RAM Ratings reaffirms Berjaya Infra's RM400m debt notes

KUALA LUMPUR (Nov 4): RAM Rating Services Bhd has reaffirmed the AA3 rating of Berjaya Infrastructure Sdn Bhd RM400 million medium-term notes (MTN) programme (2008/2028), with a stable outlook.

The rating agency said on Friday that as at end-August 2011, Berjaya Infrastructure's outstanding debt notes were RM55 million.

Berjaya Infrastructure's subsidiaries are involved in the operation, maintenance and management of water-treatment plants as well as the supply of treated water.

RAM Ratings said Berjaya Infrastructure has an extensive track record of almost two decades in water-treatment services in Malaysia. Its strong business profile is supported by its stable and predictable concession-driven cashflow. Its commendable operations have translated into robust financial metrics.

'Under a stressed-case scenario, the Group is projected to generate an average operating cashflow (OCF) of RM18.7 million per annum throughout the tenures of the MTN issues, which translates into a minimum OCF debt-coverage ratio of 0.36 times (fiscal 2011-2016). As at end-May 2011, its balance sheet remained healthy with a gearing ratio of 0.49 times,' it said.

The ratings agency said the collections of Air Utara Indah Sdn Bhd (AUI) have improved since the resumption of payments from Syarikat Air Darul Aman (SADA) in early 2011.

It added AUI's receivables cycle is expected to recover to about the same levels before the formation of SADA, albeit still lengthier than the credit period permitted by its privatisation agreement.

'We highlight that any significant deterioration in AUI's collections beyond the parameters of our sensitivity tests would weaken its liquidity profile and, ultimately, the rating of the MTN Programme. Our cashflow analysis assumes a nine-month delay in payments from SADA,' it said.

In mid-2011, Berjaya Infrastructure acquired a 100%-stake in IDS TECHNOLOGY [] Sdn Bhd for RM10.86 million from a related company.

RAM Ratings said this acquisition contrasted against the group's past acquisitions that had only focused on water-related assets.

'RAM Ratings will have to assess the impact on the credit profile of the MTN Programme if Berjaya Infrastructure's future investments are financed by additional borrowings or are not supported by adequate returns to maintain its debt-servicing ability, or if the group makes substantial investments in non-water-related assets that will alter its overall business risk profile,' it said.

On a related note, the ratings agency said there has not been much progress in the restructuring of the domestic water industry.

Although Berjaya Infrastructure's local units have been permitted to retain their water-treatment services in accordance with their respective concession agreements, an official announcement from the authorities would be essential towards determining the final outcome.

KLCI snaps three-day losses, up 15 pt

KUALA LUMPUR (Nov 4): Blue chips snapped their three straight days of losses on Friday, with the FBM KLCI surging on late buying of selected stocks in line with the positive European and key regional markets.

Reports said Greece had scrapped its referendum plan while the European Central Bank's move to cut interest rates had helped shore up investors' risk appetite.

Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialists back him in a confidence vote on Friday, government sources told Reuters.

The KLCI closed up 15.14 points or 1.04% to 1,477.51. Turnover surged to 2.30 billion shares valued at RM1.51 billion. ''The broader market was firm with advancers beating decliners 591 to 194 while 248 stocks were unchanged.

Japan's Nikkei 225 rose 1.86% to 8,801.40, Hong Kong's Hang Seng Index jumed 3.12% to 19,842.79, Shanghai's Composite Index 0.81% higher at 2,528.29, Taiwan's Taiex 1.92% to 7,603.23, South Korea's Kospi 3.13% to 1,928.41 and Singapore's Straits Times Index 1.36% to 2,848.24.

At Bursa Malaysia, the strong export numbers for September also supported investors' appetite for equities.

DiGi rose the most, up 82 sen to RM33.30, Tasek 60 sen to RM8.30, Nestle 50 sen to RM50, HLFG 40 sen to RM11.80 and Dutch Lady 32 sen to RM20.28 while RHB Cap added 24 sen to RM7.53 and MISC 21 sen to RM6.89.

Genting advanced 44 sen to RM10.80, pushing the KLCI up 3.77 points while CIMB's 17 sen gain to RM7.36 nudged the index up 2.93 points while a 16 sen gain by Tenaga to RM5.88 enabled the index o chalk up 2.0 points.

Harvest jumped 23.5 sen to 87.5 sen with 94.51 million shares and the warrants 16.5 sen to 75 sen with 110.49 million units as speculators ignored Bursa Malaysia Securities Bhd's query over the unusual market activity regarding its shares and warrants.

F&N posts 4Q net profit of RM66.2m, dividend 62c

KUALA LUMPUR (Nov 4): Fraser & Neave Holdings Bhd (FNHB) posted net profit of RM66.21 million in the fourth quarter ended Sept 30, 2011 , down 85.7% from the RM462.31 million a year ago due to a gain on RM382.03 million from the divestment of its glass container business a year ago.

It said on Friday revenue rose just 0.5% to RM995.46 million from RM990.25 million a year ago which had included revenue from the sale of Ampang development project of RM54 million.'' Earnings per share were 18.44 sen compared with 129.70 sen. It proposed a final single tier dividend of 47 sen per share together with a special single tier dividend of 15 sen.

For the financial year ended Sept 30, its net profit was RM383.13 million, down 44.8% from RM695.29 million a year ago that included the RM382 million gain on divestment of the glass business. Its revenue rose 7.6% to RM3.915 billion from RM3.637 billion.

FNHB said operating profit from continuing operations rose 14% to RM443.80 million from RM389.30 milion despite higher input costs and sugar subsidy withdrawal in Malaysia.

'It marks another new record and the 11th consecutive year of steady growth for the group,' it said.

FNHB chief executive officer Datuk Ng Jui Sia said: 'Despite current challenges that we are facing in terms of higher input costs and the global economic and financial uncertainties, our core business in food and beverages remains strong, with solid growth from soft drinks and broad-based growth in dairies Thailand.'

Ng said the soft drinks division recorded all-time sales record of 69.8 million cases whilst maintaining market share. Revenue was up 16% to RM1.84 billion from RM1.59 billion last year due to good growth from the core brands and promising performance of new products.'' Operating profit surged 41% to RM274 million from RM194 million.

As for the dairies division, its registered lower volume due to the numerous price increases to offset the higher sugar costs. As for the dairies Thailand, he said FNHB achieved a broad-based domestic volume growth of 9%.

'We made greater inroads into Indochina with a 40% growth and started to move to Vietnam with the appointment of a local distributor,' he said

Commenting on the prospects, Ng said in the absence of Coca-Cola products, the soft drinks division will see an immediate fall in sales volume in the new financial year.

However, he was added the division has focused on deepening and widening its product portfolio over the last few years to prepare for this eventuality.

As for dairies products in Malaysia, he expected it to remain soft, due to the continuation of the selective sugar subsidy policy and volatility in raw material prices globally.

Ng also said in the first half of FY2012, he said the dairies division would be moving to the RM350 million Pulau Indah plant which would increase operating costs in the short term but lead to long term benefits of increased productivity.

He added once operations started in December 2011 or January 2012, the group would be able to crystallise a deferred tax asset of RM76 million in relation to the halal hub tax incentive.

As for the dairies plant at Rojana, Thailand, he said it had temporarily ceased operations due to the massive floods.

'We expect production to recommence approximately three to five months after flood waters recede. To mitigate disruptions to the marketplace and customers, we have plans to ship products from outsourced manufacturing locations.

'We have in place an all risk insurance policy for the business in Thailand. The total sum insured is Baht 5 billion and the indemnity period is for twelve months.'

Ng pointed out the group's overall results would be bolstered by the non-operating items of deferred tax income.

''

Nestle posts flat 3Q earnings of RM110m on higher raw materials

KUALA LUMPUR (Nov 4): Nestle (Malaysia) Bhd posted net profit of RM110 million in the third quarter ended Sept 30, 2011 marginally lower from the RM113.18 million a year ago as profit margins were affected by higher prices of key raw materials

It said on Friday that operating profit was RM143.16 million, up 3.8% from RM137.83 million. Revenue rose 18.2% to RM1.171 billion from RM991.07 million, boosted by strong domestic and exports sales. Earnings per share were 46.91 sen compared with 48.27 sen.

'The good domestic growth performance was noted for all categories and some with double digit especially for milks, coffee and beverage, confectionery as well as Nestle liquid drinks. The encouraging sales were further driven by higher demand during the fasting month, followed by Hari Raya celebrations,' it said.

Nestle added the sustained economic growth in the region helped drive the group's export performance. The increase demand for coffee creamers and soluble coffees within the Asean region contributed to the strong double digit export growth.

However,'' escalating prices of key raw materials consumed by the group such as coffee beans, cocoa powder, skimmed milk powder and palm oil have negatively impacted the gross profit margin which reduced by 230bps, despite increasing by 10.3% in absolute terms.

For the nine-month period, its earnings rose 4.8% to RM369.23 million from RM352.14 million. Its revenue increased by 14.6% to RM3.51 billion from RM3.06 billion driven by both domestic and export sales.

Melati Ehsan awarded RM298m public housing project

KUALA LUMPUR (Nov 4): MELATI EHSAN HOLDINGS BHD []'s unit Pembinaan Kery Sdn. Bhd.'' has accepted two contracts from the Housing and Local Government to undertake two housing projects worth RM298 million.

It said on Friday,'' the first project valued at RM88.10 million, was to design and build 500 units of flats and the ancillary works for public housing in Kuala Lumpur. The contract period is 30 months.

The second project, worth RM215.90 million, was to build 1,600 flats and ancillary works, also under the public housing scheme in Kuala Lumpur. The second contract is over 36 months.

Melati said Kery was required to execute the formal contract with the ministry in due course subject to the terms and conditions of the letters of award.

'The project is''expected to contribute positively to the earnings per share of Melati for the current financial year ending Aug 31, 2012 and the subsequent financial years during the contract period,' it said.

Malaysia Smelting Corp 3Q net profit RM41.81m, but outlook cautious

KUALA LUMPUR (Nov 4): MALAYSIA SMELTING CORPORATION [] Bhd posted net profit of RM41.81 million in the third quarter ended Sept 30, 2011 compared with net loss of RM37.05 million a year ago where there was impairment provision for goodwill of RM73.63 million.

MSC said on Friday that revenue increased by 25.9% to RM907.04 million from RM719.96 million.'' Earnings per share were 41.80 sen compared with loss per share of 49.40 sen.

It posted a 121.7% increase in pre-tax profit of RM51.91 million before unusual items from RM23.41 million. This was due to higher profits from its tin mining and smelting operations in Malaysia and Indonesia mainly due to an improved operating performance and higher average tine prices.

There was an impairment provision for goodwill arising from acquisition of subsidiaries totaling RM73.63 million.

'However, for the current year is expected the operating environment to be difficult and challenging due to the weaker demand for commodities due to prevailing global economic slowdown and on-going uncertainty in the global finance markets,' it said. However it expected to remain profitable in the fourth quarter.

For the nine-month period, it recorded net profit of RM106.39 million versus net loss of RM58.20 million in the previous corresponding period. Revenue increased by 25.2% to RM2.497 billion from RM1.994 billion.

It said for the nine-month period in 2010, the impairment provision for goodwill arising from acquisition of subsidiaries was RM121.63 million.

PacificMas board accepts RM450m offer from OCBC Capital

KUALA LUMPUR (Nov 4): PACIFICMAS BHD []'s board of directors has accepted the offer from OCBC Capital (Malaysia) Sdn Bhd to acquire its units and subsidiaries for'' RM450 million.

It said on Friday the board except for the interested directors -- Datuk Ahmad Zahudi Salleh, George Lee Lap Wah, Jeffrey Chew Sun Teong and Wong Ah Wah and Tan Sri Nasruddin Bahari'' -- had resolved to accept the offer.

'Accordingly, the board (save for the interested directors and Nasruddin) does not intend to seek other alternative bids,' it said.

To recap, OCBC Capital had on Oct 17 proposed to acquire 100% of Pac Lease Bhd, PB Pacific Sdn Bhd, PacificMas Fidelity Sdn Bhd and PacificMas Capital Sdn Bhd and 85% in Pacific Mutual Fund Bhd.

The purchase consideration would be RM450 million to be satisfied by the payment of RM164.23 million cash on completion and RM285.76 million as the mount due and owing by OCSB to PacificMas payable at a later date.

OCBC Capital confirmed it has sufficient financial resources for the cash portion.

OCBC Capital is a unit of Singapore-listed Oversea-Chinese Banking Corporation Ltd.

RAM Ratings reaffirms Pengurusan Air SPV's RM20b sukuk ratings

KUALA LUMPUR (Nov 4): RAM Rating Services Bhd has reaffirmed the respective long- and short-term ratings of AAA (stable outlook) and P1 for Pengurusan Air SPV Bhd's (PASB) RM20 billion Islamic medium-term notes programme (2009/2039)'' and RM20 billion Islamic commercial papers programme (2009/2016) (ICP).

It said on Friday the IMTN and ICP programmes (with a combined limit of RM20 billion in nominal value) have been collectively referred to as the Sukuk.

PASB is a unit of Pengurusan Aset Air Bhd (PAAB), to undertake the financing of the latter's acquisition of water assets and their accompanying liabilities in Peninsular Malaysia and Labuan. PAAB is responsible for the subsequent development of water infrastructure in the states involved.

RAM Ratings said under the transaction structure, the Sukuk holders' recourse to PAAB is recognised via an irrevocable and unconditional purchase undertaking deed.

PAAB (as the obligor) will purchase the trust assets from PASB (the issuer) upon maturity'' at a price equal to the exercise price.

'The ratings of the Sukuk therefore reflect PAAB's credit risk; we thus view the Group in aggregate from a credit perspective,' it said.

RAM Ratings said the ratings reflect the strategic importance of PAAB's role under the Water Services Industry Act 2006 ' to restructure the water-services industry by consolidating ownership and responsibility in funding the water assets in Peninsular Malaysia and Labuan.

PAAB ' a unit of the government ' operates on a non-commercial basis and relies on external funding almost exclusively, backed by implicit support from the government if required.

PAAB's credit risk mirrors that of the government. A recent testament of the Government's support is PASB's procurement of a further RM20 billion IMTN programme, which is guaranteed by the Government, the first issue under this debt facility took place in February 2011.

To date, a respective RM1.15 billion and RM9.5 billion from the Sukuk and government programme remain outstanding.

GLOBAL MARKETS-Shares rally on hopes Greece will drop referendum

TOKYO (Nov 4): Asian shares rallied more than 3 percent and the euro steadied on Friday on hopes Greece will abandon a proposed referendum on a European Union bailout, but investors remained cautious over a confidence vote scheduled for later in the Greek parliament.

Greece's abrupt call for a referendum, just days after a deal was struck to save the debt-stricken country from defaulting, sparked panic in global financial markets, prompting EU leaders to talk of a possible Greek exit from the euro zone to preserve the single currency.

Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialist lawmakers back him in a confidence vote on Friday, raising hopes for a political consensus on the EU rescue framework.

"The market regained some calm but uncertainty remains over the outcome of today's confidence vote," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo. "Uncertainty at this point entails risks, as it means delays in the efforts (to resolve the debt crisis)."

MSCI's broadest index of Asia Pacific shares outside Japan jumped 3.1 percent, led by a more than 4 percent jump in materials as copper and oil rebounded. The index's energy sector soared 3.7 percent, while the TECHNOLOGY [] sector gained 3.4 percent. Japan's Nikkei share average rose 1.9 percent.

European shares were expected to make modest advances from Thursday's rally. Financial bookmakers called the FTSE 100 to open up 0.3 percent, Germany's DAX to open up 0.5 percent and France's CAC-40 to gain 0.3 percent.

Investors may be hunting for a bargains, but underlying concern about whether measures can really be implemented to rescue Greece from its debt crisis remained intact, said analyst Woon Khien Chia of the Royal Bank of Scotland in Singapore.

"Nobody wants to take very big positions," she said, adding that even after the basic framework was agreed to rescue Greece, questions have already been raised about who was going to fund the bailout.

Late in October, Euro zone leaders struck a deal with private banks and insurers for them to accept a 50 percent loss on their Greek government bonds under a plan to lower Greece's debt burden, while asking Greece for severe austerity measures.

They also agreed that the European Financial Stability Facility, a bailout fund, would be leveraged to give it firepower equivalent to about 1 trillion euros ($1.4 trillion).

G20 leaders meeting in southern France will try to look beyond the Greek drama that has shaken their annual gathering and agree on measures that will convince markets the risk of further euro zone contagion can be stemmed.

ECB CUT SUPPORTS

Market sentiment was also supported by the European Central Bank's surprise rate cut of 25 basis points on Thursday, the first meeting under new President Mario Draghi. Draghi said the euro zone could enter a "mild recession" later this year.

"The ECB's surprise move to cut rates suggested it took a preemptive move as it forecast growth slowdown, which gave a positive surprise to the market," Credit Agricole's Saito said.

The euro steadied against the dollar around $1.38 .

Hong Kong's benchmark Hang Seng Index jumped more than 3 percent, recovering almost all of this week's losses, while the iShares A50 China tracker , an exchange-traded fund in Hong Kong that provides the most direct exposure to mainland markets, hit its highest since mid-August.

The ECB's rate cut bolstered Shanghai-traded commodities such as iron, zinc and copper. The most-active January copper contract on the Shanghai Futures Exchange jumped as much as 4.5 percent.

Brent crude held above $110 a barrel and U.S. crude rose 0.2 percent to $94.26.

Investors' appetite eased for protection in the options market against losses, with the CBOE Volatility index VIX -- a measure of expected volatility in the S&P 500 over the next 30 days often dubbed Wall Street's "fear gauge" -- falling to 30.50 on Thursday from 32.74 the day before.

The VIX was below 30 for most of the time in the 15 years up to 2008, before being driven close to 90 by the global financial crisis in October that year. It hit this year's peak at 48 in August.

As optimism buoyed riskier assets, Asian credit markets stabilised, with the spreads on the iTraxx Asia ex-Japan investment grade index narrowing sharply by more 20 basis points. The index is a gauge of investor risk appetite.

"Its a bit more positive this morning although headline risks are still alive. Its just one step forward and two steps back," said a Singapore based trader with a European bank. - Reuters

#Flash* Bursa Securities queries Harvest Courts over price surge, volume

KUALA LUMPUR (Nov 4): Bursa Malaysia Securities Bhd has queried Harvest Courts Industries Bhd over the unusual market activity regarding its shares and warrants.

'We draw your attention to the sharp increase in price and high volume of your company's securities recently,' it said on Friday.

Bursa Securities advised investors to take note of the company's reply to the unusual market activity query which would be posted on the stock exchange website under the company announcements.

At 2.54pm, Harvest-WA was up 17.5 sen to 76 sen with 78 million units done while the shares added 19.5 sen to 83.5 sen with 70 million shares transacted.

Sunway not in Iskandar Devt township talks with Sime

KUALA LUMPUR (Nov 4): Sunway Bhd has clarified that it is not involved in any discussions with Sime Darby'' Bhd for a joint development of a township in Iskandar Malaysia.

It said on Friday that as a leading property and CONSTRUCTION [] company, it was constantly on the lookout for property development opportunities both locally and abroad.

Sunway issued the statement to Bursa Malaysia to clarify an article on Bernama.com on Nov 3 that both parties would jointly develop Iskandar Malaysia.

Lingui falls after 1Q net loss of RM28m

KUALA LUMPUR (Nov 4): Shares of Lingui Developments Bhd fell on Friday after the timber-based company reported net loss of RM28.06 million in the first quarter ended Sept 30, 2011.

At 3.28pm, it was down 11 sen to RM1.43 with 1.99 million shares done.

The FBM KLCI rose 8.52 points to 1,470.89. Turnover was 1.81 billion shares valued at RM962.08 million. There were 548 gainers, 169 losers and 224 stocks unchanged.

Lingui had on Thursday it registered an operating profit of RM19.46 million compared with RM9.59 million a year ago.

However, it made a net loss of RM28.06 million versus net profit of RM39 million a year ago as it was adversely affected by losses in fair value of biological assets.

Lingui recognised a loss from changes in fair value of biological assets of RM25.9 million as the softwood log prices soften at the end of financial quarter under review compared to immediate preceding financial quarter.

European shares edge up on Greece political hopes

LONDON (Nov 4): European shares extended the previous session's strong gains on Friday as signs Greece would seek political consensus on a new aid package and dump a referendum helped cap some fears of an imminent default, although the outcome remains uncertain.

Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialists back him in a confidence vote on Friday, government sources told Reuters.

"It seems a Greek drama has been avoided for the time being as there are some signals that the proposed referendum on the bailout package will be scrapped," said Koen De Leus, strategist at KBC Securities, in Brussels.

"But the situation is far from clear yet and there is a possibility that the Greek government might fall, which would mean that no bailout money will be available to them for some time. Any such outcome would create more uncertainties."

At 0807 GMT, the FTSEurofirst 300 index of top European shares was up 0.2 percent at 991.79 points after climbing 1.9 percent in the previous session.

Banks, many of which have a significant exposure to the peripheral euro zone economies and have taken a hit on their balance sheets, were among the top gainers. The STOXX Europe 600 banking index rose 1.6 percent, while BNP Paribas rose 5.4 percent. - Reuters

ARK advances after lifted from PN 17

KUALA LUMPUR (Nov 4): Shares of ARK RESOURCES BHD [] surged on Friday after it was uplifted from the Practice Note 17.

At 12.05pm, the shares were up 18 sen to 51.5 sen with 826,800 units done while the warrants, ARK-WB surged 16 sen to 36 sen with 24,000 units transacted.

The FBM KLCI rose 7.89 points to 1,470.26. Turnover was 1.23 billion shares valued at RM596.04 million. Gainers beat losers 504 to 115 while 205 stocks were unchanged.

A Bursa Malaysia circular said on Thursday the company had regularised its financial condition and did not trigger any of the criteria under the PN17 classification of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd.

Proton hopes govt incentives for green cars

SURREY, Britain (Nov 4): PROTON HOLDINGS BHD [], hopes the government will look into an incentive policy or offer rebate for electric vehicles (EVs) to spur Malaysians to move to EVs.

Its Green Tech Department, Board Project director Datuk Zainuddin Che Din said the cost of the vehicle ownership was among the challenges in the
implementation of the EVs or hybrid vehicles initiatives.

He said the Green Project Team is working with the United Kingdom-based Frazer-Nash Research Ltd to develop the Proton Saga EV and Proton Exora Extended Range EV (REEV) expected to roll out in the first half of 2013.

Citing examples, he said, the United States government provides US$7,500 tax credit, the Chinese government provides subsidies of up to US$8,800 for purchase of alternative fuel vehicles and UK Plug-in Car Grant offers 25 per cent discount up to a maximum 5,000 pound sterling for a new car.

Zainuddin said there was lack of awareness of the benefits and advantages in Malaysia for EV vehicles and relatively the cost would be higher than normal vehicles.

"The EV or better known as the hybrid industry is still new among Malaysians and the price will be higher due to high TECHNOLOGY [] acquisition costs and high installation costs of charging stations," he told BERNAMA after briefing the Malaysian media on the progress of electrification plans for proton cars.

At the media briefing, Zainuddin said while the EVs would be cheaper to operate but purchasing would be costly, (therefore) it was important to promote the industry's growth.

He said incentives or rebates would be one way to attract Malaysians to buy EVs which would snowball to create awareness going forward.

The Exora REEV has an on-board generator to recharge the battery-driven engine and the Proton Saga EV is purely battery-powered.

On demand, Zainuddin said if the government withdrew fuel subsidies, the petrol consumption would be less as compared to previous petrol quantity at the same price.

"So, demand for EVs would likely increase as people will perhaps look into moving to EVs and incentives will encourage them further," he added. - Bernama

September exports up 16.6% to RM58.68b

KUALA LUMPUR (Nov 4): Malaysia's exports in September hit RM58.68 billion, up 16.6% from a year ago, according the Minister of International Trade and Industry (MITI).

Its minister, Datuk Seri Mustapa Mohamed said on Friday imports rose 12.9% to RM49.05 billion. 'Total trade rose by 14.9% to RM107.73 billion with a trade surplus of RM9.63 billion in September 2011,' he said.

From January to September, total trade expanded by 8.6% to RM937.97 billion from a year ago. Exports increased 8.3% to RM513.59 billion while imports rose by 8.9% to RM424.37 billion, resulting in a trade surplus of RM89.22 billion.

Mustapa said from manufacturing to commodities, almost all major sectors recorded increases in exports in September. Total exports in September rose RM8.36 billion, of which 50% was from the manufactured exports.

Market snaps 3-day losses, boost from DiGi, Genting

KUALA LUMPUR (Nov 4): The local stock market was broadly higher at midday on Friday, following encouraging regional bourses while September's stronger exports should bolster buying sentiment in the meantime. DiGi and Genting were among the major'' gainers.

At 12.30pm, the FBM KLCI was up 8.09 points to 1,470.46, snapping its three straight days of losses following the Greek debt rescue impasse. Turnover was 1.43 billion shares valued at RM673.89 million. Advancing counters beat decliners 524 to 126 while 200 stocks were unchanged.

Among the regional markets, Japan's Nikkei 225 rose 1.42% to 6,762.94, Hong Konmg's Hang Seng Index surged 3.31% to 19,880.34, Taiwan's Taiex 2.09% to 7,615.90 and South Korea's Kospi 2.89% to 1,924.76 while Singapore's Straits Times Index advanced 1.6% to 2,855.

Reuters reported that Asian shares rose more than 2% and the euro steadied on Friday on hopes Greece will abandon a proposed referendum on a European Union bailout, but investors remained cautious over a confidence vote scheduled for later in the Greek parliament.

In Malaysia, September's exports hit RM58.68 billion, up 16.6% from a year ago. Almost all major sectors recorded increases in exports in September. Total exports in September rose RM8.36 billion, of which 50% was from the manufactured exports.

DiGi was the top gainer, up 68 sen to RM33.16, Genting 26 sen to RM10.26, RHB Cap 16 sen to RM7.45 and Tasek 14 sen to RM7.84.

ARK Resources jumped after it was lifted from the Practice Note 17 classification. Its shares rose 19 sen to 52.5 sen and the warrants 16 sen to 36 sen.

Among the decliners were Lingui, down 11 sen to RM1.43 after posting losses. PLANTATION []s stocks fell, with KLK and BLD Plantations down 10 sen each to RM21.04 and RM6.60 while IJM Plantations gave up five sen to RM2.63.

EM ASIA FX- Won up on Greece, but Asia FX head for weekly loss

SINGAPORE (Nov 4): The won and most emerging Asian currencies rose on Friday amid hopes that Greece may not face a disorderly default, but they are still headed for weekly losses, suggesting investors are still hesitating to increase exposure in regional units.

Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialist lawmakers back him in a confidence vote later in the day, raising hopes for a political consensus on the euro zone's rescue framework.

The surrender boosted riskier assets such as stocks and other emerging currencies including Mexico's peso.

The South Korean won rose on local interbank speculators' demand with foreign investors turning to net buyers in the country's stock markets.

The Taiwan dollar also gained led by stock inflows while the central bank was spotted buying U.S. dollars to cap the local dollar's rises.

Still, investors remained cautious over the euro zone's debt and financial crisis with government bonds of Italy, Spain and even France trading with hefty spreads over German bonds. Market players are also keeping an eye on the Greek confidence vote.

"The markets remain tenacious and eager to latch on to any positive development on the risk appetite front," said Emmanuel Ng, FX strategist at OCBC in Singapore.

"But the risk relief run is probably at its tail end now, and any further strengthening would have to be on the back of a significant change in the global landscape. So we would probably look for better levels to initiate fresh shorts (in dollar/Asia)."

Emerging Asian currencies lost rising momentum from last month after Papandreou's surprising call for a referendum rattled global financial markets. Despite Friday's rises, most of the regional units stay weaker than a week ago.

The Malaysian ringgit has lost 1.9 percent against the dollar so far this week, according to Thomson Reuters data. The Singapore dollar also has shed 1.7 percent.

Olympus delays earnings announcement; shares plunge

TOKYO (Nov 4): Japan's Olympus Corp said it won't announce its quarterly earnings on Nov. 8 as expected because it needs more time after appointing an external panel to look into past deals, sparking a fresh plunge in the firm's shares.

A spokesman for the scandal-hit maker of cameras and endoscopes said on Friday Olympus aimed to release the July-September figures in mid to late November, and would not necessarily wait for the panel to reveal its findings.

"The decision to delay is not due to any issues pointed out by external parties," said the spokesman. "We simply feel it would be difficult to hold an earnings conference under the current circumstances."

Olympus on Tuesday named six men, including a former Japanese supreme court justice, to investigate past M&A deals at the core of a scandal engulfing it in a bid to stem an exodus of investors. The panel has set no deadline to complete its investigation.

Listed firms in Japan are usually required to report quarterly earnings within 45 days after the end of the period. Failure to comply can result in the company being delisted.

The Tokyo Stock Exchange said the usual time limit for reporting July-September earnings is Nov. 14 and approval to report any later needs to come from the government, a spokeswoman for the exchange said.

Shares in Olympus dived as much as 12 percent after the news, before paring losses to end the morning down 7.3 percent at 1,113 yen.

The company has lost about 60 percent of its value since it suddenly fired British CEO Michael Woodford last month, saying he failed to understand the company's management style or Japanese culture.

Woodford said he was forced out for probing astronomical fees paid in the $2 billion acquisition of British medical equipment company Gyrus in 2008, as well as three other acquisitions of small Japanese firms whose value had been largely written off after the purchases.

The investigative panel has expressed interest in talking to Woodford.

Many Japanese firms held their annual earnings announcements later than usual this year, as they scrambled to clarify the effects of the March 11 earthquake. But it is unusual to put off an announcement once the date has been made public.

Most analysts have dropped coverage of Olympus due to the lack of clarity over its past deals.- Reuters

Asian shares rise on Greece hopes, confidence vote eyed

TOKYO (Nov 4): Asian shares rose and the euro steadied on Friday on hopes Greece will abandon a proposed referendum over a euro-zone bailout but investors remained cautious over a confidence vote later in the day in the Greek parliament.

Greece's abrupt call for a referendum, just days after a deal was struck to save the debt-stricken country from defaulting, sparked panic in global financial markets, prompting EU leaders to talk of a possible Greek exit from the euro to preserve the single currency.

Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialist lawmakers back him in a confidence vote on Friday, raising hopes for a political consensus on the EU rescue framework.

"The market regained some calm but uncertainty remains over the outcome of today's confidence vote," said Yuji Saito, director of the foreign exchange division at Credit Agricole Bank in Tokyo.

"Uncertainty at this point entails risks, as it means delays in the efforts (to resolve the debt crisis). There is also the outcome from the G20, so risk-on momentum isn't likely to gain."

MSCI's broadest index of Asia Pacific shares outside Japan rose 1.5 percent led by the materials sector which gained 3 percent as oil prices recovered.

Japan's Nikkei share opened up 1.4 percent.

Global stocks and crude oil rallied on Thursday on rising hopes Greece will abandon the referendum plan, which would reduce the chance of a disorderly default.

MSCI's all-country world index rose 1.4 percent and the FTSEurofirst 300 index of top European shares gained 1.9 percent on Thursday.

U.S. stocks also bounced on Thursday after the Institute for Supply Management said its services index eased to 52.9 in October from 53.0 the month before, showing the pace of growth in the vast U.S. services sector slowed to its lowest level since June as new orders declined.

But government data showed new claims for U.S. unemployment benefits fell below 400,000 last week for the first time in five weeks, suggesting modest improvement in the labor market.

Market sentiment was also supported by the European Central Bank's surprise rate cut of 25 basis points on Thursday, the first meeting under new President Mario Draghi. Draghi said the euro zone could enter a "mild recession" later this year.

"The ECB's surprise move to cut rates suggested it took a preemptive move as it forecast growth slowdown, which gave a positive surprise to the market," Saito said.

THe euro was up 0.1 percent against the dollar and held above $1.38 .

As optimism buoyed riskier assets, safe-haven appetite retreated, sending U.S. Treasury debt prices down on Thursday. The benchmark 10-year U.S. Treasury note fell 25/32 in price to yield 2.08 percent.

Conversely, Asian credit markets stabilised, with the spreads on the iTraxx Asia ex-Japan investment grade index narrowing sharply by 12 basis points early on Friday. The index is a gauge of investor risk appetite.

G20 leaders meeting in southern France will try to look beyond the Greek drama that has shaken their annual gathering and agree on measures that will convince markets the risk of further euro zone contagion can be stemmed.

On Friday, heads of state from the 20 major economies will focus on ways to ramp up the IMF's resources and build a financial firewall to protect vulnerable euro zone peripherals like Italy and Spain from a possible Greek default. - Reuters

OSK Research raises Guinness FV to RM14.20

KUALA LUMPUR (Nov 4): OSK Research has raised the fair value for GUINNESS ANCHOR BHD [] to RM14.20 and is maintaining its Buy rating.

It said on Friday, GAB reported earnings of RM55 million in the first quarter ended Sept 30, 2011, which was a 43% increase year-on-year and 90% quarter-on-quarter, which was in line with its expectations. GAB's Tiger brand is now the best selling beer, while Guinness and Heineken registered double-digit growth.

'With no excise duty hike announced in the recent Budget 2012, we expect continued growth in industry volume, with Euro 2012 being an added near-term kicker. We raise our FV to RM14.20 and maintain our BUY rating,' it said.

RHB Research maintains Underperform on Unisem, MPI

KUALA LUMPUR (Nov 4): RHB Research Institute is maintaining its underperform ratings on Unisem and MALAYSIAN PACIFIC INDUSTRIES [] (MPI) at 92 sen and RM2.19 respectively.

It said on Friday with the poor earnings visibility on the back of weak guidance by major players in the industry, the outlook for 2012 remains in doubt amidst the bearish outlook in the global economy.

'Furthermore, post Unisem's analyst briefing recently, there was lack of conviction as to whether the guided 4Q2011 revenue decline would be short-term, with a quick a recovery in 2012, although management appeared optimistic on such a scenario,' it said.

RHB Research said the largest fab player, Taiwan Semiconductor Manufacturing Company (TSMC) expects overall industry growth of only 1% (from 2%) for 2012, following the weaker-than-expected performance in 3QFY11. On the other hand, market research groups expect growth of 5-7%.

'Therefore, given the contrasting views for 2012, we believe medium-term forecasts beyond 4Q2011 are unreliable at this time,' it said.

RHB Research said due to the lack of earnings visibility, it believed that PER-based valuation methodology is no longer reliable.

'Thus, we have shifted to an asset-based valuation methodology as this may provide a better indication of price support levels. We have used 0.6x BV as a benchmark.

'This is mainly based on Unisem's 5-year historical data which suggests that the bottom is around 1 standard deviation below the mean. We have also applied this to MPI as recent data indicates that the stock has fallen to unprecedented lows in terms of P/BV,' it said.

RHB Research maintains market perform on Quill Capita

KUALA LUMPUR (Nov 4): RHB Research Institute is maintaining its market perform on Quill Capita. The indicative fair value is maintained at RM1.25 based on weighted average target yield of 6.9% on its FY12 dividend per unit forecast of 8.7 sen.

It said on Friday Quill Capita's 3Q11 realised net income of RM9.4 million (+8.3% on-year; +2.5% on-quarter) came in within its and consensus estimates.

Sequential gross revenue growth was flattish, and interest expense was higher (+16.1% on-year; +15.4% on-quarter) during the period mainly due to the write-off of balance of the amortisation cost relating to its RM80 million term loan facilities.

'However, the lower operating expenses in 3Q11 have offset the higher finance costs, leading to an overall increase in the realised net profit margins. As expected, no DPU was declared during the period as Quill Capita declares its dividends semi-annually,' it said.

Maybank IB Research maintains Buy on MMHE

KUALA LUMPUR (Nov 4): Maybank Investment Bank Research is maintaining a buy on Malaysia Marine and Heavy Engineering Bhd (MMHE) at a target price of RM8, based on 20 times 2013 earnings per share.

It said on Friday that MMHE's latest Tapis contract, valued at RM1.4 billion, readily filters concerns over its replenishment rate.

'Orderbook momentum is set to continue into 2012-15 with the FLNG, TLP and RAPID projects among the high profile projects that would propel orders and earnings growth. MMHE remains as among our top pick in the oil & gas sector,' it said.

Maybank IB Research said the job scope entails the CONSTRUCTION [] and installation of the main structure for the Tapis R topside.

The Tapis R topside is an 18,000MT integrated deck that includes facilities for gas compression, water injection, production separation and living quarters for 145 personnel.

'A RM1.4b job with an 18-month delivery date. Works will be undertaken at its Pasir Gudang yard. Installation of facilities is scheduled to commence in 2Q 2013 and EMEPMI targets to start production by end-2013. The Tapis R platform will be connected by a bridge to the existing Tapis B platform and a new riser platform, known as Tapis Q,' it said.

Yeo Hiap Seng 3Q earnings double to RM8.27m

KUALA LUMPUR (Nov 3): Yep Hiap Seng (Malaysia) Bhd's earnings rose 104% to RM8.27 million in the third quarter ended Sept 30 from RM4.05 million a year, as it benefited from better sales, less bad debts write off and gain on disposal of machinery.

It said on Thursday revenue increased by 26.5% to RM147.12 million from RM116.27 million as sales for Malaysia, Indonesia and Singapore including the export market grew by 18%, 368% and 8% respectively.

'The increase in sales is mainly due to more advertising and promotion activities undertaken during the Hari Raya festive period,' it said.

Earnings per share were 5.42 sen compared with 2.65 sen a year ago.

For the nine-month period, its earnings surged 363% to RM20.02 million from RM4.31 million while revenue increased 11.9% to RM414.86 million from RM370.70 million.

Tomypak 3Q earnings up 12% to RM3.40m

KUALA LUMPUR (Nov 3): TOMYPAK HOLDINGS BHD []'s earnings rose 12.21% to RM3.40 million for the quarter ended Sept 30, 2011 from RM3.03 million a year ago, due to higher sales.

It said on Thursday revenues increased 25.8% to RM54.73 million from RM43.49 million. Earnings per share were 3.14 sen compared with 2.80 sen. The group announced dividends of 1.50 sen compared to 1.40 sen a year ago.

Tomypak said the higher earnings and turnover was due to a 19% increase in sales volume achieved in the period. However, profit after tax was slightly weaker due to an increase in raw material prices.

For the first nine months ended Sept 30, 2011, profit fell 21.11% to RM9.17 million from RM11.65 million a year ago. Revenue rose 19.30% to RM160.87 million from RM134.84 million.

Quill 3Q earnings slightly higher

KUALA LUMPUR (Nov 3): QUILL CAPITA TRUST [] earnings rose nearly 1.4% to RM9.39 million for the period ended Sept 30, 2011 from RM8.68 million a year ago, due to rental rates of certain PROPERTIES [].

It said on Thursday revenues increased 8.2% to RM17.63 million from RM17.39 million. Earnings per share were 2.41 sen compared to 2.22 sen.

Quill Capita said that the increase in profits were due to increases in rental rates of certain properties as well as lower property operating expenses.

For the first nine months ended Sept 30, 2011, profit rose 1.6% to RM26.25 million from RM24.45 million a year ago. Revenue rose 7.3% to RM52.76 million from RM51.93 million.

Lingui 1Q net loss RM28m on decline in biological assets

KUALA LUMPUR (Nov 3): Lingui Developments Bhd posted net loss of RM28.06 million in the first quarter ended Sept 30, 2011 versus net profit of RM39 million a year ago as it was adversely affected by losses in fair value of biological assets.

It said on Thursday that revenue increased by 19.1% to RM435.01 million from RM365.05 million. Loss per share was 4.25 sen compared with earnings per share of 5.91 sen.

It registered an operating profit of RM19.46 million compared with RM9.59 million a year ago.

'The group recognised a loss from changes in fair value of biological assets of RM25.9 million as the softwood log prices soften at the end of financial quarter under review compared to immediate preceding financial quarter,' it said.

Lingui said similarly, due to lower crude palm oil price during the financial quarter under review, the group's share of the losses from changes in fair value of biological assets of an associate involved in oil palm PLANTATION [] was RM16.3 million.

More downside for markets, Greek worries weigh

KUALA LUMPUR (Nov 3): European and key Asian markets fell on Thursday as chaos over Greece's role in the euro zone battered investors' sentiment while at Bursa Malaysia, it extended its losses for the third day, pushing the FBM KLCI to the lowest since Oct 25.

The FBM KLCI opened at the start of trade, but a sheer lack of buying support saw the index falling a few minutes later. It closed down 8.58 points to 1,462.37, with analysts viewing the 1,450 level to provide the immediate support.

Turnover was 1.76 billion shares but, most boosted by penny stocks, as total value was only RM1.14 billion. Declining stocks beat advancers 524 to 226 while 273 counters were unchanged.

Hong Kong's Hang Seng Index closed down 2.49% to 19,242.50 but the Shanghai Composite Index rose 0.16% to a 1 1/2 month high of 2,508.09, underpinned by ample liquidity in the financial system and assurances the government would be flexible with macro-economic policy, Reuters said.

South Korea's Kospi fell 1.48% to 1,869.96, Taiwan's Taiex 1.82% to 7,460.31 and Singapore's Straits Times Index 0.87% to 2,910.04.

Reuters said Chaos over Greece's role in the euro zone battered equity markets and hit the euro on Thursday, swamping any residual support from the U.S. Federal Reserve's soothing comments less than 24 hours earlier.

The threat of a Greek exit from the euro hung over a meeting of G20 leaders after France and Germany made it clear that Athens must decide urgently whether it wants to stay in the 12-year-old currency bloc.

On the commodity front, US light crude oil fell 31 cents to US$92.20 but crude palm oil third-month futures rose RM11 to RM2,971. The ringgit weakened against the US dollar to 3.3.1475 from 3.1271.

At Bursa Malaysia, investors decided to stay on the sidelines as the Greece chaos dampened sentiment for riskier assets including equities.'' The adverse to risk was reflected in the top gainer of the day, GAB, chalking up only a 20 sen gain.

Among the finance stocks, HLFG fell the most, down 46 sen to RM11.48, CIMB 12 sen to RM7.19, Maybank six sen to RM8.22, Public Bank four sen to RM12.66.

Tenaga lost 14 sen to RM5.72, while Axiata gave up six sen to RM4.80 and Genting Malaysia four sen to RM3.38.

Among PLANTATION []s, Sarawak Oil Palms lost 29 sen to RM4.17, Batu Kawan 14 sen to RM15.80, IOI six sen to RM5.08 but KLK rose four sen to RM21.14.

Karambunai was the most active stock with 140.30 million shares done but speculative buying saw Harvest surging 14.5 sen to 64 sen and the warrants 13.5 sen to 58.5 sen.

Among the gainers were GAB and BAT, up 20 sen each to RM10.94 and RM46.20 and DiGi 18 sen to RM32.48 and Genting 10 sen to RM10.36.

ARK Resources uplifted from PN17 from Friday

KUALA LUMPUR (Nov 3): ARK RESOURCES BHD [] will be uplifted from the Practice Note 17 with effect from Friday, Nov 4.

A Bursa Malaysia circular said on Thursday the company had regularised its financial condition and did not trigger any of the criteria under the PN17 classification of the Main Market Listing Requirements of Bursa Malaysia Securities Bhd.

#Flash* MMHE secures RM1.4b ExxonMobil contract

KUALA LUMPUR (Nov 3): Malaysia Marine and Heavy Engineering Holdings Bhd has secured a RM1.4 billion contract to build an offshore platform deck and two inter-platform bridges.

MMHE said on Thursday its unit Malaysia Marine and Heavy Engineering Sdn Bhd had signed a contract with ExxonMobil Exploration and Production Malaysia Inc.

The contract was part of the Tapis enhanced oil recovery project with ExxonMobil and was expected to be completed by end-2013.

'The contract is expected to contribute positively towards the group's future earnings,' it said.

Malaysia, China firm ink RM983m underground sewage plant deal

KUALA LUMPUR (Nov 3): The Malaysian government and Beijing Enterprises Water Group Ltd (BEWG) have signed an agreement for the CONSTRUCTION []
of the RM983 million Pantai 2 Sewage Treatment Plant, the country's first underground sewage treatment plant.

Minister of Energy, Green TECHNOLOGY [] and Water, Datuk Seri Peter Chin Fah Kui, said on Thursday the job was awarded to Beijing Enterprises on a design-and-build basis following the signing of a memorandum of understanding on cooperation in the sewerage services industry here on Nov 11, 2009.

Chin said the new sewage plant, with the application of green technology, would have a capacity of 1.423 million population equivalent (P.E) or equal to 320,000 cubic meters per day.

It will cater to the sewerage treatment needs of the 1.8 million residents within the Klang Valley until the year 2035.

He also said that the government would close down more than 100 small sewage plants by 2020 as the cost of operation of these plants was high.

The first phase would see 27 plants in the Pantai area closed down next year.

"The cost of operation of small plants is high. The Pantai 2 sewage plant is expected to reduce the cost of operations by 20-30 per cent," he said to
reporters at the signing ceremony here.

The Pantai 2 catchment areas covers places like Bandar Baru Sentul, the Kuala Lumpur Business District, Bangsar, Bukit Kiara recreational areas,
Seputeh, Kerinci and Old Klang Road.

Work on the project started on July 28 this year and is expected to be completed in 2015. Being a design and build contract, BEWG will be required to operate and maintain the plant for two years.

BEWG, listed on the main board of the Stock Exchange of Hong Kong, owns and operates over 70 water supply and water sewerage treatment plants in China, with an actual water treatment capacity of over seven million cubic meters daily.

Chin said the plant would see green technology initiatives such as effluent reuse and rain-harvesting system, utilisation of solar power for street
lighting, biogas utilisation, and treated effluent reuse for air-conditioning usage.

The new plant will be built underground and integrated with leisure parks, sports facilities and a community centre atop it.

"By using the advanced A20 system, the space required for the new sewerage treatment plant will be reduced by 50 per cent of the size required for a conventional treatment system using extended aeration," Chin said.

The open space allocated for sport facilities will include a football field, sepak takraw, basketball, tennis, volleyball and futsal courts as well as a
jogging track. - Bernama

RAM Ratings: Corporate bonds issuance at RM52.6b from Jan-Sept

KUALA LUMPUR (Nov 3):'' Corporate bond issuances rose to RM52.60 billion for the January-September period, of which the highest monthly issuance was RM13.30 billion of debt papers in August, according to RAM Rating Services Bhd.

'Going into the final quarter, we expect bond issuance to be on track towards achieving RAM Ratings' projection of RM60 billion for the full year,' it said on Thursday.

It said corporate bond issuance increased 13.3% quarter-on-quarter and 12.6% in the January-September period.

'In 3Q 2011, the bulk of the RM21.41 billion of offerings that came to the market comprised new issues from the financial-services and infrastructure sectors,' it said.

RAM Ratings said the sukuk market saw impressive growth. Sukuk issuance almost tripled year-to-date to RM42.10 billion, accounting for 73% of total bond issuance as at end-September 2011.

'Notably, the recent Budget 2012 announcements on tax deductions and income-tax exemptions are envisaged to encourage more sukuk issuance,' it said.

The rating agency said the market's appetite remained strong for highly rated papers; over 90% of the bonds issued as at end-September carried at least AA ratings.

'This trend is not expected to change given the uncertainties looming over the global economy and the slower growth projected for 2012. Cautious sentiment in the equity market has, however, translated into greater demand for bonds.

Maybank president Abdul Wahid is EMAC co-chairman

KUALA LUMPUR (Nov 3): MALAYAN BANKING BHD [] president and chief executive officer Datuk Seri Abdul Wahid Omar has been appointed co-chairman of the Institute of International Finance's (IIF) Emerging Markets Advisory Council (EMAC).

Maybank said on Thursday Abdul Wahid takes over from K.V. Kamath who steps down from EMAC to resume his new role as chairman of Infosys Technologies, India.

The EMAC comprises of 40 senior executives of major financial services firms in emerging markets and it advises the board of directors of the Institute of International Finance.

The IIF is a global association of financial services firms with over 440 member institutions.

Abdul Wahid said he was looking forward to working with EMAC members around the world to address compelling financial issues and 'ensure that our institutions play our role in driving continued growth of the industry, especially in such challenging times'.

He is currently chairman of the Association of Banks in Malaysia. He is also chairman of Malaysia Electronic Payment System Sdn Bhd and director of Cagamas Holdings Bhd.

He is also the vice chairman of the Institute of Banks Malaysia, and a member of investment panels of Lembaga Tabung Haji and Kumpulan Wang Persaraan (KWAP).

''

Dayang, with RM1.5b order book, seeks more contracts

KUCHING (Nov 3): Sarawak-based oil and gas services provider, DAYANG ENTERPRISE HOLDINGS BHD [] (DEHB), expects further growth after chalking up successful quarters on strong order book of RM1.5 billion until 2016.

Its executive chairman, James Ling, said on Thursday the company, listed on the Main Market of Bursa Malaysia in 2008, recorded a strong second quarter on Petronas Carigali deal.

"The primary enabler of DEHB's success is Petronas' Vendor Development Programme, a programme aimed at providing local contractors with incentives and the confidence to increase their capital base," he told Bernama here Thursday.

Sarawak's only homegrown Petronas-registered contractor grew parallel to the rise in the state's oil and gas business, and its share prices hovered around RM1.75 this week.

He said DEHB's success and accomplishments over the past 30 years were mainly due to the support and guidance from Petronas Carigali, Shell and Murphy Oil.

The programme also allowed DESB to expand its business and become a competitor in the international and local markets, he said.

Ling said DEHB qualified for the programme by bringing in Bumiputera partners.

DEHB started in 1980 as a hardware and manpower supplier with a capital of only RM10,000, four employees and 100 offshore workers.

Today it is a thriving enterprise providing maintenance services, fabrication operations and hookup and commissioning services with 300 employees and 1500 workers deployed to its offshore operations. - Bernama

Iskandar Malaysia gets RM2.5 bln investment from China company

KUALA LUMPUR (Nov 3): Iskandar Investment Bhd, the catalytic project developer of Iskandar Malaysia, has secured a RM2.5 billion real estate investment from China-based company, Qingdao Zhouyuan Investment Holdings.

Qingdao Zhouyuan is a subsidiary of Hebei-based real estate developer, Zhouda Real Estate Group.

President and chief executive officer Datuk Syed Mohamed Ibrahim said on Thursday the investment project, over three phases, will commence next year and be over a period of about 10-15 years.

"This is the first real estate investment by a foreign company in Medini Iskandar Malaysia and the biggest project investment in the area, to date," he added.

He was speaking to reporters after signing two framework agreements with Qingdao Zhuoyuan for the development of mixed residential and commercial projects in Medini Iskandar here.

The ceremony, witnessed by Deputy Prime Minister Tan Sri Muhyiddin Mohd Yassin, was held in conjunction with the third World Chinese Economic Forum.

The first framework is for the establishment of a joint venture between Iskandar Investment and Qingdao Zhuoyuan to develop a residential project on a 7.256-hectare plot in Medini North, in close proximity to LEGOLAND Malaysia.

The total sales value (TSV) of the project, 80 per cent owned by Qingdao Zhouyuan, is RM157.6 million with an estimated initial investment reaching RM1.2 billion.

The second framework agreement is for the sale of lease for a 3.896-hectare plot, also in Medini. Qingdao Zhouyuan will establish a mixed-use development on the site, which has a TSV of RM70.8 million and total investment estimated at an initial RM520 million.

"Qingdao Zhouyuan's investment into Medini, is a clear affirmation of the company's confidence in the growth potential of Iskandar Malaysia and Iskandar Investment as its investment partner, to take on opportunities in Southeast Asia," Syed Mohamed said.

Currently, Iskandar Investment is also in discussions with several foreign investors from China, Korea, Indonesia, Japan, India and Singapore in the Iskandar Malaysia project.

The discussions are expected to be finalised in the next six months. - Bernama

SC, Bursa launch probe into MAS-AirAsia share swap

KUALA LUMPUR (Nov 3): The Securities Commission (SC) and Bursa Malaysia have launched an investigation into the swap deal between state
investment arm Khazanah Nasional Bhd and Tune Air Sdn Bhd of shares in MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and AIRASIA BHD [].

Deputy Finance Minister Datuk Dr Awang Adek Hussin told the Dewan Rakyat on Thursday the probe would also look into the possibility of insider trading.

"It will take time because it involves many accounts and a huge value. "In this matter we need to look into it thoroughly," he said when winding-up
the debate on the Supply Bill 2012 on the ministry's behalf.

He said if the probe by the SC and Bursa Malaysia found evidence of insider trading, the Malaysian Anti-Corruption Commission (MACC) could also be invited
to investigate.

Under the deal announced in August, Tune Air and Khazanah -- the major shareholders of AirAsia and MAS respectively -- agreed to swap their shares
which resulted in Tune Air holding 20.5 percent equity interest in full service carrier MAS and Khazanah holding 10.0 percent equity interest in budget airline AirAsia. - Bernama

Greek woes hammer stocks, KLCI dn 9.5pts

KUALA LUMPUR (Nov 3): Most key regional markets fell in the morning session on Thursday as investors worried about the fallout in the impasse between Greece and the EU as its debt rescue hung in a balance.

At 12.30pm, the FBM KLCI fell 9.56 points or 0.65% to 1,461,39, the third day of straight losses for the 30-stock index.

Turnover was 1.10 billion, mainly due to heavy trading in penny stocks like Karambunai, Tejari, Harvest and Compugates which totalled more than 310 units done.

The quality was however lower, valued at RM538.52 million. Declining stocks beat advancers 417 to 208 while 244 counters were unchanged.

Taiwan's Taiex fell the most, down 1.54% to 7,481.67, Singapore's Straits Times Index lost 1.16% to 2,801.75, South Korea's Kospi 1.12% to 1,876.81 and Hong Kong's Hang Seng Index 0.98% to 19,540.28.

Reuters reported the leaders of Germany and France told Greece on Wednesday it would not receive another cent in European aid until it decides whether it wants to stay in the euro zone. They also made clear that saving the euro was ultimately more important to them than rescuing Greece.

US light crude oil fell 96 cents to US$91.55 and the ringgit weakened against the US dollar to 3.1500.

Crude palm oil third-month futures fell RM14 to RM2,946 per tonne. The weakening CPO prices also weighed on PLANTATION [] stocks, which emerged as the top losers.

Kuala Lumpur Kepong fell the most, down 32 sen to RM20.78, Sarawak Oil Palms and PPB 28 sen each to RM4.18 and RM16.82 while Batu Kawan shed 24 sen to RM15.70 while IOI Corp declined six sen to RM5.08.

Tenaga fell 13 sen to RM5.73, dragging the index down by 1.63 points. Among finance stocks, CIMB's decline of nine sen to RM7.22, pushed the index down 1.55 points, Maybank fell three sen to RM8.25 and Public Bank four sen to RM12.66. HLFG fell the most, down 24 sen to RM11.70.

Karambunai was the most active with 107.26 million shares done, down two sen to 18.5 sen. Tejari added 0.5 sen to eight sen with 61.19 million shares done. Compugates was unchanged at 6.5 sen with 45.82 million shares done.

However, Harvest extended its gains, rising to a fresh six-year high of 56.5 sen with 45 million shares done while its warrants rose 6.5 sen to 51.5 sen with 49.97 million units done.

Guinness Anchor was the top gainer, adding 16 sen to RM10.90 after posting a strong set of earnings, Carlsberg added six sen to RM7.01.

Bursa Securities defers delisting of Tricubes

KUALA LUMPUR (Nov 3): Bursa Malaysia Securities Bhd has deferred the decision to suspend and delist the securities of TRICUBES BHD [].

The stock exchange said on Thursday the deferment was made after the company submitted an application for more time to submit its regularisation plan.

At midday, the share price was up 0.5 sen to 16 sen.

Bursa Malaysia fines dealer's rep RM10,000 over unlawful trades

KUALA LUMPUR (Nov 3): Bursa Malaysia Securities Bhd has rapped and imposed a fine of RM10,000 on Zainol Abidin Ahmad over unlawful and unethical trading activities in the securities of SURIA CAPITAL HOLDINGS BHD [] and Pilecon Bhd warrants.

The stock exchange had on Thursday also ordered that Zainol Abidin be struck off from the Register as a Dealer's Representative.

It said Zainol, who committed the offence at that time, was a dealers' representative of HwangDBS Investment Bank Bhd.

Bursa Securities said he had triggered and breached the provisions of Rules 1302.1(1)(a)&(g), 401.1(1)(f), 404.3(1)(a)&(b) and 1302.1(1)(i)(iii) of the Rules of Bursa Securities.

It said Zainol had carried out several sale and purchase transactions in the securities of Suria and Pilecon-WA using a client's account.'' The client has denied knowledge of or authorising these transactions. The unauthorised transactions resulted in losses which were disputed by the client.

It added that Zainol'' failed to act in the best interest of his client by executing personal trades using his client's account for his own benefit as admitted by him in a declaration made to the client. Despite making the declaration, he had failed to settle the outstanding amount in his client's account.

''

Lingui plans RM143m investment for FY2012

KUALA LUMPUR (Nov 3): LINGUI DEVELOPMENT BHD [] plans to invest RM143 million in FY2012 for timber replanting efforts, infrastructure and upgrading of equipment.

Its managing director Yaw Chee Ming said on Thursday the group is looking at replanting between 10,000 ha to 15,000 ha of its timber PLANTATION [] here for FY2012.

"Our hardwood trees mature between 8 to 10 years. We have planted some 30,000 ha and hope to replant up to 15,000 ha," he said after the group's AGM, adding replanting cost between RM4,000 to RM5,000 per ha.

Yaw also said Lingui plans to upgrade its machinery to cope with worker shortage from Indonesia.

On its softwood plantations in New Zealand, Yaw said Lingui plans to increase its harvest to 800,000 per cubic metre per annum in the next two to three years, with the upgrading of infrastructure.

"We are investing between RM8 million to RM12 million to build roads and other infrastructure that would help increase our harvest," he said.

Lingui has 25,000 ha of planted pine trees in New Zealand and harvested 520,000 cubic metres of softwood for FY2011.

CIMB Research has technical sell on Public Bank

KUALA LUMPUR (Nov 3): CIMB Equities Research has a technical sell on Public Bank at RM12.70 at which it is trading at a FY12 price-to-earnings of 10.9 times and price-to-book value of 3.2 times.

It said on Thursday the recent rebound from the September lows has taken prices back up to almost its 78%FR levels. The stiff resistance at RM12.80-RM12.85 could potentially keep the bulls at bay.

'Technical landscape is still positive but both indicators are starting to weaken. Its MACD histogram and RSI appear to be flattening out.

'Traders should begin to lock in some profits after prices approaches the said resistance. A break below RM12.48 is likely to take prices towards RM11.80-RM12.05 levels in the short to medium term,' it said.

CIMB Research has technical sell on Telekom Malaysia

KUALA LUMPUR (Nov 3): CIMB Equities Research has a technical sell on Telekom Malaysia at RM4.19 at which it is trading at a FY12 price-to-earnings of 20 times and price-to-book value of 2.3 times.

It said on Thursday the fall from Telekom's high of RM4.50 appears to be impulsive. The current rebound has taken prices back up to retest its 62%FR levels.

'The technical landscape remains lethargic. MACD has just confirmed its dead crossover while its RSI sports a minor bearish divergence signal.

'Sell into strength with a buy stop placed above RM4.33. Prices could ease back below the recent low of RM3.93-RM4.00 towards the key support trend line at RM3.75 once this rebound ends,' it said.

CIMB Research has technical sell on JCY

KUALA LUMPUR (Nov 3): CIMB Equities Research has a technical sell on JCY International at 60 sen at which it is trading at a FY12 price-to-earnings of 8.8 times and price-to-book value of 1.4 times.

It said on Thursday the recent sharp rebound has taken JCY back up towards its 200-day SMA and it appears to be finding some difficulty in breaching it. Two out of the last three candles had long upper shadow, probably suggesting that sellers are quite strong around those levels.

'Both indicators look to be flattening out and its RSI is also spoting a bearish divergence. A possible reversal perhaps?

'We believe that the upside from here is likely limited. Avoid buying now. Continue to sell on rebounds as we think that prices are likely to head back towards 53 senfirst and settle between 48 sen and 53 sen to form a strong base.

HDBSVR sees KLCI testing 1,475

KUALA LUMPUR (Nov 3): Hwang DBS Vickers Research (HDBSVR) said the steadier overnight close on Wall Street may lift share prices on Bursa Malaysia on Thursday.

The benchmark FBM KLCI will probably rise to challenge the immediate resistance level of 1,475 ahead, it said.

HDBSVR said overnight, major equity indices on Wall Street rebounded between 1.3% and 1.6% overnight, boosted by stronger US economic fundamentals.

According to the U.S. Federal Open Market Committee, the U.S. economy had strengthened in 3Q11 but there remain significant downside risks to the outlook, which prompted the policymakers to indicate that they are ready to employ new tools if required to promote a stronger economic recovery.

At Bursa Malaysia, it said the steadier external backdrop may lift share prices on Bursa.

HDBSVR said one counter that is expected to be in the limelight today is Parkson Holdings. The listing of its subsidiary Parkson Retail Asia in Singapore this morning could set a new valuation benchmark for the Malaysian-listed parent going forward.

GLOBAL MARKETS-Stocks, euro, oil fall as investors shun risk

SINGAPORE (Nov 3):'' Asian shares, the euro and the Australian dollar all fell on Thursday as fears that Europe's debt crisis could unleash financial chaos prompted investors to continue shedding riskier assets in favour of the relative safety of the dollar.

U.S. stock futures also eased, stepping back from a Wall Street rebound on Wednesday, as leaders of the world's biggest economies began arriving in France for a G20 summit set to be dominated by concerns that Greece is on course for default.

The leaders of France and Germany, angered at Greece's shock move to call a referendum on its latest bailout plan negotiated last week, told Prime Minister George Papandreou on Wednesday that Athens would not receive another cent in EU aid until it decides whether it wants to stay in the euro zone.

If Greek voters reject the 130 billion euro bailout package, which is conditional on harsh austerity measures, it could lead to a disorderly default, with the fallout affecting European banks and rippling across the global financial system.

MSCI's broadest index of Asia Pacific shares outside Japan fell 0.9 percent, while S&P 500 futures traded in Asia lost 0.8 percent. Wall Street shares had gained more than 1.5 percent on Wednesday.

Tokyo's financial markets were closed for a public holiday.

As well as watching events at the G20 summit in Cannes, investors were also focused on Frankfurt, where the European Central Bank was holding its first policy meeting under new President Mario Draghi.

Many analysts see the ECB as the only institution with the firepower to calm tensions, and the key question after the meeting -- at which no change in interest rates is expected -- will be whether it will increase its purchases of bonds issued by debt-ridden euro zone states.

On Wednesday the U.S. Federal Reserve offered no new stimulus, but said it was mulling the possibility of buying more mortgage debt to spur a struggling recovery.

The euro fell 0.5 percent to around $1.3680 as investors took sanctuary in the dollar, which rose by a similar margin against a basket of six major currencies .

The pullback from risk also knocked oil lower, with U.S. crude down 0.6 percent at $91.95 a barrel and Brent crude off 0.2 percent at $109.10.

The Australian dollar , seen as a "risk" currency because it is heavily influenced by demand for Australia's natural resources, fell 1 percent to around $1.0230. - Reuters

Blue chips in the red in early trade

KUALA LUMPUR (Nov 3): Blue chips fell in early trade on Thursday, as sentiment continued to stay cautious in line with regional markets despite the firmer overnight close on Wall Street.

At 9.10am, the FBM KLCI was down 7.28 points to 1,463.67, extending its losses for the third consecutive day. Turnover was 183.34 million shares valued at RM71.31 million. Losers led gainers 108 to 99 while 151 counters were unchanged.

DiGi fell the most, down 30 sen to Rm32, HLFG 26 sen tp RM11.68, PetGas 14 sen to RM12.96 while Sime and Tenaga gave up eight sen each to RM8.70 and RM5.78.

Maybank, CIMB and AirAsia fell five sen each to RM8.23, RM7.26 and RM3.80 while Genting retreated four sen to RM10.22.

OSK Research: Stronger rebound in banks crucial for sustained rally

KUALA LUMPUR (Nov 3): OSK Retail Equities Research said on Thursday an improvement in the relative strength of banking stocks is paramount for a sustained rebound for the FBM KLCI.

It said the broad market had staged a respectable rebound since reaching a low on Sept 26. The benchmark FBM KLCI managed to regain slightly more than 62% of the July-September decline, which is a respectable feat given the extent of the drop.

OSK Research pointed out that banking stocks also rebounded in tandem given their high weighting in the benchmark index.

'But many may not notice the relatively weak rebound of banking stocks compared to that of the benchmark. Therefore, an improvement in the relative strength of banking stocks is paramount for a sustained rebound for the FBM KLCI,' it said. In its Thursday report, it identified banking stocks which may lead the market on its recovery path and vice versa.

Maybank:

OSK Research said Maybank showed much promise at the early phase of decline that started in July.

The stock was able to hold above the 10-month support level at RM8.40, which translates into outperformance in its relative strength line of August-September.

However, its performance deteriorated after breaking below the support level, as shown by the downward sloping relative strength line for the whole of October.

A break below the one-year support level could see the continuation of the underperformance of this stock. The price trend is similarly weak although not as pronounced as its relative strength line.

The series of lower highs since April is unbroken and a close below RM8.20 should see the continuation of the price weakness.

Strong support is expected at RM7.50, the 52-week's lowest close, above which a break should see the test of the May 2010 low of RM7.00.

''

CIMB

CIMB is one of the stocks that are hit hardest since the broad market sell-off began in July. The failed test of the all-time high heralded the start of a reversal in its market outperformance since early-2009.

Its relative strength line even broke below the March low. Despite having made a short-term higher high since 26 Sept and trading above the 50-day MAV line, the stock's relative strength has stayed flat and well below the broken support.

The October price retracement was also weak as it clawed back only 38% of the July-September decline at RM7.50.

A close below the two-week low of RM7.15, also a Fibonacci retracement of the July-September decline and where the 50-day MAV lies, should see a return in selling and a possible continuation of its underperformance.

Watch out for the share price to test the recent low of around RM6.50 and if violated, the stock may trade at as low as RM6.00, which is the low of February 2010.

However, another break above RM7.50 may see a return of its outperformance, provided that its relative strength line breaks above the broken March support.

Public Bank

Similar to Maybank, Public Bank managed to stave off the early selling pressure of July/August.

But that took a turn after the stock broke the February-low and the subsequent rebound off the Sept 26 low underperformed the benchmark.

This is not too different from the relative strength performance from January-July. One marked difference is that the relative strength peak in September was higher than that of January, indicating a possible uptrend should the relative strength line make a higher low.

This displays the stock's more defensive nature versus the other two big-cap banks, and the possibility of a faster recovery once the broad market downtrend ends.

The price trend is, nonetheless, weak judging from the lower lows since January, and a close back below RM12.50 should see a continuation of the downward movement, with support expected near the recent low of RM11.50.

But watch out for a return in buying as the stock may lead the sector on a price uptrend.

''

Alliance Financial Group

The stock has been unexciting, at least in relative strength terms, as illustrated by its sideways move up to June.

However, things changed in July when the stock broke above the resistance level, both in terms of price and relative strength.

The share price has retraced subsequently but its relative strength line stays at a high level, and had even made higher lows.

This puts the stock in a strong position to rally once the benchmark trend weakness is over.

Note that the stock broke its four-month downtrend two weeks ago and its 50-day MAV is pointing up. Its price support and resistance levels are clear at RM3.00, RM3.20, RM3.60 and RM3.80.

From the widest point of the trading range, the share price may even test RM4.60 should the RM3.80 resistance level be broken.

However, a break below RM3.00 should see it heading lower. This should also see a breakdown in its relative strength line.

Expect support at the May and Feb 2010 lows of RM2.60 and RM2.40 respectively.

Maybank Research upgrades Guinness to Buy

KUALA LUMPUR (Nov 3): Maybank Investment Bank Research has upgraded GUINNESS ANCHOR BHD [] to a Buy with a marginally higher target price of RM11.50 (from RM11.30) on raised earnings.

It said on Thursday that GAB's'' first quarter net profit for the period ended Sept 30 (1QFY12) of RM55.2 million (+42.7% YoY, 89.9% QoQ) were broadly above expectations.

Maybank Research said revenue hit a new record of RM445 million and margins expanding further.

'What is positive is that Guinness would appear to be gaining market share in the malt liquor market and with decent gross yields of about 5.6% in FY12 to boot, we upgrade our call to a Buy with a marginally higher target price of RM11.50 (from RM11.30) on raised earnings,' it said.

The research house said the 1QFY12 net profit accounted for about 26% of its full-year forecast and this is fairly strong, considering the fact that 2Q and 3Q are typically the seasonally better quarters for earnings. 1Q12 revenue growth was an impressive 21% YoY (+27% QoQ) to RM444.6m (+21.3% YoY, +27.5% QoQ).

Plantations weigh on blue chips

KUALA LUMPUR (Nov 3): PLANTATION []s weighed on blue chips on Thursday as the FBM KLCI extended its losses in line with the cautious regional markets.

At 10.12am, the FBM KLCI fell 13.38 points to 1,457.57. Turnover was 631.64 million shares done valued at RM260.62 million. There were 138 gainers, 320 losers and 206 stocks unchanged.

Among the plantations, KLK fell 40 sen to RM20.70, Sarawak Oil Palms 26 sen to RM4.20, PPB and Batu Kawan 14 sen each to RM16.96 and RM15.80.

Other decliners were BAT, down 48 sen to RM45.52, DiGi and HLFG 24 sen each to RM32.06 and RM11.70 while Petronas Dagangan shed 20 sen to RM16.

Wall St. on edge over Greece, Bernanke soothes

NEW YORK (Nov 2): Stocks rebounded from two days of sharp losses on Wednesday after the Federal Reserve said it is prepared to do more for the economy if conditions warrant, helping to stanch the panicky reaction to Europe's debt crisis.

Trading volume was light, however, possibly signaling that worries about Greece hold greater sway than the Fed at this time. Investors sold heavily this week after Greece said it would hold a referendum on an EU bailout crucial to stabilizing the euro zone's financial system.

Federal Reserve Chairman Ben Bernanke said the central bank was closely monitoring developments in Europe and left open the possibility that the Fed could expand its holdings of mortgage debt if U.S. economic conditions worsened.

"Bernanke was clear that they were prepared to do more, that they have the tools to do more," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. "We remain in a very volatile situation."

The energy and financial sectors were among the strongest performers on Wednesday after having led the market lower the previous two sessions. The S&P energy index rose 2.9 percent while the financial index rose 2.8 percent.

Some 7.5 billion shares were traded on the NYSE, the Amex and Nasdaq, which was nearly 10 percent below the 20-day moving average and well below Tuesday's high volume selloff when over 10 billion shares changed hands.

"There's no volume, which means there's no conviction in the move; the market remains 100 percent "macro" driven, and any news out of Europe could still shift markets," said Eric Lichtenstein, managing director at Knight Capital in Jersey City, New Jersey,

The Dow Jones industrial average rose 178.08 points, or 1.53 percent, at 11,836.04. The Standard & Poor's 500 Index gained 19.62 points, or 1.61 percent, at 1,237.90. The Nasdaq Composite Index added 33.02 points, or 1.27 percent, at 2,639.98.

Also helping Wednesday's market gains, data showed U.S. private employers added more jobs than expected last month, continuing a recent pattern of better-than-expected economic data.

Conditions in Europe remained a wild card as sources told Reuters the EU and IMF will not release an 8 billion euro payment to Greece until after the country has held its referendum, which could happen in December.

Among advancing stocks, Citigroup Inc gained 2.3 percent to $29.83 and JPMorgan Chase & Co added 2.8 percent to $33.64. The KBW Bank index climbed 3.3 percent.

The CBOE volatility index eased after gaining more than 40 percent over the past two sessions to hit its highest in a month. On Wednesday it fell 5.8 percent to 32.74.

Despite a decline in the VIX index, often called Wall Street's fear gauge, it is still about 16 percent above fair value and is likely to remain elevated as traders struggle to price Greek referendum risk, Credit Suisse said in a research note.

"The furious VIX perturbation and gyrations observed over the last two days can basically be distilled down to the following takeaway: equity investors don't know how to price referendum risk," said Credit Suisse in a research note.

MasterCard Inc shares jumped 7 percent to $357.66 after the credit card processor reported its quarterly profit easily beat estimates on double-digit increases in volumes. - Reuters

Fed lowers GDP forecast, mulls more action

WASHINGTON (Nov 2) The Federal Reserve on Wednesday slashed its forecast for growth, raised projections for unemployment and said it was mulling the possibility of buying more mortgage debt to spur a struggling recovery.

While members of the central bank's policy-setting panel voted 9-1 to hold a steady course, one official urged more stimulative action now and Fed Chairman Ben Bernanke said Europe's debt crisis posed big economic risks.

At a news conference after a two-day meeting, Bernanke said buying more mortgage-backed securities was an option to help the economy and added that the U.S. central bank was still looking for ways to give clearer guidance on its policy path.

"While we still expect that economic activity and labor market conditions will improve gradually over time, the pace of progress is likely to be frustratingly slow," he said.

"Moreover, there are significant downside risks to the economic outlook," Bernanke said. "Most notably, concerns about European fiscal and banking issues have contributed to strains in global financial markets, which have likely had adverse effects on confidence and growth."

He said the central bank was "closely" monitoring developments in Europe. Group of 20 political leaders are meeting in Cannes, France, on Thursday and Friday, with the euro zone debt crisis expected to dominate talks.

One analyst speculated that concern about potential instability in Europe -- especially after a shock decision by Greece to hold a referendum on a bailout package that had been agreed to -- likely played into the Fed's decision.

"The Fed probably wanted to preserve its ammo until there was more clarity on how the European sovereign debt crisis unfolds," said Bernard Baumohl, chief global economist for The Economic Outlook Group, in Princeton, New Jersey.

The Fed's decision had little impact on financial markets. U.S. stocks held early gains, prices of 10-year Treasury notes were little changed on the day and prices for MBS tracked the larger debt market.

WEAK SIGNALS

In fresh quarterly projections, the Fed lowered forecasts for growth and raised forecasts for unemployment for this year, 2012 and 2013. Policymakers do not see the jobless rate, now at 9.1 percent, falling to a level they consider consistent with full employment even by the outer edge of their forecasting horizon, the final quarter of 2014.

Officials now expect the world's largest economy to grow by a tepid 2.5 percent to 2.9 percent next year, down from the rosier 3.3 percent to 3.7 percent they were expecting in June, with inflation muted over the forecast horizon.

They see the unemployment rate going no lower than 8.5 percent to 8.7 percent by the end of 2012, up from the more sanguine 7.8 percent to 8.2 percent range envisioned in June.

Fed officials believe the economy will have reached full employment when the jobless rate drops to between 5.2 percent and 6 percent, with a growing number seeing it at the top of that range. In their forecast, the unemployment rate would still be at 6.8 percent to 7.7 percent at the end of 2014.

Bernanke has called the lofty level of U.S. unemployment a national crisis and some officials at the central bank have urged new steps to foster stronger growth.

Charles Evans, president of the Chicago Federal Reserve Bank, dissented on Wednesday because he wanted to ease policy at this meeting, while three officials who had voted against an easing in September supported the consensus.

DEBATE CONTINUES

Evans has suggested the Fed keep interest rates near zero until the unemployment rate reaches 7 percent, unless inflation threatens to rise above 3 percent.

Bernanke indicated that there was a range of different approaches to the Fed's policy framework that were under debate, including the idea put forward by Evans. However, he was dismissive of an approach recommended by several economists -- targeting nominal GDP -- and said the Fed would continue to keeps its focus on inflation and employment.

"We are not contemplating at this time any radical change in framework," he said.

The U.S. central bank's debate over the course of policy comes against a troubled global backdrop and with the U.S. economy far from full health.

Greece's call for a referendum on the latest euro zone debt deal dashed hopes Europe had finally come to grips with its debt crisis, sending global equity markets into a tailspin.

The U.S. recovery remains anemic and could be knocked off course if Europe fails to quell its crisis. The economy grew at a 2.5 percent annual pace in the third quarter, a significant improvement over the second quarter but still too soft to put a dent in unemployment.

Faced with a still-weak recovery, the Fed in September embarked on a program to sell $400 billion in short-term Treasuries and invest the money in longer-dated bonds, an effort to keep long-term rates down.

It also dipped back into the mortgage market by reinvesting proceeds of its real estate bond holdings back into MBS.

While Bernanke left open the possibility that the Fed could expand its holdings of mortgage debt, he stopped short of pledging action.

"I do think that purchases of mortgage-backed securities is a viable option. Certainly, something we would consider if the condition were appropriate," Bernanke said. - Reuters

MF Global customers fume as funds, trades frozen

CHICAGO/NEW YORK (Nov 2): Joe Ocrant, a veteran livestock trader, is livid.

His accounts frozen, unable to trade with his bankrupt broker and denied access to the Chicago trading floor, his frustration over the failure of 230-year-old MF Global was turning to rage as regulators said it may have misappropriated some $600 million in customer funds.

Ocrant remained hopeful that somehow his collateral at MF Global would be returned. In the meantime, like so many others, he was left idle, unable to transfer or liquidate his trades.

"I am aggravated and upset.... I feel fairly confident my customers will be made whole. The question is how long the feds will tie the funds up so they can't be used," said Ocrant, president of livestock-focused fund Oak Investment Group.

It was a common tale across the markets.

As the initial chaos surrounding the collapse and bankruptcy of one of the commodity market's leading brokers slowly subsided, former customers fumed over the slow and frustrating process of moving their traders over to rival brokers or returning the cash used to back them.

Some hope for a more rapid resolution appeared near after U.S. Bankruptcy Judge Martin Glenn in New York late on Wednesday approved the transfer of customer accounts to other brokers, which should speed the process.

Before MF Global brokers stopped processing transactions earlier on Wednesday, customers faced a Hobson's choice: close out positions they might otherwise maintain, or put up a second hefty dose of collateral.

A total of 150,000 customer accounts were effectively frozen on October 31, more than a third commodity accounts, according to the court filing on Wednesday. That is too much diversity for any single broker to take on, and six other brokers were named likely to take the accounts.

MF Global, as a clearing broker, was responsible for taking the collateral required to back the trades it placed on exchanges. Getting that collateral back was proving difficult.

Tales of vague responses, unanswered telephones and confusing plans spread among the many independent introducing brokers, local traders and small-scale hedgers that made up a sizable share of MF Global's business.

"I'm confident that eventually this will be sorted out but for the moment when you call MF Global and the call doesn't get answered for two to three hours, how do you think customers feel? They can't open new positions which is not good in these volatile markets. You either liquidate it or sit on it," says Matthew Bradbard of MB Wealth Commodity Brokerage in Florida.

COLLATERAL DAMAGE

In theory, up until earlier on Wednesday, customers could call MF Global brokers and close out their trading positions or arrange to have them transferred to another broker, a process that was being partly facilitated by the exchanges.

In practice, MF Global has not been able to cope with the mad scramble to liquidate or hand over positions.

"The problem is there are only five people on their 'give-in' desk at MF and 30,000 screaming customers," said one hedge fund manager.

Additionally, with MF Global in bankruptcy, the collateral it was holding to back those trades -- typically 5 to 10 percent of the face value of the contracts, some $5,000 or up to nearly $20,000 per contract -- was stuck at the broker.

As a clearing broker, MF Global would have been holding three types of customer funds in its segregated accounts: 1) the minimum margin required to clear trades on the exchange; 2) additional margin over and above that sum that the broker itself may have required of smaller or less credit-worthy customers; 3) any excess funds over and above the collateral that customers would have simply left on account.

Brokers have been loath to take on new positions without the payment of new margin.

Sean McGillivray, Vice-President at Great Pacific Wealth Management in Grants Pass, Oregon, relayed a typical story.

Since MF Global declared bankruptcy on Monday, he has tried without success to move $5.5 million in funds tied to commodity futures positions to a rival broker, RJ O'Brien, one of the biggest independents after MF Global.

But as he's discovered, while brokers are happy to take the positions, he'll need to stump up new capital for margin.

"For us to move positions without collateral, that's basically worthless," he told Reuters.

He said the allegations of missing money had added complexity to what is meant to be a relatively smooth process of moving funds from one broker to another.

"We seem to be in the dark on the regulatory side, from the MF Global management side and also from the exchange side."

Every day the complexity grows.

With prices gyrating, the amount of margin that traders are required to post fluctuates daily. For loss-making positions, that means an even higher collateral requirement than on Friday, when MF Global was last operating. For profitable trades, that means more money due back from the broker.

SMALL TRADERS HURT MOST

MF Global was a leading broker in the U.S. commodity markets, claiming the No. 1 most active spot on the key New York oil and metals markets and the No. 2 spot at the Chicago Mercantile Exchange's grain and financial pits.

It acquired a sizable number of smaller local customers when it took over much of the business of Refco, a once-mighty broker which failed six years ago.

Those smaller customers are scrambling, since few had relationships with other brokers or extra capital to manage their trades. Many independent commodity brokers have been eager to lift some MF Global customers, but not for free.

"The policy is we'll take positions from MF Global only if the client will margin them," said Pedro Dejneka, director of business development RJ O'Brien, one of the firms that was subsequently named likely to take on some MF Global accounts.

"It's tough for them, not every client from MF Global has the extra money to do this as it's still tied up. You want to be able to help the client out but you just can't take the risk. They need to double-margin."

It is not clear exactly how much money is trapped at MF Global, and the company's brokers have been unable to offer much reassurance to clients.

"I think my broker at MF has been as helpful as he is allowed to be and has been answering in the boilerplate that they're being allowed to say." says George de Luna, an independent energy trader.

"I asked, aren't the accounts segregated and they should be okay? and the broker answered: 'In the theory, yes. That did set off alarm bells." - Reuters