Earnings calls wake up to Wall Street pain

NEW YORK: Earnings forecasts for U.S. companies are starting to feel the pain on Wall Street and in the broader economy as the odds of another recession rise, Reuters reported on Saturday, Sept 24.

Intense fear that global debt issues and stagnant growth cannot be resolved has pummeled market confidence in the past couple of months.

Earnings have been one of the market's few positives, coming in strong despite economic woes.

But analysts now are toning down double-digit growth targets for the rest of this year and next on the heels of a record second quarter.

A distressing signal came from FedEx Corp, the world's No. 2 package delivery company, which many on Wall Street look to as an economic bellwether. FedEx lowered its full-year profit outlook this week, citing high fuel costs and a struggling global economy.

Since July 1, the Standard & Poor's 500 Index has tumbled 15 percent. Forecasts for third-quarter earnings for the S&P 500 companies have slipped to 13.7 percent growth from 17 percent, according to Thomson Reuters data. But many strategists say those estimates are still too high.

For next year, S&P 500 earnings-per-share estimates are eyeing $112, which would be a record.

"If that number is anywhere near real, order the champagne now," said Howard Silverblatt, senior index analyst at S&P.

Over the last few weeks, analysts have cut earnings estimates for S&P 500 companies across all sectors except TECHNOLOGY []. Financials are among the hardest hit.

Negative guidance from companies is also on the rise, outweighing positive guidance by a ratio of more than 2 to 1.

Estimates for the fourth quarter and 2012 are down slightly to around 15.4 percent and 13.5 percent, respectively, and could pull back further as analysts react to more guidance, as well as to critical economic data, including housing and jobs numbers, and a worsening debt crisis in the euro zone.

Profit growth could still be relatively strong for the season that kicks off in early October, and that could lift stocks, which sold off nearly every day this week on panic reminiscent of the financial meltdown in 2008.

The Dow Jones industrial average ended the week down 6.4 percent, its largest weekly percentage loss since October 2008, while the S&P 500 slid 6.6 percent. The Nasdaq Composite Index tumbled 5.3 percent for the week.

"The way things are going, we're going to be in a recession by the end of the fourth quarter," said Barton Biggs, managing partner of New York-based Traxis Partners, in an interview with Reuters Insider.

The mystery lies beyond the third quarter into next year. Strategists speculate that estimates may be inflated by 5 percent to 15 percent as the market questions how far the cost slashing since the last recession can shield the bottom line.

FINANCIALS: THE ACHILLES' HEEL

Financials, worth more than 13 percent of the S&P 500 and the second-most influential group behind technology stocks, have been subjected to drastic cuts in earnings estimates.

"That's obviously the Achilles' heel of the market," said Robbert Van Batenburg, head of equity research at Louis Capital in New York. "Investment banking is probably going to be very moribund, bank lending is still not existing, and there are no gains to be booked at all."

Banks are also suffering from worries about possible write-downs of euro-zone debt and less profitable lending due to the U.S. Federal Reserve's new measures to lower longer-term interest rates.

Financial institutions' shares have been dragged lower in recent days on renewed fears of exposure to European debt. Credit-default swaps, a measure of the cost of insurance against default on long-term debt, have been climbing.

"The wild card here is really the banks. That's really where the earnings for the S&P have been kind of jerked around in the last couple years," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co., in San Francisco.

Insurers are also very susceptible to a lower-rate environment, while energy and consumer discretionary sectors are vulnerable to see-sawing commodity prices and damaged confidence.

For the country's biggest insurers, the Fed's "Operation Twist," designed to stimulate credit for consumers and businesses, could threaten earnings for years to come. The problem is returns on insurers' investment portfolios can't keep pace with the obligations they have accumulated from torrid sales of annuities and life policies.

TECHS BUCK TREND

Tech, meanwhile, has been the sector where forecasts are rising behind powerhouses such as Apple,, whose stock hit an all-time high this week.

The forecast for technology earnings for the full-year 2011 is 16.6 percent growth, compared with 2010, according to Thomson Reuters data released on Friday. In July, the forecast called for growth of 13.7 percent.

Yet even in this healthy sector, a cautionary tale came this week from chipmaker Xilinx, a component of the Philadelphia Semiconductor Index. Xilinx dropped its sales forecast, citing weak industrial markets.

And after a relatively quiet few days on the economic calendar, the flow of data will pick up next week with reports on housing, factory activity, consumer spending and the broader economy. New home sales for August are due on Monday, followed by the consumer confidence index on Tuesday.

Durable goods orders for August will be released on Wednesday, giving an indication of demand for manufactured items like refrigerators meant to last three years or more. On Thursday, the government will release its final reading on growth of second-quarter gross domestic product. On Friday, August personal income and spending data will come out, as well as the final reading on September consumer sentiment from the Reuters/University of Michigan surveys. - Reuters

Wall Street stabilises after disastrous week

NEW YORK: The Dow Jones industrial average on Friday, Sept 23 suffered its worst week since the depths of the financial crisis in 2008, stung by severe anxiety over Europe's spiraling debt crisis and a warning from the Federal Reserved about the U.S. economy.

But stocks ended higher after a disastrous four days of selling, which helped push down the S&P 500 index 6.6 percent for the week.

Volatility spiked in a revival of the tumult seen in August. Fears of a Greek default and the Federal Reserve's gloomy prognosis for the U.S. economy spurred heavy selling in equities.

Stocks seesawed between gains and losses on Friday, but the S&P was able to hold above the August 8 low of 1,119, a key support level that served as a trigger for buyers during the week.

While the market remains susceptible to further losses, many traders believe it will take a significant deterioration, either in the economy or in Europe, to spur another sharp decline.

"I would have been happier to see the market up 100 points or so ... however, in these rather cautious times people are a little hesitant to commit in a big way," said Doreen Mogavero, chief executive of Mogavero, Lee & Co. in New York.

The CBOE Volatility index edged up 0.6 percent, its fifth straight advance.

For the week, the Dow dropped 6.4 percent for its worst weekly performance since October 2008 and the Nasdaq lost almost 5.3 percent.

The primary trigger for the rebound came from policymakers suggesting additional steps will be taken to support Europe's financial system.

Ewald Nowotny, European Central Bank Governing Council member, said it might be advisable for the ECB to add more liquidity into the banking system.

The Dow Jones industrial average gained 37.19 points, or 0.35 percent, to 10,771.02. The Standard & Poor's 500 Index gained 6.83 points, or 0.60 percent, to 1,136.39. The Nasdaq Composite Index gained 27.56 points, or 1.12 percent, to 2,483.23.

The escalating turmoil in global markets has led many analysts to cut their year-end targets for the benchmark S&P 500 index, with even some of the most bullish investors beginning to scale back their optimism a bit.

"We are at a very conservative position. We reduced our net long from 70 percent a week ago to 20 percent as of now," Barton Biggs, managing partner at New York-based Traxis Partners told Reuters Insider.

For Reuters Insider interview with Barton Biggs, see link.reuters.com/cex83s

Bespoke Investment Group notes the average consensus year-end price target is currently at 1,311 for the S&P, down from the 1,374 at the start of the year and nearly 100 points off its high mark of the year at 1,406.

Biggs said the chances of another recession in the United States are now three-in-four because officials in Europe and the United States are not doing enough to deal with the banking problems and their weak economies.

"Financial markets are sick and tired of the authorities in Europe and in the U.S. twiddling their thumbs and not doing substantive things to solve this crisis of the global economy,

and that's what its all about," he said.

"The odds of a double dip recession on a global basis are increasing rapidly."

Bob Doll, BlackRock's chief equity strategist and a noted bull, told Reuters Insider that while he feels most of the bad news is in the market, he has the odds of a double-dip recession at roughly one-in-three.

Gains in the Nasdaq were helped by semiconductor stocks, with the PHLX index up 2 percent. Texas Instruments gained 3.8 percent to $27.22 after Caris boosted its rating on the stock.

Hewlett-Packard Co was down 2.1 percent to $22.32 a day after Meg Whitman, the former head of EBay Inc, was named to run the computer and printer maker. The move was met with criticism of the company's board, which has been accused of recent missteps.

Trading was active with about 8.9 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 7.94 billion.

Advancing stocks outnumbered declining ones on the NYSE by 1,886 to 1,104, while on the Nasdaq, advancers beat decliners 1,728 to 815. - Reuters

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UBS CEO quits, board wants faster restructuring

ZURICH: Swiss bank UBS's Chief Executive Oswald Gruebel resigned on Saturday, Sept 24 shouldering the blame after its scandal-hit investment banking business lost $2.3 billion in alleged rogue trading.

Changes that will see that part of the bank's operations adopt a less risky business model would be pushed through faster, its chairman said, and Europe, Middle East and Africa head Sergio Ermotti would replace Gruebel on an interim basis.

"Oswald Gruebel feels that it is his duty to assume responsibility for the recent unauthorized trading incident. It is testimony to his uncompromising principles and integrity," Chairman Kaspar Villiger said in a statement.

Gruebel, a 67-year-old former trader who helped turn around Credit Suisse a decade ago, was brought out of retirement in 2009 to try to revamp UBS after it almost collapsed in 2008 under the weight of more than $50 billion lost on toxic assets.

Ermotti, a 51 year-old from Switzerland's Italian-speaking region of Ticino, was already being groomed as a possible successor since he joined UBS in April from UniCredit after he was passed over in a management reshuffle at the Italian bank following the departure of CEO Alessandro Profumo.

The board statement made no mention of the fate of investment bank boss Carsten Kengeter, whose future had also hung in the balance over the trading loss in his division.

The UBS board, which continued a meeting by telephone conference on Saturday that had started in Singapore this week, said it was "deeply disappointed" by the trading scandal.

"It will fully support the independent investigation and will ensure that mitigating measures are implemented to prevent such an incident from recurring," it said.

UBS trader Kweku Adoboli was "sorry beyond words for what had happened" and was "appalled at the scale of the consequences of his disastrous miscalculations," his lawyer Patrick Gibb said at a court hearing in London on Thursday.

The 31-year old did not enter a plea and was remanded in custody until a further hearing next month.

LESS RISKY INVESTMENT BANK

The board reconfirmed the bank's "integrated" strategy, combining wealth management, investment bank, asset management and Swiss retail and corporate businesses, but said it wanted to speed up a restructuring of investment banking.

The board said it had asked management to accelerate the implementation of a client-centric strategy for the investment bank "concentrating on advisory, capital markets, and client flow and solutions businesses," but gave no further details.

"In the future, the Investment Bank will be less complex, carry less risk and use less capital to produce reliable returns and contribute more optimally to UBS's overall objectives," Villiger said.

UBS had already said in August it would axe 3,500 more jobs to shave 2 billion Swiss francs off annual costs, with almost half of those cuts coming from the investment bank, which had grown to almost 18,000 staff from 16,500 a year ago.

Clients pulled nearly 400 billion Swiss francs ($442 billion) -- almost 20 percent of total client assets -- from UBS after the bank was battered in the financial crisis as well as a prolonged dispute with the U.S. tax authorities and posted the biggest annual corporate loss in Swiss history.

Villiger said Gruebel had achieved an "impressive turnaround and strengthened UBS fundamentally." But other private banks are now circling again to nab clients worried about reputational risk in the wake of the rogue trader affair.

UBS's largest shareholder, Singapore sovereign wealth fund GIC, met the bank's management earlier in the week and in a rare public statement expressed its disappointment. It urged them to take firm action to restore confidence and wanted details of how the bank would tighten risk controls.

The board said it would continue to look for a permanent successor to Gruebel. Villiger thanked Ermotti for standing in on an interim basis, adding: "With his extensive industry experience and together with the executive leadership team he will continue to implement UBS"s strategic alignment."

Ermotti has worked in all UBS's core business areas: as UniCredit deputy CEO he had responsibility for corporate and investment banking as well as private banking and at Merrill Lynch he led equity markets activities globally.

UBS's board meeting, one of four regular ones per year, had originally been due to end on Friday ahead of the UBS-sponsored Singapore Formula One motor racing Grand Prix on Sunday, when executives will be trying to reassure big clients.

In 2007, former UBS CEO Peter Wuffli was ousted unceremoniously at a board meeting in Spain to coincide with the America's Cup yachting event there, in which UBS was sponsoring a team.

The loss allegedly caused by Adoboli in unauthorized trades compares to the 4.9 billion euros ($6.6 billion) lost by rogue trader Jerome Kerviel at Societe Generale three years ago, an event that prompted calls for tighter rules and felled that bank's then-chairman and CEO Daniel Bouton. - Reuters

Guocoland MD acquires option to buy 10m shares

KUALA LUMPUR: GUOCOLAND (MALAYSIA) BHD [] managing director Yeow Wai Siaw had acquired an option to purchase 10 million shares of Guocoland or 1.42%.

The company said on Friday, Sept 23 that he acquired the option on Thursday for the acquisition of the 50 sen shares at an exercise price of 87 sen each under the executive share option scheme.

The paid-up is 700.458 million shares. GLL (Malaysia) Pte Ltd is the single largest shareholder with 455.13 million shares or 64.98%. Tan Sri Quek Leng Chan owns 19.50 million shares or 2.79%.

Guocoland share price closed at 77.5 sen on Thursday.

S P Setia plans second Aussie project with RM772m GDV

KUALA LUMPUR: S P Setia Bhd is expanding its landbank in Australia with an investment of RM81 million for its second property project in Melbourne with an estimated gross development value of RM772 million (AUD250 million).

It said on Friday, Sept 23 that its wholly owned subsidiary S P Setia International Ltd had entered into a contract of sale with Portbridge Pty Ltd to acquire the freehold land measuring 2.23 acres in the South Yarra suburb in Melbourne.

The company said the land was a prime corner development site on Australia's premier boulevard ' St Kilda Road.

The land was also linked to the Melbourne public transportation network, with the Moubray Street tram station located just opposite the site, it said.

S P Setia said South Yarra had seen a high influx of young professionals attracted by the suburb's close proximity to the Melbourne central business district.

On the rationale for the buy, the company said the acquisition followed its maiden Fulton Lane project, which''it said had received tremendous support and interest particularly amongst its existing Malaysian customers.

'The strong interest registered for the first tower of the Fulton Lane project is a firm testament to the strength of the S P Setia brand-name.

'It also justifies management's belief that there are significant opportunities to monetise our vast customer data-base across national boundaries, particularly in cities where Malaysians have close economic, educational, familial and business ties with,' it said.

S P Setia said Fulton Lane's success with its Malaysian customers also validated its firm conviction on the attractiveness of Melbourne as a choice investment destination for savvy property investors.

The company said it was still too preliminary to reveal details regarding the estimated total development cost or expected profits to be derived, but the land was expected to capitalise on the shortage of residential units in the area.

It said the land would be developed into an apartment project, with an estimated gross development value of AUD250 million, that should contribute positively to its future earnings.

The Edge to launch digital versions

KUALA LUMPUR: The Edge has signed with Germany's OneVision Software AG, a leader in press and electronic publishing solutions, to develop and deliver The Edge Digital Editions to readers and subscribers.

With this, The Edge Financial Daily and other titles from The Edge will be available soon to subscribers to tap and read on an iPad or Android-based tablet.

"Our readers can soon expect the complete edition of the fastest growing financial daily waiting for them when they wake up for the trading day," said Tan Boon Kean, regional managing director of The Edge Media Group, after the contract signing on Friday, Sept 23 at The Edge Communications' office at Mutiara Damansara.

"The way in which we get news and analyses changes rapidly, and we wanted to get it right before we launched our digital editions," added Tan.

"The Edge's decision for OneVision's Mirado is of strategic importance for us. It confirms our understanding and the direction we have taken to secure future growth," said Hussein Khalil, CEO of OneVision.

"Mirado is OneVision's world-class solution for re-purposing print content for tablet devices, web space and e-publishing. It enables the publishers to utilise the dynamic capabilities of the tablet devices by quick integration and enrichment of printed content with dynamic media content such as video, audio or animation."


The Edge Financial Daily and The Edge Singapore weekly will be the initial titles to roll out, said Tan. Readers can also expect benefits with the integrated print and digital versions.

KLCI ends week in the red

KUALA LUMPUR: The FBM KLCI closed sharply lower on Friday, Sept 23 in line with its regional peers as investors spooked by fears of a global recession sold down equities in a panic mode.

The situation was made worse with Moody's Investors Service downgrading the long-term deposit and senior debt ratings of eight rated Greek banks by two notches.

Moody's said Sept 23, the banks were the National Bank of Greece SA (NBG), EFG Eurobank Ergasias SA (Eurobank), Alpha Bank AE (Alpha), Piraeus Bank SA (Piraeus), Agricultural Bank of Greece (ATE) and Attica Bank SA downgraded to Caa2 from B3. Emporiki Bank of Greece (Emporiki) and General Bank of Greece (Geniki) downgraded to B3 from B1. All of the banks' long-term deposit and debt ratings carry a negative outlook.

The FBM KLCI fell 1.58% or 21.87 points to 1,365.94, its lowest closing since Aug 16, 2010. The index had earlier fallen to its intra-day low of 1,358.47.

Losers beat gainers by 624 to 187, while 230 counters traded unchanged.

On a week-on-week basis, the FBM KLCI has fallen 64.99 points.

South Korea's Kospi tumbled 5.73% to 1,697.44, Taiwan's Taiex lost 3.55% to 7,046.22, Hong Kong's Hang Seng Index fell 1.36% to 17,668.83, the Shanghai Composite Index shed 0.41% to 2,433.16 and Singapore's Straits Times Index was down 0.80% to 2,698.80.

On Bursa Malaysia, HLFG fell 88 sen to RM10.06, Dutch Lady and BAT lost 86 sen each to RM18.02 and RM42.90, KLK and Nestle down 50 sen each to RM20.70 and RM48.50, Maybank 41 sen to RM7.99, Tasek and Batu Kawan 40 sen each to RM6.59 and RM15.04, while MAHB and Tradewinds lost 39 sen each to RM5.56 and RM7.92.

Dialog was the most actively traded counter with 27.2 million shares done. The stock fell four sen to RM1.92.

Other actives included AirAsia, Maybank, Telekom, Petronas Chemicals, Axiata and MRCB.

Among the gainers, Southern Steel added 16 sen to RM2.20, Hartaleda 15 sen to RM5.69, Cepco 13 sen to RM1.98 and MMC Corp 10 sen to RM2.35.

Aikbee Resources suspended Monday

KUALA LUMPUR: Trading in the shares of AIKBEE RESOURCES BHD [] will be suspended throughout Monday, Sept 26 for a material announcement.

The company said on Friday, Sept 23 it had requested for the suspension to announce a proposed corporate exercise involving its shares.

Aikbee's main core business is logging and sawmilling. It posted net losses of RM144,000 in the second quarter ended June 30 on the back of RM24.37 million in revenue.

Affin Research maintains Overweight on banks

KUALA LUMPUR: Malaysian banks' earnings this year would continue to be driven by sustainable net-interest-income growth given continuous domestic credit demand and liquidity, non-interest income as well as lower credit cost, according to Affin Investment Bank Research.

The research house in a note Sept 23 maintained its overweight rating on the banking sector and said ''that banks remained a proxy to the domestic economic recovery, which was supported by both government spending under the 10 Malaysia Plan, the ETP and still buoyant consumer spending.

The research house picked CIMB, PBB, Maybank, RHB Capital, Hong Leong Bank and AFG as its stock choices in the banking sector.

Affin Research said although there was keen industry competition and high loan-to-GDP penetration rate of 100%, it continued to see upside potential in banking stocks price target due to new income streams from M&As, bank revenue diversification benefits through tie-ups with insurance companies and productivity gain from group transformation initiatives.

"We believe that Bank Negara Malaysia would continue to strike a balance between inflation and economic growth with an accommodative monetary policy stance, and this should not affect our loan growth forecast of +12% yoy in 2011," it said.

Affin Research said investors should focus on banks with good asset-liability management, loan-to-deposit (LD) ratio of not more than 90%, improving return on equity (ROE) generation and exposure to higher growth regional markets through tie-ups and subsidiaries.

Meanwhile, the research house Affin Investment Bank's economist is expecting Bank Negera Malaysia (BNM) to resume the normalisation of interest rates from 2QCY12 onwards with a potential hike of 50 basis points.

Although the interest rate hike is often perceived to be a sector catalyst, it does not think it would provide much boost to banks' earnings as net interest margins (NIM) improvement from the rate hike could be tepid owing to the rise in funding cost due to competitive pressure on loan yields.

'Based on our current real GDP growth forecast of 4.5% in 2011 and 5.0% in 2012, our banking sector earnings growth forecast are 9.1% 2011 and 13.5% 2012.

'There are however downside risks to these given the escalating external developments,' it said.

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OSK Investment Bank resigns as Kinsteel independent adviser

KUALA LUMPUR: OSK Investment Bank Bhd has resigned as an independent adviser to KINSTEEL BHD []'s corporate exercise, which includes a proposed restricted offer for sale.

According to a statement on Friday, Sept 23, OSK Investment Bank had resigned with effect from Thursday, citing that new developments had arisen which it believed would affect its independence to act as the independent adviser.

TA Securities Holdings Bhd was appointed as the new independent adviser to replace OSK Investment Bank.

The corporate exercise involved a proposed subscription of RM280 million nominal value of seven-year 7% redeemable convertible unsecured loan stocks issued by its subsidiary, Perwaja Holdings Bhd at 100% of its nominal value.

Kinsteel had proposed a renounceable restricted offer for sale of such nominal value of the RCULS held by it to the entitled shareholders of Perwaja, other than Kinsteel, on the basis of RM1 nominal value of RCULS for every two existing shares of RM1 each in Perwaja.

Timber exports target cut to RM20b

KUALA LUMPUR: The global economic slowdown has taken a toll on Malaysia's exports of timber and timber products, prompting the Malaysian Timber Industry Board (MTIB) to revise downward its forecast for 2011.

"Earlier in the year, we expected the value to be RM23 billion but due to the economic slowdown it's lower now," MITB director-general Dr Jalaludin Harun said on Friday, Sept 23.

"We will be very happy if it can touch RM20 billion," he told reporters on the sidelines of a seminar on Building A Sustainable Future Through Timber CONSTRUCTION [] here.Malaysia's exports of timber and timber products amounted to RM20.52 billion last year.

Deputy PLANTATION [] Industries and Commodities Minister Datuk Hamzah Zainudin said in a speech read out by Jalaludin that lower exports would not augur well with the aspirations of the National Timber Industry Policy (NATIP) which has set an export target of RM53 billion by 2020.

"The MTIB and the Malaysian Timber Council (MTC) should be working together with the industry to re-strategise our marketing efforts to address the multiple and simultaneous challenges faced by the industry," he said.

Exports aside, he said, the timber industry should also place greater emphasis on the domestic market which has tremendous potential for growth.

"A recent study by the MTIB and the Forest Research Institute Malaysia (FRIM) shows that domestic consumption of timber is estimated to be more than
RM20 billion," he said.

Of the total, sawn timber accounts for RM10.8 billion, furniture RM4 billion, plywood and other panels RM4 billion, door/window frames RM1 billion,
and others RM1 billion. - Bernama

Maybank under mild selling pressure, volume up

KUALA LUMPUR: Shares of MALAYAN BANKING BHD [] fell in very active in the afternoon session on Friday, Sept 23, as selling pressure extended to the bank though analysts said the banking group's fundamentals were intact and the banking sector remained sound.

At 3.10pm, Maybank fell 33 sen to RM8.07 with 11.69 million shares done.

The FBM KLCI fell 17.45 points to1,370.36. Turnover was 635.73 million shares valued at RM1.06 billion> Falling stocks beat gainers 640 to 122 while 209 stocks were unchanged.

Hong Leong Bank rights shares or HLBank-OR fell 36 sen to RM1.01 and Hong Leong Financial Group lost 32 sen to RM10.62.

Affin Investment Research said the reality that the selldown in equities have more do to with fear and jitters, and in fact, could be uncontrollable when irrationality sets in.

It said based on the share price behaviour in the 2008 financial crisis, there was still more downside risk, ranging from 20%-54% (based on a - 1 Standard Deviation from mean price-to-book value) for the Malaysian banking stocks, though fundamentals are expected to be largely intact.

'Foreign shareholdings level (ex-strategic stakes) remain high at CIMB, Public Bank and AMMB, estimated at 36.4%, 24.5% and 26.6% respectively and further foreign selldown could be the main factor for causing share price to decline further. Notwithstanding the deleveraging risk, we think that the selldown is unwarranted, given the fundamentals of our banking sector and economy,' it said.

Affin Research said the Malaysian banking sector remains sound, as reflected by sufficient capital adequacy ratios and healthy loan growth even through 2008-2009, aided by accommodative monetary policy.

'In terms of asset quality, there was no significant build-up of non-performing loans during the last financial crisis in 2008 despite the financial market turbulence. No banks in Malaysia suffered from serious collateral damage as there was little portfolio exposure to western derivative instruments or the developed economies,' it said.

The research house said it maintained its Overweight rating on the banking sector. Earnings in 2011 would continue to be driven by sustainable net-interest-income growth, non-interest income as well as lower credit costs.

'We recommend a focus on banks with a reasonable level of LD ratio (below 90%), steady and improving ROE generation and exposure to the higher growth regional markets (through tie-ups and subsidiaries). On our stock pick, we like CIMB, Public Bank, Maybank, RHBCap, Hong Leong Bank and AFG,' it added.

Moody's downgrades 8 Greek banks

KUALA LUMPUR: Moody's Investors Service has downgraded the long-term deposit and senior debt ratings of eight rated Greek banks by two notches.

It said on Friday, Sept 23, the banks are the National Bank of Greece SA (NBG), EFG Eurobank Ergasias SA (Eurobank), Alpha Bank AE (Alpha), Piraeus Bank SA (Piraeus), Agricultural Bank of Greece (ATE) and Attica Bank SA downgraded to Caa2 from B3. Emporiki Bank of Greece (Emporiki) and General Bank of Greece (Geniki) downgraded to B3 from B1. All of the banks' long-term deposit and debt ratings carry a negative outlook.

Moody's said the main factors driving the rating actions on domestically owned Greek banks are tThe impact of recent impairments of Greek government bonds (GGBs), and the increasing risk of significant additional impairments of GGBs, on banks' capital levels.

Another factor is the expected impact of the deteriorating domestic economic environment on non-performing loans (NPLs) and potential additional provisioning costs from the upcoming diagnostic asset quality study, initiated by BoG and to be conducted by external consultants (BlackRock).

The ratings agency said another significant factor was the declines in deposit bases and still fragile liquidity positions, as illustrated by limited remaining eligible collateral for funding from the European Central Bank (ECB) and the recent activation of Emergency Liquidity Assistance (ELA) by the Bank of Greece (BoG).

Moody's said Greek banks' direct holdings of GGBs, which in most cases exceed 150% of Tier 1 capital, expose system capital levels to the risk of material reductions.

It also pointed out that although the capital position of Greek banks appears adequate (Tier 1 ratio of 11.1% for the system at the end of March 2011, prior to recording the above impairments), solvency levels were at risk from further write-downs on their GGB holdings.

'The deteriorating operating environment, with a deeper-than-expected recession now forecast, is likely to further increase the level of non-performing loans (NPLs) in the system, which stood at an already high 11.5% at the end of March 2011.

'The Greek economy declined by 7.3% year-on-year in the second quarter of 2011, while unemployment currently stands at 16%. In line with our recent revision of GDP growth projections to -5.4% for 2011, from -3.4%, Moody's expects operating conditions to continue to exert significant pressure on banks' profitability and asset-quality metrics,' it said.

KLCI pares down losses at mid-day

KUALA LUMPUR: The FBM KLCI pared down some of its losses the mid-day break on Friday, Sept 23 after having fallen more than 1.9% in the morning session to an intra-morning low of 1,358.47.

At 12.30pm, the FBM KLCI was down 1.11% or 15.35 points to 1,372.46. However, the outlook remains gloomy as the global markets turned bearish this morning, according to analysts.

Market breadth remained negative with losers leading gainers by 620 to 118, while 185 counters traded unchanged. Volume was 531.92 million shares valued at RM838.79 million.

The ringgit weakened 0.69% to 3,1708 versus the US dollar; crude palm oil futures for the third month delivery fell RM19 per tonne to RM2,990, crude oil added 52 cents per barrel to US$81.03 while gold gained US$1,743.18.

Meanwhile, Asian stocks fell to a 16-month low and emerging market currencies tumbled on Friday amid fears of a global recession, but a pledge from the G20 to preserve financial stability helped stem the scale of losses, according to Reuters.

Equity markets pulled back from the depths of their slump and the euro gained after a statement committed the Group of 20 major economies to "take all necessary actions" and said central banks stood ready to provide liquidity, it said.

Alarm at the U.S. Federal Reserve's dire outlook for the world's biggest economy at its two-day policy meeting this week pushed world stocks to 13-month lows as investors shed risky assets from portfolios and scurried to safer havens, said Reuters.

At the regional markets, South Korea's Kospi was down 3.78% to 1,732.49, Taiwan's Taiex lost 3.21% to 7,071.12, Hong Kong's Hang Seng Index fell 1.68% to 17,610.65,Singapore's Straits Times Index declined 1.21% to 2,687.69 and the Shanghai Composite Index shed 0.91% to 2,420.94.

Japan's stock markets were closed for a national holiday.

On Bursa Malaysia, Dutch Lady fell 70 sen to RM18.18, KLK 66 sen to RM20.54, Tasek, Batu Kawan and Nestle 40 sen each to RM6.95, RM15.04 and RM48.60 respectively, Panasonic 38 sen to RM18.42, Petronas Dagangan 32 sen to RM16.08, Tradewinds 29 sen to RM8.02 and HLFG down 26 sen to RM10.68.

Dialog was the most actively traded counter with 16.96 million shares done. The stock fell nine sen to RM1.87.

Other actives included AirAsia, Key West, Petronas Chemicals, Telekom, MRCB and Trinity.

Gainers included Shell, Ewein, Parkson and MMC Corp.

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Singapore Stocks-Down at 16-mth low on recession fears

SINGAPORE: Singapore shares fell to a 16-month low on Friday, Sept 23 as worries about a global recession intensified following the U.S. Federal Reserve's warning of a grim economic outlook and weak manufacturing data from China.

By 0500 GMT, the Straits Times Index (STI) was down 1.3 percent, or 36.27 points, at 2,684.26. Around 910 million shares worth S$837 million were traded, compared with 576 million shares worth S$592 million that changed hands by the same time on Thursday.

Shares of rig builders Keppel Corp and Sembcorp Marine lost 1.8 percent and 3.3 percent respectively.

"Our cautious stance is unchanged as we expect lingering external uncertainties to affect market sentiment," said UOB Kay Hian. "Being an open economy, Singapore's 2012 GDP growth outlook has been curtailed and this will eventually lead to earnings downgrades."

UOB Economic Treasure Research recently cut its 2012 GDP growth forecast to 4.5 percent from 5.0 percent, but the consensus expects a wider range of 2.0-6.5 percent, UOB Kay Hian said.

DBS Vickers also said in a report that if the 2008 global financial crisis were to be repeated, PLANTATION [] stocks could have 20-80 percent downside from current levels.

The brokerage cut its target prices on Singapore-listed palm oil producers Wilmar International to S$5.60 from S$6.25 and on Indofood Agri Resources to S$1.35 from S$1.75, citing limited upside to the stocks.

By around 0500 GMT, Wilmar and IndoAgri shares were down 2.1 percent and 2.2 percent respectively.

However, UOB Kay Hian said that the market could potentially bottom out in either the first or the second quarter of 2012, after which sectors such as banking and property are expected to outperform.

On Friday, shares of Singapore offshore services firm Swiber Holdings bucked the weak market trend, jumping as much 5 percent after announcing it had won a $155 million contract for a project in South Asia.

The company added in a statement that its order book is now close to $1 billion. At around 0500 GMT, Swiber shares were up 3 percent at S$0.52 on a volume of 6.3 million shares, 1.1 time the average daily volume in the last 30 days. - Reuters

Faber dips, RHB Research cuts FV to RM1.63

KUALA LUMPUR: FABER GROUP BHD []'s shares fell at the midday break on Friday, Sept 23, in line with the weak broader market, while RHB Research Institute reduced its fair value to RM1.63 from RM2.19.

At 12.30pm, Faber was down five sen to RM1.43. There were 110,500 shares done at prices ranging from RM1.41 to RM1.46.

The FBM KLCI fell 15.35 points to 1,372.46. Turnover was 531.92 million shares valued at RM838.78 million. Losers beat gainers 620 to 118.

RHB Research said it heard three concessionaires, including Faber Medi-Serve, Pantai Medivest and Radicare, were asked to submit a request for proposal (RFP) for renewal of their concessions.

'This is good news as there have been concerns that the concessions, which expire on Oct 28, would not be renewed.

'However, based on Pharmaniaga's experience last year, we believe the concession may only be renewed for 10 years, rather than our assumption of 15 years,' it said.

The research house said this may however, be partly mitigated by the likelihood that the concessionaires may be able to charge higher service fees for more technical services such as maintenance of diagnostic equipment, although this could be offset by lower fees for more general cleaning and laundry services.

'We are concerned that speculation of Faber losing Sabah and Sarawak service areas has resurfaced. If we assume new parties are brought in as 49% JV partners for the two states, and Faber continues to do the work as a subcontractor, this would reduce our FY12-13 earning per share (EPS) forecasts by 7.3%-8.6%,' it said.

RHB Research lowered its sum-of-parts fair value estimate to RM1.63 (from 2.19) to impute: 1) a shorter renewal period; and 2) risk of losing some Sabah/Sarawak earnings.

'Although the concession renewal is positive, we believe the market may continue to focus on the negative aspects, especially in light of the uncertain global economic environment. Therefore, although Faber's share price has dropped by 17.7% over the last month, we believe there could be further weakness ahead. We thus downgrade our call on the stock to Market Perform, from outperform,' it said.

China property stocks's 30% correction overdone

KUALA LUMPUR: The more than 30% decline in China property stocks over the past couple weeks is overdone, says CIMB Equities Research.

In its report issued on Friday, Sept 23, it said that in its view, 'the market correction is overdone as it has taken the sector's RNAV discount, P/BV and P/E to 2008 trough levels'.

It pointed out the market appears to be factoring in a financial distress scenario and a hard landing for China property sector.

'We think the valuations are unjustified as the major listed companies under our coverage are unlikely to go bust given their cash reserves which should enable them to ride through these tough times,' it said.

CIMB Research said although the China property sector was under pressure in near-term due to uncertain global economy outlook and on-shore credit tightening, the distressed level valuations offer good values for long-term investors.

To recap, it said the sector's average 67% discount to RNAV was similar to the discount seen during 2008. By assuming a hard landing scenario with 30% average selling price (ASP) fall in primary cities and 20% decline in secondary cities (vs its base case assumption of 10% price decline), the sector valuation at average 62% discount is only slightly higher than that in 2008 troughs.

CIMB Research also said the current sector average FY11 P/BV of 0.8 times was even lower than the 2008 trough level of 0.9 times. The comparison with 2008 trough valuations indicate that COLI, CRL, Evergrande, Poly HK, Shimao and Sino-Ocean should trade above their current prices. However, the comparison shows that there may be more downside risk for Guangzhou R&F, Agile, KWG and SOHO China.

It advised investors to stick to developers with solid financials. Its forecasts of developers' operating

cash flows in 2H11 showed that Greentown, Sino-Ocean, Poly HK and CRL were likely to see negative operating cash flow in 2H11.

It also noted the low short-term debt coverage of Greentown and Glorious.

'Investors should stick to developers with solid financials and strong debt payment capability, i.e. COLI which is our top pick, CRL, KWG, Agile, COGO and SOHO China,' it said.

Cypark teams up with LG Electronics in solar tech

KUALA LUMPUR: CypARK RESOURCES BHD [] is teaming up with LG Electronics to venture into solar TECHNOLOGY [], which includes collaborative solar projects within Malaysia and Southeast Asia.

Cypark said on Friday, Sept 23 the initiative was to make Malaysia the centre for the solar business hub in the region, by tapping into LG's long history in solar photovoltaic (PV) technology.

Under the plan, Cypark and LG would undertake joint research & development in solar technologies particularly designed for the Southeast Asia's tropical weather conditions. They would also undertake a study to set up a solar PV manufacturing plant in Malaysia, particularly in Negeri Sembilan.

Cypark said'' LG was its technology partner and the engineering, procurement and CONSTRUCTION [] contractor in the installation of its large solar farm project in Pajam, Negeri Sembilan.

"The collaboration will further strengthen Cypark's position as the leading Renewable Energy company in Malaysia,' said Cypark chairman Tan Sri Razali Ismail in Pajam where Cypark and LG inked an memorandum of understanding (MoU) for the strategic partnership in solar technology.

Negeri Sembilan Menteri Besar Datuk'' Seri Utama Mohamad Hasan, who witnessed the signing of the MoU, also launched the 'Renewable Energy Development Policy Master Plan' to transform the state to be the leader in Malaysia's renewable energy development.

The RE Policy Master Plan is to enable Negeri Sembilan help achieve the government's target to reduce national carbon emission by 40% by 2020 and the National Energy Policies on renewable energy.

Also present at the signing of the MoU were LG Electronics vice president for solar worldwide C.S. Chung and HSBC Amanah Malaysia chief executive officer Rafe Haneef.

Cypark also received the land lease offer letter from the Negeri Sembilan Government which gives rights to a 21-year leasehold land title. The land is used to develop the 10 MW Integrated Pajam RE Park project.

Cypark also signed a RM75 million financing agreement with HSBC to finance the development of the Pajam Integrated RE Park.

Cypark's chief executive officer Daud Ahmad said securing the funds for the project reflected the'' bankability and viability of the project.

"We expect the implementation of the 8MW solar plant will be completed smoothly and operational by end of this year,' he said.

KLK slips on downgrade, CPO futures below RM3,000

KUALA LUMPUR: Shares of KUALA LUMPUR KEPONG BHD [] (KLK) slipped on Friday, Sept 23, weighed down by the weaker crude palm oil (CPO) futures which fell below RM3,000.

At 11.26am, the FBM KLCI was down 16.37 points to 1,371.44, off the early low of 1,358. Turnover was 449 million shares valued at RM673 million. Losers beat gainers nearly six to one, with 582 losers to 106 gainers.

The CPO third month futures fell RM21 to RM2,988, lowest since Sept 6.

KLK bore the brunt of the selling, down 76 sen to RM20.44 with 467,200 shares done while its major shareholder Batu Kawan slipped 40 sen to'' RM15.04.

Hwang DBS Vickers Research said KLK's 4QFY11 earnings could drop 10% on-quarter. It said the FY11-13 earnings were revised by -2% and +1% after changes to CPO price and forex rate assumptions

'Rating cut to Hold, with revised TP of RM22.60 due to higher ERP in DCF valuation 4QFY11 earnings to fall 10% q-o-q. KLK's 4QFY11 FFB production could ease 1% q-o-q on fewer working days due to Eid festival and workers' biometric registration, as required by the government.

'Given 7% lower average selling prices on-quarter, 4QFY11 core earnings are expected to retreat by c.10%on-quarter. Contribution from manufacturing should moderate after record operating profit in the past two quarters, but we do not expect significant impact from a global economic slowdown,' it said.

Recession fears grip Asian markets

KUALA LUMPUR: Recession fears ripped apart Asian markets on Friday, Sept 23 as the FBM KLCI fell more than 1.9% in early trade and sank below the 1,360-level before paring down some of its losses at mid-morning.

Asian stocks, in particular in South Korea and Taiwan, fell sharply with foreign investors taking flight as concerns about global economic stagnation deepened on debt problems in Europe and an increasingly grim US and Chinese economic outlook, according to Reuters.

The FBM KLCI fell 1.37% or 19.08 points to 1,368.73 at 10am. The index had earlier fallen to a low of 1,358.47.

Market breadth continued to be negative with losers beating gainers by 541 to 50, while 125 counters traded unchanged.

Volume was 267.66 million shares valued at RM356.75 million.

At the regional markets, South Korea's Kospi tumbled 4.84% to 1,713.49, Taiwan's Taiex lost 3.80% to 7,027.77, Hong Kong's Hang Seng Index fell 2.35% to 17,491.89, Singapore's Straits Times Index was down 1.90% to 2,668.96 and the Shanghai Composite Index shed 1.29% to 2,411.58.

BIMB Securities Research in a note Sept 23 said that after the US Federal Reserve failed to rally the markets with their 'twist', global equity markets were all now doing the 'limbo rock ' how low can you go'?

At this juncture, with the fear button activated the global markets are playing catch down, it said.

It said Wall Street yesterday sparked into a selling spree pre-empting that Europe would experience what US did in 2008, adding that as result, Wall Street plunged by almost 400 points to below the 11,000 level.

Earlier, Asian and European stocks also a wave of selling as most saw declines of 2-4%, it said.

'For today, we would expect a spate of unloading ahead of the weekend for the regional markets.

'For Malaysia, we expect the selling to continue with the immediate support for the FBM KLCI at 1,380,' said BIMB Research.

Among the decliners at mid-morning, KLK and Dutch Lady fell 78 sen each to RM20.42 and RM18.10, Batu Kawan 44 sen to RM15, Panasonic 40 sen to RM18.40, Petronas Dagangan 38 sen to RM16.02, Hong Leong Bank 36 sen to RM9.62, BAT 30 sen to RM43.54, Tradewinds 29 sen to RM8.02 and United Malacca 25 sen to RM6.40.

The actives included Dialog, AirAsia, Trinity, Key West, Petronas Chemicals, MRCB, Compugates and Timecom.

CIMB Research has Technical Sell on Genting Plantations

KUALA LUMPUR: CIMB Equities Research has a Technical Sell on Genting PLANTATION []s at RM7.16, at which it is trading at a FY12 price-to-earnings of 13.3 times and price-to-book value of 1.8 times.

It said on Friday, Sept 23 that Genting Plantations's share price has been consolidating in a sideways manner for the past few weeks.

'Yet, we think the longer term trend continues to favour the bears. Looking at the chart, it appears that near term gains are likely capped at RM7.40 to RM7.60,' it said.

CIMB Research said the technical landscape remains subdued. MACD signal line is still hovering in the negative territory while RSI has hooked downward.

'Unless prices swing back above the RM7.60 level, we would rather stick with the bear's camp. On the downside, once the RM6.91 level is violated, prices should de-rate towards RM6.61 and RM6.40 next,' it said.

CIMB Research has Technical Sell on Genting

KUALA LUMPUR: CIMB Equities Research has a Technical Sell on GENTING BHD [] at RM8.80, at which it is trading at a FY12 price-to-earnings of 10.4 times and price-to-book value of 1.9 times.

It said on Friday, Sept 23 that Genting's share price broke below its triangle support early this week and this has drawn investors into selling mode on Thursday.

'As the candles deviate further away from its key moving averages, we think the near term trend is firmly down. The following support levels are RM8.50 and RM8.20,' it said.

CIMB Research said the MACD histogram bars have turned negative while RSI has also hooked downward. Beware of the next downleg as it could be sharp.

'Any rebound is an opportunity to take profit. The gap at RM9.23-RM9.28 would likely keep the bulls at bay for now. Put a buy stop at RM9.39, just in case,' it said.

CIMB Research has Technical Sell on Hong Leong Bank

KUALA LUMPUR: CIMB Equities Research has a Technical Sell on Hong Leong Bank at RM9.98 at which it is trading at a FY12 price-to-earnings of 10.2 times and price-to-book value of 2.1 times.

It said on Friday, Sept 23 that the recent correction does not look complete. Prices violated its 200-day SMA on Thursday and this could induce greater selling pressure in days to come.

The next downleg should push prices closer towards RM9.50 and RM8.80.

'MACD is heading south while RSI is below the 30pts mark. The deteriorating technical landscape shows that the bears are still strong here.

'Our strategy here is to unload on strength, preferably near the 200-day SMA (now at RM10.62). Only a swing above RM10.96 would prompt us to reevaluate our call,' it said.

KLCI continues to get hammered, falls 1.64%

KUALA LUMPUR: The FBM KLCI fell 1.64% or 22.76 points to 1.365.05 at 9.05am on Friday, Sept 23 in line with the steep overnight fall at Wall Street as well as the panic-selling across Asia.

A grim economic outlook from the US Federal Reserve on Wednesday triggered falls in world stocks and commodities overnight.

US stocks plunged 3.5% on Thursday, extending a selloff to four days, as policymakers' failure to arrest global economic stagnation sent markets spiraling downward, according to Reuters.

Among the major early losers on Bursa Malaysia were KLK, Tradewinds, JT International, UMW, Star, Genting, Batu Kawan, MSM, AirAsia and Petronas Chemicals.

Losers beat gainers by 259 to 27, while 74 counters traded unchanged.

Mudajaya dips in early trade

KUALA LUMPUR: MUDAJAYA GROUP BHD [] shares declined in early trade on Friday, Sept 23 in line with the overall weaker market sentiment but also on the back of the resignation of its managing director Ng Ying Loong.

At 9.25am, Mudajaya lost nine sen to RM2.01 with 407,500 shares done.

CIMB Research in a note Sept 23 said Ng's resignation caught the research house by surprise, but added that although it may trigger concerns due to its sudden nature, there was no reason to view it negatively.

There research house said that while it was disappointed that there had been no warning, Ng's departure was for personal reasons and there was no hint of conflicts at the management level or issues with the strategic direction of the group.

Management remains optimistic that the changes at the helm do not affect its ability to clinch projects under the 10MP and ETP, it said.

'We make no changes to our forecasts or Buy call but raise our RNAV discount from 20% to 30% in view of the short-term concerns that this change in leadership is likely to stir.

'Our target price goes down from RM5.50 to RM4.81. The main potential re-rating catalyst is contract wins,' it said.

Seoul shares open down 3.6 pct hit by recession fears

SEOUL: Seoul shares opened sharply lower on Friday as concerns about global economic stagnation deepened on debt problems in Europe and an increasingly grim U.S. and Chinese economic outlook.

Falls were led by crude oil refiners and shipbuilders, with SK Innovation , the country's top refiner, down 6.3 percent and Hyundai Heavy Industries , the world's top shipyard, tumbling 7.1 percent.

The Korea Composite Stock Price Index was down 3.43 percent at 1,738.86 points as of 0003 GMT. ' Reuters

HDBSVR sees muted spillover effects on Asian equities

KUALA LUMPUR: Hwang DBS Vickers Research said while main US equity indices on Wall Street plunged between 3.2% and 3.5% overnight on Thursday, Sept 22, there could be muted spillover effects on Asian equities on Friday.

It said this followed the sell-down suffered on Thursday, which saw bellwethers in Indonesia (-8.9%), China shares listed in Hong Kong (-6.3%) and Hong Kong (-4.8%) the hardest hit.

At Bursa Malaysia, it expects to see less selling pressures on Friday. The benchmark FBM KLCI, which tumbled 31.2 points or 2.2% on Thursday, may gyrate sideways with a marginal negative bias, as it will likely struggle to cross past the psychological threshold of 1,400 ahead.

One counter that will be hoping to attract buying interest is WCT, which has entered into a concession agreement for the privatisation of the CONSTRUCTION [], development and financing of an integrated complex at KLIA2 with a project cost valued at RM530 million.

CIMB Research retains Outperform on WCT

KUALA LUMPUR: CIMB Equities Research said the 25 years plus 10 years concession agreement between WCT BHD [] and MAHB for the KLIA2 integrated complex was a big milestone for WCT.

It said on Friday, Sept 23 this was WCT's first concession in Malaysia and would give it both CONSTRUCTION [] and recurring income.

'A positive surprise is the estimated RM100 million to RM200 million upside to the RM530.3 million construction cost,' it said.

CIMB Research said it made no changes to its FY11-13 EPS forecasts or RM4.44 RNAV, which already factored in WCT's 70% share of the integrated complex's NPV(13% WACC).

'We retain our OUTPERFORM call and RM3.99 target price, which is pegged to an unchanged 10% RNAV discount. This announcement and other project awards including a potential sizeable contract from the Middle East could catalyse the stock. The group's end-11 target of RM2 billion new contracts remains intact,' it said.

CIMB Research maintains Sell on Berjaya Land

KUALA LUMPUR: CIMB Equities Research said it was floored by BERJAYA LAND BHD []'s 1QFY4/12 core net loss of RM3.9 million as it had forecast RM46.7 million core net profit for the full year.

It said on Friday, Sept 23 the variance stemmed mainly from higher tax expenses, weaker-than-expected property earnings and lower contribution from the hotel and recreation business.

'Factoring in a scaled-back sales schedule and lower EBITDA margin assumption for its property projects, we now slash our FY12-14 EPS forecasts by 35%-46%,' it said.

CIMB Research said it also imputed a higher tax rate on FY12-14 earnings. In view of its volatile earnings and the macro headwinds, it widen its sum-of-parts discount from 10% to 40%, which reduces its target price from RM1.11 to 93 sen.

'B-Land remains a SELL, with potential downside catalysts being these poor results, execution risk for its overseas projects and continuous losses for its club division,' it said.

World Bank chief warns of spreading crisis

WASHINGTON: Protectionism and populist policies in the developing world could rise as countries face increasing head winds from a growing European sovereign debt crisis and a weakening economic recovery in the United States, World Bank President Robert Zoellick said on Thursday, Sept 22.

Zoellick warned another crisis was building at a time when the budgets of many developing economies had not fully recovered from the 2008 financial storm, adding to their fiscal strains.

He told Reuters in an interview more than half of developing countries' budgets have deteriorated by 2 percent of gross domestic product since 2007, and more than 40 percent of developing nations now have government deficits in excess of 4 percent of GDP.

"If the situation deteriorates further, then developing countries' growth could turn down, their asset prices could drop and then their non-performing loans could increase," Zoellick said.

"With these pressures and prospects we have to anticipate possible protectionist pressures, beggar-thy-neighbor policies and a risk of a retreat to Populism," he added.

While he still believed advanced economies could avoid a double-dip recession, Zoellick said his concerns were growing unless they acted forcefully to tackle their problems.

"A crisis made in the developed world could become a crisis for developing countries," he said. "Europe, Japan and the United States must act to address their big economic problems before they become bigger problems for the rest of the world.

"Not to do so would be irresponsible," he added.

Developing economies, he said, had grown more resilient over the past decade and were in a better position to withstand another crisis but they were still concerned about the spillover effects from troubled advanced economies.

Some of the largest impacts to poorer countries would be felt through a decline in global demand, which would affect trade and commodity prices.

Zoellick said $6.1 trillion was wiped out globally in stock market declines over the past couple of months, which is equivalent to 10 percent of global GDP.

A meeting of finance leaders from emerging market economies -- China, India, Russia, South Africa and Brazil -- in Washington on Thursday called for 'decisive action' by advanced countries to tackle the deterioration in their economies.

"The best role for the BRICS countries is the same as the best role for any country, which is to focus on what they need to do at home to get through the current financial dangers and to move on to long-term growth," he said.

Zoellick said he was paying close attention to consumer and business confidence in emerging economies. - Reuters

HP names Whitman CEO, Apotheker out

SAN FRANCISCO: Hewlett-Packard Co named former eBay Inc Chief Executive Meg Whitman its president and CEO, replacing the harshly criticized Leo Apotheker in a bid to restore investor confidence in the U.S. TECHNOLOGY [] company, Reuters reported on Thursday, Sept 22.

The decision was made without a formal CEO search and piled renewed criticism on the board, which Wall Street has been blamed -- at least in part -- for the storied Silicon Valley's recent missteps.

Whitman, an Internet retail expert with a mixed track record, is not an obvious choice to revive HP, analysts said. The failed California gubernatorial candidate transformed eBay from a few dozen employees in 1998 into a global Internet retail powerhouse, but the final years of her reign were marked by sputtering growth, intensifying Wall Street criticism and a string of unwise acquisitions, including of Skype.

While her elevation surprised many with its seeming hastiness -- for the second time, internal candidates such as enterprise chief David Donatelli were passed over -- Apotheker's ejection had been a matter of time.

He becomes the third straight HP CEO shown the door.

"Some might be saying maybe Meg Whitman isn't the right person, either. She's not a hardware person," said Auriga analyst Kevin Hunt. But HP "just needs someone to set the direction."

Analysts had speculated that Apotheker's departure might presage a backtracking on major decisions taken during his 11-month term. But HP reassured investors on a conference call on Thursday that the board was not changing strategy again.

Whitman said HP remained committed to completing a review of its PC division before the year ends, and expected to close the pricey $12 billion acquisition of British software maker Autonomy Corp Plc as planned.

HP's shares closed down 4.8 percent at $22.80, wiping out much of Wednesday's 6.6 percent gain.

"We would view any decision not to conduct a comprehensive search of internal and external candidates for a permanent CEO role as unsatisfactory and unnecessarily hasty," Sanford Bernstein analyst Toni Sacconaghi, who has been openly critical of HP's board, wrote in a note earlier on Thursday.

HP Chairman Ray Lane dismissed such concerns. He said the board chose Whitman after serious consideration and that her strong communication and operational execution skills made her the best candidate.

QUESTIONS?

In less than a year on the job, Apotheker, formerly SAP AG CEO, slashed HP's forecasts for three straight quarters and struggled to reverse a 50 percent plunge in the share price.

The storied Silicon Valley computer maker is fighting to restore its crumbling credibility. Whitman has to galvanize growth at a company that gets more than a third of its revenue from a slowing European economy, and is struggling to offset sliding PC revenue with services and software.

"We are at a critical moment and we need renewed leadership to successfully implement our strategy and take advantage of the market opportunities ahead," said Lane, who moved from non-executive chairman to executive chairman on Thursday.

Whitman's record at eBay came under scrutiny during her failed campaign for California's governorship. Analysts question whether her stewardship of eBay prepared her to steer a sprawling enterprise and computer giant.

The billionaire is credited with catapulting eBay into the upper echelons of a then-nascent e-commerce arena, and taking it public. But critics note she pushed hard to acquire Internet telephony service Skype, beginning a long and ultimately fruitless attempt to wring value from it. EBay eventually unloaded it, and it ended up with Microsoft Corp.

Her successor, John Donahoe, spent years engineering a turnaround and trying to rekindle stalled growth.

"While we believe she has proven to be a very capable manager helping grow eBay from a start-up into one of the largest Internet companies, we think an ideal candidate for HP should have extensive experience in the enterprise market," Stern Agee analyst Shaw Wu said in a client note.

Better choices would include HP enterprise chief Dave Donatelli and PC head Todd Bradley, two names that had also made the rounds in Silicon Valley for the top job after Mark Hurd's ouster in August 2010, he added.

On a more personal level, opponents and media on the campaign trail last year raised questions about Whitman's fierce temper and imperious manner with employees, and even about her integrity after it emerged that the wealthy former CEO had employed an illegal alien maid. - Reuters

U.S. equity funds see $4.6 bln in outflows -Lipper

NEW YORK: Investors withdrew $4.6 billion from domestic equity funds in the week ended Sept. 21, but added $2.9 billion in international stocks, data from Thomson Reuters' Lipper showed on Thursday.

The bulk of the outflow in domestic equity funds came from exchange-traded funds, suggesting that institutional money fled in a week marked by the downgrade of Italian debt, renewed concerns about Greek debt and sour economic news.

All equity funds combined suffered $1.65 billion in net outflows.

Investors' optimism that Europeans were moving to resolve the region's long-simmering debt crisis and that the Federal Reserve would move to avert economic recession had lifted global markets at the beginning of the five-day period.

"I don't think investors really had the time to have a meltdown," said Tom Roseen, a Lipper senior analyst in Denver.

'My takeaway from this was it could have been a lot worse, as far as outflows go."

But the mood darkened after the Fed said on Wednesday that the U.S. economy faces "significant downside risks."

"The everyday investor felt pretty good for most of the week," Roseen said. "However, the active traders, those were the guys moving the market."

The outflow from domestic ETFs was $4.3 billion, while from domestic non-ETFs, the outflow was just $271 million.

Roseen said the data suggests retail investors are staying conservative, through selective stock selection and staying invested in equities, while continuing to buy municipal bonds.

ETFs also accounted for the bulk of money flowing into international equity funds, at $2.8 billion. Only $101 million flowed into non-ETF international equity funds.

Taxable bond funds took in $2.9 billion, almost evenly divided between ETF and non-ETF funds. Municipal bond funds took in $296 million, almost 93 percent going to non-ETFs.

Money market funds had $15.9 billion in outflows.

Lipper's weekly fund flows data are compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds. ' Reuters

''

Market's 3 percent fall suggests deepening worry

NEW YORK: Stocks plunged on Thursday, Sept 22 extending a selloff to four days, as policymakers' failure to arrest global economic stagnation sent markets spiraling downward.

The heavy volume of Thursday's plunge signaled investors are selling in anticipation of more losses. Wall Street's "fear gauge," the CBOE Volatility Index, jumped 12 percent, giving the index its biggest 2-day percentage spike in a month as investors protected against more losses to come.

Energy and materials shares were among the hardest hit areas on worries of slowing worldwide demand. Signs of a slowdown in China fed those fears.

"It's tough to find anything that is a positive catalyst for the market, either domestically or internationally," said TD Ameritrade Chief Derivatives Strategist J.J. Kinahan.

The Dow Jones industrial average dropped 391.01 points, or 3.51 percent, to 10,733.83. The Standard & Poor's 500 Index lost 37.20 points, or 3.19 percent, to 1,129.56. The Nasdaq Composite Index slid 82.52 points, or 3.25 percent, to 2,455.67.

Weak data from China followed an unsettling outlook about the U.S. economy from the Federal Reserve on Wednesday in stoking recession fears. The previous session's losses were sparked after the Fed said it saw "significant downside risks" facing the economy.

China's once-booming manufacturing sector contracted for a third consecutive month, while the euro zone's dominant service sector shrank in September for the first time in two years.

Those searching for positive market signs could point to the benchmark S&P 500 index holding above 1,120, seen as a key technical support level which could trigger more selling if broken.

"We haven't seen the market completely tilt just yet, so that does show there is some resilience. There is some fresh capital on the sideline and people aren't necessarily hitting the panic button," said Joseph Greco, managing director at Meridian Equity Partners in New York.

"If we tested 1,100 -- that is where we could see a really sharp decline from there."

Volume of about 13.24 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq was well above the daily average of 7.8 billion and the highest since August 10.

U.S. crude oil futures tumbled more than 6 percent, the biggest one-day percentage drop in six weeks. For details, see

The PHLX oil service sector index tumbled 6.6. Schlumberger slid 6 percent to 61.22. The S&P materials index fell 5.5 percent, with miner Freeport-McMoRan Copper & Gold Inc off 9.7 percent to $32.14.

Banks also lost ground with the KBW bank index off 2.7. Citigroup shares were down 6.1 percent to $23.96. The Fed's plan to lower long-term rates will compress margins for banks that borrow at short-term rates and lend at longer-term rates. The declines also came a day after Moody's cut debt ratings for big lenders.

FedEx Corp, considered to be an economic bellwether, slumped 8.2 percent to $66.58 after the world's No. 2 package delivery company pared its outlook for the full year.

In addition to the statement on Wednesday, the U.S. central bank detailed additional stimulus measures to help push down long-term rates. Investors worried the latest plan would have little effect on lending and that there appeared to be few solutions to sluggish worldwide demand.

Near the close, traders exchanged about 1.10 million option contracts in the S&P 500 Index as 2.69 puts were in play for each call, according to Trade Alert. That put-to-call ratio was higher than the 22-day moving average of 1.77.

Declining stocks outnumbered advancing ones on the NYSE by 2,724 to 343, while on the Nasdaq, decliners beat advancers 2,230 to 353. - Reuters

Warnings mount on euro crisis, BRICS mull more aid

WASHINGTON: World leaders and finance chiefs on Thursday, Sept 22 pushed Europe to quell its debt crisis and big emerging economies said they might provide more money to help stop the chaos from spreading.

As finance ministers and central bankers gathered for talks amid growing concern about sharply slowing growth and plunging stock markets, the leaders of seven big economies stressed the need to contain the euro zone crisis.

"Euro zone governments and institutions must act swiftly to resolve the euro crisis and all European economies must confront the debt overhang to prevent contagion to the wider global economy," the leaders of Australia, Canada, Indonesia, Britain, Mexico, South Africa and South Korea wrote in an open letter to France, chair of the Group of 20 leading economies.

Separately, officials from the so-called BRICS countries, including heavyweights China, Brazil and India, said they would consider giving more funds to the International Monetary Fund to boost global stability.

But India issued a reminder that developing countries were not in a position to bail out richer economies.

"We represent a group of countries where there is (an) enormous amount of demand for resources at home for poverty reduction," Reserve Bank of India Governor Duvvuri Subbarao told a joint BRICS news conference in Washington.

The euro area crisis has put a strain on the IMF's resources. With key economies teetering on the edge recession, more countries could seek emergency loans, quickly depleting its capital.

An internal IMF staff report obtained by Reuters last week showed that the fund could comfortably lend out another $390 billion without endangering its balance sheet. But in a worst-case scenario, it may face demands for $840 billion -- an increase of $200 billion from staff estimates made in June.

Highlighting the growing role of the BRICS in the world economy, China's central bank governor said major emerging markets should boost domestic demand to take up some of the slack caused by weakness in the United States and Europe.

"In today's crisis period, internal demand of each economy is important, and we should find a way to enlarge internal demand in our economy," Zhou Xiaochuan said.

But he made no mention of repeated U.S. calls for Beijing to let the yuan currency rise faster.

As stock prices around the world fell on fears of a new economic slump, U.S. Treasury Secretary Timothy Geithner voiced optimism that Europe would devote more of its own resources to backstop euro area governments and banks under stress.

"I am very confident they're going to move in the direction of expanding (their) effective financial capacity," he said. "They're just trying to figure out how to get there in a way that is politically attractive."

French Finance Minister Francois Baroin said giving more clout to Europe's new bailout mechanism, the European Financial Stability Fund, could be done but was not top of his agenda.

"The main issue (for the euro zone) is reducing deficits as quickly as possible. Leveraging the EFSF is not a priority for now, we could eventually consider how to leverage it to give it more systemic firepower."

ECB WARNS EURO IN DANGER

In Frankfurt, a European Central Bank study on Thursday warned the entire euro currency project was now in peril.

The study, perhaps the most stern warning about the euro's future from a central banker, was a parting shot from ECB chief economist Juergen Stark, who resigned this month after opposing the bank's purchases of troubled countries' bonds.

"Greatly increased fiscal imbalances in the euro area as a whole and the dire situation in individual member countries risk undermining stability, growth and employment, as well as the sustainability of (Europe's Economic and Monetary Union) itself," said the research paper, which was published by the ECB but not endorsed by it.

G20 finance ministers will meet for dinner in Washington on Thursday to discuss the crisis, but they have no plans to issue a communique to outline a response.

That may be disappoint investors who are alarmed about the inability of policymakers to tackle jointly the world's economic problems as they did at the height of the financial crisis in 2008 and 2009.

World stocks plunged on Thursday as investors worried about the grim global growth outlook including data pointing to a slowdown in China, one of the world's key economic engines.

European stocks fell over 4.5 percent and the Dow Jones Industrials closed down over 3.5 percent.

Investors flooded into the safe haven of U.S. Treasury debt, pushing yields to new lows a day after the Federal Reserve, warning the U.S. economy faced significant risks, announced a new plan to keep lending rates low.

The European Union's monetary affairs commissioner, Olli Rehn, did not rule out the possibility of a Greek debt restructuring but vowed European leaders would not allow an uncontrolled default nor Greece leaving the euro zone.

In Athens, Prime Minister George Papandreou said further austerity measures were vital to Greece, even as workers striking in protest shut down the country's transport system.

"There is no other path. The other path is bankruptcy, which would have heavy consequences for every household," he said.

BANKS IN FOCUS

The crisis has raised pressure on European banks, particularly in France, which are heavily exposed to Greece and other troubled euro zone sovereigns. Baroin said any liquidity problems for Europe's banks were addressed by a move by global central banks to set up new liquidity facilities last week.

The IMF has pressed for a recapitalization of European banks but has faced opposition from bank executives and EU governments who have said balance sheets are sound.

Europe's banking regulator denied a Financial Times report that it would force 16 weaker, mid-tier banks to raise capital more quickly after they came close to failing European stress tests last year.

France's biggest bank, BNP Paribas denied a Reuters report that it was in talks with the Gulf state of Qatar on taking a stake in the bank. - Reuters

Two ex-directors of Multicode Electronics jailed, fined

KUALA LUMPUR: Two former directors of Multicode Electronics Industries (M) Bhd were jailed after they were found guilty of committing criminal breach of trust (CBT) involving over RM26 million of funds belonging to the company.

The Securities Commission said on Thursday, Sept 22, the Kuala Lumpur Sessions Court found Gordon Toh Chun Toh, a Singaporean, and Datuk Abul Hassan Mohamed Rashid guilty of CBT under section 409 of the Penal Code.

Toh was sentenced to 12 years imprisonment and Abul Hassan received a jail sentence of six years. Toh was also ordered to pay a fine of RM1 million, in default two years imprisonment.

Judge Datuk Jagjit Singh said 'A pre-meditated white collar scandal executed with precision within T+3 is how I would sum up the whole case'.

He stressed that the sentences imposed on the two must send a strong message to offenders and would-be offenders that crime does not pay.

Jagjit Singh also pointed out that the victim, Multicode, is a public listed company which lost millions as a result, causing its public shareholders to suffer as well.

He said that for the business and commercial sector to flourish, the corporate environment must be free of white collar crimes.

To recap, Toh and Abul Hassan were charged in the Sessions Court in Kuala Lumpur in March 2009 with having engaged in an act which operated as a fraud on Multicode by causing the uplifting of fixed deposits belonging to Multicode under section 87A of the Securities Industry Act 1983.

An alternative charge of CBT was preferred at the same time under section 409 of the Penal Code.

The prosecution called a total of 31 witnesses over the period of the trial.

Berjaya Land 1Q net profit dn 28% at RM56m

KUALA LUMPUR: BERJAYA LAND BHD [] posted a 28% decline in net profit at RM56.08 million in its first quarter ended July 31, 2011 from RM77.89 million a year ago due to lower profit contribution from the hotels and recreation business.

It said on Thursday, Sept 22 that revenue was 2.1% higher at RM1.00 billion compared with RM978.94 million. The pre-tax profit was RM94.80 million, down 15.6% from RM112.40 million. Earnings per share were 0.04 sen compared with 0.89 sen.

'The increase in revenue was mainly contributed by the gaming business via BERJAYA SPORTS TOTO BHD []'s principal subsidiary, Sports Toto Malaysia Sdn Bhd and the higher property sales registered by the property development business.

Berjaya Land said the drop in group pre-tax profit for the quarter under review was mainly due to the lower profit contribution from the hotels and recreation business due to lower occupancy rates resulting from lower tourist arrivals and lower sales from the MICE sector.

There was also an impairment of available-for-sale quoted equity investments and unfavourable changes in fair values of quoted equity investments.

However, the decline was partly mitigated by the higher profit contribution registered by the gaming business mainly attributed to lower prize payout compared to a year ago and the gain on disposal of a subsidiary company.

'In addition, the preceding year corresponding quarter's results included an exceptional gain on disposal of an associated company amounting to about RM53.2 million,' it said.

Jakarta plunges 8.9%, biggest fall since Oct 2008

SINGAPORE: Indonesia stocks plunged 8.9 percent on Thursday, Sept 22 their worst drop since the 2008 financial crisis, as concerns over the struggling rupiah currency and fears over the global economy battered a market that had been the region's best performer.

Jakarta's stock index shed 328.35 points to its lowest close since Jan. 24, its biggest single-day percentage loss since Oct. 8, 2008, at the height of the financial crisis.

The region's best performer last year, which attracted $1.6 billion of inflows to August on top of $2.4 billion in 2010, suffered outflows of $94.3 million on Thursday as worries over the weaker rupiah prompted panic selling.

"It's mainly because of internal currency issues with the rupiah seen weakening above 9,000," said Pardomuan Sihombing, head of research at Jakarta-based Recapital Securities.

"There is panic selling in stocks both from local and foreigners due to the weakening of rupiah and that will cause capital outflows. Firms with dollar exposure, especially importers including Indofood and Astra, will be affected," he said.

Indofood and Astra closed down 13 percent and 9.5 percent respectively.

Exchange authorities dismissed suggestions panic had taken hold.

"We're monitoring conditions. If there is one side that is panic selling, we will stop [trading]. But, for now, there's no panic selling," said Eddy Sugito, listing director at the Indonesia Stock Exchange.

"We will suspend trading if it falls 10 percent or more."

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REGIONAL CURRENCIES, STOCKS UNDER PRESSURE

The dollar rose to a seven-month high against major currencies as a broad sense of aversion to risk swept through financial markets. The U.S. Federal Reserve set the ball rolling on Wednesday when it launched "Operation Twist", a plan to lower borrowing costs by selling or not renewing short-term debt in

favour of longer bonds.

Emerging Asian currencies are expected to weaken further after the Fed's move, although moves by regional authorities are seen as slowing down the pace of their falls, dealers and analysts said.

Despite the worries, the Indonesian currency edged up on Thursday as the central bank intervened through buying government bonds in "large amounts" to stabilize the rupiah.

Other Southeast Asian markets also lost ground as a gloomy outlook for the U.S. economy by the Federal Reserve put a spotlight on risky emerging-market investments.

Thailand fell 3.8 percent to its lowest close since March 3, Singapore was off 2.6 percent to its 15-month closing low, the Philippines hit a near six-month low with a 2.6 percent fall, while Malaysia shed 2.2 percent to end at a more-than one-year low.

Thailand suffered foreign outflows of $87.9 million and Malaysia saw a net offshore selling of $48 million on Thursday.

The gloomy economic outlook after the Federal Reserves comments a day earlier drove World stocks to a more than one-year low. World stocks measured by MSCI fell as much as 2.4 percent to a new one-year low, while the more

volatile emerging-markets stock index was down 4.7 percent for by 0952 GMT.

The MSCI Asia Pacific ex-Japan index was trading 5.4 percent weaker at its lowest level since July 2010 by 0956 GMT.

Financial stocks led falls in the region with Indonesia's largest lender, Bank Mandiri , the biggest micro lender Bank Rakyat Indonesia , and fourth biggest lender by assets Negara Indonesia slumped more than 13 percent each.

Bangkok's Siam Commercial Bank was off 3.4 percent and Singapore's DBS was down 2.1 percent.

Shares of Singapore property stocks tumbled on fears that developers may soon start cutting prices in the face of slowing sales. CapitaLand fell 4.2 percent and City Developments lost 2.9 percent. - Reuters

SapuraCrest awards US$227m contract to Cosco for 2 ships

KUALA LUMPUR: SAPURACREST PETROLEUM BHD []'s unit TL Offshore Sdn Bhd has issued two letters of awards to Cosco'' Nantong Shipyard Co. Ltd to build two ships costing a total of US$227 million.

SapuraCrest said on Thursday, Sept 22, Cosco was to build two pipe-lay cum heavylift offshore CONSTRUCTION [] vessels.

It said the contract price for the first ship was US$116.75 million and the second was for US$110.25 million. The delivery date was 28 months and 26 months.

'The acquisition will enable TLO to capitalise on the positive outlook in the installation of pipelines and facilities (IPF) segment in the oil and gas industry,' it said.

SapuraCrest said with the deployment of these vessels, TLO would be able to boost its market share by growing the revenue stream within its existing core business. After delivery, the ships would deployed for marine construction contracts for major oil companies.

MAA Holdings gets shareholders's nod to sell insurer

KUALA LUMPUR : MAA HOLDINGS BHD [] has obtained its shareholders' approval to dispose its core business Malaysian Assurance Alliance Bhd (MAAB) for RM344 million to Zurich Insurance Co Ltd, which values MAAB at 1.36 times book value.

MAA Holdings'' chairman Tunku Datuk Yaacob Tunku Abdullah'' said on Thursday, Sept 22 although the price tag for MAAB wass considered very low, due to the high capital adequacy requirement sets out by Bank Negara for insurance business, the group's shareholders decided that it is better to dispose MAAB.

He said going forward, MAA Holdings would focus on its takaful business under MAA Takaful Bhd and its asset management business under MAAKL Mutual Bhd.

However, the profit margin for asset management business is considered low, but the group intends to grow its asset value under management which currently stands at RM1 billion to grow its profit.

At the EGM, shareholders approved MAA Holdings name change to MAA Group.'' It will be structured to become an asset management holding company, to acquire stakes in other companies at reasonable price, and later sell it at a rather expensive price.

Tunku Yaacob liken the group's business going forward as more 'like a trader'.

He did not discount any corporate activities to acquire another business to boost the group's profitability going forward, as the current profits derived from its 70% owned MAA Takaful and 75% owned MAAKL Mutual were relatively small compared to profit derived from MAAB prior to the disposal.

ECM Libra 2Q earnings up 189% to RM14.62m

KUALA LUMPUR: ECM Libra Financial Group Bhd's earnings soared 189% to RM14.62 million in the second quarter ended July 31,2011 from RM5.06 million a year ago, contributed by brokerage income, fee income and gains from trading and investment securities.

It said on Thursday, Sept 22, revenue rose 38.64% to RM45.86 million from RM33.08 million. Earnings per share were 1.79 sen compared with 0.62 sen.

The group achieved profit before tax of RM19.7 million compared to RM19.1 million for the preceeding quarter.

'For the current quarter, the group reported a writeback of impairment allowance for bad and doubtful debts of RM5.0 million as compared to RM1.8 million in the last quarter. This increase was partially offset by a lower net interest income of RM8.4 million in the current quarter compared to RM9.7 million in the previous quarter,' it said.

For the first six months ended July 31, 2011, its profit increased by 135.14% to RM28.94 million from RM12.31 million a year ago. Revenue rose 36.25% to RM92.45 million from RM67.86 million.

MAHB privatises RM530m KLIA2 complex to WCT JV

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is privatising the CONSTRUCTION [] and financing of the integrated complex at KLIA2 under a 25-year concession period to Segi Astana Sdn Bhd ' joint venture between WCT BHD [] and MAHB. The construction cost is RM530.3 million.

WCT said on Thursday, Sept 22 it had signed a concession agreement with MAHB and Segi Astana for the privatisation of the construction, development and financing of the complex on a build-operate-transfer model.

WCT said Segi Astana was currently a unit of WCT Land Bhd, which in turn was a wholly-owned subsidiary of WCT.

Segi Astana's authorised share capital will be increased to RM150 million from RM100,000 while its paid up would be RM106.06 million from RM2 when the commercial operation of the complex starts.

Under the agreement, WCT Land will hold 70% or RM74.24 million of Segi Astana's paid-up and MAHB 30% or RM31.818 million.

MAHB granted WCT the sole and exclusive right and authority during the concession period to build and manage the complex and also arrange for any necessary financing.

The complex comprises of a transportation hub for the Express Rail Link, buses, taxis, car rental services and private transport. It would have''a commercial complex consisting of a shopping mall with net lettable area of approximately 350,000 sq ft; and car parks with 6,000 parking bays.

The construction cost of the project is about RM530.3 million to be funded through external borrowings by Segi Astana and the balance by shareholders equity.

'The concession shall be for a period of up to 25 years and may be extended for a further period of 10 years at the option of the concession company.'' The commencement date of the concession is Aug 1,'' 2011.

'Upon the expiry of the concession period, Segi Astana shall transfer the integrated complex including the building, fittings and relevant documents at no cost to MAHB,' WCT said.

WCT said in consideration of MAHB granting the concession to WCT, Segi Astana would pay MAHB a lease rental of RM31.818 million.

The lease rental shall be net off against the subscription price payable by MAHB in respect''of their''30% equity holding in Segi Astana.'' MAHB may also be entitled to royalty payments.

'As KLIA2 will be a dedicated international terminal for low-cost carriers and in view of the expected increase in demand for low cost air travel, the prospects of the concession company are expected to be positive. The revenue from the project will further broaden and strengthen WCT group's future recurring income base,' it said.

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KYM ventures into iron ore mining in Aceh

KUALA LUMPUR: KYM HOLDINGS BHD [] is venturing into iron ore mining'' in Aceh with the mining concession holder with PT Samana Citra Agung.

KYM said on Thursday, Sept 22 that Samana Citra Agung granted its unit KYM Mineral Sdn Bhd the rights to mine, process and sell the products from the concession in the Aceh province, Sumatra covering 158 ha.

It said for a period of three months from the date of the memorandum of agreement, KYM Mineral would have the rights to conduct and complete a due diligence on the project.

However, if the due diligence was been completed after three months, and/or if the outcome of the study was not satisfactory in KYM Mineral's opinion, either party could terminate this agreement.

If KYM Mineral was satisfied with the due diligence, it would have the rights to set up a processing plant at or near the concession within six months.

Bursa introduces corporate disclosure guide, effective Jan 3

KUALA LUMPUR: BURSA MALAYSIA BHD [] is introducing a corporate disclosure guide to improve the quality of information for financial reporting which will take effect from Jan 3, 2012.

It said on Thursday, Sept 22 that to promote high standards of corporate disclosure, it has amended its Listing Requirements (LR) and introduced a Corporate Disclosure Guide (CD Guide) to help listed issuers raise their standards of disclosure.

'High standards of disclosure is a value proposition that can enhance a listed issuer's investability,' it said.

Bursa Malaysia's chief executive officer Datuk Tajuddin Atan said Bursa Malaysia's regulatory framework was to 'primarily to maintain market integrity and investor protection'.

He pointed out reliable, informative and timely disclosures were crucial to build a corporate community that was disclosure based and transparent.

'The amendments made are part of the Exchange's continuous review given the ever-changing capital market environment. In this dynamic environment, investors demand for timely, adequate and relevant information to make informed decisions,' he said.

The amendments were:

(a) improving the quality of information for financial reporting;

(b) improving disclosure by listed issuers in areas of related party transactions, poll voting, corporate proposals, boardroom/senior management/external audit announcements;

(c) according greater flexibility to listed issuers in structuring share scheme for employees;

(d) promoting greater transparency in respect of share schemes for employees which do not involve issuance of new shares;

(e) facilitating listed issuers to pay dividends in shares to their shareholders through a 'Dividend Reinvestment Scheme'; and

(f) promoting greater efficiency in the market by allowing listed issuers to buy back odd lot shares through direct business transactions.

''

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KLCI falls to lowest level since Aug 2010

KUALA LUMPUR: The FBM KLCI fell 2.2% on Thursday, Sept 22 to its lowest level since August 19, 2010 in line with global markets spooked by the grim economic outlook for the US economy and slowing manufacturing output in China.

The FBM KLCI lost 31.23 points to 1,387.81 as the broader market turned negative with losers pummeling gainers by 802 to 85, while 162 counters traded unchanged.

Volume was 874.11 million shares valued at RM1.71 billion.

Among the major decliners, Dutch Lady and Hong Leong Bank fell 62 sen each to RM18.88 and RM9.98, Petronas Dagangan 52 sen to RM16.40, Nestle and Genting 50 sen each to RM49 and RM8.80, MSM 43 sen to RM4.54, Parkson 40 sen to RM5.10, Aeon 38 sen to RM6.90 and Shell 33 sen to RM9.45.

Petronas Chemicals was the most actively traded counter with 28 million shares done. The stock fell 27 sen to RM5.54.

Other actives included Axiata, AirAsia, MRCB, UEM Land, Dialog, Genting and Timecom.

Among the gainers, Proton added 26 sen to RM2.88, Aeon Credit 15 sen to RM4.70, Kawan Food 11.5 sen to 99.5 sen, Maypak 10 sen to 32 sen, UMS nine sen to RM1.64, while Ewein and Lafarge Malayan Cement added seven sen each to 88 sen and RM6.80.

At the regional markets, Hong Kong's Hang Seng tumbled 4.85% to 17,911.95, Taiwan's Taiex lost 3.06% to 7,305.50, South Korea's Kospi fell 2.90% to 1,800.55, the Shanghai Composite Index down 2.78% to 2,443.06, Singapore's Straits Times Index lost 2.55% to 2,750.53 and Japan's Nikkei 225 shed 2.07% to 8,560.26.

Mudajaya MD resigns effective Sept 30

KUALA LUMPUR: MUDAJAYA GROUP BHD []'s managing director Ng Ying Loong tendered his resignation citing family commitments as the main reason but he would continue to be an adviser to the board.

Mudajaya said the resignation will take effect on Sept 30. His role will be taken over by the current joint managing director Anto Joseph, a veteran with the company for the past 18 years.

It said Ng would continue playing a key role in the group as advisor to the board.

'We are also confident that Anto who has co-helmed the group as joint managing director since April 2011 is the ideal leader to add value to the business and opportunities of Mudajaya,' it said.

Ng said: 'This change is a good move for the Group and it is with great faith that I pass on my responsibilities to Anto who will undoubtedly embrace this role with great ease and propel us forward in meeting our financial targets.'

He said Mudajaya's current order book was RM4.8 billion which he described as 'clearly a strong figure and coupled with our stable management and the prospect of the Indian power project providing steady quality earnings once it is completed, indeed the Group is in a solid position with great opportunities ahead'.

Anto, 59, is a professional engineer who has been with the Group since 1993 holding various posts including executive director since 1996.

He holds a Bachelor of TECHNOLOGY [], Civil (First Class) from the Indian Institute of Technology and is a member of the Board of Engineers, Malaysia and Chartered Engineer, UK.

The board also said the chairman Asgari Mohd Fuad Stephens would pass the baton to Datuk Yusli Mohamed Yusoff. However, Asgari will remain as a member of the board.

Yusli, 52, helmed Bursa Malaysia for seven years, he served as chief executive at CIMB Securities and held senior positions with METACORP BHD [], Shapadu Corporation and Renong Bhd.

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