KDN PP9488/05/2010 (023849) Thursday – 21/10/10

MORNING NOTE
For Private Circulation Only

Indices Value Net Chg
FBM KLCI 1486.78 -1.87
FBM EMAS 10034.81 -5.08
FBM-ACE 4244.48 +59.54
KLCI Futures 1491.0 +1.0
Vol (m shrs) 1,488.83
Value (RM´m) 1,802.94


DJIA 11107.97 +129.35
S&P 500 1178.17 +12.27
NASDAQ 2457.39 +20.44
NIKKEI 9381.60 -157.85
HANGSENG 23556.50 -207.23
CHINA CSI 300 3396.88 +21.20
STI 3179.15 -13.14


OFF MARKET TRANSACTION
( 2 1m shares )
Stock Name Volume Price
INGENS 7,441,000 0.06
CAROTEC 10,000,000 0.07
EDUSPEC 1,000,000 0.21
PRIVA 1,000,000 0.06
CIMB 4,406,892 7.88
IJM-WC 2,100,000 1.65
GLOMAC 3,000,000 1.53
GLOMAC-WA 3,000,000 0.55
MEDAINC 8,885,000 0.10
MUTIARA 1,200,000 0.96
MEDIAC 3,344,445 0.74
CNI 3,000,000 0.18
PELIKAN 1,186,175 1.24
GOODWAY 1,000,000 1.00


MOST ACTIVE
Stock Name Volume Price
KBUNAI 162,532,900 0.235
ASB 52,153,300 0.205
ASB-LA 42,414,000 0.095
TIMECOM 40,314,100 0.705
PMCAP 30,703,400 0.105


TOP GAINER ( By %)
Stock Name Change Price
GFB-WB 100.0 0.01
KEYWEST 50.0 0.09
JADI-WA 50.0 0.12
TCUBES 33.3 0.10
MAXBIZ 28.6 0.135


TOP LOSERS ( By %)
Stock Name Change Price
AGLOBAL-WA 50.0 0.005
WASEONG-CB 25.0 0.015
FONICS 25.0 0.015
MTOUCHE-WA 22.2 0.035
HSBC-C6 20.0 0.02



RESEARCH DEPARTMENT
research@pmsecurities.com.my

MEDIA HIGHLIGHTS

• BCorp gets licence for vehicle production
• RM1.5b jobs for WCT
• Genting teams up with UK's Apollo
• Khazanah approached Hong Leong last year, says Rin
• RHB optimistic of overseas boost with Mestika
acquisition
• P1 aims for 280,000 users by year-end
• Pasdec calls off gelatine plant tie-up
• Puncak Niaga to bid for India water jobs
• Bintulu Port asked to submit proposal
• Gopeng seals deal over Perak-Hanjoong stake
• 100-storey tower to be PNB new HQ
• BAT 3Q net profit up 2.4% to RM170.65m




The market rebounded from a day´s low yesterday and may continue to advance
but will be capped by the 1500 resistance level. Better corporate earnings fueled
a rebound over in Wall Street last night but the Dow Jones is still in a holding
pattern, trading in a sideways band for the past one week. Hence, until the
FBMKLCI make some new headway such as breaking the 1500 barrier
convincingly, we remain cautious on the market direction. With no new fresh
factor visible over the horizon, the market may trend sideways within a band.









2
MORNING NOTE
MARKET COMMENTARY

US











Malaysia









Japan










Hong Kong










China










Singapore



Stocks advanced, with benchmark indexes rallying the most in two weeks, on
higher-than-estimated results at Boeing Co. and Yahoo! Inc. and speculation the
Federal Reserve will inject more money into the economy. Boeing climbed 3.4%
after also raising its full-year earnings projections. Yahoo! rose 2% after third-
quarter profit beat analysts´ estimates. Freeport-McMoRan Copper & Gold Inc.
added 2.8%, leading a measure of raw-materials producers to the biggest gain
among 10 industries in the S&P 500 Index. The S&P 500 rose 1.1% to 1,178.17,
maintaining gains after the Fed said in its Beige Book business survey that U.S.
economic growth showed little sign of acceleration last month, fueling speculation it
will boost purchases of government debt. The DJIA increased 129.35 points, or
1.2%, to 11,107.97.

Share prices on Bursa Malaysia ended off their lows yesterday, with buying in
Genting, AirAsia and DiGi helping to lift the market amid bearish sentiment and
declines across Asian bourses. At the close, the FBM KLCI was easier by 1.87 points
at 1,486.78. Among the external factors that impacted the market was the fall in
key indices in the US share market, which dropped by more than 1% overnight,
suffering the worst single-session drop in two months, as Apple forecast a profit
that missed estimates and concern re-emerged over US housing foreclosures.
Decliners outnumbered advancers by 408 to 385, while 293 counters were
unchanged, 286 untraded and 28 others suspended.

Stocks fell, dragging down the Nikkei 225 by the most in a week, after China
unexpectedly raised interest rates to curb inflation in the world´s fastest-growing
major economy. Toyota Motor Corp., the world´s largest carmaker, slid 1.3%.
Fanuc Ltd., a maker of industrial robots, fell 2%. Mitsui & Co., a trading company
that counts commodities as its biggest source of profit, sank 2.7% and Inpex
Corp., Japan´s largest oil and gas explorer, dropped 3.4% after oil and metal prices
tumbled. The Nikkei 225 fell 1.7% to 9,381.60, the biggest drop since Oct. 12 and
the largest slump among major equity indexes in the Asia-Pacific region. The Topix
lost 1.2% to 823.69, with more than six times as many shares declining as
advancing.

Stocks fell after China unexpectedly increased its lending and deposit rates, raising
concern a slowdown in the world´s fastest-growing major economy may derail the
global recovery. Guangzhou R&F Properties Co., the biggest real-estate company in
the southern Chinese city of Guangzhou, slumped 5.3%. China Resources Land
Ltd., a state-controlled developer, tumbled 4.1%. PetroChina Co., the country´s
biggest oil company, fell 2.5% after crude prices slid on concern demand from
China, the world´s biggest energy-using country, may slow. The Hang Seng Index
declined 0.9% to 23,556.50, with more than nine stocks declining for every two
that advanced on the 45-member gauge. The Hang Seng China Enterprises Index
slid 0.9% to 13,448.83.

Benchmark stock index rose to a six-month high on speculation the nation´s first
interest-rate increase since 2007 will help tame inflation and contain asset bubbles.
China Life Insurance Co. and Ping An Insurance (Group) Co. rose more than 4%
after Mirae Asset Securities said insurers will outperform in a rising rate
environment. Liquor maker Kweichow Moutai Co. and Tsingtao Brewery Co. led
gains among consumer stocks that are less dependent on the economy. China
Vanke Co. and Poly Real Estate Group Co. slumped at least 6% as higher
borrowing costs may deter demand for housing. The Shanghai Composite Index
gained 2.10 to 3,003.95, the highest since April 21. China´s CSI 300 Index added
0.6% to 3,396.88, led by consumer and energy stocks.

The STI fell 0.41%, or 13.14 points, to 3,179.15. Firms with significant business
exposure in China came under selling pressure after an increase in China's rate,
with Singapore's third largest property developer, Keppel Land falling 2% on
concern the rate increase could hit demand for Chinese properties. Among bright
spots, Singaporean container shipping firm Neptune Orient Lines rose 3.4% after it
reported stronger-than-expected third quarter net profit.








3
MORNING NOTE

ECONOMIC & CORPORATE NEWS

BCorp gets licence
for vehicle
production






RM1.5b jobs for WCT






Genting teams up
with UK's Apollo










Khazanah
approached Hong
Leong last year, says
Rin











RHB optimistic of
overseas boost with
Mestika acquisition





P1 aims for 280,000
users by year-end








Berjaya Corp Bhd (BCorp) has obtained a licence to manufacture passenger and
commercial vehicles at a factory to be built in Selangor, but the rights do not cover
small cars that the diversified group is more interested in. The Ministry of
International Trade and Industry's licence is for the production of commercial
vehicles, hybrid cars, electric cars and luxury passenger vehicles. BCorp wanted to
partner China's BYD Auto to develop 1-litre cars for the domestic and Asean
markets at a new factory on 41ha in Bukit Tagar. Plans to assemble BYD vehicles
had not been shelved. (Business Times)

WCT Bhd has secured two turnkey projects in Doha, Qatar, and Sabah, worth a
combined RM1.49b. The RM1.36b Doha project is for the construction, completion
and maintenance of a government administrative building. The job is scheduled to
be completed by April 2013. The RM127.8m project in Sabah is to design, build,
equip, commission and maintain the Tuaran Hospital. Work on the hospital is
expected to be completed on May 1 2013, it added. (Business Times)

Genting Malaysia Bhd is teaming up with Britain's Apollo Resorts & Leisure Ltd to
bid for a casino licence from the London Borough of Newham in the UK. Genting's
indirect wholly-owned subsidiary, Genting Ibico Holdings Ltd, has signed a deal
with Apollo to set up a joint-venture company, Sevco Ltd. Sevco, to be renamed
Apollo Genting London Ltd, will obtain a long-term lease or buy 6.4ha in the
Docklands area in Newham to develop and operate a leisure entertainment
destination. It will also develop the Olympic Festival Village and lease, sell or sub-
lease parts of the development to each of the parties if Apollo wins the casino
licence and transfers it to Gencas. Work on the development, which will incorporate
a casino as part of an enhanced leisure and entertainment facility, is expected to
start by the third quarter of 2012. The casino is scheduled to open in 2013.
(Business Times)

Khazanah Nasional Bhd had approached Hong Leong Bank Bhd on potentially
selling its stake in EON Capital Bhd (EONCap) as early as the first half of last year.
This was among some of the things that Rin Kei Mei, a substantial shareholder and
director of EONCap, revealed when he took the stand in the High Court yesterday.
Rin, while being cross-examined by Primus' counsel Ranjit Singh, agreed to a
suggestion that his adviser, Kenanga Investment Bank chief Datuk Tengku Zafrul
Aziz, had approached Hong Leong towards the end of the first quarter of 2009 to
see if the bank might be interested in his EONCap shares. Rin said he instructed
Tengku Zafrul to approach Hong Leong as the bank had as far back as 2004
offered him RM7 a share for his holdings in EONCap, which he had declined at the
time. He said Tengku Zafrul, now chief of Maybank Investment Bank, did so and
later reported to him that Hong Leong was interested and that Khazanah was also
looking to sell its shares. (Business Times)

RHB Capital Bhd expects the acquisition of PT Bank Mestika Dharma to boost
contributions from overseas to about 10%, from 6% currently. Its plans to buy an
80 per cent stake in the Indonesian lender for RM1.16b, first announced in October
last year, were to have been completed in the second quarter, but encountered
delays as a result of queries from the Indonesian central bank. There are some
requirements from regulators and RHB Capital hopes to sort out the purchase of
Bank Mestika by the last quarter of this year. (Business Times)

Packet One Networks (Malaysia) Sdn Bhd (P1), a fourth-generation (4G)
broadband service provider, expects to double its subscriber base to 280,000 by
the year-end from about 140,000 last year. P1 has targeted RM650m capital
expenditure this year, including on expansion in Malacca, the only state where it is
not currently operating. P1 was on track to achieving its initial target of covering
45% of Peninsular Malaysia's population by this year and 65% of the country's
population in 2012. To achieve the latter goal, P1 will need a total investment of
RM1b. (Business Times)









4
MORNING NOTE

Pasdec calls off
gelatine plant tie-up



Puncak Niaga to bid
for India water jobs




Bintulu Port asked to
submit proposal




Gopeng seals deal
over Perak-Hanjoong
stake



100-storey tower to
be PNB new HQ










BAT 3Q net profit up
2.4% to RM170.65m





Pasdec Holdings Bhd has called off its collaboration with Pembangunan Buku Hijau
Holdings Sdn Bhd and Imtech Dygenic Technology (M) Sdn Bhd to build a halal
gelatine plant in Pahang. The companies had signed a pact to undertake the
project on June 23 this year. (Business Times)

Puncak Niaga Holdings Bhd has signed two separate joint-venture agreements with
India-based P&C Constructions (P) Ltd to bid for water projects in India. The pacts
enable the companies to collaborate and cooperate as members of an
unincorporated joint venture on a 60:40 basis in favour of Puncak. (Business
Times)

Bintulu Port Holdings Bhd has been asked to submit a detailed proposal to develop,
maintain, manage and operate the proposed Samalaju Port by the Sarawak state
government. Bintulu Port received a letter of intent on the submission from the
state government recently. The port will serve the industries to be located in the
Sarawak Corridor for Renewal Energy. (Business Times)

Gopeng Bhd has sealed a firm deal with YTL Cement Bhd to sell its 35.16% stake
in Perak-Hanjoong Simen Sdn Bhd for RM200m cash. The disposal of 117.742m
shares will result in a loss of RM55.4m to the company. On completion of the sale,
Gopeng´s core businesses will be in oil palm plantation and property development.
(Business Times)

The 100-storey tower that forms part of Warisan Merdeka will be the new
headquarters of Permodalan Nasional Bhd (PNB) as the fund manager is already
thinking about redeveloping its existing head office. Come 2016, its main building
on Jalan Tun Razak, Kuala Lumpur, will be 30 years old. It is already fully occupied
by PNB and its companies. Warisan Merdeka, a 10-year mixed-development project
estimated to cost RM5b, will be PNB's single biggest property project to date. Its
construction is set to create some 5,000 jobs. The tower alone, of about 525
metres, makes up half of the cost. The project will be done by PNB's wholly-owned
PNB Merdeka Ventures Sdn Bhd, but it is open to having partners. It may also sell
part of the 14.6ha site, but this has yet to be finalised as it also wants to have
recurring income from the properties. (Business Times)

British American Tobacco (M) Bhd net profit for the third quarter ended Sept 30,
2010 rose 2.4% to RM170.7m from RM166.7m a year ago, on the back of revenue
RM993.6m. Earnings per share was 59.8 sen, while net assets per share was
RM1.71. BAT declared a second interim dividend of 64 sen per share, tax exempt
under the single-tier tax system totaling RM182.7m in respect of the financial year
ending Dec 31, 2010. For the nine months ended Sept 30, BAT´s net profit declined
to RM548.4m from RM573.9m, despite achieving a higher revenue of RM3b from
RM2.9b a year earlier. The company attributed the decline in net profit to operating
profit movements, marginally higher finance costs, due to the timing of bond
refinancing in 2009, and lower effective tax rate from revised tax payable for 2009.
(the edge financial daily)

The information contained in this report was prepared from data believed to be reliable but we have not independently verified such data and we do not make any representation or
warranty as to the accuracy or completeness of the information. This report is general in nature and has been prepared for information purposes only. It does not have regard to
any specific investment objective, emphasis or need of any person or party and is not to be construed as an offer, invitation, solicitation or recommendation to buy or sell any
securities of the company or companies covered herein by this report. Opinions expressed are subject to change without notice. PM Securities Sdn Bhd and/or its directors and
staff may have an interest in securities of the company or companies covered by this report and may earn brokerage for dealing in the securities mentioned herein. Any
person/party acting upon this report do so at their own risk and PM Securities Sdn Bhd and/or its directors and/or staff do not accept any liability arising from use of this report.









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