December 16, 2008 Daily Highlights

December 16, 2008 at 6:10 am Leave a comment

MARKET REVIEW

KLCI Update
Share prices closed mixed on Bursa Malaysia yesterday amid cautiousness in a gloomy global economic outlook led by the situation in US, said dealers.However, they said throughout the session there were selective buying on key index-linked stocks as investors renewed positions following the recent market fall.The benchmark Kuala Lumpur Composite Index (KLCI) ended at 846.470, down 5.80 points after opening 2.39 points higher at 854.66 yesterday morning. Turnover decreased to 287.70 million shares valued at RM445.50 million from last Friday’s close of 306.74 million shares worth RM501.34 million.

Regional Update
Asia’s stocks bounced back yesterday as investors hopes were raised of a bailout in the US for the Big Three car companies. Japanese stock index jumped 5.21 per cent, tracking gains on Wall Street late last week. The Nikkei climbed 428.79 points to 8,664.66. The Topix index of all first section issues gained 33.56 points, or 4.1 per cent, to 846.93. Australian stock shares finished 2.3 per cent higher, following a positive lead from Wall Street. The benchmark SP/ASX 200 rose 81 points to 3,591.4 while the broader All Ordinaries had gained 83.2 points, or 2.4 per cent, to 3,535.7. Shares in Shanghai closed up 0.52 per cent, off early highs amid concerns that Beijing’s pledges to stabilise the stock market may not work. The benchmark Shanghai Composite Index
closed up 10.16 points at 1,964.37.

US Stocks
U.S. stocks fell, wiping out last week’s gains, after manufacturing showed a worsening economy that analysts said will hurt earnings at companies from. The Standard & Poor’s 500 Index slipped 1.3 percent to 868.57 as financial and technology shares were the biggest drags on the gauge. The Dow Jones Industrial Average declined 65.15 points, or 0.8 percent, to 8,564.53. The Russell 2000 Index of small U.S. companies decreased 3.4 percent. The first simultaneous recessions in the U.S., Europe and Japan since World War II have dragged the S&P 500 down almost 45 percent since its October 2007 record. The benchmark index rose 0.4 percent last week on speculation President-elect Barack Obama’s spending proposals will restore growth and the Bush administration may save General Motors Corp. and Chrysler LLC.

MEDIA HIGHLIGHTS

Astro makes 9-month loss
ASTRO All Asia Network plc incurred a pre-tax loss of RM392.065 million in the nine months ended October 31 2008 against a pre-tax profit of RM119.11 million in the same period last year.The group also recorded a net loss of RM500.3 million compared to a net profit of RM11.8 million previously. This was largely due to costs of cessation of the direct-to-home television business proposal in Indonesia and previous expenses incurred in its development of RM641.2 million.In addition, the group incurred finance cost of RM92 million against finance income earned of RM12.9 million in the same period last year, partially offset by higher earnings before interest, tax, depreciation and amortisation (ebitda).Group revenue, however, was up RM305.2 million, or 16.1 per cent, to RM2.196 billion, while ebitda increased by RM49.2 million, or 11.1 per cent, to RM492.6 million, it said in a filing to Bursa Malaysia yesterday.

UMW Toyota sets new sales record
UMW Toyota Motor Sdn Bhd has set a new sales record after selling 95,000 units of vehicles last week.It is the best annual sales performance ever achieved by UMW Toyota Motor since 2005 when 92,000 units were sold, said managing director Kuah Kock Heng in Shah Alam yesterday. “The sale of 95,000 units is above the original target of 94,000 units for this year,” he said, after the Toyota Classics 2008 cheque presentation ceremony.He said the core models such the Vios, Hilux, Camry and Avanza had helped the company achieve the sales record. Meanwhile, Kuah said the industry outlook for 2009 is very much dependent on the total industry volume (TIV) for this year.

Malaysia-US bilateral trade to strengthen further
Bilateral trade between Malaysia and the US will continue to strengthen – possibly under a new conceptual framework – when the new US administration takes office on Jan 20, according to US ambassador James R. Keith.He said it was not possible to be too specific as to the changes that would occur for now but once the new administration came into power there would be greater clarity in terms of policies and direction.“The US is keen to resume free trade talks with Malaysia and to look for ways to strengthern both nations’ economies and resilience, especially during
these tough times,” Keith told reporters yesterday.After two and a half years of negotiations, the US-Malaysia Free Trade Agreement talks reached a plateau.Keith said with the economic crisis affecting most countries it was important for all nations, including the US and Malaysia, to collaborate and work together to look for business opportunities to cushion the impact of the downturn, which was expected to last several quarters

Water deal with Malacca PAAB to take over assets
After months of negotiations, Pengurusan Aset Air Bhd (PAAB) has struck its first water deal – to take over all the water assets from the Malacca government.The signing of the agreement is scheduled for tomorrow and it involves Syarikat Air Melaka Bhd (SAMB) handing over three dams and six treatment plants to PAAB. In return for the assets, PAAB will contra off the outstanding loan of over RM700mil that SAMB owes the Government.The signing is expected to be witnessed by Deputy Prime Minister Datuk Seri Najib Tun Razak, Malacca Chief Minister Datuk
Seri Mohd Ali Mohd Rustam, Finance Minister II Tan Sri Nor Mohamed Yakcop and Energy, Water and Communications Minister Datuk Shaziman Abu Mansor.PAAB is a wholly owned unit of Minister of Finance Inc while SAMB is wholly owned by the Malacca government.

Tremont Group Funds Invested $3.3 Billion With Madoff
Tremont Group Holdings Inc., a hedge- fund firm owned by OppenheimerFunds Inc., had $3.3 billion invested with Bernard Madoff, according to a person familiar with the matter. Tremont, which manages a total of $5.8 billion, is the second hedge fund company to report that more than half its assets were invested with Madoff, who was arrested Dec. 11 after he allegedly confessed to running a “giant Ponzi scheme” that may have bilked investors out of $50 billion. Fairfield Greenwich Group said on Friday it had placed $7.5 billion of its $14.1 billion in total assets with the Madoff.

Caroline Kennedy Wants Senate Seat, Official Says
Caroline Kennedy, daughter of President John F. Kennedy, will seek the U.S. Senate seat Hillary Clinton is vacating to become secretary of state. Kennedy called Governor David Paterson of New York today to “express her interest in the job,” said Paterson spokesman Errol Cockfield. A Dec. 3 conversation between them was just for information purposes, the spokesman said. Kennedy’s spokesman, Stefan Friedman, confirmed she is seeking the Senate seat.

Australia Central Bank Saw Need for Expansionary Rate
The Australian central bank’s one percentage point interest-rate cut this month puts monetary policy at an “expansionary setting” to stoke business and consumer confidence, policy makers said. The rate cut had to be “large enough to have a noticeable effect on financing decisions of lenders and borrowers,” the Reserve Bank of Australia said in minutes of its Dec. 2 meeting, released in Sydney today. It also trimmed its forecast for inflation in the 12 months through June 2009 to 2.5 percent from a November prediction of 3 percent.The bank board, led by Governor Glenn Stevens who proposed December’s “substantial reduction,” reduced the overnight cash rate target to a six-year low of 4.25 percent, extending the most aggressive round of policy easing since a recession in 1991. The bigger-than-forecast cut also was warranted because the board isn’t scheduled to meet in January, the minutes said.

Toshiba to Cut Flash-Memory Output 30% on Weak Demand
Toshiba Corp., Japan’s biggest chipmaker, said it will cut production of NAND flash memory used in mobile phones and portable music players by 30 percent from January because of slumping demand. The company will also halt operations at its factory in Yokkaichi, western Japan, before the output reduction, Tokyo- based Toshiba said today. Two chip-production lines using 300- millimeter wafers will stop for 13 days and two 200-millimeter lines will halt for four days from Dec. 31, it said. “Recession in the global economy and the slowdown in consumer spending are
having a significant impact on demand for semiconductors,” Toshiba said in a statement. “Toshiba will continue to monitor the NAND market and will review operation plan in Yokkaichi as needed.”

U.S. Economy: Industrial Production Falls on Autos
Manufacturing in the U.S. slumped further in November as exports tumbled and automakers slashed their assembly rate to the lowest level in more than 18 years. Industrial production fell 0.6 percent, the third drop in four months, the Federal Reserve said today in Washington. The New York Fed reported the weakest factory performance in its region this month since its survey began in 2001. Today’s figures may intensify pressure on the Bush administration to prevent a collapse of General Motors Corp., the biggest American carmaker. As consumer demand slides with higher unemployment and a cut-off of credit, manufacturing is poised to keep contracting into 2009, economists said.

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16 December 2008 Newz Bits Gamuda – Profit warning

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