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Wednesday, March 18, 2009

Bursa Chat News Highlights (18.03.2009)

IOI Corporation Bhd (IOI MK, Hold, TP: RM3.90) has extended the closing date for its offer to buy the remaining shares in IOI Properties Bhd to 5pm on March 31. All other terms and conditions of the offer remain unchanged. IOI Corp, which already holds 89.68% of IOI Prop as at 6pm yesterday, needs only the acceptance of 2.63mor a 0.32% stake in the property developer to delist the company. (BT)


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AMMB and MAA get green light from Bank Negara Malaysia (BNM). AmLife Insurance Bhd, the insurance arm of AMMB Holdings Bhd (AMM MK, Buy, TP: RM3.40) and MAA Holdings Bhd (MAA) have received approvals from BNM to commence negotiations for the proposed acquisition by the former on of an equity stake in MAA Takaful Bhd. (BT)


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Dubai Ventures Group sells 10.57% stake in property development company Guocoland. The shares sold by Dubai Ventures would be worth RM51.08m based on the price of RM0.69. The children of the controlling shareholder, Tan Sri Quek Leng Chan, acquired 25.03m shares of the company on the same day worth RM17.27m. (BT)


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Proton Holdings Bhd's maiden multi-purpose vehicle (MPV), the Exora, is scheduled to be launched on April 15, some buyers who had test-driven the MPV disclosed. They said the on-the-road price of the 1.6-litre Exora, excluding insurance, will be not more than RM77,000. "Two versions are available, with the entry-level unit selling at about RM72,000," one of them said. (BT)


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Eastern & Oriental Bhd (EOB) has disposed of its interest in a joint-venture vehicle mandated to develop several parcels od land in Kuala Lumpur to a wholly owned subsidiary of Selangor Properties Bhd (SPB) for RM261,550 cash. In an announcement yesterday, the company said it disposed of its 50% stake and preference shares in Puncak Madu Sdn Bhd to Damansara Development Sdn Bhd, a subsidiary of SPB. EOB is expected to incur a loss of approximately RM20m in the transaction but will recover shareholders advances of RM56.1m from the deal. (Financial Daily)


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Malaysia Airports Holdings Bhd (MAHB) hopes to recoup LCCT investment in two years. MAHB hopes to recover its costs through rising passenger traffic, demand for retail goods; food and beverages. The company had spent RM108m to set up a 35,920 sq m LCCT in Sepang, and allocated another RM124m for expansions in the international and departure halls, including a public concourse, government offices, a curbside and a parking area. The expansion is scheduled to be completed in April 2009, enabling the handling of 15m passengers per year from the current 10m. In 2008, the airport operator handled around 10.138m passengers, of which 5.088m passengers were from international flights. (BT)


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Malaysia's consumption of natural gas declined about 5% last month from a year earlier because of falling demand from power plants, a Petroliam Nasional Bhd (Petronas) (6033) official said. The country burned 2bn cu ft a day last year, and the power industry accounts for two-thirds of the usage, Ezhar Yazid Jaafar, Petronas senior manager of strategic business planning for gas business, said at the Gas Asia conference in Kuala Lumpur yesterday. "The power sector is not
taking as much because of the economic slowdown," Ezhar said. (BT)


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Alam Maritim Resources Bhd has signed a heads of agreement (HOA) with OCI Energy Sdn Bhd and Ombak Marine Sdn Bhd to jointly establish and participate in a working arrangement to execute and complete a shore approach project awarded by a local installation contractor. The HOA will bind the parties on the preliminary matters and to record their mutual basic understanding and intention pending finalisation of terms and conditions of joint operation agreement and/or other relevant documents. (BT)


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In a move to check unemployment in the country as a result of the weakening economy, the government is speeding up its recruitment process. Targeting fresh graduates and those who have been retrenched, the government hopes to fill up 46,000 existing vacancies quickly. “In the past, the government processes for hiring has been slow. But in view of the rising number of retrenchments, we have decided to quicken this process,” Deputy Minster in the Prime Minister’s Department Senator T Murugiah told reporters yesterday. (Financial Daily)


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Some 26,000 jobs have been lost in the country since the global financial crisis blew up last September and nearly twice as many jobs could be shed this year as struggling manufacturers cut output, a senior government official said. “It (unemployment) is going to be quite long and badly affected,” Human Resources Ministry deputy director of labour Sh Yahya Sh Mohamed said in an interview. Some 40,000 to 50,000 more jobs are expected to be lost this year, Yahya also said. (Financial Daily)


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INVESTMENT RESEARCH
Global


Stocks surged Tuesday, with the major stock gauges ending higher for the fifth out of six sessions, as investors continued to dig out from 12-year lows. A better-than-expected housing market report released yesterday gave investors a reason to cheer. The Dow Jones industrial average gained 2.5% (+178.7 pts, close 7,395.7). The Standard & Poor' 500 index gained 3.2%s
(+24.2 pts, close 778.1) and the Nasdaq composite gained 4.14% (+58.1 pts, close 1,462.1). In currency trading, the dollar fell against the euro and gained against the yen. U.S. light crude oil for April delivery rose US$1.81 to settle at US$49.16 a barrel on the New York Mercantile Exchange. (CNNmoney)


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U.S. housing starts in February unexpectedly snapped the longest streak of declines in 18 years, raising optimism the market may be finally finding a floor. Work began on 583,000 homes at an annual rate, a 22% increase from January that was propelled by a surge in condominiums, apartments and townhouses, Commerce Department figures in Washington showed yesterday. A separate report showed gains in producer prices slowed, underscoring a lack of inflationary pressures with the economy in a recession. U.S. producer prices rose 0.1% in February as the cost of energy products, cigarettes, light trucks and household appliances increased. (Bloomberg)

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Chairman Ben S. Bernanke and Federal Reserve policy makers may have to ramp up their purchases of mortgage securities and other assets after the economy and job market deteriorated further since they last met. The Federal Open Market Committee needs to redouble its efforts after the central bank’s balance sheet shrank 17% from a US$2.3trn December peak, Fed watchers said. The retreat came even as Bernanke acknowledged the chance that the unemployment rate will exceed 10% for the first time in a quarter century. This week’s FOMC meeting could mark a shift toward more aggressive monetary expansion to fight deflation after demand waned for many of the Fed’s existing programs. One top consideration is an increase in the pace and size of a US$600bn program to buy bonds issued and backed by U.S. housing agencies such as Fannie Mae, while other measures could include everything from purchases of Treasuries to corporate bonds. (Bloomberg)

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The Federal Reserve will delay by two years limits on capital held at bank-holding companies to help lenders maintain adequate funding as they weather the worst financial crisis since the Great Depression. The Fed action postpones implementation of rules initially set to take effect March 31. The requirements would have limited the amount of cumulative perpetual preferred stock, trust preferred securities and minority interests in the equity accounts included in banks’ Tier 1
capital. The Fed rule, adopted in 2005, would create “a substantial burden” on lenders if implemented this month, the central bank said. The delay allows banks to hold higher levels of Tier 1 capital, a measure of financial strength and ability to absorb losses. (Bloomberg)
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European Central Bank President Jean-Claude Trichet said policy makers are in an “ongoing process” of considering whether to adopt more unconventional monetary policies. The ECB is under pressure to outline a strategy for how it would help the euro-region economy once it runs out of room to cut interest rates. Policy makers reduced the benchmark to a record low of 1.5% on March 5. (Bloomberg)
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The Bank of Japan may step up purchases of government bonds as Prime Minister Taro Aso prepares a third stimulus package to ease the nation’s recession. The central bank will increase its monthly government debt purchases to 1.6trn yen (US$13bn) from 1.4trn yen, economists said. The bank yesterday said it may provide as much as 1trn yen of subordinated loans to banks to replenish capital depleted by falling stock prices. Governor Masaaki Shirakawa last week signalled he would endorse plans for more government spending, saying Japan needed “appropriate fiscal measures.” More purchases of government bonds would help avert a jump in bond yields, which have risen on concern that the government will have to sell more debt to pay for the stimulus. The yield on Japan’s benchmark 10-year bond rose to 1.295% at yesterday’s close from 1.165%. (Bloomberg)

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German investor confidence unexpectedly rose to the highest level in almost two years in March after the European Central Bank reduced borrowing costs to a record low. The ZEW Center for European Economic Research said its index of investor and analyst expectations increased to minus 3.5 from minus 5.8 in February. That’s the highest reading since July 2007. Economists expected a drop to minus 8, according to the median of 39 forecasts in a Bloomberg News survey. The ECB on March 5 lowered its key rate by 50 basis points to 1.5% to stem the worst economic slump in 60 years. In Germany, Chancellor Angela Merkel’s coalition has agreed to spend about 80bn euros (US$104bn) to stimulate economic growth. The euro rose almost half a cent to US$1.3021 on ZEW’s report. ZEW’s gauge of current conditions fell to minus 89.4 from minus 86.2 in February. That’s the lowest since September 2003. (Bloomberg)
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