US MARKET & NEWS 30.7.2009

Stocks trimmed losses by the close Wednesday, but remained in the red after a weak durable goods orders report added to worries about the economy and investors soured on Yahoo's partnership with Microsoft. In addition to the day's news, Wall Street was also vulnerable to a pullback in the wake of a big two-week rally that lifted the Dow and S&P 500 by more than 11%
and the Nasdaq by 12%. The Dow Jones industrial average lost 0.3% (-26.0 pts, close9,070.7).The Nasdaq lost 0.4 (-7.7 pts,close 1,967.8) and the S&P 500 index lost 0.5% (-4.5 pts, close 975.2). In currency trading, the dollar gained against the euro and the Japanese yen. U.S. light crude oil for September delivery fell US$3.88 to settle at US$63.35 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
Orders for U.S. durable goods, excluding automobiles and aircraft, unexpectedly rose in June, signalling manufacturing may expand in 2H09. Excluding transportation equipment, demand for goods meant to last several years climbed 1.1%, the most in four months, the Commerce Department said yesterday in Washington. Total orders fell 2.5%, the first decrease in three months. The durable-goods figures used to calculate economic growth indicate companies plan to boost investment in coming months, adding to evidence the worst recession in five decades is starting to ease. Economists expected a 0.6% drop in orders, according to the median of 73 forecasts in a Bloomberg News survey, after a previously reported 1.8% gain in May. Estimates ranged from a decline of 2% to a gain of 2%. (Bloomberg)
* * * * *
The Federal Reserve said most of its 12 regional banks detected a slower pace of economic decline in June and July, further signs the worst U.S. downturn in at least five decades is closer to an end. “Economic activity continued to be weak” in June and July, the Fed said yesterday in its Beige Book business survey, published two weeks before officials meet to set monetary policy. San Francisco, the district with the biggest economy, and three others “pointed to signs of stabilization,” while Chicago and St. Louis showed a “moderating” pace of decline. The Beige Book provided few signs of outright growth. Retail demand was “sluggish” in most areas, with “mixed” auto sales. Non-financial services were “largely negative” with “a few bright spots,” and manufacturing was “subdued” yet “slightly more positive” than in the previous report, the Fed said. Lending in most regions “was stable or weakened further” in most loan categories, and banks tightened credit standards in seven districts, the report said. (Bloomberg)
*

KLSE BUY & SELL AND NEWS 30.7.2009

Boustead Holdings Bhd (BOUS MK, Hold, TP: RM3.50) is looking to raise up to RM1.3bn through a rights issue anddivestment of its non-core assets. Boustead wants to use the proceeds to reduce its debt as well as for expansion purposes in key operations, namely shipyard, property and plantations. Shareholders have approved the two-for-five rights issue that could raise up to RM729.16m. Major shareholder, Lembaga Tabung Angkatan Tentera Malaysia with a 59.55% stake, has agreed to subscribe all of its portion of the rights shares. Boustead is looking to raise another RM500m to RM600m from the disposal of non core assets that include 17,000ha of plantation land in Indonesia and an 80% stake in BH Insurance (M) Bhd. (The Malaysian Reserve)

* * * * *
CIMB Thai bank, 94% owned by Bumiputra Commerce Holdings Bhd (BCHB MK, Hold, TP: RM8.80), hopes its recent restructuring and an expected recovery in Thailand’s economy will help it return to net profit next year, earlier than expected. “A return to net profit this year, that’s hard to predict,” president Subhak Siwaraksa said. “Even though we are
already showing operating profits, the key variable is provisioning charges, which depend on economic conditions.” CIMB Thai had no plans to expand through mergers or acquisitions, he added. (Financial Daily)

* * * * *
The possibility of a merger between AirAsia (AIRA MK, Buy, TP: RM1.90) and its sister company AirAsia X, if it were to materialise at all, is unlikely to happen anytime soon, Datuk Tony Fernandes and Azran Osman Rani were quoted saying despite the deal being favourable in their opinion. Besides, AirAsia would have to deal with strengthening its balance sheet first
before it could consider any merger exercise with AirAsia X, and it was in the midst of raising capital. (Financial Daily)

* * * * *
AirAsia X is proceeding with its expansion plans, including the launching of two new routes, to Chengdu, China and a city in the Middle East this year. The company plans to increase flight capacity this year to current routes by 50% to the Gol Coast in Australia, by 40% to Taipei, Taiwan and by 20% to Hangzhou, China. Also this year, either Melbourne or Perth
Australia may see a boost in capacity from one flight daily to having 2 flights on four days weekly. He said the new flight to the Middle East would start before Hari Raya Haji. (Financial Daily)

* * * * *
Alliance Financial Group Bhd (AFGB) is likely to pay lower dividend for the current financial year in anticipation of a weaker performance due to the challenging economic setting, said chairman Datuk Oh Chong Peng. He said that the group had passed on every sen that it received from Alliance Banking Group to shareholders and that it paid 6.5 sen per share last year, but expected it to be lower this year as profits are likely to be lower. AFGB is the parent company of Alliance Bank Malaysia Bhd as well as Alliance Investment Bank Bhd, Alliance Investment Management Bhd and Alliance Islamic Bank Bhd.
(StarBiz)

* * * * *

Alliance Financial Group Bhd’s banking arm, Alliance Bank Malaysia Bhd (ABMB) will be relooking at its product offerings and focusing on selling less risky products in view of the uncertain times. ABMB group CEO Datuk Bridget Lai said there was a need to focus on less risky products that gave the bank the revenues it was looking for in the financial year ending March 31, 2010. On the bank’s loans growth in FY10, Lai said that ABMB remained cautiously optimistic about its prospects and would continue to grow its loans portfolio at a slower rate, most likely in the lower teens, in terms of percentage growth. (Financial Daily)

* * * * *
Lion Diversified Holdings Bhd said its wholly-owned unit Well Morning Ltd has entered into a conditional sale and purchase agreement with Lion Asiapac Management consultancy (Shanghai) Co Ltd (LAPS). The agreement is for the disposal of the right to invest in the remaining 30% registered capital of Changshu Lion Enterprise Co Ltd to LAPS for a nominal cash consideration of 1 renmimbi (51 sen). LAPS is a subsidiary of Lion Asiapac Ltd (LAP) while Changshu Lion is a
property development company in Changshu city, Jiangsu Province in China. (StarBiz)

* * * * *

Carlsberg Brewery Malaysia Bhd (CBMB) expects Carlsberg Singapore Pte Ltd (CSPL) to contribute about 30% to its net profit in the financial year ending Dec 31, 2010 pursuant to its proposal to acquire the latter. CBMB also expects to resume its dividend payout at previous levels after surprising the market with its lower dividend early this year. CBMB managing director Soren Holm Jensen said preliminary estimates showed CBMB’s net profit for2010 to increase to RM113m from RM76m in 2008, on the assumption that the proposal to acquire CSPL was approved by minor shareholders. (Financial Daily)

* * * * *
KPJ healthcare Bhd’s unit Kumpulan Perubatan (Johor) Sdn Bhd (KPJSB) is buying the Bandar Baru Klang Medical Centre Building from Greenbelt View Sdn Bhd RM38m cash. KPJ said the proposed acquisition was in line with its objective to increase its network of hospitals to locations where private healthcare was in demand. The proposed acquisition, which was
expected to be completed by year-end would be financed via internally generated funds. (Financial Daily)
* * * * *

Mudajaya Corp Bhd has been awarded a RM75.38m contract to build a hospital in Pahang. The project was awarded by Takdzim PMG Sdn Bhd on July 27. The project is expected to be completed by Jan 31, 2012. (Financial Daily)

* * * * *
Bank Negara Malaysia kept the overnight policy rate unchanged at 2% at the Monetary Policy Committee meeting yesterday, saying there were signs the global and local economies were stabilising. “Conditions in the domestic economy have also showed signs of stabilising in the 2Q, with several indicators such as the industrial production index and retrenchment recording a slower pace of decline,” it said in a statement. (Financial Daily)

US& GLOBAL MARKET 29.7.2009

Stocks ended mixed Tuesday as investors weighed a weaker-than-expected consumer confidence report and a better-thanexpectedhousing report in the aftermath of a big rally. Stocks have gained for the last two weeks, as investors have breatheda sigh of relief that second-quarter results have been mostly better than expected. The Dow and S&P 500 have added around11.5% and the Nasdaq has gained 12%. But after such a big run in a short period of time, stocks have become vulnerable. TheDow Jones industrial average lost 0.1% (-11.8 pts, close 9,096.7). The Nasdaq gained 0.4% (+7.6 pts, close 1,975.5) and theS&P 500 index lost 0.3% (-2.6 pts, close 979.6). In currency trading, the dollar fell against the euro and fell against theJapanese yen. U.S. light crude oil for September delivery fell US$1.15 to settle at US$67.23 a barrel on the New YorkMercantile Exchange. (CNNmoney)

* * * * *

A gauge of U.S. house prices posted its first monthly gain in three years, but consumer confidence this month fellmore than forecast. The S&P/Case-Shiller home-price index rose 0.5% m-o-m in May, the first gain since July 2006 andbiggest since May of that year, the group said yesterday in New York. The S&P/Case-Shiller home-price index was down17.1% y-o-y, less than projected and the smallest y-o-y drop in nine months. Economists forecast the index would drop 17.9%y-o-y, according to the median of 32 projections in a Bloomberg News survey. The Conference Board’s confidence indexdropped to 46.6, a second consecutive decline, following a reading of 49.3 in June, the New York-based research group said.The figure reached a record low of 25.3 in February. (Bloomberg)

* * * * *

U.K. house prices rose for the first time in 17 months in June, led by gains in London, the Land Registry said yesterday.The average price of a home in England and Wales increased 0.1% m-o-m, the first gain since January 2008, to 153,046pounds (US$253,000), the government agency said in a report on its Web site. Values in the capital rose 2%. The report addsto evidence that the market for residential property is stabilizing while the economy is mired in the worst recession in ageneration. A survey published this week by London-based property researcher Hometrack Ltd. showed prices held their valuefor a third month in July. Half of the 10 regions tracked by the Land Registry showed an increase from the previous month.Yesterday’s national reading is down 14% y-o-y. (Bloomberg)

* * * * *

Japanese manufacturers probably increased production for a fourth month in June, capping the largest quarterly outputexpansion in more than 50 years. Production climbed 2.5% from May, according to the median forecast of economistssurveyed before a Trade Ministry report tomorrow. That would be an 8.3% quarterly gain, the biggest increase since the end ofthe Korean War in 1953. Leaner inventories and US$2.2trn in emergency spending by governments worldwide have stabilizedglobal demand, giving a lift to Japanese exports. Automakers including Mitsubishi Motors Corp., benefiting from subsidies onfuel-efficient cars, are raising production and reinstating overtime. Japan’s output will still be a quarter below last year’s,economists said. (Bloomberg)

* * * * *

China’s rate of inflation may rebound in 2H09, the People’s Bank of China said yesterday, adding that it plans to keeppolicies stable to ensure an economic recovery. China’s economy is at a “critical” stage, the central bank said in a report on itsWeb site. It said the acceleration in growth in 2Q09 from 1Q09 had exceeded expectations. Premier Wen Jiabao and the rulingCommunist Party’s Politburo last week pledged to maintain a “moderately loose” monetary policy, countering speculation thatrecord new loans and surging asset prices will trigger a tightening. Consumer prices fell 1.7% y-o-y in June, the fifth monthlydecline and the biggest drop since 1999. (Bloomberg)

* * * * *

India’s central bank may start reversing its interest-rate cuts in early 2010 as food and energy prices fan inflation, after itkept borrowing costs unchanged yesterday to bolster economic growth. “On the way forward, the Reserve Bank will have toreverse the expansionary measures to subdue inflationary pressures while preserving the growth momentum,” GovernorDuvvuri Subbarao said. Inflation may “creep up” to about 5% by March next year compared with an April estimate of 4%, hesaid. India is vulnerable to inflation as it relies on imported oil and demand for food from its 1.2bn people exceeds supply.Besides being buffeted by higher global commodity costs, inflation in India is also fuelled by congested roads and ports andpower shortages that add to the cost of doing business. (Bloomberg)

MAS, AIR ASIA, KNM

Malaysian Airline System Bhd (MAS) (MAS MK, Sell, TP: RM2.00) saw an improvement in the passenger load factor for
June and July this year after it adopted aggressive strategies to boost sales. Passenger load factor for June was up to
67%, while July’s figures were up to 76% y-o-y. In the quarter between January and March this year, MAS reported a 13.1%
drop in load factor compared with a year earlier. (Financial Daily)
* * * * *
AirAsia Bhd (AIRA MK, Buy, TP: RM1.90) has teamed up with telecommunications services provider Tune Talk Sdn Bhd
(TTSB) to generate extra revenue and boost AirAsia’s branding. Under the terms of their agreement, AirAsia would
become the launch partner of TTSB and purchase 200,000 units of TTSB SIM cards worth RM860,000 that will bear both
company’s branding. The purchase would be satisfied by 5,059 e-gift vouchers in RM200 denomination, less 15% discount. It
would also market TTSB’s top-up vouchers and earn a 5% commission on total top-up sales. In return, TTSB would offer
AirAsia free advertising in the value of the purchase price. (Financial Daily)
* * * * *
KNM Group Bhd (KNMG MK, Hold, TP: RM0.84), whose share price has rallied recently, saw substantial shareholder
SmallCap World Fund Inc disposing of 2.2m KNM shares on July 24. A filing with Bursa Malaysia yesterday showed the
shares were disposed of at 88 sen apiece. After the disposal of the shares, the US-based fund’s direct shareholding was
reduced to 5.84% or 228.95m shares. (Financial Daily)
* *

US MARKET 27.7.2009

The Nasdaq fell Friday, ending a 13-session winning streak after Microsoft reported a weaker-than-expected quarterly
profit. But the broader market mustered gains at the end of an up week on Wall Street. The Dow Jones industrial
average gained 0.26% (+23.95 pts, close 9,093.24)). The S&P 500 index gained 0.31% (+2.97 pts, close 979.26). The Nasdaq
Composite Index fell 0.39% (-7.64 pts, close 1,965.96). In currency trading, the dollar fell against the euro and the Japanese
yen. US light crude oil for September delivery rose 89 cents to settle at $68.05 a barrel on the New York Mercantile Exchange.
(CNNmoney)
* * * * *
The worst U.S. recession in five decades probably eased in 2Q09 as trade and government stimulus mitigated the damage
from declines in housing, inventories and consumer and business spending, economists said before a report this week. The
world’s largest economy shrank at a 1.5% pace following a 5.5% drop in 1Q09, according to the median forecast of 66
economists surveyed by Bloomberg News ahead of Commerce Department figures due July 31. Other reports may show
orders for long-lasting goods fell and sales of new houses rose. Leaner stockpiles set the stage for a return to growth this
quarter as manufacturing and homebuilding stabilize, while efforts to revive demand globally boost exports. Consumer
spending, which accounts for 70% of the economy, may be slower to recover as unemployment is projected to keep rising and
home values are likely to fall further. (Bloomberg)
* * * * *
Wagers against the Standard & Poor’s 500 Index declined for the first time since May as investors shorted fewer
shares of financial institutions, including a 92% reduction in bets on American International Group Inc. Short interest on the
S&P 500 fell to 9.98bn shares as of July 15, a decrease of 0.2% from two weeks earlier. Financial companies saw the only
decline among 10 industries, with short interest falling 7.1% to 3bn shares. (Bloomberg)

MAS, KIMLONG, TANJONG

Malaysia Airlines (MAS MK, Sell, TP: RM2.00) will increase flights from Kuala Lumpur to Tawau as well as Kuala Lumpur-Sandakan route to twice daily from Sept 16. Tawau and Sandakan are popular destinations for business and tourism, said MAS senior general manager for network and revenue management Dr Amin Khan. He said that demand for domestic travel has increased by 15% in the past few months due to the highly competitive fares offered by airlines. (TheStar)

* * * * *
Kim Loong Resources Bhd (KIML MK, Hold, TP: RM1.70) expects earnings to move upwards in the remaining six months of this year in tandem with crude palm oil (CPO) prices. Demand for the commodity is “optimistically” expected to pick up within the next six months due to the upcoming festive seasons and a low crop season, according to managing director Gooi Seong Heen. “However, the downside risk is that inventory has begun piling up in China and India, which may pull down the price.” (Financial Daily)

* * * * *
Tanjong Energy Holdings Sdn Bhd, the power generation arm of Tanjong Plc (TJN MK, Buy, TP: RM17.40), hopes to expand in the three regions of South-East Asia, the Middle East and North Africa and South Asia. Chief Executive officer Ong Peng Sung said the company was looking at investing in both greenfields and brownfields. (The Star)
* * * * *
Tanjong Plc (TJN MK, Buy, TP: RM17.40) is looking to improve on its property division and expects its leisure sector to see a continuing growth. Chairman Datuk Robert Chiem, said the total revenue for Tropical Islands had increased by 37% to RM141m. He said that they are definitely continuing within the business especially with the signed agreement with an
European group for them to build houses in that location adding that the first phase will be completed by January 2011. Tanjong’s ED, Ralph Marshall continued that after the properties were built they may have an opportunity to consolidate, or sell, or take the benefit of growth of Tropical Islands. (Malaysian Reserve)

US MARKET 24.7.2009

Stocks rallied Thursday, with the hitting its highest point since November, as investors welcomed better-than-expectedquarterly results and home sales. The Dow Jones industrial average gained 2.1% (+188.0 pts, close 9,069.3). The Nasdaqgained 2.5% (+47.2 pts, close 1,973.6) and the S&P 500 index gained 2.3% (+22.2 pts, close 976.3). In currency trading, thedollar gained against the euro and the Japanese yen. U.S. light crude oil for September delivery rose US$1.76 to settle atUS$67.16 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *

Sales of existing homes in the U.S. rose in June for a third consecutive month, signalling the four-year slump thatprecipitated the financial crisis is ending. Purchases climbed 3.6% to an annual rate of 4.89m, stronger than forecast and thehighest level since October, the National Association of Realtors said yesterday in Washington. Sales gains buttress FederalReserve Chairman Ben S. Bernanke’s remarks this week that the worst housing downturn in eight decades appears to bemoderating. Economists forecast existing-home sales would rise to a 4.84m rate from a previously reported 4.77m for May,according to the median of 68 projections in a Bloomberg News survey. Estimates ranged from 4.7m to 5m. (Bloomberg)

* * * * *

The number of Americans filing claims for unemployment benefits jumped last week from a six-month low asdistortions caused by shifts in the timing of auto-plant shutdowns subsided. Applications rose by 30,000 to 554,000 in the weekended July 18, in line with forecasts, figures from the Labour Department showed yesterday in Washington. Claims had fallenby 93,000 over the previous two weeks. The number of people collecting unemployment insurance decreased to the lowestlevel in three months, also reflecting seasonal issues surrounding closures at carmakers. (Bloomberg)

UMW, SUNWAY CITY, TENAGA,PUBLIC BANK,MAYBANK, TELEKOM

UMW Holdings Bhd (UMWH MK, Hold, TP: RM5.70), through its subsidiary UMW Sher (L) Ltd, is taking up a 65% stake in Arab Drilling Services LLC for US$2.97m (RM10.5m) as a springboard for further investments and inroads into the Middle East. UMW Sher will end up with the 65% stake via a subscription and acquisition of shares in Arab Drilling. (Financial Daily)

* * * * *
Sunway City Bhd’s (SCITY MK, Buy, TP: RM3.60) wholly owned subsidiary Sunway Platinum Success Sdn Bhd has secured a Musharakah Mutanaqisah Term Financing-I (MMTF-I) facility amounting to RM132m from Maybank Islamic Bhd. Suncity said it was to refinance the existing term loans granted by HSBC Bank Malaysia Bhd and OCBC Bank (Malaysia) Bhd that was obtained to part-finance the construction of Monash University Sunway Campus. (Financial Daily)

* * * * *
Tenaga Nasional Bhd (TNB MK, Buy, TP: RM9.90) has failed its High Court appeal bid to set aside an arbitration sum totalling RM113m plus interest awarded against it in favour of two other parties and has appealed to the Court of Appeal against the court order. Tenaga’s wholly owned subsidiary TNB Transmission Network Sdn Bhd (TNBT) had in 2005 filed an arbitration proceeding for a restitution of all rentals, warehouse management and other payments made to Irham Niaga Sdn Bhd (INSB) and Irham Niaga Logistics Sdn Bhd (INLSB) under five year tenancy agreements. Both parties had filed a counterclaim against TNBT. (Financial Daily)

* * * * *
Public Bank Bhd’s (PBK MK, Buy, TP: RM12.80) non-executive chairman and founder Tan Sri Teh Hong Piow isrecovering well following a minor operation. The banking group registered a 3% growth in net profit to RM610.74m growth for 2Q ended June 30, 2009, from RM539.54m a year earlier. The group managed to keep its net non-performing loans ratio below 1%, despite the tougher operating environment in light of the economic downturn. PBB closed 10 sen lower at RM10.20 yesterday. (Financial Daily)
* * * * *
Malayan Banking Bhd (Maybank) (MAY MK, Buy, TP: RM6.40) expected non performing loans (NPLs) to be on a downward trend. Maybank declined to give figures ahead of the full year June 30 results. However, head of consumer banking Lim Hong Tat said that in terms of receivables, the bank expected above industry average growth in credit card debt and auto loans. Credit card debt grew 16% y-o-y compared with 6% for the industry while auto loans registered 10% growth
compared with industry average of 4%-5%. (Financial Daily)

* * * * *
KUB Malaysia Bhd has been awarded a RM26.77m contract from Telekom Malaysia Bhd (T MK, Buy TP: RM4.90) for the supply of digital subscriber line access multiplexer (DSLAM) system and the provision of works. The tenure of the contract is 3 years for the supply of DSLAM and 5 years for the comprehensive maintenance. KUB said the contract should contribute positively to the group’s earnings and earnings per share for the financial year ending Dec 31, 2009.(Financial
Daily)
* * * * *

US & GLOBAL MARKET 23.7.2009

The Nasdaq gained for the 11th straight session Wednesday as investors welcomed Apple's profit results, but concerns about Boeing and Coca-Cola's profits dragged on the Dow. The Dow Jones industrial average lost 0.4% (-34.7 pts, close 8,881.3). The Nasdaq gained 0.5% (+10.2 pts, close 1,926.4) and the S&P 500 index lost 0.1% (-0.5 pts, close 954.1). In currency trading, the dollar gained against the euro and fell versus the Japanese yen. U.S. light crude oil for September
delivery fell 21 cents to settle at US$65.40 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
Federal Reserve Chairman Ben S. Bernanke said a potential wave of defaults in commercial real estate may present a “difficult” challenge for the economy, without committing to additional steps to aid the market. Bernanke, testifying before the Senate Banking Committee yesterday, urged lenders to modify “problem” mortgages to avert defaults. Christopher Dodd, the Connecticut Democrat who chairs the panel, told Bernanke that “some have suggested” the commercial market “may even dwarf the residential mortgage problems” in the U.S. The state of commercial real estate was one of the most-asked-about subjects in questioning by lawmakers so far in Bernanke’s two days of testimony on the economy. Bernanke said it’s too early
to tell how effective the Fed’s main initiative in the area will be. (Bloomberg)
* * * * *
U.S. home prices had the smallest annual drop in 10 months, signalling the free fall of property values is abating in the three-year housing slump at the centre of a global recession. Prices declined 5.6% y-o-y in May and rose 0.9% m-o-m, the Federal Housing Finance Agency in Washington said yesterday. Economists expected a 0.2% drop for the month, according to
the median of 16 estimates in a Bloomberg survey. Five U.S. regions showed price increases in May from April, the FHFA said. Job losses and record foreclosures have deterred buyers and slashed U.S. home prices 33% since the July 2006 peak, according to the S&P/Case-Shiller index. The highest unemployment since 1983 and the biggest foreclosure rate on record
thwarted government efforts to revive real estate demand. (Bloomberg)
* * * * *
European industrial orders declined more than economists expected in May as the worst recession in six decades curtailed demand for machines and equipment. Orders to industrial companies in the euro region fell 30.1% y-o-y, the European Union’s statistics office in Luxembourg said yesterday. That was the 10th straight drop and followed a record 35.3%
decline in April. Economists forecast a 27.9% fall in May, according to the median of 14 estimates in a Bloomberg survey.From the prior month, May orders fell 0.2%, also more than economists expected. (Bloomberg)

* * * * *
Bank of England policy makers voted unanimously to maintain their asset-purchase program in July, saying there was no clear evidence to support an increase as the risks to the economy had probably diminished. The nine-member Monetary Policy Committee, led by Governor Mervyn King, kept the benchmark interest rate at 0.5% and said they will review the size of
the money-printing plan in light of new economic forecasts in August, according to minutes of the July 9 decision released by the bank yesterday in London. Policy makers didn’t allude to investor expectations for an increase in the plan size, which led to a sell-off in government bonds after the July decision to keep it unchanged. While data suggest the housing market slump now
may have eased and the recession has shown signs of moderating, a recovery has yet to become entrenched in the British economy. (Bloomberg)

* * * * *
The U.K.’s house-price slump will persist until 2012 and hurt consumer spending, the National Institute of Economic and Social Research said. Home values will resume their decline because recent gains were driven by a lack of available homes and the number of mortgages remains 65% lower than before the financial crisis, the London-based institute said yesterday. It also predicts gross domestic product will keep falling until the final quarter of this year. (Bloomberg)

* * * * *
Japanese demand for banks loans fell over the past three months as companies turned to an improving credit market for funding and households cut spending amid the worst recession since World War II. An index of demand for loans by businesses declined to minus 14 in July from 13 in April, the Bank of Japan said in a quarterly survey of loan officers in Tokyo yesterday. Households’ desire to borrow dropped to minus 14, the lowest since the central bank began the report in April 2000. Some Japanese may remain reluctant to take on debt until there are more signs of a sustainable economic recovery. Japanese banks became more willing to lend to companies than they were three months ago, the survey showed. An index of willingness to lend money to large businesses rose to 5 this month from minus 1 in April. (Bloomberg)
* * * * *

TENAGA, LITRAK,AXIATA,SIME DARBY, AIR ASIA

The government has decided that the average electricity tariff will be retained at 31.31sen per kWh until the end of the year. The government had decided that the existing gas price of RM10.70/MMBtu be retained. In line with this decision, the average electricity rate will be retained at 31.31sen/kWh until the end of the year 2009. Tenaga Nasional Bhd (TNB MK, Buy,
TP: RM9.90) said they stood by the government’s decision to keep the tariff rates and gas price. (Financial Daily)
* * * * *
Litrak (LTK MK, Hold, TP: RM2.22) the concessionaire of the Damansara-Puchong Expressway (LDP) has assured roadusers that the highway’s Puchong Jaya Interchange is safe for the public to use. The statement was made as many roadusers were alarmed by cracks that have appeared at the base of the bridge. The group stated that the cracks were no threat to safety and that it had discovered the cracks during an annual inspection programme conducted last year. It also
stated that repair works had started in March. The group engineering department senior manager Francisco Anthony Dass stated that the cracks were most probably due to shrinkage and were only hairline cracks. (The Star)

* * * * *
Luxemborg-based Millicom International Cellular, which owns Cambodia’s number one mobile operator Mobitel, expects to complete the sale of its Asian mobile assets by the first quarter of 2010. Axiata Group Bhd (AXIATA MK, Buy, TP: RM3.12) is believed to be among parties that have submitted non-binding bids for Millicom’s assets. Milicom is looking to sell 58.4% of Cambodia’s Mobitel, 100% of Celtel Sri Lanka (Tigo) as well as 74.1% stake in Millicom Laos Co Ltd. (Financial Daily)

* * * * *
Hyundai-Sime Darby Motors Sdn Bhd (HSDM), a unit of Sime Darby Bhd (SIME MK, Buy, TP: RM7.70) targets to maintain car sales of 7,000 units this year despite sluggish economic condition via several promotional packages. These include an interest rate of 1.99%, compared with 3% previously, for a five year loan as well as the Hyundai Assurance programme that helps car buyers to cope with their liabilities in the event they lose their jobs within one year of buying a Hyundai car, HSDM head of marketing Kelvin Chuah said. (Financial Daily)

* * * * *
A merger between AirAsia X and AirAsia Bhd (AIRA MK, Buy, TP:RM1.90) makes business sense and the combined balance sheet would make sourcing for future funding much easier, said AirAsia X chief executive officer Azran Osman- Rani. AirAsia is said to need the growth from AirAsia X and the merger would allow it to tap growth opportunities in the longhaul
markets. Azran said that AirAsia X had a net profit of RM18m in 1Q09 with a positive net cashflow. He also said that a share swap was likely but AirAsia had an option to increase it stake from 16% to 30% and with that it could equity account its venture in AirAsia X. (StarBiz)
* * * * *

US MARKET & NEWS 22.7.2009

Stocks finished higher Tuesday with the Dow ending at a 6-month high after a volatile session in which investors weighed
better-than-expected corporate earnings with Federal Reserve Chairman Ben Bernanke's warning that the economic recovery
would be slow. The Dow Jones industrial average gained 0.8% (+67.8 pts, close 8,915.9). The Nasdaq gained 0.4% (+6.9 pts,
close 1,916.2) and the S&P 500 index gained 0.4% (+3.5 pts, close 954.6). In currency trading, the dollar gained against major
currencies, including the euro, British pound and Japanese yen. U.S. light crude oil for August delivery rose 72 cents to settle
at US$64.72 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
Federal Reserve Chairman Ben S. Bernanke said while the economy is showing “tentative signs of stabilization,” the
central bank intends to maintain a “highly accommodative” monetary policy for “an extended period.” “The pace of
decline appears to have slowed significantly,” Bernanke said yesterday in semi-annual testimony before the House Financial
Services Committee. At the same time, “in light of the substantial economic slack and limited inflation pressures, monetary
policy remains focused on fostering economic recovery,” he said. Fed officials said in a report submitted as part of Bernanke’s
testimony that policy will be “tightened” when the labour market improves, an economic recovery takes hold and pressures
holding down inflation “diminish.” The comments follow a rally in stocks and a rebound in corporate earnings that have stoked
speculation the worst recession in half a century is ending. (Bloomberg)
* * * * *
Regional Federal Reserve bank directors expressed concern that rising unemployment and loss of wealth from falling
incomes and house prices posed a risk to recovery from the worst recession in at least half a century. The boards of
directors of all 12 regional Fed banks voted to request leaving the so-called discount rate, or the rate on direct loans to
commercial banks, unchanged at 0.5% in meetings before the Fed’s Open Market Committee gathering in June, the central
bank said yesterday. “While pointing to signs of some stabilization in economic conditions, most notably the slowing pace of
decline in GDP, and to modest improvements in financial markets, they generally considered economic activity to be weak and
the financial system to remain somewhat fragile,” the Fed said in minutes of the Board of Governors’ discussions on the
discount rate. (Bloomberg)
* * * * *

SIME DARBY

Sime Darby Bhd (SIME MK, Buy, TP: RM7.70) says its current year's earnings will not match what it has achieved in the
previous period, given the lower crude palm oil (CPO) prices but will remain within expectations. Group president and
managing director Datuk Seri Ahmad Zubir Murshid said the lower performance is anticipated in all of its business divisions
due to the global economic slowdown, but it will not be as bad as expected. "It will be within our expectations. Although crude
palm oil prices have gone down, it would be offset by other divisions," Ahmad Zubir told reporters in Selangor yesterday. (BT)
* * * * *
Sime Darby Bhd (SIME MK, Buy, TP: RM7.70) is sending a team to China to conduct further studies on its proposed
participation in the 700-sq km economic development zone (EDZ) near Weifang city. “The initial size that we are looking
at is about 100-sq km but we don’t know the gross development value yet,” said its president and group chief executive Datuk
Seri Ahmad Zubir Murshid. (Financial Daily)

Astro studying revamp proposals

By B.K. SIDHU and LEONG HUNG YEE

The exercise may include separation of overseas operations

KUALA LUMPUR: Astro All Asia Networks plc is considering various proposals to restructure the company in efforts to put in place an efficient capital and corporate structure. The exercise may include a separation of its overseas operations, as well as a possible one-time special dividend payoff.

At a press conference after the company’s AGM yesterday, deputy chairman and group CEO Ralph Marshall said the board had not decided on any of the proposals that its bankers had put forth and that no timeframe had been set for any possible restructuring.

Over the weekend, several media reports speculated Astro was considering a plan to divest its unprofitable international operations in a deal valued at about RM9bil.

The reports said Astro’s two main shareholders, privately-held Usaha Tegas Sdn Bhd and Khazanah Nasional Bhd, would buy the company’s unprofitable international operations in a deal which might see Astro paying a one-off dividend of RM1 per share.

The reports also suggested Astro would sell its Indian operations.

Marshall dismissed the reports as “pure speculation,” saying “it may include the separation of the international operations from the Malaysian operations but we do not know yet as the advisers are evaluating all the proposals.’’

Astro is under-leveraged and this gives us a great opportunity to establish a very robust capital structure for the future,’’ he said.

Astro shares reacted to the reports with the price rising to a 14-month high of RM3.68 when the counter resumed trading after a short suspension yesterday morning. The shares then succumbed to selling pressure in late afternoon and closed 20 sen lower on a volume of 11.7 million shares, making it the third biggest loser for the day.

Astro had bought over 20% of India’s Sun Direct TV (which offers 170 channels nationwide) two years ago and also owns and operates 23 FM radio stations in India.

In China, Astro has a marketing service company and Hong Kong Celestial Pictures which owns the Shaw Brothers film library.

In Indonesia, Astro is pursing all legal means to resolve issues arising from its venture there.

“A separation seems plausible and makes business sense but there is no way the Indian operations will be sold out of Astro group as India offers huge growth potential,” a source said.

“If parked under Astro, the Indian operations may need to be financially supported in the next four to five years, so a separation lifts that burden,’’ the source added.

Astro TV chief executive officer Rohana Rozhan said: “The Malaysian operations are clearly the cash-cow of the Astro group. Separating all the other overseas operations allows Astro to focus on its resources to grow and enhance returns from the Malaysian operations.’’

Astro has been evaluating proposals for some time now and to create an efficient capital and corporate structure, it can de-list from Bursa Malaysia, stay the way it is and support its overseas expansion or separate the overseas operations in India, Hong Kong and China by hiving them off to another company.

The major shareholders of Astro will own a stake in the company that will house the overseas operations.

As a sweetener for any such deal to go through, the shareholders need to be rewarded and that is why a one-time special dividend may well be in the offing.

T. Ananda Krishnan, via Usaha Tegas, may be repeating what he did for Maxis Communications Bhd where he de-listed Maxis to allow it to take on more debts to grow its Indian operations.

For Astro, it may or may not be de-listed, but the entry of new partners for the separate unit is not to be discounted so that it can fund its future expansion.

MAYBAN, HONG LEONG BANK

Moody’s Investors Services has reaffirmed eight out of the nine Malaysian banks’ deposit and debt ratings after
determining that the systemic support input for their ratings should be at the A1 level, which is two notches above the
country’s local currency government debt rating of A3. Moody’s said the banking system’s significant size, its expectations
that levels of credit stress faced by banks in the economic downturn would be manageable, and evidence of the government
demonstrating strong support in times of need underpinned the confirmation of eight of the nine Malaysian banks’ deposit and
debt ratings. Moody’s lowered CIMB Investment Bank Bhd’s local currency long-term/short-term issuer ratings to Baa1/P-2
from A3/P-1, while the foreign currency long-term/short-term issuer ratings were revised to Baa1/P-2 from A3/P-1. All ratings
carry a stable outlook. Malayan Banking Bhd’s (MAY MK, Buy, TP: RM6.40) local currency long-term deposit rating of A1, and
foreign currency Tier 1 capital securities rating of A3 were confirmed, but with a negative outlook. (Financial Daily)

* * * * *

Hong Leong Bank Berhad (HLB) (HLBK MK, Hold, TP: RM5.80) has received a licence from the State Bank of Vietnam to
incorporate and operate a wholly-owned commercial bank in Vietnam by the name of Hong Leong Bank Vietnam Ltd
(HLBVN). HLB said yesterday HLBVN was incorporated on 9th July 2009 and that it had received the Business Registration
Certificate issued by the Business Registration Division, Ho Chi Minh Department and Investment, Vietnam on 17th July 2009.
(Financial Daily)

ASTRO-- FULLY VALUED BY HWANG DBS

Astro
Rumoured disposal of Sun Direct TV, capital distribution (Fully Valued; RM3.62; ASTR MK; TP RM2.70) The media reported that Astro disposing its 20% stake in Sun Direct TV in India (SunDTV) and potentially distributing RM0.80-1.00 per share. The article reported that SunDTV would be merged into Aircel (7th largest celco in India),which is part of Maxis. Both Maxis and Astro are owned by Ananda Krishnan.

SunDTV added 700k subscribers in the Apr09 quarter to 3.2m vs. 2.5m in Jan09, and vs. only 0.5m a year ago. We expect Astro’s FY1/10F net profit to jump by c. 60% from our current forecast of RM169m, should Astro dispose its entire 20% stake in SunDTV. A capital distribution of RM1.00 per share could raise Astro’s FY1/10F forecast net gearing to as high as c. 200% from 24% currently projected without factoring in the sale consideration The unconfirmed report of the capital distribution could trigger trading activity on the stock. However, value enhancement from such an exercise would depend on the valuation achieved for SunDTV. Until further development, we are maintaining our forecasts and sum-of-parts price target of RM2.70. Our Fully Valued call is retained.

TELEKOM,TENAGA, SUNWAY HOLDING

Telekom Malaysia Bhd (TM) (T MK, Buy, TP: RM4.90) expects its sales to be better in the second half of this year,
following the launch of its TMpoint TM Authorised Dealership (TAD) programme. TAD is an initiative by TM to reach out
to its current and potential customers via an effective nationwide network based on the "dealer-owned, dealer-operated"
concept. It plans to set-up up to 80 TAD outlets nationwide over the next three years. TM chief executive officer Datuk
Zamzamzairani said the costs to open the TAD outlets were minimal for TM. (BT)
* * * * *
Sunway Holdings Bhd (SGW MK, Hold, TP: RM1.09) has placed its bid for the local concrete plants, quarries and
asphalts owned by HeidelbergCement AG. The bid was placed sometime last week and Sunway may rope in a strategic
partner, potentially a private equity firm, to finance the project. According to sources, if Sunway were to rope in a private equity
firm as partner to fund the purchase, it is likely to form a special purpose vehicle (SPV) where it would hold a 51% stake.
However, Sunway is not happy that HeidelbergCement has upped its selling price to US$250m. Sunway is less keen to bid at
US$250m, as the price tag would neutralise its earnings upside. “Sunway is interested to buy the assets, but not at all costs,”
said the source. (The Edge)
* * * * *
Tenaga Nasional Bhd (TNB) (TNB MK, Hold, TP: RM7.00) will increase electricity tariff if the Government raises the gas
price. President and chief secretary Datuk Seri Che Khalib Mohamed Noh said that the tariff increase was to cover higher
operating costs because of the rise in fuel prices. He also said that when the fuel prices came down, the electricity tariffs were
also adjusted accordingly. (StarBiz

Stocks to watch: Public Bank, Bursa, Astro, Proton, WCT

FROM THE EDGE

KUALA LUMPUR: Two big capitalised companies are due to announce their second quarter results on July 20 – Public Bank and Bursa Malaysia – which could see investors’ attention focused on the companies.

Strong earnings from the companies would underpin market sentiment, especially from Public Bank which analysts expect it to outperform its peers despite the weaker economic climate
RHB Research has maintained its outperform call and fair value of RM11.50 on Public Bank as it believes investors would switch their focus to the bank’s earnings prospects. “With investors’ focus switching to 2010 earnings prospects, we believe its (Public Bank) 1H09 share price underperformance should reverse with upward bias in 2H09.

“Concerns (capital, dividend payout and maintaining high return on equity) that have weighed down on its 1H09 share price performance have been overplayed and are likely to be the catalyst for share price performance in 2H09,” it said in a recent report.

The strong trading volume in the second quarter and the rally should also underpin Bursa Malaysia’s earnings.

Maybank Investment Bank expects Bursa Malaysia’s second quarter ended June 30, 2009 net profit to double that of 1Q09 on strong trading activities, although it maintains its sell recommendation on the company’s stock as “valuations are still ahead”.
“With between 50% and 60% of operating revenue derived from trading activities, we expect Bursa’s 2Q09 net profit to exceed RM30 million, from RM15.5 million in 1Q09,” the research house said.

Astro All Asia Networks’ AGM on July 20 would see shareholders raising questions whether the satellite TV operator is hiving off its 20% owned Indian associate Sun Direct TV.
The Edge weekly in its July 20-26 edition reports the company could return some cash to shareholders. This could see continued interest in Astro, whose share had run up last week.

The weekly also reported Proton Holdings managing director Datuk Syed Zainal Abidin Syed Mohamad Tahir as saying the national carmaker has hired a professional advisory company to help it improve the business in its sports car subsidiary Lotus.

In WCT Bhd, the company secured four contracts worth RM766.48 million from Medini Iskandar Malaysia Sdn Bhd to undertake infrastructure works in Medini Iskandar Malaysia, Johor.

The works comprise of earthwork, drainage, roads, infrastructure works, sewerage pumping station, electricity sub-stations and 33KV main distribution sub-stations.

The EGM of SLK Holdings is expected to attract interest on news reports of a shareholder feud. Shareholders of the highway concessionaire have to put to vote a plan to buy an oil and gas services company.

The report said SILK majority shareholder and executive chairman Datuk Muhammad Azlan Hashim has differing views from substantial shareholder Cerah Sama Sdn Bhd.

US MARKET & NEWS 17.7.2009 the worst is over?

Stocks rallied Thursday, finding momentum in a choppy session, as investors welcomed JPMorgan Chase's better-than expected profit report and geared up reports from tech leaders after the close. After the close, Google reported higher quarterly earnings that topped estimates. IBM reported higher quarterly earnings that topped estimates on lower revenue that missed analysts’ forecasts. The Dow Jones industrial average gained 1.1% (+95.6 pts, close 8,711.8). The Nasdaq gained 1.2% (+22.1 pts, close 1,885.0) and the S&P 500 index gained 0.9% (+8.1 pts, close 940.7). In currency trading, the dollar gained versus the euro and fell versus the yen. U.S. light crude oil for August delivery rose 48 cents to settle at US$62.02 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
The number of Americans filing claims for unemployment benefits fell last week to the lowest level since January, depressed by shifts in the timing of auto plant shutdowns. Initial jobless claims dropped by 47,000 to 522,000, lower than forecast, in the week ended July 11, from a revised 569,000 the prior week, the Labour Department said yesterday in
Washington. The number of people collecting unemployment insurance plunged by a record 642,000, also reflecting seasonal issues surrounding the closures at carmakers. A Labour analyst said the distortions may play havoc with claims data for another couple of weeks. General Motors Co. and Chrysler Group LLC accelerated shutdowns this year heading into bankruptcy, months before the traditional July closings. Through the gyrations, job losses may subside amid signs the housing and manufacturing slumps are easing. (Bloomberg)

* * * * *

U.S. foreclosure filings hit a record in the first half, a sign that job losses and falling property prices deepened the housing recession, according to RealtyTrac Inc. More than 1.5m properties received a default or auction notice or were seized by banks in the six months through June, the Irvine, California-based seller of default data said yesterday in a statement. That’s a 15%
y-o-y increase. One in 84 U.S. households received a filing. Home prices in 20 major U.S. metropolitan areas dropped 18.1% y-o-y in April, according to the S&P/Case-Shiller index. The unemployment rate rose to 9.5% in June, the highest since 1983, bringing the total number of lost jobs to about 6.5m since the recession started in December 2007, the Labour Department
said. Defaults by subprime borrowers with poor credit histories spurred the housing recession and spread to prime borrowers as home prices and sales declined. One in eight Americans is now late on a payment or already in foreclosure, the Washington-based mortgage group said. (Bloomberg)

* * * * *
The worst U.S. recession in at least five decades may be over at year’s end, said Nouriel Roubini, the New York University economist who predicted the financial crisis. “In many ways the worst is behind us in terms of economic and financial conditions,” Roubini said, cautioning that “the recession might continue through the end of the year.” He said his comments yesterday on the recession ending by year-end were consistent with views he “expressed previously” and that he continues to see a “shallow, below-par and below-trend recovery.” “We should continue with fiscal stimulus and we might need a second one,” Roubini said. There’s still a “meaningful amount of weakness” in labour markets, industrial production and housing, he said. A second stimulus package of as much as US$250bn may be needed sometime early next year, particularly if unemployment goes “well above 10% by the end of the year,” he said. (Bloomberg)

* * * * *
A split among Federal Reserve officials widened last month: Depending on who is doing the forecasting, economic growth will either remain stalled next year or will accelerate to the fastest rate since 1999. Minutes from the Fed’s June meeting show central bankers are less certain than they were in April over how the economy will emerge from the worst recession in a half century. Policy makers have differing assessments of how quickly credit markets will heal, and how effective a US$78bn fiscal stimulus and US$1trn expansion of the Fed’s balance sheet will be, according to the Federal Open Market Committee’s minutes released Wednesday. Central bankers left the benchmark lending rate in a range of zero to 0.25% last month and said the policy rate was likely to remain “exceptionally low” for an “extended period.” The range of projections forn2010 growth showed a gap of 3.2 percentage points, up from a 2.5 percentage-point divide in April. The lowest forecast suggests the economy will grow just 0.8% from 4Q09 to 4Q10; the highest projects 4% growth. (Bloomberg)
* * * * *
Global

SAPURA CREST AND AIR ASIA again

SapuraCrest Petroleum Bhd’s (SCRES MK, Hold, TP: RM1.32) wholly-owned unit TL Geo Sciences Sdn Bhd (TLGS) is buying the remaining 30% equity stake in TL Geohydrographics Sdn Bhd (TLGH) for RM18m cash. SapuraCrest said TLGS had entered into a sale and purchase agreement with William Adam Petrie (WAP) to buy the 30% shareholding in TLGH. Upon completion of the acquisition, SapuraCrest will wholly-own TLGH. (Financial Daily)

* * * * *
AirAsia Bhd (AIRA MK, Buy, TP: RM1.90) plans to sell the three B737 aircraft it owns as part of a plan to have a fleet comprising only A320s, says group chief executive officer Datuk Seri Tony Fernandes. The airline’s 16 B737 are used by its associate companies in Indonesia and Thailand. The remainder 13 B737 planes will be returned to GE Commercial Aviation Services (GECAS). (Starbiz)

* * * * *

US MARKET & NEWS 16.7.2009

Stocks surged Wednesday, with all three major gauges jumping at least 3% after Intel's forecast for a second-half pickup and the Federal Reserve's improved outlook reassured wary investors. Intel reported profit and revenue late Tuesday that dipped from a year ago, but surpassed forecasts. Also, the chipmaker predicted better revenue growth in the third and fourth quarters
thanks to improved demand for personal computers. Both the Dow and Nasdaq saw their best one-day point gains in nearlyMfour months. The S&P 500's gain was the best in two months. The Dow Jones industrial average gained 3.0% (+256.7 pts, close 8,616.2). The Nasdaq gained 3.5% (+63.2 pts, close 1,862.9) and the S&P 500 index gained 3.0% (+26.8 pts, close
932.7). In currency trading, the dollar fell versus the euro and gained versus the yen. U.S. light crude oil for August delivery rose US$2.02 to settle at US$61.54 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
Industrial production shrank less than forecast and a New York regional factory gauge showed the smallest contraction in more than a year, signalling manufacturing is on the verge of stabilizing. The 0.4% decrease in output at factories, mines and utilities in June was the smallest in eight months, Federal Reserve figures showed yesterday in Washington. The New York Fed’s Empire Index rose to minus 0.6 in July from minus 9.4 the month before. The Commerce
Department said separately consumer prices rose 0.7% last month, spurred by energy costs. (Bloomberg)
* * * * *
The cost of living in the U.S. rose more than forecast in June, led by a jump in energy costs that overshadowed slower price gains for other goods. The consumer price index increased 0.7% after a 0.1% advance in May, the Labour Department said yesterday in Washington. Economists forecast consumer prices rose 0.6 percent, according to the median of 74 projections in a Bloomberg News survey. Excluding food and energy costs, the so-called core index rose 0.2%. Compared with a year earlier, prices fell 1.4%, the biggest drop since January 1950. Declines in consumer spending and business investment are forcing companies to boost incentives or keep a lid on prices in order to move merchandise, and preventing them from passing higher energy costs on to customers. A surge in gasoline costs in recent months is now abating, indicating inflation may moderate as the year progresses. (Bloomberg)

* * * * *
Most Federal Reserve officials judged the economy at risk to further shocks last month even as they rejected an expansion in asset purchases, reflecting doubt at the likely impact of such a move. “Most participants saw the economy as still quite weak and vulnerable to further adverse shocks,” the central bank said in minutes of the Federal Open Market Committee’s June 23-24 meeting released yesterday in Washington. “Although financial market conditions had improved,
credit was still quite tight in many sectors.” Policy makers were concerned that consumer spending will resume its decline once temporary benefits to household incomes from the fiscal stimulus subside, the minutes showed. Some officials also saw a danger of a renewed decline in the housing market, in part as mortgage rates increase. At the same time, the FOMC
concluded that it was best to keep its programs for purchasing Treasuries and mortgage debt unchanged. (Bloomberg)
* * * * *
European consumer prices fell in June for the first time since at least 1996 as energy costs dropped and rising unemployment curbed household spending. Prices in the 16-nation euro area dropped 0.1% y-o-y, the first annual decline since the data were first compiled in 1996, the European Union statistics office in Luxembourg said yesterday. The core rate of
inflation, which excludes volatile energy and food prices, eased to 1.4% from 1.5%. European Central Bank policy makers have downplayed the threat of deflation, blaming negative inflation on the drop in oil prices from a record last year and pointing to the core rate. Energy prices dropped 11.8% y-o-y in June and food prices fell 0.2%, yesterday’s report showed. From May,
overall prices rose 0.2%. (Bloomberg)
* * * * *
European car sales rose in June for the first time in 14 months as government-backed incentives boosted demand at Volkswagen AG and Fiat SpA. New-car registrations increased 2.4% to 1.46m vehicles, the first gain since April 2008, the Brussels-based European Automobile Manufacturers’ Association said in a statement yesterday. Sales for the first six months
fell 11% to 7.43m cars. State-funded sales and vehicle-scrapping subsidies have propped up demand after the recession plunged the auto industry into its worst crisis in decades. The incentives, topped by Germany’s 2,500 euro (US$3,500) bonusfor car buyers who junk old vehicles, have favoured sales of smaller models. (Bloomberg)
* * * * *
Global

TENAGA, MAYBANK, PUBLIC BANK & DIGI

Tenaga Nasional Bhd (TNB MK, Hold, TP: RM7.00) says that there has been a surge in industrial and private consumer electricity demand in the past two months, which may suggest a slight pick-up in the country’s economic activities. Senior vice-president for corporate affairs Datuk Abdul Razak Majid said that electricity demand surged to 14,029MW last month,
beating last year’s record of 14,007MW last May. (BT)

* * * * *
Malayan Banking Bhd (Maybank) (MAY MK, Buy, TP: RM6.40) has appointed Takaful Malaysia chairman Tan Sri Dr Hadenan Jalil, former banker Datuk Seri Ismail Shahudin and Southern Steel Bhd group managing director Datuk Dr Tan Tat Wai as new independent directors. The bank said the appointments, which took effect yesterday, represented a significant development in the ongoing transition and succession planning exercise implemented by the Maybank board of directors. With the new appointments, Maybank’s board now comprises eight directors, four of whom are independent nonexecutive directors. (Financial Daily)

* * * * *
Public Bank Bhd (PBK MK, Buy, TP: RM9.50) and Bank of China (Malaysia) have established a yuan trade settlement service cooperation between them to facilitate Malaysia’s yuan trade settlement with China. With the tie-up, Public Bank becomes the first bank in Malaysia apart from Bank of China (Malaysia) that is ready to offer the yuan trade settlement service. The list of designated and eligible enterprises in China that are allowed to settle their cross-border transactions in yuan will be released by the People’s Bank of China soon. Public Bank’s managing director Tan Sri Tay Ah Lek said the initiative, which covers open account transactions, documentary collections, letters of credit and bank guarantees, would enable Public Bank to reach a wider spectrum of the business communities that did business with China. (Financial Daily)

* * * * *
DiGi Telecommunications Sdn Bhd (DiGi), unit of DiGi.Com Bhd (DIGI MK, Hold, TP: RM22.60) has changed its strategy to focus more on a market-segmented rather than a product-based strategy. In tandem with the new strategy, the telco yesterday launched its new postpaid “DG Family” and “Hit1 DiGi Prepaid” plans, which were aimed at strengthening its hold on the growing family and youth markets. “We’ve taken a segmented approach to differentiate ourselves in a very competitive market, listening very closely to our customers who’ve clearly expressed that they want more relevance and value in the products and services they need and use,” DiGi’s head of products and segment marketing Albern Murty said.(Financial Daily)
*

US MARKET & NEWS 15.7.2009

Stocks gained Tuesday after a choppy session in which investors welcomed Goldman Sachs' better-than-expected results but showed caution ahead of all the quarterly reports due in the weeks ahead. The Dow Jones industrial average gained 0.3%(+27.8 pts, close 8,359.5). The Nasdaq gained 0.4% (+6.5 pts, close 1,799.7) and the S&P 500 index gained 0.5% (+4.8 pts,
close 905.8). In currency trading, the dollar gained versus the euro and fell versus the yen. U.S. light crude oil for August delivery fell 17 cents to settle at US$59.52 a barrel on the New York Mercantile Exchange. (CNNmoney)
* * * * *
U.S. businesses cut inventories again in May, according to a report signalling firms are making slow progress toward reducing excess supply but that more work lies ahead adjusting to lower sales. Inventories fell more than expected, Commerce Department data yesterday showed. The 1.0% drop from the prior month to a seasonally adjusted US$1.368trn followed a revised 1.3% decrease in April. Originally, April inventories were seen down 1.1%. Economists surveyed by Dow Jones Newswires forecast a 0.8% decline in May inventories. Business sales dipped by 0.1% to US$966.1bn in May. Sales in April fell an unrevised 0.3%. (Dow Jones Newswires)
* * * * *
Surging gasoline costs spurred gains in U.S. retail sales and wholesale prices in June, while a drop in spending outside of auto dealers and service stations reinforced concern an economic recovery will be limited. Sales at retailers rose 0.6% from May, more than forecast and the biggest gain since January, Commerce Department figures showed yesterday in Washington. Excluding autos and gas, purchases dropped for a 4th consecutive month. The Labour Department’s producerprice index gained 1.8%, twice as much as anticipated. Yesterday’s figures indicate that consumer spending likely fell last quarter, with little momentum heading into the latter part of the year. Job losses and declining home values are weighing on households, leaving them with little appetite to spend more, other than on necessities. (Bloomberg)
* * * * *
Industrial production in the 16 countries that use the euro posted its first m-o-m rise in nine months in May, in one of the first signs that the economy could be on the road to recovery. According to figures released yesterday by the European Union's statistics agency Eurostat, industrial production rose by 0.5% from April - the first monthly increase since August 2008
and also the largest monthly increase since a 1% rise in April 2008. Production in May fell by 17.0% y-o-y. The annual drop was the smallest since January this year, Eurostat said. The report of a rise in the monthly measure of output, as well as a slowdown in the pace of the y-o-y slump, suggests that the recent improvements reported in the more timely purchasing
managers manufacturing survey are now evident in the official indexes. In the 27 countries that are in the European Union, output rose 0.1% on the month and fell 15.9% on the year, Eurostat said. (Dow Jones Newswires

sapura crest, MAHB, , BCHB,KLKEPONG

SapuraCrest Petroleum Bhd (SCRES MK, Hold, TP: RM1.32) has teamed up with GE Oil & Gas (GEOG), a unit of USbased global industrial conglomerate General Electric (GE) to further expand and enhance its 7-year-old service centre for the regional oil and gas industry. The group had entered into an agreement with GEOG last month via its subsidiary Sapura Power Services Sdn Bhd, to further improve the centre’s capabilities. Under the deal, the service centre will use the most advanced service and repair technologies from GEOG to maintain, repair and refurbish heavy industrial gas turbines and its components. (NST)

* * * * *
Malaysia Airports Holdings Bhd (MAHB), which has been at loggerheads with AirAsia Bhd (AIRA MK, Buy, TP: RM1.90) over the timeline for the completion of the new low-cost carrier terminal (LCCT), said yesterday the terminal would be ready by 2011, dispelling any notions of a possible delay. AirAsia, on its part, said that if that was the case, it would stick to and may even accelerate its fleet expansion plans. “We are only contemplating the deferment for 2011, we have not confirmed. We may even accelerate the delivery of Airbus A320s if the LCCT is ready on time,” AirAsia group chief executive officer Datuk Seri Tony Fernandes said. (Financial Daily)

* * * * *
Bumiputra-Commerce Holdings Bhd’s (BCHB MK, Hold, TP: RM8.80) subsidiary CIMB Islamic Bank Bhd (CIMB) has extended a RM1.5bn loan to the National Higher Education Fund Corporation (PTPTN). CIMB was also PTPTN’s repayment agent, via its bank branches and online banking portal, in addition to being its agent for the opening of accounts and
deposit-taking for the National Education Savings Scheme. Total repayments collected via CIMB amounted to RM232m which makes CIMB’s deposit taking for SSPN the highest among SSPN agents. (Financial Daily)

* * * * *
Kuala Lumpur Kepong (KLK) Bhd’s (KLK MK, Sell, TP: RM10.40) unit PT Steelindo Wahana Perkasa (SWP) is buying 95% of PT Bumi Makmur Sejahtera (BMS) for RM2.3m to further increase its oil palm plantation area in Indonesia. KLK expects the acquisition to be completed in 1Q10, subject to the fulfilment of all conditions stated in the sale and purchase agreement.( financial daily )

US MARKET & NEWS 14.7.2009

Stocks surged Monday, with financial and consumer shares leading the advance, as investors welcomed an analyst’s improved outlook on Goldman Sachs one day ahead of its quarterly report. Stocks gained through the morning, after a shaky start. But the advance got an extra boost after influential banking analyst Meredith Whitney upgraded her view on Goldman
Sachs and said that Bank of America could provide value for investors. The Dow Jones industrial average gained 2.3%(+185.2 pts, close 8,331.7). The Nasdaq gained 2.1% (+37.2 pts, close 1,793.2) and the S&P 500 index gained 2.5% (+21.9pts, close 901.1). In currency trading, the dollar fell versus the euro and gained versus the yen. U.S. light crude oil for August
delivery fell 20 cents to settle at US$59.69 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
The U.S. budget deficit topped US$1trn for the first nine months of the fiscal year and broke a monthly record for June as the recession subtracted from revenue and the government spent to rejuvenate the economy. The shortfall for the fiscal year that began Oct. 1 totalled US$1.1trn, the first time that the gap for the period surpassed US$1trn, Treasury figures showed
yesterday in Washington. The excess of spending over revenue for June was US$94.3bn, the first deficit for that month since 1991, according to data compiled by Bloomberg. Individual and corporate tax receipts are sliding even as the worst recession in five decades shows signs of easing because the jobless rate continues to rise -- reaching a 26-year high in June - and
companies have yet to see a sustained increase in demand. The shortfall is also widening as the government ramps up spending from the US$787bn stimulus program President Barack Obama signed into law in February. (Bloomberg)

* * * * *
Construction spending on offices, retail centres and hotels is likely to fall 16% this year and 12% in 2010, more than previously forecast, the American Institute of Architects said. Rising unemployment and reductions in business spending prompted the Washington-based institute to cut its outlook from January, when it predicted non-residential construction spending would drop 11% this year and 5% in 2010. “We’ve had a really rocky six months in the economy and in the construction sector,” Kermit Baker, the institute’s chief economist, said in a telephone interview. “People are seeing a real tough environment out there and not a lot of incentive to invest in projects.” Spending on office buildings is forecast to sag 22% this year and 17% in 2010, while retail construction probably will sink 28% this year and 13% in 2010, the architects group
said. (Bloomberg)

GENTING, SUNWAY CITY AND PROTON

Genting Group (GENT MK, Hold, TP: RM5.95) is still on track to launch its S$6.59bn (RM16bn) integrated resort in Singapore by the first quarter of 2010, despite recent news of delays by rival Las Vegas Sands. "We are on track and on time for the soft launch of Resorts World at Sentosa," Genting Bhd head of strategic investments and corporate affairs Datuk Justin Leong said. Meanwhile, Leong did not rule out the possibility of bringing Universal Studios to Malaysia in the future, but said such plans would hinge on the success of Universal Studios in Singapore. (BT)


* * * * *
Sunway International Hotels & Resorts, subsidiary of Sunway City Bhd (SCITY MK, Buy, TP: RM3.60), has marked its entry into China’s hospitality industry with an agreement to manage the Golden Diamond Hotel in Zhongshan for Perfect (China) Co Ltd. Sunway International chief executive officer Hanley Chew said: “With Sunway Hotel Golden Diamond as our first hotel in China, we have set our sights to expand further in China with potential hotel projects in the pipeline for Beijing and Anhui.” Renamed from Golden Diamond Hotel, Sunway Hotel Golden Diamond is an 18-floor building in the heart of Shiqi district with 194 hotel rooms and 134 apartments. (Financial Daily)

* * * * *
Proton Holdings Bhd is emphasising on high growth regional markets such as Asean, China, India, the Middle East and North Africa to strengthen its export business. The national carmaker said the selected markets would benefit Proton in terms of economies of scale, quality and capability transfer. Managing director Datuk Syed Zainal Abidin Syed Mohamed
Tahir said the current economic environment demanded for a more aggressive export strategy and that drastic changes would be made to ensure growth in Proton’s business abroad. (StarBiz)
* * * * *

US MARKET & NEWS 13.7.2009

Blue chips slipped Friday, after a profit warning from Chevron dragged on oil stocks, but the Nasdaq managed modest gains for the day at the end of a down week for Wall Street. The Dow Jones industrial average lost 0.45% (-36.7 pts, close 8,146.5). The Nasdaq gained 0.2% (+3.5 pts, close 1,756.0) and the S&P 500 index dropped 0.4% (-3.6 pts, close 879.1). In currency
trading, the dollar gained against the euro and fell against the Japanese yen. U.S. light crude oil for August delivery fell 52 cents to settle at US$59.89 a barrel on the New York Mercantile Exchange. (CNNmoney)

* * * * *
Sentiment among U.S. consumers dropped in July after four months of gains as unemployment approached 10%. The Reuters/University of Michigan preliminary index of consumer sentiment fell by more than forecast to 64.6 from 70.8 in the prior month. Consumers in the survey said they are less likely to buy cars or appliances, suggesting that the recovery may be weaker than anticipated. “Until the employment picture clears up, we can’t anticipate persistent gains in consumer spending." said Jonathan Basile, an economist at Credit Suisse Holdings Inc. (Bloomberg)

* * * * *
The U.S. trade deficit unexpectedly narrowed in May to the lowest level in almost a decade as exports jumped while imports of crude oil and auto parts declined. The gap between imports and exports decreased 9.8% to US$26bn, the smallest deficit since November 1999, from a revised US$28.8bn in April that was lower than previously estimated, the Commerce Department said today in Washington. Imports fell while exports rose the most since July 2008. (Bloomberg)

* * * * *
The U.S. economy will expand faster than previously forecast in the second half of this year and in 2010 as a revival in consumer spending signals an end to the recession, a Bloomberg News survey showed. The U.S. economy will expand faster than previously forecast in the second half of this year and in 2010 as a revival in consumer spending signals an end to the recession. Signs of stability in the housing market, improving consumer confidence and smaller declines in auto sales are reinforcing forecasts for gains in consumer purchases. While the recovery is likely to be tempered by job cuts and shrinking household wealth, most economists said a second stimulus package won’t be needed. (Bloomberg)

* * * * *
The United States financial crisis is expected to complete its cycle through the turmoil within a year, given its accelerated pace compared to the Japanese experience in 1997/98, holder of the Tun Ismail Ali Chair in monetary and financial economics Takatoshi Ito said. He said unlike in the US, where the crisis began in early 2007 and was now in the recovery process, Japan’s banking crisis lasted around 10 years. Speaking on the differences between the two crises, he also cited that the US had avoided nationalising its banks, compared to Japan. (Financial Daily

TENAGA, BCHB, BOUSTEAD

Tenaga Nasional Bhd (TNB) (TNB MK, Hold, TP: RM7.00) and Sarawak Energy Bhd (SEB) signed a share sale agreement with Sime Darby Energy Sdn Bhd (SDESB) in relation to their acquisition of 100% interest in Sime Darby Power Link Sdn Bhd (SDPLSB). The purchase consideration was RM15.6m plus an adjustment amount to cater for additional cash advances made by SDESB to SDPLSB being payment for consultants before the completion of the deal. TNB and SEB will each hold 50% of the issued and fully paid-up capital of SDPLSB, while it is also intended that the Minister of Finance Inc participate in the equity of SDPLSB at the appropriate juncture. (Starbiz)

* * * * *
CIMB Bank has issued 667m new shares to Bumiputra Commerce Holdings Bhd (BCHB) (BCHB MK, Hold, TP: RM8.80) to pay off debt. The new CIMB shares were issued to settle the coupon payments and principal on the RM667m irredeemable convertible unsecured loan stocks (ICULS) which are due and payable to BCHB, it said in a filing with the stock exchange. (BT)


* * * * *
Boustead Holdings Bhd’s (BOUS MK, Hold, TP: RM3.60) plan to raise some RM729.1m in a rights issue has been approved by the Securities Commission. In a filing to Bursa Malaysia on Friday, Boustead said it plans to issue 260.4m new shares at the ratio of two rights shares, at RM2.80 each, for every five ordinary shares held. (BT

ADVENTA

This is the share I have, thus posting it to keep myself informed. Adventa fixes placement price at RM1.08

Written by The Edge Financial Daily

Friday, 10 July 2009 00:03

KUALA LUMPUR: Adventa Bhd has fixed the issue price for the remaining placement of 4.37 million new shares of 50 sen each at RM1.08 per share. Adventa said on July 9 the issue price represented a discount of about 2.8% to the five market day volume-weighted average market (VWAM) price from July 2 to July 8 of RM1.11. The exercise is in pursuant to its earlier proposed private placement of up to 13.37 million shares representing 10% of its paid-up capital, first announced in October 2007. Since then, it had placed out a total of nine million shares at RM1.56 per share, representing a premium of about 9.9% to the five market day-VWAM price of RM1.42. The stock on July 9 rose one sen to RM1.16, with 1.23 million shares done.

SUNWAY CITY ,SIME DARBY

Sunway City Bhd (SCITY MK, Buy, TP: RM3.60) plans to construct new buildings over the next few years, that will later be injected into its RM4bn real estate investment trust (REIT). "We are working on pipeline investment assets to include into the REIT later when they mature in earnings and have the right tenant mix," SunCity executive director Datuk Jeffrey Ng
Tiong Lip told Business Times in an interview. SunCity is still weighing its option of whether to list on Bursa Malaysia or via reverse takeovers in Singapore or Australia. (BT)


* * * * *
Sime Darby Plantation Sdn Bhd, a unit of Sime Darby Bhd (SIME MK, Buy, TP: RM7.70), is set to invest an initialRM100m to develop oil palm plantations on Native Customary Rights (NCR) lands in Julau. Its Plantation Agency and Consultation head Mohd Helmy Othman Basha said the project would cover an area of about 20,000ha and that it will be a joint ventureship with landowners from 109 longhouses in three areas namely KJD/Lower Julau, Sungai Julau/Sungai Pitoh and Merurun/Meluan/Entabai. In the joint venture, Sime Darby will hold 60% equity while the landowners will hold 30% and the Land Custody and Development Authority (LCDA) 10%. Helmy said the target was for Sime Darby to develop around 50,000ha
in Sarawak and another 50,000ha in Sabah. (The Malaysian Reserve

US MARKET 9.7.2009

Wall Street erased most of its losses by the close Wednesday, as investors set aside concerns about the economy to gear
up for the quarterly reporting period, which got underway after the closing bell with Alcoa. Stocks slipped through most of
Wednesday as investors continued to worry about the economy and the quarterly reporting period in the aftermath of a big run
up. But after touching fresh multi-month lows in the afternoon, stocks bounced back. The Dow Jones industrial average gained
0.2% (+14.8 pts, close 8,178.4). The Nasdaq ended just unchanged (+1.0 pts, close 1,747.2) and the S&P 500 index lost 0.2%
(-1.5 pts, close 879.6). In currency trading, the dollar gained versus the euro and fell versus the yen. U.S. light crude oil for
August delivery fell US$2.79 to settle at US$60.14 a barrel on the New York Mercantile Exchange. (CNNmoney)


* * * * *
U.S. apartment vacancies rose to their highest in 22 years in 2Q09 as job losses cut tenant demand and more units came
to market. Vacancies climbed to 7.5% from 6.1% a year earlier, New York-based real estate research firm Reis Inc. said
yesterday. The last time landlords had so much empty space was in 1987, when vacancies reached 7.6% as the Standard &
Poor’s 500 Index plummeted 23% in the last three months of that year. Job losses and falling wages are shrinking the pool of
potential renters, defying forecasts that prospective homebuyers would rent rather that purchase as house prices decline.
Asking rents for apartments fell 0.6% q-o-q in 2Q09, Reis said. That matched the rate of change in 1Q09, the biggest drop
since Reis began reporting such data in 1999. Asking rents dropped 0.7% y-o-y to an average US$1,040 a month.
(Bloomberg)
*

AIRASIA AND AXIATA BUY FROM STARBIZ

There will be no write-offs on the amount owed by Thai AirAsia (TAA) and Indonesia AirAsia (IAA) to parent AirAsia
Bhd (AIRA MK, Buy, TP: RM1.90), said chief executive officer Datuk Seri Tony Fernandes. “A draft agreement is being
prepared to ratify and seek approval from shareholders at an EGM to be called on Aug 3 for the past and continuing financial
assistance to the two units,” Fernandes said. This is necessary since the amount owed by the two 49% owned associates
exceeds the 5% threshold of AirAsia’s shareholder’s funds which stand at RM1.81bn. As at Dec 31, 2008, net borrowings due
to AirAsia are RM603m. Fernandes said the two units were now cash-flow positive and that they had been paying back some
of their dues, but noted that it would take two to three years for them to fully pay their dues to AirAsia. (Starbiz)
* * * * *

Axiata Group Bhd (AXIATA MK, Buy, TP: RM3.12) continues to look at ways to expand its business but there is nothing
on the table with regard to the purchase of assets owned by Millicom International Cellular SA in Asia. “It does not
make sense for two parties to combine in a very competitive marketplace. Internally, we look at all sorts of transactions but
there is nothing going on,” said executive director and chief financial officer Datuk Yusof Annuar Yaacob. Even if Axiata were to
consider buying the stakes, the issue of funding would arise, as Yusof puts it: “If it makes sense, do we have the money to buy
the assets?” (Starbiz

MAYBULK AND BJ TOTO by HDBS

Malaysian Bulk Carriers
Riding the down-cycle (Fully Valued; RM3.06; MBC MK; TP
RM2.25)
• The recent run up in Maybulk’s share price is likely not
sustainable. Expect more downward pressure in the
near-term
• Outlook for the drybulk shipping sector remains bleak
mainly due to severe vessel oversupply
• Initiate coverage with a Fully Valued call and RM2.25 TP
based on asset break-up value. Our valuation implies
1.2x CY10F BV and 16.4x CY10F EPS

Berjaya Sports Toto
BLand Places 40m BST Shares (Hold; RM4.98; BST MK; TP:RM4.80)Parent Berjaya Land (BLand) has placed out 40m of BST’s shares for RM190m or RM4.75/share. This would dilute
BLand’s stake by 3.2% from 50.7% to 47.5%.Concurrently, major shareholder Tan Sri Vincent Tan has placed out 15.6m shares (including Berjaya Corp and hisother private companies). All these would collectively dilute Tan Sri’s stake by 4.4% from 57.4% (direct 5.58%, indirect
51.85%) to 53.0%.The placement was done at a 4.6% discount to BST’s lastclosing price and values BST at 13.6x FY11 PE. The price is close to our dividend discount model value of RM4.83.
Net proceeds from the placement would be used for partialredemption of BLand’s RM848m 8% secured exchangeable bonds due in 2011 which bondholders can exercise a put option for early redemption on 15 Aug09 at 100% nominal value. The placement exercise follows the 80sen bumper dividends declared by BST in 4QFY09, including a 1-for-14treasury shares distribution valued at 35 sen. Collectively,BLand would have RM667m in hand (including the Treasury
shares receivable which may be placed out later should theneed arise) for the potential bond redemption (79%).

Maintain Hold on BST, and our DDM-TP of RM4.80

SUNWAY, BERJAYA LAND, AXIATA, MAS

Sunway Holdings Bhd’s (SGW MK, Hold, TP: RM1.09) interest in acquiring the local concrete plants, quarries and asphalt factories owned by HeidelbergCement AG may have waned, after the latter raised the indicative sale value for these assets to US$250m (RM885m) from US$200m. The German company upped the asset’s selling price following the emergence of three other interested parties. Submission for bids is expected to start next week. However, with the raising of the price, Sunway, as well as one of the three private equity firms are no longer keen to place their bids. (Financial Daily)
* * * * *
Berjaya Land Bhd (BLand) has placed out a 3.18% stake comprising 40m shares of 10 sen each in numbers forecast operator Berjaya Sports Toto Bhd (BToto) (BST MK, Buy, TP: RM5.80) at RM4.75 per share for a total of RM190m cash to partly redeem RM848.1m, 8% secured exchangeable bonds that would mature on Aug 15, 2011. BLand said yesterday itsmajor shareholder Tan Sri Vincent Tan Chee Yioun had also concurrently placed out a total of 15.6m shares in Toto, thus reducing his direct interest to 54.5m shares representing 4.34% stake in BToto. Following the placement, BLand group’s stake in BToto was reduced to 47.48% comprising 596.27m shares from 50.66% comprising 636.27m shares. BLand said despite
the weak market conditions, there was ample interest to absorb a total of 55.6m shares, raising some RM264.1m cash.
(Financial Daily)
* * * * *
Axiata Group Bhd (AXIATA MK, Buy, TP: RM3.12) is considering an offer for Millicom International Cellular SA’s assets in Cambodia and Sri Lanka. The company may bid as much as US$500m (RM1.77bn) for Millicom’s stake in its Cambodian unit and US$200m for the Sri Lankan operations, according to two people with knowledge of the matter. Axiata declined to
comment. (Financial Daily)
* * * * *
Malaysian Airline System Bhd (MAS MK, Sell, TP: RM2.00) will suspend its thrice-weekly services from Kuala Lumpur to New York via Stockholm, and the return leg, effective October due to a drop in demand. The last flight would be on September 30, after serving New York since 1998. “The suspension is part of our continuous review to ensure that we retain the correct balance in network and fleet utilisation given supply and demand.” said commercial director Datuk Rashid Khan.
(Financial Daily)

BCHB, UMW,GENTING fall in early trade from THE EDGE

BCHB, UMW, Genting fall in early trade

Written by Joseph Chin

Tuesday, 07 July 2009 10:35

KUALA LUMPUR: The 30-stock FBM KLCI fell in early trade on July 7 following declines in BCHB, UMW and Genting with analysts seeing more consolidation for the overall market. At 10am, the FBM KLCI fell 0.91 point to 1,064.92. Turnover was 106.09 million shares valued at RM91.37 million. There were 161 gainers, 82 losers and 125 stocks unchanged. Japan’s Nikkei 225 fell 0.18% to 9,663.45 and Shanghai’s Composite Index lost 1.22% to 3,086.59. Singapore’s Straits Times Index rose 0.62% to 2,280.24 and Hong Kong’s Hang Seng Index opened 0.17% higher at 18,010.02. RHB Research Institute said as expected, the selling pressure returned yesterday after the swift rebound from the 10-day SMA on last Friday proved to be unsustainable. Furthermore, investors have decided to trim down some of their holdings on profit-taking activities, following the absence of trading leads after a smooth migration of the KLCI to the FBM KLCI yesterday. “Also, as the FBM KLCI fell below the 10-day SMA of 1,070 yesterday, the short-term technical outlook for the index has turned more negative. Combined with poor trading volume, the chart is pointing to further consolidation in the short term. “We expect investors to sideline pending sharper correction ahead, and foresee the return of bottom-fishing activities only near the 1,000 psychological level and the long-term support at 980,” it said. BCHB fell 15 sen to RM9.35, UMW and LPI 10 sen lower to RM5.90 and RM11.40 while Genting and MISC gave up five sen each to RM5.75 and RM8.50. Yesterday, LPI declared an interim dividend of 26.25 sen per share for the second quarter ended June 30. Its net profit rose 27% year-on-year to RM22.74 million, from RM17.9 million a year ago. However, Tanjong and Public Bank added 10 sen each to RM13.70 and RM9.20 while Hong Leong Bank and Public Bank foreign rose five sen each to RM5.70 and RM9.15. Among lower liners, GBH jumped 18 sen to RM1.51 with 10,000 shares done while KPS gained five sen to RM1.89. Dreamgate was the most active with 12.98 million shares done, rising two sen to 19 sen.