#Stocks to watch:* Ramunia, BCorp, Bintai Kinden, AFG

KUALA LUMPUR: Stocks on Bursa Malaysia may see some mild selling pressure on Monday, July 11 following the cautious close Wall Street after a weak jobs report dashed hopes the US economy was emerging from a soft patch.

Hence, investors may have to hold back their hopes that the FBM KLCI can cross the psychological important 1,600 level this week.

Late fund buying on selected stocks pushed the index to a fresh historic close of 1,594.74. But the broader market displayed some caution due to the Bersih 2.0 rally on Saturday.

However, OSK Research director Chris Eng said the Malaysian market will easily recover in half of week despite initial concerns about the Bersih rally.

'The remainder of July should be positive,' he said, adding sentiment would be underpinned by the economic reforms and the strategic reform initiatives,' he said.

On Wall Street, the sell-off was broad and halted an eight-day streak for the Nasdaq, though stocks ended off their lows. U.S. employers added only 18,000 workers in June, short of even the lowest forecast, jolting buyers who had rushed into the market after some encouraging labour-market figures earlier in the week.

The S&P 500 components are expected to show earnings growth of an average of 7.3 percent in the second quarter, but estimates have been lowered in the last 30 days.

The Dow Jones industrial average slipped 62.29 points, or 0.49%, to 12,657.20 at the close. The Standard & Poor's 500 Index shed 9.42 points, or 0.70%, to 1,343.80. The Nasdaq Composite Index dropped 12.85 points, or 0.45%, to 2,859.81.

At Bursa Malaysia, stocks to watch include RAMUNIA HOLDINGS BHD [], BERJAYA CORPORATION BHD [], Bintai Kinden Corp Bhd and ALLIANCE FINANCIAL GROUP BHD [].

Ramunia is buying a floating, storage and offloading (FSO) vessel for US$82.5 million (RM248.37 million) cash. The acquisition would be financed by bank borrowings of'' RM201.3 million and the remainder via internally generated funds

Berjaya Corporation aborted the proposals including a special dividend after it decided to go ahead and privatise its Hong Kong-listed Cosway Corp Ltd (CCL), after listing it about two years ago.

The corporate exercise then had included the issuance restricted non-renounceable offer for sale by CCL of HK$491.56 million loan stocks to BCorp shareholders.

Bintai Kinden and Biz Investment Pte. Ltd have proposed a takeover of Lereno Bio-Chem Ltd, which is listed on the Singapore Exchange's Catalist Board in a deal valued at RM214.84 million.

Bintai Kinden and Biz Investment would sell their 100% stake in Bintai Kindenko Pte Ltd (BKPL), representing 8.5 million shares, for RM214.84 million to be satisfied by the allotment and issuance of new securities in Lereno.

Bintai Kinden would dispose of its 69.82% stake for RM150,000 and Biz Investment of its 30.18% for RM64.84 million.

AFG shares fell last Friday as investors were disappointed that no deal had yet firmed up about Temasek Holdings Pte Ltd and Langkah Bahagia Sdn Bhd disposing of their combined 30% stake in AFG.

Market talk was that Temasek might want to dispose of its stake in AFG after selling its stakes in two of China's biggest banks.

Analysis: Belt-tightening may squeeze economy, markets

NEW Y0RK: Two years removed from its worst recession since World War Two, the U.S. economy is still struggling to create jobs, and things could get even tougher if all the talk of belt-tightening in Washington becomes reality.

Data on Friday showed hiring ground to a near halt last month, driving the jobless rate up to 9.2 percent and casting doubt on whether a sluggish U.S. recovery would soon pick up steam.

This all but ensures the Federal Reserve will keep interest rates at record lows well into 2012. But help probably won't be as forthcoming from Congress and the White House, which are locked in battle over cutting a $1.4 trillion budget deficit.

The problem is one of timing: Economists and investors fear that with weak labor and housing markets causing consumers to tighten their own belts, the last thing the economy needs is an aggressive dose of austerity from the federal government.

"The U.S. government has its work cut out for it," said Douglas Borthwick, managing director at Faros Trading in Stamford, Connecticut. "U.S. fiscal problems have been put off for so long that the government has to cut spending at a time when the economy is unable to absorb it."

As a share of output, the $1.4 trillion budget gap expected for the fiscal year ending in September is one of the largest since World War Two.

President Barack Obama and Republican leaders are aiming for savings of $2 trillion to $4 trillion over 10 years but are at odds over the right mix of spending cuts and tax hikes.

A deal is needed by August 2 in order to lift the $14.3 trillion cap on government borrowing.

While that's not an astronomical amount for a $14 trillion economy, it still amounts to tighter policy at a time that many economists say requires even more aggressive federal spending.

Much depends on the size, scope and timing of spending cuts. If they are large enough and take effect next year, they will depress corporate earnings and weigh on equity markets, according to Credit Suisse U.S. equity strategist Doug Cliggott.

Solid corporate earnings and loose monetary and fiscal policies have helped the S&P 500 index double in value since early 2009.

"We really are in a bind here," Cliggott said, "We have to start addressing the deficit, and if it means a rough stretch for corporate profits and the equity market, then they go through a rough stretch. Putting it off is not the answer."

WALKING THE TIGHTROPE

Fed Chairman Ben Bernanke and others have urged lawmakers to reduce the deficit but to back-load the most draconian spending cuts or tax hikes to shield the fragile economy.

"The idea seems to be that reducing the deficit will somehow produce jobs," said Kathy Jones, fixed income strategist at Charles Schwab. "I'm not sure there's a direct correlation there. We need to allow growth now, because stronger growth will help the long-term fiscal outlook."

That's clear in Europe. Facing default, Greece's parliament last week adopted a package of large and unpopular spending cuts and tax hikes in exchange for international aid.

But economists and investors fear the austerity will make it difficult for the country to grow its way back to health.

Britain, too, has been more aggressive than the United States in cutting spending and raising taxes, and the pace of growth slowed to 1.6 percent in the 12 months to March. Markets are even starting to bet the central bank may have to act by pumping more money into the economy.

David Semmens, U.S. economist at Standard Chartered, said the 2012 election may clip even the biggest deficit hawks' wings, as lawmakers won't want to lose votes. A rising jobless rate is an impediment for Obama's reelection chances.

"I think any spending cuts will be aimed at 2013," he said.

But history does suggest a commitment to fiscal probity is required for long-term economic health. Cliggott said countries with debt-to-output ratios above 90 percent have traditionally grown at slower rates than those with stronger finances.

"It shows the tightrope that has to be walked," said Greg McBride, senior financial analyst at Bankrate.com. "We've got to rein in the government red ink so we don't in coming years face a day of reckoning. But it's a balancing act, because if you rein it in too much, it will plunge us into recession." - Reuters

Jobs halt Wall Street rally, investors eye earnings

NEW YORK: Stocks fell on Friday, July 8 as a weak jobs report dashed optimism that the economy was emerging from a soft patch, leaving investors to hope earnings season would revive an appetite for buying.

The sell-off was broad and halted an eight-day streak for the Nasdaq, though stocks ended off their lows. U.S. employers added only 18,000 workers in June, short of even the lowest forecast, jolting buyers who had rushed into the market after some encouraging labor-market figures earlier in the week.

Despite the day's drop, the three major U.S. stock indexes ended higher for the week. The market is coming off a string of gains that reflected increased hope for an economic rebound and a strong earnings season.

"If you're going to get concerned about the jobs report, you should wait for earnings before going through a complete manic swoon," said Phil Dow, director of equity strategy at Minneapolis-based RBC Wealth Management, which oversees $164 billion.

"Our guess is that we'll see better-than-expected earnings and revenue, and combined with the valuation of the market, this is a compelling time to get in."

The S&P 500 components are expected to show earnings growth of an average of 7.3 percent in the second quarter, but estimates have been lowered in the last 30 days.

The Dow Jones industrial average .DJI slipped 62.29 points, or 0.49 percent, to 12,657.20 at the close. The Standard & Poor's 500 Index .SPX shed 9.42 points, or 0.70 percent, to 1,343.80. The Nasdaq Composite Index .IXIC dropped 12.85 points, or 0.45 percent, to 2,859.81.

For the week, though, all three major U.S. stock indexes rose: The Dow advanced 0.6 percent, while the S&P 500 rose 0.3 percent and the Nasdaq gained 1.6 percent.

Alcoa Inc (AA.N) is scheduled to report results on Monday as earnings begins. Among other companies on tap to report next week are JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) and Google Inc (GOOG.O). Shares of Google slumped 2.7 percent to $531.99 after Morgan Stanley downgraded the Internet giant to "equal-weight," citing margin concerns.

The CBOE Volatility Index .VIX or VIX, widely seen as a measure of anxiety on Wall Street, finished the session unchanged at 15.95. The VIX is down 30 percent from a high reached on June 16.

"This reflects a lack of investor anxiety," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion. "Even though the data suggests a soft patch, investors don't see big clouds on the horizon that would prompt them to hedge their positions in a major way."

Shares of Monster Worldwide (MWW.N), an online employment agency, sank 3.2 percent to $14.65 on the jobs report. Monster's stock was the biggest percentage loser in the Dow Jones U.S. business training and employment index .DJUSBE, which dropped 3.9 percent.

Banking stocks also fell, with the S&P's financial index .GSPF fell 1.3 percent, pressured by Bank of America (BAC.N), which shed 2 percent to $10.70 as the most actively traded stock on the New York Stock Exchange.

President Barack Obama cited the gloomy jobs report as one more reason lawmakers must strike a deal soon to raise the U.S. debt limit, saying the impasse was fueling uncertainty within financial markets and in the business sector.

On the upside, Merck & Co (MRK.N) rose 1.1 percent to $36.12 and was the Dow's top gainer.

Volume was extremely light, with about 5.95 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 8.47 billion.

More than two stocks fell for every one that rose on both the New York Stock Exchange and the Nasdaq. - Reuters

Dollar likely lower without debt limit progress

NEW YORK: The dollar is likely to trend lower in the week ahead, starting July 11 in the aftermath of an abysmal U.S. jobs report on Friday and without clear signs of progress on the approaching U.S. debt ceiling deadline.

The U.S. dollar fell against the yen, Swiss franc and sterling on Friday as significantly weaker-than-expected U.S. jobs data -- released on Friday, July 8 -- raised expectations that the Federal Reserve will leave interest rates low well into next year.

The U.S. Treasury runs out of cash to pay its bills on August 2 unless the government is legally allowed to borrow more. With the United States long regarded as the most stable country and with its currency used as the global reserve, even talk of a U.S. default has sent shudders through global markets.

The rapidly approaching deadline has for now overshadowed debt problems in the euro zone.

Friday's jobs report showing only meager growth in June payrolls added to the gloom surrounding the U.S. dollar as investors see the government and Federal Reserve as failing in efforts to stoke economic growth despite a huge stimulus program and rise in borrowings.

"U.S. policy (on debt) has been extend and pretend," said Douglas Borthwick, managing director of Faros Trading in Stamford, Connecticut. "We've come to an end of that."

The euro is down 2 percent against the dollar this week, its biggest weekly decline since June 12 at current prices, while the dollar is down 0.2 percent against the yen. The euro is now up 6.5 percent against the dollar year to date, while the dollar is down 0.7 percent against the yen in 2011.

One-month euro/dollar risk reversals last traded at -2.825 on Friday, according to Reuters data, with a bias toward euro puts and dollar calls, suggesting more investors are betting the euro will fall than will rise.

But investors are less bearish than a few weeks ago when the same risk reversal traded at -3.4, its lowest since June 2010.

Trying to break a budget deadlock and allow for an increase in the $14.3 trillion debt ceiling, Obama and congressional leaders are aiming for more than $2 trillion in budget savings and possibly as much as $4 trillion.

With Republicans and Democrats still far apart, President Barack Obama has scheduled another round of talks for Sunday.

"It's not like there's some imminent deal about to happen," said House of Representatives Speaker John Boehner at a news conference. "There are serious differences about how to deal with this very serious problem.

While no deal is expected, investors will be seeking any clue that there is at least some compromise.

"Any headline indicating they are closer to an agreement will be dollar positive," said Jessica Hoversen, foreign exchange and fixed income analyst at MF Global in New York.

BAD JOBS DATA

U.S. employment growth ground to a near halt in June, data from the U.S. Labor Department on Friday showed, with employers hiring the fewest workers in nine months, damping down hopes the economy was on the cusp of regaining momentum after stumbling in recent months.

The euro initially tumbled to a session low of $1.4204 on Reuters data, then trimmed losses, with traders saying the sharp drop toward the $1.42 level triggered short-term buying.

It last traded at $1.4244, down 0.8 percent on the day.

"It's a terrible number, there is no good news you can glean from it," said David Semmens, U.S. economist at Standard Chartered in New York, of the payrolls data. "I don't think this puts pressure on the Fed to do more, though."

Speculators increased bets against the dollar at least up to the Tuesday before the jobs report was released, according to CFTC data made public on Friday. - Reuters

US jobs barely rise, dashing hopes of an economic revival

NEW YORK: U.S. employment growth ground to a halt in June, with employers hiring the fewest number of workers in nine months, dampening hopes the economy was on the cusp of regaining momentum after stumbling in recent months.

Nonfarm payrolls rose only 18,000, the weakest reading since September, the Labor Department said on Friday, July 8 well below economists' expectations for a 90,000 rise.

Many economists raised their forecasts on Thursday after a stronger-than-expected reading on U.S. private hiring from payrolls processor ADP, and they expected gains of anywhere between 125,000 and 175,000.

The unemployment rate climbed to 9.2 percent, the highest since December, from 9.1 percent in May.

The government revised April and May payrolls to show 44,000 fewer jobs created than previously reported. The report shattered expectations that the economy was starting to accelerate after a soft patch in the first half of the year.

The private sector added 57,000, accounting for all the jobs created, with government employment shrinking 39,000 because of fiscal problems at local and state governments.

Economic activity in the first six months of the year was dampened by rising commodity prices and supply chain disruptions following Japan's devastating earthquake in March.

WHITE HOUSE HEADACHES

Signs the labor market is struggling is a major blow for the Obama administration, which has struggled to get the economy to create enough jobs to absorb the 14.1 million unemployed Americans.

The economy is the top concern among voters and will feature prominently in President Barack Obama's bid for re-election next year. So far, the economy has regained only a fraction of the more than 8 million jobs lost during the recession.

At the same time, the Federal Reserve -- which wrapped up a $600 billion bond-buying program last week designed to spur lending and stimulate growth -- appears unlikely to take any further steps to boost the economy.

The economy needs to create between 125,000 and 150,000 new jobs a month just to absorb new labor force entrants.

Details of the report showed widespread weakness, though factory payrolls rebounded 6,000 after contracting in May for the first time in seven months, with the recovery reflecting a step-up in motor vehicle production.

CONSTRUCTION [] employment fell 9,000 last month after declining 4,000 in May. Government employment declined for an eighth straight month as municipalities and state governments continued to wield the axe to balance their budgets.

The report also showed the average workweek fell to 34.3 hours from 34.4 hours. Employers have been reluctant to extend hours because of the uncertainty surrounding the recovery.

Average hourly earnings slipped a penny, more evidence that wage-driven inflation is not a risk. - Reuters

Ramunia buying vessel for RM248m

KUALA LUMPUR: RAMUNIA HOLDINGS BHD [] is buying a floating, storage and offloading (FSO) vessel for US$82.5 million (RM248.37 million) cash.

It said on Friday, July 8 it would RAHB proposes to finance up to RM201.3 million or 81% of the purchase price via bank borrowings and the remainder via internally generated funds

It had on Thursday, signed a memorandum of agreement with DP Producer AS to buy the vessel from Drydocks World, which is equally owned by Dubai LLC and NTM Refectio II AS.

DP Produce, which was incorporated in Norway on May 16, 2006, is under bankruptcy or liquidation proceedings.

'The proposed acquisition provides an excellent opportunity for Ramunia to tap into and participate in the development of marginal oilfields and deepwater fields in Malaysia and the region,' it said.

It added the exploration, production, storage and offloading activities for the upstream O&G sector involved the fabrication of offshore structures, provision of offshore terminals, marine support services, transportation and installation, operations and maintenance and drilling.

'The proposed acquisition also presents an immediate opportunity for Ramunia to participate in any direct negotiations, invitation to bids and requests for new proposals for the proposed deployment of FPSOs, to be undertaken by Malaysian and regional oil companies, where the demand is increasing within the backdrop of higher oil prices,' it said.

Bintai Kinden in takeover of Singapore listed Lereno

KUALA LUMPUR: Bintai Kinden Corp Bhd and Biz Investment Pte. Ltd have proposed a takeover of Lereno Bio-Chem Ltd, which is listed on the Singapore Exchange's Catalist Board in a deal valued at RM214.84 million.

Bintai Kinden said on Friday, July 8 said the company and Biz Investment would sell their 100% stake in Bintai Kindenko Pte Ltd (BKPL), representing 8.5 million shares, for RM214.84 million to be satisfied by the allotment and issuance of new securities in Lereno.

Bintai Kinden would dispose of its 69.82% stake for RM150,000 and Biz Investment of its 30.18% for RM64.84 million.

It added the RM214.84 million was based on the unaudited profit attributable to the equity holders of BKPL of about S$10.7 million for the financial year ended March 31, 2011 and its prospective earnings.

'Based on the consideration of RM214.84 million and the unaudited profit of approximately S$10.7 million attributable to the equity holders of BKPL, the price earnings multiple is approximately 8.18 times.

'The consideration of RM214.84 million is justified after taking into account the prospective earnings of

BKPL given its expected performance/earnings for the FYE March 2012 and its subsequent earnings from its present order book,' it said.

Based on BKPL's audited consolidated financial statements of BKPL for the FYE March 2010, Bintai Kinden would realise an estimated gain of RM428,000 on a consolidated basis upon completion of the proposal.

Explaining its rational, it said BKPL, with its headquarters in Singapore, has to-date undertaken and completed numerous projects in Singapore, and has since expanded its operations regionally in Southeast Asia and China.

'It is the intention of the board to increase the international profile and stature of BKPL. The board believes that BKPL, through Lereno, would essentially be able to tap into alternative funding options leveraging on the Singapore capital markets and international banking community to complement the Malaysian financial markets for future funding needs and facilitate the plans for its future growth opportunities and regional expansion in the long term,' it said.

Bintai Kinden said it would also be to 'unlock' its shareholding value in BKPL through its stake in a listed entity, namely Lereno.

It added Lereno is an integrated bio-TECHNOLOGY [] company with involved in biofuels processing comprising first and second generation of biofuels; upstream businesses (feedstock and bio-resources development); and downstream businesses (process engineering, downstream oleochemicals production).

On completion of the proposal, Bintai Kinden together with Biz Investment would hold more than 85% of the enlarged voting share capital of Lereno, while the public spread would be below 15%.

To restore the public spread, the Bintai Kinden, Biz Investment and/or Lereno would have to undertake a'' placement by selling the consideration shares and/or allotment of new Lereno shares to investors.

Bintai Kinden said if the public spread was not met, the shares of Lereno would be suspended from trading.

BCorp aborts special dividend as it privatises Cosway HK

KUALA LUMPUR: BERJAYA CORPORATION BHD [] has aborted the proposals including a special dividend after it decided to go ahead and privatise its Hong Kong-listed Cosway Corp Ltd (CCL), after listing it about two years ago.

The corporate exercise then had included the issuance restricted non-renounceable offer for sale by CCL of HK$491.56 million loan stocks to BCorp shareholders.

'On behalf of the board of BCorp, we wish to inform that as a consequence of the proposed privatisation, the company has aborted the proposals,' BCorp said on Friday, July 8.

On Thursday, BCorp, which owns 55.47% or 2.615 billion shares in CCL out of the 4.715 billion shares, said the exercise would be at a cash consideration of HK$1.10 or 42 sen per ordinary share of HK$0.20 each in CCL shares and HK$1.10 per HK$0.20 nominal amount of irredeemable convertible unsecured loan securities (CCL ICULS).

BCorp also owns 6.837 billion CCL ICULS, which are convertible into 6.837 billion new CCL Shares.

At HK$1.10 per share, BCorp is valuing the company at HK$5.19 billion. The remaining 44.53% or 2.1 billion shares it does not own is valued at HK$2.31 billion.

BCorp chairman Tan Sri Vincent Tan and executive director Rayvin Tan also own 330,000 and 221,707 shares respectively.

BCorp said in its statement it would be in the best interests of the company to privatise CCL in the light of the current development of its group of companies.

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KLCI closes at new high again, eyes 1,600

KUALA LUMPUR: Fund buying in the last hour nudged the FBM KLCI to close at a fresh historic high on Friday, July 8 despite a more cautious broader market where investors' appetite was restrained by the Saturday rally by several groups.

The KLCI closed up 4.5 points to 1,594.74, the highest ever for the 30-stock index, lifted by gains in Petronas Gas, MISC, GENTING BHD [] and Axiata Group. The four stocks pushed up the index by 3.99 points.

Turnover was 810.53 million shares valued at RM1.57 billion, contributed by the call warrants of MSM and Malton which totalled 50.49 million units. The broader market displayed the cautious sentiment with decliners leading advancers 390 to 287 while 366 stocks were unchanged.

The ringgit rose to 2.9923 against the US dollar, up 0.175 from the previous close of 3.0098. This was the strongest since May 11 when it was at 2.979. The crude palm oil third-month futures rose RM26 to RM3,080 while US light crude oil was at US$98.01.

The local funds took their cue from the firmer close on key regional markets.

Institutional dealers said there were some local fund buying of key stocks but the overall market sentiment was somewhat cautious, as reflected in the lower volume and the outcome of the rally as several parties and activities vowed to converge at Stadium Merdeka.

Reuters reported bank stocks helped Chinese stocks post a third consecutive week of gains on Friday and extend their recovery from nine-month lows, with retail investors bargain hunting ahead of China's June inflation data due on Saturday.

Thin trading volume and lack of participation by institutional investors, though, suggested equity markets in China and Hong Kong may struggle to keep a rally going next week, without a further pick-up in bank stocks.

The benchmark Hang Seng Index gained 0.9 percent on the day and 1.5 percent on the week to close at 22,726.4 points, while the Shanghai Composite Index closed up 0.1 percent on the day and 1.4 percent on the week to 2,797.8 points.

Gold prices eased on Friday, tracking losses in the euro versus the dollar ahead of key U.S. jobs data, but remained on track for their biggest weekly gain since late April as risk-averse investors recovered their appetite for the metal, Reuters reported.

Spot gold was bid at $1,526.00 an ounce at 0927 GMT against $1,531.85 late in New York on Thursday. U.S. gold futures for August delivery eased $4.20 to $1,526.40.

Brent crude fell over $1 on Friday ahead of closely watched U.S. non-farm payrolls data, as investors booked some profits after data from the previous session lifted confidence on the global economy and pushed Brent up nearly $5. ICE Brent crude was down $1.33 cents at $117.26 a barrel by 0915 GMT.

At Bursa Malaysia, Petronas Gas rose 52 sen to RM14, Nestle 32 sen to RM47.30, MISC 20 sen RM7.70 while Genting Bhd added 12 sen to RM11.22 and heavyweight Axiata three sen to RM5.05.

MSM added four sen to RM5.59 and the call warrants MSM-CB rallied 24.5 sen to 45.5 sen with 25.76 million units done.

Jerneh-WA was the top loser, down 34 sen to RM1.09 while Malton-LA shed 16 sen to 84 sen. AFG snapped its rally, down 16 sen to RM3.46 while Top Glove shed 14 sen to RM5.34, Tradewinds PLANTATION []s 13 sen to RM3.50 and MMHE 12 sen to RM8.42.

MARC affirms rating on Cagamas MBS RM2.1b sukuk

KUALA LUMPUR: Malaysian Rating Corp Bhd (MARC) has affirmed its AAA IS rating on Cagamas MBC Bhd's RM2.11 billion mortgage backed Islamic debt notes with a stable outlook.

It said on Friday, July 8 the rating action affects outstanding Sukuk of about'' RM1.78 billion.

'CMBS 2007-1-i represents the fourth residential mortgage-backed securitisation issuance by Cagamas MBS,' it said.

MARC said the transaction's affirmed rating reflects a strong credit enhancement level of 126.61% for the outstanding Sukuk, supported by a collection account balance of RM132.59 million and an outstanding collateral pool balance of RM2.12 billion in non-defaulted mortgages.

The collateral pool, which comprises seasoned mortgages of high credit quality, has continued to show stable performance over the period under review.

The affirmed rating also benefits from satisfactory management of collateral servicing and transaction administration.

SC seek feedback on company chairman, poll voting

KUALA LUMPUR: The Securities Commission is seeking the feedback from the public on whether a company chairman should also be an independent director.

Another major point in the blueprint which whether poll voting should be mandated for other substantive resolutions apart from related-party transactions.

There are two major points which the SC is seeking the public's feedback on under the five-year Corporate Governance blueprint unveiled on Friday, July 8.

On the poll voting, the SC the blueprint had recommended that it be mandated for related-party transactions.

The SC said the objective of the blueprint is to push for a shift in corporate governance culture from mere compliance with rules to one that more fittingly captures the essence of good corporate governance.

Essentially, it is to deepen the relationship of trust between companies and stakeholders.

The SC said the blueprint would help strengthen corporate governance culture in Malaysia.

'It outlines strategic initiatives aimed at strengthening self and market discipline, and promoting greater internalisation of the culture of good governance,' it said.

It added the move is to deepen the governance process by romoting more extensive and proactive participation by a broader range of stakeholders.

The SC said there are 35 broad recommendations. Most would be implemented through a new Malaysian Code on Corporate Governance and through changes to the Listing Requirements.

As for the others, taskforces and working groups would be set up by the industry in collaboration with the SC.'' Some recommendations require legislative amendments.

The SC envisaged the Malaysian Code on Corporate Governance will come into effect by early 2012. Changes to the Listing Requirements would also be effected by early 2012.

It also said the recommendations will be implemented over a five-year period.

The progress of implementation would be assessed by 2013 and a full post implementation review carried out at the end of the five year period.

PM: RM8b to RM12b spin off from MRT

KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak said the Klang Valley mass rapid transit (MRT) project would result in between RM8 billion to RM12 billion in spin-offs.

Speaking at the historic launch of the project, which was renamed MY Rapid Transit (MRT) project on Friday, July 8, he said it was one of the key projects in the National Key Economic Area under the Economic Transformation Programme.

'This project will have a positive impact on Malaysia's economy overall as it is capable of generating between RM3 billion and RM4 billion in gross national income between 2011 and 2020.

'We should also be able to see between RM8 billion and RM12 billion generated from spin-off projects from the CONSTRUCTION [] of this Klang Valley MRT project,' he said.

According to a joint statement issued by Syarikat Prasanara Negara Bhd and Suruhanjaya Pengangkutan Awam Darat (SPAD), they said the MRT is the largest civil infrastructure project undertaken by the government as part of the ETP.

They said the transport infrastructure would bring long-term benefits to the nation's economy and the public.

In effect the MRT would not only be the means to move large volumes of peoples, reducing traffic congestion and increasing productivity, but as an enable of economic growth for the whole nation and to improve the standard of living and life style'' of the large number of Malaysia workers who make the Greater KL/Klang Valley their home.

Blue chips extend losses on rallies concerns

KUALA LUMPUR: Investors turned cautious on Friday, July 8 and were seen taking profit on blue chips on some concerns about the impact of the proposed rallies in the heart of Kuala Lumpur Saturday afternoon.

The parties involved in the rallies, including Bersih and Umno were seen stepping up rhetoric as police barred 91 of the leaders and activists from the city centre and warned of a crackdown.

Bersih leaders, denied a permit to hold the rally at the historic Stadium Merdeka, said they would go ahead with the rally at 2pm on Saturday though police had refused to give them a permit.

Bersih opponents, including Umno Youth, also raised their rhetoric and warned they too would hold a rally.

At 3pm, the FBM KLCI was down 4.63 points to 1,585.61. Turnover was 482.2 million shares valued at RM763.74 million. There were 206 gainers, 433 losers and 310 stocks unchanged.

Jerneh-WA was the top loser, down 37 sen to RM1.06, Dutch Lady 24 sen to RM19.30, Malton-LA 16 sen to 84 sen, AFG 16 sen also to RM3.46. Other losers were Cepco and Top Glove, shedding 13 sen each to RM1.92 and RM5.35 while MMHE lost 12 sen to RM8.42 and SunCity 10 sen to RM5.29.

Securities Commission unveils 5-yr Corporate Governance Blueprint

KUALA LUMPUR: The Securities Commission unveiled its five-year Corporate Governance blueprint to raise the standards of corporate governance in Malaysia on Friday, July 8.

The blueprint focuses on six themes of corporate governance -- shareholder rights, the roles of institutional investors, boards, gatekeepers and influencers, disclosure and transparency as well as public and private enforcement.

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The thrust of the blueprint was to layout the action plan to raise the standards of corporate governance in Malaysia, by focusing on strengthening of self and market discipline and promoting greater internalisation of the culture of good governance.

SC chairman''Tan Sri Zarinah Anwar said: 'The essence of the blueprint is to achieve Excellence in Corporate Governance by inculcating good corporate governance culture. It is the mutual responsibility of all participants in the capital market to exercise greater care and effort to create value and meet shareholder expectations".

The blueprint was unveiled by Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah.

The blueprint, developed through a highly consultative, is the first major deliverable of the Capital Market Masterplan 2 (CMP2), the SC said.

The 10-year CMP2, which was launched in April, would focus on expanding the role of the capital market in invigorating national economic growth. However, the emphasis is that growth is only sustainable if it is underpinned by a proper system of accountabilities and governance.

The SC said extensive research and international benchmarking were undertaken to prepare the blueprint. This, it said, was to ensure the recommendations were sufficiently robust and suitable for Malaysian corporate governance.

The major points of the blueprint, which was developed through a highly consultative process, were corporate governance ecosystem namely shareholder rights, the roles of institutional investors, boards, gatekeepers and influencers, disclosure and transparency as well as public and private enforcement.

The SC said it welcomed feedback from all parties and the public on the blueprint and the deadline for the submission of comments was Sept 15.

Highlights of the blueprint:

Facilitating the exercise of shareholder rights

A number of measures are recommended to stimulate greater shareholder activism.'' These include mandatory poll voting on resolutions approving related-party transactions and a requirement for the chairman at general meetings to inform shareholders of their right to demand a poll vote before voting is introduced.

Responsible ownership by institutional investors

The blueprint also recognises the leadership role that can be played by institutional investors through the exercise of responsible ownership. A new stewardship code and an umbrella body for institutional investors will therefore be formulated to promote responsible ownership.

Boards as active and responsible fiduciaries

On the role of boards, the Blueprint proposes measures to enable boards to become more active and responsible fiduciaries. These measures include''a mandatory formal board charter, limitation on the''tenure of independent directors and''a reduction in the number of directorships in listed companies that''directors may hold, separation of chairman and CEO roles and the setting up of a taskforce to conduct an industry-led study on directors' compensation.'' The Blueprint also mandates the establishment of a Nominating Committee, chaired by an independent director, which should focus on recruitment, assessment, diversity and training needs of directors.

Role of gatekeepers and influencers

Noting that boards do not function in isolation, the Blueprint highlights the important role of gatekeepers and influencers - professionals like corporate advisers, company secretaries, and the media - and recommends measures such as clarifying the role of company secretaries in corporate governance, exploring the extension of whistleblowing obligations to some professionals and enhancing internal codes of conduct to prevent the abuse of market sensitive information.

Improving disclosure and transparency

Proposals for improving disclosure and transparency includes a shortening of the submission period for quarterly and annual reports and making companies focus on substance rather than form in meeting corporate governance requirements.

Facilitating private enforcement actions

To facilitate shareholders in undertaking private enforcement actions to pursue civil remedies, a working group will be set up to study the feasibility of third party funding of litigation to assist investors in private enforcement actions.

The SC also said the'' recommendations in the blueprint would'' be implemented over a five-year period. Most of the recommendations will be applied through a corporate governance code and changes to the Listing Requirements, both of which would take effect by early 2012.

''

''

FBM KLCI slips below 1,590-level on profit taking

KUALA LUMPUR: The FBM KLCI slipped below the 1,590-point level at the mid-day break on Friday, July 8 as pre-weekend profit taking at key blue chips weighed the benchmark index down.

Key regional markets mostly pared down their gains ahead of US jobs data due out later in the day.

The FBM KLCI shed 0.22% or 3.46 points to 1,586.78, with losses including at Gamuda, AMMB, Sime and Genting Malaysia.

Losers beat gainers by 375 to 210, while 312 counters traded unchanged. Volume was 418.87 million shares valued at RM619.92 million.

The ringgit strengthened 0.38% to 2.9984 versus the US dollar; crude palm oil futures for the third month delivery rose RM42 per tonne to RM3,096, crude oil slipped 18 cents per barrel to US$98.49 while gold fell US$1.32 an ounce to US$1,531.05.

At the regional markets, Hong Kong's Hang Seng Index was up 1.07% to 22,771.50, Japan's Nikkei 225 added 0.70% to 10,141.91, Singapore's Straits Times Index gained 0.61% to 3,145.09, and the Shanghai Composite Index edged up 0.21% to 2,800.13.

Meanwhile, Taiwan's Taiex fell 0.16% to 8,759.52 and South Korea's Kospi shed 0.08% to 2,178.80.

Among the decliners on Bursa Malaysia, Gamuda and Sime Darby fell four sen each to RM3.80 and RM9.19, AMMB and Genting Malaysia down eight sen each to RM6.63 and RM3.78, Petronas Chemicals seven sen to RM7.12, Maybank three sen to RM8.94 and DiGi down 18 sen to RM29.78.

Other losers included Dutch Lady, AFG, Cepco, Top Glove and MMHE.

Among the gainers, LPI Capital added 24 sen to RM14.04, MISC 13 sen to RM7.63, KLK and SBC Corp 12 sen each to RM22.70 and RM1.07, while South Acids added 10 sen to RM2.52.

The actives included MSM warrants, Timecom, AirAsia, Malton and Petronas Chemicals.

''

Private properties acquisition for MRT reduced by half

KUALA LUMPUR: The acquisition of private PROPERTIES [] has been reduced by half with the finalisation of the alignment of the Sg. Buloh-Kajang MRT line.

Suruhanjaya Pengangkutan Awam Darat (SPAD) chairman Tan Sri Syed Hamid Albar said on Friday, July 8 it had made many changes to the MRT line after taking into consideration of public's feedback.

'We are happy to say that there has been a major reduction of land acquisition (in the approved final alignment)," he said.

The final alignment saw the elimination of private properties acquisitions by half especially in area surrounding the proposed stations in Cheras and Kajang.

SPAD CEO Mohd Nur Ismail Mohamed Kamal added that 70% of the project would be built on road reserves and the remaining on private properties.

The number of MRT stations has also been reduced from 35 to 31.

However, they did not reveal the overall costs of the Sg. Buloh-Kajang MRT line.

"We expect to nail down the cost sometime in August or September," he said after the launch of the Sg-Buloh-Kajang MRT line.

While there has been no official figure for the project, analysts had estimated it to cost RM20 billion.

Prime Minister Datuk Seri Najib Tun Razak launched the MY Rapid Transit (MRT) project today with land clearance works commencing at three sites of the Sg Buloh-Kajang line.

Prasarana group MD Shahril Mokhtar said pre-qualifications for the MRT line has been closed and they are currently evaluating the bids.

He said civil works is expected to begin by year-end.

KKB rises on Samalaju job

KUALA LUMPUR: KKB ENGINEERING BHD [] shares advanced on Friday, July 8 after the company secured a RM70 million contract from OM Materials (Sarawak) Sdn Bhd for the proposed earthworks package for OM Sarawak Plant at Samalaju Industrial Park.

At 9.35am, KKB rose three sen to RM1.96 with 13,000 shares traded.

OSK Research maintained its Buy call on KKB with a fair value of RM3 based on 10 times FY11EPS

'We continue to remain positive on KKB and expect more contract announcements to flow through post state elections, and remain convinced on their future prospects which remain supported by their solid fundamentals, strong track record and undemanding valuation,' it said in a note July 8.

FBM KLCI edges up as Asian markets trend higher

KUALA LUMPUR: The FBM KLCI rose marginally higher at mid-morning on Friday, July in line with the slightly firmer overnight close at Wall Street.

Asian stocks rose to a one-month high on Friday as investors hoped for a strong US jobs report that may signal the economy is pulling out of a soft patch, while the euro held on to much of its overnight gains after the European Central Bank raised interest rates, according to Reuters.

Risky assets have been on a tear since last week as fears of an imminent Greek debt default ebbed and as encouraging US data strengthened views that the world's largest economy was turning around after a patchy first half, it said.

The FBM KLCI rose 1.84 points to 1,592.08 at 10am, with gains including at KLK, MISC, Petronas Dagangan and Genting.

Gainers led losers by 210 to 170, while 196 counters traded unchanged. Volume was 175.73 million shares valued at RM214.47 million.

At the regional markets, Hong Kong's Hang Seng Index rose 1.30% 22,823.48, Japan's Nikkei 225 added 0.98% to 10,170.34, Singapore's Straits Times Index gained 0.72% to 3,148.24, Taiwan's Taiex up 0.45% to 8,812.53, the Shanghai Composite Index added 0.29% to 2,802.35 while South Korea's edged up 0.11% to 2,183.07.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients July 8 said that due to the US markets' firm tone last night, there could be some buying activities on the local bourse.

He said the market could rise marginally, with some pre-weekend profit taking.

'There is a good possibility that it will test its all-time high and resistance of 1,595.87. If the index surges and sustains above 1,595, then we see upside to 1,601 and 1,618 in the short term.

'However, we could have a steady rise to the 1,601 and 1,618 levels, as some pre-weekend liquidation takes place,' he said.

Among the gainers at mid-morning, LPI Capital rose 32 sen to RM14.12 after it declared a first single tier interim dividend of 25 sen per share to be paid on July 28.

Other gainers included KLK that added 22 sen to RM22.80, MISC 15 sen to RM7.65, MSM 13 sen to RM5.68 and Petronas Dagangan 12 sen to RM17.24.

Meanwhile, Genting added eight sen to RM11.18 on reports of speculation that the Genting Group was among those eyeing a US$2.1 billion (RM6.3 billion) mega theme park project in Gujarat, India.

Losers included Dutch Lady that fell 54 sen to RM19, Batu Kawan 10 sen to RM17.20, AFG six sen to RM3.56, while Atis and Parkson fell five sen each to RM1.10 and RM5.94.

The actives included MSM shares and warrants, Timecom, Malton, Perisai and Hubline.

CIMB Research has Buy on Maybank at RM8.97

KUALA LUMPUR: CIMB Equities Research has a technical Buy on MALAYAN BANKING BHD [] at RM8.97 at which it is trading at a FY12 price-to-earnings of 13.4 times and price-to-book value of 2.2 times.

It said on Friday, July 8 Maybank is consolidating in a triangle pattern with prices holding above all its key moving averages. The bulls continue to dominate here and it expects prices to swing past the resistance trend line soon.

'Technical landscape remains compelling. MACD is hovering in the positive territory while RSI is also above the 50pts mark. Once the RM9.26 level is taken out, the following resistance levels are RM9.48 and RM9.90.

'Aggressive traders may start to nibble now while others should only go long after RM9.26 is taken out. Always put a stop at below RM8.57,' it said.

CIMB Research has Buy on Kossan at RM3.17

KUALA LUMPUR: CIMB Equities Research has a technical Buy on KOSSAN RUBBER INDUSTRIES BHD [] at RM3.17 at which it is trading at a FY12 price-to-earnings of 7.5 times and price-to-book value of 2.2 times.

It said on Friday, July 8 Kossan is consolidating in a bullish flag pattern. Recent rebound lift prices above the resistance channel as well as its 30-day and 50-day SMAs.

There is a good chance that the candles may swing past the flag resistance.

CIMB Research said once the RM3.24 level is taken out, it expect follow through momentum to pick up. This should further lift prices towards RM3.40 and RM3.58 next.

'Our short term bullish stance is also backed by the improving technical landscape. MACD has returned to the black while RSI is also rising.

'Risk takers may take some position here before the breakout materialises. Others should join the bandwagon when RM3.24 is taken out. Place a stop at below RM3.06-2.98 in case this is a bull trap,' it said.

CIMB Research has Buy on Sapura Resources at RM1.18

KUALA LUMPUR: CIMB Equities Research has a technical Buy on Sapura Resources at RM1.18 at which it is trading at a price-to-book value of 0.5 times.

It said on Friday, July 8 that Sapura Resources after breaking out of its triangle pattern, the share price is building a base above its 200-day SMA.

'We see this as a prelude to more upside ahead. The next upswing to test the RM1.25 and RM1.38 resistances,' it added.

CIMB Research said the MACD histogram bars continue to gain strength, suggesting that there is more room to the upside. RSI too is rising.

'As long as prices stay above the 200-day SMA (now at RM1.08), we would continue to stick with the bull's camp. Only a fall below RM1.06 would trigger our stop,' it said.

LPI Capital jumps in early trade

KUALA LUMPUR: LPI CAPITAL BHD [] shares jumped in early trade on Friday, July 8 after it declared a first single tier interim dividend of 25 sen per share to be paid on July 28.

At 9.05am, LPI Capital rose 40 sen to RM14.20 with 8,700 shares done.

LPI Capital's net profit for the second quarter ended June 30, 2011 rose 18.83% to RM31.42 million from RM26.44 million a year ago, due mainly to higher gross premium underwritten and higher underwriting profit.

It said on Thursday, July 7 that revenue'' rose 23% to RM213.88 million from RM173.87 million. Earnings per share were 14.26 sen while net assets per share was RM5.21.

For the six months ended June 30, LPI Capital's net profit rose to RM70.04 million from RM64.77 million, on the back of revenue RM427.3 million.

On its outlook for the year, LPI Capital said barring unforeseen circumstances, its prospects for the year should be satisfactory.

YTL Power up on strategic tie-up with Marubeni

KUALA LUMPUR: YTL POWER INTERNATIONAL BHD [] shares advanced on Friday, July 8 after it formed a strategic tie-up with Marubeni Corp following the latter taking up a 42.86% stake in YTL Power's Indonesian outfit YTL Jawa BV.

At 9.20am, YTL Power added three sen to RM2.19 with 580,100 shares traded.

YTL Power on July 7 said that it expects to realise a gain on disposal of RM210.10 million from the sale of a 42.86% equity interest in YTL Jawa BV to Marubeni Corporation for US$224 million (RM680.96 million).

Its unit YTL Jawa Power Holdings Ltd had entered into the share purchase agreement with Maubeni and its subsidiary Aster Power for the sale of 7,715 ordinary shares of '1 each and certain company interests.

On the rationale for the share sale, YTL Power said it would enable Aster Power and Marubeni to co-invest in YTL Jawa BV and form a strategic partnership with the group, which was in line with YTL Power's growth strategy of investing in long-term geographically diverse infrastructure assets, whilst concurrently achieving synergies across its portfolio of utility businesses.

It said the strategic partnership would facilitate collaborations between YTL Power and Marubeni on potential investments and the development of future opportunities in the global utilities industry.

'The YTL Power group is continuously seeking to develop and expand its presence in utility businesses both in Malaysia and offshore,' it said.

CIMB Equities Research has a Buy call on YTL Power with a sum-of-parts target price of RM2.80.

The deal could be positive as the partnership will improve YTL Power's chances of clinching other Indonesian power projects.

'However, we cut our FY11-13 core EPS by 2-11% for lower contributions from YTL Jawa and higher WiMax losses. Our SOP-based target is now 2% lower at RM2.80 as cash received from Marubeni does not offset the drop in contributions from YTL Jawa and higher borrowings.

'We also cut FY11-13 net DPS by 31% to reflect a more conservative payout policy,' it said.

CIMB Research said despite the downgrade in its numbers, YTL Power remains a BUY as it believe its share price already reflects the WiMax uncertainties and lower dividends.

It said there could be a re-rating on the back of M&A and positive WiMax developments.

''

ASIA-Shares set for stronger open on growth optimism

WELLINGTON: Asian stocks are set to open higher on Friday, as improved U.S. data and moves by the European Central Bank to support struggling Portugal lifted optimism.

The main Wall Street indices posted solid gains of between 0.7 percent and 1.4 percent, with the tech-laden Nasdaq notching its eighth day of gains, its best rise in two years.

Data showed U.S. private-sector employers added 157,000 jobs last month, more than double what was expected, which, along with a fall in new claims for jobless benefits, raised hopes that Friday's non-farm payrolls report will show an improving labour market.

Other data showed a healthy lift in retail sales for June.

Both the S&P retail index and the Dow Jones Transportation Average hit all-time highs.

Asian stocks listed on Wall Street rose 0.95 percent, while global stocks as measured by the MSCI world equity index rose 0.75 percent.

British stocks were up 0.9 percent and European ''shares rose 0.4 percent to a five week high on the strong U.S. data.

The euro recouped losses as the European Central bank said it would suspend minimum credit rating requirements for Portugal's debt, despite Moody's move to downgrade it to junk territory. The move was seen as showing the ECB, which is raised its benchmark rate to 1.5 percent, will support the euro.

Japanese markets, which snapped a week of rises on Thursday, are seen opening stronger. The benchmark Nikkei held above the 10,000 level with reports of orders by local pension funds and Asian investors supporting the view of future gains going into the earnings season.

Nikkei futures traded in Chicago were 140 points above the last closing level in Osaka.

Australian stocks are looking to a strong start on the gains on Wall Street and higher metals prices. Share price index futures are up 0.7 percent, an 11.5 point premium to the underlying S&P/ASX 200 index. ' Reuters

''

Nikkei hits 4 month high as Wall Street shines on data

TOKYO: The Nikkei benchmark index hit a four-month peak on Friday, getting closer to pre-quake levels, pushed sharply higher after improvements in labour market and retail sales data buoyed Wall Street ahead of crucial employment figures.

The Nikkei average opened up 1.3 percent at 10,205.71 on Friday, while the broader Topix gained 0.9 percent to 878.39. ' Reuters

''

CIMB Research has Buy on YTL Power, TP RM2.80

KUALA LUMPUR: CIMB Equities Research has a Buy call on YTL POWER INTERNATIONAL BHD [] with a sum-of-parts target price of RM2.80.

It said on Friday, July 8 that YTLP is selling a 43% stake in its unit YTL Jawa Power Holdings to Marubeni Corp for US$224 million or US$1.5 a MW, which is a fair price.

The deal could be positive as the partnership will improve YTLP's chances of clinching other Indonesian power projects.

'However, we cut our FY11-13 core EPS by 2-11% for lower contributions from YTL Jawa and higher WiMax losses. Our SOP-based target is now 2% lower at RM2.80 as cash received from Marubeni does not offset the drop in contributions from YTL Jawa and higher borrowings.

'We also cut FY11-13 net DPS by 31% to reflect a more conservative payout policy,' it said.

YTLP said despite the downgrade in its numbers, YTLP remains a BUY as it believe its share price already reflects the WiMax uncertainties and lower dividends.

It said there could be a re-rating on the back of M&A and positive WiMax developments.

Retail, tech lead Wall Street rally before jobs data

NEW YORK: Stocks closed sharply higher and the Nasdaq notched an eighth day of gains on Thursday, July 7'' as improved labor market and retail sales data added to optimism a day before the critical June payrolls report.

Equities have been on a tear recently as improving economic data and a potential resolution to Greece's fiscal issues paved over fears of slowing growth and contagion stemming from the euro zone's debt crisis.

The Nasdaq's 8.3 percent gain over the past eight trading sessions is the most for the index in two years and the S&P's 6.7 percent rise is its best since September 2010, as the market reacted to news of the Fed's second round of stimulus. The Dow is up 6.6 percent over the same period.

"It's all about the data today, which was great, and is causing people to revise their outlooks up for tomorrow," said Jeffrey Friedman, senior market strategist at Lind-Waldock in Chicago. "We passed through a resistance level of 1,352 on the S&P, and the next stop after that could be new highs for the year."

All 10 S&P sectors rose, led by materials .GSPM, which gained 1.5 percent, while Freeport McMoRan Copper & Gold (FCX.N) climbed 3.7 percent to $55.49.

Both the S&P retail index .RLX and the Dow Jones Transportation Average .DJT hit all-time highs.

Data from payrolls processor ADP showed U.S. private-sector employers added 157,000 jobs last month, more than double what was expected. The report, coupled with a fall in new claims for jobless benefits, raised hopes that a recent slowdown in the economy may only be temporary.

The report fueled speculation that Friday's non-farm payrolls report from the Labor Department would provide more evidence of an improving labor market, a key factor if markets are to rally into the end of the year.

The Dow Jones industrial average .DJI shot up 93.47 points, or 0.74 percent, to 12,719.49. The Standard & Poor's 500 Index .SPX gained 14 points, or 1.05 percent, to 1,353.22. The Nasdaq Composite Index .IXIC climbed 38.64 points, or 1.36 percent, to 2,872.66.

The market's rally has some analysts calling for a near-term pullback.

"I can't make a case from this rally that we're home clear," said James Meyer, chief investment officer of Tower Bridge Advisers in West Conshohocken, Pennsylvania. "We've gone from the bottom of the range to the top, and I suspect trading will be choppy around here."

Retailers were among the best performers after several top companies reported better-than-expected sales gains for June, using bargains to lure shoppers in an uncertain economy.

Target Corp (TGT.N) jumped 6.7 percent to $51.67 while Macy's Inc (M.N) added 5.5 percent to $30.46 and Gap Inc (GPS.N) gained 5.2 percent to $19.28. The S&P retail index .RLX gained 2.4 percent to close at 557.26, a new high.

Elsewhere, the semiconductor index .SOX rose 2.1 percent and added to the Nasdaq's gains. Intel Corp (INTC.O), a Dow component, rose 2.1 percent to $23.23.

There were some glimmers of a potential compromise that would avoid a debt default as President Barack Obama and top congressional leaders searched for ways to break a deadlock over spending and taxes.

Volume was light again, with about 6.69 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 8.47 billion.

Almost four stocks rose for every one that fell on the New York Stock Exchange while on the Nasdaq, three stocks rose for every one that fell. - Reuters

Hack job! Murdoch axes paper to save deal

LONDON: In an astonishing response to a scandal engulfing his media empire, Rupert Murdoch shut down the News of the World on Thursday, July 7 Britain's biggest selling Sunday newspaper.

As allegations multiplied that its journalists hacked the voicemails of thousands of people, from child murder victims to the families of Britain's war dead, the tabloid hemorrhaged advertising, alienated millions of readers and posed a growing threat to Murdoch's hopes of buying broadcaster BSkyB.

Yet no one, least of all the paper's 200 staff, was prepared for the drama of a single sentence that will surely go down as one of the most startling turns in the 80-year-old Australian-born press baron's long and controversial career.

"News International today announces that this Sunday, 10 July 2011, will be the last issue of the News of the World," read the preamble to a statement from Murdoch's son James, who chairs the British newspaper arm of News Corp.

Staff gasped and some sobbed as they were told of the planned closure of the 168-year-old title, the profits of whose final edition will go to charity.

"No one had any inkling at all that this was going to happen," said Jules Stenson, features editor of News of the World, outside the News International offices.

It seemed a bold gamble, sacrificing a historic title that is suffering from the long-term decline of print newspapers to stave off a threat to plans to expand in television: "Talk about a nuclear option," said a "gobsmacked" Steven Barnett, professor of communications at Westminster University.

But some analysts predicted Murdoch would make The Sun, the tabloid daily that is Britain's best-selling newspaper, a seven-day operation and that the demise of the News of the World would ultimately benefit News International's bottom line.

Nevertheless, Murdoch still faces pressure to remove his close confidante and top British newspaper executive Rebekah Brooks, a friend of Prime Minister David Cameron. Her editorship of the News of the World a decade ago is at the heart of some of the gravest accusations.

The scandal has tarnished Cameron, who picked as his communications director a former News of the World editor who resigned over the hacking affair. The Guardian newspaper reported on Thursday that the journalist, Andy Coulson, would be arrested on Friday. Police declined to comment.

INHUMAN

Praising a fine muck-raking tradition at the paper, which his father bought in 1969, James Murdoch wrote in a statement to stunned staff that the explosion of a long-running scandal over phone hacking by journalists had made the paper unviable.

"The good things the News of the World does ... have been sullied by behavior that was wrong. Indeed, if recent allegations are true, it was inhuman and has no place in our company. The News of the World is in the business of holding others to account. But it failed when it came to itself."

It was unclear whether the company would produce a replacement title for the lucrative Sunday market, in which, despite difficult times for newspaper circulations, the News of the World is still selling 2.6 million copies a week.

One option, analysts said, might be for its daily sister paper the Sun to extend its coverage to a seventh day - an option that some commentators said was already in train.

The website www.sunonsunday.co.uk was registered on Tuesday this week but the party who registered it opted to keep their identity secret.

TELEVISION TAKEOVER

Stephen Adams, a fund manager at Aegon asset management, which is one of the biggest shareholders in BSkyB, told Reuters he saw News Corp's move as "something to restore or remedy a tarnished reputation for the News Corp group.

"But we also critically see it as a reflection of News Corp's desire to progress the BSkyB bid and have full ownership of the company."

Cameron's right of center government had already given an informal blessing to the takeover, despite criticism on the left that it gave Murdoch too much media power.

The storm of outrage at the News of the World turned attention on Cameron's own links to the paper and to other News Corp executives, including Brooks, a regular guest of the Camerons.

Growing popular and political anger over the phone hacking saga had fostered concerns among investors that there could be snags in securing final approval for the $14-billion bid.

SEETHING ANGER

Journalists said that an emotional editor Colin Myler had read out the announcement at the east London newsroom where Murdoch changed the face of British journalism in the 1980s by breaking the power of the printing unions.

"People are just in a complete state of shock," said one journalist who asked not to be named.

Asked how staff felt toward Brooks, the reporter said there was a sense of "seething anger" and "pure hatred" directed toward her: "We think they're closing down a whole newspaper just to protect one woman's job.

Opposition leader Ed Miliband said Brooks should go, echoing the view of the journalists' trade union. The union said some sub-editors at The Sun had walked out in support of their colleagues on Thursday evening.

However, James Murdoch made clear Brooks remained in place as chief executive, telling Sky News he was satisfied Brooks knew nothing of the crimes allegedly committed when she was editor.

One employee of the doomed paper told Reuters: "We didn't expect it at all. We had no indication. The last week has been tough. None of us have done anything wrong. We thought we were going to weather the storm."

One source at News International said the decision had been taken and acted upon with little delay.

WAR DEAD

Investigations into phone hacking at the News of the World have been bubbling for several years and until recently only celebrities and other well-known figures were believed to have been victims.

But the scandal exploded earlier this week after revelations an investigator working for the paper may have listened to -- and deleted -- the voicemail messages of a missing 13-year-old schoolgirl, later found murdered.

The scandal deepened on Thursday with claims News of the World hacked the phones of relatives of British soldiers killed in action in Iraq and Afghanistan. Britain's military veterans' association broke off a joint lobbying campaign with the paper and said it might join major brands in pulling its advertising.

Many of the paper's readers are ardent supporters of the armed forces so suggestions it may have hacked the phones of the families of grieving service personnel only further alienated a core readership already horrified by suggestions its reporters accessed the voicemails of missing children and bombing victims.

Shortly before the announcement the paper would be closing for good, advertising website Brand Republic said the paper had lost all advertising for this weekend's edition.

News Corp wants to buy out the 61 percent of BSkyB it does not already own. The government has said the News of the World case should not affect that. But U.S. shares in News Corp fell over 5 percent on Wednesday, though they recovered somewhat in a stronger general market on Thursday.

Formal approval for the deal had been expected within weeks after the government gave its blessing in principle. But it now seems unlikely for months, although officials denied suggestions that they were delaying a decision because of the scandal.

"The Secretary of State has always been clear that he will take as long as is needed to reach a decision. There is no 'delay' since there has been no set timetable for a further announcement," a government spokesman said. Some British media reported that a decision was now expected in September.

The main accusations are that journalists, or their hired investigators, took advantage of often limited security on mobile phone voicemail boxes to listen in to messages left for celebrities, politicians or people involved in major stories.

Disclosure that the practice involved victims of crime came when police said a private detective working for the News of the World in 2002 hacked into messages left on the phone of murdered schoolgirl Milly Dowler while police were still looking for her.

Police have also been criticized over allegations officers took money from the News of the World for information. London's Evening Standard newspaper said on Thursday that police officers took more than 100,000 pounds ($160,000) in payments from senior journalists and executives at the paper.

Analysts believe the global Murdoch empire, which includes Fox television and the Wall Street Journal, can weather a storm of reproach from advertisers, readers and politicians in Britain -- though there were signs of international ramifications.

In Murdoch's native Australia, the leader of the Greens party said he wants the government to examine the ramifications on Australia of the phone hacking scandal. - Reuters

LPI Capital 2Q net profit up 18.8% to RM31.42m

LPI Capital net profit for the second quarter ended June 30, 2011 rose 18.83% to RM31.42 million from RM26.44 million a year earlier, due mainly to higher gross premium underwritten and higher underwriting profit.

It said on Thursday, July 7 that revenue for the period rose 23% to RM213.88 million from RM173.87 million. Earnings per share was 14.26 sen while net assets per share was RM5.21.

LPI Capital declared a first single tier interim dividend of 25 sen per share to be paid on July 28.

For the six months ended June 30, LPI Capital's net profir rose to RM70.04 million from RM64.77 million, on the back of revenue RM427.3 million.

On its outlook for the year, LPI Capital said barring unforeseen circumstances, its prospects for the year should be satisfactory.

''

YTL Power expects to realise RM210.1m gain from YTL Jawa BV share sale

KUALA LUMPUR: YTL POWER INTERNATIONAL BHD [] expects to realise a gain on disposal of RM210.10 million from the sale of a 42.86% equity interest in YTL Jawa BV to Marubeni Corporation for US$224 million (RM680.96 million).

The company said on Thursday, July 7 that its wholly owned unit YTL Jawa Power Holdings Ltd had entered into the share purchase agreement with Maubeni and its subsidiary Aster Power for the sale of 7,715 ordinary shares of '1 each and certain company interests.

YTL Jawa BV is the holding company of YTL Jawa Power BV, which in turn holds a 35% stake in P.T. Jawa Power (Jawa Power).

Jawa Power is the owner of a coal-fired power generation plant with an installed capacity of 1,220 megawatts ('MW') located at the Paiton Power Generation Complex in the district of Probolinggo, in East Java, Indonesia.

YTL Power said it intends to utilise the proceeds from the disposal for future investments in utility assets, working capital requirements and/or for the paring down of existing borrowings.

'There is no intended timeframe at this juncture for full utilisation of the proceeds from the disposal.

'Until such time as the proceeds are fully utilised, they will be placed in interest-bearing deposits with licensed financial institutions,' it said.

On the rationale for the share sale, YTL Power said it would enable Aster Power and Marubeni to co-invest in YTL Jawa BV and form a strategic partnership with the group, which was in line with YTL Power's growth strategy of investing in long-term geographically diverse infrastructure assets, whilst concurrently achieving synergies across its portfolio of utility businesses.

It said the strategic partnership would facilitate collaborations between YTL Power and Marubeni on potential investments and the development of future opportunities in the global utilities industry.

'The YTL Power group is continuously seeking to develop and expand its presence in utility businesses both in Malaysia and offshore,' it said.

Currently, YTL Power owns 100% stakes in Wessex Water Limited, a water and sewerage operator in the United Kingdom, PowerSeraya Limited, which has a total licensed capacity of 3,100 MW representing approximately 25% of Singapore's licensed generation capacity and operates multi-utility businesses, and YTL Power Generation Sdn Bhd, an independent power producer which owns power stations with a combined generation capacity of 1,212 MW in Malaysia.

In addition to its 35% stake in Jawa Power, the group also has an indirect 33.5% investment in ElectraNet Pty Ltd, the company which owns and operates the power transmission grid for the state of South Australia under a 200-year concession.

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I-Bhd gets 21-year concession from Selangor state

KUALA LUMPUR: I-BHD [] has inked a 21-year concession agreement with the Selangor state government to develop the i-City Area as a Technopreneur Campus.

In a filing Thursday, July 7, the company said its wholly owned unit I-City (Selangor) Sdn Bhd had entered into a management and development agreement with the Selangor state and Shah Alam city council to develop the area.

It said the concession was subject to revision of every five years for I-City Selangor to operate the project.

I-City Selangor is principally involved in the development and management of i-City, Shah Alam as a MSC Malaysia Cybercentre.

I-Bhd said the objective of the agreement was to define the parameters for the development and management of i-City as a knowledge hub, tourism destination and as an international park.

It said I-City Selangor would be authorised to manage, operate and maintain the i-City Area throughout the concession period for which it would be reimbursed by MBSA up to 70% of the assessment charges paid by the owners of the PROPERTIES [] in the i-City Area.

Other terms include the state government granting I-City Selangor a temporary occupation licence for 30 acres of neighbouring land for 21 years; the plot ratio of the i-City development area could be increased from the current overall of 1:3 to 1:5; the Bumiputera sales quota for all the plots in the i-City development would be 30%; and I-City Selangor would be allowed to establish and carry out the approved outlets and activities anywhere within the i-City Area on a twenty four (24) hours per day basis.

Genting, MMHE weigh on FBM KLCI

KUALA LUMPUR: The FBM KLCI slipped into negative territory on Thursday, July 7 in line with the cautious sentiment at key regional markets ahead of employment data to be released in the US later in the day.

The FBM KLCI shed 0.07% or 1.10 points to 1,590.24, as profit taking at blue chips including at Genting, MMHE and MISC kept the index struggling to stay above the 1,590-level.

Gainers edged losers by 368 to 355, while 355 counters traded unchanged. Volume was 1.27 billion shares valued at RM2.07 billion.

At the regional markets, the Shanghai Composite Index and Taiwan's Taiex fell 0.58% each to 2,794.27 and 8,773.42, Japan's Nikkei 225 shed 0.11% to 10,071.14 while South Korea's Kospi added 0.43% to 2,180.59, Singapore's Straits Times Index rose 0.36% to 3,125.87 and Hong Kong's Hang Seng Index edged up 0.06% to 22,530.18.

Among the decliners on Bursa Malaysia, Genting fell 16 sen to RM11.10, MMHE 13 sen to RM8.54, MISC eight sen to RM7.50, RHB Capital and PPB six sen each to RM9.05 and RM17.74, while Hong Leong Bank, IOI Corp, Petronas Dagangan and YTL fell four sen each to RM13.72, RM5.31, RM17.12 and RM1.53 respectively.

Other losers included Nestle that fell 52 sen to RM46.98, Unite PLANTATION []s and GAB that lost 16 sen each to RM21 and RM10.40, Glenealy and Far East 15 sen each to RM5.70 and RM7.25, while Hap Seng and BIMB shed 14 sen each to RM5.29 and RM2.23.

Dutch Lady topped the gainers and rose 74 sen to RM19.54, DiGi 20 sen to RM29.96, AFG 19 sen to RM3.62, APM Automotive 16 sen to RM5.03, Malayan Flour Mills 15 sen to RM8.41, while Ibraco and UOA Development gained 12 sen each to RM1.12 and RM2.21.

The actives included Timecom, Flonic, AFG, KBB and Genting Malaysia.

Bank Negara maintains OPR at 3%

KUALA LUMPUR: Bank Negara Malaysia has maintained the overnight policy rate (OPR) at 3% at its Monetary Policy Committee (MPC) on Thursday, July 7.

In a statement today, Bank Negara said the global economic recovery in the second quarter of the year was affected by supply disruptions arising from natural disasters and geopolitical developments, the impact of fiscal consolidation measures, the more uncertain conditions in the global financial markets and the higher commodity prices.

Going forward, global growth will remain highly uneven across regions, with increased downside risks, it said.

For the region, growth is expected to be sustained by robust domestic demand, increased investment activity and intra-regional trade, said the central bank.

Bank Negara said that in the domestic economy, the latest indicators pointed to a moderation in growth in the second quarter, due primarily to slower external demand, greater than expected disruptions in the global manufacturing supply chain and lower than projected public sector investment.

Private consumption and investment have, however, continued to be important drivers of growth, it said.

'Going forward, growth is expected to improve, underpinned by continued strength in private consumption and private investment.

'This growth prospect however, could be affected by the heightened external risks,' it said.

Bank Negara said domestic headline inflation increased to 3.3% in May on account of higher food and fuel prices.

Supply factors continue to be the key determinant affecting consumer prices with global commodity and energy prices projected to remain elevated, it said.

There are also some signs that domestic demand factors could exert upward pressure on prices in the second half of the year, it said.

'The MPC's assessment is that the risks to inflation are on the upside. While the outlook for growth remains positive, there are heightened uncertainties arising from global developments that have created higher downside risks to growth.

'The MPC will assess carefully the evolving economic conditions and to the extent that the growth momentum is sustained, further normalisation of monetary conditions will be considered to safeguard price stability,' it said.

Bank Negara raises Statutory Reserve Requirement to 4%

KUALA LUMPUR: Bank Negara Malaysia has raised the Statutory Reserve Requirement (SRR) Ratio from 3% to 4%, effective from July 16, 2011.

In a statement Thursday, July 7, the central bank said the decision to raise the SRR was undertaken as a measure to manage the significant build-up of liquidity, which may result in financial imbalances and create risks to financial stability.

'The SRR is an instrument to manage liquidity and is not a signal on the stance of monetary policy.

'The Overnight Policy Rate (OPR) is the sole indicator used to signal the stance of monetary policy that is announced through the Monetary Policy Statement released after each Monetary Policy Committee meeting,' it said.

Bank Negara foreign reserves up US$1.1b

KUALA LUMPUR: Bank Negara Malaysia's international reserves rose US$1.1 billion to US$134.3 billion (RM406.3 million) as at June 30, 2011 from US$133.2 billion (RM402.6 billion) as at June 15 this year.

In a statement Thursday, July 7, the central bank said the increase was after taking into account the quarterly foreign exchange revaluation gain, following the strengthening of some major currencies against the ringgit during the quarter.

The reserves position is sufficient to finance 9.6 months of retained imports and is 4.5 times the short-term external debt, it said.

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RAM reaffirms ratings of CCM RM500m debt notes

KUALA LUMPUR: RAM Rating Services Bhd reaffirmed the respective long- and short-term ratings of CHEMICAL COMPANY OF MALAYSIA [] Bhd's RM500 million Islamic debt notes at AA3 and P1.

The rating agency said on Thursday, July 7 the debt notes were the Musharakah commercial papers/medium-term notes programme (2008/2023).

'Concurrently, the negative outlook on the long-term rating has been maintained,' it said, adding that CCM's patchy recovery since the 2008/2009 global financial crisis.

CCM's subsidiaries are involved in the manufacture and distribution of pharmaceutical products, fertilisers, industrial chemicals and polymer-coating solutions as well as designing, installing and providing maintenance services for water and wastewater-treatment systems.

RAM Ratings said the reaffirmation of the ratings was due to CCM's strong market position in its core businesses and its well-diversified business profile.

To recap, CCM is one of Malaysia's largest manufacturers of pharmaceuticals and compound fertilisers; it is one of only two companies in the country that supplies liquefied chlorine to water-treatment plants.

It added that CCM is also the largest local producer of polymer-coating solutions for rubber gloves. Its diversified business profile enables it to better withstand a downturn in any particular sector.

'CCM derives financial flexibility from its major shareholder, Permodalan Nasional Bhd (PNB); PNB's active participation in the strategic direction of the Group underlines CCM's importance to its parent,' it said.

However, it said CCM's chemicals division remains exposed to the cyclical nature of manufacturing demand while the performance of its fertilisers division largely depends on the fortunes of the oil palml industry, which is also highly cyclical.

RAM Ratings said cautioned that due to the competitive landscape of its core businesses and the relatively generic nature of its products (pharmaceuticals, fertilisers and chemicals), CCM is exposed to pricing risk. CCM is vulnerable to the price volatility of raw materials, which constitute a large proportion of the various divisions' costs.

'Meanwhile, our reiteration of the negative rating outlook is premised on CCM's patchy recovery since the 2008/2009 global financial crisis. Although the Group's overall performance improved in fiscal 2010, its recovery remained slow, largely due to the more intense competition faced by its fertilisers and pharmaceuticals divisions.

'As such, its funds from operations debt cover (FFODC) of 0.14 times as at end-December 2010 remained below our initial projection of 0.2 times (end-December 2009: 0.08 times). As at end-March 2011, CCM's annualised FFODC stayed unchanged at 0.14 times,' it said.

RAM Ratings' Head of Consumer & Industrial Ratings Kevin Lim said looking ahead, the fertilisers division may keep being plagued by price competition amid an oversupply of local fertilisers.

'This, coupled with the anticipated commencement of commercial production for its new fertiliser plant in Lahad Datu, Sabah (in July 2011), heightens the group's exposure to demand risk.

'In addition, the division may still have to contend with escalating raw-material costs. Meanwhile, the pharmaceuticals division's profit margins, which have been thinning over the years, remain vulnerable to competitive pressures. The Group's water-system business is still mired in losses due to insufficient contracts amid lacklustre investment growth for the industrial sector,' he added.

Lim said should CCM's financial profile deteriorate, there may be downward pressure on its ratings. On the other hand, the rating outlook may be revised to stable if the group is able to show sustainable improvement in its debt-coverage ratios and capital structure.

KKB Engineering gets RM70m Samalaju job

KUALA LUMPUR: KKB ENGINEERING BHD [] has secured a RM70 million contract from OM Materials (Sarawak) Sdn Bhd for the proposed earthworks package for OM Sarawak Plant at Samalaju Industrial Park.

In a filing Thursday, July 7, KKB Engineering said that its wholly owned unit KKB Builders Sdn Bhd signed the form of agreement with OM Sarawak for the project.

It said the contract was for a period of 12 months.

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RHB Cap says still in market for merger partner

KUALA LUMPUR: RHB Capital, Malaysia's fifth largest lender, remains open to merger opportunities if the price is right, its chief said after two larger rivals scrapped plans to acquire it in a bid to create Southeast Asia's biggest bank.

RHB was earlier pursued by Maybank'' and, Malaysia's top two lenders, and is expected to remain in the spotlight despite the failed bids as the authorities encourage consolidation to create bigger banks with the muscle to grab regional market share.

A potential merger with Maybank, CIMB or other lenders could be considered if valuations are right, RHB's group managing director Kellee Kam told Reuters in an interview on Thursday, July 7

"We are happy with RHB's standalone strategy, but if opportunities for M&A exists that outweigh a standalone strategy, then it's something that can be evaluated," Kam said.

"As we understand it, they (CIMB and Maybank) believed they couldn't put together a compelling enough proposition for us to be able to continue our discussions."

CIMB and Maybank called off separate merger plans with RHB last month after Abu Dhabi Commercial Bank'' sold its 25 percent stake in RHB to its sister company Aabar at RM10.80 per share.

The RM10.80 price tag effectively prices RHB at RM23.7 billion or 2.25 times book value. Analysts said that Aabar's transacted price had set a benchmark for any potential merger deal, which could have deterred Maybank and CIMB.

But a banker involved in the earlier merger discussions told Reuters the share sale to Aabar had not been completed with the Abu Dhabi investment fund yet to be registered as an RHB shareholder.

All conditions of the sale agreement have been met but as the shares have not been transferred from Abu Dhabi Commercial Bank meant that the final sale price could still change, the banker, who was not authorised to speak to the media, said.

"If the deal happens at a lower price, the banks can probably look at it again," the banker said. "It can be resurrected. It's all about the valuation."

Kam said a change in the price was a possibility although RHB was not presently not in discussions with anyone. - Reuters

LFE Corp external auditors quit

KUALA LUMPUR: LFE CORPORATION BHD []'s external auditors, Messrs Russell Bedford LC & Company'' tendered its resignation on Thursday, July 7.

The company said an EGM would be arranged for the proposed appointment of new external auditors and to authorise the directors to fix their remuneration.

LFE said the resignation of the existing external auditors shall take effect on the date of approval by the shareholders on the proposed appointment at''the EGM.

George Kent targets to double profit every 3 yrs

KUALA LUMPUR: GEORGE KENT (M) BHD [] is planning to double its net profit every three years on the back of stronger order book for both its water meter manufacturing and CONSTRUCTION [] divisions.

It has also confirmed that it has submitted a bid for construction jobs for the MRT Ampang line.

'We are one of the bidders for the MRT Ampang line. We cannot say anything else about that but wait for the announcement. In any case, we are keen on jobs announced by the government and have placed competitive bids,' said its chairman Tan Sri Tan Kay Hock on Thursday, July 7.

George Kent is also said to be one of the bidders for the RM5 billion double tracking job from Gemas to Johor Bahru.

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RAM Ratings reaffirms AAA(s) rating of Muhibbah's Islamic bonds

KUALA LUMPUR: RAM Ratings has reaffirmed the AAA(s) rating of MUHIBBAH ENGINEERING (M) BHD []'s (Muhibbah) RM130 million Islamic Bonds with a stable outlook.

In a statement Thursday, July 7 the rating agency said the AAA(s) rating was supported by the irrevocable and unconditional guarantee from Maybank, to honour Muhibbah's irrevocable and unconditional undertaking to purchase and cancel all the Islamic Bonds at the exercise price upon the declaration of an event of default.

'The trustee, on behalf of the bondholders, will be able to call on the bank guarantee to honour Muhibbah's Purchase Undertaking.

'The guarantee from Maybank enhances the credit profile of the Islamic Bonds beyond Muhibbah's inherent or stand-alone credit standing,' it said.

Muhibbah is principally involved in CONSTRUCTION [], crane manufacturing and shipbuilding.

The group also has associate stakes in a Malaysian road-maintenance concessionaire, and an operator as well as concession holder of 3 international airports in Cambodia.

RAM Ratings said that excluding the bank guarantee, Muhibbah's credit profile was underpinned by its established track record within the construction industry, specialising in oil-and-gas-related jobs, as well as marine-engineering and civil-engineering works.

It said Muhibbah's outstanding order book of RM2.9 billion as at May 19, 2011 should sustain it through the next two years.

'Looking ahead, the group is deemed well poised to secure some expected jobs amid the brighter prospects of the local construction sector and the anticipated uptick in domestic oil and gas (O&G) activities.

'Muhibbah also derives earnings diversity from its involvement in cranes and shipyards, and enjoys recurring dividend income from its associates,' it said.

Nevertheless, RAM Ratings said Muhibbah's credit profile had been affected by its weaker-than-expected profit performance, balance sheet and debt coverage, not to mention its tight liquidity.

Its margin on operating profit before depreciation, interest and tax has also been narrowing in recent years, compared to 6.73% in fiscal 2007, it said.

The rating agency said that given the competitive operating environment for the construction and O&G sectors, Muhibbah's ability to earn healthier margins for future jobs remains to be seen.

'The group also faces collection issues, including a large sum for a petroleum-hub project in Johor.

'All said, the group is exposed to the cyclical nature of the construction and O&G sectors, and foreign-exchange risk from its overseas operations,' it said.

#Update* Sapura Resources edges up in afternoon session

KUALA LUMPUR: SAPURA RESOURCES BHD [] shares advanced on Thursday, July 7 after the company said it was acquiring the business assets of a hangarage and training services provider for RM28 million as part of its plans to expand the scope of its business in property management and industrial training.

At 2.55pm, Sapura Resources added three sen to RM1.19 with 1.52 million shares done.

In a filing Thursday, July 7, Sapura Resources said its unit Nova Embun Sdn Bhd had entered into a sale of business agreement with DNest Aviation Services Sdn Bhd and DNest Aviation Training Centre Sdn Bhd (DATC) to acquire their business assets .

It said the acquisition would be financed a combination of internal funds and bank loan.

The principal activities of DNest Aviation are the provision of hangarage services, while DATC's principal activities are the provision of training services.

'The proposed acquisition will therefore enhance the value of the company's business proposition and contribute positively to''Sapura Resources,' said the company.

Sapura Resources buys hangarage & training services company for RM28m

KUALA LUMPUR: SAPURA RESOURCES BHD [] is acquiring the business assets of a hangarage and training services provider for RM28 million as part of its plans to expand the scope of its business in property management and industrial training.

In a filing Thursday, July 7, Sapura Resources said its unit Nova Embun Sdn Bhd had entered into a sale of business agreement with DNest Aviation Services Sdn Bhd and DNest Aviation Training Centre Sdn Bhd (DATC) to acquire their business assets .

It said the acquisition would be financed a combination of internal funds and bank loan.

The principal activities of DNest Aviation are the provision of hangarage services, while DATC's principal activities are the provision of training services.

'The proposed acquisition will therefore enhance the value of the company's business proposition and contribute positively to''Sapura Resources,' said the company.

Axiata slips, Affin Research maintains reduce rating

KUALA LUMPUR: Axiata Group Bhd shares slipped in late morning on mild profit taking activities on Thursday, July 7 while Affin Research maintained its anti-consensus reduce rating.

At 11.55am, it was down four sen to RM5. It rose to a high of RM5.05 earlier. There were 5.15 million shares done.

Affin Research explained its anti-consensus reduce rating on Axiata due to inferior dividend yields at 2% which do not support its valuations and also high risk to earnings downgrade.

'We think that street (12% above ours) is overly optimistic (1Q11 net profit accounts for 19% of FY11 forecast),' it said.

Other factors were a potential share overhang from Telekom Malaysia's disposal of its remaining 101.5 million shares in Axiata while there was a renewal fee for 70% owned Robi's spectrum (estimated at US$278 million) although it believed the market had already priced in this info.

'The high foreign shareholdings of 23% pose great risk should there be a reversal in short-term protfolio flows ' we also note that foreign shareholding has progressively risen over the past 12 month and is near its all time high of 26% prior to its demerger.

'We also believe that the recent uptick in share price was also driven by an increased weighting on the FBM KLCI index rather than spurred by intrinsic fundamental improvement,' it said.

Axiata's weighting in the 30-stock KLCI is 6.21%.

Bursa Securities strikes off dealers' rep from register

KUALA LUMPUR: Bursa Malaysia Securities Bhd has struck off Yap Boh Hian from the Register as a Dealer's Representative for his involved in unlawful/unethical trading activities/practices.

The stock exchange said on Thursday, July 7 that it had also publicly reprimanded and imposed a fine of RM50,000 on Yap.

It said he had engaged in the activities through non-permissible contract amendments.

'In this regard, Yap had transferred numerous profitable trades from his other clients' accounts to his wife's accounts through non-permissible contract amendments carried out by him,' it said.

Bursa Securities said the finding of the breach and the imposition of the aforementioned sanctions were made under Rule 1301.2 of the Rules of Bursa Securities.

It said Yap had carried out amendments to numerous purchase and sale contracts in his clients' accounts (first named clients) which had day trade gains so that these gains were thereafter transferred to his wife's account.

It added that through the process of abusing the contract amendment facility in the trading system, Yap had unlawfully transferred/amended profitable trades in the first named clients' accounts to his wife's account resulting in illegal/unlawful gains in his wife's account to the disadvantage of the first named clients.

'Yap had carried out frequent and numerous contract amendments which resulted in a change of the original party to the contract, most of which involved the same clients/common clients thus indicating that the contract amendments carried out were not due to execution error,' it said.

Mild profit taking halts FBM KLCI's rise

KUALA LUMPUR: ''The FBM KLCI succumbed to some mild profit taking at the mid-day break on Thursday, July 7 as Japan's Nikkei 225 snapped its seven-day rally as investors began selling down on worries of an overheating market.

The FBM KLCI shed 0.04% or 0.63 point to 1,590.71, weighed by losses at select blue chips.

Gainers led losers by 325 to 279, while 319 counters traded unchanged. Volume was 721.66 million shares valued at RM920.12 million.

The ringgit strengthened 0.11% to 3.0078 versus the US dollar; crude palm oil futures for the third month delivery rose RM7 per tonne to RM3,035, crude oil gained 73 cents per barrel to US$97.38 while gold added US$2.45 an ounce to US$1,531.35.

At the regional markets, Japan's Nikkei 255 fell 0.19% to 10,063.72 and Taiwan's Taiex lost 0.65% to 8,767.12.

Elsewhere, Hong Kong's Hang Seng rose 0.66% to 22,666.14, the Shanghai Composite Index up 0.24% to 2,817.32, South Korea's Kospi gained 0.40% to 2,179.90 and Singapore's Straits Times Index up 0.54% to 3,131.59.

Among the losers, MMHE fell nine sen to RM8.58, MISC eight sen to RM7.50, Petronas Chemicals six sen to RM7.13, IOI Corp five sen to RM5.30, Hong Leong Bank four sen to RM13.72, while YTL, Petronas Gas, Petronas Dagangan and RHB Capital fell two sen each to RM1.55, RM13.44, RM17.14 and RM9.09 respectively.

Other decliners included Nestle, Cepco, Sindora, GAB, KYM, Sunway City and Shell.

Among the gainers, AFG rose 25 sen to RM3.68, DiGi 20 sen to RM29.96, Malayan Flour Mills 17 sen to RM8.43, MPI and UOA Development 13 sen each to RM4.50 and RM2.22, while Ibraco, Genting PLANTATION []s and APM Automotive added 12 sen each to RM1.12, RM7.99 and RM4.99 respectively.

The actives included Flonic, KBB, Timecom, AFG, MSM warrants and Time warrants.