Wednesday, March 10, 2010

20100310 1825 FCPO EOD Daily Chart Study.

FCPO closed : 2685, changed : +35 points, volume : higher.
Bollinger band reading : upside biased still.
MACD Histrogram : continue lower, buyer retreat, seller present.
Support : 2670, 2650, 2620 level.
Resistant : 2700, 2730, 2750 level.
Comment :
Wild doji bar FCPO ended the day higher with improved volume after tested support and resistant level. Daily chart reading remained unchanged with a upside biased outlook and side way range bound correction market to take 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.

20100310 1733 FKLI EOD Daily Chart Study.

FKLI closed : 1333, changed : +12 points, volume : higher.
Bollinger band reading : bullish.
MACD Histrogram : going higher. buyer still in.
Support : 1325, 1315, 1307 level.
Resistant : 1335, 1345, 1355 level.
Comment :
Malaysia Boleh 5 points premium FKLI ended the day right at the new high with better volume Transacted. Daily chart reading is definitely a bullish biased market with price closed above upper Bolliger band level indicate a over extended upward movement market.
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.

20100310 1306 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1326, changed : +5.5 points, volume : high.
Bollinger band reading : mildly bullish.
MACD Histrogram : getting weaker. buyer taking profit.
Support : 1325, 1315, 1307 level.
Resistant : 1335, 1345, 1355 level.
Comment :
High volume transacted FKLI traded higher and break another new high today despite a mixed Asia market development. Hourly chart wise, the outlook remained upside biased but MACD indicator shows some sign of exhaustion by registering a weaker reading. Expect market to trade side way range bound with possible testing support level.

20100310 1252 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2660, changed : +10 points, volume : low.
Bollinger band reading : downside biased.
MACD Histrogram : getting lower, seller returned.
Support : 2650, 2620, 2590 level.
Resistant : 2670, 2700, 2730 level.
Comment :
Thin volume traded FCPO recovered some of yesterday losses ended the morning session higher after soy oil futures traded firmer and improved export data released by ITS cargo surveyor. Despite trading higher, the near dead volume and hourly chart reading didn't reflect the positive price movement and suggesting a side way range bound little downside biased market.

20100310 1000 Malaysia Corporate News.

Bahrain Asphalt Establishment B.S.C. (BAE) has served a request for arbitration against the Gamuda-WCT JV pertaining to the subcontracted pavement works for the completed Dukhan Highway in Qatar. BAE is claiming a total sum of RM101.1m comprising RM87.8m for the prolongation, escalation and associated cost for the delay in completion of subcontracting works, RM12.4m for overcharging/wrongful deduction of aggregates and RM0.9m for wrongful deduction for the supply of bitumen. Gamuda-WCT JV highlighted that the request for arbitration by BAE is premature as the preconditions for the arbitration have not been met. This suggests that the JV has a good defence against the claims. (BMSB)

The price of palm oil may rise to as high as RM3,300/MT in 2H2010, as the global supply of vegetable oils struggle to meet burgeoning consumer demand, industry experts predict. "Vegetable oils supply is under pressure. For the first time in history, Malaysia's palm oil production will fall for two years in a row, and this year it is likely to be 17.2m tonnes.
  • My reasons are already well-known - the prevailing El Nino, the government's ongoing replanting scheme and most biological cycle of palm trees," said India's Godrej Group director Dorab Mistry. Mistry also said that a strong US dollar in the next few months acts as a calming influence on commodities prices. However, he expects the greenback to weaken around July, prompting commodities to move ahead strongly. (BT)
The new US dollar-denominated palm oil futures contract is scheduled to be launched in Kuala Lumpur on May 24 and simultaneously in Chicago on May 23. "It is an outstanding development. I think it will increase the portfolio of contract in the palm oil industry on a global basis," said Attunga Capital Pty Ltd's portfolio manager Phillip Pyle. (Bernama)

Malaysia is confident of exceeding the total palm oil export figure of RM50bn registered last year. This follows a strengthening of CPO price and a forecast increase in production for this year. "The price is better this year and we are certainly going to exceed the 2009 figure. As for surpassing the 2008 figure, we will work on that," said Minister of Plantation Industries and Commodities, Tan Sri Bernard Dompok. (Bernama)

Palm oil will continue to play a leading role in sustainability as well as major role in feeding the growing world population. United Plantations vice-chairman and ED of corporate affairs Datuk Carl Bek-Nielsen said palm oil continues to lead in sustainability as oil palm areas as at 2009/2010 only cover 5.5% of world agriculture area compared with soyabean's 44.3%. (BT)

Telekom Malaysia (TM) which is set to launch its triple play retail service bundle by month's end, is open to leasing capacity from other players to deliver its high speed broadband (HSBB) services should such commercial arrangements make sense, its group CEO Datuk Zamzamzairani Mohd Isa said.
  • "At the end of the day, it's all about (financial) feasibility...Why not lease if it makes sense? We (TM) would have rolled out a HSBB network even without the partnership with the government, but the rollout would be purely done on a commercial basis because we (as a public-listed company) would have obligations to shareholders," he said. 
  • Meanwhile, TM would expand its HSBB network beyond the 1.3m premises (by 2012) stipulated under its partnership with the government, Zamzamzairani said but this would be done for areas with sufficient demand. (Financial Daily)
DiGi plans to invest another RM60m in sustainable programmes in Malaysia until 2012, said its CEO Johan Dennelind. DiGi had invested RM40m since 2008. (StarBiz)

Broadband provider Tanjong Agas Technology (TATSB) said its high-speed broadband dubbed "TARB" is to complement the market and not to compete with existing broadband players to provide retail business, said its managing director Mohd Faidzal Ahmad Mahidin.
  • "We have no plans to go into the retail business," he told Business Times in Kuala Lumpur last week. 
  • He said TATSB is more comfortable in providing high-speed broadband infrastructure to the market. It is ready to expand its broadband services nationwide before the end of this year. 
  • He said the company will provide the broadband connection through a system called Broadband Over Power Line (BPL). (BT)
Privasia Technology has been awarded the contract to design, supply and install equipment for Phase 1 of the high speed broadband network by Jalur Lebar Nasional (Jalenas). The job involves setting up the infrastructure in Kuantan, Pahang. Under the agreement, Jalenas also has the option of appointing Privasia for the subsequent maintenance and support services for the active components rolled out under Phase 1. (BT)

Billet prices into Southeast Asia have risen by US$45 per tonne cfr in the past week due to higher scrap costs. Prices have risen to US$500-545 per tonne cfr, from US$490-500 per tonne cfr last week. Offers from Turkey, Russia and US continue to jump, reaching US$540-550 per tonne cfr, from US$520-530 cfr last week, said sources in Malaysia, Singapore, Vietnam and Indonesia. Malaysian billet offers have also gone up to US$520- 540 per tonne fob from US$500-535 fob last week, said sources.
  • Billet offers are highest in Vietnam at US$540-550 per tonne cfr but the "highest bid is only at US$520 per tonne", said a Vietnamese mill official. "We are still waiting to see if the traders from Turkey and Russia will accept the bids," he said. Turkish and Russian billet are cheaper than Malaysian material and so are more popular in Vietnam. 
  • Billet transaction prices are highest in Indonesia when some mills are buying Malaysian billet at US$545 per tonne cfr. Most Indonesian buyers however are staying away from the market.
  • Meanwhile, billet prices in the Malaysian market have risen to touch US$525 per tonne, the highest in any domestic market in the region, said sources. (Metal Bulletin)
Malaysia Airlines, which carried 3.5m passengers from Kuala Lumpur to destinations in Australia last year, expects a 5% growth this year. Its assistant general manager of sales for Malaysia and Brunei, Azman Ahmad, said MAS would introduce two new weekly direct flights to Brisbane from March 28.
  • “The flights on Fridays and Sundays will complement our current five weekly flights from Kuala Lumpur to Brisbane via Sydney,” he told a press conference after the launch of “Only in Oz Holidays” campaign in Kuala Lumpur yesterday. Azman said MAS would also increase its flights to Perth to 10 weekly. (Bernama, BT)
PLUS Expressways says it does not see the need for a second north-south highway because Malaysia does not have the traffic volume. MD Noorizah Abd Hamid said the existing North-South Expressway (NSE) was still underutilised and it would be costly to build a second one. (BT)

Petronas is keen to work with Norwegian oil & gas firms to leverage on their expertise in deepwater exploration, said president and CEO Datuk Shamsul Azhar Abbas. “Recently Petronas acquired six new exploration blocks in Greenland from UK’s Cairn Energy plc with the aim of strengthening its presence in exploration," said Shamsul. He added that if the partnership with the Norwegian firms is successful, it could pave the way for similar mutually beneficial alliances in other areas of exploration. (Bernama)

Naza Group and TH Properties have agreed to work together in various initiatives that the two can collaborate in. The first venture involves the development of 52 high-end residential enclave bungalows with a GDV of RM100m at Bandar Enstek, Selangor. It is understood that the project, which is specifically targeted at the Malaysia My Second Home (MM2H) market, will see the properties bundled with vehicles from Naza. (BT)

Kulim (M) is selling Menara Ansar in Johor, to AmanahRaya Trustees Bhd for RM105m. Kulim will be paid partly in cash of RM63m, while the remainder will be through the issuance of 42.9m new units of Al-'Aqar KPJ REIT at an issue price of 98 sen per unit. Kulim MD Ahamad Mohamad said proceeds from the divestment will be utilised for repayment of the group's borrowings. (BT)

Bolton will launch four projects worth RM1bn this year as it is bullish on the market, its chief said. Executive chairman Datuk Azman Yahya expects its property sales to improve 50% next year to some RM425m. On the redevelopment of the 12-storey "Bolton Court" in Bukit Ceylon, Kuala Lumpur, Azman said the company will start building a 33-storey condominium block on the site six months from now, to be named "sixceylon". (BT)

Malaysian Merchant Marine will downsize its operations in all areas to contain operating and administrative overhead costs. This follows its inability to buy a chemical tanker that was instrumental in the company’s turnaround plan. MMM will sell its wholly owned subsidiary in Singapore, C M Ram Holdings Pte Ltd and its four subsidiaries. “The subsidiaries are being disposed to Mr Gurudaib Singh for S$1 per company. There are no related party transactions in this disposal,” it said. MMM did not identify who Gurudaib is. (BT)

Sumatec Resources’ sub-subsidiary Sumatec Engineering & Construction has secured a RM49.24m contract from Asean Bintulu Fertilizer to upgrade its plant. (Financial Daily)

20100310 0950 Malaysian Economic News.

Malaysia is ready to sign the joint declaration on economic cooperation (JDC) with the European Free Trade Association (EFTA), the Minister of International Trade and Industry, Datuk Seri Mustapa Mohamed said. The EFTA comprises Switzerland, Iceland, Norway and Liechtenstein. "We are pleased to announce that all outstanding matters have been resolved and the JDC is ready for signing," he said. (Bernama)

RAM Holdings Bhd group chief economist, Dr Yeah Kim Leng said that the government's 5.1% fiscal deficit target for this year is achievable provided there is no unexpected spending, said an economist. The country's deficit level was considered moderate compared to the advanced economy. Malaysia's moderate debt level and strong funding capability with low external debt suggested no fiscal risk as long as fiscal retrenchment continued without derailing growth, he added.
  • 5.0-6.0% economic growth this year is within the country's reach, helped by factory restocking activities and a global recovery, even though it has forecast 4.9% growth in the economy this year. Factories ramping up stockpile, will alone contribute 1.0-2.0% to the gross domestic product (GDP) expansion this year 
  • Inflation would be at 2.5% this year. It would be cost-push rather than demand-pull and still below the trend of around 3.0-3.5%.
  • The ringgit was likely to strengthen following better growth performance, high account surplus and positive interest rates. It is expected to strengthen by 2.0-3.0% to between RM3.20-RM3.30 by year-end. (Bernama, BT)
The government is considering an application from SME Bank for new allocation under the 10th Malaysia Plan to implement and develop its factory scheme. Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir said the ministry through SME Bank was giving priority to entrepreneurship programmes, particularly those involving small and medium scale Bumiputera entrepreneurs, in the country's development. (Bernama)

The government is expected to table the proposed Small and Medium Enterprise (SME) Masterplan 2011-2020 by June 2010. International Trade and Industry Deputy Minister Datuk Mukhriz Tun Mahathir said the government and other related agencies are currently studying the matter and putting in the details before tabling it to the Cabinet. It was reported that the SME masterplan is aimed to increase and synchronise the development of the sector with the new economic model. (BT)

The Federation of Malaysian Manufacturers (FMM) suggested that the government consider a Retail Sales Tax (RST) as the country was not ready for the Goods and Services Tax (GST). Chairman of the Task Force on GST Datuk Lee Ow Kim recommended that the GST be deferred until Malaysia was ready when average income was higher and the income disparity was smaller. The RST is an alternative which was simpler, less costly for government and businesses to administer but generates the same revenue to the government, he said. (Bernama)

The Malaysian Trades Union Congress (MTUC) called on the government to provide tax incentives to coffee shop and restaurant owners to encourage them to employ locals. The incentives could be in the form of rebates or lower tax when more locals were employed, said its vice-president, A. Balasubramaniam. (Bernama)

20100310 0936 Global Economic News.

Most US employers are still cautious when it comes to hiring, planning neither to add nor cut jobs from their payrolls this spring, according to a staffing firm survey. About 73% of employers surveyed by Manpower Inc. expect no change in their hiring plans from March to June this year.
  • But there were also signs of improvement in the hiring outlook. Only about 8% of employers said they plan to make cuts, down from 12% in the previous quarter, and 14% a year ago. About 16% of employers said they expect to add to their payrolls, up from 12% last quarter.
  • Of the 13 industry sectors Manpower surveyed, employers in leisure and hospitality, business services and mining reported the strongest hiring outlooks for the quarter. (CNN Money)
Restrictive credit and other headwinds are "abating" this year, but for those 40% of the unemployed without a job six months or more, even an improvement in the unemployment rate may not help as much as hoped, Chicago Federal Reserve Bank President Charles Evans said. Evans said the "unprecedented" duration of unemployment may have "longlasting effects on consumer confidence and demand" even as the economy improves. (Xinhua)

US President Barack Obama gave a positive response to the European efforts to combat some aspects of market speculation that could destabilise markets and the euro, Greek Prime Minister George Papandreou said following a meeting at the White House. "The European Union is ... stepping up to its responsibilities to deal with this issue, and I think that is a very important signal around the world because what is saying is that Europe is united on this cause, there is solidarity, and it will not allow speculators to play around with the stability of the eurozone and the currency," Papandreou said. (Xinhua)

European Central Bank (ECB) council member Axel Weber said the bank could accept government bonds with lower credit ratings as collateral against loans if a higher risk premium were applied. “It’s not necessarily the only solution to have a level of rating at which we cut off the access to the central bank. We could take higher haircuts for lower ratings; we could have a more continuous collateral framework,” Weber said. (Bloomberg)

European Commission President Jose Barroso said the bloc will consider banning “purely speculative” credit-default swaps (CDS) as German Chancellor Angela Merkel called for a crackdown on derivatives trading to prevent a rerun of the Greek financial crisis. “We’re of the opinion that a quick implementation of actions in the area of CDS has to happen,” Merkel said. (Bloomberg)

Japan’s broadest indicator of economic health rose for a 10th month, extending the longest streak since 1997 as exports fueled the recovery. The coincident index, a composite of 11 indicators including factory production and retail sales, climbed from 97.4 to 99.9 in January. Economists had forecast for an advance to 99.6. Leading index rose from 94.7 to 97.1 in January, which was above the market consensus for an increase to 96.6. (Bloomberg)

China’s yuan is facing increased pressure to appreciate as a widening interest-rate differential spurs inflows of funds through "underground money shops," said Yi Gang, head of the State Administration of Foreign Exchange. The yuan’s exchange rate will be kept stable at a “reasonable and balanced level,” he reiterated. (Bloomberg)

China would step up work to monitor non-banking financing, said Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC). He added that more focus would be put on businesses in connection with trust companies and the real estate sector to prevent banks from using non-banking financing to circumvent policies. The 2010 government loan target is RMB7.5tr (US$1.1tr). But in January alone, banks extended RMB1.4tr in new loans or18.5% of the full-year target. (Xinhua)

Deputy Governor of China Central Bank Yi Gang said that gold stock may be a good asset but is no longer the major component of China's foreign exchange reserve. As the world gold market was limited, large purchase of the precious metal by China would further push up the international price, he said. China would consider "cautiously" based on market conditions on any suggestion to increase its gold reserve. (BT)

The Monetary Authority of Hong Kong announced that additional exchange fund bills of HK$18.0bn (US$2.3bn) will be offered in tenders on 16, 23 and 30 Mar to meet banks' increased demand for the paper given the abundance of liquidity in the banking system. Interbank liquidity is expected to remain abundant after the issuance of additional bills, which is not expected to have a significant impact on liquidity conditions and interest rates. (Xinhua)

Singapore’s petrol dealers raised their pump prices. Shell, Caltex and ExxonMobil increased prices by 4 cents a litre. With the increase, 98 grade petrol costs S$1.940 a litre, 95 grade fuel costs S$1.857 and diesel costs S$1.313 a litre. (Channel News Asia)