President Hu Visit: "RED" stock in up trend??

BEIJING, November 2, Foreign Ministry Spokesperson Jiang Yu announces: At the invitation of Malaysia Mizan and the Supreme Head of State President of the Republic of Singapore SR Nathan invited President Hu Jintao will be held November 10 to 13 pay a state visit to the two countries.

Chinese President Hu Jintao, invited by Singapore Prime Minister Lee Hsien Loong to attend the 17th Asia-Pacific Economic Cooperation on November 14 to 15 held in Singapore informal meeting of leaders.

accumualting actitvities have been spotted on chinese stocks listed in BURSA (HUAAN, XINQUAN, MSPORTS) since the news release... 
Plz pay more attention to SIME Darby as well, rumor say it might sell its 10% stake to China ppl

Stocks to watch: MRCB, Genting, MBSB, Scomi Group

KUALA LUMPUR: The firmer close on Wall Street, with the Dow Jones industrial average crossing 10,000 for the first time in two week, could see investors increasing their risk appetite for equities on Friday, Nov 6.

However, the gains could be limited ahead of the weekend as investors tend to square off their positions.

Nevertheless, the broad-based gains on Wall Street should bolster sentiment. US stocks jumped on Thursday, Nov 5 pushing the S&P 500 up for a fourth day, boosted by economic data. Strong results from Cisco Systems suggested a rebound in TECHNOLOGY [] spending, according to a Reuters report.

The DJIA rose 203.82 points, or 2.08%, to end at 10,005.96. The Standard & Poor's 500 Index gained 20.13 points, or 1.92%, to 1,066.63. The Nasdaq Composite Index rose 49.80 points, or 2.42%, to close at 2,105.32.

Stocks to watch today are MALAYSIAN RESOURCES CORP [] Bhd (MRCB), MALAYSIA BUILDING SOCIETY BHD [] (MBSB),GENTING BHD [] and SCOMI GROUP BHD [].

MRCB has proposed a renounceable rights issue to raise up to RM566 million. The rights shares could be issued at RM1.172 each, a discount of about 9.8% to the theoretical ex-rights price of MRCB shares of RM1.30,based on the three-month weighted average market price of about RM1.36.

The basis for the proposed rights issue is one rights share for every two existing MRCB shares held at the entitlement date.

MBSB's net profit for the third quarter (3Q) ended Sept 30, 2009 jumped 565% to RM52.68 million from RM7.92 million a year ago due to higher net interest income, the recovery of a major account and lower allowance for loans and financing losses.

Genting chairman and chief executive Tan Sri Lim Kok Thay has said its S$6.6 billion integrated resort, Resorts World at Sentosa, was on track to open in January. He added Genting was mulling to dispose of its non-core assets but it would not be a fire sale.


Scomi Group Bhd's net profit rose 19% rise in net profit to RM22.98 million in its third quarter (3Q)  from RM19.33 million a year earlier mainly due to the contribution from the energy and logistics engineering division.

Other stocks to watch include UAC BHD [], MTD CAPITAL BHD [], RCE CAPITAL BHD [], MBM RESOURCES BHD [] and Perusahaan Sadur Timah Malaysia Bhd (Perstima).

Building and CONSTRUCTION [] materials maker UAC Bhd’s net profit fell 13.56% to RM3.7 million in its third quarter ended Sept 30, 2009 (3QFY09) from RM4.28 million a year earlier due to both lower sales and margins.

RCE Capital's net profit for 2Q rose 16% to RM18.91 million from RM16.28 million a year earlier. Its net loan receivables grew by 30% from a year ago, adding that it managed to maintain the healthy growth in net loan receivables due to initiatives taken in expanding its product offerings.

MTD Capital Bhd group has proposed to dispose of PROPERTIES [], including the Shell building here to a subsidiary of its major shareholder, Haluan Gigih Sdn Bhd, for a total of RM175 million cash.

MBM Resources Bhd’s 3Q net profit fell 30% to RM22.49 million from RM32.15 million a year earlier on the back of a 3% decline in revenue to RM304.99 million from RM314.86 million.

Earnings per share dipped to 9.29 sen from 13.28 sen. MBM said yesterday profit from operations fell 49.7% to RM11.2 million while share of results of associated companies fell 2.8% to RM19.63 million.

Tin-plate maker Perstima posted a 173% jump in net profit to RM20.4 million in its second quarter (2Q) ended Sept 30, 2009 from RM7.47 million a year earlier due to lower cost and better contribution from a subsidiary, despite posting a lower revenue.

Perstima said the group’s operating environment was expected “to remain challenging and competitive” but it was confident that the group could achieve a better performance for the year ending March 31, 2010 mainly due to recovery of contribution by a subsidiary.

US Market Commentary (After Market Close): Stocks Rise Sharply Ahead of Key Jobs Report

Broad-based buying on the back of a strong quarterly report from Cisco and a couple of pleasing economic reports helped stocks net robust gains ahead of tomorrow's potentially pivotal nonfarm payrolls report.

Cisco (CSCO 23.93, +0.64) won support for itself and other large-cap tech issues by posting better-than-expected top and bottom line results for its latest quarter and announcing that it has authorized an additional $10 billion to add to its share repurchase plan, which now stands at roughly $13 billion. Cisco went one step further and issued a solid outlook during its conference call.

Strength among large-cap tech issues helped hand the Nasdaq to its best single-session percentage advance since July. Meanwhile, all 30 Dow components advanced and helped the blue chip index close above 10,000 for the first time in two weeks.

The positive tone among this session's participants was also helped by news that third quarter nonfarm productivity surged 9.5% in its preliminary report. That is considerably better than the 6.5% increase that had been widely expected. The surge marked the largest gain in productivity since 2003. It was fueled by the sharp increase in third quarter output and the considerable drop in hours worked. With job conditions still weak, unit labor costs dropped 5.2% in the third quarter. They were expected to fall 4.2%.

The latest initial jobless claims total came in 512,000, down 20,000 from the previous week and not as bad as the 522,000 initial claims that had been widely expected. Continuing claims came in at 5.75 million, which is in stride with what had been forecast and down from 5.82 million in the previous week. That decline, though, is primarily rooted in the trend that unemployed workers are losing their benefits, not finding jobs.

That trend has many market watchers looking ahead to the government's official nonfarm jobs report, which will be released before the opening bell Friday morning. The consensus forecast is that the October unemployment will hit 9.9%, which would be the highest level since 1982.

Despite concerns for that matter, all 10 major sectors finished the session with a gain. Only consumer staples failed to gain more than 1%. Disappointment over pharmacy benefit management business at CVS Caremark (CVS 28.87, -7.28) overshadowed the company's better-than-expected earnings and additional share repurchase authorization, and caused the stock to drag on the consumer staples sector. Consumer staples, as a group, settled with a relatively modest gain of 0.6%.

Insurers also lagged as participants shunned Allstate (ALL 29.05, -0.57) and Prudential Financial (PRU 44.64, -1.92). Allstate missed the consensus earnings estimate, but Prudential actually posted a positive earnings surprise. Despite their weakness, financials still advanced 2.5%.

Only the consumer discretionary sector had a better gain. It advanced 2.6% in the face of mixed monthly same-store sales results from retailers.

Stocks to watch: PPB, Sime Darby, Lityan, Time

KUALA LUMPUR: Key Asian markets, including Bursa Malaysia, should extend gains on Thursday, Nov 5 after US stocks closed slightly higher and supported by an upbeat outlook from the World Bank for developing economies especially China.

Overnight, the US Federal Reserve reported the U.S. economy had "continued to pick up" since its last meeting in September, but it expressed concern the economy's recovery was likely to be muted.

The Dow Jones industrial average gained 30.23 points, or 0.31 percent, to end at 9,802.14, after rising as much as 156.13 points, or 1.6 percent, in the hour after the FOMC statement to touch a session high at 9,928.04.

The Standard & Poor's 500 Index edged up 1.09 points, or 0.10 percent, to finish at 1,046.50. But the Nasdaq Composite Index slipped 1.80 points, or 0.09 percent, to close at 2,055.52.

At Bursa Malaysia, stocks to watch will be PPB Group, Sime Darby, Lityan and Time Engineering and also the banks.

OSK Research has maintained an overweight on the banking sector following most domestic banks' and selected foreign banks' move to revise upwards their mortgage rates.

PPB, which posted its biggest one-day gains since July, should see some trading interest as the sharp gains were in the last 10 minutes of trade on Wednesday.

A head of institutional dealing at a local stockbroking house expressed concern over the artificial support, even though the stock has strong fundamentals, due to the push in the share price in late trading. For more, see today's The Edge  FinancialDaily.

Sime Darby should see trading interest as China's President Hu Jintao visit to Malaysia next week as the market is abuzz the Malaysian government may finally seal a deal to sell 10% of the PLANTATION []s-property group to a Chinese group.

Lityan continues to surge despite the unusual market activity, creating concerns about heavy speculative activity which is pushing the share price way above its fundamentals. Retail investors should brace for profit taking.

Time Engineering should see positive trading activity after the regulator agreed to uplift the company from the Practice Note 17 status. The shares rose in very active trade on Wednesday.

OSK Research has maintained an overweight on the banking sector following most domestic banks' and selected foreign banks' move to revise upwards their mortgage rates on Tuesday.

Among telcos, Norwegian Telenor ASA says it is confident its 49%-owned DIGI.COM BHD [] and its rivals -- Maxis Bhd and Celcom (M) Bhd -- can fend off competition from new 3G and WiMAX licensees.

US Market Commentary (After Market Close): Stocks Surrender Gains in Late Sell Off

The latest FOMC policy statement and a weaker dollar helped bolster buying in stocks, but some late selling caused stocks to rollover in the final hour and close near the neutral line.

The major indices started the session in higher ground as participants responded to strong overseas gains and a downturn in the U.S. dollar. Gains among the major indices were both broad and strong.

Participants also digested in the early going the ADP Employment Change Report for October. The report indicated that last month private payrolls fell by 203,000, which is a bit worse than the 198,000 job losses that were widely expected. The ADP Report is a precursor to the official nonfarm payrolls report on Friday.

In other economic news, the ISM Manufacturing Index for October came in at 50.6. Though any reading above 50 denotes expansion, the October reading fell short of the 51.5 that had been forecast.

Reaction to the data was relatively muted as participants were largely focused on the latest FOMC policy statement, which was released midafternoon. The directive indicated that the FOMC will maintain the target range for the federal funds rate at 0.00% to 0.25% and it continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.

The statement was met with a volatile response by stocks, while the Dollar Index extended its losses. It settled with a 0.7% decline, its worst single-session percentage drop in two weeks.

As the dollar slid, both stocks and commodities showed strength. Gold futures prices had hit a new intraday record high around $1096.50 per ounce, but settled at $1087.30 per ounce with a fractional gain. However, in electronic trade, gold prices have ticked higher toward $1098 per ounce.

Meanwhile, oil futures prices settled 1.0% higher at $80.36 per barrel, helped along by the weaker greenback and an unexpected draw in weekly inventories. The gains by gold and oil helped drive the materials sector and energy sector more than 1% higher, respectively. Those gains vanished late in the session, though. The two sectors settled with losses of 0.1% each.

Late weakness came about as a broad-based selling effort took hold of stocks. Financials were at the center of the downturn, however. Financials were up as much as 1.6% in the early going, but steadily saw their gains erode before dropping sharply to a 1.5% loss late in trading. Multiline insurers (-3.8%) were among the worst performers in the sector.

However, managed care providers (+3.8%) fared well and helped the health care sector to a 1.3% gain, which was the best of any major sector. Strength in the sector came amid news from the Associated Press that the Senate's top Democrat signaled that Congress may fail to meet a year-end deadline for passing health care legislation. That could make for an uncertain outcome in 2010.

Earnings played somewhat of a supportive role in the early going, but had little lasting impact on this session's trade. Kraft (KFT 26.67, -0.87) was the only Dow component to report. It struggled as light revenue results overshadowed its better-than-expected earnings.

In other earnings news, broadcasters Time Warner (TWX 30.10, -0.06) and Comcast (CMCSA 14.06, -0.45) topped earnings expectations, but oil drillers and services outfits Baker Hughes (BHI 40.89, -2.54) and Transocean (RIG 84.41, -1.50) missed earnings estimates.

Stocks to watch: Lityan, Sime, Time, Jetson

KUALA LUMPUR: Market sentiment is expected to continue to be lacklustre on Wednesday, Nov 4, except for selected stocks following the uninspiring close on Wall Street.

At Bursa Malaysia, stocks which may see trading interest include Lityan Holdings, Sime Darby, Kumpulan Jetson and Time Engineering. Other companies are Mah Sing, Supermax, Scomi Marine and Paramount.

On Wall Street, the S&P 500 and Nasdaq rose slightly on Tuesday news of a major railroad acquisition helped sentiment, but the Dow edged lower on caution before a Federal Reserve statement on interest rates and the economy.

The Dow Jones industrial average slipped 17.53 points, or 0.18 percent, to end at 9,771.91. But the Standard & Poor's 500 Index added 2.53 points, or 0.24 percent, to finish at 1,045.41. The Nasdaq Composite Index advanced 8.12 points, or 0.40 percent, to close at 2,057.32.

Meanwhile, EPFR reported global equity markets began to run out of steam during the fourth week of October as the euphoria generated by the 3Q09 earnings season in the US and elsewhere was trumped by mixed macroeconomic data.

"Flows into EPFR Global-tracked emerging markets equity funds, which had averaged US$4.4 billion the previous two weeks, slid to US$2.2 billion while US, Japan and Europe Equity Funds all posted outflows," it said.

At Bursa Malaysia, Lityan fell for this first time in three days, down 25 sen to RM2.45 in late trade before it was voluntarily suspended on Tuesday after replying to a Bursa Securities query over the sharp price and volume increase.

It resumes trading Wednesday at 9am. Today is also T+3, which settlement date for the shares bought on Friday.

While there could be profit taking after the price surge, the fundamentals of the company remain strong with Lembaga Tabung Haji as a major shareholder with a 65% stake, underpinned by its solid book order.

Sime Darby targets to complete the infrastructure for its groundwater project in Perak by end 2010 and start supplying 500 million litres a day to Selangor. Foreign companies are reported to be keen in the project. Total investment is expected to be RM1.3 billion.

Time Engineering has sought the approval of Bursa Securities for the lifting of its Practice Note 17 (PN17) status of the Main Market Listing Requirements.

The company said it had fully addressed its financial and operational viability following the completion of its debt and capital restructuring.

Jetson has proposed to undertake a private placement of 10% of its paid-up or 5.279 million shares to raise gross proceeds of up to RM11.1 million, assuming the issue price of the placement shares is fixed at RM2.10 per placement share

MAH SING GROUP BHD []'s proposed en bloc sale of The Icon@Mont Kiara commercial property project for RM285.4 million hit a snag, as the supposed purchaser failed to meet the conditions stipulated in the sale and purchase agreement (SPA) signed two years ago.

Lembaga Tabung Haji recently took profit in its investment in Supermax, whose shares rallied in recent months on surging demand for latex gloves following the outbreak of the H1N1 flu.

The pilgrimage fund had sold 6.07 million shares from Oct 9 to Oct 27 when the shares were on the upward trend. The share price was trading between RM2.81 on Oct 9 to RM3.69 on Oct 27.

Paramount Corp is purchasing a 21.7-acre piece of land in Shah Alam, Selangor, from The Titular Superior of the Brothers of Saint Gabriel for RM62.39 million or RM66 per sq ft.

Land and General has teamed up with Mayland Parkview Sdn Bhd, a company linked to its major shareholder, to develop a piece of land in Ampang which the JV will acquire from a firm controlled by former minister Tan Sri Abdul Kadir Sheikh Fadzir.

Scomi Marine posted a 25% rise in net profit to RM25.52 million in its third quarter (3Q) ended Sept 30, 2009 from RM20.4 million a year earlier, mainly due to improved gross profit margin.

BURSA: Lityan surge

Shares of Lityan Holdings posted sharp gains for a second straight day, lifted by heavy speculation that the revamped firm’s new status as a government-linked company (GLC) would put it in a better position, at least financially, to secure lucrative public contracts. The stock yesterday hit a high of RM2.88 but closed at RM2.70 – up 55% from Friday’s closing of RM1.74. The counter was relisted on Oct 30 at a reference price of RM1 after the completion of its restructuring exercise. Post-restructuring, Lityan is 56% owned by Lembaga Tabung Haji (LTH). Lityan group MD and CEO Nor Badli Mohd Alias told reporters that the company had partnered China’s Huawei to bid for part of Telekom Malaysia’s massive RM11.3bn high speed broadband project. 

Dow Theory Sell Signal?

Dick Russell explained the situation in his always excellent letter dated October 26, 2009 (the brackets are my inserts). To wit:

“The secret of the direction of the great primary trend of the market lies in the secondary reaction and what happens AFTER a secondary reaction. A secondary reaction usually takes three weeks to three months in duration while correcting one-third to two-thirds of the previous move. Since the March low, we have yet to experience a true secondary reaction. And I'm wondering whether we could be on the edge of a secondary reaction now. Following a secondary (reaction), if BOTH Averages (Industrials and Transports) rise to new highs, the primary trend is taken to be bullish. Following the lows of a secondary reaction, there will be a rally. If (that) rally fails to take both Averages to new highs, and the Averages then turn down and break to new (reaction) lows, the primary trend is taken to be as bearish. Secondary reactions often start with one of the Averages sinking while the other Average continues to the upside.”

Well said Dick Russell. We, therefore, told our callers, “How can you have a sell-signal when we have not even experienced a downside secondary reaction since the March lows?” Indeed, you need a downside reaction, which “sets” the reaction lows, followed by a rally. If that rally fails to make a new reaction high, and subsequently breaks below the aforementioned reaction lows, then (and only then) will we have a Dow Theory “sell signal,” at least as I understand Dow Theory.

For the record, the recent closing price reaction “highs” are 10092.19 for the DJIA and 4045.11 for the DJTA. Measuring from those highs suggests a one-third “give back” would leave the DJIA at ~8910 and the DJTA at ~3412. That would be consistent with our comments in which we stated that we thought any correction would probably be contained between the 50-day moving average (DMA) and the 200-DMA. In the Dow’s case the 50-DMA is currently at ~9718 and the 200-DMA at ~8593, while the Transport’s 50-DMA resides near 3613 and the 200-DMA around 3269. Of course the markets can do anything, but I would be surprised if the Averages correct by more than one-third. Nevertheless, we have been pretty cautious since the latter part of September, fearing that the vacuum created by the July to September melt-up might get “filled” to the downside once quarter-end window dressing is over. Initially that strategy looked good, and then it looked bad; but all said, the Averages are only marginally below where they were when we turned cautious. Yet, we are still cautious.

The call for this week: When the going gets tough the tough go on the road. That’s what we did last week and that’s what we are doing again this week, so once again these will likely be the last strategy comments of the week. Nevertheless, last week’s “wilt” left everything we follow lower except for the U.S. Dollar Index. And while the DJIA (9712.73) averted a loss in October, none of the other indices we monitor did. Indeed, the S&P 500 (SPX/1036.19) slid 3.9%, bringing its two-week retreat to 5.6%. While our sense is that we are into a secondary correction, our proprietary overbought/oversold indicator is VERY oversold and the number of S&P 500 stocks that are above their 50-DMAs has fallen from more than 90% to 33.2%. Consequently, we continue to think it is a mistake to get too bearish. Ergo, until Dow Theory “tells us” otherwise, we think the primary trend remains UP, and we continue to trade, and invest, accordingly.

Source: raymondjames.com

Stocks to watch: Public Bank, HL Bank, Scomi, Sunrise

KUALA LUMPUR: Investors should heave a sigh of relief on Tuesday, Nov 3 after US markets closed on a firmer note overnight following a fresh round of positive economic data.

However, the undertone of the market, though with some upside, would be cautious, as reflected in several sessions even though there was a spurt of recovery in US markets then. The broader market will remain lacklustre and interest focus would be on selected stocks.

On Wall Street, US stocks rose on Monday, Nov 2 after another round of solid economic reports but pulled off session highs after a Federal Reserve official's warning about banks' loan losses.

The Dow Jones industrial average gained 76.71 points, or 0.79%, to end at 9,789.44. The Standard & Poor's 500 Index climbed 6.69 points, or 0.65%, to 1,042.88. The Nasdaq Composite Index added 4.09 points, or 0.20%, to 2,049.20.

At Bursa Malaysia, stocks to watch are Public Bank, Hong Leong Bnk, SCOMI ENGINEERING BHD [], SUNRISE BHD []. Also on the watch list are Pilecon and Ho Hup.

Public Bank put an end to weeks of market rumours of a selldown when it issued a statement that its non-executive chairman Tan Sri Dr Teh Hong Piow has recovered from a minor operation and will not be selling his stake in the bank.

HONG LEONG BANK BHD [] is venturing into the consumer lending business in China through a 49:51 joint venture with its associate, Bank of Chengdu Co Ltd.

Scomi Engineering Bhd is teaming up with Geodesic Techniques Private Ltd to bid for the CONSTRUCTION [] of new monorail alignments in Bangalore.

Upbeat news from Sunrise are that the high-end property developer expects its current fiscal year real estate sales may surpass its previous year's numbers. Its executive chairman Tong Kooi Ong said this would be boosted helped by its upcoming launches.

In PPB GROUP BHD [], the PLANTATION []s company may utilise the RM1.29 billion proceeds from the sale of its sugar refining and trading business in Malaysia, to subscribe for shares in Wilmar China.

Ho Hup could see further downside, extending its losses from the 6.5 sen decline to 33.5 sen on Monday, after announcing a 20-into-one share capital reduction.

PILECON ENGINEERING BHD [] posted audited net loss of RM177.91 million in fourth quarter ended Dec 31, 2008 (4Q FY08) due to large provisions and write-offs. Unaudited 4Q net loss was RM798,000 only.

Written by Joseph Chin

Market Commentary (After Market Close): Whipsaw Trade Ends with Gain

Better-than-expected economic data helped the S&P 500 ascend to a 1.5% gain, but a bout of selling and technical resistance sent stocks to a 0.7% loss before buyers stepped back in to drive stocks to a positive finish.

News that the ISM Manufacturing Index for October came in at 55.7, construction spending in September spiked 0.8%, and pending home sales for September made a 6.1% monthly increase helped bring about some early, broad-based buying, which sent all 10 major S&P 500 sectors into the green.

Financials were a standout as the sector climbed to a 2.5% gain. Investors in the sector paid little attention to news that regional lender CIT Group will enter bankruptcy after weeks of struggling to secure financing and put together a plan for sustainability.

However, financial stocks soon saw their gains reverse as weakness among insurers spread to the rest of the sector. That took the financial sector to a 1.7% loss before buyers stepped back in and helped it finish with a 0.8% gain.

Midsession weakness among financials undercut the broader S&P 500, which was having trouble extending its gains past its 50-day moving average of 1052. Such technical resistance combined with weakness in one of the stock market's leading sectors eventually caused the broader market to roll over and surrender all of its gains.

Stocks were able to garner some support as an underlying bid limited the stock market's move to the downside. That support inevitably helped it settle the session with a gain.

Materials stocks were finished the session with some of the strongest gains. The sector closed 1.0% higher, partly helped by a weaker dollar, which oscillated for the entire session before settling roughly 0.1% lower. The greenback's move lower helped the CRB Commodity Index climb 1.2%.

Other solid gains were made by consumer staples stocks (+1.0%) and consumer discretionary stocks (+0.9%), which were helped by strength in shares of Ford (F 7.58, +0.58). The automaker posted this morning better-than-expected earnings and also announced an increase in market share.

In other earnings news, Humana (37.01, -0.57) posted better-than-expected earnings of its own, but offered a mixed forecast that weighed on the stock. Managed care providers still advanced 1.5% as a group, though.