Monday, May 31, 2010

20100531 1813 FCPO EOD Daily Chart Study.

FCPO closed : 2436, changed : -21 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : turned lower, seller still in control.
Support : 2400, 2370, 2340 level.
Resistant : 2450, 2470, 2500 level.
Comment :
FCPO continue to head south today with quiet volume traded. Daily chart reading still remained showing a downside biased market likely to develop in the near term but having said that soy oil futures price seems having some recovery.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/breakdown with quick cut loss and profit target.

20100531 1748 FKLI EOD Daily Chart Study.

FKLI closed : 1284, changed : +5 points, volume : lower.
Bollinger band reading : correction side way downside biased.
MACD Histrogram : recovering, seller short covering.
Support : 1280, 1274, 1270 level.
Resistant : 1290, 1300, 1318 level.
Comment :
FKLI started the week in recovery pace by traded higher in lesser volume. Daily chart reading shows market continue to have correction within a downside biased market testing further resistant levels.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with larger cut loss and profit target

20100531 1437 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1284, changed : +5 points, volume : high.
Bollinger band reading : upside biased.
MACD Histrogram : weakening, buyer in and taking profit.
Support : 1280, 1274, 1270 level.
Resistant : 1290, 1300, 1318 level.
Comment :
FKLI continue to trade firmer with sustainable volume upward correction with hourly chart suggesting a side way range bound upside biased market reading.

201000531 1426 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2440, changed : -17 points, volume : low.
Bollinger band reading : downside biased.
MACD Histrogram : getting lower, seller in control.
Support : 2400, 2370, 2340 level.
Resistant : 2450, 2470, 2500 level.
Comment :
World cup mood FCPO traded lower in ultra low volume changed hand. Hourly chart reading shows a downside biased potential market.

20100531 1048 Malaysia Corporate News.

The ban on sale of cigarette packs of less than 20 sticks per pack will take effect from Jan 1 next year. Deputy Director-General of Health (Public Health) Datuk Dr Hasan Abdul Rahman said the provision for the ban had been gazetted on Sept 23, 2004 through the Control of Tobacco Products Regulations 2004. “It is hoped that with this notification, tobacco manufacturers will have sufficient time to make changes,” he said. (Bernama)

It could be a a start of a consolidation of the oil & gas sector given the local and regional jobs that are coming onstream over the next few years and the rise in M&A activities in the past six months. The business area that is expected to be most active in the upturn of the sector is fabrication. Also, the listing of Malaysia Marine and Heavy Engineering S/B could be a re-rating catalyst for the sector. (Edge Weekly)

Sime Darby has been dethroned as the largest company on the FTSE Bursa Malaysia KL Composite Index (FBM KLCI) and now occupies third place after having shed close to RM5.89bn in market capitalisation over the last one month. Instead, Malayan Banking (Maybank) now reigns as the largest company on Bursa Malaysia with a market cap of RM50.54bn as at May 27. Second spot is held by CIMB Group Holdings Bhd with a market cap of RM47.89bn. (Starbiz)

The new acting president and chief executive officer of government-linked conglomerate Sime Darby was questioned by the Malaysian Anti-Corruption Commission (MACC) as part of its probe into the recent massive losses incurred by the company. The MACC lodged a report and started investigating the case following a revelation on May 13 by the company that it had incurred losses amounting to RM964m.
  • Azhar said that the anti-graft body questioned him as part of its preliminary investigations. “I had a three-hour serious discussion with (the MACC). They asked general questions as (the probe) is still in the early stages. Sime Darby will give our fullest cooperation,” he said. (Starbiz)
Sime Darby has appointed a legal firm, believed to be Zaid Ibrahim & Co, to investigate if fraud had taken place at the conglomerate’s stricken energy and utilities (E&U) division.
  • “The board has appointed a legal firm to independently conduct follow-through investigations to determine culpability, based on the findings of the work group on the four key projects of the division,” it said. 
  • Sime Darby also said it had commissioned PricewaterhouseCoopers (PwC) to review the group and its reporting structure as well as to conduct forensic audits into the affected projects in conjunction with the legal review. (Starbiz)
A source close to Khazanah says the investment arm is not interested in a corporate brawl, but instead continues to see healthcare as a strategic business. Government investment arm Khazanah Nasional will not sell its stake in Singapore's healthcare group Parkway Holdings Ltd even if Indian shareholder Fortis Healthcare Ltd launches a counter offer, a source close to the company said.
  • On Saturday, India's The Economic Times said that Fortis was in discussion with the Government of Singapore Investment Corp Pte Ltd (GIC) over financing options as the former considers the possibility of launching a counter offer on Parkway. 
  • Quoting a source familiar with the situation, the publication said that Fortis is also in talks to buy Khazanah's shares in Parkway after Khazanah made a S$1.18bn (RM2.8bn) offer last Thursday to take control of the healthcare group. (BT)
Trade in palm oil products should not be victimised by legislation in the European Union (EU), and in Australia, arising from the Western anti-palm oil campaigns, said the Malaysian Palm Oil Council (MPOC) CEO Tan Sri Yusof Basiron.
  • Such legislation would be seen as a trade protection measure, which could force the affected countries to retaliate. Malaysia's above average performance in habitat conservation of the orang utan and in greenhouse gas emission (GHG), as well as being a net sequester of carbon, deserves recognition, he said. 
  • "We have earned our right to trade. We should not be asked to clean the mess (GHG emission) of developed countries," Yusof said. He cited the refusal of Russia, a world leader in timber production and export, to comply with the EU-certified timber scheme. Likewise, palm oil should not be singled out for sustainability compliance unless other competing oils are also subjected to similar requirements.
  • GHG emission is not an issue as Malaysia is a net carbon sink country with more than 82% tree cover provided by permanent forests and plantation crops, including oil palms, rubber, cocoa and coconuts. 
  • Yusof said the Western non-governmental organisations (NGOs) should focus on campaigning for the reduction of GHG emission in their own countries, for instance, closing polluting coal mines. 
  • "How is it that the UK produces 18m tonnes of coal per year and the NGOs do not seem to notice the GHG emitted but they can detect burning of a few hectares of forest for agricultural conversion in Indonesia 10,000 km away?"
  • He pointed out that 66m tonnes of carbon dioxide emitted a year from 18m tonnes of coal produced in the UK was equivalent to deforestation of 378,000ha of degraded rainforests. "This is more than double the yearly expansion of oil palm cultivation in Malaysia which in the past involved deforestation of degraded forest land zoned for agriculture." (BT)
European Union (EU) lawmakers are increasingly convinced that Malaysia is on the same path as the EU on the sustainability of palm oil production, but would need more scientific data to support Malaysia's case. Dan Jorgensen, who is the vice-chair of the environment, public health and food safety committee in the European Parliament, has promised to bring Malaysia's case on its discrimination versus other oils in the Renewable Energy Directive (RED). "We don't want any discrimination at all of the palm oil sector, and we promised the industry here to help have discussions with the EU on this," he said.
  • Jorgensen, who was in Malaysia last week with two other Members of the European Parliament (MEPs) Martin J. Callanan and Ole K. Christensen, were impressed with the work undertaken by the government and the palm oil industry and the sustainability efforts. 
  • "People there don't know how efficient an oil it (palm oil) is. I wasn't aware myself how much oil you can get per hectare compared with other oils - in that way it is iscriminated against," he added. According to the RED which will come into force in December this year, biofuels must have greenhouse gas savings of at least 35% and according to EU's calculation, the use of palm oil-based biodiesel failed the requirement as it achieved only 19%. (BT)
Penang has banned Berjaya Corp’s Ascot Sports to conduct any sports betting business in the state. CM Lim Guan Eng said “I believe Penang is the first state to apply this ban state-wide.” Lim added the decision did not mean that the state was against betting or gaming outlets but it was concerned over the excessive number of draws and special draws being conducted by the licensed operators.
  • Meanwhile, the Selangor government will also not allow premises in the state to be used for football betting, MB Tan Sri Abdul Khalid Ibrahim said. "Although the federal government had issued football betting licence, the state government, via local authorities has the power to stop it,” he said. 
  • Kelantan is likely to follow suit. (The Star)
Celcom Axiata foresees good growth in its enterprise segment with the signing of an MoU with SME Corporation Malaysia (SME Corp), which has about 40,000 SMEs registered, to promote a range of customised wireless products and services to its members.
  • "The enterprise segment alone contributes more than 10% to our revenue. We can grow it bigger as the machine-to-machine segment in Malaysia has yet to progress compared with other countries," Celcom Axiata CEO, Datuk Seri Shazalli Ramly said. (Bernama)
SK Telecom will invest US$100m in 25% of Packet One (P1) Networks, a unit of Green Packet, pending a final contract signing in June. After seeing little success in its earlier drive to directly enter the mobile business in the United States and China, SK Telecom is shifting focus to business-to-business network services and seeking alliances with Asian operators to tap corporate clients in the region. P1, which pioneered mobile WiMAX broadband service in Malaysia, had 175,000 subscribers as of end-March, according to SK. (Reuters)

Petra Energy will hold an EGM on 24 Jun to remove Tengku Datuk Ibrahim Petra, Lee Mee Jiong and Suhaimi Badrul Jamil as directors of the company. It is believed that the move is spearheaded by Petra Perdana's MD Shamsul Saad with the backing of Datuk Henry Kho and Francis Koh.
  • It is also believed that Shorefield Resources Sdn Bhd, which owns 30% of Petra Energy, is currently inclined to support the removal bid. Tengku said it is too early to say if he can muster enough shareholder support to defeat the resolution at the EGM. (BT)
Malaysia's latest issue of five-year global bonds advanced on their first day of trading after yesterday's sale attracted orders for more than five times the US$1bn (RM3.3bn) originally sought. "Malaysia is oil-rich, the fundamentals are solid and they don't have funding needs," Paul Chan, the Hong Kong-based CIO at Invesco Asia Ltd, said before the sale. "There will be scarcity value in Malaysia's dollar bonds. Asian countries are generally underrated" given what's happening in Europe”, he added.
  • Malaysia's sale of so-called sukuk notes, its first international debt issue since 2002, will set a new benchmark for pricing bonds in the nation, Prime Minister Datuk Seri Najib Razak said. (BT)
Promoting takaful via agency is fast gaining prominence with more players now investing significantly to beef up their agency channel and grab a larger slice of the competitive takaful market. This mode of distribution, according to an industry player, had become more significant in view of the “Takaful For All” approach adopted by newer takaful entrants whereby takaful could be sold or promoted by anyone regardless of faith and religious beliefs. The earlier operators were mainly using direct marketing to promote their products and services. (StarBiz)

Some 30km of beach near Teluk Ramunia are polluted with oil sludge following the collision between two ships in Singaporean waters last Tuesday. Fishermen said the sludge hit the beaches on Friday night. On Tuesday, MISC’s MT Bunga Kelana collided with bulk carrier MV Waily, causing about 2,500 tonnes of crude oil to spill from a gash on the double-hulled tanker's port side.
  • Efforts to contain the spill have been carried out, with crews using biogradable dispersants and absorbent materials to soak up the oil, while 3.3km of booms circled the main slick in the shipping lanes that straddle the waters of Singapore, Malaysia and Indonesia. It is understood that the fishermen have not been going out to sea since the oil spill began. (NST)
CSC Steel Holdings hopes to maintain its full-year pre-tax profit at some RM100m compared with last year's RM116.6m, says outgoing MD Su Wei Jin. CSC Steel Holdings Bhd, the country's largest producer of cold rolled steel by volume, expects to post higher profits and revenue for the first half of this year from a year ago, driven by stable domestic demand, a continuing recovery in steel prices from 2008 lows and cost cuts.
  • "Our first half performance should be better (than the year-ago period). And as long as the market remains in the same mood, the second half of the year will still be good. Liang Shiu-Chang has since 1 May assumed the role of the company's group MD, replacing Su who has taken a larger role as assistance vice-president (commercial) of China Steel Corp, Taiwan's largest steelmaker. CSC Steel is a 45% owned by China Steel. (BT)

20100531 1040 Malaysian Economic News.

Malaysians must bite the bullet and wean off subisidies to save the government RM103bn in five years to reduce the nation's deficit and debt, said Datuk Seri Idris Jala, Minister in the Prime Minister's Department. He said the government would focus on big ticket items such as fuel, electricity and toll to achieve the savings but it would continue to subsidise the poor and disadvantaged. Studies by Bank Negara have shown that inflation will rise to 4.0% (2011-2012) and 3.0% post 2013. (Bernama)

The proposal made by the Subsidy Rationalisation Lab (SRL) to increase the charge for outpatient treatment at public clinics and hospitals from RM1 to RM3 is important to improve the quality of health facilities in the country, said Health Minister Datuk Seri Liow Tiong Lai. The SRL had also proposed that the cost for in-patient treatment be doubled to RM160 for Class One wards, RM40 (Class Two) and RM6 (Class Three).
  • Those whose household income is under RM2,160 or categorised under the Fees Act will still enjoy fee exemption. 
  • It also proposed that from 2013, patients pay a percentage of their in-patient cost instead of the current flat rate, and from 2015, patients are to pay a percentage of their outpatient treatment and medication. (Bernama)
The rural and regional development ministry will establish a special laboratory to plan and outline strategies to strengthen the rural economy. The laboratory -- to be placed under the ministry's National Key Result Area and New Economic Model -- would see the participation of its various agencies to help generate the economy of the target group. (Bernama)

Malaysia is targeting at least RM40bn worth of investments this year from the RM32.6bn approved in 2009, says Minister of International Trade and Industry Datuk Seri Mustapa Mohamed. The 10th Malaysia Plan would emphasise on greater efforts to attract more private investments as they would be a major engine to drive the country's economic growth. (Bernama)

Local institutions should explore the possibility of establishing partnerships and joint ventures with globally-renowned asset management companies to explore the potential in that segment. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the potential in that segment can be seen through the combined wealth of the Asia Pacific and the high net worth of individuals in the Middle East, which is estimated to grow at an annual rate of 8.8% and 15.6% respectively until 2018. It’s faster than the global average of 7.1%. (Bernama)

20100531 1032 Global Economic News.

US personal spending was flat in April, after six months of increases, while income rose, according to the Commerce Department report. This shows consumers are now taking a step back to moderate their spending and build their savings.
  • Individual spending rose less than 0.1% mom in April (0.6% in Mar), coming below market expectations (0.3%). 
  • Personal income climbed 0.4% in April (0.4% in Mar). Personal savings as a percentage of disposable personal income, was 3.6% in April (3.1% in March). That's the first increase after three months of declines. (Bloomberg)

The Commerce Department revised US GDP downward to a 3% annual rate in 1Q10 from 3.2% previously. This means the economy grew in the first quarter, but not quite as much as the government originally reported. Meanwhile, the core personal consumption expenditures index, a closely watched inflation gauge that excludes food and energy was also flat. (Bloomberg)

US initial jobless claims fell to 460,000 in the week ended May 22, down 14,000 from an upwardly revised 474,000 the previous week. The number of claims was slightly higher than expected (455,000). The report also said 4,607,000 people continued to file unemployment claims for their second week or more during the week ended May 15, the most recent data available. That's down from an upwardly revised 4,656,000 the week before. (Bloomberg)

Fitch Ratings cut Spain’s credit grade one step from AAA to AA+ and assigned it a “stable” outlook. Spain has held the top rating at Fitch since 2003. Standard & Poor’s lowered Spain’s ratings to AA on April 28. “The process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term,” the statement said. (Bloomberg)

The Thai government has ended the curfew in Bangkok and 23 other provinces. Prime Minister Abhisit Vejjajiva said the decision followed assurances from security forces that they had regained control following recent riots and a deadly crackdown in Bangkok and some other provinces that left 85 dead in the capital. The curfew, which had been in place since May 19, ended at 4am yesterday. (Bangkok Post)

Thailand’s general election is unlikely to be held before the end of the year, Prime Minister Abhisit Vejjajiva said, but added he had not ruled out early elections. "Obviously it's a lot more difficult now to have elections before the end of the year because the November date was set with the (idea of) protesters joining the plan right from the start," the prime minister said.
  • Mr Abhisit had proposed November polls in a bid to end two months of crippling protests in Bangkok by the anti-government United Front for Democracy against Dictatorship (UDD), but he shelved the plan because demonstrators did not agree to it and refused to disperse. (Bangkok Post)

The Thai government says a fresh tax incentive is in the pipeline as it wants to rejuvenate the tourism industry which has been devastated by the political unrest. Finance Minister Korn Chatikavanij said he wants income tax rebates for individuals using domestic hotel accommodation as part of measures to revive tourism. (Bangkok Post)

Investors are demanding greater yields to lend to China property firms, a sign they expect borrowers will have a harder time meeting debt payments amid a government clampdown down on lending.
  • Yields on the US$3.9bn of bonds issued by Kaisa Group Holdings Ltd., Country Garden Holdings Co. and seven other developers since January widened by an average 2.26 percentage points relative to Treasuries as of last week, more than the 2.05 percentagepoint increase in spreads for the seven dollar-denominated bonds sold by other companies in Asia outside Japan. (Bloomberg)

Australia’s central bank may keep its benchmark interest rate unchanged this week after the most aggressive round of increases in the Group of 20 restrained retail sales and slashed mortgage lending by a quarter. The central bank will leave the overnight cash rate target at 4.5 percent tomorrow, according to all 22 economists surveyed.
  • The Reserve Bank of Australia’s decision may be echoed across Asia this week as central banks from Indonesia to Thailand and the Philippines are forecast to hold off on rate increases as they gauge fallout on the global economy from Europe’s debt crisis. (Bloomberg)

South Korea proposed central banks set up a permanent arrangement for foreign currency swaps to help address the type of funding shortages that emerged during the global financial crisis. “Broadening and institutionalization” of such measures could help establish “a global financial safety net,” Bank of Korea Governor Kim Choong Soo said. (Bloomberg)

Japan’s unemployment rate unexpectedly increased in April, household spending fell and deflation deepened, signaling domestic demand is restraining the nation’s recovery from its worst postwar recession. The jobless rate rose to 5.1% from 5%. The median forecast surveyed was for no change. Consumer prices excluding fresh food slid 1.5% yoy after dropping 1.2% in March. (Bloomberg)

Japan’s exports rose 40.4% yoy in April (43.5% in Mar), more than economists estimated (38.3%) in April, the first sign that the nation’s trade-led expansion extended into the second quarter. Imports climbed 24.2% yoy, leaving a trade surplus of JPY742.3bn. That’s about 15 times bigger than the JPY49bn surplus posted in Apr 09, when Japan was beginning to emerge from its worst postwar recession. (Bloomberg)

South Korea’s current-account surplus narrowed from US$1.8bn to US$1.5bn in April as the nation’s companies paid more of their dividends to international investors. Dividend payments to foreign shareholders amounted to US$2.3bn in April. “The current-account surplus will likely rise to US$2.5bn in May, the biggest so far this year,” Lee Young Bog, a Bank of Korea official said. He added that there is “no sign” that the European debt crisis is affecting the nation’s “export and capital flows.” (Bloomberg)

Hong Kong’s exports rose 21.7% yoy to HK$242.2bn in April (32.1% in Mar), marking the sixth month increase and buoyed by demand from China, the world’s fastest-growing major economy. That was more than the 19.3% median estimate. Imports rose a more-thanestimated 28.8% in April, leaving a trade deficit of HK$35.2bn. (Bloomberg)

The members of Thai parliament late Thursday night voted 250 to 172 to approved the first reading of the THB2.07tr (about US$63.61bn) 2011 draft fiscal budget bill. According to Bangkok Post online, the House meeting also agreed to set up a 63-member panel to consider details of the draft budget bill and submit to the House meeting for the second reading within 30 days. The ad hoc panel will convene its first meeting at 4:00pm on Tuesday. (Bloomberg)

Thailand’s foreign-exchange reserves fell 0.7% to US$143.9bn in the week ended 21 May, from US$145.0bn a week earlier. The central bank’s holdings of forward contracts rose 11.6% to US$13.2bn in the same week, from US$11.8bn a week earlier. (Bloomberg)

Philippine economic growth accelerated more than forecast in the first quarter, putting pressure on the central bank to raise interest rates even amid concern the European debt crisis will derail the global recovery. Gross domestic product increased 7.3% yoy in 1Q (2.1% in 4Q09). That’s the fastest pace since 2Q07, and beats the 4.4% median forecast. (Bloomberg)

India’s food inflation slowed from 16.5% yoy to 16.2% yoy in the week ended 15 May. This marked the first time ease in three weeks as Prime Minister Manmohan Singh pledged to drive down prices. (Blooomberg)

Thursday, May 27, 2010

20100527 1249 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1264.5, changed : +11.5 points, volume : high.
Bollinger band reading : upside biased.
MACD Histrogram : continue higher, short covering with buyer taking small exposure.
Support : 1250, 1250, 1240, level.
Resistant : 1265, 1270, 1274 level.
Comment :
FKLI continue to trade firmer with ultra high volume changed hand having a technical rebound correction. Hourly chart reading has turned into a upside biased potential market testing upper resistant level.

201000527 1240 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2470, changed : +18 points, volume : low.
Bollinger band reading : side way downside biased.
MACD Histrogram : recovering, not much action from both buyer and seller.
Support : 2450, 2400, 2370 level.
Resistant : 2470, 2500, 2521 level.
Comment :
Holiday mood FCPO traded higher in ultra low volume ahead of long weekend holiday and rebound on crude oil and soy oil futures price. Hourly chart continue with it side way range bound downside biased market reading.

20100527 1110 Malaysia Corporate News.

Genting Malaysia announced that its earlier call option to acquire a 10% stake in related party entity, Walker Digital Lottery, has lapsed and the group did not exercise the option. (BMSB)
This latest development is positive and should clear earlier concerns of potentially another Walker Digital related-party transaction within the group. To recap, Genting Malaysia had, in Nov-08, acquired a 10% stake in Walker Digital Gaming from KHD, an entity owned by its chairman's family trust company.

Petra Perdana and its MD Shamsul Saad have requisitioned for an EGM to remove Tengku Dato’ Ibrahim Petra, Suhaimi Badrul Jamil and Lee Mee Jiong as directors of Petra Energy. Also, Petra Perdana and Shamsul are seeking the appointments of Francis Koh and Surya Hidayat Abdul Malik as directors of Petra Energy. The EGM is scheduled to take place on 24 June.
  • “It is nothing personal against Tengku Ibrahim or anyone. We’re just acting for the business benefits of both Petra Perdana and Petra Energy,” said MD Shamsul Saad, adding that Petra Perdana wanted to re-establish the synergy of business alliance for both companies. He is looking at the positive growth of the synergy between the two companies. 
  • Meanwhile, Tengku Ibrahim said he had always acted in the best interest of both Petra Perdana and Petra Energy and as such he questioned the true motives behind the requisition for the EGM. “I believe this attempt to remove me may be linked to the recent legal suit filed against Koh, amongst others, and interested parties to the suit may be seeking to influence its progress through the Petra Energy board,” he said. (BMSB, Star)
Malaysia ranks a lowly 102nd out of 152 countries in terms of its average download speed, according to analyses by leading internet speed testing website Malaysia ranks behind 101st placed St Kitts and Nevis (1.89 Mbps), Albania (100th, 1.91 Mbps) and Mozambique (99th).
  • Critics have long complained, however, that the lack of competition has hampered the nation’s broadband development. Incumbent broadband service provider, Telekom Malaysia, launched its high speed broadband service, UniFi, in March. 
  • Random tests done by The Malaysian Insider, which subscribes to the 20 Mbps UniFi package, on showed download speeds ranging from as high as 67.86 Mbps for servers located in Singapore to as low as 0.93 Mbps for servers located in San Francisco, US.Other server locations tested by The Malaysian Insider include London (8.16 Mbps); Hong Kong (3.15 Mbps); Reston, Virginia, US (5.07 Mbps); and Balikpapan, Indonesia (1.89 Mbps). (The Malaysian Insider)
Mobile banking which allows one to perform everyday transactions like transfer money, pay bills via mobile phones - has yet to take off in a big way. "Today, the market is fragmented, where everybody is talking about their own solution. We should talk about an industry effort to provide a common infrastructure for payment. The banks already got it through the likes of MEPS.
  • But, from the operators' perspective, we don't have yet. Everyone is still very individual in their approach ... I believe the industry will consolidate, it will happen, but it will take some time," said Maxis head of product development and infotainment services T. Kugan. Celcom Axiata Bhd head of mobile commerce Areehan Abdullah, said, "When it comes to customer experience, banks have their own mobile banking and Maxis, DiGi and Celcom have their own mobile banking. 
  • MEPS, which sits in the middle, has its own mobile banking. So, if you count all the financial institutions that we have, as well as the mobile operators in the country, we could have 14 different types of mobile banking," he said.He said Bank Negara Malaysia is now spearheading an initiative to promote customers from any phones, any network, can perform mobile banking to any bank. "It has moved forward from a conceptual stage, and now everyone, the telcos, the banks and MEPS, are ganging up together to make this happen," said Areehan. (BT)
Asiaspace says Telekom Malaysia's backhaul charges are expensive and as such it is forced to build its own microwave facilities. "We are replacing all our metro-E link of backhaul with microwave link, which is much more cheaper and serves the same purpose, so why should we pay more to TM?" Asiaspace chairman Datuk Abdul Ghani Abdullah. It is spending RM30m for the backhaul facilities and the vendor is Huawei.
  • It has so far spent RM90m for its network build-up. Ghani had in March written to the Information, Communicatins and Culture Minister to complain about TM's backhaul rates. In April he wrote to the Government, urging it to be forceful in ensuring that the incumbent reduce the cost of backhaul charges to facilitate growth of broadband in the country. 
  • On May 20, the industry regulator reminded players that access needs to be provided on reasonable terms and they should work towards concluding access agreements and not delay them any further. TM, in response, said, "As in all commercial arrangements with other service providers, the price was negotiated and agreed by both parties. 
  • As the backhaul service provider, TM fulfilled its obligation as set out in the agreement. Unfortunately, Asiaspace failed to honour its obligation on payment to payment to TM." (StarBiz)
Celcom Axiata has introduced the first real-time online payment update application in the telecommunications and banking industries, following a tie-up with CIMB Clicks. Previously, Celcom customers had to make payment over the counter or via the payment kiosk at a Celcom branch or Blue Cube outlet in order to receive immediate billing updates. (Bernama)

The Selangor Islamic Religious Department (Jais) is asked to state its stand on the government's decision to allow football betting. "I am surprised why Jais has kept mum although this is a clear-cut, non-negotiable issue," Shah Alam MP Khalid Samad from PAS said. He said he was seeking an audience with the Sultan of Selangor, Sultan Sharafuddin Idris Shah to ask for the ruler's consent to bring the issue of legalised football betting to the Conference of Rulers, scheduled to meet next month. (Bernama)

Becoming a major shareholder in Cardiff City Football Club is part of Berjaya Corp chairman Tan Sri Vincent Tan's plans to expand Cosway to Europe. He had flown to London last Saturday to watch Cardiff City take on Blackpool in the Championship play-off final.
  • Tan revealed that the jerseys of the Cardiff players will carry the name of Cosway and this will see the brand, which markets household, beauty, healthcare and other consumer products, get more exposure via television telecast, media coverage and matches at stadiums. 
  • At a board meeting in Cardiff City, Tan's business partner, Datuk Chan Tien Ghee, is set to be named as chairman of Cardiff City FC. Tan and Chan bought a 36.7% stake at STG6m (RM29m), giving them the controlling shares in Cardiff City FC. (BT)
Neste Oil's 800,000 mt/year NExBTL renewable diesel plant in Singapore is 90% complete and commercial start-up is targeted for the fourth quarter of 2010, a senior company official said.
  • "With the construction of our NExBTL renewable diesel plant in Singapore into its final stages, we are the world's leading provider of renewable diesel," Matti Lievonen, Neste's president and CEO said. 
  • The Eur550m Singapore plant will be Neste's third renewable diesel plant. It currently operates two 190,000 mt/year plants in Porvoo in Finland.
  • The company is building another 800,000 mt/year plant in Rotterdam, which is scheduled for startup around the middle of 2011. 
  • The Singapore plant will primarily be using palm oil as a feedstock, but has the flexibility to use other feedstocks such as jatropha oil and animal fats.
  • Neste has already sourced feedstock for the plant and has gotten into sales agreements for its output. The renewable diesel produced here will be shipped to Europe and North America, Lievonen said. (Platts)
Proton Holdings has officially confirmed talks with Volkswagen and the outcome would be revealed in two weeks time, its chairman Datuk Nadzmi Mohd Salleh said. He, however, declined to provide further information on the matter. According to group MD, Datuk Syed Zainal Abidin Syed Mohamed Tahir, Proton is expected to introduce a new model either in Oct/Nov this year. (Bernama)

Naza Kia, distributor of Kia vehicles in Malaysia, aims to sell 300 units of the limited edition higher-specification Citra II Rondo. The Rondo features 13 new aesthetic and practical enhancements that add a sporty and premium touch to the popular versatile CUV. However, Naza Kia will offer these higher specifications for only 300 units for a limited period. (Bernama)

The government has deferred the ban on 14-stick cigarette packets which was supposed to take effect on June 1, said sources. It is learnt that the decision was made during the Cabinet meeting yesterday. However, it is not known if a new deadline has been set. (Financial Daily)

AirAsia is giving away 10,000 free seats to Bangkok as part of its efforts to help revive the Thai capital’s travel and tourism industry. The promotion will be launched on Wesak Day on May 28, for travel between June 7 and Aug 31. Chief executive Tony Fernandes said AirAsia would aggressively market Bangkok as well as its other Thai destinations with low fares and attractive promotions. Besides free seats, 50 hotels in Bangkok were offering a free night stay with minimum of two nights’ stay and a half day free city tour. (Star)

Media Prima has implemented a state-of-the-art broadcast management application using Accenture's Integrated Broadcast System (IBS), replacing its legacy broadcast management system. Media Prima said it has streamlined and simplified its broadcast management process to achieve better time to market, higher productivity and efficiencies in its core broadcast operations. (Bernama)

IGB Corp is looking to aggressively expand its hospitality brand locally and abroad, this year. Group MD Robert Tan Chung Meng also said the group has changed its focus from property development to property investment, due to the strong recurring income. "We are reviewing several proposals and are in discussions for possible hotel projects in countries such as Japan, China, as well as the Indochina market," he said. (Bernama)

MTD Capital has signed a contract to build and operate the Yangshuo-Luzhai Expressway project in China’s Guangxi Zhuang Autonomous Region. The total project investment is expected to be RM1.8bn. (Bloomberg, BT)

Mamee-Double Decker will invest RM20m to plant oil palms in Central Kalimantan at the end of the year. It is part of the company's strategies to diversify its revenue base and produce enough palm oil for its own use in the future, says MD Datuk Pang Tee Chew. The investment will be split into three phases involving 10,000ha secondary land. Central Kalimantan in Indonesia was chosen because it is sparsely populated.
  • On its products, Mamee has added two more products to its range: Mister Rice Crisps and Indonesia Instant Fried Noodle. The former is free of monosodium glutamate. The latter, made in Indonesia through contract manufacturing, is aimed at meeting growing demand, especially from the younger generation and Indonesians. (BT)
Far East Holdings has signed an initial pact with Rangkaian Delima Sdn Bhd (RDSB) to develop 2,145ha of land in Tebu Hitam, Rompin, Pahang, into an oil palm plantation. The Pahang state government has transferred 72% of the land to RDSB and the rest has yet to be approved, Far East said in a statement to Bursa Malaysia. Far East and RDSB will form a 70:30 joint-venture company, which will lease the land from RDSB. (BT)

Bintai Kinden Corp’s Vietnamese unit has won a US$32.4m (RM105m) contract to do mechanical, electrical and plumbing works for the proposed Indochina Plaza project in Hanoi, Vietnam. Work will take 16 months and is due for completion in 2011. (BT)

20100527 1101 Malaysian Economic News.

The government will delay plans to cut state subsidies to allay inflation fears and allow more time for public feedback, Minister for Domestic Trade and Consumerism Ismail Datuk Sabri Yaakob said. The government may now phase out subsidies on essential items, from flour to highway tolls, “gradually” within 3-5 years. The government does not plan to implement the subsidy rationalization plan anytime soon or from 1 Jun 10,” Ismail Sabri added. (BT)

Based on the Performance Management & Delivery Unit (Pemandu) Subsidy Rationalisation Lab’s recommendations, the government will continue to provide affordable social services and protect the hardcore poor and vulnerable groups. One way of making subsidies work is to manage the transition and to provide assistance to cushion the impact like stablisation fund and subsistence allowance. If this can happen, 9% or RM2.9bn can be potentially rationalized, or saved from subsidy expenditure this year.
  • Studies done shows that the planned subsidy removal will trigger inflation by 4.0-4.5% next year before moderating to 2.9%. 
  • Subsidy savings should be invested or spent, otherwise GDP growth will decline from 5.4% to 5.2% between 2010 and 2015. 
  • Subsidy cuts will focus on the big ticket items: fuel, gas, electricity and tolls; but subsidies will continue in education, agriculture and fisheries, and healthcare. (The Sun)
The Federation of Malaysian Consumers Associations (FOMCA) has called on the government to systematically dismantle the various subsidies as they are a huge "waste" and not benefiting the target groups. Its secretary-general, Muhammad Shaani Abdullah, said besides removing the subsidies, the government should also ensure that development funds were properly and effectively utilised. (Bernama)

The government has delayed making a decision on the size and timing of its first sale of Islamic bonds in eight years due to unstable market conditions, said two people with direct knowledge of the plan. The decision won’t be made this week because of swings in emerging-market assets. (Bloomberg)

US-based MEMC Electronic Materials Corp will invest RM710m to set up a solar wafer plant at Sama Jaya Free Industrial Zone here, said Deputy Chief Minister, Tan Sri Dr George Chan Hong Nam. The plant is expected to commence operation by 2011 to cater to the rapid growth and demand of solar cells globally. It will generate about 4,000 jobs. (Bernama)

Sarawak has secured 48 projects with investments totalling RM2.86bn in the manufacturing sector for the first five months of this year, said Deputy Chief Minister Tan Sri Dr George Chan Hong Nam. 17 projects with investment of RM2.79bn were supported for Ministry of International Trade and Industry approval while another 31 projects, totalling RM68m, were approved by the State Industrial Coordination Committee.
  • These investments are predominantly in four main industries -- food manufacturing products (RM1.62bn), electronic and electrical appliances (RM710m), basic metal products (RM369m) and transport equipment products (RM82m). 
  • The total investment, RM2.2bn (77%) were foreign direct investments, while RM650m (23%) were domestic investments. (Bernama)

20100527 1058 Global Economic News.

US housing demand in May appears to have collapsed, the result of second-round stimulus which pulled sales into March and April. The Mortgage Bankers Association's purchase index fell another 3.3% in the May 21 week to sit at deeper 13-year lows (-27.1% in Apr). More and more homeowners are refinancing their existing mortgages to lock in the low rates as the refinancing index jumped 17.0% (14.5% in Apr). The average 30-year mortgage fell 3bp to 4.80%. (Bloomberg)

US durable goods orders surged 2.9% mom in April (-1.3% in Mar), beating market consensus for a 1.5% rise. Excluding the transportation component, new durables orders slipped 1.0% after a 4.8% spike in March. The jump in the headline number was led by huge 16.1% boost in the transportation component (-13.1% in Mar). (Bloomberg)

US new home sales surged 14.8% to a 504,000 annual rate in April (411 units in Mar), coming in above market expectations for only 425,000. The surge made for the biggest drop ever in supply, down 7.0% for the lowest level, at 211,000, in nearly 42 years. Supply at the current sales rate fell to 5.0 months vs. 6.2 months in March.
  • April's end to second-round stimulus was supposed to have depressed new home sales which are measured by contract signings, not by actual closings which had to make the April 30 deadline to qualify for tax credits. (Bloomberg)
US oil inventories rose for the 16th time in 17 weeks, up 2.4m barrels in the May 21 week to 365.1m, according the Energy Information Administrative (EIA) report. Refineries eased up on production, making for small draws in both gasoline and distillate stocks. Strong demand for distillates, up 15.8% yoy, indicates strong shipping and industrial demand. Gasoline demand eased to 1.2%. (Bloomberg)

The Organization for Economic Cooperation and Development (OECD) raised its growth forecasts for this year and next year as emerging economies outpace debtburdened developed countries to drive the global expansion. The economy of the OECD’s 30 members will grow 2.7% this year, more than the 1.9% predicted in November.
  • The global economy will expand 4.6% this year and 4.5% in 2011. While the economies of China and India risk overheating, indebtedness may threaten expansion in the developed world. 
  • The US economy will grow 3.2% in 2010 and next year instead of the 2.5% predicted in November. The Eurozone will advance 1.2% (0.9% previously) and Japan’s economy will expand 3% this year (1.8% previously).
  • China will expand more than 11% this year, India (8.3%) and Brazil (6.5%). While India will grow 8.5% next year, China and Brazil’s expansion will slow to 9.7% and 5% respectively as monetary policy is tightened to prevent asset bubbles and to keep inflation in check. (Bloomberg)
China is “worried about” the effect Europe’s debt crisis and the weak euro will have on the global economic recovery and its own exports, and will consider the currency’s movements when evaluating the yuan’s level, said Chinese diplomat He Yafei.
  • “The euro’s fluctuation will have an impact on China’s thinking, but it’s only one element” in any decision to allow the yuan to appreciate", he said. “It has to be reviewed in the context of China’s growth. We cannot afford to see China’s economy slowing down because of a move on the currency front.” (Bloomberg)
Nobel Prize winning economist Robert Mundell said debt restructuring may be “inevitable” in parts of the euro area and Steve Hanke, the architect of currency regimes from Argentina to Estonia, warned a Greek default may become unavoidable.
  • Mundell predicted debt restructuring for “one or two” euro nations within five years. Hanke of Johns Hopkins University said Greece’s “death spiral” will end in default if debt obligations can’t be renegotiated. (Bloomberg)
South Korea’s consumer confidence rose in May 10 for the first time in seven months as the nation’s economy strengthened. The sentiment index advanced to 111 in May (110 in Apr), the first increase since October 2009 when it reached a seven-year high of 117. A number exceeding 100 indicates optimists outnumber pessimists. (Bloomberg)

Thailand’s exports rose for the sixth consecutive month in April on overseas demand for electronics and automobiles, helping to sustain an economy hurt by the nation’s worst political violence in 18 years. Shipments jumped 35.2% yoy in April (40.9% in Mar) to US$14.1bn. The median estimate in a survey was for a 37.5% gain. (Bloomberg)

Singapore’s industrial production grew at a faster pace than economists estimated, spurred by a surge in the electronics and pharmaceuticals industries. Output at factories, which accounts for about a quarter of the economy, surged 51% yoy in April (+46.6% in Mar). That’s the fifth straight month of growth. The median estimate surveyed was for a 20.7% gain. (Bloomberg)

European Union regulators have refused to follow Germany’s unilateral ban on naked short-selling of sovereign debt securities and some financial shares, said Eddy Wymeersch, chairman of the Committee of European Securities Regulators. “An EU ban isn’t on the cards and it isn’t off the Cards. Regulators have not made up their minds, but there’s certainly not a unanimous move to follow the German route,” he said. (Bloomberg)

Prime Minister Silvio Berlusconi’s government approved EUR24bn (US$30bn) of budget cuts over the next two years as part of a European effort to convince investors that euro nations can trim deficits and defend the single currency. The measures include a three-year wage freeze for civil servants and a crackdown on tax evasion. The Italian measures, worth 1.6% of GDP, aim to bring the deficit within the EU limit of 3.0% of GDP in 2012 from 5.3% in 2009. (Bloomberg)

The Bank of England should start raising interest rates and scaling back its asset purchases no later than the end of this year as inflation pressures mount, the Organization for Economic Cooperation and Development said. “The authorities face the challenge of preserving credibility, with headline inflation and some measures of inflation expectations exceeding the targeted rate. Fiscal policy will be a “drag” on UK growth from this year,” it said. (Bloomberg)

South Korea reported a current-account surplus in April for a third month as a recovering global economy spurred demand for cars and semiconductors. The surplus narrowed to US$1.49bn from a revised US$1.8bn in March. (Bloomberg)

The two-day China-US Strategic and Economic Dialogue ended on 25 May with the signing of 26 agreements and both countries agreeing to deepen cooperation to strengthen and reinforce the global economic recovery. Consensus was reached in many issues involving financial, currency structure reforms, trade and investment and the stability and reform of the financial market. They also agreed to enhance dialogue and coordination in macroeconomic policies. (Bernama)

Thailand’s government plans to spend about a third of its THB2.07tr (US$63.6bn) budget next year on measures to narrow a divide between rich and poor that fueled deadly street protests in Bangkok this month. “The budget is a mechanism to expand the country’s economy and reduce income gaps in society,” Prime Minister Abhisit Vejjajiva said.
  • The plan to increase spending by 22.0% will widen the budget deficit to THB420bn in the fiscal year starting October, Abhisit said. The government targets revenue of THB1.65tr in fiscal 2011. 
  • Of the total budget, THB624.4bn will be used to help reduce inequality, alleviate poverty and improve education and health care. A further THB220bn will be spent on economic development. (Bloomberg)
Thailand’s finance ministry said this month’s deadly political protests in Bangkok may cost the nation’s economy as much as THB145bn (US$4.5bn). The disruption caused by the unrest may reduce gross domestic product this year by as much as 1.1%-pt, Satit Rungkasiri, head of the ministry’s fiscal policy office noted. The ministry estimates the economy may grow 4.5% this year. The forecast will be revised on 29 Jun, Satit added. (Bloomberg)

Bank of Thailand Governor Tarisa Watanagase said political unrest will have a significant impact on the nation’s economy in 2Q10, especially on tourism, investment and consumption. But, the country still have exports as a positive factor” for the economy. “The risk premium for Thailand has increased because of the unrest. We will have to see whether we will be downgraded. If that happens, the cost of funding will be affected,” she said. (Bloomberg)

Vietnam’s central bank is working on regulations that will help improve the competitiveness, efficiency and safety of the nation’s lenders and other financial institutions, Deputy Governor Nguyen Dong Tien said. The regulations are being reviewed by the National Assembly, he added. (Bloomberg)

The Philippine central bank said it will consider the European debt crisis and escalating tension on the Korean peninsula at its next policy meeting, suggesting it may refrain from raising interest rates in June. “We are watchful of developments in the other markets, particularly shifts in investor sentiment and their impact on the movements of international commodity prices and exchange rates,” Governor Amando Tetangco said. (Bloomberg)

Wednesday, May 26, 2010

20100526 1806 FCPO EOD Daily Chart Study.

FCPO closed : 2452, changed : +16 points, volume : lower.
Bollinger band reading : side way downside biased.
MACD Histrogram : reversed higher, seller still in.
Support : 2450, 2400, 2370 level.
Resistant : 2470, 2500, 2521 level.
Comment :
FCPO traded higher on recovering crude oil and soy oil futures prices in lower volume transacted. Daily chart reading still suggesting a downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/breakdown with quick cut loss and profit target.

20100526 1722 FKLI EOD Daily Chart Study.

FKLI closed : 1253, changed : +12 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : continue lower, seller still in control.
Support : 1250, 1240, 1232 level.
Resistant : 1260, 1265, 1270 level.
Comment :
Partly recovered FKLI ended the day higher with sustaining volume traded to have a market correction after past few days of selldown activities in tandem with major regional market. Daily chart wise today doji bar candle positioned at the upper part of yesterday down bar candle body formed a classic harami candlestick pattern within a downside biased market with upward correction taking place.
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.

20100526 1301 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1257, changed : +16 points, volume : high.
Bollinger band reading : side way correction downside biased.
MACD Histrogram : rising higher, seller taking profit.
Support : 1250, 1240, 1232, 1220 level.
Resistant : 1260, 1265, 1270 level.
Comment :
Finally, pullback correction took place today in FKLI that traded higher after yesterday panic selldown in unison with major regional recovering market. However, the hourly chart reading still showing a correction taking place side way range bound downside biased market.

201000526 1254 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2474, changed : +38 points, volume : low.
Bollinger band reading : side way little downside biased.
MACD Histrogram : recovering, seller reducing position.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550  level.
Comment :
Recovery on crude oil and soy oil futures price after market sell down yesterday lead FCPO to end the first session on higher ground recovered most of yesterday losses in lesse volume traded. Hourly chart reading shows a pullback correction market taking place after yesterday panic selling closing within a little downside biased market.

20100526 1134 Malaysia Corporate News.

The Malaysian Anti-Corruption Commission (MACC) has initiated investigations into the massive losses suffered by Sime Darby. Investigations will start with a probe focusing on the internal inquiry being carried out by the conglomerate. The company's internal investigation, believed to have started eight months ago, is to determine the real extent of the losses in its energy and utilities division and whether they were anything beyond just making bad investment calls. There may also be probes into other divisions and projects. MACC investigations director Mustafar Ali confirmed that the commission had started investigations. "We will indentify areas that have elements of corruption, misappropriation and abuse of power. Like all cases, we'll deal with this one with urgency, not only because this probably involves billions of ringgit but also the interests of the people, Separately, Sime Darby is also expected to disclose tomorrow the findings of the task force set up to investigate its energy and utilities division. (NST)
This is negative for Sime as the on-going investigations by external parties may affect staff morale and result in further short-term uncertainties in the group's prospects. On a more positive front, the investigations could help shed some light on the massive losses recently discovered at the energy and utilities division.

The Securities Commission (SC) is studying the developments at Sime Darby, which is carrying out a probe after cost overruns of almost RM1bn for this year alone. "We are assessing the developments at Sime Darby. At this stage, the SC prefers not to comment any further," an SC spokesperson said. (BT)

Kencana Petroleum has been awarded a US$15.5m contract by Larsen & Toubro to construct jackets for offshore platforms to be located in India. This one-off contract is expected to run from 1Q-2Q11. (BMSB)

Tenaga (TNB) plans to bid for two or three power generation projects in the Middle East and South Africa, together with local and foreign partners. It has to bid as a group to minimise risk, among others, because each project is worth more than US$2bn (RM6.7bn). CFO Mohamed Rafique Merican Mohd Wahiduddin said TNB is looking at several projects currently and it has submitted pre-qualification bids for some. (BT)

Sarawak Energy (SEB) is exploring the potential for long-term transmission of hydropower from Sarawak to Peninsula Malaysia. Besides Bakun, other sources with a combined capacity of 20,000MW can also be tapped. “SEB needs to establish the right pricing for hydropower which should be more competitive than coal-fired plants,” an industry source said, adding that SEB’s plans would be more relevant post-2017. When contacted, Tenaga’s CEO Datuk Seri Che Khalib said, “If it makes financial and technical sense, we will consider it. However, there is no concrete proposal for us at this juncture to look into.” (Starbiz)

Exports of Indonesia's crude palm oil and its derivative products increased slightly in the first four months to 4.65m tons, Indonesia Palm Oil Producers Association (Gapki) reported. Director Executive of Gapki, Fadhil Hasan said the demand of the commodity from Indonesia keeps rising despite domestic green campaign against the CPO consumption. "India has been the main destination country for Indonesia's CPO exports so far," he said. The European Union has said that it will continue purchasing CPO from Indonesia, ignoring environmental concern from the public. The director said that the shipments during the first four months comprised 2.5m tons of CPO and 2.15m tons of its derivative products. (Xinhua)

Palm oil should not be singled out for sustainability compliance unless other competing oils are practising the same; delegates to the International Palm Oil Sustainability Conference 2010 were told. Extensive scientific studies should be carried out to determine the true situation, said the Malaysian Palm Oil Council (MPOC) CEO Tan Sri Dr Yusof Basiron, obviously referring to the misinformation circulated on palm oil by Western Green Non-Governmental Organisations (WEGNGOs). Lamenting that other competing edible vegetable oils, like soyoil, rapeseed and canola, were not subjected to similar requirements, he said Malaysia should therefore commission more scientific studies. Dr Yusof said if legislation was passed in the European Union and Australia, on the basis of non-scientific evidence, this would be discriminatory to trade and unnecessarily drive oil palm farmers to poverty in Indonesia and Malaysia. (Bernama)

The Roundtable on Sustainable Palm Oil (RSPO), in a move to segregate functions, will soon contract Accreditation Services International (ASI) of Germany as an accreditation agency to take over the functions of awarding certification for sustainable crude palm oil, its Secretary-General Dr Vengeta Rao said. He said "there has to be separation of powers" as the RSPO cannot be "writing and policing" the accreditation process. He said a pilot project would be carried out soon and within one-and-a-half years from now, this would become a reality. (Bernama)

It would be a healthy year for the construction industry with support expected in the next two quarters from projects awarded under the RM60bn second stimulus package, Master Builders Association Malaysia (MBAM) said. Among projects under the country's stimulus packages include the RM2bn new low-cost carrier terminal (LCCT) and the RM3bn LRT extension (two lines) in the Klang Valley. "After that, we will see how the 10MP (is working) as the effects will be seen by year end and next year," president Ng Kee Leen said. The construction sector saw a growth of 8.5% in 1Q 2010. (Bernama)

Thailand, Indonesia and Malaysia, the world’s top three rubber producers, want to set up a cash market for the commodity that would make pricing more transparent and stable, industry officials said on Tuesday. A regional rubber market might also reduce the influence on physical prices of futures markets such as the Tokyo Commodity Exchange (TOCOM), said Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium (IRCo). “The concept has been agreed upon and a special committee of experts has been established to study the feasibility of this concept in greater detail,” Latiff said. (Reuters)

Supermax Corp aims to increase revenue from the Asian market to 10% next year from the current 6% as it has identified the region as the new growth area. Its executive chairman and group managing director, Datuk Seri Stanley Thai Kim Sim, said the rising income level, fuelled by economic growth, would lead to the increase in health spending following the increase in awareness. "We are tapping Asia's emerging market economies for our future growth. We will see significant growth in the future if, for example, China decides to have healthcare reforms like in the US," he said. (Bernama)

Edaran Tan Chong Motor (ETCM) will continue with efforts to explore opportunities for regional expansion. Executive Director Datuk Dr Ang Bon Beng also said ETCM is still an auto company at heart but is extending its reach to new product segments and markets regionally. Locally, he said, the company will introduce at least one completely knocked down (CKD) model annually, particularly in segments it was not represented, over the next three years. "Overseas, our Indo-China strategy is slowly taking shape with exclusive distribution rights in Cambodia and Laos, as well as a full manufacturing, distribution and after sales investment certificate in Vietnam. Our total investment is US$25m in total,” he disclosed. (BT)

Ann Joo Resources is bullish on the outlook for this and next year, thanks to the massive pump-priming activities worldwide with the bulk of the funds being channelled towards infrastructure sector. Its group executive chairman, Datuk Lim Kiam Lam, said the tight supply of construction steel and the demand-pull price upswing were expected in the medium term. "The demand is expected to pick up in 2H10. However, in the immediate term a lot of correction is expected as the economies are still in early stage of recovery," he said. Going forward, he said, the company planned to acquire companies to provide synergy to the group, especially in terms of efficiency. "Our main focus in within the Asean market. Talks are at a preliminary stage," he said. (Bernama)

PT Semen Gresik is considering to buy cement plants in Malaysia, the Philippines and Thailand, President Director Dwi Soetjipto told reporters in Jakarta today. The company may spend 3 trillion rupiah on acquisitions this year, Soetjipto said. (Bloomberg)

Johor Corp’s (JCorp) CEO Tan Sri Muhammad Ali Hashim said several companies including Sime Darby and Malton are interested in the redevelopment of Pusat Bandar Damansara in Kuala Lumpur. “But who gets it depends on who gives the best price," he said, noting that no decision has been made. "It is obvious that something needs to be done on the property and unlock its true value," Muhammad Ali said. (BT)

KUB Malaysia plans to buy 12 floors of commercial and retail office space at Oasis Ara Damansara for RM39.1m from Sime Darby’s units. KUB will use this office space to house its new corporate headquarters. (BT)

Malaysia Airports Holdings (MAHB) is still looking at various options for its funding requirements including via any ringgit and US dollar debt fund-raising exercises. This reply was in response to recent press reports suggesting that MAHB would issue RM2.5bn bonds for the construction of the country's second low-cost carrier airport and to refinance existing debts. (Bernama)

Singapore's CapitaMalls Asia is keen to expand in Malaysia and plans to have a property trust in the future are still on the drawing board. CapitaMalls, a unit of property developer CapitaLand, views Malaysia as a key market in the region and it could develop new properties or buy existing ones, said its head for Malaysia Sharon Lim. When asked about plans to develop a mall in I-City owned by I-Berhad as previously reported, Lim said "we have spoken to them. But we are not ready to announce anything." As for plans to set up a real estate investment trust in Malaysia, it is still an option. "It is our stated strategy that ultimately, the aim is to list in the market where we operate in," she added. (BT)

It is the second time in three years that a substantial stake in Magna Prima has changed hands, after Tan Sri Chua Hock Chin's exit from the company in 2007. Filings to the stock exchange show that Tan San Li and Wong Bin Chen have ceased to be substantial shareholders after selling their entire stakes in Fantastic Realty, which owns 15.41% of Magna Prima and more than half of its warrants. The duo were replaced by Lee Ban Chuan and Lee Hing Lee. (BT)

Eng Teknologi Holdings will continue to expand its capacity regionally to cope with the strong Hard Disk Drive (HDD) demand. "Mobile 2.5" drive components will be our key focus of growth in our new capital investment," CEO Datuk Teh Yong Khoon said. He said the group was also making efforts to expand its range of products to cover a more balanced product portfolio mix. (Bernama)

CCM Duopharma Biotech (CCMD) is confident of achieving more than 10% growth in its international sales this year. But its CEO Leonard Ariff Abd Shatar is concerned over certain challenges with the ringgit having appreciated quite substantially since last year. Leonard said the company was also looking into the Australian market this year and was already in talks with one party. He said CCMD would continue to focus on the Middle East and Northern Africa markets. (Bernama)

20100526 1128 Malaysian Economic News.

It would be a healthy year for the construction industry with support expected in the next two quarters from projects awarded under the RM60bn second stimulus package, Master Builders Association Malaysia (MBAM) said. "After that, we will see how the 10th Malaysia Plan (is working) as the effects will be seen by year end and next year," its President Datuk Ng Kee Leen added. (Bernama)

Tourist arrivals increased 5.0% yoy to 5.75m in Jan-Mar this year compared with 5.46m in the same period last year. Tourism Ministry secretary-general Datuk Dr Ong Hong Peng said that the Influenza A (H1N1) disease did not have any effect on tourist arrivals. The ministry is expecting 24.0m tourist arrivals for this year with a targeted revenue of RM56.0- 57.0bn (23.65m and RM53.4bn in 2009). (The Star)

The Government will look into ways to get more bumiputra entrepreneurs to graduate from traditional businesses to a more “advanced” manufacturing sector. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said only 3% of bumiputra enterprenuers had companies with turnover exceeding RM25m a year, who are mostly operated in Terengganu and Kelantan. (The Star)

Three medical device multi-national corporations (MNCs) are planning to set up manufacturing facilities in Penang, lending further credibility to the state’s growth as a medical device hub. One of the three incoming MNCs, Accellent Inc, is looking to invest over RM300m in manufacturing facility at the Bukit Minyak Science Park (BMSP). The other two MNCs are from US and Germany. The Association of Malaysian Medical Industries (AMMI) said the medical devices industry in the country should register double digit growth this year. (StarBiz)

This year’s International Halal Showcase (Mihas 2010) is expected to see more sales and deals as a result of the improving economy, said Datuk Mohamad Kamarudin Hassan, deputy chief executive officer of Matrade. Last year, Mihas generated total sales of RM3.23bn. (Malaysian Reserve)

The “ultimate” government service is for it to be accessible and mobile so the public can get things done in the simplest and shortest manner. “It is incredible how the use of IT can improve services, including that provided by the Government, and boost productivity,” Chief Secretary to the Government Tan Sri Sidek Hassan said. He added that US$9.5bn (RM29.5bn) had been allocated by Microsoft this year for research and development. (The Star)

20100526 1126 Global Economic News.

The Federal Reserve doesn’t intend to sell any of its assets, including more than US$1.1trn in mortgage-backed securities, until after it begins raising interest rates, the central bank said in a report to Congress. “The Federal Reserve currently does not anticipate that it will sell any of its securities holding in the near term, at least until after policy tightening has gotten under way and the economy is clearly in a sustainable recovery,” the Fed in its annual report, which was posted on its Website. (Bloomberg)

US home prices fell in the first quarter of 2010 but are still higher than they were a year ago. According to the S&P/Case-Shiller nation-wide index, home prices fell 3.2% qoq in 1Q but have still managed to climb 2% yoy. The index continued to show weakness despite very low mortgage interest rates and tax incentives to encourage home purchases. Two other indexes tracked by Case-Shiller registered declines for the month of March, 0.5% for its index of 20 major cities and 0.4% for the 10-city index. (CNNMoney)

U.S. consumers are much less pessimistic, rising by 6.6pts to 63.3 in May (57.7 in Apr), according to the Conference Board's measure of consumer confidence index. Market had expected a reading of 59. The assessment of the jobs market has improved for a third month with 43.6% describing jobs as currently hard to get (47.3% in Feb). 20.4% of total respondents see more jobs six months from now (17.7% in Apr) and fewer see fewer jobs ahead, at 17.7% (19.9% in Apr).
  • The Conference Board’s measure of present conditions increased to 30.2 this month, the highest level since December 2008. 
  • The gauge of expectations for the next six months surged to 85.3, the highest point since August 2007, four months before the recession began. (Bloomberg)
The Federal Reserve will probably transfer record earnings exceeding US$70bn to the US Treasury Department this year (US$47.4bn in 2009, US$15.7bn higher than in 2008) on income from assets including mortgage-backed securities, according to the Congressional Budget Office. “The Federal Reserve’s actions to stabilize the financial markets are likely to significantly increase the amount of its remittances over the next few years,” the CBO said. The CBO report estimated that the value of subsidies from the Fed’s aid during the financial crisis was US$21bn. The biggest subsidies occurred through the Term Asset- Backed Securities Loan Facility, or TALF, where subsidies totaled US$13.0bn. (Bloomberg)

The German Finance Ministry proposes to ban the so-called naked short selling of all shares of German companies listed on German exchanges, as well as naked short sales of euro region bonds admitted for trading on German exchanges. The proposed law would also ban naked sales of some credit default swaps on euro region bonds. The discussion paper also aims to ban certain euro currency derivatives. (Bloomberg)

The U.K. economy grew more than previously estimated, with real GDP growth of 0.3% qoq in 1Q10 (0.2% previously estimate) as rebounding investment and the biggest jump in manufacturing for four years strengthened the recovery. That matched the median forecast. Manufacturing surged 1.2%, the most since the first quarter of 2006. (Bloomberg)

European industrial orders jumped 5.2% in March (1.9% in Feb), the most in almost three years, led by surging demand for capital goods such as machinery. That’s the biggest gain since June 2007. Economists forecast an increase of 2.5%. March’s industrial orders rose 20% yoy. (Bloomberg)

Bank of Korea board members voted unanimously to keep the benchmark interest rate unchanged at 2.0% in April, even as one urged a pre-emptive increase in borrowing costs and two wanted to signal the policy stance may change. The central bank will maintain its “easy policy,” it said in minutes of the April 9 meeting released yesterday. The bank also kept the rate at a record-low 2% at its latest meeting on May 12. (Bloomberg)

A Thai court issued orders on Tuesday, May 25 to arrest former Prime Minister Thaksin Shinawatra on terrorism charges in connection with riots over the past two months that were the worst in the country's modern history. Armed with the arrest warrant, Thai prosecutors and the Foreign Ministry will launch a global hunt for the fugitive telecoms tycoon, a top government official said. Thaksin was last believed to be in France, but he keeps his location secret.
  • "The court said there was enough evidence to believe that Thaksin was the mastermind, having played a significant role in instructing and manipulating the incidents," Department of Special Investigations chief Tharit Pengdit said, referring to the riots. 
  • Government officials say Thaksin funded the 10-week, anti-government protests to the tune of about US$1.5m a day and is believed to have organised the smuggling of arms and fighters from Cambodia. (TheEdge)
The Philippine economy probably expanded at the fastest pace in more than a year last quarter as remittances boosted consumer spending and exports surged, reducing the need for record-low interest rates. Gross domestic product increased 4.4% yoy in 1Q10 (+1.8% in 4Q09), according to the median forecast surveyed. The government will release the report at 10 a.m. tomorrow in Manila. (Bloomberg)

South Korea's sentiment index advanced to 111 in May (110 in Apr) as the nation’s economy strengthened. This was the first increase since Oct 09 when it reached a sevenyear high of 117. A number exceeding 100 indicates optimists outnumber pessimists. (Bloomberg)

Singapore’s visitor arrivals surged 20.4% yoy to 938,000 in April as a recovery in the global economy encouraged travel and the island’s two casino-resorts attracted tourists to their roulette tables, shops and hotels. The arrivals were the highest ever for April, and followed four months of record gains. Singapore aims to lure 17m visitors and reach annual tourism revenue of S$30bn by 2015, helped by casino resorts run by Las Vegas Sands Corp. and Genting Singapore Plc. The island may get as many as 12.5m visitors this year and tourism receipts may reach as much as S$18.5bn, Senior Minister of State for Trade and Industry S. Iswaran said. (Bloomberg)

Vietnam’s trade deficit narrowed 35.0% mom to US$750.0m in May (US$1.2bn in Apr) as exports rebounded from US$5.3bn to US$6.1bn in May, buoyed by a reviving global economy and a weaker currency. That brings the deficit for the year to US$5.4bn, more than four times the shortfall of US$1.1bn for the same period in 2009. For the first five months of 2010, exports increased 12.6% yoy to US$25.8bn. (Bloomberg)

Tuesday, May 25, 2010

20100525 1811 FCPO EOD Daily Chart Study.

FCPO closed : 2436, changed : -54 points, volume : higher.
Bollinger band reading : downside biased.
MACD Histrogram : reversed lower, seller taking chances again.
Support : 2400, 2370, 2340 level.
Resistant : 2450, 2470, 2500 level.
Comment :
Mr Bear dominated both the equity and commodities market today as major commodities also facing selling pressure and traded lower. The same goes to FCPO that ended the day lower right at the low with improved volume traded forming a wide range down bar candle. Daily chart reading shows that the downside biased market movement has resumed after a few days of correction testing the recent tested support level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/breakdown with quick cut loss and profit target.

20100525 1728 FKLI EOD Daily Chart Study.

FKLI closed : 1241, changed : -31 points, volume : higher.
Bollinger band reading : downside biased.
MACD Histrogram : continue lower, seller ruled.
Support : 1240, 1232, 1220 level.
Resistant : 1250, 1260, 1265 level.
Comment :
Bear haunted FKLI deliberatly punished all the buyer to closed almost at the low of the day with sustaining increase volume traded forming a scary wide range down bar candle way way seriouly way below the lower Bollinger band. Needless to mentioned, the daily chart reading continue to show a downside biased market that is 20 points away from a critical pivotal support level with potential pullback could take place soon.
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.

20100525 1327 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1254.5, changed : -17.5 points, volume : high.
Bollinger band reading : downside biased.
MACD Histrogram : reversed upward, seller taking profit.
Support : 1250, 1240, 1232 level.
Resistant : 1260, 1265, 1270 level.
Comment :
Program selling still take place today as major regional market negative development continues lead FKLI to closed lower with sustaining volume changed hand. Hourly chart continue to record downside biased market reading without any sign of correction through the entire morning.

201000525 1315 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2490, changed : unchanged, volume : low.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : weakening, not much action from both buyer and seller.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550 level.
Comment :
Not much excitement happening on FCPO that ended the first session flat although CME palm oil futures market kicked start yesterday. Hourly chart reading suggesting a side way range bound market with little upside biased potential. On the other hand ITS cargo surveyor announced export figure up 8.6% to 1,028,533 tonnes for the period 1 ~ 25 May 2010.

20100525 0948 Malaysia Corporate News.

Sime Darby will spend RM3 to RM5bn on its oil palm estates this year as global demand for the vegetable oil grows, a senior official said. Sime owns 530,000ha of estates planted with oil palm in Malaysia and Indonesia and has another 300,000ha-400,000ha of concessions from Liberia and Sarawak that are yet to be developed.
  • "If you are a big player like us, you will need to spend that kind of money to maintain plantations, get equipment and yes, buy more land," Sime Plantations MD Datuk Azhar Abdul Hamid said. He said some of the expenditure will be channeled to Liberia in West Africa for a 63-year concession to develop 220,000ha. Sime has already spent RM70m on the estates there and has set up a nursery. 
  • Sime is on the lookout for brownfield land in Indonesia and Malaysia and Azhar said the company was eyeing 50,000-80,000ha but would be happy with 30,000ha.
  • Sime, which is expected to produce 2.4m tonnes of crude palm oil for the financial year ending June 2010, has already committed 80% of its output. (Reuters) 
This is not a surprise to us. The group has mentioned its intention to add 300k ha of plantation land to its existing estates to the investment community in the past.

Mudajaya was offered term loan facilities from institutions and banks in India to finance the development of the remaining of phase 2 of the IPP venture in Chhattisgarh, India. Collectively, RKM, the JV company, has been granted a total term loan facilities of RM2.8bn or 75% of the total development expenditure for phase 2 comprising unit 2, 3 and 4 of the IPP Project. Therefore, financial closure for the entire project is fully secured. The balance of the funding is through equity capital injection from the shareholders of RKM. (BMSB)
This news is positive but not entirely a surprise. This development should address some concerns over the timing for the closure of the remaining funding requirement for phase 2 and is a major milestone for the project. All four units (1,440 MW) are scheduled to be fully commissioned by 2012.

The government is placing emphasis on enhancing smallholders' productivity through the adoption of better planting materials, automation, mechanisation and good agriculture practice. Smallholders, who account for 40% of the crude palm oil produced in the country, at present, only manage to yield an average of between 2.5 and 3 tonnes of oil per hectare per year.
  • "The industry average is about four tonnes and we want the smallholders to catch up to this level. The average can even go up to between 6-7 tonnes in the future. "There are 300,000 smallholders in the country and we have to see how they can benefit from the experience of bigger plantation companies," said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok. (Bernama).
A dollar-denominated palm oil contract introduced by CME Group Inc., the largest futures exchange, may attract U.S. and European investors, according to Dorab Mistry, a director at Godrej International Ltd. The contract started trading yesterday. Final cash settlement prices are based on ringgit- denominated futures on the Malaysia Derivatives Exchange, where August-delivery was little changed at 2,496 ringgit ($753) a ton.
  • “The main players are likely to be U.S. and European consumers and investors who are not comfortable trading a ringgit contract,” said Mistry from Godrej, one of India’s largest traders of cooking oils. While local traders in Malaysia and Indonesia “may not be significant” participants, “refiners who export in dollars and crude palm oil shippers who export will find it an attractive hedge,” he said. “It’s an ideal arbitrage instrument for the palm-soya spread,” he said. (Bloomberg)
The palm oil industry continues to be blamed for loss of wildlife habitat and biodiversity in the country, thus making the efforts to readdress the negative image of the industry extremely tedious, said the Chairman of Malaysian Palm Oil Council, Datuk Lee Yeow Chor.
  • He said the media was flooded with a continuous stream of reports that alluded to abuses committed by the industry. "There is often little or no avenue to verify the sources and statistics of these reports but they surely leave a lasting adverse impression on the consumers," he said. 
  • Lee said it was no surprise that major food producers had been pressured to drop palm oil from their formulations. "When the public is brainwashed into believing that our palm oil is a culprit to be avoided, the efforts to readdress this negative image is extremely difficult," he said.
  • Fortunately, MPOC is now well geared to tackle such issues and provide responses to unfair comments and campaign much faster than before, he added. (Bernama)
Malaysia is unhappy with the EU Renewable Energy Directive (EU RED) which assigned a much lower value of 19% greenhouse gas (GHG) emission savings to palm oil, as this can disqualify the commodity as a biodiesel source for use in Europe, said Malaysian Palm Oil Council (MPOC) chairman Datuk Lee Yeow Chor.
  • The directive states that biofuel must result in GHG savings of at least 35% versus fossil fuel in 2009 and also increase over time to 50% by 2017. Based on the lifecycle carbon analysis (LCA) by experts over the past two years, the GHG savings from the LCA of palm oil is actually over 50% - much higher than the EU's estimate, Lee said. 
  • Lee said: “Having such ammunition in our hands will allow MPOC to continue negotiations with the EU. The Malaysian Palm Oil Board is also ready to publish its own LCA data.” Malaysia would be looking at laying the foundation for palm oil to qualify as an advanced biofuel source in the United States under its Renewable Fuels Standards 2 or RFS2, he added. (Starbiz)
Oil palm planters in Malaysia and Indonesia are joining hands to form a coalition to fight anti-palm oil lobby that has been intensifying recently. Fierce rivalry from competing vegetable oils grown in Europe and North America has prompted underhanded tactics by developed nations to curb the growth of the palm oil trade.
  • At a meeting, Malaysian and Indonesian oil palm planters did not discuss an alternative scheme to certify that palm oil is produced from sustainable methods. However, they agree to engage with the existing Roundtable on Sustainable Palm Oil (RSPO) for a more practical scheme. (BT)
The contribution of hydro to Sarawak’s power generation mix will rise to 74% from the present 8% when the Bakun and Murum dam projects are operational. Sarawak Public Utilities Minister, Datuk Amar Awang Tengah Ali Hasan said by 2020, the state’s expected installed capacity of 8,400MW would comprise 80% hydro, 13% coal and 7% gas.
  • Meanwhile, it is understood that Sarawak Hidro, which owns the Bakun dam, has yet to receive approvals to start impounding the dam, which was originally planned for Nov-09. (Starbiz)
Four major Australian companies are keen to embark on innovation and technology exchanges through trade and investment, especially under the Sarawak Corridor of Renewable Energy (Score), Australian Senior Trade and Investment Commissioner Paul Martins said.
  • Martins said he was confident that the Australian companies' capabilities in clean energy, mineral processing and project development would represent a great opportunity for both countries to work together with their direct interest in Score. (Bernama)
The board of EON Capital (EON Cap) is expected to send out to shareholders its EGM notice and circular on the RM5.06bn takeover offer from Hong Leong Bank (HLB) this week. It is understood that the banking group held a board meeting to discuss what would be written in the circular after it had decided to go ahead and table the proposed offer to shareholders despite facing resistance from its independent financial adviser (IFA), Credit Suisse Securities.
  • Credit Suisse said the proposal was “not fair from a financial perspective.” source familiar with the matter said the notice and circular could be send out earliest by tomorrow, with the board meeting for this purpose. After the circular is sent out, the EGM should be held within 14 days. (StarBiz)
EON Capital is “fully confident” of the level of provisions for impaired loans. “EON Bank group remains fully confident of the level of its provisions and its ability to conduct its business successfully and views such comments that the group is not observing prudential standards to be irresponsible,” the bank said.
  • The gross NPL rate had improved to 3.5% as at Mar 10 from 3.8% at Dec 09 while net NPL improved to 2.1% as March 10 compared with 2.3% as at Dec 09, it said. “Meanwhile, loan loss coverage continues to be strengthened to 88.2% at end-Mar 10 from 86.1% at end-Dec 09. Further to that, the banking group maintains a strong capital adequacy ratio of 14.7% as at end-Mar 10, compared with 14.1% as at end-Dec 09.” 
  • The bank said with the adoption of FRS139 effective 1 Jan this year, the gross impaired loans ratio had declined to 4.2% as at Mar 10 compared with 4.3% as at Dec 09. “The impaired loans coverage ratio stood at 83% as at end-Mar 10,” it said. (StarBiz)
Come June, there will be some excitement in the banking industry when Bank Negara reveals some of the successful recipients for foreign commercial banking licences in line with the financial sector liberalisation plan. Up to five new banking licences are expected to be issued in niche and up to two new takaful licences will also be announced.
  • ING, Allianz, Manulife, Great Eastern and AmAssurance are some of the insurers believed to have submitted their applications. An industry observer felt Great Eastern might be one of the successful applicants for the takaful licence. 
  • It is learnt that the proposed two Islamic banking licences expected to be issued next month may be delayed as the central bank is still assessing the applications of suitable candidates.
  • Although industry observers are still speculating on the possible foreign commercial banking licensees, names like DBS Bank, UOB, The National Bank of Abu Dhabi (NBAD) and Sumitomo Mitsui Banking Corp have been popping up of late on analysts' radar as among the potential candidates. 
  • Bank Negara has been tight-lipped about this matter but hinted that the licences to be issued would be to banks from Asia, Europe and the Middle East. (StarBiz)
Bank Simpanan Nasional's profit-after-tax and zakat for 2009 rose to RM347m from RM168m in 2008 on strong growth in loans, advances and financing. Group revenue rose to RM1.2bn from RM1bn previously, BSN GM cum CEO Datuk Adinan Maning said.
  • Its total loans, advances and financing rose 27.2% to RM5.9bn. BSN's total deposits edged up to RM17bn from RM15.4bn in 2008. Total assets rose to RM18.7bn from RM16.7bn, fuelled by a 49.2% rise in conventional loans and syariah-financing portfolios. 
  • The total assets are expected to grow to RM20bn this year, Adinan said. BSN's NPL ratio stood at 1.8% as at the end of 2009, a marginal increase over 1.5% in 2008.
  • Adinan said BSN will continue to expand its business presence by diversifying products and improving services. The bank aims to explore branchless banking via Internet banking as an alternative channel, he added. In micro-financing, BSN plans to expand branch network with four additional new centres, and an increase in staff strength to boost growth.
  • As at April this year, a total of RM36.8m was approved for micro-financing and about RM36.3m had been disbursed. 
  • BSN also plans to open a full-fledged Islamic banking branch with each state having three branches. About RM10m had been set aside for the purpose. (BT)
Indian telco minister A Raja expressed optimism that the broadband wireless access (BWA) spectrum auctions, which kicked off today, will be as good as the 3G auctions and that he expects to mop up over Rs 150bn (US$3.2bn) from the process. "We expect competition will be as high as that of 3G. We expect to get more than Rs 15,000 crore towards licence fee from the BWA auctions," he said. (Economic Times of India)

Malaysian mills plan to cut rebar prices by RM50-100 per tonne due to slow demand and cheaper imports."The mills have been talking about price cuts for the last few weeks. There is no decision on when to cut prices yet, but most likely, it will be this week," said an official at a major Malaysian mill.
  • Rebar continues to trade at RM2,250-2,350 per tonne in the domestic market on Monday, unchanged since early April due to slow demand. This is lower than mills' offer prices of RM2,350-2,400 per tonne, also stagnant for almost two months now. "There is just no demand in the market. Many big projects such as the Penang bridge is very slow to start," said another mill official. 
  • "It's really not surprising that the mills are thinking of cutting prices. They have to do it to be in line with international prices," said a Singapore-based trader with operations in Malaysia. Import prices from China and Turkey into the region have already fallen to US$620-670 per tonne cfr, he said. 
  • The first mill official confirmed that worry about competition from cheaper imports was a reason to cut prices. (Metal Bulletin)
Lafarge Malayan Cement has become the first Malaysian cement company to receive the Green Label certification from the Singapore Environment Council. The company's president and chief executive officer Bi Yong Chungunco said its two cement products, Mascrete LH and Phoenix, fulfilled the pre-requisites to become eligible for the Green Label certification.
  • According to Chungunco, the Green Label certification is a milestone in Lafarge Malayan Cement's journey to reduce its carbon footprint. She said the company already had undertaken several initiatives to reduce the consumption of non-renewable natural resources and save energy during product manufacturing and construction. (Bernama)
PowerSeraya, together with parent YTL Power, is seeking to expand its operations, which could include selling utilities, fuel trading, and oil storage, in the region, PowerSeraya’s CEO John Ng said. But he added that there were no immediate plans or targets on the company's horizon at this time. PowerSeraya is in the last stages of commissioning a new S$800m 800 MW co-gen combined cycle plant. The unit, which will come on line by end- June, will generate both electricity and steam. (Reuters)

MMC Corp’s Senai Airport Terminal Services Sdn Bhd has signed a MoU with Koreanbased STX Energy Co Ltd to lease land in Senai Hi-Tech Park to build a solar module and/or solar cell manufacturing facility. It also signed similar agreements with Universiti Teknologi Malaysia, Universiti Sains Malaysia and Universiti Malaysia Perlis for the development of research in the fields that will benefit all parties. (BT)

The medium-term note (MTN) holders of Transmile Group, a troubled air cargo carrier, will continue with their move to wind up the company. Sources said the five MTN holders, who are owed RM105m, believe they have priority over the assets. They had on April 28 met to appoint receivers for the company.
  • The company's other obligations included RM214m in syndicated term loans and RM209m in guaranteed convertible bonds. The five MTN holders are believed to be the Employees Provident Fund (EPF), Meridian Asset Management, OSK Group, Agrobank and AmBank Group. The EPF is believed to hold around half of the notes. (BT)
MBM Resources plans to spend RM100m over the next three years to expand its distribution network. Its managing director, Looi Kok Loon, said this year, RM20m was allocated to expand its Perodua, Hino and Volkswagen (VW) dealerships. "MBM will set up 3S centres (sales, service and spare parts) in Butterworth, Ipoh, Shah Alam, Johor Bahru, Batu Pahat and Kota Kinabalu to deliver growth potential," Looi said. (Bernama, BT)

IGB Corp is mulling over spinning off its assets into three separate REITs comprising its retail, hotel and commercial components, its top official said. Group MD Robert Tan Chung Meng said that should this plan take off, this could "potentially be the biggest REIT in Malaysia". It could also create history by being the first group to spin off three REITs. (BT)

Sunway City may place out about a fifth of its planned IPO of a REIT to cornerstone investors who have greater holding power for the shares, sources with direct knowledge of the deal said. It is in talks with seven local funds in the hopes of getting some of them to become cornerstone investors in the IPO which is expected to raise around US$500m (RM1.65bn), the sources said. (Reuters, BT)

Sarawak Cable, which is listing on the Main Market of Bursa Malaysia today, is bidding for a turnkey contract to build a 275kV substation in Samalaju, said its MD Aaron Toh. The company was also bidding for other sizeable projects, including the turnkey construction of the Murum-Murum Junction transmission line. The value of the jobs is not known but industry observers say a substation normally costs RM100m to construct. (Financial Daily)

IJM Plantations has redesigned chief operating officer Joseph Tek Choon Yee as its new CEO and MD effective May 23 following the retirement of Velayuthan Tan Kim Song. (Malaysian Reserve)

KrisAssets Holdings
, the owner and operator of Mid Valley Megamall, is aggressively seeking foreign shopping complexes to be injected into the company. Group MD Robert Tan Chung Meng said that the properties could either be in the US or in Europe. He added that KrisAssets has the muscle to raise RM1bn-2bn to fund the purchases.
  • There are many properties available and what is of interest to the group are the densely populated major areas like Florida, California and Chicago, he said. The plan may materialise in two to three months. "The next two years will be very interesting for us," Tan added. (BT)
Hiap Teck Venture has bought a 55% stake of Eastern Steel Sdn Bhd, which owns 240ha of land in Teluk Kalung, Kemaman in Terengganu, for RM110m. (BT)

Unimech Group has set a dividend policy to distribute 30% of the group’s net profits to shareholders for FYE12/10. (Financial Daily)

Malaysia Building Society Bhd (MBSB), a property finance company, has made enquiries on being a “development financial institution” and not as a full-fledged bank, an industry source said. “There has been an inquiry by (MBSB) on the possibility of it being considered a development financial institution under the purview of the central bank,” a source said. (StarBiz)