Saturday, June 25, 2011

Wall Street sinks on Europe's debt misery

NEW YORK: Wall Street dropped for a third day on Friday on worries about the Italian banking sector and Greece's debt crisis, but the S&P 500 managed to hold its 200-day moving average in a sign buyers still see value.

The Dow industrials and the S&P 500 fell for their seventh week in the last eight. The benchmark S&P 500 is down 7 percent from its 2011 closing high at the end of April.

Investors are fearful that Greece's government may fail to pass an austerity plan next week, which could force a default on its debt repayments. The government faces an electorate vehemently opposed to the austerity measures.

"They (politicians) may not believe that financial markets are as sensitive to their decisions as they actually are, and there is a worry that somewhere along the line, some political vote goes against the market," said Nicholas Colas, chief market strategist of the ConvergEx Group in New York.

The S&P 500 remained within striking distance of its 200-day moving average -- a line that has been tested twice in recent trading and has so far acted as a springboard for stocks. The level was at 1,263.47.

"Every time you test a resistance or support level, you make it weaker," Colas said. "It's almost like a piece of metal. Every time you hit it, it grows more fragile and that's why people are really worried the third or fourth time."

Problems in the euro zone appeared to intensify as shares of Italian banks UniCredit SpA (CRDI.MI) and Intesa Sanpaolo (ISP.MI) fell sharply on concerns about their capital positions. Trading in their shares was briefly suspended.

The CBOE Volatility Index .VIX or VIX, Wall Street's barometer of investor anxiety, rose 9.4 percent to 21.10. Some analysts say fear needs to rise further before the market reaches a bottom.

The Dow Jones industrial average .DJI dropped 115.42 points, or 0.96 percent, to 11,934.58 at the close. The Standard & Poor's 500 Index .SPX fell 15.05 points, or 1.17 percent, to 1,268.45. The Nasdaq Composite Index .IXIC lost 33.86 points, or 1.26 percent, to 2,652.89.

For the week, the Dow fell 0.58 percent and the S&P 500 shed 0.24 percent, while the Nasdaq gained 1.39 percent.

Bank stocks fell on concerns about the economic outlook. The KBW Banks Index .BKX lost 1 percent and the S&P Financial Sector Index .GSPF shed 0.7 percent. The sector has been the worst-performing this year, falling around 8 percent.

On Thursday, the market welcomed Greece's agreement to a five-year austerity plan.

The euro declined against the dollar for a third straight session on worries Greece's parliament might not pass austerity measures needed for the country to secure more bailout funds.

In the latest economic data, new orders for long-lasting U.S. manufactured products, known as durable goods, increased 1.9 percent in May after dropping 2.7 percent in April as bookings for transportation equipment rebounded strongly.

Oracle Corp (ORCL.O) fell 4.1 percent percent to $31.14 .NDX a day after the world's No. 3 software maker posted disappointing results, especially in hardware sales. Oracle's results sparked concerns about a bigger slowdown in TECHNOLOGY [] spending.

Micron Technology Inc (MU.O) tumbled 14.5 percent to $7.21 after the memory chipmaker recorded results below expectations late Thursday.

About 9.26 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq -- well above the daily average so far this year of around 7.57 billion. Analysts said Friday's volume was much higher than average due in part to the rebalancing of the Russell 2000 Index .TOY.

Declining stocks outnumbered advancing ones on the New York Stock Exchange by a ratio of 19 to 11. On the Nasdaq, about three stocks fell for every two that rose. - Reuters

Euro direction to hinge on Greece vote next week

NEW YORK: It was rough week for the euro and next week, starting June 27 could prove an even tougher one if Greece's parliament does not approve a package of austerity measures.

Passage is mandatory for the country to secure more bailout funds from euro zone governments. If more funds are not secured, Greece could default on its massive debt, which would roil markets.

Worries about Greece caused the euro to drop against the dollar for three straight sessions, pushing the single currency down 0.9 percent for the week and off 1.6 percent this month.

"It is make or break time for the euro next week," said Mark McCormick, currency strategist at Brown Brother Harriman in New York. "A lot hinges on this vote."

While Greece's successful confidence vote this past week raised the possibility the austerity program will pass, such an outcome is not guaranteed, particularly given a disgruntled opposition and public revolt.

The vote is scheduled for June 29 and 30 and the result should not only dictate the direction of the euro, but also global financial markets.

McCormick said if Greece's package does not pass, the euro will likely break through the $1.40 level and could potentially reach $1.36, a level not seen since February.

Thomas Robopoulos, a deputy of Greece's ruling PASOK party, rattled markets on Friday when he said he will vote against the mix of higher taxes, spending cuts and sales of state-owned assets. His remarks helped the euro wipe out initial gains on a stronger-than-expected survey of German business sentiment.

"If Greece defaults it would be a pretty big systemic event and there will be ramifications not only for the euro, but throughout global financial markets," McCormick said.

In late afternoon New York trading, the euro was off 0.6 percent on the day at $1.41720. Concerns about Italy also weighed on the euro, with some Italian bank shares tumbling before being halted.

Against the Swiss currency, the euro was last at 1.1882 Swiss francs, down 0.6 percent, after hitting a record low of 1.1844 on electronic trading platform EBS. The single currency was also weaker versus the yen, trading down 0.6 percent at 114.08 yen.

The Eurogroup -- the finance ministers of the euro zone -- meets on July 3 to decide on a Greek bailout package.

Greece accepted a package of 110 billion euros of European Union and International Monetary Fund loans in May 2010 but now needs a second bailout of a similar size to meet its financial obligations until the end of 2014.

The U.S. Federal Reserve, meanwhile, ends its second round of quantitative easing, or QE2, next week. The program, launched in November, 2010, entailed buying $600 billion in Treasury securities. It has been a negative for the dollar as it was tantamount to printing money, diluting the value of the greenback.

Aroop Chatterjee, chief FX quant strategist, and Jeffrey Young, head of North American FX research at Barclays Capital in New York, said the end of QE2 has implications for FX spot and vol markets and is likely to lead to higher volatilities for most currencies at some point during the next 6-12 months.

"Further, as the effect of QE2 wanes and liquidity supply potentially tightens, the riskiness of assets will likely rise; we see this pushing up the riskiness of the high carry currencies versus those of the safer havens," they said in a report.

Currency speculators reduced bets against the U.S. dollar for the second straight week, according to data from the Commodity Futures Commission released on Friday.

The dollar fell 0.1 percent to 80.44 yen. The dollar index .DXY , which measures its value against a basket of currencies, traded 0.3 percent higher on the day at 75.652.

Next week U.S. economic data is relatively light, making headlines out of Europe all the more likely to impact financial markets. The highlight of U.S. data will be Friday's June ISM manufacturing survey. - Reuters

Madoff trustee triples JPMorgan suit to $19b

NEW YORK: The trustee seeking money for Bernard Madoff's victims is now demanding $19 billion in damages from JPMorgan Chase & Co, more than tripling what he hopes to recover from what had been the main bank for the now-imprisoned Ponzi schemer, Reuters reported on Friday, June 24.

The amended complaint by the trustee Irving Picard adds new charges and was filed three days after the second-largest U.S. bank agreed to pay $153.6 million to settle U.S. Securities and Exchange Commission fraud charges.

Picard maintained that JPMorgan was "thoroughly complicit" in Madoff's fraud and ignored red flags. In his original complaint, made public in February, he had sought $6.4 billion, including $5.4 billion of damages and $1 billion for fraudulent transfers and claims.

"JPMorgan Chase chose to enable Madoff's fraud, not just through the various ways it participated in its activity, but by helping to cover Madoff's naked theft with the imprimatur of a globally recognized financial institution," the 155-page amended complaint said.

The higher damage request reflects "life-to-date damages," or what the trustee considers the minimum losses over the entirety of Madoff's Ponzi scheme.

Picard is also seeking at least $500 million that JPMorgan made "off the backs of Madoff's victims," and more than $400 million of alleged fraudulent transfers.

Tasha Pelio, a JPMorgan spokeswoman, repeated in an email the bank's earlier statement that Picard's lawsuit is meritless and distorts the facts and law.

"JPMorgan did not know about or in any way become a party to the fraud orchestrated by Bernard Madoff," she said. "At all times, JPMorgan complied fully with all laws and regulations governing bank accounts."

Picard has filed roughly 1,050 lawsuits seeking more than $100 billion for former investors at Bernard L. Madoff Investment Securities LLC.


The amended JPMorgan complaint adds new allegations that another financial services company around 1997 investigated nearly daily transfers of $1 million to $10 million between Madoff's account there and his account at Chase.

It said that company questioned Madoff's employees about the suspicious back-and-forth transfers. Having failed to be satisfied about them, they closed Madoff's account, it said.

"JPMorgan Chase's bankers literally watched the fraud unfold before their very eyes," Deborah Renner, a lawyer representing Picard, said in a statement. Both are partners at the law firm Baker & Hostetler.

The amended complaint also discusses Madoff's longtime relationship with Sterling Equities, a private banking customer of JPMorgan founded by Fred Wilpon and Saul Katz, owners of the New York Mets baseball team.

Picard has sued the Mets' owners for $1 billion, prompting them to enter talks to sell part of the team to hedge fund manager David Einhorn for $200 million. [ID:nN26247232] The owners have denied knowing Madoff was committing fraud.

In a regulatory filing last month, JPMorgan estimated that as of March 31 it might have to pay out as much as $4.5 billion more for litigation than it had set aside for that purpose. It also said it faced more than 10,000 legal proceedings.

Tuesday's SEC accord resolved charges that JPMorgan did not tell investors that a hedge fund helped shape -- and then bet against -- complex mortgage securities they bought.


Picard's case against JPMorgan is being overseen by U.S. District Judge Colleen McMahon.

It is one of three high-profile Madoff lawsuits that have been moved to federal district court, where juries can hear cases, from bankruptcy court, where Picard originally sued.

U.S. District Judge Jed Rakoff is reviewing some issues in Picard's $9 billion case against HSBC Holdings Plc.

Rakoff is also considering whether the trustee can invoke racketeering law in a $58.8 billion lawsuit against Italy's UniCredit SpA, Austria's Bank Medici AG and its founder Sonja Kohn, and other defendants.

JPMorgan has until August 1 to respond to the amended complaint, Picard said.

Madoff, 73, was arrested on December 11, 2008, and after pleading guilty is serving a 150-year prison sentence.

JPMorgan shares fell 16 cents in after-hours trading, after closing Friday's session down 58 cents at $39.49.

The cases are Picard v. JPMorgan Chase & Co et al, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-04932; and Picard v. JPMorgan Chase & Co et al, U.S. District Court, Southern District of New York, No. 11-00913.

#Stocks to watch:* Kencana, Muhibbah, Tambun Indah, Subur Tiasa

KUALA LUMPUR: Worries about the Greek debt issue and the slide on Wall Street will weigh on investors' sentiment in the week ahead, starting Monday, June 27, and maybe investors may give up the hope of window dressing as the first half draws to an end.

On Wall Street, Reuters reported the Dow industrials and the S&P 500 fell for their seventh week in the last eight. The benchmark S&P 500 is down 7% from its 2011 closing high at the end of April.

Investors are fearful Greece's government may fail to pass an austerity plan next week, which could force a default on its debt repayments. The government faces an electorate vehemently opposed to the austerity measures.

The Dow Jones industrial average dropped 115.42 points, or 0.96%, to 11,934.58 at the close. The Standard & Poor's 500 Index fell 15.05 points, or 1.17%, to 1,268.45. The Nasdaq Composite Index lost 33.86 points, or 1.26%, to 2,652.89.

For the week, the Dow fell 0.58% and the S&P 500 shed 0.24%, while the Nasdaq gained 1.39%.

At Bursa Malaysia, stocks to watch include KENCANA PETROLEUM BHD [], MUHIBBAH ENGINEERING (M) BHD [], Tambun Indah Land Bhd and SUBUR TIASA HOLDINGS BHD [].

Kencana's earnings rose 81% to RM56.42 million in the third quarter ended April 30, 2011 from RM31.17 million a year ago underpinned by the progress achieved for the contracts. Revenue rose 34.7% to RM377.83 million from RM280.37 million. Earnings per share were 3.08 sen versus 1.92 sen a year ago.

When compared with a year ago, where revenue and pre-tax profit came in at RM280.37 million and RM36.5 million, this was an improvement of 35% and 91% respectively in the current quarter.

Muhibbah was awarded a RM338 million contract from Northport (Malaysia) Bhd to build a multipurpose wharf and the associated facilities. Hopefully, this could inject some positive news into the stock which was battered by its exposure to the Asian petroleum hub debacle.

Muhibbah said the wharf would be an extension to the existing wharf eight and upgrading of wharf 16. The contract is scheduled to start in July and completed in March 2014.

Some upbeat news from Tambun Indah Land Bhd. The Penang-based developer, with projects totaling gross development value (GDV) of RM1.6 billion, expects to record strong revenue growth in the financial year ending Dec 31, underpinned by the sustained property boom in Penang.

Growth would be driven by strong interest in its ongoing projects due to the rapid industrial expansion in Seberang Perai. It would also benefit from the spillover effect from the strong demand for residential PROPERTIES [] on Penang island.

Tambun Indah has several ongoing projects on mainland Penang with total GDV of RM1.6 billion, which is enough to last until 2016.

On a downbeat note, Subur Tiasa's'' net profit in the third quarter ended April

30, 2011 fell 19.5% to RM8.40 million from RM10.44 million a year ago but it expects the outlook to be positive on firm demand overseas.

'The market outlook for timber and timber products in the coming quarter remain positive with the continued firm demand for timber in India and China,' it said.

The company's financial performance was impacted by higher operational costs due to the increase in raw material, fuel and adhesive costs.

Revenue declined 11.8% to RM144.66m from RM164.12 million. Earnings per share were 4.62 sen compared with 5.55 sen.

Subur Tiasa said for the nine-month period, net profit was flat at RM23.838 million while revenue declined 4.8% to RM486.22 million from RM510.79 million.

Friday, June 24, 2011

Tambun Indah to ride on Penang property boom

KUALA LUMPUR: Tambun Indah Land Bhd expects to record strong revenue growth in the current financial year ending Dec 31, underpinned by the sustained property boom in Penang.

Its managing director Teh Kiak Seng said on Friday, June 24 there was strong interest in its ongoing projects due to the rapid industrial expansion in Seberang Perai. This was also due to the spillover effect from the high demand for residential PROPERTIES [] on Penang island.

'At present, Tambun Indah has several ongoing projects on mainland Penang with total gross development value (GDV) of RM1.6 billion until 2016, which has positioned the group as a leading property developer in mainland Penang,' he said after the shareholders meeting.

Teh said since the beginning of the year, the group has recorded an increase in sales, both in terms of units and value, from its various projects.

'To date, we have sold more units than what we had sold in the first half of 2010. At this rate, Tambun Indah is likely to sell more units this year than what we did in 2010. Therefore, we are optimistic of a higher revenue base for FY2011,' he said.

Tambun Indah's ongoing projects include Pearl Garden, Pearl Villas, Juru Heights, Carissa Park, Impian Residence, Dahlia Park and Tanjung Heights

Launched in 2009 and 2011 respectively, Pearl Garden together with Pearl Villas have a GDV of RM277 million.

'The RM277-million GDV projects are expected to contribute 45% to the group's revenues in FY2011, compared to 35.1% in FY2010,' he said.

Wahid: Maybank pulled out due to high price

KUALA LUMPUR: A pricey deal which would not have created value for shareholders could have been the possible reasons for MALAYAN BANKING BHD [] (Maybank) to pull out of negotiations for the purchase of RHB Capital.

The RM10.80 per share in RHB Capital, paid by Aabar Investments for Abu Dhabi Commercial Bank's 25 per cent stake in RHB Cap, "will not have been value creating for Maybank shareholders," said Maybank president and chief executive officer Datuk Seri Abdul Wahid Omar on Friday, June 24.

Asked whether the high price of RM10.80 per share was the stumbling block for the merger, he said: "When we announced the possible merger, we believed the transaction would, if executed properly, be creating value for our shareholders.

"Having said that, there were recent developments, which created certain expectation in terms of valuation and we believe that valuation will be very difficult to create for our shareholders".

This was among reasons for Maybank to pull out of negotiations, he told reporters on the sidelines of the Government Linked Companies (GLC) open day.

Wahid said at this juncture, the bank would continue to focus on organic growth activities but was also open, at the same time, to any transaction opportunity.

"Maybank is progressing well. We have reported our third quarter results and have generated RM3.3 billion in profits for the nine-month period. We are on track for further improvement," he added. - Bernama

GLOBAL MARKETS WEEKAHEAD-Braced for potentially stormy H2

LONDON: Investors are bracing themselves for a potentially stormy market in the second half of this year as they assess the extent of a slowdown in the global economy and fallout from a possible Greek sovereign debt default, Reuters reports on Friday, June 24.

World stocks, measured by MSCI , are courting 2011 lows as downgrades to the growth outlook from the Federal Reserve and the lingering euro zone debt crisis have prompted investors to cut back on risky assets.

The key event risk seen over the next few weeks relates to Greece, which has been promised more money to help stave off a looming default provided its parliament enacts an austerity plan agreed with international lenders.

A vote on the package, which aims to plug a 3.8 billion euro funding gap, is due on Tuesday, but its passage is not seen as certain given vehement popular opposition to the measures.

Euro zone finance ministers will decide on July 3 on the second bailout package, which is crucial to prevent Greece from defaulting on debt that matures in mid-July.

Against these uncertainties, investors are also weighing up opportunities towards the latter half of this year given attractive valuations. For now, staying put seems to be the favourite course for asset managers.

Market moves this year also show there is no panic among asset managers. The MSCI index may be near lows, but it is broadly flat since January, after losing nearly 8 percent since hitting a three-year high in May.

"We recommend hedging portfolios ... The Greek financial crisis puts equity markets at risk. If a default becomes the solution, the risk of contagion to countries such as Spain and Italy could lead to a vast equity markets consolidation," said Christophe Donay, head of strategy at Pictet Wealth Management.

"Also, in case of a more pronounced slowdown than the anticipated soft patch in the global economy, earnings estimates are at risk."

Barclays Capital also advised investors to maintain their neutral stance given a moderately benign investment climate mildly supportive of risky assets.

When asked which asset class is likely to perform the best over the next three months, 20 percent of investors surveyed by the bank in June chose equities, against other assets that received 15-18 percent.

In comparison, investors were distinctly more bullish in the December and March surveys, with more than 60 percent of respondents favoring commodities and equities.

According to the U.S. AAII investor survey cited by Barclays, the proportion of investors reporting a bullish outlook over the next six months had declined steadily, to as low as 24 percent in recent weeks from 43 percent in the first week of April.

"Asset allocation opportunities are likely to be limited in magnitude and more tactical in nature. In the near term, for example, we believe that the present soft patch should be succeeded by a recovery in activity over the summer, which may provide a tactical opportunity to fade market anxieties in the weeks to come," Barclays said in a note to clients.

The coming week's data might brighten sentiment for the medium-term outlook for the global economy.

In Japan, the central bank's closely-watched tankan survey is expected to show big manufacturers plan to ramp up capital spending to invest after supply chain disruptions after the March 11 earthquake.



A Greek default would force European banks and governments to take big losses, undermine the creditworthiness of other stressed euro zone sovereigns and potentially plunge the economy of the world's biggest trading bloc, already slowing, back into recession.

Greek jitters are sweeping into the funding market, where the cost of one-month euros in the London interbank market hit its highest since March 2009 earlier this week, reflecting demand for liquidity in the single currency.

The one-year euro/dollar cross-currency basis swap , which shows the rate charged when swapping euro interest payments on an underlying asset into dollars, stood at -33.25 on Friday, having fallen all the way from -14.25 earlier in the month.

It posted on June 16 its sharpest one-day fall since early May 2010, before Greece's first bailout deal was reached.

Moreover, European banks are particularly reliant on U.S. money markets for their funding and any contagion or further ratings downgrades could put their funding at risk.

JP Morgan estimates that $600 billion of European commercial paper and certificates of deposits -- about 3.5 percent of total liabilities -- is held by U.S. prime money market funds, one third of which is issued by French banks.

Fitch Ratings estimates that U.S. money market funds' exposure to European banks stand at roughly 50 percent of total assets.

"Money market funds are a potential channel for euro zone credit market volatility. For European banks, a loss or reduction in MMF funding could create negative perceptions about an institution's financial strength," Fitch said in a report. - Reuters

PM proposes closer GLC-private sector collaboration

KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak wants closer GLCs-private sector collaboration, particularly in expanding their joint footprints overseas.

"There can also be collaborations in catalysing new growh sectors domestically. Yet, at the same time, GLCs will continue divesting non-core and non-competitive assets," he said when launching GLCs 'Open Day 2011' on Friday, June 24.

Najib said GLCs have not only performed well but have also expanded their footprints beyond Malaysia's shores.

"We see some of these GLCs are now Malaysia's multinationals. This is the kind of transformation we are aiming for at this crossroads in our nation's history," he said.

Najib, however, cautioned that there was no room for complacency, but there was ample avenue for improvement.

"One example is the Vendor Development Programme. This is a perfect means by which the wealth generating capabilities of GLCs benefit the broader business community.

"According to the Report Card, 130 vendors have graduated from this programme, but there are many, many such vendors in Malaysia. The GLCs should reach out to more small and medium enterprises and entrepreneurs and make that number significantly high," he added. - Bernama

Kencana 3Q net profit jumps 81% to RM56.42m

KUALA LUMPUR: KENCANA PETROLEUM BHD []'s earnings rose 81% to RM56.42 million in the third quarter ended April 30, 2011 from RM31.17 million a year ago underpinned by the progress achieved for the oil and gas contracts.

It said on Friday, June 24 that revenue rose 34.7% to RM377.83 million from RM280.37 million. Earnings per share were 3.08 sen versus 1.92 sen a year ago.

'Compared to the corresponding quarter ended April 30, 2010 of RM280.37 million and RM36.5 million, revenue and profit before tax had increased by approximately 35% and 91% respectively in the current quarter.

'This is mainly due to higher progress achieved for contracts in hand on the back of bigger order book and better management of relevant costs as well as contribution from drilling services,' it said.

For the nine-months, earnings increased by 69% to RM159.38 million from RM94.3 million while revenue increased by 31.5% to RM 1.06 billion from RM811.51 million.

Its cash and cash equivalents increased to RM809.50 million as at April 30 from RM222.39 million on July 31, 2010.

Kencana was upbeat about its prospects following the Malaysian government's strategy to intensify exploration activities in Malaysia to increase the oil and gas production as set out in the Economic Transformation Programme.

Muhibbah gets RM338m wharf upgrading project

KUALA LUMPUR: MUHIBBAH ENGINEERING (M) BHD [] has secured a RM338 million contract from Northport (Malaysia) Bhd to build a multipurpose wharf and the associated facilities.

It said on Friday, June 24 the wharf would be an extension to the existing wharf eight and upgrading of wharf 16.

'The contract is scheduled to commence in July 2011 with a target date of completion in March 2014.

'The contract is expected to contribute positively to the earnings and net assets of Muhibbah group for the current and future financial years,' it said.

Subur Tiasa 3Q net profit slumps 19.5% to RM8.4m on-yr

KUALA LUMPUR: SUBUR TIASA HOLDINGS BHD []'s net profit in the third quarter ended April 30, 2011 fell'' 19.5% to RM8.40 million from RM10.44 million a year ago due to higher operation costs resulting from the increase in raw material, fuel and adhesive costs.

It said on Friday, June 24 that revenue declined 11.8% to RM144.66m from RM164.12 million. Earnings per share were 4.62 sen compared with 5.55 sen.

'The decrease in revenue was mainly due to the weakening of US dollar against the ringgit as the group's export proceeds are denominated in US dollar,' it said.

Subur Tiasa said for the nine-month period, net profit was flat at RM23.838 million compared with RM23.836 million a year ago. Revenue declined 4.8% to RM486.22 million from RM510.79 million.

'The market outlook for timber and timber products in the coming quarter remain positive with the continued firm demand for timber in India and China,' it said.

The company said plywood restocking activities for the housing and infrastructure rebuild after the earthquake and tsunami in Japan has already kick started an upward trend in plywood prices, which is expected to stabilise in the medium term.

However, it said the fear of escalating oil prices due to geopolitical issues in the Middle East and the renewed concerns over the state of economies of Greece and the chain effects in some other countries in Europe, have partly foreshadowed the general market outlook.

FBM KLCI closes higher as China, HK markets surge

KUALA LUMPUR: The FBM KLCI edged higher to close in positive territory on Friday, June 24 as most key regional markets rose sharply, boosted by comments from Chinese Premier Wen Jiabao that price rises would be kept firmly under control this year, lifting hopes that China would relax its fiscal policy.

Chinese Premier Wen Jiabao was quoted by the Financial Times as saying he was confident that price rises would be kept firmly under control this year, giving some market players a reason cover short positions, according to Reuters.

The FBM KLCI rose 1.47 points to 1,546.66, lifted by gains including at CIMB, Maybank, KLK and Sime Darby.

Gainers led losers by 434 by 286, while 288 counters traded unchanged. Volume was 1.08 billion valued at RM1.72 billion.

At the regional markets, the Shanghai Composite Index jumped 2.16% to 2,746.21, Hong Kong's Hang Seng Index rose 1.90% to 22,171.95, South Korea's Kospi added 1.70% to 2,090.81, Japan's Nikkei 225 up 0.85% to 9,678.71 and Singapore's Straits Times Index up 0.73% to 3,066.85.

Meanwhile, Taiwan's Taiex shed 0.40% to 8,532.83.

On Bursa Malaysia, Malayan Flour Mills rose 43 sen to RM7.74, Batu Kawan added 38 sen to RM17.18, Warisan added 20 sen to RM2.60, Dutch Lady up 18 sen to RM18.68, CIMB 17 sen to RM8.68, Shangri-La and Subur Tiasa added 15 sen each to RM2.75 and RM2.79, AirAsia added jumped 13 sen to RM3.29, KLK 10 sen to RM22.08, Maybank six sen to RM8.88 and Sime Darby up two sen to RM9.19.

Among the decliners, Panasonic fell 34 sen to RM24.62, HLFG lost 32 sen to RM13, RHB Capital down 28 sen to RM8.75, Hong Leong Bank 22 sen to RM12.68, Nestle, BAT and MSC lost 20 sen each to RM47.50, RM45.80 and RM4.48, Kluang down 16 sen to RM2.59 while RCI was down 14 sen to RM1.74.

The actives included Ingenuity Solutions, HWGB, Karambunai, Kurnia Asia, CIMB, SAAG, RHB Capital and Silver Bird.


Sentiment in Top Glove perks up

KUALA LUIMPUR: Investors' sentiment in Top Glove Corp Bhd improved on Friday, June 24 as analysts became more upbeat about the world's largest glove maker following its diversification and latex prices off its peak.

At 4.07pm, it was up six sen to RM5.28.

Analysts said Top Glove's management had been proactive in diversifying into nitrile, as a defensive move against latex price volatility.

'With latex prices off its peak and gloves demand anticipated to recover, Top Glove is looking at a better 4QFY11,' a foreign research house said.

Top Glove consumes about 10 million kg of latex and 2.5 million kg of nitrile every month. Every RM1 drop in latex price translates to RM10 million raw material cost saving.

The management had said it expects the latex price to drop further to RM7 a kg in future with 90% chance. This is supported by higher supply coming on stream, especially from north east Thailand due to improving weather condition.

Latex price was at the highest level of RM10.99 a kg on April 11 this year and since then, it has declined to RM9.50 a kg as at June 20.

Analysts said Top Glove's 60%-70% of its production capacity is capable of producing nitrile glove. The company expects nitrile glove to contribute 17% and 26% to the production mix for this year end and next year respectively.

Asia moves to tap oil reserves

TOKYO: Asian nations moved to release emergency oil stockpiles on Friday, June 24 as part of a rare global coordinated action by consumer countries to prevent high energy prices from stunting a stuttering economic recovery.

The move, led by Washington and criticized by the oil industry as an unnecessary distortion of markets, suggests a fundamental shift on the part of industrialized nations toward intervention in commodity markets as an economic policy tool.

Brent oil prices edged back up on Friday after tumbling to a four-month closing low on Thursday, reflecting doubts that the unexpected decision by the International Energy Agency to release 60 million barrels over the next month would have a long-term impact.

Japanese Economics Minister Kaoru Yosano said the move was a warning to speculative buyers but India's Oil Minister S. Jaipal Reddy doubted the action would have an impact.

"Even if there is a slight increase in production (supply), those gains will not be made available to us because of unbridled speculation in the financial markets of the world," he said. "We don't know whether this (weaker oil prices) is a stable trend."

The stock release is only the third in the 37-year history of the agency that was set up as a counter weight to exporting group OPEC.

IEA Asian members Japan and Korea said that from next week they will start releasing oil reserves in line with the agency's targets.

Japan will cut the reserve requirement for oil companies by 7.9 million barrels over the next 30 days and South Korea will release 3.46 million barrels, together providing about 19 percent of the IEA target.

Australia and New Zealand, the remaining members from the Asia-Pacific region, are not participating.

The news follows a Group of 20 agreement, struck in Paris on Thursday, to tackle high food prices by boosting farm output, food market transparency and policy coordination.

The G20 deal is another sign that global policymakers are reaching beyond traditional economic policy tools to sustain global growth.

The world economy, recuperating from the 2008-2009 global financial and economic crisis, has shown signs of losing traction in recent months and the Federal Reserve acknowledged that this week by cutting its forecasts for growth in the world's biggest economy.

High commodity costs that sap consumers' spending power and squeeze manufacturers' profit margins are blamed for much of the slowdown.


Industrialized nations managed to pull their economies from the brink of depression by dishing out trillions of dollars in stimulus packages and slashing borrowing costs to record lows.

But that left rich economies from Japan to the United States with huge debt and few policy options if their economies were to weaken again.

While the release of oil was spearheaded by the United States and other developed nations, booming emerging powerhouses such as China and India are also set to benefit as they try to contain stubbornly high inflation without sacrificing too much growth.

"To some extent, it will help lessen some inflation pressure facing Asian countries and it is also good news for the global economic recovery," said Gong Jialong, former chairman of a body representing China's petroleum industry body.

Gong and others, however, compared the move that will increase daily supply by nearly 2.5 percent to currency market intervention. It is not something that could reverse a broad trend but it could help prevent excessive price moves.

"The hoped-for impact is not to induce a downward trend in commodity markets, but instead to head off potential price increases stemming from the increase in third quarter demand," said PFC, a Washington-based energy consultancy.

Seasonal oil demand ramps up in the third quarter as refineries prepare for the northern hemisphere winter when heating consumption peaks.

Another factor suggesting that the IEA decision will only have a short-term impact on prices is that oil faces an incremental increase in demand now that several countries are turning away from nuclear power generation following Japan's crisis, a Japanese government official said.

"Demand for fuel will rise globally with more countries unable to rely on nuclear power as much as that had initially hopes. That means prices have more reason to rise further than decline," he said. He declined to be identified because he is not authorized to speak to the media.

JPMorgan Chase, however, said that even some cooling effect on prices would prove a boon to the world economy.

"If our projections are realized, the IEA release provides the equivalent of a $140 billion stimulus to consumers," it said in a note. "The release will prove stimulatory to the global economy, particularly for emerging markets and the U.S."


The IEA decision was the culmination of a plan that President Barack Obama put into motion more than a month ago, and shows the deepening concern among rich nations over the economic damage from high energy costs.

Obama drew immediate criticism from the oil industry and Republicans, who called it an ill-timed misuse of stockpiles that risks leaving the government with less ammunition should a deeper supply crisis emerge.

Oil prices have risen 20 percent over the past year, pushing U.S. retail gasoline prices to $4 a gallon.

While Brent crude peaked above $125 in April, it has since fallen sharply. After dropping a further 6 percent on Thursday, prices are only a little higher than mid-February, just before the Libyan conflict began.

The IEA said the action would fill shortages caused by the Libyan conflict and get oil quickly to market while Saudi Arabia makes good on its pledge to pump more oil.

The 28-nation agency will decide whether to release more oil in a month.

The previous two releases followed abrupt shortages caused by the first Gulf War in 1991 and by Hurricane Katrina in 2005, and the global response was swift. In this case, it has been over 3 months since Libya's exports stopped.

The United States will provide 30 million barrels from its huge 727-million barrel crude reserve, about 1.5 days of U.S. consumption, with Europe supplying 30 percent in crude and refined products and the rest from Pacific OECD nations. - Reuters

Deutsche's firing of top trader sparks probe

NEW YORK: In the fall of 2009, Deutsche Bank quietly fired one of its top derivative traders in London after a colleague in New York complained about finding "substantial trading anomalies" in a multibillion dollar portfolio of high-risk credit default swaps managed by the German-based bank, Reuters has learned.

In its report on Friday, June 24 it said the bank dismissed Alex Bernand after a quick internal investigation prompted by the employee's complaint led to the discovery of improper trading in one of Bernand's personal brokerage accounts, according to documents seen by Reuters and interviews with people familiar with the situation.

The documents, part of a Sarbanes-Oxley whistleblower action filed against Deutsche in May 2010 by the employee in New York, also reveal that the Securities and Exchange Commission opened an inquiry last year into a related allegation that some of the assets in the derivatives portfolio overseen by Bernand may have been improperly valued in order to hide trading losses.

Deutsche bank spokeswoman Renee Calabro declined to comment on Bernand's dismissal. But she said the allegation that some assets in the bank's derivatives book had been improperly valued was investigated by the bank and is "wholly unfounded."

The SEC investigation and Bernand's October 2009 firing, neither of which has been previously reported, come as Deutsche is aggressively winding down the portion of its derivatives trading business that Bernand had overseen. Earlier this month, the bank reported in an investor presentation that its plan to unwind its "high-risk" credit correlation portfolio "is well ahead" of schedule. The bank first announced a plan to begin "de-risking" some of its derivatives trading desks in late 2008.

In January, Deutsche settled the whistleblower case by agreeing to pay $900,000 to trader Matthew Simpson and promoting him to managing director shortly before he voluntarily agreed to leave the bank in April. It was the largest Sarbanes-Oxley whistleblower settlement for a complaint filed in 2010. Simpson, who now works for Rochdale Securities in Stamford, Connecticut, did not return a phone call seeking comment.


"This complaint, which is over a year old, has been the subject of a thorough investigation, and we believe that any allegations about financial misreporting are wholly unfounded," said Calabro, who declined to comment on the terms of the settlement with Simpson. "The bank is cooperating with the SEC on its review of the matter."

An SEC spokesman declined to comment.

Bernand, who lives in France, also declined to comment. On his LinkedIn profile, Bernand describes himself as an "independent philanthropy professional."

Simpson's and Bernand's names were redacted from the whistleblower documents seen by Reuters, but their identities were confirmed by two people familiar with the situation.

In its settlement agreement with Simpson, Deutsche also denied "any wrongdoing in connection with the matter." In light of the settlement, the U.S. Department of Labor in February closed its investigation into Simpson's claim that he had been retaliated against by some of his superiors for bringing the allegations of improper trading to the attention of the bank's compliance department.

The firing of Bernand, a one-time rising star in the derivatives world, is something of an embarrassment for Deutsche. In 2006, the bank issued a press release to trumpet his hiring from Bank of America as its global head of credit correlation. At BofA, Bernand had pretty much built the Charlotte, North Carolina-based bank's structured credit trading business from scratch.

Inside Deutsche, the portfolio that Bernand oversaw from London was called the "exotics book," because many of the derivatives in the portfolio were tied to complex securities. At its peak, the portfolio was one of the largest on Wall Street with the assets underlying the trades valued in the tens of billions of dollars.


The bank's credit correlation desk specialized in using credit default swaps to make proprietary trades that were aimed at hedging some of the bank's exposure to potentially risky corporate bonds, leveraged loans, currencies, indexes and commercial paper. Many of the trades put on by correlation traders involve synthetic collateralized debt obligations (CDOs), financial instruments that use credit default swaps to get exposure to various bonds and other assets.

Some have blamed credit default swaps -- a type of derivative that is supposed to provide a level of insurance against an underlying asset going bad -- with exacerbating the global financial crisis because they increase the level of risk on balance sheets of the world's major banks. However, the synthetic CDOs traded by the correlation desk were not like the more popular variant of CDOs which were stuffed with subprime mortgage securities.

Janet Tavakoli, a Chicago-based derivatives consultant who has written several books on credit derivatives and structured products, said many bank managements did not fully appreciate the illusory nature of the trading profits being generated from derivatives correlation desks before the financial crisis. She said those profits often disappeared and turned into losses when the underlying assets turned south.

"The thing about correlation desks is that it will appear you are making a lot money from trades, but it is all money at risk," said Tavakoli. "I call this kind of trading an invisible hedge fund."

In an early 2010 regulatory filing, Deutsche attributed some of the rise in the bank's value-at-risk, or VAR, at the end of 2009 to a "recalibration of parameters in the Group's credit correlation business."

On Wall Street, VAR is one metric used by a bank to estimate how much money it could conceivably lose in a day if all of its trading bets and hedges went awry. It's an imperfect measurement, but one followed by most industry analysts.

A person familiar with Deutsche said the bank is winding down the credit correlation desk to both reduce its risk profile and better comply with the so-called Volcker Rule's ban on proprietary trading in the United States.

The bank's internal investigation into Simpson's allegations was overseen by the big New York law firm Fried Frank.

The revelation that the SEC is investigating the valuations used for some of Deutsche's derivatives portfolio comes at an awkward time. Over the past few months, the bank has taken some high-profile lumps for its role in contributing to the financial mess.

A Senate report released in April faulted Deutsche for continuing to churn out collateralized debt obligations and other securities backed by subprime mortgages even as the housing market in the United States was starting to crumble. The report from the Senate's Permanent Subcommittee on Investigations said Deutsche aggressively marketed CDOs to its client, "despite the negative views of its most senior CDO trader" about the failing health of the housing market.

Just last month, federal prosecutors in New York filed a civil suit against Deutsche, claiming its MortgageIT subsidiary repeatedly lied about the quality of the mortgages it was issuing to obtain federal guarantees on those iffy home loans. The government seeks to recoup some $1 billion in losses it incurred from insuring the mortgages. Deutsche contends most of the problem loans were issued before the bank acquired MortgageIT in 2007.

Before filing his whistleblower complaint last May, Simpson had built a long track record at Deutsche. Over the dozen years he worked for the bank in New York, he held positions in finance, risk management and then trading. He joined the firm's correlation trading group in 2008 and was responsible for trading derivatives tied to bonds and currencies.

In his whistleblower complaint, Simpson said when he reported his concerns about trading improprieties to Deutsche's compliance department he "expressed concerns for future retaliations."

Among the acts of retaliation that Simpson alleged were being passed over for a promotion in February 2010 and later "stripped" of all his trading and management responsibilities. Calabro said the bank denies Simpson's claim of retaliation.

Robert Bosch's RM2.2b project to draw suppliers to Penang

PENANG: Robert Bosch's RM2.2 billion investment in a solar panel manufacturing plant in Batu Kawan, will see a few of its key suppliers setting up base in the state.

While Robert Bosch's director of sales Robert Tan declined to name the companies which serve its main plant in Arnstadt, Germany, it is believed they are in involved in poly silicon and wafer cutting technologies.

The RM2.2 billion investment is the largest single investment to date by Robert Bosch globally. It will have an annual capacity of 800 megawatts peak (MWp) for wafers and 620MWp peak for cells.

This would be on top of producing solar power plants with a total output of 640MWp and module production lines of 150MWp. Production output will be similar to its plant in Germany which has an annual revenue of 1 billion Euros.

Tan said on Friday, June 24 the decision to build the plant on a 80-acre site in Batu Kawan, Penang was after 10 years of deliberation.

These included visits to 45 sites in 23 countries, including 10 sites in Malaysia. The team visited some of these sites up to six times before making the decision to have the plant in Penang.

Among the key decision making point included the presence of its sister plant here for more than 40 years.

'The recommendations from our sister plant on the investment conditions and climate here in Penang over the last four decades was also the clincher for us to set up base here,' he said at a press conference.

Also present were Chief Minister Lim Guan Eng and Robert Bsoch GmbH director Rainer Osswald

Other deciding factors were a strong supply chain, a thriving electronics and electrical sector, good infrastructure support, human talent and very impressive and aggressive team from both the federal and state governments.

"The second Penang crossing (P2X) which is coming up in Batu Kawan will also easily link us to our plant in Bayan Lepas on the Island," said Osswald. He said 90% of the supplies would be sourced locally.

Unlike the other three solar power producers in the country, Robert Bosch's plant will cover the entire value chain from silicon crystals known as ingots and solar cells to the modules which can be installed on roofs or in solar power plants.

At least half of the 2,000 workers required for the plant would be engineers while the rest would consist of skilled workers.

The company plans to work with universities in Penang and other states to meet its need for engineers from the applied sciences field.

Lim said with 40 years of experience in the electronics industry, Penang has the talents to meet the skills required by Bosch, especially in wafer fabrication.

"After nine months of intense evaluation with investPenang and PDC, the company decided to locate their first offshore manufacturing facility here and this facility will be their second world site after Arnstadt in Germany.

"When Bosch Solar Energy's plant is running on full production capacity, it is anticipated to further facilitate Malaysia's aspirations to become the second largest producer of solar cells in the world in 2020, increasing our market share to 17% after China," Lim added.


AirAsia flies higher, Credit Suisse Research keeps Outperform

KUALA LUMPUR: Shares of AIRASIA BHD [] extended its gains in the afternoon session on Friday, June 24, rising to RM3.26 while Credit Suisse Research maintained its RM4.80 target price.

At 2.41pm, it was up 10 sen to RM3.26.

The research house said on Friday, June 24 it remains positive on AirAsia and maintained its Outperform rating on the low-cost carrier.

Credit Suisse Research said it was positive on AirAsia's decision to order 200 Airbus A320-NEOs (with an option to purchase a further 100 aircraft). Delivery of the A320-NEOs, which offers 15% fuel cost savings, is expected to start from 2016.

'We maintain our Outperform. We see this as a positive development, as AirAsia has secured delivery of the next generation of aircraft at a significant 'early bird' discount,' it said.

Credit Suisse Research said the orders are for AirAsia's long-term growth, including the new ventures in the Philippines and Vietnam. It also expected the large scale order at such an early stage of the aircraft development, would enable'' AirAsia to enjoy significant discounts over the list price of the aircraft.

It pointed out the orders were also part of AirAsia's fleet renewal programme. By 2016, AirAsia would have 16 aircraft that are 10 years old and over, with a further 19 aircraft to hit the 10-year mark in 2017.

'We expect AirAsia to maintain a young fleet (lower maintenance cost), thus will dispose of older aircraft to crystalise the gains from the large discounts enjoyed from its A320-200 order,' it said.

The research house said it did not factor the impact of the A320-NEO order, as deliveries are only expected to start in 2016.

'We remain positive on AirAsia and reiterate our OUTPERFORM rating on the stock and RM4.80 target price,' it said.

XOX shares crossed at 36% below market price

KUALA LUMPUR: Mobile virtual network operator XOX Bhd's 275,000 shares were crossed at 36% below the prevailing market price in the afternoon session on Friday, June 24.

Stock market data showed the shares were transacted at 26.5 sen apiece, which was 15 sen below the market price of 41.5 sen.

The share price closed at 43.5 sen on Thursday.

XOX, was listed on June 10 and its offer price was 80 sen and it ended the day at 52 sen.

Ernst & Young declines reappointment as Metronic Global auditor

KUALA LUMPUR: METRONIC GLOBAL BHD [] has received a notice from the auditor, Messrs Ernst & Young that it has declined to be reappointed as auditors of the company for the ensuing year.

The company said on Friday, June 24 that its board of directors had received a notice from E&Y (in a letter dated June 20) about its intention not to seek reappointment.

Metronic said that on June 23, the board had nominated Messrs LLTC, who had given their consent to be appointed as the incoming auditors of the company.

The company posted losses of RM2.32 million in the first quarter ended March 31, 2011, compared with losses of RM5.33 million a year ago.

Sungei Way Corp's RM21.84m acquisition

KUALA LUMPUR: Sungei Way Corporation Sdn Bhd paid RM21.84 million to acquire 8.4 million shares of SUNWAY HOLDINGS BHD [].

A filing with Bursa Malaysia showed Sungei Way Corp acquired the shares at RM2.60 apiece from the open market on June 20.

The latest acquisition increased Sungei Way Corp's shareholding to 42.46% or 248.79 million shares.

The share price closed at RM2.59 on that day.

Asia-Pacific biz software market to hit US$$46b this year, says Ovum

KUALA LUMPUR: The Asia-Pacific (AP) business software market is expected to grow by 8.4% to hit US$46 billion this year, according to Australia-based to Ovum.

In a latest report entitled AP Market Trends 2010 Business Software Forecasts, Ovum said recovery from the global economic downturn would begin in earnest this year for the sector, which did not grow at all in 2010.

The Ovum software forecasts include software solutions for business, covering systems infrastructure, enterprise applications, office applications, information management, and security.

Ovum said the business software sector would grow at a compound annual growth rate (CAGR) of 8.9% over the next four years, reaching revenues of US$65 billion in 2015.

'The strong growth is driven by exploding volumes of data, increased enterprise mobility, the transition to cloud computing models and the emerging markets, such as huge demand in China and India, although the markets in Japan, South Korea and Australia are expected to show strong single digit growths as well,' it said in a statement Friday, June 24.

Ovum said the information management software sector would experience the biggest increase in revenues of all the business software areas, at a CAGR of almost 11% from 2010 to 2015, as businesses grapple with spiralling volumes of data and try to extract business value from them.

Ovum chief analyst Tim Jennings said as the global economy continued its recovery, the emphasis of IT investment was moving on from the traditional area of back-office automation and transaction processing, towards the exploitation of information to add value to the business.

'The volume of information within enterprises continues to grow at an astonishing rate and investment is needed both to manage this information, and to turn it into actionable intelligence, through technologies such as business intelligence and analytics,' said Jennings.

Ovum also said that although information management software would experience the strongest growth, all the sectors will enjoy a healthy outlook.

The security software market will grow by a CAGR of 10% from 2010 to 2015, while applications software will grow by a CAGR of 9.7% for the same period, it said.

Jennings said organisations were breaking away from the shackles of desktop IT, and providing mobile workers with access to systems from any location and any device.

The mobile revolution will generate strong demand for mobile applications, as well as for the development and management platforms to support this shift, he said.

'Although it is still relatively early days for cloud computing, growth will accelerate over the next five years, as organisations move further towards a software-as-a-service model and take their data centres towards the hybrid combination of public and private cloud infrastructure. This will generate new demand for both infrastructure and application services.'

'The emerging markets will also make a substantial contribution to the strong growth the software sector is set to experience,' he said, adding that emerging markets around the world had an insatiable appetite for TECHNOLOGY []-driven expansion, often unencumbered by the constraints of peers in mature markets.

Sarawak Energy issues RM3b sukuk

KUALA LUMPUR: Sarawak Energy Bhd (SEB) has issued RM3 billion out of the RM15.0 billion Sukuk Musyarakah programme which will be used for capital expenditure and refinancing some existing borrowings.

RHB Investment Bank Bhd said on Thursday, June 23 the first tranche of RM500 million has a maturity of five years with a profit rate of 4.40% per annum. The second tranche of RM700 million at 4.7% per annum is for seven years.

The remaining tranches comprising of longer-dated maturities were priced at 5.15% pa for 10 years (RM1.0 billion) and 5.65% pa for 15 years (RM800 million).

RAM Rating Services Bhd has accorded a long-term rating of AA1 for the Sukuk Musyarakah programme.

RHB Investment Bank is the sole principal adviser and lead arranger for the programme. For this maiden issue, RHB Investment Bank is also the joint lead managers with AmInvestment Bank Bhd.

RHB Banking Group acting director, corporate and investment banking, Mike Chan said the good demand of the issue reflected SEB's high credit standing amongst investors. It is also the single biggest issue by a power utility company so far this year.

'It is significant to note that the Sukuk programme with an overall limit of RM15 billion represents the single largest debt programme ever established by a power utility company in the domestic market and is designed to cater to the funding requirements of SEB from now till 2016,' Chan said.

Asian markets advance on Greece austerity plan

KUALA LUMPUR: Key regional markets advanced at mid-day on Friday, June 24 on bargain hunting as buyers lapped stocks that had been battered in recent days, following improved investor sentiment on news that Greece had agreed to a five-year austerity plan.

Analysts however cautioned that trading at the local bourse could remain volatile.

At 12.30pm, the FBM KLCI was up 0.18 point to 1,563.37. Gainers edged losers by 280 to 277, while 302 counters traded unchanged. Volume was 525.96 million shares valued at RM728.16 million.

The ringgit weakened 0.14% to 3.0363 versus the US dollar; crude palm oil futures for the third month delivery fell RM3 per tonne to RM3,133, crude oil rose US$1.15 per barrel to US$92.17 while gold gained US$1.90 an ounce to US$1,523.30.

At the regional markets, the Shanghai Composite Index jumped 1.55% to 27,29.91, Hong Kong's Hang Seng Index rose 1.42% to 22,068.67, Japan's Nikkei 225 added 0.65% to 9,658.99, South Korea's Kospi gained 1.21% to 2,080.81 and Singapore's Straits Times Index edged up 0.28% to 3,053.32.

Meanwhile, Taiwan's Taiex shed 0.60% to 8,515.95.

Maybank Investment Bank Bhd head of retail research Lee Cheng Hooi said that due the US markets' softer tone last night there could be some initial selling activities on the local bourse.

'The market could decline marginally, with some blue chip buying activities cushioning the drop later in the day. As a result, we expect the FBM KLCI to remain volatile on an intraday basis today.'' There is a possibility it will test its resistances of 1,569 and 1,576, though the rise will be of a rough and rocky nature,' he said.

Among the gainers this morning, Malayan Flour Mills added 18 sen to RM7.49, Ibraco up 17 sen to RM1.15, Batu Kawan 16 sen to RM16.96, Aeon 12 sen to RM7.27, BIMB 11 sen to RM1.96, Milux and MAS up nine sen each to RM1.27 and RM1.54, while BHIC added eight sen to RM4.05.

Hong Leong Bank was the top loser this morning and fell 28 sen to RM12.62, Panasonic and RHB Capital were down 26 sen each to RM24.70 and RM8.77, HLFG 24 sen to RM13.08, Tasek, Inno, BAT and MPI fell 10 sen each to RM7.80, RM1.40, RM45.90 and RM4.50 respectively, while Aeon Credit and Texchem lost eight sen each to RM4.82 and 65 sen.

Among the actively traded counters, Ingenuity Solutions added half a sen to 8 sen, HWGB was up 3.5 sen to 41.5 sen, SAAG unchanged at 7 sen, Kurnia Asia gained 1.5 sen to 50 sen, Silver Bird down three sen to 55 sen and Perisai added 2.5 sen to 82.5 sen.

FBM KLCI in the red at mid-morning, RHB Capital extends loss

KUALA LUMPUR: The FBM KLCI was in the red at mid-morning on Friday, June 24 while RHB Capital extended its losses after Maybank and CIMB on Thursday had confirmed that they had ended all merger talks with the bank.

Regional markets, meanwhile, advanced on news that Greece had agreed to a five-year austerity plan, although gains were limited.

The FBM KLCI slipped 0.83 point to 1,562.36 at mid-morning, weighed by losses including at Hong Leong Bank, RHB Capital, HLFG and KLK.

Losers led gainers by 198 to 155, while 202 counters traded unchanged. Volume was 218.70 million shares valued at RM220.32 million.

At the regional markets, Japan's Nikkei 225 rose 0.28% to 9,624.09, Hong Kong's Hang Seng Index rose 0.60% to 21,890.44, the Shanghai Composite Index edged up 0.04% to 2,689.21, South Korea's Kospi gained 0.71% to 2,070.40 and Singapore's Straits Times Index added 0.07% to 3,046.85.

BIMB Securities Research in a note June 24 said wild swings in the Dow Jones overnight depicted the heightening volatility in Wall Street.

Initial bearish sentiments over the increased in US jobless claims were later buoyed by the agreement reached between Greece and the European Union and IMF over the country's austerity measures, it said.

Meanwhile news of the IEA to release oil stocks into the market had put commodities trading in a tailspin, it said.

'Today, we may see more unloading of RHB Cap following the pullout of Maybank and CIMB from the prospective merger negotiation.

'However, we doubt that the deal is dead as the suitors may revisit the deal in the near future. As for the FBM KLCI, we expect there to be some accumulation of stocks to push the index on a firmer footing,' it said.

On Bursa Malaysia, Hong Leong Bank led the decliners and was down 30 sen to RM12.60; RHB Capital fell 22 sen to RM8.81, HLFG 14 sen to RM13.18, Tasek and Far East down 10 sen each to RM7.80 and RM7.35, KLK eight sen to RM21.90, Aeon Credit seven to RM4.83 while LPI Capital and KPJ lost six sen each to RM13.72 and RM4.49.

Among the gainers, Ibraco added 22 sen to RM1.20, Tradewinds 12 sen to RM10.54, Top Glove nine sen to RM5.31, BIMB and BHIC eight sen each to RM1.93 and RM4.08, MAS seven sen to RM1.52, AirAsia and Jaya Tiasa six sen each to RM3.22 and RM7.16, while Maybank gained five sen to RM8.87.

Ingenuity Solutions was the most actively traded counter with 29.9 million shares done. The stock added half a sen to 8 sen.

Other actives included HWGB, Kurnia Asia, RHB Capital, Perisai and Asia Media.

Jaya Tiasa up in early trade

KUALA LUMPUR: JAYA TIASA HOLDINGS BHD [] shares rose in early trade on Friday, June 24 after the company announced on Thursday that it had adopted a dividend policy to pay dividend of not less than 20% of its net profit for future financial years.

At 9.10am, Jaya Tiasa was up four sen to RM7.14 with 3,100 shares traded.

The company's net profit surged five-fold to RM54.49 million in the fourth quarter ended April 30, 2011 from RM8.98 million a year agor, due mainly to higher profit margin and increase in average selling prices.

It said on Thursday, June 23 revenue rose to RM255.52 million from RM189.62 million. Earnings per share rose to 20.41 sen while net assets per share was RM4.66.

It proposed a first and final gross dividend of six sen per share.

For the financial year ended April 30, Jaya Tiasa's net profit jumped to RM146.91 million from RM24.37 million on the back of revenue RM870.91 million.

Commenting on its outlook, Jaya Tiasa said on Thursday, June 23 that the prospect of the timber division was expected to remain positive in view of the tight log supply condition and increase in demand for wood products from Japan's reCONSTRUCTION [] efforts coupled with strong demand from emerging economies, such as India and China.

"For the oil palm division, higher fresh fruit bunches and CPO production volume is expected to contribute significantly to the group's profitability.

BIMB active, extends gains

KUALA LUMPUR: BIMB HOLDINGS BHD [] extended its gains in early trade on Friday, June 24 after HwangDBS Vickers Research yesterday initiated coverage on the stock with a Buy rating and target price of RM2.40.

At 9.20am, BIMB rose 12 sen to RM1.97 with 2.24 million shares traded.

HwangDBS Vickers Research in a note June 23 said BIMB's core financing activities would drive its earnings and growth.

The research house also said the largely untapped Islamic finance market could expand its market share in the overall industry.

'Our RM2.40 TP is based on the Gordon Growth Model and assumes 4% long term growth rate, 10.3% cost of equity, and 13% ROE.

'Key catalysts are (i) earnings turnaround and sustainability; and (ii) untapped potential in Islamic finance in Malaysia and ASEAN region. BIMB is currently trading at 1.0 times FY11BV and our RM2.40 TP implies 1.4 times,' it said.


AirAsia rises in early trade

KUALA LUMPUR: AIRASIA BHD [] shares advanced in early trade on Friday, June 24 after the low cost carrier placed an order with Airbus SAS for 200 A320 Neo aircraft with a list price of US$18.2 billion (RM54.6 billion), to be delivered in 2016-2026

At 9.20am, AirAsia rose three sen to RM3.19 with 48,900 shares traded.

RHB Research has upgraded the stock to Market Perform from Underperform an d raised its target price to RM3.18 from RM2.66.

In a note June 24, RHB Research said that with the latest aircraft order, AirAsia has effectively locked in new capacity over the next 15 years for the entire group.

'Separately, we are raising AirAsia's FY12/12-13 net profit forecasts by 12% each, having moderated our jet fuel price assumption to US$115-120/bbl from US$120-125/bbl previously.

'Upgrade to Market Perform from Underperform as valuations have become less demanding after we rolled forward the base year from FY12/11 to FY12/12 as well as the earnings upgrade.'' Indicative fair value is raised by 20% from RM2.66 to RM3.18,' it said.

Italian fashion house Prada makes flat debut

HONG KONG: Shares of Italian fashion house Prada SpA , known for its leather handbags and colorful dresses, made a flat trading debut on Friday, defying expectations of a weak start.

Prada shares opened at HK$39.50 each, the same level at which the company priced its $2.14 billion initial public offering, which was at the bottom of a revised indicative range.

Prada had originally set an indicative price range of HK$36.50 HK$48 per share, before narrowing it to between HK$39.50 and HK$42.25 each last Thursday.

The weak debut follows the 7.7 percent first-day plunge for luggage maker Samsonite International SA last week as investors fretted over high valuations for Hong Kong listings and volatility in global markets. Samsonite has since recovered, ending Thursday at HK$14.50, matching its IPO price.

Prada and shareholders Prada Holding BV and Intesa Sanpaolo SpA sold 423.3 million shares in the offering, raising HK$16.72 billion ($2.14 billion). ' Reuters

CIMB Research has Buy on BIMB at RM1.85

KUALA LUMPUR: CIMB Equities Research has a technical Buy on BIMB HOLDINGS BHD [] at RM1.85, at which it is trading at price-to-book value of 1.2 times.

It said on Friday, June 24 the recent correction dragged BIMB towards the 30-day SMA. Since then, prices have rebounded a tad higher. It appears that the RM1.69 low would likely be its near term bottom. This support is also near the 38.2% FR level, which it thinks it is a good entry point.

CIMB Research said indicators are showing signs of improvement. MACD histogram bars are falling at a slower pace while RSI has hooked upward.

'Any pullback is an opportunity to accumulate. Only a fall below RM1.69 would trigger our stop. Resistance is at RM2.00 and RM2.15,' it said.

CIMB Research maintains Outperform on Gamuda

KUALA LUMPUR: CIMB Equities Research said although Gamuda's annualised 9MFY7/11 core net profit was 1% below its forecast (5% higher than consensus), it was above expectations.

It said on Friday, June 24 CONSTRUCTION [] margins topped expectations and property sales surpassed both its and management's targets for the full year.

'As this will help drive 4Q earnings, we raise our FY11-13 EPS forecasts by 2-4% and DPS forecasts by around 1-2%. Gamuda's earnings momentum is building up and it is heading for a record year in FY11.

'We maintain our OUTPERFORM call and nudge up our RNAV-based target price from RM5.60 to RM5.63. Groundbreaking for the MRT project is slated for 8 July, which could be a share price catalyst, together with the strong 3Q results,' it said.

CIMB Research maintains Outperform on AirAsia, TP RM4.20

KUALA LUMPUR: CIMB Equities Research said AirAsia announced a widely-expected order for 200 A320neo aircraft at the Paris Air Show on Thursday, June 23 for delivery starting 2016.

'The orders are a positive development as the aircraft will be 15% more fuel efficient than the existing A320,' it said on Friday.

CIMB Research said AirAsia will not overstretch its balance sheet as its Thai and Indonesian associates should be able to take these planes in their own names post listing and AirAsia has the option to dispose of the older model.

The new planes are also needed to grow its Philippines and future Vietnam operations.

'We maintain our forecasts, RM4.20 target price (9x P/E) and OUTPERFORM rating as AirAsia's low operating costs and strong demand put it in the best position to ride out high oil prices and global overcapacity. A potential catalyst is the listing of its two associates,' it said.

OSK Research retains BUY Call on RHB Cap

KUALA LUMPUR: OSK Research said both CIMB and Maybank have officially announced that they have decided not to pursue the potential merger opportunity with RHB CAPITAL BHD [].

It said on Friday, June 24 this piece of news did not entirely come as a surprise given the fact that the proposed merger with RHB Capital was rumored to have been at the invitation of Bank Negara rather than being initiated by CIMB or Maybank.

'As such pricing and rationale for a synergistic merger were key stumbling blocks from the start.

'We have been highlighting in our previous notes that both banking groups would exercise some form of pricing discipline/caution given the apparent lack of revenue synergies, especially in CIMB's case,' it said.

OSK Research said Abu Dahbi Commercial Bank's relatively expensive sale pricing of its 24.9% stake in RHB Capital to Aabar Investment could have been the deal breaker for Maybank, while in CIMB's case there were no meaningful synergies from the very beginning.

'We are retaining our BUY call for RHB Capital (FV of RM10.16), Maybank: FV:RM10.07 (2.32x FY11 PBV, 15.4% ROE) and CIMB (BUY, FV:RM9.15),' it said.

#Flash* RHB Capital opens sharply lower

KUALA LUMPUR:'' RHB CAPITAL BHD [] shares opened sharply lower on Friday, June 24 after MALAYAN BANKING BHD [] and CIMB Group Bhd confirmed they had ended all merger talks with RHB Cap.

At 9am, RHB Capital fell 34 sen to RM8.69 with 69,300 shares traded.

Meanwhile, Maybank and CIMB rose four sen each to RM8.86 and RM8.55.

Speculation about the Maybank and CIMB Bank's decision not to go ahead with the talks had sent RHB Cap shares down sharply on Thursday, skidding 57 sen to RM9.03 with 12.37 million shares done.

ASIA-Shares face soft start on mixed pressures

WELLINGTON: Asian stocks are set for a cautious open on Friday as news of an agreement on an austerity programme for Greece counters concerns about slowing global growth.

The main Wall Street indexes closed between 0.5 percent lower and 0.7 percent higher -- well off session lows ' after they were initially knocked by weak U.S. housing and labour data and a move to tap strategic oil reserves, which heightened fears of a slowing world economy.

The negative mood was lightened by news that Greece had won the consent of the European Union and International Monetary Fund for a new five-year austerity plan, which buoyed sentiment and prompted Wall Street stocks and the euro to trim losses.

Asian stocks listed on Wall Street were fractionally lower, while world stocks, as measured by the MSCI world equity index, fell 1.3 percent, and the Thomson Reuters global stock index was down 0.55 percent.

The global growth outlook weighed on mining and energy stocks on the British market , which fell 1.7 percent, while European shares were down 1.45 percent to three-month low.

The U.S. dollar gained for a second session against the euro as investors looked to safe havens on the weak data although the Greek debt news lifted sentiment.

Oil prices fell after the International Energy Agency said it would inject 60 million barrels of government-held oil reserves into global markets.

Gold prices had their biggest one-day drop in more than a month, amid anxiety about Greece and the economic outlook. The 19-commodity Reuters-Jefferies CRB index slid 2.3 percent.

Japanese markets are seen flat, with Nikkei futures traded in Chicago 10 points below the last closing level in Osaka.

Australian stocks are set for a soft start, with share price index futures up 1 point at 4,488, a 12.5 point discount to the close of the underlying S&P/ASX 200 index. ' Reuters


Oracle hardware sales drop, shares fall

BOSTON: Oracle Corp posted disappointing quarterly results particularly in hardware sales, sparking concerns about a sharper-than-expected slowdown in tech spending and sending its shares down 6 percent on Thursday, June 23.

Oracle's earnings came on the same day Micron TECHNOLOGY [] reported quarterly revenue below expectations, and the combination raised fears about how well the technology sector is holding up in the face of shaky economies, especially in Europe.

Tech investors pay attention to Oracle's earnings as its fiscal quarters are out of sync with most others and it is the first to give a glimpse of business conditions in the most recent months, in this case April and May.

Trip Chowdhry, an analyst with Global Equities Research, said Oracle's results suggest spending on technology has slowed down. "Any company that is in technology is going to get impacted," he said.

While Oracle's quarterly profit, excluding items, rose to 75 cents a share and surpassed expectations by nearly 6 percent, investors had hoped for a more impressive beat. Over the past six quarters Oracle has exceeded profit estimates by an average of 10 percent.

"Traditionally, in the fourth quarter they usually beat by a huge margin. This time they just managed just to beat," Chowdhry added.

Its fiscal fourth quarter revenue rose 13 percent from a year earlier to $10.8 billion, in line with the average analyst forecast of $10.75 billion.

The world's No. 3 software maker reported that fourth-quarter new software sales rose 19 percent from a year earlier to $3.7 billion. That beat its own forecasts of 4 percent to 14 percent growth. New sales, it said, should be up 10 percent to 20 percent in the first quarter.

Yet sales in its hardware division, which it acquired with its purchase of Sun Microsystems, dropped 6 percent to $1.2 billion.

"The story is the software side was decent, the licensing was decent but the hardware was disappointing," said Kevin Caron, a market strategist with Stifel, Nicolaus & Co.

During a conference call after the earnings release, analysts grilled Oracle executives on the drop in hardware sales.

President Safra Catz said that they fell because Oracle had walked away from deals that would have been unprofitable. "We'd just rather make money than make revenue," Catz said, adding with a sarcastic tone, "We're funny that way."

Oracle said it expected first quarter hardware revenue to be in the range of down 5 percent to up 5 percent.

Oracle shares fell 4 percent to $31.15 in extended trade, down from their Nasdaq close of $32.46.

They were down more than 6 percent prior to the conference call, during which the company issued its first-quarter forecasts.

It said it expects to post first quarter profit, excluding items, of 45 cents to 48 cents per share, in line with the average analyst forecast of 46 cents.

The company also forecast that non-GAAP revenue will rise between 9 and 12 percent from a year earlier to between $8.3 billion and $8.5 billion. Analysts were expecting revenue of $8.3 billion. - Reuters

Greece in deal with EU/IMF on austerity plan

ATHENS/BRUSSELS: European Union leaders promised more money to help Greece stave off looming bankruptcy, provided its parliament enacts an austerity plan finalized in fraught last-minute talks with international lenders, Reuters reported on Thursday, June 23.

Greek Prime Minister George Papandreou promised to push through radical economic reform after his new finance minister clinched agreement with EU and IMF inspectors on extra tax rises and spending cuts to plug a 3.8 billion euro funding gap.

"A comprehensive reform package... and adoption by the Greek parliament of the key laws on the fiscal strategy and privatization must be finalized as a matter of urgency in the coming days," EU leaders said in a summit statement.

"This will provide the basis for setting up the main parameters of a new program jointly supported by its euro area partners and the IMF and allow disbursement in time to meet Greece's financing needs in July," the 27 leaders said.

The euro rebounded against the dollar and U.S. stocks pared losses on news of the agreement in Athens.

Greece needs 12 billion euros in European and IMF aid to avoid a default on its debt mountain in mid-July that could spread contagion across the euro currency area and send shock waves around the world economy.

"Greece is committed, strongly committed, to continue a very important program for major changes, radical changes, to make our economy viable," Papandreou told reporters.

The EU leaders also exhorted conservative Greek opposition leader Antonis Samaras to rally behind the austerity program, but he stuck to his refusal to vote for the entire plan, saying he would support the spending cuts but not tax increases.

German Chancellor Angela Merkel, who has taken perhaps the toughest line on Greece, urged the Greek opposition to do what was necessary and get behind the package. "In such a situation, everyone must stand together in a country," she said.

Euro zone governments are meanwhile talking to banks and insurance companies to convince them voluntarily to maintain their exposure to Greek debt when their bonds mature, as part of a second rescue package for Athens.


The leaders also approved the creation of a permanent euro zone bailout fund from June 2013 as well a strengthening of the existing temporary rescue fund.

European Council President Herman Van Rompuy, who chaired the summit, said they would decide on Friday on the appointment of Italy's Mario Draghi to succeed Jean-Claude Trichet as head of the European Central Bank.

Van Rompuy sidestepped questions about French demands that the existing Italian member of the ECB's executive board, must step down to make way for a Frenchman.

The Greek crisis dominated debate at the summit, the fourth EU leaders have held this year as they grope for a solution to debt woes that have forced Greece, Portugal and Ireland to seek bailouts and roiled global financial markets.

Investors remain skeptical. Five-year credit default swaps on Greek government debt rose 138 basis points to 2,025 bps on Thursday, according to data monitor Markit, implying a more than 80 percent probability of default over that period.

A Greek default would force European banks and governments to take big losses, undermine the creditworthiness of other stressed euro zone sovereigns and potentially plunge the economy of the world's biggest trading bloc, already slowing, back into recession.

Economists say even a second bailout plan for Greece may buy its government only a few months' respite and most expect Athens will have to default or write down its debt eventually.

Greece accepted a package of 110 billion euros of EU/IMF loans in May 2010 and now needs a second bailout of a similar size to meet its financial obligations until the end of 2014, when it hopes to return to capital markets for funding.

Euro zone member states, led by Germany, insist any second aid package must involve the private sector. But credit rating agencies have said they would treat even a voluntary debt rollover as a selective default.

At meetings this week, banks and insurers in Germany, France, Spain, Belgium and the Netherlands were asked by national financial authorities to roll over their holdings of Greek debt when the bonds mature. - Reuters

Nikkei edges up, Greece deal offsets falls in oil stocks

TOKYO: The Nikkei average edged up on Friday as news that Greece has agreed to a five-year austerity plan offset falls in oil shares on tumbling oil prices.

The benchmark Nikkei rose 0.4 percent at 9,639.18, while the broader Topix index gained 0.3 percent to 828.16. ' Reuters


CIMB Research has Buy on WTK at RM1.86

KUALA LUMPUR: CIMB Equities Research has technical Buy on WTK Holdings Bhd [] at RM1.86 at which it is trading at price-to-book value of 1.2 times.

It said on Friday, June 24 WTK Holdings has been trading in a triangle pattern for the past few months.

'As the resistance and support trend lines converge, we think the stock is ripe for a stronger rebound,' it said.

CIMB Research said the MACD is poised for a positive crossover while RSI has also hooked upward.

Once the resistance trend line (now at RM1.94) is taken out, it expects prices to swing towards RM2.04 and RM2.20 next.

'Traders may start to nibble now. However, always put a stop at below RM1.72, its April's low, in case this is a bull trap,' it said.

Thursday, June 23, 2011

MSM Malaysia 1Q net profit surges to RM62.2m

KUALA LUMPUR: Main Market-bound MSM Malaysia Holdings Bhd's net profit for the first quarter ended March 31, 2011 surged to RM62.2 million from RM12.04 million a year earlier, due mainly to increase in sales volume and higher sales price of refined sugar products.

Revenue for the quarter rose to RM503.17 million from RM497.75 million. Earnings per share was 8.82 sen while net assets per share was RM1.58.

Commenting on its current year prospects, MSM Malaysia said on Thursday, June 23 that notwithstanding the volatility of commodity prices, the group was expected to be able to sustain its satisfactory performance.

MSM Malaysia is the largest refined sugar producer in Malaysia and is set for listing on the Main Market on June 28.

Eversendai final retail price at RM1.62

KUALA LUMPUR: Eversendai Corporation Bhd's final institutional price has been fixed at RM1.70 and the final retail price at RM1.62.

Maybank Investment Bank Bhd said on Thursday, June 23 the institutional offering of 202.04 million shares was oversubscribed by 2.5 times under its bookbuilding exercise. The shares offered to the public was 7.3 times oversubscribed.

Maybank IB, which was the sole adviser, underwriter and bookrunner, said the institutional book opened for subscription on June 15 and closed on Tuesday, June 21. It is due to list on the Main Market of Bursa Malaysia on July 1.

Maybank IB chief executive officer Tengku Datuk Zafrul Tengku Aziz said Eversendai's track record included constructing iconic projects such as the Petronas Twin Tower 2, Burj Khalifa, Burj Al Arab, and the Capital Gate Building.

'The strong investor demand at a time of weak market sentiment globally is testament to the company's strength and bright prospects,' he said.

Tengku Zafrul said Eversendai will be the only listed structural steel CONSTRUCTION [] company, and one of the largest listed construction companies in Malaysia.

Eversendai executive chairman and group managing director Datuk A.K. Nathan said in view of the demand, the institutional price was fixed at RM1.70.

The final retail price shall be the lower of RM1.70 or 95% of the institutional price and hence, fixed at RM1.62, he said.

Glomac 4Q net profit up 19.8% to RM15.05m, declares 5c dividend

KUALA LUMPUR: GLOMAC BHD [] net profit rose 19.8% to RM15.05 million in the fourth quarter ended April 30, 2011 from RM12.56 million a year ago, boosted by ongoing sales and progressive recognition of development from several projects.

In a statement on Thursday, June 23, it said the projects included Glomac Tower, Glomac Damansara, Glomac Cyberjaya, Bandar Saujana Utama and Bandar Baru Bangi.

Revenue rose to RM157.75 million from RM103.37 million in 2010. Earnings per share were 5.08 sen, while net assets per share was RM2.04. It proposed'' gross dividend of five sen per share for the financial year ended April 30.

For FY ended April 30, Glomac's net profit jumped 54.2% to RM63 million from RM40.85 million, while revenue surged to RM601.49 million from RM316.76 million.

Glomac executive chairman Tan Sri F.D. Mansor said the company realised total sales of RM418 million in the financial year under review, driven by strong response to its township projects in Bandar Saujana Utama and Saujana Rawang and preliminary contribution from Glomac Damansara'' Residences, a two-tower 26-storey serviced apartments located in the RM898 million freehold Glomac Damansara development.

He said sales momentum had been on a steady rise since its soft-launch of Glomac Damansara Residences in February 2011.

'We remain confident of our continuing success in Glomac Damansara, especially now with our strategic location enhanced by the proposed Taman Tun Dr Ismail MRT station in the vicinity.

'Glomac is poised for further growth. Our unbilled sales, despite the stronger recognition of progress billings in our financial results, remained high at RM550 million as at April 30, 2011. This serves to affirm the Group's earnings visibility over the next two financial years,' he said.

F.D. Mansor said Glomac's longer term growth prospects remained robust, adding that its focus was in Greater KL / Klang Valley, where it already had an entrenched position as a reputable developer.

'Here is also where we believe we can further seek out new development opportunities, with Greater KL / Klang Valley having been identified as one of the National Key Economic Areas in the Government's Economic Transformation Programme,' he said.

#Flash* CIMB says has ceased merger talks with RHB Cap

KUALA LUMPUR: CIMB Group has said that it has ceased negotiations with RHB CAPITAL BHD [] on a potential merger exercise.

In a statement Thursday, June 23, CIMB group chief executive Datuk Seri Nazir Razak said that based on its discussions and assessment of the present expectations of key stakeholders, the bank did not believe that it would be able to arrive at a value creating merger.

'Merger negotiations are both resource consuming and distracting for staff and stakeholders. Therefore, we prefer not to prolong our discussions unnecessarily, allowing all parties to return to 'business as usual' as soon as possible,' he said.

Jaya Tiasa 4Q net profit up five-fold to RM54.49m

KUALA LUMPUR: JAYA TIASA HOLDINGS BHD []'s net profit surged five-fold to RM54.49 million in the fourth quarter ended April 30, 2011 from RM8.98 million a year agor, due mainly to higher profit margin and increase in average selling prices.

It said on Thursday, June 23 revenue rose to RM255.52 million from RM189.62 million. Earnings per share rose to 20.41 sen while net assets per share was RM4.66. It proposed a first and final gross dividend of six sen per share.

The company also adopted a dividend policy to pay dividend of not less than 20% of its net profit for future financial years, subject to not compromising its ability to support its pursuit for long term growth.

For the financial year ended April 30, Jaya Tiasa's net profit jumped to RM146.91 million from RM24.37 million on the back of revenue RM870.91 million.

Commenting on its outlook, Jaya Tiasa said on Thursday, June 23 that the prospect of the timber division was expected to remain positive in view of the tight log supply condition and increase in demand for wood products from Japan's reCONSTRUCTION [] efforts coupled with strong demand from emerging economies, such as India and China.

"For the oil palm division, higher fresh fruit bunches and CPO production volume is expected to contribute significantly to the group's profitability.

'Barring any unforeseen circumstances, the board believes that the performance for the next financial year will continue to be satisfactory,' it said.

Gamuda 3Q net profit up 39.6% to RM116.63m, declares 6 sen interim dividend

KUALA LUMPUR: GAMUDA BHD [] net profit for the third quarter ended April 30, 2011 rose 39.6% to RM116.63 million from RM83.53 million a year earlier due to higher contributions from all its divisions.

Revenue for the quarter rose to RM621.20 million from RM511.20 million in 2010. Earnings per share was 5.67 sen while net assets per share was RM1.77.

Gamuda declared a second interim tax-exempt dividend of 6 sen per share single-tier.

For the nine months ended April 30, Gamuda's net profit rose 26.7% to RM299.19 million from RM236.19 million on the back of revenue RM1.86 billion.

Commenting on its prospects, Gamuda said on Thursday, June 23 that with the existing CONSTRUCTION [] projects progressing on schedule and the strong performance of the property division, the group's results were expected to further improve in the remaining quarter of the current financial year.

#Flash* Maybank says merger plan with RHB Cap is off

KUALA LUMPUR: MALAYAN BANKING BHD [] said the possible merger of its business with RHB CAPITAL BHD [] has been called off.

'In light of recent developments and following further deliberations, the board of directors of Maybank has decided not to pursue the possible merger at this juncture,' Maybank said on Thursday, June 23.

RHB Cap share price fell 57 sen to close at RM9.03 while Maybank shed two sen to RM8.82.

FBM KLCI closes lower, banks weigh

KUALA LUMPUR: The FBM KLCI closed lower on Thursday, June 23, as RHB Capital fell the most since October 2008 following reports that CIMB and Maybank were dropping their respective takeover bids for the bank.

The FBM KLCI fell 4.16 points to close at 1,563.19, led by losses at banking stocks.

Losers beat gainers by 393 to 330, while 308 counters traded unchanged. Volume was 875.69 million shares valued at RM1.44 billion.

At the regional markets,

RHB Capital fell 5.94% or 57 sen to RM9.03 with 12.4 million shares traded after the Singapore Straits Times reported that CIMB and Maybank were dropping their separate takeover bids for RHB Capital.

The Straits Times, citing executives close to the situation said the decision by the two banks came after one of RHB's shareholders, Abu Dhabi Commercial Bank , signed the sale agreement of its 25 percent stake in RHB with Abu Dhabi-based investment fund Aabar Investments for 10.80 ringgit ($3.56) per share.

The sources said the stake sale by Abu Dhabi Commercial Bank has complicated the proposed takeover, according to the paper.

"Pricing wise, the takeover doesn't make much sense now. There is going to be a cooling down and the two banks may revisit the prospect of a merger with RHB at some other time," it quoted a senior financial executive as saying.

Meanwhile, CIMB lost four sen to RM8.51 and and Maybank shed two sen to RM8.82.

Other decliners were Aeon that fell 47 sen to RM7.15, Hong Leong Bank lost 44 sen to RM12.90, Ibraco 24 sen to 98 sen, Warisan and BAT fell 20 sen each to RM2.40 and RM46, Golsta 17.5 sen to 32 sen, HLFG 16 sen to RM13.32, Carlsberg 13 sen to RM7.29, KLK 12 sen to RM21.98, while Public Bank and AMMB shed two sen each to RM13.20 and RM6.43.

Shares of the Lion Group of companies were actively traded on news that the group was seeking to consolidate its steel business soon to pave way for the entry of a foreign strategic partner to help grow its steel operations.

The Lion Group in a filing to Bursa Securities today confirmed it was in exploratory talks with various parties for a potential strategic tie-up but was quick to caution there was no certainty these discussions would 'lead to a more definitive and conclusive understanding'.

Lion Corp fell 1.5 sen to 28.5 sen with 42.61 million shares traded; Lion Diversified edged up one sen to 45 sen with 25.7 million shares done and Lion Industries fell one sen to RM1.86 with 9 million shares done.

Other actives included Perisai, Kurnia Asia, Ingenuity Solutions, Compugates, MAA, XOX and Axiata.

Among gainers, Iretex added 13 sen to RM1.23, BIMB 12 sen to RM1.85, while UMS, Goldis, Shell, Metrod and Genting rose 10 sen each to RM1.77, RM1.80, RM10.50, RM3.60 and RM11.30 respectively.