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Maybank buys 55.6 pct of BII for $1.24 bln

2008-09-30T22:00:00.001+08:00

Malaysia's Maybank has completed the acquisition of a 55.6 percent stake in Bank Internasional Indonesia (BII) for 4.26 billion ringgit ($1.24 billion), the lender said on Tuesday.

The transaction was completed on Tuesday after BII's majority shareholders Fullerton Financial Holdings, a unit of Singapore's Temasek [TEM.UL], and South Korea's Kookmin Bank agreed to provide a rebate of 758.9 million ringgit on the price previously agreed, Maybank said in a statement.

Last week, Malaysia's central bank told the state-owned Maybank to lower the price of its bid for BII, which pulled BII shares down by more than a third on Friday.

Maybank agreed in March to pay $1.5 billion, or 510 rupiah per share, for a the BII stake to the two shareholders, and to make a tender offer for the remaining shares, putting the total price tag at $2.7 billion.

Several analysts criticised the deal at the time, saying the Malaysian bank had overpaid for BII.

Buffett to Congress: Bail out economy or face 'meltdown'

2008-09-29T22:09:00.000+08:00

Billionaire Warren Buffett told congressional negotiators that if they can't agree on a proposed financial bailout, the nation will face "its biggest financial meltdown in American history".

WASHINGTON, DC - Billionaire Warren Buffett told congressional negotiators that if they can't agree on a proposed financial bailout, the nation will face "its biggest financial meltdown in American history," two sources familiar with the talks said.

Word of Buffett's omen came as House Speaker Nancy Pelosi announced "great progress" in reaching a deal on the White House's proposed $700 billion bailout of the financial system.

Buffett, whom Forbes magazine has placed at No. 2 on its 2008 list of richest Americans, was one of several business experts whose opinions were sought, Sen. Kent Conrad, D-North Dakota, told reporters Saturday.

Buffett is chairman and CEO of Berkshire Hathaway Inc. His wealth is estimated at $50 billion. Buffett was consulted by telephone, Conrad said. Watch leaders announce progress on the deal »

Conrad, who heads the Senate Budget Committee, said he was involved in some of the talks, though he is not on the formal negotiating team, which is made up of Rep. Roy Blunt, R-Missouri; Sen. Judd Gregg, R-New Hampshire; Sen. Chris Dodd, D-Connecticut; and Rep. Barney Frank, D-Massachusetts.

They are expected to reconvene Sunday, but no time has been given. The goal is to reach consensus on a package and announce a deal Sunday, in time for the start of financial markets around the world, Gregg said.

Pelosi is hoping to have a draft of the proposal posted online by noon, he said.

Flanked by Senate Majority Leader Harry Reid and other congressional leaders, Pelosi announced early Sunday that a long evening of talks on Capitol Hill had yielded progress.

"We have to get it committed to paper so we can formally agree," Pelosi said.

Under the tentative deal, a board including the treasury secretary, secretary of commerce, head of the Securities and Exchange Commission and chairman of the Federal Reserve would oversee the rescue plan, Conrad said.

The $700 billion would be disbursed in stages, with $250 billion made available immediately. The Treasury also would establish an insurance program -- with premiums paid by the industry -- to mitigate taxpayer losses. The deal would probably also include some curbs on the compensation of executives at companies that participate. Watch what the bailout could mean for you »

The government would get the right to receive equity stakes in the companies that sell their assets. The measure is an attempt to reduce fiscal risk to taxpayers.

House Republicans have not signed off on the plan, but Blunt said Saturday he would present it to the GOP caucus Sunday morning after it's on paper.

"I think we're going to be able to have an announcement tomorrow, but these are difficult issues," Blunt said.

Reid said the "breakthrough" just before midnight Saturday was made possible by an idea proposed by Pelosi. Her idea involved how to address questions about whether taxpayers would be protected in the bailout, a senior House Democratic aide said.

"We've made great progress toward a deal which will work and will be effective in the marketplace and effective for all Americans," Treasury Secretary Henry Paulson said, standing beside Reid and Pelosi. iReport.com: Are you upset about the bailout?

Paulson first announced the plan September 18.

Frank, the House leader on the issue, said the final plan will be a compromise that includes some of the original Bush administration proposals and elements demanded by congressional negotiators.

"I do think we have reached as good a product as you can in this democracy, given all the interests," Frank said.

Gregg said he saw "dramatic progress toward accomplishing something that is critical for the American people."

"We can't underestimate what we face as a threat relative to a fiscal meltdown and the impact it would have on Main Street," he said. "This is about people's jobs. It's about people's savings. It's about people's ability to participate in commerce and send their kids to school and be able to borrow money to run their small businesses."

The Bush administration was "very pleased with the progress made tonight in these discussions," White House spokesman Tony Fratto said. He applauded the "hard work on both sides of the aisle."

The Bush administration is seeking authority for the Treasury to buy as much as $700 billion in troubled mortgage assets that are weighing down banks and other financial institutions.

If enacted, it would be the most dramatic and extensive government intervention in the economy since the Great Depression. The aim is to unfreeze the credit markets -- short-term lending among banks and corporations -- by giving the Treasury authority to purchase bad assets from banks and other financial institutions.

The core of the problem is bad real estate loans that have led to record foreclosures when the housing bubble burst and home prices declined.

In the past two weeks, the banking world and Wall Street have been reorganized by a wave of collapses and mergers.

The most recent development was Thursday's seizure by federal regulators of Washington Mutual, once a major mortgage lender and the nation's largest thrift.

Thrifts are entities -- such as savings banks and saving and loans -- that are set up to hold deposits for individuals.

Indian soybean ends down on global cues, supplies

2008-09-29T22:03:00.000+08:00

MUMBAI, Sept 29 (Reuters) - Indian soybean October futures futures breached the initial lower circuit of 3 percent on Monday and ended down tracking weakness in overseas markets and expectations of good supplies at home in the coming weeks.

Leading industry analyst Dorab Mistry in a conference on Saturday said Indian crushers may face a difficult time in the year ending September 2009 as farmers demand a better price, while soymeal buyers bargain for a discount.

Soymeal is the main byproduct derived from soybean crushing and constitutes about 82-83 percent of the seed weight.

India is likely to produce a record soybean crop of about 10-12 million tonnes, leading crushers, traders and analysts at a industry conference said on Saturday.

The October futures touched fell 4 percent, the maximum permitted in a day, to 1,981 rupees per 100 kg, its lowest in more than two weeks.

Soybean spot market in Indore was closed on Monday.

The palm oil December futures KPOZ8 on Bursa Malaysia Derivatives Exchange ended down 8.13 percent at 2,125 ringgit a tonne.

Soybean and rapeseed are crushed to produce edible oils, which compete with palm oil, and their prices move in tandem.

Soybean November futures SX8 on Chicago Board of Trade fell 2.49 percent to $11.35-½ a bushel during electronic trade on Monday.

Following are the closing prices of soybean futures <0#nsb:> per 100 kg and rapeseed futures <0#nrs:> in rupees per 20 kg on the NCDEX:

Contract Reuters Code Closing Price Change in %

=====================================================

Soybean

Oct NSBV8 1,981.50 -3.97

Nov NSBX8 1,872.00 -3.93

Rapeseed

Nov NRSX8 584.80 -2.74

Jan NRSF9 577.90 -3.58 (Reporting by Abhishek Shanker; Editing by Sunil Nair)

CBOT Soy Outlook: Lower; Outside Markets Setting Tone

2008-09-29T22:02:00.000+08:00

CBOT Soy Outlook: Lower; Outside Markets Setting Tone

By Andrew Johnson Jr.

Of DOW JONES NEWSWIRES

CHICAGO (Dow Jones)--Chicago Board of Trade soybean futures are seen starting Monday's day session on the defensive, with the bearish theme in outside markets setting the tone for early price action, analysts said.

CBOT soybean futures are called 25 to 30 cents lower.

In overnight electronic trading, November soybeans were 29 cents lower at $11.35. December soyoil was 130 points lower at 46.63 cents per pound and December soymeal was $6.50 lower at $314.20 per short ton.

A lack of fresh fundamental news is expected to keep attention on outside influences, with crude oil futures down over $5.00 a barrel and the U.S. dollar firmer attracting speculative sellers, a CBOT floor analyst said.

Worries about the U.S. economy continues to put downward pressure on grain and soybeans, with traders eyeing U.S. lawmakers getting ready to vote on a $700 billion rescue package, analysts added.

On the fundamental side, favorable near term weather for harvesting is adding to the lower theme, but variable yield results is expected to limit losses with nearby stocks tight, traders said.

A technical analyst said prices are in a three-month-old downtrend on the daily bar chart. The next upside price objective for November soybeans is to push and close prices above solid technical resistance at last week's high of $12.12 1/4 a bushel. The next downside price objective is pushing and closing prices below solid technical support at the September low of $11.99 1/2.

First resistance for November soybeans is seen at $12.00 and then at last week's high of $12.12 1/4. First support is seen at Friday's low of $11.55 3/4 and then at $11.50.

The DTN Meteorlogix weather forecast said showers early this week may slow field work, but this does not appear to be a major problem. Cooler weather may mean lows in the 30s Fahrenheit in some locations, but this does not appear to be a damaging freeze. Warmer temperatures return during the 6-10 day period.

In the U.S. Delta, mainly open weather during the next 10 days will favor soybean harvests.

Traditional large speculative traders increased their net long positions in CBOT soybean futures and options combined contracts, which now total 22,318 contracts as of Sept. 23, compared with net longs of 17,707 in the previous week. Index funds trimmed their net long positions, which now total 134,607 contracts, down from 138,718 the prior week, according to the Commodity Futures Trading Commission, as reported Friday in its supplemental commitment of traders report. Commercials held net short combined futures and options positions totaling 125,704 contracts, up from the previous week's 123,832 contracts.

The U.S. Department of Agriculture is scheduled to release its weekly export inspections report Monday at 11 a.m. EDT and its weekly crop progress report at 4 p.m. EDT.

USDA is scheduled to release its Quarterly Grain Stocks report Tuesday at 8:30 a.m. EDT (1230 GMT). The average estimate of analysts surveyed by Dow Jones for the 4th quarter soybean usage is around 532 million bushels, bringing stocks down to 144 million bushels. Estimates ranged from 125 million to 172 million. Stocks as of Sept. 1, 2007, totaled 574 million. USDA's September ending stock projection was 140 million bushels.

Meanwhile, growth in global soymeal exports is likely to slow down in 2008-09 due to negative demand in some countries and lower shipments by the U.S. and Brazil, Thomas Mielke, editor-in-chief of Hamburg-based Oil World said Sunday. "In the E.U., soymeal demand could fall to 34.0-34.5 million tons compared to the earlier estimate of 34.70 million tons as we are overestimating the pork and poultry growth," said Mielke.

In overseas markets, crude palm oil futures on Malaysia's derivatives exchange fell as much as 9.2% Monday and ended 8.1% lower on heavy speculative selling amid weaker soyoil and crude oil and the likelihood of weak export numbers, said trade participants. The benchmark December contract on Bursa Malaysia Derivatives ended MYR188 lower at MYR2,125 a metric ton.

-By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com

(END) Dow Jones Newswires

September 29, 2008 09:17 ET (13:17 GMT)

Copyright 2008 Dow Jones & Company, Inc.

Malaysian planter TH Group receives buyout offer

2008-09-29T18:25:00.000+08:00

Malaysian palm plantation firm TH Group has received an offer from its major shareholder to buy out the rest of the company, TH Group said on Monday, in a deal valuing it at about $84 million

Tung Hup Holdings has proposed to take TH Group private 0.75 ringgit a share, a 30 percent premium to TH Group's current market price, TH Group said in a filing with stock exchange Bursa Malaysia.

Tung Hup and related parties currently control a combined 53.26 percent in TH Group.

Under the terms of the proposal, TH shareholders other than Tung Hup and parties acting in concert with it will receive 0.75 ringgit a share in cash after a share capital reduction.

Trading in TH Group shares has been suspended since Thursday. The stock was last traded at 0.575 ringgit, having fallen from a 2008 peak of 0.98 ringgit in January to a low of 0.43 ringgit earlier this month.

CIMB Research Finds Bargains Galore on Bursa

2008-09-29T14:12:00.000+08:00

(Source: New Straits Times)CIMB Research has highlighted Tan Chong Motor Holdings, LCL Corp and Wellcall Holdings as among the best bargains that investors can pick up on the stock market currently.

All three stocks offer robust earnings growth at very low price- to-earnings (PE) ratio, and two of them - Tan Chong and Wellcall - also boast of defensive qualities and generous dividend yields of 9- 10 per cent.

"For investors who have the patience to ride out the next 12 months or longer, these companies are good bets, potentially doubling their share price once market conditions stabilise," CIMB head of research Terrence Wong said in a report last week.

He noted that the time horizon for performance could be faster should there be privatisation or merger and acquisition moves.

Wellcall is a rubber-hose manufacturer, while Tan Chong assembles and distributes vehicles and LCL is an interior fit-out specialist.

Wong, in his report, said there was a bargains galore to be had in Malaysia.

"We are amazed at just how cheap some stocks have become after falling by as much as 75 per cent this year."

Some companies are at levels where they could be taken private or even be the target of takeovers, he said.

Neverthesless, despite the abundance of cheap stocks, CIMB is maintaining its "neutral" rating on Malaysia because of niggling political uncertainties and deteriorating corporate fundamentals.

Its year-end target for the Kuala Lumpur Composite Index remains at 1,140 points for this year and 1,240 points for next year.

Wong advised investors to stay defensive and overweight on high- yielding stocks.

Those with a higher risk appetite, however, may want to take a look at "bombed-out" stocks that could be privatisation or M&A candidates, he added.

KLCI in Sideways Consolidation

2008-09-29T12:19:00.000+08:00

(Source: New Straits Times)By S.N. Lock

SHARE prices on Bursa Malaysia moved sideways on new political developments on the local front. The Kuala Lumpur Composite Index (KLCI) continued to stay below its major psychological support of 1,100 when it closed at 1,020.53 points yesterday.

The benchmark index staged a mild technical rebound on lack of fresh market leads on Monday. It closed at 1,028.62, giving a day- on-day gain of 2.92 points, or 0.28 per cent.

Share prices continued to ease on Tuesday, almost cancelling all of Monday's gains. The KLCI closed at 1,026.18, giving a day-on-day loss of 2.44 points, or 0.24 per cent. The market continued to move sideways on Wednesday. The KLCI closed at 1,028.40, giving a day-on- day gain of 2.22 points, or 0.22 per cent.

The KLCI staged a mild technical pullback on Thursday, closing lower at 1,024.74, a day-on-day loss of 3.66 points, or 0.36 per cent.

The index continued to consolidate yesterday. It closed lower at 1,020.53, giving a day-on-day loss of 4.21 points and a week-on- week loss of 5.17 points, or 0.50 per cent.

Following are the readings of some of the KLCI's technical indicators:

* Moving Averages: The KLCI continued to stay below its 20-, 30- , 50-, 100- and 200-day moving averages. It stayed precariously above its 10-day moving averages.

* Momentum Index: Its short-term momentum index continued to stay below the support of its neutral reference line.

* On Balance Volume (OBV): Its short-term OBV trend stayed below the support of its 10-day exponential moving averages.

* Relative Strength Index (RSI): Its 14-day RSI stood at the 36.65 per cent level yesterday.

Outlook

The KLCI's mild technical rebound hit its intra-week high of 1,040.85 on Monday, moving into the confines of this column's envisaged resistance zone (1,049 to 1,073 levels).

Subsequent sideways consolidation brought it to its intra-week low of 1,018.18 yesterday, staging a re-test of this column's envisaged support zone (988 to 1,022 levels).

Chartwise, the KLCI continued to stay below its immediate downside support (See KLCI's weekly chart - A3:A4) for the seventh consecutive week. It continued to stay below its intermediate-term downtrend (A5:A6).

The KLCI's daily trend continued to stay below its intermediate- term downtrend (See daily chart - B3:B4). Also, it continued to stay below its intermediate-term downside support (B1:B2).

The KLCI's weekly and monthly fast MACDs (moving average convergence/divergence) continued to stay below their respective slow MACDs. Its daily fast MACD staged a "golden cross" of its daily slow MACD.

The KLCI's 14-day RSI stayed at 36.65 per cent yesterday. Its 14- week and 14-month RSI stayed at 27.84 and 36.17 per cent respectively.

The KLCI's technical rebound on Monday fizzled out into a sideways consolidation over the next trading days. A decisive breach of its immediate downside support of 1,020 is likely to signal a re- test of its psychological support of 1,000.

Next week, the KLCI's immediate overhead resistance zone hovers at 1,025 to 1,059 while its immediate downside support zone is at 981 to 1,015.

The subject expressed above is based on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

KLCI Futures to See Further Consolidation

2008-09-29T12:17:00.000+08:00

(Source: New Straits Times)By Bernard

THE Kuala Lumpur Composite Index (KLCI) futures spot month contract on Bursa Malaysia Derivatives closed at 1,024.50 with an open interest of 20,194 contracts last Friday.

Trading in the September contract was largely uninspiring in the absence of a strong catalyst and the commitment of traders to take large positions. Trapped within the 1,040-1,010 range, trading was dominated by short-term traders and scalpers. With only a four- point premium to the cash index, the September contract is preparing itself for expiration this week.

The long-term weekly chart is still not favourable given the clear absence of constructive momentum in the past weeks. The declining weekly chart reflects poor bullish interest despite the market having broken key support levels with the exception of the 1,000 psychological point, where it managed to stage a technical rebound.

Without a clear indication of buying support at the current level, there is a fear that the momentum erosion will continue to drag sentiment unless a positive catalyst presents itself.

The daily chart is slightly more vibrant, with a series of peaks and troughs signalling the constant bargaining between buyers and sellers. Having ended with a hook-down angle on the daily Relative Strength Index (RSI) and the Commodity Channel Index (CCI) last Friday, the commitment of the bullish traders is once again put to the test. Shortists will argue that the futures contract will always end the week weaker because of the uncertainty over the weekend. Though there is some truth to this, it has not been proven to have occurred consistently.

The recovery in the Moving Average Convergence Divergence (MACD) indicator is one argument why sentiment might be better slightly this week. With a shorter trading week, however, the extent of the recovery may be held back. Given the mixed signals in the technical signals, the market may this week trade within the support and the resistance boundaries.

Tactically this week the market may continue with its consolidation pattern. The trading range will be shorter with key support and resistance at 1,010 and 1,030 respectively.

Technical readings

The RSI closed at the neutral region.

The CCI indicator closed at the neutral territory.

The MACD indicator remains in the negative territory with the faster average above the slower.

bernard@tactician.com.my

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

KNM Daily Price Trend May Rebound

2008-09-29T12:13:00.001+08:00

(Source: New Straits Times)By S.N. Lock

SHARE prices on Bursa Malaysia moved sideways last week, consolidating their recent losses triggered by the financial woes on Wall Street. The benchmark Kuala Lumpur Composite Index (KLCI) continued to stay below its major psychological support of 1,100 when it closed at 1,020.53 points last Friday.

The Bush administration's push for a US$700 billion (US$1 = RM3.43) bailout of the US financial industry continued to be the main focus of investors and markets worldwide.

The KLCI fell from its intra-week high of 1,040.85 last Monday to its intra-week low of 1,018.18 last Friday, giving an intra-week trading range of 22.67 points. The index closed at 1,020.53 points last Friday, giving a week-on-week loss of 5.17 points, or 0.50 per cent.

Among the other indices, the FTSE Second Board Index added 36.22 points, or 0.73 per cent, to close at 5,025.09 while the FTSE Mesdaq Index eased 41.35 points, or 1.03 per cent, to 3,958.75.

On the foreign front, trading on Wall Street remained volatile ahead of the outcome of the US$700 billion bailout proposal. The Dow Jones Industrial Average closed at 11,143.13 last Friday, giving a week-on-week loss of 245.31 points, or 2.15 per cent.

The tech stock-heavy Nasdaq Index continued to extend its technical pullback in tandem with the weak performance of the Dow. It closed at 2,183.34 points last Friday, posting a week-on-week loss of 90.56 points, or 3.98 per cent.

The Tokyo stock market moved sideways last week. The Nikkei 225 Index closed at 11,893.16 points last Friday, giving a week-on-week loss of 27.70 points, or 2.41 per cent.

In Hong Kong, the stock market continued to encounter persistent selling pressure last week. The Hang Seng Index closed at 18,682.09 on Friday, giving a week-on-week loss of 645.64 points, or 3.34 per cent.

On Bursa Malaysia, KNM Group Bhd was the most active counter last week. Its share price moved sideways to close relatively unchanged at RM1.24 last Friday.

Following are the readings of some of its technical indicators:

Moving Averages: KNM's daily price trend stayed below its 20-, 30- , 50-, 100- and 200-day moving averages. It closed above the support of its 10-day moving averages last Friday.

Momentum Index: Its short-term momentum index continued to stay above its neutral reference line.

On Balance Volume (OBV): Its short-term OBV continued to stay above its 10-day moving averages.

Relative Strength Index (RSI): Its 14-day RSI continued to stay below the 50 level. Its technical reading stood at 40.03 per cent at the market close last Friday.

Outlook

KNM was the stock market darling last year. Its fairy tale run was interrupted by its ambitious acquisition of a German outfit. Investors were concerned about funding and other issues.

Chartwise, KNM's monthly price trend came to a halt when it breached the support of its long-term uptrend.

Its weekly price trend staged a decisive breach of the neckline (See KNM's weekly chart A1:A2) of its double-top pattern formation.

Its daily price trend breached the support of the neckline (See KNM's daily chart B1:B2) of its intermediate-term double-top pattern formation on September 5 and has since stayed below it. It continued to stay below its intermediate-term downtrend (B3:B4).

KNM's weekly and monthly fast MACDs (moving average convergence divergence) continued to stay below their respective slow MACDs while its daily fast MACD stayed above its daily slow MACD.

Its 14-day Relative Strength Index (RSI) stood at the 40.03 per cent level last Friday. Its 14-week and 14-month RSIs were at the 31.84 and 47.25 levels respectively.

From the perspectives of its technical indicators, KNM's daily price trend may attempt to stage a technical rebound while its weekly and monthly price trends are suggesting a continuation of its consolidation phase.

The subject expressed above is based purely on technical analysis and opinions of the writer. It is not a solicitation to buy or sell.

Kookmin revises down value of BII stake sale

2008-09-29T09:29:00.000+08:00

Kookmin Bank (060000.KS: Quote, Profile, Research, Stock Buzz) on Monday cut the value of its planned sale of shares in Bank Internasional Indonesia (BNII.JK: Quote, Profile, Research, Stock Buzz) to reflect a revision to Maybank's bid for the Indonesian lender.

The announcement comes after Malaysia's central bank told state-owned Maybank (MBBM.KL: Quote, Profile, Research, Stock Buzz) to lower the price of its $2.7 billion bid for BII last week, which pulled BII shares down more than a third on Friday.

Singapore's state investor Temasek [TEM.UL] controls 42 percent of BII, and South Korea's Kookmin owns 14 percent.

Both hold the shares via Sorak Financial Holdings, with Kookmin under a 'tag along' agreement with Temasek if the Singapore firm sells BII shares.

"The sale value was based on a revised price between Fullerton Financial Holdings (FFH) and Malayan Banking Berhad (Maybank), reflecting global financial market conditions of late," Kookmin told the Korea Exchange in a disclosure.

Fullerton Financial Holdings is part of Temasek.

Kookmin, in which share trade has been suspended until Oct. 10 due to a holding company launch, revised the sale value of its BII shares to 361.8 billion won ($311.8 million) from the previously stated 375 billion won.

That represented 2,053,426.84748 rupiah per share compared with the original 2,436,611.39.

The South Korean bank said the sale date had yet to be determined, correcting a March disclosure under which it said the sale would be completed within the third quarter of 2008.

"It has not been finalised whether to exercise the tag along option or not, depending on the deal completion between FFH and Maybank."

With the prospective stake sale, Kookmin stands to gain four-fold on its initial investment in BII, although the transaction may signal its retreat from Indonesia.

It spent about 83.5 billion won on the stake in the Indonesian bank.

The deal, announced in March, priced BII at about 4.6 times book value, compared to Maybank's 2.3 and leading Indonesian lender Bank Mandiri's (BMRI.JK: Quote, Profile, Research, Stock Buzz) 1.98 times.

($1=1160.1 Won)

Maybank turns down Fullerton’s last-minute offer on sale of Indon bank

2008-09-28T22:33:00.000+08:00

Malayan Banking Bhd (Maybank) has not accepted the last-minute rebate of S$236.4mil (RM570mil) by Singapore’s Temasek unit Fullerton Financial Holdings Pte Ltd to close the controversial sale of PT Bank Internasional Indonesia (BII).

Fullerton said in a statement that it sent a written offer to Maybank at about 9.45pm on Friday, offering to close the transaction with the rebate.

“However, despite the rebate, Maybank did not accept the offer. We are aware that Kookmin Bank also made an offer,” it said.

This latest twist of events follows more than five months of regulatory and lately, pricing issues, in Maybank’s RM8.8bil purchase of BII.

In the wake of falling world markets, Maybank has not only asked for a reduction in purchase price but also an extension of the deadline to renegotiate for a lower price for BII, whose share price has fallen sharply.

At last Friday’s close, BII’s share price hit 310 rupiah (11 sen), compared with the original agreed purchase price of 510 (18 sen) rupiah per share.

All parties had agreed to close the deal at 2pm on Friday.

However, Fullerton said it received a faxed letter from Maybank at 8.26pm on Wednesday requesting negotiations for a reduction in the purchase price and an extension of the long-stop date (from Sept 26) to Oct 26.

Fullerton and Kookmin then informed Maybank via letters on Thursday evening that they were unable to accede.

Maybank then informed Fullerton in a faxed letter at 11.32pm the same day that Bank Negara’s approval had become conditional on Maybank obtaining an extension to the share sale agreement and a new agreement on the purchase price.

On Friday morning, Fullerton and Kookmin replied to Maybank, confirming they were ready and willing to honour the agreement and they intended to proceed with the agreed closing.

Both Fullerton and Kookmin Bank reserved their rights.

Fullerton and Kookmin waited until 8pm to close but claimed that neither Maybank nor its representatives presented themselves for the closing.

Why Warren Buffett is Betting on Banks Now

2008-09-28T15:05:00.001+08:00

Bank stocks could be the buy of a lifetime right now. The bailout is moving forward, the markets have stabilized, and Warren Buffett has put up a $5 billion bet on Goldman Sachs (NYSE:GS) this week.

Is it time to follow Buffett’s lead and go “all in” on banks now?

The answer is a simple no.

Buffett got a very sweet deal from Goldman that has reduced his risk, gave him a high degree of income, and didn’t eliminate a single cent of the potential profits from the deal. And there’s a little known way we get all that in our investments too. Let me explain.

There are a lot of reasons to like banks right now. Share values have been pummeled over the last year. If the bailout goes through, they’re about to unload their mistakes onto everyone else. The ones that are left still generate high fees, margins, and profits for the services they provide. And the ones that manage to survive will be some of the biggest winners when the U.S. economy recovers.

Banks are an extreme value play that undoubtedly caught Buffett’s eye. However, even he needed some enticing odds to make a bet this big.

As individual investors, we can’t simply follow his lead here and buy Goldman Sachs. Buffett was afforded a few special advantages that aren’t usually available to the rest of us. But as we’ll see in a moment, occasionally we can get these advantages too.

You see, Warren Buffett didn’t make a simple $5 billion investment into common shares of Goldman Sachs. Anyone can do that with a few mouse clicks or a quick phone call to his or her broker. He got a lot more for his $5 billion.

Berkshire Hathaway acquired special perpetual preferred shares of Goldman Sachs. These aren’t the shares you can buy on the NYSE. The preferred shares Goldman issued to Berkshire have all kinds of special attributes usually reserved for high-net worth individuals.

Goldman’s perpetual preferred shares carry a 10% annual yield. That’s eight times higher than the meager (if sustainable) 1.1% yield offered by Goldman’s common shares.

In addition, Goldman issued warrants as part of the deal. Warrants are similar to stock options. They give you the right to buy shares at a preset price, but not the obligation. In this case, Berkshire walked away with more than 43.4 million warrants to buy Goldman shares for $115 (currently trading at $132).

Now, there’s usually a drawback to preferred shares. They have higher yields, but the upside is usually limited. They don’t rise in value with common stock and they don’t usually go down with it either.

Preferred shares are good investments if you’re looking for high income. But they don’t offer the growth upside of common stock. Sure a 10% yield is attractive, but it’s not enough to offset the risks in this case. After all, if Goldman goes belly up the preferred shares will be worthless.

This structure of investment is a very good one from Buffett’s perspective. It allows Buffett to collect 10% per year on his investment. Since the shares are preferred, there is little chance of them falling as long as the dividends are paid.

Most importantly, Buffet will make a killing if Goldman’s shares rise. If they hit $230 (which is still 8% below the 52-week high), Berkshire will have turned a $5 billion profit on its investment all the while collecting $500 million a year in dividends. That’s the beauty of an investment structured like this.

Quite frankly, there aren’t many better deals than one that offers high income, reduced downside, and plenty of upside. As you can imagine, these types of deals are usually scooped up by big institutional investors. But you don’t have to be Warren Buffett or an investment manager that can throw hundreds of millions of dollars at a company to get your hands on these types of opportunities that only convertible securities can offer.

All too often, I see individual investors simply pass on convertible securities. Sure they might be a little bit more complicated than simply buying and selling stocks, but they’re some of the best investments you can make. In fact, their unique qualities make them even better during market downturns.

One of my favorite examples is Crown Castle International Convertible Preferred (OTCBB:CCIKO).

These are the preferred shares of Crown Castle International (NYSE:CCI) which can be converted into common shares.

Crown is one of the world’s leading cell phone tower owners in the world. The company owns more than 22,000 towers in the United States and 1,400 towers in Australia. It leases and rents these towers to deep-pocketed customers like AT&T, Sprint, and Verizon. In fact, 66% of Crown Castle’s cell towers are leased to AT&T and have towers in 91 of the top 100 U.S. markets. In a way Crown gets a small piece of the billions of dollars spent on cell phone usage each year. And the company is a veritable cash machine.

Cash flow from operations has been steadily climbing over the past couple of years as the company bought more and more towers and ratchets up the rent. The tower business has been a very good one.

But it’s expensive. Crown has to pay to build all those towers. All of those big up-front costs soak up a lot of cash. As a result of that and a couple of takeovers over the years, Crown has had to turn to outside investors for additional capital. In Crown’s case the additional capital was for justifiable expansion, not for life support. And Crown had to give the big money investors that could chip in a few million dollars what they wanted.

Crown Castle attracted capital by issuing these convertible preferred shares. These shares, which currently trade for around $48 a piece, pay out $3.14 in dividends per year (good for a yield of 6.5%), and can be converted into regular shares of Crown Castle at $36.87.

Crown Castle’s common shares currently trade around $32, so the conversion option isn’t worth much, but if they go for a run the preferred shares will run up right along with them. If not, you’ll still get a 6.5% yield while you wait.

Of course there are a lot of other considerations to make with Crown Castle Preferred shares. These shares don’t trade very much. And buying or selling a big position would have some impact on the market.

There are a lot of unanswered questions. What’s the upside with the common shares? Will there be enough cash flow to cover the dividend five years from now? What will be the impact of an economic downturn on rental and lease revenues? And that’s just to start off before we really started delving in.

However, we can take one valuable lesson away from all this. Convertible securities (preferred shares, bonds, debentures, etc.) can be some of the best investments you can make. In the right instances, they offer high income, less downside risk, and all the upside of a stock.

Convertible securities put the odds of success in your favor. At first glance, Warren Buffett might seem to be taking big swings here. But he’s actually reducing the risk as much as possible and setting himself up for either a win…or a big win.

And that’s how successful investors invest.

How Warren Buffet made his billions

2008-09-28T14:12:00.000+08:00

Warren Buffett is a man who has made millions but he also started working at his father's brokerage when he was 11 years old, that's an age when most other kids were playing hide-n-seek and didn't know how to spell 'brokerage'.

This financial wizard is by recent estimates, worth $46 billion but how he got there is the fascinating story.

It all began in the family grocery store back in Omaha. Buffett's great grandfather started the store in 1869 and it was in the Buffet family until 1969, till his uncle finally retired. But it's at this store, where he began going around his neighbourhood selling gum. This was before his stint at his father's firm.Warren Buffett told CNBC's Liz Claman, "My grandfather would sell me Wrigley's chewing gum and I would go door to door around my neighbourhood selling it. He also sold me six Coca Cola for a quarter and I would sell it for a nickel each in the neighbourhood, so I made a small profit. I was always trying to do something like this."

From small beginnings come bigger things and so after selling gum, soft drinks and working with his father, by age 14, he had bought a 40 acres farm in Washington, Thurston County.

But he confesses that he never enjoyed the farm as much as he enjoyed investing in stocks. But the first stock he bought was "Citi Service preferred stock. I had three shares and made all of $5 on it. I had bought it at $38.25 and then I sold it around $40, it went down to $27 in between and after I sold it at $40, it went to $200!"

From that poorly timed stock sale in 1944, he learnt a lesson that became his legendary investment strategy - which is essentially - patience pays, so buy them and hold them. He figured out two other critical things about himself in the 1940s - what he is good at and what he likes to do.

This pivotal moment in his journey came in 1956, when he was just 25 years old. This man who was rejected by Harvard and now armed with contributions from family and friends and $100 of his own money starts a limited partnership with seven people.

Over the next nine years, Buffett turned a $105,000 into $26 million - a stunning 24,000 per cent increase! He had invested mostly in textile companies, farm equipment manufacturers and even a company making windmills.

Thirteen years later, Buffett forms another partnership that becomes one of the greatest teams in the history of investing. He convinces longtime friend Charlie Munger to quit his investment partnership to join Buffett as his Vice President of Berkshire Hathaway.

And now with the 82-year-old Munger, Buffett sits on top of the greatest holding companies ever.

So, it's understandable that this man is looked up to for investment and business advice all the time. But what's the secret gift he's got? How does he pick the right investments all the time? He explains, "I look for something that I can understand to start with, there are all kinds of businesses I don't understand."

"I don't understand what car companies are going to do 10 years from now, or what software or chemical companies are going to win/do ten years from now but I do understand that Snickers bars will be the number one candy company in the US - like its been for 40 years. So, I look for durable competitive advantage and that is hard to find. I look for an honest and able management and I look for the price I'm going to pay."

While Buffett's big acquisitions have made headlines; wise investments in companies like Coco Cola, the Washington Post and Gillette have provided the capital to make those acquisitions possible. Since taking control of Berkshire in 1964, the company has acquired 68 subsidiaries. In March of 1964, Berkshire acquired its first insurance company National Indemnity.

In 1972, See's Candies for $25 million, in September of 1983, Nebraska Furniture Mart and Borhseim's in 1989. In 1998, Berkshire acquired Dairy Queen and Geico in January, Net Jets in August and General Re Corp in December. In April of 2002, Fruit of the Loom and most recently Buffett is looking abroad for new business.

Recently, he bought 80 per cent of the Israeli Metal Works Company and he did it without even seeing it. He was approached by the promoter via a letter and what was in that letter convinced him that 'this was the kind of the person I wanted to do business with and it is the kind of business we wanted to own.' How does this 'daring bit of investment fit in with his usual careful way of investing?

He explains, "I had to size up the business but that's a background of being in stocks. If you put your whole net worth in stocks when you are 20-21 years old - you have not visited the businesses but you are really analyzing their financials, you are trying to assess whether they have durable competitive advantage, assess the quality of the management and the integrity of the management and then you try to figure out whether you are buying it at a reasonable price and that's it, that is all we do."

He's never had anything lacking - his acute business brain has made him a lot of money. He also feels that the youth of today are living better than John D Rockefeller. His own style remains the same - he lives in the same house for 48 years, carries no cellphone, has no computer on his office desk, does not move around with an entourage.

As he puts it, "I have had everything I wanted all my life. At 20, I was having the time of my life doing what I did. Today, I'm eating the same things I always eat - burghers, fries and cherry coke. Only my clothes are more expensive now but they look cheap when I put them on!"

At 76, he married his long-time companion, Astrid Menks at a low-key ceremony at his daughter Susan's house. He is also amazingly healthy for someone on a burghers-coke diet. He's also surprisingly down to earth. He moves around freely unencumbered by a security detail. He does have a few guards with him during the annual shareholders meeting but he says he doesn't feel the need to put himself in a cocoon.

Which probably explains, why he wasn't nervous about visiting a factory in Israel, which is close to the Lebanese border. He says of that visit, "Our plant there is about 8-10 miles from the Lebanese border and there were maybe a rocket or two that hit the parking lot or something like that but it can be dangerous being in this (US) country as well."

Buffett is comfortable in Omaha in part because people leave him alone with the exception of a random fan or two. This billionaire doesn't even have a chauffeur - he drives himself around in a 2006 Cadillac DTS, recently purchased after he auctioned off his old Lincoln Town Car, which was famous for its Thrifty license plate. And no, he does not want a yacht or many mansions. He just wants to be left alone to enjoy a good football game in his sweatsuit on a big screen television - with popcorn.

It's really no surprise that America's most prominent investor chooses to live far from the nation's wealthy-elite in New York, Los Angeles, Chicago and Miami. He says that when he was in New York, he had about a 100 ideas about where to invest but it was over-stimulation.

In Omaha, he needs one good idea in a year and he feels he can think better and with less distraction. He feels there is a sense of community in living there.

His investing theories have been talked about ad nauseum by almost every business/finance writer and is a cottage industry all by itself.

But one he finds closest to reflecting his views is a book written by Larry Cunningham - 'The Essays of Warren Buffett - Lessons for Corporate America' is required reading in a one of a kind course start at the University of Missouri School of Business.

The course is called Investment Strategies of Warren Buffett. It turns up Buffett is hot on campus too. The class now in its eighth year and is the brainchild of Buffett's friend Harvey Eisen.

Harvey Eisen recalls, "This course is a breakthrough in terms of reality meeting academics. I said why don't we have a course like this and the academics scratched their head and said 'well we don't' and I said 'why don't we' and then we got it done."

Dean of the University of Missouri School of Business Bruce Walker bought the idea. He says, "We want our students to be exposed to many different approaches to investing."

The Buffett playbook is taught, analysed and written about but it is best summed up like this.

Harvey Eisen explains it, "Number one - Don't lose the money and number two - don't forget rule number 1! Number three - look for unique companies that are hard to replicate - he calls that a moat around the business. Number four - he talks about the circle of competence, which means in simple English, do what you know.

"Everybody in the stock market knows about the economy or about the Federal Reserve. Warren focuses on what he knows and he has made enormous successes at that."

He does not want his managers to report in at any committee meeting of any kind and he lets them get on with the business of running their businesses. But there is one thing he requires of each CEO. Buffett says, "I asked them to send me a letter, that I would keep in a private place that will tell me what to do tomorrow morning, if they are not alive in terms of their successor."

But what about his own successor? He says, "The succession plan is very simple. Our board met a few days ago and we talked about that every in single meeting and we have at least three people inside Berkshire, who in many respects will do my job better than I do. I can't give you the names but the board knows which one of those three they would pick, if something happened to me."

Warren Buffett has also given away $31 billion of his fortune to the Bill & Melinda Gates Foundation and he 'hopes it will accomplish just what they have set out to accomplish. I have observed their Foundation very carefully and Bill & Melinda decided initially they were spending about a billion a year. They have decided they were going to try and figure how they are going to save most lives, relieve the most human suffering.'
Ultimately, that's what money is really meant for, isn't it?

Warren Buffett buys stake in HK battery firm BYD

2008-09-27T19:42:00.002+08:00

New York/Hong Kong: MidAmerican Energy Holdings Co., a unit of US billionaire investor Warren Buffett’s Berkshire Hathaway Inc, said it would pay $230 million for a 10% stake in Chinese rechargeable battery firm BYD Co Ltd to support its ‘green´ technologies.

The deal gives MidAmerican a foothold in the Hong Kong-listed company which is developing electric-hybrid cars it expects to start selling in China later this year and Europe by 2010.

“Mr. Wang Chuanfu has an extraordinary managerial record, and we welcome the opportunity to work with him,” Buffett, the chairman and chief executive of Berkshire said in a statement, refering to the chairman of BYD.

David Sokol, chairman of MidAmerican, said the technologies being developed by BYD will be an integral part of the future for the care of the environment especially relating to global climate change.

Shares in BYD closed on Friday at HK$8.40, valuing the stake of 225 million shares at about HK$1.890 billion ($243 million) at its last traded price. The stock traded as high as HK$20.45 in October last year.

“The news is positive as the investment is big,” Frederick Wong, analyst at BNP Paribas in Hong Kong said.

Wong said BYD’s capital expenditure had been high in the past 1-2 years and needed funding for development.

“(The investment) will help the company’s fundamentals,” Wong said.

BNP had trimmed its target price of BYD, which also has a mobile phone unit, by 27% to HK$8.00 to reflect worst-than-expected macro handset demand and its bearish view on margins, it said in a note written by Wong on 5 September.

But BNP also believed BYD deserved a 20% premium over the sector average because BYD had explosive revenue growth in both the automotive and handset businesses despite earnings growth momentum being dragged down by a deteriorating gross margin.

Hong Kong-listed BYD has invested in the manufacturing of electric cars in China and plans to sell the cars to overseas markets.

Israel’s Clal Industries and Investments, a unit of conglomerate IDB Development, said on Thursday it signed a deal to import electric cars from BYD and sell them in Israel.

BYD’s electric cars are expected in Israel and Europe by 2010. The firm has said the cars could travel 300km (190 miles) on a single charge. A full charge needs nine hours using its lithium-ion batteries, although they could be charged to 80% capacity in 15 minutes.

MALAYSIA'S TANJONG POSTS 43.2 PCT RISE IN H1 PRE-TAX PROFIT

2008-09-27T18:20:00.000+08:00

Tanjong plc (KLSE:2267) has chalked up a 43.2 per cent surge in interim pre-tax profit to RM461.487 million (US$134.4 million) from RM322.264 million a year ago thanks to solid results from its power generation and gaming businesses. Revenue for the six months ended 31 July 2008 jumped 32.7 per cent to RM1.65 billion from RM1.24 billion in the same period last year, it said in a filing to Bursa Malaysia on Sept 25.

Earnings per share climbed to 83.73 sen from 57.40 sen previously.

It declared a second interim gross dividend of 17.5 sen per share, higher than 14 sen paid for the same quarter last year.

For the second quarter, Tanjong's pre-tax profit rose 15.4 per cent to RM190.337 million from RM164.987 million a year ago.

Revenue at RM840.286 million was 30.2 per cent better than RM645.221 million previously.

Tanjong said power generation revenue increased 44 per cent to RM1.204 billion in the first half from RM837 million mainly due to the contribution of RM344 million from the Globeleq plants.

The operating profit of the power generation segment however only increased by RM60 million or 17 per cent to RM408 million for the current period due to the recognition of scheduled maintenance expenses totalling RM24 million for the Panglima power plant and non-recurring corporate and other business development costs totalling RM32 million.

Gross sales proceeds from the numbers forecast operations (NFO) fell 3 per cent to RM991 million from RM1.024 billion due to the reduced number of special draws conducted in the current period.

Gaming revenue however increased to RM356 million from RM341 million due mainly to a reduction in the prize payout ratio from 68 per cent to 65 per cent for the period under review.

The current period's lower prize payout increased the gaming segment's operating profit to RM115 million from RM89 million.

Tanjong said the launch of new attractions in the Tropical Islands led to a higher number of visitors and higher average spending per visitor.

This resulted in an increase in revenue by 52 per cent for the leisure segment, accompanied by a reduction of RM14 million in operating loss to RM15 million.

On future outlook, Tanjong said it expects the group to benefit from the continuing investments made to expand its power generation operations.

It said all other businesses of the group should generally perform in line with expectations subject to factors such as the impact of prevailing conditions on discretionary spending on the group's products and services; measures to provide accommodation at the Tropical Islands resort; and the Malaysian Government's review of the energy sector.

Palm oil prices may fall another 10 percent

2008-09-27T17:12:00.001+08:00

Malaysian crude palm oil futures, down by a quarter this year, may dip 10 per cent by December as the retreat of funds from the market and economic gloom hits demand while supply remains strong, industry analyst Dorab Mistry said.

Demand for palm oil has not been able to recover after it was crimped by high prices last year, while supplies soared after excellent weather conditions this year, Mistry told Reuters in an interview on the sidelines of the Globoil conference.

Mistry, a director of India's commodities-to-appliances company Godrej International Ltd, is scheduled to present a paper on price forecasting on Sunday.

"Now of course the economic outlook for the whole world has become very cloudy, so we may not capture back the demand we have lost," he said.

On Friday, the most-active December contract on the Bursa Malaysia Derivatives Exchange closed up 33 ringgit at 2,313 ringgit ($674) per tonne.

Prices have halved since their record level in March. "Price have already fallen a great deal but we may not have bottomed out yet. We may have another 5 to 10 percent more to go on the downside," he said, suggesting crude palm oil prices may sink to 2,000 ringgit.

Palm oil was going through a cyclic high-production phase since September last year -- a phase that should normally have ended in July 2008, but was likely to last until November, he said.

"In a situation of uncertain economic times and with a problem with funds, which were propping up the commodity markets, having withdrawn or retreated, markets could fall a bit more."

Mistry said supply was up despite attempts to hide output. "Production kept going up and the suppliers kept hiding production, holding back, holding back until the stocks became unbearable and then suddenly they let go."

Prices would look up only after stocks diminish, helped by use of the cooking medium as fuel as both oils had about the same calorific value, he said.

"Prices need to go down to 2,200 ringit in order to reach this market clearing level where people can make use of oil for anything and clear the stocks," he said.

"Until that happens, until you go down and clear stocks, you won't go up again. Otherwise you will keep on suffering from indigestion."

Nineteen research houses say Bursa shares unattractive

2008-09-26T17:12:00.000+08:00

The Bursa Malaysia stock has turned unattractive based on reports by 19 research houses (local and foreign), which mostly have a “sell” or “neutral” call on the counter, while a few had “in line” or “hold” recommendations.

According to Bloomberg, the stock has a target price of as low as RM3.40 and a high of RM8.35, with RM3.76 being the overall average target price.

The 19 research houses’ reports were dated from July to August.

An analyst with Citi Investment Research, who has a “sell” call, said Bursa Malaysia had ranked poorly and was grouped together with other stocks in the Asia-Pacific region, such as AXA Asia Pacific Holdings Ltd (Australia) and top South Korean Internet gaming company NHN Corp (Korea) based on Citi’s Radar Model.

The Radar Model divides companies into four quadrants and tries to explain how the market perception may change over time and how this often affects valuations and stock prices.

According to the model, the top sectors in the Asia-Pacific that have managed to beat the global economic downturn were metals and mining, motor vehicle, energy and banking, while hotel and retailing have overtaken insurance as the least attractive to invest in this month.

Corporations in the region that had performed well (termed Asian idols) included the China National Offshore Oil Corp, Link Real Estate Investment Trust of Hong Kong, and Tata Steel Ltd, a unit controlled by India’s Tata Group.

The analyst said the Asian idols were among the quandrant stars that also had a high “buy” rating.

Another local analyst said Malaysian companies, including Bursa Malaysia, were “weighed down” by political uncertainties affecting investor confidence as well as the global economic downturn.

“The double-whammy effect has taken a toll on most stocks and Bursa Malaysia is no exception, especially since it’s the local stock exchange for listing.”

He said market sentiment remained low and that even company listings had dwindled significatly this year compared with 2007.

“But we choose to remain optimistic that things will change for the better for the economy as well as Bursa Malaysia in the longer term,” he said.

THAI FINANCE MINISTER TO DECIDE ON DEAL OF MALAYSIA'S CIMB

2008-09-26T13:18:00.000+08:00

Incoming Thai Finance Minister Suchart Thadathamrongwet have given an assurance that he would make a decision soon on Malaysia's CIMB Group purchase of 42 per cent equity worth RM577.4 million (US$168.5 million) in BankThai PlC. Suchart said any decision pertaining to the purchase would be made before the lapse of the memorandum of understanding (MOU) between CIMB and Financial Institutions Development Fund (FIDF) which holds the stake.

"I will decide myself about the purchase...but definitely within the time frame specific in the MOU," he told reporters here Wednesday.

Suchart, currently the deputy finance minister, has been nominated to be the Finance Minister under new Prime Minister Somchai Wongsawat and the new Cabinet is waiting for Royal endorsement.

CIMB Group Chief Executive Officer Nazir Razak is said to have been here last week to meet with FIDF and BankThai executives as the deal must be completed by November.

In July, the Bank of Thailand requested the Finance Ministry to approve an increase in the foreign ownership limit for BankThai Plc.

CIMB announced in June that it would pay RM577.4 million to purchase a 42.13 per cent stake in BankThai from FIDF. It also proposes to buy the remaining shares.

The transaction requires Finance Ministry approval as the foreign limit of 49 per cent could be exceeded under the deal.

The acquisition will see CIMB Group emerging as the ninth largest commercial bank in Thailand in terms of assets through 147 branches nationwide.

Malaysia c.bank tells Maybank to cut BII price

2008-09-26T10:52:00.001+08:00

State-controlled Maybank said it had been told by the Malaysian central bank to cut the price of its proposed $2.7 billion acquisition of Bank Internasional Indonesia.

Trading in Maybank shares was suspended until 0630 GMT as the deal was supposed to complete on Friday.

The path to a deal has been troubled, and the Malaysian central bank, Bank Negara Malaysia (BNM), had previously blocked the purchase when Indonesian regulators insisted Maybank would have to sell part of its stake in the future.

That block was only lifted on Sept. 16.

"(BNM told) Maybank to obtain a new agreement on a purchase price that will not result in substantial impairment under international reporting standards that would impact the fundamental soundness of Maybank," Maybank said in a statement.

BII stock has fallen nearly 8 percent to 470 rupiah since the deal was announced.

Maybank said it would hold talks with Fullerton Financial Holdings, part of Singapore's Temasek [TEM.UL], and South Korea's Kookmin Bank , majority stakeholders in BII.

Malaysian Cbank tells Maybank to renegotiate BII

2008-09-26T10:51:00.000+08:00

Malaysia's central bank has told Maybank to renegotiate the price for its proposed $2.7 billion purchase of Bank Internasional Indonesia , the company said on Friday.

Bank Negara Malaysia has also asked Maybank to obtain an extension to the Sept. 26 deadline to complete the deal, the company said in a statement to Bursa Malaysia.

Malaysia's TH Group stock halted on Bursa

2008-09-25T22:10:00.001+08:00

Shares of Malaysian plantation firm TH Group were suspended from trade pending an announcement, the company said on Thursday.

TH Group's major shareholder, Tung Hup Holdings is proposing a what it said was a a "major corporate exercise", the company said in a filing with stock exchange Bursa Malaysia. It did not provide any more details.

Tung Hup owns 18.4 percent of TH Group, Reuters data showed.

TH Group shares were up 16 percent at 0.575 ringgit prior to the announcement.

Malaysia CIMB delays S$200 mln bond sale

2008-09-25T19:29:00.002+08:00

Malaysia's CIMB Bank the country's second largest lender, has delayed a S$200 million ($139 million) bond sale as the credit crisis boosted borrowing costs, a banking source told Reuters on Thursday.

But the bank went ahead and priced another issue of 1 billion Malaysian ringgits ($292 million) worth of bonds at a yield of 6.7 percent a year, a spokesman for the bank said in Kuala Lumpur.

CIMB wanted to sell perpetual bonds in Singapore, which would have qualified as Tier 1 capital, according to a term sheet seen by Reuters earlier.

"CIMB told investors that it will consider approaching the market once conditions have normalised," said the source in Singapore, who had direct knowledge of the deal and who had seen the Malaysian lender's update to investors.

Analysts said issuers have shunned the Singapore debt market, which is reeling from tighter lending conditions since the collapse of Lehman Brothers in mid-September.

"I have not heard anyone issuing a bond in Singapore in the last two weeks," said Selena Ling, an analyst at Oversea-Chinese Banking Corp. "The credit concerns and elevated interbank lending rates have forced issuers to pull back."

The two-year offered swap rate , a key indicative rate for shorter-dated bonds, has shot up by about 40 basis points to 2.33 percent since the collapse of Lehman Brothers.

CIMB's proposed bonds were rated BBB-minus by Standard & Poor's and Fitch Ratings.

CIMB-GK, Singapore's DBS Group and UBS were the lead managers for the sale.

- Reuters

Asian stocks drift lower, U.S. dollar dips

2008-09-25T12:39:00.001+08:00

Asian stocks fell and the U.S. dollar dipped against major currencies on Thursday, pressured by doubts over the U.S. government's proposed $700 billion bailout plan and worries about the economic fallout from the crisis.

Gold gained, rising toward Tuesday's seven-week high, and short-term government debt prices climbed on concerns the U.S. bank rescue may be insufficient to deal with the turmoil.

Crude oil futures held steady near $105.70 per barrel.

The euro rose 0.6 percent from late U.S. trade to around $1.47 while the dollar index, which tracks the currency's performance against six major currencies, dropped 0.5 percent. The dollar fell slightly against the yen.

"The bailout offers some respite for the financial sector but does little to change the economic outlook, which continues to deteriorate," said Dwyfor Evans, currency strategist at State Street Global Markets in Hong Kong.

"If the bailout plan disappoints in the coming days it should give a boost to the yen's safe-haven status relative to the dollar," he said in a note.

Warren Buffett's $5 billion bet on Goldman Sachs and the Federal Reserve's new currency swap lines with more central banks helped restore some investor confidence in the dollar, but the buying interest was still limited by worries about the U.S. economy, analysts said.

Uncertainty about the $700 billion bailout plan weighed on U.S. stocks, knocking the Dow Jones industrial average and the broader-based S&P 500 index by 0.3 percent and 0.2 percent respectively.

Asian markets picked up Wall Street's cue.

The MSCI index of Asia-Pacific stocks outside of Japan fell 0.6 percent by 0130 GMT, though it remained well above a two-year low hit last Thursday.

Japanese shares also lost ground, with the Nikkei average falling 0.8 percent by 0150 GMT.

The U.S. bailout package unveiled late last week triggered a temporary rally in global stocks but concerns over when Congress will approve the plan and uncertainty about its final form quickly eclipsed that optimism.

Bush administration officials warned an angry Congress on Wednesday that the U.S. financial system would sink into Great Depression-style chaos unless it passed the bailout plan.

President Bush added his voice to the warning, saying an economic disaster loomed if Congress failed to act swiftly.

A bleak assessment of the U.S. economic outlook from Fed Chairman Ben Bernanke on Wednesday bolstered the view the U.S. central bank will lower its benchmark interest rates again by year-end.

The Fed cut its benchmark federal funds rate to 2 percent from 5.25 percent in a series of moves starting in September 2007 after the global credit crisis blew up.

Short-term U.S. Treasury debt was in demand, suggesting funding needs once again have moved to the forefront of investors' minds. The yield on the 1-month bill slipped to a mere 10 basis points, down from 12 basis points late in New York on Wednesday.

The rate on overnight dollar funds in Asia held steady to 2.5-3.5 percent from a peak of about 10 percent hit last week, signaling improved liquidity conditions after central banks have pumped billions of dollars into the money market in recent days.

Gold prices rose as far as $888.45 per ounce, up about 0.8 percent from New York's close on Wednesday.

Malaysian stocks seen lower amid US bailout fears

2008-09-25T09:59:00.002+08:00

Malaysian stocks are set to fall on Thursday as uncertainty about when Congress might approve a proposed $700 billion U.S. financial sector bailout increased concerns that global financial turmoil will continue.

These concerns saw the Dow Jones and S&P indexes fall, although the Nasdaq gained on hopes of higher spending on technology.

'The market is closely following the Dow,' said a dealer at a local brokerage house.

However, dealers said plantation stocks, such as Sime Darby and IOI Corp, may rise as palm oil prices have gained slightly.

Here are news stories and factors that may affect the Malaysian stock market on Thursday.

----------------------MARKET SNAPSHOT @ 2354 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG

S&P 500 1185.87 -0.2% -2.350

USD/JPY 106.05 -0.18% -0.190

10-YR US TSY YLD 3.809 -- -0.013

SPOT GOLD 881.60 0.07% 0.600

US CRUDE 105.45 -0.26% -0.280

DOW JONES 10825.17 -0.27% -29.00

ASIA ADRS 128.44 1.65% 2.08

-------------------------------------------------------------

> Malaysia orders tests on imported China food

> Malaysia Anwar calls for patience in power bid

> Malaysia cuts fuel cost as inflation stays high

> Palm recovers slightly as oil supports vegoils

> Malaysia's Petra Energy wins 1.1 bln rgt job

> Vietnam ABBank boosts capital base by 17.8 pct

> SE Asian Stocks-Mostly edge up after Buffett move

> US STOCKS-Bailout worries hit Dow, S&P, techs help Nasdaq

> Oil falls on demand worries

> FOREX-US dollar rises in choppy trading, yen falls

> TREASURIES-T-bill rates tumble on money market stress

> Gold rises on investor jitters, record ETF holding

Malaysia cuts fuel cost as inflation stays high

2008-09-24T07:41:00.001+08:00

Malaysia cut fuel prices for the second time in a month after annual inflation in August came in at 8.5 percent, the same level as in July.

The number was broadly in line with a Reuters poll of 8.4 percent and held near 27-year highs.

The government announced it was cutting petrol and diesel prices by another 10 Malaysian cents each, which analysts said was likely to ease price pressures in coming months.

'There will probably be an easing of the number from September onwards, primarily because of the falling global food and fuel prices as well as the cut in domestic fuel prices,' said Gundy Cahyadi, economist at IDEAglobal.com.

'Having said that, it will stay above 8 percent for the rest of the year,' he said, adding that his average forecast for the full year was 6.1 percent.'

Inflation in Malaysia has climbed since the government cut fuel subsidies as global oil prices rose. Annual inflation in May stood at 3.8 percent.

Malaysia raised petrol prices by 41 percent and diesel by 63 percent in June in an effort to staunch rising budget spending, but then partly reversed them on Aug. 23 as world oil prices retreated from a record high in July of above $147 a barrel.

The country's unpopular government has come under pressure due to rising inflation and a resurgent opposition.

A further cut in fuel prices announced on Wednesday means inflation is likely to ease further, analyst said, virtually ruling out any possibility of a rate hike by the central bank.

Bank Negara Malaysia has kept its official rate unchanged at 3.50 percent, fearing a rate hike could slow economic growth.

Rates were last raised in April 2006.