Market Thoughts
US stocks recovered from their earlier losses to close flat in thin trading Thursday, but several disappointing global economic reports that pointed to further signs of slowing kept a damper on gains. Meanwhile, European stocks slipped, hurt by grim macro data from Europe, China and the United States, although shares bounced off the day's lows as a number of investors took advantage of the pullback to lift their exposure to equities.

On the local market, the FBM KLCI plunged 20.52 points fo 1625.59 points. Following he lacklustre performane in the US and Europe, we expect the FBM KLCI to hover near its critical support level of 1600 points.

Malaysia News & Highlights
AirAsia eyes India, Zest Airways
AirAsia Bhd may be expanding its wings to India through a new start-up with an Indian partner and also strengthening its presence in the Philippines by acquiring a stake in Zest Airways, newspapers reported in the two countries. The Times of India reported on Wednesday that AirAsia might be the first carrier to invest in the aviation industry there after India's cabinet decided to allow foreign investors to own up to a 49% stake in its airlines. (Source: The Star)

Genting HK: No plans to sell Echo stake
Genting Hong Kong Ltd (GHK) said it has no plans to sell its stake in Australia’s Echo Entertainment Group Ltd, a day after Genting’s Singapore sister company sold its stake in the operator of Sydney’s only casino. In a surprise move, Genting Singapore plc sold its 4.8 per cent stake in Echo on Wednesday in a US$165 million (RM504.9 million) deal underwritten by Citigroup, saying it wanted to “rationalise its investments portfolio”. Genting Singapore and GHK, subsidiaries of Malaysian gambling giant Genting Group, each bought almost five per cent of Echo in June. (Source: Business Times)

KNM plans to list German unit on Singapore stock exchange
World-renowned process equipment company, KNM Group Bhd, has obtained backing from its shareholders at its EGM for the proposed renounceable rights issue of 488,920,659 new shares at an indicative issue price of RM1 for each rights share. The RM1 will be payable in two calls. The first call of 40 sen will be payable in cash and the second of 60 sen will be capitalised from KNM's share premium account. The group also announced its intention to list its Germany subsidiary, BORSIG Beteiligungsverwaltungsgesellschaft mbH (BORSIG), on the Singapore Stock Exchange. (Source: The Star)

Lim's rising stake in ECM stirs market talk
Lim Kian Onn, the co-founder of ECM Libra Financial Group Bhd, is keeping the market guessing on his recent purchases of ECM shares. Since July, Lim has bought more than 30 million ECM shares from the open market - increasing his stake from 9.7 per cent to almost 14 per cent in the company. Prior to these acquisitions, Lim did not buy ECM shares from the open market. (Source: Business Times)

DRB-HICOM to sell only 30pc of its stake in Muamalat
Conglomerate DRB-HICOM Bhd has expressed its intention to divest only 30 per cent of its 70 per cent stake in Bank Muamalat Malaysia Bhd to Affin Holdings Bhd during the pleminary talks held between the two entities. DRB-HICOM managing director Datuk Seri Mohd Khamil Jamil said if the merger went through, DRB-HICOM would still control a 40 per cent stake, in line with the level accepted by Bank Negara Malaysia (BNM). The final proposal on the merger is expected to be resubmitted to BNM by year-end. (Source: Business Times)

TNB loses RM113mil suit
Tenaga Nasional Bhd (TNB) has lost a RM113mil suit filed jointly by Irham Niaga Sdn Bhd and Irham Niaga Logistics Sdn Bhd. In a filing with the stock exchange, TNB said the High Court had allowed the plaintiffs' claim as pleaded in paragraph 58 of the Statement of Claim. (Source: The Star)

Astro secures 22 cornerstone investors
The relisting of Astro Malaysia Holdings Bhd has garnered the support of 22 cornerstone investors who will collectively subscribe up to 430 million shares, or about 28% of the total number of shares offered at between RM2.70 and RM3 each, according to executives familiar with the IPO. The list of cornerstone investors includes Permodalan Nasional Bhd, Caprice Capital International Ltd which is controlled by Tan Sri Quek Leng Chan, Great Eastern Life Assurance, Kencana Capital Libra Investment Sdn Bhd, Tan Sri Chua Ma Yu, and the Ministry of International Trade and Industry (Miti). (Source: The Edge)

Vehicle sales down 12.9% in August
Motor vehicle sales in August fell by 7,644 units or 12.9% to 51,823 units from the 58,382 units in the same month last year, according to the Malaysian Automotive Association (MAA). In a statement yesterday, the MAA said the passenger car segment recorded sales of 45,687 units, compared with 52,559 units last year, but that for commercial vehicles rose to 6,136 units from 5,823 units. The MAA attributed the performance to a short working month due to the Hari Raya Aidil Fitri and Merdeka Day holidays. (Source: The Star)

Foreign News
S&P 500 Falls on Growth Concern as Treasuries Erase Gain
Most U.S. stocks fell and an index of emerging-market shares slid the most in almost two months as reports spurred concern the global economy is slowing. The euro weakened and Spanish bonds dropped, while commodities erased early losses and Treasuries reversed gains. The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,460.27 at 4 p.m. in New York, trimming an earlier slide of 0.8 percent as consumer-staple and energy shares advanced.

Jobless Claims to Leading Index Show Weakness: Economy
More Americans than forecast filed claims for unemployment benefits and an index of leading indicators declined for second time in three months, adding to signs of weakness in the world’s largest economy. Jobless claims decreased by 3,000 in the week ended Sept. 15 to 382,000, Labor Department figures showed in Washington.

European Stocks Drop on China Manufacturing Report
European stocks declined for the third time in four days after a report signaled that Chinese manufacturing will contract for an 11th month, adding to concern the global economic slowdown is deepening. A gauge of mining companies posted the biggest drop of the 19 industry groups in the benchmark Stoxx Europe 600 Index. (SXXP) Daimler AG (DAI) lost 2 percent after saying earnings will fall at its Mercedes Benz Cars business.

Australia Has Scope to Cut Rates, Delay Surplus Return, IMF Says
Australia has scope to lower its benchmark interest rate further and delay a return to a budget should act as the first line of defense against near-term adverse shocks,” the IMF said in a preliminary annual assessment of the nation’s economy in Sydney “

Japanese Stock Futures Rise as Investors Back Stimulus
Japanese and Australian stock futures rose as investors speculated central-bank action to stimulate growth will be enough to offset signs of weakening economic expansion from Asia, to Europe and the U.S. American Depositary Receipts of Sharp Corp. rose 0.3 percent as the Mainichi newspaper reported surplus this year should the global outlook deteriorate, the International Monetary Fund said. With expected inflation within the target range, the strong Australian dollar, and given efforts to return the budget to surplus this year, monetary policy should remain accommodative, and Intel Corp. is in talks to invest more than 30 billion yen ($383 million) in the Japanese TV maker.
(Source: Bloomberg)