#Stocks to watch:* Melati Ehsan, TSH, KPJ, MK Land

KUALA LUMPUR: Market sentiment is likely to cautious in the week ahead, starting Monday, May 23 following the weaker closing on Wall Street and worries about the contagion effect from Europe's debt crisis.

In the latest development, credit ratings agency Standard & Poors cut its outlook for Italy to "negative" from "stable", citing weak outlook for growth and reduced prospects for slashing its debt mountain.

The downward revision, which raises the risk of a downgrade of Italy's sovereign rating, may heighten fears that contagion from Greece's and other European countries' debt crisis could be spreading to the euro zone's third-largest economy.

On Wall Street, US stocks fell on Friday, May 20'' on euro-zone debt worries that could spill over into next week's trading with a bearish note, while retailers lost ground after a weak profit outlook from Gap.

The Dow Jones industrial average was down 93.28 points, or 0.74%, to end at 12,512.04. The Standard & Poor's 500 Index was down 10.33 points, or 0.77%, at 1,333.27. The Nasdaq Composite Index was down 19.99 points, or 0.71%, to close at 2,803.32.

For the week, the Dow was down 0.7%, the S&P 500 was down 0.3% and the Nasdaq was down 0.9%.

At Bursa Malaysia, stocks to watch include MELATI EHSAN HOLDINGS BHD [], TSH RESOURCES BHD [], KPJ HEALTHCARE BHD [], MK LAND HOLDINGS BHD [], CAN-ONE BHD [] and Kiaqn Joo Can Factory Bhd.

Melati Ehsan was awarded a RM148.63 million project from the Public Works Department to build a road stretching from Gua Musang in Kelantanf to Kampung Relong in Pahang.

Melati's unit Pembinaan Kery Sdn Bhd accepted a letter of award from the PWD for the road CONSTRUCTION [] project which starts on June 15 this year until Dec 10, 2013.

TSH Resources has allocated RM100 million or more per year as PLANTATION [] development capital expenditure (capex) for new planting of oil palm trees, the bulk of which will in Kalimantan, Indonesia.

Bulk of the RM100 million capex would be for new planting in Kalimantan where it has about 58,000 ha of land which is still unplanted. The Indonesian operations, with the trees maturing by next year, would underpin TSH's fresh fruit bunches output, productivity and revenue.

KPJ Healthcare reported a set of unimpressive earnings at RM27.51 million in the first quarter ended March 31, 2011 (1QFY2011) compared with RM27.24 million a year ago.

Revenue rose 16.4% to RM437.75 million from RM376.04 million a year ago while earnings per share were 5.09 sen compared with 5.19 sen. It declared 2.4 sen dividend per share.

However, KPJ expected the group's performance would continue to improve in line with increasing demand, hospital capacity and activities.

MK Land Holdings Bhd's net profit rose more than two-fold to RM7.22 million in the third quarter ended March 31 versus RM2.02 million a year ago, underpinned by its strong property performance. Revenue rose to RM165.15 million from RM94.74 million. Net asset per share was 87 sen.

Can-One Bhd has taken court action KIAN JOO CAN FACTORY BHD [] over the latter's proposed one-for-two bonus issue and the proposed renounceable rights issue of 166.56 million 2five-year warrants 2011/2016 on the basis of one warrant for every four KJCF shares held after the proposed bonus.

Can-One claimed the proposals breached the rights of Can-One under the shares sales agreement dated March 13, 2009 and in breach of the Order of the Court of Appeal dated Aug 25, 2010 and the order of the Federal Court dated Feb 21, 2011.

The Edge weekly reports that crane manufacturer Handal Resources has been on an expansion trail since it was listed two years ago, and the strategy has borne fruit.

Meanwhile, hardware and building materials trading Chuan Huat said the group's recent strategic investment in Amalgamated Steel Industrial Steel Bhd is seen as an attempt to get its foot in the door of the steel pipe manufacturer.

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Wall Street slips on euro zone, spillover effect feared

NEW YORK: U.S. stocks fell on Friday, May 20'' on euro-zone debt worries that could spill over into next week's trading with a bearish note, while retailers lost ground after a weak profit outlook from Gap.

The S&P 500 remains hemmed in between technical support at 1,330 and resistance at 1,340, suggesting a lack of direction and keeping the market vulnerable to events such as the uncertain outcome of the euro zone's debt problems.

"It seems like there's more of a consensus building that there's some potential risk coming on line here," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management Inc in Bethesda, Maryland, which manages about $14.8 billion.

Shares of large multinationals, which tend to rely heavily on overseas sales, fell in sync with the euro's slide against the dollar. Shares of manufacturer 3M (MMM.N) dropped 1.2 percent to $93.56 and weighed on the Dow.

The euro lost nearly 1 percent over disagreements on how to handle debt problems in Greece and ahead of a Spanish regional election.

Gap Inc (GPS.N) fell 17.5 percent to $19.22 after slashing its full-year profit outlook late Thursday, saying higher price tags will not be enough to offset rising cotton costs. The S&P Retail index .RLX fell 1.4 percent.

In the options market, the predominant activity favored more bearish bets than have been seen over the past month.

"The economic recovery and macro picture do seem to indicate a more protracted slow economic recovery long term," Trunow said. "Unless we see a great deal of positive surprises on economic indicators, I think some of these negative events will continue to weigh on the market."

The Dow Jones industrial average .DJI was down 93.28 points, or 0.74 percent, to end at 12,512.04. The Standard & Poor's 500 Index .SPX was down 10.33 points, or 0.77 percent, at 1,333.27. The Nasdaq Composite Index .IXIC was down 19.99 points, or 0.71 percent, to close at 2,803.32.

For the week, the Dow was down 0.7 percent, the S&P 500 was down 0.3 percent and the Nasdaq was down 0.9 percent.

Ahead of May options expiration at Friday's close, traders had exchanged about 669,000 contracts on the S&P 500

Index as puts outpaced calls by a factor of 2.10:1, according

to options analytics firm Trade Alert. The ratio's 22-day moving average is 1.67. Trade Alert data shows.

Oil prices jumped but the S&P energy sector index .GSPE still fell 0.3 percent for the day. Exxon Mobil Corp (XOM.N) declined 0.9 percent to $81.57 and Chevron Corp (CVX.N) lost1.3 percent to $102.57, both dragging on the Dow.

In the industrial sector, Caterpillar Inc (CAT.N) shed 0.9 percent to $104.33, while the S&P Cap Goods sector index .15GSPIC lost 1.1 percent.

On the upside, Barnes & Noble Inc (BKS.N) shares jumped 29.9 percent to $18.33 after John Malone's Liberty Media Corp (LINTA.O) proposed buying the company for $1.02 billion. The largest U.S. bookstore chain put itself up for sale nine months ago.

About 6.71 billion shares were traded on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with the average of about 8.4 billion last year.

Declining stocks outnumbered advancing ones by almost 2 to 1 on both the NYSE and the Nasdaq. - Reuters

S&P cuts credit outlook for Italy to "negative"

MILAN/ROME: Credit ratings agency Standard & Poors cut its outlook for Italy to "negative" from "stable", citing weak outlook for growth and reduced prospects for slashing its debt mountain.

The downward revision, which raises the risk of a downgrade of Italy's sovereign rating, may heighten fears that contagion from Greece's and other European countries' debt crisis could be spreading to the euro zone's third-largest economy.

"In our view Italy's current growth prospects are weak, and the political commitment for productivity-enhancing reforms appears to be faltering," Standard & Poor's said in a statement early on Saturday, May 21.

"Potential political gridlock could contribute to fiscal slippage. As a result, we believe Italy's prospects for reducing its general government debt have diminished."

Standard & Poor's affirmed its 'A+' long-term and 'A-1+' short-term sovereign credit ratings on Italy, which is slowly recovering from its worst economic downturn since World War Two and has one of the world's largest public debts.

In recent years, the ratings agency has often taken a bleaker view of the state of Italy's economy, compared to its counterparts Moody's and Fitch.

Moody's currently has an Aa2 rating for Italy, while Fitch rates it at AA-, which means S&P has Italy two notches below Moody's and one below Fitch.

Italy has weathered the financial crisis better than some of its euro zone's peers but its growth has lagged behind the bloc's average for over a decade.

Many analysts say unless it adopts reforms needed to sharply improve its growth potential, it has little chance of meeting its medium term target to cut the debt.

Italy hardly grew in the first quarter, with gross domestic product (GDP) edging up only 0.1 percent, compared with rises of 1.5 percent in Germany and 1.0 percent in France. Crisis-hit Greece grew 0.8 percent.

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ITALIAN TREASURY DEFENDS ITS POLICIES

The Italian Treasury criticised the move by S&P, saying data on its economic growth and public accounts had "constantly been better than expected".

However, Italy last month cut its economic growth forecasts for 2011, 2012 and 2013 and raised its projections for the public debt. It kept the deficit outlook unchanged.

The economy is now expected to expand by 1.1 percent this year, down from a previous forecast of 1.3 percent. In 2012, GDP growth is seen at 1.3 percent, compared to 2.0 percent previously.

Public debt is expected to reach 120 percent of GDP this year, before falling slightly to 119.4 percent in 2012.

In a statement after the S&P outlook revision, the Treasury said major international organisations such as the OECD, the International Monetary Fund and the European Commission had recently given "very different" assessments on Italy from that of S&P.

Analysts from the IMF and the OECD said this month that Italy's economy was recovering slowly, but added that it would require major structural reform to boost its growth potential.

A weak economy weighs heavily on the debt and deficit ratios, and both organisations urged efforts to stimulate productivity growth and labour supply.

The Treasury ruled out the risk of political gridlock, which S&P cited as a factor that could contribute to fiscal slippage together with weaker-than-expected economic growth.

It also said measures aimed at meeting its target of balancing the budget in 2014 were "at an advanced stage of preparation" and will get parliamentary approval by July.

S&P's revision is another blow for centre-right Prime Minister Silvio Berlusconi, who is embroiled in sex and corruption trials.

The media tycoon's People of Freedom party also suffered a setback this week in local elections seen as a test of his coalition government's popularity and is facing a risky run-off on May 29-30 for the city government of Milan, Italy's business capital.

The Standard & Poor's outlook change implies a one-in-three chance that the credit ratings could be lowered within 24 months.

Standard & Poor's forecast net government debt at 116 percent of GDP this year, up from 100 percent in 2007.

"Under our analysis, the economic contraction between 2008 and 2009 has negated all of Italy's fiscal-consolidation efforts over the last decade," it said.

The Italian banking sector has been strengthened by moves to strengthen capital "and is in a stronger financial position than it was six months ago", the agency said. - Reuters

It's still mainly about the economy

LONDON: From Arab revolt to disaster in Japan and the arrest of the head of the IMF, there have been enough big news surprises thrown at financial markets this year to prompt suggestions that Elvis will show up next, Reuters reports on Saturday, May 21.

But throughout it all, investors have pretty much focused on three interlinked issues -- when the U.S. Federal Reserve will stop creating liquidity, whether China can cool itself in a controlled manner, and if the world economy is really healed.

Rising oil prices and unease over euro zone debt are crucial elements buried within.

These issues have combined to keep investors cautious, but not overly so. Yields have risen but not blown out, and world stocks are gaining at a rate that would lead to annual increases in the low double digits.

"It is clear that some investors have decided that they need to take some risk off the table but they do not want to take too much off," said Andrew Milligan, head of global strategy at Standard Life Investments.

The real stresses, however, lie ahead.

Investors are entering a heavy period for global economic data that will take on additional importance because it may reflect the first impact from Japan's triple disasters in March.

It will also be hard to shake off concerns about what will happen when the U.S. Federal Reserve ends its asset-buying quantitative easing (QE) program next month.

QE has been described as jumper cables on a dead car battery. What happens when you unclip them?

A Reuters poll released in the past week showed that stocks, bonds, gold and the euro were all expected to fall in the three months after the end of QE2.

Investors rarely wait for an event like that before acting on their holdings.

ALL SHOOK UP

For the coming week much of the data focus will be on Europe, with the release of euro zone purchasing managers' indexes and various sentiment surveys.

Economists at ING reckon these will again point to a highly divided euro zone, with core economies such as Germany soaring away and the likes of Greece and Portugal struggling under the weight of debt-reducing fiscal austerity.

The past week showed how bond investors see the two groups. A bond auction in Germany threw out lower borrowing costs than previously while one in Portugal demanded higher coupons from the government.

Attention may be distracted by the comings and goings of world leaders, culminating in the Group of Eight summit in the French resort of Deauville.

It will follow an OECD anniversary bash which German Chancellor Angela Merkel and French President Nicolas Sarkozy will attend, while President Barack Obama will also be on a pre-G8 European tour in Dublin, London and Warsaw.

None of this may add much to the investment mood, but such events tend to create a background noise for markets, which may get louder if Merkel and Sarkozy in particular speak about euro zone debt.

As for Obama, one of his immediate problems is that the U.S. debt ceiling has been hit.

Treasury prices are reasonably stable for now, but a solution to the issue will need to be found for this to remain the case.

WILD TURKEY

A wild card for attention in the coming week may be Turkey, up until recently a darling of emerging market investors.

Turkey's central bank holds a meeting on Wednesday at which it is expected to keep interest rates steady while increasing banks' reserve requirements yet again.

The latter is a novel monetary policy experiment which is roughly the opposite of QE.

Investors are keen for clues over when an actual interest rate tightening cycle could begin -- markets are currently pricing in around 75 basis points by year-end but many say more aggressive moves may be needed.

Turkey's worsening current account deficit and unabated credit growth show the reverse-QE experiment, involving low interest rates and higher reserve ratios, may be failing.

So investors have been voting with their feet -- Turkish stocks are down 8 percent alone this month.

In the past week, a Bank of America/Merrill Lynch fund manager survey showed investors underweighting Turkey for the first time in three years. - Reuters

Apple probes blast at Chinese plant linked to iPad

SAN FRANCISCO: Apple Inc is investigating an explosion that killed two people, injured 16 and forced a production halt at a Foxconn International Holdings Ltd factory in China said to produce the popular iPad 2.

Foxconn, part of Taiwan's Hon Hai Precision Industries group and Apple's main manufacturing partner, said in a statement on Saturday, May 21 the explosion happened at about 7 pm local time (7 a.m. ET) on May 20.

"Production has been suspended at the site of the explosion until the completion of the investigation," Foxconn said in a statement.

"The safety of our employees is our highest priority and we will do whatever is required to determine and address the cause of this tragic accident."

It did not name the affected plant or say what it made, but China's official Xinhua News Agency said it was the Hongfujin Precision Electronics plant in a high-tech industrial zone west of Chengdu, the capital of Sichuan province.

Hon Hai spokesman Edmund Ding said the company is still evaluating losses. He could not say whether group founder and chairman Terry Gou had gone to the site.

IPAD AFFECTED

Apple shares closed down 1.56 percent at $335.22 on the Nasdaq, which saw a broad sell-off on euro-zone debt worries.

The explosion could affect the supply of iPads and investors were watching closely. Apple spokesman Steve Dowling said the company was assessing the situation.

"We are deeply saddened by the tragedy at the Foxconn plant in Chengdu and our hearts go out to the victims and their families," he said. "We are working closely with Foxconn to understand what caused this terrible event."

Ticonderoga Securities analyst Brian White said the factory makes a lot of iPads because some production had been shifted to the facility from factories in the southern Chinese city of Shenzhen.

Apple's iPad 2 commands 80 percent of the burgeoning tablet market in which Motorola Inc and Samsung Electronics Co Ltd also compete.

Apple sold 4.69 million iPads last quarter and is scrambling to meet staggering demand for the mobile device, but is heavily backlogged. Executives had expected production to ramp up during the present quarter to meet demand.

The plant explosion is the latest setback for Foxconn, the world's largest contract manufacturer.

The company made headlines last year after reports emerged about poor working conditions at factories in southern China, which critics say may have helped drive several employees to suicide.

The company pledged to improve employee welfare.

Facing higher wages in the southern China manufacturing belt, the scene of labor disputes last year, some Taiwanese manufacturers have opted to shift some operations to the country's interior, where costs are lower.

Foxconn also has plants in North America and Mexico, as well as in European countries, including Slovakia and Poland. - Reuters

Greek PM rejects debt restructuring

ATHENS: Prime Minister George Papandreou ruled out a restructuring of Greece's debt but declined to comment whether a softer "reprofiling" was on the cards, the state-run Athens news Agency (ANA) reported on Saturday, May 21.

One year into its European Union/International Monetary Fund bailout, Greece is struggling with weak revenues and a deep recession, fuelling speculation that it will have to restructure its debt to pull itself out of the fiscal mess that triggered a euro zone crisis.

"Debt restructuring is not under discussion," Papandreou said in an interview in Sunday newspaper Ethnos, ANA said.

Asked, however, to comment on whether a debt "reprofiling" was being considered, ANA quoted Papandreou as saying that the government "does not join the public discussion about such scenarios."

The chairman of the 17-country Eurogroup Jean-Claude Juncker acknowledged on Tuesday Greece may have to move toward a "soft restructuring" of its debt [ID:nLDE74G0PD], although the European Central Bank remains strongly opposed to such a move.

Papandreou's comments come two days before a crucial cabinet meeting to discuss a new fiscal consolidation plan, which must be convincing enough for the EU and the IMF to continue bankrolling his debt-laden country.

Greece is considering deeper cuts in public sector wages and further tax increases on a range of products and professions to qualify for more aid, Greek newspapers said on Saturday.

The plan may include scrapping bonuses to civil servants and employees in state-run companies, Greek newspapers Ta Nea and Isotimia reported, without citing any sources.

The government may also lower or scrap tax-free thresholds on property holdings and the self-employed, raise consumption taxes on soft drinks and certain fuel types or shift a range of products to a higher VAT-bracket, other newspapers said.

Greece is under pressure from its creditors for more budget cuts and quicker privatizations, after disappointing budget figures for January-April suggested it will miss the deficit targets set under its bailout program for a second consecutive year in 2011.

Papandreou admitted in the interview that talks with the inspectors have been "difficult" and vowed to take any measure necessary for Greece to qualify for the next, 12 billion euro tranche of the bailout loans.

"This (failure to secure the tranche) would most probably mean bankruptcy," Papandreou was quoted by ANA as saying. "We can't permit the creation of lobbies in Europe and elsewhere... which want to push Greece to default and out of the euro zone.."

Papandreou pledged to speed up and specify a 50-billion euro privatization plan announced last month, a key element in the country's effort to exit its crisis without restructuring.

The government would eliminate its holdings in companies which do not manage public goods or vital grids, like water and energy utilities, Papandreou said according to ANA. - Reuters

KPJ Healthcare 1Q earnings flat at RM27.51m

KUALA LUMPUR: KPJ HEALTHCARE BHD []'s earnings were flat at RM27.51 million in the first quarter ended March 31, 2011 (1QFY2011) compared with RM27.24 million a year ago but it expects the group's performance would continue to improve in line with increasing demand, hospital capacity and activities.

It said on Friday, May 20 that revenue rose 16.4% to RM437.75 million from RM376.04 million a year ago while earnings per share were 5.09 sen compared with 5.19 sen. It declared 2.4 sen dividend per share.

'The profit before taxation for the current quarter has increased by 8.4% to RM41.2 million from RM38.0 million in the corresponding quarter 2010. The increase is in line with the increase in revenue of the hospitals,' it said.

KPJ Healthcare said the profit before taxation for 1Q2011 of RM41.2 million was lower by 6.8%, due to a one-off reversal of provision for impairment in associates, amounting to RM6.5 million, being included in the profit before taxation in the preceding quarter of RM44.2 million.

Tepco chief quits after $15 bln loss on nuclear crisis

TOKYO: Tokyo Electric Power Co reported a $15 billion net loss on Friday, May 20 to account for the disaster at its Fukushima nuclear plant, marking the biggest loss in Japan by a non-financial company and prompting the firm to warn its future was uncertain.

Much-criticised president, Masataka Shimizu, 66, resigned to take responsibility for the worst nuclear crisis since Chernobyl in 1986, making way for an insider, managing director Toshio Nishizawa, 60.

Engineers are battling to plug radiation leaks and bring the plant northeast of Tokyo under control more than two months after a 9.0 magnitude earthquake and deadly tsunami that devastated a swathe of Japan's coastline and tipped the economy into recession.

The disaster has triggered a drop of more than 80 percent in Tokyo Electric's share price and forced the company to seek government aid as it faces compensation liabilities that some analysts say could top $100 billion.

Before speaking, Shimizu bowed before a packed press conference at the company's headquarters in the capital. Nishizawa, who has worked at the utility since 1975, stood to his left.

"We feel sorry for the victims of the earthquake and tsunami. At the same time we want to sincerely apologise for our nuclear reactors in Fukushima causing so much anxiety, worry and trouble to society," the outgoing president said.

For the business year that ended March 31, the company, commonly known as Tepco, posted a 1.25 trillion yen ($15 billion) net loss after accounting for 1 trillion yen to scrap reactors at the Fukushima complex and write off tax assets.

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The earnings figures were released after the close of Tokyo stock market trading and represent a landmark in the company's 60-year history.

Japan Prime Minister Naoto Kan and other lawmakers have lambasted Tepco for its handling of the disaster. At one stage, Kan reportedly demanded company executives tell him: "What the hell is going on?"

Shimizu did not make any public appearances in the two weeks that followed the March 11 disaster, sparking criticism Tepco lacked leadership as it fought to bring the plant under control.

Shortly after, he was hospitalized with dizzy spells as Tepco's share price plummeted and the company lurched close to collapse.

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UNCERTAINTY AND RISK

Nishizawa takes over at a time when even the company admits there is major uncertainty over whether it can continue as a going concern.

Apart from compensation claims and quake tsunami damage, TEPCO expects other costs to include 700 billion yen this business year to buy more gas and coal to replace lost nuclear power capacity.

Since the crisis, Tepco has been supported by banks that offered emergency loans. The government has promised to help Tepco handle compensate claims by thousands of households and businesses forced to evacuate from around the Fukushima plant because of radiation risks, although the issue is far from settled.

"I feel a massive weight of responsibility to assume the post when we are in an unprecedented crisis never experienced in the history of the company," said Nishizawa.

"But I decided to take it because I believe it is my mission to challenge head-on this difficult situation."

Sakae Muto, head of the nuclear power division, also resigned from the company.

Tepco's five-year credit default swaps reached a record 762 basis points late on Thursday, or the equivalent of $762,000 to insure $10 million of debt against default.

The spreads have more than tripled since the government's chief spokesman Yukio Edano last week suggested banks waive some of Tepco's debt, raising concern the government may not support the company. Economics minister Kaoru Yosano said banks should not be liable.

"There are conflicting comments coming out of the government now," said Takashi Hiroki, chief strategist at Monex Inc.

Tepco though is the only power supplier to Tokyo and some surrounding areas that account for 40 percent of Japan's economy, so the government will be under pressure to keep the company afloat, analysts say.

The stricken Fukushima Daiichi makes up less than 5,000 megawatts (MW) of Tepco's overall generation capacity of 65,000 MW.

"You might as well recapitalize the thing that's there at the moment," said Ben Wedmore, director of equity research at MF Global FXA Securities. "I would think that by the end of June the debt-equity ratio would be such that there has to be some plan to recapitalize. Otherwise the debt would be junk level and the banks would be unable to lend."

Parliament is discussing the plan to help the utility handle compensation. Kan is battling low support ratings and a feisty opposition that has the power to block some legislation.

The compensation scheme would be funded with taxpayers' money and contributions from other nuclear plant operators, but it places no limit on Tepco's liabilities for compensation, a factor likely to hobble its finances for years and weigh on its credit rating.

"While a reconsideration of their corporate structure is important, the bigger pressure is how the government will structure their compensation scheme," said Hiroki Shibata, an analyst at Standard & Poor's Ratings. "I don't see any immediate impact from the change in presidents."

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COMPENSATION

The 1.25 trillion-yen loss revealed Friday exceeds the 812 billion yen deficit booked by Japan's biggest telephone utility, Nippon Telegraph and Telephone , in the year to March 31, 2002, and the 795 billion yen loss by industrial conglomerate Hitachi Ltd two years ago.

Only banks have had bigger losses, with Mizuho Financial Group holding the record with a shortfall of 2.4 trillion yen eight years ago.

Faced with so much uncertainty, Tepco did not offer earnings guidance for the current year to March 2012.

Tepco has not made an estimate for the likely cost of compensating all victims. Analyst forecasts have ranged from around $25 billion up to $130 billion if the crisis at the nuclear complex drags on.

On Tuesday, TEPCO said it aimed to complete initial steps to limit the release of further radiation from the plant and to shut down its three unstable reactors by January 2012.

In a bid to raise cash, TEPCO said it planned to sell assets worth 600 billion yen.

The biggest gem in its asset portfolio is a 7.9 percent stake in KDDI , a telecommunications company that owns Japan's No. 2 mobile phone network. The stake is worth 201 billion yen based on Thursday's closing price.

Other stock holdings in companies not directly involved in its generating business amount to little more. Tepco values all the stocks on its books at 310 billion yen.

Most of its investments however are locked up in its generating and transmission infrastructure, with 60 percent of 13 trillion yen in assets on its balance sheet accounted for by nuclear plants and other fixed assets.

Shares of Tepco closed up 2.5 percent at 376 yen, compared with a 0.1 percent fall in the benchmark Nikkei 225 index. ($1=81.61 yen) - Reuters

Time Engineering posts 1Q net loss of RM2.93m

KUALA LUMPUR: TIME ENGINEERING BHD [] posted net loss of RM2.93 million in the first quarter ended March 31, 2011 compared with net profit of RM871,000 a year ago as it was affected by the financing costs of its redeemable secured loan stocks.

It said on Friday, May 20 the revenue fell 35.5% to RM16.39 million from RM25.43 million mainly due to the completion of the projects in Vietnam. It reported loss per share of 0.38 sen compared with earnings per share of 0.11 sen.

However, it said its operational results would be sustained and expected an improvement in the business performance in the current financial year following 'the realisation of the business opportunities secured by the group between the last quarter of 2010 and the first quarter of 2011'.

Melati Ehsan secures RM148m PWD project

KUALA LUMPUR: MELATI EHSAN HOLDINGS BHD [] has secured a RM148.63 million project from the Public Works Department to build a road stretching from Gua Musang in Kelantanf to Kampung Relong in Pahang.

Melati said on Friday, May 20 its unit Pembinaan Kery Sdn Bhd had accepted a letter of award from the PWD for the road CONSTRUCTION [] projects which starts on June 15 this year until Dec 10, 2013.

'Kery is required to execute the formal contract with PWD in due course. Pending the formal contract, this Letter of Award shall constitute a binding agreement between Kery and PWD,' it said.

Melati said the project was''not expected to have any material effects on the earnings per share of Melati for the financial year ending Aug 31, 2011. However, the project was expected to contribute positively to the future earnings of the Melati group.

Late selling drags KLCI into the red

KUALA LUMPUR:'' Late selling on selected key index stocks especially telcos'' dragged the FBM KLCI into the red on Friday, May 20, but the broader market was cautious ahead of the weekend.

At 5pm, the KLCI was down 2.99 points or 0.19% to 1,541.03 while year-to-date, it is up just 1.46%. Turnover was 869.31 million shares valued at RM1.36 billion. There were 361 gainers, 378 losers and 342 stocks unchanged.

Key Asian markets were mostly lower, with Singapore's Straits Times Index down 0.13% at 3,168.54, Taiwan's Taiex fell 0.63% to 8,837.03 and Shanghai's Composite Index 0.04% lower at 2,858.46 and Japan's Nikkei 225 eased 0.14% to 9,607.08.'' However, Hong Kong's Hang Seng Index added 0.16% to 23,199.39.

Crude palm oil third-month futures rose RM35 to RM3,395 and US light crude oil rose 96 cents to US$99.40.

At Bursa Malaysia, telcos were among the major losers, with DiGi down 22 sen to RM28.60, Axiata and Maxis three sen each to RM4.95 and RM5.40 while TM was unchanged at RM4.17.

Genting Malaysia fell seven sen to RM3.55and Genting six sen lower at RM11.18. Their combined losses dragged the 30-stock index down by 1.17 points.

BAT was the top loser, down 36 sen to RM46m HLFG 18 sen to RM11.56 and Guan Chong 14 sen to RM2.93.

PacificMas fell 12 sen to RM4.14 after the management brushed off speculation that uits parent Oversea-Chinese Banking Corp Ltd would inject its Malaysian banking ot insurance asserts into the company.

Among the gainers were Dutch Lady, up 44 sen to RM18.28, Esso 32 sen to RM5.12, Tradewinds PLANTATION []s 23 sen to RM4.05 and Tradewinds 20 sen to RM10.48.

KLK added 20 sen to RM22, Top Glove and PPB 16 sen each to RM17.28 and RHB Cap 15 sen to RM9.25.

Rolls Royce showroom opens in Petaling Jaya

PETALING JAYA: Rolls Royce opened its first showroom in Malaysia at Quill 9 in Jalan Semangat here on Friday, May 20, which was the luxury carmaker's 18th showroom in Asia Pacific, targeting the members of the royalty, corporate or affluent entrepreneurs as its main customers.

The regional director of Rolls-Royce Motor Cars, Asia Pacific Paul Harris said the sales of Rolls Royce in Asia Pacific overtook the sales in other regions last year.

Sales in the region experienced a six-fold increase fuelled by the economic growth in the region, he said, with the sales underpinned by the Ghost in 2010.

'We continue to invest in a Malaysian market buoyed by the country's economic growth and growing appetite for super-luxury cars. Our presence signals our commitment to providing service support for current and future customers, many of whom are new to the brand,' said Harris.

He said the Ghost is a drivable model of the super luxury brand of which there has been a significant demand.

Rolls-Royce Motor Cars Kuala Lumpur managing director Datuk Michael Ong said upon the opening of its doors, it had already managed to sell some of the super luxury cars which were the Ghost and the Phantom.

Priced from RM2.1 million each, Ong said most customers for the Ghost and the Phantom were either members of the royalty, corporations or affluent entrepreneurs.

As Rolls Royce does not see any competition in the super luxury car market locally, Ong said there was enough demand for super-luxury cars in Malaysia to justify the opening of a Malaysian dealership.

Quill Motorcars owns the local dealership and Ong said the dealership hopes to achieve double-digit sales for the year.

'Quill Motorcars is ready to ensure Rolls-Royce customers have nothing less than a highly positive ownership experience. Our authorised workshop, which is fully supported by the Rolls-Royce factory is also equipped with the latest TECHNOLOGY [] to service Rolls-Royce cars,' said Ong.

Ong is also the group executive director of the Quill Group of companies and one of the two founding members of the Quill group.

The new 224 square metre showroom for Rolls-Royce Motor Cars Kuala Lumpur houses three Rolls-Royce motor cars, with a lounge that allows customers to configure their cars using colour, wood and leather samples from the manufacturing plant at Goodwood, West Sussex.

#Flash* BNM international reserves at highest ever of RM401 bln

KUALA LUMPUR: Bank Negara Malaysia's foreign reserves surged to a new historic high of RM401 billion or US$132.6 billion as at May 13.

According to the BNM statement issued on Friday, May 20 this was an increase of RM7.8 billion or US$2.6 billion above the RM393.2 billion or US$130 billion on April 29.

'The reserves position is sufficient to finance 9.4 months of retained imports and is 4.4 times the short-term external debt,' the central bank said.

Economists said the May 13 reserves at RM401 billion was the highest ever, surpassing the earlier high of RM393.2 billion on April 29. Bulk of the inflow was capital inflows, they added.

They said the fundamental factors remained supportive of private capital inflows into Malaysia, which were brighter growth prospects, positive newsflow on economic transformation and renewed investor interest.

RAM Ratings reaffirms AAA rating of Tenaga's US$500m debt notes

KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the AAA rating of TENAGA NASIONAL BHD []'s (TNB) US$500 million equivalent Islamic debt notes.

The ratings agency said on Friday, May 20 it had reaffirmed the Murabahah medium-term notes programme (2005/2025) and the long-term rating has a stable outlook.

'The rating reflects TNB's position as Malaysia's national electricity company, with a near-monopoly over the transmission and distribution of electricity across Peninsular Malaysia and Sabah,' it said.

RAM Ratings said TNB also plays a crucial role as the sole-off-taker for the generating capacity and electrical energy produced by all the independent power producers (IPPs) in Peninsular Malaysia.

TNB remains a dominant player in the domestic power-generating business, controlling 53% of Peninsular Malaysia's generating capacity despite the growing presence of IPPs in the past decade.

In view of the strategic nature of TNB's role as Malaysia's national electricity company, it enjoys strong implicit support from the government, that is its major shareholder.

Previous tariff reviews - which had helped the utility giant pass on its rising coal costs to consumers - and subsidised gas prices underline the implicit support received by TNB.

As at end-August 2010, TNB's balance sheet was weighed down by its hefty RM21.26 billion debt burden. As half of this was denominated in Japanese yen and US dollars, the group is exposed to fluctuations in foreign-exchange (forex) rates.

'Nonetheless, we recognise the improvement in TNB's key financial metrics after the group trimmed its debt level from nearly RM30 billion five years ago; as at end-August 2010, its gearing ratio had eased to 0.74 times.

'After including its heavy debt load from the fixed capacity-payment obligations under the group's power purchase agreements (PPAs) with the various IPPs, its adjusted gearing ratio climbed up to 1.74 times while its adjusted funds from operations debt coverage stood at 0.23 times as at end-August 2010,' it said.

RAM Ratings also said due to TNB's increasing dependence on coal-powered generation ' which accounted for 40.2% of Peninsular Malaysia's generation mix in FY August 2010 compared to 28.6% the previous corresponding period ' TNB remains vulnerable to unfavourable movements in coal prices and forex rates, as supply is procured at international prices.

As coal costs already represent more than half of its total fuel costs and in view of still-rising coal prices, the group's margins will face further downward pressure. Nevertheless, the impact of heftier generation costs may be moderated by the stronger ringgit against the US dollar.

Japan's Tepco posts $15 bln loss on nuclear crisis costs

TOKYO: Tokyo Electric Power Co recorded a 1.25 trillion yen ($15.3 billion) loss for the past financial year, the biggest ever by a non-financial Japanese firm, hit by costs to cope with the world's worst nuclear crisis since Chernobyl, Reuters reported on Friday, May 20.

Tokyo Electric, commonly known as Tepco, is struggling to bring its Fukushima Daiichi nuclear plant in northern Japan under control after damage from the March 11 earthquake and tsunami crippled reactors and triggered radiation leaks.

The company, Asia's largest utility, posted a net loss of 1.25 trillion yen for the year ended in March, compared with a profit of 133.8 billion yen a year earlier. It was the biggest loss by a non-financial firm in Japan, exceeding the 835 billion yen loss by Nippon Telegraph and Telephone in 2002.

The massive loss was flagged by media. The Nikkei newspaper had predicted a net loss of about 1 trillion yen, while the Yomiuri forecast a loss of 1.5 trillion yen.

The loss, the biggest in Tepco's 60-year history, reflects costs to scrap damaged nuclear reactors at Fukushima Daiichi and a write-off of deferred tax assets with compensation payouts likely to depress profits for many years.

Tokyo Electric did not offer guidance for the current year to March 2012 given uncertainty over how much of its profit will go toward paying the people forced to evacuate the areas surrounding the crippled plant and others due compensation.

The government last week agreed to set up a fund using taxpayers' money to help Tepco cope with compensation. Tepco can draw on the fund to make upfront payments and repay the fund from its annual profits over several years.

Tepco has not made an estimate for the likely cost of compensating all victims. Analyst forecasts have ranged from around $25 billion up to $130 billion if the crisis at the nuclear complex drags on. - Reuters

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Top Glove advances, RHB Research lowers stock to Underperform

KUALA LUMPUR: Shares of Top Glove Corp Bhd rose in late afternoon, Friday, May 20 on some fund buying despite the stock had been downgraded due to the weaker earnings outlook.

At 3.18pm, it was up 15 sen to RM5.33 with 1.08 million shares done.

The FBM KLCI rose 0.51 of a point to 1,544.53. Turnover was 593.35 million shares valued at RM791.60 million. There were 319 gainers, 365 losers and 317 stocks unchanged.

RHB Research said in its research note that it recently spoke with management and understand that customers continue to hold back their orders in view of the high latex prices.

'Consequently, this suggests that 3Q revenue could remain flat qoq. Bottomline, however, could be adversely impacted given that latex prices remain high and US$ continues to weaken against the ringgit,' it said.

It also said Top Glove management had stated that capacity expansion plans have been pushed back by two to eight months respectively.

'As we expect no significant improvement in its 3Q results and coupled with the delay in its capacity expansion plans, we have cut our FY11-13 revenue forecasts by 2.8-8.5% respectively,' it said.

'We have lowered our fair value to RM4.09 (from RM5.38), based on lower target PER of 15x (from 17x previously). Given the weaker earnings outlook, we downgrade our call to Underperform,' it said.

Coastal slips but cancellation of MoU with Ramunia minimal impact

KUALA LUMPUR: Shares of COASTAL CONTRACTS BHD [] fell in late afternoon on Friday, May 20 in line with a lacklustre market while analysts viewed the cancellation of the MoU with Ramunia Bhd would have minimal impact.

At 3.43pm, Coastal was down seven sen to RM3.57 with 371,000 shares done, off the intra-day high of RM3.65.

On Thursday, Ramunia said Coastal's unit Pleasant Engineering Sdn Bhd and Ramunia had both agreed not to proceed with the MoU signed on Jan 28, 2010 for the proposed collaboration to undertake tendering, bidding and fabrication in relation to structures for the O&G industry.

OSK Research said its fair value for Coastal remained unchanged at RM4.85 based on the existing price-to-earnings ratio (PER) of 8.0 times FY11 earnings.

'We continue to like Coastal for its strong delivery track record and we think its performance would be sustainable as it still has a strong orderbook of RM760 million which can keep the company busy over the next 12 months while it proceeds to enhance its shareholders' value by finding a business partner for the O&G opportunities,' it said.

Prada secures HK listing committee nod for IPO -IFR

HONG KONG: Italian luxury goods company Prada received approval to list shares in Hong Kong, moving ahead with plans for an initial public offering worth about $2 billion, Thomson Reuters publication IFR said on Friday, May 20.

The Milan-based company, known for its colorful Miu Miu dresses, Prada handbags and men's shoes, received the go-ahead after meeting Thursday night with the Hong Kong Stock Exchange's listing committee.

The IPO would be the first for an Italian company in Hong Kong, which has attracted global luxury brands and consumer companies such as Samsonite, Coach and L'Occitane .

Prada will have a couple of weeks to pre-market the IPO and then another two weeks for the roadshow, with a listing expected by the third week of June, a source told Reuters on Tuesday. - Reuters

FBM KLCI up at mid-day but gains limited

KUALA LUMPUR: ''The FBM KLCI stayed in positive territory at the mid-day break on Friday, May 20 but gave up some of its earlier gains as some mild pre-weekend profit taking emerged.

The FBM KLCI was up 0.08% or 1.29 points to 1,545.31 at the mid-day break, down from its intra-morning high of 1,547.94.

Gainers edged losers by 325 to 306, while 292 counters traded unchanged. Volume was 466.12 million shares valued at RM564.64 million.

The ringgit strengthened 0.45% to 3.0155 versus the US dollar; crude palm oil for the third month delivery rose RM12 per tonne to RM3,372, crude oil added 38 cents per barrel to US$98.82 while gold gained US$3.02 an ounce to US$1,496.38.

OSK Research in its 1Q2011 'half-time' results review said that so far, with 41% of its Malaysian coverage reporting results, earnings have been largely within its expectations with 70% of companies reporting profits that were in-line.

While Big Caps continued to outperform on fundamentals with 92% reporting results that were either above or within expectations versus 76% for Small Caps, this was still the best quarter thus far for Small Caps in a Year whereby there were more Upgrades than Downgrades for Small Caps at half time, it said on May 20.

'With the Upgrade to Downgrade ratio standing at 1.3x currently, even if there is some slippage towards the end of the season, we expect this should give enough fundamental reason for the KLCI to trundle upwards and end the month with positive gains.

'We maintain our year end KLCI target of 1,680 points while for May, we continue to recommend buying Big Caps and trading Property counters,' it said.

On Bursa Malaysia this morning, Dutch Lady was the top gainer and rose 62 sen to RM18.46; PPB was'' up 52 sen to RM17.64, F&N 28 sen to RM19.58, Tradewinds 26 sen to RM10.54, Tradewinds PLANTATION [] 21 sen to RM4.03, RHB Capital 20 sen to RM9.30, KLK 18 sen to RM21.98, DKSH 13 sen to RM1.38 and Panasonic was up 10 sen to RM23.30.

Jotech was the most actively traded counter with 21.75 million shares traded. The counter gained one sen to 14 sen.

Other actives included DBE Gurney, Malton, Asia Media, Digistar, Ideal Jacobs and Karambunai.

Among the decliners, Nestle fell 56 sen to RM47.40, Tasek down 30 sen to RM7.60, Nilai 29 sen to 59 sen, BAT 24 sen to RM46.12, Metrod 22 sen to RM3.60, while JobStreet, Guan Chong and Pharmaniaga fell 10 sen each to RM2.70, RM2.97 and RM5.90 respectively.

At the regional markets, Japan's Nikkei 225 and the Shanghai Composite Index rose 0.07% each to 9,627.72 and 2,861.68, Hong Kong's Hang Seng Index added 0.10% to 23,187.13 and South Korea's Kospi was up 0.72% to 2,110.52.

TSH Resources plans RM100m capex for new planting

KUALA LUMPUR: TSH RESOURCES BHD [] has allocated RM100 million or more per year as PLANTATION [] development capital expenditure (capex) for new planting of oil palm trees, the bulk of which will in Kalimantan, Indonesia.

Its chairman Datuk Kelvin Tan Aik Pen said on Friday, May20 the RM100 million would be internally generated.

'Bulk of the RM100 million capex would be for new planting in Kalimantan where we have about 58,000 ha of land which is still unplanted,' he said after the AGM, adding that its Indonesian operations would be the main growth driver for the group.

As at Dec 31, 2010, TSH had 23,507 ha which have been planted in Indonesia and 57,782 ha yet to be planted.

Tan said capex was not an issue for TSH due to its strong cashflow from its operations which would increase over the next few years when more of the oil palm trees mature.

He added TSH's gearing was only 0.7 times and there was no need to increase it. He expected the gearing to decline as its cashflow increases over the next few years.

He said the four factors which would underpin TSH's growth would be the substantial planted acreage which would come into maturity which would see an impressive fresh fruit bunches (FFB) growth for the next few years.

'We also have sizeable land bank for further expansion while its high yielding tissue culture would boost productivity,' he said.

Another factor which would drive TSH would'' be its emphasis on people development to create a talent pool and sustain its business in the long term, he said.

TSH group's oil palm tree age profile as at Dec 31, 2010 was that 54% of them was immature trees less than four years old, while 19% was between four and six years (mature), 14% between seven and 15 years while the remaining 13% were between 16 and 20 years.

Tan also said TSH's FFB production growth would be an average 43% over the next four years from 2011 to 2014, underpinned by its contribution from Indonesia.

It projects total production ' including Indonesia and Sabah -- to grow by 34% to 349,000 tonnes in 2011, surge by 81% to 518,149 tonnes in 2012,'' increase by 30% to 636,753 tonnes in 2013 and climb by 25% to 763,818 tonnes in 2014.

On its dividend policy, Tan said TSH would continue its policy of paying out between 20% and 30% of its net profit as dividends.

Electrified double track from Sg Gadut to Gemas ready by 2H of 2012

KUALA LUMPUR: The second phase of the electrified double tracking between Sungai Gadut and Gemas is scheduled to be completed in the second half of 2012.

Phase one, which comprised of the double tracking from Seremban to Sungai Gadut and the CONSTRUCTION [] of two railway stations at Senawang and Sungai Gadut was completed and commissioned on April 30.

The commissioning of phase one of the project will enable KTMB to run commuter train services from these two areas to the Klang Valley.

The project was undertaken by India's Ircon International Ltd which was awarded the contract by Keretapi Tanah Melayu Bhd (KTMB) in 2008.

FBM KLCI extends gains at mid-morning

KUALA LUMPUR: ''The FBM KLCI extended its gains at mid-morning on Friday, May 20 in line with gains at most key regional markets following the slightly firmer overnight close at Wall Street.

At 10am, the FBM KLCI was up 3.65 points to 1,547.67, lifted by gains including at KLK, RHB Capital, PPB, Petronas Gas and Petronas Dagangan.

Gainers led losers by 254 to 154, while 216 counters traded unchanged. Volume was 188.52 million shares valued at RM156.36 million.

At the regional markets, Japan's Nikkei 225 was up 0.29% to 9,648.84, Hong Kong's Hang Seng Index added 0.18% to 23,205.49, South Korea's Kospi gained 0.28% to 2,101.29, the Shanghai Composite Index rose 0.09% to 2,862.15 and Taiwan's Taiex edged up 0.02% to 8,894.55.

Meanwhile, Singapore's Straits Times Index slipped 0.03% to 3,171.73.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on May 20 said that due Wall Street's firmer tone last night, there could be some bargain hunting activities today.

'We expect the FBM KLCI to move up first today, but some pre-weekend profit-taking activity might emerge later to curtail the market's initial rise,' he said.

On Bursa Malaysia, Dutch Lady was the top gainer at mid-morning and rose 54 sen to RM18.38; KLK added 28 sen to RM22.08, RHB Capital 20 sen to RM9.30, Tradewinds PLANTATION [] 18 sne to RM4, Subur Tiasa and Tradewinds 16 sen each to RM3.10 and RM10.44, while Ta Ann, PPB, Petronas Gas and Petronas Dagangan added 14 sen each to RM6.74, RM17.26, RM11.60 and RM15.54 respectively.

Jotech was the most actively traded counter with 14.7 million shares done. The stock added 1.5 sen to 14.5 sen.

Other actives included DBE Gurney, Malton, Asia Media, Seal and HWGB.

Among the decliners, Nilai lost 29 sen to 59 sen, JobStreet and Cypark down 10 sen each to RM2.70 and RM2.47, PacificMas and BLD Plantations eight sen each to RM4.18 and RM5.52, Guan Chong seven sen to RM3, Pintaras six sen to RM2.30 and Hartalega five sen to RM5.70.

''

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Favelle Favco rises on new jobs

KUALA LUMPUR: FAVELLE FAVCO BHD [] shares rose on Friday, May 20 after it secured four contracts totaling RM50.30 million to build tower cranes for four clients.

At 9.05am, Favelle was up five sen to RM1.45 with 25,000 shares traded.

Its contract was to build an offshore crane for Keppel Fels Ltd and Cosco (Nantong) Shipyard Co., Ltd.

The other two contracts were with Backam Engineering Corp and Form 700 Pty Ltd to supply a tower crane each.

''

Malton active, up

KUALA LUMPUR: MALTON BHD [] shares were actively traded on Friday, May 20 after its earnings surged 620% to RM26.28 million from RM3.64 million a year ago, underpinned by higher billings from the property development division.

At 9.15am, Malton rose 2.5 sen to 79 sen with 3.79 million shares traded.

Its revenue increased by 79.4% to RM116.38 million from RM64.89 million while pre-tax profit increased by 512.7% to RM38.6 million from RM6.3 million. Earnings per share were 7.55 sen compared with 1.05 sen.

Kossan dips in early trade

KUALA LUMPUR: KOSSAN RUBBER INDUSTRIES BHD [] shares declined in early trade on Friday, May 20 after its net profit for the first quarter ended March 31, 2011 fell 24.4% to RM22.96 million from RM30.38 million a year earlier partly due to buyers holding lower stock levels due to the increase in raw material, as well as higher latex cost.

At 9.15am, Kossan lost eight sen to RM3.15 with 2,000 shares traded.

Revenue for the quarter declined to RM256.45 million from RM262.77 million in 2010. Earnings per share was 7.18 sen.

CIMB Equities Research has reduced its target price for Kossan from RM5.14 to RM4.59.

It said on Friday, May 20 that Kossan's 1Q11 annualised net profit was a letdown due to weak demand and high costs as it came in at 70% of its and consensus estimates.

'We cut our FY11-13 EPS forecasts by 5-12% after scaling back FY11 capacity by 10% to 12.5bn pieces and lowering our cost pass-through assumption. This reduces our target from RM5.14 to RM4.59, still based on 10.15x forward P/E or a 30% discount to our target market P/E. Kossan's 7x forward P/E is undemanding considering its 13% 3-year EPS CAGR.

'We continue to rate it a BUY and our top pick. Demand should recover given the steady decline in natural rubber prices, which is encouraging customers to restock. The stock may be catalysed by 1) new contracts, 2) Cleanera acquisition and 3) higher nitrile sales,' it said.

''

Tradewinds Plantation up after 1Q net profit surges 95% to RM48.63m

KUALA KUMPUR: Tradewinds PLANTATION [] Bhd shares advanced on Friday, May 20 after its net profit for the first quarter ended March 31, 2011 surged 95% to RM48.63 million from RM24.94 million a year earlier due mainly to increase in prices of palm products.

At 9.45am, Tradewinds Plantation was up 16 sen to RM3.98 with 1.11 million shares done.

Revenue rose to RM229.93 million from RM183.39 million last year. Earnings per share was 7.73 sen while net assets per share was RM2.97.

Reviewing its performance on Thursday, May 19, Tradewinds Plantation said that based on prevailing prices of palm products and the forecast increase in production in the coming quarters, the company expects its results to be better than the period under review.

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Timber-related stocks advance

KUALA LUMPUR: Timber-related stocks continued to advance on Friday, May 20 on expectations of better prices for products and increase in demand.

At 9.50am, Subur Tiasa was up 16 sen to RM3.10, Ta Ann 14 sen to RM6.74, WTK seven sen to RM2.02, Jaya Tiasa six sen to RM6.56, Lingui four sen to RM1.94 and Leweko one sen to 20 sen.

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CIMB Research has Buy on Genting Malaysia at RM3.62

KUALA LUMPUR: CIMB Equities Research has a Buy on Genting Malaysia Bhd at RM3.62, at which it is trading at FY12 price-to-earnings of 13.9 times and price-to-book value of 1.8 times.

It said on Friday, May 20 Genting Malaysia appears to be forming a bullish flag pattern. If prices can hold on steady above its recent low of RM3.55, there is a good chance that the candles may take out its 30-day SMA soon.

'Technical landscape is improving. MACD histogram bars are falling at a slower pace while its RSI has also hooked upward.

'Risk takers may start to nibble now while others should wait for a push above its 50-day SMA before taking any position. The next resistance level is seen around the RM3.77-3.84 levels. Always place a stop at below the RM3.55 low,' it said.

CIMB Research has Buy on Tradewinds Plantations at RM3.82

KUALA LUMPUR: CIMB Equities Research has a Buy on Tradewinds PLANTATION []s at RM3.82 at which it is trading at a price-to-book value of 1.3 times.

The research house said on'' Friday, May 20 that Tradewinds Plantation broke out of its triangle pattern few days ago to take out its previous high of RM3.62.

'We believe this is a prelude to more upside ahead. If prices can continue to hold on above the triangle support, there is a good chance that prices may inch towards RM4.00 and RM4.18 soon,' it said.

CIMB Research said the MACD has staged a golden cross while RSI is also rising, suggesting that the bulls have the upper hand here.

'Buy on weakness looks like a good strategy here. We will only review our call if prices violate yesterday's low of RM3.56. A fall below the lower channel of the triangle pattern would negate this uptrend,' it said.

CIMB Research has Sell on Amcorp Properties at 63 sen

KUALA LUMPUR: CIMB Equities Research has a Sell on Amcorp PROPERTIES [] at 63 sen at which it is trading at a price-to-book value of 0.7 times.

It said on May 20 that the stock is trapped in a bearish wedge pattern. Although prices could still bounce higher from here, sustainability remains a key concern. The recent swing high of 69 sen would likely keep the bulls at bay for now.

'Technical indicators are showing signs of exhaustion. MACD has flattened out while RSI has also hooked downward. A break below the wedge support (now at 61 sen) would entice greater selling pressure.

'Use any rebound to sell into strength. Unless prices move up above the 70 sen level, the candles are likely to breach its wedge support to test the 58 sen and 52.5 sen levels,' it said.

AmResearch has Sell on Tanjung Offshore, cuts fair value to RM1

KUALA LUMPUR: AmResearch reaffirms its Sell rating on Tanjung Offshore and cut its fair value to RM1 a share from RM1.33'' a share previously) ' pegging its FY11F earnings to a PE of 20 times ' following another set of weak numbers.

'We are cutting our estimates for FY11F-FY13F by 45%-54% to RM16mil-RM18mil following lower margin assumptions from 8%-9% to 7%-7.5% and cuts in revenue assumptions by 20%-30%,' it said on Friday, May 20.

AmResearch said Tanjung was in the red for the second consecutive quarter, with a larger magnitude of RM3mil for 1QFY11.

The losses are attributable to about RM3mil in losses from its UK-subsidiary Citech Ltd. Currently the unit has only about US$15mil in orderbook for the next 18 months and this is not sufficient to cover its sizeable operating costs.

Another factor is the weaker earnings from vessel chartering division. Three vessels were lying idle during 1QFY11, translating into a utilisation rate of about 80%. Nonetheless, it has since been operating at full capacity although six of the vessels are currently under spot contracts.

AmResearch said the losses for the quarter was also contributed by a net loss of RM4.7mil incurred from the disposal of its stake in Hercules Tanjung Asia s/b, a rigs provider.

HDBSVR: FBM KLCI may test 1,550

KUALA LUMPUR: Hwang DBS Vickers Research said there is a chance that the key FBM KLCI would rise towards and challenge the immediate resistance threshold of 1,550 on Friday, May 20 after making a previous attempt on Thursday.

It said investors around the region are expected to be in a positive mood following the overnight increase on Wall Street with major U.S. bellwethers finishing up between 0.2% and 0.4% at the closing bell.

'Possibly giving a lift to our benchmark index ahead are Tenaga (in response to the news that the government might approve an electricity tariff hike as early as next week) and RHB Capital (amid news that several parties are interested to bid for a 25% equity stake currently held by Abu Dhabi Commercial Bank).

'Meanwhile, Tanjung Offshore's share price could come under selling pressures today after its latest quarterly results came in below expectations,' Hwang DBS Vickers Research said.

#Stocks to watch:* Transmile, CBIP, Favelle Favco, Malton

KUALA LUMPUR: Stocks which could see trading interest on Friday, May 20 following fresh corporate developments include TRANSMILE GROUP BHD [], CB INDUSTRIAL PRODUCT HOLDING [] Bhd (CBIP) and MALTON BHD [].

Bursa Malaysia Securities Bhd has dismissed Transmile's appeal and the beleaguered air cargo transport company will be delisted on Tuesday, May 24.

Bursa Securities said on Thursday, May 19 that it decided to dismiss the appeal after considering the facts and circumstances.

CBIP's unit Modipalm Engineering Sdn Bhd has secured a RM32.28 million contract to build a palm oil mill in Sabah.

CBIP secured a contract from Winsome Brantian Palm Oil Mill Sdn Bhd to build the mill with a capacity of 45 tonnes of fresh fruit bunches an hour.

FAVELLE FAVCO BHD [] has secured four contracts totaling RM50.30 million to build tower cranes for four clients.

Its contract was to build an offshore crane for Keppel Fels Ltd and Cosco (Nantong) Shipyard Co., Ltd.

The other two contracts were with Backam Engineering Corp and Form 700

Pty Ltd to supply a tower crane each.

Malton Bhd's earnings surged 620% to RM26.28 million from RM3.64 million a year ago, underpinned by higher billings from the property development division.

Its revenue increased by 79.4% to RM116.38 million from RM64.89 million while pre-tax profit increased by 512.7% to RM38.6 million from RM6.3 million. Earnings per share were 7.55 sen compared with 1.05 sen.

HUNZA PROPERTIES [] BHD [] reported net profit of RM11.13 million in the third quarter ended March31, 2011, a marginal increase from the RM11.07 million a year ago.

Its revenue rose 13.3% to RM66.19 million from RM58.38 million while earnings per share were 5.92 sen compared with 6.94 sen. ''It proposed a special interim single-tier dividend of 2.5 sen per share.

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Gold, silver fall on U.S. data; QE2 eyed

NEW YORK: Gold and silver fell on Thursday, May 19 as weak U.S. housing and manufacturing data and uncertainty about the end of the Federal Reserve's bond-buying program dragged down commodities across the board.

Gold, which has now fallen four out of the last five sessions, was pressured by disappointing mid-Atlantic factory activity and weak existing home sales, suggesting the economy was stuck in a slow-growth gear.

Both bullion and silver are set to end flat this week, as the dollar headed for its first drop in the last three weeks. The U.S. currency fell on Thursday after the previous session's gains as weaker U.S. economic outlook offset worries over euro due to Greece's uncertain debt situation.

"The stability in the dollar over the past few days has led to the trading range in the prices of gold and silver. I am not sure that the sell-off is over, but the market is possibly waiting for another event or more clarity," said Jeffrey Sherman, commodities portfolio manager of DoubleLine Capital, which manages more than $10 billion in assets.

Spot gold dropped 0.2 percent to $1,493.16 an ounce by 3:33 p.m. EDT (1933 GMT). U.S. gold futures for June delivery settled down $3.40 at $1,492.40, after trading in a range from $1,485.80 to $1,499.60.

Gold prices were down over 5 percent after setting a record of $1,575.79 an ounce on May 2.

On the options front, gold, silver and platinum options all rose to all-time highs on Wednesday, U.S. commodity exchange operator CME Group (CME.O) said, as volatility in precious metals futures spiked.

Trading volume was lower than usual for a second day, a sign that funds were less active participants following the recent sharp sell-off, reversing a trend of heavier activity during recent sell-offs.

Silver was last down 0.1 percent at $34.97 an ounce in choppy trade.

END OF QE2 IN SIGHT

Gold, stocks, bonds and the euro are expected to fall in the three months after the end of the Fed's second massive bond buying operation, also known as quantitative easing, or QE2, a Reuters poll of 64 analysts and fund managers found on Thursday. QE2 is scheduled to expire in June.

"The psychological impact of QE2 is more important than the action itself," said Jason Pride, director of investment strategy at Glenmede, with $19.8 billion under management.

Some market watchers also expect a third round of quantitative easing.

"I don't see how QE cannot go on in some form because who's going to be left to buy the Treasury debt if not the Fed. It's hard to believe that the Fed would just shut down," said Leo Larkin, metals equity analyst at Standard & Poor's.

Bullion was up 20 percent since August when Fed Chairman Ben Bernanke's speech at Jackson Hole, Wyoming marked the beginning of QE2.

ETF WEAK, PHYSICAL COIN DEMAND SOARS

Interest in gold investment products such as bullion-backed exchange-traded funds remained soft, with holdings of the world's largest, New York's SPDR Gold Trust, declining by nearly 30,000 ounces on Wednesday.

Holdings of the largest silver ETF, the iShares Silver Trust, declined by 1.3 million ounces, the fund said on Wednesday. Its holdings rose strongly throughout last year, but silver's recent dive of more than 30 percent has been accompanied by outflows.

Industry-sponsored trade group World Gold Council said in a report that gold coin and bar investment rose in most geographical areas in the first quarter, more than doubling in China to 90.9 tonnes, rising 54 percent in the United States to 22.5 tonnes and almost doubling in Europe to 78.1 tonnes.

Central banks were also major gold buyers, adding 129.3 tonnes to their holdings, up from 58.8 tonnes in the first quarter of last year, WGC said. Until recent years, central banks were net suppliers of gold to the market.

Platinum group metals have firmed this week during London's Platinum Week, as miners, recyclers, traders, analysts and end-users gathered for the launch of an industry report bullish on palladium by PGM refiner and specialist company Johnson Matthey.

Platinum slipped 66 cents to $1,762.74 an ounce, and palladium was down 0.3 percent at $726.50.

Oil slumps on weak jobs data, IEA output call

NEW YORK: Oil prices fell more than $1 on Thursday, May19 as weak U.S. economic data stoked worries about demand, and the International Energy Agency suggested members could release emergency stocks if OPEC failed to act.

The pull-back coincided with a broad decline across commodity markets, which are testing price floors following several weeks of volatile trade.

Oil volume was light at a quarter less than the 30-day average, suggesting many traders remained on the sidelines. The oil volatility index .OVX dipped to its lowest since May 5 as demand for options protection ebbed.

U.S. crude for June delivery settled $1.66 lower at $98.44, a day after rebounding when some buyers scooped up bargains. Prices touched a session high of $100.79, trading in a narrow range of between $96 to $101 for a sixth day.

"Some of the new longs that came into the market after the recent fall of about $20 a barrel are selling as the U.S. economic data this morning wasn't supportive," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

"The recent buyers pushed prices back to over $100, but they were disappointed with the data on weekly jobless claims and regional manufacturing and are bailing out," he added.

In London, ICE Brent for July delivery settled down 88 cents at $111.42, off the early session high of $113.04.

U.S. data showed weekly jobless benefit filings fell last week, yet claims remained above 400,000 for the sixth straight week, sparking labor market concerns.

Other data showed sales of previously owned U.S. homes fell in April while factory activity in the U.S. mid-Atlantic region grew much more slowly than expected this month, raising more concerns about economic growth.

Still, with unemployment down from a year ago there was some evidence that U.S. drivers were taking near-record $4 gasoline prices in stride.

Americans will cut other expenses rather than forsake highway holidays this Memorial Day weekend, travel group AAA said on Thursday, forecasting that the number of people hitting the road would be little changed from 2010.

The 19-commodity Reuters-Jefferies CRB index .CRB, a global benchmark for commodities, was down 1.4 percent, heading for its largest loss in a week.

IEA URGES PRODUCERS TO PUMP MORE

Concerned that high oil prices would dent the fragile global economic recovery, the Paris-based International Energy Agency urged oil producers to boost supply to cut fuel costs.

IEA, a watchdog for 28 industrialized nations, suggested its members could release emergency stockpiles if OPEC failed to act, although U.S. officials played down prospects for using the Strategic Petroleum Reserve to tamp down prices.

The IEA statement, issued after its governing board met, was an unusual comment on producer policies, analysts said. The statement came ahead of OPEC's next policy meeting on June 8.

The 12-member Organization of the Petroleum Exporting Countries maintains that world oil supplies are adequate.

"The IEA is part of the equation today. Investors have to be saying to themselves, 'hey, they could be serious about pulling the trigger on reserves'," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.

Also weighing on prices, UK consultancy Oil Movements forecast that seaborne oil exports from OPEC, excluding Angola and Ecuador, will rise by 420,000 barrels per day in the four weeks to June 4.

An unexpected drop in U.S. crude oil inventories last week and a large drop in stockpiles at the key Cushing, Oklahoma, delivery point for the U.S. oil futures contract further supported Wednesday's rally. - Reuters

Wall Street hits resistance; LinkedIn soars in debut

NEW YORK: U.S. stocks edged higher on Thursday, May 19 with LinkedIn one of the few standouts in an otherwise lackluster session as its shares doubled in their trading debut.

The S&P 500 ran into resistance after its recent bounce, and many investors have resigned themselves to a patch of economic weakness over the summer.

While stocks have been resilient, only falling 1.5 percent, the S&P is struggling to make headway above 1,340, an area that has met with repeated bouts of selling.

"Now on the way back up, just as far as the next few days are concerned, I think that 1,340 could stop the short-term bounce," said Ari Wald, equity strategist at Brown Brothers Harriman in New York.

He said 1,360 on the S&P 500 is a more significant resistance level that coincides with a 76.4 percent retracement of the index's slide from its all-time high to the bear market low in March 2009. The S&P could struggle to break that level due to low trading volume, said Wald.

"We have seen very low volume on the upside and also marginally higher volume on the downside, which is also concerning," he said.

Economic data painted a cloudy picture as slowing factory activity in the mid-Atlantic region and falling sales of existing homes offset a drop in weekly jobless claims that suggested the labor market was on track for recovery.

"My bottom line, at least over the summer, is I that think there is enough valuation cushion to withstand a slowing of economic growth, so I think we have a cyclical slowing priced in," said Jack Ablin, chief investment officer, Harris Private Bank in Chicago.

Shares of LinkedIn Corp (LNKD.N), the social network company, more than doubled their IPO price in a jump reminiscent of the heyday of investors' love affair with Internet stocks.

LinkedIn rocketed to an intraday high of $121.97 -- as much as 171 percent above its initial offering price of $45. The shares closed at $94.25, up 110 percent.

The Dow Jones industrial average .DJI gained 45.14 points, or 0.36 percent, to 12,605.32. The Standard & Poor's 500 Index .SPX rose 2.92 points, or 0.22 percent, to 1,343.60. The Nasdaq Composite Index .IXIC added 8.31 points, or 0.30 percent, to 2,823.31.

Wald said he is looking for a correction back to as much as 1,230 on the S&P 500 over the summer, a seasonally weak period for equities.

Investors have been rotating into defensive areas of the market, such as healthcare and utilities, which are less sensitive to market weakness.

Semiconductor shares fell after Goldman Sachs cut its rating on Intel Corp (INTC.O), citing slowing processor shipments, rising competition and record capital expenditure levels this year. The firm also lowered its rating on Applied Materials (AMAT.O) as part of a wider downgrade on the semiconductor equipment sector.

Intel shares lost 1.4 percent to $23.54 and Applied Materials dropped 1.2 percent to $14.33. The PHLX semiconductor index .SOX declined 0.9 percent.

Stocks, bonds, gold and the euro are expected to fall in the three months after the upcoming end of the Fed's second massive bond-buying operation, also known as quantitative easing, or QE2, a Reuters poll of 64 analysts and fund managers found on Thursday.

About 6.2 billion shares were traded on Thursday on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with the average of about 8.4 billion last year.

Advancing stocks outnumbered declining ones on the NYSE by almost 3 to 2, and on the Nasdaq, the ratio was about even. - Reuters

Malton 3Q net profit surges 620% to RM26m on higher billings, sales

KUALA LUMPUR: MALTON BHD []'s earnings surged 620% to RM26.28 million from RM3.64 million a year ago, underpinned by higher billings from the property development division.

It said on Thursday, May 19 revenue increased by 79.4% to RM116.38 million from RM64.89 million while pre-tax profit increased by 512.7% to RM38.6 million from RM6.3 million. Earnings per share were 7.55 sen compared with 1.05 sen.

It attributed the strong earnings due to an increase in the billings from the property development division after the completion of en bloc sales of an office tower of V Square Project and billings from commercial projects.

The earnings were also supported by better margins together with better cost savings arising from the continuous re-engineering exercise carried out by the group.

Revenue from both the property development division and CONSTRUCTION [] and project management division increased as compared to the previous corresponding quarter.

For the nine months, its net profit increased by 176% to RM45.73 million from RM16.52 million while revenue saw a 12.8% increase to RM294.45 million from RM260.90 million.

Nasim launches Peugeot RCZ

KUALA LUMPUR: Nasim Sdn Bhd, the official distributor of the Peugeot brand in Malaysia, has launched the multiple award-winning coupe, the Peugeot RCZ.

The on-the-road price of the automatic variant is RM218,888 while the on-the-road price of the manual variant is RM223,888.

The car, which was voted the most beautiful car of the year at the 25th International Automobile Festival, features avant-garde styling and proportions that heralds a new dynamic chapter in Peugeot's history.

Nasim chief executive officer SM Nasarudin SM Nasimuddin said the RCZ was a design statement from Peugeot.

'Its futuristic exterior, luxurious interior and powerful engine is catered for enthusiasts who enjoy driving and want to be noticed.

'The RCZ enters the niche premium coupe segment in the market and we are confident it will be well received,' he said in a statement May 19.

Tradewinds Plantation 1Q net profit surges 95% to RM48.63m

KUALA KUMPUR: Tradewinds PLANTATION [] Bhd net profit for the first quarter ended March 31, 2011 surged 95% to RM48.63 million from RM24.94 million a year earlier due mainly to increase in prices of palm products.

Revenue rose to RM229.93 million from RM183.39 million last year. Earnings per share was 7.73 sen while net assets per share was RM2.97.

Reviewing its performance on Thursday, May 19, Tradewinds Plantation said that based on prevailing prices of palm products and the forecast increase in production in the coming quarters, the company expects its results to be better than the period under review.

CBIP secures RM32.28m job to build palm oil mill in Sabah

KUALA LUMPUR: CB INDUSTRIAL PRODUCT HOLDING [] Bhd's (CBIP) unit Modipalm Engineering Sdn Bhd has secured a RM32.28 million contract to build a palm oil mill in Sabah.

CBIP said on Thursday, May 19 the contract was with Winsome Brantian Palm Oil Mill Sdn Bhd to build the mill with a capacity of 45 tonnes of fresh fruit bunches an hour.

Favelle Favco gets RM50.3m contracts for tower cranes

KUALA LUMPUR: FAVELLE FAVCO BHD [] has secured four contracts totaling RM50.30 million to build tower cranes for four clients.

It said on Thursday, May 19 its contract was to build an offshore crane for Keppel Fels Ltd and Cosco (Nantong) Shipyard Co., Ltd.

The other two contracts were with Backam Engineering Corp and Form 700 Pty Ltd to supply a tower crane each.

'The above contracts are expected to contribute positively to the earnings and net assets of Favelle Favco for the financial year ending Dec 31, 2011 and beyond,' it said.

Tanjung Offshore slips into the red in 1Q

KUALA LUMPUR:'' TANJUNG OFFSHORE BHD [] posted net loss RM3.29 million for the first quarter ended March 31, 2011 compared to net profit RM3.05 million a year earlier, due mainly to weaker demand within the industry especially in the engineering equipment division.

Revenue for the quarter fell to RM100.57 million from RM127.55 million in 2010. Loss per share was 1.14 sen while net assets per share RM1.25.

Reviewing its performance on Thursday, May 19, Tanjung said the first quarter loss was also partially due to a net loss of RM4.7 million incurred from the disposal of its entire stake in Hercules Tanjung Asia Sdn Bhd.

On its current year outlook, Tanjung said it remained positive on the prospects of the oil and gas industry in Malaysia and the region.

The company said it was confident that it would be able to continue to enhance its services to the various oil majors, in particular the many development programmes spearheaded by Petronas.

'Tanjung will continue to penetrate niche markets within its four core businesses to further enhance its growth in revenue and profitability in the oil and gas industry.

'We will continue to invest in sectors or assets that are fundamentally strong in generating healthy returns and taking a long term outlook of the oil and gas industry,' it said.

''

Hunza Properties 3Q net profit flat at RM11.13m

KUALA LUMPUR: HUNZA PROPERTIES [] BHD [] reported net profit of RM11.13 million in the third quarter ended March31, 2011, a marginal increase from the RM11.07 million a year ago.

It said on Thursday, May 19 revenue rose 13.3% to RM66.19 million from RM58.38 million while earnings per share were 5.92 sen compared with 6.94 sen.'' It proposed a special interim single-tier dividend of 2.5 sen per share.

'The increase in revenue of 13% is mainly attributable to stronger sales and higher stage of physical

CONSTRUCTION [] from Gurney Paragon project (condominiums). In addition, Mutiara Seputeh in Kuala

Lumpur also recorded higher sales of its bungalow units,' it said.

Hunza Properties said gain on revaluation of the land transferred out from property, plant & equipment amounting to RM22.7 million was recognised in the current period.

Kossan 1Q net profit dips 24.4% to RM22.96m

KUALA LUMPUR: KOSSAN RUBBER INDUSTRIES BHD [] net profit for the first quarter ended March 31, 2011 fell 24.4% to RM22.96 million from RM30.38 million a year earlier partly due to buyers holding lower stock levels due to the increase in raw material, as well as higher latex cost.

Revenue for the quarter declined to RM256.45 million from RM262.77 million in 2010. Earnings per share was 7.18 sen.

In a filing to Bursa Securities on Thursday, May 19, Kossan said the lower turnover in the first quarter was within its expectations.

On its prospects, the company said it was optimistic of better performance for the remainder of the year, barring unforeseen circumstances.

''

Profit taking limits gains on FBM KLCI

KUALA LUMPUR: The FBM KLCI closed higher on Thursday, May 19 but the advance was limited as some mild profit taking chipped off gains from earlier in the day.

The lower gains at the FBM KLCI were in line with the decline at most key regional markets.

The FBM KLCI rose 0.18% or 2.75 points to close at 1,544.02, off its intra-day high of 1,550.62.

Gainers and losers were tied at 371 each, while 318 counters traded unchanged. Volume was 890.85 million shares valued at RM1.49 billion.

Among the gainers on Bursa Malaysia, Tradewinds rose 48 sen to RM10.28, Pharmaniaga added 45 sen to RM6, Far East and KLK were up 30 sen each to RM7.50 and RM21.80, Dutch Lady and Tradewinds PLANTATION []s added 28 sen each to RM17.84 and RM3.82, Ta Ann 25 sen to RM6.60, Metrod 22 sen to RM3.82, Nestle 18 sen to RM47.96 and Jaya Tiasa 17 sen to RM6.50.

Ingenuity Solutions was the most actively traded counter with 33.51 million shares done. The stock fell 1.5 sen to 19.5 sen.

Other actives included PJI, Asia Media, Ideal Jacobs, DBE Gurney, Gula Perak, Benalec and Axiata.

Among the decliners, Petronas Dagangan fell 40 sen to RM15.40, PPB 20 sen to RM17.30, Lafarge Malayan Cement 19 sen to RM7.31, BAT 14 sen to RM46.36, Harrisons and Ho Hup 12 sen each to RM3.82 and 71.5 sen, Hong Leong Bank 10 sen to RM12.04 while Fiamma, Ajiya and Iretex fell nine sen each to 90 sen, RM1.79 and RM1.04 respectively.

At the regional markets, Japan's Nikkei 225 fell 0.43% to 9,620.82, the Shanghai Composite Index was down 0.46% to 2,859.57, Taiwan's Taiex shed 0.58% to 8,892.88 and South Korea's Kospi lost 1.89% to 2,095.51.

Meanwhile, Singapore's Straits Times rose 1% to 3,172.56 and Hong Kong's Hang Seng Index added 0.66% to 23,163.38.

''

Star Publications buys 80% stake in Capital FM for RM15m

KUALA LUMPUR: Star Publications (Malaysia) Bhd is buying an 80% stake in radio station operator Capital FM Sdn Bhd for cash consideration of RM15 million to expand its portfolio.

Star said on Thursday, May 19 that it was acquiring the stake of 4.0 million shares or 80% from Multimedia Distribution & Marketing Sdn Bhd.

Capital FM shareholders are Multimedia Distribution & Marketing and ISY Holdings Sdn Bhd, which hold 4.50 million shares and 500,000 shares respectively.

ISY has an individual licence to provide terrestrial radio broadcasting which is valid from Feb 10, 2006 to Feb 9, 2016. Following an agreement between ISY and Capital FM is licensed to operate a radio station.

'The proposed acquisition is in line with Star's business strategy of acquiring more media assets to add to its existing portfolio. Radio is recognised as one of the communication media with potential growth opportunities, as shown by the increase in its share of advertising expenditure in recent years. The proposed acquisition will allow Star to participate further in the market for radio advertising to supplement its present strong foothold in the market for print advertising,' it said.

The radio channels currently under Star Rfm Sdn Bhd are 98.8 and Red FM 104.9 and Suria FM under Rimakmur Sdn Bhd.

Ideal Jacobs just 9 sen above offer price in late afternoon

KUALA LUMPUR: Shares of Ideal Jacobs (M) Corp Bhd was trading at 36 sen in heavy trade in the late afternoon on Thursday, May 19 as traders took profit after it listing on Wednesday.

At 4.16pm, the industrial labels manufacturer's share price was down seven sen to 36 sen with 19.19 million shares done.

At 36 sen, it is just nine sen above it offer price of 27 sen when it was listed on the ACE Market on Wednesday.

The FBM KLCI is up 2.53 points to 1,543.80. Turnover was 726.14 million shares valued at RM1.097 billion. There were 321 gainers, 373 losers and 336 stocks unchanged.

RHB Research Institute had accorded a fair value of 39 sen per share which was derived by applying 10.2 times target price-to-earnings ratio (in line with estimated peers' average) to its FY11 EPS forecast of 3.9 sen.

'All in, our fair value represents an upside of 46% from its IPO price,' it said.

AirAsia X inks US$600m deals to buy General Electric engines

KUALA LUMPUR: AirAsia X has inked a contract worth US$600 million with General Electric to purchase the jet engines for its new aircraft.

Under the agreement, the long haul, low fare affiliate of AirAsia Group'' would purchase CF6-80E1 engines to power the three new A330-200s (with the option of two additional aircraft).

It signed the firm contract with GE on Wednesday, May 18 in New York.'' The aircraft which is scheduled for delivery from 2012, will be operated on the carrier's expanding network, offering low fare service to destinations in Europe, Asia and the Pacific.

AirAsia X also signed a 20-year on-point solutions agreement with GE for the maintenance, repair and overhaul of the CF6-80E1 engines.

The CF6-80E1 engines supplied by GE will enhance AirAsia X's long-haul operations as it provides greater range, improved fuel burn and proven stall-free reliability.

The A330-200, which is capable of flying non-stop from Kuala Lumpur to Europe, will be configured in a two class layout with 24 premium flatbeds and 264 economy seats.

AirAsia X chief executive officer Azran Osman-Rani and GE Aviation's vice president and general manager of global sales Kevin McAllister signed the agreements in the presence of Prime Minister Datuk Seri Najib Tun Razak.

Menang Corp slips after 1Q losses

KUALA LUMPUR: Shares of Menang Corp Bhd slipped in afternoon trade on Thursday, May 18 after it posted losses of RM2.51 million in the first quarter ended March 31, 2011.

At 3.09pm, it was down 0.5 sen to 22 sen with 45,900 shares done.

The property developer announced wider losses of RM2.51 million compared with RM2 million a year ago. Revenue was RM1.3 million compared with RM1.12 million while loss per share was 0.94 sen versus 0.75 sen. Its net asset per share was 57.86 sen.

It said the increase in turnover in 1Q2011 was due to higher sales in development PROPERTIES [].'' The lower loss posted in the preceding quarter was due to write back of a provision which was no longer required.

KL Kepong at 3-month high, CPO price up

KUALA LUMPUR: Shares of KUALA LUMPUR KEPONG BHD [] rose to the highest in three months to RM21.94 in afternoon trade on Thursday, May 19 on a higher target price and also recovery in crude palm oil (CPO) futures prices.

At 3.27pm, KLK was up 44 sen to RM21.94 with 593,400 shares done.

The FBM KLCI rose 4.78 points to 1,546.05. Turnover was 576.58 million shares valued at RM824.30 million. There were 306 gainers, 366 losers and 302 stocks unchanged.

UBS Malaysia Research has a target price of RM24 for KLK, an upside of 11.6% from Wednesday's closing price of RM21.50.

CPO for third month delivery rose RM35 to RM3,332 per tonne.

JCY slumps on weak 2Q earnings, but improvement ahead?

KUALA LUMPUR: Shares of hard disk drive manufacturer JCY International Bhd fell to 62.5 sen in afternoon trade on Thursday, May 19 on the weak earnings in the second quarter ended March 31, 2011.

At 3.44pm, it was down 2.5 sen to 62.5 sen, with 2.98 million shares done.

JCY reported net profit of RM12.5 million in 2Q (up 26% on-quarter but down 81% on-year) and RM22.3 million for 1HFY11 (down 84% on-year) from RM143.4 million in 1HFY10.

UBS Research said the H1 FY11 net profit was 31% of UBS estimates full year forecast and 17% of'' consensus estimates.

'We are expecting sequentially better numbers in 2H FY11 and thus are keeping our numbers unchanged,' it said.

It said JCY was still impacted by US dollar weakness and higher input prices. The dollar weakness, lower 2Q volumes, higher aluminium and steel prices and increased labour costs continue to depress margins although recent cost down'' initiatives have pushed margins'' on-quarter higher at 5.6% in 2QFY11 versus 3.8% in 1QFY11.

'Near term outlook remains hazy. In the results statement, management remains tentative on its earnings outlook. With the lack of visibility over PC demand recovery, and a potential shortage in the HDD component supply chain due to the Japanese tsunami, HDD output may remain weak. We have already inbuilt flat volumes into our model for 2011.

'However, JCY continues to intensify cost management initiatives and we expect to see the impact of the better control efforts and increased productivity flow through in subsequent quarters, thus sequential earnings improvement,' it said.

UBS Research said it had a 12-month price target of 70 sen 'based on a DCF methodology on a COE of 10.8%. Our price target implies PE of 20.1x and 8.4x for FY11 and FY12 respectively'.

''

UOA Development plans projects with RM8b GDV

KUALA LUMPUR: UOA Development Bhd which is targeting to list on the Main Market of Bursa Malaysia on June 8, is planning to undertake 30 projects with a gross development value of RM8 billion.

Its chief operating officer of development David Khor said on Thursday, May 19 the company had 30 projects in the pipeline of which 65% would be in Bangsar South.

The company will focus on rolling out the projects in the next seven to 10 years, though it will begin to emphasise on residential PROPERTIES [].

"At the moment commercial properties make up 60% of our portfolio, another 40% is residential.By next year, we hope to turn this ratio to 70:30,"said Khor at the launch of the prospectus.

The listing exercise of UOA Development includes an offer for sale of up to 407 million existing shares of 5.0 sen each.

Of the 407 million shares there would be an offer for sale of 120 million ' of which 50 million shares would be offered to local and foreign institutions to be determined via a book building exercise and 70 million shares to the public at an indicative retail price of RM2.90 per share.

There will also be a public issue of 287 million new shares to the Malaysia and foreign institutional and selected investors approved by the Ministry of International Trade and Industry.

Limited gains on FBM KLCI at mid-day

KUALA LUMPUR: The FBM KLCI rose at the mid-day break on Thursday, May 19 but gains were limited as Asian markets remained cautious after Japan reported a contraction in its first quarter gross domestic product growth.

At 12.30pm, the FBM KLCI was up 0.22% or 3.42 points at 1,544.69. The index had earlier risen to its intra-morning high of 1,550.62.

Market breadth turned negative with 333 losers and 279 gainers, while 302 counters traded unchanged. Volume was 434.92 million shares valued at RM544.52 million.

The ringgit strengthened 0.29% to 3.0230 versus the US dollar; crude palm oil futures for the third month delivery rose RM26 per tonne to RM3,323, crude oil rose 31 cents per barrel to US$100.41 while gold added 60 cents an ounce to US$1,497.75.

At the regional markets, Japan's Nikkei 225 shed 0.31% to 9,636.16, South Korea's Kospi fell 0.73% to 2,120.29, the Shanghai Composite Index edged down 0.08% to 2,870.52 while Taiwan's Taiex was 0.07% lower at 8,938.68.

Meanwhile, Singapore's Straits Times Index rose 0.98% to 3,171.90 and Hong Kong's Hang Seng Index added 0.77% to 23,189.15.

On Bursa Malaysia, KLK was the top gainer this morning and was up 44 sen to RM21.94; Dutch Lady added 34 sen to RM17.90, Far East 30 sen to RM7.50, Metrod 22 sen to RM3.82, Tradewinds 20 sen to RM10, RHB Capital 15 sen to RM9.10 and Allianz 14 sen to RM5.24.

Timber-related stocks also advanced this morning, with Jaya Tiasa up 16 sen to RM6.49, Ta Ann 14 sen to RM6.49, Subur Tiasa five sen to RM2.85 while WTK and Lingui rose three sen each to RM1.92 and RM1.90.

Ingenuity Solutions was the most actively traded counter with 20.1 million shares done. The stock fell half as sen to 20.5 sen.

Other actives included PJI, DBE Gurney, Ideal Jacobs, Asia Media, Gula Perak, Focus and Benalec.

Among the decliners, Cypark and PPB fell 12 sen each to RM2.45 and RM17.38, Fiamma nine sen to 90 sen, BAT eight sen to RM46.42, Proton and Harrisons seven sen each to RM3.40 and RM3.87m while P.I.E., Esso and Hong Leong Bank fell six sen each to RM4.25, RM4.90 and RM12.08.