Market opens on weak note, TMI falls

KUALA LUMPUR: The market opened on a cautious note Monday, with some blue chips continuing to lose ground from last week, including TM International, despite some mild window-dressing activities.

At 9.30am, the KL Composite Index was down 6.01 points to 1,184.53 points. Turnover was 30.91 million shares valued at RM86mil. There were 47 gainers, 182 losers and 90 counters unchanged.

Japan’s Nikkei 225 rose 9.19 points or 0.07% to 13,553.55 and Singapore’s Straits Times Index added 0.48% to 2,970.09. Shanghai’s A Share Index fell 32.48 points or 1.13% to 2,850.46.

Light crude oil was trading at US$141.48 (RM461.72) per barrel.

TM International was the top loser, down 35 sen to RM6.05, LPI fell 30 sen to RM11.50 while AEON, MISC foreign and Public Bank foreign fell 10 sen each to RM4.10, RM8.15 and RM10.30 respectively.

Widetec lost 28 sen to 70 sen,WCT 12 sen to RM2.96 and SMI 10.5 sen to 19.5 sen.

Tenaga advanced 10 sen to RM8.20. Kulim rose 15 sen to RM9.65 while KFCH, KL Kepong and YTL added 10 sen each to RM6.40, RM17.50 and RM6.90 respectively.

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Genting launches online casino in Britain

PETALING JAYA: Genting International Plc has launched its first online casino brand, CircusCasino.com, in Britain.

CircusCasino would be run by unit Genting Stanley Alderney Ltd (GSAL) and would offer over 100 casino, card and table games, Genting International said in a statement yesterday.

TA Securities analyst James Ratnam said the online business would complement the company's existing business.

“A lot of young people are also more interested in utilising online services as opposed to going to physical casinos. It will probably be good for Genting International,” he said.

Another analyst concurred but said he expected the impact of CircusCasino to be minimal on Genting International’s net profit.

“This is part of the company’s strategy to strengthen its presence in Britain’s online gaming industry. However, the profits – especially within the first two years – should be minimal,” he said.

The analyst said the cost of setting up the online business would also be small, probably in the region of “a few million pounds.”

Genting International, a 53.4% subsidiary of Genting Bhd, operates 44 casinos in Britain.

On March 13, Genting International said GSAL had received approval from the Alderney Gambling Control Commission for an online gaming licence and it expected the online gaming business to start in the latter part of the second quarter.

AmResearch noted in a report yesterday that Genting had been “besieged” by a lot of rumours of late, relating to Genting International’s financial position.

Investors have been concerned that the cost of Genting International’s integrated resort project in Singapore is on the rise.

Additionally, its British operations have been affected by lower business volume, higher net bad debts written off and increased gaming duties.

According to AmResearch, however, as of May, Genting’s management had indicated there were no cost overruns for the Sentosa Island project and that it should be “comfortably financed” by borrowings of S$4.3bil and equity proceeds.

“We understand that Genting International bought forward some of its materials, like concrete and structural steel, more than 12 months ago,” it said.

Meanwhile, Genting International said the launch of CircusCasino was not expected to have any material impact on the consolidated net tangible assets and earnings per share of the company for the financial year ending Dec 31.

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Brazil state oil company to pump Nigerian field in July

SAO PAULO, Brazil (AP) - Brazilian state oil company Petrobras will start pumping oil from a Nigerian field on July 21, company officials said Saturday.

Petroleo Brasileiro SA expects to begin producing oil "of the highest quality'' in the offshore Agbami field in partnership with French oil company Total SA and California-based ChevronTexaco Corp., Petrobras' Nigeria manager Rudy Ferreira told the Agencia Brasil state news service.

The company plans to immediately pump 100,000 barrels a day from the field and will boost output to 250,000 barrels a day by next year, Ferreira said.

Since 1998, Petrobras has invested about US$2.2 billion in oil exploration and production in Nigeria, where it owns shares in three fields. The company's Nigerian operations are expected to yield about US$2 billion a year in revenue next year, given oil prices of US$80 a barrel, Ferreira said.

Light, sweet crude oil reached a record $142.99 a barrel on Friday.

Company officials announced plans to boost investments in Africa last fall, earmarking US$1.4 billion to spend on Nigerian projects and US$900 million on Angolan projects between 2008 to 2012.

Petrobras is riding a wave of optimism following a handful of major oil discoveries, including more than 5 billion barrels at its offshore Tupi field last year.

In April, a top energy official announced a deep water find off Rio de Janeiro that could approach 33 billion barrels, among the world's largest. Petrobras downplayed that estimate, saying further studies were necessary.-AP

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Big money in oil sector

KUALA LUMPUR: The oil and gas sector and the information technology industry saw the sharpest increases in salary, a survey has shown.
According to outsourcing and consulting group Kelly Services, which conducted the 2007/08 survey, base salary in both sectors increased by 30% followed by the engineering sector at 28%.
“Commodity-based companies like oil and gas and oil palm are able to absorb the salary increase as there is continued demand for their products and by-products,” said consulting director Anthony Devadoss at the launch of the Malaysia Salary Handbook 2008/09: A Practitioner’s Insight To Salaries Across Industries, here, yesterday.
“Both sectors also recorded an increase in hiring opportunities,” he said, adding that generally, “Malaysia experiences the most stable salary increment compared to India, Singapore and China.
“There is a 6% to10% increase annually, which is steady.”
He said that the survey, conducted during the first quarter of this year across salary trends among companies in the country, also found a robust situation in employment opportunities.
“There is an increase in the manufacturing, IT, engineering, marketing services and banking sectors with new job titles to cater to changing demands,’’ he said.
High value-added investments, which create jobs that command high incomes, and investment in human capital could form some of the core elements of sustaining growth.
Although most industries would see an increase in increment, there were sectors which would be hit, especially, with the economic uncertainties.
“With the price hike in food and fuel, businesses such as retail, FMCG (fast-moving consumer goods) companies, tourism, travel and automotive are much likely to be affected due to reduced and cautious consumer spending.
“Thus, an increase in salaries will be a tight squeeze for them,” he said. “These sectors will definitely take a cautious stand in raising salaries,” he added.

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Bernas expects price of rice to soften soon

KUALA LUMPUR: Padiberas Nasional Bhd (Bernas) sees the price of rice falling as major rice-producing countries are projected to have a bumper harvest from August.
The company has also struck a deal with a rice mill in Thailand to secure the supply of rice and sees more of such arrangements with other mills in the country.
“We think the price of rice will soften and are cautious about the Government entering the market now to buy a big block (of rice),'' managing director Bakry Hamzah said after the company AGM yesterday.
Bakry's caution comes as the price of rice has softened from just over US$1,000 a tonne to about US$870 now for benchmark Thai White Rice.
He expects prices to ease more as Vietnam, the second largest rice exporter in the world, may see production increase by about 18%, and India, which has an export ban, is projected to produce an extra 2 million tonnes.
Bakry Hamzah (left) and Datuk Wira Syed Abdul Jabbar at the AGM.
Bakry said he believed the benchmark Thai White Rice would fall to US$720 a tonne and the forecast bumper crop would cause uneasiness among rice millers abroad who might have hoarded the crop in anticipation of higher prices.
“We will buy when rice meets our target. It's not a matter of time but price,'' he said.
He added that the right price for big purchases from Bernas would be when rice was below US$600 a tonne, a price Bernas would face right for it to be able to overcome the circumstances it faced now.
“At high prices, Bernas will make a loss,'' said chairman Datuk Wira Syed Abdul Jabbar.
Bakry's comments were in response to questions over the supply of 200,000 tonnes of rice that was scheduled to be shipped into the country by August and a further 300,000 tonnes from Thailand.
To improve rice supply, Bakry said, it had entered into an arrangement with a mill in Thailand where Bernas would buy the paddy and supply it to the mill for processing. Bernas would then buy the rice from the mill at an agreed price.
He said the arrangement would lead to a supply of 60,000 tonnes a year. “If it works, we will extend it,'' he said, adding that foreign companies were prohibited from buying equity stakes in rice mills in Thailand.
He said the deal with the rice mills was done because obtaining supply was difficult once the price of rice surged.
Bakry also said there was a RM1.75bil benefit to the Government after Bernas was privatised. Much of the benefit comes in the form of savings in grant, corporate taxes and social obligation.
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Team up with varsities in R&D, private firms urged

JOHOR BARU: Higher Education Minister Datuk Seri Mohamed Khaled Nordin has called for private corporations to collaborate with local universities in carrying out research and development (R&D) programmes.

He said such partnership was common in foreign countries.

"We do have it here but it is not satisfying. The companies should be more involved in forming such collaborations with the universities,” he said.

"Through R&D we would be able to come out with products of higher quality for us to compete in the international arena," he said.

He said there are four research universities in the country, namely Universiti Teknologi Malaysia (UTM), Universiti Malaya, Universiti Putra Malaysia and Universiti Sains Malaysia.

"I hope to see more of such cooperation in the future," Mohamed Khaled told reporters at the UTM campus in Skudai here on Friday.

He was there to witness the signing of Memorandum of Understanding between UTM, University of Cambridge (UC) and Rolls Royce Plc, the manufacturer of the Trent engine of Airbus A380 airliners.

The three institutions will conduct a collaborative research to explore the possibility of using biofuel for gas turbine combustion.

The £220,163 (over RM1.4mil) project, to be conducted in three years, is fully funded by the Ministry of Science, Technology and Innovation.

It is part of the nearly RM5mil Science Fund research given to UTM’s “Development of A Database for Biofuel Combustion Properties” programme.

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House prices up 30%

HOUSE prices need to be raised by 30% due to the hike in building materials and petrol prices, Nanyang Siang Pau reported.

Master Builders Association of Malaysia president Patrick Wong said middle-range house prices had been increased from RM150,000 to RM190,000.

“The developers have no choice but to raise the price as the cost of building the houses has increased. The price of houses was adjusted two weeks ago,” he said.

New Era College management in the dark over the staff requirement

China Press reported that the New Era College management was in the dark over the staff requirement of the college in the past two years.

College chairman Dr Yap Sin Tian, who is also the president of Dong Zong (the United Chinese School Committees Association of Malaysia), said the college council did not receive any report from the college management about the staff requirement.

To resolve the issue, Dr Yap said the council decided that positions of administrative chief or above must get the council's approval.

Newspaper reports on Sunday said that the management and administrative staff of the college were at loggerheads.

A total of 14 department heads of the college signed a joint statement against Dr Yap.

The 14 heads accused him of refusing to allow administrative staff to be involved in planning work as well as being responsible for the departure of Dong Zong administrative chief Mo Tai Xi.

Other News & Views is compiled from the vernacular newspapers (Bahasa Malaysia, Chinese and Tamil dailies). As such, stories are grouped according to the respective language/medium. Where a paragraph begins with a sub-heading, it denotes a separate news item.

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G-8 ministers urge oil-producing nations to boost output

OSAKA, Japan (AP) - Finance ministers from the Group of Eight industrialized nations urged oil producers to boost output to help stabilize record-high oil and food prices, calling the situation a serious threat to global economic growth.

"Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide,'' the G-8 ministers said in a joint statement Saturday at the conclusion of two days of talks in Osaka in western Japan.

The fundamental factor driving oil prices is the imbalance between rising global demand and supply constraints, the ministers said. They added that geopolitical and financial factors also play a role _ a reflection of some ministers' view that speculative trading in oil markets is pushing up prices.

U.S. Treasury Secretary Henry Paulson insisted the problem stems primarily from tight supplies.

Noting oil prices have jumped fivefold since 2002, Paulson in a statement called on countries to reduce reliance on subsidies and pressed for more investment in oil exploration and production.

"I think there's a danger if people say, 'Oh, it's the speculators,''' Paulson told reporters. "We don't want to misdiagnose the problem. And if you look at the problem, I think it's pretty clear. We have not had an increase in production capacity in oil for the last 10 years.''

Echoing Paulson, British Chancellor Alistair Darling said focusing too heavily on speculators distracts from the main issue. "What we need to do, as a matter of urgency, is to increase supplies,'' he said.

But other G-8 members, particularly France, Germany and Italy, place greater blame on speculators.

Italian Finance Minister Giulio Tremonti said "enormous'' speculation is behind the rising energy prices. He has proposed an increase in margins needed to trade oil futures contracts.

Japanese Finance Minister Fukushiro Nukaga, chair of the G-8 meeting, downplayed any differences among members, saying they simply "don't yet have a full understanding of what is actually happening.''

To help find out, the ministers asked the International Monetary Fund and the International Energy Agency for a report later this year on the factors behind surging oil and commodity prices.

The agenda for the G-8 talks _ among Britain, Canada, France, Germany, Italy, Japan, Russia and the U.S. _ also included troubled financial markets, private-sector-led development in Africa and global warming.

The ministers said they "welcome and support'' a pair of new funds, including a US$10-billion clean technology fund, to help developing countries fight global warming.

Next up on the G-8 schedule is a July 7-9 leaders' summit in northern Japan. - AP

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