Malaysia Airports To Build Low-Cost Terminal For AirAsia.

The proposed RM1.6 billion low-cost carrier terminal (LCCT) project in Labu by AirAsia Bhd is as good as off.

This followed reservations raised at a meeting yesterday attended by Deputy Prime Minister Datuk Seri Najib Razak, Transport Minister Datuk Seri Ong Tee Keat and AirAsia chief executive officer Datuk Tony Fernandes, sources said. The meeting, which lasted about an hour, was also attended by representatives from Malaysia Airports Holdings Berhad and senior officials from the Transport Ministry, Economic Planning Unit in the Prime Minister’s Department and the Finance Ministry.

“Malaysia Airports will build a new LCCT near the Kuala Lumpur International Airport (KLIA) in Sepang but they will have to work closely with AirAsia,” said a source.

“The company’s input in the building of the new terminal will have to be taken into consideration.” The source also said the government felt that AirAsia would not be able to raise the funds to develop the airport that it had earlier proposed in Labu, Negri Sembilan.

Ong said an official decision would be announced in two to three weeks’ time as it involved many parties. “The Transport Ministry, EPU, Finance Ministry, Malaysia Airports and AirAsia are meeting for the good of all parties concerned,” he told Bernama. Sources said AirAsia had been given two weeks to provide its wish list, now that Malaysia Airports would be building a permanent LCCT at KLIA.

AirAsia would have follow-up meetings with Malaysia Airports and a final meeting with Najib in two weeks, they added.Among the issues that will be discussed between AirAsia and Malaysia Airports are the specifications for the new LCCT and the passenger service charge.

It was reported on Jan 5, that conglomerate Sime Darby Bhd had obtained the cabinet’s approval to proceed with its proposed airport on its land in Labu, or KLIA-East, 22km from KLIA.

However, Najib said recently that the government was rethinking its earlier decision.The government, he said, was still looking at the proposal and there was no formal decision yet. Najib had also said that the proposal would have to be studied from all angles as the government needed to verify whether it could go ahead with it or a different arrangement was required.

AirAsia, in a statement released recently, had said it was looking forward to presenting Najib a detailed brief on KLIA-East and its plans to make Kuala Lumpur the regional hub for low-cost carriers. “Since the cabinet’s approval of Central Malaysian Vision Valley project, of which the KLIA-East LCCT is a vital component, AirAsia and Sime Darby have been in negotiations to finalise the details.”

The budget airline had also said it had received numerous enquiries from domestic and international investors interested in the project. The proposed airport in Labu would be AirAsia’s answer to its fear that Malaysia Airports would be unable to build a new permanent terminal in time to support its passenger and aircraft growth. The Labu plan, however, has come under fire as the public and non-governmental organisations raised questions on the need for a new airport, considering that KLIA was under-utilised.

Article from Business Times.com

Jim Rogers: Malaysia In Better Position Than Most Countries

HONG KONG: Blessed with natural resources, Malaysia is in a better position than most countries in the current grim economic environment, according to Jim Rogers, the co-founder of the Quantum Fund.

“The Malaysian economy is natural resource-based so you are in a better position than many countries. And therefore, your currency is better positioned than other currencies,” Rogers told The Edge Financial Daily on the sidelines of the Asian Financial Forum yesterday.

“My main problem with Malaysia is that your politicians don’t seem to get it right. It’s a fabulous country and it should have a fantastic future. Get politicians who understand how the economy works and adapt and adjust. Malaysia should be and could be a wildly successful and rich country,” he added.

Rogers founded the Quantum Fund — one of the first international hedge funds — with George Soros in 1970. Speaking in his keynote address during a luncheon at the Asian Financial Forum on Monday, Rogers reiterated his belief in commodities.

“Fundamentals for a lot of industries are impaired currently. But, things that are not impaired are commodities. The fundamentals of commodities in the current environment are enhanced as supplies are short,” said Rogers, adding that the idea of making money today is through investments in raw materials and commodities.

He is also bullish on the yen but is bearish on the US dollar, bonds and stocks. “I’m not buying into any markets right now because there are problems still to come,” he said.

KL Composite Up 6.94 Point.

MALAYSIAN shares ended firmer in thin trading today amid continued nibbling at heavyweight counters, with sentiments supported by overnight gains on Wall Street, a dealer said. The Kuala Lumpur Composite Index rose 6.94 points, or 0.8 per cent, to 879.63 at the 5 pm close, its biggest gain since January 22.

The market was closed on January 26 and 27 for the Lunar New Year holidays. About five stocks gained for each two that fell on the 100- member gauge. About 213 million shares changed hands, less than half the average daily volume in the past year. Dealers said most fund managers were away on holidays. The local bourse was closed on January 26 and 27 for the Lunar New Year break.

“It is the external news that is fuelled the market today,” he said. Digi.Com Bhd added 20 sen, or 1 per cent, to RM20.9, its biggest gain since January 22. The Malaysian unit of Norway’s Telenor ASA expects to register high single-digit growth in revenue this year, a newspaper reported today, citing chief executive officer Johan Dennelind.

The Kuala Lumpur-based company also expects a low- to mid-40 per cent earnings before interest, taxation, depreciation and amortisation, or EBITDA, margin, the newspaper said. Merge Housing Bhd rose 3.5 sen, or 6.8 per cent, to 55 sen, its biggest gain since January 15. The property developer said it slipped to a loss of RM10.3 million (US$3 million) in the second quarter ended November 30 from a profit of RM480,000 a year earlier.

Sime Darby Bhd gained 15 sen, or 2.8 per cent, to RM5.5. The palm oil producer and homebuilder said it plans to generate sales of between RM25 billion and RM30 billion over 20 years from an integrated property development across two Malaysian states.

The Sime Darby Vision Valley spans 80,000 acres across Selangor and Negeri Sembilan, the company said in a statement. Among the actives, Evermaster Group inched up two sen to nine sen, Progressive Impact jumped three sen to 46 sen, KNM and UEM Land added 1.5 sen each to 44 sen and 77.5 sen, respectively. - Bernama, Bloomberg

Weak Tone Keeps KLCI Below 900.

SHARE prices on Bursa Malaysia extended their follow-through consolidations in tandem with the major weaknesses on the Wall Street and regional stock markets. The Kuala Lumpur Composite Index (KLCI) continued to stay below its critical support of 900 when it closed at 872.69 points yesterday. The KLCI opened marginally higher at 897.90 points before rebounding to its intra-day high of 900.24 on Monday. The KLCI closed lower at 890.28, giving a day-on-day loss of 6.19, or 0.69 per cent.

Overall market sentiment weakened on lack of fresh market leads on Tuesday. The KLCI gapped down before closing lower at 880.37, giving a day-on-day loss of 9.91, or 1.11 per cent. The KLCI gapped down before slipping to its intra-day low of 868.65 on Wednesday. It closed off its day's low at 873.41 points, giving a day-on-day loss of 6.96 points, or 0.79 per cent.

Overall market sentiment improved on rate cut of 75 basis points on the local front on Thursday. The KLCI closed higher at 879.02 points, giving a day-on-day gain of 5.61 points, or 0.64 per cent. The KLCI resumed its consolidation yesterday, closing lower at 872.69, giving a day-on-day loss of 6.33, or 0.72 per cent.

Elsewhere in the region, the Tokyo stock market's continuing consolidation sent its benchmark below the support of 8,000. The Nikkei 225 Index closed at 7,745.25 yesterday, posting a week-on-week loss of 484.90, or 5.89 per cent.

The Hong Kong stock market continued to tumble in tandem with the technical pullbacks on the Wall Street. It breached its critical support of 13,000 over the last four trading days. The Hang Seng Industrial Index closed at 12,578.60 yesterday, recording a week-on-week loss of 676.91, or 5.11 per cent.

The KLCI closed broadly lower at 872.69 yesterday, giving another week-on-week loss of 23.78 points, or 2.65 per cent. The FTSE Bursa Malaysia Second Board Index lost 74.33 points, or 1.86 per cent, to 3,927.56 level while the FTSE Bursa Malaysia Mesdaq Index gained 73.35 points, or 2.23 per cent, to 3,361.68 level.

Following are the readings of some of the KLCI's technical indicators:

* Moving Averages: The KLCI had since stayed below its 10-, 20-, 30-, 50-, 100- and 200-day moving averages.

* Momentum Index: Its short-term momentum index continued to stay below the support of its neutral reference line.

* On Balance Volume (OBV): Its short-term OBV trend stayed below the support of its 10-day exponential moving averages.

* Relative Strength Index (RSI): Its 14-day RSI stood at the 42.12 per cent level yesterday.

Outlook

The KLCI's very brief follow-through rebound hit its intra-week high of 900.24 on Monday, encountering resistance at this column's envisaged resistance zone (899 to 933 levels). Subsequent technical pullbacks sent the KLCI below its support of 890 and 880 before hitting its intra-week low of 867.35 yesterday, staging a re-test of this column's envisaged support zone (859 to 893 levels).

Chartwise, the KLCI's technical pullback rested on resistance-turned-support trendline (See KLCI's weekly chart - A7:A8). It breached its immediate downside support (A1:A2) at the market close yesterday. The KLCI's daily trend staged a re-test of its immediate downside support (See KLCI's daily chart - B3:B4) over the last three trading days. It rested on the recently established uptrend (B5:B6).

The KLCI's weekly fast MACD (moving average convergence divergence) continued to stay above the support of its weekly slow MACD at the market close yesterday. Its daily and monthly fast MACDs continued to stay below their respective slow MACDs. The KLCI's 14-day RSI stayed at 42.12 per cent level yesterday. Its 14-week and 14-month RSI stayed at 34.74 and 29.90 per cent levels respectively.

Overall market sentiment remained weak throughout the last five trading days. It continued to react negatively to the major weaknesses on Wall Street and regional bourses. Market undertone is not going to improve significantly in the coming festive holiday-shortened week. The KLCI is expected to drift aimlessly in a directionless market. Next week, the KLCI's envisaged resistance zone hovers at the 876 to 910 levels while its immediate downside support is at the 835 to 869 levels.

Techinical Speaking By S.N.Lock - Article from Business Times.com

USD 13.7 Billion Stimulus - Singapore

Singapore yesterday announced a S$20.5 billion (US$13.74 billion or RM49.5 billion) stimulus package to help companies and save jobs along with a one percentage point cut in corporate tax as the financial centre grapples with its worst-ever recession. The package, which comes on top of regular government spending, includes S$5.1 billion on training and other measures to save jobs and S$5.8 billion to stimulate bank lending.

"The resilience package will not get us out of recession," Finance Minister Tharman Shanmugaratnam told Parliament as he unveiled the 2009/2010 budget. "But it will help avert an even sharper downturn, and more lasting damage to the economy."

Tharman said the budget for the fiscal year ending March 2010 will be Singapore's largest ever at about 6% of gross domestic product (GDP), before accounting for transfers.

Government bonds fell on the news of the stimulus plan and expectations for a large fiscal deficit, pushing yields across the curve up by about 10 basis points to 15 basis points. "The devil is in the detail, but the initial verdict by the market is that this is a sizeable deficit and stimulus, which has prompted bonds to sell off," said Claudio Piron, a strategist at JPMorgan Chase.

Five-year yields jumped to 1.24% from 1.14% before the budget announcement, while 10-year yields climbed to 1.82% from 1.71%. Singapore said on Wednesday its economy shrank at an annualised and seasonally adjusted rate of 16.9% in the fourth quarter, the deepest contraction on record.

It predicted the economy would shrink as much as 5% this year. Singapore has already announced plans to bring forward about S$4.7 billion of construction projects as well as initiatives to help small and medium enterprises get loans.

"It will not produce a fundamental turnaround for the economy of course but will help cushion some of the pain. It's a big bang budget I will call it — most likely funded by the fiscal reserves although we will have to wait for further details," said Kit Wei Zheng, economist at Citigroup. — Reuters

Malaysia Dec Inflation Falls More Than Expected.

INFLATION fell by more than expected to a seven-month low in December, driven by lower fuel prices, and economists expect it to drop further. "Inflation is expected to continue heading south as the boost from food and other commodity prices drops out of the annual comparison, with it easily dipping below one per cent by the third quarter of the year," said Prakriti Sofat, an economist from HSBC Bank.

The consumer price index (CPI), which measures inflation, rose 4.4 per cent year-on-year. The government had cut the price of petrol by 10 sen to RM1.80 per litre while prices for RON92 petrol and diesel were lowered to RM1.70 from RM1.90 in December.

A poll done by Business Times had expected the CPI to register 4.76 per cent for December. "Food prices softened for the third consecutive month to 10.4 per cent year-on-year and more is expected to come through in the period ahead," Sofat said. Transportation costs also declined by 0.3 per cent year-on-year in December from 6.1 per cent previously and a peak of nearly 22 per cent in July last year.

She thinks that there is room to cut petrol prices further should oil prices continue to be weak. Yesterday, the price of US light crude was around US$41 (RM148) a barrel. According to the Statistics Department, the CPI grew by 5.4 per cent to 111.4 in 2008. The Business Times poll had expected the index to grow by 5.52 per cent. The increase was led by increases in food and non-alcoholic beverages and transport (8.8 per cent), alcoholic beverages and tobacco (7.3 per cent), restaurants and hotels (6.6 per cent).

Article from Business Times.com

Bank Negara Cuts Key Interest Rate to 2.5pc.

MALAYSIA's central bank cut its benchmark interest rate for a second straight meeting as easing inflation allowed it to focus on sustaining economic growth amid the deepening global recession. Bank Negara Malaysia lowered its overnight policy rate by three-quarters of a percentage point to 2.5 per cent, it said in a statement in Kuala Lumpur today.

The size of the reduction was larger than all predictions in a Bloomberg News survey of 19 economists, where seven expected a quarter-point cut and the rest forecast the rate to be lowered by 50 basis points.

Malaysia’s 2009 growth will probably miss the government’s 3.5 per cent forecast, adding pressure on policy makers to boost spending and cut borrowing costs, the Malaysian Institute of Economic Research predicts.

Finance Minister Datuk Seri Najib Tun Razak is planning a second stimulus package to add to a RM7 billion (US$2 billion) plan unveiled in November. “The pace of deterioration in the global economy is creating the urgency to act more aggressively,” said Suhaimi Ilias, chief economist at Maybank Investment Bank Bhd in Kuala Lumpur. “The rate cut is aimed at ensuring impactful monetary easing together with the economic stimulus measures announced in November, with the likelihood of additional steps coming some time in this quarter.”

Demand for the Southeast Asian nation’s electronics and commodities has slumped, prompting Citigroup Inc to predict a recession this quarter. Falling orders at the Malaysian factories of companies such as Dell Inc and Intel Corp caused exports to decline the most in almost seven years in November.

Slowing Inflation

Inflation fell to a seven-month low of 4.4 per cent in December after the government cut gasoline prices seven times since late August. Easing prices allowed Malaysia’s central bank, which avoided raising interest rates earlier last year when others were doing so to tame inflation, to join nations around the world in lowering borrowing costs in November.

A quarter-point cut on November 24 was the first since 2003 and accompanied a reduction in the amount lenders need to set aside as reserves. “International economic and financial conditions have deteriorated much more significantly in the recent period,” Bank Negara said today. “The sharper deterioration of the global economy is expected to have a greater impact on the Malaysian economy.”

Malaysia’s 2009 economic growth may slow to an eight-year low of 2.5 per cent should the government fail to effectively implement the November stimulus package, the Business Times reported January 16, citing Sulaiman Mahbob, director-general of the Economic Planning Unit. Central banks from India to Taiwan have also lowered borrowing costs in recent months to spur growth as the US, Japan and the euro region slipped into recession. - Bloomberg

KL Composite Index Down 9.91 Points.

MALAYSIAN shares ended the day lower on persistent profit-taking in heavyweights and lower-liners, with most finance counters extending losses, dealers said. The Kuala Lumpur Composite Index fell 9.91, or 1.1 per cent, to close at 880.37. It was a sixth day of declines, the longest losing streak since October 6.

Almost five stocks fell for each that rose on the 100-member measure.The dealers said that market players took in profits ahead of the Chinese New Year holidays next week and amid worries that the US financial crisis had spread to Europe.According to them, fears of the financial crisis in Europe seem to be affecting the local and regional bourses, especially after the Royal Bank of Scotland announced massive losses.

Decliners led advancers by 350 to 135 while 203 counters were unchanged, 565 untraded and 31 others suspended.The volume shed to 375.820 million shares valued at RM439.119 million against yesterday’s closing of 421.934 million shares valued at RM437.957 million. KNM Group Bhd slid 2.5 sen, or 5.5 per cent, to 43 sen, the largest decline since December 5. Scomi Group Bhd declined 2 sen, or 5.5 per cent, to 34.5 sen, the most since November 24.

SapuraCrest Petroleum Bhd dropped 3.5 sen, or 4.4 per cent, to 76 sen, after crude oil fell below US$34 a barrel in New York, eroding the prospects for oil exploration-related contracts.Lion Industries Corp dropped 5 sen, or 6.9 per cent, to 67 sen, the steepest decrease since November 24. It was the third-biggest decliner on the benchmark Composite Index.

Perwaja Holdings Bhd fell 1.5 sen, or 2 per cent, to 75 sen. Its parent Kinsteel Bhd slid 1.5 sen, or 3.5 per cent, to 41.5 sen.Perwaja cut production at its iron plant while Lion has reduced steel production amid weak demand and high gas costs, a newspaper reported, citing company officials.Berjaya Sports Toto Bhd climbed 8 sen, or 1.8 per cent, to RM4.66, the second-best performer on the Composite Index.

JPMorgan Chase & Co, following a meeting with Berjaya Sports’s management, said there’s no change in its dividend policy of a 75 per cent payout ratio. It also expects sales to increase 5 per cent for fiscal 2009, it said in a report today.IOI Corp, Malaysia’s second largest palm oil producer, dropped 4 sen, or 1 per cent, to RM3.80, its first slide in three days.

First State Investments cut its stake in the company to 5.9 per cent by selling 15.8 million shares, a stock exchange filing showed.TM International Bhd tumbled 12 sen, or 3.3 per cent, to RM3.54. The mobile phone operator controlled by state investment agency Khazanah Nasional Bhd may sell new shares in a rights offer or issue an “equity-linked security” to repay debt to Telekom Malaysia Bhd.

WCT Bhd dropped 8 sen, or 7.3 per cent, to RM1.02, the second worst performer on the Composite Index. The Employees Provident Fund sold 100,000 shares in the company, trimming its stake to 18.9 per cent, a stock exchange filing showed.— Bernama, Bloomberg

Photo : Catherine Zeta Jones

Malaysia May Scrap Palm Oil Windfall Tax

THE Malaysia's government is considering a request by domestic palm oil producers, including Sime Darby Bhd and Kuala Lumpur Kepong Bhd, to scrap a windfall tax after the price of the commodity slumped. “I have handed over the proposal to the government through the ministry of finance for further consideration,” Minister of Plantation Industries and Commodities Peter Chin told reporters today.

He didn’t say when a decision might be made. The tax was introduced last July when the price of palm oil was almost double the current level. Profit at growers such as IOI Corp has fallen from records after fertiliser costs soared and the edible oil slumped as the global recession deepened.

The tax was applied to planters when they sold palm oil for more than RM2,000 (US$560) a metric ton, and at a time when the vegetable oil fetched RM3,575 on the Malaysian market. Palm oil for April delivery now sells for RM1,860. A request by producers for a refund on tax that’s already been paid isn’t fair, Chin said in Putrajaya, the government’s administrative home outside Kuala Lumpur.

The government plans to swap palm oil worth US$60 million for fertilisers from North Korea to help growers at home cut costs, he said. The government is also seeking to swap the edible oil for fertilisers from Iran, Syria, Morocco, Jordan, Cambodia and Vietnam, he added.

Malaysian palm oil producers last year asked the government to cut the price of fertiliser, about half a grower’s production costs, after the price of the chemical doubled. Most of the fertiliser used by Malaysian palm oil producers comes from Canada and Russia, Chin said. Palm oil is used mostly in cooking and as an ingredient in soaps, and the world’s largest buyers are India and China. The oil can also be added to diesel to make a biofuel. - Bloomberg

Technically Speaking By S.N. Lock. KLCI Slip Below Key Support Level.

SHARE prices on Bursa Malaysia consolidated in step with the major weaknesses on the Wall Street and regional stock markets. The Kuala Lumpur Composite Index (KLCI) had once again slipped below its critical support of 900 when it closed at 896.47 points yesterday.

The KLCI opened higher at 919.40 points before rebounding to its intra-day high of 925.13 on Monday. The KLCI closed at 923.57 points, giving a day-on-day gain of 4.50 points, or 0.49 per cent.

Lack of fresh market leads, share prices on Bursa Malaysia fell back in tandem with the technical pullbacks on the regional stock markets on Tuesday. The KLCI closed at 913.70 points, giving a day-on-day loss of 9.87 points, or 1.07 per cent.

The KLCI fluctuated within range-bound trading activities in its inside-day move on Wednesday. The KLCI closed relatively unchanged at 913.46 points, giving a day-on-day gain of 0.24 point, or 0.03 per cent. Overall market sentiment took a heavy beating when it reacted to the major weaknesses on the Wall Street on Thursday. The KLCI closed broadly lower at 897.45 points, recording a day-on-day loss of 16.01 points, or 1.75 per cent.

The KLCI continued to consolidate within range-bound activities yesterday. The KLCI closed relatively unchanged at 896.47 points, giving a day-on-day gain of 0.98 point, or 0.11 per cent. The Dow Jones Industrial Average (DJIA) drifted sharply lower on bearish news on the economic front as it edged closer to its critical support of 8,000. The DJIA closed at 8,212.49 points on Thursday, posting a four-day loss of 386.69 points, or 4.50 per cent.

The tech stock heavy Nasdaq Composite Index continued to stay above its critical support of 1,500 after briefly slipping below 1,500 when it closed at 1,489.64 points on Wednesday. It closed at 1,511.84 points on Thursday, recording a four-day loss of 59.75 points, or 3.80 per cent.

The KLCI closed broadly lower at 896.47 points yesterday, giving a week-on-week loss of 22.60 points, or 2.46 per cent. The FTSE Bursa Malaysia Second Board Index added 20.41 points, or 0.51 per cent, to 4,001.89 level while the FTSE Bursa Malaysia Mesdaq Index lost 92.47 points, or 2.74 per cent, to 3,288.33 level.

Following are the readings of some of the KLCI's technical indicators:

Moving Averages: The KLCI continued to stay above its 30-, and 50-day moving averages while it continued to stay below its 10-, 20-, 100- and 200-day moving averages.

Momentum Index: Its short-term momentum index continued to stay precariously above the support of its neutral reference line.

On Balance Volume: Its short-term OBV trend stayed below the support of its 10-day exponential moving averages.

Relative Strength Index: Its 14-day RSI stood at the 51.52 per cent level yesterday.

Outlook

The KLCI's brief follow-through rebound hit its intra-week high of 925.13 on Monday, encountering resistance at this column's envisaged resistance zone (922 to 956 levels). Subsequent technical pullbacks sent the KLCI below its critical support of 900 before hitting its intra-week low of 889.45 on Thursday, staging a re-test of this column's envisaged support zone (882 to 916 levels).

Chartwise, the KLCI's intra-week technical pullbacks staged a re-test of its resistance-turned-support trendline (See KLCI's weekly chart - A7:A8). It continued to stay above its immediate downside support (A1:A2) at the market close yesterday.

The KLCI's daily trend staged a re-test of its immediate downside support (See KLCI's daily chart - B3:B4) over the last five trading days. It continued to stay above its short-term uptrend (B5:B6).

The KLCI's daily and weekly fast MACDs (moving average convergence divergence) continued to stay above the support of their respective slow MACDs at the market close yesterday. Its monthly fast MACD continued to stay below its slow MACD.

The KLCIs 14-day RSI stayed at 51.52 per cent level yesterday. Its 14-week and 14-month RSI stayed at 37.53 and 32.25 per cent levels respectively. Once again, the KLCI failed in its bid to take out its previous resistance high of 936.63. Instead, the KLCI breached its critical support of 900 on Thursday and remained below it yesterday.

As the market is moving closer to the long Chinese New Year holiday, overall market activities are likely to remain quiet. The KLCI is likely to trend within range-bound activities. Next week, the KLCI's envisaged resistance zone hovers at the 899 to 933 levels while its immediate downside support is at the 859 to 893 levels.

Technically Speaking by S.N. Lock from Business Times.com

KL Composite Down 0.98 Point.

MALAYSIAN shares closed lower today as most investors were reluctant to take fresh positions ahead of the weekend, dealers said. The benchmark Kuala Lumpur Composite Index (KLCI) declined 0.98 of a point to close at 896.47. It opened 0.77 of a point higher at 898.22.

The dealers said the US’ economic plan has raised confidence that their economy would be back on track as the new administration would help the economy particularly the financial sector through the bailout of its institutions. However, trading on Bursa was thin as most investors believe the outlook is still gloomy for the global economy and some believe the worst is not over.

The Industrial Index went down 6.99 points to 2,106.92, the Finance Index fell 88.33 points to 7,040.69 while the Plantation Index dropped 10.52 points to 4,347.81.

The FBMEmas declined 12.52 points to 5,869.54, the FBM30 decreased 17.88 points to 5,767.56, the FBMMesdaq dropped 1.97 points to 3,288.33 and the FBM2BRD rose 40.91 points to 4,001.89. Losers led gainers by 255 to 214 while 199 counters were unchanged, 583 untraded and 31 others suspended.

Volume rose to 546.612 million shares valued at RM549.655 million compared to yesterday’s close 602.933 million shares worth RM711.488 million. An analyst said the local market did not respond to the overnight rebound in the US market following the US government’s announcement to provide more aid to Bank of America.

Among the actives, UEM Land declined 4.5 sen to 79.5 sen, Ramunia rose 6.5 sen to 38 sen, Oilcorp increased one sen to 30 sen, KNM and Tebrau fell one sen each to 46.5 sen and 50.5 sen respectively. Among the heavyweights, Sime Darby and Bumiputra-Commerce went down five sen each to RM5.45 and RM6.50 respectively while Maybank fell 20 sen to RM5.30. Tenaga went down 10 sen to RM6.00 ahead of its first half financial year results due for release next week. However, IOI Corp rose four sen to RM3.78. - Bernama

Article from Business Times.com

KL Composite Breaks 900 Points Level.

MALAYSIAN shares closed down 1.8 per cent today amid profit-taking after an overnight fall on Wall Street and concerns over the US economy, dealers said. The Kuala Lumpur Composite Index fell for a third day, losing 16.01, or 1.8 per cent, to close at 897.45, its lowest level since January 2. Just five stocks rose on the 100-member measure.

January index futures slid 1.9 per cent to 889.50.Turnover stood at 603.30 million shares worth RM711.63 million (US$198.12 million). “Weaker-than-expected retail sales figure in the US coupled with selldown on Wall Street triggered the de-rating of the equity markets. Selling was across all boards and sectors with blue chip stocks leading the fall,” a dealer said.

The weak sentiment follows the slashing by an influential Malaysian think-tank today of its 2009 economic growth forecast to 1.3 per cent, calling for a second economic stimulus package to stave off recession. Malaysian Institute of Economic Research (MIER) head Datuk Dr Mohamed Arif Abdul Kareem said the cut was due to declines in economic indicators and a drop in business and consumer confidence.

It had previously forecast 3.4 per cent GDP growth for the year.Mohamed Arif said there was a “50 per cent chance” of a technical recession in the first two quarters but expected positive growth in the second half of the year that could offset the first half. The think-tank also predicted Malaysia’s central bank would slash the overnight policy rate by 50 basis points this year following a reduction of 25 basis points to 3.25 per cent in November 2008.

IOI Corp, Malaysia’s second biggest planter, declined 8 sen, or 2.1 per cent, to RM3.74, the lowest close since December 31. Tradewinds Plantations Bhd lost 9 sen, or 6.1 per cent, to RM1.39, the second worst performer on the benchmark Composite Index. Boustead Holdings Bhd fell 18 sen, or 5.6 per cent, to RM3.06, the steepest slide since October 28.

Malaysia’s palm oil exports fell 33 per cent in the first 15 days of January, independent surveyor Intertek said today. Palm oil futures slid as much as 3.9 per cent to RM1,811 a metric ton, on course for its lowest close since January 2.DiGi.Com Bhd slid 30 sen, or 1.4 per cent, to RM20.80, the lowest close since December 22.

The mobile phone operator’s stock rating was lowered to “sell” from “neutral” at Goldman Sachs Group Inc.Pelikan International Corp fell 5 sen, or 4.3 per cent, to RM1.11. The stationery maker said it agreed to buy 81 per cent of Indistri SA, a manufacturer and distributor of office and school stationery, for US$4.25 million. Star Publications (Malaysia) Bhd, the nation’s biggest English-language newspaper publisher, fell 12 sen, or 3.8 per cent, to RM3.08, the largest decrease since July 4.

Kim Eng Research Sdn Bhd downgraded the stock from “sell” to “hold”, saying advertising revenue had plummeted. Telekom Malaysia Bhd, Malaysia’s largest fixed-line operator, dropped 14 sen, or 4.3 per cent, to RM3.12, the most since November 12. Goldman Sachs Group Inc cut its rating on the stock to “sell” from “neutral.”

TM International Bhd slid 16 sen, or 4.4 per cent, to RM3.46, its steepest slide since December 5. The state-owned Malaysian mobile-phone operator said its group failed to win a licence to sell mobile-phone services in Iran. TM said in a statement it will continue to consider other investment opportunities. - Agencies

Article from Business Times.com

US Lumber Prices Lowest In 18 Years.

LINGUI Developments Bhd led declines in Malaysian timber producers in Kuala Lumpur trading after US lumber prices slumped to their lowest in almost 18 years because of the global recession.

Lingui, Malaysia’s second largest timber company by sales, fell 4 sen, or 5.8 per cent, to 65 sen, as of 11:45 am, the worst performer on the benchmark Composite Index, which dropped as much as 2.5 per cent.

Ta Ann Holdings Bhd lost 3.9 per cent to RM3, headed for its lowest close since December 24. WTK Holdings Bhd declined 3.7 per cent, the most since December 11. “We still do not foresee any recovery in the demand and prices of timber logs in the near term,” said RHB Research Institute Sdn Bhd in a report today. It kept its “underweight” rating on the industry.

Lumber yesterday fell US$10, the most allowed by the Chicago Mercantile Exchange, to US$165.70 per 1,000 board feet on slack demand for building materials as the US housing slump intensifies. - Bloomberg

KL Shares Down Only 0.24 Points.

Share prices on Bursa Malaysia ended mixed yesterday amid sustained buying interest in select heavyweights, said dealers. The Kuala Lumpur Composite Index (KLCI) was down 0.24 points to close at 913.46, dragged down by losses mostly in Bumiputra-Commerce. It opened 2.01 points higher at 915.71.

"Short-term investors continue to accumulate shares on weakness in the hope of a pre-Chinese New Year rally," a dealer told Dow Jones Newswires. "For this reason, the index may continue to trade within 900-936 (recent peak) in the immediate term but with upside bias," the dealer added.

The Industrial Index went up 2.59 points to 2,128.27, the Finance Index declined 48.16 points to 7,244.73 while the Plantation Index dropped 5.42 points to 4,422.91.

The FBMEmas added 0.63 points to 5,986.92, the FBM30 decreased 11.77 points to 5,885.13, the FBMMesdaq fell 9.69 points to 3,307.77 and the FBM2BRD moved up 25.98 points to 4,013.38.

Gainers led losers by 239 to 228 while 214 counters were unchanged, 570 untraded and 29 others suspended.Volume narrowed to 453.953 million shares worth RM653.787 million compared to 515.752 million shares valued at RM760.197 million. An analyst said plantation counters continued to attract strong interest, with most buying activities initiated by local funds.

He said the market trend today would be similar to yesterday's and it is likely to be attracted to counters considered as government-linked companies. "The KLCI is expected to move range-bound until the end of the week, with the level between 900 and 950 amid cautiousness in a gloomy global economic environment," he added. For the actives, KNM dropped half sen to 48.5 sen, UEM Land rose 9.5 sen at 83 sen, Tebrau increased 1.5 sen to 53 sen and MRCB added four sen to 87 sen.

Among the heavyweights, Sime Darby rose five sen to RM5.50, Tenaga Nasional dropped five sen to RM6.40, Maybank was unchanged at RM5.60 and Bumiputra-Commerce was down 25 sen to RM6.75. On Bursa Malaysia Derivatives, KLCI futures ended lower yesterday on lack of fresh leads, dealers said.

Spot month January 2009 dropped 7 points to 907, February 2009 declined 8.5 points to 903.5, March 2009 fell 0.6 points to 902.5 and June 2009 was 7.5 points lower at 885.5. Turnover rose to 5,279 lots from 5,503 lots while open interests increased to 22,787 contracts from 22,955 contracts previously. - AFP, Bernama

Article from Business Times.com

KL Composite Index Down 9.87 Points.

MALAYSIAN shares closed 1.1 per cent lower today as the bourse was hit by profit-taking in plantation, construction and banking stocks, dealers said. The Kuala Lumpur Composite Index lost 9.87 points to close at 913.70, with decliners outnumbering advancing stocks 323 to 155. “The decline on Wall Street overnight was the main trigger for today’s selldown,” a dealer said.

“The market was looking a bit stretched after recent gains and this provided a good opportunity to lock-in some gains,” the dealer added. Malayan Banking Bhd, Malaysia’s biggest bank, dropped 10 sen, or 1.8 per cent, to RM5.60, the most since December 31.

RHB Capital Bhd, Malaysia’s fourth-biggest bank, slid 16 sen, or 3.8 per cent, to RM4.02. Alliance Financial Group Bhd slid 11 sen, or 5.5 per cent, to RM1.88, the second-largest decliner on the benchmark Composite Index.

Citigroup Inc cut its 2009 earnings estimates for Malaysian banks by an average 23 per cent today, saying investors should sell banks as the country will slide into a recession in the first quarter.

IOI Corp, Malaysia’s second biggest palm oil producer, dropped 20 sen, or 5 per cent, to RM3.80, the lowest level since December 31. Kuala Lumpur Kepong Bhd slid 15 sen, or 1.5 per cent, to RM9.85. Tradewinds Plantation Bhd fell 10 sen, or 6.3 per cent, to RM1.48, the worst performer on the Composite Index. Aseambankers Malaysia Bhd, in a report today, cut its rating on the Malaysian plantation sector to “underweight” from “neutral” as share prices have “run ahead of short-term fundamentals.” Palm oil futures in Malaysia tumbled as much as 9.6 per cent today.

Gamuda Bhd dropped 6 sen, or 3.1 per cent, to RM1.90. Shares of Malaysia’s second biggest builder by market value went ex-dividend, meaning that investors buying the stock from today won’t be entitled to its first interim dividend. Petronas Dagangan Bhd slid 30 sen, or 3.9 per cent, to RM7.40, the largest drop since October 6. The stock was cut to “neutral” from “outperform” at Macquarie Group Ltd.

SapuraCrest Petroleum Bhd lost 1.5 sen, or 1.7 per cent, to 85 sen. The oil and gas services provider said it extended by a month a deadline to complete terms of a shareholder agreement related to a joint-venture with AP Prakash Shipping Co to build and finance a vessel. Among advancing stocks, Naim rose 6.7 per cent to RM1.44 and Media Prima was 2.8 per cent stronger at RM1.10. - AFP, Bloomberg

Article from Business Times.com

Interest in Property Counters .

Share prices on Bursa Malaysia ended mixed yesterday amid sustained interest in selected heavyweights, dealers said. The Kuala Lumpur Composite Index (KLCI) edged up 4.5 points or 0.49 per cent to close at 923.57, pushed by gains mostly in Sime Darby and Maybank. It opened 0.33 of a point higher at 919.4.

According to MIMB Investment Bank, the market is expected to remain volatile in the near-term as it digested the deep global economic recession, global credit and banking crisis and the extraordinary policy responses.

"Thus, without fresh leads, the market will take its cue, initially from the overnight performance on Wall Street and later progress along with regional market trends," it said in a research note.

The Industrial Index went up 4.88 points to 2,131.9, the Finance Index surged 69.63 points to 7,358.06 while the Plantation Index dropped 3.01 points to 4,558.0. The FBMEmas added 25.7 points to 6,044.19, the FBM30 rose 24.28 points to 5,947.58, the FBMMesdaq decreased 26.320 points to 3,354.48 and the FBM2BRD eased 3.28 points to 3,984.76.

Gainers led losers by 231 to 214 while 224 counters were unchanged, 582 untraded and 29 others suspended. Volume rose to 574.572 million shares worth RM896.536 million compared to last Friday's 414.903 million shares worth RM605.903 million. The volume on the main board increased to 511.633 million shares worth RM685.033 million compared to last Friday's close of 355.230 million units valued at RM596.406 million.

Turnover on the second board rose to 19.942 million units worth RM5.927 million from 26.651 million units worth RM4.969 million previously. The volume on the Mesdaq market went up 14.3 million shares valued at RM3.321 million from last Friday's close of 6.509 million units valued at RM1.997 million. For the top gainers, Tanjong moved 50 sen to RM14.20, Petronas Dagangan rose 30 sen to RM7.70 and Public Bank increased 20 sen to RM9.00.

For the actives, KNM was flat at 50.570. Bumiputra-Commerce and IOI Corp were also flat at RM7.00 and RM4.00, respectively. The KLCI futures contracts on Bursa Malaysia Derivatives closed lower on lack of fresh leads.

Spot month January 2009 dropped 5.5 points to 922.5, February 2009 declined 4.0 points to 921.0, March 2009 declined 4.5 points to 918.0 and June 2009 was 4.0 points lower at 901.5. Turnover fell to 5,495 lots from the 7,155 lots Friday while open interests rose to 22,405 contracts from 21,131 contracts previously. - Bernama

Article from Business Times.com

KL Market Tone Positive, ResistanceAt 936 Points.

Market Outlook by KALADHERGOVINDRAN - Article from Business Times.com

Lower liner construction stocks such as MRCB, Ranhill and Tebrau should register profit-taking dips following last Friday's strong gains, says a research head. THE previous week's bullish breakout from the downtrend from the all-time high of 1,525 posted in January last year extended the rise of the benchmark Kuala Lumpur Composite Index (KLCI) to a near three-month high last week, before consolidation trimmed gains.

Subsequently, the KLCI surged 24.7 points, or 2.8 per cent, for the week to close at 919.07, while daily average trading volume and value expanded to 632.3 million shares and RM891.6 million respectively, compared with 360 million shares and RM535.8 million in the previous week.

The surge in the index was driven mainly by banking and plantation stocks. The rise in crude palm oil prices last week was attributed to an increase in crude oil prices because of tension in the Middle East, the dispute between Russia and Ukraine over gas prices and fees that hit supplies to 20 nations and the production cut undertaken by Opec. However, as the fact remains that demand is dropping faster than the cuts in production, the current bout of strength in commodity prices may not last.

Weaker commodity prices and softening global demand were the crucial factors that led to a continuous declination in Malaysian exports in the month of November that contracted 4.9 per cent year-on-year. Although the drop is slightly better than the consensus estimate of 5.7 per cent, worries abound that exports will continue to deteriorate as the global economy weakens further.

The economic condition in the US, for instance, is getting worse. Unemployment has risen to a 16-year high of 7.2 per cent and looks set to go up further if nothing drastic is done immediately.

The world is hoping that US president-elect Barack Obama will embark on a huge fiscal stimulus programme when he takes over the Oval Office on January 20.

Locally, there are no major drivers for the KLCI this week except for the Kuala Terengganu by-election on Friday. More positive news with regard to additional fiscal stimulus to prop up the economy is likely to emerge over the next few days until the polls. This is likely to keep the momentum in the local market positive, at least temporarily.

The recent run-up in the index could have been a tempting moment for some to re-enter the market or play contra but investors are advised to exercise caution in their decisions as the current bear market rally is driven by sentiment and news flows and not by any change in economic and business fundamentals. A defensive approach is more suitable in the current environment for both institutional and retail investors with selective exposure to fundamentally strong big-cap plays and some growth stocks.

Technical outlook

The strong rally on global markets as investors reallocated funds into stock markets worldwide for the New Year after last year's heavy losses lifted the local market to extend window-dressing gains.

The local stock market staged a strong rally last Monday, triggered by more investors returning from the long year-end break to bargain hunt, encouraged by sharp rallies in the region on hopes government stimulus plans will help cushion the global economy from a severe recession. The KLCI rallied from an opening low of 901.84 to close 26.3 points, or 2.9 per cent, up at the day's high of 920.66, backed by strong buying momentum totalling 846 million shares.

Profit-taking the next day was well absorbed as renewed buying interest cushioned falls, ignoring the overnight retreat on Wall Street given concerns a slump in corporate profits will stretch well into 2009. Stocks retraced earlier gains on Wednesday, as profit-taking accelerated in afternoon trade after investors were shaken by a 7.3 per cent plunge in Indian stocks due to a record drop in the shares of Satyam Computer Services on news its financial accounts were falsified. The KLCI fell from a near three-month high of 936.63 but still managed to close 0.6 per cent higher for the day.

The market extended losses the next day, depressed by overnight falls in the US and regionally amid concerns over massive job losses and profit warnings from Intel and Time Warner, and a 12 per cent fall in crude oil prices to US$42.63 a barrel on a sharp increase in US weekly oil inventories. The KLCI subsequently dipped to low of 907.14, but managed a rebound on Friday after bargain hunters returned to prop up the index to close at the day's high of 919.07.

The daily slow stochastic indicator for the KLCI is easing back towards the neutral region to correct the short-term overbought momentum (Chart 1), while the weekly indicator has flattened with a mildly overbought reading. The 14-day Relative Strength Index (RSI) resumed a hook-up above the neutral mark with a reading of 63.7 last Friday, while the 14-week RSI extended higher with a reading of 40.4 after last week's buy signal.

Meanwhile, the daily Moving Average Convergence Divergence (MACD) trigger line has also expanded higher following a bullish crossing above the zero mark last week, reinforced by the weekly MACD indicator which extended upwards following the previous two weeks' buy signal. Meantime, the +DI and -DI lines on the 14-day Directional Movement Index (DMI) trend indicator expanded to strengthen last week's buy signal, with the ADX line registering a reading above 25 to qualify for an emerging bullish trend.

Conclusion

Improving technical momentum and trend indicators for the KLCI last week, reinforced by resurgent buying momentum, should ensure further upside for this week. Nonetheless, losses in US stocks last Friday, which were sparked by a surge in the unemployment rate to an almost 16-year high of 7.2 per cent in December, could act to tone down bullish sentiment on the local market in the early part of this week.

Looking at the daily KLCI chart, profit-taking and selling should be cushioned above the revised higher immediate psychological support level of 900, with the bullish breakout point near 888 and 880 acting as a stronger support zone. On the upside, immediate resistance is set at last week's high of 936, with stronger resistance from 940, and then 949.

Sector wise, plantation and oil & gas stocks may dip further given the sustained weakness on crude oil prices which continued to trade near the US$40 a barrel mark, while lower liner construction stocks such as MRCB, Ranhill and Tebrau should register profit-taking dips following last Friday's strong gains. Remain bearish in the near-term on banking stocks such as AMMB, BCHB and Maybank with further weakness likely as economic growth suffers from spillover recessions in developed markets.

Recession Will Worsen If No Bold Action. Barack Obama

WASHINGTON: President-elect Barack Obama will seek to rally support for a massive fiscal stimulus package by warning that the United States could remain mired in recession for years without bold action. Obama, who will take office on Jan 20, promised to set a new course for the economy and to move quickly to toughen the financial regulatory system.

“I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible,” Obama said in excerpts from a speech that was delivered late yesterday. “If nothing is done, this recession could linger for years. The unemployment rate could reach double digits.”

As he prepares to take over from Republican President George W Bush, Obama is about to inherit an economy that has been in recession for more than a year.

The package will include tax cuts and money for the building of new roads, bridges and schools. It would also pay for renewable energy projects, aid to cash-strapped state governments and enhanced unemployment benefits. Obama hopes to secure passage of the economic plan by mid-February.

“For every day we wait or point fingers or drag our feet, more Americans will lose their jobs,” he said in the speech excerpts. “More families will lose their savings.” On Wednesday, a report on the US budget outlook painted a bleak picture that might add to Obama’s challenges in pushing his plan through Congress. The budget deficit for the current 2009 fiscal year ending Sept 30 is expected to nearly triple to around US$1.2 trillion, according to the Congressional Budget Office. — Reuters

KL Shares Higher Ahead Of Weekend.

MALAYSIAN shares ended the day higher on further support of some foreign funds in heavyweights, particularly in Tenaga and Bumiputra-Commerce, dealers said.The Kuala Lumpur Composite Index rose 8.55, or 0.9 per cent, to close at 919.07, rebounding fr om yesterday’s 1.8 per cent fall. Almost five stocks climbed for each one that fell on the 100-member gauge.

The benchmark index had its second weekly advance after gaining 2.8 per cent this week. Overall, gainers thumped losers by 292 to 179 while 204 counters were unchanged, 576 untraded and 28 others suspended. Turnover rose to 414.9 million shares valued at RM605.9 million from 390.95 million units worth RM632.27 million previously.

Tenaga Nasional Bhd added 25 sen, or 3.9 per cent, to RM6.60, accounting for almost a quarter of the benchmark Composite Index’s gain. The power utility is among four “bombed-out” stocks investors should buy, Macquarie Group Ltd said in a report. Macquarie raised its weighting recommendation on Malaysia to “neutral” from “underweight.”

KNM Group Bhd rose 2 sen, or 4.1 per cent, to 50.5 sen, the most active stock in Malaysia with 34.5 million shares traded. Scomi Group Bhd climbed 1.5 sen, or 4 per cent, to 39 sen, its first gain in four days. SapuraCrest Petroleum Bhd climbed 3 sen, or 3.5 per cent, to 88 sen, after crude oil rose for the first time in four days, boosting optimism exploration-related contracts will increase.

Eastern & Oriental Bhd jumped 13 sen, or 22 per cent, to 69 sen, the most since May 6, 2005. Goldman Sachs Group Inc bought 10.9 million shares in the property developer from the open market, boosting its stake to 8 per cent, a stock exchange filing showed. Goldman Sachs bought the shares on December 31, the filing showed.

LPI Capital Bhd advanced 20 sen, or 2 per cent, to RM10, on course for its highest level since October 9. The insurer offers the “greatest value and long-term growth prospects” among its peers, OSK Research Sdn Bhd said in a report today. LPI said in a statement yesterday that profit in the fourth quarter ended December 31 rose 30 per cent to RM32.7 million from a year earlier.

WCT Bhd rose 4 sen, or 3.5 per cent to RM1.17, snapping a three-day, 38 per cent slump. The stock’s 14-day relative strength index, which shows how rapidly prices have advanced or dropped, fell to 33 yesterday, near the 30 level that some investors use as a trigger to buy. - Bernama, Bloomberg

Article from Business Times.com

KL Composite Going For Corrections. Down 17.10

MALAYSIAN shares closed 1.8 per cent lower today as the bourse was hit by profit-taking in plantation, finance and blue chips, dealers said. The Kuala Lumpur Composite Index lost 17.10 points to close at 901.52, with declining stocks outnumbering advancers 388 to 99.

Losers thumped gainers by 390 to 97 while 171 counters were unchanged, 616 untraded and 49 others suspended. Turnover dropped to 390.95 million units worth RM632.27 million from yesterday’s close of 743.52 million shares valued at RM1.12 billion.

Dealers tipped the KLCI to rebound tomorrow on mild bargain-hunting and trade within the 900-920 range, but said pre-weekend selling may limit any gains. “Declines on Wall Street overnight and the sharp pullback in crude oil weighed on market sentiment,” one dealer said.

“Retail and short-term investors locked in profits from the recent rally but the KLCI has managed to hold on to some gains from the December 31 close at 876.75,” he added. Among the decliners, IOI Corp ended down 6.6 per cent at RM3.98, Sime Darby lost 6.0 per cent at RM5.45 and Gamuda slipped 5.0 per cent to RM1.91.

Among the actives, KNM eased 1.5 sen to 48.5 sen and WCT shed one sen to RM1.13. Among the heavyweights, Tenaga declined 10 sen to RM6.35 and Maybank decreased five sen to RM5.55. Bumiputra-Commerce and MISC lost 15 sen each to RM6.85 and RM8.65, respectively. - AFP, Bernama

Article from Business Times.com

WCT Berhad. Still Stay As A Potential Share.

Here is an excerpt of an interview with WCT executive director Loh Siew Choh, who allays concerns of its infrastructure and building projects in the Middle East

WCT Bhd is determined to stay on and bid for more jobs in the Gulf States despite losing the job to build the Nad Al Sheba Dubai Racecourse in the United Arab Emirates (UAE). In an interview with Business Times in Shah Alam yesterday, WCT executive director Loh Siew Choh allayed concerns of its other infrastructure and building projects in the Middle East.

WCT's shares have taken a dive since UAE's Meydan LLC said it cancelled the AED4.6 billion (RM4.6 billion) contract with WCT Bhd and Arabtec Construction LLC to build the racecourse.

The stock, which was suspended two days ago after a 30 per cent drop to RM1.29, fell as much as 28 per cent yesterday to 93 sen before ending the day at RM1.14.

The late evening price recovery could have been attributed to WCT's substantial shareholders, namely Malaysia's Employees Provident Fund and Singapore government investment arm Temasek Holdings buying more WCT shares in the wake of panic selling by other investors.

Below is an excerpt of the interview:

Question: Has Meydan LLC's cancellation of the Nad Al Sheba Dubai Racecourse in the United Arab Emirates (UAE) caused bankers to doubt WCT Bhd's ability to repay loans?

Answer: We have solid backing from our bankers. For this particular project, Dubai's Mashreq Bank facilitated the performance bond of RM178 million. It is the largest project financing bank in the UAE. In fact, we're also using them to part-finance our construction of the Formula 1 Abu Dhabi project.

Q: Why are you optimistic of recovering the performance bond?

A: Our joint venture company's view is that the termination is wrongful. While we have a right to arbitration, we prefer to settle the claims amicably and if possible, promptly. It is still early days, we've just sat down for the first round of meeting with our partner Arabtec to determine the exact quantum of work done. The second round of talks is set for next week.

Q: What is WCT's financial standing?

A: As at September 30 2008, we've about RM600 million in cash. That is sufficient to tide over any eventuality.

Q: Has this incident prompted WCT Bhd to think about looking elsewhere to bid for jobs?

A: Although we're disappointed about this job cancellation, we've to put things into perspective. We still have our jobs in Abu Dhabi, Bahrain and in Qatar. Our focus is still very much in the Gulf States, we will continue to bid and negotiate for jobs there. We view this (job cancellation) as an isolated incident. We've made our name as early as six years ago. We'll continue to strengthen our presence there.

Q: What is the estimated value of job bids WCT has put forward that is likely to materialise this year?

A: We try as much as we can to negotiate and bid for high margin jobs. Last year we managed to replenish our orderbook by about RM2 billion worth of jobs. This year we will strive to do better.

Q: Could you give an update on your RM3.3 billion job to construct the Abu Dhabi Formula One Track and the RM1.55 billion Bahrain City Centre project?

A: The Abu Dhabi Formula One project is jointly undertaken with our partner Cebarco. We've completed 60 per cent of the job scope and there has been no problems with the collection of payment. Basically, whatever we've billed to the project owner is being paid on time. This project is set to be completed by the middle of this year.

Over in Bahrain, we've already completed the shopping mall of 2 million sq ft floor space a few months ago. We're now carrying out fit-out works at the two 5-star hotels. We hope to wrap up by the end of this year.

Q: Did substantial shareholders namely EPF and Temasek pare down their stakes in WCT?

A: EPF and Temasek had actually bought more WCT shares. You can check their filings with the stock exchange. When EPF contacted us two days ago, we gave them the facts and figures and that basically cleared the air. It does not help when some people misinterpreted and reported WCT losing money when this is about losing a job order. Our order book is now a little thinner from the loss of this job but WCT has always been and still is profitable.

Article from Business Times.com

KL Composite Index Add Another 5.39 Points.

MALAYSIA'S Kuala Lumpur Composite Index rose for a fourth day, adding 5.39, or 0.6 per cent, to close at 927.62, its highest level since October 15. Dealers said the support by local funds in selected heavyweights managed to push the CI to a higher level amid mixed expectations by analysts on the performance of the local bourse this year.

The Industrial Index went up 15.23 points to 2,167.95, the Finance Index surged 102.36 points to 7,296.56 and the Plantation Index edged up 3.07 points to 4,755.94. The FBMEmas increased 31.37 points to 6,074.37, the FBM30 was 42.39 points higher at 5,982.46 while the FBMMesdaq decreased 11.88 points to 3,448.82 and the FBM2BRD dropped 19.42 points to 4,050.85.

Losers led gainers by 306 to 228 while 212 counters were unchanged, 506 untraded and 28 others suspended.Turnover eased to 743.52 million shares valued at RM1.12 billion from yesterday’s close of 765.43 million shares worth RM1.08 billion.

Kuala Lumpur Kepong Bhd rose 40 sen, or 4 per cent, to RM10.40 , the highest level since September 12. Sime Darby Bhd, Malaysia’s biggest palm-oil planter, added 15 sen, or 2.7 per cent, to RM5.80.

Palm oil futures in Malaysia jumped 7.8 per cent to RM1,980 a metric ton yesterday, the most since November 3. Futures traded at RM1,907 as of 5 pm local time.

Bumiputra-Commerce Holdings Bhd jumped 50 sen, or 7.7 per cent, to RM7.00, its biggest gain since January 8, 2004. It’s the best performer on the benchmark Composite Index. Credit Suisse Group told investors to buy higher so-called “beta” stocks such as Bumiputra-Commerce. The bank is the “highest beta institutional stock,” Credit Suisse said in a report today. Beta is an indicator of volatility.

British American Tobacco Bhd dropped 75 sen, or 1.7 per cent, to RM44, the most since December 26. Credit Suisse said in a report today the stock, which “performed so well in 2008 will likely underperform in 2009.”IJM Corp, Malaysia’s third-largest builder by value, advanced 8 sen, or 2.4 per cent, to RM3.38, the highest level since October 23, after JPMorgan Chase & Co raised its rating on the stock to “overweight” from “neutral.”

Parkson Holdings Bhd slumped 70 sen, or 16 per cent, to RM3.58, the steepest decline since Oct 17, 2002. Its Beijing-based department store chain unit, Parkson Retail Group Ltd, said sales growth slowed in the fourth quarter as China’s economy cooled.

Top Glove Corp added 8 sen, or 2 per cent, to RM4.10, its highest level since September 10. The world’s largest rubber-glove maker said fiscal first-quarter profit rose 16 per cent to RM34.5 million from RM29.8 million a year earlier. Sales increased 15 per cent to RM386.1 million, it said in a statement.

WCT Bhd slid 15 sen, or 12 per cent, to RM1.14, its lowest since October 29, extending yesterday’s 30 per cent plunge. The stock is the biggest decliner on the benchmark Composite Index. The Malaysian engineering company said its worst-case direct loss from a racecourse contract in Dubai that was canceled is about RM300 million. - Agencies

Article from Business Times.Com

KL Composite Index Movement Still Intact. Up 1.57 Points

MALAYSIAN shares rose 0.2 per cent today as buying momentum from local funds helped reverse early losses, dealers said. The Kuala Lumpur Composite Index (KLCI) rose 1.57 points to close at 922.23. Decliners outnumbered advancing stocks 292 to 258. Volume declined to 765.43 million shares worth RM1.08 billion compared to yesterday’s close of 845.96 million shares valued at RM1.02 billion.

The benchmark index was tipped to trade in a range of 913-930 tomorrow on expectations of sustained buying interest from local funds, dealers said.

“Funds are continuing to accumulate oversold shares as they build their portfolios,” one dealer said. “Local government-led funds such as the Employees Provident Fund and ValueCap are among the main participants.”

Among the leading stocks, Bumiputra-Commerce was up 2.4 per cent at RM6.50, Maybank rose 2.8 to RM5.55 and Genting lost 3.0 per cent to RM3.84. Among the top gainers, British American Tobacco moved 75 sen to RM44.75, Loh & Loh rose 51 sen to RM5.35 and Nestle increased 50 sen to RM28.00.

Among the the heavyweights, Sime Darby declined five sen to RM5.65. Tenaga Nasional and Public Bank were unchanged at RM6.40 and RM8.80, respectively. MISC added 10 sen to RM8.75. - AFP, Bernama

Article from Business Times.com

WCT Race Course Terminated In Dubai.

SHARES of Malaysian construction firm WCT Bhd dived 30 per cent today after the cancellation of a US$1.3 billion contract to build a racecourse in Dubai. But the Malaysian company said the step was a “breach,” and it was considering all options.

Dubai’s Meydan LLC, which in 2007 commissioned a 50-50 joint venture of WCT and Arabtec to build the racecourse, said the contract was cancelled “because of non-adherence to the agreed time schedule for construction”. WTC said in a statement the original date of completion of the contract was October 7, 2009.

WCT shares last traded 29.5 per cent lower at RM1.29 before the company requested for a halt in trading. The company is due to make a further announcement today. Dealers said shares are automatically suspended when they rise or fall by 30 per cent from the previous day’s closing price. WCT said it was given a 14-day notice to cancel the contract.

Dubai’s Meydan said it is considering other companies to complete the racecourse by 2010, when it is to be opened with the Dubai World Cup horse race. - Reuters

KL Composite Index Gain 26.30 Points.

MALAYSIAN shares were firmer at close yesterday on follow-through buying in selected heavyweights, particularly plantation stocks, dealers said. The Kuala Lumpur Composite Index (KLCI) ended 26.30 points, or 2.941 per cent, higher at 920.66, the highest since the market went on a downtrend last year, pushed by gains mostly in IOI Corporation and Sime Darby. It opened 7.84 points higher at 901.84.

The Industrial Index went up 51.84 points to 2,140.63, the Finance Index surged 145.69 points to 7,070.90 and the Plantation Index jumped 352.29 points to 4,776.03.

The FBMEmas was 182.50 points higher at 6,039.88, the FBM30 rose 167.30 points to 5,931.19, the FBMMesdaq increased 142.62 points to 3,489.48 and the FBM2BRD surged 49.79 points to 4,081.92.

Gainers thumped losers by 530 to 119 while 131 counters were unchanged, 472 untraded and 27 others suspended. Turnover surged to 845.96 million shares valued at RM1.02 billion from Friday’s close of 507.41 million shares worth RM682.42 million. IOI Corp, Malaysia’s second- largest palm-oil producer, jumped 48 sen, or 12 per cent, to RM4.38, the best performer on the Composite Index.

Sime Darby Bhd, the biggest planter, climbed 30 sen, or 5.6 per cent, to RM5.70. The two stocks accounted for almost a third of the index’s gain. Kuala Lumpur Kepong Bhd advanced 40 sen, or 4.2 per cent, to RM10. SapuraCrest Petroleum Bhd gained 6.5 sen, or 7.9 per cent, to 88.5 sen, its highest level since Novemner 13. Petra Perdana Bhd jumped 15 sen, or 11 per cent, to RM1.46, the most since November 10, after crude oil in New York climbed for a third day, boosting prospects of exploration-related contracts. KNM Group Bhd advanced 4.5 sen, or 10 per cent, to 48 sen.

AWC Facility Solutions Bhd added 1.5 sen, or 15 per cent, to 11.5 sen, its highest since September 29. The design and engineering company said an associate company, Multi Link Environmental Services LLC, won a 171-million dirham (US$47 million) contract to provide a waste-collection system for a development on Al-Reem Island in the United Arab Emirates. The contract will mostly be completed by the end of 2010, AWC said.

Coastal Contracts Bhd climbed 11 sen, or 12 per cent, to RM1.04, the largest increase since November 3. The shipbuilder said it completed its acquisition of 22 acres of land and buildings for RM4 million (US$1.14 million). Idaman Unggul Bhd advanced 2 sen, or 44 per cent, to 6.5 sen, the steepest gain since March 25. The insurer said it agreed to sell Lambang Pertama, a Malaysian timber company, for RM400 million. The sale to Satin Court will lead to a gain of about RM136.6 million, or 33 sen a share, in the year ending December 31, 2009, Idaman said.

IJM Corp, Malaysia’s third-largest builder by market value, rose 30 sen, or 9.9 per cent, to RM3.32, its highest level since October 23. ECM Libra Capital said in a report today investors should buy the stock as the shares are “trading deep in value” with most divisions expected to “perform decently” in the coming financial year. - Agencies

Article from Business Times.com

KL Market Momentum Swings To The Upside.

Technical Speaking by S.N.LOCK - Article from Business Times.com.

Next week, the index's envisaged resistance zone hovers at the 897 to 930 levels while its immediate downside support is at the 856 to 890 levels.

SHARE prices on Bursa Malaysia rebounded in earnest in a holiday-shortened week. The Kuala Lumpur Composite Index (KLCI) continued to stay below its support of 900 points when it closed at 894.36 yesterday.

The KLCI opened higher at 868.70 before rebounding to close at its intra-day high of 881.63 on Tuesday, giving a day-on-day gain of 14.28 points, or 1.65 per cent. Share prices on Bursa Malaysia opened higher before easing back on profit-taking selling pressure. The benchmark index closed at 876.75 on Wednesday, giving a day-on-day loss of 4.88 points, or 0.55 per cent.

The KLCI resumed its technical rally on the first trading day of 2009 yesterday. It rallied to close at 894.36, posting a day-on-day gain of 17.61 points, or 2.01 per cent.

On the foreign front, the Dow Jones Industrial Average rebounded in the last three trading days. It closed at 8,776.39 on Wednesday, giving a three-day gain of 260.84 points, or 3.06 per cent. The tech stock heavy Nasdaq Composite Index continued to stay above its critical support of 1,500. It closed at 1,577.03 on Wednesday, giving a three-day gain of 46.79 points, or 3.06 per cent.

Tokyo stocks continued to hold on to their technical composure over the last two trading days of last year. The Nikkei 225 Index closed at 8,859.56 on Tuesday, giving a week-on-week gain of 120.04 points, or 1.37 per cent. The Hong Kong stock market repenetrated its resistance of 15,000 yesterday. The Hang Seng Index closed at 15,042.81, posting a week-on-week gain of 858.67 points, or 6.05 per cent.

Back on Bursa Malaysia, the KLCI posted a week-on-week gain of 27.01 points, or 3.11 per cent. Among the other indices, the FTSE Bursa Malaysia Second Board Index added 39.27 points, or 0.98 per cent, to 4,032.13 but the FTSE Bursa Malaysia Mesdaq Index eased 83.84 points, or 2.44 per cent, to 3,346.86.

Following are the readings of some of the KLCI's technical indicators:

Moving Averages: The KLCI continued to stay above its 10-, 20-, 30-, and 50-day moving averages while it continued to stay below its 100- and 200-day moving averages.

Momentum Index: Its short-term momentum index continued to stay above the support of its neutral reference line.

On Balance Volume (OBV): Its short-term OBV trend stayed above the support of its 10-day exponential moving averages.

Relative Strength Index (RSI): Its 14-day RSI stood at the 60.87 per cent level yesterday.

Outlook

The KLCI's continuing technical rebound hit its intra-week high of 897.26 yesterday, moving into the confines of this column's envisaged resistance zone (870 to 904 levels). Chartwise, the index staged an overhead breakout of its immediate overhead resistance (See KLCI's weekly chart - A1:A2). It continued to stay below its intermediate-term downtrend (A7:A8) yesterday.

The composite index's daily trend continued to stay below its intermediate-term downtrend (See KLCI's daily chart - B3:B4). It continued to stay below its intermediate-term downside support (B1:B2).

The KLCI ended the year on a rather weak note when it closed at 873.43 on December 31, posting a year-on-year loss of 571.60 points, or 39.56 per cent. The FBM Second Board Index tumbled 2,778.34 points, or 41.27 per cent, to 3,954.01 while the FBM Mesdaq Index plunged 2,863.91 points, or 46.88 per cent, to 3,245.25.

Its daily and weekly fast MACDs (moving average convergence divergence) continued to stay above the support of their respective slow MACDs at the market close yesterday. Its monthly fast MACD continued to stay below its slow MACD. The index's 14-day RSI stayed at 60.87 per cent level yesterday. Its 14-week and 14-month RSI stayed at 35.39 and 32.02 per cent levels respectively.

The composite index staged an overhead breakout of its 50-day moving averages on December 30 and continued to stay above that at the market close yesterday. This signalled a shift in market momentum. With the shift in market momentum to the upside, the KLCI is now staging a re-test of its previous resistance high of 926.65 set on November 5 2008. A decisive breach of this resistance is likely to see a major trend reversal. Next week, the index's envisaged resistance zone hovers at the 897 to 930 levels while its immediate downside support is at the 856 to 890 levels.