November 25, 2008 Daily Highlights

December 2, 2008 at 1:48 am Leave a comment

MARKET REVIEW

KLCI Update
The benchmark Kuala Lumpur Composite Index (KLCI) ended 11.49 points lower to 855.39 after opening at 863.32, down 3.56 points, yesterday morning.According to an OSK Research note, the KLCI will remain immune to the US market as it had been trading relatively flat over the past two weeks. It noted that in the past three weeks, key indices in the US market swung in excess of five per cent in six separate sessions.
“Investors were non-committal today (Monday). Regional markets provided negative cues while there was a fair amount of uncertainty over what the central bank will do in terms of interest rates,” a dealer told Dow Jones Newswires.

Regional Update
Asian stocks fell yesterday on mounting signs the credit crisis is hurting profits at financial companies as recessions in the world’s biggest economies deepen. South Korea’s Kospi Index slid 3.4 percent, Singapore’s Straits Times Index retreated 2.5 percent and Hong Kong’s Hang Seng Index declined 1.6 percent. Air China Ltd. tumbled in Hong Kong after losses on hedging contracts tripled.

US Stocks
U.S. stocks posted the biggest two- day rally since 1987 after the government guaranteed $306 billion of troubled Citigroup Inc. assets and lawmakers pledged to pass another economic stimulus package. The S&P 500 surged 6.5 percent to 851.81, capping a two-day gain of more than 13 percent. The Dow Jones Industrial Average climbed 396.97 points, or 4.9 percent, to 8,443.39. The Nasdaq Composite rose 6.3 percent to 1,472.02. Europe’s Dow Jones Stoxx 600 climbed 8.4 percent, while the MSCI Asia Pacific Index slipped 0.7 percent.

MEDIA HIGHLIGHTS

Spending under 9MP going well
ABOUT 65 per cent of the Ninth Malaysia Plan (9MP) allocation for this year has already been spent and the figure should rise to over 90 per cent by end-December, says the Implementation Coordination Unit (ICU).The 9MP allocation for this year is RM47.9 billion.”Our performance this year at this time is better than in the previous two years,” ICU director-general Tan Sri Khalid Ramli said in an interview yesterday.He pointed out that 65.5 per cent of the allocation had already been spent as at the middle of this month, compared to about 48 per cent at the same time in the last two years.The allocation for next year is RM50 billion, and Khalid expects that over 90 per cent will also be spent by end-2009 despite a slower economy.”We must accelerate the projects to stimulate growth,” he said.Spending over 90 per cent of the yearly allocation is considered “very good”, he said, adding that it is impossible to spend it all as some projects run over several years while others may be tendered out at a cost below what is initially expected.”You work according to a certain ceiling in the project, so I don’t think (criticism that we don’t spend the money) is valid.

Media Prima 9-month net rises to RM81m
MEDIA Prima Bhd, the country’s largest integrated media investment group, says net profit for the nine months ended September 30 2008 rose 3.6 per cent to RM81.4 million.However, due to lower advertising spending and higher content costs, revenue growth for the third quarter was flat compared to the previous period, resulting in a decline in profit by 25 per cent.The company believes it can maintain its revenue and earnings growth, helped mainly by its diversified media portfolio. “Despite the difficult market conditions in the third quarter of 2008, Media Prima still managed to record notable revenue and earnings growth. “We now face a challenging market environment with an anticipated slowdown in advertising spend, but are hopeful that with our array of media assets we are able to maintain our current performance,” chairman Datuk Abdul Mutalib Mohd Razak said in a statement yesterday.

NSTP Q3 net profit up 23pc
The group posted net profits of RM16.09 million during the third quarter and RM40.24 million for the nine-month period ended September 30 2008. NSTP has assured shareholders that it can sustain its performance in the fourth quarter of the current financial year, despite the current global financial crisis and rising cost of raw materials.”The global financial crisis together with the impending global economic slowdown and the increase in raw material cost, particularly newsprint, will have an impact on the group’s results.”However, we have taken prudent measures to ensure that we can sustain our performance in the final quarter of this year.”Barring unforeseen circumstances, the board is optimistic of better operational performance for the current financial year,” NSTP said in a statement yesterday.

Oil palm growers to purchase less fertiliser
MALAYSIA’S 200,000-odd oil palm planters, initially forecast to spend more than RM5 billion on 3.5 million tonnes of imported fertiliser this year, have collectively agreed to reduce purchases in the next six months.Oil palm plantations consume more than 75 per cent of the nation’s fertiliser imports.”We’re considering not applying fertiliser for the next six months to cut cost if fertiliser prices do not come down. Fertiliser is still two times more costly than at the beginning of the year,” said Malaysian Palm Oil Association (MPOA) chairman Datuk Azhar Abdul Hamid, who is also Sime Darby Bhd executive vice-president of the plantation and agribusiness division.He was speaking to reporters after a meeting with Malaysian Estate Owners Association (MEOA) president Boon Weng Siew and the Malaysian Palm Oil Board
(MPOB) chairman Datuk Sabri Ahmad. MEOA’s Boon said fertiliser importers’ recent pledge to cut prices by 15 per cent is not justified.

Consumer Confidence Probably Stayed at Record Low in November
U.S. consumer confidence probably remained at a record low level in November as falling gasoline prices failed to ease concerns about rising unemployment, economists said before reports today. The New York-based Conference Board’s index of consumer confidence held at 38 for a second month, according to the median forecast in a Bloomberg survey of 66 economists. That is the lowest level since monthly records began in 1967. Another report from S&P/Case-Shiller may show a record drop in home prices in the 12 months ended in September.

Citigroup Has No Need to Sell More Assets, CFO Says
Citigroup Inc. Chief Financial Officer Gary Crittenden said the bank will hold onto assets in emerging markets as it focuses on faster-growing regions after receiving a $20 billion government cash injection. The company’s capital ratios are in the “top tier” among large U.S. banks after it raised funds and pared assets by $300 billion, Crittenden said in a Bloomberg Television interview today.

London, Tokyo, New York Office Rents Fall First Time Since 2002
Office rents in London’s West End, midtown Manhattan and Tokyo fell in the third quarter for the first time in almost seven years as the global financial crisis cut demand, CB Richard Ellis Group Inc. said. The total office occupancy cost in the West End was 139.50 pounds ($248.66) per square foot a year in the 12 months ended
Sept. 30, down 5.1 percent from a year earlier, Los Angeles-based CB Richard Ellis said today in its semiannual global-office survey. Rents in London, midtown Manhattan and central Tokyo last fell from a year earlier in January 2002, during the last recession.

GE Bets on India Rail, Power Shortage to Meet $8 Billion Target
General Electric Co., the world’s biggest provider of power-generation equipment, is betting that India’s electricity shortages and the need to replace aging locomotives will help triple sales there in the next two years. Revenue from windmills, steam turbines and diesel locomotives may help it meet the 2010 local sales target of $8 billion, Tejpreet Singh Chopra, 38, chief executive officer of GE’s India unit, said in an interview in New Delhi. GE had $2.6 billion of revenue from India last year. Prime Minister Manmohan Singh has said India will need to spend $500 billion through 2012 to build roads, ports, airports, utilities, schools and hospitals.

ECONOMY HIGHLIGHTS

Obama Vows Bold Moves to Avoid Millions of Lost Jobs
President-elect Barack Obama warned that the U.S. is “trapped in a vicious cycle” and faces the loss of “millions of jobs” unless immediate steps are taken to stimulate the economy and to rescue the nation’s automakers. “If we do not act swiftly and act boldly, most experts now believe we could lose millions of jobs next year,” Obama said at a press conference today in Chicago. “We do not have a minute to waste.”
Obama, 47, said he will nominate New York Federal Reserve Bank President Timothy Geithner as Treasury secretary and has picked former Treasury chief Lawrence Summers to be his White House economic director. Obama also named Christina Romer to head the Council of Economic Advisers, and Melody Barnes to serve as director of the Domestic Policy Council.

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UMW Holdings 3QFY08 : O&G growth still tepid IJM Corporation 2QFY09 : Above expectation

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