Saturday, June 11, 2011

Bumi Armada plans to raise up to US$800m from IPO

SINGAPORE: Malaysian-based international offshore oil field services contractor, Bumi Armada Bhd hopes to raise beteween US$700 million and US$800 million from its initial public offering (IPO) plan.

Its executive director and chief executive officer, Hassan Basma saidon Saturday, June 11 the IPO was aimed at going for bigger growth for the company.

"We are considering a couple of that range IPOs in the near future, but again provided if we can do it well," he told reporters after the FPSO ARMADA TGT 1'S "Set Sail, For Success" event here.

Looking at the number of FPSO (floating production, storage and offloading) vessels it operates, Hassan is now number eight in the world ranking.

With the new FPSO that is going to start operation in August, he said Bumi Armada would make it number six in the ranking.

"We are hoping that our target near term is to be number four. That's the kind of growth ambition that we have for the industry," he added.

When asked on when the listing will take place, Bumi Armada chairman Datuk Mahamad Fathil Datuk Mahmood said that the company was still waiting for approval from the Securities Commission.

"We hope to get the approval by the middle of this month...start producing prospectus by the end of the month if everything is in order," he said, adding that it would be the biggest local IPO for the year.

Bumi Armada currently serves clients in 11 countries across Asia, Africa and Latin America.

With 43 Offshore supply vessels and three FPSOs in operation, Bumi Armada is the largest OSV owner operator in Malaysia and the eighth largest FPSO operator in the world. - Bernama

Troubling signs point to more losses

NEW YORK: Don't be surprised if Wall Street racks up a seventh consecutive week of losses as the likelihood of more poor economic data and other disconcerting signals outweigh any thoughts that stocks are cheap, Reuters reported on Friday, June 10.

After closing at its highest level in nearly three years on April 29, the S&P 500 has tumbled nearly 7 percent on the back of a barrage of soft economic data, sparking the debate over whether the economy is headed for a double-dip, or has merely hit a soft patch in its recovery.

The benchmark S&P 500 recorded its sixth straight weekly decline on Friday and volume has picked up, as it typically does, on down days. Another week of selling will mark the longest stretch of weekly losses for the index since 2001.

Red flags, including ugliness in the junk bond market, options activity and the ease with which support levels have been broken suggest more selling ahead.

"You have to be realistic. You've got to have some sort of correction to go into this marketplace just for the healthiness of the market," said Cliff Draughn, president and chief investment officer at Excelsia Investment Advisors in Savannah, Georgia.

As stocks have declined, both investment-grade and high-yield risk premiums in the bond market have slumped as investors sought safe-haven assets.

That's troublesome since the stock market often moves in sympathy with the junk bond market because rising borrowing costs crimp corporate profits.

The CDX HY16 North America index for high-yield bonds, which conversely falls as risk appetite decreases, closed below par for the first time this year on Wednesday. The CDX IG16 North American investment grade index, which investors use to hedge against bond losses, hit its highest level since November 30, according to Tradeweb.

In another signal of skittishness about the market's footing, Ally Financial, an auto and mortgage lender majority owned by the U.S. government, delayed a $6 billion IPO due to bad market conditions, two sources familiar with the situation told Reuters.


Stocks have also been easily passing through technical support levels, with the S&P 500 most recently taking out the April 18th low of 1,294.70, leaving analysts to eye the 1,250 level as the next area of support.

And the daily volume put/call ratio for equity options on the Chicago Board Options Exchange (CBOE) hit an 18-month high on Wednesday, indicating that investors are significantly bearish on the stock market.

On top of all that, data expected for next week, including the Producer Price Index, the Consumer Price Index, May retail sales, manufacturing surveys for New York and Philadelphia as well as the index of leading indicators of economic activity are forecast to mostly show a struggling economy.

"It is a busy economic week, so we expect the market to both anticipate economic data and to react to the releases --

I don't necessarily see anything good coming out of the economic releases next week," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

Several of these indicators set off the first alarm bells about the economy's health when they came out a month ago.

By the end of the week, investors will also grapple with quadruple witching, when the options for stock-index futures, single-stock futures, equity options and stock-index options for June expire.

"This trade will lead to increased volume and the possibility of big moves in the market. Expiration also has the potential for increased volatility, especially intraday volatility next week," said TD Ameritrade chief derivatives strategist Joe Kinahan.


But even with the heavy losses suffered recently, the CBOE Volatility index has remained relatively unchanged, indicating market participants have yet to push the panic button.

"During this entire correction, the VIX hasn't budged much," said Jason Goepfert, president of, in a report. "That could be a sign of complacency among traders, but historically a stock market correction without a spike in the VIX has been a better 'buy' signal than 'sell' signal."

However, a turnaround in stocks could be stoked by any sign of progress in Washington on the debt ceiling and budget debates, an overhang on stocks that has frustrated market participants.

"The biggest thing on the horizon right now is the inability of the U.S. Congress to come to some sort of conclusion over a budget," Draughn said.

"Once that happens, that kinds of frees Bernanke's hands to where if he needs to do monetary intervention, he can. But he essentially is handcuffed at this point, due to the fact that the Treasury is happy to restrict the amount of bonds being issued for bumping up to the debt limit." - Reuters

Dow, S&P end sixth losing week - is seventh on tap?

NEW YORK: The Dow and S&P 500 closed out their sixth week of losses on Friday, June 10 as further signs of a global economic slowdown set the stage for more losses ahead.

The deepening gloom raised the prospect for the S&P, which suffered its worst week since August 2010, to break below the year's low of 1,250 next week.

The Nasdaq wiped out its yearly gains on Friday and also posted its biggest weekly decline since August 2010, as the latest deterioration in sentiment came on fear of flagging Chinese growth and fresh worries about Greece's debt crisis.

The Dow closed below 12,000 for the first time since mid-March.

Reflecting the bearish sentiment, options traders eyed calls on the CBOE Volatility Index .VIX, Wall Street's so-called fear gauge, which moves inversely to the S&P 500's performance. The VIX rose 6.1 percent to end at 18.86.

"We broke below the April low, which was about 1,295 (on the S&P 500) pretty much at the open today. We are probably going to test the March lows if data next week remain weak," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

"But investors are very susceptible to any kind of news and since we are very oversold here, we could see the market instantly bounce back if we get anything remotely good."

The Dow Jones industrial average .DJI fell 172.45 points, or 1.42 percent, to 11,951.91. The Standard & Poor's 500 Index .SPX slid 18.02 points, or 1.40 percent, to 1,270.98. The Nasdaq Composite Index .IXIC tumbled 41.14 points, or 1.53 percent, to 2,643.73 at the close.

For the week, the Dow was down 1.6 percent, the S&P 500 was off 2.2 percent and the Nasdaq was down 3.3 percent.

The S&P 500 has fallen about 6.6 percent from its intraday peak early last month. Many see the benchmark index sliding back down to around 1,250, its March low, where valuations could bring investors back into equities.

At 1,250, the S&P 500 would be roughly 1.7 percent below current levels and approaching a 10 percent decline commonly referred to as a correction.


Bank stocks, already under pressure, finished lower, with the KBW Banks Index .BKX dropping 0.4 percent after sliding more than 2 percent earlier in the day. The Federal Reserve said it will subject more banks to annual stress tests to determine whether they have enough capital and can raise their dividends.

Some of the biggest decliners were regional bank stocks that are now going to face annual tests.

Northern Trust Corp (NTRS.O) fell 1.2 percent to $46.77 and M&T Bank Corp (MTB.N) lost 1.2 percent to $84.41.

But large banks, including JPMorgan Chase (JPM.N) and Bank of America (BAC.N), rose in a late rebound, on a news report that the extra capital charge on big banks will likely be 2 percent to 2.5 percent, compared with the widely predicted 3 percent, traders said.

Bank of America shares rose 1.4 percent to $10.80 and JPMorgan added 0.2 percent to $41.05.

The S&P energy index .GSPE declined 1.9 percent while the S&P index of industrial stocks .GSPI lost 1.6 percent.

China's sales to the United States and the European Union slumped to their weakest since late 2009, excluding Lunar New Year holidays, underlining the view that the world economy is stumbling.

In another negative for stocks, the euro tumbled more than 1 percent against the U.S. dollar as fears about Greece's debt returned to the forefront and investors curbed expectations about the European Central Bank's interest-rate hikes. Investors have been recently trading the correlation between stocks and the dollar.

The PHLX semiconductor index .SOX slid 1.7 percent, sinking to its lowest since early December. The SOX fell below its 200-day moving average for the first time since last October.

About 7.47 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, compared with the daily average of 7.59 billion.

Declining stocks beat advancing ones by 2,419 to 587 on the NYSE while on the Nasdaq, decliners beat advancers by 1,987 to 593. - Reuters

Buffett charity lunch sells for $2.63 million

NEW YORK: A steak lunch at Smith & Wollensky in Manhattan starts at $36.50. The same lunch, eaten in the company of legendary investor Warren Buffett, costs approximately $2.63 million, Reuters reported on Saturday, June 11.

That was the final result of the annual online charity auction for lunch with the "Oracle of Omaha," which ended late Friday night. A total of two bidders entered eight bids in the eBay auction, which started last Sunday.

The final bid was actually for just under $2.35 million, but the anonymous winner added to that after the auction to surpass last year's winning bid by $111, organizers said.

Interest was much lower than in 2010, when nine bidders made a total of 77 bids for the luncheon.

The proceeds benefit GLIDE, a San Francisco charity that Buffett was introduced to by his late first wife, Susan.

Buffett, 80, is the chief executive of the insurance-to-ice-cream conglomerate Berkshire Hathaway and one of the world's richest men.

His fondness for red meat is also well known; during Berkshire's annual shareholder meeting in Omaha he urges investors to visit his favorite steakhouses for a T-bone steak or two. - Reuters

Fed prepares for last spurt of easy money flood

NEW YORK: The flood of Federal Reserve money that has supported Wall Street and the rest of the U.S. economy for 2-1/2 years will shrink to a trickle with the conclusion of the Fed's bond purchases announced on Friday, June 10.

The Fed said it will buy $50 billion of Treasuries, the final series of government bond purchases that marks the last phase of the $600 billion program it launched in November 2010 to prevent another recession.

As a result, once the purchases are concluded on June 30, the financial sector will receive only a fraction of the roughly $100 billion a month in easy money it has been getting from the Fed.

The conclusion of the Fed's bond-buying program, known as "Quantitative Easing 2," does not mean the stimulus will come to a complete stop. The Fed will reinvest maturing securities, mainly mortgage-related debt, which analysts predict will run at $12 billion to $16 billion per month.

"From a psychological standpoint, it is important for the market to still feel the constant presence of the Fed," said Ralph Axel, interest rate strategist at Bank of America Merrill Lynch in New York.

This gradual approach to unwind policy support is likely needed given investor anxiety over a slowing U.S. economy and the festering public fiscal problem in Europe.

While still a lot of money, it is a huge step down from stimulus levels at the height of the buying campaign, dubbed by markets as QE2 because it was the second round of Fed asset-buying in the wake of the 2008 financial crisis.

A key aim of QE2 was to hold down long-term interest rates to stimulate investment in capital equipment and risky assets. It came almost eight months after the Fed's first round of bond purchases, primarily in mortgage-related securities.

The initial bout of quantitative easing, worth $1.73 trillion, began in December 2008 and ended in March 2010. It was created to stabilize the housing sector, which was the epicenter of the financial turmoil and has yet to show signs of recovery.

The Treasury bond component of the first round of purchases totaled $300 billion, from March to October 2009.

The Fed's buying assets has been controversial from the start. Critics say it is tantamount to printing money, and it has been credited with fueling a stock market rally but blamed for a surge in oil and food prices.

The end of QE2 has been well-flagged. The Fed said at the outset it would run until the end of June 2011.

Still, investors expect stocks, bonds, gold and the euro to fall after it ends, according to a Reuters poll of 64 analysts and fund managers last month.


Come July, the Fed will rely on cash generated from its $1 trillion holding of mortgage-related securities to anchor Treasury yields and support the economy.

Proceeds from Fed's maturing mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and the Government National Mortgage Association (Ginnie Mae) will fluctuate monthly depending on house sales and mortgage refinancings.

Recent evidence suggested the real estate conditions are deteriorating again with single-home home prices dropping below their 2009 low in March. The double-dip in housing will likely be compounded by an abrupt slowdown in job growth in May.

This grim development portends that a housing recovery is farther than previously thought and would take longer for people to sell their homes and to pay off their mortgages. This means mortgage securities will not be prepaid quickly.

"We are still at least two to three years away from seeing signs of even a baby upturn in home prices," said Anthony Karydakis, senior economist at Commerzbank in New York.

Going back to the 1950s, housing starts have typically returned to their pre-recession levels in 1-1/2 to 2 years after they hit bottom. But the current housing market is showing "atypical" behavior since its euphoric highs earlier this decade, Karydakis said.

Housing starts are stagnant after 1-1/2 years into the current economic recovery and more than a year since the initial bout of bond purchases. They had enjoyed a brief revival due to a federal first-time homebuyer credit program.

"Housing starts have stabilized at very low levels, but there have been no signs of a recovery," Karydakis said.

In April, housing starts fell 10.6 percent to an annualized rate of 523,000 units. - Reuters

#Stocks to watch:* United U-Li, Top Glove, oil and gas, Mutiara

KUALA LUMPUR: Investors could stay cautious in the week ahead, as reflected in the lacklustre volume over the past week while on Wall Street, the Dow and S&P 500 closed out their sixth week of losses on Friday, June 10.

Further signs of a global economic slowdown set the stage for more losses ahead, Reuters reported.

The deepening gloom raised the prospect for the S&P, which suffered its worst week since August 2010, to break below the year's low of 1,250 next week.

The Nasdaq wiped out its yearly gains on Friday and also posted its biggest weekly decline since August 2010, as the latest deterioration in sentiment came on fear of flagging Chinese growth and fresh worries about Greece's debt crisis.

The Dow closed below 12,000 for the first time since mid-March.

Analysts said the end of June would demarcate the end of the US Federal Reserve's second round of quantitative easing, known as QE2.

The US central bank bought US$600 billion in government bonds since November. That has pumped liquidity into financial markets, helping to drive up stock prices and, some argue, commodity prices as well, according to Reuters.

China is also due to announce its producer price index and inflation report for May. Also in the pipeline would be be the industrial production in May. In April, production rose 13.4% on-year.

The director of OSK Research, Chris Eng said the Malaysian market this week was largely within expectations in that the broader market suffered from lower volume although financial stocks such as Hong Leong Bank, ALLIANCE FINANCIAL GROUP BHD [] and Aeon Credit Bhd saw a bit of interest.

'Out of the two IPOs, UOA Development Bhd was a bit of a disappointment as we had expected more premium given the size of the company as top property company in Malaysia,' he said.

However, Eng said for the week ahead, he expected the market to creep upwards although the 1,565 resistance was still formidable.

'We continue to promote our Top 10 2H2011 Buys over the longer term as their fundamentals remain intact and newsflow should be positive in a somewhat volatile market. Thus far, out of the Top 10, KPJ HEALTHCARE BHD [], KENCANA PETROLEUM BHD [] and AIRASIA BHD [] have already started to outperform,' he said.

Goldman Sachs Research's move to raise Malaysia to overweight due to its improving top-down policy and defensive character could shore up sentiment.

The four factors were a favourable macro back group, market composition, clear development policies and earnings growth of 15%.

Goldman Sachs was also positive on the government's clear and specific policies to spur Malaysia's development into a high income nation by 2020 through its Economic Transformation Programme (ETP) and Government Transformation Programme (GTP).

'We believe investors are not fully aware of these efforts and that this 'investible gap' constitutes an attractive investment opportunity,' it said.

Prime Minister Datuk Seri Najib Razak is scheduled to provide a progress update on the ETP on Monday.

On the home front, CIMB Equities Research said transformation remains the watchword and re-rating catalyst for Malaysia, which is reinventing itself through reforms that kicked off in 2004 with the GLC transformation and widened to the government and economic spheres in 2009.

'This set in motion a re-rating of the market over the past one to two years and will remain the key catalyst for the market in the near term. The monthly announcements of entry point projects have had a positive impact on tourism, CONSTRUCTION [], property, oil & gas and TECHNOLOGY [] companies.

'We should continue to see newsflow on this front for the next six months. Meanwhile, another transformation is quietly taking place in the political arena, which is timely as the general elections must be held by 2Q2013. We continue to overweight Malaysia and maintain our end-2011 FBM KLCI target of 1,700, based on 14.5 times calendar year

2012 price-to-earnings,' said CIMB Research.

Oil and gas and the supporting industries will continue to see trading interest, especially after Petroliam Nasional Bhd revised its five-year capital expenditure from RM250 billion to RM300 billion. The larger capex will benefit the broader sector, with drillers and fabricators being the big winners, CIMB Research said.

'Local companies with drilling rigs are SAPURACREST PETROLEUM BHD [], Kencana and UMW HOLDINGS BHD []. SapuraCrest's and Kencana's collective six tender rigs are typically used in production drilling while UMW's jack-up rigs Naga 2 and Naga 3 are more suitable for exploration drilling. Kencana is in a unique position because it is also a drilling rig fabricator.

Another stock which could see trading interest on Monday include UNITED U-LI CORPORATION BHD [] which will resume trading after announcing it was selling its three wholly-owned subsidiaries for RM200 million to Legrand France, SA.

U-Li Corp would sell its entire stakes in United U-LI (M) Sdn Bhd, United U-LI Steel Service Centre Sdn Bhd and Cable-Tray Industries (M) Sdn Bhd. U-Li Corp manufactures cable support systems and light fittings and it reported it posted net profit of RM3.28 million on the back of RM34.44 million in revenue.

Analysts said their break out value for U-Li XCorp indicated it would be worth RM2.12 per share. The RM200 million cash consideration alone works out to RM1.52 per share. Based on 30% discount, they expected U-Li Corp to trade around RM1.50 upon listing. The price will eventually improve when news of cash distribution is firmed up.

Top Glove Corp Bhd will also in focus ahead of the release of its third quarter results for the period ended May 31 on Friday, June 17.

AmResearch is maintaining its Sell rating on the glove maker and cut its fair value from RM4.30 share to RM3.90, based on a price-to-earnings of 15 times CY12F earnings ' at parity to the stock's 10-year mean.

'We understand lacklustre demand for natural rubber (NR) gloves and persistently strong headwinds remained as the main culprits, the same reasons which dragged down earnings in the previous quarters. 9MFY11F net profit would be flattish on a sequential basis, at best,' it said.

Meanwhile, property developer MUTIARA GOODYEAR DEVELOPMENT [] Bhd plans to undertake a commercial and residential project with gross development value of RM1.2 billion on the prime land it is acquiring from UDA Holdings Bhd.

The 1.4ha (3.6 acre) freehold site near the Sheraton Imperial Hotel along Jalan Sultan Ismail in Kuala Lumpur has been valued at RM215.5 million.

Friday, June 10, 2011

Toyota forecasts 35% profit slide after quake

TOKYO: Toyota Motor Corp forecast a larger-than-expected 35% fall in annual profit on Friday, June 10 and warned that the strong yen was making it difficult to justify keeping production in Japan.

Toyota has struggled to restore output after a massive 9.0 earthquake in March rocked northeastern Japan and forced automakers to slash output. The ensuing nuclear disaster and power shortages have compounded their woes.

The production disruption will likely see Toyota lose its title as the world's largest automaker this year.

"This is probably another conservative estimate from Toyota, but it's predicting a loss in the fiscal first half so we can tell how serious the damage from the earthquake was," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo, adding that shares in the company may fall on Monday.

Toyota reiterated its plan to restore output to pre-quake levels by November, helped by a recovery in the supply chain for key parts, and expressed confidence it could claw back market share lost as a result of the quake.

In an encouraging sign for automakers, chipmaker Renesas Electronics Corp said on Friday it now expected to restore supply capacity lost due to quake damage by the end of September, one month earlier than previously planned.

Renesas, the world's biggest maker of microcontrollers, had become one of the biggest bottlenecks in the automotive supply chain that forced car firms to curb production.

"Once our product supply is back to normal, we can compete with no problem. We have the resources and are fully charged," Toyota Chief Financial Officer Satoshi Ozawa said at a briefing in Tokyo.

But Ozawa warned that Toyota was getting hammered by the strong yen and called on the Japanese government to take action to rein it in.

The Japanese currency hit a one-month high against the dollar this week and is now about 5 yen stronger than the 85 per dollar level that Toyota sees as the break-even point for profiting on production in Japan.




Toyota said it expects operating profit to fall 35 percent to 300 billion yen ($3.7 billion) in the financial year to March 2012, well short of the consensus for a 434 billion yen profit in a poll of 23 forecasts by Thomson Reuters I/B/E/S.

The forecast, which the company would have announced in May along with its annual results if not for the earthquake, incorporates a 100 billion yen negative impact from the strong yen.

"Structural weakness remains for Toyota, as it has a higher portion of domestic production than Honda and Nissan , which makes it vulnerable to the yen's strength," said Park Sang-Won, an analyst at Eugene Investment & Securities in Seoul.

Toyota forecast global sales would fall 1 percent to 7.24 million vehicles in the year to March. The figures include sales at truck maker Hino Motors Ltd and compact car maker Daihatsu Motor Co .

The drop is expected to place Toyota behind General Motors and possibly Volkswagen AG in the global vehicle sales rankings this year, and reflects a loss of share to smaller rivals such as South Korea's Hyundai Motor Co , which has been nipping at its heels for years.

Toyota played down the possibility.

"We don't see it as necessary to be the largest automaker in the world," Ozawa said. "The most important thing is creating a stable business base."

Toyota said on Friday it expects the dollar to average 82 yen in the current financial year to next March 31, against an average currency rate of 86 yen per dollar last year.

The yen's persistent strength has raised questions about the rationale of Toyota's commitment to producing at least 3 million cars in Japan each year.

Ozawa said it was possible that Toyota President Akio Toyoda was rethinking his position.

"We are in a situation where it's becoming impossible for Japan's manufacturing industry to do business," Ozawa said.

"Our president has been saying that he would never want to see Japan's manufacturing fading from view, but he also said recently that he was unable to respond when someone made the comment that Toyota's production should not be handled only in Japan."

Toyota's shares have fallen 7.5 percent since the disaster, underperforming the benchmark Nikkei 225 average , which has lost 6.5 percent. Its shares on Friday rose 0.9 percent to close at 3,300 yen before the company released the profit forecast. ($1 = 80.305 Japanese Yen) - Reuters

GLOBAL MARKETS-World stocks head for weekly loss; euro slips

LONDON: World stocks headed for their fifth weekly loss out of the past six on Friday, June 10, depressed by concerns about a slowing global economy and by Europe's ongoing struggle to control Greek debt.

Wall Street also looked set to open lower.

The euro slipped against the dollar despite the European Central Bank's all-but-official confirmation that it will raise interest rates in July.

Brent oil hit a five week high and U.S. crude reached over $102 a barrel but both later slipped back after Saudi Arabia began offering more oil to Asian refiners, easing worries about supplies following an inconclusive OPEC meeting.

MSCI's all-country world stock index was down a quarter of a percent, losing more than 6 percent over six weeks and gaining only 1.5 percent for the year to date.

Some worries about the state of the world economy were assuaged on Thursday by better-than-expected U.S. trade deficit data, which may imply stronger second-quarter growth than expected.

But the euro zone debt troubles and a generally defensive stance by many investors pulled stocks lower.

"Even though in our base scenario we still believe that this is a temporary slowdown and that economic growth will pick up later in the year, the markets will continue to be nervous and volatile in the meantime," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

Stresses in the euro zone remained firmly in place, despite moves by Greece to institute a new austerity plan and some progress among euro zone leaders to agree a new bail out.

European Central Bank President Jean-Claude Trichet appeared to be at loggerheads with Germany over the role that private investors might play in some kind of refinancing of Greek debt.

The FTSEurofirst 300 stock index was down 0.4 percent. Earlier Japan's Nikkei closed up half a percent.



The euro struggled to keep its footing as the worries about debt problems overwhelmed any support from a likely interest rate rise by the European Central Bank next month.

"The image of European policymakers and the ECB standing toe to toe on this particular issue is something investors find deeply unsettling," said Michael Derks, chief strategist at FXPro.

The euro was down a third of a percent at $1.4462, although it got a brief boost when Germany's Bundestag voted in favour of a motion to approve new aid for Greece.

Core euro zone debt was generally a bit stronger, but there was more pressure on the periphery.

The premium investors demand to hold Spanish and other lower-rated government bonds rather than benchmark German Bunds rose.

Five-year credit default swaps (CDS) on Greek government debt rose 25 basis points to 1,545 basis points, according to data monitor Markit. This means it costs 1.545 million euros to protect 10 million euros of exposure to Greek bonds.

Spanish CDS were 9 basis points up at 269 basis points, while Portuguese CDS were 12 basis points higher at 725 basis points. Ireland's were 8 basis points higher at 695 basis points. - Reuters

HELP ties up with Naza to set up automotive college

KUALA LUMPUR: HELP International Corp Bhd is tying up with Naza Education Sdn Bhd to set up and operate a college specialises in offering courses in automotive and transportation management.

HELP said on Friday, June 10 the focus would initially be in Malaysia and plans would be to expand to Asean countries.

'The establishment of this automotive college is part of HELP's diversification plans to offer technical and vocational training for the nation,' it said.

Both parties would share the responsibility of jointly establishing this joint venture in which each party would have a 50% equity shareholding.

They would then set up a special purpose vehicle company Symphony Haven Sdn Bhd with an initial issued and paid-up share capital of RM2.

They said the financing of the JV company would require the issued and paid-up share capital to be increased.

PJI Holdings unit gets RM10.6m sub-contract from UEM Construction

KUALA LUMPUR: PJI HOLDINGS BHD []'s unit has secured a sub-contract worth RM10.6 million from UEM CONSTRUCTION [] Sdn Bhd to supply and maintain fire protection services at the Main Terminal building of the KL International Airport.

In a filing Friday, June 10, PJI said its wholly owned subsidiary P.J. Indah Sdn Bhd had accepted the letter of award from UEM Construction to provide the service at Sectors S1, S2 and S3 of KLIA.

It said the duration of the sub-contract was for a period of 43 weeks and was expected to be completed by Feb 14, 2012.

PJI said the sub-contract was expected to improve its consolidated earnings and gearing.

Olympia Industries sells JB land for RM80m to pare debts

KUALA LUMPUR: OLYMPIA INDUSTRIES BHD [] is disposing of 15.25 ha of freehold land in Johor Bahru for RM80 million cash to Adawan Development Sdn Bhd in a move to reduce its debts.

It said on Friday, June 10 the piece of land was acquired in December 1989 and is an unconverted development land zoned for residential and commercial use. It is about 5km north-east of the Johor Baru city centre.

'The land is one of several earmarked assets which have been identified as a significant divestment asset subsequent to the implementation of Olympia Industries' restructuring scheme to meet its obligations under the said scheme,' it said.

The company said the proposed disposal was to comply with the terms of the restructuring scheme, specifically to substantially reduce the debts owing to the primary holders of 2007/2013 six-year irredeemable convertible bonds which were the original lenders under the scheme.

Olympia Industries said the consideration for the proposed disposal was a willing-buyer willing-seller basis and based on the valuation carried out by Messrs CH Williams, Talhar & Wong on June 3.

CH Williams, the designated valuer of the lenders, had assessed the market value of the land at RM73 million.

AmFirst REIT acquiring two buildings in Cyberjaya for RM133m cash

KUALA LUMPUR: AmFirst Real Estate Investment Trust is acquiring two office buildings in Cyberjaya for a total of RM133 million cash, its maiden investment outside the Klang Valley.

In a statement Friday, June 10, AmFirst REIT manager Am ARA REIT Managers Sdn Bhd said the two buildings, Prima 9 and 10, were strategically located at Jalan Persiaran Apec, CyberJaya.

AmFirst REIT is acquiring the buildings from Complete Event Sdn Bhd for RM72 million and RM61 million respectively.

Am ARA REIT Managers said Prima 9 and Prima 10 were both seven-storey buildings with two levels of basement car parks, respectively.

It said the sale and purchase agreement was executed between Mayban Trustees Bhd and Complete Event today.

The acquisition of the two buildings will increase AmFIRST REIT's asset under management (AUM) by 13% to RM1.16 billion, it said.

'These two PROPERTIES [] are substantially tenanted by multi-nationals secured against long leases and is AmFIRST REIT's first maiden investment outside Klang Valley, capitalising on the economic growth and vibrancy of CyberJaya's commercial office segment as well as achieving better geographical diversification,' it said.

Am ARA REIT Managers chief executive officer Lim Yoon Peng said the new acquisition was consistent with AmFIRST REIT's growth strategy to acquire high quality assets to growth its AUM.

'This transaction will be accretive at both net property income (NPI) and distribution per unit (DPU) levels. On an annual basis, the DPU is expected to contribute 0.68 sen per unit.

'The acquisition will be funded by bank borrowings,' said Lim.

Am ARA is wholly-owned by Am ARA REIT Holdings Sdn Bhd, which in turn is 70% owned by AmInvestment Group Berhad and 30% ARA Asset Management (Malaysia) Ltd.

ARA Asset Management (Malaysia) Ltd is a wholly owned subsidiary of Singapore-based ARA AmFirst (Singapore) Pte Ltd, which in turn is a wholly owned subsidiary of Singapore listed ARA Asset Management Limited that is an affiliate of the Cheung Kong Group based in Hong Kong.

AmFIRST REIT has six properties, namely Bangunan AmBank Group, Menara AmBank Group and AmBank Group Leadership Centre in Kuala Lumpur; as well as Menara Merais in Petaling Jaya, Kelana Brem Towers in Kelana Jaya and The Summit Subang USJ in Subang Jaya.

Magna Prima's Seri Jalil units sold out within one day

KUALA LUMPUR: MAGNA PRIMA BHD [] sold out all of its 107 units in the proposed Seri Jalil gated residential scheme located at Bukit Jalil within the first day of its official launch.

In a statement Friday, June 10, Magna Prima executive director Lawrence Lee Yek Hui said the buyers had been at the developer's office since 8am till late afternoon to secure the units priced from RM957,900 to RM1.97 million.

'Our motto of knowing the market and developing quality developments consisting of superior product mixes at exceptional locations and with attractive pricing continues to drive the success of our overall business.

'The excellent sales result of Seri Jalil is further testament of Magna Prima's vibrancy and its position for strong earnings rebounds in 2011,' he further added.

Magna Prima's Seri Jalil is spread over 10.86 acres and has a gross development value (GDV) of RM126.5 million.

The scheme comprises 83 units of 2.5-storey Super Link Houses and 24 units of 2.5-storey Semi Link Villas with security, with built up areas ranging from approximately 3,345 sq ft to 4,162 sq ft.

Lee said CONSTRUCTION [] was expected to commence during the second half of 2011 and conclude by end 2012.

'Next in line for Magna Prima is the release of Phase One of the Boulevard Business Park along Jalan Kuching.

'This hybrid commercial development with a GDV of more than half a billion ringgit is slated for launch on June 22, ''2011,' he said.



ECM Libra 1Q net profit surges 97.5% to RM14.32m

KUALA LUMPUR: ECM Libra Financial Group Bhd net profit for the first quarter ended April 30, 2011 surged 97.5% to RM14.32 million from RM7.25 million a year earlier, mainly contributed by net brokerage, fee, trading and interest incomes.

Revenue for the quarter rose to RM46.59 million from RM34.78 million in 2010. Earnings per share was 1.76 sen while net assets per share was RM1.25.

Reviewing its performance for the quarter, ECM Libra said in June 10 that the increase in net profit was mainly contributed by net brokerage income of RM14.4 million, fee income of RM5.6 million, net gain from trading and investment securities of RM4.5 million as well as net interest income of RM9.7 million; partially offset by operating expenses of RM20.6 million.

On its prospects, ECM Libra said its fundamentals and financial position remain strong and ''was expected to show satisfactory performance in the current financial year.


Hong Kong unveils new measures to cool sizzling property market

HONG KONG: Hong Kong has lowered the loan-to-value (LTV) ratio for home mortgages to curb the red-hot property market, the Hong Kong Monetary Authority said on Friday.

Apartments valued at between HK$10 million and HK$12 million ($1.3-1.6 million) would have their LTV ratios lowered to 50 percent. Flats valued at HK$7-10 million would be lowered to 60 percent and for those valued below HK$7 million the LTV ration would be lowered to 70 percent, HKMA Chief Executive Norman Chan told reporters.

The LTV is the percentage of a property's value that is mortgaged. ' Reuters

Poor showing by XOX on trading debut, closes dn 35%

KUALA LUMPUR: Shares of mobile virtual network operator XOX Group Bhd closed sharply lower, shedding more than 35% off its offer price of 80 sen on its first trading day on Friday, June 10.

It closed 28 sen lower at 52 sen. It was actively traded with 31.81 million shares done.

The company reported that it made a net loss of RM1.66 million in the quarter ended March 31 mainly due to the selling and distribution expenses which were necessary in creating brand awareness for XOX's services.

It recorded revenue of RM12.68 million on the back of about 391,000 subscribers.

'During the current quarter XOX has also managed to record an average revenue from sales of recharge of approximately RM30 per user per month,' it said.

XOX chief executive officer, Ng Kok Heng, said the company would focus on the corporate sector with the introduction of the new convergence value-added services plan in the second half of this year.

Bernama quoted him saying the company planned to offer a more flexible mobile telecommunications services according to the corporate requirements, including a corporate subscription rates for all calls made by employees to customers during office hours.

"We believe that such initiatives would help enterprises reduce operating costs without compromising employee productivity," he.

Ng said with the listing, it was timely for the company to expand its market reach by increasing subscriber base to 1.5 million by year-end. To date, XOX has more than 470,000 subscribers with eight service centres nationwide.

Gadang gets RM23.9m job from Syarikat Prasarana Negara

KUALA LUMPUR: GADANG HOLDINGS BHD []'s unit Gadang Engineering (M) Sdn Bhd has received a contract worth RM23.9 million from Syarikat Prasarana Negara Bhd to undertake civil CONSTRUCTION [] (phase 1) at the Sungai Buloh Depot in relation to the Klang Valley mass rapid transport project.

In a filing Friday, June 10, Gadang said Gadang Engineering had accepted a letter of acceptance from SPNB to undertake the project.

It said the contract was to be completed within eight months from date of site possession and was expected to contribute positively to its future earnings.

FBM KLCI ends week on positive note

KUALA LUMPUR: The FBM KLCI snapped its four-day losing streak and ended the week on a positive tone when it closed higher on Friday, June 10.

The FBM KLCI closed 0.34% or 5.30 points higher at 1,556.19, lifted by gains at select blue chips including Genting and banking stocks.

Gainers led losers by 393 to 313, while 335 counters traded unchanged. Volume was 783.02 million shares valued at RM1.30 billion.

Among the gainers, Genting rose 22 sen to RM11.32, Hong Leong Bank 19 sen to RM13.02, HLFG 16 sen to RM12.66, CIMB two sen to RM8.41, MISC 13 sen to RM7.09, Petronas Chemicals eight sen to RM7.05, Genting PLANTATION []s seven sen to RM7.99 and Maxis three sen to RM5.49.

Other gainers included Tasek, Golsta, Fima Corp and Aeon.

ACE Market-debutant, mobile virtual network operator XOX Group Bhd, extended its losses in the afternoon session and fell 28 sen to 52 sen with 31.82 million shares done.

Other decliners included BLD Plantations, Glenealy, Boustead, Mentiga, Dutch Lady, Aeon Credit, Harrisons and JT International.

Focus Point was the most actively traded counter with 51.2 million shares done. The stock fell 1.5 sen to 6.5 sen.

Other actives included XOX, SAAG, Kencana, MAA, Tenaga, Karambunai, UEM Land and Axiata.

At the regional markets, Japan's Nikkei 225 pared down its gains and closed 0.50% higher at 9,514.44 and the Shanghai Composite Index edged up 0.07% to 2,705.14.

Meanwhile, Taiwan's Taiex slumped 1.81% to 8,837.82, South Korea's Kospi fell 1.19% to 2,046.67, Hong Kong's Hang Seng was down 0.84% to 22,420.37 and Singapore's Straits Times Index fell 0.62% to 3,078.35.

Petronas clarifies Tenaga's purchase of power from Singapore

KUALA LUMPUR: Petroliam Nasional Bhd clarified reports of TENAGA NASIONAL BHD [] buying power from Singapore was due to planned maintenance'' on two facilities which have since been successfully completed.

The national oil corporation said on Friday, June 10 the maintenance was carried out on an offshore production facility from April 19-26 and at an onshore crude processing facility from May 26 to June 4.

'The exercises, carried out to ensure the integrity of the systems and processes at the two facilities, required a total shutdown of the facilities, resulting in a reduction of supply of natural gas to our customers during the maintenance periods,' it said.

It was clarifying news reports that TNB's purchase of power from Singapore due to 'a shutdown of Petronas-owned gas production platforms'.

Petronas said during the maintenance periods, it curtailed the supply of gas to its customers, including to the power sector, to ensure'' each customer sector would receive optimum volume of gas.

It had also held discussions with its customers and gave advance notification of the shutdowns to allow for mitigation measures.

'The maintenance works were successfully completed as per their schedules and the supply situation to the customers has since improved,' it said.

Mutiara Goodyear plans RM1.2b project along Jalan Sultan Ismail

KUALA LUMPUR: Property developer MUTIARA GOODYEAR DEVELOPMENT [] Bhd plans to undertake a commercial and residential project with gross development value of RM1.2 billion on the prime land it is acquiring from UDA Holdings Bhd.

The 1.4ha (3.6 acre) freehold site near the Sheraton Imperial Hotel along Jalan Sultan Ismail in Kuala Lumpur has been valued at RM215.5 million.

Mutiara Goodyear executive chairman Hamidon Abdullah said on Friday, June 10 the company planned to build offices and apartments involving a development cost of some RM800 million.

'The numbers are premature and we are undertaking the project on our own,' he told reporters on Friday, June 10 after the shareholders meeting.

Hamidon said the project which have received regulators' approval since 2005, would have to be reassessed as the original plan was done in 2003.

The development cost of RM800 million which includes the price of the land, translates into a gross profit of RM400 million for the project. This indicates a gross profit margin of 33%.

In a statement to the stock exchange last month, Mutiara Goodyear said the land acquisition formed a part of the group's expansion strategy to grow its land bank in prime locations across the Klang Valley.

Hamidon said Mutiara Goodyear intended to finance 70% of the RM215.5 million price tag with bank loans while the balance 30% would be settled with the company's internal funds.

He said the commercial and residential job is expected to begin early next year for completion within five years.

On a larger scale, its current and new property projects have a combined gross development value of RM4.12 billion across the Klang Vallley and Penang, according to the company's corporate fact sheet.

The Klang Valley projects include the on-going RM1.2 billion 'Nadayu Melawati' and 'Nadayu'' 92 Kajang''' residential projects. The developer has lined up new projects in Bandar Sunway, Cyberjaya and Penang, apart from the upcoming job along Jalan Sultan Ismail.

For the current financial year ending Dec 31, Hamidon said Mutiara Goodyear planned to launch about RM1.3 billion worth of PROPERTIES [] at Bandar Sunway, Cyberjaya, Melawati in the Klang Valley and Penang.

'It is mostly residential' he said, adding that the developer had a total landbank of 346.8ha (867 acres) of which 68.4ha (171 acres) are located in the Klang Valley while the balance is in Penang.

On whether Mutiara Goodyear plans to expand its investment properties portfolio, Hamidon said the company intended to focus on property development to grow its business.

'We will build, sell and turn cash around,' said Hamidon who joined the board of Mutiara Goodyear following the takeover offer of the company by Atis Corp Bhd.

Last September, Atis Corp and its wholly-owned subsidiary Atis IDR Ventures Sdn Bhd had launched a takeover offer for the remaining shares in Mutiara Goodyear not owned by the acquirers at 97 sen a share. The takeover offer is by virtue of the Atis having acquired 44.4% or 102.63 million shares in Mutiara last year.

The level had surpassed the general offer threshold of 33% under the Malaysian corporate takeover rules.


As at April 22 this year, Atis Corp via Atis IDR is the single largest shareholder in Mutiara Goodyear with 60.8% stake.'' Hamidon is also a non-executive director of Atis.

On whether Atis plans to divest its stake in Mutiara Goodyear, Hamidon said there will be no dilution in the immediate term.

Mutiara Goodyear posted a net profit of RM30.38 million, or 13.16 sen a share in the first quarter ended March 31 this year against a revenue of RM125.62 million. As Mutiara Goodyear had changed its financial year end from April 30 to Dec 31 last year, there were no comparative figures for the latest quarterly numbers.

Note that the property developer's revenue and net profit were recognised based on the project completion method. As at March 31,'' Mutiara Goodyear's total deferred revenue from progress billings of its property development operations stood at RM30.4 billion.

Shareholders of Mutiara Goodyear had earlier approved the company's name change to Nadayu Properties Bhd. Hamidon said the change was expected to be effective within two weeks after obtaining the green light from regulators.

Bank of Korea surprises with rate rise, more seen ahead

SEOUL: South Korea's central bank raised interest rates on Friday, June 10 for the third time this year, surprising financial markets, as the government warned of rising inflation risks even as growth in Asia's fourth-largest economy cools.

The Bank of Korea raised its benchmark rate by 25 basis points to 3.25 percent, playing down growing concerns about a slowing global economy that have rattled global markets and persuaded three major central banks in Asia to hold rates steady this month.

Bond prices tumbled, with the 1-year treasury bond yield surging the most in seven months, as the central bank's unexpectedly hawkish stance on inflation suggested policy tightening would be more aggressive than previously thought.

It was the fourth time in six rate-setting meetings this year that the Bank of Korea had gone against the market consensus.

"Overall, we sense that the BOK has turned less sanguine on growth, but more hawkish on inflation, especially on core price pressures," said Christiaan Tuntono, economist at Credit Suisse. "This suggests that the process of monetary policy normalization will continue."

Central bank Governor Kim Choong-soo, a close ally of President Lee Myung-bak and often regarded as a dove, shifted his language from concerns about bad loans at domestic savings banks and "cautious consideration" at the May rate meeting to focus on battling inflation at Friday's meeting.

A majority of the 14 analysts surveyed by Reuters late on Friday forecast the Bank of Korea would raise the policy rate two more times this year.



"We have to pay attention to core inflation in order to prevent high inflation from becoming chronic," Kim told reporters, referring to the accelerating growth in prices of goods other than volatile fuels and foods.

The decision to raise rates was unanimous in the six-member policy committee, he added.

The 1-year treasury bond yield jumped 9 basis points to end at 3.49 percent, its biggest daily gain since Nov. 1, 2010. Shares fell more than 1 percent as the rate increase dented sentiment already hit by concerns about a global economic slowdown. The won held steady.

Although surprised by the sudden shift in Kim's language, some economists said recent data was not evidence of the start of a prolonged economic slump, giving the central bank more leeway in tightening policy now.

They also noted that at current levels, the Bank of Korea's monetary policy stance remained "accommodative".

Kim acknowledged that external factors such as the euro zone's debt problems and the political instability in the Middle East were big risks.

Twelve out of the 20 analysts surveyed by Reuters had predicted the Bank of Korea would hold the policy rate steady after raising it by a total of 1 percentage points in four steps between July last year and March this year.

Soon before the rate decision was announced, Finance Minister Bahk Jae-wan warned a group of senior government officials that inflation, which has consistently exceeded the Bank of Korea's target range, would stay elevated for the time being.

Bahk took office early this month after the government received a drubbing in regional polls thanks to rising inflation and subdued wage growth.

Data released early on Friday showed producer price inflation in May eased for a second consecutive month, boding well for consumer inflation that also peaked in March.

Still, consumer price inflation remains stubbornly above the top end of the central bank's 4 percent target, and core inflation jumped to 3.5 percent from 3.2 percent in the prior month.

Recent data has shown that South Korea's export-driven economy is slowing and domestic demand remains anaemic with consumers saddled with debt, a stagnant housing sector and problem CONSTRUCTION []-related loans weighing on small savings banks. - Reuters

Malaysia's palm oil stocks at 16-month high

KUALA LUMPUR: Malaysia's May palm oil stocks rose nearly 15% to their highest in 16 months as production overtook exports, potentially weighing on benchmark futures.

Industry regulator Malaysian Palm Oil Board (MPOB) said on Friday, June 10 that stocks in the world's No.2 producer rose to 1.92 million tonnes from 1.67 million tonnes a month ago, reaching a level unseen since January 2010 and just above market expectations.

The high stocks will weigh on Malaysian palm oil futures that fell marginally before the data release.

"The numbers are within market expectations, but the question is whether these numbers will spur further profit taking or selling," a local trader told Reuters.

May output rose 13.7% to 1.74 million tonnes from April as yield continued to soar after two years of unfavourable crop conditions.

Production is expected to slow in August as estate workers take leave to observe the Muslim fasting month of Ramadan and return mostly to Indonesia.

Malaysian exports in May rose 4.3% to 1.4 million tonnes, up for the third-straight month, as China and India replenished inventories and Muslim countries such as Pakistan and Egypt were in the market to stock up ahead of Ramadan.

The trend for exports in June looks strong. Cargo surveyor Intertek Testing Services said shipments for the first 10 days of June rose 22 percent to 395,041 million tonnes from the same period a month ago.

Another surveyor, Societe Generale de Surveillance will report its estimates later in the day.

MPOB said Malaysian imports of palm oil from Indonesia rose 52.8%,

indicating that Malaysian refiners are buying more in anticipation of stronger demand in the coming months since Jakarta has not raised export taxes in May. - Reuters

Top Glove falls, worries over 3Q results

KUALA LUMPUR: Shares of Top Glove Corp Bhd fell in afternoon trade on Friday, June 10 on concerns about weaker earnings when it releases it third-quarter results next week.

At 3.04pm, it was down 11 sen to RM5.29 with 1.04 million shares done.

The FBM KLCI was up 6.75 points to 1,557.64. Turnover was 495.26 million shares valued at RM723.16 million. Advancing counters beat decliners 333 to 284 while 320 stocks were unchanged.

At the midday break, the company announced it would release the''third quarter financial results for the period ended''May 31, on June 17.

AmResearch said in recent report it was maintaining its Sell rating on the glove maker and cut its fair value from RM4.30 share to RM3.90, based on a price-to-earnings of 15 times CY12F earnings ' at parity to the stock's 10-year mean.

'We are again slashing our FY11F-13F earnings forecasts, by 13%-14% this time around. This represents our third earnings downgrade in the past nine months, underpinning our view that earnings have yet to hit the trough,' it said.

AmResearch said it anticipated Top Glove's 3Q results would again undershoot market expectations.

No respite for XOX, slips lower

KUALA LUMPUR: There was no respite for mobile virtual network operator XOX Group Bhd which extended its losses in the afternoon session to hit a low of 58 sen on Friday, June 10.

At 3.25pm, it was down 22 sen to 58 sen. Its offer price was 80 sen. It was actively traded with 24.46 million shares done.

The FBM KLCI rose 7.1 points to 1,557.99. Turnover was 541.12 million shares valued at RM823.57 million. There were 348 gainers, 289 losers and 320 stocks unchanged.

The company reported that it made a net loss of RM1.66 million in the quarter ended March 31'' mainly due to the selling and distribution expenses which were necessary in creating brand awareness for XOX's services.

It recorded revenue of RM12.68 million on the back of about 391,000 subscribers.

'During the current quarter XOX has also managed to record an average revenue from sales of recharge of approximately RM30 per user per month,' it said.

XOX chief executive officer, Ng Kok Heng, said the company would focus on the corporate sector with the introduction of the new convergence value-added services plan in the second half of this year.

Bernama quoted him saying the company planned to offer a more flexible mobile telecommunications services according to the corporate requirements, including a corporate subscription rates for all calls made by employees to customers during office hours.

"We believe that such initiatives would help enterprises reduce operating costs without compromising employee productivity," he said after the listing ceremony.

Ng said with the listing, it was timely for the company to expand its market reach by increasing subscriber base to 1.5 million by year-end. To date, XOX has more than 470,000 subscribers with eight service centres nationwide.

United U-Li to sell 3 units for RM200m to Legrand France

KUALA LUMPUR: United U-Li Corporation, which manufactures cable support systems and light fittings, is selling all its shares in three units for RM200 million to'' Legrand France, SA.

The company said on Friday, June 10 that it was selling its entire stakes in United U-LI (M) Sdn Bhd, United U-LI Steel Service Centre Sdn Bhd, Cable-Tray Industries (M) Sdn Bhd.

U-Li said Legrand specialises in electrical and digital building infrastructures and reported sales of '3.9 billion in 2010. The company is listed on NYSE Euronext and a component of the CAC Large60.

Both companies had signed a memorandum of understanding on Friday and the envisaged indicative disposal consideration for the sale shares was RM200 million.

This also was based on the assumption the three companies were debt-free, cash-free and real property-free on the date of completion of the proposed disposal; and were able to operate as a going concern on a standalone basis.

According to U-Li's website, the products and services supplied by the group are used extensively in the telecommunication, oil and gas, transportation, power generation, water-works and CONSTRUCTION [] sectors while the integrated ceiling systems are used in the construction and renovation of commercial buildings.

In the first quarter ended March 31, 2011, it posted net profit of RM3.28 million on the back of RM34.44 million in revenue.

FBM KLCI extends gains, XOX skids

KUALA LUMPUR: The FBM KLCI extended its gains at the mid-day break on Friday, June 10 lifted by gains in select blue chips including Genting, HLFG and Hong Leong Bank with the broader market showing some positive signs.

However, mobile virtual network operator XOX Group Bhd had a bad start on its debut on the ACE Market, falling 19.5 sen to 60.5 sen with 18.14 million shares traded. The selling pressure was also linked to the losses in the first quarter which it announced on Thursday.

At 12.30pm, the 30-stock benchmark index was up 0.42% or 6.52 points to 1,557.41. Volume was 412.11 million shares valued at RM568.78 million. Gainers led losers by 322 to 247, while 318 counters traded unchanged.

The ringgit strengthened 0.08% to 3.0197 versus the US dollar; crude palm oil for the third month delivery fell RM15 per tonne to RM3,265, crude oil shed 11 cents per barrel to US$101.82 and gold fell US$1.90 per troy ounce to US$1,542.20.

Regional markets were mostly down as the China stock market trended lower on concerns over further monetary tightening from Beijing. Chinese shares were the worst performers in the region in May, according to Reuters.

Meanwhile, Japan's Nikkei 225 gave up some of its earlier gains on mild profit taking. The Nikkei received an early boost after a report showed the U.S trade gap narrowed unexpectedly in April, suggesting stronger second-quarter economic growth than many economists had expected, though that quickly gave way to some profit taking.

The Nikkei was up 0.83% to 9,545.72, Hong Kong's Hang Seng Index fell 0.69% to 22,454.70, the Shanghai Composite Index shed 0.20% to 2,697.99, Taiwan's Taiex lost 1.30% to 8,884.28, South Korea's Kospi was down 0.56% to 2,059.81 while Singapore's Straits Times Index edged down 0.25% to 3,089.94.

On Bursa Malaysia, HLFG, BAT and Genting added 20 sen each to RM12.70, RM46.44 and RM11.30 respectively, Hong Leong Bank rose 18 sen to RM13.02, KPJ and MISC were up 15 sen each to RM4.50 and RM7.11, Esso 14 sen to RM5.08, while Petronas Gas and Pos added 12 sen each to RM11.78 and RM3.35.

Other losers included Tradewinds that fell 20 sen to RM10.42, Mentiga down 12 sen to 76 sen, Aeon Credit 11 sen to RM4.88, Dutch Lady, Glenealy and Top Glove fell 10 sen each to RM18, RM5.60 and RM5.30 respectively, Inno and Harrisons down nine sen each to RM1.40 and RM3.84, while Litrak lost eight sen to RM3.62.

The actives this morning included Focus, SAAG, MAA, Kencana, Tenaga and HWGB.

REDTone CEO Zainal Amanshah steps down to join Invest KL

KUALA LUMPUR: REDTONE INTERNATIONAL BHD [] chief executive officer (CEO) Zainal Amanshah Zainal Arshad is stepping down to join Invest KL as its CEO effective July 11.

In a statement Friday, June 10, REDTone said that Lau Boon Sik, who is currently the CEO of its subsidiary REDtone Telecommunications Sdn Bhd, would take over the responsibilities as REDTone group CEO with immediate effect.

It said Lau, who was appointed as a board director in 2008, would be promoted as REDTone group CEO on July 8.

'Prior to joining REDtone, he held key positions with prominent multinational ICT companies.

'He holds a First Class Honours Degree in electrical engineering from Universiti Teknoloji Malaysia,' it said.

Meanwhile, REDTone said Zainal, who was appointed as its CEO in 2006 would continue to remain as a shareholder after his resignation to join Invest KL.

Invest KL in an EPP (Entry Point Project) under the Greater KL Plan which was formed by the government to attract 100 multinational companies to invest in Kuala Lumpur and the Klang Valley by the year 2020.



UOA Holdings buys back 7.29m UOA Devt shares on trading debut

KUALA LUMPUR: UOA Development Bhd's major shareholder bought 7.29 million shares of the company on June 8, when it made its debut on the Main Market of Bursa Malaysia.

A filing with Bursa Malaysia showed it acquired the shares in the open market and raised its stake to 66.58% or 796.15 million shares.

Another filing showed United Overseas Australia Ltd acquiring 2.02 million shares on the same day. It is deemed to have indirect interest throught is shareholding in UOA Holdings.

UOA Development made a lacklustre debut and closed one sen lower at RM2.59 with 78 million shares done on June 8. It had earlier fallen to its intra-day low of RM2.48.

The institutional price was RM2.60 and the final retail price at RM2.52 after the book-building exercise.

Based on its institutional strike price of RM2.60, it has a market capitalisation of RM3.10 billion.

The initial public offering was the largest IPO in Southeast Asia in this year to date and has raised RM876.2 million from local and international institutional investors and RM176.4 million from retail investors.

MMHE up on move to FBM KLCI

KUALA LUMPUR: Malaysia Marine and Heavy Engineering Bhd shares advanced on Friday, June 10 after FTSE Group and Bursa Malaysia said the stock would replace MALAYSIAN AIRLINE SYSTEM BHD [] in the 30-stock FTSE Bursa Malaysia KLCI with effect from June 20.

At 9.40am, MMHE rose 13 sen to RM8.60 with 18,400 shares done.

FTSE Group and Bursa Malaysia said on Thursday, June 9 the change was made following the semi-annual review of the FTSE Bursa Malaysia Index Series.

The index series is reviewed semi-annually by the independent FTSE Bursa Malaysia Index Advisory Committee.

FBM KLCI snaps four-day losing streak

KUALA LUMPUR: The FBM KLCI snapped its four-day losing streak on Friday, June 10 and was in positive territory at mid-morning, in line with the gains at most key regional markets.

Japan's Nikkei 225 rose more than 1% following the overnight gains at Wall Street, but analysts said trading would remain choppy on the local market.

The FBM KLCI added 4.30 points to 1,555.19 at 10am, with gains including at Genting, BAT, Petronas Gas and Hong Leong Bank.

Gainers edged losers by 208 to 134, while 215 counters traded unchanged. Volume was 179.51 million shares valued at RM156.91 million.

At the regional markets, the Nikkei 225 rose 1.25% to 9,585.59, Singapore's Straits Times Index was up 0.23% to 3,104.84, South Korea's Kospi added 0.17% to 2,074.99, and Hong Kong's Hang Seng Index edged up 0.02% to 22,613.24.

Meanwhile, the Shanghai Composite Index shed 0.23% to 2,697.07 and Taiwan's Taiex lost 0.19% to 8,983.84.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients June 10 said that despite the world markets' firmer tone last night, trading activities on the local bourse would be boring and of low volume.

'We expect the FBM KLCI to remain quiet today, as the initial gains (following the American market's rise last night) could be curtailed by the pre-weekend profit taking activities in the latter part of the day.

'Investors should trade the local market with a short-to-medium term time frame,' he said.

Among the gainers at mid-morning, Genting, BAT and MMHE rose 14 sen each to RM11.24, RM46.38 and RM8.61 respectively, Cycle & Carriage and Petronas Gas added 12 sen each to RM4.62 and RM11.78, Petronas Chemicals 11 sen to RM7.08, Hong Leong Bank 10 sen to RM12.94, HPI and MISC nine sen each to RM3.37 and RM7.05, while DiGi was up eight sen to RM28.90.

Mobile virtual network operator XOX Group Bhd, which made its debut on the ACE Market today, was the top loser and fell 16 sen to 64 sen with 12.81 million shares traded.

Top Glove fell nine sen to RM5.31, Glenealy down eight sen to RM5.62, Hap Seng six sen to RM5.28, while Carlsberg, CBIP, Yinson, Supermax and Naim fell five sen each to RM7.51, RM4.10, RM1.67, RM3.87 and RM2.45 respectively.

The actively traded stocks included Focus, MAA, SAAG, Key West, Smartag, HWGB amd Kencana.

CIMB Research has Sell on Bolton at RM1

KUALA LUMPUR: CIMB Equities Research has a Sell call on Bolton at RM1 at which it is trading at a price-to-book value of 0.7 times.

The research house said on Friday, June 10 that Bolton violated its medium term support trend line few weeks ago.

Although prices have been consolidating sideways, CIMB Research said the longer term trend is still down. The candles were unable to swing back above its key moving averages, which is another negative sign.

'MACD is hovering in the negative territory while RSI is still dwindling. Near term gains would likely capped at RM1.05-1.10, its 30-day and 200 day SMAs respectively.

'Use any rebound towards the stipulated resistance zone to unload on strength. However, always put a buy stop at RM1.12, just in case. Support is seen at RM0.93-0.90 and RM0.825,' it said.

CIMB Research has Buy call on Lion Industries at RM1.57

KUALA LUMPUR: CIMB Equities Research has a Buy call on LION INDUSTRIES CORPORATION [] at RM1.57 at which it is trading at a price-to-book value of 0.4 times.

It said on Friday, June 10 that Lion Industries is probably consolidating at the tail end of the descending wedge pattern. If prices can continue to hold on above the RM1.50 low, there is a good chance that prices may bounce back above its key moving averages.

'After taking out the RM16.7 wedge resistance, the stock should re-rate towards RM1.75-1.78. Indicators are showing signs of improvement. MACD is poised for a positive crossover while RSI is also rising.

'Risk takers may start to nibble now but a stop at RM1.50 is a must. Breaking below this level would drag prices back to the May10 low of RM1.37,' it said.

#Update* XOX extends losses, hits low of 67 sen

KUALA LUMPUR: Mobile virtual network operator XOX Group Bhd saw its shares slip further in early trade, falling to a low of 67 sen when it made its debut on the ACE Market on Friday, June 10.

At 9.11am, it was trading at 67 sen, which was 13 sen below its offer price of 80 sen.

There were 4.71 million shares done at prices ranging from 67 sen to 73 sen. It had opened at'' 73 sen.

The company reported that it made a net loss of RM1.66 million in the quarter ended March 31.

It said on Thursday, June 9 the loss after taxation was mainly due to the selling and distribution expenses which were necessary in creating brand awareness for XOX's services.

It recorded revenue of RM12.68 million on the back of about 391,000 subscribers.

'During the current quarter XOX has also managed to record an average revenue from sales of recharge of approximately RM30 per user per month,' it said.

S P Setia advances in early trade

KUALA LUMPUR: S P Setia Bhd shares advanced in early trade on Friday, June 10 after the company declared an interim gross dividend of 5 sen per share, and said it was confident of meeting its RM3 billion sales target this year.

The company has so far recorded sales of RM1.66 billion in the first seven months of the year.

Its net profit for the second quarter ended April 30, 2011 surged 80% to RM92.22 million from RM51.21 million a year earlier, due including to gain from the disposal of an investment property.

Revenue for the quarter rose to RM496.75 million from RM409.07 million a year earlier. Earnings per share were 5.55 sen while net assets per share was RM1.78.

CIMB Research has maintained its Outperform recommendation on the stock and target price of RM5.37 based on an unchanged 30% premium over its FD RNAV of RM4.13.

'Potential re-rating catalysts include 1) continued robust sales, 2) newsflow on landbanking and 3) strong earnings growth. SP Setia remains a core holding in the property sector,' it said in a note June 10.

CIMB Research has Buy on Alam Maritim at RM1.06

KUALA LUMPUR: CIMB Equities Research has a Buy on Alam Maritim Resources at RM1.06, at which it is trading at a FY12 price-to-earnings of 8.8 times and price-to-book-value of 1.8 times.

CIMB Equities Research said Alam Maritim was trapped in a huge triangle pattern. Recently, prices hit a low of RM1.00 before buying support started to set in. This shows that the triangle support drawn from its March low is still intact.

'With prices beginning to take on the key moving averages, we think the stock is ripe for stronger rebound,' it said.

The research house said the echnical landscape is improving. MACD has staged a positive crossover while RSI is also rising, last at 50.37. Follow through momentum should pick up once the candles surpass its moving averages at RM1.06-RM1.08.

'Aggressive traders may start to nibble now while others should wait for a push above RM1.08 before taking any position. Next resistance levels are RM1.15 and RM1.25. Falling below RM1.00 would trigger our stop,' it said.

Wall Street bounce fails to impress the sceptics

NEW YORK: Wall Street ended higher for the first time in over a week on Thursday, June 9 with the Dow and the S&P 500 rising 1 percent at one point, but many analysts saw the rebound as short-lived.

A report showing record U.S. exports in April eased some concerns about a stalled economic recovery, which had been weighing on the market.

A spike in oil prices helped lift materials and energy stocks. Investors also snapped up beaten-down stocks in the financial sector.

The S&P materials sector index .GSPM rose 1.6 percent and the energy index .GSPE gained 1.2 percent. The Morgan Stanley cyclical index .CYC, which is down more than 5.2 percent in June, rose 1 percent. The KBW bank index .BKX was up 1.2 percent.

Several economists said the spike in U.S. exports in April could prompt revisions higher of gross domestic product growth in the second quarter, interrupting a trend of lowered expectations.

But the mood remained fragile. Many analysts still expected the S&P to retest its March low of 1,250 after a string of data, including the latest payrolls report, provided little room for optimism.

Concerns about the future of equities after the Fed's $600 billion second round of stimulus expire at the end of this month also weighed on the market.

After falling for six straight days, "the market was looking for an excuse to bounce back and it got it" from the trade data, said Steve Blitz, senior economist at ITG in New York.

"You can't take just one day and draw a conclusion that the bear market is over."

Reflecting the bearish sentiment, the daily volume put/call ratio for equity options on the Chicago Board Options Exchange (CBOE) was at an 18-month high as of Wednesday's close, according to data posted on the exchange website, indicating investors are significantly bearish on the stock market.

The Dow Jones industrial average .DJI was up 75.42 points, or 0.63 percent, at 12,124.36. The Standard & Poor's 500 Index .SPX rose 9.44 points, or 0.74 percent, at 1,289.00. The Nasdaq Composite Index .IXIC gained 9.49 points, or 0.35 percent, at 2,684.87.

The S&P had lost more than 6 percent in the last six days leading up to Thursday, while the Nasdaq had nearly erased its gains for the year.


CBOE data showed that put/call ratio on equity options rose to 0.99 on Wednesday, which means 99 puts traded for every 100 calls, the highest ratio since January 15, 2009. The average had been between 0.55-0.70 this year.

The high put/call ratio signals investors are actively hedging their bets and setting up for further market declines. But as in other cases, extreme bearishness could also be a contrarian indicator.

"A lot of fear came into the market as investors bought puts," said Jay Shartsis, director of options trading at R.F. Lafferty & Co in New York.

"(But) the high ratio identifies a good buy level for stocks. When a ratio turns this high, from a contrarian view, the risk-reward factor is now significantly skewed to the buy side," Shartsis said.

The PHLX semiconductor index .SOX bounced off its 200-day moving average and was holding near 410, a key level that offered strong support in March.

Texas Instruments Inc (TXN.N) shares rose 0.7 percent to $32.91 even after the company cut its earnings and revenue forecasts late on Wednesday.

Reflecting the appetite for tech stocks, shares of Fusion-io (FIO.N) surged 18.4 percent to $22.50 in their first day of trading -- up from an initial public offering price of $19. Earlier, the stock was up as much as 34.2 percent at a session high of $25.50.

But shares of China-based Taomee Holdings Ltd (TAOM.N) fell 8.6 percent to $8.23 in their stock market debut as U.S.-listed Chinese companies come under more scrutiny following a series of accounting scandals.

As U.S. regulators, brokers and investors are sharpening their look at Chinese companies, about half the top percentage losers on the NYSE and the Nasdaq with share prices over $2 were Chinese companies.

Volume was thin on the New York Stock Exchange, NYSE Amex and Nasdaq with just 6.31 billion shares traded, compared with the daily average of 7.59 billion.

Advancers beat decliners on the NYSE by 1,904 to 1,076. On the Nasdaq, advancing stocks outnumbered declining ones by 1,599 to 1,002.

Details of Thursday's economic data showed the U.S. trade deficit narrowed unexpectedly in April as U.S. exports rose to a record and imports from Japan tumbled more than 25 percent.

A separate report showed the number of Americans filing new claims for unemployment benefits rose by 1,000 last week, while continued claims fell more than expected. - Reuters

Equity options put/call ratio hits 18-month high

NEW YORK: The daily volume put/call ratio for equity options on the Chicago Board Options Exchange (CBOE) hit an 18-month high on Wednesday, June 8 indicating that investors are significantly bearish on the stock market.

At 0.99, which is equivalent to 99 puts traded for every 100 calls, the ratio is the highest single day close since Jan 15, 2009, the CBOE website showed on Thursday.

The ratio was near 0.55 on average earlier this year before spiking above 0.70 since mid-May.

In general, the put/call ratio moves inversely to the performance of equities. When investors are bearish and speculation in puts gets excessive, the ratio will be high.

"The fact that it's not even near (options) expiration and we are getting this kind of sudden move is pretty significant," said Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research at Austin Texas.

"I have been expecting a real soft patch in the market from the beginning of May until at least July, and if you look back at what the market did in late January and in February of 2009, this might be signaling more downside. He added that he has been suggesting his clients to roll their positions out until August.

U.S. stocks extended losses for the sixth straight day on Wednesday on worries a slowing economy could deepen the market's retreat. Wall Street bounced back on Thursday, with major indexes rising 1 percent, but the mood remained fragile.

Most equity options volume is traded by retail investors who bet on the upward or downward direction of the market, while index options are used more by institutions for hedges and other investment strategies.

"Individual investors continue to abandon the market at a rapid clip," said Jason Goepfert, president of in a report.

"The latest evidence comes from the American Association of Individual Investors (AAII), whose survey shows only 24 percent of respondents expecting a higher stock market over the next six months," he said.


Some analysts view the high put/call ratio as being a good opportunity to buy stocks.

"A lot of fear came into the market as investors bought puts," said Jay Shartsis, director of options trading at R.F. Lafferty & Co in New York.

"(But) The high ratio identifies a good buy level for stocks. When a ratio turns this high, from a contrarian view, the risk reward factor is now significantly skewed to the buyside," said Jay Shartsis, director of options trading at R.F. Lafferty & Co in New York.

The Dow .DJI, which on May 2nd gained 10.6 percent for the year when it hit its 2011 closing high, is now up just 5.1 percent.

The S&P 500 .SPX, which had climbed as much as 8.2 percent for the year on the same day, is now up just 2.7 percent. And the Nasdaq .IXIC, which rose 8 percent for the year on May 2nd, is now up only 1.5 percent.

MIDF Research maintains Positive on oil and gas sector

KUALA LUMPUR: MIDF Research has maintained its positive stance on the oil and gas sector, with Petronas Gas and KENCANA PETROLEUM BHD [] among its top picks.

In a note Friday, June 10, MIDF Research said that taking into account higher than previously announced capex and rising long-term demand for oil and gas namely from Asia, it was holding its Positive view on the sector.

'Petronas Gas (Buy, TP: RM13.10) and Kencana (Buy: TP: RM3.16) are among the top picks. Petronas Gas is expected to benefit from Petronas' aggressive expansion in gas business and liberalisation in gas industry.

'Fabricators like Kencana and MMHE (Neutral: TP: RM6.70) will also gain on increasing demand for offshore platform structures,' it said.

Nikkei jumps 1% after Wall Street rebound

TOKYO: Japanese share prices jumped on Friday after Wall Street stocks snapped a six-day losing streak following record U.S. exports, although some analysts warned of a risk of profit-taking ahead of the weekend after Tokyo shares outperformed Wall Street this month.

The benchmark Nikkei rose 1.0 percent to 9,557.43, climbing to its highest in a week, while the broader Topix'' gained 0.8 percent to 819.67. ' Reuters


Thursday, June 9, 2011

XOX Group posts 1Q net loss of RM1.66m

KUALA LUMPUR: Mobile virtual network operator XOX Group Bhd, scheduled to list on the ACE Market on Friday, June 10, reported that it made a net loss of RM1.66 million in the quarter ended March 31.

It said on Thursday, June 9 the loss after taxation was mainly due to the selling and distribution expenses which were necessary in creating brand awareness for XOX's services.

It recorded revenue of RM12.68 million on the back of about 391,000 subscribers.

'During the current quarter XOX has also managed to record an average revenue from sales of recharge of approximately RM30 per user per month,' it said.

Under the listing exercise, the offer price of the shares was 80 sen.

It received 6,652 applications for 106.5 million shares with a total value of RM85.2 million, for the public tranche of 7.5 million shares.

MMHE to replace MAS in KLCI on June 20

KUALA LUMPUR: Malaysia Marine and Heavy Engineering Bhd (MMHE) will replace MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) in the 30-stock FTSE Bursa Malaysia KLCI with effect from June 20.

FTSE Group and BURSA MALAYSIA BHD [] said on Thursday, June 9 the change was made following the semi-annual review of the FTSE Bursa Malaysia Index Series. The index series is reviewed semi-annually by the independent FTSE Bursa Malaysia Index Advisory Committee.

The FBM KLCI reserve list, comprising the five highest ranking non-constituents of the index by market capitalisation, would be NESTLE (M) BHD [], UEM LAND HOLDINGS BHD [], IJM CORPORATION BHD [], AIRASIA BHD [] and SP SETIA BHD []. Companies in the reserve list will replace constituents that become ineligible as a result of corporate actions, before the next review due on Dec 8.

MAS share price closed one sen higher at RM1.43 on Thursday, the lowest in recent years while MMHE rose 22 sen to RM8.47.

CIMB Equities Research had maintained its UNDERPERFORM call on the MAS and target price of RM1.52 due to the near-term stresses of high fuel prices and yield pressures which were likely weigh down MAS's share price.

'MAS's 2Q performance will be even worse than 1Q as 2Q is seasonally the weakest quarter and average jet fuel prices rose from US$111/barrel in 1Q to US$135/barrel in 2Q,' it said.

S P Setia confident of meeting RM3b sales target in 2011

KUALA LUMPUR: S P Setia Bhd is confident that its 2011 sales target of RM3 billion would be met after the company notched up sales of RM1.66 billion in the first seven months of the year.

The company's net profit for the second quarter ended April 30, 2011 surged 80% to RM92.22 million from RM51.21 million a year earlier, due including to gain from the disposal of an investment property.

Revenue for the quarter rose to RM496.75 million from RM409.07 million a year earlier. Earnings per share was 5.55 sen while net assets per share was RM1.78.

S P Setia declared a gross interim dividend of five sen per share in respect of the financial year ending Oct 31, 2011.

Reviewing its performance on Thursday, June 9, S P Setia its profit and revenue were principally derived from its property development activities carried out in the Klang Valley, Johor Bahru and Penang.

'Ongoing projects which contributed to the group's profit and revenue include Setia Alam and Setia Eco-Park at Shah Alam, Setia Walk at Pusat Bandar Puchong, Setia Sky Residences at Jalan Tun Razak, Bukit Indah, Setia Indah, Setia Tropika and Setia Eco Gardens in Johor Bahru, Setia Pearl Island and Setia Vista in Penang.

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

On its prospects, the company said its second quarter sales was RM671 million, with a cumulative 6-months sales of RM1.41 billion.

It said this was its strongest ever second quarter and 6-months sales, eclipsing the previous highs achieved in the second quarter of FY2010 and 6-months FY2009 by 12% and 17% respectively.'

'Total sales of RM1.66 billion for the first seven months of the financial year has surpassed the group's full-year sales achieved in every year of the Group's history except for the RM2.315 billion recorded in FY2010.

'Based on the strong sales momentum for existing projects and the imminent launch of the group's highly-anticipated KL EcoCity project, management is very confident that, barring unforeseen external shocks, the Group's FY2011 sales target of RM3 billion will be met,' it said.

Favelle Favco secures 4 crane contracts valued at RM70.3m

KUALA LUMPUR: FAVELLE FAVCO BHD [] has received four contracts to supply cranes and spare parts totaling more than RM70.3 million.

It said on Thursday, June 9 three of the orders were to supply cranes and the fourth was to supply the spare parts.

The orders were from ExxonMobil Exploration Malaysia Inc., TES Inc, Petrovietnam Drilling & Well Services Corp's drilling division and Marr Contracting Pty Ltd.


Berjaya Food 4Q net profit dn 14.2% to RM2.5m

KUALA LUMPUR: Berjaya Food Bhd's net profit slipped 14.2% to RM2.505 million in the fourth quarter ended April 30, 2011 compared with RM2.92 million a year ago due to higher advertising and promotional expenses.

It said on Thursday, June 9 that revenue rose 9% to RM17.75 million from RM16.28 million. Earnings per share were 1.77 sen versus 2.07 sen a year ago. It proposed dividend of three sen a share.

'The higher revenue was mainly due to more restaurants operating in the current quarter compared to the preceding year corresponding quarter. The lower pre-tax profit was mainly due to higher advertising and promotional expenses, and write-offs relating to the closure of two restaurants arising from restaurant rationalisation and relocation,' it said.

For the financial year ended April 30, 2011, its net profit rose 22% to RM10.59 million from RM8.68 million while its revenue increased by 19% to RM71.94 million from RM60.41 million.

It attributed the higher revenue and earnings mainly due to additional restaurants that were opened during this financial period under review.

S&P affirms Ranhill's rating, outlook stable

KUALA LUMPUR: Standard & Poor's Ratings Services affirmed its 'B-' long-term corporate credit rating on RANHILL BHD [] while the outlook was stable.

'The rating was removed from CreditWatch, where it had been placed with negative implication on Dec. 30, 2010. We then withdrew the rating at the company's request,' said the international ratings agency on Thursday, June 9.

S&P also said it withdrew the 'CCC+' issue rating on the US$220 million, 12.5% senior unsecured notes due October 2011, issued by Ranhill (L) Ltd., on their full, voluntary early redemption on June 6, 2011. Ranhill guaranteed the notes.

"We affirmed the rating and removed it from CreditWatch because we believe Ranhill's full repayment of the US$220 million in senior unsecured notes has improved its liquidity," said S&P's credit analyst Andrew Wong. "Nevertheless, we believe Ranhill's liquidity remains less than adequate."

Ranhill's unit Ranhill Power Sdn Bhd issued RM800 million in guaranteed sukuk with a tenor of two to 15 years. Ranhill borrowed funds from Ranhill Power to help finance the redemption of its notes.

He said the long-term and staggered nature of refinancing better matched Ranhill's debt maturity to the stable cash flows from its utilities business.

'In our view, the increasing contribution of the utilities business would offset the risk from engineering and CONSTRUCTION [] (E&C) projects, gradually improving Ranhill's operating performance.

'Ranhill's financial risk profile is highly leveraged, in our opinion. For the 12 months to March 31, 2011, the company's ratio of adjusted debt to EBITDA was more than 6.0 times and debt to total capital was 60%,' it said.

S&P said the rating reflects Ranhill's exposure to the high-risk E&C business and substantial client concentration. The company's stable utility operating concessions in Malaysia and moderate business diversity partly offset these weaknesses.

'The stable outlook reflects our view that Ranhill will be able to meet its debt maturities over the next six to 12 months because of the long-term nature of the funding for the full repayment of its notes,' it said.

However, S&P cautioned that it might lower its rating if the company's liquidity is unlikely to improve;'' customer receipts or project completion get materially delayed.

The ratings agency also said while the potential for an upgrade was limited, it could raise the rating if Ranhill's liquidity strengthened and its credit protection measures improved, such that its debt-to-EBITDA ratio is consistently at, or below, 4.0 times.

FBM KLCI slips to close lower

KUALA LUMPUR: The FBM KLCI gave up its gains the morning session on Thursday, June 9 and slipped to close in the red as most key regional markets extended their losses on concerns of a slowdown in economic growth.

Wall Street had fallen for a sixth day on Wednesday after the Federal Reserve's Beige Book offered fresh evidence of an economic slowdown.

It reinforced Fed chief Ben Bernanke's bearish assessment on growth on Tuesday, according to Reuters.

In Malaysia, production output in April fell 2.2% year-on-year and was lower 7.6% month-on-month, suggesting a soft patch going into 2Q.

The FBM KLCI shed 0.90 point to 1,550.89, weighed by losses including at Tenaga, PPB, Genting PLANTATION [] and Maybank.

Gainers trailed losers by 330 to 374, while 347 counters traded unchanged. Volume was 697.44 million shares valued at RM1.36 billion.

At the regional markets, the Shanghai Composite Index fell 1.71% to 2,703.35, South Korea's Kospi lost 0.57% to 2,071.42, Hong Kong's Hang Seng Index was down 0.23% to 22,609.83, Singapore's Straits Times Index shed 0.17% to 3,097.57 and Taiwan's Taiex slipped 0.07% to 9,000.94.

Meanwhile, Japan's Nikkei 225 edged up 0.19% to 9,467.15.

On Bursa Malaysia, Tenaga fell nine sen to RM6.80, RHB Capital lost four sen to RM9.90, PPB and Genting Plantation down two sen each to RM17.48 and RM7.92, while Maybank and Axiata lost one sen each to RM8.77 and RM4.86.

Other decliners included NSOP and Fima Corp that fell 18 sen each to RM5.52 and RM6.12, SHL down 15 sen to RM1.33, Cepco 14 sen to RM2.02, BLD Plantations 12 sen to RM7.16, Ta Ann 11 sen to RM6.69 while UMW lost 10 sen to RM7.15.

MAA was the most actively traded counter with 68.8 million shares done. The stock slumped 27 sen to RM1.11 as investors were disappointed over the price which it had proposed to sell its insurance unit.

Other actives included Focus, Axiata, Asia Media, CIMB, Petronas Chemicals and KNM.

Among the gainers, HLFG and Warisan rose 32 sen each to RM12.50 and RM2.55, United Plantations and Pharmaniaga up 30 sen each to RM19.30 and RM5.90, Aeon Credit 28 sen to RM4.99, Boustead 27 sen to RM6.43, MMHE 22 sen to RM8.47 and SapuraCrest up 14 sen to RM4.20.

EPF members withdraw RM7.60b in Jan-March

KUALA LUMPUR: Employees Provident Fund (EPF) members withdrew RM7.60 billion in the January-March quarter in 2011, an increase from the RM5.94 billion in 4Q2010 and RM6.54 billion in 1Q2010.

It said on Thursday, June 9 the total withdrawals made by EPF members in 1Q11 increased 27.28% to 415,706 (4Q110: 356,198) compared to 326,612 in 1Q10.

'The growth reflects on the increase in members choosing to invest part of their savings in approved investment instruments,' it said.

The EPF also said the members' savings investment withdrawals in 1Q11 increased by 71.19% to RM1,559.82 million (4Q10: RM1,265.80 million) from RM911.15 million in 1Q10.

'Total applications approved under this withdrawal increased to 177,988 (4Q10: 149,883) up 56.39% from 113,809 in 1Q10,' it said.

Fitters' 2.5m shares done off-mkt at RM1.02 apiece, RHB Research FV RM1.28

KUALA LUMPUR: FITTERS DIVERSIFIED BHD [] saw 2.5 million of its shares traded off-market at RM1.02 a share on Thursday, June 9.

Stock market data showed that at RM1.02, this was three sen lower than Wednesday's closing price of RM1.05.

At 2.34pm, Fitters was down two sen to RM1.03 in normal trade. There were 177,500 shares done at prices ranging from RM1.01 to RM1.05.

RHB Research Institute had on Wednesday said Fitters management appeared confident about meeting the FY ending Dec 31, 2011 turnover and net profit forecasts of RM490.7 million and RM35.5 million.

'We are fine-tuning the numbers to RM474.2 million and RM36 million,' said the research house.

RHB Research said the production of dry long fibre and biofuel pellet has started in Fitters' palm oil mill in Kedah, temporarily powered by diesel and electricity generated from the steam boiler pending the installation of a biogas plant.

'Fitters hopes to sign up at least four third-party palm oil mills over the next one to two months for the conversion into 'green' palm oil mills,' it said, adding its fair value was RM1.28.