Monday, December 14, 2009

20091214 1818 FCPO EOD Daily Chart Study.

FCPO ended today 17 points lower to closed at 2513 with low volume participated. Support came in when price touched the middle Bollinger band level and manage to closed above it with the band width continue narrowing = the uptrend correction could continue or paused here. MACD Histrogram lower = selling forces still strong. With the support level touched today, there could be 2 scenario where market could possibly continue to do downward correction with next support near 2360 level or resume its upward movement from here with immediate resistant level at the upper Bollinger band.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20091214 1748 FKLI EOD Daily Chart Study.

FKLI rebounded today recovered 9.5 points to closed at 1265 with supportive higher volume traded. Daily chart wise, market seems tested and resisted at the middle Bollinger band level and today white candle closed just slightly below it with the Bollinger band width turning inwards = indeed the pullback effect took place (last friday EOD study) after price hit the lower Bollinger band and possibly side way ranging market a head. MACD Histrogram continue to recover upward = buying activities returned to the market due to good bargain price. The mentioned pull back effect could continue with possible resistant come in at the middle Bollinger band, the plotted upper downward channel line and follow by the plotted horrizontal line at 1275.5 level. Or else side way range bound market likely.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20091214 1353 FKLI Mid Day Hourly Chart Study.

FKLI opened gap up in the morning but failed to sustain the upward momentum and retreated to the low at 1253 before recovering to closed up 1 point at 1257 due to Hang Seng closed the first session up 19 points after down for more than 350 points in the morning. The last hourly candle managed to climb and closed above the middle Bollinger band with the band width turned inwards = market could trade side war range bound with some upside biased. MACD Histrogram has stopped falling and recording some improvement on the last bar = selling activities has paused with a little buying interest appear in the market. Expecting market to trade side way ranging with a little upside biased. Immediate support stands at 1251.5 level and resistant rest at 1261 level.

20091214 1337 FCPO Mid Day Hourly Chart Study.

Spilled over by bearish commodity market leads Bursa Malaysia crude palm oil futures price to closed down 27 points at 2503 with low volume traded. Price opened gap down, traded lower and follow with some minor recovery but still closed below the middle Bollinger band with the band width narrower slightly = the downward correction to continue with market reacted to the bearish development in world commodity market. MACD Histrogram penetrated the negative zone since market opened this morning and sliding downward slowly = traders decided to close their long positions. Market could possibly trading within the plotted near terms downtrend channel that is likely to trade lower and market is likely to recover should price manage to break above the plotted upper resistant line.

20091214 1109 Malaysia Corporate News.

Falling iron ore shipments and spot prices into China could signal a push by the world's biggest buyer of the steel-making raw material to position itself for an early settlement to 2010 contract talks. 
  • Iron ore prices in China have retreated to US$98.10 this week from US$104.6, price data from the Steel Index shows. 'A give-back in the spot market is not surprising, but these prices still represent a 30% rise on a freight-equalised basis. Chinese port stocks are declining and that may have created some softness,' ANZ's senior commodities analyst Mark Pervan said. 'I think CISA may want to strike early and that also might be a reason why the market is softening - the Chinese may be trying to put pressure on prices now to win a more favourable settlement.'
  • Between Sept 11 and Nov 20, the latest data available, Chinese port stocks fell 5m tonnes to 68.87m tonnes, around 5% of monthly consumption. (Reuters, SBT) 
The Baltic Dry Index slid almost 13% last week to 3,579 points on Friday, giving back part of the 75% surge in the two months through the end of November. We believe that the fall in iron ore imports by China is was a deliberate attempt manage spot iron ore prices, but the fall in iron ore stocks is a bullish forward indicator of bulk freight rates in the 1Q10.

The Cambodian telecom ministry has issued an edict on minimum tariffs for mobile services to end an ongoing dispute that, according to government officials, is destabilising the mobile industry. Mobile operators that do not comply with the new rules will have their licence suspended. Details of tariffs and when the edict will come into effect will be issued shortly. In October the ministry also issued an edict on interconnection tariffs. 
  • The new edicts are the result of a dispute sparked by new entrant Beeline. Mobitel and other operators accuse Beeline of price dumping while Beeline accuses Mobitel of blocking calls from its network. (Telecompaper)
This is positive for Axiata's unit, Axiata Cambodia, which contributes to 1% of our SOP based target price.

All the power from Bakun, which will be fully operational in 2011, will now go to Sarawak in order to serve the state's own industrial needs. This is following the federal government’s agreement to the state's request to have the power from Bakun to be dedicated entirely for the local industries, especially under Sarawak Corridor of Renewable Energy (SCORE). 
  • CM Pehin Sri Abdul Taib Mahmud said the state government was now taking the next step which was to package a deal to 'lease' Bakun hydroelectric dam from the federal government.  Meanwhile, when asked about the matter, Energy, Green Technology and Water Minister Datuk Peter Chin said, "I have not been informed on whatever new changes in the planning of the Bakun power.” (Berita Malaysia, Bernama)
This news is a negative surprise for Tenaga given that the national utility company was banking on Bakun’s hydropower for a cheaper source to generate electricity going forward. Without hydropower from Bakun, it would seem like Peninsula Malaysia would need to continue relying on coal-fired power plants given i) the cap on gas supply from Petronas and ii) limited hydropower potential in Peninsula Malaysia.

The Penang Freight Forwarders Association (PFFA) president Krishnan Chelliah noted that since June 2009, container freight rates had increased substantially. 
  • “For example, the ocean freight rates to European main ports have gone up by 300% to 400%. Presently, the ocean freight rate to Europe is about US$1,500 per TEU. To the United States, the current freight rate is US$1,900 to US$2,100 per TEU compared with between US$1,700 and US$1,900 in the first half of 2009.
  • “For intra-Asian destinations, the increase is between US$50-US$60 from about US$120 per TEU in early 2009 to about US$180 per TEU presently,” he said.
  • Krishnan said at the peak of the economic crisis earlier this year, major cargo carriers had reduced their capacity. “Although demand for sea cargo space has returned, the carriers have yet to increase their capacity as they want to increase freight rate and profitability,” he said. (Star)
The Water and Energy Consumers Association of Malaysia (Wecam) has called for the setting up of a Central Energy Agency (CEA), similar to the National Water Services Commission, to regulate the consumption, production and security of the energy sector. Wecam secretary-general S.Piarapakaran said this was the right time to set up such an agency because the first batch of PPAs with the IPPs would soon expire and provide an opportunity for the government to rectify earlier weaknesses. (Bernama) 

Former corporate high-flyer, Tan Sri Halim Saad, is part of a group of investors seeking to purchase coal-fired 1,400MW Jimah power plant and the company with the concession for its operations and maintenance, say sources. The bid made by Halim and his associates is said to be more than RM700m, which beats all other bids, including one made by MMC Corp’s Malakoff Bhd. “Up next is a detailed evaluation of the bids. A decision is expected in less than one month,” a source says. Industry officials say the big boys, such as Tanjong plc, YTL Group and Genting Power did not put in bids. (The Edge Weekly)

Iskandar Malaysia authorities are optimistic that the special economic corridor will continue to attract both local and foreign investors and remain an attractive investment destination despite negative media reports. 
  • Nevertheless, outgoing Iskandar Regional Development Authority (Irda) CEO Harun Johari acknowledged that the journey ahead for Iskandar would be long and challenging. “Frankly, it is not a smooth journey but we have to move on as the success of Iskandar is for all Malaysians and not only Johoreans,” he said.
  • 2012 would be the “tipping point” when most of the ongoing projects would be completed. The first phase – comprising the Johor state new administrative centre, Kota Iskandar, as well as Puteri Harbour Waterfront Development in Nusajaya – is already completed and developers will embark on other phases.
  • Among ongoing and soon-to-be-launched projects are the coastal highway linking Johor Baru City Centre to Nusajaya, the Danga Bay Waterfront development, Legoland Theme Park, EduCity, Senai Hi-Tech Park and Malaysian Premium Outlet. (Starbiz)
Malaysia wants greater liberalisation of air services within Asean, Transport Minister Datuk Seri Ong Tee Keat said yesterday. 
  • He said Malaysia and Singapore now had direct flights connecting 14 airports in the two countries. “We want to do the same with other Asean countries,” he said.
  • Ong was in Hanoi attending the 15th Asean Transport Ministers Meeting. “During yesterday’s (Thursday’s) meeting, we discussed greater air connectivity among Asean destinations beyond the capital cities. Towards this end, the ministers are expected tosign the Asean Multilateral Agreement on the Full Liberalisation of Passenger Air Services next year. The agreement will be implemented in stages.” (NST)
Energy, Green Technology and Water Minister Datuk Peter Chin has set Mar 2010 as the deadline for PAAB to wrap up the water restructuring in Selangor. PAAB’s CEO Ahmad Faizal Abdul Rahman said, “If you understand the concept of restructuring, there shouldn’t be much of a problem. The problem is when it involves private parties – there is profit motivation and “What’s in it for me” thinking. PAAB aims to complete the water restructuring of all remaining nine states in Peninsular Malaysia in mid-2010. Apart from Labuan, Terengganu and Kedah, progress with the rest of the states is at advanced stages. PAAB’s offers to Konsortium Abass, Splash, PNSB and Syabas will be more palatable as it will be taking over just their assets and liabilities rather than the business of the operators. In other words, the companies will retain their concession agreements (CA) through a new licensing regime. An offer will be made this week. (Starbiz)

Unilever, the world’s largest user of palm oil, has suspended purchases of edible oil from Indonesian group Sinar Mas on concerns over rainforest destruction. Unilever cancelled its annual £20m contract with Sinar Mas after a critical report by environmental group Greenpeace. “Unilever’s decision could represent a defining moment for the palm oil industry. What we’re seeing here is the world’s largest buyer of palm oil using its financial muscle to sanction suppliers who are destroying rainforests and clearing peatlands,” Greenpeace director John Sauven said. (Reuters)

Local and global core banking system providers are bidding to upgrade the core banking system of the country's two largest banks, in deals which carry a value of more than RM1bn. Maybank and CIMB Bank are in different stages of the tender to upgrade their core banking system. In the case of Maybank, one industry source said more than 40 vendors have submitted their bids. (Malaysian Reserve)

Khazanah placed out 2% of Tenaga’s shares in a move aimed at drawing foreign funds back to its laggard stock market. The placing follows an earlier call by PM Najib Razak for state funds to sell down stakes in GLCs that dominate the market. Khazanah raised RM704.7m after placing out about 87m shares in Tenaga, three dealers and one fund manager said. A source with direct knowledge of the share placement said the shares were sold to local institutional funds and the EPF has taken up 50m shares in the placement. (Reuters)

Senior general manager Dr Amin Khan of Malaysia Airlines said most airlines had dropped their fares to stimulate travel demand, but “my sense is that you’ll never see airfares dropping to such low levels again. Airfares have to progressively go up as airlines cannot sustain these fares over a long time.” 
  • He added that since there were now signs of economic recovery, a couple of airlines in the Asia-Pacific would be looking at increasing fares. “We don’t have any plans to do so now as we remain cautious about the recovery. I expect we’ll see the real recovery only towards end-2010,” Amin said.
  • He said MAS’ Everyday Low Fares scheme had garnered RM300m in sales while the Get-the-Deal (GTD) promotion launched in March had sold some RM70m worth of tickets. He said three most popular destinations for Malaysians were London, Melbourne and Hong Kong.
  • Meanwhile, as the year-end approaches travellers are taking to the skies again. “December is always a good month. We have the school holidays, Christmas and everyone wants to clear their leave,” he said. (Star)
Astro is spending RM550m on capital and operational expenditure for its financial year ending Jan 31, 2010 and 2011. The high-definition (HD) service will commence on 18 Dec 09. Astro TV has targeted for 500,000 of its existing 3m customers to convert to the HD service within the next 18 months. It will start with four HD channels - Astro Supersport HD, HBO HD, National Geographic Channel HD and History HD, ESPN HD in January 2010. 
  • The access to HD channels will correspond with the customer's current package subscription. Customers who wish to switch to the HD services are given a choice of signing up at an additional service fee of RM20 monthly for the next 12 months.
  • Astro also plans to launch new services such as an intuitive electronic programming guide, digital video recording, video on demand and internet connectivity over the next 24 months. All these services will be available through ASTRO B.yond, a next generation box technology. (Bernama)
V Telecoms is raising RM50m through a special purpose private equity fund - Ingenious Growth Fund - to finance its Metro-Ethernet (Metro-E) network expansion, said its CEO James Chan. This will allow it to connect up to 20,000 offices and subsequently increase this to 50,000 to both homes and offices within the next five years. 
  • "We are striving to rapidly expand our Metro-E footprint and deploy high-speed, yet costeffective, Internet access, data transfer and networking." 
  • V Telecoms provides leased lines, Internet, broadband and fibre optic services to multinational corporations and financial, insurance and education institutions, among others.
  • The partnership will allow V Telecoms to provide exclusive Metro-E service to the US global multinational business segment. (BT) 
Petra Perdana has disposed of 48.8m shares, representing a 25% stake, in Petra Energy at RM1.91/share. The disposal reduces Petra Perdana’s stake in Petra Energy to 29.6%, making the latter an associate. Petra Perdana will continue to seek buyer(s) for the remaining shares to complete the disposal of its stake in Petra Energy. (BMSB)

Kencana Petroleum has entered into an MOU with the government of Timor-Leste to establish and further develop the oil & gas industry in the country. The parties plan to contribute their resources to set up an Oil & Gas Services Area where there will be facilities such as a fabrication yard, a shipyard and tank farms. The MOU is valid for six months. (BMSB)

Dialog has set a long term target to maintain 20-30% expansion of its bottomline. Dialog chairman and Group MD Ngau Boon Keat said revenue and profit growth would be underpinned by its diversified business model in O&G support services based on a recurring income stream, including in the provision of specialised services, specialist products, catalysts handling and plant maintenance. 
  • "Recurring income accounts for about 70-80% of our bottom line," Ngau said. He added that," As for future revenue, we are looking at two-thirds coming from international and one-third from local." (Financial Daily) 
Ireka is buying a 4,046 square metres free hold land in Jalan Kia Peng for RM87.1m. The purchase consideration represents 4.3% from the market value of RM91m. Ireka is proposing to develop one tower of high-end residences. The project is expected to generate a gross development value (GDV) of RM272m with a gross profit margin of approximately RM58m. (Malaysian Reserve)

Malton is set to clinch a RM700m job to upgrade some parts of the Pusat Bandar Damansara commercial and office complex owned by Johor Corp. Under the deal, Malton would upgrade some parts of the 28-year-old complex or demolish some ageing structures for new development. 
  • It would then sell back the completed property at higher prices to make a profit. JCorp, through 27.7% owned Damansara Realty, owns nine commercial blocks in Pusat Bandar Damansara. The project, which is expected to take five years to complete, will also require Malton to develop a fresh plot of land next to the complex belonging to JCorp.(BT)
Salcon has won a 30-year concession to transfer treated water in China's central region of Yizheng city. Its subsidiary, Salcon Jiangsu (HK) Co Ltd won the contract through its jointventure
company, Jiangsu Salcon Water & Environmental Development Co Ltd (JV). 

  • The JV will be the investment vehicle to implement the Yizheng water integration scheme which includes the integration and consolidation water and wastewater works within the Yizheng City administrative area to enhance its efficiency and effectiveness.
  • In the first phase of works, the project involves the takeover an existing 8km pipeline of 600mm diameter and laying of treated water pipelines of 600mm diameter with length of 21km in the central region of Yizheng City. Construction of the 21km of treated water pipelines is estimated to be completed within 6 months upon signing the concession agreement. (BT) 
The DRB-Hicom Pekan automotive complex will start assemblying the Suzuki Swift car for the export market beginning next year. DRB-Hicom's group managing director Datuk Seri Mohd Khamil Jamil said the first model is expected to be exported from April next year. 
  • "DRB-Hicom has also been given the rights to launch two new Suzuki models and one of them will be assembled in Pekan as completely knocked down (CKD) unit," he said. In another development, he said DRB-Hicom would set up an automotive university college of international standard in Pekan. (Bernama) 
Tune Talk has unveiled a low cost mobile phone dubbed the Tune Talk Phone in a bid to boost subscriber base. Priced at RM109, every purchase of the phone is bundled with 100 minutes of free Tune Talk time credit and is freely available from appointed dealers in the Klang Valley. "The Tune Talk Phone is targeted at those aged 12-30 years comprising of tourists, workers and students from low to middle income group," Tune Talk's CEO Jason  Lo said. "There is no contract imposed, neither is there a limit on number of units purchased," he added. (Malaysian Reserve)

According to the Audit Bureau of Circulations (ABC), the Sun is now the number one distributed English newspaper in the country. In 1H09, it recorded an average of 300k copies/day versus Star's 295k and NST's 116k. It's circulation also beat other newspaper languages in the state of Selangor. (The Sun)

20091214 0955 FCPO Weekly Chart Study.

Looking at the weekly chart, FCPO started the correction phase after touched the upper Bollinger band twice and ended the week slightly below the upper Bollinger band with the band width continue expanding = market underlying trend is still up with possible correction in the near term. MACD Histrogram recorded a small increase = buyer still in control of the market. Expecting 2 case scenario where market continue to do correction or market can also resume the upward movement anytime. 

20091214 0946 FKLI Weekly Chart Study.

FKLI weekly chart ended still holding up above the middle Bollinger band with the band width narrowing = seems like this uptrend correction would take longer time than expected. MACD Histrogram continue to slide lower = buyer participation in the market remained low. Expect the downward correction side way ranging market to continue with immedite support stands at the middle Bollinger band.