Barefoot Investor: October 2011

Ezra Holdings’, the provider of logistics services to the oil and gas industry, says fourth quarter net profit dropped 42% to US$12.4 million ($15.4 million) from the same period last year, hit by higher operating and administrative expenses. Revenue for the three months ended September was up 101% at US$219.5 million.(The Edge Singapore)


Shares of casino operator Genting Singapore (GENS.SI) rose as much as 4.4% today after the strong third-quarter performance of rival Marina Bay Sands boosted sentiment about the overall gaming market in the city-state, reported Reuters.

The Singapore casino of Las Vegas Sands (LVS.N) delivered US$414 million ($515 million), exceeding internal projections, driven by a 37% surge in high-roller gambling volumes.

At 9:24 a.m., Genting Singapore shares were up 3.2% at $1.755. The broader Straits Times Index <.FTSTI> was 1.2% higher.(The Edge Singapore)


KUALA LUMPUR: Hirotaka Holdings Bhds shares rose on Friday, Oct 28 after MBM RESOURCES BHD [] (MBM) launched a takeover to expand its automotive manufacturing division, at a cost of RM412.5 million.

At 9.14am, Hirotako share price was up 6.5 sen to 94.5 sen with 7.27 million shares done. However, the warrants fell six sen to 17.5 sen with 26.49 million units transacted.

The FBM KLCI rallies 12.54 points to 1,483.47. Turnover was 298.17 million shares valued at RM186.47 million. There were 417 gainers to 31 losers.

MBM offered 97 per share which was nine sen above the pre-suspension price of 88 sen and only 5.0 sen per warrant.

OSK Research said at 97 sen, this was 14% above Hirotako’s five-day market average closing prices of 85 sen a share and 5% above the warrant’s exercise price of 92 sen a share.

OSK Research said the acquisition price tag is not cheap, valuing Hirotako at 11 times FY11 price-to-earnings, which is at the high end of its historical trading band (slightly above +2 SD for PE and P/BV).(


Asian stocks rose, sending the regional benchmark index toward its biggest weekly gain in more than two years, as the fastest U.S. economic growth in a year and Europe’s debt deal boosted the outlook for exporters.

Honda Motor Co., Japan’s second-largest carmaker by market value that gets 83 percent of its revenue abroad, rose 4.6 percent after U.S. household purchased beast estimates. Industrial and Commercial Bank of China Ltd. rose 1.8 percent as Europe’s announcements eased concerns about the global financial system. as copper prices headed for the biggest weekly gain since at least 1986. Jiangxi Copper Co., China’s No. 1 producer of the metal by market value, rose 2.4 percent to HK$20.20 as copper had its best week in at least 25 years.

“Consumer spending has contributed a lot into the U.S. growth, while inventory investment declined,” said Masaru Hamasaki, who helps oversee the equivalent of $24 billion as chief strategist at Toyota Asset Management Co. in Tokyo. “That’s a very good form of growth. Risk appetite should rise after Europe delivered a big answer to the debt crisis that’s plagued the market for a long time. I expect stocks to be firm after jumping.”

The MSCI Asia Pacific Index rose 1.4 percent to 124.68 as of 12:18 a.m. in Tokyo. The measure has gained 7.4 percent this week, the most since the week ended May 8, 2009. More than three stocks rose for each that fell on the gauge, which is set for its biggest month of increase since May 2009. All 10 industry groups on the gauge advanced.

U.S. Growth

Futures on the Standard & Poor’s 500 Index fell 0.4 percent. In New York, the index rose 3.4 percent yesterday after the U.S. economy grew in the third quarter at the fastest pace in a year as gains in consumer spending and business investment helped support a recovery on the brink of faltering. Household purchases, the biggest part of the economy, rose at a 2.4 percent pace, beating estimates.

Japan’s Nikkei 225 Stock Average added 1.4 percent and South Korea’s Kospi Index advanced 0.8 percent. Australia’s S&P/ASX 200 was little changed. Hong Kong’s Hang Seng Index (HSI) climbed 1.9 percent, headed for an 11 percent increase this week, its biggest such advance since May 2009.

The number of contracts to buy previously owned U.S. homes unexpectedly fell in September as lower prices and borrowing costs failed to support demand. A separate report showed fewer Americans filed applications for unemployment assistance last week, while those on benefit rolls dropped to a three-year low, signaling limited improvement in the labor market.

“It’s not an economic scenario at this stage that the U.S. will go into a recession,” saidTim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The market has been pricing in less macro-economic risks as a result of what happened over the last 24 hours.”
Honda, Hyundai

Asian exporters advanced. Honda added 4.6 percent to 2,504 yen. Hyundai Motor Co. (005380), South Korea’s biggest carmaker by market value, rose 2.9 percent to 230,000 won. Li & Fung Ltd. (494), a supplier of toys and clothes to Wal-Mart Stores Inc., rose 4.9 percent to HK$15.48. Nintendo Co., Japan’s maker of video-game players that gets 39 percent of its sales in the Americas, rose 5.3 percent to 11,700 yen.

Global stocks rallied yesterday after European leaders talked bondholders into accepting 50 percent writedowns on Greek debt and boosted their rescue fund’s capacity to 1 trillion euros ($1.4 trillion) in a crisis-fighting package intended to shield the euro area.

Banks rose. Industrial & Commercial Bank of China (601398) rose 1.8 percent to HK$5.01. HSBC Holdings Plc (HSBA), Europe’s biggest lender, rose 2.5 percent to HK$69. Sumitomo Mitsui Financial Group Inc. (8316), Japan’s second-biggest lender, rose 2.4 percent to 2,288 yen.
Mining Companies

The MSCI Asia Pacific Index declined 11 percent this year through yesterday, compared with a 2.1 percent gain by the S&P 500 and a 9.6 percent drop by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.6 times estimated earnings on average, compared with 12.9 times for the S&P 500 and 10.8 times for the Stoxx 600.

Mining companies advanced after copper in London jumped as much as 1.4 percent to $8,260 a metric ton, poised for the biggest weekly gain since at least 1986. Three-month copper on the London Metal Exchange has gained more than 15 percent this week. BHP Billiton Ltd. (BHP), Australia’s No. 1 mining company, added 1 percent to A$38.73. Jiangxi Copper rose 2.4 percent to HK$20.25. (Bloomberg)


KUALA LUMPUR: Permodalan Nasional Bhd (PNB) raised its stake in S P Setia Bhd with the purchase of another 3.469 million shares and 1.206 million warrants in the open market last Friday, Oct 21.

Maybank Investment Bank said on Monday, Oct 24 that PNB ought the 3.469 million shares at an average price of RM3.82 sen. It bought the 1.206 million warrants at an average of 87.5 sen.

On Sept 28, PNB serve the notice of take-over offer on S P Setia to acquire the shares at RM3.90 each and 91 sen per warrant.(


Asian stocks climbed for a second day as reports showing better-than-estimated exports from Japan and China’s manufacturing expanding for the first time in three months tempered concern that Europe won’t provide a solution to the debt crisis threatening the global economy.

Honda Motor Co., a Japanese carmaker that gets over 80 percent of sales overseas, rose 1.7 percent in Tokyo. Industrial & Commercial Bank of China (1398) Ltd. led Chinese lenders higher after Barclays Plc said the banks will post “strong” third quarter earnings. BHP Billiton Ltd. (BHP), the largest global mining company, advanced 2.7 percent in Sydney after copper futures extended gains.

The MSCI Asia Pacific Index increased 1.9 percent to 118.61 as of 12:45 p.m. in Tokyo, even after European leaders meeting in Brussels yesterday ruled out tapping the central bank’s balance sheet to boost a regional rescue fund. The gauge of Asian stocks last week had its biggest weekly decline in a month after Germany said there would be no quick fix to the crisis.

“Economic expectations got so depressed during the September market rout that any signs of improvement in the economic outlook should have a positive effect on the market,” Nader Naeimi, a Sydney-based strategist for AMP Capital Investors Ltd., said by telephone. “There was no clear sign of division among European leaders, but there is also some disappointment that nothing concrete was announced.”

Nikkei 225 (NKY), Hang Seng

Japan’s Nikkei 225 Stock Average gained 1.7 percent. South Korea’s Kospi Index climbed 2.7 percent and Australia’s S&P/ASX 200 rose 2.7 percent. Hong Kong’s Hang Seng Index jumped 3.5 percent.

China’s Shanghai Composite Index added 0.4 percent, paring gains of as much as 0.7 percent, after Premier Wen Jiabao said the government would continue to maintain tight monetary policies to control soaring inflation and as a report showed China’s manufacturing may expand in October for the first time in three months.

Futures on the fStandard & Poor’s 500 Index rose 0.3 percent today after the European summit at the weekend. The gauge climbed 1.9 percent on Oct. 21, capping its longest weekly rally since February, as European governments considered deploying $1.3 trillion in funds to tame the crisis.

European leaders in Brussels yesterday outlined plans to aid banks, heading toward a revamped strategy to contain the debt crisis. The 13th crisis-management summit in 21 months excluded a forced restructuring of Greece’s debt, sticking with the policy of enticing bondholders to accept “voluntary” losses to help restore the country’s finances. The complete blueprint will be formed Oct. 26.
Withstanding Slump

Japanese exporters climbed after a report showed the nation’s shipments increased more than expected in September as demand for cars and auto parts rose, a sign the recovery in shipments is withstanding a weakening global economy.

Honda Motor advanced 1.7 percent to 2,335 yen. Toyota Motor Corp. (7203), Japan’s biggest carmaker by sales, rose 1.1 percent to 2,574 yen and Suzuki Motor Corp. (7269), Japan’s No. 4 automaker by sales, climbed 2.4 percent to 1,678 yen.

Bridgestone Corp., a tiremaker, jumped 4.1 percent to 1,765 yen. The company aims to boost annual sales to 3.6 trillion yen by 2012 as it plans to expand production in China to meet rising demand, Chief Financial Officer Akihiro Eto said on Oct. 21.

Chinese banks rallied after Barclays said the Hong Kong- listed lenders may post 32 percent profit growth on average in the third quarter. Industrial & Commercial Bank of China surged 4.6 percent to HK$4.34. China Construction Bank Corp., the nation’s second-biggest lender, climbed 2.9 percent to HK$5.27. Bank of China Ltd. increased 3.4 percent to HK$2.74.
‘Too Bearish’

“We believe the current share prices may reflect too bearish a scenario for asset quality deterioration,” Barclays analysts May Yan and Shujin Chen wrote in a report today. “Negative news flow may have peaked.”

China’s manufacturing may expand in October for the first time in four months, snapping the longest contraction since 2009, after a preliminary index of purchasing managers showed a rebound in new orders and output.

The reading of 51.1 for the index released by HSBC Holdings Plc and Markit Economics today was the highest in five months and compares with the final reading of 49.9 for September and August. A reading above 50 indicates expansion.

Raw material producers advanced as copper and oil futures extended gains. BHP Billiton gained 2.7 percent to A$36.65 in Sydney. Rio Tinto Group, the world’s second-biggest mining company by sales, jumped 4.8 percent to A$65.59. Inpex Corp. (1605), Japan’s biggest energy explorer, increased 2.6 percent to 516,000 yen in Tokyo.

The MSCI Asia Pacific Index declined 16 percent this year through Oct. 21, compared with a 1.5 percent drop by the S&P 500 and a 13 percent loss by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 11.8 times estimated earnings on average, compared with 12.5 times for the S&P 500 and 10.3 times for the Stoxx 600. (Bloomberg)


China’s benchmark stock index rose for the first time in five days after a report showed the nation’s manufacturing may expand for the first time in four months and on easing concerns over the European debt crisis.

China Minsheng Banking Corp. led gains for lenders as Barclays Plc forecast “strong” third-quarter industry profit growth and European leaders outlined plans to aid banks. Jiangxi Copper Co. and coal producer China Shenhua Energy Co. climbed at least 1 percent after a preliminary index of purchasing managers signaled expansion. A gauge of startup companies slumped to a record low after Premier Wen Jiabao said the government would continue to maintain tight monetary policies.

“Europe’s progress towards solving the debt crisis will help boost sentiment on the market although there will be lots of twists and turns before the issue is finally addressed,” said Wu Kan, a fund manager at Dazhong Insurance Co., which oversees $285 million. “A stocks’ rebound will be limited as we face uncertainty such as downward earnings revisions.”

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 8.02 points, or 0.4 percent, to 2,325.30 at the 11:30 a.m. local-time break. About nine stocks dropped for every five that advanced. The CSI 300 Index (SHSZ300) climbed 0.7 percent to 2,524.45, led by financial stocks.

The Shanghai Composite slid 4.7 percent last week, the biggest weekly loss in five months, after the statistics bureau said the nation’s economy grew at the slowest pace in two years in the third quarter. The gauge slumped 17 percent this year after the central bank has raised interest rates three times in 2011 and ordered lenders to set aside a bigger portion of their deposits to curb inflation that’s near a three-year high. It’s valued at 10.8 times estimated earnings, the lowest on record, according to weekly data compiled by Bloomberg. (Bloomberg)


Asian stocks fell, driving the region’s benchmark index toward its biggest drop in two weeks as Germany damped expectations of a fast resolution to Europe’s debt crisis and China’s economy grew at the slowest pace in two years.

BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, slipped 3.4 percent in Sydney after commodity prices slumped. Sony Corp., which gets about 70 percent of its revenue overseas, dropped 1.7 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, lost 1.8 percent after U.S. banks Citigroup Inc. and Wells Fargo & Co. said quarterly revenue dropped. China Coal Energy Co. plunged 7 percent in Hong Kong.

“The implied lack of urgency by European policy makers will create additional uncertainty regarding a robust, all- encompassing solution to Europe’s growing list of problems,” said Tim Schroeders, who helps manage $1 billion in equities at Pengana Capital Ltd. in Melbourne. “Increased uncertainty will feed through to investor nervousness and is likely to see risk reduced by investors as they move to lock in gains from the past couple of weeks.”

The MSCI Asia Pacific Index lost 2.2 percent to 116.62 as of 12:19 p.m. in Tokyo, on course for the biggest drop since Oct. 4. About 13 stocks declined for each that advanced after Steffen Seibert, spokesman for German Chancellor Angela Merkel, said Europe’s leaders won’t provide the quick end to a debt crisis that global policy makers are pushing for at an Oct. 23 summit.
China Growth

The measure deepened declines today after a report showed China’s economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, as the central bank tightened monetary policy and export demand weakened. Policy makers have raised interest rates five times over the past year, curbed lending and imposed limits on home purchases to rein in property and consumer prices.

“Some investors probably like to see better headline numbers, but it’s just unrealistic to expect China to grow double-digit,” said Diane Lin, a Sydney-based Pengana fund manager.

All 10 industry groups on the Asia-Pacific stock gauge retreated today, led by raw-material stocks. The MSCI Asia Pacific Index climbed 3.4 percent last week after Merkel and French President Nicolas Sarkozy pledged to deliver a plan to recapitalize Europe’s banks and address Greece’s debt crisis.
‘Complex Issue’

“The reality is that we’re dealing with a complex multi- year issue that has a lot of stakeholders involved and can’t be resolved overnight,” said Matt Riordan, who helps manage close to $6.6 billion in Sydney at Paradice Investment Management Pty.

Japan’s Nikkei 225 Stock Average fell 1.5 percent today and Australia’s S&P/ASX 200 Index lost 1.8 percent. South Korea’s Kospi Index declined 1.6 percent. China’s Shanghai Composite Index slid 1.6 percent, while Hong Kong’s Hang Seng Index slumped 3.4 percent.

The MSCI Asia Pacific Index climbed 2.1 percent yesterday after Group of 20 finance chiefs meeting in Paris endorsed parts of a plan to contain Europe’s debt crisis. Optimism the region’s officials were developing a plan to help banks weather losses on sovereign debt also fueled gains last week in stocks and the euro.

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The gauge retreated 1.9 percent in New York yesterday after Germany said European Union leaders won’t provide a complete fix to the euro-area debt crisis. The S&P 500 rose 6 percent last week.
Heavy Selling

Germany “doused expectations there would be a definitive solution at this weekend’s European summit,” said Cameron Peacock, a market analyst at IG Markets in Melbourne. “So anticipated and hoped for has been this solution that any disappointments, setbacks during this current ‘gestation period’ are going to be met with heavy selling.”

New York-traded copper futures dropped 0.9 percent yesterday, while the London Metal Exchange Index of prices for six metals including copper and aluminum slipped 0.6 percent. Crude oil futures in New York slid 0.5 percent. Oil fell as much as 0.4 percent today, and copper futures declined as much as 1.9 percent.

The MSCI Asia Pacific Index dropped 13 percent this year through yesterday, compared with a 4.5 percent loss by the S&P 500 and a 14 percent decline by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.1 times estimated earnings on average, compared with 12 times for the S&P 500 and 10.1 times for the Stoxx 600.

The German spokesman’s comments are “another indication of the political obstacles to forging a workable solution for the eurozone,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “Investors have been reminded of the need for caution until details of any proposal are formally released and agreed on.” (Bloomberg)


The FBM KLCI fell into negative territory on Tuesday, Oct 18 as investors worried about external factors sold down to move away from risky assets as concerns over the global economic health reared its ugly head again.

Asian stocks fell on Tuesday after Germany's finance minister cautioned against hopes for a quick fix to Europe's debt problem, reminding investors not to become too optimistic about a rapid development to the two-year-old crisis, according to Reuters.

On Bursa Malaysia, the FBM KLCI fell 18.23 points to 1,447.12.

Market breadth was negative with losers beating gainers by 418 to 78, while 124 counters traded unchanged.

At the regional markets, Hong Kong’s Hang Seng Index fell 2.73% to 18,358.72, Japan’s Nikkei 225 lost 1.43% to 8,752.58, Taiwan’s Taiex was down 1.39% to 7,357.40, Singapore’s Straits Times Index fell 1.36% to 2,741.11, South Korea’s Kospi lost 1.35% to 1,839.98 and the Shanghai Composite Index shed 0.63% to 2,424.95.

BIMB Securities Research in note Oct 18 said European markets were down yesterday as the German finance minister warned that hopes for a solution to the euro zone debt crisis at a forthcoming summit were not realistic.

The Dow Jones closed lower as investors grew nervous following the news in Europe. Back to Asia, China’s 3Q GDP grew by 9.3% while inflation dipped to 6.1%, it said.

China’s latest inflation figures confirm that Beijing’s efforts to ease rising prices are bearing fruit, and reinforce predictions from market watchers that the central bank’s tightening cycle is over, said the research house.

“At home, we expect the market to remain volatile at least for a short period given negative news in the Europe and US.

“We shall see the KLCI’s immediate support level at 1,460 points and next level at 1,450 points, while on the bright side; resistance will be seen at 1,480 points,” it said.

Meanwhile, Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients Oct 18 said due to the US markets’ weaker tone last night, the local index could see a volatile tone.

“Some minor profit-taking activities could the local market slightly softer today,” he said.

Among the losers at mid-morning, Hong Leong Bank fell 36 sen to RM10.50, KLK 30 sen to RM20.68, MISC 24 sen to RM6.34, Tenaga 20 sen to RM5/37, Ta Ann and RHB Capital 18 sen each to RM4.70 and RM7.22, Genting 15 sen to RM9.97, MMHE 14 sen to RM6.01 and Petronas Chemicals 12 sen to RM6.02.

HWGB was the most actively traded counter with 25.6 million shares done. The stock shed half a sen to 37.5 sen.

Other actives included Leader Universal, Harvest Court, OSK, Tanco, SAAG and GPRO.

Meanwhile, gainers included PacificMas, AIC, Petronas Dagangan, and Genting Plantation's. (


Asian stocks fell, ending a six-day winning streak for the regional benchmark index, after credit- rating downgrades of Spain and European banks fueled concern the region’s debt crisis slow global growth.

Chinese companies tumbled as a report showed continued high inflation, lessening the chances of monetary-policy easing in the world’s second-largest economy. Esprit Holdings Ltd., a clothier that gets 83 percent of its revenue in Europe, dropped 2.2 percent in Hong Kong. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 1.2 percent after JPMorgan Chase & Co., the second-largest U.S. bank by assets, said profit declined. BHP Billiton Ltd. (BHP), the world’s No. 1 miner, fell 2.2 percent in Sydney after commodity prices slumped yesterday.

The MSCI Asia Pacific Index dropped 0.9 percent to 116.64 as of 12:39 p.m. in Tokyo. The gauge climbed 9.7 percent in the previous six days, setting the measure on course for its biggest weekly gain since March after German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to deliver a plan to recapitalize Europe’s banks and address Greece’s debt crisis.

“Investors are hoping Europe will find a solution to the sovereign-debt crisis, but if that doesn’t happen the market could come back down again,” said Lee King Fuei, a Singapore- based fund manager at Schroders Plc, which oversaw $323 billion as of June 30. “Politically, it’s going to be difficult to find a solution. Governments in the U.S. and Europe are left with limited stimulus options.”
Nikkei, Kospi

Japan’s Nikkei 225 Stock Average fell 0.8 percent, with Olympus Corp. tumbling 13 percent after saying its president will step down. Australia’s S&P/ASX 200 Index slid 0.8 percent and South Korea’s Kospi Index retreated 0.2 percent.

Hong Kong’s Hang Seng Index lost 1.3 percent after the National Bureau of Statistics said consumer prices in China increased 6.1 percent from a year earlier in September, reducing the chances of an end to monetary policy tightening. China’s Shanghai Composite Index slid 1.1 percent.

Esprit dropped 2.2 percent to HK$11.52 in Hong Kong. Billabong International Ltd. (BBG), a global surfwear maker, slumped 2.1 percent to A$3.70 in Sydney. Carmaker Honda Motor Co. lost 2.3 percent to 2,250 yen in Tokyo, while Canon Inc., a camera maker that depends on Europe for about a third of its sales, slipped 2.4 percent to 3,450 yen.

Olympus plunged 13 percent to 2,164 yen after saying President Michael C. Woodford will depart. Chairman Tsuyoshi Kikukawa said the ousted executive didn’t focus enough on bringing employees together toward a common goal. Woodford couldn’t be reached immediately for comment.
Debt Crisis

Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The U.S. gauge slipped 0.3 percent in New York yesterday, paring gains from the best rally over seven days since 2009 after JPMorgan reported a 33 percent profit decline as investment banking and trading income slumped and amid speculation equities rose too much on optimism Europe’s debt crisis may be contained.

Asian markets followed suit after Spain also had its long- term sovereign credit rating cut to AA- from AA by Standard & Poor’s with a negative outlook, the third reduction by S&P in three years. Separately, UBS AG, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc had long-term issuer default grades cut by Fitch Ratings, which put more than a dozen other lenders on watch negative.

Banks in Asia also declined as concern grew that defaults among European nations may trigger a credit crisis similar to the one after Lehman Brothers Holdings Inc. collapsed in 2008.

Mitsubishi UFJ fell 1.2 percent to 336 yen in Tokyo, while HSBC Holdings Plc (5), Europe’s biggest lender, sank 1.6 percent to HK$63.65 in Hong Kong.
‘Fiscal Austerity’

“Much uncertainty remains as to how Europe will support its banks, beef up the bailout fund and ensure a controlled ‘default’ of Greece,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd. wrote in a note to clients today. “Fiscal austerity will continue to bear down on growth.”

Stocks in Europe fell yesterday after the European Central Bank said imposing further losses on holders of Greek debt posed a risk to the euro area’s financial stability.

An escalation in Europe’s debt crisis may trigger a selloff in Asian assets and disrupt currency markets, the International Monetary Fund said yesterday. The IMF report came before Slovakia approved Europe’s enhanced bailout fund, completing ratification across the 17 euro countries.

BHP Billiton lost 2.2 percent to A$36.81 in Sydney and rival Rio Tinto Group, the world’s No. 2 miner by sales, declined 1.5 percent to A$68.29. Cnooc Ltd., China’s largest offshore energy producer, slumped 4.6 percent to HK$13.28.
Copper Drops

New York-traded copper futures fell 2.6 percent yesterday, while the London Metal Exchange Index of prices for six metals including copper and aluminum sank 2.4 percent. Crude oil futures in New York slipped 1.6 percent. Copper futures rose today, while oil was little changed.

The MSCI Asia Pacific Index dropped 15 percent this year through yesterday, compared with a 4.3 percent loss by the S&P 500 and a 14 percent decline by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12 times estimated earnings on average, compared with 12.1 times for the S&P 500 and 10.1 times for the Stoxx 600.

In Hong Kong, China Overseas Land & Investment Ltd., a developer controlled by the nation’s construction ministry, retreated 3 percent to HK$13.78 on concern China may continue with steps to slow inflation. Industrial & Commercial Bank of China Ltd., the nation’s biggest lender by market value, slid 3.4 percent to HK$4.29. (Bloomberg)


Japanese stocks fell after Standard & Poor’s cut Spain’s credit rating, fueling concern that a deterioration of Europe’s debt crisis will weigh on Asian economies and corporate earnings.

Nissan Motor Co., a carmaker that gets about 15 percent of its revenue from Europe, dropped 2.5 percent. Canon Inc. slipped 2.7 percent after the camera maker said it’s preparing to move production from two factories affected by flooding in Thailand. Olympus Corp. plunged 15 percent after the optical equipment maker’s board ousted Michael Woodford as president.

“The market has taken positively the idea of recapitalizing Europe’s banks and stocks have rebounded for the past week,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “Taking concrete action isn’t going to be easy because Germany and France are divided on the issue. Until markets get that, share prices are not going to rise.”

The Nikkei 225 (NKY) Stock Average fell 0.9 percent to 8,748.47 as 12:38 p.m. in Tokyo, trimming its weekly advance to 1.7 percent. The broader Topix dropped 1.1 percent to 750.54, with more than five shares falling for each that advanced.

The Topix tumbled 16 percent this year through yesterday amid concern the U.S. would fall into another recession while Europe’s debt crisis threatens to spread to the banking system. The slide has cut the price of shares on the index to 0.88 times estimated book value, near the lowest since March 2009. (Bloomberg)


Alliance Financial Group Bhd, a Malaysian lender part-owned by Singapore’s Temasek Holdings Pte Ltd, aims to increase return on equity to 18 percent, focusing on growth in consumer and small-business banking.

Alliance, the smallest among eight banks in the Southeast Asian nation, will offer wealth management products to lure rich clients and bolster services to a segment of corporate borrowers ignored by rivals, Sng Seow Wah, chief executive officer of its banking unit, said in an interview.

“There are market spots that are not well covered,” Sng said in Kuala Lumpur yesterday. “Big banks don’t look at the small companies.”

Sng, 53, took over the top job at Alliance Bank Malaysia Bhd in July last year, replacing Bridget Lai who resigned following an internal probe. Since his appointment, Alliance Financial has posted a 36 percent increase in net income to RM409.2 million (US$130 million) for the year ended March.

Alliance Financial’s return on equity, a measure of how well a company used reinvested earnings to generate additional income, was 13 percent last year, according to data compiled by Bloomberg. Sng said his target was to raise the ratio to 18 percent in five years.

By comparison, Malayan Banking Bhd, Malaysia’s biggest bank, had a return on equity of 15 percent for the year ended June 30, and CIMB Group Holdings Bhd, the nation’s second-biggest lender, was at 16 percent for the year ended December.

Takeover Unlikely

Shares of Alliance Financial have risen 11 percent this year, outperforming the benchmark FTSE Bursa Malaysia KLCI Index even as most Malaysian banks lost value during the period. The local stock gauge has dropped 5 percent this year. Alliance dropped 0.3 percent to RM3.38 at 10:05 a.m. in Kuala Lumpur.

Alliance Financial was among the likely Asian acquisition targets for Australian banks, analysts at Nomura Holdings Inc including Victor German wrote in a Sept. 15 report.

Sng said a merger and acquisition deal is unlikely to happen in the next three to five years because Malaysian rules that limit foreign ownership in banks at 30 percent would deter overseas buyers. Combining with another Malaysian lender “doesn’t make sense” either, he said. (Business Times)


KUALA LUMPUR: RAM Ratings said that there was no immediate rating impact from Permodalan Nasional Bhd’s (PNB) recent conditional offer for the remaining shares of SP SETIA BHD [] (SP Setia) that it does not already own.

SP Setia’s RM500 million Redeemable Serial Bonds are currently rated AA3/P1 by RAM Ratings with a stable outlook.

In a statement Friday, Oct 14, RAM Ratings’ head of real estate and CONSTRUCTION [] ratings Shahina Azura Halip said any rating action at this juncture would be premature.

“Should PNB continue to leave the strategic planning and daily operations in the capable hands of SP Setia’s present management, the Group’s strategic lineage may pave the way for additional business opportunities through PNB’s vast land bank, or put it in the running for more attractive government projects.

“This would be a positive for the group,” she said.

However, Shahina cautioned that nn the other hand, SP Setia’s longer term business profile may face negative implications if Tan Sri Liew Kee Sin decides to sell his entire stake or if PNB’s involvement and control over the Group extends beyond board representation, thus inhibiting the agility of the management team.

A strong management team was a major factor supporting SP Setia’s AA3 rating, she said.

On Sept 28, 2011, PNB offered to pay cash for the SP Setia’s shares at RM3.90 apiece and warrants at 91 sen per unit.

This had followed PNB’s (and parties acting in concert with it) earlier acquisition of 3.07 million shares from the open market, thereby raising their collective stake to 33.2% and triggering the general offer.

On Oct 10, 2011, PNB and SP Setia made a joint announcement whereby the former stated that it intended to maintain SP Setia’s listing and would restrict its involvement in the Group to only board representation.

PNB’s offer document and SP Setia’s independent advice circular to its shareholders are expected to be released next week.

RAM Ratings said it had initiated the annual rating review on the group, and would make the appropriate rating announcement in due course.(


The FBM KLCI slipped on Friday, Oct 14 after three continuous days of gains, as external factors began to weigh on investor sentiment.

Meanwhile, Eng Teknologi Holdings Bhd shares continued to slide after company said its FY11 revenue would be negatively impacted by the floods in Thailand.

Asian shares inched down on Friday, tracking New York and European shares lower as weak Chinese trade data raised concerns about the global economy, while the euro eased after another sovereign debt ratings downgrade, according to Reuters.

The FBM KLCI slipped 2.61 points to 1,442.26 at 10am.

Losers beat gainers by 257 to 146, while 170 counters traded unchanged. Volume was 259.77 million shares valued at RM215.35 million.

At the regional markets, Japan’s Nikkei 225 fell 0.53% to 8,776.25, Hong Kong’s Hang Seng Index lost 0.86% to 18,597.01, Taiwan’s Taiex fell 0.55% to 7,387.68, South Korea’s Kospi was down 0.31% to 1,817.48 and the Shanghai Composite Index shed 0.26% to 2,432.44 while Singapore’s Straits Times Index edged up 0.53% to 2,748.58.

BIMB Securities Research in a note Oct 14 said despite an all round decline in major bourses around the globe, recent chaotic sentiments may have finally eased.

It said yesterday’s easing of most equity markets were nothing more than bouts of profit taking after an impressive run-up.

The DJI Average was off a mere 40 points more from a lacklustre earnings report by JP Morgan, it said.

Regionally, Asian bourses were mostly up buoyed by China’s more proactive move to buy up its banking shares, said the research house.

“The cumulative effects especially a clearer picture from the Euro zone had also propped up the local bourse by an impressive 16 points edging ever closer to the 1,450 level.

“Today, we would expect the market to consolidate with the immediate support at the 1,440 mark,” it said.

On Bursa Malaysia, Eng Teknologi slumped 17 sen to RM1.83 after the company said its revenue for FY11 would be negatively impacted by the Thailand floods that have caused it to halt operations there.

Other losers included GAB and MISC that fell 14 sen each to RM10.40 and RM6.27, Sunchirin 13 sen to RM1.32, Parkson 11 sen to RM5.49, CIMB 10 sen to RM7.30, Genting Malaysia nine sen to RM3.69, Carlsberg eight sen to RM6.80 and Kretam down six sen to RM1.95.

Gainers included KLK, Panasonic, F&N, Petronas Dagangan, HLFG, BAT, Hong Leong Bank, Jerneh and YTL Land.

The actives included YTL Land, OSK, UOA Development, RedTone, Green Packet, Takaso and KUB.(


HONG KONG: Asian shares began Monday on a high after France and Germany said they had agreed a plan to support Europe's banks, while US jobs data also provided some lift.

However, dealers remained cautious after Wall Street finished last week with a loss and Fitch downgraded the debt ratings of Italy and Spain.

Hong Kong gained 0.66 per cent in the first few minutes, Sydney gained 1.20 per cent, Seoul was 1.10 per cent higher and Shanghai, which was closed last week for the Golden Week holiday, was 0.16 per cent up.

Tokyo and Taipei were closed for public holidays.

French President Nicolas Sarkozy and German Chancellor Angela Merkel put on a united front Sunday and vowed after talks in Berlin a response to Europe's debt crisis within weeks.

Without announcing concrete details, Sarkozy said there would be "lasting, global and quick responses before the end of the month", amid rampant fears of a crippling credit crunch.

The announcement comes a few weeks ahead of a G20 summit in Cannes, and Sarkozy said Europe must "arrive at the (meeting) united and with the problems resolved".

It also came amid concerns that France and Germany, the two main powerhouses of the eurozone, were at odds over the best way to recapitalise the region's banks.

Germany, the effective eurozone paymaster, wants banks that are under pressure to turn to investors for funds before appealing for national or European cash.

It wants the EU's 440-billion-euro ($589-billion) European Financial Stability Facility (EFSF) bailout fund to intervene only as a last resort.

But France, fearful of losing its top-notch AAA credit rating, would rather dip into European funds than its own coffers.

However, Sarkozy said Sunday that "agreement is complete".

"An economy is not prosperous without stable and reliable banks," he told reporters after the talks.

Merkel also said the two sides had "decided on doing what is necessary to recapitalise (the) banks in order to assure the granting of credit to the economy".

Also on Sunday, Belgium and Luxembourg said they had reached a deal to dismantle troubled bank Dexia, the first victim of the eurozone crisis.

Belgium's finance minister said Brussels had, in accordance with French wishes, agreed to guarantee 60 per cent of the so-called "bad bank" assets, compared with 36.5 per cent for France and 3.5 per cent for Luxembourg.

The news from Europe added to the upbeat data from the United States, which showed the economy created a better-than-expected net nonfarm 103,000 jobs in September.

The Labour Department also revised upward the two previous months' job creation numbers, indicating that employment in the faltering economy had more momentum than previously believed.

The July payrolls totalled 127,000, not the 85,000 initially estimated, while August was revised from zero to 57,000.

However, Wellington-based ANZ bank strategists said in a note: "Some optimists are hailing an end to the risk of recession for the US, but given this data is volatile and prone to large revisions, we'll not make any significant judgements from one outturn."

But putting downward pressure on markets was Fitch's decision Friday to cut it ratings on Italy and Spain, citing the increasing pressure on them as the eurozone crisis makes it harder for them to raise cash.

"The downgrade reflects the intensification of the eurozone crisis that constitutes a significant financial and economic shock which has weakened Italy's sovereign risk profile," Fitch said.

The single currency was at $1.3454 against the dollar, from $1.3375 late Friday in New York, and at 103.25 yen, from 103.10 yen.

The dollar was at 76.70 yen, from 76.73.

Crude oil prices were up in Asia Monday with New York's main contract, light sweet crude for delivery in November, adding 93 cents to $83.91 a barrel.

Brent North Sea crude for November delivery gained 53 cents to $106.41.

By 0210 GMT (10.10am Singapore time) gold was at $1,652.10 an ounce, up from $1,653.97 at 1045 GMT (6.45pm Singapore time) on Friday.(


SINGAPORE: Crude oil prices were up in Asia Monday as traders took heart from France and Germany's announcement that they had agreed a plan to shore up Europe's banks, analysts said.

New York's main contract, light sweet crude for delivery in November, added 93 cents to $83.91 a barrel.

Brent North Sea crude for November delivery gained 53 cents to $106.41.

Vows to support Europe's debt-laden lenders made by the region's two most influential members reassured crude traders, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore.

"German chancellor Angela Merkel and French president (Nicolas) Sarkozy indicated on Sunday that they would come up with a plan to recapitalise the European banks, ensuring they have the necessary capital, by the end of the month," Shum told AFP.

"Though no specific details were given, the market sentiment became more optimistic because of the news," he added.

Sarkozy promised on Sunday after talks with Merkel in Berlin of "lasting, global and quick responses before the end of the month" to combat the eurozone's debt crisis.

The French leader's announcement -- which was lacking in concrete details -- placed a time frame on the latest European attempt to try to solve a problem that has plagued the region for more than a year and depressed global economies.

Shum added that crude prices were also lifted by data from the US last Friday showing an unexpected hike in non-farm jobs.

The US Labour Department said the economy of the world's largest oil consumer created 103,000 jobs in September, far higher than economist predictions of a 60,000 jump.

The Labour Department also revised up the previous two months' figures. July payrolls totalled 127,000, not the 85,000 initially estimated, while August was revised from zero to 57,000.(AFP)


The FBM KLCI snapped its positive run and slipped at mid-morning on Monday, Oct 10 as the market appeared to show muted response to the 2012 Budget tabled last Friday, indicating that external factors still weighed on investor sentiment.

Regional markets were mixed, as investors await inflation and other economic data from China this week as Chinese markets reopen following Golden Week holidays.

At 10, the FBM KLCI slipped 3.08 points to 1,396.97, weighed by losses at select blue chips.

Losers overtook gainers by 148 to 139, while 156 counters traded unchanged. Volume was 140.01 million shares valued at RM84.25 million.

At the regional markets, Hong Kong’s Hang Seng Index fell 0.33% to 17,648.73 and the Shanghai Composite Index shed 0.06% to 2,357.87; South Korea’s Kospi rose 1.16% to 1,780.11 and Singapore’s Straits Times Index added 0.67% to 2,658.00.

Meanwhile, the Japan and Taiwan stock markets were closed for their respective national holidays.

HwangDBS Vickers Research in a note Oct 10 said the market was likely to remain volatile in the near term, adding that it did not expect an upswing to the market resulting from the Budget.

“In the immediate term, the market’s direction will more likely be determined by US growth outlook and Europe debt crisis.

“There is downside to our year-end KLCI target of 1,520 after we recently downgraded earnings for banks and property counters,” it said.

Meanwhile, BIMB Securities Research said it was getting really tiresome on the flip-flopping of sentiments that traders are leveraging on between Europe and the US.

Despite that the European Central Bank had indicated that more liquidity would be injected into the Euro zone financial system, traders had now turned sceptical from being encouraged earlier in the week, it said.

It said that as such, Wall Street’s progress had scuppered despite the encouraging US job figures for September, and that the Dow Jones dipped 20 point on Friday after what was a strong week.

Regionally, Asian bourses were largely positive and so was the local bourse, it said.

“The FBM KLCI closed stronger at just above the 1,400 level indicating that many are rather encouraged with Budget 2012.

“We are hoping this to continue and looking the FBM KLCI to test the 1,420 level further buoyed by a German-French allegiance to starve off a full blown Euro zone crisis,” it said on Oct 10.

On Bursa Malaysia, PPB fell 20 sen to RM15.74, Southern Acids lost 14 sen to RM1.79, Lafarge Malayan Cement 13 sen to RM6.75, Sime Darby 12 sen to RM8.40, Tenaga 10 sen to RM5.28, Mudajaya and Kumpulan Europlus seven sen each to RM2.16 and RM1.02, while Media Chinese International fell five sen to 99 sen.

Tobacco and brewery stocks edged up after being spared any tax hikes in the Budget 2012 unveiled last Friday.

BAT added 46 sen to RM43.96, JT International rose 30 sen to RM6.10, GAB 12 sen to RM10.02 while Carlsberg was up three sen to RM6.49.

Other gainers included DiGi, Toyo Ink, Dutch Lady, Brem, IJM PLANTATION []s and Latexx.

The actives included Karambunai, Dutaland, MBF Holdings, Malton, E&O and MBSB.(


TORONTO: Europe is likely already in a mild recession, and the United States could very well join it, but the global economic turmoil is unlikely to reach the depths of the 2008 downturn, Morgan Stanley's Stephen Roach said on Tuesday.

Unless Europe totally vaporizes before our very eyes, and that is not my view, I think the likelihood of a major global shock that would prove so disruptive to the entire world economy, is low," Roach, non-executive chairman of Morgan Stanley Asia told the Toronto CFA Society forecast dinner.

Roach -- one of three presenters, along with Goldman Sachs strategist Abby Joseph Cohen and interest rate prognosticator James Grant -- said the U.S. economy was "barely" growing, and said he expects major Euro economies France and Germany to soon begin to contract, joining other European nations that are already doing so.

"To me, the major economies of the developed world are right on the brink of a recession and are likely to tumble into a recession over the course of the next 12 months," he said.

He said the path out of trouble for the troubled Euro region is straightforward, if not exactly easy to make happen.

Europe needs a fiscal union," he told the crowd of more than 1,000 packed into a subterranean room of a massive convention center in downtown Toronto.

That requires 17 countries to come together and give up some of their sovereignty and recognize that without a cohesive fiscal union this monetary union is doomed to failure and will break up. It's that simple."

He was more upbeat on China, which has been his home for the last several years.

He said concerns of a European-style crisis afflicting Chinese banks were overblown", but warned that commodity demand from the massive economy is set to drop as China shifts to a more consumer-focused economy.

Meanwhile, Fed Chairman Ben Bernanke told Congress on Tuesday that U.S. economy is close to faltering and that European financial strains posed "ongoing risks" to its economic growth.


Cohen, whose firm cut its outlook for 2012 global GDP growth to 3.5 percent from 4.3 percent on Tuesday, said Europe's woes will continue to cast a dark cloud" over other economies.

However, she said the political will exists for Europe to solve its sovereign debt and bank capitalization problems.

The recession that we're forecasting, particularly in the periphery of Europe, is something that we think will not be particularly steep and something that at this time next year will give way to a period of economic growth, albeit not a particularly robust period of economic growth," she said.(Reuters)


KUALA LUMPUR: Permodalan Nasional Bhd continued to raise its stake in takeover target S P Setia Bhd, buying more than 20 million shares and nearly seven million warrants of the property developer on Tuesday, Oct 4.

A filing to Bursa on Wednesday showed PNB bought 20.298 million shares in the open market at an average price of RM3.8844 a share on Tuesday and 6.813 million warrants at an average price of 89.78 sen each.

On Monday, it acquired 20.77 million shares of which 10.95 million shares were from the open market at RM3.8928 a share. It also acquired 9.824 million shares in an off-market deal at RM3.89 each. PNB also acquired 10.37 million warrants in the open market at 90 sen each.

Under its proposed takeover of S P Setia, it had offered RM3.90 per S P Setia share and 91 sen per warrant.(


Asia stocks dropped, the euro fell to an eight-month low versus the dollar and bond risk jumped as data signaled global economic growth is slowing and European officials prepared to weigh the risk of a Greek default.

The MSCI Asia Pacific Index tumbled 3.1 percent at 12:34 p.m. in Tokyo, after slumping last quarter by the most since 2008. Standard & Poor’s 500 Index futures declined 0.6 percent. The euro slid 0.4 percent to $1.3329, the Malaysian ringgit sank to a 14-month low and Taiwan’s dollar weakened for a third day. Oil dipped 1.4 percent in New York and copper fell for a fourth day. The Markit iTraxx Asia index of default risk headed for its highest close since May 2009.

European finance ministers meeting in Luxembourg today will grapple with how to shield banks from the debt crisis and mull a further boost to the region’s rescue fund. The Greek government said yesterday it approved 6.6 billion euros ($8.8 billion) of austerity measures. U.S. factories grew last month at the slowest pace since July 2009, a report today may show, while the Tankan survey showed sentiment among Japan’s largest manufacturers remains worse than before the March earthquake.

“We might face more risks, particularly in a market that hasn’t had enough of a correction,” said Diane Lin, a fund manager with Sydney-based Pengana Capital Ltd., which manages about $1.1 billion in global assets. “The U.S. is not falling into recession, and we haven’t seen enough evidence yet, but it’s definitely slowing down.”

Almost 13 shares fell for every one that gained on MSCI’s Asia Pacific Index, which declined 16 percent in the three months ended Sept. 30. The gauge has fallen every quarter this year and is down 20 percent in 2011.
Asian Stocks Drop

Japan’s Nikkei 225 Stock Average slipped 2.5 percent, Australia’s S&P/ASX 200 Index lost 2.4 percent and Hong Kong’s Hang Seng Index sank 4.4 percent. Financial markets in China and South Korea are closed for holidays today.

Mitsui OSK Lines Ltd. dropped 7 percent after Japan’s second-biggest shipping line by sales reported a net loss for the six months ended September. The quarterly Tankan index of sentiment at large manufacturers rose to 2 in September from minus 9 in June, the Bank of Japan said in Tokyo today. The reading was below the reading of 6 in March and in line with the median estimate of 23 economists surveyed by Bloomberg News.

The benchmark U.S. stocks gauge sank 2.5 percent on Sept. 30, rounding off a 14 percent quarterly loss that was the biggest since the three months to December 2008. The MSCI All- Country World Index tumbled 18 percent last quarter amid signs of faltering U.S. growth.

U.S. Factories

The U.S. Institute for Supply Management’s factory index probably fell to 50.3 from 50.6 in August, according to a Bloomberg survey of economists ahead of data today. A reading of 50 is the dividing line between contraction and expansion. The yield on 10-year Treasuries was little changed at 1.91 percent.

The euro earlier fell to $1.3322, its weakest since Jan. 18. The 17-nation currency traded at 102.64 yen from 103.12 yen on Sept. 30, when it lost 1.3 percent.

Europe’s “crisis will probably be stretched for many, many months,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “A crisis prolonged means the euro will keep sliding.”

Today was the original target for approving an 8 billion euro ($11 billion) loan payment to Greece, the sixth installment of a 110 billion-euro lifeline put together in May 2010. That decision has been pushed back until mid-October as Greece seeks to repair its finances. The new measures will help cut the deficit to 6.8 percent of gross domestic product from 8.5 percent this year, the finance ministry said last night.
Ringgit, Taiwan Dollar

“Risk aversion is back in play,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ in Kuala Lumpur. “Lingering concerns over Europe’s debt crisis will continue to weigh on emerging-market assets.”

The Dollar Index, which tracks the U.S. currency against those of six trading peers, rose 0.6 percent, a fourth day of gains. Malaysia’s ringgit dropped as much as 0.8 percent to 3.22 versus the dollar, the weakest level since July 2010, and Taiwan’s currency declined as much as 0.5 percent to NT$30.672.

The cost of insuring corporate and sovereign bonds in Asia against non-payment rose, with the Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan increasing 15 basis points to 259.5 basis points, Royal Bank of Scotland Group Plc prices show.

The risk benchmark is headed for its highest close since May 4, 2009, according to data provider CMA, which is owned by CME Group Inc., and compiles prices quoted by dealers in the privately negotiated market.
Oil, Copper

Crude for November delivery fell as much as 1.6 percent to $77.90 a barrel in electronic trading on the New York Mercantile Exchange before trading at $78.72. OPEC production last month climbed to the highest since November 2008 as Iraqi and Libyan gains outpaced a Saudi cut, a Bloomberg News survey showed.

Royal Dutch Shell Plc shut crude-processing units at its biggest refinery after a fire last week at the Singapore site. The company declared force majeure, a legal clause exempting it from fulfilling contracts.

Three-month copper tumbled 2.5 percent to $6,843 a metric ton on the London Metal Exchange, headed for the lowest close since July 2010. Futures dropped 26 percent last quarter. December-delivery corn retreated 1.8 percent to $5.82 a bushel. Prices have slumped 6.8 percent this year. (Bloomberg)


KUALA LUMPUR: TA Investment Management Bhd (TAIM), which declared a gross income distribution of 3 sen per unit to unitholders of its TA Comet Fund, expects market conditions to improve only in 4Q11 given high volatility in markets currently.

In a statement Monday, Oct 3, TAIM said the global economic situation continued to be fluid with much weaker numbers coming out from the US, Europe and China.

Rising risk aversion was driving investors to seek shelter in money markets, fixed income instruments and gold, despite what it described to be high prices.

"We feel that the equity valuation has dropped to near crisis level while commodities prices are at fair value,” it said.

However, TAIM said that investors were not rushing to buy given the current uncertainties.

"We do expect markets to continue to exhibit high volatility for the next few months and the light that we are looking for may only be convincingly noticeable in the fourth quarter of the year," it added.(


KUALA LUMPUR: Banking stocks were among the major losers on Monday, Oct 3 as the FBM KLCI slumped more than 2.1% as nervous investors off-loaded riskier assets in line with the negative sentiment that swept through key regional markets.

Banks are often seen as a proxy to the economy, and given the gloomy global outlook on the back of the looming euro zone debt crisis, most prone to a selldown in the current climate given the uncertainties.

At 11.15am, HLFG fell 50 sen to RM10.40, Hong Leong Bank lost 36 sen to RM9.82, AMMB 22 sen to RM5.57, Maybank 20 sen to RM7.80, CIMB and RHB Capital 13 sen each to 6.84 and RM6.87, Public Bank 10 sen to RM12.10, Affin nine sen to RM2.40 and AFG seven sen to RM3.23.

The FBM KLCI slumped 30.35 points to 1,356.78 at 11.15am.

Losers beat gainers by 443 to 86, while 152 counters traded unchanged.(


Kuala Lumpur: DRB-HICOM Bhd's last-minute drop on Friday had investors, especially the call warrant holders sweating again.

Within the last couple of minutes, the market closed for active trading and DRB-HICOM mother shares slumped almost eight sen, after an investor dumped the stock.
It ended the day 10 sen lower at RM1.74 a share, with the buyer spread and seller spread trading wide apart.

The buyers wanted the share at RM1.74, while the sellers wanted it at RM1.81.

DRB-HICOM call warrant holders are worried, as one of the warrant expires in five days' time, while another has 18 days left.

Their concern is understandable because in late July, DRB-HICOM shares slumped to RM1.95 a share from RM2.28 in a single day.

The slump happened in the last couple of minutes of trading, after an investor keyed in to sell the DRB-HICOM mother shares some 30 bids lower than the market value.

The trading error happened just before the DRB-HICOM CE call warrants issued by OSK Investment Bank was going to expire.

The DRB-HICOM CB call warrants issued by OSK at 17 sen expires in five days' time. The strike price is set at RM1.29 for the mother on a one-for-one basis.

The DRB-HICOM CC issued at 15 sen by CIMB, with a strike rate of RM1.15, on a basis of five call warrants for one mother share, expires in the middle of this month.

The final settlement price of call warrants are calculated by using the last five days' closing price, and as such any sudden drop in prices of the mother share will affect the settlement price.

As such, there were suggestions that to even the playing field, instead of fixing the final settlement price through the last five days' closing price, the average weighted price over five days should be used instead.(Business Times)


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