Thursday March 12, 2009.

DAILY MARKET REPORT.

Wednesday Markets Closing Prices.


KLCI 850.37 down 4.88.
DJIA 6,930.40 up 3.91 or 0.06%.
Crude Oil US$42.33.
May FCPO RM1,980.
Ringgit 3.6940.


LOCAL NEWS.

Federal government PAAB bought Johor water asset from Ranhill Corp. Bhd, RM0.805, wholly owned subsidiary SAJH for RM4.03 billion cash and taking over liabilities of RM3.18 billion.

Stock Recommendation - BUY Ranhil Corp Bhd as this was a good deal for them and the company will continue to manage the water concession in Johor.

Feb. 2009 CPO production fell 10.7% to 1.18m tons while total palm oil stocks fell 14.7% to 1.56m tons. Feb. exports of palm oils were down 7.2% to 1.2m tons while palm kernel were up 6.7% to 94,300 tons from a month ago.

New LCCT to handle 30 million passengers.

MAS Bhd, RM2.55, SELL rating, set to save RM30 million from 50% rebate on airport tax. Air Asia Bhd, RM0.94. HOLD rating, will benefit too.

Foreign shareholdings in Malaysia have fallen to 17% from 19% as at the beginning of last year.


WORLD NEWS.

Wall Street up on JP Morgan Chase CEO remark his bank was profitable in Jan. and Feb. echoing Citigroup CEO a day earlier.

Analysis - The U.S. banking system still still to address the recapitalization (balance sheet) issue as their banking business model is definitely outdated and cannot work anymore. A new banking business model of 100% equity capital for every dollar of loan taken should be the new model instead. Moreover, the banks were profitable before further write off. For instance, JP Morgan had US$77 trillion derivatives contracts still outstanding in their book and a possible downgrade by rating agency.

U.S banks such as Citigroup and Bank of America bondholders next to share the bailout pain.

Freedie Mac posted US$23.9 billion loss and had a negative net worth of US$30.6 billion. They need further bailout up to US$30.8 billion from the U.S. government.


By:-
Kamel Bin Mohd Yusoh.
Kenanga Investment Bank Bhd.
013-6306544 or 03-21634549/50.