Selling it for a song?

TheStarBiz: Metdist SA, which owns 51.4% of Metrod (M) Bhd, has launched a takeover to acquire the remaining 48.6% stake in Metrod for RM84.56mil or RM2.90 per share.
Metdist is a global metal trading firm based in Britain and controlled by Lord Raj Kumar Bagri, who is also Metrod chairman.Metdist yesterday informed the Metrod board that its unit MetTube Sdn Bhd had acquired 5.56 million shares, or 9.27%, for RM16.12mil in direct business transactions from Bank Perusahaan Kecil & Serdahana Malaysia Bhd and Tieton Group Ltd.The acquisitions increased Medist’s shareholding in Metrod from 42.14% to 51.4% and triggered the mandatory takeover offer. Metrod rose from RM2.70 at midday to RM2.99 at 4.52pm before trading was halted. The shares will resume trading today.

Metdist said it intended to maintain the listing status of Metrod after the acquisition of the remaining 29.16 million shares. It added that it would not compulsorily acquire any of the remaining shares.It also said the offer would not fail due to insufficient financial capability of MetTube and that every shareholder who accepted the offer would be paid in cash.It said if MetTube were unable to meet the public shareholding spread requirement, it would use “commercially reasonable endeavours” to rectify the shortfall in the public shareholding spread.MetTube was incorporated in Malaysia in 1989 and its principal activities are manufacturing and sale of copper and copper alloys products including billets, tubes, pipes and extrusion.

For the second quarter ended June 30, Metrod posted net profit of RM30.83mil on revenue of RM561.81mil.Its net asset per share was RM4.43 while it had cash of RM90.18mil as at June 30.

MyTake: I have covered this company earlier this year. I believe Metdist's offer is way too low and minority shareholders that sell it at RM2.90 will be selling it for a song. Metdist is very smart and savvy to offer a way out to its weak shareholders during this current weak market. My reasons are written here before. You do your own calculation. Now, you understand what I mean?

* ... I am shocked and angry! This is really bad!! Desperate times? Now RPK, Teresa Kok and a SinChiew reporter are under ISA's arrest.. how about Ah Mad and the likes....it will be the talk of the nation for sometime.

* Flip-flop again! BizWeek: Malaysia cops windfall tax on power producers as it was said to cause these companies unable to meet loan obligations and to raise new financing. Why can't they think carefully before implementing them? Anyway, we have always been like this....what so shocking about it? Our foreign investors will again shake their head with disbelief.

* Bloomberg: China's industrial output expands at slowest pace in 6 years on weak exports demand, power shortages and factory shutdowns during the Olympic Games.

* Bloomberg: Lehman will find a "stronger financial partner" by September 15? Treasury and Fed are set to broker a deal by then.

Finding safe heavens

What a lousy day at the stock markets today or rather it has been like this for the past 9 months or so? The major markets across Asia were down by 2% to 3% today and most of them are currently in their 2 years low. Did the investors panic in view of the 911 aniversary today? This week in particular, markets were once again dogged by deteriorating sentiment surrounding the credit crisis and economic growth prospects. The 158 years old investment bank Lehman reported its worst ever quarterly loss overnight (passed 2 Quarters of losses- USD6.5b) and told investors it would be selling its property assets and spinning off its asset management arm. The announcement followed one from Korea Development Bank that capital injection talks had ended without reaching an agreement, painting a gloomy picture that the credit crisis isn’t going away. The decline in most major markets erased all of the gains from Monday’s rally, following the announcement by the US government it would take control of mortgage giants Freddie Mac and Fannie Mae to reduce systemic risk. With all the selling, where does the funds go? Perhaps the article below could throw some light on the matter.

The Standard: Amid the global economic slowdown,fund managers withdrew US$28.5 billion (HK$222.3 billion) of funds under management during the second quarter, according to a quarterly survey by Hongkong and Shanghai Banking Corporation covering 12 fund houses around the world.It indicates the investors' concern about the inflation and economic slowdown in Asia. They continue to take a conservative position, moving away from volatile equity markets and finding a safe haven in cash and bonds," said Bruno Lee Kam-wing, HSBC's head of wealth management for personal financial services. Meanwhile, more managers have become bearish about the equity market in the third quarter. "Managers are not optimistic about the equity markets of Asia-Pacific excluding Japan in the third quarter and 22 percent of them hold an underweight view compared to zero last quarter," said Lee. Money managers with increased towards equities in North America, Japan, emerging markets and Greater China in the coming quarter, due to the blurry prospects under the global credit crunch and economy slowdown, Lee added. However, 57 percent of managers hold an overweight view on emerging market or high- yield bonds in the third quarter compared to 25 percent in the previous quarter. Equity funds recorded outflows of US$50 billion, while balanced funds and money funds reported inflows of US$15 billion and US$11 billion respectively. More than 20 percent of funds in Asia- Pacific excluding Japan had an outflow in the second quarter compared to a 6.3 percent inflow in the first quarter.

* Picture above. Shangrila Leisure farm in Taiwan.

* NZ cuts interest rate by 50 basis point yesterday leaving the bench mark interest at 7.5%. Meanwhile, Bank of Korea leaves its key interest rate unchanged at 5.25% for the month of September and may remains so if inflation falls further.

* Ah Mad racist- 3 years of suspension and still defiant!

* MT is no longer being blocked. Another flip-flop decision!

* Forbes: Malaysia's annual factory output growth slowed to an 11-month low of 1.8% in July from a revised 2.2% in July. Earlier analysts' forecast for the July readings was at a rise of 2.4%.

Talk only....

Sometimes if you have nothing to say, say nothing at all! People may buy "talk" only news for the first time of hearing it but if such similar talks continued with no positive results, such talks become just talk only. After dazzling investors with the "talk" of potential tie-up with Chicago Mercantile Exchange("still no news until now?) last year, Bursa Malaysia is said to be talking with stock exchanges in SEA, Europe and the US to form an alliance to increase the number of sites where contracts are available for trade. Big ideas, where are the action plans? My advise: Do well within yourself, people will then take notice even if they are far far away!

BT/Bloomberg: Bursa Malaysia Bhd, operator of the nation's stock exchange, said it's talking to several rivals for an alliance as slowing economic growth erodes trading income. "We're talking to a huge number of exchanges in our network," chief operating officer Omar Merican said in an interview with Bloomberg Television in Singapore yesterday. "Most exchanges have found that they're not immune from the financial conditions that are taking place right now." Talks are aimed at collaborations in Southeast Asia to increase the number of sites where contracts are available for trade, said Omar. Other discussions are with European and US exchange owners, he said, without naming any potential partners. Bursa said last December a partnership with CME Group Inc of Chicago may take months to resolve, and in April the company said it's "optimistic" about talks with CME and NYSE Euronext.

Meanwhile, slowing economic expansion and political turmoil at home is weighing on Bursa's earnings. The political tension has deterred investors and the number of shares bought and sold each day on Malaysia's benchmark index is about a third of the total at this time a year ago. Net income at Bursa dropped 56 per cent to RM28.6 million in the quarter ended June. Bursa shares have fallen 54 per cent this year, more than double the 26 per cent decline in the benchmark Malaysian index. The stock yesterday added 0.8 per cent to RM6.60 at the close.

Growth in Malaysia's US$151 billion (RM521 billion) economy will slow to 5.7 per cent this year and 5.4 per cent in 2009, the government forecasts. The economy expanded 6.3 per cent in 2007.

Computer glitches haven't helped. Derivatives trading on Kuala Lumpur's stock exchange was halted in the morning session yesterday after a technical fault. Equity trading was suspended for a day on July 3 after a systems failure.

* Will they be the laughing stock in Taiwan? Can't wait to get news and pictures of our MPs in Taiwan learning more about "agriculture" and "karaoke". Picture above -President Ma and Lee Hom singing together.

* BT: Bank Negara intevened the ringgit at 3.462 today. The ringgit went to a low of 1USD: 3.47

* Bloomberg: Oil rises after OPEC President calls for members to stop over production and match output to the group's set limits.

* BT: According to HLebroking yesterday, a total of RM125b of funds flowed out in the 1st half of the year due to domestic political uncertainties and high inflation.( 2007: RM92.3b)

* Bloomberg: Lehman in trouble after Korean Development Bank snubbed it. Any more bidders?

* Bloomberg: Inflation tamed already in China? China's August CPI was at 4.9% (July 6.3%) The PPI is however at a stubornly high reading of 10.1% (July 10%). August's trade surplus is at USD28.7b. The total surplus this 8 months to date is USD152b or down about 6% compared with the same period last year.

Chikungunya Virus

Did not really bothered with this Chikungunya Virus earlier until my brother in law and his best friend have fallen seriously ill from it. Both of them brought their families to their farmhouse in Bentong, Pahang for a weekend retreat. Latter during the day, both men decided to climb up a hill nearby to reach a waterfall where they spend half an hour there enjoying the scenery. They suspect they were bitten by mosquitoes while ascending the hill. They are now recovering slowly after fighting weakness in the arms and legs, high fever and rashes for almost a week. I was told children normally recovers faster than adults. Seems that there are no proper prescription for this virus and you just have to let your body's natural system fight through it all. Thought of sharing some general information on this Chikungunya for the benefit of all.

Email: Attention, everyone. We have just been alerted that Chikungunya Virus Outbreak in Malaysia, spread by mosquitoes, is quite serious. More than 2,000 people are infected down south. There are claims of unreported deaths. Consult a health-care provider or visit the nearest hospital for chikungunya fever if you showed symptoms such as fever, severe joint pains and rashes. Four states have been hit, i.e. Johor, Malacca, N.Sembilan and Perak. The worst hit is Tangkak, Johor. Almost all elderly people (age 45 years and> above) are infected with this virus. Many people who are infected seek treatment from Tangkak Hospital every day. There were times beds were full, and the hospital could not warded them. Therefore they were discharge after a half day treatment in the ward. This epidemic outbreak has persisted for more than three months.

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Below is the chronological of this outbreak.1. The disease is spread by the foreigner workers in the plantations. 2. Then the 'bugs' are passed down to the local planters, of which, their families are infected eventually. 3. Now people in this town (Tangkak) are infected as well as others in nearby towns and states.

Symptoms of Chikungunya: 1. High fever 2. Rashes 3. Chronic joints pain (which will last for > 3months) 4. Concurrent deaths

Recommendations:1. Increase ad hoc facilities and manpower in district hospital and clinics. 2. Bring down the population of the vector (mosquitoes) 3. Quarantine the sick people who are infected with this virus. 4. Educate the public how to prevent and contain the disease.

Dr Teo Kim Lai (among the many courageous Pahlawan Volunteers veterinarians involved in the investigation of the Nipah VirusOutbreak,1999 archived at http://www.pahlawan.com.my/voice/VECrisis1.shtml ) recommends that the sick should be quarantined as the virus is transmitted to humans by the bite of infected mosquitoes. CHIK fever epidemics are sustained by human-mosquito-human transmission. Further information can be obtained from the Health Ministry's website at http://www.moh.gov.my/ or call (603) 88810600/ 0700 during office hours.

FURTHER READING: Chikungnya Di Malaysia

http://www.moh.gov.my/opencms/opencms/moh/chikungunya_malaysia.html
Chikungunya http://en.wikipedia.org/wiki/Chikungunya

Chikungunya - Fact Sheet by European Centre for Disease Prevention and Control http://ecdc.europa.eu/en/Health_Topics/Chikungunya_Fever/facts.aspx Insect Bite Avoidance http://www.nathnac.org/pro/factsheets/iba.htm

* Bloomberg: Pakistan is set to extend an August curb on equity trading as concern grows that an end to the limit may cause the benchmark KSE 100 to plunge anew after the Karachi Stock Exchange lost a third of its value this year.

* Xinhua: China's currency has soared against the Euro and British pound since the beginning of August and analysts believe it looks set to continue its dramatic appreciation in the fourth quarter, adversely affecting some Chinese exporters. RMB has for the month of August appreciated by 10.79% and 8.39% against the Euro and pound respectively.

Technical Analysis - September 8 2008

S&P500 (1,242, last week 1,283 or -3.2% w.o.w)

The daily MACD and DMI (+ and -) succumbed to the pressure last week and are currently in a negative hook down again. The weekly charts eg MACD has also deteriorated and is also in a negative territory. The index is currently weak and may continued to worsen this week unless some massive propping up is done. The index may find support at 1,200 while resistance is at 1,280.

KLSE CI (1,071, last week 1,101 or -2.7% w.ow)

Looks like the technical rebound fizzled out during last week. Despite the heavy selling last week, the daily MACD is still in the positive cross over but is showing sign of weakness.The weekly charts are still weak. The index is expected to trade between 1,025 and 1,100.

HangSeng (19,933 , last week 21,262 or -6.3% w.o.w ).

Looks like the technical rebound fizzled out during last week. The daily/weekly indicators have all turned into a negative cross over again. The daily 200 days ema is at 19,800. At this moment, it is unlikely this level will be maintained and as such the next support levels are at 19,500 and 18,500 while resistance is at 22,500.

Nikkei 225 (12,212, last week 13,073 or -6.6% w.ow)

Just like the KLSE CI and HangSeng, the technical rebound a forthnight ago was not sustainable during last week. The daily/weekly indicators have all turned into a negative cross over again. The support is seen at 11,700 and resistance is at 12,700.

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* Badawi should have slapped racist Ahmad instead of shaking hands with him? This should get Badawi some brownie points from us.

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* AP: South Korea facing "September crisis"? It may not be happened as predicted but the economic data does not really look that great....currency falls to a 4 year low, stock market tumbles 26%, foreign investors fleeing, USD7B South Korean bonds maturing latter this month, jobless rate at 9%, high inflation, rising external debt and expected current account deficit.

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* BT: Malaysian derivatives market failed to start this morning due to computer glitch. Will it be the hard disk failure again this time? Who will go be sacrificed now?

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* DailyTimes: Top Cat on Malaysia's expected inflation rates in the coming months. "The worse is behind us. It should be lower than 8.5% in August and September" (Note Malaysia's inflation for June was 7.7% and August was 8.5%).

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* Fannie/Freddie bailed out by US Treasury with a potential amount of USD200b. Asian markets seems to delighted by such conservatorship arrangement by the US Government. Some analysts were happy the plan was thought out wilth taxpayers in mind.

Smart Investing/Trading for the week ending September 5 2008

US Markets Update and Outlook

U.S. stock indexes likely in for another wild ride

Is weekend bailout of Fannie Mae and Freddie Mac possible?

MarketWatch: U.S. stocks are likely facing another wild ride in the week ahead, with the underlying trends decidedly bearish following Friday's unemployment report that the jobless rate has spiked to 6.1%. "I think it's very hard in the very volatile environment we're in, to predict what is going to happen on any given day," said Edmund Hyland, managing director and global investment specialist at J.P. Morgan Chase Private Bank, a unit of J.P. Morgan Chase & Co. Equities investors seem to be lurching between "varying degrees of despair," said Hyland.

On Friday, U.S. stocks finished mostly higher, but posted steep weekly losses, as the market took in a big jump in the unemployment rate in August, which supported a bleak view of the economy. After falling nearly 150 points during the session, the Dow Jones Industrial Average ended up 32 points, or 0.3%, to end at 11,220, with the blue-chip index finishing the week with a loss of 2.8%, marking its fourth consecutive weekly fall. Year-to-date, the Dow industrials are down 15.41%. The S&P 500 dipped 5.4 points, or 04% to end at 1,242, while the Nasdaq Composite fell 3 points, or 0.1%, to end at 2,255. For the week, the S&P fell 3.2% and the Nasdaq shed 4.7%.

"In the third quarter, we had weak economic data pretty much across the board, so now investors are getting nervous about third-quarter earnings, and the balance sheet problems they (financial institutions) are facing," said Hyland. In a related development, the Wall Street Journal late Friday reported in its online edition that the Treasury Department is close to finalizing a plan to help shore up mortgage giants Fannie Mae and Freddie Mac, with the newspaper citing people familiar with the matter.

Crude connection

Crude-oil futures on Friday closed below $107 a barrel, with crude closing at $10.23 a barrel on the New York Mercantile Exchange. "One thing that should be helping consumers feel better, at least the ones that are still employed, is crude is down to $107 a barrel, that's significantly down from the top, but year over year, it's still up $30 or $40 a barrel," said Dave Dickens, executive vice president, asset/liability management, at U.S. Central Bank. With the stock market watching the price of crude more carefully in recent months, Tuesday's OPEC meeting should be a focus on coming days, with many market participants expecting the cartel to curb production. "The OPEC meeting is going to be crucial for the oil market. If they decide to cut production, then we could see a firming up of oil prices and we could see the Fed raising rates at the end of the first quarter," said Peter Cardillo, chief market economist at Avalon Partners.

Incoming data

The August rise in unemployment is congruent with an economy either in or close to a recession, and doesn't bode well for upcoming economic data, which in the week ahead includes housing data on Tuesday and import prices and trade deficit data on Thursday. Friday brings the producer price index and retail sales, with the recent drop in commodities expected to bring the PPI count down, although still high. "Retail sales growth should continue to weaken given the poor labor market backdrop and expensive energy, said William Knapp, investment strategist for MainStay Investments.

Darkest before the dawn?

When things are as broadly negative as they are now, it has historically been shown to be a good time invest, said Hyland. "Twelve months from now most likely equity markets will be higher than they are today, and two or three years from now we'll look back and this will have been a good time to put money to work," said Hyland. "We're most positive on U.S. large-cap stocks, and least positive on Europe, as their slowdown is just beginning," said Hyland. The global economic slowdown is among the factors clouding the equities market, as is the hotly contested U.S. presidential race, which is likely adding to the volatility currently roiling the stock market

KLSE CI Update and Outlook

ICapital: This week's I Capital updates the weekly KLSE CI. The KLCI has now retraced more than 61.8% with its weekly MACD and DMI bearish and the RSI hovering precariously close to the oversold territory. Though the KLCI reacted positively ahead of the Budget 2009 last Friday, the uncertain political climate is still dominating the fragile market. As the technical readings are not giving out any promising picture yet, continuous selling is likely to drag the KLCI to a lower support level of 1,050.

* Remember this face! Racism remarks yet again! Ahmad Ismail?? (labeled the Chinese in Malaysia as - penumpang (delete pendatang), Dr M (stroking racial tension again) ....... when can these people understand we as a nation cannot afford all these racists remarks anymore if we intend to achieve success together in this highly competitive world.

Of washout, obsessed and out of sync!

Due credit must be given to MIER 's Ariff Kareem as he was brave enough to speak truthfully of what was right and what was wrong. As mentioned in earlier post (refer here), we need analysts and market commentators to give constructive criticism of what went wrong and how things should be done.....not just saying things that only pleased the people in authority.

Bloomberg: THE ringgit will be “almost a washout” for the rest of this year as a growing fiscal deficit, political turmoil and policy inaction on inflation turn investors away, Malaysia's biggest economic think-tank said. The ringgit will probably weaken to 3.5 per dollar by year-end, Ariff Kareem, executive director of the Malaysian Institute of Economic Research, said in an interview in Kuala Lumpur yesterday. The partially government-funded think tank had previously forecast the ringgit would strengthen to 3 per dollar by the end of 2008. Malaysia on August 29 said its budget deficit will widen to RM34.5 billion (US$10.1 billion) this year, or a five-year high of 4.8 per cent of gross domestic product, because of a trebling in food and oil subsidies. The ringgit fell this week to near the lowest in a year.“The deficit is enormous and doesn’t speak well for fiscal management,” Ariff said. “The ringgit is almost a washout. It’s partly a verdict on how the country is being governed. This budget doesn’t help, it worsens the currency position.” The ringgit may take another three years, instead of two, to reach its “fair value” of 2.8 against the US currency, Ariff said. Prime Minister Abdullah Ahmad Badawi is counting on oil prices to average US$125 a barrel in 2009, unchanged from 2008, to lift revenue by 9.1 per cent to RM176.2 billion and narrow the deficit to 3.6 per cent of GDP.

‘Obsessed’

The ringgit traded at 3.4215 against the dollar as at 9.20 am in Kuala Lumpur today, down from 3.3875 on August 28, the day before the budget announcement that included tax cuts, a bonus for government employees, and free electricity to the poor. The currency slumped 4.2 per cent in August, the worst month since Bank Negara Malaysia scrapped a dollar link in July 2005, amid concern opposition leader Datuk Seri Anwar Ibrahim will grab power by September 16 via defections by lawmakers from Abdullah’s ruling coalition. “Political uncertainty, perception about the country’s leadership, all these don’t augur well for investor perception,” Ariff said. “The sovereign rating could be affected.”Malaysia’s gross domestic product grew 6.3 per cent in the second quarter, the slowest pace in a year. Annual growth will ease to 5.7 per cent in 2008 and 5.4 per cent in 2009, from 6.3 per cent in 2007, the government said last week.“We are too obsessed with growth,” Ariff said. “There’s no way we can get back to the growth rate of the late 1980s and it’s not in our interest to get back on track when we grew too fast for our own good.”

‘Out of Sync’

The government may be overreacting in its attempt to pump-prime the economy, depleting its resources before a further slowdown in 2009, Ariff said. The institute will probably lower its 5 per cent growth forecast for 2009 at a later date, he said. Fiscal measures to boost the purchasing power of consumers will “unwittingly” fuel inflation, while a “laid back” interest-rate policy will push inflation-adjusted interest rates deeper into negative territory and spur capital flight, he said. The central bank has kept its overnight policy rate at 3.5 per cent in 19 straight meetings since April 2006, even as other Asian nations raised borrowing costs this year to cool soaring prices. Ariff predicts inflation will accelerate from a 26-year high of 8.5 per cent in July in the months ahead. “Local interest rates are artificially low and they are out of sync with what we see in the region,” Ariff said. “Some marginal adjustments are required to send the right message that we are doing something, or else the credibility issue sets in.”

* The WSJ: The CFTC is investigating the oil data providers for possible manipulation to influence the perceptions about oil supply demand.

* The Edge: The EPF has been buying plantation stocks since the 2nd week of August mopping about RM150m worth of 6 main board plantation stocks.

* Bloomberg: Russia's international reserves, the world's 3rd largest rose to USD582.5b last

month(As a comparison its 1998's reserves was only USD12.3b).

* The Standard: Coca-Cola's USD2.3b bid to takeover China's biggest juice producer will leave its co founder Zhu Xinli pocketing a massive USD1.1b!!

Asian Madness

What a worrisome start for the week yesterday. After celebrating the nation's 51st anniversery of independence, the KLCI greeted the new month of September with news of Bangkok's emergency rule, a vulnerable Korean Won, Ringgit, Indonesian Ruppiah and Thai Baht, the resignation of Japanese PM and the fear of knee jerk sell down on the prospects of PKR taking over the government on September 16. As we are aware, Asian markets have been wacked the hardest since the beginning of the US originated subprime crisis last September while the originating markets appears almost "unscathed" compared with the Asians. Below is a quick recap of the Asian economies and markets to date and what footing they are in now as compared to the 1997 financial crisis and whether it is a good time to start accumulating. I am of the opinion to just let the markets (and politics) play themselves out in this bearish cycle first....opportunities abound latter.

FT.com: Forget the subtleties of the decoupling debate – Asia seems to be reverting to type before investors’ eyes. This week alone has seen riots, threats of intervention to support vulnerable currencies, cuts to growth forecasts and gyrating equity markets. Such madness was thought to be consigned to the tail end of the last decade. Even a year ago, as the western world slipped into the first subprime cracks, Asia was supported by the view that the region could now look after itself.

Yet Asian equities are the worst performing stocks on the planet year-to-date. Most markets have fallen by between a quarter and a fifth. For more open economies, weakening exports are to blame. Singapore’s non-oil exports fell year-on-year for the third consecutive month in July. Next year, Hong Kong’s economic growth could well be half the 6.7 per cent of 2007. In countries such as Thailand and Malaysia, too-low real interest rates are fuelling inflation, which in turn is hurting consumption. Korea is suffering from both problems, as well as by excessive private sector indebtedness.

As worrying as all that appears, the region is in far better shape than it was during the turmoil of the late 1990s. (Only Vietnam, with inflation near 30 per cent, is moving worryingly close to basket-case territory.) Foreign exchange reserves are higher and overseas debts are lower. Consensus earnings growth expectations for Asia ex-Japan are still about 7 per cent for next year. What is more, falling commodity prices, particularly oil, may well boost exports and help Asian central banks keep a lid on inflation without crimping domestic demand.

Does that make equities a buy at these depressed levels? Certainly, if the good old days of Asian investing have returned, any improvement in global sentiment will be magnified across Asian markets. Trouble is, at about 15 times consensus earnings for this year, Asian equities ex-Japan are not screamingly cheap and expectations for double-digit profit growth look a tad optimistic. Welcome back the rollercoaster ride of high-risk, high-return Asia.

* Fin Facts: OECD upgrades 2008 US economic growth forecasts, downgrades Japan and the Eurozone, forecasts recession in the UK.

* Bloomberg: The Reserve Bank of Australia cuts Australia's interest rate by a quarter point to 7% yesterday and signalled it expects growth to slow further.

* BT: Besides Korea Development Bank, HSBC and a Chinese Bank are also interested in Lehman Brothers.

* The WSJ: The top four Chinese banks(CCB, ICBC, BOC and Bank of Communications) have cut their Fannie and Freddie debts investment. BOC for instance has reduced its exposure of USD23.3b as at Dec 31 2007 to USD12.7b at the end of June 2008.

* The WSJ: Tata, the maker of the world's cheapest car, warned it is suspending construction of its Nano plant and reviewing possible plans to move manufacturing from eastern India in the face of violent protest from farmers and local politicians there.

ML: Malaysia dissapointing

BT: MERRILL Lynch Asia Pacific Ltd is not too excited about Malaysian stocks, citing the lack of policy reforms in the country and weak prospects of returns as reasons. It has a small underweight call on Malaysia in the regional context because shares in Malaysia are among the most expensive in Asia ex-Japan, its head of investment strategy Stephen Corry said."For a nine per cent earnings growth in Malaysian stocks, you have to pay 14.5 times price-earnings (PE) multiple. That's close to 20 per cent premium to what you get from the rest of the region for better earnings growth," he said in an interview in Kuala Lumpur. The higher valuations for Malaysia are difficult to justify, he added.

At a time when the world faces an exceptionally tough period of surging inflation, looming recession and a US subprime crisis that continues to roil financial markets, policymakers' decisions on how a country would tackle the problems have come under the close scrutiny of money managers. In this aspect, Corry said, Malaysia has not made much progress compared with its Southeast Asian peers."I was disappointed by Malaysia's recent decision to tax the IPPs (independent power producers) and the plantation groups. It is even more disappointing when taking into context what's happening in Thailand," he said. Thailand, despite having political problems that have gone on for years, has managed to come up with a more effective policy to help the low-income group via an economic stimulus package. "Thailand is only just under 10 times PE for 22 per cent earnings growth. Malaysia does not look that attractive, actually. So, we are overweight on Thailand and have an almost negligible underweight on Indonesia," Corry said. Even Indonesia has managed the fuel price increase better than Malaysia, he added. Indonesia gave the population three weeks notice before petrol prices were raised, which minimised the shock effect and political dissent. The fuel price increase in Malaysia took effect almost immediately after the announcement. "I think we are getting to a point where policies, positive or negative, will have a big influence on whether one country's assets are more attractive than others. "With Indonesia and Thailand doing the right thing, Malaysia could do much more, but it hasn't."

MyTake: ML's comments are fair and well said based on the current state of affairs our country is in right now. In fact, we should by now getting more negative but constructive remarks from research analysts and market commentators and not only from the opposition parties in general. Our situation (politics, investment climate and economy) is getting from bad to worse and unless some miracle happens, we will continued to be criticised and slammed while watching helplessly our investment net worth in RM shrinking by the day. Sigh!

* On our recent Budget- The Edge: Out of 24 companies requested to comment, 22 of them said the budget is GOOD while 2 of them BAT and Hitachi Data Systems said otherwise. The 12 consecutive budget deficit with a deficit of 4.8% of GDP in 2008 and expected to lower it to 3.6% in 2009 cannot be classified as GOOD.....

* South Korea may act on Won slump, its worse in 4 years.

* Bloomberg News:

* 1) Aussie dollar falls to one-year low on bets interest rates to be cut soon, the 1st time since 2001.

* 2) Thailand declares state of emergency today and election results invalid? The stock market was surprisingly resilient and remains open today.

* 3) Japan's PM Fukuda resigns yesterday after holding office for less than a year due to political gridlock, plunging approval ratings and party disarray.

* Shorter trading in stock and futures market in Malaysia soon? I prefer longer hours...lets stay close to what Singapore is doing....cannot be very wrong I am sure.

* BT: Central Banks in Thailand, Malaysia and Indonesia were suspected of intervening to defend their falling currency. 1US: Baht34.47, RM3.419 and Rp9,190.

* TheStarBiz: Commerzbank to buy Dresdner for USD14b making it the largest bank in Europe overtaking Deutsche Bank AG by customers and branches.

Technical Analysis -September 1

S&P500 (1,283, last week 1,292 or -0.7% w.o.w)

The daily MACD, managed to cling on a weak positive despite under going a brief negative hook down during last week. The daily DMI(+ and -) also managed to maintain its uptrend too. The weekly charts eg MACD has for the first time managed to have a positive cross over supported by its weekly Histogram. It is just at the preliminary stage but if the index continues to improve further, there is a likelihood some mid/long term investors may return to the market. The index really needs to stay above 1,300 for this to happen. The index is likely to trade between 1,260 and 1,330. Incidentally, the resistance level of 1,330 is the index’s 200 day-ema.

KLSE CI (1,101, last week 1,086 or +1.31% w.ow)

The strong closing on Friday pushed the daily charts into an early positive uptrend again after a hook down on August 12. The question now is whether this technical rebound could turn the charts into a positive uptrend. The weekly charts are still weak and as long as it cannot break 1-115 to 1,120, the market is not out of the woods yet. The index is expected to trade between 1,050 and 1,150.

HangSeng (21,262 , last week 20,392 or +4.3% w.o.w ).

The daily index, similar to the KLCI also register an early positive uptrend during last week after a hook down on August 7. The question now is whether this technical rebound could turn the charts into a positive uptrend. The weekly charts are still weak. Immediate support is at 20,500 while resistance is at 22,500.

Nikkei 225 (13,073, last week 12,666 or +3.2% w.ow)

The daily MACD and DMI(+ and -) registers an early positive hook up due to a strong technical rebound last week. The question like the ones posted to the KLCI and HangSeng is whether the technical rebound could turn the charts into a positive uptrend. The weekly MACD are still in a negative hooked down position although some improvements were seen last week. The index is likely to trade between 12,500 to 13,500. As noted previously, the index face major resistance at 13,300.

* Deja vu feeling No 1 - Sichuan earthquakes. Another earthquake of 6.1 magnitude hit Sichuan last Saturday killing at least 32 people and destroy more than 250,000 homes.

* Deja vu feeling No 2 - Hurricane Katrina and Gustav. Arrival of Gustav today in New Orleans? What will be its impact economically? Would it be like the 2nd Sichuan earthquake mentioned above, ie milder and with little economical impact?

* Happy belated 51st Merdeka to all Malaysian! We need to continue improving ourselves in education, skill and all other social aspects of life to be world beaters that are envied by others. Let us be able to reason, to rationalise, to think and to analyse critically why we are here today and what stage we wish to go as an individual and as a nation tomorrow and in the near future.