#Stocks to watch:* Bumi Armada, Tanjung, Muhibbah, Kim Loong

KUALA LUMPUR: After a horrendous September, which saw the FBM KLCI closing down 5.89% and RM88.76 billion wiped out from the market capitalisation in that month, investors will be bracing for another difficult October in the absence of fresh positive external news from Europe and the US.

For September, the KLCI fell 86.96 points to end at 1,387.13 on Sept 30 while the market capitalisation was reduced to RM1.172 trillion. Year-to-date the KLCI has lost 8.68%.

The outlook is gloomier for Europe and the US. As RHB Research Institute aptly puts it: 'The US economic recovery has slowed to a crawl, while Europe is not just lurching from one crisis to another, it is lurching into a new one before the previous one is solved.'

The research house added there is a growing risk that sustained weak confidence could exert downward pressure on demand and business activity worldwide.

On Wall Street, stocks ended their worst quarter since the depths of the 2008 credit crisis, crippled by Europe's debt debacle, a U.S. credit downgrade and a sputtering global economy.

Reuters reported a steep slide on Friday, Sept 30 closed out a fifth month of losses as weak economic data from China sparked fears of a global economic slowdown while investment bank Morgan Stanley plummeted on concerns about its exposure to European banks.

The S&P 500 index has lost more than 14% in 3Q and over 7% in September alone. As of Thursday, Wall Street's deep downturn in the third quarter wiped out US$2.2 trillion of the Wiltshire 5000 index -- the broadest measure of U.S. stocks.

The weaker US and Europe economies would continue to impact Malaysia, especially its exporters.

RHB Research pointed out with a still cloudy global economic outlook, it believed it was "still too early to 'bottom fish' at this stage".

'As global headwinds remain strong and situations could get worse, we will continue to advocate a defensive investment strategy for investors. Under such circumstances, we believe that high dividend yielding stocks with reasonably good growth potential would be more resilient and likely outperform the overall market,' it added.

Meanwhile, on the home front, investors would focus on the Budget 2012 proposals to be unveiled by Prime Minister Datuk Seri Najib Tun Razak on Friday, Oct 7.

Economists expect Budget 2012 will be mildly expansionary. However, a mounting domestic pressures and market aversion to a heftier public debt load would curb any increase in expenditure without a concomitant rise in revenue.

Stocks to watch on Monday are companies with fresh corporate news include Bumi Armada Bhd, TANJUNG OFFSHORE BHD [], Muhibbah Engineering Bhd and KIM LOONG RESOURCES BHD [].

Bumi Armada's order backlog has increased to more than RM7 billion after it sealed a RM1.46 billion contract to supply and operate a floating production, storage and offloading (FPSO) system in Australia.

Bumi Armada had signed the contract with Apache Energy Ltd, a major Australian oil and gas producer, for the FPSO to be located in block WA-49-L of the Balnaves Field, north-west Australia. The contract was for an initial four-year fixed term time charter with an option of a further four year annual extension period thereafter.

Tanjung Offshore awarded two contracts with a total value of RM200 million for the CONSTRUCTION [] of two platform supply vessels (PSV). It awarded a contract to MUHIBBAH ENGINEERING (M) BHD [] and to Labuan Shipyard & Engineering Sdn Bhd.'' The PSVs would be used to supply and support deepwater operations of oil majors in operational waters of Southeast Asia region on long term basis.

Kim Loong's net profit for the second quarter ended July 31, 2011 surged 178% to RM33.29 million from RM11.94 million, due mainly to higher production of crude palm oil (CPO) and palm kernel oil (PKO). Its revenue for the quarter rose to RM227.53 million from RM139.02 million in 2010. The company also announced a single tier interim dividend of 6% in respect of the year ending Jan 31, 2012.

For the six months ended July 31, Kim Loong's net profit rose to RM53.19 million from RM25.3 million in 2010, on the back of an increase in revenue to RM402.68 million from RM266.02 million.

UOA Development Bhd is to collaborate with Vietnam-based construction firm Hoa Binh Construction and Real Estate Corporation to develop its proposed Sri Petaling residential project with a gross development value of RM400 million.

Kodak denies bankruptcy plan but shares plummet

NEW YORK: Eastman Kodak Co shares lost more than half their value on Friday, Sept 30 as the company hired a law firm well-known for bankruptcy cases, triggering speculation that the photography pioneer could file for bankruptcy.

Kodak, which delivered the first consumer camera in 1888, denied it had a bankruptcy plan, saying it was committed to meeting its obligations and is still looking for ways to "monetize" its patent portfolio.

Once synonymous with photography, Kodak has struggled with the move to digital cameras and failed to turn a profit since 2007. It has been exploring a sale of its digital imaging patents, worth an estimated $2 billion, and hired investment bank Lazard in July to explore options.

Rochester, New York-based Kodak said it has "no intention of filing for bankruptcy," after its shares plunged as much as 68 percent to 54 cents before recovering slightly to close down 53.8 percent at 78 cents on the New York Stock Exchange.

The company's market value plummeted to roughly $210 million on Friday, down from a lofty height of $31 billion in February 1997, as shown by regulatory filings. The cost to insure Kodak's debt with credit default swaps (CDS) surged on Friday as investors priced in greater bankruptcy risk.

Kodak had already scared markets on Monday when it tapped a credit line but refused to divulge its cash position. The stock dived to a 38-year low that day.

Then investors took fright again Friday after Bloomberg reported that potential buyers for its patent portfolio were cautious about going ahead with a bid as they could risk having Kodak creditors sue them after a bankruptcy filing.

Mark Kaufman, an analyst at Rafferty Capital Markets, said that Kodak urgently needed to seal a patent deal.

"I don't believe bankruptcy is inevitable. This is a pretty valuable portfolio, they should get a good price," he said. "They need to get this (sale) out of the way. They need to sell this portfolio, raise some type of cash."

The company said in July that it hired Lazard to advise on strategic options for its patents -- increasingly seen as lucrative assets. Bankrupt Canadian company Nortel fetched $4.5 billion in a patent sale in June, also run by Lazard. Google Inc agreed in August to buy Motorola Mobility for $12.5 billion primarily for its patent portfolio.

One expert -- Robert Miller, a professor at Villanova University School of Law -- said filing for bankruptcy may actually end up boosting the value of a patent sale.

Even if the company holds a robust, public auction outside of bankruptcy, the headache of litigation still looms if Kodak goes bankrupt later, said Miller.

Selling the assets as part of a bankruptcy court-supervised auction would solve that concern, Miller said.

Kodak confirmed that it has hired Jones Day but did not explain why, beyond saying it was "not unusual for a company in transformation to explore all options."

Investors for the company have been up in arms about everything from its share price decline to its management.

One shareholder had asked the company's board on Thursday to start a sales process while others sharply criticized Chief Executive Antonio Perez.

The company's board is not considering replacing Perez at this time, according to a story in the Wall Street Journal, which cited two people familiar with the matter.

Kodak CDS costs rose to 70 percent Friday from 61 percent Thursday, data provider Markit said. That means it would cost $7.0 million in upfront payments, plus $500,000 a year to insure $10 million debt if Kodak debt for five years.

"This is pretty expensive insurance at this point and the reason it's so expensive is that people believe there's a high likelihood of default," said Markit analyst Otis Casey. - Reuters

Worst quarter for UK, German, French stocks in 9 years

LONDON: Shares in major European economies suffered their biggest quarterly loss in nine years, hit by concerns the global economy was slipping into recession and the euro zone debt crisis was deepening with Greece facing possible default, Reuters reported on Friday, Sept 30.

The steep sell-off this quarter, wiping $1.2 trillion off European share values, was sparked by an intensification in the euro zone sovereign debt crisis and concerns the United States could be heading for a recession.

U.S. and German government bonds, however, were in demand as investors sought shelter in safe-haven assets.

Karen Olney of UBS said European stock valuations may be cheap but investors would remain cautious until euro zone politicians can come up with a decisive plan to finally put to rest the bloc's debt crisis, now threatening Italy and Spain, its third and fourth largest economies.

"Politicians tend to react better when the markets are falling than rising. If we don't get a solution imminently, we could have another leg down," said Olney, head of European thematic research at UBS.

"In a rising market, they are not going to come up with a grand slam plan. If the markets are suffering again, they may be pushed to come up with a solution that we need. This is why some people consider Europe difficult to invest in, almost uninvestable at the moment."

Among the worst to suffer in the recent sell-off was Germany's DAX .GDAXI which had outperformed all other European markets in the first half of the year.

The German blue-chip index, home to conglomerate Siemens (SIEGn.DE) and automakers Daimler (DAIGn.DE) and BMW (BMWG.DE), lost 25.4 percent in July-September, its worst quarterly performance since the third quarter of 2002.

SHORTING BAN

France's CAC 40 .FCHI, and Spain's IBEX 35 .IBEX also posted their biggest three-month fall since the third quarter of 2002, despite their regulators, along with those from Italy and Belgium, banning short selling of financial stocks starting on August 12.

The CAC 40 fell 25.1 percent in July-September, with French bank Societe Generale (SOGN.PA) losing 51 percent over the same period -- its biggest quarterly loss ever.

The IBEX 35 index, meanwhile, was off 17.5 percent, while Italy's FTSE MIB .FTMIB was down 26.5 percent.

Britain's FTSE 100 .FTSE was down 13.7 percent, faring better than other major European markets but still posting its worst three-month performance in nine years.

That compared with a 17.1 percent fall over the same period for the pan-regional STOXX Europe 600 .STOXX index, which was its biggest quarterly loss since the fourth quarter of 2008 after the global economy was sent into a tailspin following the collapse of Lehman Brothers.

In terms of valuations, the DAX and the CAC 40 carried a 12-month forward price-to-earnings ratio of 8 and 7.7 respectively, slightly cheaper than the FTSE 100's 8.8 and the U.S. S&P 500's .SPX 10.9, data from Thomson Reuters Datastream showed.

"You don't get a sustainable rally until either the growth outlook improves or you get substantial progress on the sovereign debt crisis. In the absence of either of those things, investors should remain cautious and defensive positioned," said Ronan Carr, European equity strategist at Morgan Stanley.

Morgan Stanley was "overweight" telecoms .SXKP and healthcare .SXDP, and "underweight" banks .SX7P and industrials .SXNP.

However, RBS analysts said both the DAX and the FTSE 100 looked hard done by, based on their index composition, with German auto stocks and UK oil stocks among the most attractive on a relative value basis. - Reuters

JPMorgan, BofA sued over mortgage debt losses

NEW YORK: JPMorgan Chase & Co and Bank of America Corp were hit with new lawsuits by investors claiming losses on $4.5 billion of soured mortgage debt, adding to litigation targeting the two largest U.S. banks, Reuters reported on Friday, Sept 30.

The plaintiff Sealink Funding Ltd said it lost money after buying nearly $2.4 billion of residential mortgage-backed securities (RMBS) from JPMorgan and $1.6 billion from Bank of America from 2005 to 2007, relying on offering materials that were misleading about the quality of the underlying loans.

According to court papers, Sealink is an Irish entity that oversees risky RMBS that contributed to the near collapse of Germany's Landesbank Sachsen AG.

Another plaintiff, Germany's Landesbank Baden-Wurttemberg, raised similar claims in a separate lawsuit against JPMorgan over $500 million of RMBS that it said it bought.

The lawsuits accuse the banks of packaging large amounts of high-risk mortgages by such issuers as Countrywide Financial now owned by Bank of America, and Bear Stearns and Washington Mutual, now owned by JPMorgan, in pursuit of higher profit.

"This misconduct has resulted in astounding rates of default on the loans underlying the defendants' RMBS and massive downgrades of the (investors') certificates, the vast majority of which are now considered 'junk,'" the lawsuits said.

The investors are seeking compensatory and punitive damages in the lawsuits, all filed Thursday in the New York State Supreme Court in Manhattan.

Bank of America spokesman Lawrence Grayson said the bank will defend against its lawsuit by Sealink, which "appears to be another sophisticated investor looking for someone to blame" for losses caused by a downturn in the economy.

JPMorgan spokeswoman Jennifer Zuccarelli declined to comment. Bernstein Litowitz Bernstein & Grossmann, which represents Sealink and Landesbank Baden-Wurttemberg, did not respond to a request for comment.

In a separate lawsuit filed on Thursday in the same court, Britain's Barclays Plc was sued by Germany's HSH Nordbank AG, which said it lost $40 million after being misled into buying risky RMBS.

Barclays spokeswoman Kristin Friel declined to comment.

Banks face many lawsuits by mortgage securities investors seeking to hold them responsible for losses on debt that once seemed safe but turned toxic once the housing and credit crises began more than four years ago.

Bank of America is seeking court approval of an $8.5 billion global settlement covering investors in mortgage pools with $174 billion of unpaid Countrywide principal balances.

That bank and JPMorgan are also among lenders negotiating with regulators including all 50 state attorneys general on a multibillion-dollar accord addressing foreclosure abuses.

The cases are all in the New York State Supreme Court, New York County. They are HSH Nordbank AG et al v. Barclays Bank Plc et al, No. 652678/2011; Sealink Funding Ltd v. Countrywide Financial Corp et al, No. 652679/2011; Landesbank Baden-Wurrtemberg et al v. Bear Stearns & Co et al, No. 652680/2011; and Sealink Funding Ltd v. Bear Stearns & Co et al, No. 652681/2011. - Reuters

Europe, China woes fuel earnings worries

NEW YORK: Investors are worried U.S. earnings growth may finally fall back to earth as turmoil in Europe and signs of a less robust Chinese economy hurt foreign support, Reuters reported on Friday, Sept 30.

The euro zone's debt crisis and weakness in China have fueled investor concern that the global economy could tip back into recession, possibly dampening U.S. earnings growth at a time when the U.S. economy is still struggling to gain ground.

Overseas sales have helped U.S. companies beat earnings expectations in the last couple of years, with foreign sales totaling 30 percent on average for Standard & Poor's 500 companies.

"If the euro region is crumbling, that's going to have a tremendous negative impact" on companies like McDonald's, said Todd Schoenberger, managing director at LandColt Trading in Wilmington, Delaware.

"I'm not expecting a big earnings quarter," he said. "We've been getting the clues already."

The most recent company to trouble investors about the earnings outlook is Ingersoll Rand Plc, whose shares tumbled 12.1 percent to $28.09 on Friday after the industrial conglomerate cut its third-quarter and full-year earnings forecast to below market estimates.

Investor pessimism is already high.

The S&P 500 finished the quarter with its worst performance since 2008, and many strategists have slashed their forecasts for year-end.

The S&P 500 dropped 14.3 percent in the third quarter, losing about $1.7 trillion in market capitalization.

A disappointing third-quarter earnings period, which begins the second week of October, could only trigger more losses, analysts said. Stronger-than-expected earnings helped stocks claw back fro 12-year lows in 2009.

Next week, investors also will be bracing for data on the U.S. job market, among the weakest parts of the economy. The government's September employment report is due Friday, while U.S. manufacturing data from the Institute for Supply Management is due Monday. The ISM services-sector index is set for release on Wednesday.

CURRENCY CUSHION MAY BE THINNER

Companies reporting earnings have benefited for the last decade from weakness in the dollar, which helped overseas revenue figures.

With the euro down 7.4 percent this quarter, the biggest quarterly loss by percentage since mid-2010, companies could lose some of that currency cushion.

"I think you'll see a lot of companies blaming problems on Europe," said Justin Walters, co-founder of Bespoke Investment Group in Harrison, New York.

Walters said excluding companies that report no international sales, the average percentage of overseas revenue for the S&P 500 is 41 percent.

The euro-zone debt crisis has investors worried about a repeat of the 2008 financial crisis.

In China, which has been a major engine of growth for the global economy, data has shown some weakness. On Friday, figures showed the country's manufacturing shrank for the third month in a row and had the longest contractional streak since 2009.

Analysts have slowly been reducing earnings forecasts for the quarter.

Third-quarter earnings are expected to have risen 13.3 percent from a year ago, according to Thomson Reuters data. The forecast was for 17 percent growth on July 1.

"If there's a very drastic downturn in the European economic zone, that portion of U.S. earnings will be impacted," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.

But she and other strategists are optimistic that the earnings period will not disappoint, and could even present a buying opportunity.

"U.S. multinationals don't necessarily derive all of their additional earnings (from Europe), and in China, data seems to be showing a slowdown but not in hard-landing territory," Trunow said.

Other strategists said the dramatic cost-cutting that U.S. companies started in the 2008 financial crisis will help to keep bottom-line earnings numbers relatively healthy.

"In our view, corporate America has learned to make money in this environment," said Hank Smith, chief investment officer at Haverford Trust Co. in Philadelphia. - Reuters

Wall Street ends worst quarter since 2008

NEW YORK: Stocks ended their worst quarter since the depths of the 2008 credit crisis, crippled by Europe's debt debacle, a U.S. credit downgrade and a sputtering global economy.

A steep slide on Friday, Sept 30 closed out a fifth month of losses as weak economic data from China sparked fears of a global economic slowdown while investment bank Morgan Stanley plummeted on concerns about its exposure to European banks.

The S&P 500 index has lost more than 14 percent this quarter and over 7 percent in September alone. As of Thursday, Wall Street's deep downturn in the third quarter wiped out $2.2 trillion of the Wiltshire 5000 index -- the broadest measure of U.S. stocks.

"Why is the market so soft and so weak? Because '08 is still fresh in people's memories," said Joseph Mazzella, a senior trader at Knight Capital in Jersey City, New Jersey.

Stocks have been battered by the threat of a slowdown and fears that a Greek debt default could spark a credit shock similar to that caused by Lehman Brothers in September 2008, sending markets into a tailspin.

Fears of a hard landing in the world's second largest economy joined the potent mix troubling investors after China's manufacturing sector shrank for the third month in a row.

HSBC's China flash purchasing managers index showed the longest contractional streak since 2009 in a worrying sign for the world economy, which has looked to China as a rare source of expansion.

"The economic engine that has been driving growth has been China and if that comes undone, it gets scary again," said Mazzella.

Investors will be eyeing China's official PMI, due out on Saturday, which may have edged up again in September. Any disappointment there will be a blow for markets.

Financial shares stumbled with Morgan Stanley, which fell 10.5 percent to $13.51 as investors appeared to react to fear signals in credit markets.

The cost of insuring Morgan Stanley's five-year bonds spiked in recent days to almost three times what it was on June 30. It shares have erased all their gains of the last three year.

The Dow Jones industrial average dropped 240.60 points, or 2.16 percent, to 10,913.38. The Standard & Poor's 500 Index fell 28.98 points, or 2.50 percent, to 1,131.42. The Nasdaq Composite Index lost 65.36 points, or 2.63 percent, to 2,415.40.

Wall Street's "fear gauge," the CBOE volatility index, or VIX, rose more than 10 percent to 42.96, its highest close since mid-August and indicating investors expect more volatility ahead.

"There is a lot of fear that GDP growth is going to slow down, or it's not going to be as fast as consensus estimates assume," said Adam Krejcik, an analyst at Roth Capital in Newport Beach, California. "Generally speaking there is a lot of fear out there, just a crisis of confidence."

Through Thursday, the MSCI All Country World Index had lost about $4.7 trillion in market capitalization. The U.S. benchmark S&P 500 has lost about $1.7 trillion in market cap during the quarter.

Euro zone annual consumer prices unexpectedly rose in September 3.0 percent and followed surprisingly higher inflation in Germany.

In what may be a precursor to the quarterly earnings season, Ingersoll Rand Plc tumbled 12.1 percent to $28.09 after the industrial conglomerate cut its third-quarter and full-year earnings forecast to below market estimates. The Morgan Stanley cyclical index dropped 3.6 percent.

Markets showed little reaction two U.S. economic reports that were stronger than analysts expected.

Business activity in the U.S. Midwest grew more than expected in September, buoyed by new orders and a jump in employment.

The Institute for Supply Management-Chicago business barometer surprisingly rose in September more than economists had forecast.

U.S. consumer sentiment improved in late September but worries persisted about jobs and finances, which could curb household spending in the coming months, the Thomson Reuters/University of Michigan final September reading of the overall index on consumer sentiment showed.

About four stocks fell for every one that rose on the New York Stock Exchange. On the Nasdaq, about 7 stocks fell for every two that rose.

About 8.58 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above this year's daily average of 7.96 billion. - Reuters

E&O shareholders reject ECM Libra board nominees

KUALA LUMPUR: Most of Eastern & Oriental Bhd (E&O) shareholders rejected ECM Libra Financial Group Bhd's two nominees to the company's board of directors.

At the AGM on Friday, Sept 30, about 75% of the voting shares present, voted against the resolutions to nominate Mahadzir Azizan and Leong Kam Weng. ECM Libra owns 6.3% of E&O shares.

Mahadzir is a director of ECM Libra, SYARIKAT TAKAFUL MALAYSIA BHD [], ECM Libra Investment Bank Bhd, Libra Invest Bhd and several other companies, and is a member of the investment committee of Amanah Raya REIT.

Leong sits on the board of directors and audit committee of TA ENTERPRISE BHD [] and TA Global Bhd.

As of Sept 22, ECM Libra holds 6.3% of E&O, making it the second largest shareholder after SIME DARBY BHD [] which owns 30%.

E&O's AGM dragged on for about four hours as shareholders queried the board on Sime Darby's acquisition of the 30% stake.

On Sept 9, Sime Darby bought RM766 million worth of shares from three vendors; Datuk Terry Tham, E&O's managing director, Tan Sri Wan Azmi Hamzah and GK Goh Holdings of Singapore at a 60% premium above the market price of RM2.30 per share.

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Salcon unit consortium gets RM21.99m reservoir job in Thailand

KUALA LUMPUR: SALCON BHD [] unit Salcon Engineering Bhd via its consortium Hydrotek-Salcon Consortium has been awarded a contract worth RM21.99 million to build reservoirs for the Phet Kasem and Rat Burana distribution pumping stations in Thailand.

It said on Friday, Sept 30 that the project was expected to be completed within two years from the date of notice to proceed, which it said would be issued within 20 days from the notice of award.

Salcon said the Project was expected to contribute positively to its earnings for the financial year ending Dec 31, 2012.

Poh Kong 4Q net profit up 56.4% to RM 12.18m

KUALA LUMPUR: Poh Kong Bhd net profit for the fourth quarter ended July 31, 2011 rose 56.4% to RM12.18 million from RM7.79 million a year earlier, due mainly to higher sales registered, promotional activities and increase in gold price.

It said on Friday, Sept 30 that revenue for the quarter increased 38.82% to RM183.12 million from RM131.91 million in 2010 due to higher sales.

Earnings per share increased to 2.97 sen from 1.9 sen a year ago, while net assets per share was 84 sen.

For the financial year ended July 31, Poh Kong's net profit rose 28.28% to RM41.64 million from RM32.52 million, on the back of a 23.39% increase in revenue to RM692.5 million from RM561.24 million in 2010.

Reviewing its performance, the company said the increase in profit was attributable to Poh Kong's thirty-fifth anniversary promotional activities, increase in gold prices as well as higher sale from the existing store.

On its prospects, the company said it would build its market share by differentiating its product offerings to its targeted segments.

'Towards this purpose, the group is actively evaluating various initiatives and opportunities to attract new customers through the introduction of new product designs and enhanced customer service.

'The board of directors remains positive on the performance of the group for the financial year ending July 31, 2012,' it said.

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AmIslamic Bank issues RM600m Islamic debt notes

KUALA LUMPUR: AMMB HOLDINGS BHD []'s unit AmIslamic Bank has issued the first tranche of subordinated sukuk, amounting to RM600.0 million under the RM2.0 billion nominal value subordinated sukuk musharakah programme.

The banking group said on Friday, Sept 30, the proceeds would be used for AmIslamic Bank's general working capital, including refinancing its existing RM400 million subordinated sukuk musharakah, funding the growth of its Islamic financial services business.

AMMB said the sukuk were structured in accordance with the risk-weighted capital adequacy framework and capital adequacy framework for Islamic banks issued by Bank Negara Malaysia and qualified as tier two capital of AmIslamic Bank.

Under the programme approved by BNM and the Securities Commission, the bank could issue the sukuk based on the funding requirements of AmIslamic Bank. AMMB said each tranche of the sukuk to be issued shall have a tenor of not less than five years and not more than 15 years from the issue date.

AmIslamic Bank has the option to redeem the sukuk at par with effect from the fifth year, and on any profit payment date thereafter, preceding the maturity date of the sukuk.RAM Rating Services Berhad has assigned a long-term rating of A1 to the sukuk.

Upon the issuance of the first tranche of RM600.0 million of the sukuk, AmIslamic Bank's proforma overall risk weighted capital ratio was expected to be 13.9% (12.5% as at June 30, 2011).

Kim Loong 2Q net profit surges 178% to RM33.92m

KUALA LUMPUR: KIM LOONG RESOURCES BHD [] net profit for the second quarter ended July 31, 2011 surged 178% to RM33.29 million from RM11.94 million, due mainly to higher production of crude palm oil (CPO) and palm kernel oil (PKO).

It said on Friday, Sept 30 that its revenue for the quarter rose to RM227.53 million from RM139.02 million in 2010.

Earnings per share rose to 10.88 sen from 3.92 sen, while net assets per share was RM1.57.

The company also announced a single tier interim dividend of 6% in respect of the year ending Jan 31, 2012.

For the six months ended July 31, Kim Loong's net profit rose to RM53.19 million from RM25.3 million in 2010, on the back of an increase in revenue to RM402.68 million from RM266.02 million.

Reviewing its performance, Kim Loong said fresh fruit bunch (FFB) production increased 36% to 154,000 metric ton from 112,900 metric ton a year ago.

For the period under review, the company said its profit from PLANTATION [] operations increased 175% to RM71.09 million compared RM25.83 million a year ago; and milling operations chalked up a 53% increase to RM20.57 million from RM13.44 million.

The total CPO production increased 23% to 104,700 metric ton from 85,100 metric ton a year ago, it said.

Kim Loong said the increase in production was mainly from its estates in the Keningau region which had recovered from exceptional low crop season in the corresponding period last year.

Furthermore, the prices for CPO and PKO also rose 34% and 68% respectively higher than the corresponding period a year ago, it said.

On its prospects, the company said it expects the CPO production quantity of the milling operations to be higher than previous year for FY2012.

"For the plantation operations, we expect the FFB production to recover from its low cropping yield cycle in the financial year 2011 and project to achieve at least 20% increase in the financial year 2012.

"We also expect the palm oil prices to remain satisfactory in the remaining period of the financial year 2012," it said.

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Muhibbah gets RM100m shipbuilding contract from Tanjung Offshore

KUALA LUMPUR: MUHIBBAH ENGINEERING (M) BHD [] has secured a shipbuilding contract from TANJUNG OFFSHORE BHD [] to build a platform supply vessel (PSV) for a total of RM100 million.

It said on Friday, Sept 30 that its wholly owned subsidiary Muhibbah Marine Engineering Sdn Bhd had been awarded the contract by Tanjung's unit Tanjung Kapal Services Sdn Bhd.

It said the PSV would be used to supply and support deepwater operations of oil majors in operational waters of South East Asia region on long term basis.

Muhibbah said the PSV would also be used for operations in unrestricted waters and was designed to perform transport drilling mud, cement, brine, base oil, diesel fuel and chemicals; transport of common and specialty tools; and fire fighting capabilities.

The company said the contract was expected to contribute positively to its earnings for the current and future financial years.

Tanjung Offshore gets RM200m shipbuilding contracts

KUALA LUMPUR: TANJUNG OFFSHORE BHD []'s unit has secured two contracts totaling RM200 million to build two platform supply vessels to Muhibbah Marine Engineering Sdn Bhd and Labuan Shipyard & Engineering Sdn Bhd.

It said on Friday, Sept 30 its unit Tanjung Kapal Services Sdn Bhd had secured the contracts for the vessels which would be used to supply and support deepwater operations of oil majors in Southeast Asia on a long term basis.

Tanjung said the vessels would also be used for operations in unrestricted waters as they would be equipped to transport drilling mud, cement, brine, base oil, diesel fuel and chemicals and also to fight fires.

'The CONSTRUCTION [] of the two PSVs will be part financed by internally generated funds and borrowings from financial institutions.'' The PSVs are expected to contribute positively to the future earnings and net assets of Tanjung,' it said.

Extended foreign selling batters KLCI in 3Q

KUALA LUMPUR: Extended selling by foreign funds in September, underpinned by the gloomy global economic outlook and less than clear solutions to solve the eurozone debt crisis weighed heavily on the FBM KLCI, leading it to lose more than 60 points during the month.

The FBM KLCI slipped 0.33 point to close at 1,387.13 on the final trading day of the third quarter. Year-to-date, the FBM KLCI has lost 8.68%.

Gainers edged losers by 389 to 377, while 271 counters traded unchanged. Volume was 1.1 billion shares valued at RM1.85 billion.

Meanwhile, the slump at regional markets also highlighted the fragile investor sentiment, with China's stock market falling to its lowest level in two and half years, and Japan's Nikkei 225 posting its worst quarter in over a year.

At the regional markets, Hong Kong's Hang Seng Index lost 2.32% to 17.592.41, Singapore's Straits Times Index fell 1.22% to 2,675.16, the Shanghai Composite Index shed 0.26% to 2,359.22, and Japan's Nikkei closed 0.01% lower at 8,700.29.

Meanwhile, Taiwan's Taiex added 0.60% to 7,225.38 and South Korea's Kospi edged up 0.02% to 1,769.65.

On Bursa Malaysia, MMHE was the top loser and fell 38 sen to RM5.50; Atis lost 25 sen to 90 sen, Genting 23 sen, Atland 18 sen to RM3, RHB Capital 16 sen to RM7, while Nakamichi, SHL and MISC fell 15 sen each to 81 sen, RM1.15 and RM5.87 respectively.

Among the gainers, Nestle added 98 sen to RM47.98, Panasonic 92 sen to RM19.50, F&N 36 sen to RM16.50, Parkson 30 sen to RM5.68, PPB 24 sen to RM16.26, Milux and Lafarge Malayan Cement down 21 sen each to RM1.29 and RM6.56, while NSOP and KLCCP lost 19 sen each to RM5.09 and RM3.19.

The actives included Dialog, GPRO, OSK, AirAsia, Timecom, UEM Land, Palette, MRCB and Trinity.

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Andrew Sheng resigns from Sime Darby board, joins Fung Global

KUALA LUMPUR: Tan Sri Andrew Sheng Len Tao has resigned from the board of Sime Darby and as chairman of the governance and audit committee of the board, with effect from Thursday, Sept 29.

'Tan Sri Sheng has resigned from the board in light of his appointment as the president of the Fung Global Institute in Hong Kong,' the conglomerate said on Friday.

He was appointed to the board of Kumpulan SIME DARBY BHD [] on March 1, 2006, prior to the merger of Kumpulan Sime Darby Bhd, Kumpulan Guthrie Bhd and Golden Hope PLANTATION []s Bhd.

In November 2007, post merger, Sheng served as a senior member of the board, chairman of the supervisory committee of Sime Darby's industrial division, and member of the board's risk management committee, audit committee and remuneration committee.

He was also on Sime Darby board's strategy taskforce and China operations committee. In October 2009, he was appointed the chairman of the oil & gas projects work group which was entrusted to look into the issues facing the group's energy & utilities division.

In 2011, after a group-wide reorganisation, Sheng retained his position on the board of Sime Darby and was appointed the chairman of the board's governance & audit committee.

Selling pressure picks up, MMHE, Sime among top losers

KUALA LUMPUR: The FBM KLCI fell further into the red in late trade on Friday, Sept 30, with selling pressure seen picking up in MMHE and Sime Darby.

The Malaysian markets and Asian bourses were tracking the weaker European shares, which opened lower on Friday. According to Reuters, European markets were on track to record their worst quarterly performance since late 2008, as markets grapple with slowing global growth and a long-running euro zone sovereign debt crisis.

At 4.11pm, the 30-stock KLCI was down 9.02 points to 1,378.44. Turnover was 900.78 million shares valued at RM1.37 billion. Losers beat gainers 408 to 341 while 253 stocks were unchanged.

MMHE fell 31 sen to RM5.57 with 4.59 million shares done, Hong Leong Bank shed 29 sen to RM9.91, KLK 28 sen to RM20.82, MISC 19 sen to RM5.83 while Sime and Genting surrended 17 sen each to RM8.31 and RM9.16.

UOA inks MoU with Vietnam's Hoa Binh

KUALA LUMPUR: UOA Development Bhd is to collaborate with Vietnam-based CONSTRUCTION [] firm Hoa Binh Construction and Real Estate Corporation to develop its proposed Sri Petaling residential project with a gross development value of RM400 million.

This follows the two parties signing a memorandum of understanding to collaborate and exchange construction knowledge and expertise in addition to explore construction projects in Malaysia, Vietnam and in the region.

In a statement Friday, Sept 30, UOA Development said the Sri Petaling project comprises of two blocks condominium of 670 units ranging from 1,200 sq ft per unit onwards, built on 4.86 acres of freehold land.

The project is scheduled to commence in the fourth quarter of 2011 and expected to be completed near the end of 2013, it said.

The company said the MoU was signed on Sept 29 by UOA managing director Kong Chong Soon and Hoa Binh chairman and CEO Le Viet Hai.

It said Hoa Binh, a construction company founded in 1987, had various projects including Capitaland in Singapore, Kajima in Japan, and Bouygues Construction in France.

Sime Darby's 11m shares done off-market

KUALA LUMPUR: SIME DARBY BHD [] saw 11 million shares transacted in an off-market deal at an average price of RM8.40.

Stock market data on Friday, Sept 30 showed the shares crossed valued at RM92.4 million. At RM8.40, this was eight sen below Thursday's closing price of RM8.48.

Meanwhile, in regular trade, shares of Sime fell 13 sen to RM8.35 at 3.53pm. There were 5.81 million shares done at prices ranging from RM8.29 to RM8.48.

Bumi Armada backlog at RM7b with RM1.46b job

KUALA LUMPUR: Bumi Armada Bhd's order backlog has increased to more than RM7 billion after inked a RM1.46 billion contract to supply and operate a floating production, storage and offloading (FPSO) system in Australia.

In a statement Friday, Sept 30, Bumi Armada said it had signed the contract with Apache Energy Ltd (Apache), a major Australian oil and gas producer, for the FPSO to be located in block WA-49-L of the Balnaves Field, north-west Australia.

It said the contract was for an initial four-year fixed term time charter with an option of a further four year annual extension period thereafter.

The company said the contract was expected to contribute positively to its earnings for the financial year ending Dec 31, 2011.

Bumi Armada executive director and chief executive officer Hassan Basma said the contract underscored the company's strong engineering capabilities and rising reputation for 'on time, on budget, to high quality' delivery of major projects.

'It signals our entry into the exciting but demanding Australian market and ushers in yet another growth period for the company.

'The contract increases the Bumi Armada order backlog to more than RM 7 billion,' he said.

Hassan said work had already begun with refurbishing an existing FPSO (the former Armada Prima) for this project with the objective of delivering the FPSO for First Oil in the first quarter of 2014.

The long schedule was to synchronise the arrival of the FPSO with subsea installation and cyclone season, he said.

He said the FPSO, named Armada Claire, had been designed with a disconnectable riser turret mooring system for cyclonic weather in 135m water depth.

Bumi Armada owns this TECHNOLOGY [] which allows it to work in cyclone and hurricane-prone areas like South East Asia, Australia, India and Gulf of Mexico, he said.

Hassan said the purpose-built double hull disconnectable FPSO has oil processing capacity of 80,000 barrels (bbls) per day, produced water handling capacity of 30,000 bbls per day, water injection capacity of 60,000 bbls per day, gas re-injection capacity of 53 mmscfd and storage capacity of 750,000 bbls.

The riser turret mooring is designed for four risers, he said.

The transport and installation of the riser turret mooring is the subject of another tender yet to be launched and for which Bumi Armada was a qualified bidder, he said.

Brem ready to weather volatile times, says MD

KUALA LUMPUR: BREM HOLDINGS BHD [] is prepared the weather the volatile global economic outlook over the next two years given its current order book of RM300 million, comprising mainly of water concession and waste management.

Its managing director Khoo Chai Kaa said the company also had projects with a gross development value of RM400 million spread out over 2012 and 2013.

Speaking after its annual general meeting on Friday, Sept 30, Khoo said the company was also exploring expanding into niche markets such as green power.

He also said that Brem was looking into further expansion overseas besides the existing water concessions in Papua New Guinea.

Khoo said Brem had incorporated a company in China, and was now waiting to see the best way to generate income.

The company recently acquired a 9.3 acre plot of land on Jalan 222, Petaling Jaya for RM48 million, for commercial development.

Khoo said Brem currently had a total landbank of 500 acreas of prime areas.

For the financial year ended March 31, 2011, Brem's net profit jumped to RM51.86 million from RM17.28 million a year earlier, on the back of revenue RM138.71 million.

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#Flash* PNB steps acquisition of S P Setia shares

KUALA LUMPUR: Permodalan Nasional Bhd (PNB), which launched a surprise takeover of S P Setia Bhd, bought 23.50 million shares of the property developer on Thursday, Sept 29.

Maybank Investment Bank Bhd said on Friday PNB bought the shares from the open market at an average price of RM3.868 a share. This was 3.2 sen below the offer price it made to SP Setia shareholders.

Under the takeover exercise, PNB made a cash offer of RM3.90 per share and 91 sen per warrant.

S P Setia share price rose one sen to RM3.88 at midday on Friday with 2.44 million shares transacted. The warrants increased 9.5 sen to 88.5 sen with 44.65 million units done.

KLCI slips into the red at mid-day as Asian markets fall

KUALA LUMPUR: The FBM KLCI slipped into negative territory at the mid-day break on Friday, Sept 30 in line with key regional markets that mostly fell, indicating that investor sentiment remains fragile still despite some positive movement on the European front to address the Greek debt crisis.

Asian stocks fell on Friday, extending the worst monthly performance since the most volatile days of the global financial crisis in October 2008, with Chinese shares racking up sharp losses, according to Reuters.

Fears of a spiralling European debt crisis and a slowing global economy that would hit Asian exports caused investors to slash their bets on risky assets in the September quarter, it said.

The FBM KLCI slipped 0.11 point to 1,387.35 at the mid-day break.

Gainers edged losers by 336 to 291 while 262 counters traded unchanged. Volume was 633.94 million shares valued at RM849.56 million.

The ringgit weakened 0.28% to 3.1872 versus the US dollar; crude palm oil futures for the third month delivery rose RM13 per tonne to RM2,911, crude rose 45 cents per barrel to US$82.59 while gold gained US$9.15 an ounce to US$1,623.55.

At the regional markets, Hong Kong's Hang Seng Index fell 2.08% to 17,636.47, Singapore's Straits Times Index lost 1.53% 2,666.79, South Korea's Kospi down 1.25% to 1,747.22, the Shanghai Composite Index fell 0.37% to 2,356.48 and Japan's Nikkei 225 slipped 0.28% to 8,676.54.

Meanwhile, Taiwan's Taiex was up 0.14% to 7,192.44.

On Bursa Malaysia, RHB Capital erased its earlier gains and fell 14 sen to RM7.02; MISC fell 10 sen to RM5.92, Petronas Chemicals four sen to RM5.51, Litrak 15 sen to RM3.60, Nakamichi 14.5 sen to 81.5 sen, Ireka 13.5 sen to 65 sen, SOP 12 sen to RM3.88 and Industronics 12 sen to 45 sen.

Among the gainers, Panasonic was up RM1.22 to RM19.80, Nestle 50 sen to RM47.50, Dutch Lady 40 sen to RM18, Milux'' and SPB 21 sen each to RM1.29 and RM3.28, Shell 20 sen to RM9.70, NSOP 19 sen to RM5.09, GAB 17 sen to RM9.92, OSK 16 sen to RM1.55 and AIC 13 sen to RM1.31.

The actives included OSK, Palette, Dialog, Trinity, UEM Land, AirAsia, Malton and MRCB.

StanChart confident of keeping double-digit profit growth

HONG KONG: Asia-focused bank Standard Chartered is confident it can maintain double-digit income and profit growth, its chief executive, Peter Sands, told reporters on Friday.

The bank reported a record 17 percent rise in first-half profits in August as a booming Hong Kong market and increased restraint on costs outweighed a slump in India.

Sands also said he expected the bank's revenue to grow in line with costs and it would continue hiring in 2012 and beyond. ' Reuters

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OSK Technology Ventures ups Green Packet stake

KUALA LUMPUR: OSK TECHNOLOGY [] Ventures Sdn Bhd raised its shareholding in GREEN PACKET BHD [] to 18.51% with the recent acquisition of 15 million shares from Sept 23 to 29.

A filing with Bursa Malaysia showed OSK Ventures acquired 7.50 million shares on Sept 23, 2.5 million shares on Sept 26 and five million units the next day.

The recent acquisitions raised its shareholding in the loss-making company to 120.90 million shares or 18.51%.

Green Packet posted losses of RM15.24 million in the second quarter ended June 30, 2011 vs losses of RM18.68 million a year ago. For the first half, net losses were RM34.24 million.

SGX and LSE in joint bid for London Metal Exchange -source

HONG KONG: The Singapore Stock Exchange Ltd is tying up with London's main bourse to make a joint bid for the London Metal Exchange, a source with direct knowledge of the matter told Reuters on Friday, as the world's largest metal market seeks a suitor in a deal that could be worth 1 billion pounds.

The consortium has appointed a bank to advise it on the bid, the source added, with the auction expected to attract rival offers.

The LME, the world's biggest market for industrial metals, said last week that it was considering a sale, with an expected price tag of around 1 billion pounds ($1.57 billion). The number of suitors for the exchange has risen to double digits, Chief Executive Martin Abbott told Reuters on Thursday.

SGX declined to comment. Calls and an email to the London Stock Exchange's media hotline were not immediately answered.

The source declined be named as the discussions were confidential. ' Reuters

OSK Holdings at highest since April on merger plan

KUALA LUMPUR: Shares of OSK HOLDINGS BHD [] climbed to the highest since April 26 this year, hitting an intra morning high of RM1.77 after it announced plans for a merger with RHB CAPITAL BHD [].

At 10.10am, OSK was up 25 sen to RM1.64 with 10.81 million shares done. RHB Capital rose nine sen to RM7.25 with 968,900 shares done.

The FBM KLCI surged 14.74 points to 1,402.20. Turnover was 314.36 million shares valued at RM301 million. Gainers led losers 367 to 96 while 155 counters were unchanged.

MIDF Research maintained its buy call on RHB Capital with a target price of RM9.35. It said the valuation remained undemanding at PER of 12.3 times to its PS forecast of 76 sen and PBV of 1.62 times to its projected book value for FY12.

'We retain our BUY recommendation on the stock. As it is merger talk is still in preliminary stages with not much details available, we make no adjustments to our forecast at this juncture,' it said.

KLCI extends gains, banks in focus

KUALA LUMPUR: The FBM KLCI extended its gains at mid-morning on Friday, Sept 29 as banking stocks came into focus with RHB Capital and OSK Investment Bank planning to start merger negotiations while CIMB acquired a 70% stake in a Thailand stockbroking firm.

Meanwhile, Asian stocks steadied on Friday with big gains unlikely as investors looked to take profits after three days of gains, according to Reuters.

The FBM KLCI rose 13.41 points to 1,400.87 at mid-morning.

Gainers outpaced losers by 335 to 92, while 158 counters traded unchanged. Volume was 282 million shares valued at RM267.19 million.

At the regional markets, Japan's Nikkei 225 rose 0.25% to 8,723.12, the Shanghai Composite Index added 0.46% to 2,376.22 and Taiwan's Taiex edged up 0.12% to 7,191.34.

Meanwhile, Hong Kong's Hang Seng Index fell 0.94% to 17,842.45, Singapore's Straits Times Index lost 0.44% to 2,696.15 and South Korea's Kospi shed 0.08% to 1,767.86.

BIMB Securities Research in a note Sept 29 said investors breathed a sigh of relief as Europe was edging closer to a bailout plan for Greece but there were still some detractors unconvinced of the package and commitment proposed.

Nonetheless, Wall Street buoyed by the development in Euro zone coupled with improved jobless claims figures finally rebounded from a volatile trading day to emerge with a 143 point gain, it said.

Regional markets after a rather mixed session with Hong Kong closed impacted by typhoon are expected to remain mixed albeit sentiments had improved somewhat, it said.

'On the local side, the FBMKLCI surprisingly closed the day with some gusto posting a 16 point gain breaking the immediate resistance of 1,380 underpinned by some bargain hunting activities.

'We are expecting some upside today with the benchmark index to edge closer to the 1,400 mark,' said the research house.

On Bursa Malaysia, OSK Holdings jumped 25 sen to RM1.64 with 10.5 million shares done while RHB Capital rose eight sen to RM7.24 after the two groups said they had applied to Bank Negara to start merger talks.

Meanwhile, HLFG added 20 sen to RM10.96, Maybank and Hong Leong Bank rose 12 sen each to RM8.10 and RM10.32, CIMB 11 sen to RM6.99 and AMMB 10 sen to RM5.90.

Other gainers included Nestle that rose 72 sen to RM47.72, Panasonic 32 sen to RM18.90, KLK and Genting 22 sen each to RM21.32 and RM9.55, Shell, Malayan Flour Mills and GAB 20 sen each to RM9.70, RM7.05 and RM9.95 respectively, while LPI Capital added 18 sen to RM11.98.

The actives included SP Setia warrants, Palette, Trinity, Key West, UEM Land, AirAsia and Asia EP, while losers included Litrak, KLCCP and Notion.

S&P sees New Zealand's external position worsening

KUALA LUMPUR: Standard & Poor's Ratings Services expects New Zealand's external position to deteriorate further especially when its fiscal settings have been weakened by earthquake-related spending pressures and fiscal stimulus to support growth.

The ratings agency said on Friday, Sept 30 it had lowered its long-term foreign currency ratings on New Zealand to 'AA' from 'AA+' and its long-term local currency rating on New Zealand to 'AA+' from 'AAA'.

S&P had reaffirmed the short-term ratings at 'A-1+'. The outlook on the foreign and local currency ratings was stable. It added the transfer & convertibility (T&C) assessment for New Zealand was unchanged, at 'AAA'.

'The lowering of the foreign and local currency long-term ratings follows our assessment of the likelihood that New Zealand's external position will deteriorate further at a time when the country's fiscal settings have been weakened by earthquake-related spending pressures and fiscal stimulus to support growth,' it said.

S&P said the ratings on New Zealand reflected its opinion of the country's fiscal and monetary policy flexibility, economic resilience, public policy stability, and its sound financial sector.

However, these strengths were moderated by New Zealand's very high external imbalances, which are accompanied by high household and agriculture sector debt, dependence on commodity income, and emerging fiscal pressures associated with its aging population.

CIMB Research downgrades RHB Cap to Neutral

KUALA LUMPUR: CIMB Equities Research has downgraded RHB Capital to Neutral following surprising news about RHB Cap's potential merger talks with OSK HOLDINGS BHD [].

It said on Friday, Sept 30 that the proposal for RHB Cap was short-term negative but long-term positive.

'News on RHB Cap's potential merger talks with OSK surprised us as management had not shown any interest in acquiring an investment bank. We estimate that it could lead to 9-11% EPS dilution due to a likely high price and potential rights issue,' it said.

CIMB Research said still, it would be positive in the longer term as it would give RHB Cap a regional presence and boost its domestic retail broking business.

'We retain our earnings forecasts. Though we roll our target price forward to 2012, it drops from RM10.70 to RM8.95 because we now value it on parity with its DDM value, instead of 10% premium, and scale back our dividend growth rate assumption by 2% pts to 15.1% because of weakening investment banking deal flow,' it said.

The research house said in line with its sector downgrade, it downgraded RHB Cap from Outperform to Neutal and preferred Maybank.

CIMB up in early trade on buying 70% stake in Thai stockbroking firm

KUALA LUMPUR: ''CIMB Group Holdings shares advanced on Friday, Sept 30'' in line with the positive overall positive sentiment on Bursa Malaysia and after the banking group said it was buying a 70% stake in Thailand stockbroking firm SICCO Securities Public Company Ltd (SSEC).

At 9.25am, CIMB added six sen to RM6.94 with 965,700 shares done.

CIMB is buying the stake in SSEC from the Siam Industrial Credit Public Company Limited (SICCO) for RM78.43 million cash.

In a statement Thursday, Sept 29, CIMB said it had entered into a conditional share sale and purchase agreement with SICCO to acquire SSEC.

It said SSEC was a publicly listed stockbroking company with 13 branches in Thailand and employed 269 staff.

CIMB said the acquisition would be undertaken via its wholly-owned indirect subsidiary, CIMB Securities International Pte Ltd (CSI).

The banking group said that under Thai laws, upon completion of the proposed acquisition, CSI would be required to conduct a mandatory tender offer to acquire all the remaining shares in SSEC that it did not already own.

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CIMB Research has technical sell on TDM, more downside

KUALA LUMPUR: CIMB Equities Research has a technical sell call on TDM BHD [] at RM2.69 at which it is trading at a price-to-book value of 0.8 times.

It said on Friday, Sept 30 that TDM violated the triangle support recently. This was not good news as it implies that there is still room to the downside.

"Once the RM2.63 level gives way, expect next downleg to drag prices towards RM2.45 and RM2.35," it said.

CIMB Research although intermittent rebound could take place, we believe these were likely dead cat bounces. Hence, unload on strength looks like a good option here, preferably near the RM2.75-2.84 resistances.

"We will only review our call if the candles move above the RM2.91 level. Technical landscape remains lethargic. MACD signal line is hovering in the negative territory while RSI is below the 50pts mark," it said.

CIMB Research retains Underperform on Hong Leong Bank

KUALA LUMPUR: CIMB Equities Research is retaining its Underperform rating on Hong Leong Bank as it sees challenges in its integration with EON Bank, including management distraction and possible attrition of key managers/clients.

It said on Friday, Sept 30 that credit cost could rise to restore loan loss coverage after the merger.

"We cut our FY12-14 net earnings forecasts by 4%-12% to factor in the rights issue, which would lead to a 19% increase in its share base."

"This, together with the withdrawal of the 10% premium over the DDM value, brings down our target price from RM13.50 to RM10.80. We prefer Maybank (Outperform) for exposure to the sector," it said.

OSK Research sees upside for Supermax, Top Glove

KUALA LUMPUR: OSK Research said with the expected fall in natural rubber latex price, it sees Top Glove and Supermax as the main beneficiaries.

It said on Friday, Sept 30 that it also sees Supermax as a cheaper exposure than Top Glove since they share the closest product mix and Top Glove's share price is 3.0 times more expensive than Supermax.

"Going forward, Supermax expects to increase its higher end glove production which includes dental and surgical gloves. Maintain Buy," it said.

It has a fair value of RM5.50 for Supermax which closed at RM2.50.

CIMB Research has technical buy on Tebrau Teguh

KUALA LUMPUR: CIMB Equities Research has a technical buy call on TEBRAU TEGUH BHD [] at 66.5 sen at which it is trading at a price-to-book value of 0.9 times.

It said on Friday, Sept 30 that Tebrau broke out of its medium term downtrend channel on Thursday. Prices also swung past the 50-day SMA along the way.

"Looking at the chart, we think stronger rebounds are imminent. The next resistance is seen at 69.5 sen, followed by 72.5 sen and 75.5 sen. The 200-day SMA is also a magnet for prices," it said.

CIMB Research said technical landscape is improving. MACD signal line is around the zero zones while RSI is above the 50pts mark.

"As long as prices hold on steady above the RM0.63 level, we think the bulls have the upper hand here. Always put a stop at below 61.5 sen," it said.

RHB Capital, OSK shares up on possible merger plan

KUALA LIUMPUR: RHB CAPITAL BHD [] and OSK HOLDINGS BHD [] (OSK) shares advanced in early trade on Friday, Sept 30 after the former said it intends to start merger talks with OSK Investment Bank Bhd.

At 9.05am, RHB Capital was up 12 sen to RM7.28 with 179,900 shares done while OSK jumped 29 sen to RM1.68 with 2.51 million shares traded.

RHB Capital and OSK have submitted applications to Bank Negara Malaysia for approval to commence negotiations for a possible merger between the two groups.

In separate filings on Thursday, Sept 29, the companies said they were seeking Bank Negara's approval in principle to commence negotiations for a possible merger of businesses between the RHB banking group and OSK investment banking group.

MIDF Research maintained its Buy rating on RHB Capital and target price of RM9.35, and said valuation remains undemanding at PER of 12.3 times to its EPS forecast of 76 sen and PBV of 1.62 times to projected book value for FY12.

'We retain our Buy recommendation on the stock. As it is merger talk is still in preliminary stages with not much detail available, we make no adjustments to our forecast at this juncture,' it said on Sept 30.

CapitaMalls Asia says HK shares to trade on Oct 18

HONG KONG: Singapore-based shopping mall developer CapitaMalls Asia said on Friday its secondary listing in Hong Kong would begin trade on Oct 18.

No new shares will be issued as a result of the Hong Kong listing, it said in a filing to the Hong Kong bourse.

The company, a unit of property developer CapitaLand, first said in March it would seek the secondary listing to bolster its expansion plans in China. ' Reuters

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Seoul shares open down after gains; tech issues weigh

SEOUL: Seoul shares opened lower on Friday after sharp gains in the previous session, weighed by losses in key TECHNOLOGY [] and banking issues including Samsung Electronics and KB Financial Group.

The Korea Composite Stock Price Index (KOSPI) was down 0.87 percent at 1,753.82 points as of 0004 GMT. ' Reuters

Dow, S&P rise in wild day, Nasdaq takes China hit

NEW YORK: Stocks mostly rose in a volatile session on Thursday, Sept 29 as stronger-than-expected economic data and German approval of a beefed-up euro-zone crisis fund relieved two of the worst fears hanging over the market.

But the Nasdaq was knocked lower by a brutal sell-off in U.S.-listed Chinese stocks on news of a probe into accounting practices and profit taking in Apple shares after a huge gain during the quarter.

The U.S. Labor Department said initial applications for unemployment benefits fell to a five-month low last week.

Europe again averted disaster in its debt crisis when German deputies rallied behind Chancellor Angela Merkel to approve a stronger euro-zone bailout fund on Thursday.

"The vote in Germany is obviously positive news and is exactly what is needed to give the region the go-ahead to recapitalize their banks," said Deirdre Dennehy, portfolio manager at the Rockland, Massachusetts-based Rockland Trust, which has about $4.8 billion in assets under management.

The Dow Jones industrial average .DJI gained 143.08 points, or 1.30 percent, to 11,153.98. The Standard & Poor's 500 Index .SPX gained 9.34 points, or 0.81 percent, to 1,160.40. But the Nasdaq Composite Index .IXIC dropped 10.82 points, or 0.43 percent, to 2,480.76.

Chinese Internet search engine Baidu (BIDU.O), down 9.2 percent at $110.29, and other U.S.-listed Chinese companies were among the biggest losers after a securities regulator told Reuters the U.S. Justice Department was investigating accounting irregularities at Chinese companies listed on U.S. exchanges.

Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland, said the news was a negative for sentiment at a time when markets were already experiencing high levels of uncertainty and volatility.

"That's not good news," he said. "It's accounting related, it's Chinese related. The relations between the two countries are tepid at best (and) you put this on the table during this period of time."

Tech names pressured the Nasdaq, with Amazon.com Inc (AMZN.O) off 3.2 percent at $222.44 following a sharp rally in Wednesday's session. Advanced Micro Devices (AMD.N) sank 13.7 percent to $5.31 after cutting its third-quarter revenue outlook, prompting many analysts to downgrade their views on the stock.

Apple shares fell 1.6 percent to $390.57 on profit taking after gaining more than 16 percent during the quarter.

Other big-cap Internet names were also down. Netflix Inc (NFLX.O) sank 11 percent to $113.19 while Yahoo Inc (YHOO.O) lost 5.4 percent to $13.42.

A Merrill Lynch index of Internet stocks .HHI, which includes Amazon and Yahoo, fell 3.01 percent.

Market volatility is likely to remain high as traders react to European headlines and attempt to gauge the commitment of governments and institutions as they work to prevent a Greek default.

End-of-quarter repositioning will also influence market movement. Friday will be the last day of the third quarter.

The benchmark S&P 500 index is expected to finish the year down for the first time in three years as an escalating European debt crisis and stalled U.S. economy led strategists to slash forecasts in the latest Reuters poll.

About five stocks rose for every two that fell on the New York Stock Exchange. On the Nasdaq, more than five stocks rose for every three that fell.

About 8.62 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, above this year's average. - Reuters

US Justice Department probing Chinese accounting

WASHINGTON: The U.S. Justice Department is investigating accounting irregularities at Chinese companies listed on U.S. stock exchanges, said an official with the Securities and Exchange Commission, suggesting criminal charges may be brought in addition to civil proceedings, according to Reuters on Thursday, Sept 29

"There are parts of the Justice Department that are actively engaged in this area," Robert Khuzami, director of enforcement at the SEC, said in an interview on Tuesday.

He told Reuters that a number of federal prosecutors around the United States were taking part in the investigation, but he declined to name them.

Involvement of U.S. attorneys general in various locations adds investigative firepower to the SEC and the Federal Bureau of Investigation, which are also probing the accounting methods of certain U.S.-listed Chinese companies.

"I think that you will see greater (Department of Justice) involvement as time goes on," Khuzami said when asked if criminal charges would be filed in the investigation.

A former federal prosecutor, he declined to elaborate on which Chinese companies or auditors were being scrutinized by the Justice Department.

An SEC review of accounting problems at foreign-based stock issuers sharpened its focus earlier this year when dozens of China-based companies began disclosing auditor resignations or book-keeping irregularities.

For example, Deloitte Touche Tohmatsu CPA Ltd in May resigned as auditor of Chinese software company Longtop Financial Technologies Ltd, saying it had found falsified financial records and bank balance confirmations.

Shares of some Chinese companies listed in the United States fell on Thursday after Khuzami's statements became public. Among them, Sohu.com Inc closed 4.7 percent lower at $50.62, Baidu Inc fell 9.2 percent to $110.29, China Sky One Medical Inc declined 3.8 percent to $2.29, and Sina Corp ended down 9.7 percent at $73.23.

The SEC has struggled to gain access to documents it needs in the investigation because strict Chinese laws have made auditors reluctant to turn them over.

The FBI has an embedded agent in an SEC working group on Chinese companies that enter the stock market through so-called reverse mergers with U.S. shell companies.

Officials from the SEC and the Public Company Accounting Oversight Board (PCAOB) are due to meet with their Chinese counterparts in Washington, D.C. in October for a second round of talks on joint inspections of auditing firms in China.

"Not having proper accounting and reliable audit review for publicly traded companies with operations in China is just not acceptable. We have to find a path to resolution of this issue," Khuzami said. "It is ... a big issue for us."

Earlier in September, the SEC sought a federal court order to force the Shanghai arm of Deloitte to turn over its work papers regarding Longtop Financial.

The results of the Deloitte subpoena enforcement action will be closely watched by other auditing companies, Khuzami said. The federal government is also pursuing other options to ensure better accounting practices at U.S.-listed companies based in China, he said.

"Obviously, the results here will inform the conduct of others that are similarly situated. In that sense, it's going to be instructive," Khuzami said. "At the same time, we're not a one-trick pony; There are other efforts to reach resolution of these issues. We continue to work closely with our regulatory counterparts in China and in other countries to find a path to resolution."

In a recent interview with Reuters, Assistant Attorney General Lanny Breuer, head of the Justice Department's criminal division, underscored the government's commitment to fighting accounting fraud of any kind. He declined, however, to comment on specific cases that could be brought against Chinese firms listed in the United States.

The Justice Department declined comment for this story, saying it does not confirm or deny investigations.

In any criminal case, the question would be whether the company lied to the auditor, or whether the auditor acted recklessly or knowingly in not detecting the alleged fraud.

Merely not providing records under these circumstances -- as in the Deloitte case -- would not likely rise to the level of criminal violation, Khuzami said.

The PCAOB, the agency that oversees auditors of public companies, has inspection authority over auditing firms, while the SEC has enforcement authority over those companies.

Together, the two agencies have greater leverage over auditing firms than do criminal authorities, Khuzami said. - Reuters

#Flash* RHB Cap, OSK Hldgs apply to BNM to start merger talks

KUALA LIUMPUR: RHB CAPITAL BHD [] and OSK HOLDINGS BHD [] have submitted applications to Bank Negara Malaysia for approval to commence negotiations for a possible merger between the two groups.

In separate filings on Thursday, Sept 29, the companies said they were seeking Bank Negara's approval in principle to commence negotiations for a possible merger of businesses between the RHB banking group and OSK investment banking group.

Shell shutting down entire Singapore refinery after fire

SINGAPORE: Royal Dutch Shell Plc is shutting down its entire Singapore refinery, the company's largest, to get the fire that broke out on Wednesday under control, a senior company official told reporters.

Shell is shutting more units in the vicinity of the area where the incident happened, Martijn van Koten, vice president for manufacturing operations told reporters on Thursday, and it may take two days to complete the shutdown.

The fire could have started during maintenance work, he said. Only essential staff remain on site. Reuters

''

United Malacca 1Q net profit jumps 77.4% to RM28.87m

KUALA LUMPUR: UNITED MALACCA BHD [] net profit for the first quarter ended July 31, 2011 jumped 77.44% to RM28.87 million from RM16.27 million a year earlier, due mainly to higher product prices.

It said on Thursday, Sept 29 that revenue for the quarter rose to RM70.51 million from RM43.24 million in 2010.

Earnings per share rose to 14.26 sen from 8.09 sen, while net assets per share was RM5.18.

Reviewing its performance, the company said the higher earnings were due mainly to higher crude palm oil and palm kernel prices, as well as higher fresh fruit bunch (FFB) production.

On its prospects, the company said the FFB production for the current financial year ending April 30, 2012 was expected to increase due to additional area coming into harvesting and increasing yield trend from young matured oil palms.

'Should the current level of CPO price be sustained, the group can expect better performance for the current FY ending April 30, 2012,' it said.

CIMB buys 70% of Thai stockbroking firm

KUALA LUMPUR: ''CIMB Group Holdings is acquiring a 70% stake in SICCO Securities Public Company Ltd (SSEC) from the Siam Industrial Credit Public Company Limited (SICCO) for RM78.43 million cash.

In a statement Thursday, Sept 29, CIMB said it had entered into a conditional share sale and purchase agreement with SICCO to acquire SSEC.

It said SSEC was a publicly listed stockbroking company with 13 branches in Thailand and employed 269 staff.

CIMB said the acquisition would be undertaken via its wholly-owned indirect subsidiary, CIMB Securities International Pte Ltd (CSI).

The banking group said that under Thai laws, upon completion of the proposed acquisition, CSI would be required to conduct a mandatory tender offer to acquire all the remaining shares in SSEC that it did not already own.

CIMB Investment Bank chief executive officer designate Datuk Charon Wardini Mokhzani said the acquisition strengthened CIMB's broking platform on the Stock Exchange of Thailand.

'We are consistently among the top 3 brokers in Malaysia, Singapore and Indonesia, and aim to be in a leading position in Thailand in the next few years.

'This acquisition is expected to at least double our market share and take us further towards our target of being among the top 5 players in the Thai securities market. We will also look for opportunities for synergies between this new platform and CIMB Thai Bank Plc,' he said.

GLOBAL MARKETS-European stocks, euro higher after German vote

LONDON: European stocks and the euro rose on Thursday after Germany's parliament approved new powers for the euro zone's rescue fund, offering some relief from concerns that deep political divisions are hampering efforts to end the region's debt crisis.

The German parliament backed more powers for the euro zone rescue fund with a large majority in what was Chancellor Angela Merkel's biggest test since she took power six years ago.

A leading conservative lawmaker also said the bill had passed without the need of support from the opposition, easing worries of a rebellion against Merkel within the ruling coalition that could weaken her politically.

The pan-European FTSEurofirst 300 index of top shares was up 0.3 percent at 930.14 points after falling 1.2 percent in the previous session. World stocks as measured by the MSCI index were 0.2 percent higher.

The euro was up 0.6 percent to around $1.3630, having risen to as high as $1.3678 on the news that the bill was passed.

"Beyond this vote nothing has changed and we're awaiting a more comprehensive response from euro zone policymakers," said Lee Hardman, currency analyst at BTM-UFJ. "The relief rally in the euro over the past week has been built on unsustainable foundations."

MORE HURDLES

Even with the German parliament passing the bill, more hurdles towards an effective solution to the debt crisis remain, with the threat of a Greek default very much on the horizon.

Talks between the European Union, IMF and Athens on the next aid tranche on Thursday will see if Greece has done enough to avoid running out of cash.

Despite the latest bounce, the euro has lost nearly 7 percent against the dollar this quarter, hammered by mounting worries over the prospect of a Greek default and constant bickering by European policy-makers over the response to the crisis.

The failure to find a definitive solution to the crisis has led to worries about a contagion engulfing bigger euro zone economies like Italy and Spain. Besides, it has triggered concerns about the health of the European banking system.

The German Bund future briefly fell after the vote in a volatile trading session but was last little changed on the day at 135.66.

"I think it's overly optimistic to think that the whole crisis is over and therefore the safe-haven status of the Bund is lost. I wouldn't expect to see the Bund yield much higher than where we are in the short term," said Elisabeth Afseth, fixed income analyst at Evolution Securities. ' Reuters

''

Astino earnings surge to RM15.08m as demand picks up

KUALA LUMPUR: ASTINO BHD []'s earnings surged to RM15.08 million in the fourth quarter ended July 31, 2001 from only RM1.37 million a year ago following an improvement in demand for its PVC doors and metal roof sheeting.

It said on Thursday, Sept 29 that revenue rose 28.5% to RM115.60 million from RM89.90 million mainly due to the increase in the demand of the group's products.'' Earnings per share were 11.40 sen compared with 1.08 sen.

For the financial year ended July 31, its net profit rose 69.3% to RM34.92 million from RM20.62 million a year ago. Its revenue increased 25.1%'' to RM419.17 million from RM334.83 million.

#Flash* Tenaga says no plans to break up into 3 units

KUALA LUMPUR: TENAGA NASIONAL BHD [] (TNB)'' says it has no knowledge of any plan to break up the power company into three units to reform the energy sector.

It said this in a statement to Bursa Malaysia on Thursday, Sept 29, in response to a news article that it was looking into this proposal.

The company said this 'was never discussed with TNB and that TNB has no knowledge of this matter'.

KLCI extends gains for third day, closes up 1.16%

KUALA LUMPUR: The FBM KLCI extended its gains for the third consecutive day on Thursday, Sept 29, while most regional markets reversed earlier losses and turned positive ahead of a German vote on boosting the euro zone's rescue fund.

European markets edged up in early trade, but the moves were volatile, however, as investors fretted about whether German Chancellor Angela Merkel would face dissent in her own party in a vote on new powers for the rescue fund, potentially making a further decision to resolve the euro zone debt crisis difficult, according to Reuters.

There has been worries in Merkel's coalition about the costs of a Greek bailout and any dissent could dampen hopes that further votes like the second Greek rescue package will go through lawmaking process smoothly, it said.

The FBM KLCI rose 1.16% or 15.91 points to 1,387.46

Gainers beat losers by 513 to 229, while 228 counters traded unchanged. Volume was 920.96 million shares valued at RM1.37 billion.

At the regional markets, Japan's Nikkei 225 rose 0.99% to 8,701.23, South Korea's Kospi jumped 2.68% to RM1,769.29, Taiwan's Taiex up 0.50% to 7,182.61 and Singapore's Straits Times Index gained 0.26% to 2,708.13.

The Shanghai Composite Index fell 1.12% to 2,365.34.

Meanwhile, the Hong Kong stock market was closed this morning as typhoon Nesat made its way past the island country en route to south China.

Among the gainers on Bursa Malaysia, Hong Leong Bank rose 40 sen to RM10.20, S P Setia and Genting up 37 sen each to RM3.87 and RM9.33, Panasonic 36 sen to RM18.58, Sime 34 sen to RM8.48, Litrak 33 sen to 3.75, Malayan Flour Mills 30 sen to RM6.85, MMHE 28 sen to RM5.88 and Far East 25 sen to RM6.95.

Compugates was the most actively traded counter with 63.23 million shares traded. The counter added half a sen to 6.5 sen.

Other actives included S P Setia, GPRO, Asia EP, Axiata, CIMB and UEM Land.

Meanwhile, decliners included Nestle that fell 50 sen to RM47, Pulai Springs down 34.5 sen to 81 sen, KLK 20 sen to RM21.10, Cepco 19 sen to RM1.84, HELP 16 sen to RM1.71, CIMB 13 sen to RM6.88, while Petronas Gas and Hong Leong Industries fell 10 sen each to RM12.90 and RM3.90.

V.S. Industry swings into the red in 4Q on writedowns

KUALA LUMPUR: V.S. Industry Bhd swung into the red with net losses of RM3.95 million in the fourth quarter ended July 31, 2011 following a writedown in the assets of its Indonesian subsidiary compared with net profit of RM9.28 million a year ago.

It said on Thursday, Sept 29 that its revenue rose 5.2% to RM262.62 million from RM249.51 million. Loss per share was 2.18 sen compared with earnings per share of 5.18 sen.

V.S. Industry said the losses were mainly due to the write down of net assets of the subsidiary, namely PT. GY PLANTATION [] Indonesia of RM10.6 million, amortisation of cost of employee share option scheme of RM1.9 million, higher share of losses from associates and increased competitiveness in the electronic manufacturing services sector in the current quarter.

For the financial year ended July 31, 2011, earnings rose 14.1% at RM27.72 million compared with RM24.29 million in FY10. Revenue was 28.5% higher at RM1.028 billion compared with RM800.17 million.

On the outlook, it was mindful of the current challenges faced by the global economy and it expected a challenging financial year ahead.

Alam Maritim gets RM32m contracts to provide vessels

KUALA LUMPUR: ALAM MARITIM RESOURCES BHD [] has secured two contracts to provide vessels with a total value of RM32 million.

It said on Thursday, Sept 29 its unit Alam Maritim (M) Sdn Bhd had received letters of contract extension from''Petronas Carigali Sdn Bhd to provide two anchor handling tug supply (AHTS) vessels valued at RM23.32 million.

Its unit also received a letter of award from Dayang Enterprise Sdn Bhd to provide'' one workboat valued at RM8.68 million

'The contract extension is for a period of one year each. One of the AHTS vessels under the contract extension has commenced its contract in August 2011, whereas the contract extension for the other AHTS vessel shall take effect in December 2011,' it said.

Alam Maritim said the RM32 million contracts were expected to positively contribute to the earnings and net assets for the financial year ending Dec 31, 2011 and beyond.

Tepco faces $110 bln hole in finances -Nikkei

TOKYO: Tokyo Electric Power Co , the operator of the stricken Fukushima nuclear power plant, faces a funding shortfall of up to $110 billion over 10 years, the Nikkei business daily reported on Thursday, Sept 29, citing a government panel tasked with assessing its finances.

But the question of how much taxpayer money Tepco will ultimately need will depend heavily on whether it is allowed to restart reactors that have been shut for maintenance and that have yet to get the go-ahead amid public concerns about nuclear safety.

It will also depend on whether the utility will get permission to hike electricity fees to generate extra cash flow.

The committee's calculation of 8.3 trillion yen ($110 billion) is a worst-case scenario, the Nikkei said.

Even in a best-case scenario, which assumes its Kashiwazaki-Kariwa nuclear plant is back up and running before March 2014 and that is allowed to hike fees by 10 percent, it would still face a funding shortage of 460 billion yen, it said.

The panel, comprised of lawyers and other experts, plans to submit recommendations next week for cutting costs at Tepco but has declined to make any of those proposals public.

Tepco, which must submit a business plan by the end of October, said it would not comment on the report until it is released.

The government needs to approve the business plan before funds can be released to pay compensation to residents and businesses forced to evacuate from near its radiation-leaking nuclear plant.

Separately, the Yomiuri newspaper said the panel's draft plan also states that Tepco's creditors may be asked to help by lowering interest rates or offering moratoriums on debt payments.

Trade Minister Yukio Edano, who has the power to reject or approve Tepco's final business plan, this month suggested banks forgive some of their loans but Japan's top banks, including Mitsubishi UFJ Financial Group , Mizuho Financial Group and Sumitomo Mitsui Financial Group , have so far rejected such suggestions.

They are among lenders that provided about 2 trillion yen ($26 billion) in emergency loans to Tepco in the immediate aftermath of the nuclear meltdown.

The panel wants lenders to maintain their combined outstanding loan balance to Tepco at roughly 2 trillion yen for at least 10 years, and will ask Tepco to trim its annual expenses by an further 160 billion yen, the Nikkei said.

As of the end of June, Tepco had a little more than 4 trillion yen in outstanding loans and another 4.7 trillion yen in outstanding corporate bonds.

Other media reports have said the committee will propose the utility slash 14 percent of its workforce, trim pension payouts and begin selling 600 billion yen in assets to help pay for compensation.

The biggest prize in its asset portfolio is a 7.9 percent stake in KDDI , Japan's No. 2 cellphone carrier. The holding is worth around $2.7 billion.

Tepco also faces a 1.15 trillion yen bill to decommission four reactors in Fukushima, the Nikkei said. - Reuters

Global weakness persistent, more QE possible-BoE's Dale

LONDON: The global economy faces the risk of a downward spiral and the Bank of England may have to consider further monetary stimulus if the situation worsens further, the BoE's chief economist said in a newspaper interview.

Growth was slowing in Britain's main trading partners and the confidence of the country's exporters has taken a knock, Spencer Dale told the Daily Mail in an interview published on Thursday.

"During the summer, we thought much of that was just a temporary soft patch, but that slowing now looks more persistent," Dale said.

The world faced a "rather nasty downward spiral", though the loss of confidence among consumers and businesses could exaggerate how bad things really are, he said.

Dale, who ditched his call for higher interest rates in August after a "material change" in the outlook for growth, said that the momentum had shifted towards a loosening of monetary policy.

"If things continue to deteriorate we may need to consider further monetary loosening," he said.

The Bank is now widely expected to engage in a fresh round of quantitative easing, and many economists see the BoE restarting its asset purchases as early as next week as fears of a renewed recession have increased due to the escalation of the crisis in the euro zone.

The minutes of the BoE's September showed that most of those policymakers who voted to leave the stock of asset purchases unchanged at 200 billion pounds already thought the case for more easing was "finely balanced".

But Dale said more quantitative easing was not a done deal as it was still unclear how quickly and how far inflation would fall back.

"That is why it is not just a no-brainer that we should do more QE," he said. "We need to think about the upside risks to inflation as well as the downside risks. If it were a no-brainer we would have done it already."

Dale said inflation was still likely to rise above 5 percent over the coming months, moving further away from the central bank's 2 percent target. ' Reuters

Health Minister unveils 7 medical devices projects, RM17.1b revenue

KUALA LUMPUR: Health Minister Datuk Seri Liow Tiong Lai unveiled seven new medical devices related Entry Point Projects (EPPs) which are expected to generate RM17.1 billion in revenue.

A statement from Pemandu on Thursday, Sept 29 said the new EPPs were expected to contribute to RM 11.4 billion in gross national income (GNI) and create 86,000 jobs by the year 2020.

The seven new EPPs are:

1) Tap into the fast-growing In-Vitro Diagnostics (IVD) market through academic-industry partnerships

2) Create next generation of single-use devices (SUD)

3) Build hub for high-value medical device contract manufacturing

4) Create Malaysian clinical devices champions

5) Orchestrate contract manufacturing supply chain

6) Medical equipment refurbishment hub

7) Build medical hardware and furniture cluster

Maybank expects loans to grow 10%-12% for 6 mths ending Dec 2011

KUALA LUMPUR: MALAYAN BANKING BHD [] (Maybank) expects its loan growth for the six months ending Dec 31, 2011 to hover between 10% and 12%, spurred mainly by corporate loans segment.

Its CEO Datuk Seri Abdul Wahid Omar said Maybank hoped to see its loan growth exceed the forecast local industry average of about 11% for 2011.

'We hope to achieve an ROE growth of 16% during the six-month period,' he said after Maybank's AGM on Thursday, Sept 29.

He said Maybank's primary growth route be organic although it would not discount the possibility of M&A if the opportunity arises.

Maybank had changed its fiscal year from December 31 to June 30 where the current period is a 6-month period ending Dec 2011.

Education stocks decline as optimism wanes

KUALA LUMPUR: Education-related stocks on Bursa Malaysia declined in the morning session on Thursday, Sept 29 as the outlook for the sector turned weaker.

At 12.30pm, HELP fell 25 sen to RM1.62, SEG International down two sen to RM1.70 and Masterskill shed one sen to RM1.08.

HELP yesterday when announcing its third quarter results said it was impacted by lower enrolment and higher cost, and also indicated that its students from China were likely to pursue their studies directly in the US and UK due to the weakening dollar and sterling pound.

RHB Research meanwhile downgraded the education sector from Overweight to Neutral, and said that it was cautious on the sector this quarter given rising macroeconomics headwinds, illiquid factor of the stocks and the small market capitalisation of the education stocks (less than RM1 billion).

In addition, high foreign shareholdings for HELP (12.5%) and Masterskill (49%) also increased their susceptibility to volatile portfolio flows, it said on Sept 29.

RHB Research cut its target FY12 PER by one to two times given the bearish macroeconomic outlook and few re-rating catalysts for the sector.

The research house downgraded HELP and Masterskill from Outperform to Underperform, while maintaining SEG an Outperform.

''

Genting, Tenaga lift KLCI at mid-day

KUALA LUMPUR: The FBM KLCI reversed its earlier losses and was back in positive territory at the mid-day break on Thursday, Sept 29, lifted by gains at select blue chips including Genting and Tenaga.

The 30-stock index rose 6.27 points to 1,377.82 at 12.30pm. Market breadth however remained weaker with losers leading gainers by 293 to 258, while 223 counters traded unchanged.

Volume was 409.28 million shares valued at RM534.59 million.

The ringgit weakened 0.59% to 3.1838 versus the US dollar; crude palm oil futures for the third month delivery fell RM39 per tonne to RM2,871, crude oil shed four cents to US$81.17 while gold rose US$9.07 an ounce to US$1,617.88.

At the regional markets, Japan's Nikkei 225 edged up 0.17% to 8,630.34, Taiwan's Taiex gained 0.81% to 7,205.13 and South Korea's Kospi rose 1.65% to 1,751.59.

The Shanghai Composite Index fell 0.83% to 2,372.31 and Singapore's Straits Times Index shed 0.23% to 2,695.00.

Meanwhile, the Hong Kong stock market was closed this morning as typhoon Nesat made its way past the island country en route to south China.

On Bursa Malaysia, SP Setia shares and warrants rose in active trade near the offer prices put forward by Permodalan Nasional Bhd (PNB) in its conditional takeover, despite an outright rejection by the property developer's board.

SP Setia jumped 37 sen to RM3.87 while its warrants gained 30 sen per unit to 76 sen.

Other gainers included Far East that rose 25 sen to RM6.95, HLFG 22 sen to RM10.78, UMW 21 sen to RM6.91, BAT 20 sen to RM44.80, Genting 17 sen to RM9.13, Jaya Tiasa 15 sen to RM5.20 and Tenaga 12 sen to RM5.16.

Compugates was the most actively traded counter with 59.2 million shares done. The stock added half a sen to 6.5 sen.

Other actives included CIMB, SP Setia, UEM Land, HWGB, Karambunai and Asia EP.

Decliners included HELP, Cepco, Nestle, Batu Kawan, CIMB, KLK, Suria and Boustead.

RHB Research downgrades banking sector to Underweight

KUALA LUMPUR: RHB Research has downgraded the Malaysian banking sector to Underweight from Neutral and said the worsening economic conditions that were not reflected in market valuations.

It said on Thursday, Sept 29 that banks were often viewed as proxies to the economy and share prices tend to underperform the market during a downturn.

The research house said share prices of banking stocks fell about 60% from their peaks during recent financial crisis while PER and P/BV valuations de-rated by an average of 54% and 52.5% respectively from peak levels.

It said if 2008-09 de-rating experience was repeated, valuations could fall by another 20% to 49% before reaching trough valuations in terms of PERs.

In terms of P/BV, another 15% to 57.6% compression could take place.

Currently the banking stocks are trading around mean valuations, it said.

'However, the derating experience above was notwithstanding the sector's net profits resilience during that period (2008: +6.5% year-on-year while 2009: +10.8% y-o-y).

"This suggest that fundamentals take a back seat during a downturn but we observe that efficiently run banks with sound asset quality tend to fare better than peers," it said.

The research house'' cut the fair values of Maybank, CIMB and AFG to RM6.84, RM 5.63 and RM2.83 respectively, and downgraded them from market perform to underperform.

RHB Research cut its fair value for AMMB to RM4.43 from RM6.15, while Affin's fair value was downgraded to RM2.12 from RM2.77.

Both banks were rated underperform by the research house.

Meanwhile, Hong Leong Bank was rated at market perform although its fair value was reduced from RM12.11 to RM9.7.

Only Public Bank was upgraded from market perform to outperform with a reduced fair value of RM12.54.

At 11:24am, Maybank fell 1 sen to RM7.96, CIMB lost 16 sen to RM6.65, Public Bank shed 2 sen to RM12.02, Hong Leong Bank down 2 sen to RM9.78, AMMB fell 5 sen to RM5.79, AFG fell 4 sen to RM3.16 and Affin lost 2 sen to RM2.43.

''

Samsung sees low growth rate for chip industry in 2012

TAIPEI: Samsung Electronics sees a low growth rate for the semiconductor industry next year as the global economic slowdown bites into demand, a top executive said on Thursday.

"Under an economic slowdown, the visibility of the semiconductor industry is low; the growth rate in 2012 will not be high and TECHNOLOGY [] will be an important factor," Samsung's device solutions head Oh-hyun Kwon told reporters at an event in Taipei.

The South Korean firm, along with other tech makers, is struggling with depressed consumer demand amid mounting uncertainty over global economic prospects.

On Wednesday chip maker Advanced Micro Devices Inc cut its third-quarter revenue and gross margin forecasts. ' Reuters

''

KLCI turns negative in line with global markets

KUALA LUMPUR: The FBM KLCI fell on Thursday, Sept 29 in line with the global volatility and tepid regional investor sentiment on mounting worries that an unabated euro zone malaise would plunge the world into an economic crisis.

The FBM KLCI fell 2.34 points to 1,369.21 at 10am. Gainers trailed losers by 110 to 231, while 150 counters traded unchanged.

Volume was 153.50 million shares valued at RM165.05 million.

At the regional markets, Japan's Nikkei 225 fell 0.98% to 8,531.02, the Shanghai Composite Index lost 0.83% to 2,372.23, Singapore's Straits Times Index was down 0.62% to 2,684.43 and Taiwan's Taiex shed 0.10% to 7,139.68.

South Korea's Kospi rose 0.27% to 1,727.74.

Meanwhile, the Hong Kong stock market was closed this morning as typhoon Nesat made its way past the island country en route to south China.

BIMB Securities Research in a note Sept 29 said that moves to avert a Greek tragedy had staggered on, adding that with almost 50% of the member countries ratifying the EFSF, now many are saying that the proposed '440 billion may not be sufficient to convincingly lift Europe out of prevailing financial turmoil.

As a consequence, jittery returned to Wall Street with the Dow Jones Industrial Average dropped by almost 180 points, it said.

BIMB Research said that with uncertainty still hovering above the global financial markets, trading on regional bourses today would be affected after what was a mixed day yesterday, as many remained unconvinced of an easy way out for Europe.

'On the domestic side, we reckon some selling/profit taking to emerge after posting some upside over the last two days.

'Therefore, we brace ourselves for another volatile ride with the 1,350 seen as the immediate support,' it said.

On Bursa Malaysia, losers included Pulai Springs that fell 34.5 sen to 81.5 sen, HLFG and Cepco 24 sen each to RM10.32 and RM1.79, PPB 20 sen to RM16.10, Petronas Dagangan and Batu Kawan 16 sen each to RM15.70 and RM14.80, KLK 16 sen to RM21.14, Kossan 15 sen to RM2.55, CIMB 14 sen to RM6.87 and Genting PLANTATION []s 12 sen to RM6.72.

Compugates was the most actively traded counter with 23.8 million shares done. The stock edged up half a sen to 6.5 sen.

Other actives included HWGB, S P Setia, CIMB, Tanco, Asia EP, Borneo Oil and MUI.

Gainers included S P Setia, Jaya Tiasa, Subur Tiasa, QSR, Sapura Industrial, Genting, Tenaga, Paragon and Hartalega.