Source Monday March 24, 12:02 PM Contact Us: Kuala Lumpur 603-2692-5254

1202 [Dow Jones] STOCK CALL: OCBC Investment Research keeps underperform on Courts Mammoth (5023); company hurting from competition and soft demand. Projects moderate topline growth and EBITDA margins of 15-16% in FY03-04, below historical range of 20-24%. Adds, stock unattractive with prospective PER of 13-14X and annual dividend yields of 1-2% vs sector average of 4-5%. (VGB)

1134 [Dow Jones] May Nymex crude may have been oversold on speculation of quick U.S.-led victory in Iraq, says HSBC oil and gas analyst Gordon Kwan; "prices could retest $30 a barrel again this week unless the military operations were extremely smooth going into Baghdad." Deteriorating situation in Nigeria, off-peak production in Venezuela and some lost output in Iraq, Kuwait to help prop up prices. (ILK)

1131 [Dow Jones] Dataprep Holdings (8338) suspended untraded at MYR1.23; March 21 announced subsidiary served winding-up petition on March 19 by Fujitsu Systems Business for MYR3.2 million with overdue interest of MYR210,606.51. Trader expects company to make announcement after hours to address next course of action. Does not expect any significant on share price as amount is relatively small. (VGB)

1122 [Dow Jones] Eden Enterprises Warrants (7471W) up 19.6% at 55 sen as syndicates help support strong gains on a fundamentally weak issue, says trader. Adds, recently issued irredeemable convertible unsecured loan stocks (7471-LA), which were undersubscribed with only 32.9% acceptance, now trading at premium 5.8% premium, or MYR1.65, to mother share price of MYRE1.56. Says significant block placed out to operators to help support share price. Advises staying away from stock. (VGB)

1105 [Dow Jones] Tanah Emas (7382) up 1.5% in speculative trade. Stock exhibiting significant price volatility in recent weeks, believed to be initiated by syndicated play, encouraging punters to take positions and potentially capitalize on price movements, says trader. "Today's range has been tight but the stock has climbed from a low of MYR1.26 to a peak at MYR1.38 today," says trader. However, year high MYR1.41, suggesting upside limited. (VGB)

1040 [Dow Jones] MMC Engineering (2178) untraded at MYR4.10 despite indications from parent MMC (2194) it does not plan to maintain its' units listed status. Trader says upside limited after taking into consideration transaction costs. MMC made a voluntary offer for MMC Eng. shares for MYR4.30/share or 2 MMC shares for every existing MMC Eng. shares. As of March 11, MMC owns 75% of MMC Eng. MMC flat at MYR2.06. (VGB)

1012 [Dow Jones] Kumpulan Emas (3557) up 1.4% at 36.5 sen on news unit Salcon Engineering secured MYR35 million water project from Sabah Water Department. Project, aimed at reducing non-revenue water losses, includes setting-up metered zones network, pressure management system, repair of leakages and replacement of pipelines. Contract is for 30 months period starting April 16. (VGB)

0955 [Dow Jones] MSNBC TV quotes unnamed U.S. military officials as saying special operations teams and units of CIA are in Baghdad; officials hint recent explosions there (with no air raid sirens or indications of U.S. aircraft overhead) may have been work of Iraqi resistance groups, possibly working with U.S. forces. Unclear if this is just U.S. disinformation, but it may help sustain markets' hopes for quick U.S. victory.(AXT)

0941 [Dow Jones] U.S. officials say U.S. troops have found suspected "chemical factory" in south Iraq, but don't confirm whether it's actually believed to be chemical weapons facility as Fox TV reported earlier. If U.S. can prove Iraq had major WMD projects, it will greatly help to justify U.S. decision to go to war in court of world opinion, and reduce negative geopolitical fallout from war - so positive for USD and equities. (AXT)

0934 [Dow Jones] IOI Corp. (1961) down 2.6% at MYR4.58, revisiting 13-month low of MYR4.54 as investors continue to sell stock following acquisition of plantation property from major shareholders. "A kaleidoscope of reasons have been provided as to why this is a bad deal, but investors are ignoring the fact that the deal is, in fact, 10-12% earnings enhancing going forward," says foreign analyst. Adds current share price weakness is purely sentiment driven and is excellent opportunity to accumulate stock. Warrants offer cheaper exposure; down 2.6% at MYR1.50. (VGB)

0921 [Dow Jones] Technology subindex up 2.5% at 38.48, led by strong gains in semiconductor assemblers MPI (3867), up 3.6% at MYR11.40 and Unisem (5005), up 3.8% at MYR4.98. Trader cites firmer close on NASDAQ Friday but cautions both stocks off early highs and may retreat further on profit-taking. (VGB)

0916 [Dow Jones] KLCI up 0.3% at 633.88 in follow-through buying interest, reflecting firmer U.S. markets Friday. Profit-taking on handful of blue chips beginning to emerge, suggesting upside limited. "Retail players have been chasing penny stocks and speculative issues higher since last week but buying interest is likely to fade as profit-taking accelerates," she adds. Expects KLCI to trade within 630-635 level. Volume traded moderate with 16.5 million shares valued at MYR24.5 million changing hands. Rises lead falls 137 to 13; 46 flat while 932 untraded. (VGB)

0902 [Dow Jones] Select plantation stocks may attract speculative buying interest as players punt on various merger scenarios following DPM Abdullah Ahmad Badawi's announcement last week about potential consolidation of government-linked companies. Trader says of the 7 companies, punters are likely to accumulate Austral Enterprises (1872), Guthrie Ropel (2399), Highland & Lowlands (2402), Island & Peninsular (1627). (VGB)

0857 [Dow Jones] Malaysia Airports' (5014) shares may edge up after KLIA named best Asian cargo airport in category for cargo-handling of less than 500,000 tonnes a year. Analyst says award suggests KLIA's efforts to focus on cargo-handling bearing fruit; transshipment cargo up 35% on year in 2002. Shares ended down 1.3% Friday at MYR1.52.(CAL)

0837 [Dow Jones] Malaysia PM Mahathir to address special session on Iraq at Parliament at 0200 GMT, say his spokespeople; no details on speech topic but some analysts say he may present much-anticipated economic stimulus package; officials have recently said package will be presented earlier than scheduled April 7 due to onset of U.S.-led attack on Iraq last week. (CAL)

Read more Monday March 24, 12:02 PM Contact Us: Sydney 61-2-8235-2950; djnews.sydney@dowjones.com

1501 [Dow Jones] STOCK CALL: DCA Group's (DVC) acquisition of Melbourne facilities significant, fulfills company target for 500 new beds in FY03, says UBS Warburg. "The acquisition of the 2 facilities has seen our FY04 NPAT increase by 5.8% to A$21.8 million and our FY05 NPAT increase by 4.4% to A$28.3 million," says analyst. Maintains Buy rating, 12-month share price target A$2.24 vs latest A$1.57. (BAM)

1458 [Dow Jones] S&P/ASX 200 down 11 points or 0.4% at 2855.0, stalling after negative developments for coalition forces in Iraq over weekend triggered early selloff. With S&P 500 futures down 1.0% in after-hours trade, dealers fear possible dip on Wall Street tonight. Nikkei 225 ignoring these concerns with 2.7% rise, but oil and bonds reflecting U.S. stock movements after-hours. NYMEX oil futures up 43 cents at US$27.34/barrel, while 30-year bond yield down 2 bps at 5.01%. Gold near flat at US$327.15. (DWR)

1453 [Dow Jones] BHP Billiton (BHP) Petroleum Chief Philip Aiken says US$20 billion Malaysia LNG sale to Japan doesn't threaten NW Shelf, main market for which is Japan. "At the moment we have got 15% of the Japanese market and I think there is a good chance that we will continue to have that," Aiken tells reporters, adding reliability a key attraction. BHP, Woodside (WPL) one-sixth participants in shelf. Shelf riding high after China deal last year, recent South Korea sale, but Malaysia shows competition heating up. There is concern shelf offered cheap price to get China business. (AND)

1449 [Dow Jones] STOCK CALL: UBS Warburg downgrades shipbuilder Austal (ASB) to Reduce from Neutral following 60% share price rise from record low of 47 cents early this month. Leaves 65-cent valuation unchanged but increases price target to 60 cents from 54 cents. Shares last up 1 cent at 78 cents. (BAM)

1447 [Dow Jones] BHP Billiton's (BHP) head of petroleum Philip Aiken says acquisitions remain in the mix but will need "good strategic reason." Notes that BHP Billiton lacks some operating skills in deepwater and that an acquisition which brought such skills "would appeal to us quite strongly." Queried on whether it has held any more M&A talks with Shell and Woodside (WPL), he simply says "no." Petroleum star performer for BHP with strong orangic growth outlook, but faces near-term production fall in 2003, 2004. BHP down 0.4% at A$9.35. Woodside down 2.4% at A$10.89. (AND)

1440 [Dow Jones] Spot gold up $1.07 at $327.25/oz vs late NY, but upside capped after metal faltered after early push to day's high of $328.45, says Tokyo-based trader. Japanese investors, initially buying spot gold to arbitrage on sales of Tocom futures, turning sellers; they prefer to stay long but not overly so, as prices still volatile while Iraq war progresses. Pegs $325-$329 range for rest of Asian trade. (WCP)

1435 [Dow Jones] AUD 1-month vols little changed from last week at 10.25%-10.55% as spot AUD/USD trades in narrow band and seems to be building good support base around 0.5890 (currently 0.5926); trader at major Australian bank says vols could edge higher as U.S.-led forces encounter more resistance in Iraq than many in markets expected. (CMR)

1433 [Dow Jones] May Nymex crude may have been oversold on speculation of quick U.S.-led victory in Iraq, says HSBC oil and gas analyst Gordon Kwan; "prices could retest $30 a barrel again this week unless the military operations were extremely smooth going into Baghdad." Deteriorating situation in Nigeria, off-peak production in Venezuela and some lost output in Iraq, Kuwait to help prop up prices. (ILK)

1425 [Dow Jones] News Corp (NCP) price drop could be due to combo of factors, including profit-taking after last week's gains, anticipation of Wall Street weakness on account of setbacks in Iraq war and report that Murdoch may pay US$7 billion for DirecTV, says analyst. On latter issue, analyst notes market has only sketchy media report to deal with, and it isn't clear whether US$7 billion price tag is for all of DirecTV. Figure may spook some investors, who in past have read about supposed US$3 billion deal, but percentage of equity involved at those two price levels probably quite different. NCP ordinary shares off 3.1% at A$10.93. (HGU)

1348 [Dow Jones] TECHNICAL ANALYSIS: BHP Billiton (BHP) down 7 cents or 0.8% at A$9.32. Stock was rejected from approach of Fibonacci resistance at A$9.68 last week, followed by pivot point reversal and break of initial support at A$9.47. Daily momentum indicators show sell signals. However, downside may prove limited as weekly chart is also ranging and weekly momentum indicators moving up from oversold, says Dow Jones analyst David Rogers. Allow for near-term dip to A$9.00. Note support from uptrend line off A$8.27, currently at A$8.99. (DWR)

1339 [Dow Jones] TECHNICAL ANALYSIS: Commonwealth Bank (CBA) down 5 cents or 0.2% at A$24.98, having shied off tough resistance at A$25.30 (downtrend line from A$32.26) and A$25.41 (Feb 24 high). Daily and weekly charts trending down strongly, close below A$24.85 would give reversal signal. Daily momentum indicators threatening to peak at or near overbought. Long-term uptrend line broke at A$28.00 on Nov 7 and major Fibonacci support at A$23.81 (38.2% of A$5.80-A$34.94) broke March 12. Expect another dip below A$24.00 and possible retest of A$23.05 March low, says Dow Jones analyst David Rogers. (DWR)

1336 [Dow Jones] Woolworths (WOW) CEO Roger Corbett tells reporters at store opening that outbreak of war in Iraq has had no impact so far on its retail operations. Comment differs from Coles Myer (CML) CEO John Fletcher saying Sunday that all retailers will probably see some short-term effect of people doing less discretionary shopping than they may have in light of war, but that unlikely to be permanent. Retailers underperforming, CML down 1.2% at A$6.03, Woolworths (WOW) down 1% at A$11.78, while broader market down 0.3%. (LXV MDB)

1328 [Dow Jones] Nikkei continues to rise on war-led rally; but index fate today depends on result of basket trading during midday break, traders say; some predicting midday trade to show selling as players take profits. If that happens, expect buying to slow; even with support of some last-minute buying by public pension funds, index could finish in 8300-8400 range. On broader TSE first section, gainers outnumber decliners 1278 to 134, with 103 flat. (MYA)

<a href=www.gulf-news.com>Read on... Abu Dhabi |By A Staff Reporter | 24-03-2003 Print friendly format | Email to Friend

The U.S.-led war on Iraq could cost the global economy more than $1 trillion in indirect losses and Opec is set to reel under low oil prices once the war is over and Iraq returns to the market in full force, according to an official study.

Citing independent western estimates, the study by the Zayed Centre for Coordination and Follow-up said rebuilding costs in Iraq alone could exceed $120 billion while severe losses are expected to result from global stock market turbulence, a decline in the value of the U.S. dollar, a possible trade war between the U.S. and Europe and a sharp drop in global investment because of an expected surge in terrorist acts.

Once the war is over, Iraq could start pumping crude oil at maximum capacity after the removal of the UN sanctions and this will depress prices and consequently the income of Opec, the study said.

"Iraq's return to the market will be at the expense of other Opec members, mainly Saudi Arabia, Venezuela and other key producers as they have to cut output to give way to additional Iraqi supplies.

"Given the slow growth in demand because of the slackening global economy due to the Iraq war, prices will sharply decline and this will put further pressure on other members to cut output. A fresh price war among producers is not ruled out because the Opec might be forced to change its policy of defending prices to defending its market share."

< ahref=sg.biz.yahoo.com>Read source Monday March 24, 12:00 PM (From The Wall Street Journal) By Craig Karmin

THE LONG-AWAITED war rally has begun. But after a weekend of hard fighting in Iraq, some have started to wonder how long the war rally will run.

The Dow Jones Industrial Average and the Standard & Poor's 500-stock index each are on an eight-session streak, the first time the Dow industrials have had such a run-up since 1998, and the S&P's first since 1997.

Once war in Iraq became imminent, the Dow industrials have risen 997.56 points, or 13%, and the Nasdaq Composite Index is up 12%, enough to wipe out earlier losses and send both benchmarks up so far this year. Last week's gain for the Dow industrials was 8.4%, the biggest weekly advance in more than 20 years, going back to October 1982.

For most investors and traders, the template for the rally has been clear: By studying what happened to stocks the last time the U.S. took on Saddam Hussein in 1991, they can see a blueprint for what to expect this time.

And so far, the comparisons have held up. Then, as now, the economy was facing a severe strain. Oil prices were high, and the financial system was working through a period of excess that ended with the bursting of a financial bubble and stock-market decline.

But many analysts and economists now are worried that the analogy is being carried too far. Despite these apparent similarities, analysts warn that the economy and the stock market face a number of important challenges and uncertainties that were missing at the start of the previous Gulf War. And, they say, those differences could be substantial enough to make comparisons to 1991 irrelevant.

"Today's world is a far more unstable and much scarier place than it was in the aftermath of the Gulf War of 1991," says Stephen Roach, Morgan Stanley's chief global economist.

All of this has produced some fears that the current stock-market rally may soon run its course, perhaps even faster than the rally sparked by the Gulf War. In 1991, the Dow industrials jumped 15% from Jan. 17, the day Operation Desert Storm was launched, to Feb. 28, when a cease-fire was declared. From there, however, the market was stuck in a trading range and ended the year down 10% from when the war ended.

This time, the markets have entered the war in a much weaker position. Despite the recent rally, the Dow industrials still are down by nearly 20% from a year ago and the Nasdaq composite is down about 25%. On Friday, stocks closed up sharply on news of an intensive air campaign in Baghdad and more rumors that Mr. Hussein may have been killed or injured. In the New York Stock Exchange's most active session of the year, the Dow industrials rose 235.37 points, or 2.8%, to 8521.97, while the Nasdaq was up 1.4%, or 19.07 points, to 1421.84.

Yet many traders already worry that this rally could soon fade. The military task, for one, was clearer in the previous war, when the goal was to expel invading Iraqi troops from Kuwait. Today, military planners are facing the much more complicated task of removing Mr. Hussein's regime from power and rebuilding the country.

And even once that happens, U.S. military challenges won't be over. The U.S. still faces a threat from global terrorism, and other potential international crises loom in North Korea and Iran.

Nor should investors count on an economic rebound once the guns fall silent. The economy in 1991 was in the middle of a recession and continued to struggle long after the first Gulf War was over. Although the economy now is further along in the economic cycle than it was 12 years ago, a number of analysts warn that the recovery lag could take as long, and perhaps longer.

Many companies are still trying to reduce their debt, a strain that has discouraged new capital spending. State and local governments -- compelled by law in many states to balance their budgets -- have been raising taxes and cutting spending programs, providing another drag on the economy. American household debt is also at record levels, and economists say the savings rate is inadequate.

"All these factors will still be in play even if the war gets resolved in a favorable way," says Bill Dudley, chief U.S. economist for Goldman Sachs. "The economy looks weak and vulnerable to a shock."

The global economy, meanwhile, is in worse shape today than a dozen years ago, meaning that U.S. companies can't count on demand in Europe or Japan to compensate for a weaker domestic market. And since the U.S. is launching this fight without clear backing from the United Nations, Washington will be responsible for a bulk of the war costs.

"The only thing that looks better today than 12 years ago is that U.S. productivity numbers are up," says David Rosenberg, chief North American economist for Merrill Lynch.

From a valuation perspective, stocks were more attractive then. The current price-to-earnings ratio based on trailing 12-month earnings for the S&P 500-stock index is 31 -- about double that of 1991.

And many economists argue that the stock-market excesses of the late 1990s were so spectacular that it is going to take much longer to work through the excess than it did earlier in the decade. "This is a bigger bubble and with more pernicious effects," Mr. Rosenberg says.

While the Federal Reserve aggressively cut interest rates in 1991 and 1992 -- cutting the federal-funds rate 13 times, to 3% from 7% -- the situation today is much trickier. Now, that rate is at 1.25%, leaving the Fed little room to cut rates again if the war runs into trouble or if the economy weakens further.

Mr. Rosenberg notes that the 12 interest-rate cuts during the current easing cycle haven't done much so far to revive the economy because business overcapacity, rather than prohibitively high rates, is responsible for the downturn.

A domestic slowdown would be less of a worry if markets overseas looked healthy. But as in 1991, that's not the case. "The world wasn't helping much then, and it isn't helping much now," says Carl Weinberg, chief economist for High Frequency Economics in Valhalla, N.Y. "Actually, it's bit worse today."

He notes that Europe's economy was slumping in 1991, too. But European governments were taking much more aggressive steps to stimulate their economies through fiscal and monetary policy, so that Germany and the United Kingdom enjoyed healthy rebounds by 1993. Moreover, Japan's economy, now moribund, was still strong, growing at a rate of 5% in the first quarter of 1991, compared with essentially no growth expected today.

U.S. corporations are still in the process of repairing their balance sheets by reducing debt. And even as many companies cut costs to the bone, the profit downturn is lasting much longer, and has been much deeper, than in 1991 because of an inability to raise prices following a long period of corporate overinvestment.

Consumer borrowing is another concern. Household debt as a percentage of gross domestic product stands at a record 83%, compared with 64% in 1991. Lower interest rates today take sting out of the debt load, but many analysts still think the burden is greater this time.

At the same time, the U.S. has moved from a current-account surplus in the first quarter of 1991 to a widening current-account deficit. This increases U.S. dependency on foreign capital, but it also suggests that the dollar will continue to weaken, which discourages foreign investors from buying U.S. stocks.

As in the fourth quarter of 1990, oil prices have been rising and approached $40 a barrel this month. In the weeks following Kuwait's liberation, prices plummeted to around $20 as supply concerns eased. This time, oil has already fallen to below $27, and analysts say there could be further declines when the conflict in Iraq is over, though not to the same levels seen in 1991 because circumstances have changed.

Venezuela has yet to return to full production following its recent oil-workers strike, and many other suppliers are near their capacity for pumping oil. Refining companies and other large oil consumers face low stock inventories. Higher energy costs, of course, hit the bottom line of U.S. companies.

Friday's Market Activity

Hopes that the war could be decisive and short helped drive strength in a number of individual stocks and sectors. Airlines, for instance, were the top performers, with Southwest Airlines gaining $1.04, or 7.3%, to $15.28 even though analysts point out that the majority of the stocks in the group remain significantly below levels of 18 months ago and a short war doesn't necessarily remove the threat of a bankruptcy for some companies.

Walt Disney shares gained 1.60, or 9.3%, to 18.74 on speculation a short war would ease concerns about visiting tourist spots such as Disney's theme parks.

Intuit slid 12.17, or 24%, to 38.72 on Nasdaq after the tax-software company scaled back earnings expectations.

-- Shaheen Pasha

Full story.. Reuters, 03.23.03, 11:34 PM ET

SINGAPORE, March 24 (Reuters) - Oil prices rose on Monday after hitting four-month lows as optimism for a quick Iraqi war waivered with news U.S.-led forces were meeting resistance on the road to Baghdad.

As bombs pounded the Iraqi capital for a fifth day, crucial Gulf crude exports flowed uninterrupted. Brokers said the market was volatile and prices were being driven by headline news.

U.S. light crude jumped almost 80 cents to $27.70 a barrel before easing by 0424 GMT to $27.35, up 44 cents on the day. London's Brent crude was up 35 cents at $24.70 a barrel.

"The oil market has been behaving as if peace has broken out but the level of Iraqi resistance so far suggests the war could drag on with consequences for oil prices," said Adam Sieminski, oil analyst at Deutsche Bank.

Prices dropped to four-month lows on Friday, taking crude's losses to 30 percent in a week as optimism grew that the war would be swift with little damage to Iraq's oil infrastructure and no disruption to oil supplies from the Gulf producers, which pump about 40 percent of world exports.

But over the weekend, Iraq paraded U.S. prisoners of war on television and inflicted its heaviest casualties so far on the invaders as resistance to the U.S.-led forces stiffened the closer they drew to Baghdad.

"Prices are very volatile and that volatility will continue. Until some kind of clarity emerges it will be difficult to get stability," said Yasser Elguindi of Medley Global Advisers in New York.

SOUTHERN OILFIELDS SECURE

U.S. and British forces tightened their grip at the weekend on Iraq's southern oilfields and key exporting terminals and began to assess how to restart exports.

Iraq was ranked seventh among crude exporters before the war, exporting about 1.8 million barrels per day (bpd), under U.N. supervision, from output of 2.5 million bpd.

The southern Rumaila oilfields can pump up to 900,000 bpd. The northern oil hub of Kirkuk has yet to be secured by U.S. and British forces.

Fears Iraqi soldiers might repeat the sort of damage to oil wells seen in their retreat from Kuwait in 1991 have so far proven unfounded. The U.S. has estimated that fewer than 10 Rumaila wellheads have been sabotaged.

"There could still be some issues in the north or a counter-attack in the south, but the worst case scenarios, such as torching the oilfields, are not playing out," said Raad Alkadiri of PFC Energy in Washington.

OPEC exporters, especially Saudi Arabia, have hiked output in the past few months to cover the loss of exports from strike-hit Venezuela and to cool high prices fuelled by war fears.

Demand for oil normally drops in the second quarter of the year at the end of the northern hemisphere winter.

Tribal warfare in OPEC member Nigeria has shut down about 29 percent, or a little more than 570,000 bpd, of the African country's output, offering further support for prices.

Price hawks in OPEC are already concerned about the slump in oil, which had been close to $40 late in February. The price dive has revealed deep splits in the 11-member Organisation of the Petroleum Exporting Countries.

OPEC Secretary-General Alvaro Silva said on Thursday members had been authorized to use spare output capacity if necessary to make up a shortfall in Iraqi supply.

But an adviser to Iran's oil ministry, Hossein Kazempour Ardebili, said any output hike would be a "violation" since no decision had been taken to raise OPEC quota limits.

Saudi Arabia, the world's top exporter and a key U.S. ally, is pumping more than a million bpd above its quota of eight million bpd, according to independent estimates.