#Stocks to watch:* Magna Prima, Wing Tai, SapuraCrest, Kencana

KUALA LUMPUR: Key regional Asian markets are expected to remain jittery in the week ahead, starting Monday, Aug 6, in the absence of any clear indicators about the US economy and Europe's deepening crisis.

Overnight on Wall Street, stocks closed out their worst week in more than two years on Friday, Aug 5''in a volatile session. For the week, the Dow fell 5.8%, the S&P 500 was down 7.2% and the Nasdaq was off 8.1%.

At Bursa Malaysia, there could be some bargain hunting for battered stocks which still had strong underlying fundamentals. But the buying could be restrained.

On Friday, the FBM KLCI closed down 1.45% or 22.46 points to 1,524.43 while week-on-week, the index lost 24.38 points.

A total of RM26.89 billion was wiped out from the Bursa Malaysia market capitalisation where 21 stocks hit fresh 52-week lows. Market capitalisattion was reduced to RM1.312 trillion last Friday.

For among the 30 components of the FBM KLCI, six of them hit a fresh 52-week low. They were IOI Corp Bhd, YTL Power International and YTL Corp Bhd, MISC BHD [], TENAGA NASIONAL BHD [] RM5.94 and PPB GROUP BHD [].There could be mild bargain hunting for some of these stocks which possess strong fundamentals.

Positive corporate news which could help lift sentiment are MAGNA PRIMA BHD [], Wing Tai Malaysia Bhd, SAPURACREST PETROLEUM BHD [], KENCANA PETROLEUM BHD [] and SCOMI ENGINEERING BHD [].

Magna Prima is making its foray into Australia to undertake a mixed residential and commercial project in Melbourne with an indicative gross development cost of A$148 million (RM482.18 million). The company expects to record a profit of A$62 million (RM200.32 million) from the project.

Wing Tai Malaysia expects to record a gain of RM27.63 million from the sale of two pieces of land in Seberang Perai, Penang to Aeon Co. Bhd for RM50.12 million cash consideration.

It said the two pieces of land, about 7.29 ha and 4,625 sq metres, were currently vacant and Aeon planned to build a shopping complex with car park facilities

The Edge weekly reports the River of Life project has seen two significant developments over the last two weeks, leading to renewed interest in it as well as Datuk Lim Kang Hoo's EKOVEST BHD [].

It also reported that Flonic Hi-Tec is banking on critical cleaning business.'' The company will now provide its customers with critical cleaning systems capable of filtering particles that are up to 10 microns in size, compared with 100 microns in precision cleaning systems.

The boards of SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd have agreed to their merger to become one of the world's largest oil and gas service providers in terms of market capitalisation and assets.

They had accepted Integral Key Sdn Bhd's (IKSB) RM11.85-billion offer to acquire all their assets and liabilities in a share swap. The offer shall remain open for acceptance until 5pm on Aug 15.

Fraser & Neave's net profit for the third quarter ended June 30, 2011 rose 11.2% to RM77.85 million from RM70 million a year earlier due to strong contribution from its property and soft drinks divisions.

Its revenue for the quarter dipped to RM882.47 million from RM892.77 million due mainly to lower volume of dairy products sold in Malaysia.

It said under its soft drinks division, sales activities for Coca-Cola products will cease effective Oct 1, 2011 and, as such, the division's revenue and profit thereafter will see an inevitable immediate reduction, it said.

Coca-Cola business makes up about 30% of the revenue of the soft drinks division for the current financial year, it said.

United States loses prized AAA credit rating from S&P

NEW YORK: The United States lost its top-tier AAA credit rating from Standard & Poor's on Friday, Aug 5 in an unprecedented blow to the world's largest economy in the wake of a political battle that took the country to the brink of default.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs for the American government, companies and consumers.

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.

The outlook on the new U.S. credit rating is "negative," S&P said in a statement, indicating another downgrade was possible in the next 12 to 18 months.

The move reflects the deterioration in the global economic standing of the United States, which has had a AAA credit rating from S&P since 1941, and it could have implications for the U.S. dollar's reserve currency status.

"The global system must now adjust to the many implications and uncertainties of the once-unthinkable loss of America's AAA," said Mohamed El-Erian, co-chief investment officer at Pacific Investment Management Co which oversees $1.2 trillion in assets.

The decision follows a fierce political battle in Congress over cutting spending and raising taxes to reduce the government's debt burden and allow its statutory borrowing limit to be raised.

On August 2, President Barack Obama signed legislation designed to reduce the fiscal deficit by $2.1 trillion over 10 years. But that was well short of the $4 trillion in savings S&P had called for as a good "down payment" on fixing America's finances.

The political gridlock in Washington over addressing the long-term fiscal problems facing the United States came against the backdrop of slowing U.S. economic growth and led to the worst week in the U.S. stock market in two years.

The S&P 500 stock index fell 10.8 percent in the past 10 trading days on concerns that the U.S. economy may be heading into another recession and because the European debt crisis has worsened.

Treasury bonds, once indisputably seen as the safest security in the world, are now rated lower than bonds issued by countries such as Britain, Germany, France or Canada.

U.S. TREASURY QUESTIONS CALCULATION

Obama was briefed earlier in the day regarding S&P's intentions, but discussions only took place with Treasury officials and did not include the White House, a source familiar with the discussions told Reuters.

Late on Friday, the Treasury said the rating agency's debt calculations were wrong by some $2 trillion.

S&P confirmed it changed its economic assumptions after discussion with the Treasury Department but said it did not affect its decision to downgrade.

"We take our responsibilities very seriously, and if at the end of our analysis the committee concludes that a rating isn't where we believe it should be, it's our duty to make that call," David Beers, head of sovereign ratings at S&P, told Reuters.

The theme running throughout S&P's analysis is the breakdown in the ability of the Democratic and Republican parties to govern effectively.

The agency said that policymaking and political institutions had weakened in the past few months "to a degree more than we envisioned." This has major implications for the nation's budget and debt problems.

For example, S&P now assumes that tax cuts brought in under President George W. Bush in 2001 and 2003 would not, as planned, expire by 2012 because of staunch Republican opposition to any measure that would raise revenues.

The compromise reached by Republicans and Democrats this week calls for creation of a bipartisan congressional committee to find $1.5 trillion of deficit cuts by late November, beyond the $917 billion already identified.

'DAUNTING' IMPLICATIONS

While the downgrade is a blow to U.S. prestige, it was largely expected and may not have a big impact on trading of U.S. Treasuries and other assets when markets reopen in Asia on Monday.

In fact, Treasuries have rallied this week, driving the yield on the benchmark 10-year note to 2.34 percent, its lowest level in about 10 months. This reflects a belief among investors that U.S. government debt is still a safe bet at a time when prices of stocks and commodities are falling on concern about slowing global economic growth.

"To some extent, I would expect when Tokyo opens on Sunday, that we will see an initial knee-jerk sell-off (in Treasuries) followed by a rally," said Ian Lyngen, senior government bond strategist at CRT Capital Group in Stamford, Connecticut.

But the downgrade has implications for the country's financial sector, ranging from insurance companies to government-related firms such as housing financiers Fannie Mae and Freddie Mac.

"At least initially, the impact on the market will be negative because there will some forced liquidation of U.S. assets," said Boris Schlossberg, GFT director of currency research.

The downgrade could add up to 0.7 of a percentage point to Treasuries' yields over time, increasing funding costs for public debt by some $100 billion, according to SIFMA, a U.S. securities industry trade group.

The Federal Reserve and other bank regulators moved on Friday to reassure global markets that the downgrade would not mean that additional capital would be needed by banks and other institutions holding Treasury securities.

The Fed also said the cut would not impact the operation of its emergency lending window for banks, nor its buying and selling of Treasury securities to conduct monetary policy.

The impact of S&P's move was tempered by Moody's Investors Service's decision earlier this week confirming, for now, the U.S. Aaa rating. Fitch Ratings said it was still reviewing its AAA rating and would issue its opinion by the end of the month.

S&P's move is also likely to concern foreign creditors especially China, which holds more than $1 trillion of U.S. debt. Beijing has repeatedly urged Washington to protect its U.S. dollar investments by addressing its budget problems.

"China will be forced to consider other investments for its reserves. U.S. Treasuries aren't as safe anymore," said Li Jie, a director at the reserves research institute at the Central University of Finance and Economics.

One currency strategist, however, did not think there would be wholesale selling by foreigners.

"One of the reasons we don't really think foreign investors will start selling U.S. Treasuries aggressively is because there are still few alternatives to the Treasury market in terms of depth and liquidity," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.

He said there was likely to be weakness in the U.S. dollar but a sharp sell-off was unlikely.

S&P had already placed the U.S. credit rating on review for a possible downgrade on July 14 on concerns that Congress was not adequately addressing the fiscal deficit of about $1.4 trillion this year, about 9.0 percent of gross domestic product, one of the highest since World War II.

But Obama administration officials grew increasingly frustrated with the rating agency during the debt limit debate and accused S&P of moving the goal posts in its downgrade warnings, sources familiar with talks between the administration and the agency have said.

The downgrade was immediately pounced on by candidates vying for the Republican presidential nomination. Mitt Romney said the move was "a deeply troubling indicator of our country's decline under President Obama," while Jon Huntsman said it was due to spreading of a "cancerous debt afflicting our nation."

The downgrade, 15 months before the next presidential election, and debt will be top campaign issues. - Reuters

United States loses AAA credit rating from S&P

KUALA LUMPUR: Standard & Poor's has lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.

The rating agency has also removed both the short- and long-term ratings from CreditWatch negative.

In a statement Aug 5, S&P said the downgrade reflected its opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what would be necessary to stabilise the government's medium-term debt dynamics.

'More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

'Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilises the government's debt dynamics any time soon.

The outlook on the long-term rating is negative, said S&P.

S&P said it could lower the long-term rating to 'AA' within the next two years if it saw that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than it currently assumes in its base case.

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Wall Street closes worst week since '08 with wild day

NEW YORK: Stocks closed out their worst week in more than two years on Friday, Aug 5'' in a volatile session that saw the major indexes whip back and forth before the S&P 500 ended down less than a point.

More than 15.9 billion shares -- or more than twice the daily average volume -- traded in the busiest day in more than a year as investors plowed into cash-rich mega-cap stocks that had been beaten down in recent days as the market dropped.

The market's swings on Friday were fast and furious, with the Dow Jones industrial average covering 416.41 points from its session high to its intraday low.

The intense selling this week reflects frustration with sluggish economic growth and politicians' inability to address pressing concerns over high public debt in Europe and the United States.

Options volume hit a record, a sign investors were protecting their portfolios from further declines. The CBOE Volatility Index or VIX, Wall Street's so-called fear gauge, rose as high as 39.25 earlier, its highest level since May 2010, but ended at 32, up 1.1 percent.

"Still, the volatility index is up almost 90 percent during the past two weeks, as fears about the European debt crisis, the global economy and earnings have taken a heavy toll on investor sentiment," said Joe Cusick, senior market analyst at online brokerage optionsXpress in Chicago.

The S&P 500 is now down 12 percent from its April 29 closing high.

Markets have been looking to European officials for guidance as to how the region's debt crisis will be managed. Part of the loss of confidence stemmed from what investors called an inadequate response to the growing threat to large euro-zone economies Spain and Italy and banks' exposure to their troubled debt.

In the United States, non-farm payrolls data showed a gain of 117,000 jobs in July compared with a forecast for an increase of 85,000, while the country's unemployment rate dipped to 9.1 percent last month from 9.2 percent in June, the Labor Department reported.

The Dow Jones industrial average rose 60.93 points, or 0.54 percent, to end at 11,444.61. But the Standard & Poor's 500 Index edged down just 0.69 of a point, or 0.06 percent, to finish at 1,199.38. The Nasdaq Composite Index slipped 23.98 points, or 0.94 percent, to close at 2,532.41.

On the New York Stock Exchange, decliners beat advancers by a ratio of about 3 to 1, while on the Nasdaq, more than two stocks fell for every one that rose.

For the week, the Dow fell 5.8 percent, the S&P 500 was down 7.2 percent and the Nasdaq was off 8.1 percent.

Among individual stocks, Bank of America and Citigroup continued their declines, with both stocks hitting a new 52-week low.

Bank of America shares fell 7.5 percent to $8.17, off a 52-week low at $8.03, and Citigroup dropped 3.9 percent to $33.44, off a 52-week low at $31.81.

Italian Prime Minister Silvio Berlusconi said his country will introduce a constitutional principle of a balanced budget in an effort to reduce debt levels.

Helping the market erase hefty losses in afternoon trade, sources said the European Central Bank was ready to buy Italian and Spanish bonds if Berlusconi commits to bringing forward specific reforms.

Exchange-traded funds tracking Italian and Spanish stocks rose. The iShares MSCI Italy Index jumped 5.5 percent, while the iShares MSCI Spanish Index advanced 6.5 percent.

But a possible S&P downgrade of U.S. debt after the market close pressured stocks throughout the day.

The recent steep sell-off has put all three major indexes in negative territory for the year.

On Friday, Credit Suisse reduced its year-end view of the S&P 500 to 1,350 from 1,450, citing weaker-than-expected growth. - Reuters

Sell-off wipes $2.5 trillion off world stocks this week

LONDON: More than $2.5 trillion have been wiped off the value of world stocks this week, ended Friday, Aug 5 on mounting concerns the global economy is heading toward another recession and Italy and Spain are being engulfed by the euro zone sovereign debt crisis.

The sum wiped off the MSCI All-Country World Index is almost equivalent to the size of the entire French economy.

The MSCI All-Country World Index is down 8.6 percent this week, on track for its biggest weekly percentage fall since November 2008.

The U.S. S&P 500 index .SPX alone has lost more than $840 billion from its market capitalization this week, while European equities measured by the MSCI Europe .MSCIEU have lost more than $817 billion.

"These are markets to be careful (in), not to try and be a hero," Royal Bank of Scotland Chief Executive Stephen Hestor told reporters after the bank announced its first-half results.

Credit Suisse on Friday cut its year-end target for the S&P 500 to 1,350 points from a previous forecast of 1,450. The new estimate was still 11 percent above Thursday's close of 1,200.07.

The Swiss bank also cut its forecast for U.S. companies' 2011 average earnings per share (EPS) to 12 percent growth from 14 percent and for firms in the euro zone to EPS growth of 7 percent from a previous estimate of 12 percent.

However, not all were bearish.

Ralf Groenemeyer of Silvia Quandt Research said authorities may act soon to arrest the slide.

"We expect governments and central banks to act over the weekend ... It should not be ruled out that some kind of 'quantitative easing' measures emerge," Groenemeyer said. - Reuters

U.S. attorney investigating Citigroup mortgage arm

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Wing Tai to record RM27.6m gain from land sale to Aeon

KUALA LUMPUR: Wing Tai Malaysia Bhd expects to record a gain of RM27.63 million from the sale of two pieces of land in Seberang Perai, Penang to Aeon Co. Bhd for RM50.12 million cash consideration.

It said on Friday, Aug 5 the two pieces of land, about 7.29 ha and 4,625 sq metres, were currently vacant and Aeon planned to build a shopping complex with car park facilities.

Under the agreement, Wing Tai's unit DNP Land would construct at its own cost certain infrastructure outside the site including road widening, installation of traffic lights and utility tap-off points.

'The proposed disposal represents an opportunity for WingTM group to dispose the sale property and to realise the cash from the disposal. The net proceeds from the proposed disposal shall be redeployed to WingTM Group's other property development activities and/ or general working capital purposes,' it said.

Wing Tai said the proposed shopping center would enhance the prospect of the future phases of Taman Seri Impian project to be developed by DNP Land.

The net book value of the two pieces of land is RM12.483 million were acquired by DNP Land on Aug 26, 2005 at RM12.483 million.

DNP Land estimated RM10.01 million to be incurred for its compliance with the conditions including soil tests and clearance. WingTM Group expected to derive RM27.633 million before tax from the disposal.

SapuraCrest, Kencana boards agree to RM11.85b merger

KUALA LUMPUR: The boards of SAPURACREST PETROLEUM BHD [] and KENCANA PETROLEUM BHD [] have agreed to their merger to become one of the world's largest oil and gas service providers in terms of market capitalisation and assets.

The companies said on Friday, Aug 5 that they accepted Integral Key Sdn Bhd's (IKSB) RM11.85-billion offer to acquire all their assets and liabilities in a share swap. The merger under IKSB, a special purpose vehicle, would position them stronger to bid for upstream jobs.

SapuraCrest said the board had resolved to accept IKSB's offer to acquire its business for a total consideration of RM5.87 billion subject to the terms and conditions of the letter of offer dated'' July 11 from IKSB.

'The board is not seeking other alternative bids to make an offer to acquire the SapuraCrest business,' it said.

Meanwhile, Kencana said the board had resolved to accept IKSB's offer to acquire its business for RM5.98 billion.

The offer shall remain open for acceptance until 5pm on Aug 15.

IKSB offered to acquire SapuraCrest for RM5.87 billion equivalent to RM4.60 per share of 20 sen each multiplied by 1.276 billion SapuraCrest shares.

The merger would be satisfied by the issuance of 2.498 billion new RM1 shares each in IKSB at an issue price of RM2 per new IKSB share and a cash payment of RM875.06 million. This translates into cash payment of approximately 68.5 sen and RM3.915 of IKSB shares per SapuraCrest share.

As for Kencana, IKSB was offering RM5.98 billion or RM3 per'' 10 sen share in Kencana multiplied by the enlarged paid-up of Kencana's'' 1.99 billion shares.

The merger consideration shall be satisfied by 2.505 billion new shares of RM1 each in IKSB at an issue price of RM2 per new IKSB share and a cash payment of RM968.689 million. This translated into cash payment of 48.6 sen and RM2.514 of IKSB shares per Kencana share.

Magna Prima plans RM478m Melbourne property devt

KUALA LUMPUR: MAGNA PRIMA BHD [] is making into foray into Australia to undertake a mixed residential and commercial project in Melbourne with an indicative gross development cost of A$148 million (RM482.18 million).

The company said on Friday, Aug 5 it expected to record a profit of A$62 million (RM200.32 million) from the project.

Magna Prima had on Friday signed a conditional contract of sale with Yucai Australia Pty Ltd to purchase 2,761 sq metres of land for A$26 million (RM84.01 million) on Beckett Street, Melbourne.

The land would be developed into a mixed residential and commercial project to be known as Dynasty Living.

The project would comprise a contemporary 26 level mixed development of 320 residential apartments contained within a main tower, complemented by seven retail/commercial tenancies.

The apartments and retail/commercial tenancies would have 130 single and 51 tandem car spaces providing for 181 apartments.

'The indicative gross development cost is A$148 million with an expected profit of A$62 million. CONSTRUCTION [] is expected to commence in the fourth quarter of 2011, and to be completed in 2013,' it said.

Magna Prima said the development cost would be its own funds and/or bank borrowings. The planning permit from the Minister of Planning was obtained on May 5, 2002 and amended on Oct 6, 2009.

'As part of the company's plan of putting a strong footing for growth, the proposed acquisition will be the company's first step in placing the group on the global map,' it said.

Magna Prima said the proposed acquisition was in line with its strategy of acquiring niche suitable development land with strong potential for prime and sizable new developments.

'The board is of the view that the proposed acquisition provides the group with a rare and valuable opportunity to venture into the robust, high-income and mature Melbourne property market,' it added.

Global markets routed

KUALA LUMPUR: Global markets were routed on Friday, Aug 5 as worries about another potential US recession and Europe's deepening debt crisis rattled investor confidence globally.

The fall was part prompted by the worst sell-off overnight on Wall Street since the global financial crisis in 2008, according to Reuters.

Investors were also bracing for US jobs data later in the day, a sensitive indicator at the best of times but a key gauge at the moment of the extent of the US economy's troubles, it said.

The FBM KLCI fell 1.45% or 22.46 points to 1,524.43 at 5pm, dragged by losses at banks and key blue chips. Week-on-week, the index lost 24.38 points.

At the regional markets, Taiwan's Taiex tumbled 5.58% to 7,853.13, Hong Kong's Hang Seng Index lost 4.29% to 20,946.14, Japan's Nikkei 225 down 3.72% to 9,299.88, South Korea's Kospi fell 3.70% to 1,943.75, the Shanghai Composite Index lost 2.15% to 2,626.42 and Singapore's Straits Times Index fell 3.61% to 2,994.78.

European markets were mostly mired in the red in early trade.

Commenting on the local bourse, MIDF Research head Zulkifli Hamzah said the severe retracement in the market today was not unexpected and was clearly a contagion effect from the turmoil on Wall Street.

He said the fall in prices today had been driven by aggressive selling by the foreign investors, adding that foreigners had been net sellers on the local market every day throughout this week.

However, he said that local support was still quite heavy, which explained why the decline in the FBM KLCI was not as severe as that experienced by other markets in the region, some of which fell by more than 5%.

'What is a bit disconcerting is that while foreign funds are exiting local equity, some are also leaving the shore.

'This is manifested by the sharp decline in the ringgit exchange rate against the greenback,' he said.

Zulkifli said he believed that investors are bracing for a prospect of a global double dip recession.

A cure to the global malaise in equity is likely to be in the form of QE3 (the third quantitative easing) in the US, since fiscal pump priming is out of the question there, he said.

'However, it could be a short-term panacea. Monetary easing has not had a sustainable impact on the real economy, and QE3 may be seen in similar light. Therefore, if policymakers in the US opted for QE3, the impact on the market may not be seen as long-lasting.

'At the end of the day, we need the real economy to breathe and respond to all the measures for the equity markets to come to life,' he said.

On Bursa Malaysia, United PLANTATION []s was the top loser and fell 98 sen to RM19.62; BAT fell 86 sen to RM45.42, Nestle lost 64 sen to RM47.13, Panasonic 38 sen to RM24, Batu Kawan 36 sen to RM16.20, Tradewinds 33 sen to RM9.05, while BLD Plantations, Dutch Lady and Genting lost 32 sen each to RM6.88, RM18.70 and RM10.46 respectively.

Among the banking stocks, RHB Capital fell 22 sen to RM9, HLFG lost 40 sen to RM12.70, Hong Leong Bank 30 sen to RM13.26, CIMB 11 sen to RM8.29, Public Bank 10 sen to RM13.14, AMMB nine sen to RM6.40 and Maybank eight sen to RM8.77.

Among the gainers, Tasek added 20 sen to RM8.50, Catcha Media 14 sen to 90, Atis eight sen to RM1.23, while UMS and Scomi Engineering added five sen each to RM1.73 and 87 sen.

Sanichi was the most actively traded counter with 66.25 million shares done. The stock fell 2 sen to 8.5 sen.

Other actives included Axiata, AirAsia, CIMB, Petronas Chemicals, DVM, UEM Land and MRCB.

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Prestar secures RM60m loan, mainly to repay debt notes

KUALA LUMPUR: PRESTAR RESOURCES BHD [] has secured Islamic banking facilities not exceeding RM60 million from AmIslamic Bank Bhd.

The company said on Friday, Aug 5 that RM50 million would be used to repay the balance outstanding amount of Prestar's seven years commercial papers, which expire on Sept 7, 2012. The debt notes were raised and underwritten by the RHB Bank Bhd.

The tenure for RM30 million of RM50 million debt notes would be from the first day of the following month from the date of full disbursement.

Apart from the RM50 million, the remaining RM10 million would be for working capital.

Prestar said the Islamic banking facilities would be secured by a first party first fixed charge over a parcel of freehold land with factory buildings and office, measuring 517,948 sq feet in built-up area, in the Rawang industrial estate.

F&N 3Q net profit up 11.2% to RM77.85m

KUALA LUMPUR: Fraser & Neave Holdings Bhd net profit for the third quarter ended June 30, 2011 rose 11.2% to RM77.85 million from RM70 million a year earlier due to strong contribution from its property and soft drinks divisions.

It said on Friday, Aug 5 that its revenue for the quarter dipped to RM882.47 million from RM892.77 million due mainly to lower volume of dairy products sold in Malaysia.

Earnings per share was 21.70 sen while net assets per share was RM4.10.

For the six months ended June 30, F&N's net profit jumped to RM316.92 million from RM232.97 million, on the back of revenue RM2.92 billion.

Commenting on its prospects, the company said that while there were signs of slowing economic growth and decline in real disposable income in the region, consumer demand is expected to remain stable in the main markets of Malaysia and Thailand during the fourth quarter.

'For quarter 4 which is the final quarter of this financial year, apart from the busy Hari Raya related sales activities, soft drinks division will run the final production of the Coca-Cola beverages.

'In addition, rebranding activities of all its merchandising material and sales equipment will be completed before the expiry of the transition agreement on Sept 30, 2011,' it said.

Consequently, all sales activities for Coca-Cola products will cease effective Oct 1, 2011 and, as such, the division's revenue and profit thereafter will see an inevitable immediate reduction, it said.

Coca-Cola business makes up about 30% of the revenue of the soft drinks division for the current financial year, it said.

F&N said Dairies Malaysia would focus on managing its business with a view to optimising its current available production capacity as it awaits the completion of its new state-of-the-art production facility in Pulau Indah, Port Klang, in the new financial year.

Dairies Thailand is also expected to continue its current effort in growing its revenue and volume both in Thailand and Indochina, it said.

'Given the strong results for the first nine month of the year, the board is confident that the group's performance for this financial year will be satisfactory,' it said.

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Bank Negara foreign reserves up US$800m

KUALA LUMPUR: The international reserves of Bank Negara Malaysia rose US$800 million to US$135.4 billion (RM409.6 billion) as at July 29,'' 2011 from US$134.6 billion (RM407 billion) as at July 15.

In a statement Friday, Aug 5, the central bank said the reserves position was sufficient to finance 9.6 months of retained imports and was 4.5 times the short-term external debt.

Scomi Eng shines amid market carnage

KUALA LUMPUR: SCOMI ENGINEERING BHD [] provided a brief respite to the local stock market on Friday, Aug 5 amid the heavy selling pressure on Bursa Malaysia and key regional markets, triggered by worries about euro zone's debt crisis and that the U.S. economy may slide back into recession.

At 2.58pm, Scomi Engineering rose 6.5 sen to 88.5 sen with 999,300 shares done.

However, the 30-stock FBM KLCI plunged 26.58 points to 1,520.04. Turnover was 1.19 billion shares valued at RM2.25 billion. Losers hammered gainers 934 to 31 while 98 stocks were unchanged.

Scomi Engineering said at midday the consortium had been officially'' awarded the RM2.76 billion tender for the 20-km monorail line for the city of Manaus in Brazil.

Scomi Engineering said the Infrastructure Secretariat of the State of Amazonas had published on Friday, Aug 5 that the tender was awarded the consortium.

The Manaus monorail will consist of nine stations from Largo da Matriz to Jorge Teixeira and will involve the supply of 10 train sets of six cars in each set.

The total award is valued at 1.46 billion real or RM2.76 billion of which Scomi Engineering's share is RM646.38 million.

Royal Bank of Scotland shares skid 11% on 2Q losses

LONDON: Shares of Royal Bank of Scotland Group PLC tumbled 14% in London trade on Friday, Aug 5 after it slid to a pretax loss of 678 million pounds ($1.1 billion) in the second quarter, hit by losses on Greek government bonds and Irish customers still struggling to repay loans.

Reuters reported the loss compared with a profit of 1.17 billion pounds a year ago and came as impairments on bad loans rose to almost 2.3 billion pounds from 2 billion in the first quarter of this year but eased from 2.5 billion pounds a year earlier.

RBS wrote off 733 million pounds to cover anticipated losses on its 1.45 billion pound Greek bond portfolio.

It also said the impairment charge at its Ulster Bank operations in Ireland, where consumers are grappling with a housing market collapse, was 1.25 billion pounds, just 49 million pounds better than in the first quarter.

Earnings at RBS, 83 percent owned by the government after a bailout during the credit crisis, were also undermined by an 850 million pound provision to cover the costs of compensating customers mis-sold payment protection insurance by banks.

Overall that left RBS with an 897 million pound net loss, worse than the 424 million pounds forecast by analysts at WestLB and broadly in line with the 800 million predicted by brokerage Keefe, Bruyette & Woods.

The result followed a grim set of results from larger rival Lloyds on Thursday when it reported a first half pretax loss of 3.25 billion pounds on the back of mis-selling charges and losses in Ireland.

Shares in Lloyds slid on the news, making any profitable sell down of the government's 41 percent stake acquired after a credit crisis bailout an even more distant prospect.

RBS stock, which closed at 30.28 pence on Thursday, is also a long way short of the 49.9 pence at which the British taxpayer effectively bought its stake.

Group income in the second quarter fell 5 percent versus a year earlier to just under 7.8 billion pounds as the bank pointed to a drop in revenue at its GBM investment banking operations, citing heightened risk aversion among clients.

"GBM seems likely to experience activity levels below those targeted while markets remain anxious," the bank said in a statement.

The bank incurred lower staff costs in GBM, however, helping second quarter costs fall 6 percent from the previous quarter.

RBS has cut 27,500 jobs, including thousands of investment bankers. It has scaled back its GBM business, reducing its client base to 5,000 from 26,000 before the financial crisis and exiting 12 countries.

UOB Kay Hian sees stronger newsflow for MMHE by year-end

KUALA LUMPUR: UOB Kay Hian Malaysia research expects stronger newsflow for Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) towards year-end.

It said on Friday, Aug 5 this would occur after the Gumusut's floating production system (FPS) superlift exercise and the completion of the yard acquisition.

'MMHE remains the only Malaysian major oil & gas fabrication player who has yet to announce a major contract win in this upcycle. Capacity constraint has prevented it from taking on more projects, which will no longer be an issue once the Gumusut FPS is delivered and the yard acquisition is concluded,' it said.

UOB Kay Hian research lowered its target price from RM8.80 to RM8.60. This was a 12.4% upside from Thursday's closing price of RM7.65.

It said MMHE's share price has retreated 13% from its recent high. The recent sell-down was unwarranted. Crude oil prices (Brent) being the single most important determinant to the sector's valuation is still holding steadily at around US$110/barrel.

'MMHE could re-rate upwards once its capacity constraint issue is resolved, enabling it to take on new contracts,' it said.

The superlift of its Gumusut FPS topside on to its hull by end-August is expected to relieve the currently tight yard space faced by MMHE. The FPS alone takes about 50%-60% of its yard space, and the lifting of the topside will reduce the space occupied by the FPS by half.

Measured in deadweight tonnage, the Gumusut FPS has taken up more than 54% of MMHE's tonnage capacity. The Gumusut FPS is expected to be delivered in 2Q12.

UOB Kay Hian research said there were no red flags thus far that could derail the Pasir Gudang yard acquisition. Due diligence carried out for Sime Darby's Pasir Gudang yard has been extended for another month and this may have caused some concerns, causing share price to fall from its recent high.

A decision on the acquisition will be made in September. The acquisition of Sime Darby yard is important as it could allow MMHE to increase its capacity by 46%.

Earnings in the next quarter will come in largely in line without any positive surprises. The only major contract secured by MMHE in 2Q11 was the Floating Storage Unit (FSU) conversion contract from its parent MISC valued at around RM100 million.

RAM Ratings assigns AA1 to YTL Power's RM5b debt notes

KUALA LUMPUR: YTL POWER INTERNATIONAL BHD [] has proposed to issue up to RM5 billion under its medium-term notes (MTN)'' programme (2011/2036).

RAM Rating Services Bhd said on Friday, Aug 5 that it had assigned a long-term rating of AA1 to the proposed MTN.

'At the same time, we have reaffirmed the respective AA1/P1 and AA1 ratings of the company's RM2 billion commercial papers/MTN'' programme (2007/2014) and RM2.2 billion serial redeemable bonds (2008/2013); all the long-term ratings have a stable outlook,' it said.

YTL Power is involved in power generation, water and sewerage services, electricity transmission and telecommunications.

RAM Ratings said the ratings reflected the group's robust business profile stemming from its regulated asset base, particularly its investments in power and water-sewerage services via its unit YTL Power Generation Sdn Bhd (YTLPG) in Malaysia, PowerSeraya Ltd (PowerSeraya) in Singapore, and Wessex Water Ltd in the UK.

RAM Rating said YTLPG and PowerSeraya had completed another year of commendable operations while Wessex Water Services remained among the best-performing water-and-sewerage companies in the UK.

The ratings agency said its cashflow analysis was based on YTL Power's stable returns (in the form of dividend income) from its investments in the utilities sector, to support its company-level debt load. Inflows from the company's utility investments were expected to be relatively stable due to their regulated business activities.

'Our assessment of the company's proposed MTN programme is based on the expected drawdown of up to RM2.2 billion in 2011 under this facility, followed by another RM2 billion in 2014'' ''' as indicated by the management - for the refinancing of its existing debt facilities.

'Given that the issuance proceeds will be solely for refinancing purposes, there will not be any additional company-level debt burden on YTLPI; as at end-December 2010, its adjusted company-level debt load stood at RM5.63 billion, translating into an adjusted gearing ratio of 0.71 times. At the same time, the group boasted a sizeable cash pile of RM6.24 billion that is free from encumbrances; these funds will be readily available to YTL Power if required. Nonetheless, any deviation from our assumptions may warrant a reassessment of the ratings,' it said.

RAM Ratings highlighted that YTL Power group's capital structure remained constrained by its hefty debt burden.

However, most of these debts reside with its subsidiaries that generate stable and predictable income from regulated assets; they are ring-fenced and have been structured on a non-recourse basis to YTL Power.

The ratings remain constrained by the competitive pressure faced by YTL Power's telecommunications arm (60%-owned YTL Communications Sdn Bhd). YTL Ppwer's appetite for acquisitions may also expose it to additional operations, political, regulatory and currency risks.

''

Fresh recession fears spook Asian markets

KUALA LUMPUR: Fears of a fresh recession in the United States swept through Asian markets on Friday, Aug 5 as the contagion from the overnight slump at Wall Street saw key regional markets falling between 1.6% and 5%.

The FBM KLCI fell more than 37 points in the earlier part of morning before paring down some of its losses.

At midday, the FBM KLCI was down 25.65 points or 1.66% to 1,521.24 at the mid-day break, weighed by losses at banking stocks and key blue chips. Losers thumped gainers by 904 to 27, while 100 counters traded unchanged. Volume was 1.02 billion shares valued at RM1.87 billion.

The ringgit fell 1% to 3.0091 versus the US dollar; crude palm oil futures for the third month delivery fell RM52 per tonne to RM3,039, crude oil lost US$1 per barrel'' to US$85.63 while gold rose US$7.53 an ounce to US$1,654.05.

US stocks on Thursday suffered their worst sell-off in two years. European stocks slumped to a level not seen since after the financial crisis in mid-2009, according to Reuters.

Analysts have cautioned that stocks could sink further, as investors await fresh US jobs data later Friday that could prove decisive in determining if the world's largest economy could hobble into a fresh recession.

US payrolls probably rose by 85,000, according to a Reuters survey, after a measly 18,000 gain in June. The unemployment rate is expected to hold steady at 9.2%, it said.

At the regional markets, Taiwan's Taiex slumped 5.07% to 7,895.45, Hong Kong's Hang Seng Index lost 4.75% to 20,844.59, Japan's Nikkei 225 down 3.71% to 9,300.77, Singapore's Straits Times Index fell 3.36% to 3,002.54, South Korea's Kospi down 3.28% to 1,952.22 and the Shanghai Composite Index shed 1.88% to 2,633.52.

On Bursa Malaysia, BAT fell 86 sen to RM45.42, United PLANTATION []s 50 sen to RM20.10, Tradewinds 38 sen to RM9, Dutch Lady and DiGi 34 sen each to RM18.68 and RM29.70, Petronas Gas 24 sen to RM13.10, Petronas Chemicals 22 sen to RM6.69, Petronas Dagangan 12 sen to RM17.20 and MISC 18 sen to RM7.

Among banks, HLFG lost 50 sen to RM12.60; Hong Leong Bank lost 24 sen to RM13.32, RHB Capital fell 23 sen to RM8.99, Public Bank 16 sen to RM13.08, CIMB 14 sen to RM8.26, Maybank 10 sen to RM8.75 and AMMB eight sen to RM6.41.

Catcha Media was the top gainer and added 9.5 sen to 85.5 sen. Other gainers included Atis, Hoover, Focal, UAC, Nilai and Mexter.

Sanichi was the most actively traded counter with 51.85 million shares done. The stock fell 2.5 sen to 8 sen.

Other actives included Axiata, Dutaland, CIMB, DVM, AirAsia, Karambunai, Kencana and Petronas Chemicals.

Maybank targets RM2.5b deposit growth

KUALA LUMPUR: MALAYAN BANKING BHD [] (Maybank) is aiming for least a RM2.5 billion deposit growth from the new Save & Win Campaign and online savings account called M2U Savers, to strengthen its market leadership in the traditional deposit segment.

"As of May 2011, our market share for total traditional deposits stood at 17.8 per cent and occupied the top spot for the country," said Maybank deputy president and head of community financial services, Lim Hong Tat on Friday, Aug 5.

He added that for current and savings accounts retail market share, the company was also in the top spot at 24.5 per cent.

Lim said the Save & Win Campaign, being run for the second consecutive year from today until Dec 31, is to promote savings amongst the public while enabling customers to enjoy the benefits of new products introduced to meet their ever changing needs.

"Developing a good savings habit is among the key foundations for good financial planning.

"Customers can develop this when they are more aware of the range of savings products and the best available interest rates we offer," he said in a statement. - Bernama

Scomi Eng confirms official award of RM2.76b Brazil rail job

KUALA LUMPUR: SCOMI ENGINEERING BHD [] and its partners have officially been awarded the RM2.76 billion tender for the 20-km monorail line for the city of Manaus in Brazil.

Scomi Engineering said the Infrastructure Secretariat of the State of Amazonas had published on Friday, Aug 5 that the tender was awarded the consortium.

The Manaus monorail will consist of nine stations from Largo da Matriz to Jorge Teixeira and will involve the supply of 10 train sets of six cars in each set.

The total award is valued at 1.46 billion real or RM2.76 billion of which Scomi Engineering's share is RM646.38 million.

Scomi Engineering said the project was expected to be completed in 40 months.

Its consortium partners are CR Almeida S/A Engenharia De Obras, Mendes Junior Trading E Engenharia S/A, and Serveng-Civilsan S/A Empresas Associadas De Engenharia.

Oil heads for 10 pct weekly drop as global economy falters

SINGAPORE: U.S. crude fell below $86 on Friday, Aug 5, heading for its biggest weekly drop since early May, as fears of a global economic slowdown drive investors to the exits in a commodities sell-off that has erased the benchmark's 2011 price gains.

Brent has dropped by nearly 9 percent and U.S. oil by about 10 percent this week as concern grows that the world's largest economy is sliding back into recession, putting growth in oil demand at risk. Europe's escalating debt crisis also threatens to engulf Italy and Spain, two of the region's top countries.

U.S. crude fell by as much as $1.40 to $85.23 a barrel, the lowest price since Feb. 17. It was down $1.08 at $85.55 at 0437 GMT, after plunging almost 6 percent on Thursday, the biggest daily drop since May 5. Brent was unchanged at $107.25, after dropping almost $6 in the previous session.

"The U.S. economy appears headed for a double dip recession," said Monty Guild, chief executive officer of Guild Investment Management. "Even though we expect weak economic activity will lead to more money printing from central banks, the markets are going through a rugged period, which makes us want to reduce our exposure."

Guild recommended oil investors to take profits.

French President Nicolas Sarkozy will discuss financial markets with German Chancellor Angela Merkel and Spanish Prime Minister Jose Luis Rodriguez Zapatero, Sarkozy's office said in a statement, as Thursday's rout also signalled fear Europe's debt crisis is spinning out of control.

The announcement came as Australia's Treasurer Wayne Swan said the nation was well equipped, should there be a re-run of the 2009 financial crisis, becoming one of the first leaders to comment on such a step in the latest turmoil.

Commodities continued their slide, extending the rout after the benchmark 19-commodity Reuters-Jefferies index , fell 2.8 percent on Thursday, its biggest one-day decline since May 11.

Asian stocks tumbled as much as 5 percent on Friday, the day after the worst sell-off on Wall Street since the global financial crisis.

DEMAND SLOWDOWN

Barclays Capital, one of the most bullish forecasters of oil prices this year, now sees slower global demand growth this year. In a report to be published in the next few days, Barclays Capital now sees global oil demand increasing by 1.1 million barrels per day (bpd) this year to 88.68 million bpd, to reflect the dramatic economic slowdown.

The investment bank previously forecast a rise in oil demand this year of 1.56 million bpd and two months ago expected the increase to be as much as 1.7 million. The sharp reduction would take it from one of the most bullish on growth to one of the most bearish, according to a Reuters poll two months ago.

Traders are now awaiting U.S. employment data due later in the day for the latest indication on the health of the economy, after disappointing manufacturing and consumer spending numbers earlier this week.

High oil prices have hurt consumer spending. U.S. gasoline futures led oil's slump on Thursday after stockpile data added to evidence that expensive fuel and a weak economy have reduced demand in the world's top user.

As crude broke out of a trading range it held for weeks, implied volatility in the options market spiked to the highest since the May 5 meltdown across commodities market. The Oil VIX index , a measure of volatility based on NYMEX options, surged more than 26 percent on Thursday. - Reuters

Mayhem at Asian markets, KLCI below 1,530

KUALA LUMPUR: The FBM KLCI tumbled more than 37 points in early trade on Friday, Aug 5 before re-gaining some lost ground at mid-morning, following the steep overnight crash at Wall Street.

Asian markets, spooked by the selloff at Wall Street that saw both the Dow Jones and S&P 500 fall more than 4% each and the Nasdaq by 5%, followed suit, with the Hang Seng Index tumbling more than 4.8%.

The FBM KLCI lost 18.10 points to 1,528.79 at 10am, as key blue chips slumped. Market breadth was negative with losers thumping gainers by 751 to 20, while 76 counters traded unchaged.

At the regional markets, Hong Kong's Hang Seng Index fell 4.84% to 20,825.17, Taiwan's Taiex lost 5.09% to 7,894.27, Japan's Nikkei 225 lost 3.36% to 9,334.26, South Korea's Kospi down 3.82% to 1,941.40, Singapore's Straits Times Index lost 2.96% to 3,105.08 and the Shanghai Composite Index fell 2.27% to 2,623.16.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients said that due to the US markets' crash last night, there would be some volatile trading activities in the local bourse today.

'Some very heavy profit-taking and liquidation activities will emerge later to depress the markets' rebound from its opening 'gap down' low.

'We see a longer term decline for the local and foreign indices. Sell on rallies and keep cash for the crash,' he said.

Meanwhile, MIDF Research in a note Aug 5 said markets in the region in general and locally in particular should be bracing for a rough trading session today.

'It will probably get worse in the afternoon when Europe opens,' it said.

BAT led the losers on Bursa Malaysia and was down 80 sen to RM45.48; Panasonic lost 78 sen to RM23.60, Tasek 37 sen to RM7.93, Batu Kawan 36 sen to RM16.20, HLFG 34 sen to RM12.76, Tradewinds and F&N 30 sen each to RM9.08 and RM18.90, LPI Capital 28 sen to RM13.40, while Hong Leong Bank and DiGi lost 24 sen each to RM13.32 and RM29.80 respectively.

Sanichi was the most actively traded counter with 27 million shares done. The stock fell one sen to 9.5 sen. Other actives included Axiata, Karambunai, XOX, MRCB, CIMB, DVM, MBSB and MAS.

Gainers included Latitude, UAC, Atis, Catcha and Focal.

KLCI tumbles to below 1,530

KUALA LUMPUR: The FBM KLCI fell sharply at the opening of early trade on Friday, Aug 5 in line with the overnight slump at Wall Street as persistent global economic worries set off a selling frenzy.

The FBM KLCI lost 16.95 points to 1,529.94 at the opening bell, weighed by losses at key blue chips.

Key Asian markets tumbled in early trade, with Japan's Nikkei 225 falling to a five-month low and South Korea's Kospi tumbling more than 4%.

Overnight in the US, stocks were dumped with Wall Street suffering its worst session in two years, and analysts are predicting more to come with the market seen entering a corrective phase.

The main Wall Street indices were all battered ' the Dow lost 4.3%, the S&P 500 fell 4.8% and the Nasdaq lost 5.1%.

On Bursa Malaysia, among the early losers were BAT, HLFG, KLK, UMW, Petronas Chemicals, Genting, MMHE, DiGi and MISC.

OSK Research downgrades AFG to Neutral

KUALA LUMPUR: OSK Research downgraded Alliance Financial Group (AFGB) to Neutral and said the stock has come under the spotlight owing to market speculation of the potential disposal by its substantial shareholders, Temasek and Langkah Bahagia.

'Given that its share price has rallied by some 19.3% over the past 3 months and outperformed the KLCI by 17.7% - and in the process charted a historical high of RM3.75 - we think the stock's valuations are now fair.

'Downgrade to NEUTRAL with our fair value unchanged at RM3.80, based on 1.65x FY12 PBV (13.1% ROE, 9.5% COE and 4% growth rate),' it said in a note Friday, Aug 5.

OSK Research upgrades GAB to Buy, raises TP to RM13.58

KUALA LUMPUR: OSK Research has upgraded GUINNESS ANCHOR BHD [] to a Buy with higher target price of RM13.58 (from RM10.18) and said the company's FY11 earnings of RM181 million (+19% y-o-y) came in above expectations by 9%.

For the 4Q period, the lower margins and earnings contraction were due to some provisions for market restructuring, the research house said in a note Aug 5.

'Moving forward, we expect GAB to register positive volume growth with the Euro 2012 as a kicker for next year's beer consumption.

'We do not expect an excise duty hike in the upcoming budget. A final DPS of 44 sen was declared. We raise our FY12-13 earnings by 19-27% and upgrade GAB to BUY based on our remodeled FCFF valuation," it said.

Affin slips in early trade on aborted Indon plan

KUALA LUMPUR: AFFIN HOLDINGS BHD [] shares slipped in early trade on Friday, Aug 5 after the group said it had decided not to go ahead with its proposed acquisition of an Indonesian bank on mounting concerns about Indonesia's central bank limiting majority shareholdings in commercial banks.

At 9.20am, Affin lost 11 sen to RM3.28 with 186,400 shares traded.

Affin called off the proposed acquisition of Indonesia's PT Bank Ina Perdana, one year after the share purchase agreement (SPA) and subscription agreement (SA) had lapsed. It said the conditions precedent to these agreements had not been fulfilled as of Aug 4, 2011.

Most importantly, Affin expressed concern about Bank Indonesia's currently study of the policy to limit majority shareholdings in commercial banks in Indonesia.

Catcha Media remains in the limelight

KUALA LUMPUR: Shares of Catcha Media continued to attract attention despite the overall negative sentiment at the local bourse and rose in early trade after HSC Healthcare Sdn Bhd emerged as a substantial shareholder in the company with a 5.01% stake.

At 9.25am, Catcha Media rose 3.5 sen to 79.5 sen with 989,300 shares done.

HSC Healthcare, which is helmed by Dr Lim Yin Chow, acquired 6.66 million shares in the company.

The acquisition comes on the heels of other strategic investments in Catcha Media by Genting group's Datuk Justin Leong Ming Loong who acquired a 5.01%t stake on Aug 2 and STAR PUBLICATIONS (M) BHD [] that bought a 4.99% stake on July 4.

''

Nikkei tumbles as concerns over global economy dominate

TOKYO: The Nikkei benchmark tumbled on Friday, hit by sharp falls in U.S. stock markets as worries over the global economy appear likely to dominate, offsetting the impact of Japan's currency intervention and monetary easing the previous day.

The benchmark Nikkei fell 2.0 percent to 9,467.66, while the broader Topix shed 2.0 percent to 809.48. ' Reuters

''

Seoul shares dive as econ fears rattle market

SEOUL: Seoul shares opened sharply lower on Friday as fears about the global economy sparked a selloff, breaking below the psychologically significant 2,000 point level.

The Korea Composite Stock Price Index (KOSPI) was down 3.8 percent to 1,941.85 points as of GMT. ' Reuters

Wall Street suffers worst selloff in two years

NEW YORK: Investors fled Wall Street in the worst stock-market selloff since the middle of the financial crisis in early 2009 in what has turned into a full-fledged correction.

The Dow and the S&P tumbled more than 4 percent on Thursday, Aug 4 and the Nasdaq lost 5 percent on fear the United States is staring at another recession and that Europe's sovereign debt crisis is swallowing two of its largest economies.

Analysts predicted further losses even though stocks have fallen on nine of the last 10 days. Two-year Treasury yields fell to a record low as investors sought safety in short-term government bonds.

"People are throwing in the towel because they can't find relief on any front," said Milton Ezrati, market strategist at Lord Abbett Co. in Jersey City, New Jersey, which manages $110 billion in assets.

The S&P 500's drop puts it more than 10 percent below its April 29 high, considered a correction. Nearly 14 billion shares changed hands, the busiest trading day in more than a year. Decliners beat advancers on the New York Stock Exchange by about 19 to 1.

The market's recent malaise stems from a number of factors. U.S. economic data has worsened, suggesting slowing growth from already sluggish pace in the first half. Europe's sovereign debt crisis has defied remedies and threatens to engulf large euro-zone economies Spain and Italy.

"The debt troubles in Europe, especially with the yields on Italian and Spanish government bonds soaring, are making investors gather as much liquidity as possible," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

The Dow Jones industrial average was down 512.46 points, or 4.31 percent, at 11,383.98. The Standard & Poor's 500 Index fell 60.21 points, or 4.78 percent, at 1,200.13. The Nasdaq Composite Index lost 136.68 points, or 5.08 percent, at 2,556.39.

Some 13.92 billion shares changed hands on the New York Stock Exchange, NYSE Amex and Nasdaq, the highest since June 25, 2010, and well above the daily average of around 7.48 billion.

Losses occurred in all sectors. Among stocks hitting new 52-week lows were Bank of America, down 7.4 percent at $8.83, Citigroup, down 6.6 percent at $34.81, and Hewlett-Packard, down 5.1 percent at $32.54.

Among sectors, losses in energy and materials outpaced others, with S&P energy down 6.8 percent and materials down more than 6.6 percent.

U.S. crude futures settled down $5.30 to $86.63 a barrel in New York.

The CBOE Volatility index jumped 35.4 percent to 31.66, its highest since July 2010. It was the biggest rise since February 2007.

Overseas, the European Central Bank signaled it was buying government bonds in response to a deepening European debt crisis. In Japan, the government intervened in currency markets to stem recent gains in the yen.

On Friday the government releases July's payrolls report, a closely watched number to gauge the U.S. economy. - Reuters

Fear frenzy consumes U.S. markets

NEW YORK: Investors fled U.S. stocks and dumped commodities on Thursday, Aug 4 rushing to the safety of government bonds on growing fears the global economy was weakening.

EQUITIES

* The Standard & Poor's 500 stock index fell 60.27 points, or 4.78 percent, to 1,200.07 its lowest level since December 1, 2010. The S&P 500 has fallen in 8 out of the last 9 sessions.

* Thursday's 4.78 percent decline in the S&P 500 is the biggest one day drop since the 4.912 percent plunge on February 10, 2009.

* The S&P's 10.7 percent drop over the last 10 days is the worst 10-day period for the index since the 10 days ended March 6, 2009 when it was off 11.3 pct in that period.

* The Dow Jones industrial average plunged 512.76 points, or 4.31 percent, to 11,383.68, its lowest close since December 10, 2010. The Dow industrials have fallen 9 out of the last 10 sessions.

* The Nasdaq Composite Index fell 136.68 points, or 5.08 percent, to 2,556.39, its lowest close since December 2, 2010.

* Trading volume in the U.S. equity markets reached 13.8 billion shares, the busiest day since 14.48 billion shares changed hands in composite trading on June 25, 2010.

* The CBOE Volatility index, Wall Street's "fear index," rose 35.4 percent, its largest daily percentage gain since February 27, 2007.

FIXED INCOME

* Biggest 6-day drop in long-dated yields, for both the U.S. benchmark 10-year Treasury and the 30-year Treasury bond, since December 2008, at the height of the financial crisis.

* U.S. 2-year Treasury yields hit a record low of 0.26 percent.

* U.S. 10-year Treasury yields fell to 2.42 percent, lowest since October 2010.

* U.S. 30-year Treasury yields fell to 3.71 percent, the lowest since October 2010.

CURRENCIES

* The U.S. dollar, trading on the EBS platform, at one point rose as much as 4 percent against the Japanese yen before seeing gains cut.

* The dollar traded up 2.5 percent to 79.03 yen at current prices, the largest one day percentage gain against the Japanese yen since mid-September 2010.

* Japanese authorities intervened in the foreign exchange market on Thursday to stop the yen's rise, spending one trillion yen ($12.6 billion) in the process to help protect exporters. This unilateral intervention followed an internationally coordinated currency intervention to weaken the yen by the world's major central banks in March 2011. Japan also intervened in September of last year.

* The euro suffered its biggest one day fall against the U.S. dollar since July 11, 2011, dropping 1.5 percent at $1.4110.

* The euro fell 1.9 percent at 1.0825 Swiss francs.

* The dollar fell 0.5 percent to 0.7670 Swiss francs.

COMMODITIES

* The 19-commodity Reuters-Jefferies CRB index , a global benchmark for the asset class, closed down 2.8 percent for its biggest daily decline since May 11, 2011.

* Gold prices hit a record high in intraday trade of $1,684.90, but fell to close on Thursday to $1,651.40.

* Silver plunged 7 percent to $38.76, its biggest one-day percentage loss since May 11, 2011.

* U.S. crude for September delivery settled at $86.63 a barrel, sliding $5.30, or 5.77 percent, the biggest daily percentage loss since May 5, 2011 and the lowest close since February 18, 2011. Losses accelerated after breaking through a key technical support level at the June low of $89.61.

* Crude oil trading volume in New York of nearly 914,000 contracts was 52.3 percent above the 30-day average, the highest since June 23, according to Reuters data. In London, volume hit 696,000 contracts, 46.7 percent above the 30-day average, the highest since June 24.

* In London, ICE Brent for September delivery settled at $107.25 a barrel, falling $5.98, or 5.28 percent, the biggest one-day percentage loss since June 23's 6.1 percent drop. The settlement was the lowest since the June 27 close at $105.99.

* U.S. gasoline for September delivery closed at $2.7372 a gallon, falling 19.41 cents, or 6.62 percent, front-month gasoline's biggest one-day percentage loss since the May 11 7.6 percent fall. It hit the day's low at $2.7280, the lowest since the February 28 intraday low of $2.70.

* U.S. gasoline's crack spread -- the profit refiners make per barrel after processing crude into motor fuel -- hit $28.05, the narrowest since July 6's 27.23. - Reuters

ASIA-Shares to dive as investors seek safety amid gloom

WELLINGTON: Asian stocks look set for a heavy sell off on Friday, as global markets tumbled on the twin fears of a spreading European debt crisis and slowing economic outlook.

Stocks were dumped, with Wall Street suffering its worst session in two years, and analysts are predicting more to come with the market seen entering a corrective phase.

The main Wall Street indices were all battered ' the Dow lost 4.3 percent, the S&P 500 shed 4.8 percent and the Nasdaq lost 5.1 percent.

Volume was at its highest in more than a year while the CBOE Volatility index, the market's so-called fear index, jumped 35.4 percent to its highest in more than a year.

Asian stocks listed on Wall Street fell 5.7 percent while world stocks, as measured by the MSCI world equity index, fell 4.1 percent.

British shares fell 3.4 percent while European shares lost 3.2 percent as the European Central Bank signaled it was buying government bonds in response to a deepening European debt crisis.

The Italian stock market plunged on fears it would be the next euro zone economy to succumb to a crippling debt burden, taking its losses to more than 30 percent since February.

Investors were seen preparing for a weak U.S. payrolls report due later on Friday, which will further stoke fears of a double-dip recession.

The yen steadied after its sharp selloff in the wake of the central bank's intervention to stem the currency's rise.

Japanese markets are set to slide, with Nikkei futures traded in Chicago 375 points below the last closing level in Osaka.

Australian stocks are picked to fall to two year lows, with share price index futures down 175 points to 4,085, 4.5 percent below the close of the underlying S&P/ASX 200 index. ' Reuters

Nikkei set to tumble as concern over global economy dominates

TOKYO: The Nikkei benchmark is set to tumble on Friday, hit by sharp falls in the U.S. market as worries over the global economy appear likely to dominate the mood, offsetting the impact of Japan's currency intervention and monetary easing the previous day.

The Dow and the S&P tumbled more than 4 percent on Thursday and the Nasdaq lost 5 percent on fears that the United States is staring at another recession and that Europe's sovereign debt crisis is swallowing two of its largest economies.

Before the market opened, foreign securities houses placed net sell orders for 14.0 million Japanese shares, traders said.

"A heavy sell-off is expected today. Negative factors are coming from overseas markets, so there's nothing Japan can do to avoid the repercussions," said Kenichi Hirano, a strategist at Tachibana Securities.

He saw immediate support at 9,300, where the index hovered for some time after a slide that followed the March quake.

Analysts also said futures-led selling may drag down the market, while retail investors may pick up some defensive stocks on dips.

"But such dip-buying may not have an impact on the overall market as foreigners are likely to be the main sellers," Hirano said.

The market's recent malaise stems from a number of factors. U.S. economic data has worsened, suggesting slowing growth from an already sluggish pace in the first half. Europe's sovereign debt crisis has defied remedies and threatens to engulf the large euro-zone economies of Spain and Italy.

Nikkei futures in Chicago ended at 9,280, down 390 points from their Osaka close of 9,670.

The benchmark Nikkei rose 0.2 percent to 9,659.18 on Thursday, while the broader Topix shed 0.1 percent to 826.36.

Analysts said that the Nikkei is expected to trade between 9,200 and 9,400 on Friday. ' Reuters

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Sanichi: Protev has started due diligence

KUALA LUMPUR: Projektarbelt Technische Beratung Venretung International (Protev) has started its due diligence of SANICHI TECHNOLOGY [] BHD [].

Sanichi said on Thursday, Aug 4 the due diligence is scheduled to be held between August and September. Market talk was that Protev could be keen to take a major stake in the ACE Market-listed company.

It had on June 8 said it had signed a memorandum of understanding with Protev.

This is the latest corporate development after The Edge FinancialDaily reported on Thursday that Datuk Md Wira Dani Abdul Daim, son of former finance minister Tun Daim Zainuddin, had surfaced as a new substantial shareholder of Sanichi Technology Bhd.

Md Wira, 33, bought 10 million shares or 6.12% of the loss-making precision moulds and tools maker on Wednesday, according to the filing with Bursa Malaysia.

A total of 10 million shares crossed for RM6 million or six sen per share in a direct off-market deal on Wednesday. The transacted price was about 20% below the market price 7.5 sen the stock was fetching on the open market at the time shares were crossed.

CIMB Group ventures into Sri Lanka

KUALA LUMPUR: CIMB Group Holdings Bhd's'' CIMB Securities International Pte. Ltd is venturing into Sri Lanka to set up an investment banking advisory joint venture.

It said on Thursday, Aug 4 CIMB Securities International -- its indirect wholly-owned subsidiary ' had entered into a joint venture agreement with its partners Alex Lovell and Reshani Dangalia to establish an investment banking advisory JV.

Under the agreement, the shareholders have committed up to US$2 million for the venture. It will be a subsidiary of CIMB Securities International upon its incorporation.

'The JV company shall provide investment banking services such as corporate, equity and debt capital market and general advisory on mergers and acquisitions, initial public offerings and secondary offerings, primary and dual listings, privatisations, corporate restructuring and capital management, as well as such other related businesses that the Joint Venture company may choose to undertake in the future,' said CIMB.

HLFG gets SC nod for RM1.8b debt notes

KUALA LUMPUR: HONG LEONG FINANCIAL GROUP BHD [] (HLFG) has received the Securities Commission's approval to undertake a master debt issuance programme of up to RM1.80 billion in nominal value.

It said on Thursday, Aug 4 the corporate exercise comprised of a commercial papers (CP) programme of up to RM1.80 billion and a medium term notes (MTN) programme of up to RM1.80 billion in nominal value.

'At any point in time, the aggregate outstanding balance of the CPs and MTNs shall not exceed RM1.80 billion, being the maximum amount allowed under the master debt programme,' it said.

HLFG said the tenure of the CP programme would be seven years and the MTN programme 20 years from the date of first issuance.

'Proceeds raised from the master debt programme will be utilised to repay borrowings, for general investments and/or working capital purposes,' it said.

Tambun Indah posts RM4.73m net profit in 2Q

KUALA LUMPUR: Tambun Indah Land Bhd posted net profit of RM4.73m in the second quarter ended June 30, on the back of RM52.44 million in revenue.

The Penang-based property company said on Thursday, Aug 4 that its earnings per share were 2.14 sen. It declared dividend of 4.6 sen per share.

Tambun Indah said the 2Q pre-tax profit before tax was RM11.33 million, up RM9000,000 than 1Q's RM10.43 million.

'This is mainly due to higher revenue were recorded during the current quarter of RM52.45 million compared to revenue of RM35.95 million in the preceding quarter,' it said.

However, the increase in revenue was partially offset by increase in cost of sales, administrative expenses and selling and marketing expenses. Higher administrative expenses in current quarter mainly due to expenses related to three proposed acquisition of Pridaman, Ikhtiar Bitara and Bandar Tasek Mutiara land.

"Higher selling and marketing expenses were incurred in the current quarter as a result of more sales activities from development projects.

Elaborating on the financial results, it said the revenue was RM88.40 million in the first half while pre-tax profit was RM21.76 million.

It said the profit and revenue were mainly from its property development activities. Ongoing projects which contributed to the Group's profit and revenue include Pearl Villas, Pearl Garden, Juru Heights, Carissa Park, Dahlia Park, Impian Residence, Tanjung Heights and Capri Park.

Apart from property development, the group's CONSTRUCTION [] activities and investment holdings activities also contributed to the earnings.

Favelle Favco gets 3 orders worth RM93.4m

KUALA LUMPUR: FAVELLE FAVCO BHD [] has received purchase orders for two offshore cranes and a tower crane with a combined value of RM93.4 million.

It said on Thursday, Aug 4 that its wholly owned subsidiaries Favelle Favco Cranes Pte Ltd, Favelle Favco Cranes Pty Ltd and Favelle Favco Cranes (M) Sdn Bhd had received the purchase orders for the cranes.

It said Favelle Favco Cranes Pte Ltd and Favelle Favco Cranes (M) Sdn Bhd were to supply the offshore cranes to Keppel Fels Limited and MISC BHD [] respectively, while Favelle Favco Cranes Pty Ltd was to provide Marr Contracting Pty Ltd with the tower crane.

It said the tower crane was expected to be delivered by the first quarter of next year, while the offshore cranes would be supplied between the second quarter of 2012 and end 2013.

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

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#Update* Affin Holdings purchase of Indonesian bank is off

KUALA LUMPUR: AFFIN HOLDINGS BHD []'s proposed acquisition of Indonesia's PT Bank Ina Perdana has been called off on mounting worries about its central bank limiting majority shareholdings in commercial banks.

Affin said on Thursday, Aug 4 that the share purchase agreement (SPA) and subscription agreement (SA) had lapsed, exactly one year after they were signed.

It said the conditions precedent to these agreements had not been fulfilled as of Aug 4, 2011. Most importantly, Affin expressed concern about Bank Indonesia's currently study of the policy to limit majority shareholdings in commercial banks in Indonesia.

'Affin and the parties to the SPA and SA are of the view that it would be in the best interest of all parties to discontinue with the existing agreements. All parties may renegotiate the terms of the proposals after the policy has been released,' it said.

The corporate proposals involved Affin Bank acquiring 20.82% or 65.28 million existing shares in the enlarged paid-up share capital of Bank Ina, proposed subscription of 185.60 million new shares of 59.18%.

The exercise also involved a proposed put and call option for up to 56.48 million existing shares of up to 18.01% of the enlarged paid-up of Bank Ina.

Trading in Sarawak Cable suspended

KUALA LUMPUR: Trading in the securities of Sarawak Cable Bhd will be suspended from Friday, Aug 5 to Monday, Aug 8.

The company said on Thursday, Aug 4 the request for the suspension was pending an announcement on a material transaction.

The share price closed 11 sen lower at RM2.10. There were 3.32 million shares transacted at prices ranging from RM2.07 to RM2.26.

HSC Healthcare emerges as substantial shareholder in Catcha Media

KUALA LUMPUR: HSC Healthcare Sdn Bhd has emerged as a substantial shareholder in Catcha Media after it acquired 6.66 a 5.01% stake in the company.

Filings to Bursa Malaysia Securities on Thursday, Aug 4 showed that HSC Healthcare, which is helmed by Dr Lim Yin Chow, acquired 6.66 million shares in the company.

The acquisition comes on the heels of other strategic investments in Catcha Media by Genting group's Datuk Justin Leong Ming Loong who acquired a 5.01%t stake on Aug 2 and STAR PUBLICATIONS (M) BHD [] that bought a 4.99% stake on July 4.

Catcha Media closed 3.5 sen higher at 76 sen with 5.58 million shares traded.

Yen sinks after intervention; stocks near lows

LONDON: The yen tumbled on Thursday, Aug 4 from near record highs on Monday after Japan intervened to curb the currency's export-damaging strength, while world stocks held above 2011 lows as expectations grew for more policy action in developed countries.

Japan spent an estimated 1 trillion yen ($13 billion) to sell the yen throughout Tokyo and London trading hours and is likely to leave extra liquidity from the intervention in the system. The Bank of Japan pledged to ease monetary policy further to bolster growth by buying assets such as stocks and bonds.

Japan's action follows an unexpected interest rate cut by Switzerland to weaken its currency on Wednesday.

There are expectations that may be the forerunner for fresh rounds of quantitative easing by the Federal Reserve and Bank of England, while the European Central Bank is under pressure to resume bond buying to ease the euro zone debt crisis.

"This is going to be a long and drawn out campaign, since for Japan the Fed is more likely to cut than hike interest rates and thus the dollar remains pressured and for the Swiss there seems no resolution to the euro zone debt crisis," said Chris Turner, chief currency strategist at ING.

The dollar rose 3.7 percent to 79.90 yen , having fallen as low as 76.29 on Monday.

The MSCI world equity index fell 0.6 percent, although it stayed above the previous day's 2011 low. The index is on track for its biggest weekly gain in a year.

European stocks rose 0.2 percent while emerging stocks fell 0.6 percent.

Last year's Japanese FX intervention and easing by the Federal Reserve led to Brazil's finance minister Guido Mantega to declare a "currency war" was erupting as developed economies sought to weaken their currencies to support export growth.

This in turn boosted hot money inflows to emerging countries, fanning inflation and helping trigger interest rate rises by some central banks.

"It seems a fresh chapter is opening up in the currency wars, with both Japanese and Swiss officials trying to draw lines in the sand regarding the strength in their currencies they are prepared to tolerate," Turner said.

U.S. crude oil was steady at $91.92 a barrel.

The dollar rose 0.8 percent against a basket of major currencies.

The euro was down 0.6 percent at $1.4240.

EUROPE DEBT BOUNCE

There were some positive moves in Europe. Speculation that the European Central Bank may resume its bond buying helped Italy's 10-year government bond yield fall back below 6 percent. Bund futures were down 33 ticks.

Speculation the Federal Reserve may buy Treasuries again contributed to a turnaround on Wall Street on Wednesday as the previous round involving $600 billion bond buying which ended in June supported risky assets.

Two former top Fed officials conditionally endorsed a further round of bond buying, according to the Wall Street Journal .

Italy and Spain have been under increased pressure in recent weeks as markets feel the size of the euro zone's bailout fund is too small to protect larger fringe economies if contagion from the Greek crisis cannot be stopped.

"On the back of government intervention (in currency markets) there's improved expectation that the ECB could do something today - maybe a longer term repo or something in the secondary markets," a bond trader said. - Reuters

FBM KLCI pares down gains to slip below 1,550

KUALA LUMPUR: ''The local stock market saw some mild profit taking activities in the afternoon session on Thursday, Aug 4 in line with the still tepid overall sentiment at regional bourses.

The index closed just 0.12% or 1.79 points higher at 1,546.89, after having risen to its intra-day high of 1,552.91 in early trade.

Gainers edged losers by 397 to 363, while 316 counters traded unchanged. Volume was 1.16 billion shares valued at RM1.55 billion.

At the regional markets, Japan's Nikkei 225 closed 0.23% higher at 9,659.18 and the Shanghai Composite Index added 0.21% to 2,684.04.

South Korea's Kospi tumbled 2.31% to 2,018.47, Taiwan's Taiex lost 1.65% to 8,317.27, Hong Kong's Hang Seng Index down 0.49% to 21,884.74 and Singapore's Straits Times Index

On Bursa Malaysia, BLD PLANTATION []s was the top gainer and rose 36 sen to RM7.20; Nestle added 32 sen to RM47.76, GAB 16 sen to RM10.86, JT International 14 sen to RM7.19, Petronas Chemicals 12 sen to 6.91, Eversendai and RHB Capital 11 sen each to RM1.80 and RM9.22, while MNRB added 10 sen to RM3.23.

Sanichi, whose trading was halted from 4.05pm on Thursday and would resume on Friday, was the most actively traded counter with 76 million shares done. The stock added one sen to 10.5 sen.

Datuk Md Wira Dani Abdul Daim, son of former finance minister Tun Daim Zainuddin, surfaced as a new substantial shareholder of the ACE Market-listed Sanichi, according to filings to Bursa Malaysia Securities.

Other actives included DVM, Ingenuity Solutions, XOX, Ramunia, MBSB, AirAsia and Dutaland.

Among the decliners, Tasek and MISC fell 20 sen each to RM8.30 and RM7.18, F&N and DiGi down 18 sen each to RM19.20 and RM30.04, Sarawak Cable down 11 sen to RM2.10 and Stone Master nine sen to 33 sen.

#Update* SC places US-based RS Life Fund on alert list

KUALA LUMPUR: The Securities Commission (SC) has placed RS Life Fund Management, a company with addresses in the United States, on its alert list for unlicensed activities.

The company was placed on the SC's alert list on Thursday, Aug 4.

In an e-mail reply to The Edge Financial Daily, an SC spokesperson said RS Life Fund Management, RS Investment and RS Invest had been placed on the alert list because the entities were not licensed by the SC to undertake any fund management or other regulated activities under the Capital Markets & Services Act 2007 in Malaysia.

The SC listed three addresses for the company in the US, as well as two websites to alert investors.

The addresses were listed as:

Investments, c/o Boston Financial Data Services, P.O.Box 219717 Kansas City MO64121-9717

Investments, c/o Boston Financial Data Services, 330 West 9th Street, First Floor, Kansas City, MO 64105-1514

Investments, 388 Market Street, Suite 1700, San Francisco, CA 94111

The websites are: ''http://hk.rs-invest.com and http://rs-invest.com

The alert list includes websites, investment products, companies and individuals not authorised nor approved under the securities laws to deal in securities, trade in futures contracts, advise on corporate finance, provide investment advice, financial planning and/or fund management services related to securities or futures.

'The public is advised not to make any investment with companies/individuals that are not licensed or approved by the SC.

'Offers often come in the guise of seemingly attractive investment opportunities or schemes and may also be camouflaged as direct selling or business opportunities,' the SC said on its website.

Guinness Anchor proposes 44c dividend

KUALA LUMPUR: GUINNESS ANCHOR BHD [] (GAB) rewarded shareholders with a single tier dividend of 44 sen per share for the financial year ended June 30, 2011 (FY June 2011) compared with 35 sen a year ago.

It said on Thursday, Aug 4 that net profit fell 18% to RM29.08 million from RM35.48 million a year ago, mainly due to provisions made for its market restructuring.

Revenue increased by 13% to RM348.76 million from RM308.71 million mainly due to price, sales mix and an increase in activities in the fourth quarter. Earnings per share were 9.63 sen compared with 11.74 sen.

MISC top loser, weak freight rates worry

KUALA LUMPUR: Shares of MISC BHD [] fell the most in late afternoon trade on Thursday, Aug 4 on rising concerns that the weak freight rates and volumes could impact the petroleum, chemical and container business.

At 4.11pm, it was down 21 sen to RM7.17'' with 496,600 shares done.

The FBM KLCI was up 1.89 points to 1,546.99. Turnover was 994.66 million shares done valued at RM1.22 billion. There were 364 gainers, 381 losers and 289 stocks unchanged.

RHB Research Institute had in a July 11 research report said the performance of MISC's petroleum, chemical and container liner segments will continue to be capped by the weak freight rates and volumes over the next one to two years.

However, it added that value has emerged with an imminent re-rating of the valuations of MISC's offshore assets on the heels of the IPO of Bumi Armada.

'Operationally, we also expect steady income stream from its LNG division and high growth at its offshore & engineering businesses. Indicative fair value is raised by 17% from RM7.26 to RM8.47 based on 'sum of parts'. Upgrade to Outperform from Underperform,' RHB Research said.

SC places US-based RS Life Fund on alert list

KUALA LUMPUR: The Securities Commission (SC) has placed RS Life Fund Management, a company with addresses in the United States, on its alert list for unlicensed activities.

The company was placed on the SC's alert list on Thursday, Aug 4.

The SC listed three addresses for the company in the US, as well as two websites to alert investors.

The addresses were listed as:

Investments, c/o Boston Financial Data Services, P.O.Box 219717 Kansas City MO64121-9717

Investments, c/o Boston Financial Data Services, 330 West 9th Street, First Floor, Kansas City, MO 64105-1514

Investments, 388 Market Street, Suite 1700, San Francisco, CA 94111

The websites are: ''http://hk.rs-invest.com and http://rs-invest.com

The alert list includes websites, investment products, companies and individuals not authorised nor approved under the securities laws to deal in securities, trade in futures contracts, advise on corporate finance, provide investment advice, financial planning and/or fund management services related to securities or futures.

'The public is advised not to make any investment with companies/individuals that are not licensed or approved by the SC.

'Offers often come in the guise of seemingly attractive investment opportunities or schemes and may also be camouflaged as direct selling or business opportunities,' the SC said on its website.

''

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Lundin-Petronas Carigali discovers gas in second well off Sabah

KUALA LUMPUR: Lundin Petroleum AB and its joint venture partner Petronas Carigali Sdn Bhd have made a second gas discovery offshore Sabah.

The Swedish independent oil and gas exploration and production company said on Thursday, Aug 4 the discovery was with the Cempulut-1 well that was drilled in Block SB303, off Sabah.

According to the statement posted on its website, Cempulut-1 was drilled with the Offshore Courageous rig in a water depth of about 75 meters. The well was drilled to a total depth of 1,095 meters.

'The Cempulut-1 well intersected a large Late Miocene carbonate reef with excellent reservoir PROPERTIES [],' it said.

Lundin Petroleum said the gross total vertical pay thickness encountered was about 50 metres. The deeper targeted oil leg however proved to be water bearing.

An extensive data acquisition program was completed including pressure measurements, sampling and a mini flow test. The data recovered from the well would be analysed further to determine a range of resource estimates.

Lundin Petroleum president and CEO Ashley Heppenstall said this was the second gas discovery made by Lundin Petroleum in SB303 and the third in the contract area which also contains the Titik Terang discovery.

'All three discoveries are in close proximity to one another and with additional undrilled leads and prospects also in the block a clear opportunity to evaluate the potential for a cluster development now exists," he said.

Heppenstall said the rig would now move to drill the Batu Hitam prospect, in PM308A, the third well in Lundin Petroleum's five well drilling campaign in Malaysia in 2011.

Lundin Petroleum has a 75% stake in SB303 through its subsidiary Lundin Malaysia BV. Lundin Malaysia's partner is Petronas Carigali with a 25% stake.

E&O up, despite SP Setia not looking at acquiring stake

KUALA LUMPUR: Shares of Eastern and Oriental Bhd (E&O) edged up in afternoon trade on Thursday, Aug 4 as the positive outlook for the property company outweighed a statement that S P Setia Bhd was not looking at acquiring it.

At 3.34pm, E&O was up two sen to RM1.68, off the earlier high of RM1.75. There were 9.34 million shares transacted.

S P Setia was unchanged at RM3.91, off the high of RM3.96. There were 108,200 units done.

S P Setia announced during the midday break it was on the lookout for strategic partnerships and opportunities to increase its land bank. However, it clarified that it was not currently in any acquisition or takeover talks with E&O or its shareholders.

CIMB Research had said in a recent report that E&O has many attractions including the rights to reclaim some 760 acres of the most prime landbank on Penang island.

"But E&O is not alone in being undervalued as there is a long list of Malaysian property companies that are trading at steep discounts even to net tangible asset.

'We remain bullish on the property sector, which could be catalysed by M&A speculation. Mah Sing remains our top pick while SP Setia is a core holding,' it said.

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CIMB Bank sees 45% revenue growth from currency exchange biz

KUALA LUMPUR: CIMB Bank Bhd expects a 40% to 45% growth in turnover from its Bureau de Change (BDC), or currency exchange business, this year, bolstered by the tie-up with the Malaysian Association of Tour and Travel Agents (MATTA).

Its deputy head, retail financial services, Abdul Karim Md Lassim, said last year, the bank registered 30 per cent growth in BDC turnover.

"Last year, the foreign currency exchange transactions were over one million with turnover of RM1.5 billion," he told reporters after the signing of the memorandum of understanding with MATTA on retail forex Pick and Pack Service here Thursday, Aug 4.

Currently, MATTA has over 2,800 members, comprising local tour and travel organisations.

Abdul Karim said the bank planned to open another 17 BDCs from the existing 42 by year-end as part of its strategy to strengthen the business.

Under the Pick and Pack Service partnership, CIMB would provide foreign currency exchange services for travellers to travel agents that registered with MATTA.

"So far, 24 had signed up for the services while six are expected to come onboard soon," he said.

The bank would also guarantee a buy-back of up to 30 per cent of unspent foreign currency at the same rate, subject to a minimum of RM3,000 in equivalent of foreign currency, he said.

He said the travellers would be able to exchange foreign currencies, from 29 foreign currencies available, at travel agents' offices or have the option to either pick up the foreign currencies directly from the travel agents or alternatively, at any CIMB BDC prior to the departure at several locations.

The locations are Kuala Lumpur International Airport and the Low-Cost Carrier Terminal in Sepang, Penang International Airport, Langkawi International Airport, Kuching International Airport and Kota Kinabalu International Airport. - Bernama

Palm oil slips on economic jitters, comparative oils

JAKARTA: Malaysian palm oil futures traded lower on Thursday, Aug 4 tracking comparable vegetable oils lower on persistent global economic jitters and crude prices that flirted with one-month lows.

The benchmark October contract on the Bursa Malaysia Derivatives Exchange traded down 0.6 percent at RM3,116(US$1,048) per tonne, but off an earlier low of RM3,106.

Traded volumes for the contract were 4,460 lots of 25 tonnes each, compared to 9,607 lots on Wednesday.

"We have seen a lot of bearish pressure across the board, linked to the big macroeconomic picture in the United States, plus the fact that crude is slightly cheaper," said Abah Ofon, a Singapore-based analyst at Standard Chartered Bank.

The latest figures continued to paint a sombre picture for the U.S. economy, with the pace of growth in the services sector falling in July to its lowest since February 2010, while new U.S. factory orders also fell in June.

The reports followed poor figures on U.S. consumer spending and factory activity. That, along with the festering European debt crisis, is likely to keep buyers cautious.

The yen fell on Thursday after intervention by Japanese authorities, though investors steered clear of riskier assets, uncertain if the European Central Bank would join the fray by increasing bond purchases to fight a crisis of confidence.

Ofon added that further price pressure in August may come from a build-up of stocks in Indonesia ahead of an expected change in the export tax rate later this month.

Indonesia, the world's biggest palm oil producer and exporter, could lower the maximum export tax rate in August.

Ofon forecasts second half benchmark prices to average RM3,400.

In comparable markets, U.S. soybeans for November delivery eased, while the most active May 2012 soyoil on China's Dalian Commodity Exchange also dipped.

'Sluggish U.S. soyoil due to a weak global economy and favourable crop weather in U.S. soybean planting regions pressured China's soyoil market," said Zhan Zhi Hong, an oil analyst with Shenzhen-based China Merchant Futures.

"Choppy trade will continue in China's soyoil if U.S. markets fail to set a clear and strong direction," she added.

This week, benchmark palm oil prices have been supported by rising export data, leading to a near two-week high of RM3,144 on Thursday.

Exports of Malaysian palm oil products for July jumped 13.5% to 1,628,688 tonnes, cargo surveyor Societe Generale de Surveillance said on Monday.

Traders also say that the fasting month of Ramadan will also lead to lower output in Indonesia and Malaysia, the top two global palm producers.

On Thursday, a leading agronomist said Southeast Asian palm oil output growth will slow in the second half of 2011 as the impact of El Nino weather conditions from two years ago manifests with lower oil-yielding palm fruits.

Crude oil posted a modest rebound from one-month lows on Thursday, tracking a bounce in Asian stock markets ahead of key U.S. employment reports.

On the economic calendar, investors are eagerly awaiting'' July's U.S. non-farm payroll number, due Friday, and updated USDA crop forecasts due to be released on Aug 11. - Bernama

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