Malaysia - Equity
The stock market closed mixed yesterday but the benchmark index managed to break and stay above the 1,340 resistance level.
Investors locked in their profits in selected lower liners but gains in some heavyweight counters pushed the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to end 6.75 points higher at 1,340.72.
The FBM KLCI which shed 0.78 point at the start of trade at 1,333.19, moved between 1,332.38 and 1,341.88.
Dealers said market fundamentals remained strong, boosted by improvement in the country's Industrial Production Index as well as the double digit growth in manufacturing sales.
Many investors stayed on the sidelines ahead of Malaysia's first quarter gross domestic product figures which is expected to be out by end of this week.
The Finance Index improved 34.37 points to 12,018.07, the Industrial Index added 6.6 points to 2,729.48 and the Plantation Index went up 11.2 points to 6,397.95.
The FBM Emas Index rose 28.34 points to 9,004.66 and the FBM70 edged up 1.82 points to 8,794.34 but the FBM Ace Index lost 38.88 points to 3,970.08.
Losers outnumbered gainers by 399 to 302 while 272 counters closed unchanged, 399 untraded and 29 others suspended.
Total turnover decreased to 781.76 million shares valued at RM1.344 billion from 805.641 million shares valued at RM1.31 billion on Monday.
The top gainer was Genting which rose 17 sen or 2.511 per cent to RM6.94, followed by Genting Malaysia which added 9 sen to RM2.89.
Among active stocks, Talam Corp and KNM Group shed 1/2 sen each to 13.5 sen and 53 sen respectively while Johan Holdings slipped 1.5 sen to 45 sen.
Among heavyweights, Tenaga Nasional added 4 sen to RM8.56, CIMB Group gained 8 sen to RM14.36, Maybank edged up 2 sen to RM7.55 and Sime Darby rose 7 sen to RM8.63.
Petra Perdana Bhd plans to raise up to RM109.74 million from a private placement priced at 50 sen per share.
It plans to sell new shares not more than a tenth of the firm . Proceeds from the exercise will be used to lease additional vessels, vessel equipment and interest cost savings from the repayment of borrowings. After completion of the proposed placement, the company plans to undertake a renounceable rights issue of new shares, with new free detachable warrants at an issue price to be determined later.
Berjaya Corp Bhd has requested its shares be suspended from trading on Bursa Malaysia today, pending an announcement of an acquisition from a related party of the company and a capital-raising exercise. Analysts believe the announcement has to do with BCorp's offering its shareholders stakes in Hong Kong-listed Cosway Corp Ltd. BCorp has offered shareholders the option to buy Cosway Corp irredeemable convertible unsecured loan stocks (Iculs) on the basis of two Cosway Corp Iculs for every one BCorp share. BCorp and its subsidiaries hold some HK$1.74 million (HK$100 = RM42.82) worth of Cosway Corp Iculs that were issued as consideration when Cosway (M) Sdn Bhd was injected into Berjaya Holdings (HK) Ltd, which was renamed Cosway Corp in December 2009.
RM
The ringgit ended easier against the US dollar yesterday amid uncertainty over the US$1 trillion rescue package for the troubled euro zone countries, dealers said.
At 5pm, the local currency was traded at 3.2080/2130 compared with 3.1960/2010 on Monday.
A dealer said although the emergency package is expected to be helpful in shunning a near-term crisis, there were still doubts on the euro zone.
Another possible rate hike this week and growing chances for Beijing to revalue its yuan currency could lift the ringgit further, although concerns about the spillover from Greece's debt crisis may limit the upside.
Meanwhile, the ringgit was mostly higher against other major currencies.
The local unit was higher against the Singapore dollar at 2.3166/3214 from 2.3180/3238 on Monday but depreciated against the Japanese yen to 3.4677/4739 from 3.4233/4290.
The local currency was also higher against the euro at 4.0697/0770 from 4.1666/1741 and firmer against the pound at 4.7616/7697 from 4.7780/7865 previously.
CPO
Crude palm oil (CPO) futures on Bursa Malaysia Derivatives ended lower yesterday on profit taking as well as a weaker rival soyabean futures market, dealers said.
"There was not much news in the market today. Overall sentiment was weak and prices fell as players took cue from the decline in other commodities like crude oil and soyabean futures," one dealer said.
Crude oil price went below US$76 per barrel yesterday. At close, May 2010 and June 2010 contracts were down RM32 each to RM2,543 per tonne and RM2,518 per tonne, respectively.
July 2010 went down RM24 to RM2,505 per tonne and August 2010 slipped RM30 to RM2,493 per tonne.
News
PENINSULAR Malaysia will not get power from the Bakun hydroelectric dam but the government is still keen on securing power from Sarawak due to its renewable energy potential. This means that a RM9 billion undersea cable project connecting Sarawak and Peninsular Malaysia is still on the drawing board.
The sports gaming licence issued to tycoon Tan Sri Vincent Tan's Ascot Sports Sdn Bhd early this year comes with several conditions attached. Ascot Sports will be allowed to operate in only 200 of the 680 Sport Toto outlets in non-Muslim areas in major towns and online betting would not be allowed. The Sports Toto games are offered by Berjaya Sports Toto Bhd, a listed company controlled by Tan. According to sources, these outlets would also be required to put up notices that only adult non-Muslims would be allowed to place bets. It is also understood that Ascot Sports, which was reissued the licence on Jan 13, is unlikely to be ready for the FIFA World Cup in South Africa, which will take place between June 11 and July 11.
Pay-TV operator Astro All Asia Networks plc says it is on track to signing up half a million B.yond subscribers by the end of January next year as it introduces more high-definition content. Currently, Astro B.yond customers can watch HBO movies, National Geographic, History programmes and selected English Premier League football games on high definition. Next month, they can also watch the World Cup matches live on high definition. Astro also hopes to grow its sports package customer base from more than 1.57 million currently, or about 55 per cent. As of end-January this year, Astro has close to three million subscribers.
Kencana Petroleum Bhd's subsidiary Kencana HL Sdn Bhd has secured a RM91.9 million job from the Energy, Green Technology and Water Ministry for a subsea pipeline installation works between a water treatment plant in Beaufort, Sabah and Labuan. The contract will be implemented through Kencana HL-Leighton joint venture, a non-incorporated business venture between Kencana HL and Leighton Contractors (Malaysia) Sdn Bhd. The job is a one-off pipeline installation contract and is expected to be delivered within the fourth quarter this year.
Bursa Malaysia Bhd hopes to roll out an electronic trading initiative that will allow local investors direct access to stocks listed in other exchanges within the Asean region in about a year from now, said chief executiv officer Datuk Yusli Mohamed Yusoff. It was previously reported that the Asean e-trading link initiative was part of a road map to integrate Asean capital markets by 2015. The local bourse had been lagging behind regional exchanges' performance in recent years, partly due to low volume of foreign investment participation. Stock exchange data showed that foreign shareholding of local stocks had dwindled to 20% as at end of March, with a number of big companies like Tenaga Nasional Bhd and Public Bank Bhd reporting foreign shareholding level at near record low.
From next year, the limit of bank deposits insured by Malaysia Deposit Insurance (PIDM) will be raised to RM250,000 per depositor per member bank from RM60,000 now. Prime Minister Datuk Seri Najib Razak also announced yesterday a plan to introduce an explicit insurance compensation scheme (ICS) for insurance and takaful policyholders. According to the Finance Ministry, it is the Prime Minister's intention to implement a package of legislative initiatives aimed at enhancing financial consumer protection for Malaysians.
Tan Sri Abdul Rahman Omar, former DRB-HICOM Bhd adviser for automotive, is tipped to become chairman of UMW Holdings Bhd ( 4588 ), replacing Tan Sri Asmat Kamaludin. Abdul Rahman has been offered the post and an official announcement is expected by the end of next month, sources said.His appointment may lead to the shake-up of the automotive-to-oil-and-gas group's top management, now led by president and chief executive officer (CEO) Datuk Abdul Halim Harun.Abdul Halim is expected to leave UMW by the end of October when his contract expires, sources said.
Meanwhile, UMW Holdings Bhd may list its oil and gas (O&G) division by year-end, said its president and group chief executive officer Datuk Abdul Halim Harun. He said the firm is still hopeful to see the proposed listing take off after three postponements. The original listing proposal involved a public issue of 250 million new 50 sen shares, with the exercise expected to raise over RM400 million.
Magna Prima has lodged a police report against its former CEO Lim Ching Choy for alleged criminal breach of trust. The property developer said yesterday Lim was alleged to have made fraudulent personal claims during his tenure with the company between Nov 1, 2006 and May 14, 2009.
Alliance Financial Group Bhd said it has identified a replacement for Datuk Bridget Lai as group chief executive officer of its banking unit. Alliance Bank Malaysia Bhd will announce the name once the appointment has been endorsed by Bank Negara Malaysia, the firm said in an e-mailed response to a query.Lai tendered her resignation in February following an internal investigation related to a property renovation.
JOHAN Holdings Bhd�s subsidiary Diners Club (Malaysia) Sdn Bhd has completed its RM150 million medium term notes (MTN) programme from the securitisation of charge and credit cards receivables. Domayne Asset 2 Corp Bhd, a special-purpose vehicle has been incorporated to undertake the issuance of notes under the 7.25-year programme. RAM Ratings Services Bhd has assigned a rating of A2, A3 and BBB2 to Domayne�s RM110 million Class A Notes, RM2.5 million Class B Notes and RM3.5 million Class C Notes.
Economic News
Malaysia is expected to raise its benchmark interest rate by another 25 basis points (bps) for the second time in a row to normalise interest rates and prevent financial imbalances. Almost all economists polled by Business Times expect the Overnight Policy Rate, which determines the borrowing costs by banks, to be increased to 2.5 per cent tomorrow. Bank Negara Malaysia was among the first central banks in the region to raise interest rates in March.
FACTORY output, led by a rebound in the electrical and electronics (E&E) industry, pushed the Industrial Production Index (IPI) up by 14.1 per cent year-on-year in March. March's data exceeded the Business Times poll forecast of a 12.93 per cent growth. Month-on-month, the IPI increased 15.1 per cent.
The Statistics Department in releasing the IPI data yesterday, said the index, which measures the pace of activities in the manufacturing, E&E and mining sectors, increased by 11 per cent in the first quarter of this year compared with the same period of 2009.Meanwhile, manufacturing sales in March posted a 27.7 per cent growth to a record RM46.6 billion. The sector registered a double-digit growth of 24.5 per cent to record RM130.1 billion in sales for the first quarter. Manufacturing activities were led by refined petroleum products (36 per cent), other basic industrial chemicals, except fertilisers, nitrogen compounds (75.3 per cent) and motor vehicles (55.5 per cent).
Results
Hartalega Holdings Bhd's net profit for the fourth quarter ended March 31 2010 jumped almost half to RM46.4 million, backed by strong sales of both nitrile and latex gloves. The achievement is in line with the group's continuous expansion in production capacity, increase in demand, improvement in production processes and better cost control.for the final three month period, earnings per share was RM19.15 while net assets per share stood at RM146.20. Earnings before interest, taxation, depreciation and amortisation was RM62.4 million compared with RM39.5 million previously. Cumulatively, Hartalega recorded a net profit of RM143 million for the financial year ended recently against RM84.5 million in financial year 2009. This marked an impressive 69.3 per cent increase in net profit compared with the last fiscal year. In tandem with the group's strong performance, Hartalega declared a total dividend of 20 sen per share for the fiscal year. In an effort to reward shareholders for their continuous support, the group has proposed a bonus issue of 121.2 million new shares of 50 sen each. The issue is on the basis of one new share for every two existing shares held.
Despite the net loss of RM29.13 million for the first quarter (1Q), Malaysia Smelting Corporation Bhd (MSC) is expecting a better year for its financial year ending Dec 31, 2010, thanks to higher prevailing metal prices and contributions from its Rapu-Rapu Polytechnic Project in the Philippines. According to MSC, the 1Q loss of 38.8 sen per share is due mainly to the hefty RM48 million impairment provisions on its investments abroad.
In fact, MSC�s revenue for the quarter had almost doubled to RM651.18 million from RM351.65 million a year earlier, due to satisfactory performance in its Malaysian and Indonesian operations, and also higher net contributions from the Rapu-Rapu project. MSC said that it would have recorded RM27.75 million pre-tax profit if not for the impairment provision. Its RM48 million of impairment provisions were for the investments in Sydney-listed BCD Resources NL (BCD) of RM41 million and RM7 million for its funding of its joint-venture company Guilin Hinwei Tin Co Ltd (GHT) in China. To cut costs, MSC said it planned to divest 22.12% stake in BCD and 30% stake in the Rapu-Rapu project. The divestments are yet to be completed. The impairment provision of RM7 million its investment in China was because one of the joint-venture partners, Guangxi Guilin Jinwei Realty Co Ltd, failed to fulfill certain obligation to establish GHT. GHT, which is owned by three shareholders, is planned to venture into smelting and refining tin in China. The other shareholder of GHT is Vertex Metals Incorporation.
Petronas Gas (PetGas) net profit fell 23% to RM201.4 million in the fourth quarter ended March 31, 2010 from RM261.82 million a year ago on lower throughput revenue and utilities sales. Revenue also dropped 14% to RM802.21 million from RM935.87 million while earnings per share were 10.18 sen versus 13.23 sen.
It proposed a final dividend of 30% per share under single tier system and 5% per share tax exempt altogether amounting to RM692.56 million for FY10. For the financial year ended March 31, 2010 it said net profit rose just 1.31% to RM940.89 million from RM928.69 million a year earlier. Revenue was RM3.22 billion versus RM3.42 billion.
Insurer Kurnia Asia Bhd's earnings fell 9.7% to RM23.81 million in the first quarter ended March 31, 2010 from RM26.39 million a year ago due to higher tax expenses. Earnings were lower mainly due to the significantly higher tax expenses of RM11.24 million compared with RM70,000 a year ago. Pre-tax profit rose 32.5% to RM35.04 million from RM26.46 million a year ago. Revenue declined to RM274.96 million from RM280.62 million. Earnings per share were 1.6 sen versus 1.77 sen. It achieved an underwriting surplus of RM10.76 million for 1Q, which was a 160.9% increase on-year, underpinned by improvements in the management of its claims and management expenses. Net investment income was RM29.58 million, with an investment yield of 6.6%, which was higher than last year's yield of 5.9%. Net asset value improved by 10.5% to RM331.69 million from a year ago.
ASIA
Asian investors switched to sell mode yesterday as euphoria over a massive eurozone bailout gave way to doubt over debt-ridden countries' ability to reduce their deficits.
Asian markets joined a global surge on Monday after Europe and the International Monetary Fund agreed on the biggest financial system bailout since the 2008 banking crisis.
However, markets in Asia pulled back yesterday and the euro fell as investors focused on how the massive bailout will be carried out and the implications for the eurozone's underlying fiscal woes.
China and Hong Kong were hit by worries Beijing may move to further dampen mainland credit after new data showed consumer prices rose faster than expected in April, while property prices continued soar and lending jumped.
SINGAPORE: BANKING shares led falls as the stock market pulled back yesterday in line with other bourses in the region.
The benchmark Straits Times Index closed down 0.79 per cent, or 22.81 points, at 2,857.67.
DBS fell 24 cents to S$14.40 and Singapore Airlines eased 16 cents to S$14.62. Singapore Telecom dropped 4 cents to S$2.98.
HONG KONG: STOCKS fell yesterday as a global rally in response to a US$1 trillion deal to resolve Europe's debt crisis quickly lost steam, prompting investors to take profits on sharp gains seen the previous day.
The benchmark Hang Seng index fell 1.37 per cent, or 280.13 points, to close at 20,146.51, giving back roughly half of Monday's advance.
TOKYO: Tokyo closed down 1.14 per cent, or 119.60 points, at 10,411.10.
SYDNEY: Sydney lost 1.13 per cent, or 51.8 points, to end at 4,548.00.
Australia is willing to negotiate on the details of its "super profits" tax on mining firms, a government minister said yesterday, after complaints from miners that the tax could stop billions of dollars in investments. Australian Prime Minister Kevin Rudd has so far resisted making concessions over the 40 per cent levy on profits to help fund social programmes that some miners have compared to a near-nationalisation of the sector.
Australia�s government aims to bring the budget into surplus three years ahead of forecast, seeking a �solid buffer� against a European debt crisis that threatens to undermine the global recovery. Treasurer Wayne Swan, releasing the annual budget yesterday in Canberra, estimated a A$1 billion ($900 million) surplus in 2012-13, from a A$40.8 billion deficit in the year to June 30, 2011. He said he�ll keep a 2 percent cap on spending growth until the surplus reaches 1 percent of gross domestic product. The pledge reflects concern that investors will punish countries that fail to rein in deficits, which swelled during the world recession. Australia, whose public debt is projected to peak at 6.1 percent of GDP, is reaping the rewards of Chinese demand for its resources, and the surplus forecast is aided by a proposed �super� tax on miners.
SHANGHAI: Shanghai lost 1.90 per cent, or 51.18 points, to end at 2,647.57, a near one-year low.
China said yesterday that consumer prices and bank lending accelerated in April, fuelling fears the economy may overheat and building pressure on Beijing to raise interest rates and let its currency rise. Property prices also marked a double-digit rise for the third straight month, signalling measures introduced by the government in recent weeks to curb inflation and rein in soaring prices were having little effect. "Currently, prices are rising quite fast," a spokesman for the National Bureau of Statistics, Sheng Laiyun, told reporters, though he insisted those increases remained "relatively mild". "In the near term, prices are still under quite significant upward pressure. Total demand is still on the rise and domestic liquidity is still abundant."
The consumer price index, the main gauge of inflation, rose a higher-than-expected 2.8 per cent compared with April last year, outpacing the 2.4 per cent jump in March, the NBS reported.
SEOUL: Seoul closed 0.44 per cent lower, or 7.39 points, at 1,670.24.
TAIPEI: Taipei dropped 0.73 per cent, or 56.29 points, to 7,608.44.
JAKARTA: Jakarta lost 1.32 per cent, or 37.54 points, to 2,812.89.
Indonesia's economy is likely to expand 6 per cent next year, slightly above the budget forecast of 5.8 per cent growth for 2010, thanks to strong investment and exports, Finance Minister Sri Mulyani Indrawati said yesterday. The central bank has forecast 2011 growth of 6-6.5 per cent, compared with a consensus forecast of 6.1 per cent in a Reuters poll in April. Indrawati said exports were likely to grow 10.8 per cent next year, slowing from forecast growth of 15.8 per cent this year. Export growth was expected to be strong this year due to a low base effect last year when global demand was still weak for the country's goods, she said.
Indrawati said investment was likely to grow 10.9 per cent next year. She did not give comparative figures.
BANGKOK: Bangkok edged down 0.89 per cent, or 6.97 points, to close at 772.09.
MANILA: Manila closed up 3.85 per cent, or 120.87 points to 3,262.93.
Dealers were lifted by relatively peaceful national elections, with results showing a win for Benigno Aquino and going largely unchallenged. It was the biggest jump in more than eight and a half months, the exchange said.
MUMBAI: Mumbai fell 1.09 per cent, or 189.02 points, to 17,141.53.
EUROPE
European shares slipped yesterday over doubts the massive rescue plan which boosted stocks in the previous session was a long-term solution and whether Greece can deliver budget deficit cuts.
After losing more than 2 per cent during the session, stocks trimmed losses in late trade as US shares edged higher on Wall Street.
Banking stocks led the losers, with the STOXX Europe 600 banking index slipping 1.8 per cent. Spanish banks Banco Santander and BBVA fell 3.3 and 3.1 per cent respectively while Greek banks lost 4.9 per cent.
The pan-European FTSEurofirst 300 index of top shares closed down 0.4 per cent at 1,035.00 points after jumping 7.4 per cent on Monday on euphoria over the euro zone's US$1 trillion rescue package.
Across Europe, the FTSE 100 index fell 1 per cent, Germany's DAX rose 0.3 per cent and France's CAC 40 slipped 0.7 per cent.
European levels of government debt have hit danger levels and vigorous action will be needed to get them down again, the International Monetary Fund warned yesterday. The IMF, fresh from a trillion dollar European debt bailout package with Brussels, said debt levels had to be reduced and national budgets brought back into balance over the medium term. Radical action in the short-term had to be avoided as it risked �a relapse into recession�, the IMF said in a report on Europe.
Greece requested a first emergency loan of e20 billion (e1 = RM4.08) from the European Union and the International Monetary Fund yesterday to avoid bankruptcy after the government unveiled radical pension reforms that have alarmed the country. The money will be the first tranche of an unprecedented e110 billion rescue package agreed with the EU and the IMF a this month in return for drastic budget cuts. The tranche of e14.5 billion from the EU and e5.5 billion from the IMF �should be available possibly within the day�, the official said.
Greece needs e9 billion by May 19 to meet debt repayments and tens of billions more in the next few months as its access to debt markets has effectively been blocked by high rates demanded by investors. The yields on Greek 10-year government bonds rose to 7.850 per cent during trading yesterday from 6.717 per cent late on Monday, indicating a loss of investor confidence.
Europe�s sovereign debt crisis is punishing corporate borrowers, with bond issuance tumbling as investors doubt a $1 trillion bailout plan will be enough to bolster confidence in government finances for the region. Borrowers worldwide have sold $15 billion of corporate debt this month, a 62 percent decline from the same period in April and 83 percent less than the average for the past year, according to data compiled by Bloomberg. The extra yield investors demand to own corporate debt instead of government securities soared last week to the highest in more than four months. While a finance package hammered out over the weekend by European leaders slowed the decline in the euro and spared Greece from defaulting, investors aren�t showing they�re convinced a 13-month credit-market rally is poised to resume. Corporate bonds have lost 0.47 percent in May, the worst start to a month since February, according to Bank of America Merrill Lynch index data.
The rate banks pay for three-month dollar loans held near the highest level in about nine months as Europe�s near-$1 trillion loan plan failed to encourage institutions to lend more to each other. The London interbank offered rate, or Libor, rose to 0.423 percent yesterday from 0.421 percent yesterday, according to data from the British Bankers� Association. Libor reached 0.428 percent on May 7, the highest since Aug. 17, on concern the sovereign-debt crisis triggered by Greece�s budget deficit is hurting the quality of loan collateral.
US
Stocks seesawed Tuesday, losing steam late in a volatile session, as investors welcomed Europe's $1 trillion aid package, but showed caution amid the recent market turmoil.
The Dow Jones industrial average lost 35 points, or 0.3%, after having been down nearly 100 points and then up 89 points earlier in the session. The S&P 500 index lost 4 points, or 0.3% and the Nasdaq composite was little changed.
Stocks lost steam in the last hour of trade as investors, cautious after Monday's huge rally, continued to digest the European aid package.
However, the worries of the last few weeks pushed investors into safe-haven areas such as the U.S. dollar and gold. COMEX gold for June delivery settled at a record high of $1,220.30, up $19.50 an ounce.
U.S. stocks rose Monday, joining stocks around the globe, after European leaders approved an almost $1 trillion rescue package aimed at containing the growing debt crisis and stabilizing the euro. The Dow gained 405 points, its biggest gain since March 23, 2009.
But the euphoria of Monday gave way to a more measured response Tuesday amid questions about whether the bailout package will work if Greece and other debt-plagued nations don't make other efforts to cut their growing deficits. Markets around the world slipped after also rallying Monday.
Stocks have become increasingly volatile over the last few weeks as the period of markets gently moving higher has given way to bigger intraday swings.
The CBOE Volatility index, or the VIX, Wall Street's fear gauge, slipped 2% in choppy trading, reflecting the mixed market. On Monday, the VIX slipped around 30%, reflecting a lessening of worries following last week's selloff.
During last week's sell off, culminating in the one-two punch of Thursday's "flash crash" and Friday's follow-up, the VIX rallied to 13-month highs as investors grew more panicky.
After the close of trade Tuesday, Walt Disney reported quarterly earnings and revenues that topped expectations.
Market breadth was positive. On the New York Stock Exchange, winners beat losers eight to seven on volume of 1.46 billion shares. On the Nasdaq, advancers beat decliners eight to five on volume of 2.49 billion shares.
After the crash: The House Financial Services Subcommittee on Capital Markets was discussing last Thursday's stock market roller-coaster ride, in which a 350-point loss on the Dow became a nearly 1,000-point loss in under 10 minutes. The Dow erased two-thirds of that loss by the close, but investors remained rattled. The intraday selloff was the biggest on a point basis in market history.
Executives from the nation's largest stock exchanges and the chairwoman of the SEC were expected to tell Congress that the ultimate cause of the crash remains a mystery.
SEC chairwoman Mary Schapiro said regulators need more time to figure out what exactly happened. She said they had ruled out computer hacking, a terrorist attack or any malicious intent having driven the selling.
In addition, regulators and exchanges have reportedly firmed up plans to institute "circuit breakers" on individual stocks in an attempt to prevent a repeat of last week's incident.
Greece: Greece requested $18.4 billion in funds Tuesday from the European Union (EU) and is due to receive $7 billion from the International Monetary Fund (IMF) Wednesday. In total, the nation is requesting access to around $25 billion of the over $140 billion the EU and IMF have pledged in support.
The funds mean Greece will be able to meet the May 19 deadline to pay back roughly $11 billion in debt.
However, the pledge of over $140 billion came with requirements that Greece implement more rigid austerity measures that have angered unions and caused rioting.
Worries that Greece's problems would hurt other struggling nations such as Portugal have created fears that a broad European debt crisis could cripple the burgeoning economic recovery.
Economy: Wholesale inventories rose 0.4% in March, the Commerce Department reported, after climbing 0.6% in February. Economists thought inventories would increase by 0.5%.
World markets: Stocks around the globe were mostly lower. In Europe, Germany's DAX gained 0.3% after rising over 5% Monday, but other major markets fell. France's CAC 40 lost 0.7%, after gaining almost 10% on Monday. Britain's FTSE lost 1% after gaining over 5% Monday.
Asian markets fell, with Japan's Nikkei losing 1.1% and Hong Kong's Hang Seng falling 1.7%.
Dollar and commodities: The dollar was barely changed versus the euro. On Monday, the euro bounced versus the dollar after hitting 14-month lows against the U.S. currency during last week's big stock selloff. The dollar was barely changed versus the yen.
U.S. light crude oil for June delivery settled down 43 cents to $76.37 a barrel on the New York Mercantile Exchange. Bonds: Treasury prices fell, pushing the yield on the 10-year note to 3.56% from 3.54% late Monday.
The stock market closed mixed yesterday but the benchmark index managed to break and stay above the 1,340 resistance level.
Investors locked in their profits in selected lower liners but gains in some heavyweight counters pushed the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) to end 6.75 points higher at 1,340.72.
The FBM KLCI which shed 0.78 point at the start of trade at 1,333.19, moved between 1,332.38 and 1,341.88.
Dealers said market fundamentals remained strong, boosted by improvement in the country's Industrial Production Index as well as the double digit growth in manufacturing sales.
Many investors stayed on the sidelines ahead of Malaysia's first quarter gross domestic product figures which is expected to be out by end of this week.
The Finance Index improved 34.37 points to 12,018.07, the Industrial Index added 6.6 points to 2,729.48 and the Plantation Index went up 11.2 points to 6,397.95.
The FBM Emas Index rose 28.34 points to 9,004.66 and the FBM70 edged up 1.82 points to 8,794.34 but the FBM Ace Index lost 38.88 points to 3,970.08.
Losers outnumbered gainers by 399 to 302 while 272 counters closed unchanged, 399 untraded and 29 others suspended.
Total turnover decreased to 781.76 million shares valued at RM1.344 billion from 805.641 million shares valued at RM1.31 billion on Monday.
The top gainer was Genting which rose 17 sen or 2.511 per cent to RM6.94, followed by Genting Malaysia which added 9 sen to RM2.89.
Among active stocks, Talam Corp and KNM Group shed 1/2 sen each to 13.5 sen and 53 sen respectively while Johan Holdings slipped 1.5 sen to 45 sen.
Among heavyweights, Tenaga Nasional added 4 sen to RM8.56, CIMB Group gained 8 sen to RM14.36, Maybank edged up 2 sen to RM7.55 and Sime Darby rose 7 sen to RM8.63.
Petra Perdana Bhd plans to raise up to RM109.74 million from a private placement priced at 50 sen per share.
It plans to sell new shares not more than a tenth of the firm . Proceeds from the exercise will be used to lease additional vessels, vessel equipment and interest cost savings from the repayment of borrowings. After completion of the proposed placement, the company plans to undertake a renounceable rights issue of new shares, with new free detachable warrants at an issue price to be determined later.
Berjaya Corp Bhd has requested its shares be suspended from trading on Bursa Malaysia today, pending an announcement of an acquisition from a related party of the company and a capital-raising exercise. Analysts believe the announcement has to do with BCorp's offering its shareholders stakes in Hong Kong-listed Cosway Corp Ltd. BCorp has offered shareholders the option to buy Cosway Corp irredeemable convertible unsecured loan stocks (Iculs) on the basis of two Cosway Corp Iculs for every one BCorp share. BCorp and its subsidiaries hold some HK$1.74 million (HK$100 = RM42.82) worth of Cosway Corp Iculs that were issued as consideration when Cosway (M) Sdn Bhd was injected into Berjaya Holdings (HK) Ltd, which was renamed Cosway Corp in December 2009.
RM
The ringgit ended easier against the US dollar yesterday amid uncertainty over the US$1 trillion rescue package for the troubled euro zone countries, dealers said.
At 5pm, the local currency was traded at 3.2080/2130 compared with 3.1960/2010 on Monday.
A dealer said although the emergency package is expected to be helpful in shunning a near-term crisis, there were still doubts on the euro zone.
Another possible rate hike this week and growing chances for Beijing to revalue its yuan currency could lift the ringgit further, although concerns about the spillover from Greece's debt crisis may limit the upside.
Meanwhile, the ringgit was mostly higher against other major currencies.
The local unit was higher against the Singapore dollar at 2.3166/3214 from 2.3180/3238 on Monday but depreciated against the Japanese yen to 3.4677/4739 from 3.4233/4290.
The local currency was also higher against the euro at 4.0697/0770 from 4.1666/1741 and firmer against the pound at 4.7616/7697 from 4.7780/7865 previously.
CPO
Crude palm oil (CPO) futures on Bursa Malaysia Derivatives ended lower yesterday on profit taking as well as a weaker rival soyabean futures market, dealers said.
"There was not much news in the market today. Overall sentiment was weak and prices fell as players took cue from the decline in other commodities like crude oil and soyabean futures," one dealer said.
Crude oil price went below US$76 per barrel yesterday. At close, May 2010 and June 2010 contracts were down RM32 each to RM2,543 per tonne and RM2,518 per tonne, respectively.
July 2010 went down RM24 to RM2,505 per tonne and August 2010 slipped RM30 to RM2,493 per tonne.
News
PENINSULAR Malaysia will not get power from the Bakun hydroelectric dam but the government is still keen on securing power from Sarawak due to its renewable energy potential. This means that a RM9 billion undersea cable project connecting Sarawak and Peninsular Malaysia is still on the drawing board.
The sports gaming licence issued to tycoon Tan Sri Vincent Tan's Ascot Sports Sdn Bhd early this year comes with several conditions attached. Ascot Sports will be allowed to operate in only 200 of the 680 Sport Toto outlets in non-Muslim areas in major towns and online betting would not be allowed. The Sports Toto games are offered by Berjaya Sports Toto Bhd, a listed company controlled by Tan. According to sources, these outlets would also be required to put up notices that only adult non-Muslims would be allowed to place bets. It is also understood that Ascot Sports, which was reissued the licence on Jan 13, is unlikely to be ready for the FIFA World Cup in South Africa, which will take place between June 11 and July 11.
Pay-TV operator Astro All Asia Networks plc says it is on track to signing up half a million B.yond subscribers by the end of January next year as it introduces more high-definition content. Currently, Astro B.yond customers can watch HBO movies, National Geographic, History programmes and selected English Premier League football games on high definition. Next month, they can also watch the World Cup matches live on high definition. Astro also hopes to grow its sports package customer base from more than 1.57 million currently, or about 55 per cent. As of end-January this year, Astro has close to three million subscribers.
Kencana Petroleum Bhd's subsidiary Kencana HL Sdn Bhd has secured a RM91.9 million job from the Energy, Green Technology and Water Ministry for a subsea pipeline installation works between a water treatment plant in Beaufort, Sabah and Labuan. The contract will be implemented through Kencana HL-Leighton joint venture, a non-incorporated business venture between Kencana HL and Leighton Contractors (Malaysia) Sdn Bhd. The job is a one-off pipeline installation contract and is expected to be delivered within the fourth quarter this year.
Bursa Malaysia Bhd hopes to roll out an electronic trading initiative that will allow local investors direct access to stocks listed in other exchanges within the Asean region in about a year from now, said chief executiv officer Datuk Yusli Mohamed Yusoff. It was previously reported that the Asean e-trading link initiative was part of a road map to integrate Asean capital markets by 2015. The local bourse had been lagging behind regional exchanges' performance in recent years, partly due to low volume of foreign investment participation. Stock exchange data showed that foreign shareholding of local stocks had dwindled to 20% as at end of March, with a number of big companies like Tenaga Nasional Bhd and Public Bank Bhd reporting foreign shareholding level at near record low.
From next year, the limit of bank deposits insured by Malaysia Deposit Insurance (PIDM) will be raised to RM250,000 per depositor per member bank from RM60,000 now. Prime Minister Datuk Seri Najib Razak also announced yesterday a plan to introduce an explicit insurance compensation scheme (ICS) for insurance and takaful policyholders. According to the Finance Ministry, it is the Prime Minister's intention to implement a package of legislative initiatives aimed at enhancing financial consumer protection for Malaysians.
Tan Sri Abdul Rahman Omar, former DRB-HICOM Bhd adviser for automotive, is tipped to become chairman of UMW Holdings Bhd ( 4588 ), replacing Tan Sri Asmat Kamaludin. Abdul Rahman has been offered the post and an official announcement is expected by the end of next month, sources said.His appointment may lead to the shake-up of the automotive-to-oil-and-gas group's top management, now led by president and chief executive officer (CEO) Datuk Abdul Halim Harun.Abdul Halim is expected to leave UMW by the end of October when his contract expires, sources said.
Meanwhile, UMW Holdings Bhd may list its oil and gas (O&G) division by year-end, said its president and group chief executive officer Datuk Abdul Halim Harun. He said the firm is still hopeful to see the proposed listing take off after three postponements. The original listing proposal involved a public issue of 250 million new 50 sen shares, with the exercise expected to raise over RM400 million.
Magna Prima has lodged a police report against its former CEO Lim Ching Choy for alleged criminal breach of trust. The property developer said yesterday Lim was alleged to have made fraudulent personal claims during his tenure with the company between Nov 1, 2006 and May 14, 2009.
Alliance Financial Group Bhd said it has identified a replacement for Datuk Bridget Lai as group chief executive officer of its banking unit. Alliance Bank Malaysia Bhd will announce the name once the appointment has been endorsed by Bank Negara Malaysia, the firm said in an e-mailed response to a query.Lai tendered her resignation in February following an internal investigation related to a property renovation.
JOHAN Holdings Bhd�s subsidiary Diners Club (Malaysia) Sdn Bhd has completed its RM150 million medium term notes (MTN) programme from the securitisation of charge and credit cards receivables. Domayne Asset 2 Corp Bhd, a special-purpose vehicle has been incorporated to undertake the issuance of notes under the 7.25-year programme. RAM Ratings Services Bhd has assigned a rating of A2, A3 and BBB2 to Domayne�s RM110 million Class A Notes, RM2.5 million Class B Notes and RM3.5 million Class C Notes.
Economic News
Malaysia is expected to raise its benchmark interest rate by another 25 basis points (bps) for the second time in a row to normalise interest rates and prevent financial imbalances. Almost all economists polled by Business Times expect the Overnight Policy Rate, which determines the borrowing costs by banks, to be increased to 2.5 per cent tomorrow. Bank Negara Malaysia was among the first central banks in the region to raise interest rates in March.
FACTORY output, led by a rebound in the electrical and electronics (E&E) industry, pushed the Industrial Production Index (IPI) up by 14.1 per cent year-on-year in March. March's data exceeded the Business Times poll forecast of a 12.93 per cent growth. Month-on-month, the IPI increased 15.1 per cent.
The Statistics Department in releasing the IPI data yesterday, said the index, which measures the pace of activities in the manufacturing, E&E and mining sectors, increased by 11 per cent in the first quarter of this year compared with the same period of 2009.Meanwhile, manufacturing sales in March posted a 27.7 per cent growth to a record RM46.6 billion. The sector registered a double-digit growth of 24.5 per cent to record RM130.1 billion in sales for the first quarter. Manufacturing activities were led by refined petroleum products (36 per cent), other basic industrial chemicals, except fertilisers, nitrogen compounds (75.3 per cent) and motor vehicles (55.5 per cent).
Results
Hartalega Holdings Bhd's net profit for the fourth quarter ended March 31 2010 jumped almost half to RM46.4 million, backed by strong sales of both nitrile and latex gloves. The achievement is in line with the group's continuous expansion in production capacity, increase in demand, improvement in production processes and better cost control.for the final three month period, earnings per share was RM19.15 while net assets per share stood at RM146.20. Earnings before interest, taxation, depreciation and amortisation was RM62.4 million compared with RM39.5 million previously. Cumulatively, Hartalega recorded a net profit of RM143 million for the financial year ended recently against RM84.5 million in financial year 2009. This marked an impressive 69.3 per cent increase in net profit compared with the last fiscal year. In tandem with the group's strong performance, Hartalega declared a total dividend of 20 sen per share for the fiscal year. In an effort to reward shareholders for their continuous support, the group has proposed a bonus issue of 121.2 million new shares of 50 sen each. The issue is on the basis of one new share for every two existing shares held.
Despite the net loss of RM29.13 million for the first quarter (1Q), Malaysia Smelting Corporation Bhd (MSC) is expecting a better year for its financial year ending Dec 31, 2010, thanks to higher prevailing metal prices and contributions from its Rapu-Rapu Polytechnic Project in the Philippines. According to MSC, the 1Q loss of 38.8 sen per share is due mainly to the hefty RM48 million impairment provisions on its investments abroad.
In fact, MSC�s revenue for the quarter had almost doubled to RM651.18 million from RM351.65 million a year earlier, due to satisfactory performance in its Malaysian and Indonesian operations, and also higher net contributions from the Rapu-Rapu project. MSC said that it would have recorded RM27.75 million pre-tax profit if not for the impairment provision. Its RM48 million of impairment provisions were for the investments in Sydney-listed BCD Resources NL (BCD) of RM41 million and RM7 million for its funding of its joint-venture company Guilin Hinwei Tin Co Ltd (GHT) in China. To cut costs, MSC said it planned to divest 22.12% stake in BCD and 30% stake in the Rapu-Rapu project. The divestments are yet to be completed. The impairment provision of RM7 million its investment in China was because one of the joint-venture partners, Guangxi Guilin Jinwei Realty Co Ltd, failed to fulfill certain obligation to establish GHT. GHT, which is owned by three shareholders, is planned to venture into smelting and refining tin in China. The other shareholder of GHT is Vertex Metals Incorporation.
Petronas Gas (PetGas) net profit fell 23% to RM201.4 million in the fourth quarter ended March 31, 2010 from RM261.82 million a year ago on lower throughput revenue and utilities sales. Revenue also dropped 14% to RM802.21 million from RM935.87 million while earnings per share were 10.18 sen versus 13.23 sen.
It proposed a final dividend of 30% per share under single tier system and 5% per share tax exempt altogether amounting to RM692.56 million for FY10. For the financial year ended March 31, 2010 it said net profit rose just 1.31% to RM940.89 million from RM928.69 million a year earlier. Revenue was RM3.22 billion versus RM3.42 billion.
Insurer Kurnia Asia Bhd's earnings fell 9.7% to RM23.81 million in the first quarter ended March 31, 2010 from RM26.39 million a year ago due to higher tax expenses. Earnings were lower mainly due to the significantly higher tax expenses of RM11.24 million compared with RM70,000 a year ago. Pre-tax profit rose 32.5% to RM35.04 million from RM26.46 million a year ago. Revenue declined to RM274.96 million from RM280.62 million. Earnings per share were 1.6 sen versus 1.77 sen. It achieved an underwriting surplus of RM10.76 million for 1Q, which was a 160.9% increase on-year, underpinned by improvements in the management of its claims and management expenses. Net investment income was RM29.58 million, with an investment yield of 6.6%, which was higher than last year's yield of 5.9%. Net asset value improved by 10.5% to RM331.69 million from a year ago.
ASIA
Asian investors switched to sell mode yesterday as euphoria over a massive eurozone bailout gave way to doubt over debt-ridden countries' ability to reduce their deficits.
Asian markets joined a global surge on Monday after Europe and the International Monetary Fund agreed on the biggest financial system bailout since the 2008 banking crisis.
However, markets in Asia pulled back yesterday and the euro fell as investors focused on how the massive bailout will be carried out and the implications for the eurozone's underlying fiscal woes.
China and Hong Kong were hit by worries Beijing may move to further dampen mainland credit after new data showed consumer prices rose faster than expected in April, while property prices continued soar and lending jumped.
SINGAPORE: BANKING shares led falls as the stock market pulled back yesterday in line with other bourses in the region.
The benchmark Straits Times Index closed down 0.79 per cent, or 22.81 points, at 2,857.67.
DBS fell 24 cents to S$14.40 and Singapore Airlines eased 16 cents to S$14.62. Singapore Telecom dropped 4 cents to S$2.98.
HONG KONG: STOCKS fell yesterday as a global rally in response to a US$1 trillion deal to resolve Europe's debt crisis quickly lost steam, prompting investors to take profits on sharp gains seen the previous day.
The benchmark Hang Seng index fell 1.37 per cent, or 280.13 points, to close at 20,146.51, giving back roughly half of Monday's advance.
TOKYO: Tokyo closed down 1.14 per cent, or 119.60 points, at 10,411.10.
SYDNEY: Sydney lost 1.13 per cent, or 51.8 points, to end at 4,548.00.
Australia is willing to negotiate on the details of its "super profits" tax on mining firms, a government minister said yesterday, after complaints from miners that the tax could stop billions of dollars in investments. Australian Prime Minister Kevin Rudd has so far resisted making concessions over the 40 per cent levy on profits to help fund social programmes that some miners have compared to a near-nationalisation of the sector.
Australia�s government aims to bring the budget into surplus three years ahead of forecast, seeking a �solid buffer� against a European debt crisis that threatens to undermine the global recovery. Treasurer Wayne Swan, releasing the annual budget yesterday in Canberra, estimated a A$1 billion ($900 million) surplus in 2012-13, from a A$40.8 billion deficit in the year to June 30, 2011. He said he�ll keep a 2 percent cap on spending growth until the surplus reaches 1 percent of gross domestic product. The pledge reflects concern that investors will punish countries that fail to rein in deficits, which swelled during the world recession. Australia, whose public debt is projected to peak at 6.1 percent of GDP, is reaping the rewards of Chinese demand for its resources, and the surplus forecast is aided by a proposed �super� tax on miners.
SHANGHAI: Shanghai lost 1.90 per cent, or 51.18 points, to end at 2,647.57, a near one-year low.
China said yesterday that consumer prices and bank lending accelerated in April, fuelling fears the economy may overheat and building pressure on Beijing to raise interest rates and let its currency rise. Property prices also marked a double-digit rise for the third straight month, signalling measures introduced by the government in recent weeks to curb inflation and rein in soaring prices were having little effect. "Currently, prices are rising quite fast," a spokesman for the National Bureau of Statistics, Sheng Laiyun, told reporters, though he insisted those increases remained "relatively mild". "In the near term, prices are still under quite significant upward pressure. Total demand is still on the rise and domestic liquidity is still abundant."
The consumer price index, the main gauge of inflation, rose a higher-than-expected 2.8 per cent compared with April last year, outpacing the 2.4 per cent jump in March, the NBS reported.
SEOUL: Seoul closed 0.44 per cent lower, or 7.39 points, at 1,670.24.
TAIPEI: Taipei dropped 0.73 per cent, or 56.29 points, to 7,608.44.
JAKARTA: Jakarta lost 1.32 per cent, or 37.54 points, to 2,812.89.
Indonesia's economy is likely to expand 6 per cent next year, slightly above the budget forecast of 5.8 per cent growth for 2010, thanks to strong investment and exports, Finance Minister Sri Mulyani Indrawati said yesterday. The central bank has forecast 2011 growth of 6-6.5 per cent, compared with a consensus forecast of 6.1 per cent in a Reuters poll in April. Indrawati said exports were likely to grow 10.8 per cent next year, slowing from forecast growth of 15.8 per cent this year. Export growth was expected to be strong this year due to a low base effect last year when global demand was still weak for the country's goods, she said.
Indrawati said investment was likely to grow 10.9 per cent next year. She did not give comparative figures.
BANGKOK: Bangkok edged down 0.89 per cent, or 6.97 points, to close at 772.09.
MANILA: Manila closed up 3.85 per cent, or 120.87 points to 3,262.93.
Dealers were lifted by relatively peaceful national elections, with results showing a win for Benigno Aquino and going largely unchallenged. It was the biggest jump in more than eight and a half months, the exchange said.
MUMBAI: Mumbai fell 1.09 per cent, or 189.02 points, to 17,141.53.
EUROPE
European shares slipped yesterday over doubts the massive rescue plan which boosted stocks in the previous session was a long-term solution and whether Greece can deliver budget deficit cuts.
After losing more than 2 per cent during the session, stocks trimmed losses in late trade as US shares edged higher on Wall Street.
Banking stocks led the losers, with the STOXX Europe 600 banking index slipping 1.8 per cent. Spanish banks Banco Santander and BBVA fell 3.3 and 3.1 per cent respectively while Greek banks lost 4.9 per cent.
The pan-European FTSEurofirst 300 index of top shares closed down 0.4 per cent at 1,035.00 points after jumping 7.4 per cent on Monday on euphoria over the euro zone's US$1 trillion rescue package.
Across Europe, the FTSE 100 index fell 1 per cent, Germany's DAX rose 0.3 per cent and France's CAC 40 slipped 0.7 per cent.
European levels of government debt have hit danger levels and vigorous action will be needed to get them down again, the International Monetary Fund warned yesterday. The IMF, fresh from a trillion dollar European debt bailout package with Brussels, said debt levels had to be reduced and national budgets brought back into balance over the medium term. Radical action in the short-term had to be avoided as it risked �a relapse into recession�, the IMF said in a report on Europe.
Greece requested a first emergency loan of e20 billion (e1 = RM4.08) from the European Union and the International Monetary Fund yesterday to avoid bankruptcy after the government unveiled radical pension reforms that have alarmed the country. The money will be the first tranche of an unprecedented e110 billion rescue package agreed with the EU and the IMF a this month in return for drastic budget cuts. The tranche of e14.5 billion from the EU and e5.5 billion from the IMF �should be available possibly within the day�, the official said.
Greece needs e9 billion by May 19 to meet debt repayments and tens of billions more in the next few months as its access to debt markets has effectively been blocked by high rates demanded by investors. The yields on Greek 10-year government bonds rose to 7.850 per cent during trading yesterday from 6.717 per cent late on Monday, indicating a loss of investor confidence.
Europe�s sovereign debt crisis is punishing corporate borrowers, with bond issuance tumbling as investors doubt a $1 trillion bailout plan will be enough to bolster confidence in government finances for the region. Borrowers worldwide have sold $15 billion of corporate debt this month, a 62 percent decline from the same period in April and 83 percent less than the average for the past year, according to data compiled by Bloomberg. The extra yield investors demand to own corporate debt instead of government securities soared last week to the highest in more than four months. While a finance package hammered out over the weekend by European leaders slowed the decline in the euro and spared Greece from defaulting, investors aren�t showing they�re convinced a 13-month credit-market rally is poised to resume. Corporate bonds have lost 0.47 percent in May, the worst start to a month since February, according to Bank of America Merrill Lynch index data.
The rate banks pay for three-month dollar loans held near the highest level in about nine months as Europe�s near-$1 trillion loan plan failed to encourage institutions to lend more to each other. The London interbank offered rate, or Libor, rose to 0.423 percent yesterday from 0.421 percent yesterday, according to data from the British Bankers� Association. Libor reached 0.428 percent on May 7, the highest since Aug. 17, on concern the sovereign-debt crisis triggered by Greece�s budget deficit is hurting the quality of loan collateral.
US
Stocks seesawed Tuesday, losing steam late in a volatile session, as investors welcomed Europe's $1 trillion aid package, but showed caution amid the recent market turmoil.
The Dow Jones industrial average lost 35 points, or 0.3%, after having been down nearly 100 points and then up 89 points earlier in the session. The S&P 500 index lost 4 points, or 0.3% and the Nasdaq composite was little changed.
Stocks lost steam in the last hour of trade as investors, cautious after Monday's huge rally, continued to digest the European aid package.
However, the worries of the last few weeks pushed investors into safe-haven areas such as the U.S. dollar and gold. COMEX gold for June delivery settled at a record high of $1,220.30, up $19.50 an ounce.
U.S. stocks rose Monday, joining stocks around the globe, after European leaders approved an almost $1 trillion rescue package aimed at containing the growing debt crisis and stabilizing the euro. The Dow gained 405 points, its biggest gain since March 23, 2009.
But the euphoria of Monday gave way to a more measured response Tuesday amid questions about whether the bailout package will work if Greece and other debt-plagued nations don't make other efforts to cut their growing deficits. Markets around the world slipped after also rallying Monday.
Stocks have become increasingly volatile over the last few weeks as the period of markets gently moving higher has given way to bigger intraday swings.
The CBOE Volatility index, or the VIX, Wall Street's fear gauge, slipped 2% in choppy trading, reflecting the mixed market. On Monday, the VIX slipped around 30%, reflecting a lessening of worries following last week's selloff.
During last week's sell off, culminating in the one-two punch of Thursday's "flash crash" and Friday's follow-up, the VIX rallied to 13-month highs as investors grew more panicky.
After the close of trade Tuesday, Walt Disney reported quarterly earnings and revenues that topped expectations.
Market breadth was positive. On the New York Stock Exchange, winners beat losers eight to seven on volume of 1.46 billion shares. On the Nasdaq, advancers beat decliners eight to five on volume of 2.49 billion shares.
After the crash: The House Financial Services Subcommittee on Capital Markets was discussing last Thursday's stock market roller-coaster ride, in which a 350-point loss on the Dow became a nearly 1,000-point loss in under 10 minutes. The Dow erased two-thirds of that loss by the close, but investors remained rattled. The intraday selloff was the biggest on a point basis in market history.
Executives from the nation's largest stock exchanges and the chairwoman of the SEC were expected to tell Congress that the ultimate cause of the crash remains a mystery.
SEC chairwoman Mary Schapiro said regulators need more time to figure out what exactly happened. She said they had ruled out computer hacking, a terrorist attack or any malicious intent having driven the selling.
In addition, regulators and exchanges have reportedly firmed up plans to institute "circuit breakers" on individual stocks in an attempt to prevent a repeat of last week's incident.
Greece: Greece requested $18.4 billion in funds Tuesday from the European Union (EU) and is due to receive $7 billion from the International Monetary Fund (IMF) Wednesday. In total, the nation is requesting access to around $25 billion of the over $140 billion the EU and IMF have pledged in support.
The funds mean Greece will be able to meet the May 19 deadline to pay back roughly $11 billion in debt.
However, the pledge of over $140 billion came with requirements that Greece implement more rigid austerity measures that have angered unions and caused rioting.
Worries that Greece's problems would hurt other struggling nations such as Portugal have created fears that a broad European debt crisis could cripple the burgeoning economic recovery.
Economy: Wholesale inventories rose 0.4% in March, the Commerce Department reported, after climbing 0.6% in February. Economists thought inventories would increase by 0.5%.
World markets: Stocks around the globe were mostly lower. In Europe, Germany's DAX gained 0.3% after rising over 5% Monday, but other major markets fell. France's CAC 40 lost 0.7%, after gaining almost 10% on Monday. Britain's FTSE lost 1% after gaining over 5% Monday.
Asian markets fell, with Japan's Nikkei losing 1.1% and Hong Kong's Hang Seng falling 1.7%.
Dollar and commodities: The dollar was barely changed versus the euro. On Monday, the euro bounced versus the dollar after hitting 14-month lows against the U.S. currency during last week's big stock selloff. The dollar was barely changed versus the yen.
U.S. light crude oil for June delivery settled down 43 cents to $76.37 a barrel on the New York Mercantile Exchange. Bonds: Treasury prices fell, pushing the yield on the 10-year note to 3.56% from 3.54% late Monday.
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