Nikkei inches lower, energy stocks recoup losses

TOKYO: Japan's Nikkei stock average opened lower on Friday and is expected to round off a week of thin choppy trade inside the tight range that has confined it since the start of the month, with resource and energy shares bouncing back after oil prices gained the day before.

Resource-related companies such as Inpex Corp, Japan's largest oil and gas developer, rose in line with gains in commodity and oil prices as a weaker dollar offset worries that surging prices would erode demand.

Japan's benchmark Nikkei average opened down 0.1 percent at 9,646.22 on Friday, while the broader Topix shed 0.1 percent to 845.52. ' Reuters

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US STOCKS-Dow, S&P inch up as growth questioned, Google off late

NEW YORK: Stocks that outperform in a weak economy helped the Dow and S&P 500 eke out gains on Thursday, April 14'' as concerns about faltering growth and inflation prompted investors to seek out less volatile names.

The Dow industrials' top percentage gainers were Coca-Cola Co, up 1.5 percent, Kraft Foods Inc, up 1.7 percent and Merck & Co, up 1.2 percent.

Energy shares also rallied as U.S. crude oil futures gained more than 1 percent to trade above $108 a barrel.

The S&P 500 fell almost 1 percent early but found support near 1,300, a level that attracted buying interest in early March. Failing to hold that level could trigger a test of the benchmark's 2011 low near 1,257.

Stocks have sagged lately as economists have lowered forecasts for U.S. growth. A Reuters poll of economists showed 2011 gross domestic product forecasts fell to 2.9 percent from 3.1 percent.

"GDP forecasts are continuing to fall, so (bets on defensives) are a safety trade," said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

Adding to the bearish sentiment, Google Inc shares fell 5 percent to below $550 in extended trading after the company's first-quarter profit fell short of Wall Street's target as operating expenses surged.

The Dow Jones industrial average rose 14.16 points, or 0.12 percent, to end at 12,285.15. The Standard & Poor's 500 gained 0.11 of a point, or 0.01 percent, to 1,314.52. The Nasdaq Composite dropped 1.30 points, or 0.05 percent, to 2,760.22.

GOLDMAN FALLS, EL PASO GAINS

A Senate investigation of Goldman Sachs hurt the Wall Street giant and some of its peers, while an unexpected rise in jobless claims added to bearish sentiment that kept gains in check.

Goldman shares fell 2.7 percent to $155.79 and were a drag on the S&P financial sector index, which was down 0.9 percent.

Further weighing on financials, major housing lenders agreed late on Wednesday to costly fixes of their foreclosure practices as part of a settlement with U.S. bank regulators that jumped ahead of a states' probe.

The KBW Banks Index dropped 1.1 percent.

Adding to the boost from the energy sector as oil prices rose, natural gas producer and pipeline company El Paso Corp said it will develop a shale oil field without a partner. El Paso shares jumped 5.5 percent to $18.26 to lead gains in the S&P energy sector index, which rose 0.6 percent.

"Oil closed above $108 so all the energy stocks rallied this afternoon," Boockvar said.

Weighing on the tech sector, Fairchild Semiconductor International Inc shares dropped 4.5 percent to $18.31 as it disappointed investors after it said last month's earthquake that threw Japan's electronics supply chain into disarray has yet to generate new business for the company.

Supervalu Inc forecast fiscal-year earnings above Wall Street's expectations after its quarterly profit fell less than feared. The supermarket operator's shares shot up 16.9 percent to $10.61.

TWO STRONG DEBUTS

Although the overall stock market's activity was tepid in Thursday's regular session, the U.S. market for initial public offerings showed signs of strength.

Shares of Arcos Dorados Holdings Inc, a large South American franchisee of fast-food chain McDonald's Corp, jumped 24.7 percent to $21.20 in their stock market debut as investors clamored for exposure to the famous brand in a region with booming consumer spending.

McDonald's, a Dow component, rose 0.2 percent to $77.07.

The stock of Zipcar Inc soared 55.6 percent to $28 on Nasdaq in its first day of trading as investors bought into the leader of the small, but growing, U.S. car-sharing industry.

Ford Motor Co fell 1.1 percent to $14.81 after the company agreed to expand a recall of the best-selling F-150 pickup trucks. U.S. safety regulators said the recall was due to a possible short circuit that could cause airbags to deploy unexpectedly.

On the economic front, a government report showed a surprising jump in U.S. jobless claims, raising some questions among investors about the health of the labor market recovery. Economists said the number could be a one-time occurrence.

The core U.S. Producer Price Index rose faster than expected in March as fuel prices rose strongly, adding to concerns about inflation.

About 6.91 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below last year's estimated daily average of 8.47 billion.

Advancing stocks outnumbered declining ones on the NYSE by 1,600 to 1,358, while on the Nasdaq, 1,455 stocks rose and 1,121 fell.- Reuters

Cost surge under new Google CEO unnerves Street

SAN FRANCISCO : Google Inc's stunning 54 percent spending surge spooked investors on Thursday, April 14, who were already worried its new CEO may take his eye off the bottom line to chase revenue growth, driving its shares more than 5 percent lower.

Investors zeroed in on the stunning surge in expenses to $2.84 billion, which dwarfed a 29 percent jump in net revenue and reflected a record hiring spree, company-wide salary raises, and splurging on everything from marketing to TECHNOLOGY [].

Analysts now expect co-founder and new Chief Executive Larry Page to keep spending on new products to spearhead an aggressive push into areas such as social networking and mobile businesses. Google executives said on Thursday the dramatically stepped-up spending was needed to galvanize growth.

Page, 38, a media-averse technology wiz who took over as CEO this month from decade-long veteran Eric Schmidt, came on a conference call with analysts for just a few minutes, disappointing some eager to hear his plans to jump-start growth and innovation.

Page expressed his optimism in his company's future, then departed, leaving a trail of questions in his wake that analysts directed at the other executives.

"You got expenses growing faster than revenue and some people were caught by surprise by the willingness of the company to spend," said BGC Partners analyst Colin Gillis.

"But Larry Page has signaled pretty clearly that he is going to be driving up expenses. If the expenses are targeted and result in future revenue streams, then good for Larry. If not, that results in an undisciplined spending approach."

Page is expected to bolster innovation and cut bureaucracy as Google battles social networking leader Facebook and Apple Inc.

Google plans to hire more than 6,000 people this year, after taking a record 2,000 on board in the quarter and raising salaries by about 10 percent across the board on Jan. 1.

"The discipline of the company has not changed; we're just really bullish on our prospects," CFO Patrick Pichette told analysts. "I can tell you every element of the company (expenses from real estate to food) is scrubbed and scrutinized."

WHAT'RE YOUR INTENTIONS?

The company posted net income of $2.3 billion in the first quarter, or $7.04 a share, up from $1.96 billion, or $6.06 a share, in the year-ago period.

Excluding certain items, Google said it earned $8.08 a share, below the average analyst expectation of $8.10 a share.

Google's net revenue rose to $6.54 billion in the first quarter, above the $6.32 billion expected by analysts.

The average cost-per-click to advertisers for its search ads in the first quarter grew about 8 percent year-over-year and decreased 1 percent from the fourth quarter.

Shares of Google, which underperformed the market in 2010, are down roughly 9 percent since the company announced in January that Page would replace Schmidt. This week, Page moved swiftly to streamline decision-making at Google's upper ranks by reshuffling reporting lines, but investors are anxious about how the management change could affect the company.

Page, with his succinct speech on Thursday, remains very much uppermost on investors' minds. Google's stock fell 5.3 percent to $547.87 in after-hours trade.

Google is ramping up efforts to supplement its core search advertising business with revenue from display and mobile ads. And the company is increasingly focused on social networking and the local ad market, where rivals Facebook and online coupon service Groupon rule the roost.

Page's attitude toward spending on such strategic areas, as well as on less crucial initiatives such as self-driving cars, and the potential impact on Google's profit margins are high on investors' list of concerns.

"I don't think his focus is going to be on managing to margins. I think his focus is going to be on managing to topline growth and new business areas," said Oppenheimer & Co analyst Jason Helfstein.

"The key here is margins are weaker and as a result there's still a question about the company's long-term spending intentions." - Reuters

#Stocks to watch:* SP Setia, YTL Corp, Proton, SEGi

KUALA LUMPUR: Stocks on Bursa Malaysia may consolidate on Friday, April 15 following the mixed overnight performance on Wall Street while on the local front, the pullback on Thursday and political concerns over Sunday's polls in Sarawak could see investors staying on the sidelines.

On Wall Street, stocks that outperform in a weak economy helped the Dow and S&P 500 eke out gains on Thursday as concerns about faltering growth and inflation prompted investors to seek out less volatile names.

The Dow industrials' top percentage gainers were Coca-Cola Co, up 1.5 percent, Kraft Foods Inc, up 1.7 percent and Merck & Co, up 1.2 percent. Energy shares also rallied as U.S. crude oil futures gained more than 1 percent to trade above $108 a barrel.

The Dow Jones industrial average rose 14.16 points, or 0.12 percent, to end at 12,285.15. The Standard & Poor's 500 gained 0.11 of a point, or 0.01 percent, to 1,314.52. The Nasdaq Composite dropped 1.30 points, or 0.05 percent, to 2,760.22.

At Bursa, stocks to watch out for are SP SETIA BHD [], YTL Corp, PROTON HOLDINGS BHD [] and SEG INTERNATIONAL BHD [].

The Edge FinancialDaily reports that SP Setia Bhd is making its maiden venture into Singapore. The developer has proposed the purchase of 27 strata units in Leong Bee Court for S$65 million (RM159 million) with the plan to redevelop the property, currently comprising flats, into residential apartments.

Having missed the opportunity to pick up assets at basement prices during the global financial crisis, YTL Corp Bhd's Tan Sri Francis Yeoh Sock Ping believes a second chance at a shopping spree could be knocking on YTL's door.

Proton Holdings Bhd's unit Lotus Cars Ltd will sign an agreement on syndicated financing with CIMB Bank, Maybank, OCBC, EON Bank, Exim Bank and Affin on Friday.

SEG International Bhd is teaming up with Chung Cheong University in South Korea to train and place nurses and allied health professionals in the US, Canada and Europe.

SEGi said the academic collaboration was expected to contribute an increase in earnings of approximately 4% to the group for FY ending Dec 31, 2011.

IJM Land Bhd's additional 229.88 million new shares will be granted listing and quotation with effect from 9am on Monday, April 18. The new shares arose from the conversion of RM400 million nominal value of 10 year 3% coupon redeemable convertible unsecured loan stocks (RCULS)by IJM Corp Bhd.

NAIM HOLDINGS BHD [] disposed of two million shares in DAYANG ENTERPRISE HOLDINGS BHD [] on April 13, reducing its stake to 34.17% or 187.94 million shares.

MARC lowers Dawama's RM140m debt notes, sees risk of default

KUALA LUMPUR: Malaysian Rating Corp Bhd (MARC) has lowered both Dawama Sdn Bhd's (Dawama) two tranches of debt notes, totaling RM140 million, while the ratings have been removed.

MARC said on Thursday, April 14 it had lowered the RM120.0 million senior and RM20.0 million junior sukuk musyarakah medium term notes (MTN) programme to C IS from B IS. The ratings were removed from MARCWatch Negative where they had been placed on Feb 18, 2011.

'The lowered rating reflects the high likelihood of payment default on April 27, 2011 given the absence of positive developments pertaining to its liquidity position and negotiations with sukukholders since MARC's last rating action on Feb 18, 2011,' it said.

The rating agency had earlier cautioned about Dawama's increased vulnerability to non-payment in light of its inability to meet scheduled sinking fund payments for its forthcoming RM20.0 million Senior Sukuk redemption due on April 27, 2011.

Dawama's outstanding obligations under the rated programme are limited to RM100.0 million of Senior notes and RM5.0 million of Junior notes.

The 'C' ratings will be lowered to 'D' or default on redemption date if Dawama fails to make its principle repayment on the Senior Sukuk.

SEGi sees 4% increase in earnings in JV with Korean university

KUALA LUMPUR: SEG INTERNATIONAL BHD [] is teaming up with with Chung Cheong University in South Korea to train and place nurses and allied health professionals in the US, Canada and Europe.

SEGi said on Thursday, April 14 the academic collaboration was expected to contribute an increase in earnings of approximately''4% to the group for FY ending Dec 31, 2011.

It said the collaboration was also expected to contribute positively to the earnings and net assets of the group for the future years.

FBM KLCI erases gains from Wednesday

KUALA LUMPUR: The FBM KLCI fell on Thursday, April 14, just after a day it had rebounded following losing nearly 36 points over three trading days as local funds cleared their positions after the strong recovery on Wednesday.

The FBM KLCI fell 9.79 points to 1,525.80 at the close, in effect wiping out its entire gains from a day earlier.

Losers thumped gainers by 651 to 174, while 251 counters traded unchanged. Volume was 965.84 million shares valued at RM1.53 billion.

MIDF Research head Zulkifli Hamzah said foreign investors were net buyers today, the first time this week.

'Therefore the decline in the market was attributable to an 'overselling' by local funds, which are quick to clear the position after the strong rebound yesterday.

'The trading pattern in the market shows that local investors are averse to having an unduly large exposure ahead of the Sarawak election,' he said.

Zulkifli said as at the close today, the KLCI was down 1.3% for the month, but that the index had closed in the positive gain territory in April in the last 6 consecutive years.

'On that score, there is a good probability that the market may rebound in the second half of the month because fundamentally, nothing has changed in recent weeks,' he said.

At the regional markets, Japan's Nikkei 225 rose 0.13% to 9,653.92, Taiwan's Taiex edged up 0.26% to 8,802.73, South Korea's Kospi gained 0.90% to 2,141.06 while Hong Kong's Hang Seng Index fell 0.50% to 24,014.00, Singapore's Straits Times Index lost 0.41% to 3,158.92 and the Shanghai Composite Index shed 0.25% to 3,042.64.

Among the major losers on Bursa Malaysia, Hong Leong Bank fell 18 sen to RM10.40, CIMB down eight sen to RM8.20, DiGi lost 16 sen to RM29.50, MISC 15 sen to RM7.61, Gamuda 13 sen to RM3.73, while Litrak, Petronas Chemicals, Tenaga and Proton fell 11 sen each to RM3.65, RM7.25, RM6.06 and RM3.25 respectively.

MAA was the most actively traded counter with 19 million shares done. The stock fell seven sen to RM1.37.

Other actives included Axiata, Lion Corp, E&O, AirAsia, Melewar, CIMB and HWGB.

Allianz rose 21 sen to RM5.20 following an upbeat report by CIMB Equities Research that said the company offers the only exposure to a well-managed Malaysian composite insurer that is controlled by an established international insurance group.

KPJ closed four sen higher at RM4.15 after MIDF Research upgraded the stock to a Trading Buy with a higher target price of RM4.60 from RM3.51 previously based on EPS12.

Continuous expansion locally with one or two new hospitals''each year as well as potential venture into countries such as Vietnam, Cambodia and Myanmar will support KPJ's future growth and enhance its brand name regionally, MIDF Research said.

Other gainers included Aeon, United PLANTATION []s, Ibraco, UMS and APM Automotive.

SP Setia plans residential apartments in Singapore, GDV S$130m

KUALA LUMPUR: SP SETIA BHD [] plans to undertake a multi-storey residential apartment building at Woodsville Close in Singapore with an estimated gross development value of S$130 million.

The company said on Thursday, April 14 its subsidiary SP Setia International (S) Pte Ltd had signed a sale and purchase agreement with 27 strata units' subsidiary proprietors at Leong Bee Court.

The acquisition would include the strata units and common property on a 0.68 acre site for S$65 million or RM159 million.

'The land is square shaped with a flat terrain which makes re-development potential very attractive. The purchaser proposes to undertake a re-development of the said land into a multi-storey residential apartment building.

'Based on the preliminary feasibility study and subject to the approvals of the relevant authorities, the proposed project is expected to have an estimated GDV of approximately S$130 million or approximately RM318 million,' it said.

Maxis the first service provider to surpass 5k 3G sites nationwide

KUALA LUMPUR: Maxis Bhd has become the first service provider in the country to surpass 5,000 sites across both West and East Malaysia, delivering high speed wireless broadband and mobile data capabilities to 21 million Malaysians covering over 80% of the Malaysian population.

In a statement Thursday, April 14, Maxis said this was made possible through the expansion plan that it embarked last year, with a capital expenditure of over RM1.4 billion.

Maxis chief executive Sandip Das said that over the last two years the company had worked hard at revamping its system, modernising its network, creating new transmission and building its IP networks to prepare ourselves for the surge in demand for data and broadband.

'This ticks another leadership box for Maxis. The strength and quality of our coverage will help bring to life the rich content, applications, downloads and relevant services that Maxis can offer, across a wider footprint than any other service provider in Malaysia.

'This leadership position in wireless broadband complements Maxis' leadership in fibre footprint and strategically positions us as an integrated player,' he said.

Sandip said it provided Maxis with the capability to offer seamless''experience regardless of the delivery''and access network to customers.

Maxis recently launched its Maxis Home Services on 31 March 2011, the first multiple-play service in the country.

For customers residing in a fibre-connected area, as Maxis customers, they will be able to benefit from Maxis Home Services which offer High Speed Internet packages that bundle a number of existing services, said Sandip.

Additionally, customers will also have the opportunity to experience a range of enriched categories of content, including interactive applications that can be enjoyed on their laptops, tablets and smartphones, he said.

He said Maxis would offer the full suite of the services by the third quarter of 2011.

Meanwhile, Maxis executive vice president for network and TECHNOLOGY [] Mark Dioguardi said that by providing the widest and fastest broadband network coverage in the country, our customers can take the Internet with them essentially wherever they go.

With its enhanced broadband footprint, Maxis was enabling them to enjoy wider coverage as the company covered more tertiary and secondary towns, he said.

'With this new accomplishment, Maxis is 'blanketing' Malaysia with increasingly seamless Wireless Broadband coverage.

'Customers connecting to the Internet on Maxis' Wireless Broadband network can now experience a sense of security - trusting that reliable connectivity and wide coverage will be available to them as they move around Malaysia,' he said.

In addition to all major urban cites, the recent expansion has occurred in towns such as Batu Pahat, Labis, Bahau, Gemencheh, Kuala Pilah, Palong, Sik, Hutan Melintang, Padang Besar, Labuan, Beaufort, Kuala Penyu, Keningau, Tambunan, Kota Marudu, Ptas, Kudat, Lahad Datu, Papar, Sandakan, Bera, Semantan, Jengai, Semporna, Sipitang, Tawau, Tuaran, Bau- Lundu, Betong, Kanowit-Julau, Limbang-Lawas, Marudi, Meradong-Dalat, Mukah, Niah, Padawan, Saratok, Sarikei, Serian, Sri Aman, Tatau, Asajaya-Simunjan.

Dioguardi said Maxis had also recently completed trials of Next Generation LTE technology which promises quadruple data speed and network capacity.

'The Maxis High Speed IP network is in place to now support even more advanced services and we expect to be able to deploy the LTE networks within the next few months.'

'Maxis was the first to get off the blocks to trial LTE successfully. The lab testing commenced in June 2010 and Maxis has since started the live field testing at four sites in the Klang Valley, namely at Bandar Utama, Taman Tun Dr Ismail, Damansara Utama and Damansara Jaya,' he said.

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Respite for Transmile as creditors agree to debt revamp schemes

KUALA LUMPUR: TRANSMILE GROUP BHD [] received a respite on Thursday, April 14 after the scheme creditors agreed to its debt-restructuring schemes.

The beleaguered air cargo company said the scheme creditors had agreed to the proposed restructuring of the debts and a plan to seek new investors to pump in fresh funds to settle the long overdue repayments.

Transmile said the proposed Transmile Group and Transmile Air Services Sdn Bhd (TAS) scheme were approved by 'more than 50% in number of the respective scheme creditors representing more than 75% in value of the respective scheme creditors present and voting in person or by proxy at the respective meeting'.

In March, Transmile said while the proposed restructuring exercise was to address its debt obligations, it was not 'a proposed regularisation plan to regularise the group's financial condition for Transmile's continued listing on the Main Market of Bursa'.

To recap, Transmile's shares have been suspended from trading since last Thursday as it failed to submit a regularisation plan to the stock exchange.

The company said it had appealed to Bursa against the exchange's decision to delist its shares and it was seeking more time to work out a regularisation plan.

Under the latest proposed debt restructuring scheme, all the debts in its core unit TAS are to be transferred to a special purpose vehicle (SPV), which would be wholly owned by Transmile.

In addition, the proceeds of RM210.4 million from the disposal of MD-11F aircraft in January would also be injected into the SPV.

The divestment consideration would be retained in the SPV until the final outcome of a legal case concerning the medium-term notes (MTN) holders have the priority in repayment against the other financial lenders.

Transmile said upon completion of the debt restructuring, it would invite 'new potential investors to be identified'. The proceeds from new investors would be ultimately applied towards the settlements of the debts, it added.

The primary objective of the proposed restructuring scheme is to "ring-fence" the debts of TAS and to preserve the value of TAS as a going concern moving forward for the purpose of inviting new potential investor(s) seeing that TAS is the main operating subsidiary of Transmile.

Transmile's board had then said it was 'highly unlikely' that Transmile and TAS will be able to obtain any further extension of the restraining order when it expires on April 19 after the several extensions already granted by the High Court.