Wednesday, February 24, 2010

20100224 1826 FCPO EOD Daily Chart Study.

FCPO closed : 2590, changed : +45 points, volume : lower.
Bollinger band reading : side way bullish biased.
MACD Histrogram : continue lower, buyer off loading with seller present.
Support : 2590, 2570, 2521 level.
Resistant : 2620, 2650, 2670 level.
Comment :
Drop in most of the world commodities price lead FCPO to closed weaker at the low of the day in low volume. Daily chart outlook suggesting a side way correction market with still bullish biased reading in the near term. Expect market to trade side way with a little downside biased testing lower support level.
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.

20100224 1742 FKLI EOD Daily Chart Study.

FKLI closed : 1269.5, changed : -0.5 point, volume : higher.
Bollinger band reading : side way.
MACD Histrogram : rising higher, buyer still in charge.
Support : 1260, 1250, 1235 level.
Resistant : 1270, 1278, 1290 level.
Comment :
FKLI closed half a point lower with higher volume and has yet to closed above the crucial 1270 resistant level after tested above it. Side way range bound reading continue to show on the daily chart basis with some test at support and resistant level. Another thing to take notice will be the announced better than expected 4th quarter GDP seems didn't bring any surprise to the market to response accordingly and perhaps it's already reflected in during the previous January climb.
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.

20100224 1652 Malaysia 4th Quater GDP improved 4.5%.

Malaysia Prime Minister Najib Razak said Wednesday that the nation's economy expanded at a faster-than-expected 4.5% in the fourth quarter, a rebound from the third quarter's 1.2% contraction. For the whole of 2009, gross domestic product fell 1.7%, less severe than an official forecast of 3.0% contraction.

20100224 1448 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1269.5, changed : -0.5 point, volume : high.
Bollinger band reading : side way bullish biased.
MACD Histrogram : improved slightly but still weak, roll over activities taking place.
Support : 1260, 1250, 1235 level.
Resistant : 1270, 1278, 1290 level.
Comment : FKLI opened down lower following by roll over activities lifted price to above but closed just half point below the 1270 resistant level. Hourly chart suggesting a side way range bound little upside biased market to take place in the second half session.

20100224 1231 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2630, changed : +6 points, volume : low.
Bollinger band reading : side way bullish biased.
MACD Histrogram : turned lower, buyer off loading.
Support : 2620, 2590, 2570 level.
Resistant : 2650, 2670, 2700 level.
Comment :
FCPO traded slightly lower with disappointing volume transacted. Price traded throught out the first session hovering near the middle Bollinger band level with the band width started to turned inward and MACD Historgram continue to register lower reading suggesting market is consolidating and is likely to trade side way range bound with a little upside biased.

20100224 1117 US - Confidence falls to lowest since April.

Confidence among US consumers fell in February 2010 to the lowest level in 10 months, a sign that concern about job prospects may hold back the spending needed to sustain the recovery. The Conference Board’s confidence index slumped to 46, below the lowest forecast in a Bloomberg News survey of economists, from 56.5 in January 2010, a report from the New York-based private research group showed. (Bloomberg)

20100224 1116 Malaysia - GDP likely to grow 3.2% in Q4 2009.

Malaysia will likely see an expansion of the economy in terms of gross domestic product (GDP) numbers in the final quarter of 2009 after three preceding quarters of negative growth. A Bloomberg survey of 15 economists ahead of the central bank’s scheduled release of the fourth quarter GDP figures showed economy growing by 3.2% after a contraction of 1.2% in the previous quarter. (The Star)

20100224 0930 Global Economic News.

US consumer confidence fell in February to the lowest level in 10 months, a sign that concern about job prospects may hold back the spending needed to sustain the recovery. The Conference Board’s confidence index slumped to 46 (56.5 in Jan). Economists forecast the confidence index would decrease to 55. (Bloomberg)

US home prices in 20 US cities rose in December for a seventh consecutive month, indicating the industry at the heart of the worst recession since the 1930s is stabilising. The S&P/Case-Shiller home-price index increased 0.3% mom on a seasonally adjusted basis, more than anticipated and matching the gain in November. The gauge was down 3.1% yoy, the smallest decline since May 2007. (Bloomberg)

US Treasury announced that it is reopening and rebuilding its Supplementary Financing Program (SFP), under which the Treasury last year sold extra Treasury bills and deposited the proceeds in a special SFP account at the Fed. The net effect of SFP operations is to drain reserve balances from depository institutions. But it is not expected to have a significant monetary impact in the near term, especially with the Fed continuing to purchase agency and agency-guaranteed mortgage backed securities. (Xinhua)

The Bank of England (BOE) may have to restart its asset-buying programme if the economic outlook worsens, governor Mervyn King said. While the serious downside risks of another Great Depression had diminished, the economy was not out of the woods yet, he said. “If the news is that the economic outlook seems even weaker, inflation pressure is lower and that moves down that profile, I think there is a strong case then for expanding further the asset purchases,” King said. (Financial Daily)

China's exports may grow by 8% in 2010 but problems still existed with getting exports back to pre-crisis levels, Minister of Industry and Information Technology (MIIT), Li Yizhong said. It was unlikely for China's exports to recover to pre-crisis levels in the short-term, attributing the slow rebound to rising international protectionism and the fact that Chinese manufacturers relied too much on overseas markets, Li said. (XinHua)

Hong Kong’s inflation slowed to 1.0% in January (+1.3% in Dec 09) as the timing of a Chinese Lunar New Year holiday distorted comparisons with a year earlier. That matched the median estimate in a Bloomberg News survey. (Bloomberg)

Singapore’s consumer prices climbed 0.2% yoy in January (-0.5% in Dec 09) as transportation and healthcare costs rose. The index this month reflects a change in the base year to 2009 from 2004. Prices climbed 0.7% mom in January (-0.6% in Dec 09), without adjusting for seasonal factors. Economist s projected it would increase by 0.7% yoy. (Bloomberg)

India’s fiscal stimulus is a “short-term measure” to support economic growth, junior finance minister Namo Narain Meena said, signaling the government may remove some tax incentives in the budget on 26 Feb. “The expansionary fiscal stance is a short-term measure to address demand slowdown in the economy and to minimise the adverse impact of the global financial crisis,” Meena said. (Bloomberg)

Ballooning debt is likely to force several countries to default and the US to cut spending, according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big American banks. Following banking crises, “we usually see a bunch of sovereign defaults, say in a few years,” Rogoff said.
  • The US is likely to tighten monetary policy before cutting government spending, sending “shockwaves” through financial markets. Fiscal policy won’t be curbed until soaring bond yields trigger “very painful” tax increases and spending cuts, he said. 
  • “Most countries have reached a point where it would be much wiser to phase out fiscal stimulus,” said Rogoff. It would be better “to keep monetary policy soft and start gradually tightening fiscal policy even if it meant some inflation.” (Bloomberg) 

20100224 0924 Malaysian Economic News.

Malaysia and Germany signed an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (DTA). The Ministry of Finance said the agreement would provide for the avoidance of the incidence of double taxation on income such as business profits, dividends, interests and royalties derived in Malaysia and remitted to Germany or vice versa. It said with the agreement would replace the previous DTA Malaysia and Germany signed on Apr 8, 1977. (Bernama)

The special laboratory set up to find solutions on issues concerning foreign nationals would focus on four main areas – entry procedure, legalisation, monitoring and enforcement system. Home Minister Datuk Seri Hishammuddin said the lab could function as an important platform to discuss issues and make recommendations to fine-tune the responsibilities of each ministry and government agency in a systematic and effective manner.
  • “Among the lab’s focus will be to study the entry procedure of foreign nationals by taking into consideration the real needs of an industry and its effect on the country’s economy and security,” he said. (The Star)
The government hopes to increase the ratio of domestic investments to foreign direct investments (FDIs) to 60:40 by 2020 with improved business environment, investment policies and other incentives in the country.
  • The current ratio of domestic investment to FDIs stood at 32:68. International Trade and Industry (Miti) Minister Datuk Seri Mustapa Mohamed said given the uphill challenges in the economic recovery globally, FDIs have been in on the decline. 
  • It is therefore important to raise domestic investments to stimulate the domestic economy. The 60:40 ratio is in line with the Third Industrial Masterplan (IMP3), which spans over a 15-year period starting from 2006.
  • Miti, in its effort to boost domestic private investment, will meet Bank Negara to discuss problems faced by small and medium-scale enterprises (SMEs) in securing financing from banks. Easy and speedy financing approval remained a concern among SMEs. (Bernama, StarBiz, FinancialDaily)

20100224 0920 Malaysia Corporate News.

The Cabinet will decide on the new electricity tariff tomorrow, says Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui. He said his ministry had submitted a proposal paper to the EPU in the PM’s department. “If the Cabinet approves, there will be some increase, it can’t be a reduction,” he said. (Bernama)
Tomorrow's tariff decision is timely and consistent with the mid-Feb time frame suggested by Tenaga’s management during its post-1QFY10 results briefing in mid-Jan. We hold the view that it will most likely be status quo for power tariffs tomorrow given stable gas and coal prices in 2H09 and the recovering economy. We also think that the best way for a base tariff hike to happen is to slip one in during a fuel-led tariff adjustment.

CIMB Group expects a higher net profit this year after a stellar 2009, to be driven by stronger earnings from its regional operations, a more vibrant capital market and a better economy. CIMB is aiming for a higher 16% ROE this year, up from 2009’s 15%. "We had a very good 2009, financially as well as in the overall development of our regional franchise. Our regional model remains 'work-in-progress' and we are determined to realise its full potential over the next few years," group CEO Datuk Seri Nazir Razak said. (BT)

CIMB Group said it will wait till the global discussion on banks' capital requirement is over before it decides what to do with its excess capital. CEO Datuk Seri Nazir Razak had last year said that it may consider returning its excess capital once the fear of global recession subsides this year. "(Although) I don't think Basel 3 is embedded, there are still some worries.
  • A stronger view will surface from the emerging market banks to question the extreme treatment (after the financial crisis)." Basel 3 is not really a concern for Malaysian banks at this stage, he said. (BT)
AXA Affin General Insurance has received the approval from Bank Negara to acquire 80% of BH Insurance (M) from Boustead Holdings and 20% from Felda Marketing Services Sdn Bhd. "It is a very good opportunity for us to build a stronger presence for general insurance in Asia," said AXA Asia General Insurance CEO Jan van den Berg.
  • "The business portfolio and market sectors of the two companies complement each other and the combined strengths will reinforce our position in the market," said AXA Affin CEO Jahanath Muthusamy. (Bernama)
The Securities Commission (SC) will soon be making amendments to the guidelines for the unit trust industry to allow for greater flexibility and choices to meet investors’ needs, said chairman Tan Sri Zarinah Anwar. The SC chief said that among the key changes was allowing multiple currencies for unit trust funds. Timing-wise, she said, “It’s being worked on and as soon as we get the amendments ready, the SC will be publishing it.” (Starbiz)

The property market is set to rebound this year, according to an online poll by Malaysian property website, The pool also showed that 34% of respondents expect prices to increase 1-9%. (Bernama)

Malaysian mills are hoping to raise rebar prices to track increases in the global market, according to market participants. “We are hoping to increase prices shortly. After all, international prices are rising,” an official at one Malaysian mill said. “The Chinese new year festive season is over, so there will be no more distractions. Several projects will be coming back (for material),” an official at another mill said.
  • But demand in the first week after the holiday has been sluggish, according to market participants, and mills continue to list rebar at RM2,000-2,100 per tonne, unchanged from two weeks ago. “As yet, we haven’t seen any significant rise in demand,” a Singapore-based steel trader with operations in Malaysia said. (Metal Bulletin)
More licenses would be granted to small and medium enterprises in the telecom industry to encourage their involvement, particularly the mobile segment, said Communications and Culture Minister Datuk Seri Dr Rais Yatim. (Financial Daily)

Indian telco minister A Raja said the Indian government will issue a notice inviting applications (NIA) for bids from operators by the end of this week. The auctioning of 3G spectrum would start after 45 days of issuing the notice, he added, indicating that the auction will only take place by the next fiscal starting Apr 2010.
  • "NIAs will be released this week. Then, auction can take another 40-45 days," Mr Raja said. The government will auction four slots of 3G spectrum in each circle in addition to the one already allotted state-owned BSNL and MTNL, he added. (Economic Times of India)
Asiaspace has targeted at least 3,000 to 5,000 WiMAX subscribers in 1Q10, with the launch of its "amax city". (Bernama)

Notion VTec is expecting its net profit and revenue to grow by over 20% for FYE9/10, backed by its growing business. Notion VTec plans to expand its production capacity in both its Thai and Malaysian operations. "We are looking at a third factory, which is located near to our existing plants.
  • Hopefully, everything will be settled and be commercially up-and-running six months from now," executive chairman Thoo Chow Fah said. For the current FY, Notion VTec has allocated some RM70m for capex. Over the longer term, the company may set up a plant in China to cater to the increasing demands from customers. However, no timeframe has been set. (BT)
Trading of LKT Industrial’s shares will be suspended upon the expiry of five market days from Feb 23, after Singapore Precision Engineering raised its stake in the company to 90.94%. (Financial Daily)

Cycle & Carriage Bintang has appointed its current chief operating officer Wong Kin Foo as its chief executive officer. The appointment will take effect from March 1. (BT)

JCY International expects to start supplying hard-disk drive (HDD) components to Hitachi Ltd and Samsung Electronics Co before FYE9/10. JCY is currently in the pre-qualification stage, which involved testing processes, with both companies and also negotiating on prices, ED James Wong said.
  • The two companies have a combined 61% global market share of HDD sales and JCY hopes to increase its market penetration to about 85% from its tie-ups with Hitachi and Samsung Electronics. (Starbiz)
Malaysian commercial radio stations are taken by surprise over the government’s recent that all stations need to air new local songs, effective next month. “We are surprised by the announcement and hope to seek an audience with the minister to clarify the matter,” said Commercial Radio Malaysia (CRM) association president Datuk Borhanuddin Osman.
  • Yesterday, Information Communication and Culture Minister Datuk Seri Dr Rais Yatim announced that all radio stations should air new songs from local singers to promote the domestic music industry. (Bernama)

20100224 0905 Malaysia - Inflation in January 2010 expected to increase

"Inflation is likely to rise in January 2010 and in the coming months as the government may decide to cut subsidies further, said economists. Economists polled by the Business Times poll expect the consumer price index (CPI) to grow 1.44% in January 2010, up from 1.1% in December 2009. The full year CPI could be affected by the adjustment in petrol subsidies from May 2010. (BT)"