US stocks fall as China reviews holdings
May 27, 2010 - 7:06AM
Wall Street staged yet another late-day reversal on Wednesday to end lower as news suggesting China was reassessing its euro-zone debt holdings pushed investors into profit-taking mode.
The Dow slipped below 10,000, with the late turnaround in stocks showing investor psyche remains fragile, and investors are inclined to sell strength in this volatile rumor-driven market.
The Financial Times said representatives of China's State Administration of Foreign Exchange, which manages the reserves under the country's central bank, has been meeting with foreign bankers in Beijing in recent days to discuss the issue.
What you need to know
"There is still nervousness out there. Yesterday's turnaround does not mean the market correction is over or that investors are confident about the direction of European policy or the success of European policy," said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.
The S&P 500 has fallen more than 10 percent from a closing high on April 23, putting the benchmark index into correction territory.
Large-cap liquid holdings, including Microsoft Corp and McDonald's Corp, led the Dow lower as the software giant's stock dropped 4.1 per cent to $US25.01 and the fast-food restaurant operator lost 2.7 per cent to $US66.01. At the same time, Apple Inc, which shed 0.5 per cent to $US244.11, managed to surpass Microsoft to become the second- largest company in market cap behind Exxon Mobil Corp.
The Dow Jones industrial average dropped 69.30 points, or 0.69 per cent, to 9974.45. The Standard & Poor's 500 Index fell 6.08 points, or 0.57 per cent, to 1067.95. The Nasdaq Composite Index lost 15.07 points, or 0.68 per cent, to 2195.88.
Late-day volatility has been a hallmark during the recent slide on Wall Street, with investors quick to pull the trigger at the slightest provocation. On Tuesday, Wall Street staged a furious rally toward the end of trading to reverse initial declines of more than 3 per cent.
"It really seems like the same old thing," said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research in Cincinnati, Ohio.
"This is the kind of intraday volatility that we will be seeing continuously."
Earlier in the session, data showed sales of new US homes hit their highest level in nearly two years in April as buyers rushed to take advantage of an expiring government tax credit.
The Dow Jones US Home Construction Index added 0.3 per cent, while the PHLX Housing Sector Index edged up 0.2 per cent.
Luxury home builder Toll Brothers Inc gained 0.8 per cent to $US20.78 after it said its quarterly loss narrowed from the previous year.
Elsewhere on the economic front, orders for durable goods rose in April to their highest level since September 2008.
Volume was solid, with about 12.44 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq -- well above last year's estimated daily average of 9.65 billion.
Advancing stocks outnumbered declining ones on the New York Stock Exchange by a ration of about 3 to 2, while on the Nasdaq, nearly five stocks rose for every four that fell.
Reuters
Thursday, 27 May 2010
Wednesday, 26 May 2010
A quick look at IOI (26.5.2010)
A quick look at IOI (26.5.2010)
http://spreadsheets.google.com/pub?key=t6k-5R8Ct5ImEhMAU1ZokUA&output=html
A quick look at KLK (26.5.2010)
A quick look at KLK (26.5.2010)
http://spreadsheets.google.com/pub?key=tiqZWoM_oZRjfGawqsN8J8w&output=html
A quick look at 3A Resources (25.5.2010)
A quick look at 3A Resources (25.5.2010)
http://spreadsheets.google.com/pub?key=t5sIgC4RjUfn6WTFOcjH0Jg&output=html
A quick look at Lion Diversified (25.5.2010)
A quick look at Lion Diversified (25.5.2010)
http://spreadsheets.google.com/pub?key=t81VR7MgWn4jn2yIKdVNceg&output=html
In Europe, Britain May Face Largest Debt Hurdle
In Europe, Britain May Face Largest Debt Hurdle
By LANDON THOMAS Jr.
Published: May 24, 2010
LONDON — As governments from Greece to Portugal to Spain try to sell markets on their budget-cutting zeal, the country that may face the biggest hurdle is Britain.
Propelled by a robust economy that finally collapsed in 2008, Britain’s spending boom was the most expansive in Europe, producing a welter of shiny hospitals, school buildings and highways, along with a cadre of well-paid public sector officials.
Now the new government must unwind not so much the debt incurred from two years of economic stimulus efforts, but more broadly, the structural deficits built up over more than a decade of expanded health care, education and pension commitments.
Prime Minister David Cameron has talked boldly of closing a British budget deficit now equal to 11 percent of its gross domestic product. But he also has said that he will allow health spending to outpace inflation, continuing a trend started by the Labour government that has doubled the cost of the government’s elephantine National Health Service since 2000.
It is this apparent disconnect between the promises of politicians and the harsh demands of investors for immediate and across the board spending cuts that is at the root of the financial crisis in Europe today.
Even after the nearly $1 trillion rescue package arranged by European Union leaders to shore up the weaker euro zone members, financial markets have gyrated as fears build that debt-plagued nations lack the will to stand up to powerful unions and pare back once generous welfare programs.
“You need a martyr to cut this type of deficit,” said Andrew Lilico, chief economist at Policy Exchange, a right-leaning London research group, who has argued that quick and immediate spending cuts would actually hasten economic recovery rather than derail it.
“You need someone to say, ‘I will do the right thing and everyone will hate me.’ ”
According to a recent analysis by Citigroup, Britain’s structural deficit — meaning the part of the budget gap that will not close even when the economy improves — was 9.2 percent of G.D.P. last year, ranking third in the world behind rapidly aging Japan and almost bankrupt Greece.
As is the case with other countries in Europe, like Spain, Greece and Ireland, Britain has a deficit that has grown mostly because of a decade of rising government outlays that seemed reasonable at the time, but rested heavily on rising tax revenue that disappeared when the bubble burst.
In a recent report, the International Monetary Fund warned that the countries that would have to make the biggest sacrifices in spending cuts and tax increases to return to precrisis levels of indebtedness — Britain, France, Ireland, Spain and the United States — also face the biggest increase in spending demands. These are driven by the rising number of the elderly, thus making the cuts all the harder to impose.
“All developed economies now have in-built structural components in their government deficits due to having pension and health systems and aging populations,” said Edward Hugh, an independent economist based in Barcelona. “And these costs will go up by the year.”
The British chancellor of the Exchequer, George Osborne, who has long urged the Conservative Party to trim the deficit, said on Monday that he would push through £6 billion ($8.65 billion) in spending cuts.
Though decidedly modest when compared with a budget deficit estimated to be about £178 billion, the cuts represent an effort to convince skittish markets that Mr. Cameron’s team is committed to fiscal restraint.
The latest menu of restrictions, freezes and spending reversals also represents an effort to convince the public that Britain must be in tune with the budget-cutting in Greece, Portugal, Spain and other parts of Europe.
“The years of public sector plenty are over,” Mr. Osborne said. “The more decisively we act, the more quickly we can come through these tough times.”
Mr. Cameron has fulminated publicly about cutting public sector pay and decreed that members of Parliament themselves take a 5 percent pay cut.
But it remains unclear whether he can force significant savings in what has become in many respects a public sector aristocracy of elite civil servants, heads of national railroads and top officials of obscure agencies, like the National Policing Improvement Agency and the Horserace Betting Levy Board. The heads of those two agencies, for example, were paid salaries last year that exceed Mr. Cameron’s pay of £197,000 (about $284,000) — £211,831 and £220,665, respectively.
Among the highest paid have been administrators and doctors within the country’s government-financed National Health Service, which has become its own separate economy with its 1.7 million employees and £100 billion plus budget.
For example, David Taube, a doctor, administrator and medical director for five hospitals comprising the Imperial College Healthcare N.H.S. Trust, was paid £260,000 (about $375,000) at the exchange rates last year. That is also more than the prime minister received.
According to the TaxPayers’ Alliance, an advocacy group for spending cuts, the highest-paid 805 government employees in Britain received a 5.4 percent pay increase last year, with the average official taking in £209,224.
Whether it be the £1.3 million paid to the chief executive of the Royal Mail, the £267,000 for the head of information technology in the Department for Work and Pensions, or the £270,000 earned this year by the chief executive of the Guy’s and St. Thomas Hospitals in London, the galloping pay of public sector workers in Britain has become a major component of the structural deficit and shows little sign of letting up.
“We have been doing this for five years now, and the numbers just get bigger and bigger,” said John O’Connell, an analyst at the TaxPayers’ Alliance.
Starting in 2000, the Labour government made it a priority to improve the N.H.S.’s lackluster reputation and invested billions in bricks and mortar as well as the salaries of its growing ranks of doctors and administrators.
Health care spending in Britain soared to 9 percent of G.D.P. from 3 percent. The image of the service has been transformed from one that exemplified drab inefficiencies of the British state to what is now hailed as a world archetype, even by Conservative politicians like Mr. Cameron.
As for Dr. Taube, a spokeswoman for the Imperial College Healthcare N.H.S. Trust said that he was a leading renal clinician and that the bulk of his salary, £180,000 to £185,000, came from his clinical work. He was paid an additional £75,000 to £80,000 for his administrative duties.
Now the new government must wrestle with whether it can restrain such pay and spending and at what political cost.
http://www.nytimes.com/2010/05/25/business/global/25debt.html?src=me&ref=business
By LANDON THOMAS Jr.
Published: May 24, 2010
LONDON — As governments from Greece to Portugal to Spain try to sell markets on their budget-cutting zeal, the country that may face the biggest hurdle is Britain.
Propelled by a robust economy that finally collapsed in 2008, Britain’s spending boom was the most expansive in Europe, producing a welter of shiny hospitals, school buildings and highways, along with a cadre of well-paid public sector officials.
Now the new government must unwind not so much the debt incurred from two years of economic stimulus efforts, but more broadly, the structural deficits built up over more than a decade of expanded health care, education and pension commitments.
Prime Minister David Cameron has talked boldly of closing a British budget deficit now equal to 11 percent of its gross domestic product. But he also has said that he will allow health spending to outpace inflation, continuing a trend started by the Labour government that has doubled the cost of the government’s elephantine National Health Service since 2000.
It is this apparent disconnect between the promises of politicians and the harsh demands of investors for immediate and across the board spending cuts that is at the root of the financial crisis in Europe today.
Even after the nearly $1 trillion rescue package arranged by European Union leaders to shore up the weaker euro zone members, financial markets have gyrated as fears build that debt-plagued nations lack the will to stand up to powerful unions and pare back once generous welfare programs.
“You need a martyr to cut this type of deficit,” said Andrew Lilico, chief economist at Policy Exchange, a right-leaning London research group, who has argued that quick and immediate spending cuts would actually hasten economic recovery rather than derail it.
“You need someone to say, ‘I will do the right thing and everyone will hate me.’ ”
According to a recent analysis by Citigroup, Britain’s structural deficit — meaning the part of the budget gap that will not close even when the economy improves — was 9.2 percent of G.D.P. last year, ranking third in the world behind rapidly aging Japan and almost bankrupt Greece.
As is the case with other countries in Europe, like Spain, Greece and Ireland, Britain has a deficit that has grown mostly because of a decade of rising government outlays that seemed reasonable at the time, but rested heavily on rising tax revenue that disappeared when the bubble burst.
In a recent report, the International Monetary Fund warned that the countries that would have to make the biggest sacrifices in spending cuts and tax increases to return to precrisis levels of indebtedness — Britain, France, Ireland, Spain and the United States — also face the biggest increase in spending demands. These are driven by the rising number of the elderly, thus making the cuts all the harder to impose.
“All developed economies now have in-built structural components in their government deficits due to having pension and health systems and aging populations,” said Edward Hugh, an independent economist based in Barcelona. “And these costs will go up by the year.”
The British chancellor of the Exchequer, George Osborne, who has long urged the Conservative Party to trim the deficit, said on Monday that he would push through £6 billion ($8.65 billion) in spending cuts.
Though decidedly modest when compared with a budget deficit estimated to be about £178 billion, the cuts represent an effort to convince skittish markets that Mr. Cameron’s team is committed to fiscal restraint.
The latest menu of restrictions, freezes and spending reversals also represents an effort to convince the public that Britain must be in tune with the budget-cutting in Greece, Portugal, Spain and other parts of Europe.
“The years of public sector plenty are over,” Mr. Osborne said. “The more decisively we act, the more quickly we can come through these tough times.”
Mr. Cameron has fulminated publicly about cutting public sector pay and decreed that members of Parliament themselves take a 5 percent pay cut.
But it remains unclear whether he can force significant savings in what has become in many respects a public sector aristocracy of elite civil servants, heads of national railroads and top officials of obscure agencies, like the National Policing Improvement Agency and the Horserace Betting Levy Board. The heads of those two agencies, for example, were paid salaries last year that exceed Mr. Cameron’s pay of £197,000 (about $284,000) — £211,831 and £220,665, respectively.
Among the highest paid have been administrators and doctors within the country’s government-financed National Health Service, which has become its own separate economy with its 1.7 million employees and £100 billion plus budget.
For example, David Taube, a doctor, administrator and medical director for five hospitals comprising the Imperial College Healthcare N.H.S. Trust, was paid £260,000 (about $375,000) at the exchange rates last year. That is also more than the prime minister received.
According to the TaxPayers’ Alliance, an advocacy group for spending cuts, the highest-paid 805 government employees in Britain received a 5.4 percent pay increase last year, with the average official taking in £209,224.
Whether it be the £1.3 million paid to the chief executive of the Royal Mail, the £267,000 for the head of information technology in the Department for Work and Pensions, or the £270,000 earned this year by the chief executive of the Guy’s and St. Thomas Hospitals in London, the galloping pay of public sector workers in Britain has become a major component of the structural deficit and shows little sign of letting up.
“We have been doing this for five years now, and the numbers just get bigger and bigger,” said John O’Connell, an analyst at the TaxPayers’ Alliance.
Starting in 2000, the Labour government made it a priority to improve the N.H.S.’s lackluster reputation and invested billions in bricks and mortar as well as the salaries of its growing ranks of doctors and administrators.
Health care spending in Britain soared to 9 percent of G.D.P. from 3 percent. The image of the service has been transformed from one that exemplified drab inefficiencies of the British state to what is now hailed as a world archetype, even by Conservative politicians like Mr. Cameron.
As for Dr. Taube, a spokeswoman for the Imperial College Healthcare N.H.S. Trust said that he was a leading renal clinician and that the bulk of his salary, £180,000 to £185,000, came from his clinical work. He was paid an additional £75,000 to £80,000 for his administrative duties.
Now the new government must wrestle with whether it can restrain such pay and spending and at what political cost.
http://www.nytimes.com/2010/05/25/business/global/25debt.html?src=me&ref=business
Wall Street Slips and Then Recovers
By CHRISTINE HAUSER
Published: May 25, 2010
Wall Street traveled a long way on Tuesday, but the journey was circular.
Uncertainty in Europe and Asia spilled over into the American market Tuesday, pushing stocks lower for most of the day and stirring concerns that the debt crisis could stall a recovery.
The Dow tumbled at the opening and languished below 10,000 until the last half hour, when shares staged a comeback. At one point, the major indexes were down more than 2 percent losses.
The Dow ended mostly flat, down 0.2 percent, or 22.82 points, at 10,043.75. The Standard & Poor’s 500-stock index was 0.38 points, 0.04 percent, higher at 1,074.03. The Nasdaq slipped 2.60 points, or 0.1 percent, at 2,210.95.
The drop followed equity markets in Asia and Europe, where most major markets were down at least 2 percent.
As investors had feared for months, the uncertainty over the sovereign debt crisis in Europe exacerbated concerns about the health of the global economy.
“If there was a doubt about it, there isn’t any more,” said Marc Chandler, the global head of currency strategy for Brown Brothers Harriman & Company.
“The European debt crisis is not simply a Greek phenomenon,” he said in a research note.
Fiscal troubles have circulated in Greece, reached Spain, where the central bank has taken over a failing lender, and hit home in Portugal, which has taken steps to make cuts. The government in Italy was also announcing spending cuts.
Germany, which last week banned some forms of financial market speculation in banning naked short-selling, went further Tuesday, proposing a law that would broaden restrictions on instruments investors use to bet against stocks, bonds and currencies.
As the American markets tumbled, investors fled equities for the relative safety of United States securities, pushing the benchmark 10-year Treasury note lower to 3.14 percent, its lowest level in a year.
The president of the St. Louis Federal Reserve Bank, James B. Bullard, said in a speech in London that he did not think the current situation would lead to a repeat of the financial crisis seen after the collapse of Lehman Brothers in 2008.
The United States “may actually be an unwitting beneficiary of the crisis in Europe, much as it was during the Asian currency crisis of the late 1990s.”
“This is because of the flight to safety effect that pushes yields lower in the U.S.,” he said. “Of course the U.S. also has its own fiscal problems that must be directly addressed in a timely manner if the nation is to maintain credibility in international financial markets.”
He also addressed concerns that the crisis could lead to a recession, saying it would probably fall short of becoming “a worldwide recessionary shock,” partly because governments are working to contain the risks. “In most cases,” Mr. Bullard said, “there is little reason to think that such events by themselves have the power to trigger global recessions.”
“Of course, it is always possible that ‘this time will be different’ and maybe it will be,” he said
There were also renewed tensions on the Korean Peninsula.
President Lee Myung-bak of South Korea said Tuesday that he would redesignate North Korea as his country’s archenemy, as the South Korean and American militaries announced plans for major naval exercises.
Asian indexes closed lower as a result.
Adrian Cronje, chief investment officer of Balentine, said however, that problems on the Korean peninsula aside, the fiscal troubles in Europe were overriding confidence.
Mr. Cronje said markets needed more than the nearly $1 trillion European support package to restore confidence. Instead, he said, investors are looking for a credible plan for sustainable public finances in Europe.
“What is happening now is people are starting to wake up to the fact that this stands a chance of derailing the robust economy,” Mr. Cronje said.
The euro continued to weaken on Tuesday, falling to $1.2347 from $1.2371 late Monday.
“The fundamental fallout of all this is an increasing risk of recession again in the U.S. and global economies,” said Allen Sinai, president and chief global economist of Decision Economics Inc.
“The way the U.S. is getting hit at the moment is sneaking in via the stock market. It is like water flooding the house; water seeps, finds a way.”
Domestic economic indicators were watched closely for any sign that events in the Euro-zone were having an impact on the United States, said James O’Sullivan, chief economist for MF Global.
The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday showed a 0.5 percent drop in March compared to February, a sign that the housing market was weakening despite low mortgage rates and government tax credits.
But more important than the March housing statistics were more current figures showing consumer confidence rose this month, Mr. Sullivan said,
The Conference Board index of consumer confidence rose to 63.3 in May, from 57.7 in April, according to a report released Tuesday.
“The decent rise in U.S. consumer confidence in May suggests that the turmoil in financial markets and lower house prices have yet to have an impact on the real economy,” said Paul Dales, United States economist for Capital Economics.
Interbank lending is coming under increasing pressure. Conditions in the credit markets deteriorated further on Tuesday, with the London interbank offered rate, or Libor, for three-month dollar loans rising for a 12th consecutive day, to 0.53625 percent from 0.50969 percent Monday. It was the Libor’s highest rate since late July 2009.
Bettina Wassener, David Jolly and Sewell Chan contributed reporting.
http://www.nytimes.com/2010/05/26/business/26markets.html?src=me&ref=business
Published: May 25, 2010
Wall Street traveled a long way on Tuesday, but the journey was circular.
Uncertainty in Europe and Asia spilled over into the American market Tuesday, pushing stocks lower for most of the day and stirring concerns that the debt crisis could stall a recovery.
The Dow tumbled at the opening and languished below 10,000 until the last half hour, when shares staged a comeback. At one point, the major indexes were down more than 2 percent losses.
The Dow ended mostly flat, down 0.2 percent, or 22.82 points, at 10,043.75. The Standard & Poor’s 500-stock index was 0.38 points, 0.04 percent, higher at 1,074.03. The Nasdaq slipped 2.60 points, or 0.1 percent, at 2,210.95.
The drop followed equity markets in Asia and Europe, where most major markets were down at least 2 percent.
As investors had feared for months, the uncertainty over the sovereign debt crisis in Europe exacerbated concerns about the health of the global economy.
“If there was a doubt about it, there isn’t any more,” said Marc Chandler, the global head of currency strategy for Brown Brothers Harriman & Company.
“The European debt crisis is not simply a Greek phenomenon,” he said in a research note.
Fiscal troubles have circulated in Greece, reached Spain, where the central bank has taken over a failing lender, and hit home in Portugal, which has taken steps to make cuts. The government in Italy was also announcing spending cuts.
Germany, which last week banned some forms of financial market speculation in banning naked short-selling, went further Tuesday, proposing a law that would broaden restrictions on instruments investors use to bet against stocks, bonds and currencies.
As the American markets tumbled, investors fled equities for the relative safety of United States securities, pushing the benchmark 10-year Treasury note lower to 3.14 percent, its lowest level in a year.
The president of the St. Louis Federal Reserve Bank, James B. Bullard, said in a speech in London that he did not think the current situation would lead to a repeat of the financial crisis seen after the collapse of Lehman Brothers in 2008.
The United States “may actually be an unwitting beneficiary of the crisis in Europe, much as it was during the Asian currency crisis of the late 1990s.”
“This is because of the flight to safety effect that pushes yields lower in the U.S.,” he said. “Of course the U.S. also has its own fiscal problems that must be directly addressed in a timely manner if the nation is to maintain credibility in international financial markets.”
He also addressed concerns that the crisis could lead to a recession, saying it would probably fall short of becoming “a worldwide recessionary shock,” partly because governments are working to contain the risks. “In most cases,” Mr. Bullard said, “there is little reason to think that such events by themselves have the power to trigger global recessions.”
“Of course, it is always possible that ‘this time will be different’ and maybe it will be,” he said
There were also renewed tensions on the Korean Peninsula.
President Lee Myung-bak of South Korea said Tuesday that he would redesignate North Korea as his country’s archenemy, as the South Korean and American militaries announced plans for major naval exercises.
Asian indexes closed lower as a result.
Adrian Cronje, chief investment officer of Balentine, said however, that problems on the Korean peninsula aside, the fiscal troubles in Europe were overriding confidence.
Mr. Cronje said markets needed more than the nearly $1 trillion European support package to restore confidence. Instead, he said, investors are looking for a credible plan for sustainable public finances in Europe.
“What is happening now is people are starting to wake up to the fact that this stands a chance of derailing the robust economy,” Mr. Cronje said.
The euro continued to weaken on Tuesday, falling to $1.2347 from $1.2371 late Monday.
“The fundamental fallout of all this is an increasing risk of recession again in the U.S. and global economies,” said Allen Sinai, president and chief global economist of Decision Economics Inc.
“The way the U.S. is getting hit at the moment is sneaking in via the stock market. It is like water flooding the house; water seeps, finds a way.”
Domestic economic indicators were watched closely for any sign that events in the Euro-zone were having an impact on the United States, said James O’Sullivan, chief economist for MF Global.
The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday showed a 0.5 percent drop in March compared to February, a sign that the housing market was weakening despite low mortgage rates and government tax credits.
But more important than the March housing statistics were more current figures showing consumer confidence rose this month, Mr. Sullivan said,
The Conference Board index of consumer confidence rose to 63.3 in May, from 57.7 in April, according to a report released Tuesday.
“The decent rise in U.S. consumer confidence in May suggests that the turmoil in financial markets and lower house prices have yet to have an impact on the real economy,” said Paul Dales, United States economist for Capital Economics.
Interbank lending is coming under increasing pressure. Conditions in the credit markets deteriorated further on Tuesday, with the London interbank offered rate, or Libor, for three-month dollar loans rising for a 12th consecutive day, to 0.53625 percent from 0.50969 percent Monday. It was the Libor’s highest rate since late July 2009.
Bettina Wassener, David Jolly and Sewell Chan contributed reporting.
http://www.nytimes.com/2010/05/26/business/26markets.html?src=me&ref=business
The New Touch-Face of Vending Machines
The New Touch-Face of Vending Machines
By STEPHANIE ROSENBLOOM
At a hotel in Abu Dhabi, a cash machine dispenses gold. Futuristic vending machines are proliferating, selling high-end products, and not for small change
Tuesday, 25 May 2010
A quick look at Coastal (25.5.2010)
A quick look at Coastal (25.5.2010)
http://spreadsheets.google.com/pub?key=taWOgEdJSr517zWzGn9LnQA&output=html
FBM KLCI falls for eighth day running
FBM KLCI falls for eighth day running
Written by Surin Murugiah
Tuesday, 25 May 2010 10:40
KUALA LUMPUR: The FBM KLCI extended its losses for the eighth straight day on Tuesday, May 25, dragged by losses at key blue chips and banking counters.
On Wall Street, stocks slid on Monday, May 24, driving the Dow to its lowest level since Feb 10 as fresh signs of Europe's banking problems emerged, according to Reuters.
Concerns about Europe's banking system continued to weigh on markets, after the Bank of Spain took over a small savings bank, CajaSur, over the weekend, increasing anxiety among investors worried about debt problems spreading throughout financial markets, according to Reuters.
The Dow Jones industrial average dropped 126.82 points, or 1.24%, to 10,066.57. The Standard & Poor's 500 Index slipped 14.04 points, or 1.29%, to 1,073.65. The Nasdaq Composite Index fell 15.49 points, or 0.69%, to 2,213.55.
At mid-morning Tuesday,
Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients advised them to remain vigilant of a potential damaging and sustained bear trend in the coming months.
He said the euro zone crisis and the Dow Jones and European equity market malaise would persist, and it was best for investors to turn defensive and remain in over 90% cash at least.
"Recent price movements and global volatility suggest that investors should shy away from the FBM KLCI.
"We advise clients to sell and step aside for the next few months, as we believe that the market might revisit 801.27 and possibly 626.50 in the longer term," he said in a note Tuesday.
At 10am, the FBM KLCI fell 10.93 points to 1,262.76, dragged by losses at key blue chips including CIMB, Genting, PPB and Tanjong.
Losers thumped gainers by 322 to 62, while 143 counters traded unchanged. Volume was thin with 108.61 million shares valued at RM173.58 million.
Among the major losers in early trade, DiGi fell 42 sen to RM22.48, PPB Group down 32 sen to RM15.88, KLK 20 sen to RM15.60, Genting and Hartalega down 13 sen each to RM6.41 and RM7.60, while Tanjong fell 12 sen to RM17.34.
Among banking stocks, Hong Leong Bank lost 11 sen to RM8.44, and CIMB, Public Bank and Maybank fell six sen each to RM6.76, RM11.46 and RM7.19, respectively.
Meanwhile, Sime and IOI Corp lost eight sen each to RM7.73 and RM4.80, respectively.
Gainers included Petronas Gas that added 13 sen to RM9.79, HELP up 11 sen to RM2.34 and UEM Land up one sen to RM1.34.
CIMB, IOI Corp, UEM Land, Genting and Berjaya Corp were among the most actively traded counters.
http://www.theedgemalaysia.com/business-news/166709-fbm-klci-falls-for-eighth-day-running-.html
Written by Surin Murugiah
Tuesday, 25 May 2010 10:40
KUALA LUMPUR: The FBM KLCI extended its losses for the eighth straight day on Tuesday, May 25, dragged by losses at key blue chips and banking counters.
On Wall Street, stocks slid on Monday, May 24, driving the Dow to its lowest level since Feb 10 as fresh signs of Europe's banking problems emerged, according to Reuters.
Concerns about Europe's banking system continued to weigh on markets, after the Bank of Spain took over a small savings bank, CajaSur, over the weekend, increasing anxiety among investors worried about debt problems spreading throughout financial markets, according to Reuters.
The Dow Jones industrial average dropped 126.82 points, or 1.24%, to 10,066.57. The Standard & Poor's 500 Index slipped 14.04 points, or 1.29%, to 1,073.65. The Nasdaq Composite Index fell 15.49 points, or 0.69%, to 2,213.55.
At mid-morning Tuesday,
- Japan's Nikkei 225 fell 2.37% to 9,526.67,
- South Korea's Kospi lost 2.63% to 1,562.73,
- Taiwan's TAIEX Index fell 2.02% to 7,175.14,
- Singapore's Straits Times Index fell 1.12% to 2,693.29,
- Shanghai's Composite Index down 0.86% to 2,650.20 while
- Hong Kong's Hang Seng Index opened 1.8% lower at 19,317.14.
Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients advised them to remain vigilant of a potential damaging and sustained bear trend in the coming months.
He said the euro zone crisis and the Dow Jones and European equity market malaise would persist, and it was best for investors to turn defensive and remain in over 90% cash at least.
"Recent price movements and global volatility suggest that investors should shy away from the FBM KLCI.
"We advise clients to sell and step aside for the next few months, as we believe that the market might revisit 801.27 and possibly 626.50 in the longer term," he said in a note Tuesday.
At 10am, the FBM KLCI fell 10.93 points to 1,262.76, dragged by losses at key blue chips including CIMB, Genting, PPB and Tanjong.
Losers thumped gainers by 322 to 62, while 143 counters traded unchanged. Volume was thin with 108.61 million shares valued at RM173.58 million.
Among the major losers in early trade, DiGi fell 42 sen to RM22.48, PPB Group down 32 sen to RM15.88, KLK 20 sen to RM15.60, Genting and Hartalega down 13 sen each to RM6.41 and RM7.60, while Tanjong fell 12 sen to RM17.34.
Among banking stocks, Hong Leong Bank lost 11 sen to RM8.44, and CIMB, Public Bank and Maybank fell six sen each to RM6.76, RM11.46 and RM7.19, respectively.
Meanwhile, Sime and IOI Corp lost eight sen each to RM7.73 and RM4.80, respectively.
Gainers included Petronas Gas that added 13 sen to RM9.79, HELP up 11 sen to RM2.34 and UEM Land up one sen to RM1.34.
CIMB, IOI Corp, UEM Land, Genting and Berjaya Corp were among the most actively traded counters.
http://www.theedgemalaysia.com/business-news/166709-fbm-klci-falls-for-eighth-day-running-.html
A quick look at Petdag (25.5.2010)
A quick look at Petdag (25.5.2010)
http://spreadsheets.google.com/pub?key=tJvGV-4QVGoRFu1hPL2GHDA&output=html
A quick look at Parkson (25.5.2010)
A quick look at Parkson (25.5.2010)
http://spreadsheets.google.com/pub?key=tXVsOu0LzdXykg2thm_IQrA&output=html
Shares tumble as all the bears come out
Shares tumble as all the bears come out
May 25, 2010 - 4:15PM
Australian shares tumbled today, hitting fresh nine-month lows as investors remain spooked by euro-zone instability, while rising tensions on the Korean peninsula also discouraged buyers.
The benchmark S&P/ASX200 index closed down 130.1 points, or 3 per cent, at 4265.3, its lowest close since August. The broader All Ordinaries index was off 126.5 points, or 2.9 per cent, at 4286.3.
At home, all the major sub-indexes were down, with energy shares off 3.9 per cent, materials down 3.7 per cent and financials slumping 3 per cent.
The Aussie dollar also resumed its retreat, dropping nearly 2 US cents to sink to 81.3 US cents.
About $150 billion has been wiped from the market this month, with the All Ordinaries off 11 per cent so far - the biggest slide since October 2008 when the collapse of US investment bank Lehman Brothers sent financial markets into a tailspin.
Europe's fumbling response to a debt crisis in Greece and bulging deficits in other euro-zone countries has unnerved markets, and the central bank takeover of a small Spanish lender at the weekend stoked the latest fears of a wider meltdown.
Across the region, other major markets were also sharply lower. South Korea's Kospi Index was down 4.3 per cent after a report said North Korea ordered its military to prepare for war last week. Japan's Nikkei 225 was off 2.7 per cent, with the benchmark indexes in Hong Kong and Singapore both down more 2 per cent.
“It appears that every single bear in Asia is emerging from its caves. It’s the complete reversal of what we’re seeing yesterday,” said Arab Bank Australia treasury dealer David Scutt. “Banks are being smacked. Commodity producers are being smacked. An all-around bad day for the markets.”
Also, short-term banks bill futures were selling off, Mr Scutt said.
"This is another sign that markets are wary of another liquidity crisis forming and mirrors the increase in Libor rates seen overnight in London."
Libor, the three-month US dollar London interbank offered rate - a key measure of the health of the credit markets - rose to 0.5 per cent overnight, the highest since July 2009. The increase suggests that there is growing caution among banks about lending to each other. Libor hit 3.6 per cent at the end of 2008, during the height of the financial crisis.
“Worryingly, the same feature was seen in the months leading up to and following the collapse of Lehman Brothers in 2008.”
Blue chips tumble
The world’s biggest miner, BHP Billiton, fell $1.52, or 4 per cent, to $36.28 and rival Rio Tinto dropped $2.45, or 3.8 per cent, to $61.70.
Iron ore miner Fortescue renewed its criticism of the government’s mining super profits tax plans and said it is likely to delay plans to start paying dividends due to the proposed tax, warning investors its shares could fall further as a result.
The shares duly extended early losses, to finish down 28 cents, or 7.5 per cent at $3.44.
The four major banks closed lower also.Commonwealth Bank was off $1.92, or 3.7 per cent, at $50.31 and Westpac declined 90 cents, or 3.9 per cent, to $22.26. ANZ closed down 56 cents, or 2.6 per cent, at $21.34 and National Australia Bank was 80 cents, or 3.3 per cent, lower at $23.76.
In the energy sector, Oil Search had dipped 26 cents to $5.25, Woodside was down $1.46, or 3.4 per cent, at $41.37 and Santos gave up 54 cents, or 4.4 per cent, to $11.75.
Flight Centre bucks trend
Flight Centre shares rosed 2.9 per cent to $16.80 after the travel firm upgraded its profit guidance for 2010 to a pretax profit of $190 million to $200 million, up from forecasts of $160 million to $180 million.
Healthscope saw its shares slip 1.9 per cent to $5.15, after private equity firm Blackstone Group joined a group bidding $US1.5 billion for the hospital operator, a source familiar with the situation said.
Minara Resources fell 4.5 cents, or 6.3 per cent, to 66.50 cents after it said it is looking offshore to more desirable tax jurisdictions.
Transurban declined 11 cents, or 2.5 cents, to $4.30 after the Takeovers Panel has refused to make interim orders sought to stop a rights issue by the toll roads operator.
Agribusiness and real estate group Ruralco Holdings was steady at $2.50 after it said it expected a solid full year financial result after boosting first half net profit by 23 per cent.
The most traded stock by volume was Australian Mines, with 222.32 million shares changing hands for $222,328 thousand. The stock was steady at 0.1 of a cent.
Preliminary national turnover was 2.26 billion shares worth $5.91 billion, with 250 stocks up, 867 down and 256 unchanged.
Losses 'overdone'
The Australian market has fallen 14 percent from its recent peak in April as the European worries, the Australian dollar's fall and a planned mining tax whacked sentiment.
"It is definitely overdone, the forward P/E of the market is 10 times which is extraordinarily low," said E.L. & C. Baillieu director Richard Morrow.
The long-term average forward price/earnings ratio for Australian stocks is around 14 times.
"People are staring down the barrel at this horrendous tax and everything has gone into abeyance ahead of that," he said.
http://www.smh.com.au/business/markets/shares-tumble-as-all-the-bears-come-out-20100525-w8i2.html
May 25, 2010 - 4:15PM
Australian shares tumbled today, hitting fresh nine-month lows as investors remain spooked by euro-zone instability, while rising tensions on the Korean peninsula also discouraged buyers.
The benchmark S&P/ASX200 index closed down 130.1 points, or 3 per cent, at 4265.3, its lowest close since August. The broader All Ordinaries index was off 126.5 points, or 2.9 per cent, at 4286.3.
At home, all the major sub-indexes were down, with energy shares off 3.9 per cent, materials down 3.7 per cent and financials slumping 3 per cent.
The Aussie dollar also resumed its retreat, dropping nearly 2 US cents to sink to 81.3 US cents.
About $150 billion has been wiped from the market this month, with the All Ordinaries off 11 per cent so far - the biggest slide since October 2008 when the collapse of US investment bank Lehman Brothers sent financial markets into a tailspin.
Europe's fumbling response to a debt crisis in Greece and bulging deficits in other euro-zone countries has unnerved markets, and the central bank takeover of a small Spanish lender at the weekend stoked the latest fears of a wider meltdown.
Across the region, other major markets were also sharply lower. South Korea's Kospi Index was down 4.3 per cent after a report said North Korea ordered its military to prepare for war last week. Japan's Nikkei 225 was off 2.7 per cent, with the benchmark indexes in Hong Kong and Singapore both down more 2 per cent.
“It appears that every single bear in Asia is emerging from its caves. It’s the complete reversal of what we’re seeing yesterday,” said Arab Bank Australia treasury dealer David Scutt. “Banks are being smacked. Commodity producers are being smacked. An all-around bad day for the markets.”
Also, short-term banks bill futures were selling off, Mr Scutt said.
"This is another sign that markets are wary of another liquidity crisis forming and mirrors the increase in Libor rates seen overnight in London."
Libor, the three-month US dollar London interbank offered rate - a key measure of the health of the credit markets - rose to 0.5 per cent overnight, the highest since July 2009. The increase suggests that there is growing caution among banks about lending to each other. Libor hit 3.6 per cent at the end of 2008, during the height of the financial crisis.
“Worryingly, the same feature was seen in the months leading up to and following the collapse of Lehman Brothers in 2008.”
Blue chips tumble
The world’s biggest miner, BHP Billiton, fell $1.52, or 4 per cent, to $36.28 and rival Rio Tinto dropped $2.45, or 3.8 per cent, to $61.70.
Iron ore miner Fortescue renewed its criticism of the government’s mining super profits tax plans and said it is likely to delay plans to start paying dividends due to the proposed tax, warning investors its shares could fall further as a result.
The shares duly extended early losses, to finish down 28 cents, or 7.5 per cent at $3.44.
The four major banks closed lower also.Commonwealth Bank was off $1.92, or 3.7 per cent, at $50.31 and Westpac declined 90 cents, or 3.9 per cent, to $22.26. ANZ closed down 56 cents, or 2.6 per cent, at $21.34 and National Australia Bank was 80 cents, or 3.3 per cent, lower at $23.76.
In the energy sector, Oil Search had dipped 26 cents to $5.25, Woodside was down $1.46, or 3.4 per cent, at $41.37 and Santos gave up 54 cents, or 4.4 per cent, to $11.75.
Flight Centre bucks trend
Flight Centre shares rosed 2.9 per cent to $16.80 after the travel firm upgraded its profit guidance for 2010 to a pretax profit of $190 million to $200 million, up from forecasts of $160 million to $180 million.
Healthscope saw its shares slip 1.9 per cent to $5.15, after private equity firm Blackstone Group joined a group bidding $US1.5 billion for the hospital operator, a source familiar with the situation said.
Minara Resources fell 4.5 cents, or 6.3 per cent, to 66.50 cents after it said it is looking offshore to more desirable tax jurisdictions.
Transurban declined 11 cents, or 2.5 cents, to $4.30 after the Takeovers Panel has refused to make interim orders sought to stop a rights issue by the toll roads operator.
Agribusiness and real estate group Ruralco Holdings was steady at $2.50 after it said it expected a solid full year financial result after boosting first half net profit by 23 per cent.
The most traded stock by volume was Australian Mines, with 222.32 million shares changing hands for $222,328 thousand. The stock was steady at 0.1 of a cent.
Preliminary national turnover was 2.26 billion shares worth $5.91 billion, with 250 stocks up, 867 down and 256 unchanged.
Losses 'overdone'
The Australian market has fallen 14 percent from its recent peak in April as the European worries, the Australian dollar's fall and a planned mining tax whacked sentiment.
"It is definitely overdone, the forward P/E of the market is 10 times which is extraordinarily low," said E.L. & C. Baillieu director Richard Morrow.
The long-term average forward price/earnings ratio for Australian stocks is around 14 times.
"People are staring down the barrel at this horrendous tax and everything has gone into abeyance ahead of that," he said.
http://www.smh.com.au/business/markets/shares-tumble-as-all-the-bears-come-out-20100525-w8i2.html
A quick look at KLCC Property (24.5.2010)
A quick look at KLCC Property (24.5.2010)
http://spreadsheets.google.com/pub?key=tNyYnPuP_011FQrdQxNx_AQ&output=html
How Do Real Estate Investment Trusts Grow?
How Do Real Estate Investment Trusts Grow?
One argument that might be made against real estate investment trusts is that, because they are required by the government to pay out at least 90% of net income to their shareholders, they don't have the cash from retained earnings to expand their businesses.
However, good REIT management teams have found ways to raise the money they need.
When speaking of this, even non-retail REITs make use of a retail industry term -- same store sales. That is, the more sales that can be generated by the same store, the more profitable it. The more rent and other revenue that can be raised from the same property, the profitable it is and the more cash it generates for the company.
This can include raising rents on existing occupants, upgrading properties to higher-level occupants and reducing vacancy rates. It can include upgrading or expanding the property.
Retail REITs, especially shopping malls, usually have percentage-rent clauses in their leases. This means that the mall gets a percentage of the store's revenue above a certain preset level. The more successful the store, the higher rent it pays. Keep that in mind the next time you hear a commercial for a shopping mall on the radio -- the mall wants you to come and shop there because the more money their individual stores make, the more rent the mall receives.
Some REIT leases include periodic rent bumps that are fixed amounts or based on an index of inflation such as the Consumer Price Index.
Some mall and other types of REITs save on expenses by getting occupants to pay for common needs such as security, advertising, and janitorial services. This is known as expense sharing or cost recovery.
Overall, the more cash the real estate investment REIT can raise through its operations, the higher its internal rate of return or IRR.
Obviously, the Higher a Company's Internal Rate of Return is, the Better for its Investors
Of course, the stronger the real estate trust company is to begin with, the more able it is able to raise additional money.
The REIT Real Estate Investment Trust can use the additional cash to purchase additional properties, or even to purchase entire private real estate companies, or even other REITs.
The goal is to find opportunities to make an additional internal rate of return that's higher than the company's cost of equity capital. The difference between the cost of capital and the FFO a company can earn from the property is called the spread.
Strong Real Estate Investment Trusts have picked up great properties at bargain basement prices following local and national real estate market collapses. Eventually demand picks up again, and the REIT is making money off the properties.
Some REITs are Able to Expand by Developing New Properties in their Specialization and Local Geographic Area
Of course, this depends on their ability to raise the necessary capital to fund the development until it begin making money.
Of course, such development projects come with the risk of cost overruns on the construction, the demand for the space may be reduced during the development period (perhaps a recession has just started), and the risk that interest rates rise during the construction period.
Some real estate companies have formed joint ventures (JVs) with institutions to develop, acquire and manage properties. The REIT provides the skills and experience to acquire, develop and manage the commercial properties. The institutions provide the capital. Both can benefit.
With the passage of the REIT Modernization Act, these trusts have been allowed to engage in real estate-related businesses.
REIT trust investors should look for management teams who are aggressively seeking to increase both Funds From Operations and Internal Rates of Return.
http://www.incomeinvesthome.com/growth/reit/equity/growth.htm
Related: Understanding REITS
Investing in Real Estate Investment Trusts (REITs)
http://www.pimco.com/LeftNav/Bond+Basics/2006/REIT+Basics.htm
Real Estate Investing through REITS
http://beginnersinvest.about.com/od/reit/a/aa101404.htm
Understanding Risks before Investing in REITS
http://findarticles.com/p/articles/mi_m0JQR/is_3_14/ai_30366025/
One argument that might be made against real estate investment trusts is that, because they are required by the government to pay out at least 90% of net income to their shareholders, they don't have the cash from retained earnings to expand their businesses.
However, good REIT management teams have found ways to raise the money they need.
- Sometimes they raise money by selling additional shares of stock, including preferred stock.
- They can borrow money from the debt markets through issuing unsecured notes and debentures -- bonds.
- They can do private placement offerings.
- They can sell poor performing properties and reinvesting the proceeds in more profitable real estate.
- Good REIT management also seek ways to raise additional cash from their existing businesses, by raising rents and reducing expenses *this includes reducing overhead.). This increases their Funds From Operations (FFO).
When speaking of this, even non-retail REITs make use of a retail industry term -- same store sales. That is, the more sales that can be generated by the same store, the more profitable it. The more rent and other revenue that can be raised from the same property, the profitable it is and the more cash it generates for the company.
This can include raising rents on existing occupants, upgrading properties to higher-level occupants and reducing vacancy rates. It can include upgrading or expanding the property.
Retail REITs, especially shopping malls, usually have percentage-rent clauses in their leases. This means that the mall gets a percentage of the store's revenue above a certain preset level. The more successful the store, the higher rent it pays. Keep that in mind the next time you hear a commercial for a shopping mall on the radio -- the mall wants you to come and shop there because the more money their individual stores make, the more rent the mall receives.
Some REIT leases include periodic rent bumps that are fixed amounts or based on an index of inflation such as the Consumer Price Index.
Some mall and other types of REITs save on expenses by getting occupants to pay for common needs such as security, advertising, and janitorial services. This is known as expense sharing or cost recovery.
Overall, the more cash the real estate investment REIT can raise through its operations, the higher its internal rate of return or IRR.
Obviously, the Higher a Company's Internal Rate of Return is, the Better for its Investors
Of course, the stronger the real estate trust company is to begin with, the more able it is able to raise additional money.
The REIT Real Estate Investment Trust can use the additional cash to purchase additional properties, or even to purchase entire private real estate companies, or even other REITs.
The goal is to find opportunities to make an additional internal rate of return that's higher than the company's cost of equity capital. The difference between the cost of capital and the FFO a company can earn from the property is called the spread.
Strong Real Estate Investment Trusts have picked up great properties at bargain basement prices following local and national real estate market collapses. Eventually demand picks up again, and the REIT is making money off the properties.
Some REITs are Able to Expand by Developing New Properties in their Specialization and Local Geographic Area
Of course, this depends on their ability to raise the necessary capital to fund the development until it begin making money.
Of course, such development projects come with the risk of cost overruns on the construction, the demand for the space may be reduced during the development period (perhaps a recession has just started), and the risk that interest rates rise during the construction period.
Some real estate companies have formed joint ventures (JVs) with institutions to develop, acquire and manage properties. The REIT provides the skills and experience to acquire, develop and manage the commercial properties. The institutions provide the capital. Both can benefit.
With the passage of the REIT Modernization Act, these trusts have been allowed to engage in real estate-related businesses.
REIT trust investors should look for management teams who are aggressively seeking to increase both Funds From Operations and Internal Rates of Return.
http://www.incomeinvesthome.com/growth/reit/equity/growth.htm
Related: Understanding REITS
Investing in Real Estate Investment Trusts (REITs)
http://www.pimco.com/LeftNav/Bond+Basics/2006/REIT+Basics.htm
Real Estate Investing through REITS
http://beginnersinvest.about.com/od/reit/a/aa101404.htm
Understanding Risks before Investing in REITS
http://findarticles.com/p/articles/mi_m0JQR/is_3_14/ai_30366025/
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