Happy New Year 2011

IJM Land, MRCB merger called off

MALAYSIAN RESOURCES CORP [] Bhd (MRCB), IJM Land Bhd’s proposed merger has been called off after both parties failed to agree on the terms of the MoU which expired on Wednesday, Dec 29.

MRCB said that after a series of discussions, MRCB and IJM Land have not been able to reach an agreement on the definitive terms and conditions of the proposed merger.

The Employees Provident Fund (EPF) is a common shareholder in all the companies involved in the merger. The EPF owns a 19.4% equity stake in IJM Corp, while it is the single largest shareholder of MRCB with a 41.63% stake. IJM Land is in turn a 62.48%-owned unit of IJM Corp Bhd.

The Eye of the Recession's Storm

by Robert Kiyosaki

Recently, as I was finishing my dinner at a local Italian restaurant, my waiter asked me, “May I talk to you about my mortgage?”

“Sure,” I replied.

“I haven’t paid my mortgage in over 18 months,” he said. “What do you think I should do?”

“Has the bank been calling you?” I asked.

“At first, but lately I’ve heard nothing,” he said hesitantly. “And I’m not the only one. Three of the cooks in the kitchen have also stopped paying their mortgage.”

“And what are you doing with the money?”

“We’re saving it.”

“And what do you plan on doing?” I asked.

“Wait till they take our houses,” he said. “Do you think this is a good idea?”

“I wouldn’t do it,” I said with a smile. “Why are you doing it?”

“Because the mortgage is more than the value of the house. We’re better off not paying the mortgage and saving the money. Let them take our houses.”

I didn’t agree or disagree with this man…yet, silently, I couldn’t fault his logic. Since he was 18 months behind on his mortgage, he was so far behind that he was actually ahead.

As you probably know, the mortgage mess is only getting worse, not better. Many people aren’t paying their mortgages because they don’t have a job. Yet there are a growing number of people who have jobs but who are also refusing to pay their mortgage.

A medical doctor friend of mine confirmed this growing trend. He said the doctors he works with, doctors who make a lot of money, are buying a lower-priced second home and then defaulting on their primary residence.

If this trend turns into an avalanche, the real estate market will crash again. The only people holding onto their homes are people like me, people who purchased before the bubble and don’t owe much, if anything, on their homes.

If there is another real estate crash, it’s people like me -- people who pay their mortgages -- who might be the biggest losers.

Looking at the chart, it’s easy to see the eye of the storm. The second half of the storm is about to hit.

The leading edge of the storm was the subprime mortgage defaults, the storm that hit in 2007. The trailing edge of the storm will be the defaults of people who are solid citizens, people who have good jobs and good credit.

How severe the second front of the storm will be is yet to be seen. If there are more people like the waiter and cooks in the Italian restaurant and the highly paid doctors who don’t want to pay for a house that is going down in value, the second half of the storm will be very severe.

China Increases Rates to Counter Highest Inflation in Two Years

Dec. 26 -- China raised interest rates for the second time since mid-October to counter the fastest inflation in more than two years and more moves may follow.

The benchmark one-year lending rate will rise by 25 basis points to 5.81 percent and the one-year deposit rate will climb by the same amount to 2.75 percent, effective today, the People’s Bank of China said in a one-sentence statement on its website late yesterday.

Economists surveyed by Bloomberg News earlier this month forecast one percentage point of increases by the end of 2011. Premier Wen Jiabao is seeking to slow gains in property values and consumer prices that are making it harder for families to buy homes and pay for food. Bank lending and a wider-than- forecast November trade surplus have pumped more cash into an economy already awash with money.

Third-quarter growth revised up to 2.6 percent, But.....

Washington - Economic growth was a touch higher than previously estimated in the third quarter, but below expectations as a rise in the pace of inventory accumulation was offset by downward revisions to consumer spending, a government report showed on Wednesday.

Gross domestic product growth was revised up to an annualized rate of 2.6 percent from 2.5 percent, the Commerce Department said.

Economists had expected GDP growth, which measures total goods and services output within U.S. borders, to be revised up to a 2.8 percent pace. The economy expanded at a 1.7 percent rate in the second quarter.

But data so far suggests growth accelerated in the fourth quarter and will remain supported in 2011 by an $858 billion tax deal, which will help plug the gap from the fading boost from the rebuilding of inventories by businesses and winding down of the government's $814 billion stimulus package.

Israel moving tank defense system near Gaza

Israel will deploy tanks equipped with a miniature missile-defense system along the Gaza Strip border in the coming weeks now that Palestinian militants are using a sophisticated, tank-piercing missile, defense officials said Wednesday.

Violence has been escalating along the Gaza border in recent weeks, and Israel's military chief disclosed on Tuesday that militants from the Palestinian coastal strip had for the first time fired a Cornet missile earlier this month and that it penetrated an Israeli tank.

FCPO - Where to go ??

The Crude Palm Oil is trying to hit another new high again. be alert ! after the winter, the price will come down very fast.

Moody's says may cut Spain rating, sees no bailout

(Reuters) - Ratings agency Moody's said on Wednesday it had put Spain on review for a possible downgrade because of its high funding needs and doubts about its banking sector and regional finances, prompting the euro to slide.

However, the agency said it did not expect Madrid to have to resort to an EU bailout as Greece and Ireland have.

"Moody's does not believe that Spain's solvency is under threat and in its base case assumptions does not expect the Spanish government to have to ask for EFSF liquidity support," Moody's lead analyst on Spain Kathrin Muehlbronner said in a statement.

Genting Singapore may consider dividends: Citi

Genting Singapore (G13.SG) could be considering paying dividends as it is refinancing its $4.19 billion debt, says Citigroup, which has a Buy call with a $2.75 target.

According to Genting, the 7-year syndicated loan from 5 banks will give it more flexibility in using the funds.

“With the covenant of the existing debt, Genting Singapore is restricted from (paying dividends) until the group starts repaying its loan,” Citigroup says.

Notes Genting currently pays SGD swap offer rate plus 1.75%, but will pay 1.6% for the first 3 months and swap offer rate plus 1.2%-1.6% under the new facility.

The existing loan was taken in 2008 to build Resorts World Sentosa.

While the refinancing is positive, investors are hardly swayed, with shares down 1.8% at $2.16 after a sustained rise over the past 7 sessions. Support is tipped at the 10-day moving average, last at $2.10.

DRB-HICOM BHD (1619.KL)

# Will go for privatization soon, offering price around RM2.50 per stock.