BT biznewz4u 26/02/09

US Stocks Rally Led by Financials After Fed Chief’s Statement
Overnight US stocks snapped a six-session losing streak by rallying 4.0%, helped by short covering after the stock market registered a multi-year closing low in the prior session. The market also took the cue from Federal Reserve Chairman Ben Bernanke’s statement that warned that the "severe" U.S. recession could drag into next year, but said banks should be able to weather the downturn without being nationalized, sparking a rally in the financial stocks.

The Dow Jones Industrial Average gained 236 points, or 3.3%, its best day on a point basis in over a month. The S&P 500 index rose almost 30 points, or 4%, after ending the previous session at the lowest point since April 11, 1997. The Nasdaq composite added 54 points, or 3.9%.

MARA Inc, the investment arm of Majlis Amanah Rakyat (Mara), is set to partner Can-One Bhd in its takeover of Kian Joo Can Factory Bhd, sources said. The partnership would help Can-One fund the purchase of Kian Joo, which is a much bigger company. It is understood that the partners have negotiated for
a loan from Bank Rakyat, which would cover the funds needed for the initial purchase

Maybank Bhd plans to raise about RM5bn to RM6bn through a rights offering, banking sources said yesterday, up from what it had originally planned. Maybank said last month that it needed to raise RM3 billion to boost its working capital and was looking at various options. The sources said that Goldman Sachs
and Credit Suisse had been hired to arrange the rights offering

TM International is looking to raise more than US$1bn (RM3.67bn) in a rights offering in the first half of this year to cut debt, sources with direct knowledge of the deal said yesterday. A TMI spokeswoman said nothing has been finalised yet, but the firm is on track to announce details of its capital raising plan in the
first quarter

Mah Sing Group Bhd registered a drop in its net profit for the fourth quarter to RM16.5mn compared with RM20.5mn recorded in the same period last year. Fourth quarter revenue was higher at RM151.7mn from RM120.4mn in the previous corresponding period. For the full year ended December 31 2008, the group recorded a net profit of RM93mn compared with RM82.3m in 2007, while revenue grew to RM651.6m in 2008 from RM573.4mn the year before

IJM Corporation Berhad announced that it plans to lengthen the Middle Ring Road II (MRR2) and the Pandan area by a further 12km to ease the traffic congestion at the southern end of Kuala Lumpur and the MRR1 and MRR2, which are now exceeded their vehicular capacity. The additional work is estimated at RM649mn and would be implemented by Besraya(M) Sdn Bhd in 36 months. Besraya is a wholly owned subsidiary of Road Builder (M) Holdings Bhd, which is in turn a wholly owned subsidiary of IJM.

AirAsia Bhd has put in a proposal for a lower international passenger service charge (PSC) or better known as airport tax, at RM10 and the domestic OSC remaining unchanged as part of its “wish list” for the new low-cost carrier terminal (LCCT) at the KLIA, source said.

Plus SPV, a special purpose vehicle owned by state-controlled toll road operator PLUS Expressways, is planning a book-building exercise for RM400mn of 10-year notes, a source said. The book-building opened yesterday and will close on Friday. CIMB and Bank Islam are managing the deal.

Sell on Rally AirAsia, BCHB & TM Switch to Sell on Rally AirAsia, BCHB and TM towards the upper Bollinger band to maximize profits upon a rebound, while revert to Buy on Dip MRCB, Tebrau and Puncak Niaga given likelihood for return of rotational trading plays to lower liner construction and property stocks.

FKLI Spot month February KLCI futures contract gapped down to open at 876 on Tuesday, but promptly bounced back from low of 875.5 and gradually traded upwards to a high of 890 by late afternoon. The contract closed at 887.5 for a 3.5-point gain for the day, while total traded volume ballooned to 22,434 contracts on rollover trades.

The surge from early lows to close higher yesterday formed a bullish engulfing candle and triggered a buy signal on the daily slow stochastics oscillator, improving upside momentum for the short-term. However, the wider discount to cash implies weak undertone and good likelihood that selling on strength will cap near-term upside, with strong resistance seen at 900.

HAPPY TRADING FOLKS