MO R N I N G C O F F E E - Tuesday, May 15, 2012


Market roundup-Bloomberg

Dow Falls to Lowest Level Since January on Greece Concern: U.S. stocks declined, sending the Dow Jones Industrial Average to the lowest level since January, as Greece struggled to form a new government amid growing speculation the nation may leave the European currency. Greece's political deadlock went into a second week after President Karolos Papoulias failed to secure agreement on a unity government.The S&P 500 slid 1.1 percent, the lowest since Feb. 2. The Dow fell 1 percent. The Chicago
Board Options Exchange Volatility Index, which measures the cost of using options as insurance against S&P 500 losses, rose 10 percent to an almost four-month high of 21.87

Oil Falls Near Five-Month Low on Greece, Saudi Price Call: Futures dropped 1.4 percent after Greece failed to agree on a unity government and European Union officials considered the country's possible exit from the euro. Saudi Arabia wants crude prices lower than they are now; the kingdom is pumping at its highest rate in almost three decades, OPEC data show. Crude for June delivery fell $1.35 to $94.78 a barrel on the New York Mercantile Exchange, the lowest settlement since Dec. 19.

European Stocks Drop on Greek Deadlock, Merkel's Setback: European stocks retreated, snapping two days of gains, as Greece moved closer to a possible exit from the euro currency union and German Chancellor Angela Merkel's party lost a state election. Merkel's party lost an election in Germany's most populous state, helping the Social Democrats tighten their grip on the country's regional governments The U.K.'s FTSE 100 declined 2 percent. France's CAC 40 lost 2.3 percent. Germany's DAX dropped
1.9 percent.

Corporate News
Shell Refining warns of depressed margins: For the three months to March 31, Shell Refining's net profit fell 78.8% to RM28.67 million from RM135.54 million a year ago, mainly due to weak refining margins and lower stockholding gains after tax. Earnings per share were 9.56 sen compared with 45.18 sen in the previous corresponding quarter.

Gas Malaysia expected to list on June 11: the listing is expected to raise over RM734.4 million, potentially making it the third-largest initial public offering this year after Felda Global Ventures Holdings Bhd and Integrated Healthcare Holdings Bhd. MMC-Shahpadu (Holdings) Sdn Bhd has a 55% stake in Gas Malaysia, Tokyo Gas-Mitsui & Co (Holdings) Sdn Bhd has 25% and Petronas Gas Bhd 20%.

Exim Bank expects to disburse RM1.5b loans this year: against RM1.2 billion last year, construction, power
and water companies are venturing out of Malaysia as it (the market) is quite limited here. About 80% of the bank's disbursements are loans to small and medium enterprises ranging from RM20 million to RM30 million

-SunBiz

CPO price hits 3-month low: to RM3,173 on Bursa Malaysia Derivatives as concerns on the global economic slowdown and weak palm oil demand continue to worry investors. The benchmark futures CPO July contract tumbled RM102 to close at RM3,173 per tonne on Monday from RM3,275 per tonne last Friday. This is its three month low since Feb 14, 2012.

Zeti: Asia can weather Euro storm: We are affected, but we are in a better position to cope given that the Asian markets are now more developed, particularly in the bond market. The financial reforms that were put in place earlier paid out, and the economic fundamentals are sound. We are still experiencing growth, although at a moderate pace.

United Plantations earnings down on production costs: net profit fell 15.6% to RM72.65mil for the first
quarter ended March 31, versus a year earlier, mainly due to higher production costs of crude palm oil (CPO), palm kernel and coconuts.

-StarBiz

Latexx Partners posts lower Q1 pretax profit: recorded a lower pre-tax profit of RM11.61mil for the first quarter ended March 31, 2012, compared with RM14.94mil in the same period in 2011. Revenue however rose to RM98.99mil from RM94.75mil due to higher demand for gloves.

-StarBiz

Axiata's Bangladesh unit to pay RM55m in unpaid taxes: Axiata Group's Bangladesh unit, Robi Axiata Ltd, has to pay the government nearly Tk 1.5 billion (RM55.16 million) in unpaid taxes after the mobile operator lost a legal battle against the country's telecommunications regulator.

Continental AG buys Continental Sime Tyre: German automotive supplier Continental AG has acquired the
remaining 30 per cent stake in Continental Sime Tyre Sdn Bhd from joint venture partner Sime Darby Bhd, giving it 100 per cent ownership of the venture. Sime Darby had said that it was disposing non-core business to focus on its main operations such as plantations, which contributes 70 per cent to its earnings.

CSR Zhuzhou faces 5 rivals for RM1.8b MRT job: will have to face competition from five contenders to win a RM1.85 billion job to supply electric trains for the Klang Valley ' MY Rapid Transit (MRT) project. They include Kawasaki Heavy Industries Ltd, a consortium comprising Bombardier (Malaysia) Sdn Bhd, Bombardier Sifang (Qingdao) Transportation Ltd and Scomi Rail Bhd; Changchun Railways Vehicles Co Ltd, Germany's Siemens AG and South Korea's Hyundai Rotem Co/CMC Engineering.Tender offer closes this week but MRT Co is expected to extend it to June 14.

-Btimes

Source:Jupiter Securities Research 15 May 2012