Malaysia - Equity

The stock market ended broadly lower across the board yesterday with the benchmark index dropping 1.6 per cent on heavy selling amid fresh worries over the debt crisis in Europe.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) lost 21.94 points, or 1.6 per cent, to close at 1,308.23, an eight-week low, after touching an intra-day high of 1,329.05. It had opened 1.12 points lower at 1,329.05.

The weak sentiment on the local bourse was also triggered by a 5.8 per cent fall in the shares PPB Group. The local plantation and property group fell yesterday after its affiliate, Wilmar International Ltd was downgraded by Credit Suisse Group AG. It fell RM1.02 to close at RM16.60.

The Finance Index dived 204.64 points to close at 11,828.09, Industrial Index declined 43.29 points to 2,649.83 and the Plantation Index slipped 171.42 points to 6,168.44.

Topping the actives list, Talam eased 1 sen to 14 sen, Berjaya Corp fell 6 sen to RM1.56, Affin Holdings-Warrants fell 2 sen to 6.5 sen, Advance Information was unchanged at 13.5 sen and Maybank declined 9 sen to RM7.49.

Of the heavyweights, CIMB Group was down 17 sen to RM7.04, IOI Corp lost 26 sen to RM5.00, Sime Darby fell 8 sen to RM8.18 and British American Tobacco declined 82 sen to RM42.98.

Shares in Wah Seong Corp Bhd tumbled yesterday on news the company had lost a bid to acquire long-time partner Socotherm SpA to a consortium led by a bigger rival It was previously reported that Wah Seong was the leading contender to buy the troubled Italy-based pipe coating company. Wah Seong's share price fell as much as 8.8% yesterday before it closed at RM2.31, down 19 sen, or 7.9% for the day. A total of 2.5 million shares changed hands. A spokeperson at Wah Seong yesterday confirmed that Socotherm had "favoured" a proposal submitted by a consortium led by the world's biggest pipe coater, Bredero Shaw, and two private equity funds, 4D Global Energy Advisors of France and Sophia Capital of Argentina.

Cash-rich General Corporation Bhd (GCorp) has entered into a formal agreement with its major shareholders, Tan Sri Low Keng Huat and his son Datuk Marco Low Peng Kiat, for them to acquire the group's entire business and undertaking for RM505.04 million, representing RM1.70 per share. GCorp said it had inked a conditional master sale and purchase agreement with the duo's private vehicle, Consistent Records Sdn Bhd (CRSB), for the proposed transaction. GCorp said it would be paid RM290.83 million cash less the deposit in cash and the remaining RM214.21 million left owing by CRSB to GCorp.

AT Systematization Bhd has proposed a special bumiputera issue of 25.6 million shares of 10 sen each to investors to be identified and approved by the Ministry of International Trade and Industry. The issue would represent about 12.5% of its enlarged paid-up capital. It said the issue may be implemented in tranches depending on the prevailing market conditions and interest from investors.

RM

The ringgit closed lower against the US dollar yesterday amid fresh worries as Germany's move to ban naked short-selling of some securities rattled investors, dealers said.

At 5pm, the local currency was traded at 3.2510/2560 against the dollar compared with 3.2100/2150 Tuesday.

A dealer said the ban has added to the already shaky sentiment in the European zone and market players were looking elsewhere.

The local stock market was also weighed down across the board by Germany's regulation, a dealer said.

The ringgit was mostly lower against other major currencies.

It was lower against the Singapore dollar at 2.3197/3237 from 2.3123/3176 Tuesday and also against the Japanese yen at 3.5491/5561 from 3.4598/4659.

However, the ringgit was higher against the euro at 3.9584/9655 from 3.9790/9837 but weaker against the British pound at 4.6398/6483 from 4.6368/6431.

CPO

Crude palm oil futures on the Malaysia Derivatives Exchange closed mostly lower yesterday on lack of fresh leads.

Most investors remained sidelined, awaiting the release of May's palm oil exports figures, before taking up fresh positions.

Cargo surveyors, Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS), are expected to announce Malaysia's palm oil offtake for the first 20 days of May, today.

Meanwhile, traders pegged support for the spot month at RM2,400 per tonne although the market traded sideways today with no clear direction, one dealer said.

At close, June rose RM2 to RM2,472 per tonne, July declined RM4 to RM2,451, August eased RM10 to RM2,435 and September slipped RM7 to RM2,424.

News

The Malaysian Anti-Corruption Commission (MACC) will open an investigation file into the financial affairs of conglomerate Sime Darby Bhd if any element of corruption is suspected in its massive losses. MACC deputy commissioner Datuk Mohd Shukri Abdull said the commission will let Sime Darby complete its internal investigations first. Sime Darby is a government-linked company Sime Darby recently confirmed the market's worst fears when it announced that it would have to book in massive losses suffered in projects in the Middle East as well as the Bakun hydroelectric dam project in Sarawak
It is expected to book in close to RM1 billion losses in its third quarter results, which are expected to be released on May 27.

Winding up Transmile Group Bhd will take many months but it is a process that a group of creditors is willing to endure because they have waited long enough for their money.

Malaysian Trustees Bhd, which represents the creditors that include the Employees Provident Fund (EPF), has identified the receivers but it has yet to make the appointment.On March 26 2010, Malaysian Trustees served notice on Transmile demanding that the air cargo company pay the default outstanding amount from the RM105 million medium term notes (MTNs) within three weeks or face winding-up proceedings. Transmile, which had been hit by an accounting fraud scandal in 2007, slipped into Practice Note 17 status in February 2010 It was reported that EPF's aggressive move is based on the fact that it has not seen any improvement in the financial condition of Transmile.

PPB Group Bhd (4065), the largest shareholder in Wilmar International Ltd, reiterated Wilmar's denial of fraudulent tax claims for its operations in Indonesia.Wilmar told the Singapore stock exchange that its Indonesian units, collectively the biggest exporters of Indonesian palm oil, are and have at all times been complying with all relevant Indonesian tax laws. The statement also revealed that Wilmar's Indonesian units collectively export more than US$3 billion (RM9.7 billion) worth of palm oil annually in 2007, 2008 and 2009.

Tradewinds Corp Bhd's group chief executive officer (CEO) Shaharul Farez Hassan will go on a year's sabbatical beginning June 1 2010, sources say. Shaharul, who was appointed to helm the group since January 2 2008, will take leave to pursue his MBA. A chief operating officer is expected to be in charge in his absence.
Shaharul did not answer calls from Business Times.

Retired managing director Datuk Ramli Ismail has been removed from K&N Kenanga Holdings Bhd's board, a move said to have been initiated by its majority shareholders. Ramli, who was redesignated as a non-executive director on March 31 this year, was to have stood for re-election at yesterday's annual general meeting (AGM) in Kuala Lumpur. Ramli's re-election was the only resolution among 11 resolutions that was not passed. He had served on the board since 1996. K&N Kenanga had planned for a vote by poll even before the almost four-hour meeting took place.

State oil firm Petroliam Nasional Bhd (Petronas) yesterday awarded two oil exploration blocks off Sabah to a partnership that includes Sweden's Lundin. The blocks, SB307 and SB308, measure about 6,230 sq km and are located in water depths of up to 70 metres. Both blocks have been explored since 1965, Petronas said in a statement yesterday.

Maxis Bhd, the country's leading mobile operator, expects its annual capital expenditure (capex) to ease from next year onwards, as it has upgraded most of its existing network equipment. Maxis, which allocated more than RM4 billion on capex over the past four years, will be investing RM1.4 billion on capex for 2010. It is believed to be one of the highest annual capex commitment in the company's history.

RHB Capital Bhd (RHB Cap) expects to both finalise the acquisition and list PT Bank Mestika Dharma on the Indonesian bourse by the third quarter Group managing director Datuk Tajuddin Atan said RHB Cap was still awaiting approval from Bank Indonesia, the central bank, for the acquisition of up to 89% of Bank Mestika. He said the group had in January received the Bank Negara nod for the acquisition.

The privatisation of Astro All Asia Networks plc may be a "done deal." An industry source say some shareholders of the Employees Provident Fund (EPF) are in favour to the terms and conditions of the proposed privatisation. "We believe the deal (privatisation of Astro) is likely to go through once consensus by the EPF shareholders is achieved," he said, adding that some of the EPF shareholders had agreed to the privatisation. The final outcome of the privatisation of Astro is expected to be announced tomorrow. As it stands, about 84% of Astro shareholders are in favour of the privatisation.

MISC Bhd will pay about US$850mil for a 50% stake in international tank terminal operator VTTI BV by the time the deal is completed in six months time, up from the original US$735mil price tag announced earlier this week The variation in purchase price took into account "some adjustment in capital expenditure and working capital" incurred by VTTI during the intervening period, according to analysts who attended a briefing by MISC on Tuesday.

Petra Energy Bhd's wholly-owned subsidiary Petra Resources Sdn Bhd (PRSB) has filed a writ of summons against seven persons it did not identify for breach of fiduciary duties and breach of trust. "The defendants were in 2005 either employees of then holding company of PRSB or persons connected to or associated with those employees," the company said in a statement to Bursa Malaysia yesterday The writ of summons and statement of claim was based on findings in a preliminary confidential status report by Ferrier Hodgson MH Sdn Bhd (FHMH) dated Apr 26, it told the stock exchange The relief claimed included general damages and a declaration that the seven defendants had been "unjustly enriched" and were liable to "disgorge any profits" that might have been made to PRSB.
Pahang based oil palm plantation group Kurnia Setia Bhd (KSB) ( 5193 ) plans to invest up to RM2 billion over the next 15 years to develop an integrated township called Kota Sri Ahmad Shah (KotaSAS) in Kuantan, Pahang. The group's maiden venture into property development will be via its property arm, KotaSAS Sdn Bhd.

Tan Chong Motor Holdings Bhd, the assembler and distributor of Nissan vehicles in Malaysia, is bullish that car sales will improve by 8 per cent to 10 per cent this year, despite interest rates increasing. Edaran Tan Chong Motor Sdn Bhd executive director Datuk Dr Ang Bon Beng said it is working to improve car sales to cushion any shortfall in the coming months. Last year it sold 29,683 vehicles. For the first three months of this year, Nissan car sales improved by 23 per cent from a year ago.

Zecon Bhd has received a letter of tender acceptance from the Ministry of Rural and Regional Development for a RM28.59 million contract for a proposed water treatment plant in Kapit. The project was for a 24-month period from the date of site possession that was scheduled for May 26, 2010.

Faber Group Bhd has had two contracts totalling AED65.6 million (RM57.8 million) with the Department of Municipal Affairs, Western Region Municipality (WRM), Emirate of Abu Dhabi, renewed for another year.
Its subsidiary Faber LLC had received the contract renewal for the provision of civil, mechanical and electrical maintenance services for low cost houses at Madinat Zayed in WRM with an estimated annual contract price of AED32.8 million (RM28.9 million) and for the same services and price of RM28.9 million at Liwa in WRM.

National postal company Pos Malaysia Bhd hopes to attract 30 per cent of the country's taxpayers to use its online transaction portal at PosOnline to pay their income tax. This follows its collaboration with the Inland Revenue Board of Malaysia (IRB) yesterday. Pos Malaysia group managing director and chief executive Datuk Syed Faisal Albar said the new service provides ease and convenience for customers to pay their income tax via PosOnline or at any of Pos Malaysia's extensive network of over 700 outlets nationwide.

TRC Synergy's unit Trans Resources Corporation Sdn Bhd has secured a RM45 million contract to upgrade the Sultan Ismail Petra airport in Kota Baru. Its unit received the letter of acceptance from Wira Akil Holdings Sdn Bhd on Monday.

Malaysia yesterday launched a benchmark US dollar-denominated Islamic bond, the second global sovereign sukuk in eight years. The sukuk, launched under the Malaysia International Islamic Financial Centre initiative, is believed to be bigger than the first global sovereign sukuk of US$600 million (RM1.9 billion) launched in 2002. At the launch, Prime Minister Datuk Seri Najib Razak also announced the roadshow for the sukuk - structured under the Ijarah principle - that will cover destinations in Asia, the Middle East and the US.The sukuk, to be listed on Bursa Malaysia, Hong Kong and Labuan exchanges, is expected to be assigned ratings of A- by Standard and Poor's and A3 by Moody's.

The Bursa Malaysia bourse may have been hit with another technical glitch yesterday, which caused a temporary disruption on its stock indices, including the benchmark FTSE Bursa Malaysia KLCI. The exchange, in a statement, said that all the FTSE Bursa Malaysia indices could not be disseminated since 11.09am and it was investigating the cause of the problem. The problem was resolved just over an hour later ? at 12.16pm, when the exchange resumed its normal dissemination of all indices.
At press time, the exchange did not reveal the cause of the problem.

Malaysia has broken into the top 10 list of the world's most competitive countries, a result that will make it more attractive to foreign investors and proof that the government's transformation efforts are bearing fruit.
The country has taken the 10th spot on the Switzerland-based IMD's World Competitive Yearbook for 2010, up from 18th placing last year. The list measures Malaysia against 58 countries this year, from 57 nations last year. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said that Malaysia had been steadily improving its rating since it was first included in the well-respected list in 1999 With an index score of 87,228, Malaysia has joined the ranks of the most competitive countries in the world, sharing the Top 10 ranking with Singapore, Hong Kong, the US, Switzerland, Australia, Sweden, Canada, Taiwan and Norway.

Bank Negara Malaysia may revise upwards Malaysia's forecast gross domestic product (GDP) for 2010, given the stronger than expected first quarter growth of 10.1 per cent. Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said potential for a revision was high despite uncertainties in Europe which has seen the euro hit a four-year low.Prime Minister Datuk Seri Najib Razak had earlier forecast Malaysia's GDP to grow at 5-6 per cent this year.

Results

Media Prima Bhd made a net profit of RM45.6 million for the first quarter ended March 31, compared with a loss of RM23.2 million in the same period last year, boosted by new acquisitions and higher advertising revenue. Revenue more than doubled to RM323.7 million, helped by strong contributions from its television, radio, outdoor media and print media assets. Excluding exceptional items of RM17.5 million arising from negative goodwill as a result of the acquisition of publisher The New Straits Times Press Bhd (NSTP), Media Prima's net profit from continuing operations grew by more than 100 per cent to RM28.04 million, from a loss of RM9.93 million.

Diversified GUH Holdings first quarter net profit tripled to RM12.67 million from RM4.34 million a year earlier as the company booked a higher topline, and gains from its investment in quoted securities. Its revenue for the first quarter ended March 2010 rose 32.1% to RM70.22 million from RM53.17 million, helped mainly by sales of the electronic component manufacturer's circuit boards.In quarterly terms, GUH's net profit fell 0.9% from RM12.78 million in the preceding fourth quarter while revenue rose 3.5% from RM67.85 million.

Taliworks Corp Bhd's first quarter net profit rose in annual and quarterly terms as the company booked higher revenue and registered gains from derivative financial instruments Net profit in the quarter ended March 31, 2010 more than doubled to RM19.41 million from RM8.42 million year earlier. Revenue rose 20.7% to RM44.37 million from RM36.75 million. Compared to the preceding fourth quarter, net profit grew 57.7% from RM12.31 million while revenue was slightly down from RM44.73 million.

Diversified Tradewinds Corp Bhd's first quarter net profit surged 330% to RM16.82 million from RM3.93 million a year earlier, boosted by higher revenue, and larger contributions from its associate companies. Its revenue rose 12.8% to RM125.24 million from RM110.99 million, buoyed mainly by its financial services and hotel operations.In quarterly terms, Tradewinds' bounced back into the black from a net loss of RM48.75 million in the preceding fourth quarter while revenue fell 1.8% from RM127.56 million.

Scomi Marine Bhd posted a net profit of RM21.9mil for its first quarter ended March 31, 97% higher compared with RM11.1mil in the previous corresponding period, due to improved operations management, lower bunker costs and capitalisation of docking costs. Revenue for the period was RM102.8mil, a 7% dip compared with the same quarter last year mainly due to negative impact from forex translation.For the quarter under review, the company's coal logistics division continued to be the major contributor to earnings.

Amway (M) Holdings Bhd had posted a lower net profit of RM16.9mil for the first quarter ended March 31 versus RM19.4mil in the same period last year The decrease was due to higher distribution expenses incurred from consumer access strategies, brand-building initiatives, higher purchase price of products, offset against favourable foreign exchange movements and increase in sales revenue Revenue for the period was higher at RM175.5mil against RM163.8mil previously mainly due to pre-price increase buying ahead of the distributor price increase effective March 1.
Asia

The euro hit a new four-year low against the US dollar in Tokyo yesterday after a move by Germany to ban certain market trades fuelled fears for Europe's banks, amid a deepening debt crisis.

Shares across Asia were also lower as the euro's woes weighed on exporters and worries about the eurozone debt crisis persisted, despite a European effort to contain the problem with a trillion-dollar rescue package.

"The German decision to ban short-selling suggested policymakers were deeply worried about threats to their banks from their lending to Greece," said John Kyriakopoulos of National Australia Bank in Sydney.

The euro slid to a four-year low of US$1.2144 in Tokyo from US$1.2162 in New York on Tuesday, before recovering slightly to US$1.2210.

In Asian trade Tokyo ended 0.54 per cent, or 55.8 points, lower at 10,186.84

Sydney fell to its lowest level in nine months, giving up 1.87 per cent, or 83.6 points, to close at 4,387.1, weighed by the debt fears as well as a proposed 40 per cent tax on mining profits.

The region followed a 1.08 per cent slump on Wall Street.

However, Shanghai was up 1.08 per cent, reversing earlier losses on bargain hunting, although dealers were jittery about the eurozone and probable government moves to tighten credit.

In other markets:

Singapore: The Straits Times Index declined 2.5 per cent to 2,774.54 at the close, the biggest drop since January 26.

The following shares were among the most active: HTL International fell 6.3 per cent to 59.5 Singapore cents, Neptune Orient Lines fell 4.9 per cent to S$1.96 and Sembcorp Industries fell 2.4 per cent to S$3.99.

Hong Kong: Shares fell 1.83 per cent yesterday, with the European debt crisis and weakness in the euro causing jitters in global markets.

The benchmark Hang Seng Index ended 365.96 points lower at 19,578.98. Turnover was HK$59.06 billion.

Shanghai lost 0.27 per cent, with the composite index, that covers both A and B shares, down 6.98 points at 2,587.81 on turnover of 76.6 billion yuan

Shanghai lost 0.27 per cent, with the composite index, that covers both A and B shares, down 6.98 points at 2,587.81 on turnover of 76.6 billion yuan
* Seoul closed 0.80 per cent, or 13.16 points, lower at 1,630.08.

* Taipei fell 0.34 percent, or 26.14 points, to 7,559.16.
Nan Ya Plastics fell 2.26 per cent to 60.5 Taiwan dollars while Taiwan Semiconductor Manufacturing Co closed 0.34 per cent lower at 59.3.

* Manila closed 1.31 per cent, or 42.88 points, lower at 3,222.19.
Ayala Corp was unchanged at 320 pesos while Energy Development was down 2.94 per cent to 4.95 pesos. Philippine Long Distance Telephone was down 0.61 per cent at 2,455 pesos.

* Wellington ended 0.95 percent lower, losing 29.80 points to 3,121.88. Contact Energy eased 1.5 percent 6.01 New Zealand dollars and Telecom fell one per cent to 2.05. ING Property Trust closed down 2.6 per cent at 74 cents.

Europe

European stocks hit their lowest closing level in nearly two weeks yesterday, dragged down by banking shares, as investors became jittery following Germany's move to ban naked short sales of a range of financial assets.

Appetite for risky assets fell, with the VDAX-NEW volatility index surging 21 per cent.

The FTSEurofirst 300 index of top European shares ended 3 per cent lower at 996.38 points. It fell below 1,000 for the first time since a US$930 billion package aimed at preventing the Greek debt crisis from spreading was unveiled earlier this month.

London's benchmark FTSE 100 index of leading shares lost 2.81 per cent to 5,158.08 points. In Paris, the CAC 40 slumped 2.92 per cent to 3,511.67 points and in Frankfurt the DAX shed 2.72 per cent to 5,988.67 points

USA

Stocks recovered from deep losses posted earlier in the session but ended lower Wednesday, as investors welcomed the Fed's forecast of an improving economy amid lingering fears about the global economy.

The Dow Jones industrial average finished 67 points lower, or 0.6%. Earlier, the index dropped 150 points. Industrial stocks led the decline, with shares of Caterpillar and Boeing falling more than 2%.

The S&P 500 lost 6 points, or 0.5%. The broad index also slid as much as 20 points to hit an intraday low of 1100.66. Investors will keep a close eye on 1,100, a key psychological level. If the index breaks below that level, it could trigger further selling or may wind up bringing money back into the market.

The Nasdaq composite slipped 19 points, or 0.8%. Earlier in the session, the tech heavy index fell more than 1%. The euro zone's fiscal troubles remained in the spotlight for most of Wednesday following Germany's announcement that it will ban 'naked' short selling. But the Fed's minutes released later in afternoon lifted the central bank's outlook for the economy, and in turn boosted investor confidence and prompted U.S. stocks to regain some ground.

The CBOE Volatility index, or the VIX, the market's fear gauge, spiked 15.5% to its highest point since May 7, the day after the market's flash crash. It later recovered to just 3.7% higher.

World markets: European shares also took a hit, with Germany's DAX and France's CAC finishing 2.9% lower. The FTSE 100 in Britain slipped 2.8%,

The German trading ban also sparked jitters in Asia, where Hong Kong's Hang Seng sank 1.8% and Japan's Nikkei finished the session 0.5% lower.

Economy: The Labor Department said its consumer price index slipped 0.1% in April on a monthly basis, but climbed 2.2% compared to a year earlier. Still, that's the smallest annual increase since January 1966.

The government's report showed that core CPI, which excludes volatile food and fuel prices, held steady with March's figures and rose 0.9% on an annual basis.

Economists had expected the CPI and core CPI to edge up 0.1%, according to a consensus forecast from Briefing.com.

A report from the Mortgage Banker Association showed that a record 10.06% of borrowers were behind on the payments during the first quarter of 2010.

Investors also took in minutes from the Federal Reserve's latest policy meeting. The central bank improved its outlook for economic growth this year and decreased its forecast for the unemployment rate.

Wall Street reform: Senators in favor of the financial reform bill failed to muster enough votes to end debate on the legislation in a crucial test vote on Wednesday afternoon.

Proponents were shy 3 of the 60 votes needed to pass the test, which intended to set up the bill for a final vote by the end of the week .

Companies: Target reported Wednesday that its quarterly profit rose 28% to $671 million from a year ago. The retailer's earnings per share of 90 cents missed analysts' expectations of 91 cents per share. Target's stock ended 0.4% lower.

Dollar and commodities: The dollar fell 1.6% against the euro after the shared currency eased off a four-year low hit Tuesday. But while the euro is clawing back up, Cardillo said it is only enjoying a relief rally and further declines are expected.

The greenback also turned lower against the British pound, sliding 0.6%, and the buck declined 0.7% versus the Japanese yen.

U.S. light crude oil sank to a 7-month low below $68 a barrel earlier Wednesday, before regaining losses to settle 46 cents higher at $68.87.

Gold for June delivery fell $21.50 to settle at $1,193.10 per ounce. Bonds: Treasury prices ended lower. The 10-year note's yield rose to 3.37%.