#Stocks to watch:* IGB, Notion, Axiata, SYF

KUALA LUMPUR (Dec 10): Stocks on Bursa Malaysia could be given a boost on Monday following the firmer close on Wall Street as EU leaders worked out a plan to restore market confidence.

The Dow Jones industrial average ended up 186.56 points, or 1.55%, at 12,184.26. The Standard & Poor's 500 Index was up 20.84 points, or 1.69%, at 1,255.19. The Nasdaq Composite Index rose 50.47 points, or 1.94%, at 2,646.85.

For the week, the Dow rose 1.4%, the S&P gained 0.9% and the Nasdaq was up 0.8%.

As for Bursa Malaysia, the FBM KLCI fell 12.79 points or 0.87% to 1,460.13, weighed by losses including at KL Kepong, GENTING BHD [], PPB, AMMB and Gamuda.

Hong Kong's Hang Seng Index lost 2.73% to 18,586.23, South Korea's Kospi fell 1.97% to 1,874.75, Japan's Nikkei 225 was down 1.48% to 8,536.46, Taiwan's Taiex lost 1.28% to 6,893.30, the Shanghai Composite Index shed 0.62% to 2,315.27 and Singapore's Straits Times Index lost 1.24% to 2,694.60.

However, whether the rebound could last in the week ahead also remains to be seen.

Affin Investment Bank head of retail research Dr Nazri Khan is more cautious as he believes the FBM KLCI is likely to pullback lower to 1,430 to 1,420 support level on absence of an EU catalyst and lack of momentum from last week liquidity boost rally.

'We reckon the bearishness are driven by two important factors namely : (1) further caution from S&P 500 warning to massively downgrade EU countries and (2) investors losing''expectation over EU summit to produce a financial bazooka to contain the debt crisis,' he said.

Stocks which could see trading interest on Monday include IGB Group Bhd, Axiata Group Bhd, NOTION VTEC BHD [] and SYF RESOURCES BHD [].

On Monday, Broadcast Australia will ink and agreement with Axiata Group Bhd's unit Axiata Celcom wherein the former will be Celcom's technical partner to bid for the RM2 billion digital terrestrial television broadcasting (DTTB) project.

Celcom would ultimately be providing infrastructure for the (DTTB) network and rent it out for stable income in the future.

Celcom, which invested RM1 billion in the 3G infrastructure this year and plans to spend another RM1 billion next year.

The Edge weekly reports that the IGB group is said to have engaged investment banks to look into structuring a real estate investment trust. The property group is hoping to launch the REIT by first half of 2012.

It also reported that Notion VTec Bhd is hoping to grow its hard disk drive segment by 40% next year with the growing momentum in its 2.5in HDD base plate business, which is expected to turn profitable in the second quarter.

Meanwhile, SYF is now on firmer footing after regularising its financial condition. It recorded net profit of RM39.24 million in the first quarter ended Oct 31, 2011 when compared with net loss of RM581,000 a year ago after the waiver of debts and overprovision of interest.

Its revenue was 6.3% higher at RM42.98 million compared with RM40.44 million a year ago. Its earnings per share were 43.37 sen compared with loss per share of 0.69 sen.

GLOBAL MARKETS-Stocks, euro advance on EU deal, China report

NEW YORK (Dec 9): Global stocks rebounded and the euro rose on Friday after nearly all European Union leaders agreed to build a closer fiscal union to address the region's debilitating debt crisis.

A Reuters report that China planned a new $300 billion vehicle to invest in Europe and the United States also buoyed investor sentiment.

Yields on Italian debt also were trading below the 7 percent threshold, which was seen as unsustainably high. However, traders said frequent European Central Bank purchases offset disappointment over the prospect for a quick end to the crisis.

Led by Germany and France, 26 of the 27 nations in the European Union agreed after a two-day summit to pursue tighter integration with stricter budget discipline in the euro zone. Britain said it could not accept the proposed EU treaty amendments.

European and U.S. shares surged more than 1 percent, recouping most of Thursday's losses as investors saw merit in the EU deal.

"Some were hoping for a bigger deal, but we're seeing a lot more meat behind the effort with these measures," said Dennis Wassung, portfolio manager at Cabot Money Management in Salem, Massachusetts.

But some analysts warned that EU leaders failed to deliver a convincing answer to investors worried about their ability to tackle growing debt crises in Italy and Spain.

Italian bonds rebounded, and yields on the 10-year bond fell. Yields were off 15 points to 6.38 percent, with traders citing frequent European Central Bank purchases that offset market disappointment at the lack of prospects for a quick end to the debt crisis.

The euro also reversed course, gaining 0.2 percent to $1.3372. The single currency hit a global session high of $1.3433 on news of the Reuters report about China's planned investment vehicle.

Still, concerns remained that implementation of tougher budgetary discipline is going to be difficult.

"While many promises were made to stick to the rules of keeping debt at manageable levels, there were no tools offered that would supply an immediate and tangible benefit to the area," said Brendan McGrath, senior analyst at Western Union Business Solutions in Victoria, British Columbia.

The FTSEurofirst 300 index of top European shares rose 1.3 percent to close at 985.81 points.

The Dow Jones industrial average closed up 186.56 points, or 1.55 percent, at 12,184.26. The Standard & Poor's 500 Index was up 20.84 points, or 1.69 percent, at 1,255.19. The Nasdaq Composite Index was up 50.47 points, or 1.94 percent, at 2,646.85.

Banks, which have been pressured by the uncertainty of the debt crisis, rallied. The Financial Select Sector SPDR in New York rose 2.2 percent to $13.10, while the STOXX Europe 600 Banking Index rose 2.6 percent to 135.18.

A rise in U.S. consumer sentiment also drove gains on Wall Street. Consumer sentiment in early December hit its highest level in six months on signs of better labor conditions and an improving economic outlook, according to a survey by Thomson Reuters/University of Michigan.

The U.S. trade deficit narrowed in October to its lowest in 10 months, but imports from China hit a record high, a government report showed.

U.S. Treasury debt prices stumbled on the Wall Street rally and as traders reduced bond holdings in advance of next week's $78 billion in coupon debt supply.

Benchmark U.S. 10-year Treasury notes fell 27/32 in price to yield 2.07 percent.

Oil prices rallied after a choppy start.

ICE Brent futures rose 51 cents to settle at $108.81 per barrel. U.S. crude futures rose $1.07 to settle at $99.41.

U.S. gold futures for February delivery settled up $3.40 at $1,716.80 an ounce. - Reuters

COMMODITIES-China's 'Europe fund' helps oil, metals; soy dives

NEW YORK (Dec 9): Oil and copper prices rebounded on Friday from the previous day's drop, on speculation that a new Chinese investment vehicle could help Europe; but a string of earlier losses pulled both markets down for the week.

Sharp losses in agricultural futures also led the broader commodities complex to close down for the day and week.

The 19-commodity Thomson Reuters-Jefferies CRB index finished half a percent down for the session and nearly 2 percent lower for the week after soybean prices hit a 14-month bottom and cocoa 3-year lows.

For the week ahead, investors are also expected to pay attention to U.S. data such as retail sales, consumer prices, manufacturing and jobless claims -- aside from headlines out of Europe -- to gauge direction.

In Friday's session, energy and metals markets rose after Reuters reported that China's central bank plans to create a $300 billion vehicle to manage investment funds in the United States and Europe.

The report "suggests (that) it will make funding conditions easier for struggling euro zone countries", said Sebastien Galy, analyst at Societe Generale in London. Some markets were also bolstered by the European Union's pledge after a two-day summit to pursue tighter integration and stricter budget discipline in the euro zone, although Britain dismissed such notions.

"I think the bottom line from the EU agreement is that it kind of takes the disaster scenario off the table," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.

"There were a lot of fears that you could see major European banks, particularly French banks, fail if they didn't reach some sort of agreement." U.S. crude oil futures' benchmark front-month contract ended the session up 1 percent at $99.41 a barrel, boosted by the new Chinese investment vehicle for Europe and the EU pledge for tighter fiscal coordination.

On a weekly basis, U.S. crude fell 1.5 percent, weighed down by earlier losses in the week after threats by Standard & Poors to downgrade most of the countries in the euro zone if it did not find the outcome of the EU summit encouraging.

London's Brent crude finished at $108.62 a barrel, up half a percent for the day and down 1.2 percent for the week. Copper climbed in tandem with higher equity markets and a stronger euro versus the dollar after news of the EU agreement. It gathered more steam after the report about China's upcoming investment vehicle for Europe.

Three-month copper on the London Metal Exchange settled at $7,815 a tonne, up $105 from Thursday. For the week, it was down $75.

In New York, U.S. copper's most active contract, March , rose 5.75 cents to finish at $3.5575 per lb. It fell 2.7 cents for the week.

On the agricultural front, soybean futures traded in Chicago fell 2.3 percent to a 14-month low, finishing at $11.07 a bushel. Chicago wheat skidded to a five-month low, while corn dropped more than 1 percent after a government forecast topped expectations for supplies of the key U.S. grains.

New York-traded cocoa for March dropped $64, or 3 percent, to end at $2,067 a tonne. It finished the week down 7.2 percent, dropping for the sixth straight week and marking the biggest weekly drop in three months.

Cocoa futures have fallen more than 22 percent since early November, plumbing 3-year lows and reaching extremely technically oversold levels. The market has been pressured by plentiful nearby supplies and bearish macro sentiment.- Reuters

Olympus ousted CEO to visit Japan, seeks new board

TOKYO, Dec 10 (Reuters) - Olympus Corp's ousted CEO, Michael Woodford, will travel to Japan on Tuesday seeking support from shareholders and investors for a new management to lead the firm after a $1.7 billion accounting fraud.

Woodford will arrive in Japan on Tuesday evening and leave on Friday morning, an assistant in Tokyo said in an e-mail.

His visit comes as Olympus prepares to issue its earnings before a deadline Wednesday in order to avoid being delisted by the Tokyo Stock Exchange.

Even if it met the deadline, the 92-year-old maker of endoscopes and cameras could still be dumped from the exchange if its accounting misstatements were large enough.

The board, slammed in an independent report on the accounting scandal roiling the company, has said it plans to stay in place for the time being.

Woodford will also meet candidates for any new board, the Yomiuri reported earlier. Nearly all the current directors served during Olympus's 13-year cover-up of investment losses.

Japanese prosectors, jointly with police and securities watchdog, have decided to raid homes of potential suspects and offices linked to the Olympus accounting scandal next week, media reported on Saturday.

Prosecutors' investigation is expected to cover a total of more than 10 locations, including the main office of the camera maker, Jiji news agency said.

Prosecutors are also planning to conduct hearing of former president Tsuyoshi Kikukawa, who told the independent investment panel set up by Olympus last month that he has only learned about the scandal recently, Jiji said.

Olympus has seen its existence threatened by the scandal, in which senior executives cooked the books in a $1.7 billion scheme to hide investment losses. Olympus shares have lost about half their value since Woodford blew the whistle on the accounting problems.

The independent panel made up of six legal and accounting experts, described the management as rotten to the core.

In order to remove them, Woodford will need the support of most shareholders, including Japanese stock holders, who have yet to voice support for the former president.

US STOCKS-Wall St rallies on EU deal but concerns linger

NEW YORK (Dec 9): U.S. stocks rallied Friday, finishing the week higher after European Union leaders agreed on a plan to toughen the region's budget rules to help restore market confidence after a two-year sovereign debt crisis.

The agreement went some way to address the structural problems behind the bloc's debt crisis, but investors said more was now needed to relieve stress in the region's troubled debt markets.

"The fiscal agreement will help, but not for long," said George Feiger, chief executive of Contango Capital Advisors based in San Francisco.

"There is no happy ending to the situation. There are just solutions that are not horrible," he said.

Equities had risen in anticipation of a plan, with the S&P 500 up 6.5 percent since late November. But Wall Street tumbled on Thursday after the European Central Bank dashed hopes for additional bond buying.

There are investors who believe the ECB will eventually have to commit to bigger purchases of euro zone sovereign debt to shore up the battered market.

At least part of Friday's rally was a snap-back from the previous session's losses, traders said.

The Dow Jones industrial average ended up 186.56 points, or 1.55 percent, at 12,184.26. The Standard & Poor's 500 Index was up 20.84 points, or 1.69 percent, at 1,255.19. The Nasdaq Composite Index rose 50.47 points, or 1.94 percent, at 2,646.85.

For the week, the Dow rose 1.4 percent, the S&P gained 0.9 percent and the Nasdaq was up 0.8 percent.

Banks, which have been pressured by the uncertainty over Europe, rallied after the EU summit. Bank of America Corp rose 2.3 percent to $5.72, while JPMorgan Chase & Co added 3 percent to $33.18. The Financial Select Sector SPDR rose 2 percent.

In the latest sign of resilience in the U.S. economy, consumer sentiment rose to its highest level in six months in early December on signs of a better jobs market and an improving economy, according to a survey by Thomson Reuters/University of Michigan.

The EU summit failed to secure changes to the EU treaty among all the member countries and investors warned the move was far from a panacea. Indications suggest the region is sliding into a recession and questions about how to bring down high sovereign debt yields are still unanswered.

Goldman Sachs suggested that investors short German equities through the benchmark DAX index in a note to clients published late on Thursday.

"The European summit seems focused on a set of future priorities for increased fiscal risk sharing and the outlining of some of the needed elements of a new fiscal arrangement, but looks to have little to say about alleviating proximate stresses in Greece and Italy and the European banking system more generally," Goldman said.

Still, Italian bonds reversed losses, with traders citing frequent European Central Bank forays into Italian debt markets throughout the day.

Traders also said "fast money" accounts were covering short positions in bonds of so-called peripheral EU countries.

Some caution signals were sent by major U.S. companies. DuPont and Co fell 3.1 percent to $45.04 after the Dow component cut its 2011 profit outlook, citing slower growth in some businesses.

Texas Instruments Inc cut its revenue outlook for the current quarter, warning of lower demand. The stock ended flat at $29.94.

Trading volume was 6.71 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, below the year's daily average of around 7.95 billion shares.

Advancing stocks outnumbered declining ones by a ratio of 6 to 1 on the NYSE, while on the Nasdaq, advancers beat decliners by a ratio of 5 to 1. - Reuters

US STOCKS-Futures rise after Europe summit results

NEW YORK (Dec 9): U.S. stock index futures rose on Friday after European Union leaders agreed on measures that partially addresses the region's crippling sovereign debt crisis.

* The summit agreed on stricter budget rules for the euro zone but failed to secure changes to the EU treaty among all the member countries. Investors viewed the agreement positively, with the FTSEurofirst 300 index of top European shares gaining 1.1 percent.

* Equities have risen in anticipation of a deal, with the S&P 500 up 6.5 percent since Nov. 25. But Wall Street tumbled on Thursday after the European Central Bank dashed hopes for an even stronger deal.

* Banks, which have been pressured by the European uncertainty, rallied in premarket trading. Bank of America Corp rose 1.8 percent to $5.69, while JPMorgan Chase & Co added 1.2 percent to $32.60, and Citigroup Inc rose 1.8 percent to $28.25.

* S&P 500 futures rose 11.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures jumped 106 points, and Nasdaq 100 futures added 14.75 point.

* Chipmakers will be in focus a day after Texas Instruments Inc cut its revenue outlook for the current quarter, warning that demand was broadly lower.

* The Commerce Department will release October International Trade data at 8:30 a.m. EST (1330 GMT). Economists expect a deficit of $43.5 billion in October versus a September deficit of $43.11 billion.

* The Thomson Reuters/University of Michigan Surveys of Consumers preliminary December consumer sentiment index will come at 9:55 a.m. EST (1455 GMT) Economists predicted a reading of 65.5, compared with 64.1 in the final November report.

* Wall Street fell sharply on Thursday after the ECB dashed hopes of a financial "bazooka" to contain the crisis. The S&P and Nasdaq each fell about 2 percent, while the Dow was off more than 1 percent. - Reuters

China fund report gives FTSE a fillip, summit eyed

LONDON (Dec 9): Britain's top shares rose on Friday, reversing initial losses, fuelled by hopes a new Chinese investment vehicle could be used to help alleviate the impact of the euro zone debt crisis, as investors awaited the outcome of a crucial EU summit.

A source told Reuters China's central bank plans to create a new vehicle to manage two investment funds worth a total of $300 billion, one targeting investments in the United States and the other focused on Europe.

"I guess they're hoping that China's going to be the white knight that rides to Europe's rescue," Joe Rundle, head of trading at ETX Capital, said.

"I think in time China will probably step in and have an effect on Europe, but it's going to be very much on China's terms rather than European terms."

The UK benchmark index had oscillated in and out of negative territory earlier as hopes waxed and waned a European summit would take big strides towards solving the region's debt crisis.

At 1305 GMT, the FTSE-100 index was up 18 points, or 0.4 percent, at 5,502.21, led by banks, having recovered from an intra-day low of 5,440.86. Volumes were thin.

The index has gained about 7 percent over the past two weeks on mounting expectations of an imminent solution to Europe's debt crisis.

Disappointingly for investors, European leaders have failed to agree on a treaty change and decided to cap the euro zone's permanent bailout fund, with the fund also not aiming for a banking licence that could have increased its firepower.

Summit talks resume today, but some market participants saw little cause for reassurance, taking the view there would be no rapid solution to the euro zone's debt crisis.

"I don't think we're going to get many more announcements (from the summit). I think the more helpful thing is to get more from the ECB ... The market's increasingly sceptical about whether politicians can deliver much more in the short term," said Colin Mclean, managing director of SVM Asset Management, which has around 700 million pounds of assets under management.

Sentiment was dented on Thursday when European Central Bank President Mario Draghi cooled market expectations about the prospect of an acceleration in ECB bond purchasing, although the bank did cut interest rates by 25 basis points to 1 percent.

"There's been quite a lot of scrambling to cover shorts, and I think probably a lot of institutions are quite underweight on banks (which are deleveraging quite sharply in Europe now), so there's more potential upside in that sector," Mclean said.

After suffering hefty falls in the previous session, banks staged a recovery, with Lloyds Banking Group , Royal Bank of Scotland and Barclays grabbing the top three spots on the leader board, climbing 4.6-5.9 percent.

Among fallers, GlaxoSmithKline shed 1 percent after its drug Tykerb failed to hit its goal in a clinical trial testing its role in women with early breast cancer, dimming hopes for its use in this setting.

On the second line, African Barrick Gold was a significant laggard, down 3.1 percent, as the miner said it would fall short of its 2011 production target because of escalating power disruptions to national grid electricity supply in Tanzania.

UBS strategists said the recent market moves probably reflect some pricing out of extreme negative scenarios, "but risks remain".

"We believe the market is priced for a small decline in earnings next year," UBS said.

"While we see upside to end-2012 (target 6,100 for FTSE 100), we believe that we would need to see a big positive surprise from EU politicians to push convincingly through this range-bound market in the near term."

UBS said that positive developments from the EU leaders could lead to a number of financials and mining stocks performing well, while consumer staples, utilities and pharmaceuticals should outperform if the crisis deepens.

The FTSE 100 currently trades on a price to earnings ratio of 9.9 times, compared with a historical average of around 14 times, and a price to book ratio of just 1.57, according to Thomson Reuters data. Its dividend yield of 4.15 compares favourably to those offered on "safer" euro zone and U.S. bonds.

Atif Latif, director of equities and derivatives at Guardian Stockbrokers, sees downside risk to the index's consolidated low at 5,362, then to 5,200/5,100, the base for the last rally, on negative news out of the summit, while good news may trigger a re-test of its recent high at 5,632.

Traders said that if, on the other hand, no news of particular consequence were to emerge from the summit, this would only trigger a 'small down' on the FTSE 100, although the index would remain reasonably volatile.

Toyo Ink to fund US$2.5b Vietnam power plant from project capital, borrowings

KUALA LUMPUR (Dec 9): TOYO INK GROUP BHD [] plans to finance the US$2.5 billion coal-fired power plant power plant in Vietnam from a corporate exercise and also through borrowings.

Since the project involved a massive capital outlay, the company said on Friday it would consider raising part of the project capital from a corporate exercise and funding the balance via borrowings.

Toyo Ink said it would also seek equity partnerships to incorporate a joint venture company in Vietnam, adding this might involve changes in the company's existing corporate structure, capital management and financial risk management.

The company was responding to a query from Bursa Malaysia Securities on the proposed investment project.

Toyo Ink also said the power purchase agreement, implementation agreement and the developing and expanding cooperation framework had yet to be finalised.

It share price closed 10 sen lower at RM1.67 as investors were concerned its recent price surge was overdone as returns on investment in the power plant would be longer.

The Edge FinancialDaily reported on Friday Toyo's share price has benefited from the letter of approval it received from the'' Vietnamese government for'' the power plant, but realising the earnings may be a long way off.

SYF Resources posts RM39m net profit in 1Q, thanks to debt waiver

KUALA LUMPUR (Dec 9): SYF RESOURCES BHD [] posted net profit of RM39.24 million in the first quarter ended Oct 31, 2011 when compared with net loss of RM581,000 a year following the waiver of debts and over provision of interest.

The company said on Friday its revenue was 6.3% higher at RM42.98 million compared with RM40.44 million a year ago. Its earnings per share were 43.37 sen compared with loss per share of 0.69 sen.

SYF said there was a waiver of debts by scheme lenders and over provision of interest amounting to RM32.3 million and RM5.4 million respectively upon the completion of the proposed restructuring scheme on Oct 25.

It also issued 102.72 million redeemable convertible secured loan stocks of 25 sen each to unsecured financial institution creditors; and 84.07 million rights shares of 25 sen each.

Malaysian spend average of RM46 monthly on mobile Internet

KUALA LUMPUR (Dec 9): Malaysians spend an average of US$15 (RM46) per month on mobile Internet, a segment which has expanded more than double
since last year with growth spurred mainly by those in the 15-25 age group.

The top four mobile-related activities that Malaysians mostly indulge in are emailing, accessing social networking sites, dowloading ringtones and instant
messaging, the annual Yahoo! Net Index Survey 2011 revealed on Friday.

"The usage of smart feature phone handset with affordable data plans, advanced features such as call and text function, access to mobile web and
multimedia features is prevalent among the Malaysians," said the survey.

DiGi was the top mobile and smart phone service provider in Malaysia with 47% market share, followed by Maxis 32% and Celcom 8%.

It also said compared with other Southeast Asian (SEA) countries, Malaysians tend to own more high-cost handsets including smart phones.

The survey said more than 60% of mobile users in the country own handset worth US$100 (RM312) and nearly a quarter own mobile phones that cost more than US$300 (RM937) when compared with the low-cost feature phones prevalent in Indonesia, Vietnam and the Philippines.

Unlike the other Southeast Asian markets where Nokia is the dominant manufacturer, Malaysia is the only market where Sony Ericsson dominates with 39% market share, followed by Nokia 26% and Blackberry and Apple 6% respectively. - Bernama

#Update* Celcom Axiata plans another RM1b capex for 3G infra

KUALA LUMPUR (Dec 9): Celcom Axiata Bhd, which invested RM1 billion in the 3G infrastructure this year, plans to spend another RM1 billion next year.

Its chief financial officer Chari TVT said on Friday the network was long term evolution (LTE) capable for upgrading.'' (LTE is a standard for wireless communication of high-speed data for mobile phones and data terminals.)

'Currently, 86% of mobile phones in Malaysia still depend on the 2G network. Over in Japan, they have only just phased out the 2G network this year. Malaysia is roughly five years behind Japan, therefore we can expect to phase out 2G TECHNOLOGY [] in about five years,' said Chari.

When asked about plans by Broadcast Australia to ink a deal on Monday to be Celcom's technical partner to bid for the RM2 billion digital terrestrial television broadcasting (DTTB) project, Chari declined to comment.

He said the details of the deal would be announced on Monday but said that Celcom would ultimately be providing infrastructure for the DTTB network and rent it out for stable income in the future.

'We have 98% of the infrastructure in place for the DTTB network,' said Chari.

On Celcom Axiata's financial performance for the third quarter ended Sept 30, 2011, Chari said it posted all-time record high profit and revenue.

Its profit after tax and minority interests for the third quarter rose 10% on-year to RM531million from RM509 million driven by revenue which grew by 6% to RM1.826 billion from RM1.768 billion.

Chari said he expected the group to achieve its key performance indicators and reach its targeted RM7.9 billion in revenue for the full year.

Moving forward, Celcom would continue to modernize its network, and accelerate its technology transformation by investing into network fiberisation, 4G LTE, and alternative access technologies while focusing on IT transformation.

Data makes up about 38% of Celcom's revenue, but that figure is expected to reach 50% by 2015, he said.

He attributed the rapid growth of Celcom's data business to the quickly expanding but highly competitive market.

'Smartphone penetration for our network has gone from 10% to 18% within a year,' said Chari who expected smart phone uptake to continue at a rapid pace as smart-phone prices continue to decline.

KLCI closes on weaker note as eurozone debt woes persist

KUALA LUMPUR (Dec 9): The FBM KLCI ended the week on a weaker note in line with global markets, as investors worried over the uphill battle European leaders faced in agreeing to a more permanent solution to solve the eurozone debt crisis started liquidating their stocks.

The FBM KLCI fell 12.79 points to 1,460.13, weighed by losses including at KLK, Genting, PPB, AMMB and Gamuda.

Losers beat gainers by 515 to 213, while 278 counters traded unchanged. Volume was 1.3 billion shares valued at RM1.06 billion.

EU leaders agreed stricter budget rules for the euro zone at a summit seen as crucial to the future of the single currency in Brussels, but failed to secure changes to the EU treaty among all 27 member states, meaning a deal will instead have to involve just euro zone states and any others that want to join, according to Reuters.

After 10 hours of talks there was little concrete progress among the leaders, apart from their commitment to work towards a new "fiscal compact", it said.

At the regional markets, Hong Kong's Hang Seng Index lost 2.73% to 18,586.23, South Korea's Kospi fell 1.97% to 1,874.75, Japan's Nikkei 225 was down 1.48% to 8,536.46, Taiwan's Taiex lost 1.28% to 6,893.30, the Shanghai Composite Index shed 0.62% to 2,315.27 and Singapore's Straits Times Index lost 1.24% to 2,694.60.

On Bursa Malaysia, KLK fell 72 sen to RM22.28, Genting down 26 sen to RM10.62, Cepco 23 sen to RM1.66, Knusford lost 22 sen to RM1.64, PPB fell 20 sen to RM16.30, Parkson and AMMB lost 16 sen each to RM5.50 and RM5.74, Gamuda and MISC down 15 sen each to RM3.13 and RM5.80, while AirAsia lost 12 sen to RM3.67.

Among the gainers, Nestle added 28 sen to RM54.38, GAB 18 sen to RM12, Hartalega 17 sen to RM5.72, Harvest Court 15 sen to RM1.24, Dutch Lady 14 sen to RM24.92, Magni 13 sen to RM1.23, Bintulu Port and SOP 10 sen each to RM6.95 and RM5.40, while Perduren added 8.5 sen to 93.5 sen.

Compugates was the most actively traded counter with 66.9 million shares done. The stock was unchanged at 7 sen.

Other actives included SYF Resources, Versatile, DPS Resources, Utopia, Pavilion REIT and Emico.

Toyo Ink shares fall on concerns of longer ROI from Vietnam IPP

KUALA LUMPUR (Dec 9): Shares of TOYO INK GROUP BHD [] fell on Friday on concerns that its recent rally was overdone as its returns on investment in Vietnam's US$2.5 billion (RM7.8 billion) power plant would be longer.

At 3.37pm, it was down 12 sen to RM1.65. There were 41,000 shares done at prices ranging from RM1.59 to RM1.71.

The FBM KLCI fell 15.17 points to 1,457.75. Turnover was 952 million shares valued at RM690.61 million. There were 155 gainers, 520 losers and 255 stocks unchanged.

The Egde FinancialDaily reported on Friday Toyo's share price has benefited from the letter of approval it received from the'' Vietnamese government for'' the power plant, but realising the earnings may be a long way off.

It has taken over three years of hard work to obtain the letter, but Steven KC Song, managing director of Toyo, said on Thursday that the plant will take three to four years to build and estimated that it would only begin operating in 2017 or 2018.

It should be at least six to seven years before the US$2.5 billion project even begins turning in cash, yet Toyo's share price surged as high as RM1.88 on Tuesday, with a 50 sen or 36.23% gain for the month.

Song had also said Toyo has yet to secure funding as it has not yet nominated a merchant bank to provide financial advice.

BNM pushes ahead financial sector blueprint with MobileLINK

KUALA LUMPUR (Dec 9): Bank Negara Malaysia's financial sector blueprint, which will chart the direction of development of the country's financial system in the next 10 years, took another step ahead with the launch of its MobileLINK to reach out to the under-served communities.

Its governor Tan Sri Dr Zeti Akhtar Aziz said on Friday the blueprint placed a high priority on the financial inclusion agenda to reach out to under-served.

'Among the areas of focus are the development of cost efficient delivery channels that will enhance the outreach of financial services, expand the range of products and services to meet the distinct financial needs of the underserved and strengthen the institutional arrangements to enhance the capacity of providers of such financial services.

'Equally, important will be the attention accorded to financial consumer education and protection in which the standards of consumer care are high and consumers have choices and are confident about making their financial decisions,' she said.

Speaking at the launch of the MobileLINK, she explained the custom-made coach had all the supporting facilities for the consumers.

Zeti said the coach would enable consumers particularly from the non-urban areas to engage on matters relating to banking services which need to be addressed and on any other financial services that are offered by our financial institutions.

'This will allow members of the public including SMEs to receive rapid response and facilitation on financial matters.'' It will also enable the bank to hear directly from the public on financial issues concerning our financial system,' she said.

The journey for MobileLINK began on Friday to cover about 50% of the identified non-urban areas nationwide in the next three years.

In the first phase, the MobileLINK's journey will start from Mersing, Johor and will continue to northern states and later back to the south to Jerantut, Pahang.'' This part of the journey will be completed in December 2012.

Zeti said the terminals in the MobileLINK coach are connected to BNM's information TECHNOLOGY [] systems such as central credit reference information system (CCRIS), customer redress mechanism system and the bank's corporate website.

Among the services that will be available are advisory services on banking, insurance & takaful and SMEs financing related matters; retrieval of personal credit status through the CCRIS; and advisory on any other financial related matters under the purview of BNM.

Zeti added the introduction of MobileLINK complemented the series of consumer financial advisory initiatives that have been introduced by the Bank since 2005.

On deposit accounts in Malaysia, she said the ratio had increased from 19,738 deposit accounts per 10,000 adults in year 2000 to 29,311 deposit accounts per 10,000 adults this year.

Similarly, there has been significant increase in loan accounts from 3,105 loan accounts per 10,000 adults to 8,600 loan accounts per 10,000 adults.

''

Zeti refutes Nomura report on European banks' exposure to Malaysia

KUALA LUMPUR (Dec 9): Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz refuted'' a Nomura International report that European banks' exposure to Malaysia totalled US$50 billion (RM155 billion) or about 19% of the country's gross domestic product.

"That is not correct information. What I really want to emphasise is our foreign banks are locally incorporated and therefore they have less exposure compared to other places where they are not locally incorporated.

"We'll issue the numbers because that's not correct. It's something like less than five per cent or so, it's very low," she told reporters when asked to comment on the issue after launching the central bank's MobileLink here.

An economist at Nomura International, an asset management company, stated recently that Malaysia was one of the economies that would weaken the most as it was in the economies weaker group.

The economist also said Malaysia ranked third in Asia, excluding Japan, in terms of exposure to European bank claims after Hong Kong and Singapore, which could mean drying up of liquidity should European banks start cutting their exposure to the region.

Meanwhile, on scam activities, Zeti advised the public to report to the central bank and the police.

"We don't want to wait until it is serious before we inform the public that there are these scams. It is not just telling people who are not involved in the financial sector but people who are already in the financial mainstream, that means participating in the financial system.

"They don't have the knowledge that some of these are scams and it is important to be educated," she said.

Zeti also said there were all kinds of financial wealth products and a lot were not correct.

"Sometimes they use Bank Negara letterheads and names of Bank Negara senior officials. All these, of course, can be charged (in court) and the public should report them not only to Bank Negara but also to the police," she added. - Bernama

October exports at record RM63.57 bln, up 15.8% on-year

KUALA LUMPUR (Dec 9): Malaysia's exports rose to a record RM63.57 billion in October, up 15.8% from a year, with manufactured products accounting for 64.8%, according to the Minister of International Trade and Industry.

Datuk Seri Mustapa Mohamed said on Friday imports increased by 4.6% to RM50.35 billion while total trade expanded by 10.6% to RM113.91 billion.

'Compared to the month of September 2011, total trade, exports and imports in October 2011 were higher by 5.7%, 8.3%, and 2.6%, respectively,' he said in a statement.

For the January-October period, Malaysia's total trade breached RM1 trillion to RM1.052 trillion, up 8.8% from a year ago.

Mustapa said despite the challenging global trading environment and slow down in advanced economies, exports increased by 9.1% to RM577.16 billion while imports rose by 8.5% to RM474.72 billion, resulting in a trade surplus of RM102.44 billion. Growth in trade was supported by regional markets in Asia, he said.

On the October exports data, he said manufactured exports accounted for 64.8% of total exports. They showed a 2.2% increase on-year.

'Overall, manufactured goods contributed 10.5% to the growth in October exports. The major thrust was provided by chemicals and chemical products, manufactures of metal and rubber products, which increased by 24.3%, 38.5% and 23.7% respectively,' he said.

Mustapa noted that this growth offset the impact of the lower exports of electrical and electronic (E&E) products, which declined by 9%.

Commodities, mainly liquefied natural gas (LNG), palm oil, crude and refined petroleum products, contributed 76.2% to export growth in October 2011. These commodities accounted for 29.1% share of the total exports.

He said Asean had become showed a significant market, with October exports up 16.2% on-year to RM15.8 billion and the region accounted for 24.8% of Malaysia's total exports in October 2011.

The main commodities were which exported to Asean were refined petroleum products, crude petroleum, chemicals and chemical products, palm oil, manufactures of metal, tin, iron and steel products, optical and scientific equipment, as well as, non-metallic mineral products.

He pointed out with the exception of Laos, Malaysia's exports to all Asean countries registered growth with the strongest growth to Indonesia, Thailand, the Philippines and Vietnam.

China imported RM8.66 billion of goods from Malaysia in October, which was a 37.1% on-year increase. Among the products were commodities, manufactured goods such as E&E products, manufactures of metal, chemicals and chemical products and processed food.

Exports to Japan rose 29.6% to RM7.52 billion. Higher exports were seen for LNG, machinery, appliances and parts, palm oil, wood products, chemicals and chemical products as well as optical and scientific equipment.

Exports to the European Union increased by 5% to RM6.49 billion, due mainly to higher exports of manufactures of metal, as well as, palm oil. Germany, the Netherlands and France remained the top three export markets.

The US was the fourth largest export market, accounting for a 7.9% share of Malaysia's total exports in October.

Sime to expand oil, fats biz in S. Africa

JOHANNESBURG (Dec 9): Sime Darby Group plans to further expand its oil and fats business in South Africa with the setting up of a packaging
facility and another refinery in the future.

Its South Africa unit, Sime Darby Hudson & Knight (Pty) Ltd, was expected to set up the packaging facility, a company official said.

The official said this at a briefing for Minister of PLANTATION [] Industries and Commodities, Tan Sri Bernard Dompok, and his delegation during a visit to
the refinery in Boksburg on Thursday.

The official said the expansion, which started with the packaging facility, was in the final preparation stage as the group found new marketing
opportunities for its products in neighbouring territories and countries.

"The new refinery will come in later when demand has increased sufficiently," he said.

The Sime Darby Hudson & Knight refinery has a capacity for 160,000 tonnes with about 80 per cent utilisation. About half of the refinery output is for Unilever.

Sime Darby group is a major investor in the oil and fats business in Africa.

Apart from the refinery, it is also currently involved in setting up plantations in Liberia. - Bernama

Celcom Axiata plans another RM1b capex for 3G infra

KUALA LUMPUR (Dec 9): Celcom Axiata Bhd, which invested RM1 billion in the 3G infrastructure this year and plans to spend another RM1 billion next year.

Its chief financial offer Chari TVT said on Friday the network was long term evolution (LTE) capable for upgrading.'' (LTE is a standard for wireless communication of high-speed data for mobile phones and data terminals.)

When asked about plans by Broadcast Australia to ink a deal on Monday to be Celcom's technical partner to bid for the RM2 billion digital terrestrial television broadcasting (DTTB) project, Chari declined to comment.

He said the details of the deal would be announced on Monday but said that Celcom would ultimately be providing infrastructure for the (DTTB) network and rent it out for stable income in the future.

On the financial performance for the third quarter ended Sept 30, 2011, Chari said Celcom posted record profits and revenue. Its profit after tax and minority interests had grown 10% on-year to RM531million and revenue by 6% to RM1.826 billion.

Asian market extend losses on EU summit uncertainties

KUALA LUMPUR (Dec 9): The FBM KLCI fell 0.98% at the mid-day break on Friday as losses at key Asian markets widened on increasing concern that European policy makers would not be able to formulate concrete plans to solve the eurozone debt crisis.

The FBM KLCI fell 14.58 points to 1,458.44, weighed by losses at blue chips including Genting, Petronas Dagangan and KLK.

Market breadth was negative with losers beating gainers by 471 to 136, while 237 counters traded unchanged. Volume was 727.43 million shares valued at RM485.12 million.

The ringgit weakened 0.70% to 3.1540 versus the US dollar; crude palm oil futures for the third month delivery fell RM2 per tonne to RM3,085, crude oil slipped 20 cents per barrel to US$98.14 whole gold gained US$1.38 an ounce to US$1,709.75.

Losses at regional markets accelerated after EU diplomats said it had been agreed that a new permanent bailout fund would not have a banking licence, meaning it would not be able to borrow from the European Central Bank (ECB), according to Reuters.

At the regional markets, Hong Kong's Hang Seng Index lost 2.63% to 18,605.92, Japan's Nikkei 225 fell 1.63% to 8,522.98, South Korea's Kospi was down 2.04% to 1,873.33, Singapore's Straits Times Index lost 1.15% to 2,696.90, Taiwan's Taiex fell 1% to 6,913.13 and the Shanghai Composite Index shed 0.63% to 2,315.24.

On Bursa Malaysia, KLK was the top loser this morning and fell 70 sen to RM22.30; Nestle was down 30 sen to RM53.80, BAT and Petronas Dagangan down 28 sen each to RM47.12 and RM16.90, Genting 26 sen to RM10.62, BLD PLANTATION []s 25 sen to RM7.05, HLFG 24 sen to RM11.26, PPB 22 sen to RM16.28, MISC 18 sen to RM5.77 and AMMB down 17 sen to RM5.73.

Compugates was the most actively traded counter with 61.5 million shares done. The stock was unchanged at 7 sen.

Other actives included Versatile, SYF Resources, DPS Resources, Pavilion REIT, Takaso, Utopia and LFE Corp.

Gainers this morning included Dutch Lady, Cycle & Carriage, Aeon, F&N, Riverview, Kretam and Asas.

BIMB targets return on equity of 16% for 2012

KUALA LUMPUR (Dec 9): BIMB HOLDINGS BHD [] targets to achieve return on equity of 16% for the banking group under its headline key performance indicators for the financial year ending Dec 31, 2012.

In a statement issued to Bursa Malaysia on Friday, BIMB said it was targeting return on assets of 1.5% for FY2012.

'These headline KPIs targets have been set and agreed by the board and management of BIMB group as part of a broader KPIs framework that the group has in place. The headline KPIs targets have been arrived at based on the targeted consolidated financial results of the group for FY2012,' it said.

On the outlook for the banking and financial services sector, BIMB said the uncertainties in the macro economic conditions were expected to be challenging which may affect the sector going forward.

The headline KPIs set by the group reflected its main corporate targets in pursuing sustainable financial results, it said.

BIMB said the announcement of headline KPI targets were under the government-linked companies' transformation programme which were disclosed on a voluntary basis. However, it said the targets should not be construed as forecasts, projections or estimates of the group or representations of any future performance.

''

Gamuda dips on being removed from KLCI

KUALA LUMPUR (Dec 9): GAMUDA BHD [], which would be leaving the FBM KLCI index following the semi-annual review of the FTSE Bursa Malaysia Index Series on Thursday, declined in late morning trade on Friday.

The decline in Gamuda's shares was also in line with the weaker broader market.

At 11.56am, Gamuda fell 17 sen to RM3.11 with 915,500 shares traded.

OSK Research in a note Dec 9 said the removal of Gamuda from the FBM KLCI removed the CONSTRUCTION [] sector representation.

FTSE Group (FTSE) and BURSA MALAYSIA BHD [] yesterday said the constituent changes take effect at the start of business on Dec 19,''2011 and the next review will take place on June 7, 2012.

The FBM KLCI lost 1.02% or 15.08 points to 1,457.84.

RAM Ratings maintains AA1 ratings of Panglima's RM830m debt notes

KUALA LUMPUR (Dec 9): RAM Ratings has reaffirmed the AA1 rating of Panglima Power Sdn Bhd's RM830 million redeemable secured serial bonds, with a stable outlook.

The ratings agency said Panglima is an independent power producer (IPP) that owns and operates a 720-MW nominal-capacity, combined-cycle, gas-turbine power plant in Teluk Gong, Melaka.

'The rating remains supported by Panglima's strong business profile,' it said. In FY ended Jan 31, 2011, the company reported satisfactory operational performance as it met most of the operating parameters under its power purchase agreement (PPA) with Tenaga Nasional Berhad (TNB).

RAM Ratings said although Panglima was unable to claim full available capacity payments owing to two incidents of failure to despatch instructions, the shortfall was minimal and had no detrimental effect on the Company's debt-servicing ability.

Meanwhile, the plant's heat rates had been kept below the PPA's allowable levels, thus allowing Panglima to fully pass through its fuel costs to TNB.

The Company's debt-servicing ability remained intact in FY ended Jan 31, 2011, with a debt-service coverage ratio (DSCR) of 2.43 times (with cash balances, post-distribution).

'Looking ahead, Panglima is expected to register minimum and average DSCRs (with cash balances, post-distribution) of 1.60 times and 2.15 times, respectively, on principal repayment dates,' said the ratings agency.

RAM Ratings said the company will retain sufficient cash to prioritise its debt-servicing obligations and potential maintenance expenditure throughout the tenure of the serial Bonds.

However, Panglima remains exposed to regulatory and single-project risks, it said, adding these risks were similar to other IPPs.

LFE Corp continues to be traded actively

KUALA LUMPUR (Dec 9): LFE CORPORATION BHD [] shares continued to be traded actively on Friday, a day after the company had replied to a Bursa Malaysia Securities query that there was no material corporate development relating to its ''business that may have accounted for the unusual market activity (UMA) involving its shares on Dec 7.

At 9.30am, LFE Corp was up 3.5 sen with 6.99 million shares done.

The company had on Thursday said the UMA on Dec 7 could have been caused by its announcement on Dec 6 of the acquisitions of 5.7 million and 6.1 million shares respectively by Liew Teow Woon and Liew Chee Woon respectively on Dec 1, 2011.

The company said Lew Mew Choi had informed it that he disposed the said shares to Teow Woon and Chee Woon.

'Lew Mew Choi has further informed that he will provide the Company with a duly executed Form 29C (Notice of Person Ceasing to be a Substantial Shareholder) soonest possible and thereafter, the company will make the relevant announcement accordingly.

'Save for the above, the board of LFE Corp is unaware of any rumour or report concerning the business and affairs of the group that may account for the unusual market activity,' it said.

KLCI in red at mid-morning on profit taking, weaker regional sentiment

KUALA LUMPUR (Dec 9): The FBM KLCI looked poised to extend its losses on Friday on profit taking ahead of the weekend as Wall Street and European markets fell overnight on heightened worries over the Eurozone debt crisis.

The FBM KLCI fell 11.34 points to 1,461.58 at 10am, weighed by losses at blue chips.

Losers outnumbered gainers by 306 to 97, while 185 counters traded unchanged. Volume was 331.08 million shares valued at RM196.19 million.

Asian shares and commodities fell on Friday, while the euro remained under pressure, on growing doubts that European leaders could forge a credible plan to solve the euro zone's debt crisis at a summit later in the day, according to Reuters.

European Union leaders looked set to adopt a new system of fiscal discipline, but sentiment worsened after the European Central Bank dashed hopes that it would serve as lender of last resort and as Germany rejected a long-term goal of issuing common euro zone bonds, it said.

At the regional markets, Hong Kong's Hang Seng Index lost 1.85% to 18,753.93, Japan's Nikkei 225 fell 1.65% to 8,521.73, South Korea's Kospi was down 1.55% to 1,882.72, Taiwan's Taiex lost 1.32% to 6,891.04, Singapore's Straits Times Index fell 0.91% to 2,703.39 and the Shanghai Composite Index shed 0.38% to 2,320.96.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients Dec 9 said the FBM KLCI fell by 10.07-points to close at 1,472.92 on Thursday on profit taking.

'Its resistance areas of 1,472 and 1,500 will cap market gains, whilst the weaker support areas may be located at 1,450 and 1,469.

'Due to the US markets' poorer tone last night, we will have a volatile day for the local index today with broad pre-weekend profit taking and liquidation,' he said.

On Bursa Malaysia, KLK was the top loser at mid-morning and fell 70 sen to RM22.30; Petronas Dagangan lost 36 sen to RM16.82, HLFG 24 sen to RM11.26, PPB 22 sen to RM16.28, BAT 20 sen to RM47.20, Genting 18 sen to RM10.70, MISC 16 sen to RM5.79, AMMB 15 sen to RM5.75, Petronas Gas 14 sen to RM13.70 and Gamuda 13 sen to RM3.15.

Compugates was the most actively traded counter with 35.6 million shares done. The stock fell half a sen to 6.5 sen.

Other actives included Versatile, Pavilion REIT, LFE Corp, SYF Resources, DPS Resources and Takaso.

The gainers included Dutch Lady, JT International, Cycle & Carriage, Harvest Court, Quill Capita and LFE Corp.

CIMB Research has technical sell on RHB Cap at RM6.92

KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on RHB Capital at RM6.92 at which it is trading at a FY13 price-to-earnings of 7.5 times and price-to-book value of 1.4 times.

It said on Friday that respite numerous attempts, RHB Capital failed to swing above its resistance trend line.

'This shows that the bears are firmly in command. If we are right, prices would likely ease towards RM6.53 and RM6.25 over the next few days, if not weeks,' it said.

CIMB Research said as prices stay below its key moving averages, it doubted any rebound would be strong.

'MACD has staged a negative crossover while RSI is also dwindling towards the oversold territory. Near term outlook favours the bear.

'Use any rebound towards its 50-day and 30-day SMAs (now at RM7.25 and RM7.39 respectively) to unload on strength. Put a buy stop at RM7.12-RM7.40, just in case,' it said.

''

CIMB Research has technical sell on London Biscuits at 86.5 sen

KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on London Biscuits at 86.5 sen at which it is trading at a price-to-book value of 0.4 times.

It said on Friday the previous day's sharp fall formed a bearish marubozu pattern and we are worried about its near term outlook.

'If the candles continue to stay below its 200-day SMA, there is a high possibility that prices may plunge towards 82 sen and 77.5 sen.

'As the fall was accompanied by high volume, we doubt prices can bounce back strongly any time soon. Hence, selling into strength looks like a good option here, especially near the 87.5 sen and 90.5 sen resistance levels,' it said.

CIMB Research said the technical landscape is deteriorating, pointing out that the MACD histogram bars are falling at a fast pace while RSI has also hooked downward.

CIMB Research has technical sell on WTK at RM1.17

KUALA LUMPUR (Dec 9): CIMB Equities Research has a technical sell on WTK Holdings at RM1.17 at which it is trading at a price-to-book value of 0.5 times.

It said on Friday WTK Holdings is still trapped in a downtrend channel. Despite numerous attempts, prices fail to push above the downward slopping resistance trend line. The 30-day and 50-day SMAs at RM1.32-1.28 respectively will also put a lid on the bulls.

'Indicators are showing signs of exhaustion. MACD signal line has slipped into the red while RSI is below the 50pts mark.

'We will continue to stick with the bear's camp unless prices swing past the resistance trend line. Next supports are RM1.08 and RM1.03,' it said.

RHB Research maintains market perform on S P Setia, FV RM3.90

KUALA LUMPUR (Dec 9): RHB Research Institute said S P Setia's FY11 results were within expectations.

It said on Friday the group's property sales exceeded target by almost 10% to RM3.29 billion for FY11.

'We believe SP Setia's sales target of RM4 billion for FY12 has already taken into account a 15%-25% decline in sales of existing projects (excluding Eco City).

RHB Research said however, given RM3 billion worth of new launches next year, S P Setia would still be able to achieve the target safely.

'Our fair value is kept at RM3.90 (that is Permodalan Nasional Bhd's takeover offer price). Maintain Market Perform,' it said.

KLCI extends losses as global markets fall on European debt woes

KUALA LUMPUR (Dec 9): The FBM KLCI extended its losses in early trade on Friday, in line with the overnight slump at Wall Street and European markets on growing doubts that European leaders could forge a credible plan to solve the euro zone's debt crisis.

At 9.05am, the FBM KLCI lost 14.50 points to 1,458.42, weighed by losses at blue chip stocks.

Losers led gainers by 141 to 35, while 102 counters traded unchanged. Volume was 64.19 million shares valued at RM37.51 million.

Among the early decliners were BAT, Petronas Dagangan, KLK, HLFG, PPB, Genting, Petronas Gas, Hong Leong Bank, AirAsia and UMW.

S.Korea c.bank cuts 2011, 2012 growth forecasts

SEOUL (Dec 9: South Korea's central bank on Friday sharply cut its economic growth forecasts for this year and next, citing a significant cooling in global demand with advanced economies struggling under fiscal debt problems.

Asia's fourth-largest economy is now seen growing 3.8 percent this year and by 3.7 percent in 2012, down from growth of 4.3 percent and 4.6 percent respectively seen in July, the Bank of Korea said in a scheduled revision.

Inflation this year will average 4.0 percent, the same as its July projection, and then slide to 3.3 percent next year, just below the 3.4 percent seen in July, it added. - Reuters

Seoul shares dip led by banking issues

SEOUL (Dec 9): Seoul shares opened lower on Friday as the European Central Bank dashed investor hopes of a bolder action plan to tackle the region's debt crisis, having ruled itself out as a direct lender to governments by purchasing bonds.

Early losses were led by banking shares, with Hana Financial Group down 2.48 percent and Shinhan Financial Group shedding 2.99 percent.

The Korea Composite Stock Price Index (KOSPI) was down 1.75 percent as of 0001 GMT. - Reuters

GLOBAL MARKETS-Markets jolted as hopes for EU action wane

NEW YORK (Dec 8): Investors dumped stocks, commodities and the euro Thursday as investors began to lose hope that European leaders would produce a grand plan to solve the European debt crisis.

Trouble started when the European Central Bank squelched optimism for aggressive action to fight the region's debt crisis, and markets were knocked back further when Germany rejected proposals that would bolster the strength of a bailout fund late in the day.

Thursday's developments deflated some hopes that policymakers will be able to agree on a credible plan at an EU summit getting underway that will reassure investors and stop the euro zone's debt problem from deepening.

"The whole thing is just a mess. I have been hopeful something will get done, but it's hard to hold on to those hopes given their track record," said Thomas Roth, executive director in U.S. government bond trading at Mitsubishi UFJ Securities USA in New York.

ECB President Mario Draghi poured cold water on market expectations the bank could step up bond purchases, a measure that has been seen as key to stabilizing rising borrowing costs of highly indebted members of the euro zone.

In an ominous sign heading into a key EU summit, Germany rejected draft proposals that would increase the euro zone's firepower in dealing with the credit crisis, triggering a steep sell-off in U.S. stocks and the euro late in the day.

"Once the Germany comment on rejecting the draft came out, that is when the euro and the Dow both reversed from their afternoon highs," said Joe DeGeronimo, chief dealer at SMBC.

"The stock market falling late in the day means the euro is likely going to trade heavy into the Sydney and Asian session overnight."

In a draft obtained by Reuters, EU leaders plan to move up the introduction of a permanent bailout fund to July 2012 and give the facility a banking licence.

Such a move would bolster the strength of the rescue fund, but a senior German source said Germany rejected the measures.

"That just spells more trouble ahead in the days to come," Peter Cardillo, chief market economist at Rockwell Global Capital in New York, said of Germany's rejection.

The Dow Jones industrial average ended down 198.67 points, or 1.63 percent, at 11,997.70. The Standard & Poor's 500 Index tumbled 26.66 points, or 2.11 percent, to 1,234.35. The Nasdaq Composite Index gave up 52.83 points, or 1.99 percent, at 2,596.38.

The MSCI All-Country World Index was down 1.8 percent, while the FTSEurofirst 300 slumped to a one-week closing low, down 1.5 percent.

The euro fell to a session low of $1.3288 on Reuters data, its lowest since Nov. 30. It was last at $1.3343, down 0.5 percent.

"TWO STEPS BACK"

Draghi also announced unprecedented action to support Europe's banks, saying the ECB will start offering banks funding for 3 years, as well as easier collateral rules. The ECB also cut interest rates 25 basis points to 1 percent.

But markets appeared less concerned with the possibility of a liquidity crunch than they are with the high cost of debt for troubled countries, and yields on Italian and Spanish bonds jumped.

"One step forward, two steps back," said Alan Clarke, UK and euro zone economist at Scotia Capital. "The euro zone leaders might as well not bother. Pack their bags, go home, enjoy the weekend and do their Christmas shopping."

Draghi also took some of the steam out of another talked-about scenario, that the ECB would lend to the International Monetary Fund to help support debt-saddled euro zone economies.

Draghi said lending money to the fund was not compatible with European Union treaties.

"His comments here raise the risk that nothing will be announced this week on how the IMF's resources will be increased," said Greg Fuzesi, economist at JP Morgan Chase in London.

Meanwhile, Europe's banking watchdog said the region's banks must find more capital than previously expected to make them strong enough to weather the debt storm.

The leaders of France and Germany were in Marseilles ahead of the summit, lobbying for their plan to amend the EU treaty to toughen budget discipline.

Paris and Berlin need to win backing quickly for their plan if they are to have it ready as they hope by March, but several countries are skeptical of a treaty change.

German Chancellor Angela Merkel said she was convinced leaders would find a solution to the euro crisis at the summit.

Even safe-haven gold was hit by the selling. Spot gold fell 1.8 percent to $1,709.59 an ounce.

Other commodity prices were also hit by worries Europe was not doing enough to contain the credit crisis, with U.S. crude oil futures settling at $98.34 a barrel, down $2.15, or 2.14 percent.

Ten-year Italian government bond yields rose 44 basis points to 6.51 percent and Spanish 10-year government bond yields jumped 37 basis points to 5.82 percent. - Reuters

Wall St falls on dashed euro-zone hopes, Germany's rejection

(Dec 8): Wall Street fell Thursday after the European Central Bank dashed hopes that policy-makers were preparing a financial "bazooka" to contain the debt crisis, and Germany rejected some proposals to add power to the euro zone's bailout fund.

U.S. markets have been on edge all week in anticipation of a summit deal that would come to grips with the euro zone's growing debt crisis, and pave the way for greater action by the ECB to hold down bond yields.

But actions from Europe - both early and late in the day - were a stark disappointment.

Before the market's open, ECB President Mario Draghi discouraged expectations that the central bank would massively increase its purchases of government bonds after a crucial Brussels summit on Friday.

Shortly before the closing bell, Germany rejected some measures in draft conclusions from the summit, including giving the European Stability Mechanism (ESM) a banking license and issuing common euro-zone debt. U.S. stocks and the euro fell sharply following the news. "It looks like it's (the opposition) coming from Germany. That just spells more trouble ahead in the days to come," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

More than 44,500 S&P E-Mini futures contracts traded between 3:40 p.m. and 3:45 p.m., when the Germany headline appeared. This was the busiest five minutes of the day, other than the last five minutes of trading, which typically has the highest volume.

The S&P financial sector index was the biggest loser, falling 3.7 percent. That followed sharp losses in European banks' shares as sources told Reuters the European Banking Authority (EBA) sees the capital shortfall at European banks at 114.7 billion euros ($154 billion).

Shares of Morgan Stanley a barometer of risk aversion due to its perceived exposure to Europe's crisis, fell 8.4 percent to $15.88.

The latest developments from Europe overshadowed a cut in the bloc's interest rate to a record low 1 percent and extra liquidity provisions for banks.

The Dow Jones industrial average tumbled 198.67 points, or 1.63 percent, to end at 11,997.70. The Standard & Poor's 500 Index fell 26.66 points, or 2.11 percent, to 1,234.35. The Nasdaq Composite Index lost 52.83 points, or 1.99 percent, to close at 2,596.38.

The decline comes after three days of gains for U.S. stocks when the S&P 500 tried and failed to stay above its 200-day moving average, which has been a key level for investors to watch this year, and one that could prove tough to break.

But Thursday's pullback, concentrated in economically sensitive areas, was a far cry from the wild swings of recent months when uncertainty over Europe has dominated headlines. That is being seen as a sign of resilience by many investors who are hoping for seasonal strength into the end of the year.

Yields on European sovereign debt spiked. Ten-year Italian government bond yields rose 44 basis points to 6.51 percent -- the day's high. German Bund futures hit a session high of 136.89, up 109 ticks on the day.

Earlier, data showed U.S. jobless claims fell more than expected in the latest week, a sign the labor market recovery was gaining momentum. Claims slid to a nine-month low.

About 7.55 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, slightly below the daily average of 7.95 billion.

Declining stocks outnumbered advancing ones on both the New York Stock Exchange and the Nasdaq by a ratio of slightly more than 6 to 1.

#Stocks to watch:* S P Setia, Kencana, Boustead, Benalec

KUALA LUMPUR (Dec 9): The FBM KLCI could trade in a tight range on Friday, as the focus turns on the economic data from China over the next two days as well as the crucial summit of European policymakers.

Global markets, however, could edge upwards as the European Central Bank cut interest rates by a quarter of a point on Thursday to counter the twin threats of recession and deflation in the euro zone.

The ECB is also expected to unveil fresh measures to help banks hurt by the bloc's debt crisis, according to Reuters.

At Bursa Malaysia, the market could be given a boost from the slew of fresh corporate announcements.

Among the stocks are S P Setia Bhd, KENCANA PETROLEUM BHD [], BOUSTEAD HOLDINGS BHD [], Benalec Holdings, Bumi Armada Bhd and MELEWAR INDUSTRIAL GROUP BHD [].

S P Setia Bhd set a set a new full-year sales record in FY 2011 of RM3.29 billion, or a 42% increase from the previous record of RM2.31 billion set in FY 2010. The company has also set a target to achieve total new sales of RM4 billion in FY 2012.

For the financial year ended Oct 31, S P Setia's net profit rose 30.2% to RM327.97 million from RM251.81 million, on the back of an increase in revenue to RM2.23 billion from RM1.75 billion in 2010.

However, the offer price cap set by Permodalan Nasional Bhd (PNB) in its takeover bid could restrain any upside.''PNB offered RM3.90 per share and 91 sen per warrant.

Kencana's unit, Kencana HL Sdn Bhd, secured a RM1 billion contract from Bechtel International Inc to fabricate and assemble a liquefied natural gas (LNG) processing plant in Australia.

The contract includes fabrication to loading of process equipment modules for Wheatstone Project LNG plant at Ashburton North, Western Australia.

Boustead subsidiary, Boustead Naval Shipyard Sdn Bhd secured a RM62 million job from the government to supply spare parts, maintenance, integrated logistic support and training for the 17th patrol vessel squadron of the Malaysian navy.

Benalec inked a MoU with Singapore-based Rotary Engineering Ltd to jointly develop an independent deepwater storage terminal for oil products in Tanjung Piai, Johor.'' The MoU would enable it to become a strategic business partner with Rotary in the equity ownership and development of the terminal in Tanjung Piai.

Bumi Armada's subsidiary Armada TGT Ltd has inked a US$341.1 million (RM 1.08 billion) loan with seven financial institutions to fund the conversion and installation of the FPSO Armada TGT 1 to be used in the Te Giac Tran Field, offshore Vietnam.

Its chief financial officer Shaharul Rezza Hassan said the facility was for seven years and represented about 80% of its capex value.

Meanwhile, Melewar's unit Melewar Integrated Engineering Sdn Bhd (MIE) has inked an MoU with KAZMY Steel Company wherein MIE would be the contractor to design and build the MycroSmelt plant in Almaty, Kazakhstan.

S&P affirms TM's A- long-term corporate credit rating

SINGAPORE (Dec 8): Standard & Poor's Ratings Services affirmed its 'A-' long-term corporate credit rating on TELEKOM MALAYSIA BHD [] (TM), and removed it from CreditWatch. The outlook is stable.

The ratings agency said on Thursday it had removed from CreditWatch the 'axAA' ASEAN regional scale rating on the company.

'We also affirmed and removed from CreditWatch the 'A-' issue ratings on the US$500 million notes due 2014 that TM guarantees, and the US$300 million 7.785% debentures due 2025 that the company issued,' it said in a statement.

To recap, on July 28, S&P had placed TM on CreditWatch with negative implications on July 28, 2011.

"We removed the ratings from CreditWatch after assessing TM's stand-alone credit profile now as 'a-', compared to 'bbb+' previously. We expect the company to maintain its financial performance due to its solid cash flow generation capacity," said S&P's credit analyst Manuel Guerena.

"Moreover, its 'business as usual' capital expenditure is likely to be lower than in previous years, even if the expenditure related to its high-speed broadband (HSBB) network grows temporarily," he said.

S&P said TM's dominant position in the domestic fixed-line, data, and broadband markets translated into a strong business risk profile.

This supports the company's strong operating cash flows, which along with proceeds from noncore assets divestitures, has funded a significant portion of its capital expenditure program. A decline in TM's traditional voice fixed-line business and the company's limited cash flow diversity partly offset these strengths.

GLOBAL MARKETS-Fears grow over EU summit outcome, euro falls

LONDON (Dec 8): World stocks eased and the euro fell on Thursday after a euro zone official added to signs playing down expectations for what may emerge from two crucial days of meetings aimed at quelling the bloc's debt crisis.

The official told Reuters countries are likely to agree to lend 150 billion euros to the IMF via bilateral loans from their central banks - read by markets as a low number - and said a proposal to give the euro zone's permanent bailout fund a banking licence was off the table.

That came on top of warnings from a German official playing down hopes for a comprehensive deal on Friday that cut short an eight-day rally on Wednesday.

Stock, debt and money markets in Europe were all trading in tight ranges on Thursday but the cost of insuring Italian and Spanish debt against default rose on uncertainties over whether politicians will do enough to stem the crisis.

U.S. stocks looked set to open moderately lower.

"What will be crucial for markets is whether the summit will deliver enough for the ECB to act (to support euro zone governments' borrowing). So even if there is a lift in the euro post-ECB, most will be wary going into the summit," said George Saravelos, G10 FX strategist at Deutsche Bank.

France and Germany planned to lobby conservative European leaders to back a plan to defuse a crisis now stretching back more than two years. Paris and Berlin need to win backing quickly for their plan to amend the European Union's Lisbon treaty to toughen budget discipline, if they are to have it ready as they hope by March.

"I have the feeling that euro zone politicians know what is at stake," Carsten Brzeski, senior economist for ING, told Reuters Insider.

"I think they would try to do really everything to get their act together and to come off with some tangible results at the end of this summit," he said.

ECB EYED

The ECB is also expected to unveil a new package of bank aid on Thursday, with investors looking for any hint it will intensify its buying of bonds issued by the euro zone economies struggling with high debt, setting the stage for a critical euro zone summit that starts with a dinner on Thursday night.

A Reuters survey of 73 analysts showed a 60-percent chance the ECB will cut rates by 25 basis points for the second month running, back to the record low of 1.0 percent it reached during the financial crisis.

The euro which had been trading in a tight range around $1.3405, fell to $1.33980 on the latest developments.

The euro had risen in the Asian session after the Nikkei business daily said the G20 was preparing a $600 billion lending facility for the IMF to help Europe, but the effect faded after it was denied by G20 and IMF officials.

The MSCI All-Country World Index had risen nearly 9 percent since the start of last week, mainly on hopes that the threat of financial meltdown would force European leaders to come up with a coherent plan to save the euro.

The Bank of England is expected to hold interest rates unchanged at 0.5 percent and reaffirm a commitment to loose policy on Thursday as the euro zone debt crisis threatens to tip Britain back into recession.

Underlining the case for an ECB rate cut, the Bank of France said French growth would grind to a halt in the final quarter of the year after the economy, the euro zone's second-biggest, grew 0.4 percent in the previous quarter. - Reuters

Europe's wary cash funds add to bank woes

LONDON/FRANKFURT (Dec 8): European banks, struggling to tap capital in fickle interbank markets, face further pressure on their short-term funding as sovereign downgrades and economic chills drive them onto the blacklists of money market fund managers.

The reluctance of money funds to buy bank bonds is contributing to pressure on the European Central Bank to extend its liquidity relief programmes to include 2 and even 3 year paper to ease access to money for some lenders.

But with little sign of cash funds returning to the market for the banks and sovereigns they have deserted, the ECB may have to play a much bigger, long-term role in keeping some blacklisted names afloat, experts said.

"Confidence within the banking system has disappeared, reappeared and then disappeared again. This is the role of the central banks, to make sure that all banks who need liquidity can have access to liquidity," Patrick Zweifel, chief economist at Pictet Asset Management said.

"Usually they would only act on the money market between 1 and 7 days. It was rare to see central banks intervene at 28 day maturities but these are now almost seen as conventional measures," he said.

It has never been a more stressful time to run a money market fund, say the managers who rely on healthy trading of high-quality, ultra-liquid bonds to provide clients with an efficient and safe alternative to conventional bank accounts.

In doing so, these funds supply banks with a substantial portion of their short-term funding, a source that has become crucial to institutions struggling to access the capital they need from interbank lending markets.

But with some euro zone sovereign ratings lurching from "risk-free" to "roulette", managers say counterparty risk fears are killing off appetite to hold paper issued by the region's elite banks, as well as its indebted minnows.

U.S. ratings agency Standard & Poor's put the euro zone's remaining six AAA-rated governments on watch for a possible downgrade on Monday, just days after inflicting a two-notch downgrade on Rabobank, the region's last remaining AAA lender.

On Wednesday the same agency also put the AAA rating of the 27-nation European Union on credit watch and said it would cut ratings of a slew of banks if a mass downgrade of euro zone countries materialised.

As the number of AAA ratings falls, so does the number of entities most cash managers are allowed to lend to, potentially diverting up to 450 billion euros managed by members of the Institutional Money Market Funds Association away from euro zone banks and governments.

"Quite often I say to my clients that we have gone pretty well as far as we can in terms of lending to banks. The scale of this (crisis) is so big it is quite difficult to make reasonably sensible decisions on it," Tom Meade, a director at Royal London Cash Management, told Reuters.

Even banks identified as Systemically Important Financial Institutions (SIFIs) are being bypassed by some managers.

"Without collateral, we hand out only to a few SIFIs and most of the Nordic banks at the moment," said Stefan Kreuzkamp, Head of Fixed Income Europe at DWS, a subsidiary of DB Asset Management, which runs around 200 billion euros in assets.

TURNING TO ASIA

Kreuzkamp said money market funds had already slashed exposure to banks in peripheral euro zone countries and were now reducing lending to big bank names unless they provided additional security against their paper.

The moves follow warnings from Federal Reserve official Jeffrey Lacker, who in November admitted he was worried about money market funds and their "ability to weather major problems at European institutions."

Uncertainty about the outcome of the two-year old euro zone debt crisis, and worries about the possible break-up of the 17-nation currency bloc, are prompting fund firms across the region to review counterparty risk, the Reuters Investment Outlook Summit heard this week.

Jennifer Gillespie, head of money markets at Legal & General Investment Management, one of Europe's biggest liquidity fund managers, told Reuters her team was increasingly "nervous about buying anything," including SIFIs.

"We have lost some of the Danish names, Spain is gone, Portugal is gone, Ireland has been gone for a long time, Italy has gone, there's only one institution we are willing to buy in Belgium and we are taking a serious look at Austria," she said.

"We are still buying France, but we have brought in our geographic limits there to well under what we would buy for the likes of UK or Canada."

To replace abandoned euro zone sovereigns and their financial institutions, Gillespie's fund is turning increasingly towards Asia, with Singapore, China, Australia, Korea, and the Middle East seen more appealing than Spain or Italy.

But every day seems to bring fresh doubts about the security of assets she once identified as her staple investments.

"We are probably doing a couple of hours a day now, literally sitting down with people, assessing our high risk and our low risk and it seems that just when we feel we've got somewhere, something else happens," Gillespie said.

"We're trying to get ahead (of the ratings agencies). We do not want to be a forced seller of assets in an illiquid market at a really quiet time ... telling a client we've lost 5 percent of their cash fund is not an option." - Reuters

AirAsia, Bumi Armada to be included in KLCI on Dec 19

KUALA LUMPUR (Dec 8): AIRASIA BHD [] and Bumi Armada Bhd will replace GAMUDA BHD [] and MISC BHD [] in the 30-stock FTSE Bursa Malaysia KLCI with effect from Dec 19.

FTSE Group (FTSE) and BURSA MALAYSIA BHD [] said the changes following the semi-annual review of the FTSE Bursa Malaysia Index Series on Thursday.

'All constituent changes take effect at the start of business on Dec 19,'' 2011 and the next review will take place on June 7, 2012,' they said in a joint statement.

They said the FTSE Bursa Malaysia KLCI reserve list, comprising the five highest ranking non-constituents of the index by market capitalisation, would be (in order of full market capitalisation) UEM Land Holdings, IJM Corporation, S P Setia, Malaysia Airport Holdings and Fraser & Neave Holdings.

Companies in the reserve list will replace constituents that become ineligible as a result of corporate actions, before the next review.

'This review sees the FTSE Bursa Malaysia Index Series experiencing a higher turnover level than in previous reviews.'' This is due to the implementation of a new and enhanced liquidity rule. The new rule is based on the median of the daily turnover of a stock (expressed as a percentage of its shares in issue and adjusted for its free float weighting) over the course of a month,' it said.

They said the old rule was based on the total turnover for a month (expressed as a percentage of shares in issue and adjusted for free float weighting).

The new rule is in line with the FTSE Global Equity Index Series which further aligns the series to global standards whilst continuing to provide an accurate representation of the true investability of companies in the FTSE Bursa Malaysia Index Series.

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FTSE Bursa Malaysia Mid 70 Index Changes:



Inclusions

Exclusions

1

Dayang Enterprise Holdings

Aeon CO. (M)

2

Eastern & Oriental

AirAsia

3

Gamuda

Bintulu Port Holdings

4

JCY International

Capitamalls Malaysia Trust

5

MSM Malaysia Holdings

Guinness Anchor

6

Padiberas Nasional

Jaya Tiasa Holdings

7

QSR Brands

JT International

8

Rimbunan Sawit

KrisAssets Holdings

9

SEG International

Lingkaran Trans Kota Holdings

10

Kossan Rubber

NCB Holdings

11

Ta Ann Holdings

Nestle (M)

12

TA Enterprise

Star Publications Malaysia

13

TH PLANTATION []s

Sunway Real Estate Investment Trust

14

TSH Resources

United Plantations

15

UOA Development

YTL Cement

''

FTSE Bursa Malaysia Hijrah Shariah Index Changes:



Inclusions

Exclusions

1

Dialog Group

Bintulu Port Holdings

2

KFC Holdings (M)

Malaysian Bulk Carriers

3

KPJ Healthcare

MISC

4

MSM Malaysia Holdings

Nestle (M)

5

QL Resources

PETRONAS Chemicals Group

6

Sarawak Oil Palms

United Plantations

7

Tradewinds Malaysia

WCT

ECB cuts rates to record low on recession fears

FRANKFURT (Dec 8): The European Central Bank cut interest rates by a quarter of a point on Thursday to counter the twin threats of recession and deflation in the euro zone, and is expected to unveil fresh measures to help banks hurt by the bloc's debt crisis.

The widely expected rate cut, back to a record low of 1 percent, came hours before a high-stakes EU summit which will aim to agree on a plan to defuse the crisis, with France and Germany pushing for rule changes to stricter budget discipline in the bloc.

The ECB, which euro zone officials say has been closely involved in drafting plans for tighter fiscal integration in the bloc, has pressed governments to toughen their budget rules and signalled it could do more to tackle the crisis if they deliver.

ECB President Mario Draghi hinted last week the bank could take stronger action - maybe by buying euro zone government bonds more aggressively - if European leaders agree on tighter budget controls.

The rate cut was aimed at buoying the euro zone economy, which economists expect to slide into recession by early 2012. The euro edged higher after the decision and the benchmark index of European stocks pared gains.

A Reuters survey of 73 analysts had showed a 60 percent chance the ECB would cut rates by 25 basis points for the second month running, back to the record low of 1.0 percent it reached during the financial crisis in 2009.

"No surprise. This was the easy bit," Berenberg bank economist Holger Schmieding said of the rate cut.

"Standard monetary policy, including all the things they may announce to support banks, is of secondary importance," he added. "The only thing that really matters is whether or not they step up their efforts to contain the sovereign crisis."

Attention now shifts to Draghi's 1330 GMT news conference, at which he will present revised in-house economic forecasts that are expected to show the euro zone is teetering on the brink of recession.

The Italian, who took the ECB helm last month, is also expected to present new measures to aid banks hit by the crisis.

Sources have told Reuters the ECB is likely to start offering banks funding for two or even three years for the first time ever, to try to prevent the euro zone crisis precipitating a credit crunch that chokes the bloc's economy.

Policymakers will have had to decide whether the bank should charge a premium for the funding or allow the cost to track its headline rate as in other operations.

The ECB is also expected to make it easier for banks to get its funding by further expanding the menu of assets they can swap for ECB loans, something Draghi has hinted at by saying the bank is aware of the funding difficulties some banks are facing.

The ECB has already reinstated some of its most potent crisis-fighting tools in recent months in a bid to calm escalating tensions in bank-to-bank lending markets. Last week it, the U.S. Federal Reserve and a clutch of other top central banks slashed the cost of the dollar loans they offer banks.

BAZOOKA WATCH

Perhaps the most intense focus will be on what the ECB signals it is prepared to do regarding its bond purchases.

France and Italy but also the United States and Britain have all put intense pressure on the ECB to use its potentially unlimited firepower to calm the euro zone's crisis which is now casting a dark cloud over the global economy.

Earlier this week ratings agency S&P warned that its threat of a mass downgrade of euro zone members would be tough to avoid if larger ECB bond buying was not part of Friday's summit deal.

Pressure is getting ever more intense on the central bank to avert a euro zone meltdown.

A senior euro zone source said hours before the start of the EU summit that a proposal to give the euro zone's permanent bailout fund, the European Stability Mechanism, a banking licence - which could allow it to access ECB funds, boosting its firepower - had been rejected.

The ECB had been uncomfortable about the idea but the jettisoning of another proposal that could have put a firewall around euro zone debt strugglers puts it ever more firmly in the spotlight to act directly.

However, with the summit just round the corner Draghi is expected to remain deliberately vague at his news conference.

Goldman Sachs, whose European economists are now headed by Huw Pill, a top ECB official until earlier this year, doubts the ECB will set a ceiling above which they would not allow Italian and other strained euro members' borrowing costs to go.

"We expect the ECB to move progressively towards more proactive purchases on a larger scale. But any such actions will fall short of attempts to 'cap spreads'," Pill said in a note.

With the euro zone in such turmoil, the ECB may also signal that cutting rates below 1.0 percent is no longer a taboo.

Draghi reinforced expectations for a rate cut last week when he warned the euro zone's economy was deteriorating and stressed the bank would fight deflation as aggressively as it does inflation. - Reuters

Kencana unit lands RM1b fabrication contract from Bechtel

KUALA LUMPUR (Dec 8): KENCANA PETROLEUM BHD []'s unit, Kencana HL Sdn Bhd, has secured a RM1 billion contract from Bechtel International Inc for the fabrication and assembly of a liquefied natural gas (LNG) processing facility in Australia.

Kencana said on Thursday that the contract scope included fabrication, assembly, testing and loading of process equipment modules for Wheatstone Project LNG Plant Facility located at Ashburton North, Western Australia.

It said the Chevron-operated Wheatstone Project was one of Australia's largest resource projects, adding that the project was a joint venture between Australian subsidiaries of Chevron (73.6%), Apache (13%), Kuwait Foreign Petroleum Exploration Company (7%), and Shell (6.4%).

It said the initial phase of the project would consist of two liquefied natural gas trains with a combined capacity of 8.9 million tonne per annum and a domestic gas plant.

Kencana said the fabrication work would be carried out at Kencana HL fabrication yard in Lumut.

Boustead Naval Shipyard gets RM62m government contract

KUALA LUMPUR (Dec 8): BOUSTEAD HOLDINGS BHD []'s subsidiary, Boustead Naval Shipyard Sdn Bhd has been awarded a contract worth RM62 million by the government for the supply and delivery of spares, maintenance, integrated logistic support and training for the 17th patrol vessel squadron of The Royal Malaysian Navy.

It said on Thursday that the contract period was from June 7, 2011 to June 6, 2014.

Boustead said the contract would''have a positive''effect on its earnings in the new financial year.

''

DRB-Hicom, SAAB ink strategic partnership in defence and aerospace

KUALA LUMPUR (Dec 8): DRB-HICOM BHD [] and SAAB AB of Sweden have signed an agreement to collaborate and supply Airborne Early Warning and Control System (AEWC) for the Royal Malaysian Air Force.

In a statement Thursday, DRB-Hicom said the integration of SAAB's Eyerie Radar and the incorporation of the "Eye in the Sky" would provide significant data link to the Royal Malaysian Navy and Malaysian Maritime Enforcement Agency.

The AEWC system will enable the government to enhance its airspace and maritime awareness, it said.

'The ability to detect, track and monitor territorial and international domain in combating piracy, smuggling, illegal fishing and terrorism within and around Malaysian borders will also be enhanced.

'The collaboration aims to strengthen current expertise in terms of competencies in project management, system engineering and supply chain management,' it said.

DRB-Hicom said it would provide a significant local involvement in the entire project cycle, starting from production to testing and eventually to support AEWC operations.

The company said the agreement was a major step taken towards upgrading Malaysia's defence aviation technologies and capabilities, specifically in areas of Aeronautics System Integration and Command & Control, it added.

KLCI closes lower, Asian markets slip in weak turnover

KUALA LUMPUR (Dec 8): The FBM KLCI closed lower on Thursday, while key Asian markets slipped in weak turnover ahead of the European leaders' summit on Friday and release of economic data from China over the next two days.

The FBM KLCI fell 0.68% or 10.07 points to close at 1,472.92.

Losers beat gainers by 447 to 300, while 287 counters traded unchanged. Volume was 1.62 billion shares valued at RM1.18 billion.

At the regional markets, Hong Kong's Hang Seng Index lost 0.69% to 19,107.81, Japan's Nikkei 225 fell 0.66% to 8,664.58, Taiwan's Taiex was down 0.71% to 6,982.90, South Korea's Kospi lost 0.37% to 1,912.39, the Shanghai Composite Index shed 0.12% to 2,329.82 and Singapore's Straits Times Index down 1.95% to 2,728.31.

The top loser on Bursa Malaysia was BAT that fell 60 sen to RM47.40; F&N lost 30 sen to RM17.80, JT International down 27 sen to RM6.53, Allianz 22 sen to RM4.66, Riverview, CIMB and RHB Capital down 21 sen each to RM2.91, RM6.99 and RM6.92 respectively, while Hong Leong Bank, IJM Corp and Axiata lost 20 sen each to RM10.54, RM5.50 and RM4.89 respectively.

SAAG was the most actively traded counter with 71.7 million shares done. The stock was unchanged at 6.5 sen.

Other actives included Versatil, DVM, Sycal, Compugates while Proton and DRB-Hicom warrants were also actively traded.

Gainers included KLK, Nestle, Batu Kawan, Sarawak Oil Palm, BLD PLANTATION []s, Boxpak, BHIC, Lafarge Malayan Cement, Genting and Nilai.

Boustead subsidiary appointed exclusive agent for W.Giertsen Hallsystem

KUALA LUMPUR (Dec 8): BOUSTEAD HOLDINGS BHD []'s 51%-owned subsidiary Atlas Hall Sdn Bhd has been appointed by Norway-based W.Giertsen Hallsystem as its exclusive agent for the marketing and sale of its products in Malaysia.

Boustead said on Thursday that Atlas Hall had entered into an agency agreement with Giertsen to market and sell rub-halls, aircraft hangers and future products to be developed by Giertsen.

Giertsen is''part of the W.Giertsen AS Group incorporated in Norway and is engaged in the business of supplying hall products for use in industrial, leisure, peace keeping and emergency relief operations.

Boustead said the agreement would be valid for two years.

''