Saturday, September 10, 2011

Works Ministry to discuss Bumi contracts with Prasarana

TAMPIN: The Works Ministry will hold discussions with Syarikat Prasarana Negara Bhd (Prasarana) to identify job scope and contracts worth RM8 billion to be distributed to Bumiputera contractors via the implementation of the Sg Buloh-Kajang stretch of the Mass Rapid Transit (MRT) system.

Its minister, Datuk Shaziman Abu Mansor, said he would meet Prasarana officials next week to determine the areas of work suitable to be undertaken by Bumiputera contractors according to their ability and capacity.

"Via this way, we will find the best mechanism to distribute the contracts to the Bumiputera contractors," he told reporters at his Hari Raya open house here on Saturday, Sept 10.

Shaziman said the meeting would be a follow-up to the announcement made by Prime Minister Datuk Seri Najib Tun Abdul Razak who had earlier allocated RM8 billion worth of projects under the Sg Buloh-Kajang MRT to Bumiputera contractors.

Shaziman said the initiative was also intented to ensure the distribution was done systematically to avoid any hiccups in future.

The minister also said he would meet the Bumiputera Contractors Association to brief them on how they can participate in the project. - Bernama

US STOCKS-Wall St tumbles as ECB discord stirs broad fears

NEW YORK: U.S. stocks tumbled more than 2 percent on Friday, Sept 9'' after the top German official at the European Central Bank resigned in protest of the bank's bond-buying program, which has been a major tool in fighting the region's debt crisis.

The resignation of Juergen Stark from the ECB throws into question policymakers' ability to deal with Europe's debt crisis, a problem that could engulf a world economy already teetering on the brink of recession.

Investors' rising fears were highlighted by a 12 percent jump in the market's main measure of expected turbulence, the VIX volatility index. The VIX neared 40, close to its highest level this year, as it marked its biggest jump in three weeks.

"Stark's resignation is suggesting that there is a lot of pressure being built in the senior levels in the ECB," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania. "There is an increasing realization that this is a major solvency issue in the banking system."

Doubts about President Barack Obama's $447 billion stimulus proposal added to the negative sentiment, with investors unconvinced his administration has the tools to revive the flagging U.S. economy.

The sell-off was broad and on solid volume. All 10 S&P sectors were in the red and more than 80 percent of stocks listed on the New York Stock Exchange fell. There were 8.7 billion shares traded on the NYSE, the Nasdaq and the Amex,

above the exchanges' 20-day moving average.

Unnerving traders further were unconfirmed terrorism threats against New York City and Washington just ahead of the 10th anniversary of the September 11 attacks.

"There is an extreme amount of negativity," said Sam Ginzburg, a senior trader at First New York Securities.

"In talking to the sell-side desks that we do business with, they're not telling me that there are long-onlys adding to or initiating positions right now," he said.

The Dow Jones industrial average dropped 303.68 points, or 2.69 percent, to 10,992.13. The Standard & Poor's 500 Index dropped 31.67 points, or 2.67 percent, to 1,154.23. The Nasdaq Composite Index dropped 61.15 points, or 2.42 percent, to 2,467.99.

The ECB has been buying up sovereign bonds to help hold down borrowing costs in some debt-strapped euro zone members, and the program has been considered critical to arresting market contagion. The resignation of Stark, who will step down by the end of the year, may deepen the gulf between the ECB and German guardians of central banking orthodoxy.

At a meeting of finance chiefs from the Group of Seven wealthy nations being held in France, U.S. Treasury Secretary Timothy Geithner on Friday pressed Europe's strongest economies to give "unequivocal" financial support to weaker euro zone states to overcome a debt crisis that threatens the world economy.

The S&P 500 ended the week 1.7 percent lower and is now down 8.2 percent this year.

Shares of some big companies fell after Obama's speech did not address proposals to allow large, multinational companies to repatriate an estimated $1.5 trillion of overseas profits to the United States at a reduced tax rate.

"These are software companies, pharma companies that have billion of dollars stranded overseas," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "It's a disappointment that we didn't see a definitive package on bringing those profits back home."

Among stocks that would benefit from such a move, Xerox Corp fell 5.5 percent to $7.41 and Hewlett Packard fell 5.1 percent to $22.65.

Bank of America Corp officials discussed slashing roughly 40,000 jobs during the first wave of a restructuring, The Wall Street Journal said, citing people familiar with the plans. The shares slid 3.1 percent to $6.98.

McDonald's Corp fell 4.1 percent to $84.02. The world's largest hamburger chain reported a lower-than-expected rise in worldwide August sales at established restaurants on a steep drop in Japan and a lull in new product launches in the United States. - Reuters

Europe debt crisis fears hammer euro, stocks

NEW YORK: Growing doubts about Europe's ability to resolve its debt crisis punished the euro and world stock markets on Friday, Sept 9, while G7 finance ministers met to discuss measures to revive economic growth.

The euro hit 6-1/2 month lows against the U.S. dollar on nervousness over the outcome of a Greek debt swap deal and on jitters fueled by the planned resignation of Juergen Stark, the top German on the European Central Bank's board, in protest

over its controversial bond-buying program.

Bond buying has been one of the ECB's main weapons in fighting the debt crisis. The Stark news kindled uncertainty over internal ECB support for it and pummeled the euro, a day after a sell-off on the ECB backing away from further interest rate rises.

The nervousness fueled safe-haven buying of German and U.S. government debt. The 10-year Bund yield hit another record low, while 10-year U.S. Treasuries yields touched a 60-year trough.

"Europe is the No. 1 thing causing pressure on the market as the realization grows that what we've done so far hasn't worked," said Liz Ann Sonders, the New York-based chief investment strategist at Charles Schwab Corp, which has $1.65

trillion in client assets.

Stark's departure highlighted divisions within the ECB on the handling of Europe's debt woes. The ECB later confirmed Stark will step down at the end of the year.

"When you get a new story like this, that there's internal turmoil on the ECB, that immediately has implications for the bond-buying program, which immediately has implications on the capital level in European banks," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

Traders, surprised by the Stark news, were keeping tabs on developments with Greece's debt swap. The deal is critical for Athens to secure a second 109 billion euro bailout and avert a near-term default that could ripple across Europe and the global banking system.

Banks and insurers face a Friday deadline to indicate whether they will join an exchange of Greek debt, part of an international bailout package agreed in July. It is expected 70 percent of the private investors would agree to such a move, below the 90 percent threshold that Greece has said it wants to go through with the deal.

The cost to insure Greek sovereign debt for five years surged to a record high of 3,106 basis points, up nearly 300 basis points on the day, according to data vendor Markit.

Finance ministers and central bankers from the Group of Seven industrialized nations were meeting in Marseille, where host France has called for a coordinated response from G7 members to deal with Europe's debt crisis and the region's shaky banks.

In the United States, President Barack Obama unveiled his $447 billion plan to revive economic growth late on Thursday, but investors worried that Congress would not pass the measure and the Federal Reserve may not follow quickly enough with its own action.

Fed Chairman Ben Bernanke, in a speech on Thursday, left the door open for more monetary stimulus but withheld details on the timing and what type of measures the Fed would enact.

The Dow Jones industrial average finished down 303.68 points, or 2.69 percent, at 10,992.13. The Standard & Poor's 500 Index ended 31.67 points lower, or 2.67 percent, at 1,154.23. The Nasdaq Composite Index closed down 61.15 points, or 2.42 percent, at 2,467.99.

For the week, the Dow fell 2.2 percent; the S&P 500 lost 1.7 percent and the Nasdaq slipped 0.5 percent.

The FTSEurofirst 300 index of top European shares lost 2.6 percent on the day and the MSCI world equity index was off 3.2 percent. Both indexes were down 3.7 percent on the week, their third-largest drop in the past 12 months.

Earlier, Tokyo's benchmark Nikkei ended down 0.6 percent, bringing its weekly loss to 2.4 percent.

Another retreat in equities boosted safe-haven German and U.S. government bond prices. The 10-year Bund yield touched an all-time low of 1.74 percent, while the benchmark 10-year U.S. Treasury was last down 1.6 percent against the dollar at $1.3668 after touching its lowest in 6-1/2 months at $1.3627.

The single currency has fallen 5 percent in September.

Gold slipped after soaring to a record high above $1,900 an ounce earlier this week due to its appeal as both a safe haven and a hedge against inflation. It ended down 0.6 percent at $1,860 an ounce as nervous investors sold the metal on growing concerns its run-up had been overdone. - Reuters

Stocks primed for more volatility

NEW YORK: Investors will grapple with more turbulence surrounding Europe's deepening debt problems next week, starting Monday, Sept 12 and the prospect of another round of dismal data on the faltering U.S. economy.

More volatility is almost guaranteed after the top German official at the European Central bank quit and rumors circulated throughout global markets that Greece will default this weekend. Greece later called the rumor market speculation designed to hurt the euro.

Recent market trading patterns and options activity also suggest August's roller-coaster ride will keep apace throughout September.

Juergen Stark's sudden resignation from the ECB on Friday came after a conflict over the bank's policy of buying government bonds to combat the euro zone's debt crisis, raising questions about a program that has been a key market stabilizer in recent months.

"You can tie our stock market directly to European banks -- the problem they have is sovereign debt exposure," said Jack de Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire.

In a light week for earnings with only electronics retailer Best Buy Co Inc and diversified manufacturer Pall Corp among S&P 500 companies set to report, investors will eye a batch of data for any clues the economy has regained its footing. Economic readings over the past two months have left little reason for optimism.

But the euro zone, where a two-year sovereign debt crisis has unsettled investors worldwide, will be the real focus.

De Gan noted the ECB's critical role in potentially solving the sovereign debt issue, highlighting the implications for global markets on any reports of internal turmoil.

"Europe matters right now -- the ECB resignation, Trichet's keeping rates flat as opposed to outright cutting them," said Phil Orlando, chief equity market strategist, at Federated Investors, in New York. "There are rumors I can't substantiate, but the rumors are still out there that this is the weekend Greece goes bust.

"So certainly, Europe is going to capture our attention," Orlando said.

Data on tap for next week includes retail sales along with the consumer price and producer price indexes for August. Also expected are regional manufacturing surveys by the Philadelphia Federal Reserve Bank and by the New York Federal Reserve Bank, both of which showed contractions in factory activity last month.

"Each bit of this data theoretically gets us down the road to understanding what the true state of the economy is. I expect overreaction to rule the day," said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

At the same time, the benchmark S&P 500 has been mired in a range of about 100 points -- between 1,120 and 1,220 -- for the past month, leaving the market susceptible to wide swings on a daily basis.

"We are just kind of in this nowhere zone," said Ken Polcari, managing director at ICAP Equities New York.

"We haven't broken through to the downside but nor have we broken it to the upside. So what you are going to continue to get is this erratic movement in the market until at some point, it's going to have break out one way or the other."

The continued rise in the CBOE Volatility index also points to large moves in the market. The index rose nearly 20 percent to top the 40 level for the first time since August 26, indicating a rise in investor skittishness.

"I expect high volatility next week, big swings to the upside and downside. The VIX is quite high and pretty elevated," said Randy Frederick, director of trading and derivatives at Charles Schwab & Co in Austin, Texas.

"When the VIX is rising the way it is, that generally means the puts are going up too." - Reuters

#Stocks to watch:* MAHB, telcos, Benalec, BDRB

KUALA LUMPUR: Investors will have to brace for more downside pressure again the week ahead, starting Sept 12, after US stocks tumbled 2.69% on Friday on mounting worries about Europe's debt crisis.

US stocks fell after the top German official at the European Central Bank, Juergen Stark resigned in protest of the bank's bond-buying programme, which has been a major tool in fighting the region's debt crisis.

Reuters reported Stark's resignation raised questions of policymakers' ability to deal with Europe's debt crisis, a problem that could engulf a world economy already teetering on the brink of recession.

The Dow Jones industrial average fell 303.68 points, or 2.69%, to 10,992.13. The Standard & Poor's 500 Index dropped 31.67 points, or 2.67%, to 1,154.23. The Nasdaq Composite Index dropped 61.15 points, or 2.42%, to 2,467.99.

The ECB has been buying up sovereign bonds to help hold down borrowing costs in some debt-strapped euro zone members, and the programme has been considered critical to arresting market contagion. The resignation of Stark, who will step down by the end of the year, may deepen the gulf between the ECB and German guardians of central banking orthodoxy.

The external headwinds are expected to continue to weigh down markets, where Malaysia also has not been spared.

On the outlook for Bursa Malaysia, the head of retail research of Affin Investment Bank Dr Nazri Khan said the FBM KLCI was likely to dip further next week.

This negative outlook was amidst rising volatility with a combination of slow external growth and heavy sovereign debt reinforcing fears that the world's biggest economies are sliding back into recession, he said.

'We are pegging 1,450 and 1,430 as the likely FBMKLCI support for any immediate downside,' Nazri said.

Stocks which could see trading interest are Malaysia Airports Holdings Bhd (MAHB), telcos, Benalec Holdings Bhd and BANDAR RAYA DEVELOPMENTS BHD [] (BDRB).

MAHB has put on hold the proposed implementation of new rates for the international passenger service charge and also aircraft landing and parking charges.

MAHB said on Friday it was advised by the Transport Ministry that the charges, which were to be implemented on Sept 15, 'be put on hold until further review by the government'.

Telcos are incurring the wrath of the authorities following their plans to go ahead to impose the 6% service tax on prepaid mobile phone users effective Sept 15.

Even Prime Minister Datuk Seri Najib Tun Razak said the move was not approved by the government. He added: 'The move to impose the service tax on consumers is very unpopular and difficult to accept'.

Can consumers expect the telcos to back down from the growing unpopular plan? As for the telcos, they have been absorbing the service tax which was introduced in 1998.

Meanwhile, Benalec announced it is in the midst of bidding for land reclamation projects with a combined estimated contract value of approximately RM8 billion and its current unbilled orderbook stands at RM590 million.

The Edge weekly reports that BDRB's proposed related-party transaction involving its flagship asset, the Bangsar Shopping Centre, has turned the spotlight on its 18.88% shareholder Ambang Sehati Sdn Bhd, because persuading the minority shareholders to accept the offer may prove a stiff test for the private company.

Already, RAM Rating Services cautioned Ambang Sehati's acquisition of BDRB's investment PROPERTIES [] would have a mixed impact on the group's credit standing.

'While the potential divestment may be an immediate positive to BRDB's financial profile, it would exert a negative effect on its business risk profile over the longer term,' it said.

SIME DARBY BHD [] announced on Friday it had completed the acquisition of 237 million shares of Eastern & Oriental Bhd and 60 million loan stocks of 65 sen each ' representing 30% -- for RM766 million. The settlement is on Sept 14.

Syarikat Air Selangor Sdn Bhd has filed a statement of claim for RM1.054 billion on the Selangor government as compensation under the terms of the concession agreement.

PUNCAK NIAGA HOLDINGS BHD [] said the compensation was due to it from Jan 1, 2009 to March 31, 2011 under the concession agreement dated Dec 15, 2004. The agreement was between Syabas, the Federal Government and the Selangor Government.

Friday, September 9, 2011

#Flash* MAHB puts off new rates on govt advice

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) has put on hold the proposed implementation of new rates for the international passenger service charge and also aircraft landing and parking charges.

MAHB said on Friday, Sept 9, it was advised by the Transport Ministry that the charges, which were to be implemented on Sept 15, 'be put on hold until further review by the government'.

Hong Yeam Wah exits Tambun Indah

KUALA LUMPUR: Datuk Hong Yeam Wah disposed of his entire stake of 8.98% in Tambun Indah Land Bhd and ceased to be a substantial shareholder of the Penang-based property company.

A filing with Bursa Malaysia showed he disposed of the stake, comprising of 19.85 million shares, on Sept 7, Wednesday in an off-market deal. The price of the shares was not disclosed but it closed at 65 sen.

According to the latest annual report, Hong was the third largest shareholder in the company prior to the disposal of the shares. Siram Permai Sdn Bhd is the largest shareholder with 40.38% or 89.25 million shares while Amal Pintas Sdn Bhd owns 10.39% or 22.95 million shares.

He is also a director of Tah-Wah Sdn Bhd which was involved in the sale of a property development company Premcourt Development Sdn Bhd to Tambun Indah

On Aug 29, Tambun Indah announced it was acquiring Premcourt Development for RM5.5 million which is slated to undertake a project with gross development value (GDV) of RM180 million in Bandar Jelutong on Penang island.

Tambun Indah had signed a share purchase agreement with Messrs. Siram Permai Sdn Bhd and Tah-Wah Sdn Bhd to acquire Premcourt's entire equity of 250,000 shares of RM1 each.

Premcourt's directors are Teh Kiak Seng, Hong and Teh Theng Theng (alternate to Teh Kiak Seng).


PM unveils Maybank's refreshed corporate identity

KUALA LUMPUR: The Prime Minister unveiled MALAYAN BANKING BHD []'s refreshed corporate identity on Friday, Sept 9, replacing the current brand in place since 1993, with the new look ''symbolising the group's aggressiveness and dynamism to be a regional financial services leader.

The three key elements of the banking group's identity remains -- the name Maybank, the Yellow colour and the Tiger head symbol.

The decision to have a refreshed corporate identity which was more modern and up-to-date, was also driven by its mission to 'Humanise financial services across Asia', Maybank said.

'It incorporates a more noble, majestic rendition of the tiger to further demonstrate the bank's strength and leadership especially in the region,' the banking group said.

Datuk Seri Najib Tun Razak launched the refresh corporate identity ' which was to humanise the brand with a contemporary and approachable logo -- at Menara Maybank.

Also present at the launch were Maybank chairman Tan Sri Megat Zaharuddin Megat Mohd Nor, president and chief executive officer Datuk Seri Abdul Wahid Omar and other board members and senior management at a staff Aidilfitri celebration attended by about 5,000 employees

On the current brand which had been in place since 1993, Megat Zaharuddin explained: 'Lots of people love it, but many feel we are not keeping up with all stakeholders across our region.'

'What we have come up with is a refreshed Maybank brand that embodies our aspirations - a regional leader in humanising financial services - and how our values are manifested into the brand attributes. These would translate into our shared personality,' he added.

Megat Zaharuddin added Maybank had grown even bigger in the region now with the recent acquisition of Kim Eng Holding and the organisation's buzz was attracting more talents.

'Since coming out of the depth of 2008 global financial crisis, we've delivered total shareholder returns of 37.1% and 28.1% respectively in our last two financial years. And just weeks ago, we announced yet again record profits of RM4.45 billion,' he added.

He also said the refreshed corporate identity was to reflect Maybank's personality which was courageous, genuine, creative, empathetic and collaborative.

He added it was a move to reaffirm the bank's commitment to serve its stakeholders and encourage them to share in a new experience as the bank moved forward.

Wahid said in coming up with the refreshed corporate identity, the views from various stakeholders including the employees were sought.

'It became very clear that the stakeholders want the three key elements of our identity to remain, that is the name Maybank, the Yellow colour and the Tiger head symbol. The refreshed corporate identity is timely to reinforce the significant progress we have made and the impending rebranding of our newly acquired entities.'

The contemporary, friendly typeface of the new corporate identity represents the human character of the brand. The Kievet Family was chosen as it is clean, crisp and easy to read with uniquely crafted letterforms.

Tatt Giap unit to venture into steel fittings

KUALA LUMPUR: Tatt Giap Group Bhd's unit is acquiring a total of 5.1 ha of land in Seberang Perai, Penang for RM18.80 million to expand its pipes production and also venture into stainless steel fittings.

It said on Friday, Sept 9 its unit Superinox Pipe Industry Sdn. Bhd had signed an agreement to acquire two plots of land -- 2.01 ha and 3.09 ha with the office block and double-storey factory buildings -- from GUH Electrical Appliances Sdn Bhd.

'The proposed acquisition is to cater for future expansion of stainless steel industrial pipes and venture into new business activity ' manufacturing of stainless steel fittings,' it said.

Tatt Giap said Superinox would finance the acquisition from its own funds (10%) and bank borrowings (90%).

Syabas seeks RM1.05b from Selangor govt

KUALA LUMPUR: Syarikat Air Selangor Sdn Bhd has filed a statement of claim for RM1.054 billion on the Selangor government as compensation under the terms of the concession agreement.

PUNCAK NIAGA HOLDINGS BHD [] said on Friday, Sept 9 the compensation was due to it from Jan 1, 2009 to March 31, 2011 under the concession agreement dated Dec 15, 2004. The agreement was between Syabas, the Federal Government and the Selangor Government.

It said Syabas was seeking a declaration that RM1.054 billion was due and owing from the Selangor government from January 200 to March 2011.

It added the costs of the action be paid by the state government to Syabas and such further or other relief or remedy as the''court shall deem just.

The Kuala Lumpur High Court fixed the matter for case management on Sept 22.

Blue chips close lower

KUALA LUMPUR: Blue chips ended mixed following a choppy trade on Friday, Sept 9 amid see-saw movements in Asian stocks as investors weighed on China's easing inflation, dealers said.

At 5pm, the FBM KLCI was down 0.71 of a point to 1,469.12. It had opened 3.1 points steadier at 1,472.93. Gainers led losers 343 to 297 while 282 counters were unchanged. A total of 739.612 million shares worth RM977.252 million changed hands.

A dealer said markets fell globally as US President Barack Obama's job stimulus packages plan failed to spark a rally in the US.

With US Federal Reserve Chief Ben Bernanke not providing any details on the new measures to support the economy, traders continued to worry on the global economic outlook, a dealer said.

Another dealer said the Malaysian market still looked attractive following Bank Negara Malaysia's decision to retain the overnight policy rate at 3%.

However, he added the weaker report for the Industrial Production Index (IPI) in July 2011 which fell by 0.6 per cent compared with the same month
last year further reduced the local bourse's earnings.

Jupiter Securities Head of Research Pong Teng Siew said the weak data of IPI had been expected amid the global economic slowdown and anticipated reduction in the demand especially in the manufacturing and electrical and electronics sectors.

"Traders are still cautious on the market movement amid the absence of local leads with the market moving in a tight range following the overnight fall on Wall Street," Pong added.

Bursa Malaysia's PLANTATION [] Index added 7.18 points to 7,405.84, the INDUSTRIAL INDEX [] was down 3.07 points to 2,708.02 and the Finance Index declined 27.49 points to 13,691.96.

The FBM Emas Index was up 1.79 points to 10,038.43, the FBM Mid 70 Index gained 24.68 points to 10,892.80 and the FBM Ace Index added 66.08 points to 3,854.87.

Among active counters, GPRO Technologies fell 0.5 sen to eight sen, Systech added seven sen to 41 sen, Time DotCom earned four sen to 61 sen
and LBS Bina gained five sen to 82.5 sen.

As for heavyweights, Maybank was flat at RM8.69, CIMB lost two sen to RM7.16, Petronas Chemicals added two sen to RM6.40 and Sime Darby rose five sen to RM8.79.

MISC slips again, worries about petroleum biz

KUALA LUMPUR: Shares of MISC BHD [] continued its losing streak on Friday, Sept 9, but in thin trade as investors worried about the impact of its slowing petroleum business and a decline in its revenue.

At 3.38pm, it was down 11 sen to RM7. There were 152,300 shares done.

The FBM KLCI was a marginal 0.81 of a point higher at 1,470.64. Turnover was 499.15 million shares valued at RM597.15 million. There were 289 gainers, 291 losers and 267 counters unchanged.

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.

MISC said 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.

Analysts said MISC appeared to be losing out to Bumi Armada Bhd.

Credit Suisse Asia Pacific/Malaysia Equity Research had initiated coverage on Bumi Armada with Outperform rating and a RM4.40 target price that implied 19% potential upside.

The research house said under the Economic Transformation Programme, the government is pushing to increase oil production levels through enhanced oil recovery (EOR) projects, and the development of deepwater and marginal fields.

'The end of MISC's de-facto monopoly on the domestic floating production storage and offloading (FPSO) market leaves Bumi Armada well placed to tap into this development,' it said.

July IPI down 0.6% on-yr as oil, gas output shrink

KUALA LUMPUR: Malaysia's industrial production index (IPI) decline in July 2011, from a year ago and also from June, as oil and gas production output shrank.

The Statistics Department said on Friday, Sept 9 the IPI in July eased 0.6% from a year ago. The IPI in June was revised positive 1.3% year-on-year.

'The decrease in July 2011 was due to the decrease of MINING INDEX [] (7.5%). However, the index of manufacturing and electricity posted an increase of 1.5% and 4.6% respectively.

'Month-on-month, the IPI decreased 0.6%. The cumulative index for the period of January-July 2011 increased 0.2% as compared with the same period of 2010,' it said.

On the manufacturing sector, the department said output in July 2011 increased 1.5% on-year.

It also said the output for June 2011 increased by 4.9% (revised) on-year.

The department said July's manufacturing performance, when compared with the revised June data, showed a 1.6% decline. However, growth in the January-July period increased by 3.6% from a year ago.

It added the on-year increase in manufacturing output in July 2011 was due to increases in non-metallic mineral products, basic metal and fabricated metal products (21.7%); food, beverages and tobacco products (8.5%) and wood products, furniture, paper products and printing (3.6%).

As for the mining sector, the output fell 7.5% in July 2011 on-year, due to declines in crude oil index (8.8%) and natural gas index (4.5%).

But when compared with June, mining output increased 1.0%. For January to July, the mining sector's output shrank 8.3% from a year ago.

The electricity output increased 4.6% in July 2011 on-year and also 3.8% higher on-month. For January-July, the electricity output increased 1.2% from a year ago.

Volvo Malaysia names Mansoor Ahmed as new MD

KUALA LUMPUR: Volvo Malaysia Sdn Bhd has appointed Mansoor Ahmed as its new managing director, taking over from Eric Leblanc.

In a statement Friday, Sept 9, Volvo said that prior to appointment, Mansoor was its vice-president for vehicle sales and marketing of Asia trucks operations, based in Beijing, China.

It said he was responsible for vehicle sales, product management and support besides brand and marketing for all the Volvo group truck brands namely Volvo, Renault, Nissan and Mack.

With his move to Malaysia, Mansoor brings with him a wealth of experience of more than 25 years in the automotive industry. He joined Volvo Group in India in 1997 and has since led various sales, product, marketing and strategy roles.

'His expertise and experience include both direct retail sales and dealer sales handling an extensive range of products ranging from cars, multi utility vehicles besides light duty, medium duty and heavy duty trucks,' it said.

Volvo said that prior to joining the company, Mansoor worked with Tata Motors for 12 years.

It said Mansoor graduated from India's Aligarh University in 1985 with a Mechanical Engineering degree and also holds a Diploma in Marketing Management from Symbiosis Institute of Business Management in 1987.

TMC Life Science targets medical tourism

PETALING JAYA: TMC LIFE SCIENCES BHD [] is targeting medical tourism to be a major contributor its revenue in the next three years as it seeks to become profitable, its chief executive officer Francis Lim Poon Thoo said.

He said on Friday, Sept 9 that the group targeted medical tourists to account for 30% of its patients within the three year timeframe. The expertise which TMC Life Sciences could offer to medical tourists would range from diagnosis to cardiac and orthopaedic.

Speaking to reporters after its AGM, he said TMC Life Sciences expected the 30% of the medical tourists to contribute to 40% of TMC's revenue. At the moment, less than 5% of TMC's patients are foreigners, he said.

To recap, for the two-months ended May 31, 2011, it posted net loss of RM3.12 million on the back of RM10.26 million in revenue. It changed the financial year from Dec 31 to May 31, 2011.

It had accumulated losses of RM15.89 million as at May 31, 2011. For the 17 month period ended May 31, 2011, it recorded net loss of RM35.01 million on the back of RM78.64 million in revenue.

The net losses of RM35.01 million during the 17-month period were mainly due to the intangible assets write-off of RM12 million.

Lim explained the impairments were not recurring while the cashflow was still positive.

On the plan to attract medical tourists, Lim said the target markets would be Indonesia, Bangladesh, and Indo-China, where the population is large and medical facilities are insufficient.

TMC's flagship tertiary care hospital, Tropical Medical Centre in Kota Damansara, is also a strategically located for medical tourism, he said.

The private hospital is about 15 minutes away from the Sultan Abdul Aziz Shah Airport in Subang.

Tropical Medical Centre, which currently has 120 hospital beds, is also renovating a floor to serve as a ward which would add about another 30 beds, said Lim.


BNM unlikely to hike OPR until 1H 2012

KUALA LUMPUR: Bank Negara Malaysia, which kept the overnight policy rate (OPR) unchanged at 3%, is unlikely to raise the interest rates until the first half of 2012 when economic conditions show a firmer recovery.

CIMB Economics research said on Friday, Sept 9 the central bank could tolerate a brief period of real negative interest rates as the downside risk to growth takes precedence over inflation risk.

'Our view is that BNM will stick to a wait-and-see approach to safeguard growth whilst monitoring the need to adjust the benchmark interest rate according to developments in inflation and the economy.

'As such, we expect BNM to keep the policy rate at 3.00% until 1H12. BNM is likely to start raising the OPR, probably to 3.50% in 2H12,' it said.

In its assessment of BNM's statement on Thursday, CIMB Research said the central bank's decision to maintain the OPR for the second time was due to concerns that risks were tilting to the downside.

The research house said this was not surprising due to worries over the global economy.'' The tone of the policy statement suggested that BNM will continue to remain on the sidelines as long as the global uncertainties persist.

Bumi Armada inches up, Credit Suisse has Outperform, RM4.40

KUALA LUMPUR: Shares of Bumi Armada inched up in moderate trade at the midday break on Friday, Sept 9 in line with the firmer equities.

At 12.30pm, it was up two sen to RM3.68. There were 430,400 shares transacted at prices ranging from RM3.66 to RM3.69.'' Since Friday, Sept 2, the share price is up nine sen from RM3.59.

Credit Suisse Asia Pacific/Malaysia Equity Research had on Thursday initiated coverage on Bumi Armada with Outperform rating and a RM4.40 target price that implied 19% potential upside.

'Our target price is based on 20x FY12E earnings, in line with the average sector P/E for large-cap Singapore-Malaysia oil and gas stocks,' it said.

Credit Suisse Research said under the Economic Transformation Programme, the government is pushing to increase oil production levels through enhanced oil recovery (EOR) projects, and the development of deepwater and marginal fields.

The end of MISC's de-facto monopoly on the domestic floating production storage and offloading (FPSO) market leaves Bumi Armada well placed to tap into this development.

'Not only can the company provide FPSOs to domestic projects, such as Shell's St Joseph Chemical enhanced oil recovery (EOR) project, but it can also participate as a risk-sharing contractor to develop marginal fields in Malaysia.

#Flash* Benalec eyes opportunities in other states

KUALA LUMPUR: Benalec Holdings Bhd is looking for opportunities in Johor, Penang and Port Klang, and aims to diversify its client base in its future projects to bigger players.

Its managing director Vincent Leaw said on Friday, Sept 9 the opportunities could be for mixed development as well as its new growth area for maritime industrial park and oil and gas industry.

Speaking to reporters after the EGM, he said the group was still in negotiations for the projects and hoped they would materialise in the next few months.

Malaysian trade still resilient, says Mustapa

KUALA LUMPUR: Malaysia's trade performance from January to July continued to maintain a good trajectory, with trade expanding by 7.7% to RM724.09 billion compared with a year ago, said Minister of International Trade and Industry Datuk Seri Mustapa Mohamed.

Trade data for January to July showed a 6.9% growth in exports and 8.7% growth in imports on-year. Total exports increased to RM396.35 billion while imports expanded to RM327.75 billion, he said.

"We have done reasonably well, but not as well as 2010," said Mustapa, adding that the country's resilient trade performance was due to Malaysia's diversified markets and broad product base.

Speaking to reporters on Friday, Sept 9, Mustapa said that there was good export growth in all major markets except for Hong Kong and the US, attributing it to a lower rate of electrical and electronic equipment exports.

Looking forward, the government expects Malaysia's trade to grow but at a slower rate than the one recorded in 2010, he said.

"We are confident of achieving a 7% to 8% growth rate, but are unlikely to achieve figures like 10%. It is doable, but requires that the world economy improves,' he said.

Mustapa said'' the numbers reached were consistent with import figures, and due to consistent trade with Asia and Asean nations and a diverse product base, Malaysia would continue to perform resiliently.

Large regional economies such as China, India and Indonesia were expected to not only provide markets for the nation's exports, but also serve as a major source of investment, TECHNOLOGY [] and business partnership.

The nation recorded its 165th consecutive month of trade surplus in July, with exports and imports expanding at 7.1% and 2.9% compared with July last year. The main contributors to export growth are palm oil, liquid natural gas, chemicals and chemical products.

Other products supporting growth were crude petroleum, machiner, appliances and parts, and manufacturers of metal, rubber products, processed food and textiles and clothing.

Mustapa also said that the implementation of Economic Transformation Programme (ETP) projects would generate high value exports in the areas of E&E, oil and gas, medical products, engineering design, business services and creative content.

Prime Minister Datuk Seri Najib Razak had on Thursday said the combined value of the ETP initiatives was now RM171.21 billion in investment, with RM228.55 billion in contribution to the gross national income.

The second half of 2011 is expected to see better trade performance with the year-end festive seasons as retailers begin to restock and manufacturers start inventory preparation, said Mustapa.

Muted gains on KLCI at midday

KUALA LUMPUR: ''The FBM KLCI pared down some of its gains at the mid-day break on Friday, Sept 9 in line with the cautious sentiment at key regional markets, following the absence of fresh stimulus plans from Western central banks to revive their economies.

However, some reprieve came for regional markets on better news from China, where consumer inflation appears to have peaked, with August numbers coming in slightly below July's three-year high.

Worries about the darkening outlook for the developed world prompted Asian central banks including South Korea and Indonesia to hold interest rates steady on Thursday, following similar moves by Australia, Canada, Japan and Sweden this week, according to Reuters.

China's annual inflation moderated slightly to 6.2% in August from July's three-year high, in line with market expectations and raising expectations that Beijing too will hold off from further policy tightening which could dampen its demand for commodities and other imported materials, it said.

The FBM KLCI edged up 0.14% or 2.06 points to 1,471.89 at the mid-day break.

Gainers led losers by 265 to 238, while 252 counters traded unchanged. Volume was 369.88 million shares valued at RM409.65 million.

The ringgit weakened 0.25% to 2.9987 versus the US dollar; crude palm oil futures for the third month delivery rose RM24 per tonne to RM3,034, crude oil gained 15 cents per barrel to US$89.20 while gold fell US$10.07 an ounce to US$1,860.10.

At the regional markets, Hong Kong's Hang Seng Index edged up 0.22% to 19,957.18, the Shanghai Composite Index added 0.13% to 2,502.26 and Taiwan's Taiex gained 0.29% to 7,570.05.

Meanwhile, Japan's Nikkei 225 slipped 0.39% to 8,758.41, South Korea's Kospi fell 1.26% to 1,823.31 and Singapore's Straits Times Index shed 0.36% to 2,846.49.

On Bursa Malaysia, ''BAT rose 48 sen to RM44.38, Nestle added 42 sen to RM50, DiGi 38 sen to RM31.50, GAB 28 sen to RM10.20, Puncak Niaga 18 sen to RM1.32, Kumpulan Europlus up 14.5 sen to RM1.06, Cocoaland and Petronas Gas 14 sen each to RM2.10 and RM13.62, Aeon Credit 12 sen to RM4.60 and Genome up 10 sen to 70 sen.

Timecom was the most actively traded counter with 14 million shares done. The stock added 2.5 sen to 59.5 sen.

Other actives included Compugates, Malton, TMS, Time, LBS, Kurnia Asia and Systech.

Decliners this morning included Milux, Petronas Dagangan, Edaran, HLFG, Paos, PPB, QSR, Allianz and Theta.


BofA discussing about 40,000 job cuts - WSJ

Bank of America Corp officials have discussed slashing roughly 40,000 jobs during the first wave of a restructuring, the Wall Street Journal said, citing people familiar with the plans.

The number of job cuts are not final and could change. The restructuring aims to reduce the bank's workforce of 280,000 over a period of years, the Journal said.

BofA could not immediately be reached for comment by Reuters outside regular U.S. business hours.

The Journal said BofA executives met Thursday at Charlotte, North Carolina, where the bank is headquartered, and will gather again Friday to make final decisions on the reductions, putting the finishing touches on five months of work.

Investors are pressing BofA to improve its performance after it lost money in four of the last six quarters and its stock has fallen by half this year.

The Journal said the proposed job cuts may exceed BofA's last big cutback in 2008 when it called for 30,000 to 35,000 job cuts over three years. That move was triggered by an economic slowdown and the planned takeover of securities firm Merrill Lynch & Co.

Earlier this month, the Charlotte Observer reported that BofA executives were discussing plans to potentially shed 25,000 to 30,000 jobs over the next several years.

BofA had earlier planned to cut 3,500 jobs, its Chief Executive Brian Moynihan had said in a memo to staff on Aug. 18, as it tries to come to grips with $1 trillion of problem home mortgages.

BofA announced a far-reaching reorganization of its senior management team on Tuesday, which included the departure of consumer bank chief Joe Price and wealth management head Sallie Krawcheck.

Banks are shedding jobs worldwide as stricter regulations and a tough second quarter for trading income take their toll on investment banking units in particular.

More than 70,000 staff cuts have been announced this year or are reported to be in the works at U.S. and European banks, some of them to be lost over three or four year programmes. ' Reuters


Puncak Niaga up on RM1.05b Syabas claim against Selangor govt

KUALA LUMPUR: PUNCAK NIAGA HOLDINGS BHD [] shares advanced on Friday, Sept 9 after its subsidiary Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) filed a RM1.05 billion claim against the Selangor government.

At 11.20am, Puncak Niaga rose 19 sen to RM1.33 with 1.59 million shares done.

The claim filed on Sept 8 was for compensation from Jan 1, 2009 to March 31, 2011 under the 2004 concession agreement between Syabas, the Federal government and Selangor state.

RHB Research, which has a Trading Buy rating on Puncak Niaga with a fair value of RM3.05, however said on Sept 9 that given the lengthy nature of lawsuits, it would be challenging for Syabas to recover its huge receivables amounting to RM1.4 billion as at end June 2011.

Toyota to build new factory in Indonesia -Nikkei

TOKYO: Toyota Motor Corp plans to spend nearly 30 billion yen ($388 million) to build an assembly plant in Indonesia that it aims to launch in the first half of 2013, the Nikkei business daily said, as it taps demand from the fast-growing Southeast Asian auto market.

The move would enable Toyota to nearly double its production capacity in Indonesia to about 200,000 vehicles a year, the Nikkei said.

The plan comes after three years of limiting capital investment to expanding existing plants in Japan and abroad, the Nikkei said.

The facility will be built adjacent to its existing factory in the Jakarta suburbs of Karawang and is expected to assemble three subcompact models, including a low-priced strategic vehicle under development for the country, the paper said.

Officials at Toyota were off on Friday and unavailable to immediately comment on the report.

Toyota aims to increase its output in Southeast Asia's biggest economy and said in May it would spend 16.5 billion yen to boost production capacity there to 140,000 vehicles a year in early 2013 from 100,000 units.

Last year, auto sales in Indonesia totalled around 750,000 units, approaching Thailand's roughly 800,000, with the number seen exceeding 1 million units in the coming years, the Nikkei said.

Toyota controls about 60 percent of the Indonesian market when contributions by group firms such as Daihatsu Motor Co are included. But as competition grows with Nissan Motor and Suzuki Motor announcing plans to boost output, Toyota aims to improve cost competitiveness through increased local production, the Nikkei reported.

Other global automakers are looking to increase production in Indonesia. On Thursday, the Indonesia head of Geely Automobile Holdings Ltd told Reuters that the Chinese automaker plans to set up a car factory in country by 2015.

Shares of Toyota were down 0.1 percent in early morning trade on Friday, in line with the benchmark Nikkei average. ' Reuters


KLCI remains lackluster at mid-morning, pares down gains

KUALA LUMPUR: Asian markets, including Bursa Malaysia, traded cautiously as the investor sentiment turned tepid with the lack of clearer stimulus plans from both US and Europe, and with all focus now on data to be released later today in China.

The European Central Bank discussed downside risks to the euro zone's economy while U.S. Federal Reserve Chairman Ben Bernanke said authorities would do all they can to boost growth and employment.

But both steered clear of announcing any fresh steps, disappointing some and leaving them to wait for a raft of Chinese data.

A job package proposal by US President Barack Obama was broadly in line with expectations and failed to impress markets.

The FBM KLCI pared down some its earlier gains and was up 5.07 points to 1,474.90 at 10am. The index had earlier risen to 1,480.33 in early trade.

Gainers edged losers by 161 to 154, while 170 counters traded unchanged. Volume was 124.13 million shares valued at RM103.87 million.

At the regional markets, Japan's Nikkei 225 edged up 0.09% to 8,801.11, the Shanghai Composite Index added 0.22% to 2,504.50 and Taiwan's Taiex rose 1.22% to 7,640.55.

Meanwhile, Hong Kong's Hang Seng Index slipped 0.14% to 19,885.85, South Korea's Kospi fell 0.80% to 1,831.94 and Singapore's Straits Times Index lost 0.64% to 2,838.74.

BIMB Securities Research in a note Sept 9 said it was a case of traders getting too fixated on Bernanke and his none too revealing speech yesterday had again been deemed as disappointing thus the decline on Wall Street with the Dow Jones Industrial Average losing 119 points.

It would be interesting to see if traders liked Obama's US$300 billion plan to resurrect employment on Friday.

Meanwhile, regional markets were mixed amid the stagnant European bourses, it said.

'As for the local bourse, we noticed that foreign selling has somewhat abated and may see a more steady market moving forward.

'Following the recently concluded quarterly results reporting, we noticed earnings growth for corporate Malaysia remains intact albeit tweaked marginally lower, FY11 and FY12 would still achieve double digit growth. We would expect to see a firmer market today,' it said.

On Bursa Malaysia, DiGi rose RM1.38 to RM32.50 after the company announced a corporate exercise that would see it making a capital distribution of RM509 million to shareholders.

BAT gained 48 sen to RM44.38, Puncak Niaga 17 sen to RM1.31, Cocoaland 14 sen to RM2.10, Genome and Petronas Gas 10 sen each to 70 sen and RM13.58, Kumpulan Europlus 9.5 sen to RM1.01, while Amway added eight sen to RM9.

Timecom was the most actively traded counter with 9.66 million shares done. The stock gained three sen to 60 sen.

Other actives included Malton, TMS, Tricubes, Tanco, Time, LBS, E&O and MK Land.

Meanwhile, losers included Ta Ann, Nestle, Boustead, Bintulu Port, Glomac, Golsta, Bernas, Kluang and Cymao.

CIMB Research has technical sell on TSH

KUALA LUMPUR: CIMB Equities Research has a technical sell on TSH RESOURCES BHD [] at RM3.21 at which it is trading at a price-to-book value of 1.6 times.

It said on Friday, Sept 9 that it appears that TSH may have peaked at RM3.25. The bulls tried to take on this resistance on four occasions and have failed.

'Hence, we see any rebound towards RM3.25 as an opportunity to reduce holdings,' it said.

CIMB Research said the bearish divergence on its MACD indicator shows that follow through momentum has weakened. RSI too has hooked downward.

'The bears seem to have the upper hand here. The next downleg is likely to drag prices towards RM3.00 and RM2.85. However, put a buy stop at RM3.30, just in case,' it said.

CIMB Research has technical buy on Berjaya Food

KUALA LUMPUR: CIMB Equities Research has a technical buy on Berjaya Food at 85.5 sen at which it is trading at a price-to-book value of 2.4 times.

It said on Friday, Sept 9 Berjaya Food is still trading in a triangle pattern. The sideways consolidation took longer than expected but it still thinks the next leg is more likely to rise than fall.

'In view of the favourable risk to return profile, we think traders should do well taking some position now. Technical landscape is progressing well. MACD is slowly gaining strength while RSI is also above the 50pts mark,' it said.

CIMB Research said once the 88 sen level is taken out, prices should edge closer towards 93.5 sen and 96.5 sen next. Stay invested unless prices fall below the 82 sen level.

DiGi advances on capital distribution plan

KUALA LUMPUR: DIGI.COM BHD [] shares rose on Friday, Sept 9 after the company announced plans for a capital distribution to its shareholders.

At 9.15am, DiGi rose RM1.88 to RM33.00 with 136,800 shares traded.

The company on Sept 8 had announced a 1-for-10 share split which would increase in the number of shares from 777.5 million shares to 7.775 billion shares.

Its unit, DiGi Telecommunications Sdn Bhd (DiGiTel), is proposing to undertake a capital management initiative whereby DiGiTel will distribute RM509 million to

The proposed capital distribution entails the issuance of redeemable preference shares from DiGiTel to DiGi which upon redemption will result in a cash payment of RM509 million to

DiGi said it intended to distribute the excess proceeds from the capital distribution to all its shareholders by the first half of 2012.

RHB Research in a note Sept 9 said it was positive that DiGi intended to distribute excess cash of about RM509m (65 sen per share) to shareholders by 1HCY12.

The research house upgraded the stock to Outperform previously Trading Buy) with DCF-derived fair value of RM34.00 (WACC=7.7%), which offers total upside of 15.7% inclusive of 6.4% net dividend yield.

It said DiGi should be paying more dividends for FY11 (versus FY10: RM1.63/share) totalling RM1.6 billion (RM2.05/share) comprising: 1) FY11 DPS forecast of RM1.40 based on 100% payout of FY11 EPS; and 2) RM509m capital distribution (65/share).

Based on core FY11 earnings (after stripping out accelerated depreciation), this implies a payout ratio of 114%, it said.

'DiGi still has about RM692 million (89 sen per share) in share premium left. Going forward, management intends to tap into this account for future cash distribution,' said the research house.

Tricubes active, up in early trade

KUALA LUMPUR: TRICUBES BHD [] shares were active and up in early trade on Friday, Sept 9 on positive investor sentiment after its 70% owned subsidiary secured contract worth RM4.4 million from the Ministry of Home Affairs in relation to the Mobile Card Acceptance Device (MCAD) supplied to the Royal Malaysian Police (PDRM).

At 9.25am, Tricubes rose 2.5 sen to 16 sen with 4.07 million shares traded.

The MCAD enables the the police force to read all MyKads.

Tricubes said on Thursday, Sept 8 that TricubesNCR JV Sdn Bhd had accepted the letter of award on Sept 6, and that the contract was for a period of one year.


RHB Research sees strong upside for Malton, but'

KUALA LUMPUR: RHB Research Institute sees strong upside for property player MALTON BHD [] but it said investors should be aware of overbought signals.

It said on Friday, Sept 9 Malton's share price rallied from a low of 30 sen in Jul 2010 to a year-high of 71.5 sen in Nov 2010 before correcting to a low of 46.5 sen in March.

Although the stock staged a technical rebound to a high of 67.5 sen in May, it failed to retest its year-high of 71.5 sen and resumed its downtrend to a low of 39 sen on Aug 9.

Facing an oversold situation, the stock recovered to consolidate above the 46 sen (61.8% FR level) over the next few weeks.

On Sept 7, the stock registered a positive candlestick to close at 49.5 sen (from its open of 47.5 sen). While volume remained thin at 2.3m shares, the stock's price crossed above the 40-day SMA.

RHB Research said Thursday's'' surge in trading volume of 33.1 million shares pushed the stock's price to a day-high of 60 sen (from its open of 50.5 sen) before pulling back to close at 58.5 sen, registering a long-white candlestick.

Noticeably, the sharp increase of 10-day SMA (48.35 sen) saw it decrease its divergence below the 40-day SMA (49.03 sen) to indicate a possible change to the stock's medium-term outlook to positive (from negative previously).

The research house said this was further strengthened by the increasing divergence of the MACD line above the signal line (coupled with the likelihood of both lines crossing into the positive region), indicating an increasingly positive outlook in the short term.

Nevertheless, the sharp spike in Malton's share price on Thursday pushed the RSI (72.932 pts) and Stochastic into the overbought region.

'Overall, we expect Malton's share price to breakout above the resistance region of 60-62 sen and resume its uptrend towards the next resistance of 67 sen in the short term and 72 sen in the medium term.

'In the event of a breakout above the 72 sen resistance, we expect the stock's price to extend its uptrend towards the next target of 81.5 sen (23.6% FP level),' it said.

RHB Research said the stock may see a strong pullback in the immediate term given the overbought indication of the RSI and Stochastic.

It advised investors to buy towards the support region of 53.5-56 sen for a better bargain.

'Although, we expect good support at 53.5 sen, breaching this level would lead to its share price falling towards the 40-day SMA (RM0.4903), which would in turn offer medium-term investors a chance to further bargain buy.

'Investors should, however, take note that the breaching of the 40-day SMA would turn the immediate outlook negative. Hence, short-term investors should cut loss if the price breaches 53.5 sen while medium-term investors may choose to cut loss below the 40-day SMA.

'Nonetheless, we see a good risk to reward ratio for investors with a theoretical entry price of 55 sen given that the downside to the 40-day SMA is 6 sen while the upside to the resistance of 67 sen and 72 sen is 12 sen and 17 sen respectively,' it said.

ASIA-Shares set to be wary ahead of data

WELLINGTON: Asian stocks face another difficult start on Friday as the head of the Federal Reserve disappointed by not detailing how it might support the struggling U.S. economy, while the euro zone's ever present debt woes weighed.

Wall Street fell after Ben Bernanke promised the Fed would do all it could to boost growth and cut unemployment, but was short on spelling out the sorts of measures that would be taken to do that.

The risk averse sentiment had already been underscored by the European Central bank's decision to hold rates with the ECB President talking about the downside risks to the euro zone's economy.

Wall Street's main indexes closed between 0.8 percent and 1.1 percent lower, with banks the biggest decliners.

Asian stocks listed on Wall Street fell 1.4 percent, world stocks, as measured by the MSCI world equity index, eased 0.6 percent.

Investors are looking to the reaction to a speech by U.S. President Barack Obama, who unveiled a $447 billion plan to boost the U.S. economy.

A raft of Chinese data, including consumer inflation, retail sales and industrial output will be watched for what it portends for growth.

European stocks closed up 0.9 percent, erasing earlier losses after Trichet's speech, while British shares closed up 0.4 percent.

Japanese stocks, which climbed further from a six-month low on Thursday, are seen tentatively higher, with Nikkei futures traded in Chicago 55 points above the close in Osaka.

Australian shares are seen opening lower, with the share price index futures down 0.4 percent to a 18 point premium to the underlying S&P/ASX 200. ' Reuters


Nikkei edges down as Obama speech fails to impress

TOKYO: The Nikkei benchmark edged lower on Friday and is expected to stay in a narrow range as a keenly awaited speech from U.S. President Barack Obama was almost in line with market expectations.

Obama proposed a $447 billion jobs package on Thursday to help boost the U.S. economy, challenging Congress to pass legislation made up largely of tax cuts for workers and businesses.

The benchmark Nikkei shed 0.6 percent to 8,739.82, while the broader Topix index was down 0.3 percent at 755.33. ' Reuters

CIMB Research maintains Outperform on Genting M'sia

KUALA LUMPUR: CIMB Equities Research is maintaining its Outperform call and sum-of-parts based target price of RM4.50 for Genting Malaysia.

It said on Thursday, Sept 8 US lawmakers are reportedly considering whether to allow table games in places like the Saratoga Casino and Raceway in New York.

Currently, table games are only allowed in tribe-operated casinos in New York. While it is still early days, this is good news for Genting New York's Resorts World New York (RWNY) as the net win for table games can be much higher than for slot machines or video lottery terminals (VLT).

'This suggests potential upside to our earnings projections which currently factor in only the VLT operations.

'As Genting Malaysia's overseas operations gain traction, the group's earnings profile will slowly but surely transform. We maintain our OUTPERFORM call and SOP-based target price of RM4.50 for Genting Malaysia,' it said.

CIMB Research maintains Outperform on DiGi

KUALA LUMPUR: CIMB Equities Research is maintaining its Outperform call on DIGI.COM BHD [] and retains its discounted cashflow-based target price of RM34.

It said on Friday, Sept 9 that it was positive on DiGi's move to potentially unlock RM692 million (RM0.89/share), on top of the RM509 million (RM0.65/share) capital distribution that is being proposed.'' DiGi also announced a 1-for-10 share split.

'We gather that the telco is confident of reaping RM1.1 billion in opex and capex savings from its collaboration with Celcom and would not be surprised if it exceeded the target.

'As we expect the capital distribution to be announced with its FY11 results, we raise our FY11 net DPS by 29%, which results in tweaks of less than 1% to our EPS forecasts,' it said.

However, CIMB Research said its DCF-based target price of RM34.00 is intact. It maintained its'' OUTPERFORM call, with likely re-rating catalysts being more capital management and consensus forecast upgrades for the just-announced prepaid sales tax pass-through.

Bernanke disappointment pushes Wall Street lower

NEW YORK: Stocks closed sharply lower on Thursday, Sept 8 after Federal Reserve Chairman Ben Bernanke gave no indications of new stimulus measures to boost the flagging economy in a keenly awaited speech.

Investors have been looking to Bernanke, who gave his outlook on the U.S. economy on Thursday, and other policymakers to address a host of concerns from slowing global growth to Europe's debt crisis.

A rise in jobless claims reported earlier in the day underscored the weakness in the U.S. economy and came ahead of a speech by President Barack Obama. Obama is due to speak at 7 p.m. and is expected lay out a plan for creating jobs.

"The Fed hasn't come out with more options or tools that the market wants or was expecting," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. "The market was disappointed because this wasn't a game changer."

Banks were the biggest decliners after sharp gains on Wednesday. They have been one of the most turbulent sectors in the volatility that has engulfed equity markets this summer. The KBW Bank Index .BKX fell nearly 3 percent.

The Dow Jones industrial average .DJI dropped 119.05 points, or 1.04 percent, to 11,295.81. The Standard & Poor's 500 Index .SPX fell 12.72 points, or 1.06 percent, to 1,185.90. The Nasdaq Composite Index .IXIC lost 19.80 points, or 0.78 percent, to 2,529.14.

Among bank shares, JPMorgan (JPM.N) fell 3.8 percent to $33.51, the biggest decliner on the Dow. Bank of America Corp (BAC.N) fell 3.7 percent to $7.20. The S&P 500 financial sector index .GSPF lost 2.3 percent.

The VIX volatility index .VIX, a measure of expected market turbulence, rose 2.8 percent to 34.32. Although down from levels seen in August, it is still elevated compared with early in the year.

Volume on the NYSE, the Nasdaq and Amex was 7.46 billion shares, 13 percent below the 20-day moving average, a sign that participation is weakening after the high volume sell-off in August. About 76 percent of NYSE shares fell.

The current market conditions mean that short-term views are dominating and company fundamentals are taking a back seat.

"All of a sudden everybody is a trader, now, nobody is an investor," said Sam Ginzburg, a senior trader at First New York Securities. "Everything is trading macro, everything is trading on psychology, and everybody is staring at charts."

Stocks of health insurers fell The Morgan Stanley Healthcare payor index .HMO fell 2.4 percent, while Aetna Inc (AET.N) fell 1.9 percent to $39.19.

A U.S. appeals court on Thursday overturned a lower court ruling that the federal government could not compel people to buy health insurance or face paying a penalty. The appeals court ruled only that Virginia did not have standing to challenge the federal law. It did not rule on whether the mandate itself was constitutional.

The S&P 500 struggled to hold up the 1,200 mark although it broke above that level earlier in the day, which could mark a significant resistance level for the market.

On the upside, Yahoo shares (YHOO.O) rose 6.1 percent to $14.44 after a top shareholder, Third Point LLC, demanded that Yahoo overhaul its board of directors.

Shares of SanDisk Corp (SNDK.O) , a flash memory maker, jumped 2.4 percent to $38.52.

Separately, the government said the U.S. trade deficit narrowed considerably in July, a positive signal for economic growth in the third quarter after a sluggish first half. - Reuters

Major Yahoo shareholder calls for new board

NEW YORK: Shareholder activist Daniel Loeb has scooped up shares of Yahoo Inc and is demanding that the company overhaul its board, saying the directors have made "serious misjudgments" and "destroyed value" for stockholders.

A "reconstituted board with new directors who will bring fresh eyes, relevant industry expertise and increased investor alignment to the table is immediately necessary," wrote Loeb the chief executive of hedge fund Third Point LLC, which has about $8 billion under management and now owns about 5 percent of Yahoo shares.

In a letter to the Yahoo board, Loeb called for the prompt resignation of Chairman Roy Bostock and directors Arthur Kern, Vyomesh Joshi and Susan James.

Third Point said it has held discussions with a number of potential replacements for current directors.

Bostock fired Yahoo CEO Carol Bartz over the phone two days ago, less than three months after he expressed support for her during a shareholder meeting.

Third Point welcomed Bartz's departure but said the board ultimately was responsible for the company's performance.

"From the failed Microsoft sale negotiations, to a subsequent bungled and disappointing search deal with Microsoft, through a series of misguided CEO selections, and most recently the Alipay debacle, this board's failures have destroyed value for all Yahoo stakeholders," the letter said.

Yahoo's board said through a spokesperson that it recognizes the critical challenges facing the company. "Accordingly, the Yahoo board welcomes a dialogue about the concerns that have been raised by the Third Point filing. The board is committed to acting in the best interests of shareholders."

Additionally the board said that Bartz cannot stay on as a Yahoo director and is obligated to resign her seat.

The fact that shareholders are beginning to stir is not surprising given Yahoo's recent woes and share performance, said Scott Kessler analyst at Standard & Poor's.

"It was only a matter of time before something like this happened," said Kessler.

Kessler pointed out that only one Internet company, Akamai, is represented on Yahoo's board. "If you look at the board, it seems to me like you have more people with experience at airlines than you do at Internet companies."

Two decades ago, Yahoo was one of the world's hottest Internet companies -- in January 2000, at the height of the dot-com bubble, its shares traded at more than $125. It has since been mired in problems as it tries to hang on to its share of online advertising revenue, which is being siphoned away by larger and more nimble rivals Google and Facebook.

In 2008, Yahoo turned down an offer from Microsoft to buy the company for $31 a share. Shares of Yahoo closed up 6.1 percent at $14.44 on the Nasdaq on Thursday.

Third Point said its own analysis values Yahoo at more than $20 a share.

The hedge fund said that in four years Yahoo executives have not been able to set the company on the right course and that Bartz only aggravated Yahoo's problems, especially when it came to its Asian assets.

"Ms. Bartz's poor decision-making and communication skills publicly alienated the company's highly respected Asian partners, as well as its shareholders, sell-side analysts, bloggers, customers and employees," the Third Point letter said.

Yahoo is currently worth about $16 billion, with much of that ascribed to its roughly 40 percent stake in China's Alibaba, the parent company of websites including and Taobao. Yahoo, along with Japanese mobile company Softbank. own Yahoo Japan.

Relations between Yahoo's Bartz and Alibaba founder Jack Ma had frayed recently. In May, Yahoo revealed that Alibaba had abruptly handed Alipay -- one of Alibaba's crown jewels -- to a company controlled by Ma. Yahoo claimed it was blindsided by the move. - Reuters

Thursday, September 8, 2011

US jobless claims up by 2,000 to 414,000

KUALA LUMPUR: US initial jobless claims for the week ended Sept 3 rose by 2,000 week-on-week to 414,000, according to the US Department of Labor (DOL).

In a statement on its website on Thursday, Sept 8, the DOL said the 4-week moving average was 414,750, an increase of 3,750 from the previous week's revised average of 411,000.

The advance seasonally adjusted insured unemployment rate was 3% for the week ended August 27, unchanged from the prior week's unrevised rate of 3%, it said.

The advance number for seasonally adjusted insured unemployment during the week ended August 27 was 3.72 million, a decrease of 30,000 from the preceding week's revised level of 3.75 million, it said.

The 4-week moving average was 3.73 million, an increase of 5,500 from the preceding week's revised average of 3.72 million, it said.


US trade gap narrows sharply in July to $44.8 bln

WASHINGTON: The U.S. trade deficit narrowed much more than expected in July as strong Latin American demand helped push exports to a new record and imports fell slightly, a government report showed on Thursday.

The trade gap totaled $44.8 billion, 13.1 percent less than in June and well below a consensus forecast of $51.0 billion from Wall Street analysts surveyed before the report. It was the biggest month-to-month percentage drop in the deficit since February 2009.

U.S. exports rose 3.6 percent to a record $178.0 billion, driven by record shipments to countries in South and Central America and higher demand from China and major oil producers. Records were also set for two large categories, goods and services, as well as for capital goods and autos.

The buoyant export numbers are good news for President Barack Obama, who has set a goal of doubling exports by 2014 to help create jobs. On Thursday night, he will make a speech outlining additional ideas for reducing high U.S. unemployment.

However, exports declined in July to Japan, which is still recovering from a massive earthquake and tsunami disaster earlier this year, and also to the European Union, which has been rattled by debt crises in a number of member states.

U.S. imports slipped 0.2 percent in July to $222.8 billion, as the average price for imported oil declined for a second consecutive month to $104.27 per barrel and the volume of crude oil imports also fell.

However, imports from China rose 2.1 percent to $35.1 billion and helped swell the bilateral trade gap with that country to $27.0 billion, the highest in 10 months.

Capital goods imports were the highest on record and auto imports were the highest since February 2008, before the global financial crisis caused U.S. demand to plummet. ' Reuters


Tricubes subsidiary gets RM4.4m PDRM job

KUALA LUMPUR: TRICUBES BHD []'s 70% owned subsidiary has been awarded a contract worth RM4.4 million by the Ministry of Home Affairs in relation to the Mobile Card Acceptance Device (MCAD) supplied to the Royal Malaysian Police (PDRM).

The MCAD enables the the police force to read all MyKads.

Tricubes said on Thursday, Sept 8 that TricubesNCR JV Sdn Bhd had accepted the letter of award on Sept 6, and that the contract was for a period of one year.

ECB holds rates as recession fears mount

FRANKFURT: The European Central Bank held interest rates at 1.5 percent on Thursday, Sept 8 and is likely to indicate that a policy tightening cycle it began in April is on hold in the face of growing evidence the euro zone's economic recovery is losing momentum.

ECB President Jean-Claude Trichet will explain the Governing Council's decision at a 1230 GMT news conference. Markets are looking for hints of a long break before the next interest rate increase, and for any signs the ECB could even cut rates.

The bank's reactivation of its bond-buy programme will also be in the spotlight now the euro zone debt crisis has spread to Italy.

Euro zone year-on-year inflation remains at 2.5 percent, well above the ECB's target of just under 2 percent.

The 17-country bloc's central bank increased its rates in July and April, when it become the first major central bank to hike after the intensification of the financial crisis.

The ECB said the interest rate on its deposit facility would remain at 0.75 percent, and the rate on the marginal lending facility would stay at 2.25 percent. - Reuters

Ireka buys land for mix-use industrial development

KUALA LUMPUR: IREKA CORPORATION BHD [] is acquiring a parcel of freehold land in Kajang for RM22.43 million for a proposed gated and guarded mix-use industrial development.

It said on Thursday, Sept 8 that its wholly owned unit Ireka Engineering & CONSTRUCTION [] Sdn Bhd (IECSB) had entered into a sale and purchase agreement with Borncity Development Sdn Bhd to acquire the parcel of land measuring 83,339.82 sq metres (0.008ha) located with the Bukit Angkat Industrial zoning.

Ireka said the acquisition would be financed via internally generated funds and bank borrowings.

The company said that the concept for the proposed development was in the preliminary stage, and no submissions had been made to the authorities yet.

The total development cost and expected profits would be determined after the development order has been obtained at a later stage, it said.

IECSB will be sourcing for bank facility to finance the proposed development once the development planning has been finalised, it said.

On the rationale for the acquisition, Ireka said that it was a good opportunity for the group to extend its development operation to the industrial PROPERTIES [] sub-sector.

'From the market research, there is a very healthy demand for well designed industrial parks in prime location with superior infrastructural and road connectivity.

'The subject location is considered a prime industrial location with established industrial properties and excellent road connectivity,' it said.


MAS unions protest Air Asia deal

PETALING JAYA: Three unions in MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) representing about 15,000 employees will hold a picket over the national carrier's share swap exercise with AirAsia.

Union representatives said on Thursday, Sept 8 they felt the deal would not benefit MAS, and that they believed the carrier's new management team was planning the creation of a new brand within the airline as part of a union-busting move.

"We do not agree with the collaboration or the move to establish the new airline Sapphire (under the deal)," said MAS Employees' Union (Maseu) president Alias Aziz.

"What we saw from the collaboration will benefit AirAsia and also there is a rumour that there a new airline company will be set up from the collaboration.

"We already have MASwings Firefly and Mas. So, what is the purpose of wanting to establish a new airline company," he told reporters during news
conference at Maseu office in Subang Jaya.

Maseu is joining the Airline Workers Union of Sarawak and Air Transport Workers Union of Sabah in threatening industrial action in the attempt to stop
the share-swap from going ahead.

Alias also questioned why Maseu was not invited to give their opinions on the decision of the Mas supreme management about the collaboration.

MAS and AirAsia had on Aug 9 entered into the collaboration agreement to establish a framework to explore the possibilities of mutual co-operation.

To strengthen the collaboration and to further align their respective interests in AirAsia and MAS, Tune Air and Khazanah Nasional -- the major
shareholders of AirAsia and MAS respectively, have agreed to acquire from each other existing shares of both companies. - Bernama

McDonald's Malaysia to invest RM348m for 87 outlets

PETALING JAYA: McDonald's Malaysia will invest RM348 million to open another 87 restaurants by 2014, says managing director, Sarah Casanova.

She said on Thursday, Sept 8 the company aimed to have 300 restaurants nationwide by 2014 from 213 now, adding it would spend RM4 million for each new restaurant.

Casanova said McDonald's Malaysia planned to spend RM112 million this year for 20 new outlets and also to remodel 13 existing ones, adding that it was also looking to open 25 new restaurants next year.

Speaking to reporters after launching the Family Dinner Box, she said the company expected sales to grow by 20 per cent this year from RM1.095
billion last year.

Casanova said the business prospects were promising despite consumers being under pressure due to rising commodity prices and the government's subsidy rationalisation programme.

"This is due to the affordability and products with good value offered by McDonald's Malaysia," she said, adding that it has yet to see slow traffic at
its 213 restaurants nationwide.

She said McDonald's Malaysia aimed to have 100 franchised stores by 2014.

"Currently, we have 13 local franchisees in Malaysia and a total of 27 franchised restaurants," she said. - Bernama

EPF reports better 2Q performance

KUALA LUMPUR: The Employees Provident Fund's (EPF) performance report for the second quarter of this year showed an increase of 60.05 per cent in investment withdrawals to RM1.78 billion from RM1.56 billion in the same quarter last year.

The total number of approved applications under this withdrawal also grew 52.9 per cent to 199,441 compared to 130,442 applications in the same quarter last year.

EPF chief executive officer Tan Sri Azlan Zainol said the continued growth of withdrawals for investments was the result of increasing awareness among members to prepare for their retirement.

"However, we urge our members to be cautious when investing as the market may face increased volatility with the debt woes plaguing some developed countries which could have an adverse impact on the global economy," he said in a statement today.

In the same quarter, flexible age 55 withdrawals also saw a 48.18 per cent growth in the number of application growth at 26,313 against 17,757 last year, while the amount withdrawn during the quarter rose 34.89 per cent to RM981.37 million versus RM727.51 million previously.

EPF also announced that it has won the IDC Enterprise innovation Award 2011 for its Enterprise Identity Management System at the recent CIO Summit 2011. ' Bernama

Hong Leong Mfg transforms DSEM into major LED exporter

KUALA LUMPUR: Hong Leong Manufacturing Group, which acquired a strategic stake in DSEM Holdings Sdn Bhd, will transform the latter from a contract manufacturer into a leading light emitting diodes (LED) exporter under its own brand.

DSEM chief executive officer Davindra Singh Gendeh said on Thursday, Sept 8 that LED-based lighting was the way forward as it was energy efficient and environment friendly.

He said LED was expected to replace current modes of lighting in a big way in the near future.

'Already latest CONSTRUCTION [] of buildings, street lighting and giant displays are employing SSL (solid state lighting) TECHNOLOGY []. DSEM Holdings is collaborating with a host of foreign technology partners in its quest to get ahead of the SSL technology curve,' he said.

Prime Minister Datuk Seri Najib Tun Razak, who provided an ETP progress update to the media and analysts on Thursday, announced eight initiatives which were being implemented including DSEM.

DSEM is under the electronics and electrical NKEA of the Economic Transformation Programme.

While DSEM is a supplier to major US and European brands, Hong Leong Manufacturing is taking steps to transform it from contract manufacturing into a company which produces, distributes and markets its own brands.

DSEM's venture is expected to create high value jobs, especially in product development, business development and materials engineering.

This strategic partnerships is expected to have a gross national income (GNI) impact of RM300 million and create 350 jobs by 2020.

BNM maintains OPR at 3%

KUALA LUMPUR: Bank Negara Malaysia decided to maintain the Overnight Policy Rate (OPR) at 3% at its monetary policy committee meeting (MPC) on Thursday, Sept 8.

The central bank said the more challenging external environment had increased the downside risks to the domestic economy though there was also concern about inflation which had moderated slightly to 3.4% in July.

'In the MPC's assessment, while inflation remains a concern, the increased uncertainties on the global and domestic economic growth prospects and their potential consequences could have a moderating impact on inflation.

'The MPC will continue to assess carefully the evolving developments surrounding inflation and the economy, and adjust monetary conditions accordingly to ensure the sustainability of growth of the Malaysian economy in an environment of price stability,' it said.

On the global economy, it said global growth had moderated in the recent months as growth in the advanced economies slowed by more than expected following the greater policy uncertainties, worsening of confidence and heightened financial market volatilities, amidst continued weaknesses in labour market conditions.

BNM said the advanced economies are expected to register a slower pace of growth than earlier anticipated.

However, in Asia, sustained domestic demand was expected to continue to support economic growth amid weaker external performance.

'Prolonged uncertainties in the financial markets, weakness in the labour market and the prevailing fiscal conditions in the advanced economies have heightened the downside risks and fragility of the global economy,' it said.

As for the Malaysian economy, BNM said recent indicators pointed to slower growth in external demand following the weaker global economic environment.

However, it expected domestic growth prospects to remain positive, underpinned by the expansion in private consumption and private investment.

As for employment, it said the conditions remained favourable amid sustained business and consumer confidence. The public sector would also continue to support economic growth.

'Moving forward, the more challenging external environment has, however, increased the downside risks to the domestic economy,' it cautioned.

Berjaya Food 1Q net profit up 10.2% to RM2.86m

KUALA LUMPUR: Berjaya Food Bhd net profit for the first quarter ended July 31, 2011 rose 10.2% to RM2.86 million from RM2.59 million a year earlier, due mainly to higher sales recorded as a result of the school holidays and the Malaysia Mega Sales Carnival as well as the opening of additional restaurants.

It said on Thursday, Sept 8 that revenue for the quarter increased 15.7% to RM20.12 million from RM17.38 million in 2010. Earnings per share was 2.01 sen while net assets per share was 34.96 sen.

Reviewing its performance, Berjaya Food said the higher revenue and pre-tax profit was mainly due to additional restaurants operating in the current quarter compared to the preceding year corresponding quarter and also improved sales from existing restaurants.

On its prospects, the company said that the opening of additional restaurants in the subsequent quarters in accordance with its business plan for Malaysia and the completion of the corporate proposals already announced would likely enhance its performance for the financial year ending April 30, 2012.

#Update* RM400m investment for MedikTV

KUALA LUMPUR: Vasseti Datatech Bhd will invest up to RM400 million in Malaysia's MedikTV ' which will be the Ministry of Health's (MoH) official broadcast channel ' to focus on healthcares and cover Asian disease healthcare.

According to Medic Channel (M) Sdn Bhd chairman Datuk Dr Rahman Ismail, the MedikTV would be a channel on its own and initially available on internet protocol TV (IPTV) but it would also be made available online as well.

He said on Thursday, 8 at the Economic Transformation Programme (ETP) update the MedikTV would transform the way MoH communicates with its stakeholders, customers and staff and provides the avenue to educate the rakyat on healthcare and wellness issues.

'Based on the MoH demographics report, the channel has a targeted viewership of 24.9 million people annually comprising visitors and patients,' he said.

To recap, Vasseti approached the MoH with the initial proposal for the MedikTV plan. Under the proposal, Vasseti and its subsidiary Medi Channel (M) Sdn Bhd would deploy 1,410 42-inch television sets in168 locations nationwide.

These locations include 138 hospitals, 15 state health departments, five 1Malaysia clinics and 10 MoH sites in Putrajaya to provide coverage for the MedikTV under the first phase.

He said the TV sets could be placed in high-traffic locations and expected annual viewership of MedikTV was estimated at 24.9 million, based on MoH data.

'All costs will be borne by Vasseti Datatech Bhd and Medic Channel (M) Sdn Bhd and recovered via advertising revenue. Advertising from a range of private corporations has been secured including medical product manufacturers,' he said.

The gross net income impact is estimated at RM470 million by 2020 and the jobs created are expected to be 650 by 2020.

RAM: Mixed impact from Ambang Sehati purchase of BDRB assets

KUALA LUMPUR: RAM Rating Services Bhd views the corporate exercise involving Ambang Sehati Sdn Bhd's acquisition of BANDAR RAYA DEVELOPMENTS BHD []'s (BRDB) investment PROPERTIES [] to have a mixed impact on the group's credit standing.

'While the potential divestment may be an immediate positive to BRDB's financial profile, it would exert a negative effect on its business risk profile over the longer term,' it said on Thursday, Sept 8.

To recap, Ambang Sehati ' a major shareholder in BDRB -- had on Sept 5 proposed to acquire four of BRDB's investment properties -- CapSquare Retail Centre, Permas Jusco Mall, Bangsar Shopping Centre and Menara BRDB.

These properties had a total carrying value of RM942 million as at end-December 2010. The purchase consideration, which has yet to be determined, is expected to be satisfied by cash upon completion of the proposed acquisition. BRDB is expected to inform Ambang Sehati of its decision by Sept 19.

RAM Ratings pointed out that should the proposed acquisition be accepted, BRDB would be divesting all of its investment properties, which have been providing a stable source of recurring rental income.

The ratings agency said the investment properties division, which accounted for 21% of BRDB's operating profit in 1H FY December 2011, had been expected to contribute 20% to 30% of the group's projected operating profits over the next three years.

While plans have yet to be firmed up on the expected utilisation of the sale proceeds; these could entail reducing some of BRDB's borrowings, funding working capital and the remainder to be used to pay a special dividend to its shareholders, it said.

'We note that the potential divestment could lighten BRDB's debt load (which stood at RM769 million as at end-June 2011), with a corresponding improvement in its gearing and debt-coverage ratios in the immediate term.

'However, these positives would be offset by the payment of special dividends and the loss of stable rental income as well as cashflow. Furthermore, the divestment will steer BRDB towards becoming a pure property developer as it will cease to benefit from its more stable income from property investment. This, in our opinion, heightens the group's business risk,' it said.


Banks, blue chips prop KLCI higher

KUALA LUMPUR: The FBM KLCI extended its gains, albeit marginally, to close higher on Thursday, Sept 8 while its key regional peers mostly pared down their gains as the initial euphoria over the positive close at Wall Street a day earlier fizzled out.

The local bourse was given a boost by updates on the Economic Transformation Programme (ETP) by Prime Minister Datuk Seri Najib Tun Razak who said that 84% of the initiatives announced under the ETP were being implemented.

On a collective basis, the ETP recorded RM171.21 billion investments, RM228.55 billion in gross national income and 372,361 new jobs, he said.

The FBM KLCI rose 0.36% or 5.22 points to 1,469.83, lifted by gains at select blue chips including banks, Tenaga and Genting.

Gainers led losers by 415 to 265, while 284 counters traded unchanged. Volume was 812.87 million shares valued at RM1.14 billion.

At the regional markets, Japan's Nikkei closed 0.34% higher at 8,793.12, South Korea's Kospi rose 0.72% to 1,846.64, Taiwan's Taiex gained 0.26% to 7,548.37 and Singapore's Straits Times Index xxxx

Meanwhile, the Shanghai Composite Index fell 0.68% to 2,498.94 and Hong Kong's Hang Seng Index shed 0.67% to 19,912.82.

On Bursa Malaysia, Nestle was the top gainer and added 58 sen to RM49.58, BAT 30 sen to RM43.90, Tan Chong 26 sen to RM4.75, Tradewinds 23 sen to RM9.13, RHB Capital 20 sen to RM8.49, HLFG and Tenaga 18 sen to RM11.66 and RM5.30, IOI Corp 14 sen to RM4.81, Genting nine sen to RM9.84 and CIMB two sen to RM7.18.

Among the decliners, Panasonic fell 24 sen to RM21.24, Petronas Dagangan 12 sen to RM17.62, Genome 10 sen to 60 sen, Southern Steel and Hong Leong Industries nine sen each to RM2.16 and RM4, Petra Energy, Top Glove and PacificMas eight sen each to RM1.03, RM4.70 and RM3.38 respectively, while Astral Asia lost seven sen to RM1.08.

The actives included Malton, E&O, Karambunai, Systech, DVM, AirAsia, CIMB and HWGB.

Meanwhile, DiGi.Com said its wholly owned subsidiary DiGi Telecommunications Sdn Bhd (DiGiTel) had proposed to undertake a capital management initiative whereby DiGiTel would distribute approximately RM509 million to DiGi.Com.

In a statement Thursday, Sept 8, DiGi said the capital distribution would be via the issuance of redeemable preference shares, which upon redemption will result in a cash payment of approximately RM509 million to DiGi.

DiGi said it intends to distribute the excess proceeds from the capital distribution to all its shareholders by first half of 2012.

Trading in DiGi shares had been halted from 9am till 5pm today.

Indonesia central bank holds rate, lowers interbank band

JAKARTA: Indonesia's central bank left its main policy rate unchanged on Thursday for a seventh straight month, choosing to ignore a temporary upward blip in inflation in favour of caution as the global economic outlook deteriorates.

At the same time, Bank Indonesia lowered the floor of the trading band for interbank overnight rates by half a percentage point to give its banking system the flexibility to deal with fickle cash conditions and fluctuating money market rates.

Core inflation in August rose above the 5 percent mark that one central bank official suggested is the threshold for a policy shift.

Yet Thursday's decision to hold the policy rate at 6.75 percent confirmed that the central bank views the upward blip in food, clothing and gold prices during the Ramadan festivities as temporary.

It also put Indonesia in the growing camp of central banks shifting focus away from inflation to growth as they brace for a protracted period of weak global demand.

South Korea left rates on hold for a third month at a review on Thursday, Australia's did the same earlier this week.

Inflationary pressures in Southeast Asia's largest economy are subdued and growth is robust in the largely domestic-driven economy. Analysts therefore suspect the fear of financial contagion and market volatility is behind Bank Indonesia's decision to err on the side of caution.

That seemed to be the reason Bank Indonesia widened the floor of its interbank overnight rate to 150 basis points below the policy rate, from 100 basis points below previously.

"This decision is taken by considering the need to guard economic stability amid rising uncertainties in the global financial system triggered by the U.S. and Europe debt problems," Bank Indonesia said in a statement.

Indonesia's stock market, Asia's best performing this year, has been spared a lot of the volatility spawned by Europe's debt crisis and faltering global growth.

But, having used a rising rupiah to keep price pressures in check, the central bank is worried about market turbulence and potential capital outflows from Southeast Asia's largest economy.




All 12 analysts polled by Reuters had forecast a rate hold. BI made a surprise move to raise the policy rate by 25 basis points in February to address inflation worries.

Core inflation in August accelerated to 5.15 percent, though broader inflation remained manageable at 4.79 percent as Muslims spent more on foods, clothes and transport to celebrate Eid.

Analysts also expect Bank Indonesia to leave the rate unchanged for the rest of 2011 as part of efforts to maintain solid growth at a time of increasing worry about the global economy, given woes in Europe and the United States.

"The focus has switched back to growth instead of inflation," said Eugene Leow, an economist with DBS in Singapore.

"With the external economy more uncertain, the central bank has to be seen to help to boost the economy and is likely to keep rates low. It looks unlikely that they will be willing to hike rates this year.

"Inflation has been surprisingly tame so looks like this sweet spot will continue for a while more," Leow said.

BI Governor Darmin Nasution told Reuters in an Aug. 25 interview that the bank would prefer to continue using monetary policy tools rather than rate rises to counter increasing prices or to slow loan growth.

The central bank has allowed the rupiah rise to a seven-year high and used other macroprudential measures to tame inflation after the surprise 25 basis point rate increase in February aimed at calming the market.

The rupiah has risen 5 percent against the U.S. dollar so far this year, one among the top gainers in Asia along with the Korean won and Singapore dollar.

Indonesia's benchmark stocks index is up 13.7 percent so far this year on a dollar basis, while the MSCI Asia Pacific ex-Japan index is down 10.5 percent.

BI has tried to keep the policy rate low to help spur bank lending, which grew by 24 percent in August from a year ago, and economic expansion seen at 6.6 percent this year. ' Reuters