Banks, blue chips drag FBM KLCI lower

KUALA LUMPUR: ''The FBM KLCI fell on Monday, July 11 as Asian markets mostly closed lower, while European markets were mired in the red in early trade on worries that that Italy could be the next to fall victim to the euro zone debt crisis.

Italian government bonds tumbled and the yield premium investors demand to hold Italian debt over German bunds widened to a fresh euro-era high as focus shifted to a country which has the euro zone's highest sovereign debt ratio relative to its economy after Greece, according to Reuters.

A weaker-than-expected US jobs report on Friday and data showing China's import growth fell to its slowest pace in 20 months also encouraged investors to sell their risky assets, it said.

At the local market, even news of a RM11.85 billion deal involving the merging of KENCANA PETROLEUM BHD [] and SAPURACREST PETROLEUM BHD [] did little to lift investor sentiment.

The FBM KLCI slipped 0.39% or 6.16 points to 1,588.58, weighed by losses at banks and select blue chip stocks.

Losers beat gainers by 460 to 237, while 304 counters traded unchanged. Volume was 712.48 million shares valued at RM1.29 billion.

At the regional markets, Hong Kong's Hang Seng Index fell 1.67% to 22, 347. 23, Japan's Nikkei 225 lost 0.67% to 10,069.53, Singapore's Straits Times Index down 1.08% to 3,117.37, South Korea's Kospi fell 1.06% to 2,157.16, Taiwan's Taiex down 0.96% to 8,665.85 while the Shanghai Composite Index edged up 0.18% to 2,802.69.

On Bursa Malaysia, Nestle fell 40 sen to RM46.90, Dutch Lady 28 sen to RM19.08, Metrod 21 sen to RM3.60, Petronas Gas and BAT 20 sen each to RM13.60 and RM46.50, Genting and DiGi 12 sen each to RM11.10 and RM29.88, Gamuda 11 sen to RM3.71 and Genting Malaysia eight sen to RM3.78.

Among the banks, CIMB fell 10 sen to RM8.82, AMMB seven sen to RM6.64, Hong Leong Bank four sen to RM13.70, Public Bank two sen to RM13.34 while Maybank and RHB Capital one sen each to RM8.98 and RM9.04.

Among the gainers, Petronas Dagangan added 32 sen to RM17.42, Pulai Springs 30 sen to 80 sen, Panasonic 20 sen to RM24.32, Muda 18.5 sen to RM1.09, RCI and KLK 14 sen to RM1.88 and RM22.80, while CI Holdings, BIMB and AFG added 11 sen each to RM3.51, RM2.41 and RM3.57 respectively.

The actively traded counters included XDL, Key West, Petronas Chemicals, DVM, CIMB, Axiata, Genting Malaysia and Gamuda.

Bumi Armada institutional price fixed at RM3.03

KUALA LUMPUR: Bumi Armada Bhd's institutional price has been fixed at RM3.03 per share after it had completed the bookbuilding process.

It said on Monday, July 11 the final retail price was fixed at RM3.03 per share, which was 12 sen below the retail offering of RM3.15. The retail offering closed on July 7. The difference of 12 sen would be refunded by the company within 10 market days.

The listing exercise involved an offer for sale of up to 234.277 million shares to Bumiputera investors approved by the Ministry of International Trade and Industry at the institutional price.

There was also a public issue of up to 644.26 million new shares comprising of 563.40 million shares to Malaysian and foreign institutions and approved Bumiputera investors.

The remaining 79.86 million shares were offered to the public, directors and eligible employees.

Based on the 644.26 million new shares at RM3.03 each, this would see RM1.95 billion raised from the listing exercise for the company.

SILK gets contracts worth RM39.75m from Petronas Carigali

KUALA LUMPUR: SILK Holdings Bhd has secured four long term contracts worth a total of RM39.75 million from Petronas Carigali Sdn Bhd for the provision four units of anchor handling tug supply vessel (AHTSV).

In a filing Monday, July 11, SILK said its subsidiary Jasa Merin (Malaysia) Sdn Bhd had been the awarded the four contracts.

It said the long term contracts for the four units of AHTSV were for the primary period of one year, with various effective commencement dates in July 2011 respectively, with options to extend for a further period of one year each.

It said the contracts were expected to contribute positively to its earnings for the financial year ending July 31, 2012.

UK asks for fresh regulatory advice on Sky deal

LONDON: Britain asked on Monday, July 11 for fresh regulatory advice over the bid by Rupert Murdoch's News Corp to buy BSkyB , signalling it could be looking for a way out of approving the deal while a phone hacking scandal rages.

Shares in the British satellite firm slumped over 7 percent on Monday, after a similar fall on Friday, as politicians added to the pressure by demanding the government delay the bid and send it for a longer investigation at the Competition Commission.

"We believe the deal is all but dead," Panmure Gordon analyst Alex DeGroote said.

"On Friday we cut our probability of the deal going ahead to 50:50 ('evens') from 90:10 in favour. This seems very optimistic now. Our new assessment is 10:90 in favour."

News Corp had secured initial government backing for the bid by promising to spin off BSkyB's influential Sky News channel in response to claims the deal would give Rupert Murdoch too much influence over public opinion.

News Corp would however have retained a 39 percent holding in the new company and provided much of its revenue through a deal to carry the channel on the BSkyB platform, prompting critics to question how much editorial independence the channel would really have.

The request for further information from regulators means the government may now have room to refer the deal to the Competition Commission for a full investigation which could last up to a year, taking pressure off Prime Minister David Cameron who is himself under fire for his close ties to Murdoch.

"We think there is a very strong chance the News Corp bid for BSkyB gets completely scrapped," Liberum analyst Ian Whittaker said in a note.

"While the government has emphasised that the due regulatory process has to be followed and there has been commentary News Corp would head to the courts if its bid was blocked, this has now become a completely politically-driven issue.

"It will be hard for the government to approve the bid, either now or at some point in the future."

The Department of Culture, Media and Sport is to write to Ofcom and the Office of Fair Trading on Monday to ask whether the original submissions around the deal should change following the phone hacking scandal that has damaged the reputation of the media conglomerate.

The letter is expected to ask if the undertakings given by News Corp over Sky News are still acceptable in light of the hacking scandal, which resulted in Murdoch closing the tabloid at the centre of the problem.

It will also ask if that closure affects media plurality, or the number of media voices, in Britain, and to inform the government of any opinion it takes on whether News Corp is a 'fit and proper' holder of a broadcast licence.

Several analysts said they still expected a deal to go through eventually, while others said it was now too hard to call as the deal is overtaken by political events.

Citi analyst Thomas Singlehurst said a potential BSkyB/News Corp merger no longer looked as certain as thought a week ago.

"At the same time, the actions taken to date by News Corp suggest that its ambition to own 100 percent of BSkyB is undimmed," he said. "Barring the most dramatic of outcomes from the criminal investigations, we still see it as a matter of 'when' not 'if'."

Analyst Claudio Aspesi at Bernstein said the chance of the deal going through was now less than 50 percent, although he said a deal could be resumed at a later date if they could prove the problem was confined to the newspaper arm of the company.

"What I worry about is that questions will now shift to "What did James (Murdoch) and Rupert know, and when did they know it?"," he told Reuters.

"Unless this is cleared very soon, the deal will fall through, because the government will be under pressure to distance itself from the Murdoch family."

BSkyB shares were trading between 550 and 600 pence before News Corp made its initial approach in June last year. They then spiked over 700 pence as the two sides revealed that News Corp had offered 700 pence and BSkyB independent directors were insisting on an offer of over 800 pence.

On Monday they were trading down 7.3 percent to 695 pence.

Chief Secretary to the Treasury Danny Alexander said the Department of Culture, Media and Sport was writing to the regulators because it needed the most up to date information as it made its final decision on the deal.

"It is right in the light of ... all the developing issues (that) Ofcom have the opportunity to come forward with fresh advice," he told Sky News. - Reuters

Integral Key to merge SapuraCrest, Kencana in RM11.85b deal

KUALA LUMPUR: Integral Key Sdn Bhd (IKSB), a special purpose vehicle, has made a RM11.85-billion offer to acquire SAPURACREST PETROLEUM BHD [] and KENCANA PETROLEUM BHD [].

The companies said on Monday, July 11 that they had received the offer letters from IKSB to acquire all their assets and liabilities in a share swap.

'The offer is to propose and facilitate a merger of the businesses within the Kencana Petroleum group of companies and the SapuraCrest group of companies,' according to the statement issued by the companies via their merchant banks.

The offer shall remain open for acceptance until 5pm on Aug 15.

IKSB offered to acquire SapuraCrest for RM5.87 billion equivalent to RM4.60 per share of 20 sen each multiplied by 1.276 billion SapuraCrest shares.

'The merger consideration shall be satisfied by the issuance of 2.498 billion new ordinary shares of RM1 each in IKSB at an issue price of RM2 per new IKSB share and a cash payment of RM875.06 million. This translates into cash payment of approximately 68.5 sen and RM3.915 of IKSB shares per SapuraCrest share,' it said.

As for Kencana, IKSB was offering RM5.98 billion or RM3 per'' share of 10 sen each in Kencana multiplied by the enlarged paid-up of Kencana's'' 1.99 billion shares.

The merger consideration shall be satisfied by 2.505 billion new shares of RM1 each in IKSB at an issue price of RM2 per new IKSB share and a cash payment of RM968.689 million. This translated into cash payment of 48.6 sen and RM2.514 of IKSB shares per Kencana share.

May manufacturing sales up 8% on-yr to RM47.8b

KUALA LUMPUR: Malaysia's May manufacturing sales value rose 8% or RM3.5 billion to RM47.8 billion from RM44.3 billion a year ago, underpinned by growth in the sales value of industries especially petroleum products and semiconductor related items.

The Statistics Department said on Monday, July 11 the sales value however slipped 3.7% or RM1.8 billion from April. The sales value in April 2011 was a revised positive 15.2% on-year to record RM49.6 billion.

It said out of the 116 industries surveyed, 88 industries of 72.4% recorded an increase in sales value.

The five major industries whose sales value increased significantly were manufacture of refined petroleum products (17.9%), manufacture of electronic valves and tubes and printed circuit board (20.7%).

They also included the manufacture of other basic industrial chemicals except fertilisers and nitrogen compounds (12.0%), manufacture of other basic precious and non-ferrous metals (48.9%), and rubber remilling and latex processing (25.2%).

However, when compared with April, there was a decline in sales value in May due to drop in 50 industries (43.1%) out of 116 industries covered in the survey. Among the five major industries whose sales value fell included manufacture of refined petroleum products (15.2%) and'' manufacture of computer and computer peripherals (15.3%).

In January-May 2011, the manufacturing sector's sales value posted a double digit growth of 11.1% or RM24.0 billion to register RM241.3 billion.

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KPJ inks JV to set up specialist hospital in Perlis

KUALA LUMPUR: KPJ HEALTHCARE BHD [] has inked a joint venture agreement with Yayasan Islam Perlis (YIP) to set up and operate a new hospital to be known as KPJ Perlis Specialist Hospital.

In a filing Monday, July 11, KPJ said its wholly owned subsidiary Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB) had signed the agreement with YIP on July 11.

It said the JV would operate under the name Perlis Specialist Hospital Sdn Bhd, of which KPJSB would hold 60% equity interest while YIP would hold the remaining 40%.

KPJ said the JV company will have an initial authorised share capital of 25 million shares of RM1 each, o which YIP would subscribe 6.5 million shares payable in consideration for transfer of land to the company, while KPJSB would subscribe 9.75 million shares payable in cash.

KPJ said the proposed joint venture was in line with its objective to increase its network of hospitals to locations where private healthcare was in demand, and enlarge its customer base as well as other areas of healthcare services.

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May IPI down 5.1% on-yr, fell 1.3% on-month

KUALA LUMPUR: Malaysia's industrial production index (IPI) in May decelerated sharply, down 5.1% on-year, weighed down by the sharp decline in the mining sector despite a marginal increase in the manufacturing sector.

The Statistics Department said on Monday, July 11 the April IPI was revised to a negative 1.7% on-year.

'The decline in May 2011 was due to the decreases in the MINING INDEX [] (20.1%) and electricity index (1.6%). The manufacturing index posted an increase of 0.6%.

'Month-on-month, the IPI decreased 1.3%. The IPI for the period of January-May 2011 recorded a positive growth of 0.2% as compared with the same period of 2010,' it said.

It said the data showed May manufacturing output inched up 0.6% on-year. Output for April 2011 rose 0.3% (revised) on-year.

As compared with April, output for May 2011 increased 2.4%. The growth for the first five months of 2011 increased 3.7% from the previous corresponding period.

The increase in the manufacturing output in May 2011 was due to the positive growth in non-metallic mineral products, basic metal and fabricated metal products (21.2%); food, beverages and tobacco (10.3%); and wood products, furniture, paper products and printing (7.0%).

The department said the mining sector's output decreased 20.1% in May from a year ago as the crude oil index fell 24.2% and natural gas index (10.7%).

When compared with April, the mining output fell 12.2%. For January to May, the mining sector declined 7.8% on-year.

Inari IPO oversubscribed 10.42 times

KUALA LUMPUR: Inari Bhd's initial public offering has been oversubscribed by 10.42 times after the company received 6.308 applications for 114.2 million shares with a total value of RM43.4 million for its public tranche of 10 million shares.

Inari, which is an electronic manufacturing services (EMS) provider, is scheduled to list on the ACE Market of Bursa Malaysia on July 19.

In a statement Monday, July 11, its managing director Dr Tan Seng Chuan said the oversubscription indicated investors' confidence in its track record in the global EMS industry, as well as the potential growth prospects in the smart mobile device industry.

'Inari stands in good position to ride the global wave for smart mobile devices.

'Our upcoming listing on the ACE Market of Bursa Malaysia is crucial for our expansion in production capacity to fulfil customers' demand in the future,' said Dr Tan.

Inari is issuing 83 million new ordinary shares, of which 10 million are available to the Malaysian public via balloting, 10.4 million shares for eligible directors, employees and business associates of the group and its subsidiaries, 26.1 million shares for private placement to selected investors, and 36.5 million shares for approved Bumiputera.

At an issue price of 38 sen per share, Inari plans to raise RM31.54 million in proceeds from the IPO.

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KLCI extends losses at mid-day

KUALA LUMPUR: The FBM KLCI extended its losses at the mid-day break on Monday, July 11 in line with the tepid sentiment at key regional markets.

Asian stocks dropped on Monday as a spate of weak economic data from China and the U.S. renewed concerns about the health of the global economy although sharp declines look unlikely before an emergency meeting to stem the spreading debt crisis, according to Reuters.

The FBM KLCI fell 0.58% or 9.24 points to 1,585.50, weighed by losses at blue chips, including BAT, Hong Leong Bank, DiGi and HLFG.

Losers beat gainers by 373 to 183, while 278 counters traded unchanged. Volume was 347.85 million shares valued at RM502.69 million.

The ringgit weakened 0.44% to 3.0055 versus the US dollar; crude palm oil futures for the third month delivery gained RM8 per tonne to RM3,086, crude oil shed 49 cents per barrel to US%95.71 while gold fell 15 cents an ounce to US%1,544.

At the regional markets, Japan's Nikkei 225 was down 0.76% to 10,061.09, Hong Kong's Hang Seng Index lost 0.88% to 22,525.47, Taiwan's Taiex fell 1.11% to 8,652.08, South Korea's Kospi down 0.95% to 2,159.67 and Singapore's Straits Times Index shed 0.72% to 3,128.68.

Meanwhile, the Shanghai Composite Index edged up 0.09% to 2,800.18.

On Bursa Malaysia, BAT was the top loser this morning and fell 52 sen to RM46.18; Dutch Ladu lost 26 sen to RM19.10, Hong Leong Bank and Petronas Gas down 18 sen each to RM13.56 and RM13.82, DiGi 16 sen to RM29.84, Tasek, Kotra, HLFG and Glenealy down 10 sen each to RM7.85, 48 sen, RM13.40 and RM5.75 respectively, Genting Malaysia nine sen to RM3.77 and Petronas Chemicals down four sen to RM7.07.

XDL was the most actively traded counter with 29/7 million shares done. The stock fell one sen to 39.5 sen.

Other actives included Key West, DVM, Petronas Chemicals and Genting Malaysia.

Among the gainers, Nestle rose 40 sen to RM47.70, Petronas Dagangan 25 sen to RM17.36, Asia File 22 sen to RM4.20, Muda 14.5 sen to RM1.05, BIMB 14 sen to RM2.44, KLK 12 sen to RM22.78, AFG 11 sen to RM3.57 and CI Holdings 10 sen to RM3.50.

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