#Stocks to watch:* Pos Malaysia, HELP, TA Enterprise, Maybulk

KUALA LUMPUR: The FBM KLCI posted six straight days of gains last Friday, March 25, with the FBM KLCI up 0.77% or 11.66 points to 1,515.55 following the recent aftermath of the Japan earthquake and the on-going Mid-East turmoil but trading is expected to be lacklustre in the week ahead.

On Friday, Wall Street advanced for a third straight day, giving the S&P its best weekly performance since early February, but volume remained light as global uncertainty persisted.

The Dow Jones industrial average gained 50.03 points, or 0.41%, to 12,220.59. The Standard & Poor's 500 Index rose 4.14 points, or 0.32%, to 1,313.80. The Nasdaq Composite Index added 6.64 points, or 0.24%, to 2,743.06.

For the week, the Dow gained 3.1%, the S&P climbed 2.7% and the Nasdaq advanced 3.8%.

As for Bursa Malaysia, overall trading has been lacklustre and gains restrained also on concerns of high oil price, rising food prices and the impact on inflation, which is forecast to climb between 2.5% and 3.5% this year.

Malaysia's consumer price index rose 2.9% in February 2011 from a year ago as prices for food & non-alcoholic beverages and non-food rose. The CPI rose 0.5% from January. For the period of January-February, the CPI rose 2.7% from the previous corresponding period.

The index for food & non-alcoholic beverages and non-food for the month of February 2011 showed increases of 4.7% and 2.1% respectively as compared to the same month in 2010.

While the market has managed to eke out marginal gains, investors are expected to nibble on selected stocks with on-going news, including RHB Capital and companies which announced their results including HELP INTERNATIONAL CORPORATION [] Bhd and TA ENTERPRISE BHD [].

Companies like POS MALAYSIA BHD [], MALAYSIAN BULK CARRIERS BHD [] and PACIFICMAS BHD [] would see trading interest after declaring dividends.

Pos Malaysia declared dividends totaling 17.5 sen for the financial year ended Dec 31, 2010.

PacificMas announced a windfall, with an interim dividend of RM1.398 per share less 25% income tax (net RM1.0485 per share) and single tier dividend of 30 sen per share (tax exempt) for the financial year ending Dec 31, 2011.

Maybulk declared a final single tier dividend of 10 sen per share for the financial year ended Dec 31, 2010. The dividend would be paid on May 6 this year.

Oil slips, but choppy eyeing demand, supply threats

NEW YORK: Oil prices dipped slightly in choppy, thin trade on Friday, March 25 as traders weighed concerns about Middle East unrest and Libya's conflict as well as demand for oil in quake-hit Japan and debt-laden Europe.

Investors eyed the threat to oil demand from Japan, where radiation fears escalated.

Concerns about euro zone debt woes continued and while U.S. fourth quarter economic growth rate was revised higher, a Thomson Reuters/University of Michigan survey showed consumer sentiment fell this month to its lowest since November 2009.

Protests in Yemen, Syria, Bahrain and by Shi'ites in Saudi Arabia kept concerns about unrest and the threat to supply from region in focus.

Rebel forces and those loyal to Libyan leader Muammar Gaddafi clashed as Western warplanes struck at armor used by the government to crush the revolt.

Brent crude futures for May delivery dipped 30 cents to $115.42 a barrel by 1:55 p.m. EDT, having seesawed between $115.20 and $116.13.

U.S. May crude futures fell 26 cents to $105.34 a barrel, swinging between $104.50 and $105.95.

"We've had a good run this week and for today we are seeing some pre-weekend profit-taking. While there is a lot of turmoil in the Middle East, none of the ongoing unrest affects big oil producers," said Ed Meir, senior commodities analyst at MF Global in New York.

"And on balance we are not short of physical supply. Libya's outage due to the fighting there has been offset by Saudi production and the demand in Japan is down. So there's no real tightness in supply at the moment."

BRENT/WTI SPREAD ALSO SEESAWS

Brent's premium to the U.S. benchmark West Texas Intermediate crude, down 23 cents at $10.11 a barrel, was choppy on Friday, swinging from $9.83 to $11.24, but remaining well off its March 1 record above $17.

Brent and U.S. crude have stalled ahead of 2011 peaks. The May Brent may run into resistance ahead of its contract peak of $118.42, before approaching the 2011 front-month intraday high of $119.79 struck on February 24.

U.S. crude has been unable to move above its 2011 high of $106.95 reached on March 7 and several recent moves above $106 have stalled.

Total U.S. crude trading volume, at just over 321,000 lots traded, continued to track well below the 30-day average. Brent trading volume also remained anemic at just above 208,000 lots.

The U.S. volume was on track to be one of the lowest weekly volumes in 2011. - Reuters

Oracle drives Wall Street higher; volume stays weak

NEW YORK: Wall Street advanced for a third straight day on Friday, March 25 giving the S&P its best weekly performance since early February, but volume remained light as global uncertainty persisted.

The three major stock indexes posted weekly gains after two straight weeks of declines brought on by the Japan earthquake, turmoil in the Arab world and a resurfacing of European debt problems.

Helped by a rise in tech shares after an upbeat outlook from Oracle Corp(ORCL.O), the S&P notched its best week since early December. But low volume, and the market's uncanny ability to withstand bad news, spurred questions about the rally's strength.

"Overall, I keep looking at the pluses and minuses and this week has been spectacular with respect to everybody ignoring the minuses," said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

The CBOE Volatility Index .VIX posted its second-worst seven-day run as investors shed anxieties about the global tumult.

Friday's trading volume of 6.56 billion shares on the New York Stock Exchange, NYSE Amex and Nasdaq, was weak, with Friday's session the second-lowest of the year, pointing to a lack of conviction. Daily average volume is 8.04 billion.

Oracle's stock climbed 1.6 percent to $32.64 and was the Nasdaq's most actively traded name a day after forecasting a rise in new software sales for its current fiscal quarter. The outlook fueled hopes that a global resurgence in tech spending remains intact, prompting at least 12 brokerages to raise their price targets on the stock.

The S&P TECHNOLOGY [] index .GSPT rose edged up 0.2 percent on Friday, and is up 3.3 percent so far this quarter.

In a further boost to techs, Accenture (ACN.N) rose 4.5 percent to $54.29 after the technology outsourcing and consulting company raised its outlook.

The Dow Jones industrial average .DJI gained 50.03 points, or 0.41 percent, to 12,220.59. The Standard & Poor's 500 Index .SPX rose 4.14 points, or 0.32 percent, to 1,313.80. The Nasdaq Composite Index .IXIC added 6.64 points, or 0.24 percent, to 2,743.06.

For the week, the Dow gained 3.1 percent, the S&P climbed 2.7 percent and the Nasdaq advanced 3.8 percent.

On the downside in tech shares, BlackBerry maker Research In Motion Ltd (RIM.TO)(RIMM.O) said earnings would slip as it spends heavily to launch its PlayBook tablet. The company's U.S.-listed shares sank 11.2 percent to $56.89.

On the economic data front, the Commerce Department reported that the U.S. economy grew more quickly than previously estimated in the fourth quarter of 2010 as businesses restocked shelves to meet rising demand.

U.S. consumer sentiment in March fell to its lowest level in more than a year as gasoline and food prices rose, according to the latest consumer survey from Thomson Reuters and the University of Michigan. - Reuters

HELP 1Q net up 12.4% to RM2.7m

KUALA LUMPUR: HELP INTERNATIONAL CORPORATION [] Bhd net profit for the first quarter ended Jan 31, 2011 rose 12.4% to RM2.73 million from RM2.42 million a year earlier, driven mainly by higher revenue collection.

Revenue for the quarter increased to RM24.29 million from RM23.51 million. Earnings per share was 1.90 sen, while net assets per share was 82 sen.

Commenting on its prospects, HELP said on Friday, March 25 that the education industry continued to be strong with further demand for quality education.

The company said while its home-grown courses continued to excel, its partnership with the Pearson group and the recent investment in Bridge2think AG would enable it to reach a larger base of foreign students overseas and tap into growing online learning market globally.

'HELP is constantly on the lookout to further expand our presence abroad.

'We are bullish about the Indonesian market and will continue to build more partnerships in the Asean region, it said.

HELP said it was remain confident that the group was fundamentally strong and expect its the performance to be satisfactory for the financial year ending Oct 31, 2011.

Maybulk declares final dividend of 10c per share

KUALA LUMPUR: MALAYSIAN BULK CARRIERS BHD [] declared a final single tier dividend of 10 sen per share for the financial year ended Dec'' 31, 2010.

It said on Friday, March that the dividend would be paid on May 6 this year.

For the financial year ended Dec 31, Maybulk net profit fell to RM238.37 million from RM243.79 million, on the back of revenue RM404.25 million.

February inflation rate up 2.9pct on-year, up 0.5pct on-month

KUALA LUMPUR: Malaysia's inflationary rate, measured by the consumer price index, rose 2.9% in February 2011 from a year ago as prices for food & non-alcoholic beverages and non-food rose.

The Statistics Department said on Friday, March 25 the CPI rose 0.5% from January. For the period of January-February, the CPI rose 2.7% from the previous corresponding period.

'The index for food & non-alcoholic beverages and non-food for the month of February 2011 showed increases of 4.7% and 2.1% respectively as compared to the same month in 2010,' it said.

The department said the February CPI, when compared with January, showed an increasing trend of 1.1% and 0.2% respectively for index food & non-alcoholic beverages and non-food, it said.

For the period January to February 2011, the index for Food & Non-Alcoholic Beverages and Non-Food increased by 4.2 per cent and 2.1 per cent respectively.

FBM KLCI ends week on a higher note

KUALA LUMPUR: ''The FBM KLCI ended the week on a higher note in line with the gains at the regional markets that advanced after Japanese factories began re-opening after the earthquake a fortnight ago.

World stocks also held firm on Friday, focusing on a buoyant economic and company backdrop, while the euro shrugged off fresh ratings downgrades for Portugal, which is in the grip of a political and debt crisis, according to Reuters.

Europe's single currency wobbled after Standard & Poor's followed Fitch in cutting Lisbon's credit rating by two notches and warned of worse to come. But it soon found its feet, it said.

The FBM KLCI gained 1.71 points to 1,515.55, lifted by gains including at Petronas Chemicals, Genting, Gamuda and RHB Capital.

Gainers beat losers by 483 to 278, while 316 counters traded unchanged. Volume was 1.16 billion shares valued at RM1.73 billion.

At the regional markets, Japan's Nikkei 225 rose 1.07% to 9,536.13, Hong Kong's Hang Seng Index and the Shanghai Composite Index added 1.06% each to 23,158.67 and 2,977.81, Singapore's Straits Times Index rose 0.91% to 3,070.84, South Korea's Kospi gained 0.85% to 2,054.04 and Taiwan's Taiex edged up 0.40% to 8,610.39.

PacificMas was the top gainer today, and surged RM1.11 to RM5.79 after it proposed a total of RM1.698 in dividends per share.

Petronas Chemicals rose seven sen to RM6.83, Genting and Gamuda up six sen each to RM10.46 and RM3.85, while Genting Malaysia added four sen to RM3.59.

Other gainers included Nestle that rose 86 sen to RM47.86, RHB Capital 28 sen to RM8.31, BHIC 23 sen to RM4.17, Bursa 21 sen to RM8.30, Tasek and Panasonic 20 sen each to RM8.85 and RM21.10, while Khind added 19 sen to RM1.58.

Meanwhile, Esso shares shed two-thirds of the early gains in late afternoon trade on Friday, March 25 after the company refuted a news report it could be taken private.

Esso closed 31 sen higher at RM3.80.

HWGB was the most actively traded counter with 65.45 million shares done. The stock added five sen to 68.5 sen.

Other actives included Tanco, Perisai, JCY, Karambunai, Nam Fatt, Media Prima and Axiata.

Decliners included AIC, Ewein, SHL, APM Automotive, Hong Leong Industries and JT International.

TA Enterprise 4Q net profit RM29.14m vs RM15.1m yr ago, boost from stockbroking, hotels

KUALA LUMPUR: TA ENTERPRISE BHD []'s earnings surged 92.5% to RM29.14 million for the fourth quarter ended Jan 31, 2011 from RM15.13 million a year ago mainly due to higher contribution from the stockbroking division and TA Global Group Bhd.

It said on Friday, March 25 revenue rose 34.7% to RM167.74 million from RM124.45 million while earnings per share (EPS) were 1.7 sen compared with 0.88 sen.

TA Enterprise said that stockbroking and TA Global Group's hotel operation were the main contributors to the Group's profit, leading at approximately 40% and 38% respectively of the group's pre-tax profit.

'The contribution from the TA Global Group was higher because the group had higher number of hotels in operation subsequent to the group's hotel acquisition exercises,' it said.

For the financial year ended Jan 31, 2011, its earnings shrank 17.6% to RM78.24 million from RM95.02 million though revenue showed a 38.7% increase to RM606.94 million from RM437.28 million.

As for the prospects, it expected the stockbroking division to benefit from the local economy, which has been growing steadily while there is ample liquidity in the financial system. It expected the FBM KLCI to rise for the coming year

'TA Global Group will benefit from the buoyant local property market. Its hotel operations located outside Malaysia have shown improvement in revenue lately. Nonetheless, the group is concerned about the uncertainties caused by the political unrest in Northern Africa and Middle East,' it said.

As for TA Global, it recorded a marginal improvement in the net profit of RM23.53 million for the fourth quarter ended Jan 31, 2011 from the RM22.37 million a year ago. Revenue rose 70.7% to RM127.22 million from RM74.53 million while its EPS were 0.44 sen compared with 0.46 sen a year ago.

For FY ended Jan 31, 2011, the earnings rose 48.5% to RM88.26 million from RM59.41 million in the previous financial year while revenue increased 44% to RM423.20 million from'' RM293.78 million.

The higher earnings and revenue were mainly due to higher contribution from hotel division as a result of the recent hotel acquisition exercise.

China sees strong commodities, weak dollar in 2011

BEIJING: Loose monetary policies in developed economies will place more upward pressure on global commodity prices and weigh on the dollar this year, the Chinese central bank said on Friday, March 25.

In a report reviewing the performance of global financial markets, the People's Bank of China also warned of a deepening of the European debt crisis, though its broad view was coloured with optimism.

"We expect that the world economy will keep recovering, and the foundation for the recovery will be firmer," it said in the 125-page report.

In a brief discussion of risks, it pointed to Europe's debt woes as well as inflation and the potential for asset bubbles in developing markets.

On balance, however, it said that the dollar would fare worse than the euro.

"In 2011, the dollar will be on a downward trend overall, because of the slow recovery of its economy, low interest rates and twin deficits," the central bank said. "The possible spreading of European sovereign debt crisis and geopolitical risks may push up the dollar in some periods."

It noted that short-term interest rates in major economies would gradually rise as their recovery solidifies.

"But as the global recovery momentum is not strong, the increases will not be too large," it said.

Looking at global commodities, it said that wealthy nations were printing money to kick-start their economies and this would inevitable push up prices.

"Developed countries will continue with their loose policies and global liquidity will remain ample, which will keep prices of commodities, especially crude oil and grains at high levels," it said.

Concerns about inflation would trigger demand for gold as a store of value, but the precious metal's bull run may be near its end, it added.

"We need to note that gold prices have reached historical highs, and its downward risks should not be overlooked," the central bank said.

It said the global recovery depended in large part on coordination between major economies.

"All countries should avoid competitive devaluation of their currencies and pay more attention to risks brought by excessively loose policies on the back of a global recovery," it said.

The central bank reiterated that China would make its currency more convertible under the capital account, a long-standing pledge that has resulted in only incremental progress so far.

"We will relax restrictions on cross-border capital transaction activities in a selective and step-by-step manner, making sure that all risks are effectively under control," it said. - Reuters

Pos Malaysia recommends 17.5c dividends for FY2010

KUALA LUMPUR: POS MALAYSIA BHD [] is rewarding its shareholders with dividends totaling 17.5 sen for the financial year ended Dec 31, 2010.

Pos said on Friday, March 25 its board of directors had recommended a first & final and special dividend of 10 sen and 7.5 sen respectively per ordinary share less 25% tax.

However, the dividends were subject to the shareholders' approval at its AGM. The entitlement date and payment date would be determined and announced later.

PacificMas surges on hefty dividends for shareholders

KUALA LUMPUR: Shares of PACIFICMAS BHD [] surged when trading resumed in the afternoon session on Friday, March 25 after it proposed a total of RM1.698 in dividends per share.

At 2.45pm, PacMas was up RM1.12 to RM5.80 with 314,100 shares done.

The FBM KLCI was up 2.77 points to 1,516.61. Turnover was 694.72 million shares valued at RM884.84 million. There were 423 gainers, 238 losers and 291 stocks unchanged.

PacificMas Bhd has declared dividends totaling RM1.698 for each share for the financial year ending Dec 31, 2011.'' The dividends will go ex on April 7.

The company announced on Friday, March 25 an interim dividend of RM1.398 per share less 25% income tax (net RM1.0485 per share) and single tier dividend of 30 sen per share (tax exempt) for the financial year ending Dec 31, 2011.

Esso pares gains after refuting privatisation news

KUALA LUMPUR: ESSO MALAYSIA BHD [] shares shed half of the early gains in late afternoon trade on Friday, March 25 after the company refuted a news report it could be taken private.

At 2.56pm, Esso was up 39 sen to RM3.88, off the high of RM4.40 at the midday break.

The FBM KLCI was up 1.67 points to 1,515.51. Turnover was 731.12 million shares valued at RM967.67 million. There were 420 gainers, 252 losers and 291 stocks unchanged.

Esso informed Bursa Malaysia during the midday break that it was not aware of any plans to take it private as had been reported.

'Esso wishes to also announce that there have been no undisclosed developments which would account for the apparent unusual market activity,' it said, referring to the high trading volume in its shares.

Esso quashes privatisation talk

KUALA LUMPUR: ESSO MALAYSIA BHD [], whose share price surged on Friday, March 25 has quashed speculation that it is going to be taken private.

Esso rose 26.07% or 91 sen to RM4.40 in the morning session with 3.17 million shares done on a report in a local daily that said the company;s shares had been actively traded a day earlier on rumours that it was going to be taken private.

The stock had advanced 8.72% or 28 sen to RM3.49 on Thursday.

In a filing to Bursa Malaysia Securities, Esso said on Friday that it was not aware of any plans to take it private as had been reported.

'Esso wishes to also announce that there have been no undisclosed developments which would account for the apparent unusual market activity,' it said, referring to the high trading volume in its shares.

Banks lift KLCI, RHB Cap in focus

KUALA LUMPUR: The FBM KLCI extended its gains for the sixth consecutive day as banking stocks and key blue chips advanced on Friday, March 25 in line with the gains at the regional markets.

RHB Capital was in focus on expectations of suitors for Abu Dhabi Commercial Bank's (ADCB) 25% stake in the local banking group.

At 12.30pm, The FBM KLCI rose 0.20% or 3.03 points to 1,516.87. Volume was 643.24 million shares valued at RM802.29 million. Gainers led losers by 408 to 226, while 284 counters traded unchanged.

The ringgit strengthened 0.07% to 3.0260 versus the US dollar; crude palm oil futures for the third month delivery added RM10 per tonne to RM3,280, crude oil slipped five cents per barrel to US$105.55 while gold gained US$2.28 to US$1,432.93.

Asian stocks rose on Friday amid optimism about upcoming company earnings, and the dollar retreated as investors sold the low yielding currency in favour of riskier assets, according to Reuters.

The Shanghai Composite Index jumped 1.07% to 2,978.14, Hong Kong's Hang Seng Index added 0.93% to 23,127.47, Singapore's Straits Times Index was up 0.91% to 3,070.57, South Korea's Kospi Index rose 0.82% to 2,053.58 and Taiwan's Taiex'' rose 0.56% to 8,624.04. Japan's Nikkei 225 pared down some of its gains from early trade and was up 0.53% to 9,484.93.

The euro steadied despite a political crisis in Portugal that prompted a downgrade from ratings agency S&P and added to concerns over Europe's sovereign debt crisis, it said.

Among banking stocks, RHB Capital rose 23 sen to RM8.26. AMMB nine sen to RM6.45, CIMB four sen to RM8.12 and Maybank two sen to RM8.77.

The Edge FinancialDaily reported that ADCB, which is the single largest foreign shareholder in RHB Cap, had called for a beauty parade among investment banks last week to pitch for an advisory role on the sale of its 25% stake in the local banking group.

Genting and Genting Malaysia added four sen each to RM10.44 and RM3.59, Gamuda and Petronas Chemicals were up five sen each to RM3.84 and RM6.81, while Nestle rose RM1 to RM48.

F&N added 28 sen to RM28 sen to RM15.88, BHIC 21 sen to RM4.15, Panasonic and Shell 20 sen each to RM21.10 and RM11.10, while Bursa rose 14 sen to RM8.23.

PacificMas rose 14 sen to RM4.82 before it was suspended at 11.26am and will resume trading at 2.30pm. It declared dividends totaling RM1.698 for each share for the financial year ending Dec 31, 2011.'' The dividends will go ex on April 7.

Meanwhile, Esso which surged 91 sen to RM4.40 on an article that it was to be taken private denied the report in a filing to Bursa Malaysia Securities on March 25.

'Esso wishes to state that, having made due enquiries, it is not aware of any plans to take Esso private as stated in the above article, it said. It also said there had been no undisclosed developments which would account for the apparent unusual market activity.

Perisai was the most actively traded counter with 33.8 million shares done. The stock was up four sen to 77 sen.

Other actives included HWGB, Media Prima, Nam Fatt, Karambunai, Tanco and CNI.'' Decliners included APM Automotive, Ewein, AIC, Fima Corp and Bonia.

#Flash* PacificMas declares RM1.69 in dividends per share

KUALA LUMPUR: PACIFICMAS BHD [] has declared dividends totaling RM1.698 for each share for the financial year ending Dec 31, 2011.'' The dividends will go ex on April 7.

The company announced on Friday, March 25 an interim dividend of RM1.398 per share less 25% income tax (net RM1.0485 per share) and single tier dividend of 30 sen per share (tax exempt) for the financial year ending Dec 31, 2011.

Trading in the shares was suspended at 11.26 am and will resume at 2.30pm on Friday.

On Thursday, PacificMas Bhd announced it had completed the disposal of its 100% stake in The Pacific Insurance Bhd to Fairfax Asia Ltd. The parties had agreed to the share sale agreement and variation letter to be RM216.48 million.

'The balance disposal consideration, net of the deposit, of RM196.48 million has been received by the company, and the proposed disposal is completed today,' it said on Thursday.

Actual cost for initial part of MRT to be known end-May

KUALA LUMPUR: The actual cost for the Klang Valley Mass Rapid Transit (MRT) project will hinge on the finalisation of the infrastructure design which will be known by end-May, says the Land Public Transport Commission.

Its chief executive officer Mohd Nur Kamal, whose commission is overseeing the project, said on Friday, March 25 said the estimated costs increase had been factored into the project.

He said the actual cost for the initial portion of the MRT project would be determined when the infrastructure design is finalised possibly by end of May.

On the funding structure of the MRT which will connect Sungai Buloh and Kajang for a start, he replied that: 'It's still too early to say.'

Mohd Nur who was speaking at a press conference organised by the GO-MRT Interim Support Committee in KL today said the Klang Valley centric project is pivotal to address additional capacity needed in the public transportation system going forward. "Coverage and connectivity is key," he said.

Zarinah Anwar's tenure as SC chairman extended for another year

KUALA LUMPUR: Securities Commission chairman Tan Sri Zarinah Anwar's tenure has been extended for one year, with effect from April 1, 2011.

The SC announced on Friday, March 25 that Zarinah has held the position of chairman since April 1. She joined the SC as deputy chief executive in 2001.

AmResearch downgrades MISC to Hold from Buy, lowers FV to RM7.30

KUALA LUMPUR: AmResearch has downgraded MISC BHD []'' to Hold from Buy previously and lowers its discounted cashflow-derived fair value to RM7.30 a share from RM11.80 a share.

The research house said on Friday, March 25 that it had cut its earnings projections and attached a higher 10% discount to its sum-of-parts valuation from 5% previously given deteriorating shipping fundamentals.

'We have cut our projections by 48-57% over FY11F-13F after factoring in lower tanker and container rates as well as higher bunker fuel cost assumptions. Reflecting our bearish view, our projections are now 32%-34% below consensus estimates over the FY11-13 forecast period,' it said.

AmResearch said tanker rates have been weaker than expected, as seen by the absence of winter peak in 4QCY10.'' Accelerating fleet growth and a shift forward in delayed orders means oversupply will worsen over the next 2 years.

The research house added that Clarksons projects global tanker fleet growth at 6.4% in 2011 and 6.7% in 2012 versus the past 4-year average fleet growth of 5.8%.

'MISC's valuation is already rich at 30x FY12F earnings, versus the broader market's PER of 14x. MISC's status as a high-beta cyclical stock positions it unfavourably in the current volatile market environment. At just 21% YoY EPS growth and 114% premium valuation to the KLCI, MISC is likely to underperform the index over the next 12 months,' it said.

FBM KLCI extends gains

KUALA LUMPUR: The FBM KLCI extended its gains on Friday, March 25 in line with regional markets following the firmer overnight close at Wall Street.

The Nikkei share average rose on Friday, helped by gains in U.S. stocks on optimism about upcoming earnings reports, while Asian investors took the reopening of some of Japan's factories post-earthquake as positive news.

The Asian markets also appeared to shrug off Standard & Poor's downgrade of Portugal's credit ratings by two notches to BBB on Friday and warning that it could cut it again by one notch as early as next week depending on the final shape of the euro zone bailout fund.

S&P, which followed a two-notch cut by Fitch on Thursday, said the collapse of Portugal's government has increased political uncertainty, hurting market confidence and potentially raising refinancing risk.

The FBM KLCI added 3.45 points to 1,517.29 at mid-morning, lifted by gains including at KLK and DiGi.

Gainers led losers by 302 to 115, while 214 counters traded unchanged. Volume was 219.7 million shares valued at RM217.65 million.

At the regional markets, Japan's Nikkei rose 1% to 9,529.14, Hong Kong's Hang Seng Index gained 0.79% to 23,095.83, South Korea's Kospi added 0.56% to 2,048.21, Singapore's Straits Times Index up 0.55% to 3,059.90, Taiwan's Taiex rose 0.15% to 8,589.06 while the Shanghai Composite Index edged up 0.07% to 2,948.82.

BIMB Securities Research in a note March 25 said Wall Street closed in positive momentum at the back of encouraging quarterly earnings and also the drop in first time claim for unemployment benefit, a sign that the job market is improving.

'It is hopeful that the drop in first time claim for unemployment benefit will be a precursor for the improvement in US unemployment figure, as this has been the biggest stumbling block for the US economy.

'Given this positive development in Wall Street, expect the local and regional market to continue its positive momentum today,' it said.

On Bursa Malaysia, Nestle was the top gainer and added RM1 to RM48; F&N rose 28 sen to RM15.88, Esso added 25 sen to RM3.74, PacificMas 17 sen to RM4.85, KLK 14 sen to RM21.18, Bursa 13 sen to RM8.22, NPC and BHIC 12 sen each to RM2.15 and RM4.06, while DiGi added 10 sen to RM27.74.

Media Prima was the most actively traded counter with 16.44 million shares done. The stock added five sen to RM2.40.

Other actives included CNI, Nam Fatt, TMS, JCY and Karambunai.

Decliners at mid-morning included JT International, Hing Yap, Nam Fatt, KKB, Berjaya Land and Maxis.

RHB Research positive on SEGi dividend plan, FV RM4.44

KUALA LUMPUR: RHB Research Institute is positive on SEG International's plans to pay out 50% of its earnings as dividends.

RHB Research said on Friday, March 25 it was maintaining its FY11-13 annual gross dividends of 17 sen to 30 sen a share, which translate to gross yields and net payout ratios of 3.7%-6.5% and 49.6%-51.0% respectively.

It has a fair value for SEGi at RM4.44.

SEGi announced on Thursday it has set a dividend policy to distribute a minimum of 50% of the group net profits to its shareholders, with effect from the financial year ending Dec 31, 2011.

SEGi said the board''believes that the dividend payout of a minimum of 50% of its net profits is within the group's financial capability considering its future earnings growth.

HDBSVR ups Kossan TP to RM3.90

KUALA LUMPUR: Hwang DBS Vickers Research has raised the Target Price for Kossan to RM3.90 after rolling forward its valuation base to FY12F, based on 8.5 times PE.

'We raised FY11-12 EPS by 10%-11% after revising up GP margins to 14% (from 13%) on the back of Kossan's good cost management.

'Kossan's earnings are proven to be resilient despite being hit by rising latex costs and a weakening US dollar. A key re-rating catalyst for Kossan would be re-emergence of the demand cycle to lift valuations,' it said.

SEGi up on 50% dividend policy

KUALA LUMPUR: SEG INTERNATIONAL BHD [] shares rose in early trade on Friday, March 25 after it set a dividend policy to distribute a minimum of 50% of the group net profits to its shareholders, with effect from the financial year ending Dec 31, 2011.

At 9.15am, SEGi was up one sen to RM3.47 with 119,00 shares done.

SEGi said the board''believes that the dividend payout of a minimum of 50% of its net profits is within the group's financial capability considering its future earnings growth.

BHIC continues ascend

KUALA LUMPUR: BOUSTEAD HEAVY INDUSTRIES CORP []oration Bhd (BHIC) extended its gains in early trade on Friday, March 25.

At 9.30am, BHIC was up 11 sen to RM4.05 with 12,000 shares traded.

HwangDBS Vickers Research on March 24 initiated coverage on the stock with a Buy rating and target price RM6.55.

The research house said BHIC was a a bargain for its strong earnings visibility.

It said BHIC had a monopoly in naval vessel contracts, and enjoyed strong government patronage, especially from the Royal Malaysian Navy.

It also said that as one of seven Petronas-licensed fabricators, BHIC was poised to benefit from the booming O&G industry.

'With Petronas emphasizing more on the local front, and strong news flow on marginal oil field and brownfield services, and deepwater development, fabricators will be the first beneficiary of the cycle,' it said.

S&P cuts Portugal credit rating, warns of further downgrade

SYDNEY: Standard & Poor's downgraded Portugal's credit ratings by two notches to BBB on Friday and warned it could cut it again by one notch as early as next week depending on the final shape of the euro zone bailout fund.

S&P, which followed a two-notch cut by Fitch on Thursday, said the collapse of Portugal's government has increased political uncertainty, hurting market confidence and potentially raising refinancing risk.

Whether there will be another downgrade hinges on the design of the bailout fund, or European Stability Mechanism (ESM), the S&P said.

"Based on current information and expectations, we could lower the ratings on Portugal again by one notch once the details of the ESM are officially announced," S&P said in a statement. "Such a rating action could take place as early as next week."

The agency said it would cut its rating again if the ESM raised the likelihood that Portuguese government bondholders become subject to a restructuring, or if the local market suffered a drop in trading liquidity.

The euro dipped to a session low around US$1.4150 after the S&P announcement from US$1.4171 late in New York on Thursday before recovering completely to US$1.4179, indicating markets had already priced in the cut following Fitch's move.

"The markets have expected that. The market is also expecting that at some stage Portugal will seek a bailout from the EU," said Daniel Brdanovic, senior manager Treasury at HSBC in Auckland.

''

END GAME NEARING?

Senior euro zone officials said Portugal was likely to need 60-80 billion euros in assistance from the EU rescue fund and the International Monetary Fund. No talks have begun yet and will anyway have to wait until a new government is formed.

"Mixing political crisis with a lack of austerity package and a bond market that is unwilling, that is not a situation that can carry on for very long at all, so I think we're moving towards that end game where Portugal is forced to seek help," said Robert Rennie, strategist at Westpac Bank.

Despite Portugal's rejection of austerity measures, S&P predicted the new government would eventually have to agree to the steps.

"We expect that a successor government would have no choice but to adopt some version of these reform proposals, given investors' apparently reduced appetite for Portuguese government debt, though perhaps on a delayed basis," S&P credit analyst Eileen Zhang said.

European leaders agreed on Thursday to increase their financial rescue fund to the full 440 billion euros by June, but avoided discussion of Portugal, which is under pressure to seek a bailout following the resignation of its prime minister.

Having said for weeks that they would agree a "comprehensive package" to tackle the euro zone debt crisis by the end of March, the leaders ended up delaying a final decision on boosting their safety net until mid-year.

The Portuguese upheaval underscored the wealth of political obstacles the single currency bloc faces in trying to solve a debt crisis that has deepened over the past year.

S&P said it could affirm the ratings at 'BBB/A-2' if "our current views about the ESM and its potential effect on Portugal's sovereign debt were to change as a result of further developments and if we were to take the view that the downside and upside risks to our forecasts are broadly balanced." - Reuters

Nikkei rises on U.S. stocks, draws buying on dips

TOKYO: The Nikkei share average rose on Friday, helped by gains in U.S. stocks on optimism about upcoming earnings reports, although investors will continue to cautiously monitor developments at Japan's troubled nuclear power plant.

Analysts said the overall market may get a lift as investors buy on dips, with some technical indicators showing that Japanese stocks are heavily oversold.

The benchmark Nikkei average rose 1.4 percent, or 130.48 points, to 9,565.49. The Topix gained 1.2 percent to 864.13. - Reuters

CIMB Research maintains Outperform on Gamuda, TP RM5.60

KUALA LUMPUR: CIMB Equities Research said although Gamuda's annualised 1HFY7/11 core net profit made up 99% of its forecast and 98% of consensus, it'' considered the performance to be above expectations.

It said on Friday, March 25 that it expects 2H11 to be stronger due to the gradual rise of CONSTRUCTION [] margins as key projects enter their mature phase.

'The reason for the deviation was our underestimation of EBIT margin. We now up our FY11-13 EPS forecasts by 8-10%, which raises our RNAV-based target price from RM5.45 to RM5.60,' it said.

CIMB Research said these strong results could catalyse the stock, along with project awards and newsflow on the MRT project for which Gamuda is the PDP and potentially the contractor for the tunnelling works.

'The RM6bn-7bn tunnelling portion for the SBK line is expected to be awarded in early 2012. We reiterate our OUTPERFORM call,' it said.

HDBSVR sees KLCI trading sideways with slight positive bias

KUALA LUMPUR: Hwang DBS Vickers Research said for the fifth day in a row this week, the benchmark FBM KLCI will probably show a sideways trading pattern with a slight positive bias on Friday, March 25.

'Essentially, the key market barometer is looking to inch its way up towards the immediate resistance threshold of 1,530 ahead,' it said.

Wall Street was up last night with its leading equity indices closing higher by between 0.7% and 1.4%, lifted mainly by better corporate earnings trend and a drop in jobless claims.

'In terms of corporate developments, investors could be focusing on: (a) Gamuda after the CONSTRUCTION [] outfit beat street estimates with a robust set of interim profit announced last evening; and (b) SEG International, which has just set a dividend policy to distribute a minimum of 50% of the Group's net profit to its shareholders. Based on consensus net earnings of RM62m for FY Dec 2011, this could translate to a DPS of 12 sen, implying a dividend yield of 3.5%,' it said.

Japan wants extra budget by end-April, may review corp tax cut

TOKYO: The Japanese government aims to have an emergency budget for post-quake relief and reCONSTRUCTION [] by the end of April, Finance Minister Yoshihiko Noda said on Friday.

Noda also said Japan should be careful about increasing its bond supply and that it will need a dedicated agency to lead government disaster relief efforts.

"We cannot easily increase government bond issuance," Noda told reporters.

Ruling coalition officials have suggested that the government will try to seek savings and spending cuts in the regular budget to limit the need to borrow more.

Economics Minister Kaoru Yosano, speaking separately, told reporters that the government may need to reconsider its earlier plan to cut the corporate tax, given the reconstruction needs.

He also said the parliament would have to start debating an emergency budget within a month.

The government on Wednesday estimated the direct damage from a deadly earthquake and tsunami that struck the country's northeast this month at as much as US$310 billion, making it the world's costliest natural disaster.

But with its debt already twice the size of its US$5 trillion economy -- the highest among industrialised nations -- Japanese Finance Minister Yoshihiko Noda has warned the country should not rush to borrow to pay for the reconstruction.

Ruling party officials have said Tokyo will need two or more supplementary budgets to finance Japan's biggest rebuilding effort since the post-World War Two reconstruction.

Economists polled by Reuters this week forecast total public spending related to the disaster at up to almost US$250 billion with forecasts ranging between 5 and 20 trillion yen. - Reuters

Earnings hope lifts stocks, S&P above key resistance

NEW YORK: U.S. stocks advanced on Thursday, March 24 as optimism about upcoming earnings and investor buying of the quarter's top performers lifted the S&P 500 above a key technical level.

The S&P 500 broke above its 50-day moving average at 1,305, leading investors to believe the market may have absorbed the worst of its recent pullback caused by Japan's earthquake and tumult in the Arab world, positioning stocks for another move higher.

"Yes, there are legitimate concerns. Yes, there are legitimate headline risks," said Phil Orlando, chief equity market strategist at Federated Investors, in New York.

"But it's entirely possible the market feels comfortable that this 7 percent correction we saw from mid-February into mid-March has priced those concerns in, and now we are starting to look forward to the prospect of continued economic growth and solid first-quarter profits."

The S&P 500 is up 24.8 percent since the start of September but briefly dipped into negative territory for the year recently as global concerns pushed commodity prices higher.

The Dow Jones industrial average .DJI gained 84.54 points, or 0.70 percent, to end at 12,170.56. The Standard & Poor's 500 Index .SPX climbed 12.12 points, or 0.93 percent, to 1,309.66. The Nasdaq Composite Index .IXIC rose 38.12 points, or 1.41 percent, to 2,736.42.

Ken Polcari, managing director at ICAP Equities in New York, said the S&P's 50-day moving average has acted as a point of resistance for the last week and a half, and a close above 1,305 will be bullish in the short-term.

SEMIS' STAR TURN

Semiconductor stocks were among the best performers and helped boost the Nasdaq after Micron TECHNOLOGY [] Inc (MU.O) posted a quarterly profit that topped Wall Street's forecasts.

Micron shares jumped 8.4 percent to $11.50. The PHLX semiconductor index .SOX gained 2.5 percent.

It was the second consecutive day of gains for the market, with the S&P 500 up 2.4 percent so far for the week.

With the market near the end of the quarter, portfolio managers will buy equities that have performed well as they execute window dressing, and hedge funds will cover short positions that are under pressure.

The S&P energy index .GSPE is among leading sectors for the quarter, with gains so far of 13.7 percent. Tesoro Corp (TSO.N) was the top performer in the sector for the quarter, up 40.4 percent.

The S&P technology index .GSPT, up 3.1 percent so far for the quarter, was up 1.6 percent on Thursday. The rally on Thursday pushed Micron Tech up more than 43 percent for the quarter, making it the sector's top gainer.

"Maybe there are some clients that are taking the opportunity to put some cash to work and put it to work in some areas like technology that have been leadership groups," Orlando said. - Reuters

#Stocks to watch:* SEGi, Gamuda, Ramunia, Digistar

KUALA LUMPUR:Stocks on Bursa Malaysia could extend their gains on Friday, March 25 but the gains could be restrained by concerns over the Middle-east turmoil and record high oil prices which would ultimately dampen global economic growth.

In the US, stocks advanced on Thursday as optimism about upcoming earnings and investor buying of the quarter's top performers lifted the S&P 500 above a key technical level.

The Dow Jones industrial average gained 84.54 points, or 0.70 percent, to end at 12,170.56. The Standard & Poor's 500 Index climbed 12.12 points, or 0.93 percent, to 1,309.66. The Nasdaq Composite Index rose 38.12 points, or 1.41 percent, to 2,736.42, Reuters reported.

The S&P 500 broke above its 50-day moving average at 1,305, leading investors to believe the market may have absorbed the worst of its recent pullback caused by Japan's earthquake and tumult in the Arab world, positioning stocks for another move higher.



At Bursa Malaysia, stocks with fresh corporate developments that could see trading interest include SEG INTERNATIONAL BHD [] (SEGi), GAMUDA BHD [], RAMUNIA HOLDINGS BHD [] and Digistar Corp Bhd.

SEGi said it has set a dividend policy to distribute a minimum of 50% of the group net profits to its shareholders, with effect from the financial year ending Dec 31, 2011.

SEGi said the board''believes that the dividend payout of a minimum of 50% of its net profits is within the group's financial capability considering its future earnings growth.

Gamuda's'' net profit for the second quarter ended Jan 31, 2011 rose 19.6% to RM94.03 million from RM78.63 million a year earlier, mainly due to higher contributions from all its divisions. Revenue rose marginally to RM607.19 million from RM603.24 million. Earnings per share were 4.59 sen, while net asset per share was RM1.74.

For the six months ended Jan 31, Gamuda's net profit rose to RM182.56 million from RM152.66 million in 2010.

Meanwhile, Ramunia's net profit for the first quarter ended Jan 31, 2011 fell to RM1.1 million from RM3.42 million a year earlier due mainly to the tail end of the remaining projects billings and lower operating income. Revenue slumped to RM1.36 million from RM15.85 million in 2010. Earnings per share were 0.17 sen while net assets per share was 25.1 sen.

Reviewing its results and commenting on its prospects, Ramunia said it was finalising its PN 17 regularisation plan.

As for Digistar, it said with the secured order book of RM102 million, it is in the midst of tendering and bidding of additional of RM130 million worth of contract and project of broadcasting jobs in Malaysia.

'The company is in the view that, once secure with additional contracts, barring any unforeseen circumstances, the expectation in rise of additional revenue in FY2011 shall increase around 30% to 40%, if compared to recorded revenue of RM73 million in FY10,' it said in reply to a query from Bursa Securities.

PacificMas completes disposal of Pacific Insurance to Fairfax Asia for RM216m

KUALA LUMPUR: PACIFICMAS BHD [] has completed the disposal of its 100% stake in The Pacific Insurance Bhd to Fairfax Asia Ltd.

The company said on Thursday, March 24 that the parties had agreed to the share sale agreement and variation letter to be RM216.48 million.

'The balance disposal consideration, net of the deposit, of RM196.48 million has been received by the company, and the proposed disposal is completed today,' it said.

US durable goods orders fall, job market healing

WASHINGTON: New orders for long-lasting manufactured goods fell in February, hinting at some unexpected softness in manufacturing activity and business investment plans.

But other data Thursday, March 24 showed the improvement in the labor market was becoming sustained, with new claims for jobless benefits falling last week and the four-week moving average dropping to it lowest level in more than 2-1/2 years.

The Commerce Department said durable goods orders fell 0.9 percent after a 3.6 percent increase in January. Economists polled by Reuters had expected a 1.1 percent increase. Excluding transportation, orders fell 0.6 percent after dropping 3.0 percent in January.

"Durables were extremely disappointing ... it is not a very good sign for what is happening in the first quarter," said Rudy Narvas, a senior economist at Societe Generale in New York.

The durable goods report conflicted with other data on manufacturing, which have underscored the strength in factory activity.

A second report from the Labor Department showed initial claims for state unemployment benefits slipped 5,000 to a seasonally adjusted 382,000, a touch below economists' expectations for a fall to 383,000.

The four-week moving average of unemployment claims -- a better measure of underlying trends - dropped 1,500 to 385,250, the lowest since mid-July 2008 and holding below the 400,000 level for a fourth straight week.

A reading below 400,000 is generally associated with steady job growth, which until recently had eluded the economic recovery. Employers created 192,000 jobs in February, the most in nine months, after adding a paltry 63,000 new workers in January.

The Federal Reserve has acknowledged the improvement in labor market conditions and is generally expected to conclude its $600 billion government bond buying program at the end of June.

Analysts believe the economy is now on course to create at least 150,000 jobs a month over a sustained period, which should prevent the unemployment rate from rising much, even as Americans who had given up looking for work re-enter the job market.

But some caution the devastating earthquake and tsunami in Japan, and rising gasoline prices could dent business confidence and cause companies to delay hiring.

There are signs that businesses are starting to tread cautiously.

The Commerce Department report showed non-defense capital goods order excluding aircraft, a closely watched proxy for business spending, fell 1.3 percent in February after a 6.0 percent fall the prior month. Economists had predicted a 4.5 percent improvement in this category.

"We all know that housing and consumption will be weak, lagging sectors. So if the business sector's expansion momentum stalls, this is bad news, creating a risk of disappointing employment gains in coming months," said Dan Dorrow, head of research at Faros Trading in Stamford, Connecticut.

The number of people still receiving benefits under regular state programs after an initial week of jobless aid fell 2,000 to 3.72 million in the week ended March 12, the lowest level since September 2008.

The continuing claims data covered the week for the household survey from which the unemployment rate is derived. The jobless rate dipped to 8.9 percent in February from 9.0 percent in January and has dropped 0.9 percentage point in the past three months.

Economists had expected so-called continuing claims to fall to 3.70 million from a previously reported 3.71 million. - Reuters

CIMB offers end-to-end financial solution CIMB@Work

KUALA LUMPUR: CIMB Group has rolled out its CIMB@Work, a complete end-to-end financial solution, in a move to expand its reach to corporate companies and multinationals.

It said on Thursday, March 24 the CIMB@Work solution provides the convenience of an innovative and cost-efficient payroll system for employers, supported by a comprehensive banking solution for their employees.

CIMB Bank executive director and head of consumer sales and distribution of CIMB Group, Datuk Sulaiman Mohd Tahir said the solution was to help clients manage an efficient delivery of employee compensation, while they focus on their business goals.

'With CIMB@Work, we hope to grow our corporate accounts from more than 1,000 we have on board with approximately 350,000 account holders currently,' he said.

Sulaiman said employees of these companies, as well as their family members may also enjoy the flexibility and convenience from a host of retail banking products and promotions.

Products like the CIMB AirAsia Savers, CIMB Junior, CIMB Gold Deposit, CIMB Prime Plan and Preferred banking privileges were all available to them.

Both employers and employees of the companies who signed up for the CIMB@Work package would be able to leverage on CIMB's network of more than 1,000 branches and over 3,700 integrated ATM facilities spanning across Southeast Asia.

IRM Group unit gets Perak bamboo concession

KUALA LUMPUR: IRM GROUP BHD []'s (IRM) unit has entered into an agreement with Perak State Development Corporation (SDC) for a joint business collaboration for a bamboo concession in the state of Perak.

IRM said on Thursday, March 24 that the its wholly owned unit IRM Composite Sdn Bhd (ICSB) (formerly known as Betterscope Sdn Bhd) had inked the agreement with the Perak SDC.

Under the agreement, ICSB will undertake all the logging, extraction, cutting to size, and transportation of all the bamboo in the said concession, as well replant bamboo to ensure a sustainable source of bamboo supply from the said concession.

IRM said the concession was 15,000ha located in Grik, and that the location was easily accessible from the Kuala Kangsar/Grik highway.

It said the commercial terms of the agreement had not been finalised, adding that it would be done after a survey and census of the said bamboo concession was completed.

'The survey is required to establish the bamboo stand, volume and the terrain to establish logistics and replanting feasibility and requirements.

'From such information the parties will establish the commercial terms for the mutual benefit of both parties,' it said.

The company said the concession would provide ICSB a long-term supply source of bamboo for further downstream processing especially into wood polymer composite (WPC) of which the company was currently developing.

'WPC is a combination of wood base fibre and polymer (both virgin and recycle) that can be used to replace timber in most form of current timber usage.

'The availability of the concession will provide ICSB ample supply of bamboo base fibre to ensure its future WPC program will be not inhibited by shortage of raw material,' it said.

IRM said the concession would complement the already strong business foundation the company has in PVC resin compounding, extrusion business and expertise via the development of WPC based on bamboo fibre.

'WPC is currently an important global product. The WPC industry is expected to enjoy excellent growth in the future especially in USA and Europe.

'This is due to the scarcity of global timber stand and advancement of polymer formulation and extrusion TECHNOLOGY []. This is in line with the global quest to conserve and make optimum use of our natural resources,' it said.

Gamuda 2Q net profit up 19.6% to RM94m

KUALA LUMPUR:'' GAMUDA BHD [] net profit for the second quarter ended Jan 31, 2011 rose 19.6% to RM94.03 million from RM78.63 million a year earlier, mainly due to higher contributions from all its divisions.

Revenue for the quarter increased to RM607.19 million from RM603.24 million. Earnings per share was 4.59 sen, while net assets per share was RM1.74.

For the six months ended Jan 31, Gamuda's net profit rose to RM182.56 million from RM152.66 million in 2010.

Commenting on its prospects, Gamuda said that with the existing CONSTRUCTION [] projects progressing on schedule and the strong performance of the property division, its results were expected to further improve in the remaining quarters of the current financial year.

TM extends Zamzamzairani's contract for 3 years

KUALA LUMPUR: TELEKOM MALAYSIA BHD [] (TM) has extended the contract of its group chief executive officer Datuk Seri Zamzamzairani Mohd Isa for another three years effective April 1, 2011.

Zamzamzairani has been the Group CEO since 2008, when TM and Axiata Bhd (formerly known as TM International) demerged.

In a statement Thursday, March 24, TM said Zamzamzairani had played a very instrumental role in leading it through a challenging period in establishing itself as Malaysia's Broadband Champion and leading integrated information and communications provider.

'Under Datuk Seri Zamzamzairani's stewardship, TM has seen a steady and consistent increase in revenue and subscribers base,' it said.

It said throughout the last three years, Zamzamzairani had also driven the company's performance to reflect an almost 90% increase in profit for 2010 and consistently meeting and surpassing shareholders and market expectations in delivering dividend commitments.

The Internet segment also showed sterling growth with Streamyx subscriber base close to 1.7 million as at end 2010, it said.

Megawisra not applying for waiver in Time dotCom acquisition

KUALA LUMPUR: Megaswira Sdn Bhd and parties acting in concert in the corporate exercise for the acquisition of Time dotCom (TdC) will not be applying for an exemption from undertaking a waiver as it would not trigger a mandatory general offer.

TdC said on Thursday, March 24 it had received a letter from Megaswira, that following consultation with the Securities Commission (SC), it was concluded that Khazanah Nasional Berhad and Megawisra's unit Global Transit International Sdn Bhd were persons acting in concert.

Accordingly, Megawisra and/or each of its PAC (collectively and individually) will not trigger a MGO as that before the completion of the proposed acquisitions and after the completion, they would continue to hold more than 50% of TdC shares.

It added the proposed acquisitions would not result in Megawisra and/each of its PAC to individually hold more than 33% of the voting shares in TdC.

'Following the above, the proposed exemption is no longer relevant and as such,''Megawisra and its PAC will not be applying for a waiver from having to undertake a general offer on the remaining TdC shares not held in TdC after the proposed acquisitions under Paragraph 16 Practice Note 9 of the Code,' it said.

However, the proposed acquisitions were still conditional upon the grant by the SC for a dispensation or waiver of the 20% condition imposed by the SC.

In November last year, TdC proposed a number of acquisitions that would turn it from a local player into a regional player. The company has proposed to pay RM339 million for the Global Transit Group's entities, which mainly deal with the wholesaling of Internet protocol bandwidth through a stake in an international submarine cable. It will also venture into the data centre business through the acquisition of local data centre player, the AIMS group.

All these acquisitions will be paid through the issuance of RM248.1 million worth of TdC shares and a cash payment of RM90.9 million.
The mainstay of these entities comes from the Global Transit Group's 10% stake in the US$300 million (RM918 million) Unity cable.

The 9,620km underwater cable runs from the US to Japan with a design capacity of 4.8 Tbps of data. With a 10% stake, TdC potentially has access to 480 Gbps of bandwidth to sell to regional and local telcos.

At the same time, TdC is strengthening its balance sheet by undertaking a 90% capital reduction exercise to pare down accumulated losses of up to RM3.04 billion from past years. This will be followed by a 5:1 consolidation of TdC shares and a capital repayment to shareholders amounting to RM50.61 million.

SEGi sets dividend policy of 50pct of group net profits

KUALA LUMPUR: SEG INTERNATIONAL BHD [] (SEGi) has set a dividend policy to distribute a minimum of 50% of the group net profits to its shareholders, with effect from the financial year ending Dec 31, 2011.

It said on Thursday, March 24 it has been consistently paying dividends to its shareholders since its listing on Bursa Malaysia Securities Bhd in 1995.

'The board''believes that the dividend payout of a minimum of 50% of its net profits is within the group's financial capability considering its future earnings growth.

'The dividend policy aims to demonstrate to the shareholders and potential investors of SEGi the group's commitment to reward its shareholders with consistent returns in line with the earnings growth of the group,' it said.

KLCI closes slightly higher in lacklustre trade

KUALA LUMPUR: Blue chips closed higher in lacklustre trade on Thursday, March 24, with the benchmark FBM KLCI extending gains for the fifth consecutive day, lifted by Genting Malaysia, AMMB, Gamuda and Maxis.

The FBM KLCI closed just 0.12% or 1.87 points higher to 1,513.84. Volume was 1.04 billion shares valued at RM1.58 billion.'' Gainers beat losers by 444 to 299, while 306 counters traded unchanged.

Key regional markets advanced while Japanese stocks pared down their losses as some of the factories began to re-open after the earthquake on March 11.'' South Korea's Kospi rose as automakers advanced, while other markets rose on bargain hunting for battered stocks.

Japan's Nikkei 225 closed 0.15% lower at 9,435.01 while the Shanghai Composite Index shed 0.06% to 2,946.71.'' Hong Kong's Hang Seng Index added 0.39% to 22,915.28, Taiwan's Taiex was up 0.37% to 8,576.40, South Korea's Kospi jumped 1.22% to 2,036.78 while Singapore's Straits Times Index gained 0.69% to 3,043.03.

At Bursa Malaysia, there was some nibbling of key stocks but volume was lacklustre. BAT rose 50 sen to RM47.90, Nestle 32 sen to RM47, Esso 28 sen to RM3.49 and LPI Capital 18 sen to RM13.68.

Genting Malaysia added seven sen to RM3.55, AMMB and Gamuda rose six sen each to RM6.36 and RM3.79, Maxis five sen to RM5.43 and Petronas Chemicals three sen to RM6.76.

APM jumped 34 sen to RM5.30, Nilai 24 sen to 84 sen, Cepco 22 sen to RM2.10, Jaya Tiasa 16 sen to RM5.70 and KYM 15 sen to RM2.30.

Hai-O, Parkson and HPI fell 10 sen each to RM2.17, RM5.44 and RM3.47 respectively. Affin, PPB and Lafarge fell eight sen each to RM3.42, RM17.02 and RM7.42 respectively and Sarawak PLANTATION []s seven sen to RM2.41.

Karambunai was the most active with 36.8 million shares done. The stock added half a sen to 22 sen.'' Other actives included Lion Corp, Mieco, Perisai, ManagePay Systems, Leweko, Silver Bird, Iris, Hubline and Axiata.

E&O units sell Fututech stake for RM8.78m to Egovision

KUALA LUMPUR: Eastern & Oriental Bhd's two units are disposing of their combined 27.71% stake to Egovision Sdn Bhd for total cash consideration of RM8.78 million.

E&O said on Thursday, March 24 that E&O Property Development Bhd was disposing of its 10.37 million shares or 17.67% stake for RM5.18 million or 50 sen per share and'' 4.81 million warrants'' 2007/2017 at nominal value of RM1 each (representing 20.48% of the warrants in issue) for RM433,028 or nine sen per warrant.

Samudra Pelangi Sdn Bhd was disposing of its 10.04% stake or 5.89'' million shares for RM2.95 million and 2.35 million warrants (10.04%) for RM212.18 million.

'The original cost of investment of E&O Group in Fututech i'' RM27.34 million. The unaudited net carrying value of the investment in Fututech shares and warrants as at Dec 31, 2010 were RM7.646 million and RM2.293 million respectively.

'Based on the above net carrying value, the proposed disposal is expected to record a loss of RM1.159 million,' it said.

Ramunia 1Q net profit falls to RM1.1m

KUALA LUMPUR: RAMUNIA HOLDINGS BHD [] net profit for the first quarter ended Jan 31, 2011 fell to RM1.1 million from RM3.42 million a year earlier due mainly to the tail end of the remaining projects billings and lower operating income.

Its for the quarter revenue slumped to RM1.36 million from RM15.85 million in 2010. Earnings per share was 0.17 sen while net assets per share was 25.1 sen.

Reviewing its results and commenting on its prospects on Thursday, March 24, Ramunia said it was finalising its PN 17 regularisation plan.

'The group continues to actively participate in bids for projects in the oil and gas and engineering businesses continues with focus on the fabrication of offshore oil and gas related structures.

'The group has entered into a sales and purchase agreement to acquire a fabrication yard located at Pulau Indah, to expand its fabrication capacity,' it said.

Ramunia recently said it planned to venture to venture into the offshore oil and gas business in Malaysia and the region via a tie-up with Drydocks World of Dubai.

Transmile Group completes sale of four aircraft for RM200m

KUALA LUMPUR: Beleaguered TRANSMILE GROUP BHD [] has completed the disposal of four MD-11 aircraft to Federal Express Corporation for US$66.99 million (RM200 million).

It said on Thursday, March 24, the proposed disposal was completed on Wednesday and the final disposal consideration of US$66.99 million was received in full.

To recap, Transmile's disposal of the aircraft would enable it to reduce its debts by 39% to about RM320.1 million.

It had on Jan 10 signed a sale and purchase agreement with FedEx to sell four MD-11F aircraft for US$17 million (RM52.2 million) each to be satisfied entirely in cash. With the completion of the proposed disposal and usage of the proceeds of US$68 million (RM208.8 million), the net amount of outstanding debt obligations to be restructured was expected to be reduced by up to 39% to RM320.1 million.

Recently, it proposed a scheme of arrangement to ring fence its unit Transmile Air Services Sdn Bhd'' (TAS) and preserve it as a going concern.

The scheme would involve two inter-conditional schemes of arrangement by Transmile and TAS as the group looked into the possibility of inviting new potential investors into TAS, which is the main operating subsidiary in the group.

The proposed schemes are to avert the delisting of the group which has continued to suffer losses since a scandal was unearthed back in 2007 which saw inflated revenue of around RM625 million between the financial years 2004 and 2006.

FUND VIEW-Baring Asean fund bets on budget carriers

SINGAPORE: Budget airlines are a good way to tap the growing interest in travel within Southeast Asia, said Baring's regional fund, favouring the Philippines' Cebu Air and Malaysia's AirAsia.

Describing regional low-cost carriers as a secular growth story, Soo-Hai Lim, manager of the $328 million Baring Asean Frontiers Fund, said on Thursday, March 24 he was betting on Cebu and AirAsia to deliver strong growth and earnings, even as soaring oil prices threaten margins.

Low-cost carriers are gaining market share at the expense of full-service airlines and Asia's budget-airline industry has a lot of room to grow given its small size relative to the region's population.

"The stronger story is still with Cebu and AirAsia. AirAsia because it's the leader in this segment; and Cebu because they have a very strong domestic franchise," Lim said.

Lim is less bullish on Singapore's budget carrier Tiger Airways , as its valuations were less attractive than Cebu Air and AirAsia, Asia's largest budget carrier by fleet size.

Tiger Airways was trading at 12.2 times price-to-earnings compared with about 6.5 times for AirAsia for the current year, according to Thomson Reuters data.

The Singapore-based carrier faced greater competition than the other two, which ply domestic routes where they have fewer rivals, he said.

Lim said the situation in Japan remained uncertain but the developments were not necessarily negative for Southeast Asia.

While Thailand's factories would be hurt if production in Japan is disrupted over the medium term, Malaysia and Indonesia would benefit from the country's reCONSTRUCTION [] through higher demand for resources.

The Baring Asean Frontier Fund, which invests mainly in equities listed in Southeast Asia, said it had a return of 37.4 percent last year, compared with the benchmark MSCI South East Asia's 32.2 percent gain.

The fund has returned 40 percent since its inception in August 2008, beating the 35 percent increase in the benchmark.

BULLISH ON COMMODITIES

The fund bought AirAsia shares in 2009, when the stock fell below its IPO price due to the global recession, and has since taken some profit on its investment.

The fund is bullish on Cebu Air, whose shares have plunged 35 percent since it listed in October, as it believes investors have not factored the rise in domestic air travel within the Philippines.

"More Filipinos are flying instead of using ferries because the cost of flying has fallen so much that it becomes more affordable," said Lim.

Cebu Air shares have plunged due to concerns over greater competition in the Philippines and rising oil prices , which have soared to $115 a barrel from about $83 in October.

Asia's low-cost careers are estimated to see an average annual growth of about 19.4 percent from 2008 to 2014, compared with about 4.7 percent for network carriers, according to Morgan Stanley.

Besides airlines, the fund is also bullish on Singapore banks such as United Overseas Bank and Oversea-Chinese Banking Corp due to their cheap valuations and relatively high dividends.

Lim also owns the world's largest oil rig builder Keppel Corp , which is the second-largest holding in its portfolio as of February, as it expects the company to see strong order momentum this year, helped by buoyant oil prices.

His other holdings include Singapore-listed Indonesian palm oil firm Indofood Agri and Vegetable producer China Minzhong as Baring is bullish on commodities. - Reuters

Gamuda shares up ahead of results

KUALA LUMPUR: GAMUDA BHD [] shares rose on Thursday, March 24 following AmResearch raising its target price to RM4.25 (from RM4.20 previously) and maintaining its Buy call on the stock.

At 4.30pm, Gamuda was up six sen to RM3.79 with 3.47 shares done.

AmResearch said the target price revision was to account for maiden contributions from the Sg. Buloh-Kajang MRT line as well as the Madge Mansion development, but partly mitigated by the likelihood of further delays to the double-tracking project.

The increasing newsflow on the Klang Valley MRT project would likely re-galvanise investor interest in Gamuda, it said.

The 51km-Sg. Buloh-Kajang route ' the first major line for the new MRT system ' appears set to take off. To be sure, pre-qualification tenders may be out next month ahead of the targeted commencement of CONSTRUCTION [] works by July 2011, it said.

'There are strong indications that the overall cost for the Sg. Buloh-Kajang line could be higher than expected at RM20 billion (our earlier estimates: about RM12 billion).

'By extension, this may imply more scope of works for Gamuda for the entire system ' which will reportedly cost over RM50 billion against the initial estimate of RM36 billion,' it said.

Gamuda is expected to announce its 2QFY11 results today.

AmResearch maintains Buy on Gamuda, FV RM4.25

KUALA LUMPUR: AmResearch is maintaining its Buy recommendation on GAMUDA BHD [], with the fair value raised to RM4.25 a share from RM4.20,'' based on a 5% discount to its sum-of-parts value.

In a research note on Thursday, March 24, the research house said this was to account for maiden contributions from the Sg. Buloh-Kajang mas rapid transit (MRT) line as well as the Madge Mansion development, but partly mitigated by the likelihood of further delays to the double-tracking project.

'The increasing newsflow on the Klang Valley MRT project would likely regalvanise investor interest in Gamuda, in our view,' it said.

The 51km-Sg. Buloh-Kajang route, which is the first major line for the new MRT system, appears set to take off.

AmResearch said pre-qualification tenders may be out next month ahead of the target date for the commencement of CONSTRUCTION [] by July 2011.

'There are strong indications that the overall cost for the Sg. Buloh-Kajang line could be higher than expected at RM20 billion (our earlier estimates were around RM12 billion). By extension, this may imply more scope of works for Gamuda for the entire system ' which will reportedly cost over RM50 billion against the initial estimate of RM36 billion,' it said.

AmResearch said balance sheet risk has been substantially reduced as this massive project would likely now be funded via a Ministry of Finance-appointed special purpose vehicle.

Gamuda's exposure to the region is only about RM200 million or less than 5% of its outstanding orderbook of RM5.5 billion.

Maybank IB Research sees banking system earnings growing 11.6pct

KUALA LUMPUR: Maybank Investment Bank (Maybank IB) Research expects 11.6% earnings growth in the combined net profits for the banks under its monitor, underpinned by firm system loans growth amid the easing of credit growth in the household sector.

It said on Thursday, March 24 that its picks in the banking sector are CIMB and RHB Cap.

Maybank IB Research, which maintained its Overweight on the banking sector, said the sector remains in the pink of health with profits up a strong 34% last year, supported by strong asset ratios.

'Yesterday's analyst briefing, in conjunction with BNM's release of its 2010 Annual Report and Financial Stability and Payment Systems Report, sent a positive vibe on the domestic banking sector outlook, with key agenda in 2011 being to manage household sector resilience,' it said.

The research said there was no change to in its earnings forecasts and calls for the banks.

'System pretax profit surged 34% on-year to RM22.8 billion (2009: -11.4% on-year) driven by growth in both net interest income (+15.1% on-year) and fee income (+11.3% on-year), and the low base effect of 2009's other operating income which included an impairment provision by Maybank for its overseas investments.

'System returns on equity (ROE) strengthened to 16.5% (2009: 14%) and returns on assets to 1.5% (2009: 1.2%). Asset quality continued to improve with loan loss provisions contracting 11.6% On-year. System cost-to-income ratio was down 1.9 percentage points to 46.7%,' it said.

Household debt-to-GDP ratio was little changed at 75.9% as at end-2010 (end-2009: 76%). Although high against regional economies, BNM's assessment is of limited financial stress in the household sector as the debt level is supported by a high level of deposits and other forms of savings.

Maybank IB Research said household financial assets-to-debt ratio remained comfortable at 2.38 times (end-2009: 2.37 times) while liquid financial assets-to-debt ratio was 1.54 times (end-2009: 1.51 times).

Managing household resilience will nonetheless be a key agenda in 2011. Having announced new measures for credit cards last weekend, BNM will follow up with new guidelines on prudent lending to the retail sector.

The guidelines will set the minimum standards for new loans which include affordability and suitability assessments, incorporating stress testing on higher interest rates. The banks have been consulted on the new guidelines.

'Our expectations are for system loans to expand 11.5% in 2011, supported by stronger lending to businesses but the easing of credit growth at the household sector. Our forecasts are for an 11.6% growth in the combined net profits for the banks under our monitor. Our picks are CIMB and RHB Cap,' it said.

Moody's cautious of Singapore REITS venture into China due to business risks

KUALA LUMPUR: Moody's Investors Service is cautious about Singaporean industrial real-estate investment trusts' (S-REITs) plans to expand into China due to a number of business risks, particularly because of the legal and regulatory environment.

It said on Thursday, March 24 the competition for industrial PROPERTIES [] in Singapore is intensifying, and the S-REITs' growing risk appetite and the low interest rate environment have only exacerbated the competitive pressure.

In addition, a large supply of new industrial properties opening up over the next two years may limit rental growth in the medium term.

Moody's associate analyst Alvin Tan said in their search for higher yields, the industrial S-REITs are now looking at expanding into new regions, with several of the S-REITs identifying China, the world's fifth most active real-estate investment market, as a possibility.

"But moving into China would have negative credit implications, given the uncertainties associated with entering an unfamiliar market and the associated regulatory risk, which could nullify the potential gains of geographical diversification," said Tan.

He cited China's financial, tax, and legal frameworks were still in their infancy, which could have a number of negative ramifications, such as the regulatory risk related to tax policies on profits, the enforcement of lease contracts, and land ownership issues, as well as foreign-exchange risk for the repatriation of capital.

"Still, we do so see positive factors that could mitigate, but not fully offset, the impact of these negatives," Tan said.

The S-REITs' plan to diversify overseas would reduce their exposure to the island nation. As for those with sponsors which had an established presence abroad, the former could tap into the latter's China-related experience.

The experience in the China market would help the S-REITs reduce the risks associated with operations in a complex regulatory environment.

Finally, the acquisition of overseas properties with long-term leases and rental guarantees would provide additional income and stability to medium-term operating results.

Blue chips struggle, broader market firmer

KUALA LUMPUR: ''Blue chips struggled to return to positive territory at mid-day on Thursday, March 24 aided by some mild buying of index-linked stocks like AMMB, Petronas Chemicals and MISC but the broader market displayed more resilience.

The FBM KLCI managed to eke out marginal gains after spending most of the morning in the red. The recovery was in line with key regional markets as Japan's Nikkei 225 pared down its losses as some factories started operations again after the earthquake a fortnight ago forced them to shut down.

At 12.30pm, the FBM KLCI had edged up 0.03% or 0.48 point to 1,512.45 at the mid-day break, lifted by gains including at AMMB, Gamuda, Petronas Chemicals and MISC.

Gainers led losers by 339 to 270, while 285 counters traded unchanged. Volume was 561.3 million shares valued at RM711.97 million.

The ringgit strengthened 0.03% to 3.0285 versus the US dollar; crude palm oil futures for the third month delivery fell RM126 per tonne to RM3,180, crude oil shed 34 cents per barrel top US$105.41 while gold added US$1.18 per troy ounce to US$1,438.57.

Nikkei 225 +0.19% 9,467.27 Hang Seng Index +0.76% 22,998.79 Shanghai Composite +0.09% 2,951.25 Taiwan's Taiex +0.49% 8,587.13 South Korea's Kospi +0.98% 2,031.91 Singapore's Straits Times Index +0.85% 3,047.87 ''

Japanese shares had slipped earlier on Thursday, with short-covering after a steep fall last week running out of steam as nerve-racking radiation leaks from a quake-stricken nuclear plant impeded any optimism on the economy, according to Reuters.

While the near-term market outlook is seen depending on whether Japan can safely stabilise the crippled plant, in the longer run, the market could fall under the weight of the damage from a massive earthquake this month and likely power shortages, it said.

Among the gainers on Bursa Malaysia, AMMB and Gamuda rose five sen each to RM6.35 and RM3.78, Petronas Chemicals and MISC four sen each to RM6.77 and RM7.79, while Genting Malaysia was up three sen to RM3.51.

BHIC rose 20 sen to RM3.99. HwangDBS Vickers Research has initiated coverage on the stock with a Buy call and target price RM6.55.

Meanwhile, BOUSTEAD HOLDINGS BHD [] shares rose 12 sen to RM5.64. Other gainers included Esso, Ewein, Hing Yap, GAB, Panasonic and Cypark.

Lion Corp was the most actively traded counter with 19.1 million shares done. The stock added three sen to 33.5 sen. Other actives included Mieco, ManagePay Systems, Perisai, Silver Birdm Leweko and Sinotop.

Tahps was the top loser this morning and fell 20 sen to RM4.60. Other decliners included Perduren, Parskon, PPB, Sarawak PLANTATION []s, Affin, Tenaga and Mercury.

Hai-O fell eight sen to RM2.19 after its earnings fell 65% to RM6.34 million for the third quarter ended Jan 31, 2011 from RM18 million a year ago as revenue shrank following lower sales from its multi-level marketing (MLM) division.

RAM Ratings lowers rating of Eden unit Musteq Hydro RM108m bonds, negative outlook

KUALA LUMPUR: RAM Rating Services Bhd has lifted the negative Rating Watch on Eden Inc Bhd unit Musteq Hydro Sdn Bhd's RM108 million Al-Bai' Bithaman Ajil fixed-rate serial bonds (2002/2017).

The rating agency said on Thursday, March 24 concurrently, the Islamic bonds' rating has been downgraded from A2 to A3, with a negative outlook. It cautioned that Musteq could face a liquidity crunch in its debt servicing in 2016-2017.

Musteq Hydro is an independent power producer (IPP) which built, owns and operates a 20-MW hydro power plant at Sungai Kenerong, Kelantan. It is a unit of Eden Inc Bhd.

Under a power purchase agreement with TENAGA NASIONAL BHD [], Musteq Hydro is obliged to generate and sell electricity exclusively to TNB for 30 years until Dec 19, 2030.

'The downgrade of the Isalmic bonds' rating is premised on the company's weakened debt-servicing ability, due to the combined effects of cumulative interest payments on shareholder's advances in the past and upward revision of operations and maintenance fees as well as management fees.

'These actions, although approved by bondholders, had resulted in an additional RM10.58 million of cash outflow as at end-December 2010 against our initial expectations. Notably, management's efforts to effectively address the situation has not been finalised since 2009,' it said.

RAM Ratings said while the management has represented that there would be no further payment of interest on shareholder's advances and reduced the company's management fees payable to Eden Inc, from RM300,000 to RM50,000 per annum from 2010 onwards, these actions are insufficient to address the situation.

The A3 rating reflects Musteq Hydro's adequate debt-servicing ability up to FY Dec 2015. The debt service coverage ratios (calculated on the principal repayment date) for this period range from 1.35 to 1.46 times.

RAM Ratings said however, the company's debt-servicing aptitude is of concern in fiscal 2016 and 2017, when the lumpy principal repayments begin.

'Based on our sensitised projections, Musteq Hydro is likely to face a liquidity crunch then. Meanwhile, we acknowledge that Musteq Hydro's management is at the early stages of refinancing the Islamic bonds.

'As it stands, the company's weak debt-servicing ability in FY Dec 2016 and 2017 still persists. Given this, the rating has been placed on negative outlook, highlighting further downward pressure if the refinancing exercise is not completed in the medium-term or operational problems significantly hamper Musteq Hydro's cash-generating aptitude,' it said.

RAM Rating also noted the likelihood that Musteq Hydro will not be able to fully fund the debt service reserve account (DSRA) in late July every year throughout the bonds' tenure, in which case the bondholders could call for an event of default.

'As such, the company may continue to seek advances from Eden to top up the DSRA in the event of any shortfall,' it said.

E&O, Fututech suspended until 5pm for announcement

KUALA LUMPUR: Trading in the securities of Eastern & Oriental Bhd and its associate FUTUTECH BHD [] has been voluntarily suspended until 5pm on Thursday, March 24.

Trading was suspended since 10.15am.

'The request for suspension is due to E&O's intention to make a material announcement involving Fututech, an associated company of E&O by March 24,' E&O said.

Ramunia Energy sells 2m Ramunia shares

KUALA LUMPUR: Ramunia Energy and Marine Corporation Sdn Bhd disposed of two million shares in RAMUNIA HOLDINGS BHD [] on Tuesday, March 22.

After the latest disposal, its shareholding was reduced to 8.69% or 57.626 million shares.

The share price closed at 57 sen on that day.

FBM KLCI slips at mid-morning

KUALA LUMPUR: The FBM KLCI slipped into the red at mid-morning after a choppy start, while key regional markets advanced albeit with limited gains following the firmer overnight close at Wall Street.

Meanwhile, Japanese shares were little changed on Thursday, as their rebound from a steep fall last week ran out of steam on persistent worries about radiation leaks from a quake-stricken nuclear plant, according to Reuters.

Although Tokyo stocks have recovered around 15% from an intraday low hit last week, worries that damage from a massive earthquake on March 11 and the subsequent accident at the nuclear facility could hurt corporate earnings kept investors on edge, it said.

The FBM KLCI fell 1.73 points to 1,510.24 at mid-morning, weighed by losses including at BAT, PPB and Tenaga.

Gainers edged losers by 241 to 148, while 230 counters traded unchanged. Volume was 243.3 million shares valued at RM192.25 million.

At the regional markets, Japan's Nikkei 225 was down 0.20% to 9,430.50.

Elsewhere, Hong Kong's Hang Seng Index rose 0.81% to 23,010.89, the Shanghai Composite Index edged up 0.03% to 2,949.44, Taiwan's Taiex added 0.08% to 8,552.21, South Korea's Kospi gained 0.89% to 2,030.04 and Singapore's Straits Times Index was up 0.12% to 3,025.70.

BIMB Securities Research in a note March 24 said the reports that gasoline consumption increased in the US suggested that consumers were able to absorb costlier gasoline price, indicating that this was a sign that the US economy would not be too badly hit as a result of the conflicts in the Middle East.

'Elsewhere, the Japan government estimates that the cost of rebuilding the earthquake affected area could reach as high as US$300 billion and this may cut Japan GDP growth by as much as 0.5%.

'Nevertheless, we are of the view that the news flow in the US may not have a material bearing to the local market and hence, we expect the local market to trade in tight range today with mild upside bias closing,' it said.

On Bursa Malaysia, BAT was the top loser at mid-morning and fell 70 sen to RM46.70; PPB lost 10 sen to RM17, Bintulu Port and Hai-O fell nine sen each to RM6.60 and RM2.18,Tenaga fell six sen to RM6.12, Mercury and Top Glove five sen each to 75 sen and RM5.30, while Proton and Voir lost four sen each to RM3.45 and 52.5 sen.

BHIC was the top gainer and added 31 sen to RM4.10. HwangDBS Vickers Research has initiated coverage on the stock with a Buy recommendation and target price of RM6.55.

Other gainers included Ewein that rose 19 sen to RM1.06, Esso 16 sen to RM3.37, Chin Teck 15 sen to RM8.60, Hing Yap 12 sen to RM1.98 and GAB nine sen to RM9.58.

Lion Corp was the most actively traded counter with 16.15 million shares done. The stock added three sen to 33.5 sen. Other actives included ManagePay Systems, Silver Bird, Hua Ann, Sinotop, Perisai, Jotech, Berjaya Food and Digistar.

''

Ingress advances at mid-morning

KUALA LUMPUR: INGRESS CORPORATION BHD []'s shares advanced on Thursday, March 24 after its net profit for the financial year ended Jan 31 jumped to RM17.13 million from RM10.81 million, on the back of revenue RM761.48 million.

At 10.30am, Ingress was up two sen to 75 sen with 154,200 shares traded.

The company's net profit for the fourth quarter ended Jan 31, 2011 fell 18.1% to RM2.11 million from RM2.57 million a year ago, arising mainly from losses from its power engineering and projects division (PEP).

Reviewing its performance yesterday, Ingress had said improvement in its revenue was mainly due from the automotive division, with 25% revenue increase supported by 14% revenue improvement for both ACM Thailand and ACM Indonesia.

On its prospects, Ingress said it expects the automotive division to further improve in the coming years on the prospect of improving in the Asian region.

'We also expect PEP Division to improve given the existing and recently awarded projects and the government initiatives under the transformation programme,' it said.

OSK Research maintains Sell on Hai-O, but ups TP to RM1.93

KUALA LUMPUR: OSK Research said Hai-O's nine-month results for the period ended Jan 31, 2011 were within its full year forecast of RM27.2m.

The research house said on Thursday, March 24 that due to its poor multi-level marketing results, revenue plunged 60% to RM165m while net profit fell by an even wider 64.2% to RM20.3m.

'In tandem with the poorer results, YTD EBIT came in at 17.5% versus 19.5% in 9MFY10. Despite the weaker numbers, management says MLM sales have started to pick up.

'We raise our FY12 earnings forecast by 1.7% to RM32.6m to factor in a stronger RM against USD. Our TP is raised to RM1.93 from RM1.61 previously (based on 12x PE) as we roll over our valuation to FY12. Maintain SELL,' OSK Research said.

Hai-O slides on weaker earnings

KUALA LUMPUR: HAI-O ENTERPRISE BHD [] shares fell in early trade on Thursday, March 24 after its earnings fell 65% to RM6.34 million for the third quarter ended Jan 31, 2011 from RM18 million a year ago as revenue shrank following lower sales from its multi-level marketing (MLM) division.

At 9.10am, Hai-O fell nine sen to RM2.18 with 115,600 shares traded.

Hai-O's revenue fell to RM57.60 million from RM131.28 million a year ago due mainly due the poorer performance of the MLM division, which is its principal subsidiary.

RHB Research in a note March 24 said it was cautious on Hai-O's MLM division as the effect of the internal restructuring for the division due to the ammendment in the Direct Selling Act (DSA) may continue to impact its membership recruitment drive and slow the growth momentum of its membership base.

'In view of the current skittish and volatile market environment, we believe investors are looking for more earnings stability and reliable returns, which Hai-O would not be able to offer at this juncture, in our opinion.

'We are thus ceasing coverage on the stock, with our last recommendation being an Underperform with an unchanged fair value of RM1.35,' it said.

CIMB Research maintains Buy on Sime, TP RM10.90

KUALA LUMPUR: CIMB Equities Research is maintaining a TRADING BUY and RM10.90 target on SIME DARBY BHD [].

On Wednesday, March 24, Sime Darby announced that it and Maersk Oil Qatar (MOQ) have reached an amicable settlement of the MOQ project.

CIMB Research said on Thursday, this latest development was good news as it (1) will help put to ease investors' concerns over potential provisioning for this project, (2) will enhance the group's FY11 EPS by 2%, and (3) shows that Sime is trying actively to recover some of the losses from its problematic oil & gas projects.

'We are raising our FY11 EPS by 2% for the write-back of around RM100m. As the impact on our SOP value is just 1 sen, we retain our SOP-based target price of RM10.90. Also unchanged is our TRADING BUY call, which is premised on the potential re-rating catalysts of newsflow on plans to enhance shareholder value and stronger-than-expected results,' it said.

CIMB Research maintains Outperform on Kossan

KUALA LUMPUR: CIMB Equities Research is maintaining its Outperform recommendation on Kossan following its RM9.3 million acquisition of 51% of Cleanera HK while its target price remains RM5.41.

CIMB Research said on Thursday, March 24 this was a nice surprise as it will enable the company to diversify beyond medical examination gloves into the cleanroom segment.

Also, Cleanera's distribution network in Asean will give Kossan an opportunity to expand its operations in Asean. If the acquisition materialised, it would be transacted at a lower P/BV multiple of 2.0x than the 2.7x average that the listed glovemakers currently fetch.

'We make no changes to our earnings numbers as no details have been released and the purchase agreement is outstanding.

'Our target price remains RM5.41, still based on a forward P/E of 10.2x or a 30% discount to Top Glove's target P/E of 14.5x. Kossan remains an OUTPERFORM, with the re-rating catalysts being 1) contract wins, 2) cost savings from upstream M&A and 3) higher nitrile sales,' it said.

Toyota to slow some N.American production

WASHINGTON: Toyota Motor Corp will slow some North American production because of supply disruptions caused by the earthquake and tsunami in Japan.

The world's biggest automaker told employees and dealers on Wednesday it was too early to determine the scope, timing and duration of a slowdown but facilities in the United States, its single-biggest market, and in Canada and Mexico are all being considered.

Cindy Knight, a Toyota spokeswoman, said the company had ample supply of most products for the region, adding, "We are doing all we can" to ensure that vehicles are available to dealers.

"We will continue to work closely with suppliers in North America and Japan to minimize any disruptions to Toyota's overall North American operations," Knight said.

Most parts for Toyota's North American-built vehicles come from about 500 suppliers in the region. The company said it continues to receive parts from Japan that were already in the pipeline, limiting the immediate impact of the disruption there.

Shares of Toyota fell 1 percent to close at US$82.14 on the New York Stock Exchange.

Toyota has suspended production at all of its 12 assembly plants in Japan at least through March 26. Supply chain disruptions will also force the company to delay introduction of two new additions to the Prius hybrid model.

Toyota ships more than half of its Japan output to overseas markets. It operates nine manufacturing plants in the United States, two in Canada and one in Mexico.

Scores of Japanese manufacturers, including the other big Japanese auto companies, are facing supply chain disruptions after the March 11 disaster.

Suzuki Motor Corp said its three assembly factories in Japan will remain closed on Thursday and Friday. Honda Motor Corp has suspended production in Japan until March 27.

Michelle Krebs, senior analyst for buyer resource Edmunds.com, said shutdowns now occurring outside Japan are probably just the beginning.

"All automakers are just now figuring out who supplies every little part. The shortage of any one could shut down an assembly line. Toyota isn't the only one vulnerable; virtually all major automakers have some risks," Krebs said.

While Toyota did not identify where production would be affected in North America, other manufacturers with dwindling inventories are looking at slowing production of low-selling models.

For instance, General Motors Co has temporarily idled its pickup plant in Shreveport, Louisiana.

Toyota's pickup plant in San Antonio, Texas, could fit the criteria as well, according to a source familiar with the company's thinking.

Full and midsized pickups are among the weakest arm of Toyota's U.S. lineup, which heavily features fuel efficient cars like the hybrid Prius and Camry and Corolla models and popular sport utilities.

Knight said the company had not determined which plants are affected.

Seeking to recover business lost during a safety crisis marked by massive recalls, stepped up marketing, and an improving economy helped Toyota exceed expectations with a 42 percent gain in U.S. sales in February to 141,846 vehicles. - Reuters