Wednesday, February 28, 2007

KLCI Fell 8.2% - 28th Feb 2007; NOR YAKCOP: Confident of M’SIA Stock Market; No Change-Economic fundamentals; CORRECTION Due To External Factors

Bursa's Fall: No Cause For Worry Given Investor Confidence - PM

From Ahmad Kamil Tahir

SANA'A, March 1 (Bernama)--Prime Minister Datuk Seri Abdullah Ahmad Badawi says there is no need to worry over yesterday's fall on Bursa Malaysia, given the investor confidence in the local bourse.

As long as there was confidence in the Malaysian market, investors would continue to invest, he told a news conference for the Malaysian and Yemeni media here Wednesday. Malaysian and regional stock markets dipped sharply for the second day yesterday following a major sell-off in China on Tuesday which spread across markets worldwide.

As the market dived, Bursa Malaysia and Second Finance Minister Tan Sri Nor Mohamed Yakcop both moved to reassure investors that the sell-off was due to external factors while economic fundamentals in Malaysia had not changed. The benchmark Kuala Lumpur Composite Index (KLCI) dropped 40.63 points, or 3.3 per cent, at 1,196.45, extending the previous day's 2.8 per cent fall. It was its biggest one-day decline since Sept 21, 2001. The negative sentiment also hurt the ringgit, which eased 0.2 per cent to 3.5017 against the U.S. dollar, the lowest since Dec 19, last year.= = == =

: 1st March 07 2.19am

February 28, 2007 22:17 PM
KLCI Recovers From Sharp Losses, Down Only 3.28 Pct

KUALA LUMPUR, Feb 28 (Bernama) -- The local stock market closed lower for the third day in a knee-jerk reaction to the overnight sharp fall on Wall Street and following the trend in regional markets. However, after a situation described as panic selling in the morning, where the key Kuala Lumpur Composite Index (KLCI) was down by as much as 101.07 points at one stage, the market showed recovery in the afternoon.

The KLCI cut its losses and close the day 3.28 percent or 40.63 points lower at 1,196.45. Analysts said the country's economic fundamentals are still relatively strong with inflation and interest rates at a relatively low and competitive level to spur growth and further provide support to the share market. "What really happened in the market? The sharp losses were just because investors in local and regional markets overreacted to Wall Street and China. They panicked rather than looked at the situation rationally," said one of the analysts. He said that events in the past two days were the best example of the herd mentality of investors as they followed each other blindly to pull down the market and magnify the negative sentiment.

"Actually, our market fundamentals are still intact," he added. Taking a positive angle of the market, the analyst said the downturn so far this week had enabled the market to correct itself from an overbought situation built over the past few months. Another analyst agreed, saying that technically the sharp pullback had enabled the market to cool off the extremely overbought situation across the board. "The market's supply and demand factors have now almost reached equilibrium and moving forward, we expect that mild technical rebound will appear following the sharp pullback but trading is expected to be choppy," he said. According to the analysts, the current support level for the key index will be at 1,150 with resistance at 1,210.

Meanwhile, Second Finance Minister Tan Sri Nor Mohamed Yakcop said there was no need for the country to impose any capital control measures in light of developments in the stock market. Nor Mohamed said the country was not worried about the losses in the local bourse as Malaysia's economic fundamentals have not changed. "Our market has corrected somewhat but the fundamentals are strong. And I am confident about the Malaysian economy and stock market," he said. In a move to calm down jittery investors, Bursa Malaysia Bhd's chief executive officer Datuk Yusli Mohamed Yusoff also stressed that the market fundamentals remained strong. "The sharp fall in the morning session was only a knee-jerk reaction to the regional market slides caused mainly by the sharp declines of the China indices yesterday," he said.

ABOVE: Despite the fall in the last two days, YTL group of companies are holding fort, with overall improvements for POWER - UP 25%; CEMENT - UP 96%; E-SOLUTIONS - UP 536% and LAND & DEVELOPMENT - UP 67% , according to the EDGEDaily

"With regards to our market performance during the first half of today's trading, I would like to reassure investors that the fundamentals remain strong and we maintain our optimistic outlook on the market's performance over the medium term," Yusli said. Most of Southeast Asia's stocks also continued to suffer losses today with

Singapore's benchmark Strait Times Index declining by 3.96 percent at 3,104.15, Japan's Nikkei 225 Index down 2.85 percent to 17,604.12 and Hong Kong's benchmark Hang Seng index dropping 2.65 percent to 19,652.

ABOVE: Thai Stocks down 2% and BELOW: Jakarta Stocks Down 1%

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Malaysia's Nor Is “Confident” About Stock Market

Updated : 28-02-2007; Media : Bloomberg; Story By : Soraya Permatasari and Angus Whitley; via
Feb. 28 (Bloomberg) --
Malaysia's Second Finance Minister Nor Mohamed Yakcop said he's ``confident'' about the country's stock market after the key index fell as much as 8.2 percent.
``I am not worried because the
economic fundamentals of Malaysia have not changed,'' Nor told reporters today in Putrajaya, outside Kuala Lumpur. ``They are still robust and the correction in the last two days has been due entirely to external reasons.''
Stocks and currencies across
Asia slid after the biggest decline in Chinese equities in 10 years yesterday sparked a global sell-off. Malaysia's benchmark share index today headed for the biggest loss since April 2001, adding to a 2.8 percent decline yesterday.

Central bank data today will show the economy grew faster last year than the government's 5.8 percent estimate, Nor said. There is no plan to impose capital controls, he said. Bursa Malaysia Bhd., the operator of the nation's stock exchange, called the market's decline a ``knee-jerk'' reaction to regional slides.

``Our economy is stable and the outlook for 2007 remains positive,'' Bursa Chief Executive Officer Yusli Mohamed Yusoff said in a statement today. ``We maintain our optimistic outlook on our market's performance over the medium term.'' Second Finance Minister Nor also said he expects Proton Holdings Bhd., Malaysia's state-owned national carmaker, to pick a partner by the end of March.

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February 28, 2007 19:24 PM

Nor Mohamed Not Worried About Stock Mart Fall

PUTRAJAYA, Feb 28 (Bernama) -- Second Finance Minister, Tan Sri Nor Mohamed Yakcop (ABOVE) said Wednesday he is not worried about the fall in Bursa Malaysia, stressing the country's economic fundamentals have not changed. Noting that "we are still a robust economy," he said the correction over the last two days had been due entirely to external reasons. Nor Mohamed also said Malaysia would not impose any capital control measures in light of developments in the stock market.

"Our market has corrected somewhat but the fundamentals are strong. And I am confident about the Malaysian economy and stock market," he told reporters after attending a function at the Ministry of Finance here. The local bourse fell sharply on Tuesday with the market barometer Kuala Lumpur Composite Index (KLCI) down 2.81 percent following a sell-off in regional stocks triggered by a sharp fall in China stocks. At the close,

the KLCI fell 40.63 points to 1196.45, the Second Board Index was down 2.68 points to 98.05 and the FBMEmas was down 288.55 points to 7,944.23. Nor Mohamed brushed aside worries of a liquidity crisis caused by the selling.

"I don't think there will be a liquidity crisis. Certainly in our case there is no liquidity crisis," he said, ruling out any systemic risks. Asked whether state investment agencies would support the market, he said they were in the business of investing. "I am sure agencies like the Employees Provident Fund and Permodalan Nasional Bhd and the others know value when they see one. "And I think it's true they have been buying yesterday and today because the see values in the stocks," he said. Asked whether the current development in the market was temporary, Nor Mohamed said:

"I basically think that markets go up and down, there is some profit-taking, some correction along the way." But for the long term, we are very upbeat and our market is robust." He said economic figures to be released by Bank Negara Malaysia would show that growth for 2006 would exceed the 5.8 percent forecast earlier. "For 2007, the government is confident of achieving a growth target of six percent while inflation will be brought down to below three percent. "The earnings of big companies, including government-linked companies are expected to be better this year than in 2006," he said. He said the losses suffered by Proton Holdings had been expected.

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Malaysia shares dive 8 pct early on China sell-off

Updated :
28-02-2007 ; Media : Reuters ;Story By : N/A ;via
KUALA LUMPUR, Feb 28 (Reuters) - Malaysia's main share index fell 8.1 percent in early trade on Wednesday, extending losses after China's market crash on Tuesday. The benchmark Kuala Lumpur Composite Index <.KLSE> was down 7.44 percent at 1,145.06 percent at 0111 GMT. The index of 100 blue-chip shares had opened down 3.84 percent.
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Malaysia's Genting slides on casino concerns

Updated : 28-02-2007 ; Media : Reuters ;Story By : N/A ; via
KUALA LUMPUR, Feb 28 (Reuters) - Shares in Malaysian leisure and gaming group Genting Bhd (GENT.KL: Quote, Profile , Research) slumped on Wednesday on concerns about the future of its Singapore casino project.
Singapore said on Tuesday it had not yet awarded a casino licence to Genting, though the firm won a tender in December for the right to build and run a $3.4 billion resort there. Genting shares were down 9.7 percent at 35 ringgit at 0108 GMT. Shares in its subsidiary, Resorts World Bhd (RWBW.KL: Quote, Profile , Research), also slid. They were down 11.5 percent at 13.80 ringgit

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Updated :
28-02-2007 ; Media : Bloomberg ; Story By : Ian C. Sayson

Feb. 28 (Bloomberg) -- Malaysia stocks fell by the most in almost six years, sending the ringgit lower and extending a global sell-off sparked by a plunge in Chinese and U.S. shares yesterday.` `There's no way that we will be decoupled from what happens to the major markets,'' said Wong Shou Ning, who helps manage $136 million at Kenanga Investment Management Sdn. in Kuala Lumpur. ``Markets are global. It's like a tidal wave, you can't run.'
Tenaga Nasional Bhd. and Malayan Banking Bhd. led the decline among the nation's biggest stocks. Proton Holdings Bhd. slumped after reporting a third straight quarterly loss while Dufu Technology Corp. Bhd. gained on its first trading day. The Kuala Lumpur Composite Index tumbled 74.17, or 6 percent, to 1162.91 at the
12:30 p.m. local time break, set for its biggest loss since April 4, 2001. The measure plunged as much as 8.2 percent earlier. The index dropped 2.8 percent yesterday.
``The whole market is taking a hit,'' said Scott Lim, who helps manage $400 million as chief investment officer at CMS Dresdner Asset Management Sdn. in
Kuala Lumpur. ``Smart investors should be looking for bargains. This panic will ease once the market in China stabilizes.''
Malaysia's currency, the ringgit, fell 0.3 percent to 3.505 against the U.S. dollar as of 12:07 p.m. local time, the most since Dec. 19, according to data compiled by Bloomberg. Among Asia's currencies, the ringgit is the second-biggest gainer against the U.S. dollar this year; it ranks fourth worldwide. ``The currency's movement is part of the panic,'' Lim said. ``There has been no change in the country's fundamentals. People are taking advantage of the situation to take profit.''

Whole Market Hit

Today's loss pared the gains in the nation's main stock index this year to 6.1 percent. The 100-member measure closed last week at its highest since
Jan. 5, 1994, boosted by a 17 percent gain from end-2006. The smaller Second Board Index fell 6.9 percent to 93.78 today, while the FTSE Bursa Malaysia Emas Index declined 6.4 percent to 7703.91. Declining stocks beat gainers 1118 to 21.
Tenaga Nasional,
Malaysia's biggest power producer, lost 70 sen, or 5.7 percent, to 11.50 ringgit, set for its biggest slide since May 31, 2002.

Malayan Banking Bhd., the nation's biggest lender, declined 70 sen, or 5.4 percent, to 12.30 ringgit, the lowest since Jan. 30 and shaving this year's gain to 4.2 percent.``Malaysia will probably be one of the hardest hit because it is also one of the best performers in the region this year'' said Wong, who also owns shares in Thailand, Indonesia and Singapore. ``I don't think this means the long-term end of the rally. Nothing has changed in Malaysia's economy today compared to yesterday.''

Proton Posts Loss

Telekom Malaysia Bhd.,
Southeast Asia's second-biggest phone company, fell 60 sen, or 5.8 percent, to 9.80 ringgit, the lowest in almost five weeks. MISC Bhd., the Malaysian shipowner of the world's biggest fleet of liquefied natural gas tankers, declined 50 sen, or 5.4 percent, to 8.80 ringgit, after slumping as much as 6.5 percent.
Proton, a Malaysian carmaker in talks to sell a stake to General Motors Corp., fell 55 sen, or 7.5 percent, to 6.75, after declining as much as 14 percent. Today's decline cut the stock's gain this year to 2.3 percent. The local carmaker said yesterday after trading closed that it posted a 281.5 million ringgit ($80 million) loss in its third-quarter ended Dec. 13, compared with an 86.5 million ringgit profit a year ago.

Dufu Technology, a Malaysian maker of precision machining components, jumped 14.5 sen, or 21 percent, to 84.5 sen, after surging as much as 36 percent earlier today. The company sold 34 million shares at 70 sen each in its initial public offering. The following stocks fell. Stock symbols are brackets after company names.
Maxis Communications Bhd. (MAXIS MK),
Malaysia's biggest mobile-phone operator, fell 50 sen, or 4.2 percent, to 11.50 ringgit, trimming a loss of as much as 6.7 percent earlier.
Net income at Maxis jumped 51 percent to 642 million ringgit in the three months ended Dec. 31 from a restated 425 million a year earlier on larger sales at its Aircel Ltd. unit in India and higher earnings at its Malaysian operation. Profit beat the 481 million ringgit median estimate of 10 analysts surveyed by Bloomberg.

Malaysian Airline System Bhd. (MAS MK), the country's largest carrier, declined 40 sen, or 6.9 percent, to 5.40 ringgit, trimming this year's gain to 15 percent. Credit Suisse Group today cut its 12-month share price estimate for the airline by 1.4 percent to 7.15 ringgit.
TA Enterprise Bhd. (TAE MK), a Malaysian stockbroker and property developer, fell 26 sen, or 15 percent, to 1.52 ringgit, set for its biggest loss since
Aug. 9, 1999.
The company said it hasn't made a ``firm decision'' to list its property unit on the
Hong Kong or Singapore stock exchange, or to set up a property trust worth more than 1 billion ringgit. The company made the statement in response to a stock exchange query on a Feb. 26 Business Times report.

UMW Holdings Bhd. (UMWH MK), the local assembler of Toyota Motor Corp. cars, lost 35 sen, or 3.7 percent, to 9.15 ringgit, its lowest this month. The company said yesterday after trading closed that fourth-quarter profit fell 14 percent to 87 million ringgit as sales declined 7.6 percent to 2.57 billion ringgit, because it sold fewer
Toyota and Perodua cars.

Unisem (M) Bhd. (UNI MK),
Malaysia's second-biggest semiconductor packager, tumbled 14 sen, or 7.5 percent, to 1.74 ringgit. The manufacturer had a 29 percent increase in fourth- quarter to 15.6 million ringgit in the three months ended Dec. 3, its smallest profit in a year as its European unit reported losses.

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Malaysian Stocks Drop, Post Biggest Loss in Over Five Years
Updated :
27-02-2007 Media : Bloomberg; Story By : Ian C. Sayson

Feb. 27 (Bloomberg) -- Malaysian stocks fell, sending the index to its biggest loss in more than five years after oil prices advanced for a fifth day and following a sell-off in Chinese shares. ``The rise in oil prices and the sell-down in China is having an impact on sentiment in the region as a whole,'' said Mushtaq Ibrahim, who manages about $1.4 billion of assets at Amanah SSCM Asset Management Bhd. in Kuala Lumpur. ``This is a healthy pullback for Malaysia stocks considering the market's sharp gains.''

Tenaga Nasional Bhd. and Malayan Banking Bhd. led the decline among the nation's biggest stocks. Lion Industries Bhd., which invests in steel, property, timber and beverages, fell after profit plunged last quarter on higher taxes. The Kuala Lumpur Composite Index declined 35.79, or 2.8 percent, to 1237.08 at the close of trading in Malaysia, after falling as much as 4.1 percent intraday. Today's decline may have wiped out about $7.9 billion in market capitalization. The smaller Second Board Index dropped 6.9 percent to 100.73, while the FTSE Bursa Malaysia Emas Index lost 3.3 percent to 8232.78. Losers beat gainers 1,121 to 42 as the value of today's trade reached the highest in 10 years.

Tenaga Nasional, the biggest component of Malaysia's key stock index, fell 10 sen, or 0.8 percent, to 12.20 ringgit, a six-day low. Malayan Banking, the nation's largest lender, fell 10 sen, or 0.8 percent, to 13 ringgit, trimming this year's gain to 10 percent. The main stock index had its biggest loss since a 3.5 percent decline on Sept. 21, 2001. The measure, made up of Malaysia's 100 biggest stocks, gained 13 percent this year and climbed last week to its highest since Jan. 5, 1994. The benchmark, the fourth biggest gainer in Asia this year after main stock measures in Vietnam, China and Pakistan, rose 22 percent in 2006.

`In the Money'
``If you are already in the money in a big way, which you probably are if you were in Malaysia as early as last year, it is a good time to take some of those gains,'' Ibrahim said. Telekom Malaysia Bhd., Southeast Asia's second-biggest phone company, declined 30 sen, or 2.8 percent, to 10.40 ringgit, its biggest loss since May 19. Maxis Communications Bhd., Malaysia's biggest mobile phone operator, fell 30 sen, or 2.4 percent, to 12 ringgit, trimming this year's gain to 18 percent. Sending shares lower, oil prices advanced 0.2 percent to $61.52 a barrel in after-hours electronic trading on the New York Mercantile Exchange, extending a 5.7 percent gain in the previous four days.
In addition,
China's stocks tumbled the most in 10 years as some investorsjudged record gains in key indexes as excessive. The Shanghai and Shenzhen 300 Index, which tracks yuan- denominated A shares listed on China's two exchanges, plunged 9.2 percent at the close.

Prolonged Rally
``The rally was quite prolonged, so the fall today is a little bit sharp. The market needed a breather,'' said Teng Chee Wai, who helps manage the equivalent of $533 million at Hwang- DBS Investment Management Bhd. in Kuala Lumpur. ``There are also rumors of China tightening.''

Among other declining stocks, Lion Industries tumbled 25 sen, or 15 percent, to 1.41 ringgit, its biggest lost since May and trimming this year's gain to 37 percent. Net income in the three months ended Dec. 31 fell 65 percent to12 million ringgit ($3.44 million), compared with 35 million ringgit a year earlier, the company said yesterday after trading closed.

Lion Diversified Falls
Lion Diversified Holdings Bhd. declined 45 sen, or 6.5 percent, to 6.45

ringgit, extending a three-day, 5.5 percent retreat. The company, which agreed to buy shares in Megasteel Sdn. for 338 million ringgit, saidyesterday profit for the three months ended Dec. 31 plunged 86 percent to 62 million ringgit. Megasteel is a unit of Lion Corp., which is 23 percent- owned by Lion Diversified.

Road Builder (M) Holdings Bhd., a construction company with investments in toll operations, ports and hotels, fell 32 sen, or 7 percent, to 4.24 ringgit, its biggest loss since May. UBS AG cut its rating for the stock to ``neutral'' from ``buy,'' saying it is no longer a cheap exposure to IJM Corp., which is taking over Road Builder.

IJM, which has offered to issue two of its shares for each share of RoadBuilder, fell 55 sen, or 5.9 percent, to 8.80 ringgit, its biggest decline since May 22. UBS also cut its rating for IJM to '`neutral.'' ``IJM shares have doubled over the past 12 months, in line with order book expansion,'' Ridzuan Mohamed, an analyst at UBS, said. ``However, we believe it will take two years before earnings per share growth catches up.''

Raised Forecast

Following the market's decline, Malaysian Airline System Bhd. fell 15 sen, or 2.5 percent, to 5.80 ringgit, after rising as much as 4.2 percent earlier today. The nation's largest carrier may exceed its earnings target this yearby 14-fold after cutting jobs and unprofitable routes helped it return to a 121.5 million ringgit profit in the fourth quarter, the company said yesterday after trading closed.

Malaysian Air expects a profit of between 300 million ringgit and 700 million ringgit this year, higher than its earlier 50 million ringgit target, the company's managing director, Idris Jala, said yesterday. ``The company's results are good,'' said Christopher Eng, an analyst at OSK

Research Sdn. in Kuala Lumpur. ``It shows that the airline is on target for a turnaround.'' He raised his 12-month share price estimate for the stock by 11 percent to 7.80 ringgit, indicating a 35 percent gain from today's close.

On the broader market, shares worth 4.29 billion ringgit were traded, almost three times the six-month daily average and the biggest since Feb. 26, 1997. ``Most people have looked too far ahead, this pullback will allow fundamentals to catch up,'' Amanah's Ibrahim said. Before today's decline, ``the market has performed very strong by any standards. ''The following stocks either rose or fell. Stock symbols are in brackets after company names.

AirAsia Bhd. (AIRA MK), Southeast Asia's largest discount airline, fell 6 sen, or 3.4 percent, to 1.70 ringgit, its biggest loss since July 13.Malaysia's Johor state government plans to offer landing rights at its Senai Airport to all airlines to attract more flights to the region, the Bernama

state news agency said, citing Chief Minister Abdul Ghani Othman. AirAsia is one of only two airlines that fly to the airport, Bernama said. Cahya Mata Sarawak Bhd. (CMS MK), Malaysia's sixth-biggest builder, fell 15 sen, or 7.3 percent, to 1.90 ringgit, after advancing 3.5 percent yesterday. The company plans to submit a $488 million bid for a highway project in Indonesia in a joint venture with toll-road operator PT Jasa Marga, the Business Times reported, citing people familiar with the proposal.

Courts Mammoth Bhd. (CRTM MK), a retailer of electronics and electronic appliances, fell 12 sen, or 11 percent, to 98, its biggest loss since April 4, 2006. The stock had its rating lowered to ``sell'' from ``hold'' by Deutsche Bank AG on concerns the company's credit sales will continue tosuffer should it implement a stricter credit policy, which it needs to improve the quality of its receivables.``Investors should sell the stock,'' Pauline Chong, a Deutsche analyst, said in a note today. The ``outlook remains opaque and management isn't transparent.'' Genting Bhd. (GENT MK), the owner of Malaysia's only licensed casino, fell 75 sen, or 1.9 percent, to 38.75 ringgit. The company denied a newspaper report that said it plans to sell a stake in a palm-oil producer to focus on the gaming business. On Feb. 23, the Business Times reported Genting may sell its 55 percent stake in Asiatic Development Bhd. to companies including Wilmar International Ltd. in Singapore, PPB Group Bhd. and state-owned

Permodalan Nasional Bhd. KLCC Property Holdings Bhd. (KLCC MK), the owner of the Petronas Towers and the Suria mall in Kuala Lumpur, declined 16 sen, or 4.5 percent, to 3.40 ringgit, following a two-day, 3.8 percent loss. Aun-Ling Chia, an analyst at Deutsche Bank, cut the stock's rating to ``hold'' from ``buy'' after cutting by 7 percent the 2007 profit estimate for the property company.

Utama Banking Group Bhd. (UBG MK), which owns a third of Malaysia's Rashid
Hussain Bhd. (RHB MK), fell 10 sen, or 4.5 percent, to 2.12 ringgit
. Utama said talks to sell its Rashid Hussain stake to Kuwait Finance House are no longer exclusive. Rashid Hussain owns 65 percent of RHB Capital Bhd. (RHBC

MK), Malaysia's fourth-biggest bank. Rashid Hussain fell 8 sen, or 4.7 percent, to 1.63 ringgit, its lowest since Feb. 6. RHB Capital fell as much as 2 sen, or 0.5 percent, to 4.46 ringgit before trading unchanged at 4.48 ringgit. EON Capital Bhd. (EON MK), which is trying to take over Rashid Hussain, fell 5 sen, or 0.8 percent, to 6.55 ringgit, following a two-day loss. EON Capital may have to sweeten bids worth 6.4 billion ringgit for Rashid Hussain to beat Kuwait Finance, Winson Ng, an analyst at CIMB Investment Bank Bhd. in Kuala Lumpur, wrote in a report. EON will probably have to raise its offer to 1.90 ringgit for each Rashid Hussain share, compared withits 1.80 ringgit bid on Feb. 7, Ng said.____

Business; February 27, 2007 22:10 PM

KLCI Down 2.81 Pct Following Sell-Off In China Stocks

By Farazira Amira Yusof
KUALA LUMPUR, Feb 27 (Bernama) -- The local bourse fell sharply on Tuesday with the market barometer Kuala Lumpur Composite Index (KLCI) down 2.81 percent, the biggest single-day loss in two years following a sell-off in regional stocks which was triggered by sharp fall in China stocks, dealers said. The KLCI went down as much as 52.68 points to 1,220.19 intraday, before closing 35.79 points down at 1,237.08. It opened 0.56 of a point higher at 1,273.43.Declining stocks outweighed advancers by 1,123 to 42 on volume of 3.699 billion shares.

"The correction was expected after last Friday's run-up but not the big losses seen today," a dealer from one of the local brokerage said. The biggest one-day loss was recorded on Jan 12, 1994 when the key index dropped by 68.09 percent to 1,134.31. The dealer said that investors were overreacting on the sell down in China which spilled over into the regional bourses. The Shanghai stock market suffered its biggest one day fall in 10 years with the Composite Index closing 268.81 points or 8.84 percent lower. "From year-to-date, we are the third best regional performer after Shanghai and Vietnam Stock Exchange, that is why when China falls, we are badly hit," the dealer said. Meanwhile, another dealer said that there was forced selling by foreign funds in the market and lack of support as investors continued to be concerned about the performance of Wall Street which was weak following signs that the oil price was on the rise again.

The Dow Jones Industrial Average closed down by 15.22 points to 12,632.26 as crude oil price climbed to US$61.59 per barrel. The dealer said that the cautious market could also be attributed to the settlement period or T+3 after last week's record high volume. "Actually, it was the time for investors to settle their transaction as the market had recorded a high volume of 4.782 billion shares last Thursday," said the dealer. Moving forward, the dealer said that the market will continue to see profit taking correction amid weaknesses in overseas markets.

"The market is likely to consolidate due to lack of investors interest. Perhaps, the announcement of gross domestic data (GDP) later tomorrow will provide some support to the market," the dealer said, adding that the current psychological support level will be at 1,180-1,200-points.

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IMF chief warns of yen carry trades

POSTED: 0802 GMT (1602 HKT), February 27, 2007
Weakening yen has increased Japan's account surplus
Depreciation of dollar could help reduce U.S. account deficit, IMF has said
Huge deficits in U.S., surpluses elsewhere could trigger recession, IMF warns
Japan should pursue anti-deflationary policy, Rao says

WASHINGTON (Reuters) -- The head of the International Monetary Fund warned the increasing growth of yen carry trades could deepen global economic imbalances, and he urged Japan to make clear that deflationary pressures are being rooted out. Carry trades are when investors borrow in a low-yielding currency, such as the yen, to invest in higher-yielding assets. The yen has been a popular currency to fund these trades since Japanese interest rates are just 0.5 percent and the yen is trading at a 20-year low on a trade-weighted basis.

IMF Managing Director Rodrigo Rato (ABOVE), addressing graduates from Harvard Business School in Washington Monday, said the size of the carry trades was unknown. But they were evident in capital flows into countries like Brazil and Turkey and in the growth of yen-denominated mortgages in countries ranging from South Korea to Latvia, he added. Meanwhile, capital flows out of Japan have risen, partly due to carry trades, he added. "The carry trade is not a consequence of global imbalances. Rather, it reflects globalization of financial markets and the current environment of low volatility and wide interest rate differentials," Rato said. "But it could lead to more entrenched exchange rate misalignments that worsen global imbalances," he added.A depreciation in the yen increased Japan's current account surplus to almost 4 percent of gross domestic product in 2006. The IMF has warned that huge deficits in the United States and surpluses in other countries like China, Japan and oil-rich countries needed to be reduced, or they could trigger an abrupt slide in the dollar, or even a recession. To address imbalances, the IMF has said some depreciation of the dollar will help reduce the U.S. current account deficit. He urged China, which has a fast-growing trade surplus, to allow its currency to rise against the dollar.

But Rato said developments with the yen and carry trades were new concerns that could trigger a sudden shock in financial markets. "I am concerned that investors and the countries into which funds are flowing are not sufficiently attentive to the risks," Rato said. He said there was no simple solution to the problem, noting that the Bank of Japan had increased interest rates by a quarter of one percent last week. Rato said that with Japan just emerging from years of deflation and inflation "still uncomfortably" close to zero, the Bank of Japan needed to be cautious about raising rates. "These are circumstances that will change over time as Japan is able to apply a more normal monetary policy, but it will be some time for that to happen," Rato said.

"We think Japan should pursue an anti-deflationary policy and monetary policy," he added. He said the situation had many consequences for emerging and industrial economies alike and more flexibility in the Chinese yuan, as well as structural and fiscal changes in the rest of Asia would help. Meanwhile, Rato repeated that the global economy was headed for another strong year, with growth close to 5 percent -- the strongest five-year span for the world's economy since the late 1960s. He said risks to the outlook had diminished, with worries about a downturn in the U.S. housing market now easing, oil prices lower and no evidence of sharp increases in inflation pressures.

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Nikkei tops 18,000, as yen falls
POSTED: 1520 GMT (2320 HKT), February 22, 2007

SINGAPORE (Reuters) -- Japanese stocks rose on Thursday, led by Sony and other exporters, as the yen hit a record low versus the euro and fell against the dollar after the central bank signalled future interest rate rises would be slow in coming. Gold was steady after soaring to a nine month-high on Wednesday on active fund buying in commodities as U.S. equities held near record highs, while oil hovered at $60 a barrel after jumping more than 2 percent overnight on supply disruptions. MSCI's measure of Asian stocks excluding Japan rose more than 0.5 percent to an all-time high of 413.89. Japan's Nikkei average rose more than 1 percent to top 18,000 for the first time since May 2000. "The Nikkei could aim for around 19,000 toward April, boosted by possible upward revisions of corporate earnings," said Katsuhiko Kodama, a senior strategist at Toyo Securities.

Advantest Corp. and Canon Inc. jumped about 2 percent while Sony rose 1.4 percent as the weak yen makes their exports more competitive and boosts profits when earnings are brought home. The broad TOPIX index rose almost 1 percent after earlier hitting its highest level since November 1991. The euro surged to 159.13 yen, the highest since the single currency was launched in 1999. It later eased to 158.9 yen. The dollar edged up to 121.1 yen, after climbing nearly 1 percent against the Japanese currency on Wednesday, before easing to 120.95.

"Market players feel confident that the BOJ will not hike rates for a while," said Tsutomu Soma, a senior trader at Okasan Securities. "People seem to feel absolutely no hesitation towards selling the yen." The Bank of Japan raised interest rates to 0.50 percent from 0.25 percent on Wednesday. That is the highest in over a decade, but still the lowest among wealthy countries, and Governor Toshihiko Fukui repeated on Thursday that interest rates would be raised only slowly from here. A Reuters poll taken after the BOJ decision on Wednesday showed that most market players didn't expect further tightening until the third or even the fourth quarter of 2007. Japanese government bond prices generally rose on the belief there would not be another rate rise soon.

Korean stocks hit record. Seoul shares jumped to record highs, driven by exporters such as Samsung Electronics Co. Ltd. as the Korean won fell against the dollar, with dealers saying the scale of exporters' dollar sales would determine the trend. POSCO Co. Ltd. rose more than 3 percent on confidence about improving 2007 profits.

Hong Kong stocks rose 0.5 percent, as China Mobile extended gains a day after reporting strong subscriber data, while oil stocks followed crude prices higher. Australian shares rose as investors flocked to firms with strong earnings such as Seven Network, while Singapore hit another record high, led by banks and financial companies.
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Japan trade rebounds to surplus

POSTED: 0146 GMT (0946 HKT), February 21, 2007

January exports rose 18.9 percent from year earlier
Economists' median forecast was for a deficit
Financial markets showed little reaction
Nikkei tops 18,000, but traders attributed move to BOJ interest rate hike

TOKYO, Japan (Reuters) -- Japan posted a trade surplus of 4.4 billion yen ($36 million) in January, snapping back from a deficit of 354 billion yen the same month a year earlier, government data showed on Thursday. Firm exports on the back of a weak yen as well as subdued imports due to cheaper oil prices helped tip the balance back to the black. Many economists had expected a deficit as Japanese exports tend to slow in January because of New Year holidays. Economists' median forecast was for a deficit of 150 billion yen.

On a seasonally adjusted basis, the overall trade surplus rose 52.5 percent from the previous month to 1.086 trillion yen, the data showed. Financial markets showed little reaction to the data. The Nikkei share average topped 18,000 for the first time in nearly seven years, and the yen fell to a record low against the euro. But traders attributed the moves to an expected slow pace to future credit tightening by the central bank. (Asia stocks) Economists said the better-than-expected trade balance was due to special factors such as the Lunar New Year holidays in China starting later than last year. The breakdown of the data was not so positive, they said. "The pace of rises in export volume to the United States slowed sharply in January from a year earlier, a sign that a slowdown in the United States is affecting Japanese exports," said Naoki Iizuka, senior economist at Mizuho Securities.

Exports rose 18.9 percent from a year earlier to 5.9533 trillion yen, while imports were up 10.9 percent at 5.9489 trillion yen, data from the Ministry of Finance showed. Exports to the United States grew 5.5 percent from a year earlier to 1.2541 trillion yen, while those to China rose 50.8 percent to 893.5 billion yen. Many economists expect solid exports to help keep the Japanese economy expanding despite patchy domestic consumption Japan's economy logged stronger-than-expected 4.8 percent annualized growth in October-December. Growing confident of Japan's economic outlook, the BOJ on Wednesday raised rates to 0.50 percent from 0.25 percent, still the lowest among the world's industrialized countries but the highest level for Japan in more than a decade. Many economists also said the deficit in January last year -- Japan's first monthly trade deficit in five years -- was an aberration because the Lunar New Year holiday fell in January, slowing exports.

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Malaysia's Economy 2006 Expands 5.9%; US Slow Growth Curbs Export;. RUBBER & OIL PALM Boast Agriculture Sector; 2007 Economic growth 5.5 % Projected

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