Earnings, hope for debt deal brighten Wall Street

NEW YORK: Investors poured into tech shares on Friday, July 22 as promising chipmaker earnings and optimism that a solution was on the horizon for the U.S. debt stalemate triggered a move into growth-oriented shares.

The Dow was held back by Caterpillar Inc (CAT.N), with shares of the heavy equipment maker falling 5.8 percent on disappointing results. The stock exerted a 48.6-point drag on the Dow, which ended off 43 points.

The benchmark S&P 500 index rose 2.2 percent for the week, lifted by strong earnings and a new bailout plan for Greece to contain Europe's debt crisis. Stocks have been restrained, however, by the long slog of negotiations to resolve the U.S. debt crisis.

"It's likely an agreement in any form will cause a relief rally for equities," said Andrew Slimmon, managing director, global investment solutions at Morgan Stanley Smith Barney in Chicago.

"Coming on the heels of overall pretty good earnings numbers and some sort of resolution in Greece and that could make for a rally in the market," he said.

President Barack Obama insisted on Friday he was prepared to make "tough choices" for a sweeping deficit-reduction deal to avert a U.S. default, despite Democrats warning him not to make too many concessions.

Semiconductor shares led the market on Friday after Sandisk (SNDK.O), a maker of flash memory chips used in smartphones and tablets like the iPad, and Advanced Micro Devices (AMD.N) reported strong results late Thursday. The PHLX Semiconductor index .SOX rose 2.4 percent, led by AMD, which jumped 19.2 percent to $7.75.

"Nasdaq has more things out on the risk curve, and one of the things our folks have been saying is that the risk-on button should be pushed here," said Glenn Starkman, global head of sales trading at Dahlman Rose in New York.

"You might see some rotation into things like energy, into materials and industrials as well as TECHNOLOGY [] and money might rotate out of things like defensives."

The Dow Jones industrial average .DJI dropped 43.25 points, or 0.34 percent, to 12,681.16. The Standard & Poor's 500 Index .SPX added 1.22 points, or 0.09 percent, to 1,345.02. The Nasdaq Composite Index .IXIC gained 24.40 points, or 0.86 percent, to 2,858.83.

For the week, along with the S&P's 2.2 percent, the Dow rose 1.6 percent and the Nasdaq advanced 2.5 percent.

The second bailout for Greece supported sentiment, even as Fitch ratings agency on Friday said Greece would be in temporary default as the result of the new rescue plan. Fitch pledged to give Greece a higher, "low speculative grade" rating after its bonds had been exchanged and said Athens now had some hope of tackling its debt mountain.

Caterpillar, a maker of equipment used in mining and CONSTRUCTION [], has been a stalwart performer in recent years and was the top Dow performer for 2010, but rising labor and materials costs hit earnings.

Fellow Dow component McDonald's Corp's (MCD.N) income topped estimates, sending the stock up 2.3 percent to $88.56.

Microsoft Corp (MSFT.O) posted a greater-than-expected jump in its fiscal fourth-quarter profit but sales of its flagship Windows software disappointed for a third straight quarter. The Dow component rose 1.6 percent to $27.53.

But General Electric Co (GE.N) dipped 0.6 percent to $19.04, even as it reported a 21.6 percent jump in quarterly profit.

Verizon Communications Inc (VZ.N) lost 2.2 percent to $36.74 after the telecom giant posted second-quarter results and named a new chief executive officer.

Volume was light with about 5.81 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, well below the daily average of 7.48 billion.

Declining stocks outnumbered advancing ones on the NYSE by 1,530 to 1,400, while on the Nasdaq, decliners beat advancers 1,294 to 1,256. - Reuters

Fitch calls default, Greece pledges no let-up on debt

ATHENS/LONDON: Fitch ratings agency declared Greece would be in temporary default as the result of a second bailout, which Athens said had bought it breathing space, Reuters reported on Friday, July 22.

But the agency pledged to give Greece a higher, "low speculative grade" after its bonds had been exchanged and said Athens now had some hope of tackling its debt mountain, which most economists still expect to force a deeper restructuring in the future.

An emergency summit of leaders of the 17-nation currency area agreed a second rescue package on Thursday with an extra 109 billion euros ($157 billion) of government money, plus a contribution by private sector bondholders estimated to total as much as 50 billion euros by mid-2014.

Under the bailout of Greece, which supplements a 110 billion euro rescue plan by the European Union and the International Monetary Fund in May last year, banks and insurers will voluntarily swap their Greek bonds for longer maturities at lower rates.

"Fitch considers the nature of private sector involvement... to constitute a restricted default event," said David Riley, Head of Sovereign Ratings at Fitch.

"However, the reduction in interest rates and extension of maturities potentially offers Greece a window of opportunity to regain solvency, despite the formidable challenges that it faces," he said.

The summit agreed the region's rescue fund, the European Financial Stability Facility, will be allowed to buy bonds in the secondary market if the European Central Bank deems that necessary to fight the crisis.

It can also for the first time give states precautionary credit lines before they are shut out of credit markets, and lend governments money to recapitalize banks, both moves which Germany blocked earlier this year.

German central bank chief Jens Weidmann was openly critical of the package, saying it shifted risks onto taxpayers in countries with stronger finances and weakened incentives for governments to keep their finances under control.

"This weakens the foundation for a currency union based on fiscal self-responsibility," said Weidmann, a European Central Bank policymaker, although he conceded the deal could help ease financial market tensions.

As part of the package, the euro zone leaders also made detailed provisions for limiting the damage of a temporary default -- the first in western Europe for more than 40 years.

"There is a great breath of relief for the Greek economy and this will gradually pass on to the real economy," Greek Finance Minister Evangelos Venizelos told reporters. "But by no means does this mean we can relax our efforts."

Riley told Reuters Greece may languish in default for only a few days and would likely get re-rated at single B or CCC.

Among other steps, the leaders agreed to ease terms on bailout loans to Greece, Ireland and Portugal; maturities will be extended to 15 years from 7.5 and interest cut to around 3.5 percent from 4.5-5.8 percent now.

Doubts remain about whether the plan went far enough to assure not only Greece's debt sustainability but that of Ireland, Portugal and other heavily indebted nations.

The package yielded "more than expected but not enough to make us sleep comfortably," Barclays economists said. They were disappointed that European leaders did not agree to expand a euro zone rescue fund.

The wider EFSF role is designed to prevent bigger euro zone states such as Spain and Italy from being shut out of markets because of fears of a weaker country defaulting.

Funds are sufficient so far but the burden could rise substantially. A precautionary credit line for a large country like Italy might total more than 500 billion euros over several years, overwhelming the EFSF's current 440 billion euros.

German Chancellor Angela Merkel said all euro zone debtors had to act decisively to repair their finances.

"Italy's austerity program was absolutely good. But it will be a process and demands further steps in the future," she told a news conference.

DEBT MOUNTAIN

French President Nicolas Sarkozy said the measures would reduce Greece's debt by 24 percentage points of gross domestic product from about 150 percent today.

That still leaves a colossal debt for an economy deep in recession with no recourse to a competitive devaluation.

What is more, the figures are based on what analysts say are optimistic projections for growth and returns from a sweeping privatization program.

"Our estimates suggest that Greek debt/GDP ratios will fall around 25 percentage points over 5 years as a result of these measures but will still be a whopping 120 percent in 2016 even assuming that the full 50 billion euros of privatization measures are implemented," analysts at JP Morgan said.

"We therefore believe that (bond) spreads will widen again as short covering dissipates and reality sinks in."

Greek, Irish and Portuguese bonds jumped before relinquishing their gains and traders said expectations of a larger restructuring down the road were undimmed.

The European leaders' promise of a "Marshall Plan" of European public investment to help revive the Greek economy may help, though details were thin.

Ratings agencies Standard & Poor's and Moody's are likely to follow Fitch's lead since banks and insurers are set to write down the value of Greek bonds by 21 percent, with more losses maybe to follow.

"We have long thought that the most likely outcome for Greek bondholders would be that they would take a small haircut first followed by a larger one at a later date. To give Greece a fighting chance they probably need a write down close to 65 percent," said Gary Jenkins, head of fixed income research at Evolution.

Shares in Europe's banks rose as it became apparent that the major players had limited their losses on Greek bonds to just over 5 billion euros.

The summit accord was based on a common position crafted by Merkel and Sarkozy in late night talks in Berlin on Wednesday with ECB President Jean-Claude Trichet.

The ECB relented and signaled it was willing to let Greece default temporarily as long as it was strictly a one-off.

But Fitch said it would expect similar private creditor involvement in any future help for Ireland and Portugal if they had not stabilized their finances by 2013.

Many economists believe the only way out of the euro zone's debt crisis in the long run may be closer integration of national fiscal policies -- for example, a joint euro zone guarantee for countries' bonds, or issuance of a joint euro zone bond to finance all countries. Germany has opposed this.

Sarkozy, at least, is looking to more sweeping reforms.

He said France and Germany would make proposals by the end of August on how to improve the governance of the bloc, to "clarify our vision of the future of the euro zone."

Merkel said she would not allow a union of automatic transfers from richer to poorer states. "This shall not happen according to my conviction," she told a news conference. - Reuters

Eng Tek major shareholders in RM307m pvte offer

KUALA LUMPUR: The major shareholders of ENG TEKNOLOGI HOLDINGS BHD [], who own 23.21% of the Penang-based company, have made a takeover offer of the remaining shares in a RM307 million corporate exercise.

TYK Capital Sdn Bhd had on Friday, July 22 had offered to acquire the entire business and undertakings (including all the assets and liabilities), for RM2.50 per share.

This is 12 sen above the last trading price of RM2.28. The share price closed 14 sen higher at RM2.28 on Friday.

According to TYK's announcement, the offer price shall be RM246.4 million in cash and RM60.80 million as the amount remaining owing by TYK to Eng Tek.

The shareholdings of TYK showed that Datuk Teh Yong Khoon 94.9% of TYK (he is also Eng Tek co-founder and chief operating officer) while Datin Low Yeow Siang owns 0.1% of TYK and Singapore-incorporated Advance Capital Partners Pte Ltd the remaining 5.0%.

TYK Capital has confirmed it has sufficient financial resources to undertake the proposed acquisition. Teh and Low collectively hold 28.22 million Eng Tek shares or 23.21%.

The offer shall remain open for acceptance until 5pm on Aug 5.

Under the exercise, TYK would also acquire all the employees share option scheme (ESOS) options at the scheme's intrinsic value, which is the positive difference between the offer price per share and the ESOS exercise price.

The intrinsic value of the ESOS options ranges from RM0.00 up to RM1.37 per option under the different tranches. Of the total 4.659 million ESOSoptions, it said 4.089 million ESOS options are in-the-money.

#Stocks to watch:* Eng Tek, Latexx, Hibiscus and Pintaras Jaya

KUALA LUMPUR: Eng Teknologi Bhd will be among the stocks to watch on Monday, July 25 after its major shareholders announced a RM307 million privatisation exercise.

Other stocks to watch include LATEXX PARTNERS BHD [], PINTARAS JAYA BHD [], Hibiscus Petroleum Bhd, Pintaras Jaya Bhd, PETRONAS GAS BHD [] and PUBLIC BANK BHD [].

Public Bank is scheduled to release its second quarter results on Monday.

Eng Tek's major shareholders, who own 23.21% of the Penang-based company, have made a takeover offer of the remaining shares in a RM307 million corporate exercise.

TYK Capital Sdn Bhd had offered to acquire the entire business and undertakings (including all the assets and liabilities), for RM2.50 per share.

This is 12 sen above the last trading price of RM2.28. The share price closed 14 sen higher at RM2.28 on Friday.

Latexx, which fell 11 sen to RM2.18 on Friday, with 16.44 million shares traded could continue to see some downside pressure.'' The selling was ahead of the company's announcement of the failed proposed merger again.

YTY Industry Holdings Sdn Bhd had withdrawn its offer to merge its four glove-making subsidiaries unit with Latexx Partners.'' YTY had in writing expressed its intention not to continue with the proposed merger estimated at RM1.25 billion.

After an operational due diligence and further assessment on the YTY Group, Latexx had on Thursday presented its findings and indicated its intention to make a further revised offer. However, YTY decided not to go ahead with the merger.

Hibiscus Petroleum ' a special purpose acquisition company ' will make its debut on Monday. Its public issue of 10 million new shares at 75 sen each made available to the public was oversubscribed 3.8 times.

Pintaras Jaya secured a RM21.5 million contract for the piling and pile caps for a condominium project along Jalan Conlay in Kuala Lumpur.

Work is scheduled to start on Aug 1 and completed in nine months. It expected the contract to contribute positively to the group's future earnings.

Petronas Gas Bhd is reported to be planning a RM1.2 billion fund raising exercise to finance its 300MW gas-fired Kimanis power plant in Sabah.

This would be undertaken though project financing while the rest would be from equity financing. Petronas Gas is said to be looking at Sukuk bonds or a term loans for the 80% of the funding while the remaining 20% would be financed from equity.

SC approves 9 IPOs in 2Q with RM17m market cap

KUALA LUMPUR: The Securities Commission approved nine initial public offers (IPOs) in the second quarter ended June 30, which would have a combined potential market capitalisation of RM17.04 billion.

In its 2Q scorecard released on Friday, July 22, it said the nine approved IPOs were expected to raise a total of RM5.48 billion.

'Malaysia's capital market saw a vibrant 2Q buoyed by higher interest in all sectors of the market,' the SC said, adding it received 45 corporate proposals compared with 35 proposals in the first quarter of 2011.

It said 16 of the proposals were equity applications, while the remaining 29 were for private debt securities (PDS).'' Out of the 16 equity applications, it said 10 were IPOs with a total potential market capitalisation of approximately RM13.36 billion.

The SC also said it approved 26 PDS proposals compared to 17 in 1Q. The total funds approved to be raised from ringgit-denominated PDS increased by 150% to RM34.3 billion in 2Q compared to RM13.7 billion in 1Q.

There was also an increase in the approval for new collective investment schemes in 2Q, which saw the SC giving the go-ahead for 31 compared with 16 approved in 1Q.

Of the 31 applications for new funds, 14 were to set up new unit trust funds, 16 were to set up wholesale funds and one was for the establishment of a Shahriah-compliant real estate investment trust (REIT).

GE tops Wall Street estimates on overseas demand

BOSTON: General Electric Co reported a 21.6 percent rise in profit, topping estimates, boosted by strong demand outside the United States for its heavy equipment including jet engines and electric turbines.

The largest U.S. conglomerate said on Friday,July 22 second-quarter profit attributable to common shareholders came to $3.69 billion, or 35 cents per share, compared with $3.03 billion, or 28 cents per share, a year earlier.

Factoring out one-time items, profit was 34 cents per share. On that basis, analysts had looked for profit of 32 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell 3.5 percent to $35.63 billion, from a prior-year $37.44 billion, reflecting the sale of a majority stake in its NBC Universal business to Comcast Corp. Analysts had expected $34.7 billion.

The strongest growth came in the company's railroad locomotive unit, which posted a 74 percent surge in revenue following an extended downturn.

The energy unit stood out as a weak spot, with a 19 percent drop in profit, reflecting slower demand for wind turbines and the cost of integrating recently acquired companies.

"We are optimistic about our growth prospects in the second half and beyond," said Chief Executive Jeff Immelt.

Investors said the results showed the Fairfield, Connecticut-based company's focus on emerging markets was paying off.

"GE's strategy of growth in developing nations and energy and infrastructure and health care and TECHNOLOGY [] is serving it well," said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group, in Traverse City, Michigan, which holds GE shares.

GE joins a slew of big U.S. manufacturers reporting second-quarter results this week. Their results have been mixed. Companies that do a lot of business outside the United States, such as United Technologies Corp, have exceeded Wall Street's expectations.

Those with significant exposure to U.S. consumers, including Ingersoll Rand Plc, have fallen short.

GE shares were up 4 cents to $19.20 in premarket trading, virtually erasing an earlier 2.3 percent gain.

As of Thursday's close, GE shares had risen about 26 percent over the past 12 months, ahead of the 23 percent rise of the Dow Jones industrial average. - Reuters

Pintaras Jaya secures RM21.5m contract

KUALA LUMPUR: PINTARAS JAYA BHD [] has secured a RM21.5 million contract for the piling and pile caps for a condominium project along Jalan Conlay in Kuala Lumpur.

It said on Friday, July 22 its unit Pintaras Geotechnics Sdn Bhd was awarded the contract by Suasana Simfoni Sdn Bhd.

Pintaras said the work was to start on Aug 1 and completed in nine months. It expected the'' contract to contribute positively to the group's future earnings.

Far East acquires Pahang agri land for RM25m

KUALA LUMPUR: FAR EAST HOLDINGS BHD [] is acquiring 1,577.89 ha (3,899.06 acres) of agricultural land in Rompin and Pekan in Pahang for RM25.34 million.

It said on Friday, July 22 that it had agreed to pay the RM25.34 million to the office of Pahang Director of Land and Mines for the proposed land acquisition.

At present, the land was planted with oil palm trees and some parts were near its existing PLANTATION []s.

'The purchase consideration for the proposed land acquisition is RM25.34 million which is equivalent to RM6,500 per acre,' it said, adding that it would finance the acquisition with internal funds.

'The proposed land acquisition is in line with the expansion plan by Far East Holdings and would broaden our income base. It is expected to contribute positively to our future prospects and earnings,' it said.

Bank Negara foreign reserves up US$300m

KUALA LUMPUR: Bank Negara Malaysia international reserves rose US$300 million from US$134.6 billion (RM407 billion) as at July 15 from USD134.3 billion (RM406.3 billion) as at June 30.

In a statement July 22, the central bank said the reserves position was sufficient to finance 9.7 months of retained imports and is 4.5 times the short-term external debt.

''

FBM KLCI dips 12.19 points week-on-week

KUALA LUMPUR:'' The FBM KLCI fell 12.19 points week-on-week on Friday, July 22 and bucked the trend among key regional markets that rose after European leaders agreed on a package to rescue debt-stricken Greece.

An emergency summit of leaders of the 17-nation currency area pledged on Thursday to conduct a second bailout of Greece with an extra 109 billion euros ($157 billion) of government money, plus a contribution by private sector bondholders estimated to total as much as 50 billion euros by mid-2014, according to Reuters.

Investors who have been stricken by a series of factors ranging from the US and Europe debt crises to concerns about a sharp slowdown in China used this rare bit of good news to pick up bargains, it said.

The FBM KLCI shed 0.75 point to close at 1,565.06.

Gainers led losers by 462 to 249, while 332 counters traded unchanged. Volume was 1.17 billion shares valued at RM1.99 billion.

At the regional markets, Hong Kong's Hang Seng Index jumped 2.08% to 22,444.80, Japan's Nikkei 225 rose 1.22% to 10,132.11, Singapore's Straits Times Index was up 1.42% to 3,182.95, South Korea's Kospi up 1.22% to 2,171.23, Taiwan's Taiex added 0.55% to 8,765.32 while the Shanghai Composite Index edged up 0.18% to 2,770.79.

Among the decliners on Bursa Malaysia, United PLANTATION []s fell 40 sen to RM20, Tenaga 25 sen to RM6.27, Petronas Dagangan 24 sen to RM17.84, Sindora 14 sen to RM2.60, Fima Corp and Latexx down 11 sen each to RM6.14 and RM2.18, Far East and Hong Leong Bank lost 10 sen each to RM7.10 and RM13.60, Hiap Teck down nine sen to RM1.05 and Shell eight sen to RM10.30.

Among the gainers, CI Holdings rose 53 sen to RM4.61 after the company said it was set to record gains of RM677.10 million from the sale of its bottling unit, Permanis Sdn Bhd to Asahi Group Holdings Ltd for RM820 million.

Other gainers included S P Setia that added 32 sen to RM4.02, BAT 30 sen to RM46.50, QSR 26 sen to RM6.28, Harrisons and Y&G 25 sen each to RM3.79 and 44.5 sen, Cypark 23 sen to RM2.31 while Tasek and CCB gained 22 sen each to

The actives included Ingenuity Solutions, Bumi Armada, Tenaga, Jotech, AirAsia and newly listed Catcha Media.

BNM: Managed float regime provides flexibility to face challenges

KUALA LUMPUR: Bank Negara Malaysia (BNM) said the managed float regime for the ringgit exchange rate has provided the economy greater flexibility to face the recent global economic and financial crisis.

The central bank said on Friday that July 22 marked the sixth year since the shift to this regime.

During the six-year period, it said the global economic and financial landscape experienced exceptional developments which were the worst global economic and financial crisis since the Second World War, and extreme volatility in two-way capital flows.

'The exchange rate regime has accorded the economy with greater flexibility in facing these challenges.'' As the global economy recovers, the ringgit has strengthened in line with Malaysia's stronger economic fundamentals,' it said.

BNM said the gradual and orderly adjustments of the ringgit have facilitated the corresponding changes to take place in the real economy.

It said that it would continue to focus on facilitating orderly market conditions to ensure international financial transactions could be carried out efficiently.

'Going forward, the managed float regime and the flexibility it accords will also continue to facilitate the transformation of the economy as we advance towards being a high-income nation,' it said.

PM: Petronas to continue proactive foreign investments

SEPANG: Prime Minister Datuk Seri Najib Tun Razak said Petroliam Nasional Bhd would continue to earn with its proactive moves to invest overseas.

Referring to its investment in Turkemenistan where it has developed the Kiyanly onshore gas terminal and offshore gas production plant, Najib, who is also Finance Minister, said that the gas field was located among the "richest" in the area.

The CONSTRUCTION [] of the plant, the country's first offshore gas platform, involved an investment of about US$5.2 billion from Petronas.

Speaking to reporters immediately after arriving at the KL International Airport here on Friday, July 22 following his visit to three countries, Najib said with the location of the plant in one of the most richest areas, it would mean that Petronas would continue to see a steady stream of returns.

"And if the oil in Malaysia continues to deplete, we have already taken the proactive measures to invest overseas. "We are doing this for the Malaysian rakyat. We have made an early and very careful planning," he said.

On July 12, Najib together with the President of Turkmenistan, Gurbanguly Berdimuhammedov, had officially launched the Kiyanly gas plant.

He was in the country on a two-day official visit before continuing on his visit to the United Kingdom and Italy.

Najib also said that he was very proud to see the involvement of more than 100 Malaysian engineers from the fields of geology, chemicals and petroleum in the building of the plant.

They have made Malaysia proud, he added.

The gas facility has the capacity to produce 500 million cubic feet of gas a day and is equipped with two process trains and a 53 km pipeline linking the terminal to an export pipeline. - Bernama

Latexx-YTY merger called off

KUALA LUMPUR: ''The much hyped YTY Industry Holdings Sdn Bhd's offer to merge its four wholly-owned glove-making subsidiaries with LATEXX PARTNERS BHD [] has been called off as the offer lapsed on July 22.

In a filing Friday, July 22, Alliance Investment Bank Bhd on behalf of Latexx said YTY had in writing expressed its intention not to continue with the proposed merger estimated at RM1.25 billion.

The investment bank said that after conducting an operational due diligence and further assessment on the YTY Group, Latexx had on July 21 engaged with the shareholders of YTY (Vendors) to present its findings and indicate its intention to make a further revised offer.

'After considering the company's feedback, the Vendors had on July 22, written to the company expressing their intention not to extend and continue with the proposed merger.

'Hence, the offer lapses today,' it said.

Latex fell 11 sen to RM2.18 with 16.44 million shares traded.

''

GLOBAL MARKETS-Greek deal lifts stocks, euro; US debt talks eyed

LONDON: World stocks hit a two-week high on Friday, July 22 and the euro and oil prices rose after European leaders agreed on a package to rescue Greece that hopes to prevent the region's debt crisis from deepening.

The dollar was under pressure as uncertainty intensified as to whether U.S. lawmakers could strike on a last-minute deal to raise the country's $14.3 trillion debt ceiling to avoid a default.

The deal on Greece showed that Europe was taking stronger action than markets had expected although many economists warned that it may not draw a line under the crisis in the longer-term.

At the emergency summit on Thursday, euro zone leaders promised a second bailout of Greece with an extra 109 billion euros ($157 billion) of government money, plus a contribution by private sector bondholders estimated to total as much as 50 billion euros by mid-2014.

The region's rescue fund, the European Financial Stability Facility, will be allowed to buy bonds in the secondary market if necessary and also to lend governments money to recapitalise banks.

The comprehensive nature of the deal raised optimism that Spain and Italy may avoid the sort of spiral into Greece's problems may be prevented spread into other indebted peripheral countries such as Spain and Italy.

"It is encouraging they have come up with something and dealt with some of the restructuring," Louise Cooper, markets analyst at BGC Partners. "The markets have got excited about it."

"But the cuts to Greek debt do not put the country on a sustainable footing for growth and does not take us where we want to be."

MSCI world equity index rose 0.4 percent to levels not seen in a fortnight. European stocks added half a percent and emerging stocks bounced 1 percent.

U.S. crude oil rose half a percent to $99.66 a barrel.

Bund futures Fell 43 ticks while credit default swaps of Greece and other peripheral countries fell broadly.

"We still have to calculate the contingent liabilities of the EFSF and finally the contingent liabilities of Germany from all these rescue operations. But the markets are happy for the time being," said Kornelius Purps, strategist at Unicredit in Munich.

The dollar held steady against a basket of major currencies. The euro was also flat at $1.4417 while it rose one percent to 1.1894 Swiss francs .

''

U.S. CEILING

Efforts to avoid a U.S. default were underway in Washington with President Barack Obama and top lawmakers sought a last-minute deficit-reduction deal before the Aug. 2 deadline to raise the country's debt ceiling.

Congressional aides report that a compromise plan could include up to $3 trillion in spending cuts but might leave tax reform for later.

The main obstacle remains the issue of tax increases that Obama's Democrats demand and Republicans vehemently oppose.

Most investor appear to have been working on the assumption that a deal would be forthcoming to stop a default. The Dow Jones industrial average gained 1.2 percent on Thursday on optimism both about Europe and the U.S. debt debate. - Reuters

LBS Bina eyes RM650m sales this yr, focus on higher-end properties

KUALA LUMPUR: LBS BINA GROUP BHD [] targets to increase its sales by 54% to RM650 million from RM422 million last year as it shifts towards higher end PROPERTIES [].

Managing director Datuk Lim Hock San said on Friday, July 22 the company hoped to achieve this target following its decision to focus on the high-end property segment which provided better profit margins.

Lim said the group had recorded RM361 million in sales year-to-date. As at June 30, the group had RM558 million in unbilled sales which would be realised in the next two years.

Houses priced above RM350,000 would constitute about 80% of its portfolio, he said after LBS Bina launched its new corporate identity as it aspired to be an internationally recognised developer.

'We are already in the high-end market. Half of the RM361 million sales year-to-date consisted of units sold at RM1 million each, while houses costing between RM350,000 to RM1 million constituted 32% of sales,' said Lim, adding it would still build medium-cost housing units.

The group's projects over 2,400 acres of landbank had a total gross development value (GDV) of RM9.1 billion. It had 19 ongoing projects with a GDV of RM1.45 billion.

Lim said the main contributor for LBS in the next few years would be the 175-acre D'Island Residence project in Puchong, the Bandar Saujana Putra township and projects in Cameron Highlands.

'D'Island Residence would be our flagship project as the group moves into the high-end property segment,' said Lim, adding that the project would contribute 30% to 40% of the group's revenue and earnings in the next few years.

The RM3.5 billion project is located on a 192-ha site in Puchong. LBS Bina plans to build super-link homes, semi-detached units, bungalows, high-end condominiums, clubhouse and a 4-km jogging track.

In the early part of the decade, it was noted for delivering affordable homes with its low and medium cost housing projects.

However, rising material costs began to erode its margins and resulted in LBS Bina posting RM17.18 million losses in the financial year ended Dec 31, 2009 while revenue was RM198.47 million.

Nonetheless, LBS Bina had since recovered and posted net profit of RM17.05 million in FY2010 on the back of RM338.59 million in revenue.

LBS Bina posted RM9.46 million net profit and RM76.46 million in revenue in the first quarter ended March 31, 2011.

Lim added that LBS Bina still intends to develop its project in Zhuhai, China and hoped to launch the project next year.

No respite for Tenaga after shocking results

KUALA LUMPUR: Tenaga Nasional extended its losses throughout the day on Friday, July 22 after posting a set of 'shocking results' in the third quarter ended May 31, 2011, but analysts believe this was as bad as it gets.

At 3.49pm, it was down 29 sen to RM6.23 with 23.29 million shares done.

The FBM KLCI fell 1.64 points to 1,564.17, weighed down by Tenaga's decline. Turnover was 907.68 million shares valued at RM1.42 billion. The broader market was more positive with 384 gainers to 293 losers and 297 stocks unchanged.

Tenaga posted net losses of RM440.20 million for the third quarter a stark contrast from the net profit RM1.11 billion a year ago.

Revenue for 3Q rose marginally to RM7.77 billion from RM7.72 billion in 2010. Loss per share was 8.08 sen from earnings per share 20.39 sen a year earlier, net assets per share was RM5.32.

For the nine months ended May 31, Tenaga's net profit fell to RM903 million from RM2.81 billion in 2010 despite an increase in revenue to RM22.99 billion from RM22.45 billion.

OSK Research described the results as 'shocking' as it had expected a breakeven results. Even the most bearish of the previews had also only foreseen a slight loss, it said.

It said the main impact on Tenaga was from the outage at Janamanjung which took everyone by surprise in an environment of gas shortage and the fact that the restoration of 150 mmscfd from Bekok did not materialize.

'We cut FY11 net profit by 47% and FY12 by 8% mainly by just raising our other fuel cost item (usually hovering at RM200 million to RM400 million annually) to RM1.5 billion in FY11,' it said.

OSK Research said the outlook for TNB would be tough but 'this is as bad as it gets'.

'Gas curtailment has reduced. Janamanjung is back on line and 2% effective tariff hike will boost revenues in July and August. '' So share price took a beating as expected and now is the time to BUY into WEAKNESS,' it said.

Hiap Teck slips, OSK has sell call, FV 95c

KUALA LUMPUR: HIAP TECK VENTURE BHD []'s share price slipped on Friday, July 22 as analysts were cautious about the venture into the upstream steel mill project.

At 4.05pm, it was down four sen to RM1.10 with 2.31 million shares transacted.

OSK Research has a Sell call on Hiap Teck Venture and reduced its fair value to 95 sen as it was cautious about the latest venture.

Hiap Teck's 55% owned Eastern Steel Sdn Bhd had entered into an engineering and procurement contract and a CONSTRUCTION [] contract with China Shougang International Trade and Engineering Corporation for the 1st phase design, procurement and construction of its integrated steel mill in Terengganu.

'We continue to remain cautious on this upstream venture, given the capex intensive nature and new learning curve in operating a blast furnace, the dilution in their share price from its proposed rights issue, and struggling earnings with poor visibility beyond 6 months for the sector.

'We downgrade the Company to SELL from NEUTRAL, while holding our FV of 95 sen at 8.0 times FY12 EPS given its recent share price run-up of 20% ahead of our FV,' it said.

Tenaga, Petronas-linked stocks weigh on FBM KLCI

KUALA LUMPUR: The FBM KLCI remained in negative territory at the mid-day break on Friday, July 22 as TENAGA NASIONAL BHD [] and Petronas-linked counters weighed on the index.

Regional markets, however, displayed better investor sentiment on the back of European leaders agreeing on a package to rescue debt-stricken Greece, and on hopes that US policymakers also manage to cobble together a last minute deal.

The FBM KLCI shed 2.65 points to 1,563.16, with losses at Tenaga alone shaving off 3.89 points off the benchmark index.

Given the overall regional sentiment, gainers led losers by 321 to 244, while 304 counters traded unchanged.'' Volume was 652.04 million shares valued at RM894.67 million.

The ringgit strengthened 0.46% to 2.9825 versus the US dollar; crude palm oil futures for the third month delivery rose RM7 per tonne to RM3,137, crude oil added 32 cents per barrel to US$99.45 while gold fell US$1.65 an ounce to US$1,589.05.

At the regional markets, Hong Kong's Hang Seng Index jumped 1.69% to 22,358.05, Japan's Nikkei 225 added 1.13% to 10,123.46, Singapore's Straits Times Index rose 0.94% to 3,168.08, South Korea's Kospi up 0.93% to 2,164.94, Taiwan's Taiex gained 0.66% to 8,774.45 and the Shanghai Composite Index edged up 0.45% to 2,778.40.

Tenaga, which was hit by higher operating expenses, posted a net loss of RM440.2 million in its third quarter ended May 31, 2011 from net profit RM1.11 billion a year earlier, fell 31 sen to RM6.21.

Among the Petronas-linked counters, Petronas Dagangan lost 26 sen to RM17.82, while Petronas Chemicals and Petronas Gas fell two sen each to RM7.07 and RM13.48.

Other decliners included United PLANTATION []s that fell 40 sen to RM20, Sindora and UMS 15 sen each to RM2.59 and RM1.63, Far East 10 sen to RM7.10, while LPI Capital, Selangor Dredging and F&N fell eight sen each to RM13.70, 76 sen and RM19.52 respectively.

Among the gainers, CI Holdings rose 49 sen to RM4.57 after the company said it was set to record gains of RM677.10 million from the sale of its bottling unit, Permanis Sdn Bhd to Asahi Group Holdings Ltd for RM820 million.

Other gainers included BAT and Tasek up 22 sen each to RM46.42 and RM8.10, Cypark 20 sen to RM2.28, QSR 19 sen to RM6.21, S P Setia and Bursa 16 sen each to RM3.91 and RM8.02, KLK 14 sen to RM21.48 and AFG 13 sen to RM3.78.

Meanwhile, the actives included Ingenuity Solutions, Bumi Armada, Jotech, Key West and newly-listed Catcha Media.

AirAsia up on foray into Japan

KUALA LUMPUR: AIRASIA BHD [] shares advanced on Friday, July 22 after CIMB Research upped the target price for the stock following the low cost carrier's confirmation that it was setting up a joint venture (JV) in Japan with All Nippon Airways (ANA).

At 10.55am, AirAsia was up 11 sen to RM3.78 with 6.2 million shares done.

CIMB Research reiterated its positive view of this JV as per its 18 July in-depth report and said Japan was a huge untapped market with a very low LCC penetration rate.

After establishing three successful airlines in Southeast Asia, AirAsia has two more Asean JVs in the pipeline and now AirAsia Japan, it said.

As the largest airline in Japan, ANA is a good partner for AirAsia while AirAsia brings invaluable experience in the LCC industry as well as its mega orderbook of 286 A320/320neos, it said.

'We maintain our OUTPERFORM rating and upgrade our target price to RM4.70 (10x CY12 core P/E) from RM4.20 (9x).

'The potential re-rating catalysts are associate listings and the take-off of new JV airlines,' the research house said in a report July 22.

''

FBM KLCI bucks regional trend, Tenaga weighs

KUALA LUMPUR: ''The FBM KLCI bucked the trend at regional market and slipped into negative territory at mid-morning on Friday, July 22 as Tenaga'' Nasional Bhd's pessimistic outlook on its full-year earnings dampened investor sentiment the local bourse.

Tenaga, which was hit by higher operating expenses, posted a net loss of RM440.2 million in its third quarter ended May 31, 2011 from net profit RM1.11 billion a year earlier.

The FBM KLCI slipped 1.51 points to 1,564.30 at 10am.

Gainers led losers by 214 to 152, while 209 counters traded unchanged. Volume was 256.62 million shares valued at RM297.45 million.

Asian stocks rose and the euro climbed to a two-week high on Friday after European leaders agreed on a package to rescue debt-stricken Greece and traders said gains will sustain if U.S. policymakers also manage to cobble together a last minute deal, according to Reuters.

At the regional markets, Hong Kong's Hang Seng Index rose 1.25% to 22,262.72, Singapore's Straits Times Index gained 0.92% to 3,167.33, Japan's Nikkei 225 up 0.86% to 10,096.56, South Korea's Kospi added 0.70% to 2,59.98, Taiwan's Taiex advanced 0.46% to 8,757.66 and the Shanghai Composite Index edged up 0.40% to 2,777.00.

However, strategists at The Royal Bank of Scotland in a note July 21 cautioned that details were still emerging about the shape of the European package plan to rescue Greece and that it was too early to make a definitive comment on the plan, adding that ratings agencies were also withholding comment at the present time.

BIMB Securities Research in a note July 22 said a temporary reprieve is what ensued both in the US and Europe, with the Europeans striking deal to contain Greece's debt crisis and the US lawmakers finally agreeing to an increase in the nation's debt ceiling.

These stop gap measures though is positive in the short run but we believe a longer term headache still prevails, it said.

Nonetheless, markets players welcomed such developments as seen from the 152 points surge in the Dow Jones, it said.

'Domestically, we reckon Tenaga's 3Q11 loss of RM460 million will put a dent on analysts' forecast and may see some downgrade on its figures.

'This will hamper the FBM KLCI's progression today but we expect impact to be minimised from selective accumulation on others. Upside bias intact,' it said.

Among the decliners, Tenaga fell 27 sen to RM6.25, Petronas Dagangan lost 24 sen to RM17.84, Sindora 14 sen to RM2.60. Far East and F&N 10 sen each to RM7.10 and RM19.50, LPI and JT International down eight sen each to RM13.70 and RM7.10, while YTL Cement and MHC fell five sen each to RM5.20 and RM1.25.

CI Holdings rose 51 sen to RM4.59 after the company said it was set to record gains of RM677.10 million from the sale of its bottling unit, Permanis Sdn Bhd to Asahi Group Holdings Ltd for RM820 million.

Cypark was up 21 sen to RM2.29, BAT 20 sen to RM46.40, Lafarge Malayan Cement 18 sen to RM7.54, Panasonic and KLK 14 sen each to RM24.20 and RM21.48, MAHB 10 sen to RM6.60 and KLCCP seven sen to RM3.38.

Newly-listed Catcha Media was among the actively traded counters at mid-morning. The stock added nine sen to 84 sen with 13.32 million shares done.

Other actives included Ingenuity Solutions, Bumi Armada, HWGB, Tenaga and Kurnia Asia.

Bumi Armada still making waves, extends gains

KUALA LUMPUR: Oil and gas services provider Bumi Armada continued to be actively traded on Friday, July 22 after it made an impressive debut on the Main Market of Bursa Malaysia on Thursday.

At 10.50am, Bumi Armada was up five sen to RM4.19 with 31.26 million shares done.

ECM Libra Research on July 21 had initiated coverage on Bumi Armada with a BUY call and a TP of RM3.91, based on a 25x PE pegging 2H11-1H12 EPS of 15.6sen.

'We view that Bumi Armada can easily achieve a 2010-2013 CAGR of 22% given their strong RM5.8 billion orderbook and also active tendering activity in the FPSO market.

'Major contracts are all for the long term (5-8 years) hence providing the group with good earnings visibility,' it said.

Bina Puri rises in early trade

KUALA LUMPUR: BINA PURI HOLDINGS BHD [] shares advanced on Friday, July 22 after the company's current unbuilt book order increased to RM2.40 billion with the RM388.73 million contract for an administrative centre in Teluk Likas, Kota Kinabalu.

At 9.20am, Bina Puri added five sen to RM1.33 with 295,600 shares done.

Its unit Bina Puri Sdn. Bhd had accepted the letter of award from the Public Works Department for the phase one of the centre. The duration of the CONSTRUCTION [] is 30 months.

With the award, the group's current unbuilt book order stands at RM2.40 billion as at to date.''In 2011, the group had managed to secure new projects worth up to about RM500.00 million as at to date.

Kurnia Asia active, up in early trade

KUALA LUMPUR: KURNIA ASIA BHD [] shares were actively traded on Friday, July 22 after the company said it has received 'expressions of interests from certain parties' for a possible equity stake in its unit Kurnia Insurans (Malaysia) Bhd.

At 9.30am, Kurnia Asia rose 3.5 sen to 56.5 sen with 3.99 million shares traded.

It said on Thursday that Bank Negara Malaysia had no objection in principle for it to start preliminary negotiations with the relevant interested parties

''

Cypark extends gains on renewable energy park plan

KUALA LUMPUR: CypARK RESOURCES BHD [] shares extended their gains on Friday, July on the back of the company receiving a written approval from the Negeri Sembilan state government for Cypark to lease Pajam closed landfill site and develop the Integrated RE Park for the period of 21 years.

At 9.35am, Cypark rose 19 sen to RM2.27 with 819,500 shares done.

Cypark said on Wednesday, July 20 that the approval was given together with other 2 sites in Negeri Sembilan.

'With the 3 sites, Cypark is poised to deliver its 50 MW within its 3 years RE project delivery plan with potential concession revenue of above RM60 million annually.

'The recently approved RE Act allows the renewable energy developer like Cypark to benefit from the fixed Feed In Tariff (FIT) for 21 years concession covered under Renewable Energy Power Purchase Agreement to be signed with Tenaga Nasional,' it said.

Cypark plans to develop RE with total generating capacity of 100 MW by 2015. If the project is implemented in full, the 100 MW green energy is expected to generate additional revenue of up to RM130 mill annually.

The green energy will include waste biomass, landfill gas and solar as feedstock to its proposed RE plants.

BAT rises after declaring interim dividend 90c

KUALA LUMPUR: British American Tobacco (Malaysia) Bhd shares rose in early trade on Friday, July 22 after it declared interim dividends totaling 90 sen per share.

At 9.45am, BAT was up 40 sen to RM46.60 with 5,300 shares done.

BAT on Thursday declared a second interim dividend of 60 sen per share totaling RM171.32 million and a special interim dividend of 30 sen per share amounting to RM85.66 million, both tax exempt under the single-tier tax system,in respect of the financial year ending Dec 31, 2011.

Its net profit for the second quarter ended June 30, 2011 slipped 0.9% to RM184.14 million from RM185.84 million a year earlier, impacted by lower volumes and loss of 14's pack size margin, partially offset by higher net pricing and productivity savings.

BAT said on Thursday, July 21 that its revenue for the quarter rose to RM1.04 billion from RM993.87 million in 2010. Earnings per share was 64.50 sen, while net assets per share was RM1.76.

For the six months ended June 30, BAT's net profit fell 3.9% year-on-year to RM362.69 million from RM377.74 million on the back of revenue RM2.04 billion.

ECM Libra Research keeps AirAsia TP unch RM3.56

KUALA LUMPUR: ECM Libra Research is maintaining AIRASIA BHD []'s target price at RM3.56 based on mid-CY12 valuation of 10.0 times price-to-earnings.

It said on Friday, July 22 that as AirAsia has already achieved its target price, it downgraded it from buy to HOLD.

'While we expect the impending listing of its associates and affiliate to be positive newsflow in the near term, persistent high fuel cost remains a concern although there is sign of moderation,' it said.

On Thursday, AirAsia'' formalised a 49:51 joint venture with All Nippon Airways to establish a low cost airline in Japan which is expected to commence operations in August 2012.

'While we are positive on this news, it is premature to impute any earnings upgrade at this juncture,' it said.

ECM Libra Research said it was positive of this news as it will further strengthen AirAsia's foothold as Asia largest low cost carrier. Through its AirAsia X affiliate, AirAsia currently operates long haul flights to Haneda Airport, Tokyo.

'We view Japan as a lucrative market for AirAsia given its large population of 127 million while the greater region of North East Asia has a population of 500 million. In 2010, there were 14.7 million Japanese travelling abroad with 5.1 million visitors from the Northeast Asia,' it said.

ECM Libra Research said although Japan is a matured aviation market, the proliferation of low cost carriers is still at infancy stage.

It added the presence of ANA, Japan's largest airline, as a JV partner will allows AirAsia Japan to capitalise on the former's clout in Japan aviation industry. ANA will play contributing role as a partner in setting the foundation of schedule flights such as transfer of slots and pursue new traffic rights.

'While management guided that AirAsia Japan is expected to be profitable from its first year of operation, we maintain our estimate at this juncture until there is better clarity on aircraft procurement, AOC approval, and flight commencement,' it said.

Seoul shares open higher, Kia Motors rises

SEOUL: Seoul shares opened higher on Friday, boosted by investors' relief following euro zone leaders' plan to provide additional financial aid to Greece to contain the region's debt crisis.

Kia Motors gained 1.5 percent after South Korea's No.2 carmaker agreed to this year's wage deal with its union.

The Korea Composite Stock Price Index (KOSPI) was up 1.03 percent at 2,167.03 points minutes after opening 0.79 percent higher. ' Reuters

''

Nikkei gains on banks, euro-sensitive stocks

TOKYO: The Nikkei average rose on Friday as banks gained following strong Morgan Stanley results and euro-sensitive stocks such as Canon and Nikon rose on a stronger euro after officials agreed on measures to solve Greece's debt woes.

The Nikkei was up 0.9 percent at 10,101.71 just after the open, while the broader Topix rose 1 percent to 868.80.

Analysts said the Nikkei may trade between 10,050 and 10,150 with resistance seen at 10,207, a recent closing high marked on July 8. ' Reuters

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CIMB Research has Underperform on BAT, TP RM42

KUALA LUMPUR: CIMB Equities Research has an Underperform recommendation on BRITISH AMERICAN TOBACCO (M) [] Bhd as its 1H2011 core net profits were broadly within expectations.

It said on Friday, July 22, the profits accounted for 53% of its full-year forecast and 51% of consensus estimates.

The surprise was a special dividend of 30 sen, on top of the second interim dividend of 60 sen. This brings YTD dividends to RM1.50, which works out to 118% payout (vs our assumption of 93%).

'We are raising our FY11 DPS by 10% to account for the special dividend. But we maintain our earnings numbers in view of the rising regulatory risks in 2H, i.e. the possibility of an excise duty hike in 3Q which could hurt volumes.

'Our DDM-based end-11 target price remains unchanged at RM42 (COE 7.4%, LTG 0%). We maintain our UNDERPERFORM rating given the potential downside catalysts of 1) market share loss, 2) more regulatory negatives, and 3) investors' appetite for higher-beta stocks,' it said.

Catcha set for strong start, bids at 88c

KUALA LUMPUR: Catcha Media Bhd is expected to make a strong start on Friday, July 22 with buying bids in pre-marketing opening at 88 sen.

Stock market data showed at 88 sen, this was 13 sen above its offer price of 75 sen.

Its public offer of three million shares to the public was oversubscribed 10.67 times.

CIMB Research lowers Muhibbah TP to RM1.83

KUALA LUMPUR: CIMB Equities Research said Muhibbah Engineering Bhd's prospects straddle both the CONSTRUCTION [] and oil & gas sectors, backed by execution of the ETP.

It said on Friday, July 22 the group is a strong contender for large-scale jobs such as MRT and highways while its expertise in marine/port infrastructure gives it an added advantage in the oil & gas space.

'But uncertainty over the APH receivership issue continues to overhang the stock. Although it may be resolved satisfactorily, it is likely to dent sentiment in the medium term.

'We, therefore, raise our RNAV discount from 10% to 40%, which is broadly in line with the discount applied to our small- to mid-cap stocks. This cuts our target price from RM2.75 to RM1.83,' it said.

CIMB Research maintained its EPS forecasts and TRADING BUY call. Potential re-rating catalysts include (i) project wins, and (ii) resolution to APH.

PepsiCo quarterly profit up; tempers outlook

NEW YORK: PepsiCo Inc reported higher quarterly earnings on Thursday, helped by its acquisition of a Russian beverage company, but tempered its full-year outlook.

The maker of Pepsi-Cola, Frito-Lay snacks and Quaker oatmeal said net income was $1.89 billion, or $1.17 per share, in the second quarter that ended on June 11, compared with $1.60 billion, or 98 cents per share, a year earlier.

Net revenue jumped about 14 percent to $16.83 billion.

The company said it now expects 2011 earnings to grow at a high single-digit rate, from the $4.13 per share it earned in 2010. The new forecast includes a 2 percentage point boost from foreign exchange rates. Its prior target, for growth of 7 percent to 8 percent, did not include that boost. ' Reuters

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Bina Puri to raise RM14.5m from share placement

KUALA LUMPUR: BINA PURI HOLDINGS BHD [] is expected to raise between RM12.77 million and RM14.52 million from its proposed share placement exercise.

The company said on Thursday, July 21 this was based on an indicative issue price of RM1.17 per placement share and based on the shares to be placed out, ranging from 12.41 million shares to 14.94 million shares

It said assuming an indicative issue price of RM1.17 per placement share -- discount of about 10% to the volume weighted average market price for the five market days from July 14 to 20, of RM1.30 -- the company is expected to raise up to RM14.52 million.

BAT 2Q net profit slips 0.9% to RM184.14m, declares 90c dividend

KUALA LUMPUR: British American Tobacco (Malaysia) Bhd net profit for the second quarter ended June 30, 2011 slipped 0.9% to RM184.14 million from RM185.84 million a year earlier, impacted by lower volumes and loss of 14's pack size margin, partially offset by higher net pricing and productivity savings.

BAT said on Thursday, July 21 that its revenue for the quarter rose to RM1.04 billion from RM993.87 million in 2010. Earnings per share was 64.50 sen, while net assets per share was RM1.76.

BAT declared a second interim dividend of 60 sen per share totaling RM171.32 million and a special interim dividend of 30 sen per share amounting to RM85.66 million, both tax exempt under the single-tier tax system,in respect of the financial year ending Dec 31, 2011.

For the six months ended June 30, BAT's net profit fell 3.9% year-on-year to RM362.69 million from RM377.74 million on the back of revenue RM2.04 billion.

Reviewing its performance, BAT said the comparative period last year saw higher marketing expenditure incurred during the introduction of Dunhill Reloc and trade activities to migrate the 14's to 20's pack size.

Combined with the reduction in overhead spend in 2011 of 10.4% versus same period last year, this limits the net decline in profit before / after tax to only 4% versus same period last year, it said.

On its prospects, BAT said its volume year to date declined 4.4% versus same period last year, following the hefty excise increase in October 2010.

It said the second quarter volumes had improved versus the previous quarter in response to increased enforcement of illegal pricing activities by certain sub-value for money brands.

With regards to the loss of margin from the ban on packs less than 20 sticks, BAT said the annualised financial impact remained at its previously reported estimate of RM80 million per annum, adding that Q2 was the last quarter where the loss of margin from the ban distorted the financial comparative.

BAT said its profit outlook for 2011 remains cautious although improved in comparison to the outlook in Q1.

'Key concerns are the prevailing high incidence of illicit cigarette trade and directly impacting this high rate of illicit trade is the Government's future excise increases and continued illegal pricing activities by certain sub-value for money brands.

'However, BAT remains committed to maintaining and enhancing its leadership position in the tobacco industry through the strength of its brand portfolio and in delivering long term shareholder value,' it said.

''

Kurnia Asia gets queries for Kurnia Insurans stake

KUALA LUMPUR: KURNIA ASIA BHD [] has received 'expressions of interests from certain parties' for a possible equity stake in its unit Kurnia Insurans (Malaysia) Bhd.

It said on Thursday, July 21that Bank Negara Malaysia had no objection in principle for it to start preliminary negotiations with the relevant interested parties.

However, it said Kurnia Insurans and the relevant party would need the approval of the Minister of Finance, with the central bank's recommendation under the Insurance Act, 1996 before entering into any agreement to dispose of its equity interest.

Tenaga zapped by operating expenses, posts net loss RM440.2m in 3Q

KUALA LUMPUR: TENAGA NASIONAL BHD [], which posted net loss RM440.20 million for the third quarter ended May 31, 2011 compared to net profit RM1.11 billion a year earlier, said it expects its full year results to be severely impacted due to significant increase in operating expenses.

Tenaga said on Thursday, July 21 that revenue for the quarter rose marginally to RM7.77 billion from RM7.72 billion in 2010. Loss per share was 8.08 sen from earnings per share 20.39 sen a year earlier, net assets per share was RM5.32.

For the nine months ended May 31, Tenaga's net profit fell to RM903 million from RM2.81 billion in 2010 despite an increase in revenue to RM22.99 billion from RM22.45 billion.

Reviewing its performance, Tenaga said operating expenses rose by 14.6% and eroded the operating profit by 62% to RM2.15 billion from RM3.47 billion.

It said significant increase in operating expenses was mainly due to higher generation costs from the utilisation of coal, oil and distillate, resulting from sever gas curtailment during 3Q.

It said the average price of coal was US$103 per tonne compared to US$85.10 per tonne a year earlier.

'Effectively, lower earnings before interest, tax, depreciation and amortisation margin was recorded, from 28.2% to 18.7%,' it said.

On its prospects, Tenaga said that for the rest of the year, with coal prices trading above US$100 per cubic tonne, compounded by higher cost of generation using oil and distillate due to continuing lower gas supply, the results for the current financial year was expected to be severely affected.

'However, Tenaga will continue to strive in ensuring reliability and security of supply in meeting the demand.

'The board of directors expects the group's prospects for the year ending Aug 31, 2011 to be very challenging and that the financial results for the full year to be lower compared to the previous year,' it said.

Bina Puri's RM388m job pushes unbuilt book order to RM2.4b

KUALA LUMPUR: BINA PURI HOLDINGS BHD []'s current unbuilt book order has increased to RM2.40 billion with the RM388.73 million contract for an administrative centre in Teluk Likas, Kota Kinabalu.

The company said on Thursday, July 21 its unit Bina Puri Sdn. Bhd had accepted the letter of award from the Public Works Department for the phase one of the centre. The duration of the CONSTRUCTION [] is 30 months.

'With the above award, the Group's current unbuilt book order stands at RM2.40 billion as at to date.''In 2011, the Group had managed to secure new projects worth up to about RM500.00 million as at to date,' it said.

It expects the contract to contribute positively to its earnings for the financial year ending Dec 31, 2011.

Bumi Armada debut, fresh newsflow boost for local bourse

KUALA LUMPUR: Fresh corporate developments, as a well as a strong Main Market debut by Bumi Armada Bhd lifted sentiments at Bursa Malaysia on Thursday, July 21 and saw the FBM KLCI extending its gains.

Among the corporate news were CI Holdings Bhd selling its bottling unit Permanis to Asahi Group for RM820 million and AirAsia's entry into Japan via a joint venture with All Nippon Airways.

The FBM KLCI rose 3.22 points to 1,565.81 at 5pm, with gains at select blue chips.

Gainers overtook losers by 386 to 321, while 349 counters traded unchanged. Volume was 1.2 billion shares valued at RM2.63 billion.

Bumi Armada was both the gainer and most actively traded counter today. The stock jumped RM1.11 to RM4.14 with 303.7 million shares done.

Hong Leong Bank rose 42 sen to RM13.70, Cypark 28 sen to RM2.08, BAT 26 sen to RM46.20, F&N 24 sen to RM19.60, PPB 20 sen to RM17.50, RHB Capital 18 sen to RM9.18, AirAsia 17 sen to RM3.67 while DiGi and Dutch Lady added 16 sen each to RM30 and RM19.16.

Decliners included United PLANTATION []s that fell 30 sen to RM20.40, Sindora and MSM 16 sen each to RM2.74 and RM5.42, Malpac 15 sen to RM1.38, Petronas Dagangan 12 sen to RM18.08 while Tan Chong, GAB and Toyo Ink fell eight sen each to RM4.80, RM10.42 and RM1.42 respectively.

The actives included Ingenuity Solutions, Flonic, Hubline, Petronas Chemicals, Kencana and CIMB.

Regional markets, meanwhile were mixed with Singapore's Straits Times Index up 0.38% to 3,138.51, Taiwan's Taiex up 0.13% to 8,717.14 while Japan's Nikkei 225 edged up 0.04% to 10,010.39.

Meanwhile, South Korea's Kospi fell 0.46% to 2,145.04, Hong Kong's Hang Seng Index slipped 0.07% to 21,987.29 and the Shanghai Composite Index shed 0.01% to 2,765.89.

''

CIMB Research sees 25bp hike in OPR in Sept

KUALA LUMPUR: CIMB Economics Research is maintaining its expectations of another 25 basis points hike in September, which would increase the overnight policy rate (OPR) to 3.25% by end-2011.

It said on Thursday, July 21 that despite pausing interest rate at 3% on July 7, it believes that Bank Negara Malaysia (BNM) is not wavering from its rate normalisation path.

CIMB Research said the decision to pause in July was justifiable as growth prospects are more of a worry now than inflation.

'We continue to expect BNM to resume its normalisation when the growth fears subside. BNM reiterated that the risks to inflation are on the upside due to supply factors and possibly some signs of domestic demand pressure on prices in 2H11.

'We maintain our expectation of another 25bp rate hike in September, taking the policy rate to 3.25% by end-2011,' it said.

Commenting on the consumer inflation in June at 3.5% on-year (3.3% in May), this was the fastest pace in 27 months.

CIMB Economics Research said the June CPI was in line with its expectations of 3.4% and market forecast of 3.6%.

It said core inflation, which excludes changes in the prices of food and energy, also edged higher to 1.9% in June (1.8% in May), lifted by higher prices of clothing and footwear as well as restaurant and hotels. In the first half of 2011 (1H11), inflation increased 3.0%.

In its analysis, it said food prices inched up to 4.7% (4.5% in May), driven largely by costlier chicken, fish and vegetables. The average 7.12% electricity tariff hike in Jun had a manageable knock-on impact on overall inflation as the 'housing, water, electricity, gas and other fuels' category rose 1.9% on-year and 0.1% on-month in June.

'This was because of the tariffs for 'lifeline band' consumers consuming up to 200kWh and the next 100kWh are retained,' it added.

As for transport prices, they eased to 5.8% in June (6.0% in May), due to the 10 sen per litre cut in petrol RON97 to RM2.80/litre on June 16.

CIMB Economics Research said inflation had probably peaked in June. It expected inflation to ease in 2H11.

It said this was because the food inflation and transport price index, which accounted for 2.1% of the increase in the headline inflation in 1H11, had come close to returning to its historical month over month trend growth rate.

The second factor was the base effect -- inflation was much lower (average 1.5% on-year) in 1H10 than in 2H10 (average 1.9% on-year).

As such, the combination of slower on-month price growth and a higher year ago base would result in a slight drop in inflation to 3.2-3.4% on-year in 2H11.

'We maintain our estimate of CPI growth of 3.2% for this year,' it said.

#Flash* CI Holdings to record RM677.1m gain from Permanis sale to Asahi

KUALA LUMPUR: CI Holdings Bhd is set to record gains of RM677.10 million from the sale of its bottling unit, Permanis Sdn Bhd to Asahi Group Holdings Ltd for RM820.0 million.

It said on Thursday, July 21, it had entered into a conditional share sale agreement with Asahi to sell its 100% stake in Permanis

'CI Holdings' original cost of investment in Permanis amounts to RM72.0 million, which was incurred on'' April 1, 2004,' it said.

The CI Holdings board believed the proposed disposal was timely and provided the opportunity for it to unlock the value of its investment in Permanis at an attractive valuation.

'As at the date of this announcement, the board is still assessing and evaluating plans for the optimal utilisation of the cash proceeds from the proposed disposal which may include, but not limited to, the acquisition of viable businesses/assets and/or a distribution to shareholders of the company. It is intended that any utilisation proposed will be with the objective of maximising shareholder value,' it said.

Asian stocks retreat on China manufacturing slowdown

KUALA LUMPUR: ''Asian stocks mostly retreated on Thursday, July 21 after a China manufacturing gauge reflected contraction for the first time in a year.

The HSBC flash PMI, the earliest available indicator of industrial activity in China, the world's No 2 oil consumer, fell to 48.9 in July, its lowest since March 2009, as monetary policy tightening and slack global demand weighed on the economy.

The index was last below 50 in July 2010. The 50-point level in the PMI demarcates expansion from contraction, with a reading above 50 indicating growth.

Investor sentiment also remains jittery as questions remain about Europe, including whether the second bailout of Greece will address contagion in other fiscally weak countries such as Portugal and Ireland or even Spain and Italy, whose bond markets have been savaged in July.

The FBM KLCI was up 0.18 point to 1,562.77 at the mid-day break. But market breadth was relatively negative with losers edging gainers by 326 to 256, while 299 counters traded unchanged. Volume was 698.89 million shares.

The ringgit strengthened 0.16% to 2.9957 versus the US dollar; crude palm oil futures for the third month delivery fell RM5 per tonne to RM3,148, crude oil slipped 11 cents per barrel to US$98.29 while gold rose US$1.70 an ounce to US$1,602.20.

At the regional markets, the Shanghai Composite Index fell 0.62% to 2,776.93, South Korea's Kospi lost 0.88% to 2,135.88, Hong Kong's Hang Seng Index declined 0.23% to 21,953.36, Japan's Nikkei 225 was down 0.15% to 9,991.31 and Taiwan Taiex shed 0.09% to 8,698.33.

Meanwhile, Singapore's Straits Times Index edged up 0.04% 3,127.73.

On Bursa Malaysia, Bumi Armada made a strong Main Market debut and was the most actively traded counter. The stock jumped RM1.01 to RM4.04 with 233.3 million shares done.

BAT was up 26 sen to RM46.20, Nestle 22 sen to RM47.52, RHB Capital 15 sen to RM9.15, HLFG 14 sen to RM13.48, Bursa, Boustead and DiGi added 12 sen each to RM7.85, RM5.91 and RM29.96 respectively, while WCT and Cypark gained 11 sen each to RM3.10 and RM1.91.

Among the decliners, Sindora fell 24 sen to RM2.66, MSM 13 sen to RM5.45, UMW and GAB fell 10 sen each to RM7.34 and RM10.40, Tenaga eight sen to RM6.51 while JT International and Tan Chong fell seven sen each to RM7.11 and RM4.81.

The actives included Ingenuity Solutions, Flonic, Hubline, CIMB and Systech.

''

AirAsia makes foray into Japan in low-cost airline JV

KUALA LUMPUR: AIRASIA BHD [] plans to replicate its successful model in Japan with a proposed joint venture with All Nippon Airways Co., Ltd (ANA) of Japan.

It said on Thursday, July 21 that subject to obtaining the relevant regulatory approvals, the JV was expected to start operations in August 2012.

AirAsia said the JV would require an initial capitalisation of 1 billion yen while the authorised capital would be 5 billion yen. 'AirAsia will raise internal funding for its portion of the equity,' it said.

AirAsia said it would execute a shareholders agreement with ANA to forge a joint venture cooperation 'to establish a low cost airline in Japan based on the successful AirAsia business model'.

The company to be incorporated in Japan for the JV is named AirAsia Japan Co., Ltd.

AirAsia said the low cost carrier business model enables the airline to offer affordable fares to passengers. The business model keeps operating costs low by encouraging travelers to make Internet bookings where its lowest fares are offered.

'Overall operating efficiency further enhances the affordability of the LCC model. The presence of AirAsia Japan is to serve the highly lucrative travel market in Japan,' it said.

Both ANA and AirAsia firmly believe that AirAsia Japan will be a success as the Japanese market possesses the necessary ingredients for growth such as the population's strong propensity to travel, its high per capita income coupled with deep and significant internet penetration.

Cypark up after getting 21-year lease for Pajam site

KUALA LUMPUR: CypARK RESOURCES BHD [] shares advanced on Thursday, July 21 after it received a written approval from the Negeri Sembilan state government for Cypark to lease Pajam closed landfill site and develop the Integrated RE Park for the period of 21 years.

At 11am, Cypark rose 13 sen to RM1.93 with 739,400 shares traded.

Cypark said on Wednesday, July 20 that the approval was given together with other 2 sites in Negeri Sembilan.

'With the 3 sites, Cypark is poised to deliver its 50 MW within its 3 years RE project delivery plan with potential concession revenue of above RM60 million annually.

'The recently approved RE Act allows the renewable energy developer like Cypark to benefit from the fixed Feed In Tariff (FIT) for 21 years concession covered under Renewable Energy Power Purchase Agreement to be signed with Tenaga Nasional,' it said.

Cypark plans to develop RE with total generating capacity of 100 MW by 2015. If the project is implemented in full, the 100 MW green energy is expected to generate additional revenue of up to RM130 mill annually.

The green energy will include waste biomass, landfill gas and solar as feedstock to its proposed RE plants.

''

Tenaga down on weaker 3Q earnings outlook

KUALA LUMPUR: TENAGA NASIONAL BHD [] shares dipped on Thursday, July 21 on expectations that it was likely to report weaker 3QFY11 ended May 31 results tomorrow due to higher coal cost and plant maintenance.

At 11.15am, Tenaga fell nine sen to RM6.50 with 906,300 shares done.

The utility giant posted a net profit of RM1.11 billion in the previous corresponding quarter on the back of RM7.72 billion revenue. In 2QFY11 ended Feb 28, TNB recorded a net profit of RM630.3 million.

HwangDBS said while weaker 3Q earnings are expected this year, it looks forward to stronger earnings from 4Q onwards as TNB has received an average tariff hike of 7% effective June 1.

'We estimate there will be a net profit enhancement of RM600 million per year for TNB from the 7% tariff hike, despite the 28% increase in subsidised gas cost,' said the research house.

''

Batu Kawan slides more than RM1, trading error?

KUALA LUMPUR: Shares of BATU KAWAN BHD [] fell more than RM1 in early trade on Thursday, July 21 but in very thin trade.

At 9.59am, it was down RM1.06 to RM15.52 with 1,000 shares done.

The FBM KLCI was just up 0.45 of a point to 1,563.04. Turnover was 289.13 million shares valued at RM683.59 million. There were 162 gainers, 184 losers and 195 stocks unchanged.

At this point, it was not known if there could be a trading error. This was the first sell order at RM15.52.

FBM KLCI edges up at mid-morning, Bumi Armada in focus

KUALA LUMPUR: Bumi Armada Bhd, which made its much anticipated debut on the Main Market of Bursa Malaysia on Thursday, July 21, started its first trading day on an impressive note, and set the pace at the local bourse at mid-morning.

The FBM KLCI rose 0.55 point to 1,563.14 at 10am,

Gainers however trailed losers by 163 to 185, while 197 counters traded unchanged. Volume was 291.27 million shares valued at RM688.69 million.

Regional markets were tepid given the overnight dip at Wall Street, with the Nikkei 225 down 0.12% to 9,993.63, Hong Kong's Hang Seng Index down 0.20% to 21,958.61, the Shanghai Composite Index shed 0.28% to 2,786.28, Singapore's Straits Times Index down 0.37% to 3,115.06 and South Korea's Kospi lost 0.44% to 2,145.41.

BIMB Securities Research said as the debate on the US debt ceiling rages on, and with no agreement in sight, the equity markets were expected to remain volatile.

Though good corporate earnings may sustain Wall Street, the US' economic health remains as an overriding concern, it said in a note July 21.

'Domestically, we expect the local bourse to remain steadfast although we may see some selling today.

'The latest CPI figure of 3.5% may be a catalyst for another round of interest hike as many believe the 2H11 inflation to be higher. Short term, the FBMKLC's support is seen at the 1,560 level.

Meanwhile, Taiwan's Taiex edged up 0.08% to 8,713.37.

On Bursa Malaysia, Bumi Armada was both the top gainer and most actively traded stock. It jumped 81 sen to RM3.84 with 152.13 million shares done.

BAT rose 46 sen to RM46.40, Nestle 34 sen to RM47.64, PPB 14 sen to RM17.44, MISC 13 sen to RM13 sen to RM7.98, HLFG, MAHB and Cypark gained 12 sen each to RM13.46, RM6.62 and RM1.92 respectively, while Petronas Dagangan and Bursa were up 10 sen each to RM18.30 and RM7.83.

The actives at mid-morning included Ingenuity Solutions, Hubline, Flonic, Iris and Zelan.

Decliners included Batu Kawan, Sindora, Litrak, MSM, TH PLANTATION []s, Huat Lai and KFCH.

Nadayu slips after UDA deal axed

KUALA LUMPUR: Shares of Nadayu PROPERTIES [] Bhd slipped in late morning on Thursday, July 21 after UDA Holdings Bhd terminated the sale of a piece of land.

At 10.47am, Nadayu (formerly MUTIARA GOODYEAR DEVELOPMENT []) fell three sen to RM1.28. But volume was thin with 1,000 shares transacted.

On Wednesday, Nadayu said UDA was terminating the proposed sale of a piece of land in Jalan Sultan Ismail in the heart of Kuala Lumpur for RM215.50 million to Nadayu.

UDA said it was 'unable to obtain the approval of UDA's shareholder' for the disposal of the 3.56 acres and intended to terminate the sale and purchase agreement with Nadayu.

#Flash* KWAP net investment income dn 14.9% to RM4.85b in FY10

KUALA LUMPUR: Kumpulan Wang Persaraan's (Diperbadankan) (KWAP)'s net investment income for FY Dec 31, 2010 declined 14.9% to RM4.85 billion from RM5.7 billion a year'' ago due to lower writeback of allowances for dimunition in value.

It said on Thursday, July 21 its gross investment income increased sharply by 42.6%'' to RM4.62 billion from RM3.24 billion, while total fund size grew 14.67% to RM70.52 billion from RM61.5 billion.

KWAP achieved gross return of investment (ROI) of 7.07% compared to 5.62% a year earlier. It recorded a total weighted rate of return of 8.88% compared to 11.64%.

Equity investment contributed RM2.43 billion or 53% to the total investment income.

Fixed income assets contributed RM2.13 billion, while the remaining is reaped from alternative investments.

KWAP said the healthy boost in asset was due to vigorous domestic economy recovery and consistent contribution from the Federal Government, statutory bodies, local authorities and agencies.

Smooth sailing for Bumi Armada

KUALA LUMPUR: Oil and gas services provider Bumi Armada made its Bursa Malaysia debut on Thursday, July 21 with a splash when it opened 63 sen higher at RM3.66 with 19.1 million shares done.

The stock was both the most actively traded stock and top gainer at the opening of the market.

ECM Libra Research initiated coverage on Bumi Armada with a BUY call and a TP of RM3.91, based on a 25x PE pegging 2H11-1H12 EPS of 15.6sen.

'We view that Bumi Armada can easily achieve a 2010-2013 CAGR of 22% given their strong RM5.8 billion orderbook and also active tendering activity in the FPSO market.

'Major contracts are all for the long term (5-8 years) hence providing the group with good earnings visibility,' it said in a note on July 21.

DiGi up on interim dividend

KUALA LUMPUR: DIGI.COM BHD [] shares advanced on Thursday, July 21 after the company declared a tax exempt interim dividend of 30 sen per share.

At 9.25am, DiGi rose six sen to RM29.90.

DiGi said its revenue for the second quarter ended June 30, 2011 rose rose 9.7% to RM1.46 billion from RM1.33 billion, earnings per share were 30.4 sen compared with 35.8 sen.

It said the RM1.5 billion revenue was well above the RM1.3 billion reported a year ago.

DiGi's earnings, however, fell 15.1% to RM236.31 million from RM278.41 million a year ago on accelerated depreciation of RM323.76 million and also due to premium relating to the up-coming early redemption of its debt notes.

KLCCP rises in early trade

KUALA LUMPUR: KLCC PROPERTY HOLDINGS BHD [] shares rose in early trade on Thursday, July 21 after the company said it expects its revenue to be boosted by RM100 million from the Lot C development project.

At 9.40am, the stock added eight sen to RM3.41 with 14,600 shares traded.

It said on Wednesday, July 20 the revenue boost from the RM1 billion Lot C development would be in the financial year 2012.

Earlier news reports said the Lot C is a new extension to Suria KLCC with office blocks and a retail podium.

Its CEO Hashim Wahir was quoted saying in July 2010 the Lot C was on schedule for completion by Oct 2011.

CIMB Research maintains Outperform on Mah Sing

KUALA LUMPUR: CIMB Equities Research is positive on Mah Sing Group and it is maintaining its OUTPERFORM rating, earnings forecasts and target price of RM3.30, based on 14.5'' times P/E.

It said on Thursday, July 21 that it had organised a conference call with Mah Sing for over 20 local and foreign investors to give investors the opportunity to assess whether there are valid reasons to be more cautious on property stocks and to gauge the outlook for the sector.

'The key positive takeaway from the conference call was Mah Sing's impression from its correspondence with the authorities that the latter appears to be very careful in implementing any policy that could hurt the property sector.

'This is because of the knock-on effects it would have on 140 sub-sectors, the impact it could have on Iskandar Malaysia and the fact that there are no conclusive signs of a property bubble in Malaysia,' it said.

CIMB Research said it continued to view last week's selldown as excessive and advise investors to accumulate positions. Mah Sing remains an OUTPERFORM and its top pick in the property sector, it said.

'We make no changes to our earnings forecasts and target price of RM3.30, which is based on an unchanged target market P/E of 14.5x. Potential re-rating catalysts include 1) yesterday's reassuring conference call, 2) the very good response to the recent weekend maiden public launch of Icon City, 3) continued strong sales by the group and 4) landbanking newsflow which should pick up pace in 2H,' it said.

CIMB Research keeps DiGi as Outperform, target price RM34

KUALA LUMPUR: CIMB Equities Research said DIGI.COM BHD []'s 2Q11 reported core net profit was 3% above its forecast and 2% above consensus.

It said on Thursday, July 21 accelerated depreciation is likely to be a drag on 2H net profit.

'Revenues and EBITDA margins were robust and we believe DiGi outpaced its rivals. Although 2Q DPS was 30% lower on-quarter at 30 sen (100% net profit payout), DiGi reiterated that FY11 DPS will be maintained at the FY10 level,' it said.

CIMB Research also kept its growth guidance. It maintained its'' forecasts, DCF-based target price of RM34 and OUTPERFORM call. The likely re-rating catalysts are the pass through of the sales tax to prepaid users and continued strong growth.

CIMB Research has technical buy on KPS

KUALA LUMPUR: CIMB Equities Research has a technical Buy on KUMPULAN PERANGSANG SELANGOR [] (KPS) at RM1.06 at which it is trading at a price-to-book value of 0.5 times.

CIMB Research said on Thursday, July 21 the downtrend from the RM1.54 high could be coming to an end soon.

'Prices have been forming a bulish wedge pattern, which suggests that the next big move is likely to up,' it said.

The research house said the MACD was still negative while its RSI is also trending lower. Nevertheless, both indicators have a good chance of forming a triple bullish divergence signal.

'Coupled with the bullish wedge pattern, we think that the stock is a good buy on weakness. Wait for a fall into the RM1.00-1.05 levels to buy and place a risk management stop loss point below RM0.97. If prices can hold above the RM1.00 mark, then it is likely to rebound towards RM1.16 and RM1.27 next,' it said.

CIMB Research has technical buy on Press Metal

KUALA LUMPUR: CIMB Equities Research has a technical Buy on Press Metal at RM2.28, at which it is trading at a price-to-book value of 1.2 times.

It said on Thursday, July 21 Press Metal could be consolidating within a triangle pattern with the current downleg as the terminal move to conclude this consolidation pattern.

'If this is the case, the prices could soon embark on a strong rally. Indicators are showing signs of weakness, which is in line with the final leg lower.

'We think that the stock is likely well supported above its 200-day SMA at RM2.25,' it said.

CIMB Research said traders could opt to buy on weakness with a stop placed below RM2.16. A breakout above RM2.43 would mean that the rally is indeed taking place, targeting RM2.65 and RM2.80 next.

Bumi Armada set for strong start, bids above RM3.50

KUALA LUMPUR: The much-awaited listing of Bumi Armada Bhd is expected to see a strong start on Thursday, July 21, with pre-market opening bids above RM3.50.

Stock market data showed there were bids coming in as high at RM3.52. This is a hefty premium of 49 sen above its institutional price of RM3.03.

The final retail price was fixed at RM3.03 per share, which was 12 sen below the retail offering of RM3.15.

The listing exercise would enable Bumi Armada to raise RM2.66 billion which is the country's biggest IPO and the second largest in Southeast Asia so far this year.

At RM3.03, it is valued at more than 20 times price-to-earnings based on its FY2010 earnings per share of 11.9 sen.

The target price for the company ranges from RM3.62 to RM4.05, based on several research houses.

Wall Street closes flat as debt worries offset earns

NEW YORK: Stocks closed near unchanged on Wednesday, July 20 a day after Wall Street's best rally since March, as the oncoming debt ceiling deadline overshadowed strong earnings from Apple Inc.

Apple (AAPL.O) hit another all-time high one day after the maker of the iPhone and iPad reported quarterly revenues that far exceeded expectations.

The stock jumped 2.7 percent to $386.90 but, overall, investors sat on their hands amid the unresolved debt ceiling crisis in Washington. The White House and Congress were negotiating a deal to raise the U.S. debt ceiling before a looming default on August 2.

"The big elephant in the room is the debate about the debt ceiling, and as the clock ticks we all know that we are going to have a deal. It's just how soon," said Mohannad Aama, managing director at Beam Capital Management LLC in New York.

"Until then, the market is going to be affected by the daily news that is coming out of earnings season."

The Dow Jones industrial average .DJI lost 15.51 points, or 0.12 percent, at 12,571.91. The Standard & Poor's 500 Index .SPX shed 0.89 points, or 0.07 percent, at 1,325.84. The Nasdaq Composite Index .IXIC fell 12.29 points, or 0.43 percent, at 2,814.23.

TECHNOLOGY [] shares were lower, with Yahoo Inc (YHOO.O) tumbling 7.6 percent to $13.48 after reporting lackluster results, and Microsoft Corp (MSFT.O) dropping 1.7 percent to $27.06 ahead of its quarterly report on Thursday.

Financials were the best performing sector, boosted by a 4.4 percent rise in US Bancorp (USB.N) to $26.14. The Midwestern regional bank said second-quarter net income rose by 57 percent. The KBW Bank index .BKX climbed 1.5 percent.

In extended trade, chipmaker Intel Corp (INTC.O) shed 0.7 percent to $22.84, while American Express Co (AXP.N) added 0.3 percent to $52.26. Intel issued a current-quarter revenue forecast that trumped estimates, while American Express' profits topped expectations.

Sovereign debt problems in Europe and the protracted political battle over increasing the U.S. debt ceiling have weighed on stocks. On Tuesday, there was progress toward a $3.75 billion U.S. budget deal, prompting a late rally, but a resolution remained elusive.

European Union leaders must find a convincing solution to Greece's debt crisis at a Thursday summit or the global economy will pay the price, the head of the European Commission said in an unusually somber warning.

On the U.S. economic front, existing home sales fell unexpectedly to a seven-month low in June as cancellations of pending contracts surged, according to the National Association of Realtors.

Volume was light with about 6.38 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 7.48 billion.

Advancing stocks outnumbered decliners on the NYSE by 1,658 to 1,314, while losers beat winners 1,532 to 1,023 on the Nasdaq. - Reuters

Intel pulls back PC market outlook, shares slide

SAN FRANCISCO: Intel Corp trimmed its forecast for 2011 personal computer unit sales, warning of softness in mature markets and sending its shares more than 1 percent lower on Wednesday, July 20.

The top maker of microprocessors for PCs now expects 8 to 10 percent growth in unit shipments of computers this year, down from the low double-digits it had stuck to earlier in defiance of fears that market momentum was decelerating.

Intel's processors are used in 80 percent of the world's computers, but mobile devices from Apple Inc's iPad to Google Inc Android smartphones are eating into PC sales and Intel is struggling to gain a foothold in the fast-expanding mobile market.

Its Atom division, which caters to a mobile computing market, saw revenue slide 15 percent to $352 million.

"The mature market consumer segment is still soft, but the emerging market consumer segment is healthy and growing," CEO Paul Otellini told analysts on a conference call.

Doubts about high U.S. unemployment, the risk of a European financial crisis, climbing inventories and sluggish PC sales had clouded the second-half outlook for Intel and other chip makers like Advanced Micro Devices.

The tepid forecast and lingering concerns about the second half overshadowed a solid quarter for the chip giant. Its quarterly results and revenue forecast both trumped Wall Street's expectations.

Gains in the second quarter were driven by the PC group, Intel's largest segment, and the data center group, which has been expanding quickly in part because of cloud computing.

INSISTENCE

Intel's upbeat results followed positive quarterly earnings from Apple and International Business Machines Corp earlier this week.

The company foresaw current-quarter revenue of about $14 billion, give or take $500 million, versus the $13.5 billion analysts expect on average.

"When we look across the broader worldwide supply chain for PCs and servers, what we see are inventory levels that are lean out there. People are managing things lean, they're prudent," Intel Chief Financial Officer Stacy Smith told Reuters.

Investors eyeing slow economies and red-hot sales of Apple's iPad 2 in recent months have insisted Intel's outlook for PC growth is overly optimistic. Analysts had warned that Intel at some point may be forced to trim its estimate.

"The primary question investors are going to ask now is where Intel is seeing the fundamental strength in the PC market," said Evercore Partners analyst Patrick Wang. "It's hard to have any confidence in how they are going to deliver 7 percent growth sequentially."

Analysts on average had expected Intel's revenue to rise to $13.5 billion in the current quarter, according to Thomson Reuters I/B/E/S, less than normal growth for this time of year.

Revenue in the June quarter was $13.1 billion, up 22 percent over the year-ago period and above the $12.8 billion expected by analysts, according to Thomson Reuters I/B/E/S.

Non-GAAP net income in the quarter was $3.2 billion, up 10 percent. Non-GAAP earnings per share were 59 cents, beating expectations of 51 cents.

Shares of Intel dipped 1.52 percent to $22.64 in extended trade after closing down 0.3 percent.

ASIA-Shares to drift as debt resolutions awaited

WELLINGTON: Asian stocks are set for a mixed start on Thursday, as global stocks pushed higher on strong earnings but uncertainty over sovereign debt issues in the United States and Europe will likely keep investors wary.

Hopes that a deal would be struck to rescue Greece got a lift from news that French and German officials had agreed a position on a financial package, although details were not released.

The main Wall Street indices defied a better day on world markets to drift lower, losing between 0.1 percent and 0.4 percent as the stalemate over the U.S. debt ceiling overshadowed Apple hitting a record high after its strong results.

Other TECHNOLOGY [] shares were lacklustre, however, with Yahoo Inc tumbling 7.6 percent after reporting poor results, and Microsoft Corp dipping ahead of its earnings later on Thursday.

However, banks had a solid day on the good report by Bancorp, sending the KBW Bank index 1.5 percent higher.

Asian stocks listed on Wall Street gained 0.87 percent while world stocks, as measured by the MSCI world equity index , rose 0.59 percent.

British shares rose 1.1 percent while European ''shares rose 1.3 percent, on strong results and hopes a summit of euro zone leaders later on Thursday would strike a deal to rescue Greece.

The euro rose against the U.S. dollar as dealers took an optimistic view of the summit, while the safe-haven yen weakened slightly.

Japanese markets are set to build on Wednesday's strong gains, with Nikkei futures traded in Chicago 55 points above the last closing level in Osaka.

Australian stocks are set to struggle as metal prices weakened, with share price index futures down 7 points to 4,518, a 31.7 point discount to the close of the underlying S&P/ASX 200 index. ' Reuters

''

Hiap Teck subsidiary in RM650m mill project

KUALA LUMPUR: HIAP TECK VENTURE BHD []'s 55% owned Eastern Steel Sdn Bhd is teaming up with China Shougang International Trade and Engineering Corp for an RM650 million integrated steel mill in Teluk Kalung, Kemaman, Terengganu.

Hiap Teck said on Thursday, July 21 it had entered into an engineering and procurement contract (EPC) and a CONSTRUCTION [] contract with China Shougang.

Based on the statement issued to Bursa Malaysia, the EPC contract price was RM417.83 million while the construction contract price was RM232 million.

Under the contracts, China Shougang would carry out the design engineering and procurement, manufacturing and transportation of equipment, machinery and facilities from China to the site.

Eastern Steel would provide the technical documents and information required by China Shougang.

Under the construction contract, China Shougang would carry out the construction of the plant which includes the civil works, facilities and machinery. Eastern Steel would supply the technical documents and information.

Hiap Teck said the plant was expected to be completed by 2013. The plant would be funded by Eastern Steel shareholders wherein Hiap Teck would finance its 55% portion via a fund raising exercise involving a proposed rights issue and issuance of convertible bonds and its own funds.