Dateline Wednesday January 21, 2009.

DAILY MARKET REPORT.

Tuesday Markets Closing Prices.

KLCI 880.37 down 9.91.
DJIA 7,949.09 down 332.13 or 4.01%, S&P off 5.3% and Nasdaq off 5.8%.
Crude Oil US$41.00.
Ringgit 3.6080.

NEWS.

Bank Negara is expected to cut the interest rate again during policy meeting today.

Malaysian government is preparing for a second stimulus package to avoid a recession.

Government may increase the price of sugar after the Chinese New Year.

Comments - While it is the right things to do for the government to cut rate and introduce a new stimulus package, it is a very foolish policy to raise the price of sugar. Instead, they should concentrate on lowering the fuel pump prices in line with the world oil prices to bring down the inflation and win the heart of the 'rakyat' in line with what DPM Najib said, "change or perish".

COMPANY RESULTS.

Public Bank Bhd RM8.70. Audited 4Q FY 31.12.2008.

4Q 08 Revenue RM2.557 billion, FY08 revenue RM10.5 billion.
4Q 08 net profit RM656.6 million, FY08 net profit RM2.622 billion.
4Q 08 net EPS 19.49 sen, FY 08 net EPS 76.93 sen.
4Q 08 Dividend 25.00 sen, FY 08 dividend 55 sen.
Net assets per share RM2.84.

Stock Recommendation - Take Profit based on FYE 2009 forecast net profit of RM1.766 billion or EPS of 50 sen due to a deepening global recession and rising NPL. The fair value for Public Bank Bhd is at RM6.00 at 3X Price to NTA, dividend yield of 3.44% and a prospective PER for 2009 of 12X.


WORLD NEWS.

Professor Roubini of New York University said the U.S. banking system which is capitalized at US$1.4 trillion may need to write off bad assets up to US$3.6 trillion.

Comment - The entire U.S banking system are basically insolvent now as the up to date total write off were already U.S$1.4 trillion.