Malaysia - Equity

The stock market closed slightly higher yesterday on investor expectations of a better first-quarter performance in the country's economy.

Bank Negara Malaysia is expected to release the data today together with the monetary policy statement on the Overnight Policy Rate.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rose 3.38 points to close at 1,344.1, lifted by gains in Kuala Lumpur Kepong.

The Finance Index gained 34.449 points to 12,052.52, Industrial Index added 13.45 points to 2,742.93 and the Plantation Index rose 37.66 points to 6,435.61.

The FBM Emas Index rose by 25.39 points to 9,030.05, FBM70 increased 31.18 points to 8,825.52 and the FBM ACE Index added 7.87 points to 3,977.95.

Gainers led losers by 362 to 241 while 291 counters closed unchanged, 476 untraded and 31 suspended.

Total turnover declined to 666.761 million units worth RM934.413 million from 781.76 million units worth RM1.344 billion on Tuesday.

Among the top gainers, British American Tobacco rose 88 sen to RM43.88, KKB Engineering surged 85 sen to RM6.90 and Kuala Lumpur Kepong jumped 70 sen to RM17.20.

In active stocks, Maxbiz Corp rose 11.5 sen to 25.5 sen, Talam Corp edged up 1/2 sen to 14 sen and Advance Marketing shed 4 sen to 22.5 sen.

Among heavyweights, Maybank added 5 sen to RM7.60, Sime Darby edged up 2 sen to RM8.65, CIMB Group gained 8 sen to RM14.44, Maxis was unchanged at RM5.33 and Tenaga Nasional shed 2 sen to RM8.54.

Sime Darby today has requested for the suspension of trading in its securities from 9am to 5pm.
In a one-paragraph statement to Bursa Malaysia Securities, Sime said the trading halt was pending a material announcement to be made.

RM

The ringgit closed higher against the US dollar yesterday in anticipation of better economic growth data, dealers said.

At 5pm, the local currency was traded at 3.2030/2070 compared with 3.2080/2130 on Tuesday.
The local currency was lower against other major currencies.

It was lower against the Singapore dollar at 2.3182/3232 from 2.3166/3214 on Tuesday but appreciated against the Japanese yen to 3.4463/4521 from 3.4677/4739.

The ringgit was lower versus the euro at 4.0710/0767 from 4.0697/0770 and weaker against the British pound at 4.8093/8163 from 4.7616/7697previously.

CPO

Crude palm oil (CPO) futures on Bursa Malaysia Derivatives staged a technical rebound yesterday.

The market which had fallen to almost a three-week low yesterday, recovered on concern over supply shortage, dealers said.

May 2010 and June 2010 contracts edged up RM3 each to settle at RM2,546 a tonne and RM2,521 respectively. July 2010 rose RM2 to RM2,507 and August 2010 added RM6 to RM2,499.

News

Berjaya Corp Bhd (BCorp) , a gaming, property and hospitality group, will buy a 70 per cent stake in a private sports betting company owned by its chairman Tan Sri Vincent Tan (picture) for RM525 million. BCorp told Bursa Malaysia yesterday that it plans to purchase a controlling stake in Ascot Sports Sdn Bhd, which has been re-issued a conditional sports betting licence by the Finance Ministry.Ascot Sports is presently 70 per cent owned by Tan, while the balance is owned by his son Datuk Robin Tan. Tan has also agreed to guarantee that the company will make a cumulative net profit of at least RM375 million for the first three years of operations. To back this profit guarantee, he has offered to deposit RM81.25 million worth of listed securities and BCorp will withhold RM125 million cash from the total purchase price.Therefore, BCorp's initial consideration will be RM400 million. BCorp will finance the purchase by undertaking a renounceable rights issue
of up to RM614.46 million nominal value of 10-year eight per cent irredeemable convertible unsecured loan stocks (Iculs).It will be done on the basis of one RM1 nominal value of Iculs for every eight BCorp shares owned.

Pos Malaysia Bhd has not ruled out the possibility of becoming a controlling shareholder in Transmile Group Bhd, but any firm decision will only be made after an extensive cost and benefit study, said its top official.
However, it has not committed to carrying out any such study at the moment. Pos Malaysia chairman Tan Sri Dr Aseh Che Mat said that shareholders at its annual general meeting (AGM) yesterday had raised the possibility of its purchasing more shares in the financially troubled air cargo firm to hold a controlling stake.
It is currently the second largest shareholder in Transmile with a 15 per cent stake. According to Transmile's 2009 annual report, Trinity Coral Sdn Bhd, owned by the Kuok family, is the largest shareholder with a 17.16 per cent stake.

AirAsia Bhd has teamed up with The Royal Bank of Scotland (RBS) to offer a multi-currency pricing e-platform system This will allow the carrier's customers to get instant ticket pricing in the currency of their choice when making a purchase. AirAsia was the first Asian low-cost carrier to launch multi-current pricing using RBS FXmicropay The solution is an automated advanced pricing tool that supports about 60 currencies.It can handle up to 3,000 transactions per second. AirAsia will launch the service by offering sales in US dollar, Singapore dollar, Hong Kong dollar, pound and Australian dollar. It will later accommodate other currencies

Masterskill Education Group Bhd, en route to a Main Market listing, has received Ministry of Health and Medical Council of Malaysia approvals to offer bachelor of medicine and bachelor of surgery (MBBS) courses This means one can now study at Masterskill University College of Health Science to be a doctor. The ministry has approved Masterskill's application to offer the MBBS degree in partnership with Chettinad Hospital and Research Institute of Tamil Nadu India.

Southern Steel Bhd will invest about RM45mil this year to upgrade its plant in Prai Industrial Estate as part of its corporate social responsibility programme, said group chief operating officer Chow Chong Long The allocation will be used to upgrade five recyled water treatment facilities, install new scrap cleaning machines and replace the existing dust collection system, according to Chow.

Petra Perdana Bhd will be placing out 10% of its shares to an established shipbuilder, sources close to the deal said. "The move is strategic and synergistic. They (Petra Perdana) have been clear about not wanting to be seen to be choosing a friendly party "Once it is announced, it will show that the buyer is strategic as the businesses are synergistic. One is a shipbuilder while the other is an offshore marine services firm," the source said. The choice of the placee of the 10% block of Petra Perdana shares will be closely watched, including by the authorities. This is in light of the fact that a tussle for control is still simmering at Petra Perdana.
International retail chain Dairy Farm International Holdings Ltd has signed a deal to purchase Bintang Supermarket Group in Malaysia, sources said. The purchase is Dairy Farm's seventh in the country since its entry 11 years ago when it acquired the Giant chain owned by the Teng family.According to sources, the Hong Kong-based retailer is buying 14 Bintang retail stores and two high-end Mercato supermarkets.The purchase will help Dairy Farm's Malaysian unit, GCH Retail (Malaysia) Sdn Bhd, expand its portfolio of stores from the current 105 Giant outlets (supermarkets and hypermarkets) and 16 Cold Storage supermarkets.It is understood that once the deal is completed, the Bintang outlets will be rebranded as Giant and the Mercato outlets in the Sri Hartamas Shopping Centre and Pavilion Kuala Lumpur will become Cold Storage.

Malaysia and Qatar will sign a memorandum of understanding tomorrow to explore deals worth up to US$5 billion (RM16 billion) in fields including energy and Islamic finance, a source said yesterday. The government-to-government deal will be signed in Kuala Lumpur, said the source, who is familiar with the plan. The source declined to elaborate. An official with a Malaysian state investment authority declined to comment.

Malaysia Airlines (MAS) top executive has described the European Union's (EU) carbon emission trading scheme (ETS) as baseless. The ETS has now been extended to the aviation industry and comes into force in 2012. Managing director and chief executive officer Tengku Datuk Azmil Zahruddin said once the ETS comes into force, MAS will have to pay the EU carbon tax, effectively all the way from Kuala Lumpur to London.On delay in delivery of the Airbus A380 superjumbos, Tengku Azmil said MAS will be compensated. He did not reveal details of the compensation, but said it was stated in the contract with Airbus. Delivery of the A380s has been delayed for the third time. MAS will now get the aircraft in 2012.

WCT Bhd, which is actively bidding for local and foreign projects, hopes to clinch some RM2 billion worth of jobs this year. Its current orderbook of RM3.2 billion is expected to last for another two years. chairman Datuk Capt Ahmad Sufian also said that the claims made by the group against Dubai's Meydan LLC was ongoing. In January 2009, Meydan cancelled a racecourse construction deal with WCT and its partner Arabtec Construction LLC. A month later, it was reported that WCT Bhd and Arabtec will claim an estimated RM500 million from Meydan for work done at the Nad Al Sheba Dubai Racecourse. Meydan forfeited the RM178 million performance bond held as deposit, when it awarded the job to the joint venture company in October 2007.

Shell Refining Co (Federation of Malaya) Bhd expects to maintain positive performance for the remaining year, although there are signs of the market softening as the growth impact of the fiscal stimulus wanes and the current recovery cycle runs its course. Although the acute phase of the financial crisis has passed and a worldwide economic recovery seems under way, many analysts are viewing it differently

United U-Li Corp Bhd plans to invest some RM50 million next year to set up a new plant and increase its production capacity by 67 per cent. It is looking for suitable land, preferably in the Klang Valley, to build the plant, and once it is completed, the company hopes to produce up to 50,000 tonnes of steel a year.
The group, which manufactures cable support system (CSS), integrated ceiling system and light fittings, currently has two plants in Selangor and Perak, with total output of 30,00 tonnes of steel a year.

Asia Pacific Land Bhd (AP Land) has signed an agreement with HELP International Corp Bhd (HELP) to jointly provide education in any country including Malaysia and China. Under the deal, AP Land and HELP will form a joint venture (JV) with equal shareholding between the companies.

Malaysian Airline System Bhd (MAS) has incorporated an offshore company called Kelip-Kelip III Labuan Ltd at a paid-up capital of US$1 (RM3.22) in cash for its operation. It did not say what the company will do.

Salcon Bhd's wholly-owned subsidiary, Salcon Engineering Bhd decided not to proceed with the alternative water supply project in Rokan Hilir, Riau, Indonesia. Salcon told Bursa Malaysia Bhd that the decision was made after the detailed technical, financial and feasibility studies for the project was completed.

Moody's Investors Service has revised the outlook for CIMB Investment Bank Bhd's local currency and foreign currency long-term/short-term issuer ratings of Baa1/P-2 to positive from stable. "The change in outlook reflects the improving capability of CIMB Bank Berhad ("CIMB Bank"; A3/P-1/D+) -- CIMB's larger sister company, and with which it is closely integrated -- to provide it with support, if needed," says John Tham, a Moody's Vice-President and Senior Credit Officer, in a statement issued on Wednesday, May 12.
The outlook for CIMB Bank's bank financial strength rating (BFSR) of D+ is positive.

CIMB Investment Bank Bhd has on behalf of G Team Resources & Holding Bhd (G Team) served a notice of take-over offer on the board of directors of Maika Holdings Bhd to acquire the 125 million voting shares in the company. CIMB Group group chief executive Datuk Seri Nazir Razak said G Team's offer price for Maika share of 80 sen each would be payable in cash. He added the offer was based on the original investment of Maika's shareholders of RM100 million and the 25 million bonus shares received in 1996.According to Nazir, the offer shall be conditional upon G Team receiving more than 50% of the voting shares of Maika, failing which the offer would lapse. He pointed out that a general offer of Maika's 74.16% subsidiary Oriental Capital Assurance Bhd (OCA) would also be triggered once the offer became unconditional. CIMB Investment has been engaged as the adviser and financier to G Team for this exercise. G Team is a special purpose vehicle established by
Westports Malaysia Sdn Bhd executive chairman Tan Sri G Gnanalingam and Datuk S Kunasingam to take control of Maika with the objective of repaying shareholders their cost of investment in the company.

A rebound in external demand and industrial output could provide a robust growth in the Malaysian economy for the first quarter of this year, returning to pre-crisis levels, said economists. A Business Times poll of 18 economists expects an 8.84 per cent growth year-on-year for the first quarter, which would support an average annual growth of 6.07 per cent year-on-year. Five research houses expect Malaysia to stage a double-digit growth from a steep 6.2 per cent contraction during the first quarter of last year when Malaysia was also thrown into the throes of the global economic crisis. The economy surged by 4.5 per cent in the last quarter of 2009. Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz will announce the latest growth numbers this evening, together with the decision of the Monetary Policy Committee meeting with regard to the Overnight Policy Rate (OPR)

Results

Dialog Group Bhd, an integrated oil and gas services provider, reported RM31.8 million net profit on revenue of RM282.8 million for the third quarter ended March 31 2010. These were up from RM20.8 million and RM269.7 million, respectively, in the previous corresponding quarter. For the first nine months, the group registered a 35 per cent increase in net profit to RM87.4 million and a 16 per cent rise in revenue to RM867.2 million, from RM61.7 million net profit and RM746.5 million revenue, in the same period last year.

Putrajaya Perdana Bhd's net profit for the first quarter ended March 31, 2010 rose 46% to RM10.89 million from RM7.43 million a year ago, despite its revenue falling by nearly half to RM128.99 million from RM251.69 million. Earnings per share rose to 7.79 sen from 5.31 sen. The decline in revenue was mainly due to the completion of three major projects in the last financial year. However, the improvement in earnings were due to better profit margin for current construction projects and road maintenance jobs,

Mudajaya Group Bhd's net profit for the first quarter ended March 31, 2010 surged 260% to RM50.59 million from RM14.04 million a year ago, on the back of a 90.9% increase in revenue to RM239.35 million.
Earnings per share rose to 12.35 sen from 3.77 sen a year ago, the company said on Wednesday, May 12.
It declared a first interim dividend of 5% or one sen per ordinary share of 20 sen each under the single tier system for the financial year ending Dec 31, 2010. The company said the increase in revenue and profit was mainly due to the increased level of higher profit margin activities during the current quarter as compared to the previous corresponding quarter.

ASIA

Worries over the eurozone's debt problems despite a US$1 trillion (RM3.2 trillion) rescue deal sent gold to a record high yesterday while the euro slid as investors looked for safer assets.

Heightened concern about the risk of contagion from Greece's debt woes have attracted fresh inflows of cash into gold while investors continue to move out of the ailing euro, which remained depressed in Tokyo trade yesterday. A warning from Moody's Investors Service that it may downgrade Portugal and lower debt-laden Greece's rating to junk status also stoked bearish sentiment, after a similar move by Standard & Poor's saw borrowing costs spike for Athens.

Investors have switched focus to how the massive bailout will be carried out and the implications for future financial governance in the eurozone, amid doubts about whether debt-ridden members can reduce their deficits.

Regional shares were mixed, with some bargain-buying lifting markets following Tuesday's losses.

SINGAPORE: The stock market here joined the rally on other Southeast Asian bourses yesterday.

The benchmark Straits Times Index closed 0.79 per cent, or 22.66 points, higher at 2,880.33.

Wilmar International eased 0.3 per cent after posting a 6 per cent rise in first-quarter earnings but did not see strong volume growth lasting in 2010.

HONG KONG: Shares rose 0.33 per cent yesterday as bargain hunters moved in following the previous session's losses.

The benchmark Hang Seng Index added 65.98 points to close at 20,212.49. However, volumes were lacklustre with turnover at the lowest in six sessions.

Analysts said any near-term rebound is likely to be short-lived

Sydney rose 0.55 per cent, or 25.1 points, to 4,573.1 after Treasurer Wayne Swan forecast a return to budget surplus three years sooner than expected and before any other major advanced economy.

Tokyo ended down 0.16 per cent, or 17.07 points, at 19,394.03.

Shanghai added 0.31 per cent, or 8.14 points, to 2,655.71 as bargain hunters moved in to pick up from Tuesday's losses.

However concerns over mainland plans to cool the property market and keep a lid on inflation capped gains.

In other markets:

* Manila closed 0.20 per cent higher, adding 6.48 points to 3,269.41.

* Seoul closed 0.43 percent, or 7.21 points, lower at 1,663.03.

* Taipei ended flat, edging 5.74 points lower to 7,602.70.

* Jakarta gained 1.23 per cent, or 34.73 points, to end at 2,847.62.

* Bangkok rose 0.21 per cent, or 1.63 points, to close at 773.72.

* Mumbai rose 0.32 per cent, or 54.28 points to 17,195.81

EUROPE
European shares gained yesterday, as encouraging results from financials, such as Allianz and ING Groep, and Spain's plan to cuts its deficit lifted investor sentiment.

The pan-European FTSEurofirst 300 index of top shares closed up 1.3 per cent at 1,048.56 points. The index is now up 0.3 per cent for the year, having dipped into negative territory in early May on eurozone sovereign debt concerns.

In London, the benchmark London FTSE 100 index of leading shares closed up 0.92 per cent to 5,383.46 points.

In Paris, the CAC 40 gained 1.10 per cent to 3,733.87 points and in Frankfurt the DAX jumped 2.41 per cent to 6,183.49 points.

US

Stocks rallied Wednesday, with the Dow logging triple-digit gains, as European debt noise faded and investors focused on an improving domestic economy and corporate earnings.

The Dow Jones industrial average gained 149 points, or 1.4%, ending for the first time above last Wednesday's close, before turmoil swept through the market, culminating in last Thursday's flash crash.

The S&P 500 index added 16 points, or 1.4%, and the Nasdaq composite rose 50 points, or 2.1%.

Tech and industrial stocks led the advance. Shares of Intel, IBM and Cisco Systems, which reported its best quarter even after the close, finished up more than 3%. Manufacturers Boeing, Caterpillar and Du Pont gained more than than 2%.

Economy: The Commerce Department said the trade deficit increased 2.5% in March, widening to $40.4 billion from a downwardly revised $39.4 billion the previous month. That was lower than the $40.5 billion that analysts surveyed by Briefing.com expected.

The Treasury reported the 19th consecutive monthly deficit, with a shortfall of $82.7 billion in its April budget. That's much larger than the $52 billion gap economists were expecting during month, and it also topped March's $65.4 billion deficit. Historically, the government's budget posts a surplus during the month thanks to the April 15 tax filing deadline.

Companies: U.S. federal prosecutors are looking into whether Morgan Stanley misled investors about complex mortgage derivatives it designed, according to the Wall Street Journal . The company, however, denies any knowledge of the investigation. Shares of the bank fell more than 2%.

After the closing bell, Cisco Systems posted a fiscal third-quarter profit that surged 63% to $2.2 billion from a year earlier. Adjusted for one-time charges, the network equipment maker earned 42 cents per share, beating analyst estimates of 39 cents per share. Sales climbed 27% to $10.4 billion and also topped analysts' expectations. Shares of the company fell 1% in after-hours trading.

Disney reported profit and revenue that beat analysts' expectations late Tuesday. Thanks to the success of "Alice in Wonderland," the media giant's profit surged 55% to $953 million, or 48 cents per share, and sales climbed 6% to $8.58 billion. Stock in Disney ended 1.8% lower.

World markets: Stocks gained in Europe as the gross domestic product in the European Union rose 0.2% last quarter. Britain's FTSE 100 and France's CAC 40 finished up about 1%, and Germany's DAX rose more than 2.6%.

In Asia , Japan's Nikkei index closed 0.2% lower and the Hang Seng in Hong Kong ended up 0.3%.

Dollar and commodities: The dollar erased earlier losses and turned higher against the euro in the afternoon, rising 0.2%. The greenback also gained 0.9% against the British pound and was up 0.6% against the Japanese yen.

Gold prices continued to soar, rising $23.20 an ounce, or 1.9%, to settle at a record $1,243.50.

U.S. light crude oil slipped 72 cents, or 1%, to settle at $75.65 a barrel after a larger-than-expected build in crude supplies. Bonds: Treasury prices extended gains, with the benchmark 10-year yield up to 3.63%, after a $24 billion auction of 10-year notes.