Monday, January 18, 2010

20100118 1838 FCPO EOD Daily Chart Study.

FCPO closed : 2490, changed : -5 points, volume : lower.
Bollinger band reading : bearish.
MACD Histrogram : lower slightly, seller still in but locking in profit.
Support : 2450, 2400 level.
Resistant : 2521, middle Bollinger band level.
Comment :
Without the lead from soy oil futures that closed today, FCPO April 2010 contract opened lower followed by bargain hunting and profit taking activities pushed price upward to recovered most of the losses to end marginally lower today. Technically, the daily chart still recorded a bearish reading but today's long body up candle shows some little strength of the underlying market that may not ready for more further downside market yet in the near term.
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.

20100118 1738 FKLI EOD Daily Chart Study.

FKLI closed : 1301, changed : -1 point, volume : lower.
Bollinger band reading : bullish side way likely.
MACD Histrogram : lower, buyer off loading.
Support : 1300, 1295, 1290 level.
Resistant : 1309, upper Bollinger band level.
Comment : FKLI closed marginally lower but still maintained itself above the 1300 resistant turned support level with lower volume transacted due to lack of fresh lead or catalyst to bring the market to a new level. Expect market to trade side way range bound upside biased.
When to buy : buy at support/weakness/breakout with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20100118 1304 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1301.5, changed : -0.5 point, volume : low.
Bollinger band reading : sideway upside biased .
MACD Histrogram : recovering.
Support : 1295, 1290 level.
Resistant : 1300, upper Bollinger band, 1309 level.
Comment : FKLI opened weaker as the Dow closed down 100.90 points last Friday but managed to recovered most of the losses to closed the first session nearly unchanged. Hourly chart reading suggesting a side way ranging upside potential market should further supporting volume returned to the market at the afternoon session.

20100118 1243 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2453, changed : -42 points, volume : High.
Bollinger band reading : bearish.
MACD Histrogram : getting lower softly, seller in charge.
Support : 2430, 2400 level.
Resistant : 2460, middle Bollinger band level.
Comment : Weaker FCPO open lower and traded side way within a 24 points range at the morning session. Hourly chart wise, FCPO seen facing heavy resistant at the middle Bollinger band level since last week 11 Jan 2010 and marker is likely to trade side way range bound biased.

20100118 1020 Malaysia Corporate News.

Affin Holdings has obtained Bank Negara’s approval to commence negotiations with the existing shareholders of PT Bank Ina Perdana for a possible acquisition of a controlling stake. No details were provided on the target, the stake to be acquired or the mode of financing. (BMSB) Please refer to our report today for comments.

Kossan Rubber Industries plans to set up its first overseas plant either in Indonesia, Vietnam or Thailand, and may invest up to RM60m."This is part of our ongoing expansion plan and we are looking at all possible locations in those countries," chief executive officer and managing director Lim Kuang Sia said. He said the company has not decided on the timing of the move, but "we will be cautious and prudent (about our overseas expansion) and won't jump into it". The proposed plant will help the company meet its volume growth annually of 15-20% in capacity.
  • Lim said he still prefers to do business in Malaysia due to its good investment climate and infrastructure. However, he is aware that he has to go overseas eventually due to cheaper labour, difficulty in hiring local managers, gas, land availability and to be nearer to raw material suppliers. 
  • Lim expects demand for rubber gloves to remain strong in 2010. The company churns out 12bn pieces of rubber gloves a year or 12% of the world rubber glove market.
  • He said demand is growing from "everywhere" around the world, not so much from the influenza A (H1N1) pandemic but from all sectors. "Growth is everywhere across all sectors such as food, cleanroom, medical and other hygienic concerns. 
  • Lim also said that Kossan Rubber was open to a merger or acquisition with its rivals if that was "synergistic with its operations, fair and creates value". "If a merger creates a bigger company but destroys the value, what for? If there are no offers, we will do business on our own," he said, noting Kossan's strong cash flow and low gearing. (BT)
Although we are surprised about the company's plans to set up new plants overseas, management has not denied that they have been on the lookout on potential M&As with smaller local glove companies since last year. We think that the 15-20% annual growth in capacity is conservative, given that management has guided that they are planning to grow their production capacity by 24-31% p.a over the next few years making them one of the most aggressive rubber glove player in terms of capacity expansions. The company targets to achieve 18bn annual production capacity by the end of 2011 by putting in 36 double former lines at a new factory to be built on a piece of land in Klang which it bought in May- 05. We keep our earnings forecasts unchanged for now, until firm confirmation from management on its capacity expansion plans as well as its new overseas plant set ups.

Kossan Rubber Industries wants Petroliam Nasional (Petronas) to supply more natural gas to the industry as its shortage is a constraint on capacity expansion. Kossan Rubber chief executive officer and managing director Lim Kuang Sia said that Petronas supplied more than half of the country's natural gas to independent power producers (IPPs) alone at subsidised prices. He said Petronas would make more profit by selling it to other sectors, such as the rubber glove industry and small- and medium-scale enterprises (SMEs). "The rubber glove sector gets 15% of the natural gas supplied in the country, which is not enough. We are appealing to the government and Petronas to supply more," Lim said.
  • While Petronas also supplies gas to Tenaga Nasional and Gas Malaysia, which then distribute it to all other industries, such as ceramic makers and other SMEs, that is not enough, he said. "The shortage is acute at 50-60% and we have no other alternative energy such as coal, which is not allowed by the Department of Environment."
  • Foreign investments will not come in and industries cannot expand due to this energy shortage, he said. (BT)
The 10MP would focus on ensuring the efficiency of project implementation, said Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop. He said slight alterations would be made to the mechanisms used, especially at the administration and management level. (Bernama)

Sarawak wants to focus on infrastructure development and the implementation of its renewable energy corridor under the upcoming 10MP. Chief Minister Tan Sri Abdul Taib Mahmud said the state still needed to improve its infrastructure, particularly in the rural areas, to spur greater development and bring down transportation costs for rural folks. He said focus should also be given to the implementation of the Sarawak Corridor of Renewable Energy (Score) to help transform its economy into a high-income model. (The Star)

The EIA report on the controversial coal-fired plant in Sabah is expected to be out in March. The government has identified Felda Sahabat, Tungku near, Lahad Datu as the location for the plant.
  • Energy, Green Technology and Water Minister Datuk Peter Chin aid although other alternatives like biomass plants was being considered, these still needed to be tested on a larger scale and the 300MW plant was required to provide enough electricity supply for the entire east coast. 
  • Meanwhile, the government says it will not be considering any move to raise electricity tariff rates in Sabah until the power supply situation stabilises and power failures reduced in the state. (Bernama)

The biofuel industry needs strong domestic mandates and enforcement in order to survive, said the US Department of Agriculture (USDA) foreign agricultural service's chief economist Micheal Dwyer. (Financial daily)

The Malay Car Importers and Dealers Association (Pekema) has warned that unit volume for its members will drop significantly if the RM10,000 levy to be paid on every approved permit (AP) to import cars remains. The association is requesting that the levy be reduced by half to RM5,000, with the payment being made only after a car is sold. It also asked that the open AP policy be maintained, and for the government to act tough on errant members. (BT)

AirAsia announced to Bursa Malaysia that 50.36% of its issued and paid-up share capital was held by foreigners as at end-2009, compared with 37.98% foreign shareholding in June. AirAsia told the exchange that foreign ownership of shares in the company had exceeded the limit of 45% of its total issued and paid-up share capital.
  • Shares held by foreigners which have exceeded the prescribed limit shall also be entitled to all such rights and entitlements except for the exercise of voting rights. In contrast, local institutions now hold 90.4% stake in Malaysia Airlines. (Star)
AirAsia flew its maiden flight from Taipei to Kota Kinabalu last Friday, and established Kota Kinabalu as its second largest hub in Malaysia with a total of seven international and nine domestic destinations. (Press release)

The Baltic Dry Index posted a fifth consecutive advance last Friday on demand for larger iron-ore and coal carriers with Asia-bound cargoes. Freight rates have been supported by Chinese raw-material demand. The index rose 64pts, or 2% to 3,299pts. That's a 5.1% weekly gain. The biggest rate gains on specific capesize routes tracked by the Baltic Exchange were for the Tubarao, Brazil to Qingdao, China, voyage that jumped 5.1% and the Western Australia to Qingdao trip that had a 4.5% gain. (Bloomberg)

Tengku Datuk Ibrahim Petra is currently in the hot seat – having to fight off a move to oust him as Petra Perdana executive chairman and CEO. Shareholders will decide whether he continues to helm the offshore marine services provider at an EGM on 4 Feb. He is seen by many as a competent manager with over two decades of experience in the oil & gas industry and an ideal candidate to helm Petra Perdana, having shaped the company into one of the more prominent players in the industry. However, the divestment of Petra Perdana’s stake in Petra Energy and the disposal of three vessels to Petra Energy clearly did not go down well with some of the shareholders. (Star)

Green Packet’s Packet One Networks (M) Sdn Bhd (P1) has secured a RM50m loan from Malaysia Debt Ventures Bhd (MDV) to expand its WiMAX service nationwide. CEO Michael Lai said the MDV loan would likely be fully utilised this year for capex and would be repaid over 48 months. He said capex for P1 would be at least RM200m this year compared with about RM400m last year. (Starbiz)

The United States Department of Agriculture (USDA) believes global food prices will be higher in the next decade compared with last ten years on the retun of global economic growth, higher oil prices, developed countries' renewable policies, and rising demand from China and India. "Our view is that food prices globally will be higher in the next 10 years than the last 10 years, said USDA's foreign agricultural services' chief economist Michael J Dwyer. (Financial Daily)

A restructuring in the operations of Penang Port may be under way, with the Penang Port Commission (PPC) taking over some of the port activities currently being operated by terminal operator Penang Port Sdn Bhd (PPSB). Sources said the proposed move is to enable PPSB to improve on its port delivery system for all activities licensed to it by PPC under the Ports Privatisation Act 1990. (BT)

YTL Cement plans to buy 100% of Batu Tiga Quarry (BTQ) Sdn Bhd, which is involved in quarry operation, manufacturing and distribution of granite aggregates, sand, construction and building materials, from YTL Corp’s YTL Industries for RM150m. The proposed deal is to rationalise the quarry related businesses of YTL Corp and the group’s subsidiaries by housing these operations under YTL Cement. (BT)

Sunway City will launch three office towers worth some RM800m in Kuala Lumpur and within the Sunway Integrated Resort in Selangor and subsequently inject them into its REIT. "Development plans are afoot and we will start physical work as soon as the plans are finalised," MD for property investment Ngeow Voon Yean said.
  • Meanwhile, group founder Tan Sri Dr Jeffrey Cheah hopes to list its REIT in Malaysia this year. "We are ready to go if the market is right for listing," he said. Cheah said that the right market would be one that gives a yield of about 6%, which is a more manageable level compared with about 8-8.5% currently. (BT)

VALE S.A., the world's biggest iron ore miner, will soon conclude a deal to buy 16.5ha of land in Manjung, Perak for RM101.9m from property developer KYM Holdings, people involved in the talks said. Brazil's Vale plans to invest about US$5bn (RM16.7bn) in Perak over five years for the iron ore distribution and pelletising plant project. (BT)

AmanahRaya REIT’s management company has proposed to buy two leasehold buildings for RM227m. The two properties are the six-storey Selayang Mall and the 13-storey Dana 13, a stratified office building that is part of the Dana 1 Commercial Centre in Petaling Jaya. The acquisitions and related expenses would be part-funded via a proposed placement to raise RM119m. (Starbiz)

Fajarbaru Builders is looking to acquire landbank in the Klang Valley towards venturing into the property development business, besides bidding for larger and more sophisticated construction projects. MD and CEO Datuk Low Keng Kok said these were part of a twopronged strategy after the completion of its private placement exercise last year. (Financial Daily)

Petronas and Shell signed a final contract yesterday to develop Iraq's Majnoon field, one of the world's biggest with 12.6bn barrels of oil. The 20-year development contract is one of several deals that Iraq expects to finalise as it tries to catapult itself to 3rd place from 11th in the league of oil producing nations. The deal is also a key to Iraq's plans to revive its oil sector after years of war and economic sanctions that allowed infrastructure to fall into disrepair. (Reuters)

20100118 0955 FCPO Weekly Chart Study.

FCPO closed : 2490, changed : -136 points, volume : Higher.
Bollinger band reading : bullish but side way likely.
MACD Histrogram : lower, selling mood.
Support : middle Bollinger band, 2400, 2240 level.
Resistant : 2521, 2740 level.
Comment :
Big uptrend downward correction took place last week with price penentrated and closed below the 2521 support level. Weekly chart reading suggesting FCPO to trade side way range bound downside biased as last week correction took place with supporting volume.

20100118 0935 FKLI Weekly Chart Study.

FKLI closed : 1302, changed : +5 points, volume : lower.
Bollinger band reading : uptrend with side way ranging likely.
MACD Histrogram : edge up slowly, buyer dominance.
Support : 1290, middle Bollinger band level.
Resistant : 1309, 1335 level.
Comment :
FKLI weekly chart uptrend remained intact with Bollinger band reading still suggesting a side way range bound market and MACD Histrogram reading improved marginally. However, buyer seems a little exhausted with MACD Histrogram still strugelling to put a step into the positive zone. Should bollinger band turned expanding and MACD Histrogram rise above zero line level in the coming weeks, market should potentially trade higher or else, market is likely to stay side way ranging.