peak. Chicago corn futures reached a fresh all-time high at $7.73-1/4 before ending lower ahead of the USDA's April supply/demand report early on Friday.

Oil prices ended at 2-1/2-year highs as supply worries due geopolitical turmoil overshadowed demand concerns. U.S. May crude futures closed up $1.47 at $110.30 a barrel, the best since Sept. 22, 2008. - Reuters

Wells Fargo cuts 1,900 jobs as refinancings slow

SAN FRANCISCO: Wells Fargo & Co said on Thursday, April 7 it is shedding about 1,900 jobs, or less than 1 percent of its total workforce, as mortgage refinancings slow.

The San Francisco-based lender said notices went out March 23 giving the employees 60 days to find new jobs. Some will be reassigned in the company, spokesman Jason Menke said.

A majority of the jobs were temporary, created last year when refinancings surged due to record-low interest rates.

"They were hired during the last several months to assist us with application volumes," Menke said. "We had seen a significant increase in demand for mortgage refinancings throughout 2010."

"Interest rates were favorable by historical standards," Menke said. "Interest rates have edged up a bit. That's part of it."

The layoffs are occurring in Wells Fargo locations across the United States, Menke said, and affect about 3 percent of Wells Fargo's total mortgage staff of 52,000. - Reuters

Power producer Northern Utility Resources up for sale

KUALA LUMPUR: Northern Utility Resources Sdn Bhd (NUR), which operates an in-situ independent power utility (IPU) in Kulim, is up for sale, according to Ernst & Young.

It said on Thursday, April 7 the receivers and managers of NUR had advertised an invitation to Malaysian companies, including joint ventures or consortia with foreign equity participation not exceeding 25%, to submit their expressions of interest to acquire NUR's 100% equity in a group of three companies.

To recap, the group operates an in-situ IPU within the Kulim Hi-Tech Park in Kedah that holds licences to operate an IPU for a period up to 2028.

The group currently generates, supplies, transmits and distributes 170MW at gazetted tariffs to multi-national tenants in the 1,700-ha industrial park. The IPU is an infrastructure driving force for the growth of the park, it said.

Ernst & Young said interested parties keen to acquire NUR should have strong financial standing and meet the requirements set by the Energy Commission and other regulatory authorities for operating an IPU.

The deadline for interested parties to submit their expression of interest to the receivers and managers was by May 12.

Those interested in investing in the IPU may obtain a preliminary information memorandum after signing a confidentiality agreement and payment of RM5,000.

Ernst & Young said these parties could contact Judy Tang at Tel: 03-7495 7890 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Fiona Soh at Tel: 03-7495 7880 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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MRCB to acquire 59 iNC for RM110m, plans RM1.5b mixed devt

KUALA LUMPUR: MALAYSIAN RESOURCES CORP [] Bhd (MRCB) has proposed to acquire a company, 59 iNC Sdn Bhd, which has the rights to develop 27.41 acres of land in Setapak here, for RM110 million.

MRCB said on Thursday, April 7 it planned to undertake a mixed development project, comprising commercial and residential PROPERTIES [], with a gross development value (GDV) of RM1.5 billion.

'At a total development cost of approximately RM1.2 billion, the expected profits to be derived from the said development amount to about RM300 million representing 20% of the GDV,' it said.

MRCB said it had entered into a share sale agreement with Fadzil Ahmad, Usman Suratman and Mohd, Shamir Mohd Hassan for RM110 million cash consideration to acquire the entire stake in 59 iNC.

To recap, it said 59iNC had received a letter from the Land Office that it had granted a conditional approval for 59iNC to be the legal and beneficial owner of three plots of vacant government land in Mukim Setapak measuring 27.41 acres for mixed development.

'However, for the land to be granted to 59iNC, a payment of up to RM60.8 million (land revenue), being the alienation premium, quit rent and other charges, is to be paid to the Land Office within three months from Feb7, 2011,' it said.

MRCB said the purchase consideration took into account the outstanding land revenue payable by MRCB via 59iNC, the market value of the land of RM155.20 million as ascribed by C H Williams Talhar & Wong and the prospects of 59iNC's intended mixed development.

MRCB said the land would be developed from 2012 over eight years into a mixed development comprising both commercial and residential properties with an estimated GDV of about RM1.5 billion.

At a total development cost of approximately RM1.2 billion, the expected profits to be derived from the said development amount to about RM300 million representing 20% of the GDV.

MRCB said the proposed acquisition would enable MRCB to expand its land bank and investment in strategic property developments to enhance the group's profile and earnings prospect.

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Bank of England holds rates, leaves limelight to ECB

LONDON: The Bank of England held interest rates at a record-low 0.5 percent on Thursday , April 7 despite a surge in inflation, ceding the limelight to the European Central Bank, which was expected to raise borrowing costs less than an hour later.

A majority of BoE policy makers continue to judge the economic recovery too shaky to withstand higher rates, betting that inflation of 4.4 percent -- more than double the target -- will ease once oil and food prices come down.

Meanwhile the ECB, dealing with a much smaller inflation problem, has left little doubt that a first post-crisis rate hike was on the cards on Thursday.

All but one of 67 economists polled by Reuters had expected the BoE to leave its key rate at 0.5 percent on Thursday, where it has been since March 2009.

The Bank of England's rate-setting Monetary Policy Committee said last month that a rise in oil prices, fanned by tension in the Middle East and North Africa, had increased risks to both inflation and growth.

So far there is little evidence that Britain's economy has enjoyed a strong rebound from the shock contraction at the end of 2010, which economists believe is needed to convince BoE head Mervyn King and the majority on the MPC that it is time to hike rates. - Reuters

ECB raises rates 25 bps in exit from crisis policy

FRANKFURT: The European Central Bank raised interest rates by 25 basis points to 1.25 percent on Thursday, April 7, announcing its first hike since July 2008 to counter firming inflation pressures in the 17-country euro zone.

The euro was steady after the decision, which ECB policymakers had flagged heavily in advance. All but four of 80 economists polled by Reuters last week expected a 25 basis point rise.

The increase in the ECB's benchmark refinancing rate marks a gentle exit from the central bank's policy response to the global financial crisis. It had held the refi rate at a record low 1.0 percent since May 2009.

The ECB also raised its deposit rate by 25 basis points to 0.50 percent, and increased its marginal lending rate by the same amount to 2.0 percent.

"A -- no surprise. B -- the euro zone economy is strong enough to stand it, and C -- it will be a little problem for the euro zone periphery but as long as the Eurosystem continues generous emergency assistance for stricken banks in the periphery, the periphery can bear it," said Berenberg Bank economist Holger Schmieding.

The rate decision came less than 24 hours after Portugal announced it was seeking European Union support, a decision long expected by financial markets.

Lisbon's announcement had not changed market expectations for a rise in rates, but ECB President Jean-Claude Trichet's news conference at 1230 GMT will be eyed for signs markets are still justified in expecting more than one further rate hike this year.

For months the central bank has been privately pushing Lisbon to accept assistance, and the fact it has finally happened may free the ECB to take a firmer line on the budding inflationary risk.

The ECB is concerned that firm oil prices -- near 2-1/2 year highs -- could boost inflation expectations and financial markets are pricing in two further quarter-point rises in interest rates this year to follow a move on Thursday.

But the Frankfurt-based bank must be careful not to hurt the euro zone's struggling economies by jacking up rates fast and Trichet, who shocked markets last month by signalling an April hike, may not want to heighten expectations for further rises.

"I think it is the start of a series but I think Trichet ... will try to temper any market expectations, which are already priced in, of further hikes to come," said Lloyds interest rate strategist Eric Wand.

Bank-to-bank lending rates have already risen on rate hike expectations. The three-month Euribor rate has risen over 25 basis points since the start of the year and hit its the highest level since June 2009 on Thursday.

With Greece, Ireland and Portugal all being forced to rely on international bailouts and struggling to generate growth, the rate hike will carry risks. But the central bank believes it can tighten policy slowly enough to avoid doing serious damage.

It feels re-establishing its inflation-fighting credibility is more important to avert an upward spiral of prices and wages. Euro zone inflation rose to 2.6 percent last month, above the ECB's medium-term target of just below 2.0 percent.

''

TEMPERING EXPECTATIONS

Last month, Trichet dusted off the phrase "strong vigilance", which in the past signalled a rate rise was only a month away.

If, at Thursday's news conference, he omits a reference to rates being "appropriate" and says the ECB is monitoring inflation "very closely", markets will expect another rise in the coming months. But economists expect him to be coy.

The ECB may soften the impact of its key refi rate hike by leaving a subsidiary rate unchanged -- a move that will be closely watched to gauge just how nervous the bank is about inflation and how much pain it thinks the periphery can bear.

The ECB's overnight deposit rate, which acts as a floor for short-term market rates, could be exempted from the hike and left at 0.25 percent. This would make the refi rate rise largely symbolic; actual money market rates which guide the cost of bank borrowing might barely move.

An important issue that Trichet may have to dodge is when the ECB will phase out its offers of unlimited loans. These were introduced as an emergency step but have now become a liability, injecting so much money into banks that the ECB cannot effectively control market rates.

Last month, euro zone official sources told Reuters the ECB was close to creating a new liquidity facility that would support weak banks in Ireland and elsewhere, helping it eventually to phase out unlimited loans.

However, disagreements within the Governing Council over how much aid the central bank should provide to countries have caused that plan to be suspended. In the absence of an alternative to unlimited loans, Trichet will probably be unable to say anything explicit about ending them. - Reuters

Fitch affirms IOI Corp at 'BBB+'; outlook stable

KUALA LUMPUR: Fitch Ratings affirmed IOI Corp Bhd's long-term foreign currency issuer default rating (IDR) at 'BBB+'. The outlook is stable.

The ratings agency said on Thursday, April 7 the senior unsecured rating on its US$500 million notes due 2015, guaranteed by IOI Corp, had also been affirmed at 'BBB+'.

'The rating affirmation reflects IOI's strong operating cash generation and liquidity and its modest financial leverage.

'PLANTATION [] operations, which drive the majority of its cash generation, benefit from the strong maturity profile of its Malaysian plantations and the company's position as a low cost producer of crude palm oil (CPO),' it said.

Fitch said IOI's plantation ventures in Indonesia were broadly self-funding. Its downstream operations, which off-take most of IOI's CPO production, captured additional value from this vertical integration; however, profitability of these operations was thin due to high raw material costs.

IOI's traditional property development operations in Malaysia were performing well. However, its property development ventures in Singapore have been weak thus far and may need some financial support from the joint-venture partners, including IOI.

IOI's financial leverage as measured by adjusted debt net of cash to operating EBITDAR (including RM978 million of joint-venture debt guaranteed by IOI as of June 2010) was 0.8 times and its fund flow from operations to interest coverage was 7.7 times at end-December 2010.

Fitch said IOI's liquidity was strong with cash reserves of RM3.7 billion at end-December 2010 against limited debt maturities of around RM476 up to December 2011.

'IOI is expected to continue generating strong cash flows from plantations supported by robust CPO prices. Fitch notes that investments, in its core areas of operations - plantations, downstream operations and property - are an important growth driver for the company.

'Additionally, IOI has shown that it is committed to returning capital to shareholders during periods of excess liquidity, after having distributed a total of around RM5 billion over the last three fiscal years,' it said.

The ratings agency noted that although IOI's current gearing (as measured by net debt to equity) of around 10% was considered conservative for its current rating, it was far below the company's long-term target of 50%. Consequently, positive rating action was considered unlikely over the next 12 months.

Any major debt-funded investments or changes in the company's capital management leading to leverage being sustained over 2.5 times and/or increasing its business risk profile would put pressure on IOI's ratings.

Bank Negara international reserves up US$3.4b as at March 31

KUALA LUMPUR: Bank Negara Malaysia's international reserves rose US$3.4 billion to US$113.8 billion (RM344.5 billion) as at March 31 this year, from US$110.4 billion as at March 15.

In a statement Thursday, April 7, Bank Negara said the reserves level as at March 31 March had taken into account the quarterly adjustment for foreign exchange revaluation.

'The reserves position is sufficient to finance 8.4 months of retained imports and is 4.3 times the short-term external debt,' it said.

Fitch says shareholding restriction on banks may be relaxed over long term

KUALA LUMPUR:'' Fitch Ratings said it believed the shareholding restriction on local commercial banks might be relaxed over the long-term given the government's aim to liberalise the banking sector.

Foreign shareholdings in a local commercial bank are subject to a 30% cap and Bank Negara Malaysia's approval.

In its rating outlook report of Malaysian banks, Fitch said on Thursday, April 7 it was mostly stable, underpinned by favourable economic prospects and modest inflation risks in 2011.

It said the banks' sound balance sheets and earnings would provide a buffer against a possible renewed global economic slowdown, particularly amid weaknesses in many western economies and the ongoing unrest in the Middle East.

'Fitch further highlights that the ratings of the major local banks are rather high relative to many banks in emerging markets, reflecting the reasonably strong banking sector and a stable operating environment. They showed resilience during the recession in 2008/2009, with only a slight decline in their profitability and no capital impairment,' it said.

Fitch said the three largest Malaysian banks by assets - MALAYAN BANKING BHD [] (Maybank, 'A-'/Stable), PUBLIC BANK BHD [] and CIMB Bank Bhd (CIMB, 'BBB+'/Positive) - have individual ratings of 'B/C', as the banks' standalone financial positions are underpinned by their dominant domestic franchise and sound credit profiles.

The ratings agency said however, rating upside, particularly on the individual rating, was limited in the near term, as it is rare for banks in emerging markets to have an individual rating around 'B', due to their more challenging operating environments than developed markets, such as higher volatility and developing institutional frameworks.

The other four rated local banks - Hong Leong Bank Berhad (HLBB, 'BBB+'/Stable), RHB Bank ('BBB'/Stable), AmBank (M) Berhad ('BBB'/Stable) and EON Bank (EON, 'BBB-'/Rating Watch Positive) have Individual Ratings of 'C' and/or 'C/D'.

'Some upside to their ratings could be driven by consolidation, especially if it were to significantly boost their scale and franchise, provided there is adequate quality capital. EON's ratings are currently on Rating Watch Positive, as its risk profile will strengthen should the proposed takeover by higher-rated HLBB take place,' it said.

Among the local banks, Maybank and CIMB have the largest overseas presence. Others have followed suit, albeit on a much smaller scale, and Fitch expects this trend to continue given the high level of saturation of and competition in the domestic banking system.

The Malaysian banks have shown interest mostly in Indonesia and Thailand due to favourable growth prospects and their geographical proximity. They have so far taken a prudent approach and maintained sound capital buffer to mitigate the challenges often found in such less-developed countries.

Foreign shareholdings in a local commercial bank are subject to a 30% cap and Bank Negara Malaysia's approval.

As this may have impeded operational and financial integration between the local banks and their respective foreign shareholders, Fitch has not factored in institutional support in the banks' Support Ratings, which could otherwise have led to higher Long-Term Issuer Default Ratings for some of them.

Fitch believed that the shareholding restriction may be relaxed over the long-term given the government's aim to liberalise the banking sector.

Lion Corp seeks to defer repayment of remaining bonds, loan stocks

KUALA LUMPUR: Lion Corp Bhd is seeking the approval from the lenders to defer the repayment of its bonds and the coupon on loan stocks from April 30 to July 31.

It said on Thursday, April 7 that it had issued notices of meetings dated April 6, to the holders of the bond, US dollar debts and redeemable convertible secured loan stocks (RCSLS) which it had issued.

The deferment involved the redemption of the outstanding nominal value of the Lion Corp B(a) bonds, class B (b) bonds amounting to RM54.35 million; repayment of the outstanding nominal value of the B debts amounting to US$100,000.

It also sought the deferment on the payment of the coupon on the class B(a) RCSLS, class B(b) RCSLS and Class B(c) RCSLS amounting to RM26.97 million.

Lion Corp said the meeting of the lenders was scheduled to be held on April 26, 2011.

Sozo Global inks MoU with Halal Development Corp

KUALA LUMPUR: Sozo Global Limited has entered into a memorandum of understanding (MoU) with

Halal Industry Development Corporation Sdn Bhd (HDC) to co-operate towards promoting and developing the Halal market.

It said on Thursday, April 7 that HDC is involved in coordinating the development of Halal industry including but not limited to food and non food industries and services, leading the development of Halal standard and protecting the integrity of Halal products.

'Pursuant to MoU, HDC and SOZO are desirous to co-operate with each other in certain activities towards promoting and developing Halal market for both parties in particularly to create investment opportunities, transfer knowledge and business matching,' it said.

Sozo Global said the MoU would be valid for one year.

''

Green palm oil body censures IOI, Unilever keeps supply ties

KUALA LUMPUR: An industry body for eco-friendly palm oil has censured Malaysia's second largest palm oil planter, IOI Corp, saying it has drained peatlands and felled forests on Borneo island to expand and that it could face further sanctions.

The Roundtable on Sustainable Palm Oil (RSPO), a group of planters, NGOs and consumers, said its grievance panel found IOI to have breached its membership obligations, making it the second firm after Indonesia's SMART to face censure.

RSPO said IOI's current applications to certify its PLANTATION []s as environmentally and socially responsible have been suspended but key buyer, consumer goods giant Unilever, said it would keep supply ties with the firm.

"Failure to deliver the required proposal ... will result in the RSPO considering further sanctions, which may include the suspension of (the) IOI licence," RSPO said in a statement on its website seen on Thursday, April 7.

IOI has until May 2 to come up with an acceptable solution to the issues raised, the RSPO said.

The censure follows complaints by green groups over IOI's environmental practices in Malaysia's Borneo state of Sarawak, including a protracted land dispute with a local community.

RSPO's move will invite further scrutiny of the $30-billion palm oil industry that has tried to boost its green credentials in the wake of an aggressive campaign by activists as well as consumers shunning palm oil-based products.

Unilever on Thursday said it would continue to buy palm oil from IOI's mills that have already been certified green, playing down concerns that IOI's customers would sever ties and hit earnings.

"IOI can still trade the oil from mills certified in the past," Jan-Kees Vis, global director of sustainable sourcing development at the Anglo-Dutch consumer goods giant, told Reuters.

Based on RSPO data, IOI has four green certified mills. Another three have been audited and the remaining five mills were scheduled to be audited by the end of this year.

Vis declined to say how much palm oil Unilever sourced from IOI but the firm is one of the biggest buyers of the tropical oil, used in products like Dove soap and Stork margarine.

IOI shares were up 3 percent after the Unilever statement, recovering from losses notched the previous day.

"For now we do not expect the suspension to affect the group's operations as it will merely delay the certification of new estates," Malaysian investment bank CIMB said in a note.

"(But) this is a negative surprise and may tarnish the group's image as a sustainable palm oil producer."

''

MORE PRESSURE

IOI said on its website that the company accepted the RSPO's decision and would work with the industry body to find a solution, especially for the land dispute issue.

But it warned that activists were making unfair and false statements against the planter.

"Merely pressuring one party will not guarantee or facilitate the successful conclusion of the discussion said," IOI said.

U.S.-based green activists Rainforest Action Network welcomed the RSPO statement and called on agribusiness giant Cargill, the largest palm oil importer to the U.S., to scrutinise its relationship with IOI.

"This ruling reinforces RAN's demand that Cargill institute basic safeguards on its supply chain to ensure it is not selling palm oil from stolen indigenous lands to American consumers," said Lindsey Allen, RAN forest programme director.

The spotlight has fallen on IOI as Golden Agri Resources , the parent of Indonesia's SMART, joined the RSPO and pledged to commit to producing green palm oil as both companies raced to win back their customers. [ID:nL3E7F41I0]

Major palm oil consumers, such as Unilever and Nestle , stopped buying from SMART because of environmental concerns, and have yet to resume supply ties, traders said. - Reuters

Local fund buying lifts KLCI to highest since Jan 19

KUALA LUMPUR: Local fund buying of key stocks helped nudge the FBM KLCI to close at 1,561 on Thursday, April 7, the highest since Jan 17 with gains seen in banks and PLANTATION [] stocks.

At 5pm, the KLCI was up 9.04 points or 0.58% to 1,561.93. Turnover was 1.57 billion shares valued at RM2.28 billion. Advancers led decliners 441 to 352 while 323 stocks were unchanged.

The KLCI is just 13 points away from the all-time closing high of 1,574 on Jan 17, which was then driven by foreign buying.

The head of institutional dealing at a local bank-backed brokerage said most of the buying was by local funds. He expected the market to extend its gains at least until the Sarawak elections.

Among the regional markets,'' Japan's Nikkei 225 rose 0.07% to 9,590.93, Shanghai's Composite Index 0.22% higher at 3,007.91, Taiwan's Taiex Index 0.56% to 8,901.72 but Singapore's Straits Times Index shed 0.03% to 3,169.46.

At Bursa, investors chose to ignore negative news including those from IOI Corp and MAA. IOI Corp rose 17 sen to RM5.72, pushing up the index by 2.67 points.

IOI Corp recouped all its losses from Wednesday when it fell on concerns about the impact of the suspension of its current and ongoing certification process.

Fitch Ratings has affirmed Malaysia-based IOI Corporation's long-term foreign currency issuer default rating (IDR) at 'BBB+'. It said the outlook was stable. The senior unsecured rating on its USD500m notes due 2015, guaranteed by IOI Corp, has also been affirmed at 'BBB+'.

Among the banks, Hong Leong Bank rose 30 sen to RM10.40, HLFG 26 sen to RM9.37, AMMB 15 sen to RM6.66 while Maybank rose five sen to RM9.20 and CIMB four sen to RM8.32.

Among the top gainers were Nestle, up 90 sen to RM48.50, DiGi 54 sen to RM29.34, BHIC 37 sen to RM4.57 and Carlsberg 24 sen to RM7.83.

Goldis surged 29 sen to RM1.86 after it announced the proposed sale of its entire 78.15% stake in Hoepharma Holdings Sdn Bhd for RM289 million.

MAA rose 18 sen to RM1.38 with 64.81 million shares despite the company's denial of a news report that it was selling a 70% stake in its insurance unit for RM1.2 billion.

Profit taking saw MMHE sliding 15 sen to RM6.96, while Asas shed 12 sen to 88 sen and Subur Tiasa also 12 sen to RM3.62.

MAA rises, traders ignore denial of insurer sale for RM1.2b

KUALA LUMPUR: Shares of MAA HOLDINGS BHD [] rose in late afternoon trade on Thursday, 7 as traders ignored the company's denial of a news report that it was selling a 70% stake in its insurance unit for RM1.2 billion.

At 4.08pm, MAA was up seven sen to RM1.27 with 34.76 million shares done.'' It extended its gains from Wednesday, when it closed 22 sen higher at RM1.20 with 73.76 million units transacted.

The FBM KLCI rose 4.59 points to 1,557.48. Turnover was 1.25 billion shares valued at RM1.69 billion. There were 398 gainers, 370 losers and 314 stocks unchanged.

On Wednesday, MAA denied that it was selling a 70% stake in its unit Malaysian Assurance Alliance Bhd (MAAB) to Zurich Insurance Co. Ltd for an estimated RM1.2 billion.

However, it was still in discussions on the disposal of MAAB to Zurich Insurance.

#Update* Mitsui & Co. buys 30% stake in Khazanah's Integrated Healthcare for RM3.3b

KUALA LUMPUR: Mitsui & Co., Ltd. of Japan is acquiring a 30% strategic stake in Khazanah Nasional Bhd's unit Integrated Healthcare Holdings Sdn Bhd for RM3.30 billion.

Khazanah said on Thursday, April 7 Mitsui's subsidiary would subscribe to 989 million of new ordinary shares or 18% of the enlarged share capital of Integrated Healthcare; and acquire 661 million existing shares or 12% of the enlarged share capital.

'Integrated Healthcare will raise RM1.978 billion as new equity as part of this transaction whilst its Pulau Memutik Ventures would raise RM1.322 billion from the sale in the form of rights to allotment to be renounced in favour of Mitsui's subsidiary upon the fulfillment of condition precedents,' said Khazanah.

PMV and Mitsui's subsidiary will also enter into a shareholders' agreement, upon completion. Mitsui will nominate two members to the boards of Integrated Healthcare and Parkway Holdings Ltd following the completion of the transaction.

Khazanah managing director Tan Sri Azman Mokhtar said Khazanah started discussions with Mitsui 16 months ago and this landmark transaction marks another significant milestone in building the leading regional healthcare franchise.

'We also believe this partnership will be the start of other collaboration between Khazanah and its investee companies and Mitsui in other sectors and geographies that we could work together on.'

Mitsui president and CEO Masami Iijima said this was an excellent opportunity for Mitsui to become a partner of Khazanah and to contribute to the future prosperity of Asia.

'Mitsui believes that Integrated Healthcare will provide solutions to emerging demand of better quality and safe, trustworthy healthcare services.

'Mitsui is determined to contribute to the continuing growth and success of Integrated Healthcare by utilising our global business network. Mitsui also looks forward to developing various activities, through the partnership with Khazanah,' he said.

JCY up in active trade, next target 86.5 sen

KUALA LUMPUR: Shares of JYC International rose in active trade on Thursday, April 7 as CIMB Research said based on the technical chart, the share price was building another base before making next charge towards 86.5c

At 3.18pm, JCY was up 6.5 sen to 81 sen with 27.74 million shares done while the call warrants, JCY-CC rose two sen to eight sen.

The FBM KLCI rose 3.57 points to 1,556.46.'' Turnover was 1.02 billion shares valued at RM1.30 billion. There were 403 gainers, 331 losers and 315 stocks unchanged.

CIMB Retail Research, in its technical charting outlook, had said it had a Buy on JCY I at 74.5 sen where it is trading at a FY12 PE of 8.7 times and a price-to-book value of 1.7 times.

It said on Thursday, April 7 JCY rose to a high of 79 sen after breaking out from the wedge pattern.

'At present, the stock is building another foundation before making the next charge. A breakout from its bullish flag pattern would likely push prices towards 79 sen and 86.5 sen next,' it said.

CIMB Research said MACD histogram bars are losing some pace but it added the odds still favoured the bulls. RSI too has hooked upward.

'Traders may consider going long now. To limit exposure, one can put a stop at below 72 sen, its recent swing low. A fall below the 70.5 sen support channel would indicate that a deeper correction is forthcoming,' it said.

On March 31, JCY non-independent executive director James Wong King Kheng said the the hard-disk drive manufacturer was in the midst of courting one of the world's leading electrical and electronic (E&E) companies from Japan as its new client.

He was quoted saying JCY was confident of winning over the new client.

In its financial year 2010, the company had secured contracts to supply hard disk drive (HDD) mechanical components to two new major customers in the E&E industry from Japan and South Korea.

IOI Corp recoups part of losses, RHB keeps underperform, FV RM5.90

KUALA LUMPUR: Shares of IOI Corp Bhd rose on Thursday, April 7, recouping nearly half of its losses from the previous day on concerns about the impact of the suspension of its current and ongoing certification process.

At 3.50pm, IOI Corp was up seven sen to RM5.62 with 24.04 million shares done. It fell 17 sen to RM5.55 the previous day.

The Roundatable on Sustainable Palm Oil (RSPO) had suspended the current and ongoing certification process of all IOI Corp's estates with immediate effect in response to grievances brought about by NGOs.

The grievances were regarding: 1) land dispute over native customary land leased by IOI for palm oil production in Sarawak; 2) drained peat land on endangered wildlife habitat and clearing of forest area; and 3) illegal deforestation and non compliance to RSPO Principles & Criteria.

IOI Corp was given 28 days until May 2 to revert with an acceptable solution.

RHB Research said it believed this suspension has more to do with the NCR land dispute in Baram, Sarawak, than any other issue.

Although the Miri High Court ruled last year that the land was rightfully NCR land, the court also said that the land rights can be extinguished by paying compensation to the natives.

IOI Corp has since been waiting for the natives to provide information to the court on the details of their claims, but the natives have yet to do so.

If the NGO grievances are mainly concerning this land dispute, we believe the impact to IOIC would not be as significant as in Golden Agri's case, and should not result in the big consumer MNC's boycotting IOIC's products.

'We believe this land dispute is resolvable, as it is just a matter of how much compensation is to be paid to the natives for the land.

'While we do not expect any significant impact to IOI Corp's earnings, there could be a knee-jerk reaction to this news, particularly from foreign investors, who are more sensitive to such news.

'IOI Corp's foreign shareholding was about 18% as at end-Dec 2010. Maintain Underperform with fair value of RM5.90,' it said.