#Stocks to watch:* Public Bank, Maybank, Key West, Ken

KUALA LUMPUR: Stocks could see cautious trading on Tuesday, April 19 following the weaker close on Wall Street on Monday.

Wall Street's key indices fell more than 1% as sovereign debt fears on both sides of the Atlantic and China's monetary tightening hurt the outlook for global economic growth.

The Dow Jones industrial average slid 140.24 points, or 1.14%, to 12,201.59. The Standard & Poor's 500 Index declined 14.54 points, or 1.10%, to 1,305.14. The Nasdaq Composite Index dropped 29.27 points, or 1.06%, to 2,735.38.

Stocks to watch on Bursa Malaysia include PUBLIC BANK BHD [], MALAYAN BANKING BHD [], KEY WEST GLOBAL TELECOMM []unications Bhd and KEN HOLDINGS BHD [].

Public Bank Bhd's net profit rose 21% to RM828 million in the first quarter ended March 31, 2011 from RM685 million a year ago, underpinned by strong growth in net interest and finance income.

Maybank has received the Securities Commission's approval to undertake a multi-currency medium term notes (MTN) programme totaling US$2 billion.

The MTN programme would enable it to issue senior and/or subordinated notes in currencies other than in ringgit at any time, provided the aggregate amount of outstanding notes does not exceed US$2 billion in nominal value.

ACE Market-listed Key West, which has seen a change in shareholding, has taken the plunge into the extraction of crude oil from marginal oilfields in Indonesia.

Ken Holdings' earnings surged to RM5.07 million in the first quarter ended March 31, 2011 from RM1 million a year ago. However, details on the on-year earnings were not provided.

Revenue jumped 500% to RM19.55 million from RM3.26 million. Earnings per share were 5.55 sen compared with 1.07 sen. It had cash of RM41.64 million as at March 31, 2011.

In a separate statement, Ken Holdings said it was teaming up with Universiti Tunku Abdul Rahman (UTAR) to work together to develop green TECHNOLOGY [].

Ken Holdings had signed an MoU with UTAR to undertake joint collaborative research, share expertise and joint development on green technology.

Costume jewellery and consumer products manufacturer Zhulian Corp Bhd's earnings fell 14.2% to RM21.30 million in the first quarter ended Nov 30, 2010 from RM24.84 million a year ago. Revenue was flat at RM86.22 million compared with RM86.33 million a year ago. Earnings per share were 4.78 sen compared with 5.42 sen.

The company reported cash and cash equivalents of RM133.14 million as at Nov 30, 2010.

UNITED MALAYAN LAND BHD []'s unit Seri Alam PROPERTIES [] Sdn Bhd is teaming up with Singapore's Raffles Campus Pte Ltd to undertake a RM35 million campus in Iskandar Malaysia.

The MoU is to form a joint venture company to build the Raffles International School in Bandar Seri Alam. It will be managed and operated by Raffles as its first campus in Malaysia.

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Nikkei falls after US credit outlook cut

TOKYO: Japan's Nikkei fell on Tuesday after U.S. Stocks dropped as rating agency Standard & Poor's downgraded the country's credit outlook to negative.

The benchmark Nikkei average was down 1.2 percent, or 113.89 points at 9,442.76, while the broader Topix shed 1.0 percent to 827.88.

Analysts said that the Nikkei is expected to trade between 9,400-9,600 on Tuesday. ' Reuters

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Citi profit sags as revenue shrinks, expenses grow

NEW YORK: Citigroup Inc's first-quarter profit fell 32 percent as shrinking loans and poor trading results pressured revenue while expenses surged, according to a Reuters report on Monday, April 18.

The results highlighted how the third-largest U.S. bank, which teetered on the brink of collapse in the financial crisis, has stabilized but is still struggling to generate real growth.

The results were better than expected, which supported Citigroup's stock on a day when the U.S. equity market was falling. But like other big banks, the company's profit came mainly from dipping into money previously set aside to cover bad loans.

"We're not seeing a lot of revenues being thrown off by main businesses ... They haven't been able to turn recovery into growth," said Len Blum, a managing partner of investment firm Westwood Capital, who personally owns bank stocks.

All three of the biggest U.S. banks -- Bank of America, JPMorgan Chase and Citigroup -- have posted shrinking loan books for the first quarter, raising questions about the strength of U.S. economic growth.

The biggest boon for banks right now is that credit losses are dropping. Citigroup's credit losses fell 25 percent in the quarter and steadily declined all last year.

Citigroup is among the most international of the major U.S. banks, and that helped some businesses in its Citicorp unit, where the bank houses the operations it plans to continue operating over the long term.

That unit's Latin American consumer banking, investment banking and transaction-processing services all posted higher income from continuing operations, for example, even as North American investment banking and transaction-processing operations posted profit declines.

BEATING ESTIMATES

Overall, Citigroup earned $3.0 billion, or 10 cents per share, in the first quarter, beating analysts' average forecast of 9 cents a share, according to Thomson Reuters I/B/E/S. A year earlier it earned $4.4 billion, or 15 cents per share. - Reuters

Revenue dropped 22 percent, including a 29 percent drop in its fixed income trading revenue. [ID:nN18189626]

The slump in trading revenue reflected a volatile quarter in the markets, driven by Middle Eastern political upheaval and a Japanese earthquake and tsunami. That market environment is also expected to dampen profits at top U.S. investment banks Goldman Sachs Group Inc and Morgan Stanley, which report their quarterly results later this week.

On a conference call with investors, Chief Executive Vikram Pandit said the bank is building its investment banking franchise. Operating expenses rose 7 percent to $12.33 billion.

It is a reversal for Pandit, who spent his first few years at the helm slashing costs in an effort to right the foundering bank.

Under prior executive Charles "Chuck" Prince, investors and analysts criticized the bank for having bloated expense levels even when revenue was rising.

Singapore Exchange posts lowest profit in 2 yrs, ASX bid costs hit

SINGAPORE: Singapore Exchange Ltd , Asia's second-largest listed bourse by market value, posted its lowest quarterly profit in two years, hurt by costs related to its failed bid for Australian bourse ASX and higher TECHNOLOGY [] spending.

SGX said that it will continue to build its existing business and pursue strategic growth opportunities, repeating comments made after Australia earlier this month rejected SGX's planned US$8 billion bid for ASX, putting SGX CEO Magnus Bocker's growth strategy into question.

Bocker has said in the past he will not aggressively pursue merger partners and some analysts say the bourse could itself become a takeover target for global exchanges trying to capture Asia's growth.

"We will continue to pursue organic as well as other strategic growth opportunities," Bocker said in a statement on Tuesday. "Market activities in this quarter have been affected by global events."

SGX posted a January-March net profit of S$67.02 million (US$53.7 million), compared with S$74.6 million a year ago.

This was below an average forecast of S$85 million by four analysts polled by Reuters and the lowest quarterly net profit since the January-March 2009 quarter, when SGX posted a net profit of $55.3 million.

SGX incurred a cost of S$12 million for ASX merger costs and operating expenses rose 18 percent from a year earlier, driven by a 40 percent jump in technology spending.

Derivatives volume saw a late surge in SGX's third quarter, driven by heightened volatility in Japanese and Indian stock market futures following the March 11 earthquake in Japan.

SGX's hefty valuation remains a big obstacle for a potential bid for the firm. It is trading at almost 29 percent 2011 earnings against 17 times for ASX. Hong Kong Exchanges and Clearing, which acts as a gateway to China, trades at around 39 percent times.

Exchanges around the world are chasing cross-border deals to build scale and cut costs as competition increases from alternative trading platforms such as dark pools.

Even before launching the bid for ASX late last year, Bocker tried to boost trading volumes by rolling out American Depository Receipts of top Chinese companies and commodities futures.

The listing of Hong Kong billionaire Li Ka-shing's US$5.5 billion Hutchison ports unit last month was a big coup for Singapore, which has struggled to compete against Hong Kong and its ability to lure multi-billion dollar IPOs such as that of commodities giant Glencore.

"SGX faces multiple challenges, among them disappointing growth in securities turnover, margin contraction and a rise in operating expenses," said Sachin Nikhare, an analyst at IIFL before the earnings.

SGX's securities market revenue was only slightly up from a year earlier to S$73.7 million.

Derivatives revenue climbed about 22 percent, helped by volumes from options and commodities.

SGX's shares briefly surged to its highest in more than two months after the bid for ASX was rejected earlier this month.

SGX shares closed on Monday down 0.8 percent at S$8.08.

The shares are about 4 percent lower so far this year, underperforming bigger rival Hong Kong Exchanges and Clearing Ltd whose shares are up around 3 percent. ASX shares are down about 12 percent. ' Reuters

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Stocks fall after S&P warning and bonds recover

NEW YORK: A threat by Standard & Poor's to cut its AAA rating of U.S. government debt and renewed worries about Europe's debt crisis spurred a sell-off in major world stock markets on Monday, April 18.

The weakness started in European markets on fears that Greece will have to restructure its debt possibly as early as the summer. That put the euro on track for its biggest one-day decline in five months against the U.S. dollar.

The sell-off picked up pace later when rating agency Standard & Poor's revised its outlook on the United States to negative from stable, citing the risk that policymakers would fail to agree on proposals to cut its large budget deficit over the next two years.

Longer-dated U.S. government bond prices initially fell but recovered in afternoon trade. While the U.S. debt outlook is certainly problematic, it is not as damaging, at least immediately, as the euro zone's sovereign woes have been, analysts said.

"This morning's S&P story added to the negative tone throughout global markets and that has exacerbated the move lower," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. "It does very much highlight the difficult situation in the U.S."

While the S&P maintained the country's top AAA credit rating, the move signals there's at least a one-in-three chance that it could cut the long-term rating within two years.

MSCI's all-country world stock index started what is in many places a holiday-shortened week by losing 1.5 percent.

Wall Street stocks fell more than 1 percent as the S&P's revision added to worries about the global economy after China moved to curb liquidity to counter rising inflation pressures.

Equities ended off their lows in a heavily traded session, though the decline still amounted to the largest in a month.

Some analysts said the sell-off in equities was overdone, citing the recovery in the U.S. bond market and fresh worries about the euro zone.

"The behavior of the bond market suggests that we could get a rebound in stocks, at least one related to the S&P news," said David Joy, chief market strategist at Columbia Management in Boston, which oversees $347 billion.

The Dow Jones industrial average .DJI dropped 140.24 points, or 1.14 percent, to end at 12,201.59. The Standard & Poor's 500 Index .SPX fell 14.54 points, or 1.10 percent, to finish at 1,305.14. The Nasdaq Composite Index .IXIC slid 29.27 points, or 1.06 percent, to close at 2,735.38.

European shares sunk to a three-week closing low, with the FTSEurofirst 300 .FTEU3 off 1.7 percent.

The euro hit a two-week low against the dollar of $1.4155. It recovered some of the losses to be quoted late afternoon at $1.4232, still down 1.4 percent and on track for its biggest one-day drop since late November. The euro also lost 1.9 percent to 117.68 yen.

The euro's decline came after German government sources said they did not believe Greece, which sealed a 110 billion euro ($157.7 billion) bailout from the EU and IMF last year, would make it through the summer without restructuring. The Greek government has denied repeatedly that it plans to restructure. - Reuters

Oil falls on S&P U.S. outlook revision, demand worry

NEW YORK: Oil fell sharply on Monday,April 18 after ratings agency S&P revised lower its U.S. credit outlook to negative and OPEC ministers said high crude prices could place a major strain on consumer countries' economies.

Although it affirmed the United States' "AAA" credit rating, Standard & Poor's said there was a risk policymakers may not reach agreement on how to address the country's long-term fiscal pressures.

"The U.S. debt situation got a reality check this morning from the move by S&P," said John Kilduff, partner at Again Capital in New York. "Only precious metals will be seen as attractive in the aftermath of the outlook downgrade."

OPEC ministers voiced their concerns at a meeting in Kuwait, where Nobuo Tanaka, executive director of the International Energy Agency, said the IEA already was, "seeing some indication of the slowdown in demand, and it's alarming."

Saudi Oil Minister Ali al-Naimi said a global economic recovery remained "patchy", while his Kuwaiti counterpart added that high oil prices threaten to become an economic burden for many big consuming countries.

Oil earlier felt pressure after Saudi Arabia on Sunday confirmed it had cut output by more than 800,000 barrels per day in March because of weak demand for its crude.

Brent crude for June fell $1.84 to settle at $121.61 a barrel, having slipped to a session low of $121.

U.S. crude for May fell $2.54 to settle at $107.12, after slipping as low as $106.54. The U.S. May crude contract expires on Tuesday.

U.S. equities fell more than 1 percent on sovereign debt fears on both sides of the Atlantic. .N

Equities and oil also felt pressure from another Chinese bank reserve hike over the weekend, the latest move to control inflation that could curb demand growth.

Most commodities fell, hit by S&P move and concerns over Chinese demand. One exception was gold -- seen as a store of value -- which shot to a record near $1,500 an ounce.

S&P said there is a 1-in-3 chance it could cut its long-term credit rating on the United States within two years.

"This new warning, this time from S&P, highlights the need for the U.S. to take better control of its fiscal destiny if it is to avoid higher borrowing costs and maintain its central role at the core of the global economy," Mohamed El-Erian, chief executive at Pimco, which oversees $1.2 trillion in assets, told Reuters.

WIDENING DEMAND CONCERNS

China's hike to banks' required reserves, the fourth this year, added to investor caution about economic growth.

Crude fell early last week after Goldman Sachs (GS.N) and other key forecasters warned high oil prices were eroding demand. It rebounded late in the week on encouraging U.S. economic data and a steep fall in U.S. gasoline inventories.

The euro posted its biggest one-day decline since November against the dollar as concerns increased that Greece will be forced to restructure its debt and as sentiment against aid grows in Europe. The dollar index .DXY, measuring the greenback against a basket of currencies, strengthened.

A stronger dollar can pressure oil prices by making dollar-denominated crude more expensive for consumers using other currencies and by drawing investment to foreign exchange markets for better returns.

AFRICA/MIDDLE EAST SUPPLY THREATS

Lingering threats to Africa and Middle East oil supplies that helped spark prices to recent, 32-month peaks, remained.

Forces loyal to Muammar Gaddafi bombarded Misrata, Libya's third-largest city, Clashes broke out in Yemen and thousands demanded the overthrow of Syrian President Bashar al-Assad in escalating unrest.

Oil investors also eyed Nigeria, where rioting took place in northern cities after a contentious election, according to the Nigerian Red Cross. - Reuters

Wall Street falls on sovereign fears

NEW YORK: Wall Street fell more than 1 percent on Monday, April 18 as sovereign debt fears on both sides of the Atlantic and China's monetary tightening hurt the outlook for global economic growth.

However, equities ended off their lows as some analysts said the sell-off was overdone, though the decline was still the largest in a month.

Standard & Poor's revised its outlook on the United States credit rating downward to "negative" on a poor U.S. budget outlook, while China took additional measures to curb liquidity.

Meanwhile, financial markets are increasingly convinced that Greece will have to renegotiate the terms of its public debt, though Greek officials denied that some form of rescheduling was imminent.

Four stocks fell for every one that rose on both the New York Stock Exchange and the Nasdaq. In comparison, the reactions of the U.S. Treasury bond and dollar markets were more subdued.

"The behavior of the bond market suggests that we could get a rebound in stocks, at least one related to the S&P news," said David Joy, chief market strategist at Columbia Management in Boston, which oversees $347 billion.

The CBOE Volatility Index .VIX rose 10.7 percent after earlier climbing as much as 24.5 percent, its largest daily percentage jump since February 22.

"We're a little surprised that the VIX is as low as it is, since market risks have risen and there's been some complacency," Joy said, adding that Columbia Management had taken some short-term exposure off the table.

The Dow Jones industrial average .DJI slid 140.24 points, or 1.14 percent, to 12,201.59. The Standard & Poor's 500 Index .SPX declined 14.54 points, or 1.10 percent, to 1,305.14. The Nasdaq Composite Index .IXIC dropped 29.27 points, or 1.06 percent, to 2,735.38.

The S&P 500 index fell below 1,300 for the first time since March 24, though it later rebounded above that level. Short-term support is seen near the 1,285 area.

Volume was low, with about 7.83 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 8.47 billion.

As investors move to companies expected to outperform in uncertain economic times, the defensive S&P 500 sectors like utilities .GSPU and consumer staples .GSPS posted among the smallest losses in Monday's slide.

Citigroup Inc (C.N) was unchanged, closing at $4.42, after it reported a first-quarter profit that was slightly higher than expected, while Eli Lilly & Co (LLY.N) fell 1.1 percent to $35.62 on concerns about looming generic drugs competition.

Mitch Rubin, chief investment officer of RiverPark Advisors in New York, said the day's earnings suggested volatility in the near term.

"Market movement will be driven by earnings, and we've seen a lot of mixed results," Rubin said. "There's been disappointment about bank results."

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AMMB launches Asia Water Fund

KUALA LUMPUR: AMMB HOLDINGS BHD []'s wholly-owned private equity management arm has in conjunction with the International Finance Corporation (IFC) and the Asian Development Bank (ADB) launched an offshore private equity fund, named as Asia Water Fund LP, which invests in the water sector across Asia, primarily in China.

It said on Monday, April 18 that the fund was organized as an exempted limited partnership domiciled in the Cayman Islands.

'At its first closing, the fund had secured commitments from investors, including IFC, ADB, Kumpulan Wang Persaraan (Diperbadankan) and AmInvestment Group Bhd (AIGB), totalling US$69 million,' it said.

AMMB said AIGB's wholly-owned unit, Malaysian Ventures Management Incorporated Sdn Bhd, had acquired a 100% shareholding in AmAsia Water Management (GP) Limited (AmAsia Cayman), a company incorporated in the Cayman Islands.

It said AmAsia Cayman was the general partner of the fund and was empowered to manage, by itself or through duly appointed agents, the activities and operations of the fund.

AMMB said the the Asia Water Fund would invest 70% of its portfolio in China, and 30% in South East Asia.

The portfolio would be diversified into municipal water supply and wastewater treatment, industrial water supply and waste disposal, desalination, river and lake rehabilitation, rural water and waste treatment and other green water ventures, it said.

Besides capitalising on the investment potential of such projects, most of the projects in the fund will have demonstration effects on how the confluence of TECHNOLOGY [], deal structuring and financial engineering can potentially resolve the problem of lack of financing for good projects in the Asian countries, it said.

AMMB said the Asia Water Fund would continue fund raising until the end of 2011, and will also be inviting Japanese institutional investors to invest in the fund.

'We are targeting to increase the final fund size to up to US$200 million,' it said.

It said that AmWater, the fund manager, had its headquarters in Singapore, and would establish a subsidiary in Shanghai in the next few months.

'The company is also pleased to announce that it is reviewing various water projects in China and South East Asia at the moment, and is working towards completing its first investment in the next six months,' it said.

Zhulian 1Q net profit slips 14.2% to RM21.3m

KUALA LUMPUR: Costume jewellery and consumer products manufacturer Zhulian Corp Bhd's earnings fell 14.2% to RM21.30 million in the first quarter ended Nov 30, 2010 from RM24.84 million a year ago.

It said on Monday, April 18 that revenue was flat at RM86.22 million compared with RM86.33 million a year ago. Earnings per share were 4.78 sen compared with 5.42 sen.

The company reported cash and cash equivalent of RM133.14 million as at Nov 30, 2010.

'The revenue for the current quarter under review of RM86.223 million was higher than the immediate preceding quarter's revenue of RM84.896 million, mainly due to the increase in market demands for both local and overseas markets, offset by the increase in foreign currency loss.

'The current quarter's profit before tax of RM27.476 million has dropped as compared to the immediate preceding quarter's profit before tax of RM29.822 million, mainly due to the drop in gross profit margin as a result of strengthening of ringgit Malaysia against the US dollar,' it said.

Ken Holdings 1Q net profit surges to RM5m

KUALA LUMPUR: KEN HOLDINGS BHD []'s earnings surged to RM5.07 million in the first quarter ended March 31, 2011 from RM1 million a year ago.

It reported on Monday, April 18 revenue jumped 500% to RM19.55 million from RM3.26 million. Earnings per share were 5.55 sen compared with 1.07 sen.

It had cash of RM41.64 million as at March 31, 2011.

'The revenue for the current quarter at RM19.6 million was higher compared to the preceding year corresponding quarter.'' The profit before tax for the current quarter at RM6.8 million was higher than the preceding year corresponding period of RM1.4 million due mainly to higher revenue recorded for the current quarter,' it said.

Ken said the Group's project in Shah Alam, Selangor, the mixed residential/commercial development consisting of Ken Rimba Legian's double storey link houses together with Ken Rimba Commercial Centre consisting of shop/office units are progressing on schedule.