Stocks suffer worst week in 2 months on Europe woes

NEW YORK (Nov 25): Stocks posted seven straight sessions of losses on Friday, ending the worst week in two months, as the lack of a credible solution to Europe's debt crisis kept investors away from risky assets.

Wall Street traded higher for most of the abbreviated session on hopes that "Black Friday," the traditional start of the U.S. holiday shopping season, would support major retailers. But gains were quickly offset by headlines out of Europe that further dented market sentiment. With less than 20 minutes before the close, all three stock indexes had turned negative.

Yields on Italy's debt approached recent highs that sparked a sell-off in world markets. Italy paid a record 6.5 percent to borrow money over six months on Friday, and its longer-term funding costs soared far above levels seen as sustainable for public finances.

High debt yields from major economies in Europe such as Spain, France and Germany suggest investing in the region is seen as being more risky.

"Trading remains cautious (since) the poor auction of German bonds mid-week raised concerns the debt crisis is spreading to Europe's core," said WhatsTrading.com options strategist Frederick Ruffy.

Adding to concerns, Standard & Poor's downgraded Belgium's credit rating to double-A from double-A-plus, citing concerns about funding and market pressures.

The Dow Jones industrial average .DJI slipped 25.77 points, or 0.23 percent, to 11,231.78 at the close. The Standard & Poor's 500 Index .SPX declined 3.12 points, or 0.27 percent, to 1,158.67. The Nasdaq Composite Index .IXIC shed 18.57 points, or 0.75 percent, to 2,441.51.

For the week, the S&P 500 fell 4.7 percent, giving back almost two-thirds of its gains in October, the market's best month in 20 years. The Dow was off 4.8 percent for the week and the Nasdaq fell 5.1 percent.

Pressuring the Nasdaq, shares of Netflix (NFLX.O) fell 6.8 percent to $63.86.

Entertainment companies with major consumer product units ranked among the gainers. U.S.-listed shares of Sony Corp (SNE.N) rose 4.2 percent to $16.96. Disney (DIS.N) shares rose 0.3 percent to $33.51.

Trading volume was thin, as expected, with just 3 billion shares changing hands on the New York Stock Exchange, NYSE Amex and Nasdaq as the stock market closed at 1 p.m. The day after Thanksgiving is typically one of the lightest trading volume days of the year. - Reuters

Tata's choice of chairman preserves Parsi tradition

MUMBAI (Nov 26):'' The days when Mumbai's Parsi community dominated a city they helped to build may have faded, but the rise of Cyrus Mistry to the helm of the Tata Group reinforces the clout it wields in some of India's biggest conglomerates.

Mistry's selection as chairman-designate of India's biggest corporate house keeps the group close to the founding Tata family as he is a member through the marriage of his sister. The choice also keeps the business in the hands of the close-knit community which is as old as the city itself.

From shipyards to textile firms, Mumbai's Parsis, descendants of Persians who first landed in India in the ninth century, led the city's commercial development from sleepy fishing islands to one of Asia's business capitals.

Big business houses led by the Tata, Godrej and Wadia families keep that tradition alive today.

"Tata is a Parsi business, and so it is important that someone who grasps the culture of the group is at the top," said Zubin Karkaria, a Parsi and chief executive officer and managing director of international visa administration firm VFS Global.

Bombay House, the brick colonial building in the heart of south Mumbai where Mistry, 43, will take the reins of the $83 billion Tata empire next December, is the seat of power for a community Parsis say is inseparable from the city's history.

Mistry is the youngest son of construction magnate Pallonji Mistry, known as "the world's richest Parsi" with estimated wealth of $8.8 billion, according to Forbes.

Octogenarian Pallonji and the 73-year-old Ratan Tata are stalwarts of business groups that date back more than 140 years, carrying on a legacy of more than 300 years of Parsi-led industrial development in India's commercial capital.

Other Parsi industrialits such as Adi Godrej, head of the consumer goods and real estate-focused Godrej Group, and textile and property baron Nusli Wadia, ensure their business influence far outstrips their dwindling numbers.

"Parsis really were the pioneers of the Indian industrial movement and have put a lot into the industrial development of the country," said Shernaaz Engineer, editor of Jam-e-Jamshed, the 179-year-old Parsi newspaper.

Nariman Point, which is losing its stature as the city's prime business district, is named after the Parsi who built it, while many of Mumbai's hospitals and colleges bear the names of Parsi merchants who forged the city's development as a trade hub in the 19th century.

350 YEARS OF HISTORY

The Parsis settled in Mumbai in the 1640s when the city was under Portuguese control, according to the Bombay Parsi Punchayet (BPP), a 330-year-old administrative body.

By the mid 19th-century, Parsi industrialists had launched trading, printing and engineering businesses and in 1854, founded the city's first commercial bank.

"They have really put a lot into the city," said Engineer. "Mumbai and the Parsis are absolutely interlinked."

Surnames like Engineer, or Contractor and their job-specific Indian equivalents are common among the Parsi community.

Today, BPP administers over 4,000 Parsi-only apartments across the city open only to vetted applicants, runs a Parsi-only blood bank and awards scholarships and other financial support to students from the community.

But the group's numbers are sliding. From 112,000 in 1951, the population of Parsis in India dropped to just under 70,000 in 2001, according to census data. Sociologists say the trend will likely continue.

"The community faces the threat of extinction," wrote the award-winning Indian screenplay writer Sooni Taraporevala in her 2004 book "Parsis: The Zoroastrians of India".

"Zoroastrianism is a non-proselytizing religion -- there are no converts," she wrote. "One can only be born into it. Marriage outside the community is not encouraged."

That has to change, say liberal members of the community, if the it is to survive. Taskforces have been set up to develop strategies to encourage families to have more children, and promote marriages to non-Parsis. - Reuters

Japan reconsiders boardroom rules amid Olympus scandal

TOKYO (Nov 26):'' A Japanese government panel will propose mandatory appointments of outside directors on boards of large firms in the hope of averting the kind of accounting scandal that has engulfed Olympus Corp.

But expectations of meaningful change are not high, and experts say the process in which companies pick outside directors may also need regulatory adjustment.

The British ex-CEO of Olympus, Michael Woodford, emerged from a meeting of directors on Friday convinced its board would eventually quit.

Major foreign shareholders have called for Woodford to be immediately reinstated, saying he can restore faith in the 92-year-old cameral and endoscope maker.

Olympus fired Woodford, a rare foreign CEO in Japan, alleging he had failed to adapt to Japanese culture and the company's management style. Woodford says he was axed for questioning dubious merger and acquisition payments.

Olympus first denied any wrongdoing, but later said it had hidden investment losses from investors for two decades and used some of $1.3 billion in M&A payments to aid the cover-up.

An advisory panel under the Ministry of Justice has been working on a draft for over a year to revise Japan's corporate law including reforms to corporate governance.

Based on the draft, to be submitted next month, the ruling party would propose a revision to the law next year, the Asahi newspaper reported on Saturday without citing sources.

Outside directors, also known as non executive directors, are not employees or stakeholders in a company and are seen as relatively free from the conflicts of interest that may affect those with direct links to the organisation. - Reuters

Germany slams Barroso joint bonds as 'irresponsible'

BERLIN (Nov 26):'' German Vice Chancellor Philipp Roesler on Saturday called a proposal by the European Commission last week for joint debt issuance "irresponsible" and said Berlin will remain firm in its rejection of euro zone bonds.

Roesler, also Economy Minister, said in a radio interview that European Commission President Jose Manuel Barroso made a mistake last week by suggesting euro zone bonds could be issued once new, intrusive laws to ensure budgets of euro zone countries do not break EU rules are in place.

"I find it irresponsible of Mr. Barroso to re-open this discussion on euro zone bonds again," Roesler told Berlin's InfoRadio network, using language that went beyond Chancellor Angela Merkel's term "extraordinarily inappropriate."

Roesler, leader of the Free Democrats (FDP) junior coalition partners to Merkel's conservatives, said joint bond issues would be wrong for Germany and Europe because they would ease the pressure on indebted countries to reduce their deficits.

He did not mention a main concern in Berlin, that euro zone bonds would raise Germany's borrowing costs.

Germany has benefited from the crisis so far because the flight to quality has allowed it to refinance itself more cheaply. Yields on German bonds, considered the safest in the euro zone, have fallen to record lows in recent months.

"That would wrong for Germany -- which may not necessarily be of interest to him (Barroso)," added Roesler.

"But it would also be wrong for Europe because debts would then be collectivised. The pressure on indebted countries to consolidate their budgets would disappear instantly. In other words, that would in effect block the path towards creating a 'stability union'."

Roesler was echoed on Saturday by Hans Michelbach, a leader in the Christian Social Union in parliament.

"With his unnecessary and unauthorised proposals for euro zone bonds (Barroso) has added to the most recent uncertainty (in markets)," he said.

He said Barroso is raising the false impression that Europe does not have confidence in its own rescue measures.

"With his blathering on about euro zone bonds he's destroying confidence and causing turbulence in markets at a point where we need to see things settle down a bit."

Roesler said Germany sought greater stability with more budget discipline in the euro zone.

"And that's the reason we've got to reject euro zone bonds, and that's what we're all sticking together to do," he said.

Barroso, speaking in Portugal on Friday, said he did not see Germany's position as a major problem. He defended the Commission's proposal on the issue of joint euro bonds as one possible solution to the crisis.

"Germany's position as far as I know, is that euro bonds can be considered when there is greater integration and discipline in the euro zone, so we are not that far apart," Barroso said.

"We thought it was the time to launch the discussion. We, in the Commission, have the duty to launch and propose ideas and afterwards, obviously, it is up to member states to adopt them or not."

Merkel had said this week changing the European treaty to pave the way for closer European integration was vital to solving the debt crisis and restoring investor confidence.

The Commission's proposals are part of the euro zone's response to the sovereign debt crisis, which has now spread to threaten even the large members of the 17-member currency bloc, including Spain, Italy and France, by pushing up their borrowing costs.

The Commission, the executive arm of the 27-member European Union, proposed euro zone governments send draft budgets by mid-October, before they are voted on in national parliaments.

If the draft budgets are not in line with EU budget rules -- the Stability and Growth Pact -- the Commission could ask for changes and defend its position in the country's parliament.

Roesler said firm dismissal of euro zone bonds by Merkel and other German government leaders shows the coalition was determined and united. Asked about the strong language against Barroso's plan, Roesler said:

"It shows not only a high level of nervousness (in Europe) but also how determined and united the German government is. We've got a clear vision for all of Europe: a stability union. That's the goal we're pursuing. And we consider anything that deviates from that aim wrong. And we'll call it wrong, just like we're doing with the question of euro zone bonds." - Reuters

Europe bond yields to keep stocks spellbound

NEW YORK (Nov 25): US investors came to the Thanksgiving holiday table on Thursday mostly thankful that the week was a short one, or losses could have been larger.

As another round of news and bond auctions from Europe begins next week, traders will watch closely sovereign bond yields that have kept markets on edge.

Yields rose in almost every euro-zone country this week, and Germany failed to find enough bids for a 10-year auction. The S&P 500 reacted by posting a second straight week of declines and its worst week in two months.

Politicians are scrambling to find a way out of a two-year-old sovereign debt crisis in the euro zone and a visit to Washington from top European Union officials, as well as a meeting of euro-zone finance ministers, will provide the market with headlines and possibly add to uncertainty.

With the specter of rising yields, France, Britain, Italy, Belgium and Spain are holding debt sales next week. The direction of bond yields will determine the direction of equity markets.

"Politicians are trying to buy themselves time so austerity measures kick in and impact budgets and deficits and markets become more forgiving and rates come down," said Wasif Latif, vice president of equity investments at the San Antonio, Texas-based USAA Investment Management, which manages about $45 billion.

"The credit market and fixed income are a little bit more in the eye of storm; that's where the issue is rising, so equities are more reactionary," he said. "You may continue to see more of the same."

Investors have worried about rising borrowing costs in many euro-zone nations, but Italy, the third-largest euro zone economy, has grabbed most of the focus. On Friday Rome paid a record 6.5 percent to borrow for six months and almost 8 percent to issue two-year zero coupon bonds.

Many market participants have said that the sharply differentiated risk-on and -off trades that the euro zone crisis has generated has seen equities being sold as an asset class, with little or no difference between strong and week balance sheets and earnings reports. But a wedge has opened at least from a global perspective, as data show stocks of companies with more exposure to Europe are underperforming.

POLITICS TO DRIVE THE WEEK

President Barack Obama will meet on Monday with European Council President Herman van Rompuy and European Commission President Jose Manuel Barroso, and Europe's response to the two-year sovereign debt crisis is expected to top the agenda.

"The only thing that will come out of that is speculation," said Todd Salamone, vice president of research at Schaeffer's Investment Research in Cincinnati, referring to the meeting in Washington.

"It will come down to the U.S. trying to convince European leaders to get something in place to solve this crisis."

Not many hopes are set either on Tuesday's meeting where euro-zone finance ministers are expected to agree on how to further strengthen the region's bailout fund.

On Thursday, European Central Bank President Mario Draghi presents the bank's annual report to the European parliament.

As the latest reminder from markets to politicians that they are running out of time, Belgium's credit rating was downgraded by Standard & Poor's.

IF EUROPE ALLOWS, DATA WILL BE KEY

Some of the most important U.S. economic monthly data will be released next week, but will it be enough to unlink the stock market's behavior and European yields.

New home sales and the S&P/Case-Shiller home prices index will start the week showing if the housing market continues on life support. Data on confidence among consumers, who flooded U.S. stores on Friday as the holiday shopping season started, will be released on Tuesday.

The Institute for Supply Management's manufacturing report is due, with investors not only looking at the U.S. number on Wednesday but also factory readings from Europe and China on Thursday.

By midweek labor data takes over with the private sector employment report from ADP and Challenger's job cuts report, followed Thursday by the weekly jobless claims numbers and topped by Friday's monthly non-farm payrolls report.

"It would be a little bit refreshing to focus on the U.S. data for a change," said Brian Lazorishak, senior quantitative analyst and portfolio manager at Chase Investment Counsel in Charlottesville, Virginia.

He said if European headlines allow it, the focus will be in the labor market where "most people are looking for modest improvement." - Reuters

Govt to spend RM600m in sugar subsidy

RAUB (Nov 26): The government is expected to spend RM600 million to subsidize sugar following a hike in the price of the commodity in the world market.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said the hike was due to major sugar producing countries being hit by natural disasters which resulted in production losses.

"Three main suppliers, Brazil, Thailand and Australia are now facing difficulties to meet world demand for sugar.

"Thailand and Australia were hit by floods while Brazil is in the process of replanting sugarcane PLANTATION []s," he told reporters in Bera near here.

Ismail Sabri is also the Member of Parliament for Bera. - Bernama

Kulim 3Q earnings fall 40% to RM171m on-year

KUALA LUMPUR (Nov 25): KULIM (M) BHD []'s earnings slumped 39.9% to RM171.07 million in the third quarter ended Sept 30 from RM284.65 million a year ago.

It said on Friday that group profit fell 31.74% to RM249.8 million from RM365.92 million a year ago due to the disposal of oleochemicals group that recorded a profit of RM156 million last year.

Its revenue rose 21.7% to RM1.780 billion from RM1.461 billion while earnings per share were 13.97 sen compared with 91.13 sen.

For the nine-month period, its net profit increased 23% to RM444.46 million from RM361.21 million while revenue rose at a slightly stronger pace of 29.2% to RM5.240 billion from RM4.056 billion.

Kulim said the group's cumulative fresh fruit bunches (FFB) production inclusive of SINDORA BHD [] for the nine-month period was 13.48% higher at 465,807 tonnes from a year ago.

The group's oil extraction rate'' for the nine-months was marginally lower inclusive Sindora at 20.14% compared to 20.26%.

Its Malaysian PLANTATION [] operations achieved crude palm oil (CPO) and palm kernel cumulative price averages of RM3,248 and RM2,433 per tonne respectively for the nine-months compared to RM2,511 and RM1,488 per tonne for CPO and PK respectively a year ago.

Sersol detects embezzlement in Zhuhai associate

KUALA LUMPUR (Nov 25): SERSOL TECHNOLOGIES BHD [] has detected embezzlement in its 50% owned associate Zhuhai MS Coating Ltd (ZMCL) and the losses are estimated to be 1.756 million renminbi (RM874,000).

The ACE-listed company said on Friday that it had in September detected discrepancies in the bank accounts of ZMCL and found that cash embezzlement had occurred in ZMCL.

'The embezzlement was committed by a former employee of ZMCL who has been detained by the Police Investigative Bureau of Zhuhai, China since Oct 3, 2011 for questioning and to facilitate their investigation,' it said.

Sersol said the authorities have yet to complete their probe. However, the company carried out an internal probe and also engaged a Chinese CPA firm, Da Hua Certified Public Accountants China to conduct an independent investigation.

It said the embezzlement started during the financial year ended (FYE) Dec 31, 2009. It was committed through fraudulent withdrawals from ZMCL's bank accounts, namely the main bank account maintained with Bank of CONSTRUCTION [], China.

'The former employee was able to conceal the fraud from detection by management and ZMCL's auditors over a prolonged period through a combination of using fictitious bank statements and other banking and accounting related documents.

'Sersol's internal investigation estimated the losses to be 1.756 million renminbi (RM874,000) whilst the findings of the independent review performed by the Chinese CPA firm estimated the losses to be 1.727 million renminbi.

It said that it had yet to determine the quantum of losses sustained in each respective financial years/period arising from the embezzlement.

'Taking into consideration the minority interests, the estimated losses attributable to the shareholders of Sersol is RM437,000,' it said.

IJM Corp 2Q earnings fall 35% to RM74.7m on-year on forex loss

KUALA LUMPUR (Nov 25): IJM Corp Bhd reported a fall of 35% in its earnings to RM74.77 million in the second quarter ended Sept 30, 2011 from RM115.13 million a year ago as it was impacted by unrealised foreign exchange translation losses on US dollar loans.

It said on Friday, the forex losses were for the US dollar borrowings in the infrastructure division of RM32 million compared with unrealised forex gain of RM29 million a year ago.

The notes to the account showed the foreign exchange difference was RM20.04 million compared with a forex translation gain of RM14.49 million a year ago. Its tendering, selling and distribution expenses increased to RM34.12 million from RM24.34 million though administrative expenses declined to RM10.22 million from RM20.63 million a year ago.

However, the group's property and industry divisions posted increased profits in tandem with higher revenues.

IJM Corp said its revenue rose 39.7% to RM1.097 billion from RM785.50 million while earnings per share were 5.45 sen compared with 8.55 sen. It declared an interim dividend of 4.0 sen a share, which was similar to a year ago.

For the first half, its earnings dipped 5.5% to RM189.81 million from RM200.87 million while its revenue increased 20.3% to RM2.131 billion from RM1.771 billion.

'The group's profit before tax decreased by 1.6% mainly due to the forex translation loss of RM27 million in the current year compared to a gain of RM6 million in the previous year. However, the foreign exchange translation losses had been offset by the profits growth in industry and PLANTATION [] divisions,' it said.

On the prospects, IJM said the group's CONSTRUCTION [] division's performance was expected to improve as many of the group's local projects are expected to gain momentum in the current financial year.

'Order book replenishment prospects remain encouraging. The group's property division expects to sustain its performance in the current financial year on the back of strong unbilled sales in excess of RM1 billion,' it said.

IJM Corp said the group's Industry division expected sales of building materials to increase in tandem with the expected growth in construction activity.

On the plantations division, it said assuming the current level of palm product prices would be sustained, it expected the plantation division to record a satisfactory level of profitability.

It added that its Malaysian tolling and port operations were expected to continue to provide steady revenue streams to the group's Infrastructure division.

However, it cautioned that initial expensing of higher finance costs and amortisation of new toll concessions in India were expected to dampen its divisional results.

KFCH 3Q earnings dn 12.2% to RM33.5m as inflation bites

KUALA LUMPUR (Nov 25): KFC Holdings (Malaysia) Bhd reported a 12.2% decline in its third quarter earnings to RM33.52 million from RM38.20 million a year ago as it was affected by the higher food, commodity and energy costs.

It said on Friday, the Group's investments in KFC India and KFCH International College continued to incur initial start-up loss before they achieve critical mass of operations.

KFCH's revenue rose 10.5% to RM697.83 million from RM631.55 million. However, profit before tax decreased by 13% to RM 48.9 million from RM 56.2 mil on-year. Its earnings per share were 4.23 sen compared with 4.82 sen.

Its nine-month earnings shed 2% to RM106 million from RM108.17 million in the previous corresponding period.'' Its revenue rose 10.5% to RM2.032 billion from RM1.838 billion a year ago.

On the Malaysian operations, it said KFCH Malaysia's revenue increased by 10.2% to RM1.200 billion (2010 : RM1.089 billion) and profit before tax increased by 6.4% to RM148.60 million (2010 : RM139.60 million).

It said the Malaysian operations continued to expand its network, where 28 new restaurants including eight drive-thru restaurants were opened over the last 12 months. This increased the total number to'' 529 restaurants at end September 2011 (2010: 501 restaurants ).

KFCH also said 22 existing restaurants were remodeled during the period under review.

It added that during the period, it introduced innovative products including value promotions to encourage new trials and repeat visits.

'Profits was subjected to cost pressures arising from higher restaurants' supplies costs and labour costs as well as higher'' energy costs pursuant to the upward revision of electricity tariff in June 2011,' it said

On the Singapore operations, it said revenue rose 14.4% to RM300.70 million (2010: RM262.90 million) and profit before tax increased by 14.9% to RM13.10 million (2010: RM11.40 million).

As for the Brunei operations, it said revenue increased to RM14.30 million (2010: RM11.50 million) and profit before tax declined to RM800,000 (2010: RM1.4 million) due to inflationary pressures.

There were 10 KFC restaurants in Brunei as at end September 2011 with the addition of a new restaurant and the reopening of a temporarily closed outlet since October 2010.

On the Indian operations, it said revenue increased to RM13.80 million (2010: RM2.90 million) in tandem with the higher number of restaurants.

KFC India added eight restaurants during the 12 months ended September 2011 which increased its footprint to 10 restaurants (2010: 2 restaurants).

'However, it posted loss of RM 6.8 million (2010: RM2.20 million) due to initial start-up costs incurred for general and administration expenditures while the restaurants were being developed,' it said.

On the KFCH group's integrated poultry segment, it said revenue rose 7.0% to RM423.90 million (2010: RM 396.20 million) but profits declined to RM1.5 million (2010: RM 3.4 million).

'Sales of chicken products to the KFC restaurants and external customers improved but profit was adversely affected by the higher cost of broiler purchases as the group had to source from the open market to supplement the requirements of its expanded KFC network of restaurants,' it said.

MRCB 3Q earnings jump 191% to RM10.7m, boost from KL Sentral

KUALA LUMPUR (Nov 25): MALAYSIAN RESOURCES CORP []oration Bhd's net profit for the third quarter ended Sept 30, 2011 jumped 191% to RM10.72 million from RM3.68 million a year ago, due mainly to higher contribution from its revenue recognition of ongoing and encouraging strata office sales of property development projects at Kuala Lumpur Sentral.

The company said on Friday that its revenue for the quarter grew 5.7% to RM286.35 million from RM270.91 million in 2010. Earnings per share rose to 0.77 sen from 0.27 sen, while net assets per share were 96 sen.

For the nine months ended Sept 30, MRCB's net profit doubled to RM51.35 million from RM25.77 million in the previous corresponding period. Revenue jumped 107% to RM742.69 million from RM634.46 million.

It said KL Sentral Park was closing in 80% tenancy on total lettable area of about 515,000 sq. ft. and Q Sentral net floor area of approximately 1.0 million sq. ft. had achieved sales of over 60%.

The recent soft launch of the high-end residential condominium in Kuala Lumpur Sentral which is known as the Sentral Residences, received encouraging response with over 60% sale commitments, it said.

MRCB said the award of the over RM1.3 billion Ampang LRT extension line in August 2011 which was secured under competitive open tender bidding, provided a major boost to the group's CONSTRUCTION [] order book.

'Accordingly, the Group hopes to secure more new works on the progressive roll-out of new works under the Economic Transformation Programme.

'Despite the strong momentum for the group's property and construction projects, due to unforeseen delays in the progress and completion of certain construction projects, the board expects the group's revenue and profitability growth are unlikely to meet the KPI targets set out in the beginning of the year,' it said.

GLOBAL MARKETS-Shares drop, euro at 7-wk low as Italy debt costs leap

LONDON (Nov 25): European stocks fell and the euro hit a seven-week low on Friday, as record borrowing costs for Italy stoked fears the lack of a comprehensive policy response to the spiralling euro zone debt crisis would lead to a break-up of the currency bloc.

Italy paid a euro-era high 6.5 percent to borrow over six months, almost double the yield at a similar sale a month ago and much higher than market yields ahead of the auction.

It raised the full 10 billion euros planned but borrowing costs for Europe's third-largest economy remain unsustainably high despite the appointment of an emergency government in Rome to undertake reforms and rein its massive debt.

"Judging from the reaction in (the euro) and Bunds, this is about as weak as the market was expecting," said Peter Chatwell, rate strategist at Credit Agricole CIB.

"Today's auctions indicate that conditions for euro-sovereign supply are still extremely poor, boding ill for the market ahead of next week's bond market supply."

Italian two-year government bond yields rose above 8 percent while the interest rate premium investors charge Italy to borrow over 10 years compared to equivalent German debt continued to rise despite reported buying by the European Central Bank.

German Bund futures also extended losses, reinforcing fears that debt contagion is starting to hurt the region's soundest economy. Bund futures hit a session low, continuing to fall after a sharp sell-off in the wake of a weak 10-year bond auction on Wednesday.

European stocks lost ground for the ninth time in 10 sessions and were on course to post their biggest weekly loss in two months. The FTSEurofirst 300 index of top European shares was down 0.7 percent at 893.57 points.

It has lost about 13 percent since late October as investors fret over the slow pace of efforts to contain the debt crisis and Germany's persistent opposition to the idea of joint euro zone bonds and an expanded role for the ECB.

French President Nicolas Sarkozy and Germany's Chancellor Angela Merkel, after talks with Italian Prime Minister Mario Monti on Thursday, agreed only to stop bickering in public over whether the ECB should do more to resolve the crisis.

BANK WORRIES

A growing concern in the past month has been signs of stress in the bank-to-bank lending markets which were at the heart of the financial sector turmoil three years ago.

Funding problems for European banks have escalated, with the cost of swapping euros into dollars in the currency swap market reaching three-year highs of 157 basis points on Friday.

The ECB is looking at extending the term of loans it offers banks to two or even three years to try to prevent the euro zone crisis precipitating a credit crunch that chokes the bloc's economy, people familiar with the matter say.

The euro extended losses and fell to a fresh seven-week low against the dollar, dropping to $1.3240 and down 0.8 percent on the day.

"Merkel sees no scope for euro bonds and the ECB continues to make it clear it sees no scope for financing public debt," said Manuel Oliveri, currency strategist at UBS in Zurich.

"Without agreement on either of those two factors there is not much chance of an improvement in sentiment towards the euro and we think it can go lower from here still."

QSR 3Q earnings fall 10.5% to RM22.6m on inflationary pressures

KUALA LUMPUR (Nov 25): QSR BRANDS BHD []'s earnings fell 10.5% to RM22.22 million in the third quarter ended Sept 30 from RM25.33 million a year ago, as its margins were affected by inflationary pressures including commodity costs.

It said on Friday that its revenue increased 10% to RM821.49 million from RM746.49 million while earnings per share were 8.13 sen versus 9.22 sen.

However, profit before tax fell 10.1% to RM 58.50 million from RM65.10 million a year ago in the previous year corresponding quarter.

'The group continued to achieve commendable sales growth amid a challenging economic environment. All business segments continued to be subjected to inflationary pressures with higher supplies costs, commodity costs and energy costs,' it said.

'The group's investments in KFC India and KFCH International College continue to incur initial start-up loss before they achieve critical mass of operations. As for KFC Cambodia, the loss for the quarter reduced on the back of substantially higher revenue,' it said.

For the nine-month period, its earnings shed 0.7% to RM74.41 million from RM74.91 million in the previous corresponding period while revenue increased by 10% to RM2.426 billion from RM2.204 billion.

Commenting on the Pizza Hut Restaurants segment, it said the Malaysia operations recorded a 6.1% increase in revenue to RM316.60 million (2010: RM298.40 million) while profit before tax was'' relatively unchanged at RM37.0 million (2010: RM 36.20 million).

'Although turnover posted a moderate growth, profit was affected by inflationary cost pressures arising from higher food cost, labour cost and energy cost,' it said.

On the Singapore operations, QSR said revenue increased by 13.5% to RM142.10 million (2010: RM125.20 million) and profit increased by 96.4 % to RM 5.5 million (2010: RM2.8 million).

On the KFC restaurants, it said for the Cambodia operations, revenue rose by 4.8% to RM8.7 million (2010: RM8.3 million) but loss increased to RM3.90 million (2010: RM 2.9 million).

There were 10 restaurants as at end September 2011 with no new openings during the period under review. The dismal result was affected by Cambodia's weak economy but this is however showing signs of recovery.

'The menu was also revamped by offering products that suit local demands and it is showing encouraging results that will contribute positively to earnings,' it said.

On the KFC Holdings (Malaysia) Bhd group, it said its revenue rose 10.5% to RM2.032 billion from RM 1.838 billion in the previous corresponding period. However, it posted a lower profit before tax of RM154.50 million in the cumulative quarters compared with RM158.40 million a year ago.

'Whilst the group recorded a respectable revenue growth, its profitability was affected by cost pressures arising from higher restaurants' supplies costs, labour costs and energy costs and was also affected by the initial years start-up loss incurred by KFC India and the KFCH International College,' it said.

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Panasonic 2Q net profit falls 7.59% to RM20.32m

KUALA LUMPUR (Nov 25): Panasonic Manufacturing Malaysia Bhd net profit for the second quarter ended Sept 30, 2011 fell 7.59% to RM20.32 million from RM21.99 million a year earlier, due mainly to ''a derivative loss amounting to RM3.4 million.

The company said on Friday that its revenue for the quarter rose 10.23% to RM222.85 million from RM202.16 million in 2010.

Earnings per share fell to 33 sen from 36 sen in 2010, while net assets per share was RM10.33.

The company declared a gross interim dividend of 15 sen per share for the financial year ending March 31, 2012.

For the six months ended Sept 30, Panasonic's net profit fell to RM39.14 million from RM41.29 million, on the back of an increase in revenue to RM444.66 million from RM407.7 million.

Reviewing its performance, Panasonic said that its profitability had been affected by rising cost of raw materials, the strengthening of the ringgit against major currencies; US dollars and Japanese Yen, which had eroded export revenue and the increased costs for certain parts of which supply from its original maker has been disrupted by the Japan earthquake.

In addition, included in the current period's combined profit before tax was a derivative loss amounting to RM4.0 million compared to a derivative loss of RM127,000 in the previous year's corresponding period, it said.

On its prospects, Panasonic said the current outlook for the remaining financial year remained challenging.

'This is because the prevailing political instability in the Middle East region and the flood crisis in Thailand will have an unfavorable impact on the company's export sales,' it said.

Panasonic said that whilst it had mitigated the supply chain disruption arising from the Japan earthquake by securing new sources of supply, the cost of parts had increased and this had a negative impact on the bottom line.

'Nonetheless, as the company's export revenue are mainly denominated in US dollars and Japanese Yen, the recent strengthening of these currencies against the ringgit coupled with the easing of the price of raw materials will cushion some of the negative impact.

'Despite the challenging outlook ahead, the company will remain profitable for the current financial year,' it said.

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KLCI falls 1.14%, blue chips weigh

KUALA LUMPUR (Nov 25): The FBM KLCI closed lower on Friday, in line with key regional markets mired in the red as ''simmering fears over the euro zone debt crisis and the outlook for the global economy kept investors on the sidelines.

The extended weekend'' with the Awal Muharram public holiday next Monday also gave local investors an excuse to take profit on blue chip stocks that had made some gains over the past two days.

The FBM KLCI closed 1.14% or 16.44 points lower at 1,431.55, weighed by losses including at BAT, MISC, Genting and PPB.

Losers beat gainers by 463 to 298, while 256 counters traded unchanged. Volume was 1.58 billion shares valued at RM1.09 billion.

At the regional markets, Hong Kong's Hang Seng Index fell 1.37% to 17.689.48, Taiwan's Taiex lost 1.16% to 6,784.52, South Korea's Kospi was down 1.04% to 1,776.40, the Shanghai Composite Index fell 0.72% to 2,380.22, Japan's Nikkei 225 edged down 0.06% to 8,160.01 while Singapore's Straits Times Index fell 1.24% to 2,643.93.

On Bursa Malaysia, BAT was the top loser and fell RM1.84 to RM45.40, MISC lost 33 sen to RM5.80, Genting and MMHE fell 26 sen each to RM10.02 and RM5.60, Tradewinds 21 sen to RM9.28, PPB and MNRB 20 sen each to RM16.06 and RM2.66, QSR 19 sen to RM5.70, while DKSH lost 17 sen to RM2.01.

Among the gainers, Nestle rose 30 sen to RM50.90, Hong Leong Bank up 22 sen to RM10.42, F&N 20 sen to RM17.90, Knusford and TDM 16 sen each to RM1.95 and RM3.45, while Supermax, Tecnic and UMW added 13 sen each to RM3.55, RM2.85 and RM6.88 respectively.

Meanwhile, the actively traded counters included Sumatec, MUI Industries, JCY, Compugates, Tiger Synergy and MBF Holdings warrants.

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Guinness Anchor plans to issue RM500m debt notes

KUALA LUMPUR (Nov 25): GUINNESS ANCHOR BHD [] (GAB) plans to issue commercial papers/ medium term notes (CP/MTN) with an aggregate nominal value of up to RM500 million.

It said on Friday, the proposed debt papers programme would provide it with an alternative source of financing and enable it to effectively plan and manage its funding costs and requirements.

'The proceeds of the proposed CP/MTN programme shall be utilised for general corporate purposes including repayment of bank borrowings, if any,' it said.

GAB said the proposed programme was assigned a rating of AAA by RAM Rating Services Bhd.

Standard Chartered Bank Malaysia Bhd was appointed principal adviser, lead arranger, lead manager and book runner for the proposed programme.

Cahya Mata Sarawak 3Q net profit up 42.74% to RM38.17m

KUALA LUMPUR (Nov 25): CAHYA MATA SARAWAK BHD [] (CMSB) net profit for the third quarter ended Sept 30, 2011 rose 42.74% to RM38.17 million from RM26.74 million a year earlier, driven mainly by its ''manufacturing division.

The company said on Friday that its revenue for the quarter increased 3.57% to RM240.76 million from RM232.46 million in 2010.

Earnings per share for the quarter rose to 11.59 sen from 8.12 sen in 2010, while net assets per share was RM4.22.

CMSB's net profit for the nine months ended Sept 30 rose to RM96.59 million from RM46.18 million in 2010, on the back of an increase in revenue to RM725.09 million from RM659.43 million.

Reviewing its performance, CMSB said its earnings continued to be mainly driven by its manufacturing division followed by the CONSTRUCTION [] & road maintenance and the construction materials divisions.

The manufacturing division, being the key driver and largest contributor to the group's profitability, continued to achieve higher profit due to higher sales volume and an upward revision of prices, it said.

'All Divisions reported higher profits except for construction material and trading divisions which were affected by delay in projects.

'Whilst the operating environment faced by the group will remain challenging, the board expects that the group's financial performance will continue to remain favourable and prospects for the year to be good,' it said.

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S&P: MISC's planned exit from liner biz no impact on rating

KUALA LUMPUR (Nov 25):'' Standard & Poor's Ratings Services' rating on MISC BHD [] (BBB+/Negative/--) is not affected by the shipping company's planned exit from the liner business by June 2012.

The ratings agency said on Friday while the proposed transaction will likely result in losses for MISC, most of the losses will be non-cash in nature.

'Nevertheless, we believe the business relationship between MISC and its parent has strengthened over this period, supporting the rating. Petroliam Nasional Bhd. (foreign currency A-/Stable/--; local currency A/Stable/--; axAA+/--) owns a 62.7% stake in the company,' it said.

MISC, had on Thursday, said it had decided to exit from the liner (container shipping) business operations due to the current challenging conditions and high operating cost environment. Its liner business suffered a total financial loss of US$789 million over the past three financial years which had impacted the overall financial performance of MISC.

MISC had also then said it expected to incur losses in current financial year ending Dec 31, 2011 after it decided to exit its liner business operations, as the expected one-off costs to the income statement are estimated to be approximately US$400 million..

For the second quarter ended Sept 30, 2011, MISC's'' 2Q net profit fell 61.8% to RM140.96 million from RM369.36 million a year earlier, due mainly to depressed aframax freight rates in petroleum business, lower liftings in Liner business and high bunker costs. Its revenue for the quarter fell 15.1% to RM2.62 billion from RM3.08 billion.

For the six months ended Sept 30, MISC's net profit slumped to RM262.04 million from RM797.34 million, on the back of a decline in revenue to RM5.63 billion from RM6.36 billion in 2010.

Sarawak Oil Palms 3Q net profit rises 52.1% to RM73.14m

KUALA LUMPUR (Nov 25): SARAWAK OIL PALMS BHD [] (SOP) net profit for the third quarter ended Sept 30, 2011 rose 52.1% to RM75.14 million from RM49.4 million a year earlier, due mainly to the higher average crude palm oil (CPO) and palm kernel (PK) prices realised and sales volume.

The company said on Friday that its revenue for the quarter increased 53% to RM326.06 million from RM213 million.

Earnings per share for the quarter rose to 17.32 sen from 11.46 sen, while net assets per share was RM2.69.

For the nine months ended Sept 30, SOP's net profit surged to RM199.63 million from RM102.77 million in 2010, on the back of an increase in revenue to RM852.72 million from RM515.57 million.

Reviewing its performance, SOP said the sales volume for CPO and PK increased by 47,183 tonnes or 28% and 10,549 tonnes or 31% respectively compared to previous year corresponding period.

On its prospects, SOP said the performance of the group was largely dependent on developments in the world edible oil market, bio-diesel market, fossil oil market, movement of the ringgit, world economic situation and their corresponding effect on CPO prices.

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RAM Ratings reaffirms AAA rating of Pasdec's RM150m bonds

KUALA LUMPUR (Nov 25): RAM Rating Services Bhd has reaffirmed the enhanced AAA(s) rating of PASDEC HOLDINGS BHD []'s RM150 million rainbow exchangeable bonds (2006/2013); the long-term rating has a stable outlook.

The rating agency said on Friday the enhanced rating was based on the Pahang government's irrevocable and unconditional put option agreement to the Security Trustee, for the benefit of the bondholders, with approval from the Federal Government. This put option enhances the bonds' credit profile of the REBs beyond Pasdec's inherent or stand-alone credit strength.

RAM Ratings said the bonds were secured by and exchangeable into a pool of option shares (that is IJM Corp Bhd and YTL CEMENT BHD [] shares).

Under the put option, the state is required to purchase the option shares from the security trustee at the option price during the option period, upon the occurrence of a trigger event or event of default.

The option price reflects the aggregate of the nominal amount of the bonds, their redemption premium and coupon payments, and all other outstanding amounts.

The option price is not determined by the market price of the respective shares. Proceeds from the purchase of the option shares will subsequently be used to redeem the bonds.

As at end-October 2011, RM133 million of the bonds had been exchanged for the option shares and the same amount had been cancelled. The outstanding bonds, including the redemption premium, amounted to RM25 million as at the same date.

Pasdec is the main property-development arm of Perbadanan Kemajuan Negeri Pahang (PKNP), which effectively owns 52% of the group.

PKNP is a statutory body established as an economic-development agency under the Pahang State Legislature under Enactment Act 12, 1965.

Notably, Pasdec is one of the largest property developers in Pahang, with a 16-year operating track record. Its main objective is to supply affordable housing in the state, although it has also gradually moved into the development of medium-to-high-end residential and commercial PROPERTIES [].

Meanwhile, Pasdec's recent foray into manufacturing operations in South Africa may heighten its business risk given that it is a new venture in an unfamiliar operating environment.

Panasonic to invest RM1.86b in solar manufacturing plant

KUALA LUMPUR (Nov 25): Panasonic Corporation will invest 45 billion yen (RM1.86 billion) in a plant in Malaysia which will be the Japanese Corp's new solar manufacturing base.

The Osaka-based company said the unit -- Panasonic Energy Malaysia Sdn Bhd - to be set up in December 2011, will operate a vertically-integrated solar manufacturing facility producing from wafers to cells and modules.

'Panasonic will invest 45 billion yen in the facility, which will start operation in December 2012 with an annual production capacity of 300 MW,' it said.

The paid-up of the company will be 22.5 billion yen and it will be unit of Panasonic Corp. Production is scheduled to start in December 2012.

Panasonic said with environmental awareness increasing globally and introduction of subsidy systems and feed-in tariff schemes in Japan as well as other countries, etc., the solar cell market is predicted to grow further.

'Robust demand is expected particularly in the residential sector, the main target of the Panasonic hetero-junction with intrinsic thin-layer (HIT) solar modules.

The new factory, to be built in the Kulim Hi-Tech Park in Kedah, will not only help Panasonic meet this growing demand, but also strengthen the HIT module's cost-competitiveness with the vertically-integrated production.

According to Panasonic, it will sell its solar modules as an individual product as well as part of a system combined with storage batteries.

'As part of the comprehensive solutions business, which is built on capacities brought together across the Panasonic group companies, Panasonic will accelerate its solar business development globally,' it said.

Moody's cuts Hungary to "junk", govt sees attack

BUDAPEST (Nov 25): Moody's slashed Hungary's government bond rating to "junk" late on Thursday, citing high debt levels, weak growth prospects and uncertainty about its ability to meet fiscal goals, in what the government called part of "financial attacks" against the country.

Moody's cut Hungary's government bond rating by one notch to Ba1, below investment-grade, with a negative outlook hours after rival Standard & Poor's held fire on a flagged downgrade on news of Budapest's planned talks on getting international aid.

Hungary returned to the International Monetary Fund and the European Union last week after the forint currency fell to record lows against the euro in the wake of a warning by S&P that Hungary could lose its investment-grade credit score.

The forint fell 1 percent from its Thursday close in the domestic market to 315.80 versus the euro in early trade on Friday. It hit a record low at 317.90 versus the euro on Nov. 14 according to Reuters data.

Moody's cited rising uncertainty about Hungary's ability to meet fiscal goals, high debt levels and what it called increasingly constrained medium-term growth prospects as the main reasons behind the downgrade from Baa3.

"Moody's believes that the combined impact of these factors will adversely impact the government's financial strength and erode its shock-absorption capacity," it said in a statement.

"The rating agency's decision to maintain a negative outlook on Hungary's ratings is driven by the uncertainty surrounding the country's ability to withstand potential event risks emanating from the European sovereign debt crisis."

For a text of Moody's statement, see

The Economy Ministy said in a statement on Friday that the downgrade was professionally unfounded and considered it to be what it called "financial attacks against Hungary".

The government cited its commitment to keep the budget deficit below 3 percent of economic output next year, 1 percent of GDP worth of reserves in the 2012 budget and an expected decline in debt levels as arguments against the cut.

"Obviously, the forint's weakening is not justified by either the performance of the Hungarian economy, or the shape of the budget," the ministry said in a statement.

"Therefore, it can be driven only by a speculative attack against Hungary, which can be fuelled by exactly these kinds of professionally unfounded assessments by rating agencies."

EVEN WITH IMF/EU DEAL, HUNGARY VULNERABLE

Moody's said the request by Hungary, which was saved from collapse with a 20 billion euro IMF/EU loan in 2008, for renewed assistance illustrate the funding challenges facing the country, adding that a deal could alleviate immediate funding challenges.

Hungary will have to roll over 4.7 billion euros of external debt next year as it begins to repay parts of its 2008 loan to the IMF. Budapest has said it wants to use a new IMF/EU deal as a "safety net" against turmoil in the euro zone.

"However, Moody's believes that, even with such an arrangement, the government's debt structure will remain vulnerable to shocks in the medium term, which are inconsistent with a Baa3 rating," it said.

The weak forint pushed Hungary's government debt to 82 percent of economic output by the end of the third quarter, undoing the impact of a $14 billion pension asset grab by the government, which cut debt by several percentage points.

Moody's said it would further lower Hungary's rating if there is a significant decline in government financial strength due to a lack of progress on structural reforms and implementation of a medium-term plan.

It said the government's 2.5 percent of GDP budget deficit target for next year may be difficult to meet due to high funding costs and low economic growth.

Moody's said it would consider stabilising the outlook on the ratings if the country were to embark on a sustainable consolidation path, involving a more consistent implementation of the medium-term plan and its euro convergence programme.

The ratings cut came just hours after S&P deferred decision on a possible downgrade of Hungary to non-investment grade until the end of February pending talks with the IMF/EU about a new aid package.

Fitch, another rating agency which has Hungary in the lowest investment-grade category, said on Nov. 18 that an agreement on a new IMF programme would be a positive step and could reduce downward pressure on Hungary's sovereign rating.

Olympus ex-CEO Woodford says willing but not begging to return

TOKYO (Nov 25):'' The British ex-CEO of Japan's Olympus Corp emerged from a frosty meeting of directors on Friday, convinced its board would eventually quit over an accounting scandal engulfing the firm, but he said he wasn't "begging" to return and clean up the mess.

Michael Woodford, still an Olympus director despite being fired as CEO and blowing the whistle over the scam, described the meeting as a tense encounter with no handshakes or apologies offered from the men who had sacked him barely a month ago.

Instead, he said, the board had agreed that the once-proud maker of cameras and medical equipment should strive to avoid being delisted from the Tokyo stock exchange, a sanction that would make the business more vulnerable to takeover.

"I just see a lot of suffering and misery for no gain," Woodford said of the prospect of a delisting.

"But we should have the investigation, it shouldn't be fudged," he told a news conference after the almost-two-hour meeting at Olympus's Tokyo headquarters, where he was mobbed by reporters and TV crews as he entered and left the building.

Woodford, back in Japan for the first time since fleeing the country right after his Oct. 14 sacking, said there had been no talk at the meeting of him returning to his former post.

"I'm not begging to come back," he said, though he added that he was willing to do so if shareholders desired it. "I didn't volunteer for this, I'm not a hero," he added.

"There was a tension in the room, but there seemed to be an understanding that it was in no one's interest to raise the temperature," he said. "They didn't shake my hand and I didn't offer mine. We said good morning and goodbye."

Major foreign shareholders have called for Woodford to be immediately reinstated, saying he can restore faith in the 92-year-old firm.

The visit by Woodford, who also met this week with police and other investigators probing the scandal, coincided with a rally in Olympus shares, which have been buoyed by speculation the firm can escape delisting.

The stock, which closed up 8.6 percent at 1,107 yen on Friday, has rebounded a whopping 77 percent in just four trading days, though it is still down 55 percent from the day before it sacked Woodford and the scandal erupted.

Woodford also said Olympus could survive as an independent entity as long as banks, so far supportive, kept backing it.

DUBIOUS DEALS, CRIME SUSPICION

Olympus had fired Woodford, a rare foreign CEO in Japan, alleging he had failed to adapt to Japanese culture and the company's management style. Woodford says he was axed for questioning dubious merger and acquisition payments.

Suspicion has swirled about possible links between the payments and organised crime. Woodford said he had no firm proof of gangster links but urged authorities to "follow the money".

"That would be concerning if organised crime was involved ... but there's no evidence of that to date," he said.

The 51-year-old freckle-faced Briton had left Japan after his dismissal citing concerns for his safety.

Olympus first denied any wrongdoing, but later admitted it had hidden investment losses from investors for two decades and used some of $1.3 billion in M&A payments to aid the cover-up.

TOP PRIORITY: DEC. 14 DEADLINE

Woodford said after Friday's board meeting that the top priority was for Olympus to meet a Dec. 14 deadline for filing its financial statements for the six-months to September -- after which, he added, current management should go.

The company would be automatically delisted if it misses the deadline. Even if it meets the deadline, the Tokyo Stock Exchange can still delist it, depending on the scale of past misstatements or if a link is found to "yakuza" gangsters.

A third-party panel appointed by Olympus to look into the accounting scam said this week that it had not yet found any evidence of involvement by organised crime.

The Olympus affair has also revived criticism of corporate governance in a country that Woodford said needed people who would "challenge and scrutinise". He also took a swipe at mainstream Japanese media for being slow to cover the scandal.

"What Japan should do is look around the world for the best human resources ... It would be sad if no more gaijin come," he said, using the Japanese word for foreigners.

On the eve of the board meeting, two Olympus directors and an internal auditor blamed for the scandal quit and the president announced that current management was ready to step down once the firm's recovery was on track.

Current president Shuichi Takayama should stay until Dec. 14, but changes could start thereafter, Woodford said, adding that his fellow directors seemed to realise they would have to go but had given no explicit commitment to resign.

Woodford also said Japanese authorities probing the scandal, whom he met in Tokyo on Thursday, wanted to talk to him again.

Tokyo police, prosecutors and regulators have launched a rare joint probe of the scandal. The U.S. Federal Bureau of Investigation and Britain's Serious Fraud Office are also looking into the affair.

Shareholders have asked Olympus to seek more damages from former and current executives if they are found to have caused losses to company value through acquisitions at the centre of a scandal, the company said in a statement on Friday.

Japan deflation persists; Europe dims outlook

TOKYO (Nov 25): Japan's core consumer prices fell for the first time in four months in the year to October after a cigarette tax hike a year ago dropped out from calculations revealing persistent deflation caused by chronically weak domestic demand.

In fact, November data for the Tokyo area showed deeper declines that exceeded analysts' forecasts and backed the view that the Bank of Japan will maintain ultra-easy monetary policy for the foreseeable future.

A narrower measure of prices that excludes both food and energy fell from a year ago in a sign that the world's third-largest economy continued to struggle with lacklustre job market, weak consumer demand and excess capacity.

Core consumer prices fell 0.1 percent as forecast in a sign of weak aggregate demand as a strong yen and spillover from Europe's sovereign debt crisis dampen export demand.

Bank of Japan Governor Masaaki Shirakawa on Friday expressed the central bank's growing alarm that the euro zone crisis may bring more pain for the Japanese economy.

"Europe's sovereign problems have affected Japan through the yen's strength and stock price falls. As emerging economies that have close trading relations with Europe slow down, Japan's exports to those economies may decline," Shirakawa said.

"The impact on the Japanese economy may grow bigger."

Japan's economy rebounded from a recession triggered by the March 11 earthquake and tsunami and grew 1.5 percent in the third quarter. But it is expected to slow sharply this quarter as the initial spurt driven by companies restoring supply chains and production facilities tails off.

With an expected boost from a $155 billion reCONSTRUCTION [] budget passed this week still some months away, policymakers in Tokyo may feel pressure to help the economy again with yen-selling intervention and monetary policy easing.

"The price data underscores the sluggishness of domestic demand as the economy's recovery has taken a breather because of a delay in reconstruction efforts and a global economic slowdown," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.

Finance Minister Jun Azumi pledged to shield exporters from sharp currency moves while expressing frustration with Europe's inability to contain the debt rout that has been driving nervous investors away from the euro and into more stable markets such as Japanese government debt. [ID:nL4E7MO2CB}

"It's really a shame because Europe's problems have started to intensify just when we were starting to see some bright signs on Japan's horizon," Azumi said.

FRESH WARNING

The yen hovered around 77.35 yen against the dollar on Friday, having firmed gradually since Japan sold nearly $100 billion worth of yen last month, knocking it down from record a record high of 75.31 per dollar.

More gains threatening Japan's recovery could spur further action from the finance ministry and the BOJ. For now, however, Shirakawa stuck with the bank's view that rebuilding efforts from the devastating March 11 and continued growth in Japan's main export markets in Asia should help sustain moderate economic recovery.

"The outlook on the BOJ's easing measures will depend largely on forex moves. Europe's debt problems are expected to be prolonged and the effects from Japan's intervention and the BOJ's easing steps may fade early next year," said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.

"So there is a chance of additional BOJ easing in January or February."

While the core consumer price index, which excludes volatile prices of fresh food, inched down for the first time in four months, the so-called core-core index, which also excludes energy prices and is similar to the core U.S. index, fell 1.0 percent in the year to October.

Core consumer prices in Tokyo, available a month before the nationwide data, fell 0.5 percent in the year to November, compared with the median estimate for a 0.3 percent annual decline.

Some economists say consumer prices could fall further in coming months as a slowing global economy dents oil prices, while deflationary pressures persist. - Reuters

Fund manager: Malaysia must be more competitive to attract investors

KUALA LUMPUR (Nov 25): Malaysia will continue to attract more foreign funds but its share of regional inflows is likely to drop significantly if it does not take steps to further boost its competitiveness immediately.

Senior Fund Manager of Kumpulan Sentiasa Cemerlang Sdn Bhd, Yeoh Keat Seng said for now, Malaysia will continue to ride along with the rest of Asia in attracting funds inflow from US/Europe because of the region's favourable dynamics.

"The largest and fastest growing markets will attract a larger share of funds flows over time. Currently, Malaysia is behind Singapore and Indonesia is very close behind us, and I will not be surprised if Indonesia can surpass us in terms of attracting foriegn funds in coming years," he said during a talk given in conjunction with the 16th Malaysian Capital Market Summit, here on Friday.

Yeoh said the government's initiative through the Economic Transformation Programme must be applauded and regarded as the right move at the right time to transform the economic approach.

"If we do not do it now, then we will be left out among our neighbouring countries," he said.

"The government must remove long standing protection to force companies to compete rather than perpetually operate on a subsidy lifeline.

"Companies have to earn government contracts on competitive tender," he said, adding that it could be done by imposing certain key performance
indicators (KPI) on regional expansion.

He added that Bursa Malaysia must continue to remain relevant to issuers and international investors.

He also believed that more Malaysian companies will choose to list on the Singapore Stock Exchange and Hong Kong Stock Exchange or others where they will get better valuation and liquidity.

Yeoh also called on for a tie up with other regional exchanges to gain scale and diversity while continuously developing the regulatory framework to be
more attractive to foreigners. - Bernama

Affin Research: KLCI can hit 1,700 end-2012

KUALA LUMPUR (Nov 25): The FTSE Bursa Malaysia KLCI (FBM KLCI) is still able to hit 1,700 by end of next year despite concerns over the global economy slipping into recession, an analyst said.

Affin Investment Bank Bhd Head of Retail Research Dr Nazri Khan Adam Khan said the country, backed by high liquidity supported by the government-linked investment companies and strong interest on the Economic Transformation Programme (ETP) projects, was still resilient compared to regional counterparts.

"The downside that we made is actually less compared to Indonesia and Singapore, this means we are more resilient," he told BERNAMA on the sidelines of the 16th Malaysian Capital Market Summit here on Friday.

Nazri Khan said commodity prices are expected to remain firm next year and would push up stocks, especially in PLANTATION [] and oil and gas sectors, which makes up about 40 per cent of Malaysia's market capitalisation.

He said implementation of ETP projects had attracted huge market interest due to its focus on longer term gains.

This was evidenced by foreign funds being the net sellers in October with RM1.4 billion foreign inflows, he said.

He said the FBM KLCI gained nine per cent year-on-year in September since ETP was launched last year.

Overall, he said, the country was still in a good position to overcome the challenging global uncertainties and sectors like property, CONSTRUCTION [] and tourism would benefite from the ETP. - Bernama

Tradewinds 3Q net profit slumps to RM3.78m

KUALA LUMPUR (Nov 25): TRADEWINDS CORPORATION BHD [] net profit for the third quarter ended Sept 30, 2011 slumped to RM3.78 million from RM26.59 million a year earlier, due mainly to lower revenue recorded.

The company said on Friday that its revenue for the quarter dropped 30.6% to RM129.14 million from RM186.1 million in 2010.

Earnings per share for the quarter fell to 0.34 sen from 2.40 sen in 2010, while net assets per share was RM1.76.

For the nine months ended Sept 30, Tradewinds' net profit fell to RM24.74 million from RM54.74 million in 2010, while revenue decreased to RM384.86 million from RM433.18 million.

Reviewing its performance, Tradewinds said its revenue decrease was mainly due to lower contribution from its property division as compared to a year earlier, where the division sold a parcel of land.

It said that in addition, higher finance costs and lower share of results of associates also contributed to lower pre-tax profit.

On its prospects, Tradewinds said that it expects its financial performance to be lower compared to 2010 due to refurbishments being carried out in certain hotels.

The renovation of the hotels (which will be completed in stages) was expected to benefit the group in the medium term, said Tradewinds.

'The investment PROPERTIES []' operating performance will be affected as the group is embarking on the re-development of Menara Tun Razak and the CONSTRUCTION [] of a new tower block.

'The re-development will have a positive impact in the longer term,' it said.

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KLCI extends losses at mid-day break

KUALA LUMPUR (Nov 25): The FBM KLCI extended its losses at the mid-day break on Friday as key regional markets mostly remained in negative territory, as investor sentiment continued to be jittery on concerns of a wider impact from the eurozone debt crisis.

Asian markets fell as statements by German and French officials convinced markets that leaders were no closer to a consensus on how to contain the euro-zone debt crisis, according to Reuters.

The FBM KLCI lost 13.56 points to 1,434.43 at 12.30pm, weighed by losses at blue chips including Genting, Axiata and Petronas Gas.

Losers led gainers by 372 to 222, while 264 counters traded unchanged. Volume was 889.02 million shares valued at RM480.66 million.

The ringgit weakened 0.23% to 3.1933 versus the US dollar; crude palm oil futures for the third month delivery fell RM3 per tonne to RM3,105, crude oil added 47 cents per barrel to US$96.64 while gold slipped US$1.63 an ounce to US$1,692.70.

At the regional markets, Hong Kong's Hang Seng Index fell 1.29% to 17,704.54, Taiwan's Taiex lost 1.62% to 6,753.47, South Korea's Kospi was down 1.35% to 1,770.89, Singapore's Straits Times Index fell 1.08% to 2,648.24 and the Shanghai Composite Index shed 0.39% to 2,388.86.

Meanwhile, Japan's Nikkei 225 edged up 0.03% to 8,167.25.

On Bursa Malaysia, Nestle, Milux and Genting lost 20 sen each to RM50.40, RM1.05 and RM10.08 respectively, Tradewinds fell 10 sen to RM9.30, PPB and MNRB down 18 sen each to RM16.08 and RM2.68, MMHE 16 sen to RM5.70, while Axiata and Petronas Gas fell 14 sen each to RM4.82 and RM13.12.

Among the gainers, Hong Leong Bank added 22 sen to RM10.42, F&N up 20 sen to RM17.90, TDM 19 sen to RM3.48, Knusford 16 sen to RM1.95, Supermax nine sen to RM3.51, while OIB, Batu Kawan and Tecnic added eight sen each to RM1.39, RM16.60 and RM2.80, respectively.

The actives included MUI Industries, Sumatec, JCY shares and warrants, MBF Holdings warrants and Emico.

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#Flash* Sime Darby 1Q net profit jumps 63.9% to RM1.07b

KUALA LUMPUR (Nov 25): SIME DARBY BHD [] net profit for the first quarter ended Sept 30, 2011 jumped 63.9% to RM1.07 billion from RM654.74 million a year earlier, boosted by stronger results of the PLANTATION [] and industrial divisions.

The company said on Friday that its revenue for the quarter rose 27.5% to RM11.06 billion from RM8.67 billion in 2010.

Earnings per share for the quarter rose to 17.87 sen from 10.89 sen a year earlier, while net assets per share was RM4.17.

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RAM Ratings reaffirms RHB Bank's AA2/P1 ratings

KUALA LUMPUR (Nov 25): RAM Ratings has reaffirmed RHB Bank Bhd's respective long- and short-term financial institution ratings at AA2 and P1.

The rating agency has also reaffirmed the AA2 and AA3 ratings of the senior and subordinated notes under the bank's respective RM3 billion Medium-Term Note (MTN) Programme and RM3 billion Multi-Currency MTN Programme; the A1 rating of the securities issued under its RM600 million Hybrid Tier-1 Securities Programme has also been reaffirmed.

RAM Ratings said on Friday that all the long-term ratings had a stable outlook.

The reaffirmed ratings reflect RHB Bank's established market position as Malaysia's fifth-largest domestic bank (by assets) under the universal-banking platform, it said.

The rating agency said that RHB Bank accounts for a respective 9.7% and 8.3% of the Malaysian banking system's loans and deposits.

'Given the group's sharper business focus after its transformation, RHB Bank has been enjoying considerable growth while improving its financial performance.

'Although strategies have been mapped out, RAM Ratings is closely observing the changes in the Bank's senior management line-up,' it said.

RAM Ratings said that with the appointment of Johari Abdul Muid as its RHB Banks'new managing director, it would be monitoring the situation for potential changes to the bank's existing strategies under the new leadership.

It said the bank's gross impaired-loan ratio had gradually eased to 3.9% as at end-June 2011 (end-December 2010: 4.4%), albeit still higher than the industry average of 2.9%.

Meanwhile, its annualised credit-cost ratio was kept stable at 0.5%. In 1H FY Dec 2011, the bank delivered a sound profit performance, it said.

'However, its full-year profitability may be affected by further impairment charges on its holdings of collateralised loan obligations, which amounted to RM298.4 million as at end-June 2011.

'At the same time, its liquid-asset ratio remained at the lower end of the scale at 18.3% while its capitalisation levels were healthy, with respective tier-1 and overall risk-weighted capital-adequacy ratios of 10.3% and 14.0%,' it said.

''

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CIMB Research cuts MSM's earnings, keeps Neutral call

KUALA LUMPUR (Nov 25): CIMB Equities Research said MSM Malaysia Holdings Bhd's strong export sales could not fully cover the drop in sales volume for the more profitable domestic sugar business.

In its report issued on Friday, the research house said this resulted in weaker 3Q11 earnings. However, the eight sen dividend did not disappoint.

'The 9M11 net profit was below expectations as it was only 63% of our full-year forecast and 67% of consensus earnings.

'We cut our FY11-13 earnings and target price (based on 12.6x target market P/E) after we roll it over to end-12. Maintain NEUTRAL rating,' it said.

CIMB Research reduced the target price from RM5.82 to RM5.

KLCI slips into the red, blue chips weigh

KUALA LUMPUR (Nov 25): The FBM KLCI slipped back into the red on Friday, in line with the retreat at most key regional markets and the weaker overnight close at European markets.

Analysts said the retreat at the local bourse was also partially due to the extended weekend with Monday being a public holiday, and investors preferring to remain on the sidelines for now.

The FBM KLCI fell 11.25 points to 1,436.74, weighed by losses at select blue chips.

Losers led gainers by 242 to 146 while 183 counters traded unchanged. Volume was 390.38 million shares valued at RM149.76 million.

Meanwhile, Asian shares and the euro both hovered near seven-week lows on Friday as European officials failed to soothe investor fears that the euro zone's debt crisis could trigger a credit crunch if funding costs run out of control, according to Reuters.

European shares fell for the sixth consecutive session in low volume on Thursday while Wall Street was shut for the Thanksgiving holiday, it said.

With European policymakers struggling to break out of the deadlock and no convincing progress in sight over the euro zone debt crisis, investors were shunning riskier assets and selling assets normally perceived as safe to raise cash or cover losses, said Reuters.

At the regional markets, Hong Kong's Hang Seng Index fell 0.99% to ,757.74, the Shanghai Composite Index edged down 0.03% to 2,396.81, Japan's Nikkei 225 shed 0.02% to 8,163.38, Singapore's Straits Times Index down 0.42% to 2,665.94, South Korea's Kospi lost 0.91% to 1,778.77 while Taiwan's Taiex rose 0.13% to 6,873.29.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Friday said that due to the European markets' quite tone last night, it could be another benign day for the local index.

Persistent profit taking would take place today as the market squares positions ahead of a long holiday weekend (with Monday being the Awal Muharram holiday).

'Yesterday's rise was quite amazing as it came on the back of global equity adversity in USA and Europe.

'Ultimately, even the Malaysian bourse will fall in-line with the weaker global equity markets. Trade with obvious caution,' he said.

Among the losers at mid-morning, Nestle fell 20 sen to RM50.40, MISC down 18 sen to RM5.95, MNRB 16 sen to RM2.70, MAHB 15 sen to RM6.05, Axiara and Petronas Gas 14 sen each to RM4.82 and RM13.12, Telekom 11 sen to RM4.33, Harvest Court 10 sen to RM1.01, Bonia nine sen to RM1.61 and PPB down eight sen to RM16.18.

HLFG was the top gainer and rose 24 sen to RM11.56; Hong Leong Bank added 20 sen to RM10.40, TDM 17 sen to RM3.46, Knusford 16 sen to RM1.95, TSH 10 sen to RM3.95, Proton nine sen to RM3.27, Batu Kawan eight sen to RM16.60, Brem sen to RM1.33 while Kwantas added six sen to RM2.08.

Meanwhile, the actives included MUI Industries, Compugates, Emico, Sumatec, Tiger Synergy and JCY.

UOB Kay Hian Research: UMW's Hold call and RM6.90 target price under review

KUALA LUMPUR (Nov 25): UOB Kay Hian Research Malaysia said its Hold call and RM6.90 target price for UMW HOLDINGS BHD [] is under review pending an analysts briefing on Friday afternoon.

It said on Friday UMW's 9M11 core net profit of RM510 million is in line with its 2011 estimate, on an annualised basis.

UMW made a total of RM58 million in provisions, mainly for impairment of overseas investments. For 3Q11, core net profit of RM194 million improved 19% on-quarter, driven by the recovery of the automobile division.

UOB Kay Hian Research said the operating profits in 3Q11 for UMW's motor division jumped 41% on-quarter to RM371 million on the back of a 17% jump in revenue to RM2.6 billion.

The automobile industry was hit in 2Q11 by the earthquake/tsunami in Japan in end-March 2011. Subsequently, recovery in supply of automobile parts in 3Q11 enabled manufacturers to deliver their vehicles. Together with a weaker US dollar vs the ringgit, UMW's automobile division managed to record a strong 14% operating margin in 3Q11 vs 12% in 2Q11.

However, UMW's O&G division remained flat with pretax loss of RM22 million in 3Q11 (vs RM23 million in 2Q11) on the back of RM295 million in revenue (+3% on-quarter).

UOB Kay Hian Research said aside from a seasonally low 4Q11 ahead, the Malaysian automobile industry is hit once again this year. This time by the floods in Thailand, which restricted the supply of automobile parts and CBU vehicles.

'Using UMW's 2Q11 performance, when the group recorded core net profit of RM162 million, as a gauge for UMW's potential 4Q11, its 2011 net profit could come in slightly below'' forecast core net profit of RM707 million.

The research house said UMW still has RM52 million worth of overseas investments in its books (NBV). Assuming UMW provides about RM25 million each quarter (as it did in 3Q11), there could be only another two quarters of provisions left, until 1Q12.

'HOLD call and RM6.90 target price (11x 2012F PE) are under review, pending an analyst briefing this afternoon. We foresee little catalyst in this stock in view of weak vehicle sales next year. Global economic uncertainty, and potential credit tightening (that is, financing for car buyers) will cast a shadow over this cyclical sector.

'Further, there is little prospect of UMW's O&G division turning around in the near term as long as WSP faces stiff domestic competition (in China) following countervailing duties imposed by the US on steel imported from China,' it said.

MISC shares fall in early trade after earnings slump

KUALA LUMPUR (Nov 25): MISC BHD [] shares fell in early trade on Friday after the company said it expects to incur losses in current financial year ending Dec 31, 2011 after it decided to exit its liner business operations, as the expected one-off costs to the income statement are estimated to be approximately US$400 million.

At 9.10am, MISC fell 11 sen to RM6.02 with 89,400 shares traded.

The company cautioned about its earnings for the year when reviewing its financial performance for the second quarter ended Sept 30, 2011.

MISC said its 2Q net profit fell 61.8% to RM140.96 million from RM369.36 million a year earlier, due mainly to depressed aframax freight rates in petroleum business, lower liftings in the liner business and high bunker costs.

The company said its revenue for the quarter fell 15.1% to RM2.62 billion from RM3.08 billion.

On Thursday, MISC said it had decided to exit from the liner (container shipping) business operations due to the current challenging conditions and high operating cost environment.

The company said that its liner business suffered a total financial loss of US$789 million over the past three financial years which had impacted the overall financial performance of MISC.

MISC said the drastic shifts in the industry landscape were challenging the validity of today's operating models.

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MNRB retreats after warning negative impact from Thai floods

KUALA LUMPUR (Nov 25): MNRB HOLDINGS BHD [] shares retreated in early trade on Friday after the company said that it expected to face a challenging year in view of the impact of the Thailand flood loss.

At 9.15am, MNRB fell 14 sen to RM2.72 with 25,500 shares done.

The company on Thursday said it posted net loss RM5.94 million for the second quarter ended Sept 30, 2011, compared to net profit RM21.26 million a year earlier, due mainly ''higher claims incurred by its ''reinsurance subsidiary.

Its revenue rose 6.98% to RM362.85 million from RM338.97 million in 2010.

Loss per share for the quarter under review was 2.80 sen compared to earnings per share 10 sen a year earlier, while net assets per share was RM4.86.

For the six months ended Sept 30, MNRB's net profit fell to RM37.03 million from RM47.4 million in 2010, while its revenue rose to RM761.55 million from RM725.66 million.

Reviewing its performance, MNRB said the higher revenue was a result of the increase in the gross premium written by the reinsurance subsidiary and the increase in the wakalah fees earned by the takaful and retakaful operator.

MNRB said the results for the period under review also included provisions made by the its reinsurance subsidiary for its share of unprecedented losses incurred on the floods in Thailand, generally regarded as a "non-catastrophic territory".

It said the estimated net impact of the above event to its profit before zakat and taxation was RM55 million.

Telekom falls on decline in earnings

KUALA LUMPUR (Nov 25): TELEKOM MALAYSIA BHD [] shares fell on Friday after the company reported a 31% decline in its net profit to RM302.12 million from RM438.49 million a year ago due to unrealised foreign exchange loss on borrowings.

At 9.25am, Telekom was down 10 sen to RM4.34 with 98,100 shares traded.

It said on Thursday that forex translation losses were RM122.50 million compared with forex translation gains of RM139 million a year ago.

MIDF Research downgraded the stock to Neutral and said it was tweaking downwards its ''FY11 and FY12 earnings by 8.6% and 8.4% respectively, taking into account of the lower forex gain.

The research house in a note Friday said that as expected, there was no dividend for the quarter.

'However, we are estimating a 6.3% dividend yield for FY11. ''We continue to like TM for its defensive capabilities.

'But due to the recent spike in its share price, we have downgraded our recommendation to Neutral. Our target price is RM4.45 based on DDM, with a WACC of 9.3%,' it said.

HDBSVR cuts MISC target price to RM6.60 from RM7.60

KUALA LUMPUR (Nov 25): Hwang DBS Vickers Research has reduced its sum-of-parts based target price for MISC BHD [] to RM6.60 from RM7.60 previously.

It said on Friday that although MISC has exited one of its loss-making businesses, it remained concerned about the weak outlook for crude tanker shipping.

'However, downside should be limited by stable income from its LNG shipping and offshore divisions,' it said.

HDBSVR said the 2Q9M11 core net profit of RM151 million (+31% on-quarter) takes earnings this year to RM267 million, or 68% of its full period forecast. It said MISC's earnings were driven by its offshore & heavy engineering division (+18% on-quarter).

But its petroleum division continued to suffer with spot rates for VLCC and Aframax vessels falling 13.7% and 15.2% on-quarter, respectively. Its 48% exposure to spot rates also stifled the division's performance.

MISC decided to exit the liner business after incurring RM2.8 billion losses over the past three financial years.

'Containership timecharter rates continued to drop by another 19% QoQ, and are unlikely to improve in the near term due to tonnage oversupply. FY11 earnings had been downgraded as MISC will be hit by a one-off RM1.1 billion provision relating to the cessation of its liner business.

'However, FY12F and FY13F earnings will surge 64% and 76%, respectively, because of its move to cut losses at the liner division,' said HDBSVR.

CIMB Research downgrades DiGi to underperform

KUALA LUMPUR (Nov 25): CIMB Equities Research said DiGi's share price has bolted ahead of its fundamentals, after a 20% surge in its share price, which it attributed to its stock split.

It said on Friday that DiGi's fundamentals remain unchanged. Its P/E and EV/EBITDA valuations are now among the highest in the sector.

'Given its sky-high valuations, we downgrade it to Underperform from Outperform even though our DCF-based target price rises with our rollover to end-12.

'We also trim EPS for an assumed 8.9 sen increase in FY12 DPS paid out from its share premium account. Switch to TM and Axiata,' it said.

Nikkei falls to lowest level since April 2009

TOKYO (Nov 25): The Nikkei share average fell to a fresh two-and-a-half-year low on Friday after statements by German and French ministers convinced investors that euro zone leaders were no closer to a consensus on how to contain the region's debt crisis.

The benchmark Nikkei dropped 0.4 percent to 8,136.32, while the broader Topix index declined 0.3 percent to 704.08. ' Reuters

Seoul shares open down on euro zone caution

SEOUL (Nov 25): Seoul shares opened lower on Friday, tracking falls overnight in European markets after Germany reiterated its opposition to the use of euro bonds or monetary tools to help solve the euro zone's debt crisis, deepening worries about the region.

The Korea Composite Stock Price Index (KOSPI) was down 0.92 percent at 1,778.59 as of 0001 GMT. - Reuters

Asian shares, euro fall on Europe deadlock

TOKYO (Nov 25): Asian shares and the euro both hovered near seven-week lows on Friday as European officials failed to soothe investor fears that the euro zone's debt crisis could trigger a credit crunch if funding costs run out of control.

MSCI's broadest index of Asia Pacific shares outside Japan fell 0.4 percent on Friday, hovering near a seven-week low hit the day before. Japan's Nikkei opened down 0.3 percent on Friday, hitting a fresh two-and-a-half-year low, but was later trading flat.

European shares fell for the sixth consecutive session in low volume on Thursday while Wall Street was shut for the Thanksgiving holiday.

With European policymakers struggling to break out of the deadlock and no convincing progress in sight over the euro zone debt crisis, investors were shunning riskier assets and selling assets normally perceived as safe to raise cash or cover losses.

France and Germany agreed on Thursday to stop bickering openly over whether the European Central Bank should do more to rescue the euro zone from a deepening sovereign debt crisis, while expressing their backing for Italian Prime Minister Mario Monti in his task of overcoming the country's massive debt burden.

French President Nicolas Sarkozy also said Paris and Berlin would circulate joint proposals before a Dec. 9 European Union summit for treaty amendments to entrench tougher budget discipline in the 17-nation euro area.

But with market seeking actions rather than rhetoric, sentiment remained highly risk-averse as Germany stood firmly opposed to the creation of joint euro zone bonds or boosting the ECB's role in solving the fiscal problems of individual euro zone members.

"Disappointment that officials continue to tinker with the trivial rather than consider the bold pushed risk appetites lower and increased the downside risks to the outlook for the European sovereign debt crisis," said Besa Deda, chief economist at St. George Bank in Sydney.

Funding stresses for European banks escalated, with the cost of swapping euros into dollars in the currency swap market rising to fresh three-year highs of 148 basis points on Thursday.

The ECB is looking at extending the term of loans it offers banks to 2 or even 3 years to try to prevent the euro zone crisis precipitating a credit crunch that chokes the bloc's economy, people familiar with the matter say.

The euro hovered near a seven-week low against the dollar on Friday, trading at $1.3329, not far from Thursday's low of $1.3316.

Commodity currencies, a gauge of risk-taking, struggled, with the Australian dollar down 0.2 percent to $0.9705 and not far from a seven-week low of $0.9664 set earlier in the week.

A day after weak demand for a German bond auction shocked global markets and fuelled fears the crisis may be hurting Europe's economic powerhouse, the closely-watched German Ifo business climate index on Thursday bucked expectations and showed a rise for November for the first time since June.

German government borrowing costs stayed elevated, with 10-year German government bond yields rising as high as 2.14 percent on Thursday to their highest in nearly a month.

The premium investors demand to hold Portuguese government bonds over German Bunds rose on Thursday after Fitch downgraded Portugal's rating to junk status.

Sentiment was cautious in Asian credit markets, with spreads on the iTraxx Asia ex-Japan investment grade index little changed on Friday.

Japanese government bonds fell, with the benchmark 10-year yield rising 2 basis points to 1 percent. Spot gold fell 0.1 percent to $1,692.20 an ounce, after falling to a one-month low of $1,665.88 earlier this week. - Reuters

HDBSVR: KLCI may slip below 1,445

KUALA LUMPUR (Nov 25): Hwang DBS Vickers Research said Asian equities would probably swing sideways on Friday pending the emergence of fresh market leads.

Over in the Europe, most stock exchanges ended between flat and marginally weaker on Thursday while Wall Street was closed for Thanksgiving.

'Back home, after staging a technical rebound yesterday, the benchmark FBM KLCI might slip below its immediate support level of 1,445 ahead,' it said.

HDBSVR said against the weak market backdrop, stocks that could be in the limelight today include: (a) MISC, which could benefit from its exit from the loss-making liner business; and (b) Perdana Petroleum, DRB-Hicom and Coastal Contracts following the release of their latest quarterly results that fell short of expectations.

Australia shares suffer on Europe intransigence

(Nov 25): Australian shares dropped 0.9 percent on Friday, with sentiment suffering from Germany's rigid stance on opposing the use of euro bonds or monetary tools to help solve the euro zone's debt crisis.

Shares in Woodside Petroleum tumbled 4 percent after it updated on production and capital spending estimates. Woodside narrowed its 2011 production target range to between 63 million and 64 million barrels of oil equivalent, from 62 million to 64 million previously.

The benchmark S&P/ASX 200 index lost 36.4 points to 4,007.8 at 2318 GMT. The index eased 0.2 percent on Thursday.

New Zealand's benchmark NZX 50 index was down 0.2 percent to 3234.4.

The U.S. stock market was closed on Thursday for the Thanksgiving holiday. - Reuters

Nikkei set to slip on euro zone debt fears

TOKYO (Nov 25): The Nikkei share average is set to slip and hover near 8,100 on Friday after statements by German and French ministers convinced investors that euro zone leaders were no closer to a consensus on how to contain the region's debt crisis.

"Investors are going to continue to sell following European stocks and lack of any more clarity from leaders after the meeting," said Hiroichi Nishi, equity general manager for SMBC Nikko Securities.

The Nikkei is expected to trade in a range of 8,100 to 8,250 on Friday, strategists said.

Nishi said market participants were hoping that the Bank of Japan would buy exchange-traded funds to prop up the market.

European shares fell for the sixth consecutive session in low volume on Thursday after German Chancellor Angela Merkel stood firm on her opposition to issuance of euro bonds and said the European Central Bank cannot take a more decisive role in stemming the debt crisis.

France has called for the central bank to intervene massively to counter a market stampede out of euro zone government bonds.

German bonds fell to their lowest level in nearly a month after Wednesday's auction, as borrowing costs of almost all euro zone states, even France, Austria and the Netherlands, have spiked in the last two weeks.

On Thursday, the Nikkei tumbled 1.8 percent to 8,165.18, a two-and-a-half-year low, while the broader Topix index ''lost 1.6 percent to 706.08.

U.S. markets were closed Thursday for the Thanksgiving holiday. On Wednesday, Wall Street fell for its sixth day with U.S. financials leading the losses. ' Reuters

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Genting Bhd 3Q earnings dn 22% to RM597m on-yr

KUALA LUMPUR (Nov 24): GENTING BHD []'s earnings fell 22% to RM597.19 million in the third quarter ended Sept 30, 2011 (3QFY11) from RM765.92 million a year ago in the absence of one-off items including a net gains of RM413.60 million recorded a year ago.

It said on Thursday, pretax profit for 3QFY11 included gain on disposal of available-for-sale financial assets of RM77.6 million.

However, it was impacted by net impairment loss of RM25.10 million mainly from the group's investments in certain jointly controlled entities and associate. There was also a net fair value loss of RM16.4 million on financial assets at fair value through profit or loss.

(In 3Q10, the pre-tax profit had then included one-off items comprising a net gain of RM413.6 million arising from the entitlement to the deferred consideration in relation to the sale of the whole of the issued share capital of Cairns Ltd by Laila Ltd, an indirect 95% owned subsidiary, to BP Global Investments Ltd; and also net impairment loss of RM250.6 million.)

Genting Bhd's revenue rose 31.6% to RM5.143 billion in 3QFY11 from RM3.909 billion while earnings per share were 16.16 sen compared with 20.72 sen.

'The increase in the revenue of the leisure & hospitality division was contributed by all of the group's leisure and hospitality businesses in Singapore, Malaysia, the UK and the US,' it said.

On Resorts World Sentosa (RWS), it said there was an increased due to the gaming and non-gaming segments.

The power division's revenue increased mainly due to better dispatch and a higher 2011 tariff rate in the Meizhou Wan power plant and higher energy charge in the Kuala Langat power plant. However, the EBITDA of this division is lower than that of the previous year due to higher coal prices.

The increase in the PLANTATION [] division's revenue and EBITDA in 3QFY11 was principally due to higher palm products prices and higher FFB production.

The share of results in jointly controlled entities and associates increased in 3QFY11, mainly due to the higher profits generated by the Indian power plants.

For the nine-month period, its earnings increased by 20.5% to RM2.094 billion from RM1.737 billion in the previous corresponding period. Its revenue rose by a stronger pace of 30.4% to RM14.495 billion from RM11.108 billion a year ago.

Genting Bhd said the group's profit before tax for the nine-months included gain on disposal of available-for-sale financial assets of RM221.6 million; property related termination costs of RM39.4 million; and net impairment loss of RM29.0 million mainly from the group's investments in certain jointly controlled entities and associate.

It added that profit before tax included net impairment loss of RM1.554 billion; net gain on dilution of RM436.3 million in the company's shareholding in Genting Singapore plc when the convertible bonds were fully converted into new Getting Singapore shares in the first half of 2010 and net gain of RM413.6 million arising from the entitlement to the deferred consideration.

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