#Stocks to watch:* Maybank, MMHE, Tenaga, TSH

KUALA LUMPUR: Regional markets including Bursa Malaysia will continue to see downside pressure in the week ahead, starting Monday, Aug 22, tracking losses on European and US markets.

The FBM KLCI closed down 1.29% on Friday, or 19.32 points to 1,483.98, weighed by losses including at Genting and CIMB.

For the month, the KLCI is down 78 points while RM132.76 billion has been erased from the market capitalisation. A major concern is that another week of selldown could trigger margin calls on assets pledged with equities.

On Wall Street, stocks fell for the fourth week of losses amid mounting fears of another U.S. recession while Europe's financial system faces destabilisation, Reuters reported.

The Dow Jones industrial average fell 172.93 points, or 1.57%, to end at 10,817.65. The Standard & Poor's 500 Index dropped 17.12 points, or 1.50%, to 1,123.53. The Nasdaq Composite Index slid 38.59 points, or 1.62%, to close at 2,341.84.

For the week, the Dow ended down 4%, the S&P 500 dropped 4.7% and the Nasdaq lost 6.6%.

Stocks to watch on Monday include MALAYAN BANKING BHD [] (Maybank), Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), TENAGA NASIONAL BHD [] and TSH RESOURCES BHD [].

Other counters which could see trading interest are PLUS Expressway Bhd, UMW HOLDINGS BHD [] and TAN CHONG MOTOR HOLDINGS BHD [].

Maybank will announce its fourth quarter results and expectations are that it could announce attractive dividends, as reflected that its share price was holding much steadier over the week compared with other heavyweights over the past week.

MMHE has secured two contracts worth RM952 million from MISC BHD [] for topsides fabrication, marine repair and conversion of two energy vessels.

Tenaga may continue to see more selling pressure after falling to a new 52-week low of RM5.55 on Friday. Hefty fuel costs which could reach an additional RM400 million a month would continue to weigh on the power giant while analysts had also downgraded the stock.

TSH posted a record pre-tax profit of RM51.63 million, which was 192% above the RM17.69 million a year ago in the second quarter, boosted by its PLANTATION []s business, especially from its Indonesian operations.

Its net profit increased by 217% to RM35.96 million from RM11.32 million a year ago. Its revenue rose 59% to RM329.95 million from RM207.47 million. Earnings per share were 8.77 sen compared with 2.77 a year ago.

PLUS, which is being taken private, reported'' second quarter earnings rose 28.7% to RM383.49 million from RM297.86 million a year ago, boosted by an increase in toll collection by RM41.10 million.

UMW earnings fell 38% to RM131.18 million from RM211.69 million a year ago, due mainly to lower contributions from its automotive and manufacturing & engineering segments. Revenue dipped 3.6% to RM3.16 billion from RM3.28 billion. Earnings per share were 11.26 sen while net asset per share was RM3.66.

The Edge weekly reported that production at Tan Chong Motor Holdings' assembly plant in Segambut is being ramped up to meet the rising volume of brands owned by its sister companies. Thus, the group has decided to defer its property development plan for the tract on which the assembly plant is located.

Wall Street sinks for fourth straight week

NEW YORK: Wall Street ended a fourth week of losses on a down note on Friday, Aug 20'' as most buyers left the market before the weekend on growing fears of another U.S. recession and destabilization in Europe's financial system.

Investors already reeling from big losses in growth stocks were thumped by a dismal outlook from Hewlett-Packard, which dropped nearly 20 percent, its worst day since the stock-market crash of 1987.

It was the latest discouraging event in a month full of bad surprises ranging from the U.S. credit rating downgrade to a sharp slowdown in world growth. The S&P has lost 13.1 percent so far this month -- on track for its worst month since October 2008.

"What I'm seeing right now is a basically a crisis of confidence, more so than an economic crisis or financial crisis necessarily at this stage," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.

Hewlett-Packard's shares tumbled 19.9 percent to a six-year closing low at $23.60 and were the biggest drag on the Dow, a day after the company said it may spin off its PC business, the biggest in the world, and lowered its outlook.

The losses follow a day of sharp declines. At the session lows on Thursday, the Dow was down more than 500 points, while the S&P 500 and the Nasdaq each shed more than 5 percent at the day's worst.

Worries that the United States and the global economy may be headed for another recession have unnerved investors in recent weeks. Thursday marked the sixth time in the past two weeks that the S&P 500 has moved 4 percent or more.

TECHNOLOGY [] stocks bore the brunt of the losses among the Dow components, with H-P, International Business Machines Corp, Intel Corp, and Microsoft Corp among the biggest drags on the blue-chip average. IBM shares fell 3.8 percent to $157.54, while Intel dropped 2.9 percent to $19.19, and Microsoft lost 2.5 percent to $24.05.

"I think it's more of a drift than any real selling here," said Frank Gretz, market analyst and technician for Shields & Co in New York. "It's more common to see a drift down with people more fearful about the weekend ... Who's going to buy before a weekend with all the bad news around?"

The Dow Jones industrial average fell 172.93 points, or 1.57 percent, to end at 10,817.65. The Standard & Poor's 500 Index dropped 17.12 points, or 1.50 percent, to 1,123.53. The Nasdaq Composite Index slid 38.59 points, or 1.62 percent, to close at 2,341.84.

S&P OFF NEAR 11 PCT FOR 2011

For the week, the Dow ended down 4 percent, the S&P 500 dropped 4.7 percent and the Nasdaq lost 6.6 percent.

The S&P 500 fell below 1,130, a key resistance level during last summer that is becoming strong support. Analysts see the next support at 1,100.

"It's been a difficult week and confidence that this is just a soft patch or slowdown is declining every day, so I just think more investors are just concluding it's not a good idea to own stocks over the weekend," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.

Google Inc lost 2.8 percent to $490.92 and helped drag on the Nasdaq.

The S&P 500 is down 17.6 percent from its April 29 closing high, edging close to bear market territory. For the year, the S&P is down 10.7 percent.

Wall Street typically defines a correction as a drop of 10 percent from a recent peak, while a slide of 20 percent from a recent high is a bear market.

Roughly three stocks declined for every one that advanced on both the New York Stock Exchange and the Nasdaq, with a volume of 9.87 billion shares traded on the two exchanges and the American Stock Exchange. - Reuters

HP sinks as investors flee business revamp

NEW YORK/ BANGLORE: Shares of Hewlett-Packard slumped by more than 20 percent to a six-year low on Friday, Aug 20 as investors wiped about $16 billion off the market value of the world's biggest PC maker in a resounding rejection of its plan for a major shake-up.

Investors also appeared to lose confidence in Chief Executive Leo Apotheker after a flurry of HP announcements on Thursday including an $11.7 billion acquisition offer, a shuttering of its mobile efforts and the potential spin-off its PC business.

This was on top of disappointing financial guidance for the third quarter in a row. HP may also be risking future PC sales as its customers could flee to rivals like Dell Inc in the uncertainty, one analyst said.

"They're doing too many things at the same time," said Sterne Agee analyst Shaw Wu.

Even if it makes sense in the long term, HP should not have told the world it was thinking of getting rid of its PC business, which brings in 16 percent of its profits, Wu said.

"Why would anybody want to do business with them if it's up for sale," he said. "To have this in limbo for 12 months is going to be pretty material."

On top of this, investors worried that HP's offer of nearly $12 billion for British software company Autonomy Corp was too high and questioned why it was giving up so soon on the mobile business it bought for $1.2 billion from Palm Inc, Wu said.

HP shares fell as low as $22.76 on Friday making it the biggest loser on the New York Stock Exchange. Before the announcements its shares had closed at $31.39 on Wednesday. Investors fled to rivals like Dell, pushing its shares up nearly 3 percent, as it is expected to profit from HP's chaos.

"There's not a lot of confidence in (Apotheker's) management," said Wu, noting that he had to lower guidance every quarter since he joined HP. "This is just further proof,"

At least two brokerages downgraded Palo Alto, California-based HP, and five cut their price targets, mainly citing uncertainty and expenses related to the restructuring.

"Last night HP may have eroded what remained of Wall Street's confidence in the company and its strategy," Needham & Co said in a research note.

Gleacher & Co analyst Brian Marshall cut his price target for the stock to $39 from $50 saying he "materially underestimated the magnitude and timing of this metamorphosis."

He said however that HP "is undergoing a sound strategy transformation by focusing on high-growth, high-margin opportunities in the enterprise/commercial markets."

With a forward 12-month price-to-earnings ratio of 5.6, the company is trailing its peers, including Dell, Apple and IBM according to Starmine SmartEstimate.

Before Thursday's news HP's stock had already lost nearly a fifth of its value since it reported quarterly results in May.

HP said it has already stopped production of its WebOS-based devices like its TouchPad tablet, which failed to attract buyers.

Cypress Semiconductor Corp -- the main supplier of touch controllers for TouchPad -- will also hurt if the company pulls the plug on the product, brokerage Collins Stewart said.

Cypress' shares fell 1 percent to $16.93 on Friday.

HP has been struggling with its once hugely popular PC business, as niftier gadgets like Apple's iPad have eaten into its business.

Thursday's weak forecast follows smaller rival Dell's lowered revenue outlook earlier this week that dragged down both stocks.

Both companies have been venturing out of traditional comfort zones and into enterprise solutions and services, but continuing soft sales have been a constant source of trouble.

Brokerage Robert W. Baird said HP is no longer a "safe haven" stock and expects it to lose market share.

HP's decision to spin off the PC business reflects commoditization, as consumers change the use of computers, and this may hurt Intel, the world's largest supplier of PC chips, brokerage Nomura said in a note.

"A reversal in average selling prices would remove a key revenue driver over the last six quarters (for Intel)." - Reuters

Volkswagens to roll out from DRB-Hicom plant by November

PEKAN: The DRB-Hicom Berhad plant here is expected to start assembling Volkswagen cars in October or November, with an initial batch of more than 200 units.

Prime Minister Datuk Seri Najib Tun Razak said the assembly here would be the platform for making the country the base for the export of Volkswagen cars to Asean countries by 2014.

"The first batch from the Pekan plant will test the response of the local market for the model, a number of which, according to plans, will be exported to Asean countries," he said at the breaking of the fast with more than 1,000 DRB-Hicom employees and local residents at the Sri Maulana Mosque here on Saturday, Aug 20.

Also present was managing director of the DRB-Hicom group Datuk Seri Mohd Khamil Jamil.

The Prime Minister was confident that Pekan would be linked with the production of cars for the global market.

"Fans of Mercedes and Volkswagen will be more familiar with Pekan after this," Najib said.

In the face of challenges, he said, the DRB-Hicom management had carried out "changes and renewals" that yielded good results.

Najib hoped the company would increase its workforce from the present 2,500 people to 6,000 within four years. - Bernama

Wall St opens lower on recession concerns

NEW YORK: U.S. stocks fell on Friday after the market opened, extending the previous session's steep losses, on fears the U.S. economy may slip back into recession and European banks could be severely damaged by another credit freeze.

The Dow Jones industrial average was down 88.09 points, or 0.80 percent, at 10,902.49. The Standard & Poor's 500 Index was down 8.72 points, or 0.76 percent, at 1,131.93. The Nasdaq Composite Index was down 17.68 points, or 0.74 percent, at 2,362.75. ' Reuters

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KPJ 2Q earnings up 3.4% to RM30m

KUALA LUMPUR: KPJ HEALTHCARE BHD []'s second quarter earnings increased by 3.4% to RM30.16 million from RM29.16 million a year ago on the back of a better performance from its hospital operations.

It said on Friday, Aug 19 the pre-tax profit increased by 9.4% to RM45.22 million from RM41.30 a year ago, adding the 'increase is in line with the increase in revenue of the hospitals'.

KPJ's revenue rose 14.8% to RM470.89 million from RM410.23 million a year ago while earnings per share were 5.70 sen compared with 5.54 sen. It declared a dividend of 2.4 sen a share.

'The board of directors is confident that the group's performance in financial year 2011 will continue to improve in tandem with increasing hospital capacity and activities,' it said.

For the first half, its earnings rose 2.2% to RM57.67 million from RM56.41 million while revenue rose at a stronger pace of 5.5% to RM908.64 million from RM786.28 million.

It reported that its revenue from the Malaysian hospitals was RM844.78 million in the first half while Indonesia reported revenue of'' RM3.78 million. Its Malaysian hospitals recorded profit of RM86.30 million but its Indonesian operations posted losses of RM4.39 million.

eBworx 2Q net profit rises two-fold to RM2.98m

KUALA LUMPUR: EBWORX BHD [] net profit for the second quarter ended June 30, 2011 jumped two-fold to RM2.98 million from RM973,000 a year earlier, due mainly to higher revenue recorded from ongoing projects and new projects secured during the period.

Revenue for the period rose to RM12.92 million from RM8.53 million in 2010. Earnings per share was 1.44 sen while net assets per share was 33.37 sen.

For the six months ended June 30, eBworx's net profit rose to RM5.56 million from RM2.72 million in 2010, on the back of revenue RM23.94 million.

Reviewing its performance on Friday, Aug 19, eBworx said that with the increasing number of potential projects from financial institutions across the region, the company expects its revenue to grow.

'With a significant growth in the group's order book which is almost 3 times the balance as at Dec 31, 2010, the directors anticipate an improvement in the Group's profitability for the current financial year ending Dec 31, 2011,' it said.

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TSH Resources posts record pre-tax profit of RM51.63m in 2Q

KUALA LUMPUR: TSH RESOURCES BHD [] posted an impressive set of results in the second quarter ended June 30, 2011 with a record pre-tax profit of RM51.63 million, which was 192% above the RM17.69 million a year ago, boosted by its PLANTATION []s business, especially from its Indonesian operations.

It said on Friday, Aug 19 net profit increased by 217% to RM35.96 million from RM11.32 million a year ago. Its revenue rose 59% to RM329.95 million from RM207.47 million. Earnings per share were 8.77 sen compared with 2.77 a year ago.

For the first half, its pre-tax profit rose 139.4% to RM85.27 million from RM35.61 million in the previous corresponding period while net profit was RM59.92 million, up 165% from RM22.59 million.

'Overall, the palm and bio-integration business segment's performance improved significantly as a result of higher crop production arising mainly from higher yield and increased hectarage of mature plantation field in Indonesia,' it said.

TSH said the cocoa manufacturing segment reported a lower profit due to lower production and unfavourable cocoa butter price. As for the wood products segment, the decrease in loss was attributed to strengthening of ero and better sale mix which contributed to better gross profit margin.

Commenting on the plantations business, group chairman Datuk Kelvin Tan said: 'The group fresh fruit bunches (FFB) crop for the half year of 2011 was 50% higher than 2010, contributed by the maturing profile of TSH's Indonesian oil palm plantations as more area comes into harvesting, as well as the high yield of our Sabah plantations,' s.

For FY2011, he expected the Sabah estates to achieve average yield of above 30 tonnes FFB per hectare which was well above the industry standard.

'Despite the young age profile of our Indonesian oil palms of 4 - 5 years, we are now achieving a'' high oil extraction rate (OER) of over 25% for FFB from our own crops', stated Datuk Kelvin.'' 'This has further boosted our bottomline'.

Tan said with more of its Indonesian plantations being planted with TSH's Wakuba clonal oil palm ramets, future FFB yield and OER will be further enhanced.

He explained the ramet plantings can yield up to 17 tonnes FFB per hectare in its first year of harvesting.

'This, coupled with the young age profile of our palms, will assure us of exponential growth for years to come,' he added.

UMW 2Q net profit falls 38% to RM131.18 million, declares 10c interim dividend

KUALA LUMPUR: UMW HOLDINGS BHD [] net profit for the second quarter ended June 30, 2011 fell 38% to RM131.18 million from RM211.69 million a year earlier, due mainly to lower contributions from its automotive and manufacturing & engineering segments.

Revenue for the quarter dipped to RM3.17 billion from RM2.28 billion in 2010. Earnings per share was 11.26 sen while net assets per share was RM3.66.

The company declared an interim single-tier dividend of 10 sen per share of 50 sen each for the financial year ending Dec 31, 2011.

For the six months ended June 30, UMW's net profit fell to RM283.01 million from RM344.55 million in 2010, on the back of revenue of RM6.39 billion.

Reviewing its performance on Friday, Aug 19, UMW said the performance of both Toyota and Perodua was expected to improve in 2H2011, and that profit contributions from the automotive segment was expected to be in line with its original 2011 internal target.

However, it said both revenue and profit from the manufacturing and engineering segment for 2011 were expected to be lower due the slow-down in vehicle sales caused by the tsunami in Japan.

Meanwhile, unfavourable fair value movements of some of its investments quoted overseas and hedging instruments due to external factors beyond its control may affect the overall performance of the oil and gas segment, it said.

'Performance of the group may be affected by the recent downgrading of US credit rating as any slow-down in the US economy is likely to have a negative impact on the Malaysian economy.

'Nevertheless, the board is of the view that our internal targets for 2011 are achievable given that the group us progressing satisfactorily in accordance with its business recovery plans,' it said.

PLUS Expressway's earning up 28.7% to RM383.49m

KUALA LUMPUR: PLUS Expressway Bhd's earnings rose 28.7% to RM383.49 million in the second quarter ended June 30, 2011 from RM297.86 million a year ago, boosted by an increase in toll collection by RM41.10 million.

It said on Friday, Aug 19 that revenue rose 3.5%to RM858.91 million from RM829.28 million while earnings per share were 7.67sen compared with 5.96 sen. It declared an interim dividend of 15 sen.

PLUS said the toll collection in the second quarter increased by RM41.1 million or 6.4% from a year ago.

'Total revenue for the current quarter of RM858.9 million was RM29.6 million higher than the preceding year corresponding quarter of RM829.3million. The favourable variance was mainly due to higher toll collection, mitigated by lower toll compensation of RM15.3 million (net of fair value adjustment) due to the reversal of cash compensation accrual,' it said.

For the first half, its earnings increased by 51.4% to RM878.61 million from RM580.31 million while revenue showed an 18.2% increase to RM1.906 billion from RM1.612 billion.

For the period ended June 30, the group generated cash from operating activities of RM928.1 million, with cash and cash equivalents balance of RM3.598 billion.

MMHE lands jobs worth RM952m from MISC

KUALA LUMPUR: Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE) has secured two contracts worth a total RM952 million from MISC BHD [] for topsides fabrication, marine repair and conversion of two energy vessels.

In a statement Friday, Aug 19, MMHE said the first was an EPCC contract for the repair, life extension and conversion of MT Onozo, an Aframax tanker, into a floating production, storage and offloading (FPSO) facility.

It said that upon completion, the facility would be known as FPSO Cendor and be deployed offshore Terengganu in West Malaysia, and operated by Petrofac Malaysia.

MMHE said the FPSO Cendor was the eleventh conversion for the group, adding that it was the only domestic company that commanded the capability, proven track record and facilities in converting old floaters into FPSO and floating, storage and offloading (FSO) vessels.

Meanwhile, it said the second contract was for the repair, life extension and conversion of MISC's SS Tenaga Satu, a liquefied natural gas vessel (LNG), into a floating storage unit facility, to be known as FSU Lekas.

Upon completion, FSU Lekas would be moored at Malaysia's very first Regasification Terminal at Sungai Udang, Melaka, it said.

MMHE said that this was the first conversion into a FSU by a Malaysia-based company and also amongst the first few in the world.

'As the demand for a cleaner source of energy grows, LNG carriers will play a pivotal role in meeting future's energy demand.

'A regasification terminal or facility would be required when importing LNG and FSUs can be a cost effective solution in such a facility,' it said.

The company said the repair and conversion of LNG vessel into a FSU facility marked a successful extension of MMHE's scope of services and capabilities as the group currently also provides repair and drydocking facilities to LNG and liquefied petroleum gas (LPG) vessels.

'In the recent financial year ended March 31, 2011, 16% of the vessels repaired by MHB are high-value LNG/LPG vessels,' it said.

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Tenaga hits new 52-wk low on hefty fuel costs

KUALA LUMPUR: TENAGA NASIONAL BHD []'s share price fell to a new 52-week low of RM5.55 on Friday, Aug 19 after it issued a warning about hefty fuel costs which could reach an additional RM400 million a month.

At the close of market, it was down 18 sen to RM5.55 with13.29 million shares done.

The FBM KLCI fell 19.32 points to 1,483.98. Turnover was 958.90 million shares valued at RM2.18 billion, the highest in many months.'' Declining stocks beat advancers 677 to 127.

TNB announced to Bursa Malaysia that its president and chief executive officer Datuk Seri Che Khalib Mohamad Noh had said the power company would have to incur an additional RM400 million a month to replace the shortfall in gas with the more expensive distillates.

He had said the company might not be able to maintain its dividend payments for the current financial year ending Aug 31, 2011 as it was severely affected by the gas curtailment by Petroliam Nasional Bhd.

He also TNB needed to replace the shortfall in gas volume by utilising more oil and distillates which are five times more expensive than gas and this has resulted in the company incurring an additional RM400 million a month to replace the shortfall in gas.

'The profit warning was issued as the additional high fuel costs continued to have negative impact on the company's cash flow,' TNB said.

KLCI falls 1.29% as global markets routed

KUALA LUMPUR: The FBM KLCI fell 1.29% on Friday, Aug 19 in line with the losses at key regional markets that were rattled by the overnight slump at Wall Street on worries that the US economy could be sliding into recession.

The rout continued at European markets that opened sharply down today.

The FMM KLCI fell 19.32 points to 1,483.98, weighed by losses including at Genting and CIMB. Market breadth was negative with losers beating gainers by 677 to 127, while 231 counters traded unchanged. Volume was 958.90 million shares valued at RM2.19 billion.

At the regional markets, South Korea's Kospi plunged 6.22% to 1,744.88, Taiwan's Taiex fell 3.57% to 7,342.96, Hong Kong's Hang Seng Index lost 3.08% to 10,399.92, Japan's Nikkei 225 down 2.51% to 8,719.24, Singapore's Straits Times Index fell 3.23% to 2,733.63 and the Shanghai Composite Index shed 0.98% to 2,534.36.

On Bursa Malaysia, Panasonic was the top loser and fell 48 sen to RM23.32; PPB lost 30 sen to RM17.20, LPI Capital and Genting 28 sen each to RM13 and RM9.70, Top Glove 24 sen to RM4.94, UMW 23 sen to RM7.22, CIMB 22 sen to RM7.93, Boustead and Carlsberg 21 sen each to RM5.29 and RM6.81, while MISC lost 20 sen to RM7.10.

Petronas Chemicals was the most actively traded counter with 30 million shares done. The stock fell 18 sen to RM6.40.

Other actives included Axiata, AirAsia, Dialog, CIMB, DVM, MAS, Timecom, MAA and Telekom.

Among the gainers, BAT added RM1.04 to RM45.24, Dutch Lady 56 sen to RM18.80, NSOP 34 sen to RM5.35, Nestle 20 sen to RM1.36, SHL 17 sen to RM1.50, Hong Leong Bank 16 sen to RM13, BLD PLANTATION []s 12 sen to RM7.02 and Utusan 10 sen to 82.5 sen.

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EP Manufacturing 2Q net profit surges 98% to RM11.27m

KUALA LUMPUR: EP MANUFACTURING BHD [] (EPMB) net profit for the second quarter ended June 30, 2011 surged 98% to RM11.27 million from RM5.7 million a year earlier, due mainly to certain non-recurring charges in the preceding year's corresponding quarter.'

It said on Friday, Aug 19 that revenue for the quarter dipped to RM140.55 millon from RM157.31 million.

Earnings per share was 7 sen while net assets per share was RM1.64.

EPMB ''declared a first tax exempt interim dividend of one sen per share.

For the six months ended June 30, EPMB's net profit jumped to RM19.86 million from RM9.82 million in 2010, on the back of revenue RM266 million.

In a statement Aug 19, its executive chairman Hamidon Abdullah said

Executive Chairman, En. Hamidon Abdullah said the company expects the local automotive market to pick up in the second half of the year due to the festivities.

'As one of the largest supplier to the current top two selling models, Proton Saga FL and new Perodua Myvi, we expect a better second half of the year,' he said.

#Updated* LTAT to make offer for Esso?

KUALA LUMPUR: The superannuation fund, Lembaga Tabung Amanah Tentera (LTAT) is reported to be keen on buying the 65% stake in ESSO MALAYSIA BHD [] despite that ExxonMobil International had agreed to sell the stake to San Miguel.

Esso shares were down three sen to RM4 at 3.51pm on Friday, Aug 19, after the 18.6% share price tumble on Thursday after ExxonMobil announced the sale of the stake at RM3.50 per share. The shares had surged to RM4.95 on Wednesday.

A report by Berita Harian that the LTAT is keen to buy the stake seems to have provided some support for the shares when compared to the broader market and the fall on the 30-stock FBM KLCI.

The KLCI is down 23.64 points to 1,479.66. Turnover is 702.17 million shares valued at RM1.57 billion. Losers hammered gainers 695 to 83.

The Berita Harian said the LTAT was still keen on acquiring the Esso stake and it could offer as much as RM5.20 per share. Esso's net asset per share is RM3.28.

In April, The Edge FinancialDaily reported that BOUSTEAD HOLDINGS BHD [] and LTAT were believed to be eyeing the 65% stake. Esso's 580 Esso and Mobile service stations across the country would have complemented Boustead's own BH Petrol 300 service stations.

Britain's FTSE falls under 5,000, down 2.6 pct

LONDON: Britain's top shares plunged again on Friday, Aug 19 with the FTSE 100 dipping below the psychological 5,000 level on fears a global slowdown would tip major economies into recession.

Banks were among the worst hit on global growth worries and concerns about short-term funding stress, with Lloyds Banking Group dropping 7.7 percent to become the worst performer on the FTSE 100 .

Barclays and Royal Bank of Scotland fell 5.9 percent and 6.2 percent, respectively.

Investor nervousness intensified after some European banks were forced to pay higher rates for U.S. dollar loans on Thursday.

Barclays and Royal Bank of Scotland paid slightly above the 0.29778 percent LIBOR rate to borrow three-month money.

"If growth slows globally it could require further impairments on the balance sheets of British Banks," said Colin McLean, managing director at SVM Asset Management in Edinburgh.

"We do not see it ending until banks get more clarity on their balance sheets. We are underweight the sector."

By 0757 GMT, the UK benchmark index had fallen 134.62 points, or 2.6 percent, to 4,958.79, having already made its biggest percentage drop since March 2009 in the previous session.

The index is on track to make a weekly loss of 6.3 percent and has dropped 18.5 percent since the July to August sell-off began.

Trading in London is expected to be volatile ahead of the expiration of futures and options contracts at around 0915 GMT.

Autonomy went into orbit above a sinking FTSE with a 77 percent jump to a 10-year high in volumes 10 times its 90-day daily average after Hewlett Packard (HP) said it would buy the enterprise search software specialist.

COMMODITIES UNDER PRESSURE

Commodity stocks, whose performance is correlated to economic growth, were also among the worst performers.

Oil stocks were the hardest hit as Brent crude fell below $106 on demand worries, with the FTSE integrated oil index down 2.9 percent, with BP losing 3 percent.

Oil service provider John Wood Group was hit by a double whammy after JP Morgan cut it to "neutral" from "overweight" and fell 5.9 percent to feature among the FTSE 100's biggest losers.

"We are concerned that premium valuations will be at risk due to (i) a lull in major awards in H2, (ii) a relative slowdown in project completions in 2012, and (iii) the relatively high oil price dependence of subsea projects," JP Morgan said in a note. - Reuters

RAM Ratings reaffirms Bank Rakyat's AA2/P1 ratings

KUALA LUMPUR: RAM Ratings has reaffirmed Bank Kerjasama Rakyat Malaysia Bhd's (Bank Rakyat) respective long- and short-term financial institution ratings at AA2 and P1 with a stable outlook.

In a statement Friday, Aug 19, the rating agency said the ratings reflect Bank Rakyat's robust profitability, underpinned by its dominant market share in personal financing facilities for civil servants and access to salary deductions administered by Biro Perkhidmatan Angkasa (ANGKASA).

As the salary deductions are non-discretionary from the borrower's perspective, the repayment profiles of these personal financing facilities are considerably better, it said.

'The ratings also reflect Bank Rakyat's position as a leading cooperative bank and its role as a developmental financial institution.

'On the other hand, the ratings recognise concentration risks in the Bank's depositor and financing base,' it said.

RAM Ratings said that Bank Rakyat's asset-quality indicators remain sound, adding that despite a higher credit-cost ratio of 1.8% at end-December 2010, the bank's gross impaired-financing ratio had eased to 3.4% (end-March 2010: 5.4%).

Its heftier credit costs primarily relate to further provisions and write-offs on Bank Rakyat's commercial financing, as well as more conservative provisioning on its personal financing portfolio, it said.

'Despite narrower financing margins, higher credit costs and impairments on its securities holdings, Bank Rakyat's pre-tax profit went up 11% year-on-year to RM1.7 billion in FY Dec 2010, buoyed by strong financing growth and a corresponding increase in net financing income.

'While intense competition and further upward rate movements are expected to exert pressure on margins, the bank's net financing margins are still envisaged to be kept sizeable at above 5%,' it said.

RAM Ratings said that with a 10% deposit growth in 1Q FY Dec 2011 adding to the 26% surge in deposits in the 2010 fiscal year, Bank Rakyat's financing-to-deposits ratio had eased to 87% by end-March 2011 (end-December 2009: 98%).

'Moving forward, Bank Rakyat intends to progressively increase its paid-up capital to RM3 billion (+RM1 billion) by end-December 2011; the Bank is expected to close the year with healthy tier-1 and overall risk-weighted capital-adequacy ratios (RWCARs) of at least 13% and 14.5%, respectively (end-December 2010: 11% and 12.5%),' it said.

''

Selling pressure gathers pace, KLCI falls 20pts

KUALA LUMPUR: Selling pressure picked up pace in the afternoon on Friday, Aug 19, with the benchmark FBM KLCI falling more than 20 points.

At 3.15pm, the KLCI was down 21.36 points to 1,481.94. Turnover was 592.05 million shares valued at RM1.29 billion.'' Losers battered gainers 668 to 83 while 175 stocks were unchanged.

PPB fell 36 sen to RM17.14, Genting 30 sen to RM9.68, UMW 26 sen to RM7.19, MISC and CIMB 20 sen each to RM7.10 and RM7.95 and Tenaga 15 sen to RM5.58.

Petroliam Chemicals was the most active with 20.70 million shares done, sliding 17 sen to RM6.41 while Dialog gave up 10 sen to RM2.60.

Among the airlines, AirAsia fell nine sen to RM3.63 and MAS seven sen to RM1.68.

New twist at DVM

KUALA LUMPUR: Two shareholders of DVM TECHNOLOGY [] BHD [], owning 15.4% of the shares, who had sought be made directors after the proposed removal of four current directors, have ceased to be substantial shareholders.

Filings by the ACE Market listed company showed the two shareholders, who are based in Hong Kong, Raymond Yip Wai Man and Christian Kwok-Leun Yau Heillesen, had pared their stakes.

Yip disposed of 9.80 million DVM shares in the open market on Aug 15. His stake was reduced to 8.55 million shares or 4.85%.

He had earlier emerged as a substantial shareholder on Aug 12 when he acquired 3.949 million shares, increasing his shareholding to 10.43% or 18.36 million.

As for Yau, he also ceased to be a substantial shareholder after disposing of 8.35 million shares on Aug 15. His stake was reduced to 8.30 million or 4.71%.

He had also earlier acquired 4.60 million shares on Aug 12.

On Aug 15, both of them had sought the removal of Tan Sri Abdul Rahman Abdul Hamid, Datuk Goh Kian Seng, Kamarudin Ngah Lee Keat Hin as directors.

Yip and Yau were seeking shareholders' approval at the EGM that they be appointed as directors. They are also seeking the appointments of Douglas Arthur Choy and Koo Seng Fatt as directors.

Hock Seng Lee lands RM45.7m water supply subcontract

KUALA LUMPUR: HOCK SENG LEE BHD [] (HSL) has been awarded a subcontract worth RM45.7 million by AF CONSTRUCTION [] Sdn Bhd for the construction of rural water supply in Sibu Division, Sarawak.

HSL said on Friday, Aug 19 that the project was for the construction, testing and commissioning of a water treatment plant, the supply and laying of pipes and associated works.

The scope of works also included associated mechanical and electrical works, earthworks, roadworks and drainage works, it said.

The company said the project wad be due to be completed by last quarter of 2012.

HSL said the contract was expected to contribute positively to its earnings for the financial years ending 2011 to 2012.

Eversendai 2Q net profit RM34m, book order RM1.39b

KUALA LUMPUR: Recently-listed Eversendai Corporation Bhd posted net profit of RM34.03 million in the second quarter ended June 30, 2011 and expects its strong performance to continue in the remaining financial year, underpinned by a book order of RM1.39 billion.

It said on Friday, Aug 19 that revenue was RM258.14 million while earnings per share were 5.96 sen.

For the six-months period, its earnings were RM56.59 million on the back of RM465.99 million in revenue.

Eversendai said its book order of RM1.39 billion as at June 30 comprised of 41 projects, 74% from which were in the Middle East, 21% in India and 5% in Malaysia.

'With the diverse and strong order book, the group is strategically positioned to perform well in FY 2011,' it said.

The company said the wide geographical spread, number of projects and large client base of the current order book would minimise its risk profile substantially as it did not depend solely on any specific sector and or client.

SEMI posts July 2011 book-to-bill ratio of 0.86

KUALA LUMPUR: North America-based manufacturers of semiconductor equipment posted $1.30 billion in orders in July 2011 (three-month average basis) and a book-to-bill (BTB) ratio of 0.86, according the US-based Semiconductor Equipment Manufacturers Industry association (SEMI).

A book-to-bill of 0.86 means that $86 worth of orders were received for every $100 of product billed for the month.

SEMI is the global industry association serving the manufacturing supply chain for the micro- and nano-electronics industries.

In a statement on its website on Aug 19, SEMI said the three-month average of worldwide bookings in July 2011 was $1.30 billion.

The bookings figure was 15.7% less than the final June 2011 level of $1.54 billion, and 29.3% below the $1.84 billion in orders posted in July 2010, it said.

Asian markets hammered, gold hits record high

KUALA LUMPUR: Asian markets were hammered on Friday, Aug 19, with South Korea's Kospi plunging more than 5% as investors off-loaded riskier assets following the overnight tumble at Wall Street on poor economic and jobs data.

Growing fears the US economy was sliding into recession and as some European lenders faced short-term funding strains, raising fears of a systemic banking crisis on the continent sent crude oil prices down and gold soaring to a new record high.

The FBM KLCI fell 18.53 points to 1,484.77 at the mid-day break, weighed by losses including at CIMB, Genting, MISC and Petronas Chemicals.

Losers thumped gainers by 592 to 94, while 185 counters traded unchanged. Volume was 432.55 million shares valued at RM912.44 million.

The ringgit fell 0.10% to 2.9846 versus the US dollar; crude palm oil eased RM11 per tonne to RM3,015, crude oil fell US$1.19 per barrel to US$81.19 while gold jumped US$16.15 an ounce to US$1,839.95.

Spot gold had earlier risen more than 1% to an all-time high of $1,844.55 an ounce, according to Reuters.

At the regional markets, South Korea's Kospi fell 5.28% to 1,762.39, Taiwan's Taiex lost 3.38% to 7,357.32, Singapore's Straits Times down 2.64% to 2,750.29, Hong Kong's Hang Seng Index fell 2.38% to 19,540.60, Japan's Nikkei 225 lost 1.83% to 8,780.52 and the Shanghai Composite Index was down 1.33% to 2,525.55.

On Bursa Malaysia, PPB fell 36 sen to RM17.14, LPI Capital 28 sen to RM13, NPC 27 sen to RM1.93, UMW 26 sen to RM7.19, Top Glove 23 sen to RM4.95, MISC and Petronas Chemicals 20 sen each to RM7.10 and RM6.38, Genting 19 sen to RM9.79, while Allianz and CIMB fell 18 sen each to RM4.68 and RM7.97.

Petronas Chemicals was the most actively traded counter with 13.95 million shares done.

Other actives included MAA, Dialog, Axiata, CIMB, AirAsia, HWGB, Karambunai and MAS.

Meanwhile, gainers included Dutch Lady, Nestle, BLD PLANTATION []s, BRDB, Utusan, Southern Acids, DiGi and HELP.

Weak US data, global economic woes sink Asian equities

KUALA LUMPUR: Asian stock markets, including Bursa Malaysia, fell sharply on Friday, Aug 19 after Wall Street tumbled overnight on weak economic and employment data, sparking fears of a slide back into recession.

The FBM KLCI fell 17.77 points to 1,485.53 at 10, weighed by losses at key blue chips including Genting and CIMB.

Losers beat gainers by 475 to 64, while 122 counters traded unchanged. Volume was 216.82 million shares valued at RM394.41 million.

At the regional markets, South Korea's Kospi tumbled 4.48% to 1,777.21, Japan's Nikkei 225 lost 2.15% to 8,751.67, Hong Kong's Hang Seng Index fell 2.65% to 19,485.74, the Shanghai Composite Index was down 1% to 2,533.89, Taiwan's Taiex fell 2.93% to 7,391.64 and Singapore's Straits Times Index lost 2.51% to 2,754.18.

Maybank Investment Bank Bhd head retail research and chief chartist Lee Cheng Hooi said that the due to the US markets' bearish tone last night, there would be some wild trading activities to the downside for the local bourse today.

He said in a note to clients on Aug 19 that some heavy liquidation activities would persist to depress the market's rebound from its recent 1,423.47 low.

'Sell on rallies and keep a massive cash pile for now. In the longer term, we foresee a move to 1,378.66. As the KLCI surpassed 1,495.05 this Monday, other retracement cluster levels like 1,510.27 and 1,511.91 had capped the index's rise on Aug 16,' he said.

Lee said that as such, the FBM KLCI traced out a minor 'Rising Wedge' rebound from the 1,423.47 low to the high of 1,510.54.

'We are still within the confines of the Rising Wedge pattern, which will soon see a breakdown. Why buy now when you can buy at much lower levels eventually?' he said.

Among the losers on Bursa Malaysia, PPB lost 36 sen to RM17.14, UMW 25 sen to RM7.20, Allianz, Genting and MISC 19 sen each to RM4.68, RM9.80 and RM7.12 respectively, Batu Kawan, LPI Capital, AMMB and CIMB 16 sen each to RM15.84, RM13.12, RM6.38 and RM7.99 respectively while MAHB fell 15 sen to RM6.50.

MAA was the most actively traded counter with 8.66 million shares done. The stock added two sen to 63 sen.

Other actives included Petronas Chemicals, Karambunai, CIMB, MAS, AirAsia, Kurnia Asia, DVM and AMMB.

Gainers at mid-morning included Dutch Lady, BAT, Glenealy, DiGi, Utusan, Nestle, BLD PLANTATION []s, IJM Plantations, Kheesan and Tahps.

MISC falls on weaker earnings

KUALA LUMPUR: MISC BHD [] shares declined on Friday, Aug 19 after its earnings fell to RM121.07 million in the quarter ended June 30, 2011 from RM427.98 million a year ago as it was affected by losses
in the petroleum business as freight rates fell.

At 10.30am, MISC fell 21 sen to RM7.09 with 294,200 shares traded.

MISC said on Thursday, Aug 18 that revenue declined to RM3 billion from RM3.27 billion. Earnings per share shrank to 2.70 sen from 9.6 sen.

CIMB Research in a note Aug 19 said MISC's 1Q11 core net profit came in at only 12.5% of its full-year forecast and 14.6% of consensus, which was probably due to the usual suspects - tanker and liner losses - and an unusual suspect, heavy engineering.

'We are maintaining our earnings forecasts and target price of RM5.75 (1.2x P/BV) pending today's briefing but flag that we may cut earnings by 30-50% for FY11 and 10-20% for FY12-13.

'As expected, no dividends were declared for 1Q11, which is the quarter ending June 11 due to a change in the fiscal year-end from March to December,' it said.

CIMB Research said it continued to rate MISC an UNDERPERFORM, with the potential de-rating catalysts being (1) these poor results, (2) weak near-term prospects for petroleum and chemical tanker freight rates, and (3) swelling liner losses.

'We recommend a switch into the aviation sector instead,' it said.

RAM Ratings reaffirms Cagamas' AAA/P1 ratings

KUALA LUMPUR: RAM Ratings has reaffirmed Cagamas Bhd's respective long- and short-term corporate credit ratings at AAA and P1.

Concurrently, the AAA and P1 ratings of Cagamas' RM40 billion Islamic and Conventional Medium-Term Note (MTN) Programme as well as its RM20 billion Islamic and Conventional Commercial Paper (CP) Programme have also been reaffirmed.

The AAA/P1 ratings of the Company's RM5 billion Islamic MTN Programme and Islamic CP Programme have also been reaffirmed.

In a statement Friday, Aug 19, RAM Ratings said that all the long-term ratings had a stable outlook.

The ratings reflect Cagamas' systemic importance in the domestic capital markets, robust receivables profile, and solid capitalisation, its aid.

'The company plays the strategic role of a liquidity provider to various institutions and is also the leading issuer of private debt securities in Malaysia.

'Given Cagamas' leading role and systemic importance to the Malaysian financial markets, we believe that government support will be readily extended, if required,' said the rating agency.

RAM Ratings said Cagamas had healthy asset quality, underpinned by highly rated counterparties within the 'purchase with recourse' (PWR) portfolio, and direct salary deductions for financing facilities under its 'purchase without recourse' scheme.

'Some 89% of the Company's PWR exposures are to entities with at least AA ratings. Given the strong receivables profile, there were zero impairment charges for bad credits in fiscal 2010,' it said.

In terms of profitability, Cagamas' net interest margin (inclusive of income from Islamic operations) stood at 1.6% in fiscal 2010; return on assets came in at 1.4% for the same period, it said.

RAM Ratings said Cagamas' profitability would remain driven by market conditions, including the interest-rate cycles and liquidity conditions, as well as its pricing strategies and risk-management policies.

Cagamas' capital position remained healthy as at end-December 2010, with an overall risk-weighted capital-adequacy ratio of 20.8%, it said.

Cagamas' initial business model, based on providing liquidity to the banking sector, is less relevant in a scenario of ample liquidity.

The potential consolidation of the banking sector ' which would effectively shrink Cagamas' clientele ' and banks' priority of balance-sheet expansion are other factors that may affect its businesses, it said.

That said, Cagamas' loan acquisition schemes remain as alternative avenues for financial institutions to manage their liquidity and capital positions, in view of the rising interest rate environment, said the rating agency.

RAM Ratings' head of structured finance ratings Siew Suet Ming said that while the company's risk profile could change as it explores new business opportunities, the rating agency drew comfort from the management's intention to explore areas of growth that complement its core expertise.

CIMB Research has technical sell on MRCB at RM2.27

KUALA LUMPUR: CIMB Equities Research has a technical sell call on MALAYSIAN RESOURCES CORP [] Bhd (MRCB) at RM2.27 at which it is trading at a price-to-earnings for FY12 (FY12P/E) of 20.6 times and price-to-book value of 2.4 times.

The research house said on Friday, Aug 19 the recent rebound has taken prices back to its 62%Fibonacci Retracement (FR) levels of its fall from the RM2.60 high to the low of RM1.97.'' It added the huge gap at RM2.35-RM2.44 would also act as a resistance in the near term.

It added that MRCB's MACD remained in the negative territory while its RSI is also below the 50pts mark despite the recent sharp rebound.

'We think that the selling activities are about to resume,' it said.

CIMB Research said unless prices can overcome the gap mentioned above, it reckons that prices could fall to retest the RM1.97 levels in the near term. If that support gives way, it is probably looking at RM1.80 next.

KLCI falls sharply in early trade

KUALA LUMPUR: ''The FBM KLCI fell sharply in early trade on Frida, Aug 19 in line with slide at key regional markets after Wall Street tumbled overnight on poor economic and jobs data.

At 9.05am, the FBM KLCI lost 21.69 points to 1,481.61.

Losers thumped gainers by 304 to 15, while 63 counters traded unchanged.

Among the early loser were PPB, MISC, UMW, MAHB, DiGi, Carlsberg, BAT, Batu Kawan, CIMB and QSR.

CIMB Research has technical sell on AFG

KUALA LUMPUR: CIMB Equities Research has a technical sell call on Alliance Financial Group (AFG) at RM3.52 at which it is trading at a FY12 price-to-earnings of 11.4 times and price-to-book value of 1.6 times.

The research house said on Friday, Aug 19 that AFG's recent rebound has returned prices to almost its 62%FR levels but remained below its 30-day SMA at RM3.55.

'The odds remain in favour the bears despite the recent sharp rebound. With both its indicators still in neutral levels, the upside is likely capped here,' it said.

CIMB Research said it would remain sellers of this stock at current levels. As long as prices stay above the recent high of RM3.79, it continues to favour the downside.

'A drop below RM3.29 would likely suggest that the support at RM3.18 is not likely to hold up the impending selling pressure. We expect prices to retest at least the RM3.00 levels, where support is strong,' it said.

Dutch Lady rises on improved 2Q earnings

KUALA LUMPUR: ''DUTCH LADY MILK INDUSTRIES BHD [] shares rose on Friday, Aug 19 after reported a 46.8% increase in earnings to RM27.77 million in the second quarter ended June 30, 2011 from RM18.92 million a year ago.

At 9.20am, Dutch Lady added 52 sen to RM18.76 with 12,00 shares traded.

The company said on Aug 18 that the increase in earnings was mainly due to higher sales, a favourable sales mix and a favourable exchange rate on imported materials.

It said revenue rose 8.1% to RM200.89 million from RM185.78 million due to higher demand for liquid and powder milk. Earnings per share were 43.30 sen compared with 29.56 sen.

Nestle up on interim dividend

KUALA LUMPUR: Nestle (Malaysia) Bhd shares rose on Friday, Aug 19 after the company declared an interim dividend of 55 sen per share, tax exempt under single-tier tax system.

At 9.30am, Nestle added 10 sen to RM48.

The company said on Aug 18 that its net profit for the second quarter ended June 30, 2011 rose 6.4% to RM106.55 million from RM100.15 million a year earlier, driven by both domestic and export sales.

Revenue for the quarter rose to RM1.16 billion from RM1.05 billion in 2010. Earnings per share was 45.44 sen while net assets per share was RM2.58.

MIDF Research maintained its Neutral rating on Nestle, and said that based on the estimated dividend per share of RM2.05 in FY12 with WACC and a slight lower growth rate assumption of 7.6% and 3.2% (from 3.3% given uncertainty in global economy) respectively, its target price was maintained at RM46.90 per share.

'However, we expect Nestle to outperform during troubled times and we view it as attractive given its high dividend yield of 4.7%.

'We like Nestle for its defensive business and strong brand name,' it said in a note Aug 19.

''

CIMB Research downgrades Tenaga to Neutral

KUALA LUMPUR: CIMB Equities Research has downgraded TENAGA NASIONAL BHD [] from Trading Buy to Neutral and reduced the target price from RM7.60 to RM6.77.

The research house said on Friday, Aug 19 that Tenaga's comment that gas supply has not recovered was a negative surprise as it had said during its 3QFY8/11 results that supply would recover.

'After speaking with management, we cut FY11-12 core net profit by 13%-15% and FY11-12 DPS by 12%-13% as we were too optimistic even after slashing our numbers after the 3Q results.

'Our target falls from RM7.60 to RM6.77 due to lower earnings and the lowering of our target P/BV from 1.4x to 1.25x as we apply a higher risk premium,' it said.

CIMB Research said it downgraded Tenaga from Trading Buy to NEUTRAL. Although valuations are attractive and gas supply should eventually recover, this is offset by the lack of a robust cost pass-through mechanism.

'While cost sharing with Petronas is possible, there is no definite timeline. We recommend a switch to Petronas Gas,' it said.

CIMB Research maintains MISC as Underperform

KUALA LUMPUR: CIMB Equities Research is maintaining its Underperform rating on MISC BHD [] with several potential derating catalysts ahead.

The research house said on Friday, Aug 19 that MISC's 1Q11 core net profit came in at only 12.5% of its full-year forecast and 14.6% of consensus, which was probably due to the usual suspects - tanker and liner losses - and an unusual suspect, heavy engineering.

'We are maintaining our earnings forecasts and target price of RM5.75 (1.2x P/BV) pending today's briefing but flag that we may cut earnings by 30-50% for FY11 and 10-20% for FY12-13,' it said.

CIMB Research said as expected, no dividends were declared for 1Q11, which is the quarter ending June 11 due to a change in the fiscal year-end from March to December.

'We continue to rate MISC an UNDERPERFORM, with the potential de-rating catalysts being (1) these poor results, (2) weak near-term prospects for petroleum and chemical tanker freight rates, and (3) swelling liner losses. We recommend a switch into the aviation sector instead,' it said.

CIMB Research maintains Outperform on Tomypak

KUALA LUMPUR: CIMB Equities Research said Tomyopak's failure to pass through cost increases was the main reason for its poor interims.

The research house said on Friday, Aug 19 that annualised 1H11 net profit was only 62% of its forecast though this did not stop the company from meeting its 1.4 sen interim DPS expectations.

'Although we foresee a strong earnings recovery in 2H following the recent steep fall in raw material prices, we are slashing our FY11 EPS by 21% for the weak 1H earnings. But FY12-13 EPS forecasts and FY11-13 DPS numbers are intact,' it said.

CIMB Research retained its RM1.52 target price as it continues to value Tomypak at 6x CY12 P/E, a 40% discount to its 10.1x CY12 target P/E for Daibochi. CY12 P/E is only 4x while gross dividend yields are 8-10%.

'We maintain our OUTPERFORM rating as a continuation of the raw material price decline could spark a re-rating,' it said.

HDBSVR: Bears are back

KUALA LUMPUR: Hwang DBS Vickers Research said the bears are back, causing Wall Street to tumble again overnight on Thursday, Aug 18.

Key U.S. equity indices slumped between 3.7% and 5.2% at the closing bell on mounting concerns that the global economic recovery would stall while European banks could face capital constraints.

HDBSVR said on Friday, Aug 19 the negative vibes will surely be felt across the region.

'Back home, we expect the benchmark FBM KLCI to slip below its immediate support level of 1,495, possibly falling towards the next support mark of 1,465,' it said.

In terms of corporate development, we may see interest from investors in: (a) Dialog Group, which has proposed a rights issue with warrants (on the basis of 2 rights shares and 1 warrant for every 10 shares held); and (b) Petra Energy, following The Edge FinancialDaily report that its parent Perdana Petroleum is looking to sell its 29.6% stake in the company.

HP may drop PCs, to buy Autonomy for $11.7 billion

SAN FRANCISCO/ NEW YORK: Hewlett-Packard Co is considering a dramatic turn away from the struggling PC business by spinning it off into a separate company and is buying British software maker Autonomy Corp for $11.7 billion, focusing on faster-growing TECHNOLOGY [] sectors, Reuters reported on Thursday, Aug 18.

Underscoring the problems plaguing what was once its core business, the iconic Silicon Valley company also plans to kill WebOS-based phones and the TouchPad tablet, which was launched in June but has failed to excite consumers.

The barrage of news, which forced HP to announce third-quarter earnings an hour early, masked a sharp reduction in HP's estimates for full-year revenue and earnings that sent its shares 6 percent down to a 52-week low. They slid another 7 percent to $27.50 in after-hours trade.

HP CEO Leo Apotheker is responding to mounting pressure to fire up growth just as global economic and tech-spending outlooks darken. Like other PC makers, it is struggling to come up with an answer for Apple Inc's iPhones and iPads, which are gobbling up PC market share.

The announcement is the second this week to show how quickly technology companies are transforming as they jockey for position to cope with radical changes in consumer demand. Google Inc on Monday announced it was buying mobile handset maker Motorola Mobility for $12.5 billion, launching the Internet search and mobile software company into manufacturing for the first time.

HP's third-largest acquisition ever and its potential departure from the PC arena sets in motion a transformation that recalls International Business Machine Corp's overhaul of the last decade.

HP "is saying 'I want to be more like IBM.' They divested their PC business and they got more involved in software," said FBN Securities analyst Shelby Seyrafi.

"The PC industry is a very challenged one because of the slow growth in that sector. For those companies like HP which don't have a strong tablet offering, they are victims of the encroachment of Apple's iPads and tablets on their notebook business. So they're vulnerable to losing share."

The acquisition of cloud search-software specialist Autonomy, which analysts say may draw rival bids, marks its boldest foray into the software and technology services after Apotheker came on board with a mandate to drive innovation.

Speculation has swirled for months that HP was no longer keen on keeping a PC business struggling with low growth and single-digit margins.

Sources told Reuters in June that private equity firms from Blackstone Group and Kohlberg Kravis Roberts to TPG Capital would like HP to break up and sell them some of its units, arguing that the world's No. 1 PC maker and tech powerhouse is stretched too thin.

A PC spinoff marks a historic shift for a company that Bill Hewlett and Dave Packard built into a sprawling $120 billion empire from a $538 garage operation in 1939.

"HP is recognizing what the world has recognized, which is hardware in terms of consumers is not a huge growth business anymore," said Michael Yoshikami, chief executive of YCMNET Advisors, a minor shareholder in HP. "It's not where the money is. It's in keeping with the new CEO's perspective that they want to be more in services and more business oriented."

LEO MAKES BOLD MOVE

Spinning off the PC division, run by personal systems group chief Todd Bradley, would mark one of the biggest makeovers for the company since 1999, when it spun off its measurement and components businesses to form Agilent Technologies.

In 2001, it engineered an acquisition of PC rival Compaq, laying the foundation for its later domination of the sector.

Some alternatives HP is exploring include hiving off its PC business into a separate company through a spin-off or other transaction that would likely be tax-free to U.S. shareholders. HP expects the process to be completed within 12-18 months.

Apotheker, a former chief of European software giant SAP AG, had been expected to drive an expansion of the company's relatively small but very profitable software division -- including through major acquisitions.

Cambridge, England-based Autonomy counts Procter & Gamble Co among a long list of major corporate customers that use its software to search and organize unstructured data like emails. It said the offer values its fully diluted share capital at 7.09 billion pounds ($11.7 billion). The British firm's CFO, Sushovan Hussain, is on a visit to California, a source told Reuters.

"HP would be buying this as part of a refocus of the business on software," said Tim Daniels, technology, media and telecoms strategist at Olivetree Securities. "Clients now don't have a problem accumulating data, the problem is the structuring of it. Eighty percent of the data on the Web now is unstructured: video, pictures, emails, etc."

KILLING THE TOUCHPAD?

HP's Personal Systems Group also includes smartphones, tablets and the WebOS operating system, pulling in about $41 billion in revenue but only about 13 percent of profit.

HP's decision to discontinue the TouchPad -- which hit the store shelves in July with much costly fanfare -- follows poor demand. It was discounted by $100 a month after it was launched in a market dominated by the iPad. WebOS came with the $1.2 billion acquisition of Palm last year.

"There were also a lot of missteps, such as launching it a month before it was ready and pricing it the same as the iPad 2," said Current Analysis' Avi Greengart. "It was a great operating system. Everybody was pulling for it but a lot of people weren't buying it."

Going forward, HP expects further pressure on its revenue and cut its full-year forecast for the third straight quarter.

HP now expects full-year revenue of $127.2 billion to $127.6 billion, down from a previous estimate of $129 billion to $130 billion. It also cut its earnings per share estimate to a range of $3.59 to $3.70, down from its previous estimate of at least $4.27 per share.

Barclays Capital and Perella Weinberg are advising HP, while Qatalyst Partners, Goldman Sachs, Citigroup, Merrill Lynch, UBS and JPMorgan Chase are advising Autonomy. - Reuters

U.S. probing S&P over financial crisis: source

WASHINGTON: The U.S. Justice Department is investigating the rating agency Standard & Poor's over its actions on mortgages leading up to the financial crisis, a source familiar with the matter said on Thursday, Aug 18.

The investigation -- which the source said relates to what S&P analysts wanted to do and what they were told to do instead -- began before the ratings firm, downgraded the long-term U.S. debt to AA-plus from a AAA rating this month.

The probe is being led by the Justice Department's civil division, the source said, declining to be further identified because the investigation is ongoing and not public.

The Securities and Exchange Commission has also been probing S&P, a unit of McGraw-Hill, over its role in the crisis, the source said.

Representatives for the Justice Department and SEC declined to comment.

The confirmation comes after the New York Times reported that the probe, which is centering on whether S&P improperly rated dozens of mortgage securities in the years before the financial crisis that unfolded in 2008.

The department has been asking about instances in which S&P analysts wanted to assign lower ratings to mortgage bonds but may have been overruled by S&P business managers, the newspaper reported.

Ed Sweeney, a spokesman for S&P, said that its core principles had included "analytic independence and objectivity" and that since 2008 the firm had taken steps to enhance those policies.

"S&P has received several requests from different government agencies over the last few years regarding U.S. mortgage-related securities. We have cooperated and will continue to cooperate with these requests," he said.

It was unclear whether the Justice Department investigation involves the other two ratings agencies, Moody's Corp and Fimalac SA's Fitch, which have not downgraded U.S. debt.

The Times said that despite the outcry over the ratings agencies' failures in the financial crisis, investors still rely heavily on ratings from the three main agencies for their purchases of sovereign and corporate debt, as well as other complex financial products.

The Senate's permanent subcommittee on investigations, headed by Democratic Senator Carl Levin, issued a report in April that included scathing criticisms of S&P after holding hearings on the financial crisis.

"The hearings held by the Permanent Subcommittee on Investigations and our subsequent report documented reckless actions and significant conflicts of interest on the part of the credit rating agencies that contributed to the financial crisis," Levin told Reuters in a statement.

"It is totally appropriate for U.S. law enforcement agencies to review that sad record," he said.

Senator Chuck Grassley, a Republican from Iowa, said he hoped the investigation would focus fresh attention on the inherent conflict of interest in the industry, which is paid by potential borrowers to rate their credit-worthiness.

"Maybe a Justice Department investigation will force action on the conflicts of interest problem and accomplish what should have been done a long time ago," Grassley said in a statement.

Additionally, S&P has been under fire from lawmakers, market players and the U.S. Treasury Department since its decision to cut the U.S. credit rating earlier this month. Key committees in Congress may also hold hearings about the downgrade and reforms of the ratings industry. - Reuters

ASIA-Shares to fall as global markets hit

WELLINGTON: Asian stocks face a battering on Friday, as fears of major economies sliding back into recession gripped investors and sent stocks tumbling.

Poor U.S. data, sovereign debt concerns and worries over the health of banks were seen by many investors as adding up to a bleak economic outlook.

The main Wall Street indices fell between 3.7 percent and 5.2 percent, with TECHNOLOGY [] and bank shares the hardest hit.

A gauge of Mid-Atlantic factory activity showed a drop in August to its lowest level since March 2009. For details, see

Investors flocked to safe havens, with spot gold and the yield on ten-year British and German government bonds hitting record highs.

Asian stocks listed on Wall Street fell 4.75 while world stocks, as measured by the MSCI world equity index, shed 4.16 percent.

British shares fell 4.5 percent while European shares shed 4.8 percent, with the markets posting their worst one-day falls in more than two years, as fears grew the euro zone debt crisis was spreading.

The U.S. dollar and the Japanese yen rose on the flight to safety, but the Swiss franc was unable to gain on fears of further central bank intervention to halt the currency's rise.

Japanese markets are eyeing a third straight day of losses, with Nikkei futures traded in Chicago 170 points below the last closing level in Osaka.

Australian stocks are also set to suffer, with share price index futures down 103 points to 4,116, a 135.2 point discount to the close of the underlying S&P/ASX 200 index. ' Reuters

''

Beaten-down Wall Street slammed by recession fears

NEW YORK: Rising fears of another recession hammered U.S. stocks on Thursday, Aug 18 sending major averages sharply lower in a return to the extreme fluctuations investors endured a week ago.

New worries about the health of European banks set the tone before the market's open, and a dismal report on regional U.S. manufacturing fueled a downward spiral in which the Dow dropped as much as 528 points, spurring a flight to safe-haven assets like gold.

The Nasdaq ended more than 5 percent lower, the S&P 500 more than 4 percent and the blue-chip Dow off more than 3 percent. Thursday marks the sixth time in the last two weeks that the S&P has moved by 4 percent or more.

"Are we going to go into recession? Most market participants were looking for slow and steady growth, but the statistics and the financial situation here and in foreign economies have disturbed that view," said Richard Weiss, a Mountain View, California-based senior money manager at American Century Investments.

The Dow Jones industrial average fell 419.63 points, or 3.68 percent, to 10,990.58, while the Standard & Poor's 500 Index declined 53.24 points, or 4.46 percent, to 1,140.65, and the Nasdaq Composite Index dropped 131.05 points, or 5.22 percent, to 2,380.43.

The losses resumed a slide in stocks that began in late July and seemed to moderate in the last few days. In a more worrisome sign, volume was heavier than on recent positive days, with 11.4 billion shares changing hands, highest so far this week.

"It almost feels as though the floor in its entirety is clearly engaged in executions but the overall theme is resignation," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.

Kenny said that traders are increasingly resigned to the idea that the market trend is downward.

"What can you do about a trend that seems to be well established? It's the new -- I hate to say it -- it is the new normal," he said.

Volatility jumped, with the CBOE Volatility Index or VIX, a barometer of Wall Street anxiety, up 38 percent at 43.56. More investors were taking out protective positions against declines in the market.

The S&P 500 is now off 16.4 percent from its April 29 closing high, but the benchmark index still ended above its slump on August 9, when it fell to 1,101.54.

Adding to fears of a another recession, a survey of U.S. Mid-Atlantic factory activity by the Philadelphia Federal Reserve Bank showed a drop in August to its lowest level since March 2009.

Even though European bank worries were at the forefront of investors' minds, financials were not the worst-off stocks on Thursday.

The losses were spread throughout the market, with the biggest hits taken by growth-oriented sectors that speaks more to rising global economic concerns. Luxury retailers and large-cap TECHNOLOGY [] companies, often a hiding spot during market declines, slumped. Shares of luxury retailer Tiffany & Co fell 7.9 percent to $59.21, while software developer Oracle Corp dropped 8.3 percent to $25.19.

Top drags on the Dow included shares of IBM, down 4.5 percent at $163.83, and United Technologies, down 5.5 percent at $68.12. On the Nasdaq, shares of Oracle fell 8.3 percent to $25.19.

Hewlett-Packard Co slumped 6.1 percent after reporting quarterly results.

Bank shares also fueled the market's declines, with the KBW Banks Index down 5.6 percent.

A Wall Street Journal report said regulators are scrutinizing the financial health of U.S. units of Europe's biggest banks more closely.

Among Wall Street bank stocks, Citigroup Inc lost 6.3 percent to $27.98 and Morgan Stanley shed 4.8 percent to $16.20.

Economists at Morgan Stanley lowered the outlook for global growth and said the United States and the euro zone are "dangerously close to recession." - Reuters

US jobless claim up by 9,000 last week

KUALA LUMPUR: Initial jobless claims in the US for the week ended August 13 rose by 9,000 to 408,000 from the previous week's revised figure of 399,000, according to US Department of Labor (DOL).

In a statement on its website on Thursday, Aug 18, the DOL said the 4-week moving average was 402,500, a decrease of 3,500 from the previous week's revised average of 406,000.

The advance seasonally adjusted insured unemployment rate was 2.9% for the week ending August 6, unchanged from the prior week's unrevised rate of 2.9%, it said.

Meanwhile, the DOL said the advance number for seasonally adjusted insured unemployment during the week ending August 6 was 3.7 million, an increase of 7,000 from the preceding week's revised level of 3.69 million.

The 4-week moving average was 3.72 million, or down 4,500 from the preceding week's revised average, it said.

Deleum 2Q net profit surges 79% to RM7.37m, declares 5c interim dividend

KUALA LUMPUR: DELEUM BHD [] net profit for the second quarter ended June 30, 2011 surged 79% to RM7.37 million from RM4.12 million a year earlier, mainly contributed by its power and machinery segment from improved margins on retrofit projects and gas turbine overhaul sales.

Deleum said on Thursday, Aug 18 that revenue for the quarter however declined to RM80.59 million from RM82.89 million in 2010. Earnings per share was 7.38 sen while net assets per share was RM1.77.

Deleum declared a first interim single tier dividend of 5 sen per share of RM1 each to be paid on Sept 21, 2011.

For the six months ended June 30, Deleum's net profit rose to RM13.09 million from RM8.82 million in 2010, on the back of revenue of RM209.04 million.

On its prospects, Deleum said that as set out in the Economic Transformation Programme, Petronas had undertaken a number of initiatives in support of the government's plan to raise the production of oil and gas.

'These initiatives include increased exploration activities, development of small fields and enhanced oil recovery.

'Against this backdrop, we anticipate increased business opportunities for the group,' it said.

''

Tan Chong 2Q net profit slips 11.3% to RM56.4m

KUALA LUMPUR: TAN CHONG MOTOR HOLDINGS BHD []'s earnings fell 11.3% to RM56.46 million from RM63.65 million a year ago following slower sales due to the disruption in supplies from Japan due to the earthquake in the country.

It said on Thursday, Aug 18 it was upbeat about the remainder of the year as it was seeing stability and consistency in terms of complete knock down deliveries for the first time since the disaster in Japan.

'However, the supply side recovery is met with end-demand risks due to teething problems relating to the enforcement of the amended HPA (Hire Purchase Act) on June 15,' it said.

Tan Chong Motors said that barring a protracted resolution by the Ministry of Domestic Trade, Cooperative & Consumerism, 'our performance should catch-up in 3Q after the slowdown in 2Q'.

It expected that with most of the bad news behind and the economy indicating stability, if not mild acceleration, it said consumers were returning to showrooms even without an increase in incentive levels.

On the financial performance in the 2Q, it said revenue was just 1.6% higher at RM942.99 million from RM927.92 million. Earnings per share were 8.65 sen compared with 9.75 sen. It declared a dividend of six sen per share.

For the first half, its net profit was marginally higher at RM130.54 million compared with RM128.32 million in the previous corresponding period. Revenue increased by 15.6% to RM2.07 billion from RM1.79 billion.

It said the first half results showed improved top and bottom-line'' despite an earthquake that disrupted the global supply chain after March 11.

'Cost to income ratios may appear out of alignment due to the first year of consolidation of Nissan Vietnam Limited (NVL) which has yet to break-even after taking into account translation losses in a weaker Vietnamese Dong against a stronger denominated Ringgit,' it said.

When compared with the first quarter, it said the second quarter lost some sales momentum seen in 1Q but it managed to 'control the fall by quickly running down existing inventory as shortages in select models emerged'.

Tan Chong Motors said despite the obvious stock constraints, the company was amongst the first to replenish inventories by June to meet backlogs in the coming quarter.

'Our inventories stood at RM789.8 million (June 30) against RM878.8 million as at March 31, (the preceding

quarter immediately after the earthquake) on the back of RM943 million turnover for April to June,' it said.

The company said, when compared with the peak in 1Q, the 2Q 'appears to have bottomed with declines of 16.7% and 23.1% in terms of revenue and net profit'.

Dutch Lady's earnings rise 46.8% to RM27.77m

KUALA LUMPUR: DUTCH LADY MILK INDUSTRIES BHD [] reported a 46.8% increase in earnings to RM27.77 million in the second quarter ended June 30, 2011 from RM18.92 million a year ago mainly due to higher sales, a favourable sales mix and a favourable exchange rate on imported materials.

It said on Thursday, Aug 18 revenue rose 8.1% to RM200.89 million from RM185.78 million due to higher demand for liquid and powder milk. Earnings per share were 43.30 sen compared with 29.56 sen.

In the first half, earnings showed a 41.2% increase to RM56.11 million from RM39.73 million while revenue rose 11.6% to RM397.53 million from RM356.24 million.

Dutch Lady said despite the commendable first half results, its concern was the rising diary raw material prices which would pose a challenge. It expected the current year's profit to surpass the previous financial year.

Dialog proposes cash call to raise RM638m

KUALA LUMPUR: DIALOG GROUP BHD [] has proposed its first cash call from its shareholders to raise up to RM638 million under a rights issue with free warrants, on the basis of two rights shares and one warrant for every 10 shares held.

The company said on Thursday, Aug 18 the corporate exercise would involve a renounceable rights issue of up to 398.73 million new shares of 10 sen each with 199.36 million free detachable warrants.

'The cash call is the first equity fund raising from its shareholders since its initial public offer in 1996.

'Based on the indicative issue of RM1.60, the corporate exercise would raise up to RM638 million,' it said.

It said the rights shares and warrants would on the basis of two rights shares and one warrant for every 10 shares held, based on a minimum subscription of 280 million rights shares with 140 million warrants.

It also proposed to increase in the authorised share capital from RM250 million comprising 2.5 billion shares to RM500 million comprising five billion shares.

Dialog said this cash call would further strengthen its balance sheet with its shareholders equity increasing to RM1.2 billion from RM583.1 million as at June 30, 2011.

The proceeds from the rights issue with warrants would be mainly used to invest in its upstream oil and gas opportunities, including the development of and production of petroleum under the risk service contracts with Petronas and to capitalize on the vast business opportunities in the oil, gas and petrochemical industry.

Nestle 2Q net profit up 6.4% to RM106.55m, declares 55c dividend

KUALA LUMPUR: Nestle (Malaysia) Bhd net profit for the second quarter ended June 30, 2011 rose 6.4% to RM106.55 million from RM100.15 million a year earlier, driven by both domestic and export sales.

Revenue for the quarter rose to RM1.16 billion from RM1.05 billion in 2010. Earnings per share was 45.44 sen while net assets per share was RM2.58.

Nestle declared an interim dividend of 55 sen per share, tax exempt under single-tier tax system.

For the six months ended June 30, Nestle's net profit rose to RM259.23 million from RM238.95 million, on the back of revenue RM2.34 billion.

Reviewing its performance, Nestle said on Thursday, Aug 18 new products introduced towards the end of the last quarter such as MILO Sejuk and NESTEA were showing good results in the market.

It said operating profit increased by 6.5% to RM132.2 million.

'Higher raw material costs, coupled with strong promotional and marketing investments reduce slightly the percentage of profit margin.

'Lower financing cost offset by a higher effective tax rate drove the net profit to show a similar percentage margin trend,' it said.

On its outlook, Nestle said the prospects for the global economy were uncertain due to unfavourable economic condition in both Europe and the United States.

The sharp increase in the global commodity prices and the Malaysian government's move to gradually reduce food and fuel subsidies was putting pressure on the group's input costs, it said.

'The group will continue to closely monitor the development of commodity prices, leverage operational efficiencies and cost savings initiatives to minimise or avoid passing on price increases to consumers.

'After the strong performance in the first half, the group will continue to intensify its marketing investment in line with Nestle's objective of being the leader in Nutrition, Health & Wellness, as well as an industry benchmark for its financial performance and being trusted by all stakeholders,' it said.

Star 2Q net profit up 10.3% to RM55.25m, declares 9c dividend

KUALA LUMPUR: Star Publications (Malaysia) Bhd net profit for the second quarter ended June 30, 2011 rose 10.3% to RM55.25 million from RM50.08 million a year earlier, due mainly to lower newsprint cost.

It said on Thursday, Aug 18 that revenue for the quarter dipped slightly to RM294.25 million from RM295.74 million due to the decline in the revenue of event, exhibition, interior and thematic segment.

Earnings per share was 7.48 sen while net assets per share was RM1.41.

Star declared an interim dividend of 6 sen per share, single tier and a special tax exempt dividend of three sen per share to be paid on Oct 18.

For the six months ended June 30, Star's net profit rose to RM95.52 million from RM87.91 million in 2010, on the back of revenue RM522.28 million.

On its prospects, Star said the economic outlook over the next six months is mixed, adding that domestically, the Malaysian Institute of Economic Research (MIER) has projected that the economy will expand by 5.2% year-on-year in the second half of 2011, underpinned by projects under the government's Economic Transformation Program (ETP).

Globally, however, the economic outlook is less certain because of problems in the European Union and the United States of America, it said.

'The company will take the necessary measures to ensure that business will continue to grow amidst the uncertainty and challenges.

'Barring any unforeseen circumstances, the board of directors expects the company to perform satisfactorily for the remaining period of financial year ending Dec 31, 2011,' it said.

''

MISC earnings dn 71.7% on losses from petroleum biz

KUALA LUMPUR: MISC BHD []'s earnings fell to RM121.07 million in the quarter ended June 30, 2011 from RM427.98 million a year ago as it was affected by losses in the petroleum business as freight rates fell.

It said on Thursday, Aug 18 that revenue declined to RM3 billion from RM3.27 billion. Earnings per share shrank to 2.70 sen from 9.6 sen.

'The decline in its profit was mainly due to losses in the petroleum business due to the weakening freight rates and higher losses in the liner business,' it said.

As for the lower revenue, MISC said this was due to a decline in revenue from the heavy engineering and liner businesses. However, higher revenue from the chemicals and offshore businesses helped to cushion the impact.

As for the outlook, it said market conditions for the liner, petroleum and chemicals businesses were expected to remain weak and would have an adverse impact of the group's performance.

However, its long term contracts in the liquefied natural gas and offshore businesses combined with the relatively steady revenue and margins from the heavy engineering segment would continue to provide stable income stream to the group.

Genetec's order book rises to RM74m on new orders

KUALA LUMPUR: ACE Market-listed Genetec TECHNOLOGY [] Bhd's order book rose to RM74 million after the company secured new orders worth RM14 million from its new and existing customers.

The company said on Thursday, Aug 18 that the orders were expected to contribute positively to its earnings for the financial year ending March 31, 2012.

Its executive chairman Ron Ortscheid also said the company's revenue for the first quarter ended June 30, 2011 rose 51% to RM39.52 million from RM26.13 million a year earlier, due mainly to a strong demand''for automation from existing and new customers.

However, he said its net profit fell 60% to RM1.62 million from RM4.01 million a year earlier due to higher operating costs incurred upon consolidation of Genetec's newly acquired subsidiaries in the previous financial year ending 31 March 2011.

Genetec acquired CLT Engineering Sdn Bhd, Systems South Inc. and IP Systems Inc, with a combined value of approximately RM38.2 million.

Ortscheid said the company was experiencing strong demand in the segments in operated in as a result of its overseas expansion plan.

'Our customer base is growing and orders from the non-HDD segment now contribute approximately 30% to our total orderbook.'

'Moving forward, we are optimistic that the group will enjoy further benefits from these strategic acquisitions, which include larger orders, operational efficiency and cost savings. Hence, we remain confident of our future growth prospects,' he said in a statement.

Genetec designs and builds customised factory automation equipment and integrated vision inspection systems

Perdana Petroleum turns around in 2Q

KUALA LUMPUR: Perdana Petroleum Bhd (formerly PETRA PERDANA BHD []) returned to the black with net profit of RM8.37 million in the second quarter ended June 30, 2011 compared with net loss of RM32.98 million a year ago.

It said on Thursday, Aug 18 turnover rose 28% to RM73.3 million from RM57.4 million due to an improvement in the utilization of vessels and charter rates.

'The higher turnover enable the company topmost pre-tax profit of RM8.9 million compared with a loss of RM34.9 million a year ago,' it said. Earnings per share were 1.86 sen compared with loss per share of 11.08 sen.

The improvement was also due to the accretion of refundable deposit of RM5.6 million which mainly resulted from the termination of vessels under the sales and leaseback arrangement, as compared to an impairment loss of charter deposits of RM8.7 million a year ago.

For the first half, net profit was only RM10,000, though small was a stark contrast to the net loss of RM29.38 million in the previous corresponding period. Revenue was RM140.35 million compared with RM108.28 million.

MARC cuts Tg Langsat Port's ratings, outlook negative

KUALA LUMPUR: Malaysian Rating Corp Bhd (MARC) has downgraded its ratings on Tanjung Langsat Port Sdn Bhd's debt notes to reflect a further erosion of its credit and operating profile.

MARC said on Thursday, Aug 18 it lowered the ratings of the RM250 million Sukuk Musyarakah bonds and RM135 million Musyarakah commercial papers/medium term notes programme (MCP/MMTN) to A-IS and MARC-2ID/A-ID from AA-IS and MARC-1ID/AA-ID respectively.

The outlook on the ratings remains negative, said the rating agency, pointing out the 'negative outlook on the ratings reflects increased concerns over Tanjung Langsat Port's ability to stem its operating losses and cash flow deficits'.

MARC also pointed the downgrades were to reflect further erosion of Tanjung Langsat Port's credit and operating profile during 2010. This, it said, was due to the still lingering effects of the 2008 fire incident at its tank terminal complex and its depleting unencumbered land bank.

Of concern, said the ratings agency, was Tanjung Langsat Port's larger-than-expected revenue decline and operating cash flow deficit in 2010.

It said this had raised concerns over the cash flow and liquidity risks related to certain long outstanding balances due to its contractors for port CONSTRUCTION [] and dredging works.

Due to its depleted unencumbered land bank and current operating challenges, MARC expected Tanjung Langsat Port to become increasingly dependent on liquidity support from parent, Johor Corporation (JCorp), to fund cash flow and debt service shortfalls.

'The negative outlook on the ratings reflects increased concerns over Tanjung Langsat Port's ability to stem its operating losses and cash flow deficits,' it said.

MARC said it came to understand although one of the eight tanks at Tanjung Langsat Port's tank terminal complex was certified as ready for operations in March 2010 followed by four more tanks in May 2010 and the sixth tank in early 2011, the storage facilities were not in use by the sole lessee, Trafigura Pte Ltd.

MARC said it was informed the remaining two tanks which were earlier damaged by fire should be ready to resume operations by end-2011.

Consequently, Tanjung Langsat Port's tank terminal complex operations have not generated any revenue since the fire incident in August 2008, resulting in estimated monthly revenue losses of RM550,000.

Tanjung Langsat Port recently sold its remaining unencumbered land holdings, raising total proceeds of RM134.9 million to partially pay down the RM216.1 million due to contractors.

The company urgently needs to restore its cash flow and earnings through higher utilisation of its tank terminal complex, and dry and liquid cargo wharves beginning from the second half of 2011 to maintain compliance with its financial covenants and to meet its 2012 note maturities of RM20.0 million.

MARC said it expected Tanjung Langsat Port to further require further financial support from its parent to maintain compliance with its financial covenants.

Based on its latest consolidated audited financial statements ended Dec 31, 2010, Tanjung Langsat Port's revenue declined to RM63.59 million (FY2009: RM100.15 million) due to lower land sales.

Higher administrative expenses and finance costs, as well as RM14.7 million of write-offs from insurance receivables relating to the fire incident led Tanjung Langsat Port'' to record pre-tax losses of RM24.3 million (FY2009: pre-tax profit of RM16.1 million).

Tanjung Langsat Port had initiated legal proceedings against its insurer on May 5, 2011 to recover these sums.

MARC noted the conversion of amounts due to Tanjung Langsat Port's parent into equity during 2010 which had the effect of lowering Tanjung Langsat Port's debt-to-equity ratio to 1.68 times (FY2009: 3.33 times) against its covenanted debt-to-equity ratio of 4.0 times.

'At the same time, the rating agency considers the parent's probability of providing further support as low to moderate in light of JCorp's own heavy debt burden,' it said.

MARC said it would continue to monitor Tanjung Langsat Port's operating trends as well as key financial metrics.

It added that it would 'consider revising the outlook to stable if Tanjung Langsat Port is able to stabilise its financial and operating performance, and halt further erosion in its credit profile'.

MARC also said for Tanjung Langsat Port to maintain its current ratings, the latter had to show it could generate adequate earnings and operating cash flow on a consistent basis.

'The ratings may be lowered if Tanjung Langsat Port is unable to stabilise its performance in the near-term and turn itself around,' it said.

KLCI bucks the trend among regional markets

KUALA LUMPUR: The BM KLCI bucked the trend among the key regional markets and closed higher on Thursday, Aug 18, spurred by a late surge in buying activities.

European equities followed Asian stocks lower on Thursday as investors fretting about the global growth outlook cut exposure to riskier assets, while the Swiss franc fell on talk the central bank was intervening in the forwards market, according to Reuters.

Nagging worries about the U.S. economy and dim prospects of a quick fix for the euro zone's debt crisis prompted investors to lock in profits following this week's rally in European stocks to one-week highs, it said.

The FBM KLCI edged up 0.23 point to 1,503.30, lifted by gains at select blue chips.

The broader market was weaker with 445 losers, 265 gainers and 308 counters unchanged. Volume was 860.56 million shares valued at RM1.71 billion.

At the regional markets, Japan's Nikkei 225 fell 1.25% to 8,943.76, South Korea's Composite Index lost 1.7% to 1,860.58, Taiwan's Taiex declined 1.64% to 7,614.97, the Shanghai Composite Index fell 1.61% to 2,559.47, Hong Kong's Hang Seng Index down 1.34% to 20,016.27 and Singapore's Straits Times Index shed 0.13% to 2,824.96.

On Bursa Malaysia, PPB was the top gainer and added 32 sen to RM17.50; Metrod rose 30 sen to RM3.70, UMW 22 sen to RM7.45, BAT, MISC, Lafarge Malayan Cement and Tradewinds PLANTATION []s added 20 sen each to RM44.20, RM7.30, RM7.30 and RM3.49 respectively, while Aeon and MAHB rose 15 sen each to RM7.15 and RM6.65.

Esso was the top loser and fell 92 sen to RM4.03 after the initial euphoria over San Miguel's offer to buy a controlling 65% stake from ExxonMobil International Holdings Inc in the company fizzled out following its disappointing offer of RM3.50 per share.

Tenaga lost 15 sen to RM5.73, Panasonic and WCT lost 12 sen each to RM23.80 and RM2.72, QSR, Inno and HELP fell 11 sen each to RM5.99, RM1.28 and RM2.11, while BDB and Ann Joo were down 10 sen each to RM1.08 and RM2.64.

MAA was the most actively traded counter with 27.7 million shares done. The stock added five sen to 61 sen.

Other actives included DVM, Axiata, Petronas Chemicals, Kurnia Asia, Esso and AirAsia.

Kimlun Corp order book swells to RM1 billion

KUALA LUMPUR: Kimlun Corporation Bhd's outstanding order book swelled to RM1 billion after the company secured its latest CONSTRUCTION [] contract worth RM54.43 million.

It said on Thursday, Aug 18 that its wholly-owned subsidiary, Kimlun Sdn Bhd had accepted the letter of award from Tanah Sutera Development Sdn Bhd to build 116 units of houses in Mukim Pulai, Daerah Johor Bahru, Johor.

Kimlun said the scope of works comprised of building construction using industrial building system method, and ancillary works for the houses.

It said the project would be completed by August 2013.

Kimlun said the contract was expected to contribute positively to its earnings for the financial years ending 2011 to 2013.