Time short for S&P to end 2011 higher

NEW YORK (Dec 16): With two weeks left in the trading year, the euro zone debt crisis will remain the primary impediment to pushing the S&P 500 index into positive territory for 2011.

Uncertainty over progress in the region, along with the potential for credit rating downgrades on euro zone countries, have kept investors on edge and market volatility high.

Even with a fairly busy U.S. economic calendar, which includes a batch of data on the housing market, the final reading on gross domestic product and durable goods orders, markets will focus on developments from Europe.

"What everybody is going to look at is the same thing they've been looking at -- every time a German official opens their mouth we get crushed," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"I'm keeping my fingers crossed that Santa Claus is out there. But we've got to see something."

The benchmark S&P 500 index .SPX.INX is down about 3 percent for the year and would need to climb above 1,257.64 in order to end higher for the year.

A rally by stocks on Friday fizzled, and the market ended with only modest gains after the latest credit warning about possible downgrades of European nations. For the week, the Dow fell 2.7 percent, the S&P lost 2.9 percent and the Nasdaq was down 3.5 percent.

Italy's prime minister urged European policymakers on Friday to beware of dividing the continent in the effort to contain the debt crisis, warning against a "short-term hunger for rigor" in some countries, in a swipe at Germany.

Stocks have been whipsawed as investors weigh the threat from the euro zone crisis against modest improvement in U.S. economic data and stocks that many regard as cheap.

"There do appear to be some improving economic indicators domestically, but it's hard to see how they win the day if Europe continues to be a big concern. It's not like the valuations are at such bargain-basement prices that it becomes a one-way bet," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. - Reuters

As volumes begin to dry up and market moves become more exaggerated during the holiday period, the volatility may help lift the stock market into the plus column.

CHANCE OF RALLY

"Can you see an upside rally? Certainly, because you are going to have some asset managers in the end who are going to try and just push it so the market ends at the very least flat on the year, if not higher," said Ken Polcari, managing director at ICAP Equities in New York.

"If there is going to be a rally at all, it will happen on light volume because there will be fewer and fewer participants. When there is less volume, you do have the ability to have those exaggerated moves, but people will take advantage of that."

Volatility in individual shares could also be affected by corporate earnings preannouncements. There have been 97 negative earnings preannouncements issued by S&P 500 corporations for the fourth quarter, compared to 26 positive preannouncements, resulting in a negative-to-positive ratio of 3.7. That's the highest in 10 years, according to Thomson Reuters data.

Companies that have provided outlooks in recent weeks include DuPont (DD.N), Intel Corp (INTC.O), United Technologies Corp (UTX.N) and Texas Instruments Inc (TXN.N).

Unexpected management shakeups could also be on the horizon and increase the tumult in stocks. Both Cablevision Systems Corp (CVC.N) and the New York Times Co (NYT.N) saw high-level executives suddenly leave their posts.

But stock movements next week will ultimately be dictated by actions taken in Europe, with the light volume exacerbating market swings.

"The only thing that is going to be of any interest is certainly the continuing headlines on Europe, whether or not they come any closer to what looks like a potential agreement," said Polcari.

"You may get a little bit of a push to the 1,250 to 1,270 range, but much beyond that I don't see why it would go any higher unless you get some explosive announcement out of Europe."

#Stocks to watch:* Gamuda, Boustead, GDex, TDM

KUALA LUMPUR (Dec 17): Regional markets including Bursa Malaysia are expected to see cautious trade in the week ahead, starting Dec 19 with volume continuing to thin during the holiday season while investors' sentiment is expected to be dampened by the eurozone debt crisis.

On Wall Street, a rally in stocks fizzled, leaving major indexes with modest gains on Friday, as Wall Street was torn between hope that U.S. economic data signals better times ahead and fear Europe's debt crisis will engulf world economies, Reuters reported.

The Dow Jones industrial average fell 2.42 points, or 0.02%, at 11,866.39. The Standard & Poor's 500 Index was up 3.91 points, or 0.32%, at 1,219.66. The Nasdaq Composite Index was up 14.32 points, or 0.56%, at 2,555.33.

Meanwhile,'' credit rating agency Fitch told euro zone countries it believed a comprehensive solution to their debt crisis was beyond reach, putting six euro zone economies including Italy on watch for potential downgrades in the near future,

At Bursa Malaysia, stocks to watch include GAMUDA BHD [], BOUSTEAD HOLDINGS BHD [], GD EXPRESS CARRIER BHD [] (GDex), TDM BHD [] and Top Glove Corp Bhd.

Gamuda is upbeat about the outlook for its prospects for the remaining financial year after its earnings climbed 49.5% to RM132.32 million in the first quarter ended Oct 31, 2011, from RM88.53 million a year ago due to higher contributions from all divisions.

The infrastructure-based company expected a stronger performance this year supported by its ongoing CONSTRUCTION [] projects, continued strong property sales and steady earnings from the water and expressway divisions.

Boustead's subsidiary Boustead Naval Shipyard Sdn. Bhd has received the letter of award from the Ministry of Defence (Mindef) to supply six patrol vessels with a contract ceiling of RM9 billion.

The Edge weekly reported in its latest issue that GDex is bolstering its position to fight competition. The local express delivery provider is drawing up strategic plans on multiple fronts to deal with the increasing competition and gloomy economic outlook for 2012.

The Edge also reported that the rehabilitation of estates is paying off for TDM. It has been an exceptional year for the PLANTATION [] company as its net profit for the first nine months of FY2011 already exceeds that of any full year in the past.

Top Glove's earnings fell 12.81% to RM31.43 million in the first quarter ended Nov 30, 2011 from the RM6.05 million a year ago impacted by higher raw material prices and the oversupply in the industry

However, the world's largest glove maker performed better when compared with the preceding quarter in terms of revenue and earnings. It revenue rose 2.4% to RM554.84 million from RM541.84 million in the preceding quarter, while net profit increased 21.5% to RM32.46 million from RM26.82 million.

Commenting on the results, CIMB Equities Research said Top Glove's 20.5% on -quarter rise in net profit, though strong, was expected.

'It came primarily from cost deflation as demand remained weak and industry overcapacity is still an issue.'' At 23.2% of our forecast and 20.2% of consensus, 1Q results were broadly in line as we expect stronger quarters ahead. We maintain our Underperform rating and target price, still based on 13.05 times price-to-earnings,' it said.

Zynga falters in debut, sheds doubt on IPO market

NEW YORK/ SAN FRANCISCO (Dec 16): Online games developer Zynga Inc scored badly as it went public on Friday, dashing hopes for the year's hottest tech IPO, as investors frowned on its over-reliance on Facebook, dimming growth prospects, and outsized control by CEO Mark Pincus.

Zynga's stock fell 5 percent below its $10 initial public offering price to close at $9.50 on Nasdaq on Friday, dealing losses to IPO buyers used to racking up gains on a stock's first day of trading.

Investors had eagerly awaited the IPO as a way to get a slice of Facebook's growth before the leading social networking website goes public, possibly in 2012. Zynga makes money on Facebook by selling virtual items such as jewelry and poker chips in its games such as "FarmVille" and "CityVille."

At least one analyst said on Friday that some investors may have been turned off by Chief Executive Mark Pincus' large voting stake and control over the company. He has a special class of shares that grants him 37 percent voting power even though his equity stake is much lower, and public shareholders will have less than 2 percent of votes.

"We believe that having a CEO/owner-controlled board is particularly dangerous for investors in young companies," said Cowen and Co analyst Doug Creutz.

Creutz, who has a neutral rating on the stock, added that history is full of examples of CEOs who have built young companies but cannot manage them when they mature.

Asked about his voting shares, Pincus told Reuters he decided to retain such huge control over Zynga because he believed from the start that he was the best person to lead the company.

"Investors who want to see the company deliver long-term value are going to be better served by the fact that I can continue to ensure the company keeps its focus on the long term and we don't let short-term swings and opportunities reduce that," he said in an interview.

Based on Friday's closing share price, the value of Pincus' holdings fell to $1.05 billion from $1.1 billion at the IPO price.

Friday's flop stunned investors who had expected a strong showing because the company is profitable, unlike other recent high profile Internet IPOs such as Groupon and Pandora.

"I was stunned when I saw this. This is a disaster for them. The way you're supposed to price deals is to give investors a 15 percent IPO discount to compensate them for the risk of backing a relatively new company," said Dan Niles, chief investment officer of AlphaOne Capital Partners, who did not buy shares.

"It makes me wonder about the underlying health of the market. IPOs like this can change the whole tenor of the market," he added.

Investors said Zynga's stock performance could hurt other private companies in the pipeline such as Yelp and even Facebook. Some investors regard Zynga's IPO as a proxy for Facebook, because 95 percent of its $828 million in revenue in the past nine months comes from Mark Zuckerberg's social network.

"Now we have an exciting IPO and people don't want it and that's a big concern for when Facebook comes out," said Jeff Sica, president and chief investment officer of SICA Wealth Management.

The cooling off in the IPO markets could hurt Facebook's estimated $100 billion valuation, BGC analyst Colin Gillis said.

Zynga's reliance on the platform was supposed to attract investors looking to bet on Facebook's growth. With Facebook's IPO expected to be at least several months away, Zynga is one of the few indirect ways to bet on the website's future.

Facebook takes a 30 percent cut of the revenue Zynga derives from the social network, which features more than 222 million monthly active Zynga users.

Zynga CEO Pincus said he was looking beyond the share price drop and said the company went public at the right time.

"We're going to focus on the products and business results we deliver in the next four to eight quarters and hope the stock market values and appreciates that as they see us deliver it," he said.

In San Francisco, hundreds of employees got to work early to watch Pincus ring the bell to open Nasdaq trading and wore T-shirts saying "I love play" featuring the ZNGA trading symbol printed on the sleeves. Cinnamon buns and hot cocoa were served before the ceremony.

CONCERNS WEIGH

The company, which competes with Electronic Arts, sold 100 million shares of Class A common stock at $10 per share in the IPO, roughly 11 percent of its shares on a diluted basis, at the top end of the $8.50 to $10 indicative range.

The IPO values Zynga at $8.9 billion. In November, the company had been valued at roughly $14 billion, according to an internal estimate in a regulatory filing.

But that lowered valuation may still have been too rich for some, said Sterne Agee analyst Arvind Bhatia.

Zynga's near $9 billion valuation is less than videogame maker Activision Blizzard Inc's $13.6 billion and higher than Electronic Arts Inc's $6.7 billion. In the last four quarters, Activision and Electronic Arts generated more revenue than Zynga.

Analysts and investors have also expressed concern over how it profits from less than 3 percent of its players who buy items in its free games.

Plus, its reliance on Facebook appears unhealthy to investors who want to see Zynga diversify its revenue sources. Pincus on Friday said the company's 13 million daily users of its mobile games is a good start, and doesn't trail its daily users on Facebook as much as people assume. Zynga had 50.5 million daily users on Facebook on Friday, according to AppData, a website which tracks Facebook applications.

Yet Zynga's growth rate of bookings - the money it makes up front when users buy items, is slowing - which most analysts said is a red flag and could hurt Zynga's future revenue.

Zynga is the second online games company selling virtual items to slip in its trading debut this week. On Wednesday, Nexon Co shares fell following its $1.2 billion IPO, which was Japan's biggest offering this year.

At $1 billion in proceeds, Zynga's IPO is still the largest from a U.S. Internet company since Google Inc raised $1.9 billion in 2004. - Reuters

Global stocks mixed, euro flat on downgrade fears

NEW YORK (Dec 16): World stocks were mixed and the euro was flat on Friday as worries about downgrades of weaker euro zone countries curbed risk appetite, pushing aside an improved outlook on the U.S. economy.

Volume was below average across financial markets heading into the weekend. Trading was choppy as perceived risky assets gave up much of their initial gains.

Anxiety over potential ratings downgrades in European sovereign debt and their repercussion on the region's banks underpinned safety bids for U.S. and German government bonds.

Fitch Ratings on Friday placed Belgium, Cyprus, France, Ireland, Italy, Slovenia and Spain on watch for possible downgrade and warned that a comprehensive solution to this festering problem is "technically and politically beyond reach".

It affirmed France's AAA-rating but could strip the second-biggest euro zone economy of its top-notch rating in two years.

Fitch's rating move and dire warning about Europe trumped optimism about the U.S. economy following recent upbeat data.

Government data released on Friday showed U.S. inflation pressure waning, fanning expectations the Federal Reserve could do more to boost economic growth. The latest consumer price report followed data on Thursday suggesting a possible pick-up in job growth, which has been meager during the current recovery.

Investor fears about the euro zone debt crisis persist as European leaders have not delivered more measures to contain the crisis after promising increased fiscal disciple at a summit in Brussels last week.

"There remains a great deal of concern about the direction of the euro zone," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. "We're still not trading on fundamentals and haven't been for some time."

The MSCI world equity index rose 0.3 percent after hitting a three-week low on Thursday. The index is still down 3.5 percent on the week.

The Dow Jones industrial average .DJI closed down 2.42 points, or 0.02 percent, at 11,866.39. The Standard & Poor's 500 Index .SPX was up 3.91 points, or 0.32 percent, at 1,219.66. The Nasdaq Composite Index .IXIC was up 14.32 points, or 0.56 percent, at 2,555.33.

On the week, the Dow fell 2.7 percent; the S&P lost 2.9 percent and the Nasdaq declined 3.5 percent. .N

European stocks .FTEU3 ended down 0.5 percent, erasing earlier gains on selling tied to expiration of options contracts. They finished 2.9 percent lower on the week.

Tokyo's Nikkei .N225 ended up 0.3 percent, reducing its weekly drop to 1.6 percent.

The euro clung to the $1.30 area versus the dollar after falling to 11-month lows on Wednesday. The 17-nation common currency was poised to close up 0.1 percent against the greenback after touching a high of $1.3084. It lost 2.6 percent against the dollar on the week.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For full multimedia coverage: r.reuters.com/xyt94s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

PERIPHERAL YIELDS STAY HIGH

Long-term borrowing costs for Italy and Spain, whose heavy debt loads have worried investors and rating agencies, fell early in the trading day. That helped to steady the euro and briefly boosted European shares.

But they ratcheted back up to alarmingly high levels, with the yield on 10-year Italian government bonds creeping back above 7 percent, which analysts deem unsustainable for the euro zone's third-biggest economy to pay.

Italy faces a confidence vote in parliament, called to speed up approval of a 33 billion euro ($43 billion) austerity package aimed at restoring investor confidence.

Amid these political developments, worries linger about the euro zone debt crisis and have supported U.S. Treasuries and German Bunds. They pushed aside optimism about the U.S. economy and hopes the European Central Bank will ultimately step in to buy bonds of troubled euro zone peripheral countries.

Bund futures ended up 1 point at 138.66 at their highest in four weeks. Benchmark 10-year Treasury notes were up 17/32 in price for a yield of 1.85 percent, touching their lowest levels in early October.

Gold, another traditional safehaven asset, snapped a four-day losing streak tied to fund liquidation.

Spot bullion in London ended up 1.5 percent at $1,593.68 an ounce after touching the lowest level since late September on Thursday. For the week, gold fell 6.8 percent, the biggest weekly decline since late September.

The oil market struggled to hold early gains on nagging worries about the euro zone crisis causing a global economic slowdown. February Brent crude futures settled down 25 cents at $103.35 a barrel, while spot U.S. oil futures settled down 34 cents at $93.53, briefly falling below their 300-day moving average. - Reuters

Wall Street rally fades after warnings on Europe

NEW YORK (Dec 16): A rally in stocks fizzled, leaving major indexes with modest gains on Friday, as Wall Street was torn between hope that U.S. economic data signals better times ahead and fear Europe's debt crisis will engulf world economies.

About 8.9 billion shares changed hands on the New York Stock Exchange, NYSE Amex and Nasdaq, higher than this year's average of 7.9 billion.

Trading was choppy due to "quadruple-witching," the expiration of four types of futures contracts -- equity options, stock index futures, stock index options and single stock futures.

After an early rally, buying dried up when rating agency Fitch warned of risk of recession in Europe.

Major U.S. stock indexes, highly correlated to the performance of the euro, slipped in tandem with that currency after Fitch revised its outlook on France's AAA rating to negative, which means a downgrade is possible in 12 to 18 months.

"Investors are tired of headlines coming out of Europe and tired of the fact that there isn't a cohesive solution. But then, it's never one way or the other so they can't just ignore them," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedfor Hills, New York.

The Dow Jones industrial average .DJI was down 2.42 points, or 0.02 percent, at 11,866.39. The Standard & Poor's 500 Index .SPX was up 3.91 points, or 0.32 percent, at 1,219.66. The Nasdaq Composite Index .IXIC was up 14.32 points, or 0.56 percent, at 2,555.33.

The Nasdaq performed relatively better as stocks tied to growth, including TECHNOLOGY [], gained. Shares of Adobe Systems Inc (ADBE.O) jumped 6.6 percent to $28.20 after results from the maker of Photoshop and Acrobat software beat Wall Street projections.

For the week, the Dow fell 2.7 percent, the S&P lost 2.9 percent and the Nasdaq was down 3.5 percent.

U.S. financials .GSPF, which have underperformed the S&P 500 this week, were one of the strongest of the 10 top sectors in the benchmark index, up 0.5 percent. Credit card company Discover Financial (DFS.N) added 5 percent to $24.23 a day after posting strong results and raising its dividend.

Online game maker Zynga Inc (ZNGA.O) shares opened 10 percent above their initial public offering price of $10 per share but rolled back showing that investors were concerned about the Farmville maker's dependence on Facebook. Shares hit a session low of $9 and closed at $9.50.

U.S. consumer prices were flat in November as Americans paid less for cars and gasoline, while the 12-month inflation reading fell for the second straight month, which could give the Federal Reserve more room to help a still-weak economy.

Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, said subdued inflation will be a long-term positive as consumers benefit from contained prices.

"That's one of the reasons you're seeing better consumer (confidence) of late," he said.

Research In Motion Ltd (RIM.TO)(RIMM.O) posted a sharp drop in profit on Thursday, offered a dismal outlook for BlackBerry shipments during the holidays and delayed an overhaul of its smartphones. The U.S.-traded stock dropped 11.1 percent to $13.44.

Data this week suggested a strengthening U.S. economic recovery, giving further support to equities.

Jobless claims fell to a 3-1/2-year low last week and factory activity in parts of the Northeast picked up in December, data showed on Thursday.

Wah Seong sets up Singapore JV, eyes regional pipe, engineering biz

KUALA LUMPUR (Dec 16): WAH SEONG CORPORATION BHD [] and Insituform BV have set up a joint venture company in Singapore to target pipelines business and also provide onshore corrosion protection services in Southeast Asia and Australia.

Wah Seong said on Friday the new joint venture company WCU Corrosion Technologies Pte. Ltd would seek businesses in lining new and existing pipelines and passageways with corrosion and abrasion resistant polyethylene pipe.

WCU would also look into onshore corrosion protection services, including engineering services, CONSTRUCTION [], installation, inspection, monitoring and maintenance and related product sales.

It said WCU had an initial issued and paid-up of US$1,000 comprising 100 ordinary shares held by WC Singapore (51%) and Insituform BV (49%) respectively.

L&G unit secures RM90m loan from OCBC Bank

KUALA LUMPUR (Dec 19): Land & General Bhd's unit Sri Damansara Sdn Bhd (SDSB) has secured a RM90 million loan from OCBC Bank (Malaysia) Bhd.

L&G said on Friday the credit facilities were to enable SDSB to undertake a condominium project, Damansara Foresta, in Bandar Sri Damansara, Selangor and to provide general working capital.

SDSB is a property development company with an authorised and issued and paid-up of RM100 million and RM69 million, respectively.

The first party first legal charge would be created over three parcels of land for Damansara Foresta project;'' debenture by way of fixed and floating charge over all of SDSB's present and future assets relating to the development of Damansara Foresta project.

L&G would also execute a corporate guarantee for RM90 million and it would also provide a letter of undertaking'' to finance the CONSTRUCTION [] cost and any other costs; associated with the development of Damansara Foresta project to complete the project.

KLCI closes higher but struggles to breach 1,470-level

KUALA LUMPUR (Dec 16): The FBM KLCI could not sustain much of its gains on Friday and struggled to breach the 1,470-point level on some mild profit taking ahead of the weekend.

The FBM KLCI edged up 2.11 points to close at 1,466.22. The index had earlier risen to its intra-day high of

Gainers led losers by 426 to 345, while 313 counters traded unchanged. Volume was 1.79 billion shares valued at RM1.33 billion.

World stocks rose on Friday after upbeat U.S. data and corporate results, while concerns over the European banking sector and nervousness about potential ratings downgrades in European sovereign debt underpinned German government bonds, according to Reuters.

Surprising resilience in the U.S. economy and corporate sector are underpinning investor appetite for risky assets into the year end, although trading is thinning out ahead of a holiday season, it said.

At the regional markets, the Shanghai Composite Index rose 2.02% to 2,224.84, Hong Kong's Hang Seng Index added 1.43% to 18,285.39, South Korea's Kospi up 1.15% to 1,839.96, Taiwan's Taiex gained 0.30% to 6,785.09, Japan's Nikkei 225 edged up 0.29% to 8,401.72 and Singapore's Straits Times Index gained 0.91% to 2,659.22.

On Bursa Malaysia, PBB added 36 sen to RM16.76, KrisAssets was up 26 sen to RM5.88, Public Bank 22 sen to RM13.02, LPI Capital 20 sen to RM13.40, Warisan 19 sen to RM2.79, Orient and BHIC 17 sen each to RM5.31 and RM3.15, Tasek 16 sen to RM7.86 and Bintulu Port up 15 sen to RM6.85.

Among the losers, UMW fell 34 sen to RM6.50, Carlsberg down 33 sen to RM8.66, Southern Acids and Malayan Flour Mills lost 17 sen each to RM2.15 and RM7.50, while GAB, IOI Corp, Tan Chong and Panasonic lost 10 sen each to RM13.40, RM5.05, RM4.04 and RM19.94 respectively.

Meanwhile, the actives included Wijaya, Kurnia Asia, Proton, JCY, Envair, Astral Supreme, Dialog and Sanichi.

UMW denies ' again ' reported bid to acquire Proton stake

KUALA LUMPUR (Dec 16): For the second time in as many days, UMW HOLDINGS BHD [] denied that its major shareholders had submitted a bid to acquire Khazanah Nasional Bhd's controlling stake in national carmaker PROTON HOLDINGS BHD [].

The company on Friday was responding to an earlier report on Dec 16 that said that 'shareholders linked to UMW Holdings, a strategic partner of Toyota Motor Corp, are believed to have won a bid to buy Khazanah Nasional Bhd's stake in Proton Holdings Bhd'.

The report had said that the UMW shareholders' bid was in the range of RM6 per Proton share, and that they would eventually make a general offer for Proton via UMW Holdings.

'Further to our announcement dated 15th December 2011 on the above matter, UMW wishes to advise you that our major shareholders have confirmed that they have not submitted any bid to Khazanah Nasional Berhad ("Khazanah") nor have they won any bid to buy Khazanah's stake in Proton Holdings Bhd.

'UMW also wishes to re-affirm that it is not in any form of discussion with any parties in this regard,' it said.

UMW shares fell on Friday after it denied the initial report on Thursday, and the stock was the top loser. UMW fell 34 sen to RM6.50 with 2.3 million shares traded.

''

Axiata Group lifts suspension on Alcatel-Lucent

KUALA LUMPUR (Dec 16): Axiata Group Bhd has lifted the group-wide suspension against the Paris-based Alcatel-Lucent and its group of companies which includes Alcatel-Lucent Malaysia Sdn Bhd (ALU Group) with effect from Friday.

Axiata said the decision to lift the suspension, enforced since March 23, was made after a thorough review that included external agency reports on the institutionalisation of policies, compliance structures and higher ethical standards throughout the ALU Group.

'It also takes into account satisfactory evidence and assurances by ALU Group that it has improved its policies and implemented enforceable measures to prevent a recurrence of any improper acts in the future and adherence to all applicable legal, regulatory and ethical requirements,' it said.

Axiata said the whole process was based on Axiata's zero tolerance policy against corruption in its business dealings and transactions.

To recap, Axiata had on March 23 imposed the suspension which included suspension of the ALU group from any invitations to submit any new tenders, entry into new contracts or continuing with any negotiations that are currently being undertaken with any group member.

The suspension also applied to any consortium, joint-venture or partnership of which any ALU group member is a party.

In 2010, the US Securities and Exchange Commission had charged ALU with violating the Foreign Corrupt Practices Act (FCPA) by paying bribes to foreign government officials to illicitly win business in Latin America and Asia.

The SEC alleged Alcatel's subsidiaries used consultants who performed little or no legitimate work to funnel more than US$8 million in bribes to government officials in order to obtain or retain lucrative telecommunications contracts and other contracts.

Alcatel agreed to pay more than US$45 million to settle the SEC's charges, and pay an additional US$92 million to settle criminal charges announced today by the US Department of Justice.

The settlement covered activities in several countries in Africa, Latin America, Asia, including Malaysia.

The investigation in Malaysia covers events that occurred between October 2004 and February 2006, and involve alleged improper payments to TELEKOM MALAYSIA BHD []'s (TM) employees.

Country Heights unit redeems 68.8m loan stocks, funded by Maybank loan

KUALA LUMPUR (Dec 16): COUNTRY HEIGHTS HOLDINGS BHD []'s (CHHB) unit East Vision Leisure Group Sdn Bhd (EVL) has redeemed all its 68.82 million loan stocks funded by a RM92.91 million term loan from MALAYAN BANKING BHD [].

CHHB said the loan stocks redeemed were the 68.82 million redeemable secured loan stocks 2004/2011 (RSLS Series B).

'The rationale for redemption is to enable EVL to restructure its loan requirements and to redeem the RSLS Series B which is due and payable on Dec 19, 2011,' it said.

EVL had also signed a term loan facility agreement with Maybank wherein the loan was secured''against the pledged assets comprising of the leasehold land and building known as Malaysia International Exhibition & Convention Centre, Mines Waterfront Business Park together with CHHB's corporate guarantee.

Gamuda 1Q net profit up 49.5% to RM132.32m

KUALA LUMPUR (Dec 16): GAMUDA BHD []'s net profit for the first quarter ended Oct 31, 2011 jumped 49.5% to RM132.32 million from RM88.53 million a year earlier due to higher contributions from all divisions.

It said on Friday that revenue for the quarter rose marginally to RM641.99 million from RM634.2 million in 2010.

Earnings per share were 6.41 sen compared to 4.35 sen a year earlier, while net assets per share was RM1.85.

Reviewing its performance, Gamuda said the increase in profit resulted from higher contributions from the CONSTRUCTION [] and property divisions.

On its prospects, Gamuda said it expects to achieve a stronger performance this year supported by its ongoing construction projects, continued strong property sales and steady earnings from the water and expressway concessions divisions.

OSK Securities Thailand gets licence nod from Thai govt

KUALA LUMPUR (Dec 16): OSK Securities (Thailand) Public Co. Ltd (OSKST) has obtained the permanent approval for the foreign business licence from the Thai regulator.

OSK HOLDINGS BHD [] said on Friday the Thai unit had obtained the permanent approval for the foreign business licence from the Ministry of Commerce and the fees were paid on Dec 13.

'The aforesaid licence would enable OSKST to undertake such''businesses relating to securities businesses and services as approved by the Ministry of Finance and the Securities and Exchange Commission, Thailand,' it said.

OSKST was formerly known as BFIT Securities Public Co. Ltd, a subsidiary of OSK Investment Bank Bhd.

SE Asia Stocks-Up after better U.S. data, led by Jakarta

SINGAPORE (Dec 16): Southeast Asian stock markets gained on Friday after better data on the U.S. economy helped offset worries about the euro zone, at least for now, and Indonesia led the way after a credit rating upgrade and approval of an important land bill.

A fall in unemployment benefit claims and stronger-than-expected regional factory activity in the United States suggested an improvement in the world's largest economy, helping Southeast Asian markets snap a three-day losing streak.

Indonesia gained 1.8 percent from its lowest close since Nov. 29 in heavy volume, backed by net foreign buying of $34 million, after Fitch gave it an investment-grade rating. The passage of a land acquisition bill by parliament also boosted the market in Jakarta. It is expected to help speed up big government infrastructure projects.

Singapore gained 0.9 percent, the Philippines 0.5 percent, Thailand 1 percent and Malaysia 0.1 percent. Vietnam gained 0.4 percent, recovering from a 2-1/2-year low.

Fitch Ratings upgraded Indonesia's credit status on Thursday by one notch to BBB minus, the first rating agency to give the emerging market an investment grade since 1997, reflecting the country's resilient economic growth and fundamentals.

"The rally today is mainly due to investment grade euphoria with a bigger chance of rating upgrades from Moody's and S&P in the future," said Alfian Syah, head of research at Valbury Asia Securities.

Banks led the gains in Jakarta, with Indonesia's biggest micro lender, Bank Rakyat Indonesia, rising 4.6 percent, PT Bank Mandiri jumping 3.9 percent and the biggest bank by market value, Bank Central Asia, gaining 2.6 percent.

After Manila closed, rating agency Standard & Poor's revised its rating outlook for the Philippines to positive from stable.

The latest export data from Singapore also helped sentiment, with big-cap stocks such as Singapore Telecommunications and rig builder Sembcorp Marine gaining 2.6 and 1.6 percent respectively.

In Bangkok, Thailand's second-largest mobile operator, Total Access Communication Pcl, surged 9.8 percent after a plan to pay a special dividend and a financial restructuring.

"We are still seeing some modest foreign outflows and we expect the market to move in a narrow range next week because of caution about the euro zone debt crisis," said Teerawut Kanniphakul, a senior analyst at broker CIMB Securities.

Thailand saw net foreign outflows of $139.1 million in the week, as of Thursday.

Malaysia saw foreign outflows of $19.4 million on Friday.

The MSCI's broadest index of Asia Pacific shares outside Japan was up 1.3 percent by 0950 GMT. - Reuters

Boustead gets Mindef contract for 6 ships, contract ceiling RM9b

KUALA LUMPUR (Dec 16): Boustead Naval Shipyard Sdn. Bhd has received the letter of award from the Ministry of Defence (Mindef) to supply six patrol vessels with a contract ceiling of RM9 billion.

Bousted Holdings Bhd said its subsidiary Boustead Naval Shipyard had received the letter on Friday to design, construct and deliver six second generation patrol vessels.

'The contract carries a ceiling of RM9.0 billion, to be implemented over three Malaysia Plans, 10, 11 and 12. The delivery of the first of class ship is estimated in 2017 with follow-on ships every six months thereafter,' it said.

''

''

Mah Sing's M Residence@ Rawang gets 80% take up for Phase 1

KUALA LUMPUR (Dec 16): MAH SING GROUP BHD []'s Phase 1 of its new 226-acre township, M Residence@ Rawang saw an 80% take-up rate in a single day on Friday when the company previewed the project for priority registrants.

In a statement Friday, the company said the township, which has an estimated gross development value of RM948 million had drawn 2,500 registrants since the land was acquired in October 2011.

It said PROPERTIES [] in Phase 1 comprising 214 units of 18'x70' link homes with built up of approximately 1,650sq.ft were indicatively priced from RM360,800.

Meanwhile, Mah Sing said Phase 2 of the project comprising 233 units 22'x80' superlink homes priced from RM558,800 would be opened for bookings on Dec 17 and 18 (Saturday and Sunday) at the sales gallery opposite Jaya Jusco in Rawang, it said.

Mah Sing chief operating officer James Bryuns said M Residence@Rawang meets the current need for quality housing at accessible entry level.

''

'We believe that Phase 2 shall see equally strong interest as we are offering semi-detached layouts in our superlink homes, at link home pricing,' he said.

He said the 22 footers in M Residence@Rawang have an expansive layout boasting 3 bedrooms with en-suites on the first floor, whilst the ground floor houses the living room, dry and wet kitchen, a guest room, bathroom and powder room, adding they also came with a 10ft yard area at the back.

M Residence@Rawang is 5km away from the matured townships of Anggun 1&2@Kota Emerald and 8km from Emerald East and West.

Mah Sing said besides Rawang town itself, the project had a large target market catchment from Kuala Lumpur, Petaling Jaya, Shah Alam, Bukit Jelutong, Subang Jaya, USJ, Kepong and Selayang who are looking for an affordable alternative in a well connected location.

Furthermore, there are large catchments of upgraders from Batu Arang, Kundang, Kuang, Sungai Buloh, in search of new township schemes offering a lifestyle concept, it said.

Bukit Badong Forest Reserve is located next to M Residence@Rawang and extensive green reserves namely Templer's Park, Kanching Forest Park and Commonwealth Forest Park are all within the radius of 15km of the project, it said.

''

MAA: November vehicle sales at 48,702 units, dn 9% on-month

KUALA LUMPUR (Dec 16): The Malaysian Automotive Association expects vehicle sales to moderate further in December, extending the decline from November where sales were lower at 48,702 units.

It said in a statement on Friday the November sales were down 4,913 units or 9% from October's 43,789 units. However, when compared to a year ago, sales climbed 9%.

MAA said the slower sales were also due to the severe floods in Thailand which had disrupted certain makes of vehicles. Of the 48,702 units, passenger vehicles accounted for 42,754 and the remaining 5,948 were commercial vehicles.

'Sales volume for December 2011 is expected to moderate further due to the preference of customers to wait and take delivery of 2012 production year stocks and also the impact of the floods in Thailand may affect supply,' it said.

The trade body said from January-November, total vehicle sales rose marginally to 552,561 units from 550,391 in the previous corresponding period. Passenger vehicles accounted for 492,884 units and the remaining 59,677 units were commercial vehicles.

MAA data also showed that total production in November declined to 35,355 units from 36,265 units a year ago. Year-to-date, it said production fell 4.6% to 501,755 units from 526,194 units in the previous corresponding period.

VEGOILS-Palm oil rises but Euro zone concerns remain

JAKARTA (Dec 16): Malaysian crude palm oil futures rose more than 1 percent on Friday, rebounding from the previous day's six-week lows on rising equity markets, traders said, although they expected further losses on euro zone debt worries.

Asian shares rose and the euro edged higher on Friday, as signs of strength in the U.S. economy temporarily broke through gloom over the European debt crisis that had driven a sell-off in riskier assets over the past three days.

U.S. stocks rose modestly on Thursday, after a fall in U.S. unemployment, a stronger-than-expected rise in regional factory activity and better-than-forecast results from FedEx Corp painted an improving picture of the economy.

By midday, the benchmark March palm oil futures on the Bursa Malaysia Derivatives Exchange added 1.1 percent to 3,003 Malaysian ringgit ($940). "Weekend covering," said a Kuala Lumpur-based palm trader said about Friday's gains.

"Positive regional equity markets and short-term technicals showing signs of recovery."

Earlier this week, prices touched a six-week low of 2,971 ringgit and are down almost 3 percent for the week. T

raded volumes for the February palm contract were at 3,882 lots of 25 tonnes each, compared with a three-week high at 16,016 on Thursday. Investors said the monsoon season in top Southeast Asian countires was also offering some support, with expectations of declining output.

Among comparable oils, Chicago soybeans rose around half a percent on Friday, gaining for a second straight day on concerns over dry weather in South America, which is likely to boost demand for U.S. beans.

China's most active Sept 2012 soybean oil contract <0#DBY:> also traded in positive territory. Brent crude futures rose above $104 on worries about supply disruption after the U.S. Congress approved a bill imposing sanctions on Iran's central bank, limiting buyers' ability to pay for the oil they buy from the Islamic Republic.

But the backdrop of European debt worries refused to go away. "The market seems to be driven by the Europe debacle, rather than fundamentals," said a second Kuala Lumpur trader. "With funds pulling back from global commodity exposure, brace yourself for more volatility and price swings."- Reuters

RAM Ratings ups Cagamas SME rating to AAA

KUALA LUMPUR (Dec 16): RAM Rating Services Bhd has upgraded the rating of Cagamas SME Bhd's RM45 million Class C credit-linked notes (CLN), from AA1 to AAA.

The rating agency said on Friday it had also reaffirmed the AAA ratings of its RM75 million Class A Notes and RM30 million Class B Notes.

RAM Ratings said all the long-term ratings have a stable outlook. The Class A, Class B and Class C Notes are collectively referred to as 'the CSME 2007-1 CLN'.

'The rating upgrade for the Class C Notes is premised on the available credit support that is over and above the required credit enhancement as a result of lower-than-expected claims rates, as well as the reduction in required credit enhancement as the transaction moves closer to maturity,' it said.

RAM Ratings said this transaction involved the partial transfer of MALAYAN BANKING BHD []'s credit risks ' arising from a portfolio of up to RM600 million of loans to small and medium-sized enterprises ' to Credit Guarantee Corporation Malaysia Bhd, Cagamas SME and Cagamas Bhd.

The CSME 2007-1 CLN had been issued in consonance with a bank swap agreement between Maybank and Cagamas SME. Before any claim can be made on these counterparties, the RM30 million first-loss piece retained by Maybank (the threshold amount) would need to be exhausted.

As at end-June 2011, the portfolio contained 986 loans with a total outstanding principal of RM583.21 million.

Despite experiencing RM50.42 million of defaults, only RM13.31 million of net losses had been incurred as at end-June 2011; the net losses had reduced the threshold amount to RM16.69 million as at the same date.

'The available credit support for the Class A, Class B and Class C Notes stood at 25.86%, 20.74% and 13.07%, respectively, which are above the necessary credit enhancement for AAA rating,' said RAM Ratings' head of structured Finance Ratings explains Siew Suet Ming.

MARC affirms Danajamim's AAA rating, outlook stable

KUALA LUMPUR (Dec 16): Malaysian Rating Corporation has affirmed its AAA insurer financial strength (IFS) rating on Danajamin Nasional Bhd (Danajamin) with a stable outlook.

The rating agency said on Friday the affirmed rating reflected Danajamin's strong capital resources and claims-paying resources relative to its risk exposure, and its status as a government-sponsored financial guarantee insurer (FGI).

'The IFS rating is driven by MARC's perception of high support from the Malaysian government stemming from Danajamin's public policy objective of facilitating market access for financially viable domestic issuers of bonds and sukuk which would otherwise be under-served or served inefficiently without the benefit of credit enhancement.

'The insurer financial strength rating on Danajamin also incorporates MARC's assessment of the FGI's willingness to pay financial guarantee claims on a timely basis,' it said.

To recap, Danajamin was set up in May 2009 with a paid-in capital of RM1.0 billion. It has reasonable single-risk capacity and considerable liquidity resources.

Over the past two years, the FGI has underwritten 14 transactions with a total insured value of up to RM3.7 billion.

Danajamin has been gradually gaining traction in the domestic bond and sukuk markets and has made measured progress in terms of underwriting sector diversification.

MARC also noted the FGI's plan to expand the scope of its underwriting activity beyond corporate debt obligations and project finance transactions to include securitisation transactions of loan portfolios and real estate, albeit in the medium term.

The rating agency expected more substantial progress to be made in terms of sector diversification with regard to written premiums and the insured portfolio as the FGI matures to lessen its susceptibility to industry sector-specific or transaction-specific credit stress.

MARC added that Danajamin's success as a FGI ultimately rests with the company's ability to establish itself as a complementary institution in the national financial system while maintaining an acceptable risk profile and profitability.

'The premium rates charged by the FGI are likely to stay competitive relative to prevailing credit spreads to ensure product and pricing acceptance; notwithstanding, the FGI will still have to ensure that only issues with acceptable risk-reward characteristics are underwritten to protect shareholders' capital and the insurer's ongoing solvency,' it said.

In the first six months to June 30, 2011 (1H2011), it reported higher net earned premiums of RM4.36 million in line with the increase in its insured portfolio.

Investment income continues to account for the greater part of Danajamin's earnings given that its business has yet to be fully ramped up.

Danajamin's return on assets improved to 2.45% in 1H2011 on an annualised basis, up from 1.02% for the full year 2010 (FY2010).

As Danajamin's insured portfolio expands and the invested premiums generate investment income, overall profitability of the FGI should show further improvement, assuming its underwriting performance remains satisfactory.

Danajamin's underwriting performance would, nonetheless, remain sensitive to the domestic economic environment.

As at end-June 2011, Danajamin liquidity resources totalled RM1.05 billion. Danajamin's conservative investment and liquidity strategies should ensure the availability of sufficient liquidity resources relative to potential payments arising from a default or defaults by issuers.

MARC said Danajamin's capital position remained sound relative to the underlying quality of its insured portfolio based on its review of the FGI's insured portfolio.

The FGI did not expect to pay dividends for some time in order to preserve its capital for statutory reserve requirements and business growth needs.

The quality of the insured portfolio, the earnings power of the FGI and the manner in which its capital base along with accumulated cash flow was invested would be primary drivers of its internal capital generation capacity going forward.

That said, the rating agency derived considerable comfort from its belief that maintaining its 'AAA' rating and its capital strength would be of paramount importance to Danajamin, added to which is the government's stated readiness to increase the FGI's paid-up capital by another RM1.0 billion.

Key considerations in MARC's assessment of Danajamin's credit profile going forward would be the FGI's progress made in executing its financial guarantee business plan and building the requisite underwriting and risk management capabilities to support its expanding insured portfolio.

In this regard, MARC said the overall effectiveness of Danajamin's risk management function had yet to be tested by the seasoning of the insured portfolio and/or broad-based stress across the entire economy as is typical in an economic downturn.

The stable rating outlook reflected MARC's belief that the persisting importance of Danajamin's public policy function should ensure a high degree of government support to sustain the rating in the foreseeable future.

MAS sees 20m shares done off-market

KUALA LUMPUR (Dec 16): MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) saw 20 million of its shares transacted in an off-market deal at average price of RM1.30.

The shares accounted for 0.59% of the airline's paid-up of 3.342 billion shares.

MAS share price was unchanged at RM1.30 at the midday break.

The FBM KLCI rose 3.01 points to 1,467.12. Turnover was 964.25 million shares valued at RM555.67 million. There were 324 gainers, 291 losers and 274 stocks unchanged.

Maybank group CFO slated to head Bank Internasional Indonesia

KUALA LUMPUR (Dec 16): MALAYAN BANKING BHD []'s group chief financial officer, Khairussaleh Ramli has been identified to be the president director of Bank Internasional Indonesia (BII).

'This appointment is subject to approval from Bank Indonesia as well as the shareholders of BII at an EGM to be convened,' Maybank said in a statement on Friday.

KLCI in the black mid-day, gains limited

KUALA LUMPUR (Dec 16): The FBM KLCI remained in positive territory at the mid-day break on Friday in line with the gains at key regional markets, but gains were limited as sentiment stayed brittle with possible cuts in the credit ratings of euro zone countries.

Further compounding the already worried investors was Fitch Ratings' downgrade of Goldman Sachs, Deutsche Bank and five other large banks based in Europe and the United States, citing "increased challenges" in the financial markets.

The FBM KLCI added 3.01 points to 1,467.12 at the mid-day break, lifted by PLANTATION []s and select blue chips.

Gainers led losers by 324 to 291, while 274 counters traded unchanged. Volume was 974.25 million shares valued at RM555.68 million.

The ringgit strengthened 0.25% to 3.1788 versus the US dollar; crude palm oil futures for the third month delivery rose RM29 per tonne to RM3,000, crude oil added 28 cents per barrel to US$94.15 while gold jumped US$18.13 an ounce to US$1,588.65.

At the regional markets, Japan's Nikkei 225 added 0.51% to 8,420.30, Hong Kong's Hang Seng Index rose 0.61% to 18,136.23, the Shanghai Composite Index edged up 0.01% to 2,181.22, Taiwan's Taiex added 0.64% to 6,807.80, South Korea's Kospi rose 0.82% to 1,834.01 and Singapore's Straits Times Index was up 0.48% to 2,647.85.

On Bursa Malaysia, PPB was up 26 sen to RM16.66, Sungei Bagan and KLK up 16 sen each to RM2.98 and RM22.28, while United Plantations gained 12 sen to RM18.52.

Other gainers included Orient that rose 21 sen to RM5.35, Jaya Tiasa up 19 sen to RM7.10, Dialog 14 sen to RM2.58, Nestle 12 sen to RM56.14 and BHIC up 11 sen to RM3.09.

UMW was the top loser and fell 35 sen to RM6.49 after the company on Thursday said it was not in talks to by Khazanah's stake 42.7% stake in PROTON HOLDINGS BHD [].

Other losers included Carlsberg that fell 19 sen to RM8.80, Southern Acids down 17 sen to RM2.15, Panasonic and JT International 14 sen each to RM19.90 and RM6.86, GAB 12 sen to RM13.38, Malayan Flour Mills 11 sen to RM7.56 and Advanced Packaging nine sen to RM1.13.

Meanwhile, the actives included Proton, JCY, Kurnia Asia, Sanichi and Wijaya.

#Update* Higher raw materials, forex loss weigh on Top Glove

KUALA LUMPUR (Dec 16): TOP GLOVE CORPORATION BHD []'s earnings fell 12.81% to RM31.43 million in the first quarter ended Nov 30, 2011 from the RM6.05 million a year ago as it was impacted by higher raw material prices and the oversupply in the industry but it performed better when compared to the preceding quarter.

'The current quarter's net profit was also impacted by the recognition of net loss in foreign exchange amounting to RM13.3 million compared with a net gain of RM4.7 million in the corresponding quarter last financial year,' it said in a statement to Bursa Malaysia on Friday.

The world's largest glove maker said its revenue rose 12.9% to RM554.84 million from RM491.51 million. Earnings per share declined to 5.08 sen from with 5.83 sen.

Top Glove, however performed better when compared with the preceding quarter in terms of revenue and earnings. It revenue rose 2.4% to RM554.84 million from RM541.84 million in the preceding quarter, while net profit increased 21.0% to RM32.46 million from RM26.82 million.

'The improved performance in the current quarter was largely attributed to a decline in latex prices which fell by 9.3% from the preceding quarter (from RM9.19 per kg in the quarter ended Sept 30, 2010 to RM8.34 a kg in the quarter ended Nov 30, 2011), and a stronger average US dollar against the ringgit which improved by 4.0% (from RM3 to RM3.12).

Elaborating on the raw materials, it said average latex price rose by 16% from RM7.19 per kg in the first quarter ended Nov 30, 2010 to RM8.34 a kg in Nov 30, 2011.

The average nitrile price has also increased by 46.4% from US$1.40 a kg to US$2.05 a kg during the period.

Top Glove group chairman, Tan Sri Lim Wee Chai expected the retracement in latex prices and the stronger greenback to deliver a generous boost to the group's earnings.

'With the improved performance, our cash flow continues to strengthen, allowing us to expand capacity and invest in efficiency improvement,' he added.

Lim said the group's net cash position increased 24.9%, rising to RM317.55 million as at Nov 30, 2011.

Top Glove's total group capacity expanded to 37 billion pieces of gloves per annum in the just ended quarter after the completion of new facilities.

On the outlook for latex prices, Lim expected the downtrend in prices to likely be sustained given the uncertainty in the European debt crisis and the expectation of a slowdown in the global economy going into 2012.

'Nevertheless, we are still continuing with our strategy of achieving a more balanced product mix by increasing our production of nitrile gloves,' he said.

MARC raises concerns about Offshoreworks Capital, further downgrade seen

KUALA LUMPUR (Dec 16): Malaysian Rating Corp Bhd (MARC) has raised concerns about the funding vehicle Offshoreworks Capital Sdn Bhd whose ratings could face downgrade.

The ratings agency said on Friday it was maintaining its review of the BBIS and MARC-4IS Sukuk ratings of OWC for further downgrade.

MARC cited a continuing lack of clarity about the issuer's liquidity situation, annual and interim results of its parent company and the progress of debt restructuring negotiations with sukukholders.

In the past, MARC had commented that its ratings review would focus on the outcome of OWC's debt restructuring negotiations and the near-term financial profile of oilfield services provider Offshoreworks Holdings Sdn Bhd (OHSB).

However, MARC pointed out that since it decided to extend its review on the sukuk ratings in September 2011, OWC has yet to disclose the details of the proposed restructuring plans to its sukukholders.

Of concern is that OWC has yet to make available its audited financial statements of OHSB for the financial year ended Dec 31, 2010.

'MARC has been unable to conclude its review and believes that it has insufficient access to adequate public and/or non-public information to maintain ratings on the sukuk.

'OHSB's unaudited financial statements for 2010 had indicated that the group was in a tenuous financial position with negative shareholders funds of RM56.8 million and modest cash balances. The rating agency is concerned that OHSB's financial profile could have experienced further deterioration in its credit profile since then,' it said.

The rating agency said it would likely withdraw or suspend the ratings within the next 30 days if the requested information was not forthcoming.

Dialog advance after fixing rights share price, analysts positive

KUALA LUMPUR (Dec 16): DIALOG GROUP BHD []'s shares climbed on Friday after it fixed the price of its rights issue and warrants, drawing positive response from investors and analysts.

At 11.58am, it was up 14 sen to RM2.58 with 5.7 million shares done.

The FBM KLCI rose 2.27 points 1,466.38. The broader market was firmer, with 305 gainers to 265 losers and 279 stocks unchanged. Turnover was 899.28 million shares done valued at RM495.62 million.

Dialog, which is undertaking a cash call to raise funds for more investments in the upstream oil and gas opportunities, had on Thursday fixed the rights shares at RM1.20 each and the exercise price of the warrants at RM2.40 each.

The issue price would be a discount of about 46% to the theoretical ex-rights price of RM2.23 per share, based on the five-day volume-weighted average market price (VWAMP) up to Dec 14 of RM2.43.

As for the warrants, it said the exercise price was 8% above the theoretical ex-rights price of RM2.23 per share, based on the five-day VWAMP up to Dec 14 of RM2.43.

RHB Research Institute said on Friday it was positive about Dialog's corporate exercise involving the rights issue with warrants.

On Thursday, Dialog announced that the rights issue has been priced at RM1.20 a share for the new rights and RM2.40 a warrant.

The price of the new shares was a discount of 46.5% to the estimated theoretical ex-price of RM2.23/share (based on the five-day volume weighted average market price of Dialog up to Dec 14.

'We believe the additional discount is mainly to entice shareholders given the volatile market conditions, but the higher exercise price for the warrants suggests that the company is confident on delivering in the longer term,' it said.

RHB Research it was positive on the exercise despite the potential dilutive impact, as both projects are already secured and will propel Dialog's long-term growth prospects.

It said that Dialog remained one of its premium-play picks as it still liked the company for its long-term project visibility and sound management track record.

''

Angry Birds maker eyes 2013 Hong Kong IPO -report

HELSINKI (Dec 16): Finnish gaming firm Rovio, creator of "Angry Birds," the world's most popular computer game, is planning an initial public offering on the Hong Kong stock exchange in 2013, Finnish weekly Tekniikka&Talous reported on Friday.

Rovio's marketing chief Peter Vesterbacka told the paper the aim is to build the company into a media firm which would have a market capitalisation similar to that of Walt Disney Co, whose shares are valued at $65.3 billion.

"That is the target. There is no reason why we should not be able to build a company of that size," Vesterbacka was quoted as saying, adding Rovio's 2011 revenues would be around $100 million, compared with $10 million a year before.

In May Rovio Chief Executive Mikael Hed told Reuters the firm was aiming for a stock market listing in New York in 2-3 years time.

Unlike most mobile game crazes, Angry Birds, in which players use a slingshot to attack pigs who steal the birds' eggs, has stayed atop the charts since it was launched for Apple's iPhone in 2009.

It has reached a record 600 million downloads in two years, compared with rival Electronic Arts' hit game Tetris which reached 100 million mobile downloads last year.

Rovio has unveiled two more Angry Birds games and Vesterbacka told the paper in 2012 the firm would launch 5-6 more games with the same characters.

Rovio is also expanding the brand across traditional merchandising to items such as toys and playgrounds, and is taking the birds to the big screen.

Vesterbacka told the weekly the first full-motion animated movie featuring the characters was still 2-3 years away as film-making is a long process.

Earlier this year, Rovio raised $42 million from venture capital firms including Accel Partners, which previously backed Facebook and Baidu, and Skype founder Niklas Zennstroem's venture capital firm Atomico Ventures.

Rovio was founded in 2003 after three students including Niklas Hed -- CEO Mikael Hed's cousin and now Rovio's COO -- won a game-development competition sponsored by Finnish mobile phone maker Nokia Oyj and Hewlett-Packard CO. - Reuters

UMW top loser on confirmation not buying Proton stake

KUALA LUMPUR (Dec 16): UMW HOLDINGS BHD [] was the top loser in the morning session on Friday after the company confirmed it had not submitted a bid to Khazanah Nasional for its 42.7% Proton Holding Bhd stake

At 12.12pm, UMW was down 34 sen to RM6.50. There were 423,900 shares done.

The FBM KLCI rose 2.89 points to 1,467. There were 933 million shares done valued at RM526.42 million. There were 313 gainers, 284 losers and 274 stocks unchanged.

On Thursday, UMW confirmed that it had not submitted any bid to Khazanah for the Proton stake.

China SMEs face more credit troubles - report

(Dec 16): Cash-strapped small and medium-sized enterprises (SMEs) in an eastern Chinese city are struggling to survive in the face of financing restrictions, the state Xinhua News Agency reported, citing a Bureau of Statistics survey.

More than half of 192 enterprises surveyed in Hefei, in the eastern province of Anhui, are reeling from high loan interest rates and difficulty borrowing, in addition to rising costs, the report said.

Of 132 SMEs that applied for 3.49 billion yuan of credit($547.58 million), only 2.693 billion yuan ($422.53 million) were awarded loans, the survey said.

SMEs, which make up the bulk of China's economic engine, have also been hit by the credit crunch in the eastern city of Wenzhou, where the heads of at least 80 companies have gone into hiding after defaulting on loans.

The credit crunch is spreading among small companies that generate about 75 percent of China's jobs a year after Beijing kicked off a monetary tightening campaign to fight inflation that is fanning fears of a hard landing in the world's second-largest economy.

Small companies say they urgently need official credit as many have been forced into the informal loan market, where annual rates of interest can exceed 100 percent -- more than 15 times China's benchmark lending rate. - Reuters

OSK Research: Strong rising volume in Astral Supreme

KUALA LUMPUR (Dec 16): OSK Research said since August this year, Astral Supreme has been sustaining its posture at above the prior key low of 14 sen with heavy volume.

It said on Friday the volume has seen an increasing trend, which could be a sign of share accumulation at the bottom.

'Traders could consider accumulating the shares at the current level or closer to the 14 sen level.

'A break above the 100-week MAV line is expected to draw stronger upward momentum, which could potentially carry the stock to the next major resistance of the 200-week MAV line. Our cut-loss point is pegged at below the key low of 14 sen,' it said.

Market speculation keeps Proton in focus

KUALA LUMPUR (Dec 16): The recent heavy news flow on PROTON HOLDINGS BHD [] has kept the stock in the limelight over the past two weeks, and the shares were yet again actively traded on Friday.

At 9.40am, Proton was up 14 sen to RM4.69 with 5.58 million shares done.

The stock extended its gains this morning despite UMW HOLDINGS BHD [] denying a news report that it was in talks to acquire'' Khazanah Nasional Bhd's 42.75 stake in the carmaker.

The other names that have been bandied by the press are DRB-Hicom Holdings Bhd and most recently, the Naza Group.

In a note earlier this week, Hwang DBS Vickers Research said Khazanah's sale looked increasingly more likely, in its view.

HDBSVR said assuming Khazanah sold its 42.7% stake and not a partial interest, there might be a general offer on the cards unless exemption was given.

'We think DRB-Hicom has the financial strength as well as track record in the automotive industry to take up the exercise if a GO happens,' said the research house.

Modest gains, but vulnerability remains for KLCI

KUALA LUMPUR (Dec 16): The FBM KLCI made modest gains at mid-morning on Friday in line with the regional markets and the higher overnight close at Wall Street, but trading remained cautious following the downgrade of seven global banks in a sign of pitfalls ahead in the global economy.

Global market sentiments could further erode after Fitch Ratings on Thursday downgraded Goldman Sachs, Deutsche Bank and five other large banks based in Europe and the United States, citing "increased challenges" in the financial markets.

At mid-morning, the FBM KLCI edged up 0.71 point to 1,464.82.

Gainers led losers by 212 to 144, while 211 counters traded unchanged. Volume was 465.08 million shares valued at RM205.78 million.

Fitch cut long-term ratings on Barclays Plc and Credit Suisse AG by two notches to 'A' from 'AA-'.

The agency cut by one notch its long-term ratings on Bank of America Corp, BNP Paribas, Citigroup, Deutsche Bank AG and Goldman Sachs Group.

At the regional markets, Japan's Nikkei225 rose 0.40% to 8,411.18, Hong Kong's Hang Seng Index added 0.45% to 18,107.95, the Shanghai Composite Index was up 0.17% to 2,184.63, Taiwan's Taiex gained 0.14% to 6,773.83, South Korea's Kospi rose 0.73% to 1,832.48 and Singapore's Straits Times Index was up 0.46% to 2,647.49.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients on Friday said the FBM KLCI's resistance areas of 1,464 and 1,490 would cap market gains, whilst the weaker support areas may be located at 1,447 and 1,462.

'Despite the US markets' better tone last night, we may have a day of pre-weekend profit taking on the local index today,' he said.

On Bursa Malaysia, Dutch Lady was the top gainer at mid-morning and rose 42 sen to RM25; KLK gained 20 sen to RM22.32, Nestle 18 sen to RM56.20, BAT 16 sen to RM49.16, Dialog and Proton 13 sen each to RM2.57 and RM4.68, Orient 11 sen to RM5.25, while F&N and United PLANTATION []s gained 10 sen each to RM18.48 and RM18.50.

Decliners included Tradewinds, UMW, JT International, Panasonic, Carlsberg, Hong Leong Bank, Fibon, Shangri-La and GAB.

The actives included Proton, JCY, Dialog, Sanichi and Wijaya.

HDBSVR: Market may not show much upside

KUALA LUMPUR (Dec 16): Hwang DBS Vickers Research said the Malaysian bourse may not show much upside on Friday after outperforming its regional peers on Thursday despite the firmer overnight close on Wall Street.

Major equity indices on Wall Street rose slightly on Thursday, up between 0.1% and 0.4% at the closing bell, following the release of better manufacturing data and lower jobless claims in the U.S.

As for the benchmark FBM KLCI, it would probably struggle to overcome the immediate resistance threshold of 1,475 ahead.

In terms of share price actions for the day, HDBSVR said there could be added interest in Proton on news the national automaker is believed to be taken over at about RM6 per share by the major shareholders of UMW Holdings (despite an official denial by the company itself).

Also in focus could be Coastal Contracts, which secured RM233 million worth of vessel contracts.

RHB Research maintains underperform on Media Prima, FV RM2.10

KUALA LUMPUR (Dec 16): RHB Research Institute is maintaining its Underperform on Media Prima with a fair value of RM2.10.

The research house said Media Prima's management believed the current environment looked challenging, given the prevailing debt issues in Europe that have led to advertisers tightening their ad spending.

'Maintaining margins will be one of the key challenges amid rising staff costs,' the research house said.

RHB Research said it was maintaining the earnings forecasts and indicative fair value of RM2.10 based on 12 times CY12 EPS of 17.5 sen.

'Media Prima is vulnerable in the event of an economic downturn from its high exposure to the more expensive broadcasting segment. Maintain Underperform,' it said.

Coastal Contracts shares up as YTD order wins rise to RM690m

KUALA LUMPUR (Dec 16): COASTAL CONTRACTS BHD [] shares rose on Friday after its year-to-date order wins rose to RM690 million after the company secured new contracts worth RM233 million.

At 9.05am, Coastal Contracts added seven sen to RM1.86 with 67,900 shares traded.

The company said on Dec 15 that its units had secured contracts for the sale of three offshore support vessels, two landing crafts and two barges for a total of RM233 million.

'With this latest batch of contracts, the value of Coastal Group's secured vessel sales orders currently stood at about RM610 million, with deliveries through 2012,' it said.

Coastal Contracts said the contracts were expected to contribute positively to its earnings for the financial year ending Dec 31, 2012.

''

RHB Research maintains Outperform on Dialog Group

KUALA LUMPUR (Dec 16): RHB Research Institute is maintaining its Outperform on DIALOG GROUP BHD [] and fair value of RM3.65 a share.

The research house said on Friday it was positive about Dialog's corporate exercise involving the rights issue with warrants.

On Thursday, Dialog announced that the rights issue has been priced at RM1.20 a share for the new rights and RM2.40 a warrant.

The price of the new shares was a discount of 46.5% to the estimated theoretical ex-price of RM2.23/share (based on the five-day volume weighted average market price of Dialog up to Dec 14.

'We believe the additional discount is mainly to entice shareholders given the volatile market conditions, but the higher exercise price for the warrants suggests that the company is confident on delivering in the longer term,' it said.

RHB Research it was positive on the exercise despite the potential dilutive impact, as both projects are already secured and will propel Dialog's long-term growth prospects.

It said that Dialog remained one of its premium-play picks as it still liked the company for its long-term project visibility and sound management track record.

UMW shares dip after denying in talks to buy Proton stake

KUALA LUMPUR (Dec 16): UMW HOLDINGS BHD [] shares fell on Friday after the company ''confirmed that it had not submitted any bid to Khazanah Nasional Bhd to acquire its 42.7% stake in PROTON HOLDINGS BHD [].

At 9.20am, UMW fell 32 sen to RM6.52 with 24,800 shares done.

'UMW also confirms that it is not in any form of discussion with any parties in this regard,' it had said on Thursday.

It said in a statement to BURSA MALAYSIA BHD [] that it had no knowledge of a news report on Thursday about it making a presentation to Khazanah about the Proton stake.

The news report stated that UMW, which is majority-controlled by the government's Permodalan Nasional Bhd and the Employees Provident Fund, was also the single largest shareholder of Perusahaan Otomobil Kedua Sdn Bhd, the manufacturer of Malaysia's second national car.

US STOCKS-For a change, market ignores Europe, rises on US data

NEW YORK (Dec 15): U.S. stocks rose Thursday, as signs of strength in the economy and higher-than-expected profit at FedEx outweighed more warnings about Europe.

The U.S. equity market continued its familiar back-and-forth rotation between optimism about the U.S. economy and fears that Europe's debt crisis could spark a global recession.

Lately the fear trade has been winning, as Wall Street fell to its lowest level in two weeks Wednesday.

But FedEx Corp boosted the market's sentiment. Shares shot up 8 percent to $82.47 after the package delivery company, viewed as an economic bellwether, reported stronger-than-expected quarterly profit.

The news from FedEx, along with two strong regional manufacturing surveys and other data, was welcomed after some high-profile companies recently warned about falling profits. On Thursday, Honeywell International said Europe's slowing economy would take a toll on orders. Honeywell's stock rose 1.7 percent to $52.41.

Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York, said the question for investors is whether the U.S. economy can grow if European economies stalled.

"Can the U.S. go it totally alone? No. But the rest of the world, with the exception of Europe, we are pretty positive about. We don't think it's going to fall apart," he said.

Data showed weekly applications for unemployment insurance fell to a 3-1/2 year low, while a gauge of New York state manufacturing activity rose to its highest level since May and another measure of factory activity in the mid-Atlantic region showed a surge in new orders.

The Dow Jones industrial average was up 45.33 points, or 0.38 percent, at 11,868.81. The Standard & Poor's 500 Index was up 3.93 points, or 0.32 percent, at 1,215.75. The Nasdaq Composite Index was up 1.70 points, or 0.07 percent, at 2,541.01.

Trading was volatile ahead of Friday's quadruple witching expiration when not only equity options expire, but also stock index futures, stock index options and individual stock futures.

Earlier, stocks pared some of their gains after Christine Lagarde, the head of the International Monetary Fund, said the world economic outlook is "quite gloomy" and will require action by all countries to head off an escalating crisis that carries risks of a global depression.

The market's gains were concentrated in defensive sectors such as utilities, suggesting uncertainty was causing risk-takers to put their portfolios in neutral as the week nears an end, said Chad Morganlander, portfolio manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.

"Unfortunately austerity without a plan for structural changes will cap economic growth and potentially could bleed into earnings. Going into the new year, portfolio managers are squaring their books for that scenario," Morganlader said.

"There's a continued rotation into safety and stability in a global austerity environment."

Big-cap TECHNOLOGY [] shares slipped, including Apple Inc off 0.3 percent to $378.94 and International Business machines, which fell 0.7 percent to $187.48.

Novellus Systems Inc jumped 16.3 percent to $40.37 a day after it agreed to be bought by larger rival Lam Research Corp for $3.3 billion in stock.

Michael Kors Holdings Ltd shares jumped 21 percent to $24.20 in their debut on the New York Stock Exchange after the luxury goods company went public at $20 per share on Wednesday, above the expected range. The stock climbed as much as 25 percent to a session high at $25.23.

About 6.72 billion shares changed hands on the New York Stock Exchange, NYSE Amex and the Nasdaq. On the NYSE, advancers beat decliners by a ratio of 18 to 11, and on the Nasdaq, 13 shares rose for ever 10 that fell. - Reuters

GLOBAL MARKETS-Encouraging data stabilize stocks, euro

NEW YORK (Dec 15): Wall Street stocks and the euro snapped their three-day losing streaks on Thursday as encouraging U.S. economic data and a solid Spanish debt auction reduced fears that the euro zone debt crisis could spark a global recession.

U.S. first-time claims for jobless benefits fell to a 3-1/2-year low in the latest week, raising expectations that the weak labor market, which has bogged down U.S. economic growth, might be gaining traction. Signs of strength in the manufacturing sector also boosted investors' risk appetite.

There was also a sign of improvement in the European economy. A private gauge of euro zone manufacturing unexpectedly rose in December, although it remained at a level indicating a fourth straight month of contraction.

"Can the U.S. go it totally alone? No. But the rest of the world, with the exception of Europe, we are pretty positive about. We don't think it's going to fall apart," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.

The absence, however, of a comprehensive plan from European leaders to contain the debt crisis continued to keep investors on the defensive. A rebound in oil, gold and commodities prices fizzled, a day after a steep sell-off, while U.S. and German government debt continued to attract safe-haven bids.

The typical drop-off in trading volume at year-end has compounded an unpredictable and risk-averse climate.

"The risks are tremendous and the politics are fickle," said Milton Ezrati, market strategist at Lord Abbett Co. in Jersey City, New Jersey, which manages $100 billon in assets.

The plan produced by last week's European Union summit has failed to convince investors that leaders have a firm grip on how to rein in the region's debt crisis, resulting in growing pressure on the European Central Bank to take bold steps, including large scale purchases of euro zone sovereign bonds.

Amid objection from Germany, the ECB has so far resisted.

ECB President Mario Draghi said on Thursday that euro zone governments are on the right track to restore market confidence but reminded them that an emergency program to buy their bonds was "neither eternal nor infinite."

Richard Batty, strategist at Standard Life Investments in London, noted the cross-currents buffetting financial markets.

"We have some respite through a good auction and of course the U.S. data has been reasonably supportive," he said. "But we still do not have a policy road map in place which enables Europe to avoid a slowdown and get back on track. Standard Life Investments is part of the Standard Life Group, which administers $303 billion of assets.

Spain drew solid demand for its bonds on Thursday, with its borrowing costs for five-year debt more than 2 percentage points lower than what Italy was forced to pay a day earlier.

The Dow Jones industrial average closed up 45.33 points, or 0.38 percent, at 11,868.81. The Standard & Poor's 500 Index finished up 3.93 points, or 0.32 percent, at 1,215.75. The Nasdaq Composite Index ended up 1.70 points, or 0.07 percent, at 2,541.01.

An index of top European stocks ended up 1 percent, recouping half its drop on Wednesday.

Global stocks as measured by the MSCI world equity index were up 0.4 percent, erasing an earlier drop.

Tokyo's Nikkei ended down 1.7 percent following Wednesday's declines on Wall Street and in European equities.

The euro rose a day after hitting an 11-month low against the dollar.

The euro rose 0.26 percent to around $1.30 after having fallen as low as $1.2945 on Wednesday. The next major support for the currency will come at $1.2860, which is its lowest price this year.

The safe-haven Swiss franc got a boost after the central bank kept its cap on the currency at 1.20 per euro, curbing speculation it would move to weaken the franc further.

German Bund futures ended flat at 137.88, while benchmark 10-year U.S. Treasury notes were flat in price for a yield of 1.91 percent after touching 1.86 percent, their lowest yield since early October.

Gold, another traditional safety play, extended its recent decline, as fund managers liquidated their holdings. The spot bullion price in London was last down 0.5 percent at $1,566.20 an ounce, hovering above its lowest level since late September.

In the oil market, January Brent crude futures expired up 7 cents at $105.09 a barrel, but U.S. oil futures ended down $1.08, or 1.1 percent, at $93.87.

Oil and gold recorded their biggest one-day drop since late September on Wednesday on worries that euro zone debt crisis could hurt the global economy and commodity demand. - Reuters

NYC faces 'extreme' risk from Europe's debt crisis

(Dec 15): New York City's economy faces an "extreme downside risk" from Europe's debt crisis because its banks hold over $1 trillion of assets in the city, where they are active lenders, according to a new report released on Thursday.

The city's economy is intertwined with Europe's because non-financial companies have significant ties to European companies while millions of tourists from this region visit the city every year, according to the report by City Comptroller John Liu.

"In light of these widespread commercial interactions, adverse effects on the City's economy from Europe's debt crisis appear alarming and lend greater urgency to addressing existing budget issues," Liu said in a statement.

This potential problem could bedevil New York City's finances, which already are being pressured by the job-cutting downturn of its prime industry: Wall Street.

The Democratic comptroller warned that Mayor Michael Bloomberg might be underestimating some risks. The list includes the difficulty of negotiating labor contracts for teachers and supervisors with no wage increases for the past round of bargaining and the possibility that cash-poor New York state will cut $200 million in aid.

These kinds of possibilities could help widen the city's budget gaps to $1.7 billion in the current accord, $3.2 billion in fiscal 2013, $4.4 billion in 2014 and $5 billion in 2015.

The city's current budget is balanced.

Bloomberg, a political independent, has forecast smaller gaps of $2 billion in 2013, $3.8 billion in 2014 and $4.9 billion in 2015.

On the positive side, the comptroller estimated that the city's five pension funds will cost less than Bloomberg predicted, which could save more than $1 billion from the current fiscal year to 2015.

Though New York City typically benefits when the stock market rises, as it sweeps in higher tax collections from profitable banks and brokerages and individuals with capital gains, there is a plus to the market's current roller-coaster ride.

"The Comptroller's Office believes that continued stock market volatility and low interest rates will further encourage institutional investors to shift portfolios towards commercial real estate, especially in premium markets such as New York City, thereby stimulating transactions of commercial property," the report said. - Reuters

N. American semicon equipment makers post Nov book-to-bill ratio of 0.83

KUALA LUMPUR: North America-based semiconductor equipment manufacturers posted US$973.3 million in orders in November 2011and a book-to-bill ratio of 0.83, according to the US-based Semiconductor Equipment Manufacturers Industry association (SEMI).

In the November Book-to-Bill report published on Dec 15, SEMI said the November bookings figure was 5% more than the final October 2011 level of US$926.8 million, and 35.7% below the US$1.51 billion in orders posted in November 2010.

A book-to-bill of 0.83 means that $83 worth of orders were received for every US$100 of product billed for the month.

SEMI said the three-month average of worldwide billings in November 2011 was US$1.17 billion.

The billings figure is 6.7% less than the final October 2011 level of US$1.26 billion, and 25.1% less than the November 2010 billings level of US$1.57 billion.

SEMI president and CEO Denny McGuirk said the improvement in the book-to-bill ratio was due to a slight increase in bookings.

'The industry waits for definitive signs of stability in the worldwide economy, which will improve end market demand and help solidify investment plans for 2012,' said McGuirk.

Fitch downgrades seven global banks

(Dec 15): Fitch Ratings, the third-biggest of the major credit rating agencies, downgraded seven global banks based in Europe and the United States, citing "increased challenges" in the financial markets.

Fitch cut long-term ratings on Barclays Plc and Credit Suisse AG, by two notches to 'A' from 'AA-.'

The agency cut by one notch its long-term ratings on Bank of America Corp, BNP Paribas, Citigroup, Deutsche Bank AG and Goldman Sachs Group.

The financial market challenges the banks face "result from both economic developments as well as a myriad of regulatory changes," Fitch said in an announcement issued shortly after regular market hours in New York.

In a separate announcement about the downgrade of Citigroup, Fitch cited "policy momentum" against using taxpayer money to support banks during a crisis.

Fitch's actions follow downgrades by Standard & Poor's of several major banks at the end of last month. S&P's moves came as part of an overhaul of its ratings methods to incorporate lessons learned in the financial crisis. Moody's also issued downgrades recently.

Jerry Dubrowski, a spokesman for Bank of America, which has had ratings cut by all three agencies, said in an email, "This decision is driven more by concerns about the global economy than the specific credit quality of Bank of America. We continue to maintain strong liquidity levels and to build capital."

Fitch on Thursday also affirmed its long-term 'A' ratings on JPMorgan Chase & Co, Morgan Stanley and UBS AG , as well as its 'A+' rating on Societe Generale .

Seoul shares open higher as U.S. data, refiners help

SEOUL (Dec 16): Seoul shares opened 0.5 percent higher on Friday after gains on Wall Street and buoyed further by signs of strength in the U.S. economy.

The market's early gains were led by refiners and shipbuilders, with SK Innovation rising 1 percent and Hyundai Heavy Industries climbing 1.5 percent.

The Korea Composite Stock Price Index was up 0.59 percent at 1,829.91 points as of 0003 GMT. - Reuters

Nikkei posts modest gains after upbeat U.S. data

TOKYO (Dec 16): Japan's Nikkei share average rose modestly in early trade on Friday as data kindled hopes about the outlook for the U.S. economy, but the benchmark is still on track for a losing week.

The benchmark Nikkei was up 0.3 percent at 8,400.08 just after the open, though it is still down 1.6 percent on the week. The broader Topix index gained 0.1 percent to 726.17. ' Reuters

''

Sanichi gets LOI for 1.8m tonnes of steam coal

KUALA LUMPUR (Dec 15): SANICHI TECHNOLOGY [] BHD [] has received a letter of intent from China's Guangxi Huayin to purchase 150,000 tonnes of steam coal per month, totaling 1.80 million tonnes for a one-year period.

Sanichi said Guangxi Huayin is one of the largest and most advanced aluminium producers in China. Guangxi Investment Group Co. Ltd hold a 34% stake, Minmetals Aluminium Company Ltd (33%) and Aluminium Corporation of China (33%).

'The LOI enable Sanichi to commence negotiations with its supplier(s) to obtain firm commitments to match the buyer's specifications and requirements,' it said.

It said the earnings would from the trading margin between Sanichi's selling price to the buyer and the company's buying price from its supplier(s).

'The company expects to obtain shareholders approval by first quarter of 2012 and therefore, it is anticipated that the commencement of supply of steam coal to the buyer will be no later than end of quarter two of 2012,' it said.

Sanichi said based on the estimated net profit margin of the coal trading business to be 1%-2% and the volume of the LOI order, it expected a positive impact on its earnings per share and net assets per share for the financial year ending June 30, 2012.

The estimated profit sharing arrangement between Sanichi and FIRC Trade Sdn Bhd was 30% for Sanichi and 70% for FIRC.

Dialog rights shares fixed at RM1.20, warrants exercise price RM2.40

KUALA LUMPUR (Dec 15): DIALOG GROUP BHD [], which is undertaking a cash call to raise funds for more investments in the upstream oil and gas opportunities, has fixed the rights shares at RM1.20 each and the exercise price of the warrants at RM2.40 each.

Dialog's cash call involved a renounceable rights issue of up to 398.73 million new shares of 10 sen each together with up to 100.36 million free detachable warrants. This would be on the basis of two rights shares with one warrant for every 10 shares held as at Jan 9, 2012.

'Based on the issue price of RM1.20 per rights share, Dialog is able to further strengthen its financial position, with its shareholders' funds increasing to more than RM1.0 billion from RM583.1 million,' it said.

Dialog said the proceeds from the rights issue with warrants would enable it to boost its investments in the upstream oil and gas opportunities, including the development and production of petroleum under risk service contracts with Petroliam Nasional Berhad as well as the development of Pengerang independent deepwater tank terminals.

The issue price would be a discount of about 46% to the theoretical ex-rights price of RM2.23 per share, based on the five-day volume-weighted average market price up to Dec 14 of RM2.43.

'The discount of approximately 46% to the theoretical ex-rights price also enables the board to meet its objective of fixing the issue price at a discount of at least 30% to the prevailing theoretical ex-rights price as well as to reward Dialog's shareholders for their continuous support for the company,' it said.

As for the warrants, it said the exercise price was 8% above the theoretical ex-rights price of RM2.23 per share, based on the five-day volume-weighted average market price up to Dec 14 of RM2.43.

Dialog had on Thursday also executed an underwriting agreement with AmInvestment Bank Bhd and CIMB Investment Bank Bhd whereby they would underwrite up to 170.59 million rights shares to be issued pursuant to the rights issue with warrants, being the difference between the minimum subscription level and 109.40 million rights shares undertaken by certain shareholders and executive directors.

''

UMW associate WSP gets takeover offer at 60c per share

KUALA LUMPUR (Dec 15): UMW HOLDINGS BHD []'s associate WSP Holdings Ltd has received a takeover offer from HDS Investments LLC for 60 US cents per American Depositary share in cash.

UMW said on Thursday that WSP, a 22.3% associate which manufactures seamless pipes for oil and gas exploration, had set up a special committee of independent directors to consider strategic alternatives which would enhance shareholder value.

The China-based WSP, had in the letter to the US Securities and Exchange Commission, said HDS has had preliminary and informal talks with Expert Master Holdings and some significant shareholders of the company.

Expert Master Holdings is wholly owned by Longhua Piao, the company's chairman and chief executive officer. He is the major shareholder of WSO with 50.9% of the paid-up.

HDS could be funding the takeover through its own capital, according to WSP's letter to the US Securities and Exchange Commission.

WSP'' is a leading manufacturer of oil country tubular goods (OCTG) in China. Its products consist of seamless casing, tubing and drill pipes which are ''used for oil and natural gas exploration, drilling and extraction, and other pipes and connectors.

UMW: No submission to buy Khazanah's 42.7% Proton stake

KUALA LUMPUR (Dec 15): UMW HOLDINGS BHD [] has confirmed that it had not submitted any bid to Khazanah Nasional Bhd to acquire its 42.7% stake in PROTON HOLDINGS BHD [].

'UMW also confirms that it is not in any form of discussion with any parties in this regard,' it said.

It said in a statement to BURSA MALAYSIA BHD [] that it had no knowledge of a news report on Thursday about it making a presentation to Khazanah about the Proton stake.

The news report stated that UMW, which is majority-controlled by the government's Permodalan Nasional Bhd and the Employees Provident Fund, was also the single largest shareholder of Perusahaan Otomobil Kedua Sdn Bhd, the manufacturer of Malaysia's second national car.

Market speculation has picked up pace that Khazanah was keen to sell its stake and among the names were DRB-Hicom Holdings Bhd.

Earlier, Hwang DBS Vickers Research said Khazanah's sale looked increasingly more likely, in its view.

HDBSVR said assuming Khazanah sold its 42.7% stake and not a partial interest, there might be a general offer on the cards unless exemption was given.

'We think DRB-Hicom has the financial strength as well as track record in the automotive industry to take up the exercise if a GO happens,' said the research house.

VEGOILS-Palm hits 6-wk low on euro zone debt woes

KUALA LUMPUR/JAKARTA (Dec 15): Malaysian crude palm oil futures tumbled to a six-week low on Thursday, with a global commodities sell-off stretching from the previous day over concerns the European debt crisis was spiralling out of control.

The global economic outlook has darkened after Italy was forced to pay a record borrowing cost on five-year bonds, reinforcing the view that the European summit last week failed to provide solutions to the two-year debt crisis.

Adding to the gloom was the shrinking in China's factory output again in December, strengthening expectations that waning global demand and tight credit conditions were starting to bite.

The debt crisis and signs of ample edible oil supply will help drive palm oil to its first yearly decline since the 2008 financial crisis. It has lost 20 percent so far this year.

The decline in palm oil markets was more pronounced, thanks to a fall in Malaysian exports in the first half of December and a speculative mini-rally the day before, driven by concerns of monsoon rains disrupting harvests.

"There was no reason for the market to go up yesterday, so it is giving back what shouldn't happened in the first place," said a trader with a commodities firm in Malaysia. "The external scenario has always been bad. So any sudden upward swing (in palm oil) will be an opportunity to sell."

At the close, benchmark February palm oil futures on the Bursa Malaysia Derivatives Exchange dropped 2.7% to RM2,972 ($930) after going as low as RM2,971.

Traded volumes for the February palm contract were at a three-week high at 16,017 lots of 25 tonnes each, compared with 13,556 lots on Wednesday.

"It is all worry," said a Jakarta-based trader on the euro zone debt problems. "It should be priced in by now, but funds think a different way. Crude oil down also contributes."

Cargo surveyor Intertek Testing Services reported a drop of 16.6 percent to 668,385 tonnes in Dec. 1-15 Malaysian palm oil exports from the same period a month ago as top buyer India slowed purchases.

Rival cargo surveyor Societe Generale de Surveillance said exports of Malaysian palm oil products for Dec 1-15 fell 19.2 percent. But strong demand from China and Europe, as seen in ITS export data, suggests orders have not quite slowed and the trend is normalising from more than a two-year high of 1.68 million tonnes notched in October.

The slowdown in exports may limit the declines in December end-stocks in Malaysia, the No.2 producer, where traders and planters expect heavy rains to limit harvesting and cut production 15 percent.

Malaysia's weather office put out a heavy rain advisory for the key oil palm growing states of Pahang and Johor, warning that heavy rains over the coming weekend could cause floods in low-lying areas. Both states account for 25 percent of national output.

U.S. soyoil for Jan 2012 delivery rose 0.4 percent in Asian trade with support coming from forecasts of dry weather from South America that dominates the soy markets next year. China's most active Sept 2012 soybean oil contract <0#DBY:> dropped to a two-week low. - Reuters