Friday, December 11, 2009

20091201 1828 FCPO EOD Daily Chart Study.

Crude palm oil futures up 10 points to closed at 2531 with lower volume forming a doji bar candle today. Despite today's advance, market seems having difficulties to determine which way it should headed toward without any fresh leads and catalyst. With this directionless mood, price continue to trade side way range bound as shown in the narrowing Bollinger band width. MACD Histrogram registered a lower below zero line reading shows that buying interest is gradually decreasing. Despite this negative feeling, FCPO unarguably is still trading in the uptrend market correction phase and is too early to even start thinking about Mr Bear thus expecting the market to trade side way range bound with potentially upside biased. Immediate support stands at the middle Bollinger band level and resistant rest at the previous high 2606 level. 
When to buy : buy at support or weakness with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20091211 1741 FKLI EOD Daily Chart Study.

4.5 points range FKLI market ended the week at 1256, up 2 points compare to yesterday despite better regional market performance. Selangor's holiday also contributed to the thin volume traded today. At closed, today doji bar position still stay below the middle Bollinger band and the band width nearly unchanged = market sentiment remain weak thus is likely to move downward biased. MACD Histrogram falling has paused today = partial seller covering some short position today ahead of the weekend. Daily chart wise, the market do looks bearish sided but having said that, market can potentially having a pullback effect after price hitted the lower Bollinger band and the band width seems stop expanding. Immediate resistant rest at the middle Bollinger band and should market continue to fall further, support stands at 1243 follow by 1232 level. 
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/break down with larger cut loss and profit target.

20091211 1304 FKLI Mid Day Hourly Chart Study.

A one day up one day down FKLI market closed 3 points higher at 1257 in unison with major Asia market. Chart wise, price managed to hold above the middle Bollinger band with the band width stay flat = ranging market. The last 3 MACD Histrogram bar retreated marginally = selling pressure came in. With such a thin volume transacted and ahead of the weekend market is expected to trade sideway ranging with a little upside biased movement in the second session. Support stands at the middle and lower Bollinger band. 

20091211 1251 FCPO Mid Day Hourly Chart Study.

A quite Friday for FCPO that traded marginally lower to closed at 2518 downed 3 points with thin volume transacted. Market gap higher at  the opening and traded higher but failed to sustain the upward momentum. Price seems resisted and stay below the middle Bollinger band with the band width stay almost unchanged = a side way range bound market. MACD edging up slowly = small buying activities but still insufficient. Immediate resistant at the middle Bollinger band level and should price break up above it with higher volume would see price trying to test the upper Bollinger band level or else market is likely to trade side way ranging with downside biased.

20091211 1041 Malaysia Corporate News.

Yesterday, LCL Corp announced that its 100%-owned subsidiary, LCl Furniture S/B has defaulted in payments of its credit facilities to two banks, Affin Bank and Bank Islam Malaysia. Total loan default was RM72m. LCL also announced due to the tight overall working capital position, the defaulted bank borrowings with Affin Bank and Bank Islam will have a consequence on the on-going bank borrowings of the LCL Group, which will also be declared default by other banks under the cross default clause. 
  • Legal proceedings may be initiated by the lenders against the LCL Group of companies. The board is also deliberating the solvency status of the LCL Group and will make the necessary announcement within the required timeframe.(BMSB)
Pengurusan Aset Air Bhd (PAAB) plans to make an offer it deems "more palatable" to Selangor's water concessionaires next week, said CEO Ahmad Faizal Abdul Rahman. The water players, he said, would be given two weeks to revert. "There is not much room for negotiation. We have based our offer on the results of the due diligence and the balance sheet.
  • There is only so much one can negotiate on the difference in the interpretation of these figures. We will address the main concerns of the concessionaires and the offer would be fair to all parties." Faizal said the new offer would "more or less" be the same as the state's offer which had valued the water-related assets at about RM9.2bn or one time book value. But the approach will be different. Energy, Green Technology and Water Minister Datuk Peter Chin has set end-March 2010 as the deadline for PAAB. (Starbiz)
The timeline of the offer from PAAB is slightly earlier than expected. PAAB's clarification that the offers would "more or less" be the same with the state government's offers addresses earlier concerns that the take over prices would be lower. This means that in addition to selling their water assets and liabilities, water concessionaires would retain their O&M contracts. If this is the case, the new offers next week are not likely to be rejected. This is also positive for Puncak Niaga an in line with our expectations that the offers for PNSB and Syabas would approximate DCF value.

In a surprise move that could deprive it of over Rs 5,000 crore (US$1bn) in revenue, the Indian government has said the 3G spectrum available with it for sale currently could only accommodate three operators. A fourth slot has already been awarded to state-owned MTNL (that operates in Delhi and Mumbai) and BSNL (rest of India). 
  • It had earlier planned to auction spectrum to four private bidders, in addition to the staterun firms. The decision comes in the wake of the Ministry of Defence's reluctance to vacate the designated spectrum (air waves) for commercial use, official sources said, adding that the required notification would be issued soon. (Economic Times of India)
We are negatively surprised by this development as it would cause a more intense bidding process for 3G given the scarcity premium attached to the reduced number of slots. The key hold-up has been the release of spectrum by the Defence Department. Overall, this merely reinforces our negative view on the Indian telco sector which has seen more aggressive cuts in calling rates, roaming rates and SMS rates.

Malaysia’s palm oil stocks in November stood at 1.934m tonnes, reflecting only a marginal decrease from 1.974m tonnes, the highest level year-to-date, recorded in October. Malaysian Palm Oil Board, in its monthly report, also showed production in November dropped 19.6% to 1.595m tonnes compared with 1.984m tonnes in October. Exports grew slightly to 1.499m tonnes in November from 1.478m tonnes a month earlier. It was speculated the high inventory was due to buyers adopting a “wait and see” stance on anticipation that crude palm oil (CPO) price would fall further. (Starbiz)

Sime Darby's subsidiary Sime Darby Property is selling Caring Skyline to Green Ridge Enterprises for US$20m (RM68m). Caring Skyline is an investment holding company which has a 49% stake in PT Bhumyamca Sekawan whose principal activity was in the renting of commercial and industrial space. (Financial Daily)

Nestle will replace Parkson Holdings in the 30-counter strong FBMKLCI. This is following the semi-annual review of the benchmark index. Meanwhile, the FBM Hijrah Shariah Index will see the inclusion of Nestle, Star and Kencana. (Star)

DiGi is allowing U Mobile access to its nationwide 2G GSM network for the provision of telco services. Under the three-year domestic roaming agreement, U Mobile can offer an improved comprehensive portfolio of voice, SMS and data services nationwide. "The agreement will see the establishment of seamless hand-over of voice calls from U Mobile’s 3G network to DiGi Tel’s 2G GSM network," said DiGi. 
  • The agreement is for three years from commercial launch and may be further renewed for two years. DiGi said the domestic roaming agreement would leverage DiGi Tel’s existing infrastructure and generate additional revenue. "By increasing the traffic volumes through the contribution of U Mobile traffic, DiGi Tel will benefit from increased utilisation and network efficiency," it added. (Financial Daily)
Kencana Petroleum is bidding for more than RM4bn worth of projects, including that in Malaysia, India, Australia and Indo-China, said CEO Datuk Mokhzani Mahathir. The results will be known in a few months' time. "Chances of securing the projects are good as we have proven to be a serious player in this industry," he added. The company is looking at an investment of RM60m to increase the efficiency of its fabrication yard in Lumut. (Bernama)

Petra Perdana may have found a buyer for a block of its 55% stake in Petra Energy, according to documents obtained. In one document, Petra Perdana stated that it had appointed TA Securities as the placement agent for the disposal of its entire 54.62% stake in Petra Energy. It added that TA Securities had procured a purchaser for up to 30% stake and expected to effect a transaction either today or tomorrow. (Financial Daily)

Standard & Poor's has raised Tenaga’s long-term corporate credit rating to "BBB+" from "BBB" previously. The stable outlook reflected S&P’s expectation of continued government support for Tenaga, supply of subsidised gas from Petronas and, stable operating and financial performance in the medium term. (Bernama)

SP Setia plans to launch its RM6bn "green" mixed development opposite Mid Valley Megamall in Kuala Lumpur by July next year, CEO Tan Sri Liew Kee Sin. Kuala Lumpur City Hall will be SP Setia's partner on a profit-sharing basis, taking 20% of the project's net profits. The project, to be known as KL Eco City, will be developed in three phases over at least 10 years.
  • SP Setia will develop office, commercial and retail space in the first phase; condominiums in the second; and signature offices in the third. KL Eco City is expected to start contributing to the developer's bottom line in its financial year ending 30 Oct 2011. SP Setia will spend RM250m of its own funds over this financial year and the next to improve the infrastructure there. (BT)
SP Setia is targeting at least RM1.6bn worth of real estate sales for its current fiscal year as pent-up demand for big-ticket items may be unleashed on the back of an economic recovery. Its president and CEO Tan Sri Liew Kee Sin said the firm planned to focus on improving overall yields by growing the gross development value of its projects and expanding profit margins. 
  • "Other plans include the proposed disposal of certain non-core assets and deployment of the group's strong balance sheet to acquire new landbank to secure the group's longterm growth  prospects. We think we will do much better this year (FY10)," Liew said. (Financial Daily)
Affin Bank expects to maintain loan growth of 8-10% next year, with focus on consumer banking and SME lending. The bank also expects its NPL ratio to fall in line with the industry average of 2.5% by year-end. On its plans to start Islamic banking operations in China, ED (operations) Shariffudin Mohamad said Affin is still in talks with its substantial shareholder, Bank of East Asia Ltd (BEA) on how best to penetrate the market. (BT)

MOL Global, whose principal shareholder is Berjaya Corp’s chairman and CEO Tan Sri Vincent Tan, will acquire 100% of Friendster. Friendster is the operator of a top global web site based on traffic and a leading social network in Asia. Following the acquisition, the operations of MOL and Friendster will be combined to create Asia’s largest end-to-end content, distribution and commerce network. MOL Global Ltd expects to generate US$110m in annual revenue from the takeover, CEO Ganesh Kumar Bangah said. (Bloomberg, BT)

Naza TTDI, property arm of the Naza group, will build an iconic tower on a 25ha site near the proposed Matrade Centre in Kuala Lumpur, but is yet to finalise the height. Group MD SM Faliq SM Nasimuddin suggested that the building could even be higher than 100 storeys. However, much will depend on the amount of investments it can secure. "The master plan (for the 25ha area) is yet to be finalised. It should be completed by early next year," SM Faliq said. "No matter what the height, the structure will be a green building," he added. (BT)

Emas Kiara Industries has secured a RM49.8m job from WCT Construction S/B to undertake sub-contract work at the new low-cost carrier terminal in Sepang. Work will commence immediately and is slated for completion by 2Q10. The project is expected to contribute positively to Emas Kiara's earnings for Dec FY-10. (BT)

Magna Prima has signed a deal with Santari S/B to buy a 5.5-acre freehold land in Bandar Bukit Jalil, Kuala Lumpur for RM10.7m. The property will be used for the relocation of Lai Meng Primary School and Lai Meng Kindergarten currently located along Jalan Ampang, Kuala Lumpur. The proposed acquisition is expected to be completed in 1QCY10. This purchase is part of the Group's plan to buy Lai Meng Girls' School Association's land along Jalan Ampang for RM148.2m. (BT)

myEG Services will invest RM40m over the next two years in a pilot project to develop an online services-tax monitoring system, its executive chairman Datuk Dr Norraesah Mohamad said. The system would be launched in 1H10 targeting eateries and entertainment centres. "We are 85% there. We will roll out the system in the later part of 1H10 but only in the Klang Valley," she said. The RM40m investment would be funded by internally generated funds and was expected to be recouped in two years after the full implementation of the new system, she said. (Financial Daily)

Landmarks has appointed Sheraton Overseas Management Corp, an affiliate of Starwood Hotels & Resorts Worldwide, as the new operator of The Andaman Langkawi, with immediate effect. (Financial Daily)