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NEW YORK: The S&P 500 posted its third straight week of gains on Friday Oct 21, lifted by optimism before this weekend's summit of European leaders and strong earnings from blue-chip stocks.
U.S. stocks rose in a broad rally to their highest levels since early August after a volatile week.
Important differences still separate major players France and Germany in solving Europe's debt crisis, but with two summits scheduled for next week, investors took an optimistic view that a resolution will soon be reached. Buying was also motivated by fear of missing a sharp move if basic agreements are reached over the weekend.
"I think there's at least better visibility on the path to resolution of the European sovereign crisis, and I think the markets are responding to that, even though there is not a specific concrete agreed-upon solution at this stage," said Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.
Consumer discretionary stocks were the best performing among S&P sectors after McDonald's Corp (MCD.N) reported higher-than-expected quarterly profit.
Shares of the fast-food restaurant chain jumped to a new high of $92.45 earlier. The stock ended up 3.7 percent at $92.32 and the S&P consumer discretionary sector .GSPD gained 2.8 percent.
The Dow Jones industrial average .DJI was up 267.01 points, or 2.31 percent, at 11,808.79. The Standard & Poor's 500 Index .SPX was up 22.86 points, or 1.88 percent, at 1,238.25. The Nasdaq Composite Index .IXIC was up 38.84 points, or 1.49 percent, at 2,637.46.
For the week, the Dow was up 1.3 percent and the S&P rose 1.1 percent, but the Nasdaq fell 1.1 percent.
Recent gains have pushed the S&P 500 to the top of its trading range between 1,230 and 1,250, where it has struggled to advance. Many investors are looking for progress in Europe before earnings can push equities much higher. Light volume suggests investors aren't entirely convinced of the move; just 7.91 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq on Friday, below this year's daily average of about 8 billion.
Equity markets have been susceptible to rapid and violent swings in recent weeks as traders latch on to varying headlines on Europe's debt crisis, leaving markets prone to volatility heading into the weekend.
Among industrial companies, Honeywell International Inc (HON.N) climbed 5.8 percent to $51.28 after it reported better-than-expected results and lifted its earnings outlook. The commercial aerospace company rose as much as 5.7 percent, its biggest gain since May 2010.
General Electric Co's (GE.N) third-quarter earnings met Wall Street's estimate, driven by strong demand from Brazil, Russia and China. But its shares fell 1.9 percent to $16.31 as investors worried about declining profit margins at GE's energy equipment division.
The S&P industrials index .GSPI advanced 1.9 percent.
According to Thomson Reuters data, of the 133 companies in the S&P 500 that have reported earnings through Friday, 68 percent have topped analysts' expectations.
On the NYSE, about eight stocks rose for every one that fell. On the NASDAQ, advancers beat decliners by a ratio of about 4 to 1. - Reuters
PARIS: European stocks rallied on Friday,, Oct 21 ending a roller-coaster week on a positive note as investors bet that measures to stop contagion from the Greek debt crisis will soon be unveiled at EU summits.
Cyclical and financial stocks led the rally, with miner Xstrata up 6.2 percent and bank Societe Generale up 5.6 percent.
"People are afraid of being caught on the wrong side before the meeting. It's a rumour-driven market, clearly not controlled by long-only guys and there's a risk of hangover next week," Kepler Capital Markets Patrice Perois said.
The FTSEurofirst 300 index of top European shares closed 2.5 percent higher at 978.13 points, the index's biggest one-day rise in two weeks, though volumes were relatively thin, signalling a lack of conviction from buyers.
The index eked out a gain of 0.3 percent on the week, adding to three weeks of brisk gains.
Despite Friday's renewed investor optimism over a solution to the euro zone debt crisis, senior European sources said Berlin and Paris were still at loggerheads on two core elements of the plan: how to scale up the European Financial Stability Facility (EFSF), and how to cut Greek debt.
The rift between Europe's two biggest powers has prompted leaders to announce an extra summit in the coming week. They will now meet twice, on Sunday and Wednesday.
"The bottom line is: even if they agree on a plan for the EFSF and the banks, it won't change the fact that Germany's growth is slowing and France has to slash its growth forecast, with its triple-A rating clearly in danger," Perois said.
Around Europe, UK's FTSE 100 index rose 1.9 percent, Germany's DAX index gained 3.6 percent and France's CAC 40 added 2.8 percent.
On the week, the CAC 40 lost 1.5 percent, underperforming the other European benchmark indexes, hurt by mounting concerns over France's ability to preserve its triple-A credit rating.
Standard & Poor's said it was likely to downgrade France and four other states if Europe slips into recession. It was the second agency this week to cast doubt on Paris' rating after Moody's on Tuesday.
"In this context of uncertainty, we favour U.S. and emerging equities and corporate debt," Christophe Brule, president and fund manager of Entheca Finance, a Paris-based asset manager with 140 million euros under management.
"It's hard to see how France will manage to keep its AAA rating, and hedge funds and other speculators will see in French debt a new playground -- the CDS on the 10-year bond -- while it has become too risky to bet against Italian and Spanish debt due to the ECB intervention." - Reuters
KUALA LUMPUR: Investors will sitting on their hands over the weekend as they focus on the summit of European leaders to resolve Europe's debt crisis. A decisive framework to reach basic agreements over the weekend would bolster investor confidence.
On Wall Street, the S&P 500 posted its third straight week of gains on Friday Oct 21, lifted by optimism before this weekend's summit and strong earnings from blue-chip stocks.
The Dow Jones industrial average was up 267.01 points, or 2.31%, at 11,808.79. The Standard & Poor's 500 Index was up 22.86 points, or 1.88%, at 1,238.25. The Nasdaq Composite Index was up 38.84 points, or 1.49%, at 2,637.46.
Reuters reported important differences still separate major players France and Germany in solving Europe's debt crisis, but with two summits scheduled for next week, investors took an optimistic view that a resolution will soon be reached. Buying was also motivated by fear of missing a sharp move if basic agreements are reached over the weekend.
At Bursa Malaysia, stocks to watch are TENAGA NASIONAL BHD , Maxis Bhd, TANJUNG OFFSHORE BHD , Daibochi Plastic and Packaging Industry Bhd and SILK Holdings Bhd.
Tenaga will announce its financial results for the fourth quarter ended Aug 31, 2011 but analysts expect it to record another quarter of losses due to the shortage of gas supply from Petroliam Nasional Bhd, forcing it to burn the more expensive oil and distillate.
RHB Research Institute had maintained its Underperform call on the power company with an unchanged indicative fair value of RM4.74 based on unchanged target CY12 price-to-earnings ratio of 12 times.
'Due to ongoing gas shortage from maintenance at Petronas' liquefied natural gas plants and delays for the Bekok C bypass, Tenaga will likely record a loss in 4Q, possibly close to that seen in 3Q (net loss RM460 million),' it said.
Tenaga, meanwhile, has proposed to issue RM5 billion in Islamic debt notes to finance the development of the 1,010 MW coal fired power plant in Manjung, Perak. The tenure is 28 years.
Meanwhile, Maxis expects significant gains from the provision of its 3G radio access network to U Mobile Sdn Bhd under the country's first landmark network sharing and alliance agreement for an initial period of 10 years.
This arrangement also included long-term evolution (LTE) sharing, depending on the availability of the spectrum and TECHNOLOGY . The collaboration was a milestone in the local telecommunications industry in the sharing of active telco systems and operating frequency spectrum.
Tanjung Offshore Bhd was awarded a RM27 million contract by Petronas Carigali Sdn Bhd to provide three offshore support vessels (OSVs) for up to two primary years.
Tanjung said its unit Offshore Services Sdn Bhd had been awarded the contract on Oct 20.
Daibochi Plastic and Packaging Industry Bhd's net profit fell 5.8% to RM4.54 million in the third quarter ended Sept 30, 2011 from RM4.82 million a year ago mainly due to a lower contribution from the property segment.
Its revenue declined 5.2% to RM67.66 million from RM71.42 million mainly due to the reduction in the sales in the packaging segment. Earnings per share were lower at 6.04 sen compared with 6.40 sen. It declared an interim dividend of 3.0 sen per share.
SILK's unit Jasa Merin (Malaysia) Sdn Bhd has been awarded a contract extension worth RM23.5 million by Petronas Carigali Sdn Bhd to provide one anchor handling tug supply vessel.
SILK said the primary three-year contract had been extended for another 12 months, which started on Oct 4. It expected the extension to contribute positively to its earnings for the financial year ending July 31, 2012.
PROTON HOLDINGS BHD  plans to collaborate with China's Hawtai Motor Group to set up a joint venture (JV) company there as part of Proton's strategy to make China as one of its major manufacturing hub, especially for left-hand-drive vehicles.
MELEWAR INDUSTRIAL GROUP BHD  has proposed a two-call rights issue of up to 151.17 million rights shares to raise RM27.46 million. The rights issue would be at an indicative issue price of RM1 per rights share on the basis of two rights shares for every three existing shares held on an entitlement date to be determined later.
BOSTON: General Electric Co reported an 18 percent profit rise that met Wall Street's expectations, helped by strong revenue growth in key foreign markets including Brazil, Russia and China.
The largest U.S. conglomerate said on Friday, Oct 21 it expects earnings to rise at a double-digit percentage rate next year, following peer United Technologies Corp in trying to assuage investors' fears about Europe's brewing debt crisis.
"We continue to successfully navigate a volatile global economy," Chief Executive Jeff Immelt said in a statement.
Investors took heart in the company's 16 percent growth in industrial equipment orders -- an important indicator of future revenue, and in the 25 percent rise in international sales. GE has been counting on strong demand in rapidly developing economies to offset weak U.S. and European demand.
"The revenue number was strong and the organic growth rate in industrial was strong," said Jack De Gan, chief investment officer at Harbor Advisory Corp in Portsmouth, New Hampshire. "Those are telling and they give us a little bit of a look into next quarter and beyond."
But GE shares declined 1.4 percent to $16.40 in premarket trading as some raised concerns that its profit margins were weaker than expected in the quarter, with a low tax rate helping the company to meet expectations.
"Margins missed our forecast and were down year on year in the four big industrial businesses," said Jeffrey Sprague, managing partner at Vertical Research Partners. "There is little or no operating leverage in GE's portfolio due to low priced equipment in backlog and R&D headwinds."
The report comes amid a wave of generally strong earnings reports from big U.S. manufacturers. Also on Friday, Honeywell International Inc reported a 45 percent profit rise. Fellow blue chips Caterpillar Inc and 3M Co will report next week.
Still, investors remain concerned whether Europe's crisis could drag down global demand by shaking the financial system.
"Possible concerns going forward are going to be related to Europe and what impact that may have, not just there but on global growth in general," said Perry Adams, vice president and senior portfolio manager at Huntington Private Financial Group in Traverse City, Michigan. "There's elevated uncertainty."
BUYS BACK BUFFETT STAKE
The world's biggest maker of jet engines and electric turbines reported third-quarter earnings attributable to common shareholders of $2.34 billion, or 22 cents per share, compared with $1.98 billion, or 18 cents per share, a year earlier.
The results included an 8-cent-per-share charge to buy back the preferred shares the company had sold to Warren Buffett's Berkshire Hathaway Inc during the financial crisis.
Buying back the Buffett stake, which carried a preferred dividend, will boost GE's annual earnings by 3 cents per share in the coming years.
Factoring out one-time items, profit came to 31 cents per share, meeting analysts' average forecast, according to Thomson Reuters I/B/E/S.
Revenue was little changed at $35.37 billion, above the $34.94 analysts had forecast.
GE's weak point on profit remained its big energy infrastructure division, where earnings slipped 9 percent despite a 30 percent rise in revenue, reflecting pricing pressure on wind turbines. The company has said that business will resume profit growth next year.
"That's bottoming out. It will start to turn up probably in the next quarter but definitely in 2012," said Harbor's De Gan. "It's a margin issue. Margins have contracted because wind is just so terrible."
Before today, GE shares had fallen about 9 percent so far this year, while the Dow Jones industrial average has declined less than 1 percent. - Reuters
NEW YORK: McDonald's Corp reported a higher-than-expected quarterly profit after new menu items and renovations helped lift sales at established restaurants around the world in September, and its shares rose nearly 3 percent on Friday, Oct 21.
The world's biggest restaurant company has been benefiting from improving food quality and selection, and taking market share from rivals.
By adding Dollar Menu items and introducing high-margin beverages such as coffee and fruit smoothies, McDonald's has broadened its appeal beyond the young men who account for the biggest share of sales at most other fast-food chains.
The company also is modernizing restaurants in Europe and the United States, which is boosting sales and making operations more efficient.
Sales at established restaurants rose 6.6 percent in September, while analysts on average expected a 3.6 percent increase.
U.S. same-restaurant sales rose 5 percent, while Europe was up 6.9 percent and Asia/Pacific, Middle East and Africa had a 6.8 percent increase.
Strong results from Europe, especially Germany, helped allay fears that austerity measures would pummel demand in the region, said Lazard Capital Markets analyst Matthew DiFrisco.
McDonald's "continues to evolve into more of a staple than a discretionary brand," said DiFrisco, who added that the company also turned in solid results from the United States.
Third-quarter net income rose to $1.51 billion, or $1.45 per share, from $1.39 billion, or $1.29 per share, a year earlier.
Analysts on average forecast $1.43 a share, according to Thomson Reuters I/B/E/S.
Earnings per share rose more than 12 percent, but were up only about 6 percent excluding foreign currency benefits.
Revenue rose 13.8 percent to $7.17 billion during the quarter. Sales at established restaurants were up 5 percent globally, with increases of 4.4 percent in the United States, 4.9 percent in Europe and 3.4 percent in the Asia/Pacific, Middle East and Africa region.
The company forecast a 4 percent to 5 percent increase in sales at established restaurants in October.
DiFrisco said the company nudged up its forecast for food and other costs, but added that this was no cause for concern.
"They are managing their costs and margins in an environment where commodity costs are still heady," he said.
McDonald's shares were up 2.8 percent at $91.53 in early trading on the New York Stock exchange. - Bernama
KUALA LUMPUR: Daibochi Plastic and Packaging Industry Bhd's net profit fell 5.8% to RM4.54 million in the third quarter ended Sept 30, 2011 from RM4.82 million a year ago mainly due to a lower contribution from the property segment.
It said on Friday, Oct 21 this was in line with the lower percentage of completion recognised for the current reporting period as compared to a year ago.
Daibochi said its revenue declined 5.2% to RM67.66 million from RM71.42 million mainly due to the reduction in the sales in the packaging segment. Earnings per share were lower at 6.04 sen compared with 6.40 sen. It declared an interim dividend of 3.0 sen per share.
For the nine-month period, earnings rose nearly 1% to RM14.16 million from RM14.03 million in the previous corresponding period.
However, the group's profit before tax of RM18.00 million decreased by 1.9% from RM18.36 million due to a decline in the packaging segment. Profit from the property segment more than doubled to RM2.96 million from RM1.16 million.
Revenue rose 8.4% to RM208.52 million from RM192.28 million due to increased sales in both the packaging and property development segments.
KUALA LUMPUR: Maxis Bhd is providing its 3G radio access network to U Mobile Sdn Bhd under the country's first landmark network sharing and alliance agreement for an initial period of 10 years.
The companies said in a joint statement on Friday, Oct 21 this arrangement also included long-term evolution (LTE) sharing, depending on the availability of the spectrum and TECHNOLOGY .
Maxis and U Mobile said the collaboration was a milestone in the local telecommunications industry in the sharing of active telco systems and operating frequency spectrum.
They added the collaboration extended beyond the existing physical infrastructure sharing which has been practised for long time between operators in the industry.
Maxis said the collaboration would provide it with a significant new source of revenue and also enhance the utilisation of its network in areas which were currently underused.
Maxis chief executive officer, Sandip Das said: 'As an industry leader in the country, this collaboration is significant for Maxis as it reflects our commitment to promote non-duplication of infrastructure.
'Active sharing results in greater cost savings which in turn translates to increased direct revenue for both companies. More importantly it allows us to focus on providing innovative services and giving more value to customers, while having the benefit of doing all these in a more environmentally friendly manner,' he said.
Sandip said over 54% of Maxis' base stations sites was shared with other operators.
As for U Mobile, this collaboration enabled it to speed up its 3G network rollout by four to five times while achieving significant cost-savings through network sharing with Maxis.
However, the shared locations would exclude urban market centres, such as Klang Valley, Penang, Johor Bahru and Ipoh, where U Mobile is committed to continue providing high speed mobile broadband services.
U Mobile chief executive officer Dr Kaizad B. Heerjee said this active radio access network with Maxis set a new benchmark in the industry.
'This mutually beneficial partnership with Maxis will accelerate the expansion of our current 3G footprint to more than 4,000 3G sites in Malaysia by early-2013,' he said.
KUALA LUMPUR: Trades keyed in on select FBM KLCI stocks by a broker led to the index plunging 70 points late in the afternoon session on Friday, Oct 21.
However, the index recovered and closed 0.16% or 2.35 points lower at 1,438.83, weighed by losses at select blue chips.
An official from Bursa Malaysia Securities Bhd in an e-mailed statement confirmed that the drop of the index at 4.41pm on Friday was due to trades keyed in by the said broker.
Among the stocks that fell steeply before paring down losses were KLK, DiGi and PPB.
On Bursa Malaysia, gainers edged losers by 366 to 323, while 278 counters traded unchanged. Volume was 1.25 billion shares valued at RM1.09 billion.
Regional markets closed mixed, as most pared down losses and some even closed in positive territory, while European shares rose on hopes decisions to resolve the region's debt crisis would emerge from meetings held by European leaders.
The Shanghai Composite index closed 0.60% lower at 2,317.28 and Japan's Nikkei 225 shed 0.04% to 8,678.89.
Meanwhile, South Korea's Kospi rose 1.84% to 1,838.38, Singapore's Straits Index gained 0.68% to 2,712.41 and Hong Kong's Hang Seng edged up 0.24% to 18,025.72.
Among the major losers on Bursa Malaysia, Genting PLANTATION s fell 28 sen to RM7.30, Genting down 25 sen to RM9.75, AIC 19 sen to RM1.13, MAHB 18 sen to RM5.52, Parkson 14 sen to RM5.36, HLFG and Malayan Flour Mills down 12 sen each to RM11.28 and RM7.33, UOA Development 11 sen to RM1.59, PPB 10 sen to RM16.70 and Tenaga nine sen to RM5.46.
Gainers included BAT that rose 84 sen to RM44.44, Tasek 25 sen to RM7.80, CMSB 17 sen to RM2.09, UMS 15 sen to RM1.78, Faber 14 sen to RM1.74, Fiamma 13.5 sen to RM1.13, while BLD Plantations and Cocoaland added 12 sen each to RM6.32 and RM2.05.
The actives included TMS, IRCB, GPRO, Harvest Court, MAA and Zelan.
KUALA LUMPUR: SILK Holdings Bhd's unit Jasa Merin (Malaysia) Sdn Bhd has been awarded a contract extension worth RM23.5 million by Petronas Carigali Sdn Bhd to provide one Anchor Handling Tug Supply Vessel.
In a filing on Friday, Oct 21, SILK said the primary three-year contract had been extended for a further period of 12 months commencing 4 October 2011.
It said the contract extension was expected to contribute positively to its earnings for the financial year ending July 31, 2012.
KUALA LUMPUR: MELEWAR INDUSTRIAL GROUP BHD  has proposed a two-call rights issue of up to 151.17 million rights shares to raise RM27.46 million.
It said on Friday, Oct 21 the rights issue would be at an indicative issue price of RM1 per rights share on the basis of two rights shares for every three existing shares held on an entitlement date to be determined later.
However, its substantial shareholders Melewar Equities (BVI) and Melewar Khyra Sdn Bhd were seeking an exemption from undertaking a mandatory take-over offer due to the increase in their interests in the voting shares following the rights issue.
Melewar Industrial Group said the proposed rights issue was the most appropriate to raise funds while potentially enhancing the company's capital base.
It said the corporate exercise would recapitalise the shareholders' equity base and enable the group to raise the necessary funds to meet its working capital requirements.
The company would also be able to raise funds without incurring interest expenses as compared to bank borrowings.
Based on the indicative issue price of RM1, the indicative first call of 50 sen per rights share, the theoretical ex-rights price of the shares was 52 sen, a discount of 3.85% to the five-day weighted average market price of the shares of 54 sen.
KUALA LUMPUR: PROTON HOLDINGS BHD  plans to collaborate with China's Hawtai Motor Group to set up a joint venture (JV) company there as part of Proton's strategy to make China as one of its major manufacturing hub, especially for left-hand-drive vehicles.
Proton said on Friday, Oct 21 said its unit, Proton Marketing Sdn Bhd, had signed the memorandum of understanding to invest in product development and vendor sourcing. It would also look into joint designing and development cost sharing.
'The JV will also be responsible for vendor sourcing and component development work with local Chinese vendors. This will allow Proton to tap into the competitive cost base vendors in China and explore the potential of cross-supplying components from local Malaysian vendors to China and vice-versa,' it said.
The MoU was signed between Proton group managing director, Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir and Hawtai executive president Hou Haijing. The signing was witnessed by Prime Minister Datuk Seri Najib Tun Razak, China senior government officials in Nanning.
Proton said the collaboration would be for 10 years once the definitive agreement was signed.
'The MoU and potential of a long term relationship with Hawtai is in line with efforts to establish China as one of Proton's major manufacturing hubs especially for left-hand-drive vehicles,' it said.
KUALA LUMPUR: DAYANG ENTERPRISE HOLDINGS BHD 's unit has secured a contract extension from Muphy Sabah Oil Co Ltd and Murphy Sarawak Oil Co Ltd to provide topside major maintenance services for Murphy Production Operations.
In a filing Friday, Oct 21, Dayang said the value of the contract secured by its unit Dayang Enterprise Sdn Bhd ranged approximately RM50 million to RM100 million over the duration of the contract.
It said the contract would be effective from Nov 19, 2011 until Nov 18, 2012.
Dayang however said that the contract was a "call-up contract" made up of work orders, which would be awarded at the discretion of Murphy during the duration of the contract.
It said the value of the work orders were based on the contract schedule of rates.
Dayang said the contract extension was expected to contribute positively to its for the financial year ending Dec 31, 2011 and the subsequent financial periods within the duration of the contract extension.
KUALA LUMPUR: TANJUNG OFFSHORE BHD  has been awarded a contract worth RM27 million by Petronas Carigali Sdn Bhd for the provision of three units of offshore support vessels (OSVs) for up to two primary years.
In a statement Friday, Oct 21, Tanjung said its unit Offshore Services Sdn Bhd had been awarded the contract on Oct 20.
It said the contract for the three units of OSVs was for a primary period of between three months to two years effective October and November 2011, respectively.
'In the event the contract is renewed during the option period, the contract charters will be determined at the then charter rate,' it said.
Tanjung said the contract was expected to contribute positively to its earnings for the financial years ending Dec 31, 2011 to Dec 31, 2013.
KUALA LUMPUR: RAM Rating Services Bhd has reaffirmed the AAA rating of Tresor Assets Bhd's RM89 million tranche D senior bonds, with a stable outlook.
It said on Friday, Oct 21 the stable outlook reflected its view that the performance of Tranche D's securitised loan pool (the portfolio) would remain satisfactory throughout the transaction's tenure. However, the RM11 million tranche D subordinated bonds were not rated.
Tresor is a special-purpose vehicle set up to undertake a RM1.5 billion funding programme involving receivables purchased from RCE Marketing Sdn Bhd.
RCE Marketing is a unit of RCE CAPITAL BHD  which provides personal loans through strategic tie-ups with cooperatives.
Tranche D is the 4th issuance (out of nine issued to date) under this RM1.5 billion programme.
The Tranche D Bonds are secured against a pool of personal loans originated by Koperasi Wawasan Pekerja-Pekerja Bhd (Kowaja), and feature loans with tenures of up to 10 years.
As at end-June 2011, RM60 million of the Tranche D senior bonds remained outstanding, supported by RM35.34 million of outstanding receivables and RM60.79 million of cash and permitted investments that correspond to a collateralisation level of 160.22%.
'The reaffirmation of the rating is premised on the available credit enhancement provided by the overcollateralisation level, available excess spread, structural features of the transaction and performance of the portfolio,' it said.
As at June 30, 2011, the receivables pool recorded a cumulative net default rate of 5.23% (as a percentage of the original principal balance on the purchase date), compared to RAM Ratings' base-case assumption of 6.16%.
The cumulative prepayment rate stood at 53.52%, translating into an average monthly prepayment rate of 1.69% which is in line with our assumptions.'' As at end-June 2011, the portfolio contained 2,757 loans, with a weighted-average seasoning of 33 months; the average loan size worked out to RM12,817 with a weighted-average remaining term-to-maturity of 78 months.
KUALA LUMPUR: Share of WCT BHD  rose to a high of RM2.46 on Friday, Oct 21 as analysts were positive on the outlook for the company following its 468-acre acquisition in Rawang, Selangor and its strong order book.
At 3.23pm, it was up seven sen to RM2.40. There were 3.04 million shares done at prices ranging from RM2.34 to RM2.46
WCT had has acquired the 468 acres in Rawang for RM38.4 million, which UOB Kay Hian Malaysia Research said implied land cost of RM1.88 psf, which was deemed fair even if converted to residential title assuming a 15%-20% premium.
The research house said the site would be for township development, focusing on affordable houses. It said the site could be next to the North South Expressway and about 10km north of the Rawang toll exit.
UOB Kay Hian Research said this acquisition would fit into WCT's plan to expand its landbank and tap on the mass affordable homes.
It said the estimated gross development value (GDV) and product mix are too early to determine but judging from the relatively low land cost, it expected that the management was not in a hurry to roll out the development.
'WCT's existing CONSTRUCTION  orderbook stands at RM2.4 billion with a tender book of RM4 billion, consisting of two highways in Oman (RM2 billion), a five-star hotel in Bahrain (RM1 billion) and the remainder RM1 billion comes from domestic tenders.
'So far, WCT has won RM115 million worth of earthwork job for Vale, and we understand there is still RM800 million to RM900 million worth of earthwork contracts for the first 3,000 acres of land. Last but not least, WCT has two on-going letters of intent, namely, the Sabah Hospital (RM200 million) and KK Dam (RM2.8 billion),' it said.
UOB Kay Hian Research said there were no changes to its net profit forecasts of RM160 million and RM184 million for FY11 and FY12 respectively.
KUALA LUMPUR: The Energy Commission said the bidding process for the 1,000 MW coal-fired power plant in Tanjung Bin, Johor, had to be carried out five years ahead of the commercial operations in 2016 due to the large scale of the plant.
It said on Friday, Oct 21 the development and CONSTRUCTION  of the power plant required a minimum of five years on a brownfield site and seven years on a greenfield site.
'Greenfield development will require a longer period to undertake the full environmental impact assessment, detailed site identification and assessment including public consultation,' it said in a statement.
Other factors were the site preparation, reclamation and soil investigation and the construction of new transmission and interconnection facilities, coal handling and other common facilities, it said.
The commission had sought to clarify DAP Member of Parliament for Petaling Jaya Utara, Tony Pua's statement on the project, which had appeared in the local newspapers.
'Based on the projected economic growth, failure to award such a project on time to achieve commercial operation in early 2016 will result in potential brownouts in the country. Hence, the brownfield site option was chosen for the bidding process,' it said.
The project to develop and operate the plant was awarded to Malakoff Corporation Bhd's subsidiary Transpool Sdn Bhd.
The commission said there was a competitive restricted bidding process which was held from Nov 15, 2010 to April 15, 2011. The project was crucial to meet Peninsular Malaysia's power demand in 2016 after the submarine cable plan lining to the Bakun hydroelectric project was cancelled.
'The evaluation was conducted solely based on the technical and commercial aspects of the bid which, among other, include the proposed tariff for the entire duration of the 25-year concession,' it said.
It added the tariff and concession period had already been determined through the competitive bidding process.
KUALA LUMPUR: Losses at blue chips including at Genting and Tenaga weighed down the FBM KLCI at the mid-day break on Friday, Oct 21 as most key regional markets slipped into the red, ahead of a meeting by European policymakers this weekend to resolve the eurozone debt crisis.
Tenaga fell after Maybank IB Research lowered its target price for the stock to RM5.90 ''(from RM6.60) and said the company's upcoming 4QFY11 results scheduled on 28 Oct would be very weak due to insufficient gas supply that necessitates using oil and distillates as a fuel source to generate power (a significantly more expensive and money losing proposition).
The FBM KLCI shed 1.08 points to 1,440.10 at the mid-day break. Losers edged gainers by 262 to 254, while 264 counters traded unchanged. Volume was 626.79 million shares valued at RM446.14 million.
The ringgit weakened 0.87% to 3.1565 versus the US dollar; crude palm oil futures for the third month delivery gained RM9 per tonne to RM2,875, crude oil rose 22 cents per barrel to US$86.29 while gold was up US$5.70 an ounce to US$1,626.50.
Asian investors remained jittery after European leaders said they did not expect Sunday's meeting to give an all-cure solution to the euro zone's debt problems, with regional leaders still sharply divided over how to strengthen a euro zone rescue fund, according to Reuters.
France and Germany said in a joint statement on Thursday that the leaders will discuss in detail a comprehensive solution to the euro zone crisis at the summit on Sunday but no decisions will be adopted before a second meeting to be held by Wednesday at the latest, it said.
At the regional markets, Japan's Nikkei 225 fell 0.20% to 8,665.16, Hong Kong's Hang Seng Index shed 0.02% to 17,978.77, the Shanghai Composite Index lost 0.58% to 2,317.96 and Taiwan's Taiex was down 0.26% to 7,225.80.
Meanwhile, South Korea's Kospi pared down its gains and was up 0.70% to 1,817.69 and Singapore's Straits Times Index was up 0.41% to 2,705.08.
On Bursa Malaysia, Genting PLANTATION s fell 20 sen to RM7.38, Petronas Dagangan down 12 sen to RM16.16, Genting lost 11 sen to RM9.89, Nestle and PPB 10 sen each to RM49.20 and RM16.70, Malayan Flour Mills nine sen to RM7.36, Ta Ann, Southern Steel and MISC eight sen each to RM4.66, RM1.97 and RM6.62 respectively, while Tenaga fell seven sen to RM5.48.
Among the gainers this morning, BAT added 88 sen to RM44.48, Tasek 33 sen to RM7.88, Faber 26 sen to RM1.86, Dutch Lady 20 sen to RM19.20, Cepco 18 sen to RM1.91, CI Holdings 12 sen to RM4.90, while United Plantations and MSM added 10 sen each to RM17.30 and RM5.04.
The actives included TMS, IRCB, GPRO, MAA, JCY and AirAsia.
KUALA LUMPUR: Shares of Tenaga Nasional fell on Friday, Oct 21 on worries about an early resolution to its gas supply shortage which could push it deeper into the red in the fourth quarter ended Aug 31, 2011.
Tenaga fell eight sen to RM5.47 with 445,400 shares done.'' The FBM KLCI lost 1.99 points to 1,439.19. Turnover was 542.78 million shares valued at Rm347.91 million.
RHB Research Institute maintained its Underperform recommendation with unchanged indicative fair value of RM4.74 based on unchanged target CY12 PER of 12 times.
'Due to ongoing gas shortage from maintenance at Petronas' LNG plants and delays for the Bekok C bypass, Tenaga will likely record a loss in 4Q, possibly close to that seen in 3Q (-RM460 million),' it said.
The research house said this was a result of Tenaga receiving only an average of 950 mmscfd of gas in 4Q, just marginally higher than the average 940 mmscfd received in 3Q.
'Whether Tenaga meets our FY11 earnings forecast of RM708 million (consensus: RM750 million), mainly depends on the full extent of unscheduled maintenance by Petronas in 4Q,' it said.
Tenaga reported a core net profit of RM801 million for 9MFY11. The initial guidance from Petronas was 17 days of scheduled maintenance.
'Recall in 3Q, Tenaga incurred an additional RM1.3 billion in fuel costs, due to 61 days of gas supply disruption (of which 51 days were due to unscheduled maintenance),' it said.
KUALA LUMPUR: The FBM KLCI extended its losses at mid-morning on Friday, Oct 21 as investors wary of the eurozone debt crisis took profit ahead of the weekend meeting of European leaders for signs of progress in resolving the region's debt crisis.
Asian shares were mixed, with most bourses gingerly clinging on to mild gains in thin trade.
The FBM KLCI slipped 1.84 points to 1,439.34 at 10am, weighed by losses at select blue chips.
Gainers edged losers by 173 to 167, while 196 counters traded unchanged. Volume was 358.72 million shares valued at RM161.34 million.
At the regional markets, Japan's Nikkei 225 edged up 0.08% to 8,689.04, Hong Kong's Hang Seng Index up 0.09% to 17,999.88, South Korea's Kospi jumped 1.45% to 1,831.34 and Singapore's Straits Times Index added 0.46% to 2,706.38.
Meanwhile, the Shanghai Composite Index shed 0.24% to 2,325.66 and Taiwan's Taiex fell 0.28% to 7,224.10.
European leaders said they did not expect Sunday's meeting to give an all-cure solution to the euro zone's debt problems, with regional leaders still sharply divided over how to strengthen a euro zone rescue fund, according to Reuters.
France and Germany said in a joint statement on Thursday that the leaders will discuss in detail a comprehensive solution to the euro zone crisis at the summit on Sunday but no decisions will be adopted before a second meeting to be held by Wednesday at the latest, it said.
BIMB Securities Research in a note Oct 21 said that with Greece already choking on declining liquidity, the European leaders were still deliberating on the finer details of the bailout fund now estimated totalling '1.3 trillion.
Reassurance that more details would be revealed over the next 2 weeks had calmed the nervy investors as Wall Street managed to reverse earlier losses to close 37 points higher despite a sea of red over in Europe, it said.
Asian bourses also saw persistent profit taking as most ended in negative territory yesterday, it said.
'Domestically, the FBM KLCI was rather resilient with some late buying support ending the session 9 points down at 1,441.18.
'We reckon selling may be prevalent again taking cue from the shaky regional bourses. Next support level is seen at 1,430 level,' it said.
Meanwhile, Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Oct 21 said due to the US markets' mixed tone last night, there may be a shaky tone for the local index ahead of the weekend.
'Some profit taking activities could keep the local market softer today,' he said.
On Bursa Malaysia, PPB was the top loser at mid-morning and fell 22 sen to RM16.58; Genting PLANTATION s fell 10 sen to RM7.39, Petronas Dagangan and DiGi lost 18 sen each to RFM16.10 and RM31.42, MISC and HLFG eight sen each to RM6.62 and RM11.32, Tradewinds Plantations six sen to RM3.19, Ajiya and Genting five sen each to RM1.63 and RM9.95, while Konsortium fell four sen to RM1.22.
Gainers included BAT, United Plantations, YTL Cement, WCT, Bursa, Dolomite, Airasia, Bina Goodyear and Notion Vtec.
The actives included TMS, IRCB, Ingenuity Solutions, Tejari, JCY and YGL.
KUALA LUMPUR: OSK Research has downgraded the auto sector from neutral to underweight following the impact from the severe floods in Thailand and it also trimmed the earnings for UMW and Tan Chong.
It said on Friday, Oct 21 the prolonged flood situation in Thailand's Ayutthaya and Pathumthani province has enforced an extended shut down until Oct 28.
'Autoparts production from the flood stricken areas accounts for 10% of the country's total production and we do not foresee this heavily impacting the industry over the mid-longer term given the availability of alternative suppliers in other areas not affected by the flood in Thailand,' it said.
OSK Research said over the longer term, it sees Malaysia benefiting on higher investments in the sector considering that Indonesia too is a natural disaster prone area.
'What is concerning to us is the possibly of seeing margin compression next year for automakers which are heavily relying on completely knocked down (CKD) imports from Thailand following the populist move to increase the minimum wage policy by the new ruling Government,' it said.
The research house trimmed earnings for UMW and Tan Chong by 11%-17% for FY12 and FY13 on expectations that CKD parts could increase by 10%-15% coupled by the depreciating ringgit versus the yen and US dollar.
OSK Research said it maintained its Sell and Fair Value recommendation.
'Noting that our larger caps are all Sells now; we downgrade our sector recommendation to Underweight from Neutral,' it said.
KUALA LUMPUR: TH PLANTATION s Bhd's shares advanced on Friday, Oct 21 after its earnings rose 53.8% to RM33.12 million in the third quarter ended Sept 30, 2011 from RM21.53 million a year ago as it benefited from higher prices for crude palm oil, palm kernel and fresh fruit bunches.
At 9.05am, TH Plantations added five sen to RM2.04 with 25,500 shares traded.
Its revenue increased 37.7% to RM115.97 million from RM84.22 million. Earnings per share were 6.51 sen compared with 4.41 sen.
For the nine-month period, its earnings jumped 85.6% to RM87.12 million from RM46.93 million while revenue increased by 27.9% to RM303.73 million from RM237.44 million.
KUALA LUMPUR: BRITISH AMERICAN TOBACCO (M)  Bhd's shares rose in early trade on Friday, Oct 21 after it declared an interim dividend tax exempt of 60 sen a share compared with 64 sen a year ago, as its earnings rose 3.3% to RM176.27 million in the third quarter ended Sept 30 from RM179.65 million.
At 9.05am, BAT was 12 sen to RM43.72 with 5,600 shares traded.
Its revenue increased by to RM1.104 billion from RM993.59 million, earnings per share were 61.70 sen compared with 59.80 sen.
Maybank IB Research in a note Oct 21 said that BAT's 9M11 recurring net profit of RM551 million (+0.5% y-o-y), post stripping off a one-off restructuring charge of RM12 million, accounted for 73.9% and 77.5% of our and consensus full-year forecasts respectively.
'Post the tax hike relief, we lower our 2011 total industry volumes (TIV) decline forecast from -5% to -2.5%.
'We continue to like BAT for its resilient premium market share but industry environment remains challenging. Maintain Hold at a higher DCF-based TP of RM45.10 (from RM43.30),' it said.
KUALA LUMPUR: WCT BHD  shares rose in early trade on Friday, Oct 21 after Maybank IB Research maintained its Buy rating on the stock and said WCT's recent acquisition of a 189.3 ha piece of land in Rawang would positively allow it to diversify its property development business away from Klang, to an upcoming and growing piece of real estate in northern Klang Valley.
At 9.30am, WCT rose 12 sen to RM2.45 with 360,200 shares traded.
In a note Oct 21, Maybank Research said there is no indicative GDV just yet for WCT's latest property development, adding that the research house's earnings forecasts for WCT were unchanged for now.
'WCT remains a Buy with an unchanged SOP-based target price of RM3.08 (13x 2012 PER plus 20sen value enhancement from the KLIA IC2 concession),' said Maybank Research.
KUALA LUMPUR Maybank Investment Bank Research has reduced TENAGA NASIONAL BHD 's target price from RM6.60 a share to RM5.90.
It said on Friday, Oct 21 that it believes the upcoming 4QFY11 results to be released on Oct 28, will be very weak.
Maybank Research said was due to insufficient gas supply, it had to use oil and distillates as a fuel source to generate power, which is a significantly more expensive and money losing proposition.
'We maintain our HOLD call, with a lower target price of RM5.90 a share (from RM6.60 a share) after imputing the impact of gas supply issue. We favour the PER methodology and continue to apply Tenaga's long term average of 13 times on FY2012 forecast earnings to derive our target price,' it said.
The research house estimated Tenaga will report a loss of RM230 million for 4QFY11, which is slightly better than RM478 million core net loss achieved in 3QFY11.
'Gas supply disruption will force Tenaga to burn oil and distillates, and we estimate this to add RM1.2 billion to cost,' it said.
Maybank Research said its new target price of RM5.90 is based on Tenaga's historical average PER of 13 times (the valuation basis is unchanged).
'We think this is a fair valuation given that our secondary valuation method of price-to-book is below 1.0 times. It is very rare for a monopolistic utility company to be trading below book, and therefore that's where we see supporting intrinsic value in Tenaga,' it said.
KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) anticipates that a cautious mood will likely prevail on the Malaysian bourse on Friday, Oct 21.
It said on the chart, the benchmark FBM KLCI will probably swing sideways with a slight positive bias ahead but may struggle to overcome the immediate resistance level of 1,445.
'Essentially, sentiment is expected to be clouded by mixed signals from abroad. While there are talks that a larger rescue fund size is in the making to settle the European sovereign debt crisis, news that a subsequent meeting would now be held next Wednesday after a scheduled summit on this Sunday could suggest that a comprehensive plan may not be reached anytime soon,' it said.
HDBSVR said'' against the uncertain outlook, Gamuda and MMC shares will possibly be in the limelight on news their consortium is the only Malaysian company out of five parties which have been pre-qualified to bid for the MRT tunneling project.
KUALA LUMPUR: CIMB Equities Research has a technical buy on Adventa at RM1.67 at which it is trading at a FY12 price-to-earnings of 12.8 times and price-to-book value of 1.1 times.
It said on Friday, Oct 21 Adventa broke out of its bullish wedge pattern on Thursday. The run-up also lifted prices above its 50-day SMA.
'Looking at the chart, we think there is still room to the upside. Prices are likely to charge towards RM1.80 and RM1.93 in the near term. If these levels are taken out, the 200-day SMA (at RM2.08) will be the following target,' it said.
CIMB Research said the technical landscape is improving. MACD signal line has bounced off its lows while RSI has also hooked upward.
It added that risk takers may start to nibble now. However, always put a stop at below the RM1.60-1.54 levels, just in case.
KUALA LUMPUR: ECM Libra Investment Research said BRITISH AMERICAN TOBACCO (M)  Bhd's 3QFY11 results came in within expectations, with core net profit increased by 3.3% y-o-y to RM176.3 million mostly due to trade loading in anticipation of an excise duty hike which did not materialise.
BAT declared a third interim net dividend of 60.0 sen per share.
In a note Friday, Oct 21, ECM Libra Research said BAT was fully valued at current valuation.
'Nonetheless, CY12 dividend yield of 5.2% remains attractive. Maintain Hold call.
'RM43.80 target price is unchanged based on a DCF valuation (WACC of 7.8%, longterm growth rate of 1.5%),' it said.
KUALA LUMPUR: CIMB Equities Research has a technical sell on Media Prima at RM2.37 at which it is trading at a FY12 price-to-earnings of 11.3 times and price-to-book value of 1.8 times.
It said on Friday, Oct 21 the recent rebound may have exhausted. Prices hit the 50% FR level and the bears have since re-surfaced.
It added that even if a stronger rebound were to take place, gains will likely cap at the 50-day and 200-day SMAs, at RM2.50 and RM2.62 respectively.
'Our strategy here is to unload on strength, especially near the stipulated resistance levels. On the downside, once the RM2.31 low is infringed, expect the next downleg to drag prices towards RM2.18 and RM2.00,' it said.
CIMB Research said indicators are showing signs of exhaustion. MACD histogram bars are rising at a slower pace while RSI has also hooked downward.
KUALA LUMPUR: CIMB Equities Research has a technical sell on UEM Land Holdings at RM1.94 at which it is trading at a FY12 price-to-earnings of 29.8 times and price-to-book value of 1.9 times.
It said on Friday, Oct 21 UEM Land had a good run after prices broke out of its wedge pattern. It hit a high of RM2.06 before consolidating near its 50-day SMA.
'Looking at the chart, we think this upswing is likely over for now as the rebound has reached the 38.2% FR level. Indicators are showing easing signs. MACD histogram bars are rising at a slower pace while RSI has hooked downward,' it said.
CIMB Research said traders should do well selling into strength. However, put a buy stop at RM2.10, just in case. On the downside, a break below its 30-day SMA (at RM1.85) will drag prices towards RM1.73 and RM1.62.
SEATTLE: Microsoft Corp's quarterly profit rose 6 percent, meeting Wall Street's modest expectations, helped by strong sales of its popular Office applications package, but limited by only slight gains from its flagship Windows operating system, Reuters reported on Thursday, Oct 20.
Windows sales edged up only 2 percent from the year-ago quarter, in line with limp personal computer sales last quarter. While the rise in Windows sales broke the streak of three straight quarters of declines, it fell short of some analysts' hopes.
"We still had Windows miss again, although not by nearly as much as it has the last couple quarters," said Brendan Barnicle, an analyst at Pacific Crest Securities.
"They were just in line on EPS, which typically Microsoft beats," said Barnicle. "Q1 is seasonally not a big quarter for Microsoft, and this was no exception."
The brightest spot for the world's largest software company was an indication that its perennially money-losing online services unit -- including the MSN Internet portal and Bing search engine -- may have turned a corner.
The unit lost $494 million in the quarter, the lowest loss in the last seven quarters, slowing the flood of red ink that has cost Microsoft more than $5 billion since it launched Bing in mid-2009, as it invests heavily to catch up with Google Inc .
Microsoft's shares, which have traded in the $20-$30 range for the last decade, fell 0.7 percent in after-hours trading, to $26.85. They closed at $27.04 on the Nasdaq.
The Redmond, Washington company reported fiscal first-quarter net profit of $5.74 billion, or 68 cents per share, up from $5.41 billion, or 62 cents per share, a year ago.
That met Wall Street's average estimate, according to Thomson Reuters I/B/E/S. It is the first time in 10 quarters that Microsoft has not exceeded the average estimate.
Overall sales rose 7 percent to $17.37 billion, helped by Office, which remains popular with businesses even in the difficult global economy.
The Office unit posted an 8 percent gain in sales to $5.6 billion, making it Microsoft's biggest-selling and most profitable unit.
The server and tools unit, which sells the server software behind the datacenters enabling "cloud" or Internet-based computing, rose 10 percent to $4.2 billion, but even that fell short of some analysts' expectations for the fast-growing area of the TECHNOLOGY  market.
The entertainment and devices unit posted a 9 percent gain in sales, helped by the Xbox, which remains the most popular game console in the United States.
Microsoft said its $8.5 billion deal to buy online chat service Skype, which closed last week, would add about $600 million to expenses this fiscal year. The company now estimates costs of $28.6 billion to $29.2 billion for fiscal 2012, which started July 1.
Microsoft now has a cash hoard of $57 billion, most of which is parked overseas. Faster-growing rival Apple Inc. - Reuters
NEW YORK: Stocks ended with modest gains on Thursday, Oct 20 shifting back and forth on incremental developments in Europe where leaders sought to reassure investors that a solution to the debt crisis would come soon.
The S&P has alternated gains and losses for seven days at the close and has kept to a tight range as markets watch for the latest news out of Europe.
Germany and France released a statement on Thursday saying leaders would now hold two summits to discuss the debt crisis, with a solution in place by Wednesday's second meeting.
"The statement was enough for us to come off the lows, but there is still a long way to go," said Robert Pavlik, chief market strategist at Banyan Partners LLC in New York.
Market anxiety remained elevated. The CBOE Volatility Index VIX .VIX, Wall Street's "fear gauge," rose more than 1 percent to near 35, extending gains after rising nearly 10 percent on Wednesday.
Supporting the market, U.S. economic data showed factory activity in the U.S. Mid-Atlantic region rebounded in October while a separate report showed U.S. jobless claims fell last week.
On the negative side, other data showed a drop in sales of existing-homes last month and only a small rise in a gauge of future growth.
Financial and materials stocks were the day's top gainers. The S&P 500 financial sector index .GSPF rose 1.8 percent and materials .GSPM climbed 1 percent.
The Dow Jones industrial average .DJI ended up 37.16 points, or 0.32 percent, at 11,541.78. The Standard & Poor's 500 Index .SPX was up 5.51 points, or 0.46 percent, at 1,215.39. The Nasdaq Composite Index .IXIC was down 5.42 points, or 0.21 percent, at 2,598.62.
Progress by EU leaders toward a solution is considered vital for Wall Street stocks to break out of their trading range.
The S&P 500 has struggled after reaching the top end of a two-month trading range at around the 1,230-1,250 level.
Investors are also closely watching the developing U.S. earnings season. According to Thomson Reuters data, of the 109 companies in the S&P 500 that have reported earnings, 70 percent have topped analysts' expectations.
After the closing bell, Microsoft shares (MSFT.O) fell 0.5 percent to $26.87 following quarterly results. During regular trading Microsoft finished at $27.04, down 0.3 percent.
Ingersoll Rand Plc (IR.N) posted lower quarterly earnings, and its fourth-quarter profit forecast fell short of some Wall Street estimates, due to depressed housing and consumer markets, sending shares down 7.9 percent to $27.38.
Polycom Inc (PLCM.O) fell more than 25 percent to $16.33 and weighed on the Nasdaq after the videoconferencing company reported quarterly revenue well below market expectations. The NYSEArca networking index .NWX lost 1.8 percent.
Trading volume was about 7.8 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, below this year's daily average of about 8 billion.
On the NYSE, advancers beat decliners by a ratio of three to two, while on the Nasdaq, decliners beat advancers by a ratio of 12 to 11. - Reuters