Thursday, March 11, 2010

20100311 1840 FCPO EOD Daily Chart Study.

FCPO closed : 2660, changed : -25 points, volume : higher.
Bollinger band reading : side way upside biased still.
MACD Histrogram : getting weaker, buyer retreat, seller present.
Support : 2650, 2620, 2590 level.
Resistant : 2670, 2700, 2730 level.
Comment :
Correction FCPO ended today lower in high volume with last minutes selling activities pushed price lower. Side way upside biased market with some test at support level is likely to take place in the near term as shown on the daily chart technical reading.
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.

20100311 1739 FKLI EOD Daily Chart Study.

FKLI closed : 1321, changed : -12 points, volume : lower.
Bollinger band reading : bullish with correction.
MACD Histrogram : turned lower, buyer taking profit.
Support : 1315, 1307, 1300 level.
Resistant : 1325, 1335, 1345 level.
Comment :
19 points range market FKLI hit new high and followed by profit taking gave back all yesterday gained to closed near the low. Daily chart suggesting a bullish market with pullback and correction taking place and expect market to trade side way range bound upside biased with a lot of testing effort at support 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 quick cut loss and profit target.

20100311 1458 FKLI Mid Day Hourly Chart Study.

FKLI last looked : 1328, changed : -5 points, volume : high.
Bollinger band reading : side way.
MACD Histrogram : getting weaker. seller testing market strength.
Support : 1325, 1315, 1307 level.
Resistant : 1335, 1345, 1355 level.
Comment :
Touched new high FKLI induced buyer to lock in profit with seller interest increased for establishing short position and testing the market strength lead it to give back all the upward surged effort to closed lower with high volume. However hourly chart reading has yet to turned weak with a side way range bound market development except MACD indicator that registering weaker reading.

20100311 1237 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2665, changed : -20 points, volume : high.
Bollinger band reading : side way downside biased.
MACD Histrogram : ping pong, buyer seller battling still.
Support : 2650, 2620, 2590 level.
Resistant : 2670, 2700, 2730, 2750 level.
Comment :
Despite firmer overnight soy oil futures price, Bursa Malaysia FCPO and China Dalian palm oil futures traded weaker in negative breath with ultra high volume changed hand. Hourly chart reading shows some weakness with a downside biased side way range bound market outlook as the 2670 support turned resistant level broken.

20100311 0947 Malaysia Corporate News.

Gamuda has agreed to buy a 60% stake in Sai Gon Thuong Tin Real Estate Joint Stock Co, a Vietnamese company, for US$82.8m. Gamuda said Sai Gon has the right to build apartments, a sports centre and an educational complex in Ho Chi Minh City, Vietnam, worth RM6bn. (BT) Please refer to our note on Gamuda today for more comments.

Jobstreet has announced that Seek has lifted its stake in the company from 10% to 21.3%, paying about RM70.9m or about RM2 per share. Seek is the market leader in employment websites in Australia and New Zealand. Jobstreet's CEO Mark Chang has stated, "We are looking forward to closely working with SEEK management to grow our business. We are confident that SEEK can add significant value, particularly across strategy, marketing and product development." (Press Release)
We are positive over the slightly more than doubling of Seek's stake in Jobstreet as it was done on a friendly partner basis, it validates Jobstreet's branding and execution, provides a firmer commitment by Seek in working together and fostering closer ties, provides valuable management insight and input and enhances any potential partner arrangement between the two entities.

The outlook for biodiesel this year is choppy given the high prices of its feedstock crude palm oil (CPO) and waning interest, Frost & Sullivan Asian director Chris de Lavigne said. De Lavigne said that in the current world situation, interest in petroleum-based ethanol was down 70% from its highest point in 2008; and in vegetable oil-based biodiesel, down nearly 80% since it was highly realised in 2005. Interest in biodiesel peaked in 2007 and dropped 70% by the end of last year. Its outlook was choppy, de Lavigne said. De Lavigne said that history would repeat itself as palm oil prices were expected to rise, especially in the next two years, which would result in the commodity being too expensive to be used as biodiesel. (BT)

Two palm oil industry gurus have issued forecasts that are generally less bullish on crude palm oil (CPO) prices this year, predicting them to hover between RM2,400 and RM2,900 a tonne.
  • "Current palm oil prices are already reflecting the fundamentals. I think prices may be close to their highs if there are no additional bullish factors like further yield damage from the prolonged dry weather. I don't expect prices to surpass RM3,000 per tonne, though," Oil World editor Thomas Mielke said. 
  • LMC International chairman Dr James Fry also believes that palm oil prices are "already somewhat too high". "High crude oil prices have encouraged exploration - lifting supply and slowing demand. Palm oil is expected to hover around RM2,600 per tonne, settling to RM2,400 per tonne towards the latter part of the year," he said.
  • Mielke and Fry's forecasts are in contrast to their counterpart, Godrej Group director Dorab Mistry, who gave bullish comments that palm oil prices could scale new heights in the range of RM2,800 to RM3,200 a tonne after July on the prevailing El Nino conditions, Malaysian government's ongoing replanting scheme and tree stress. (BT)

Indonesia, the world's largest palm oil producer, will only export a maximum 50% of its total crude palm oil (CPO) production by 2015 as the country's oil palm plantation areas are diminished. PT Bakrie Sumatera Plantations president Ambono Janurianto said Indonesia, which previously had ceiling growth of 300,000 ha per year for oil palm plantation, had scaled down to 200,000 ha per year since 2009. "Also by 2020, the maximum CPO export will be further reduced to 30% of total production. Indonesia's low capacity utilisation of downstream processing will not sustain current CPO exports. The refining capacity is only at 60% now as the margin is still low. As we are the main palm oil producer, these developments must be part of future planning," he said. (Starbiz)

The Rubber Industry Smallholder Development Authority (Risda) plans to develop some 990,000ha in Sarawak for rubber and oil palm cultivation. This is in line with the authority's move to expand its activities, particularly to Sabah and Sarawak, having given the nod by their state governments to enter the states since last year. (BT)

Telekom Malaysia is set to launch its High Speed Broadband retail service on March 24. At the launch, TM will also be unveiling the new branding for its highspeed broadband service as well as announce its tiered packages and pricing. (BT)

Property developers have opposed the government's proposed move to make the provision of broadband facilities compulsory for all new commercial and residential areas, saying it would lead to increased costs. Real Estate and Housing Developers' Association of Malaysia (Rehda) president Datuk Ng Seing Liong said making it mandatory for developers to install the broadband facilities will involve a "huge amount of capital as they will have to come out with an agreement with the Internet service providers (ISPs). "Rehda is of the view that compulsory provision of the facility is punitive to developers. While the ISPs will reap profits via the subscription, developers will have to fork out extra cost to provide the facility," he said. (BT)

Perodua will be spending nearly RM4bn to buy local parts this year. "Our purchase of local parts this year is expected to reach RM3.8bn. In the past two years, we bought some RM3bn per year of local parts and components," its MD Aminar Rashid Salleh said. The bigger budget was triggered by the higher localisation of its models and projected sales of 176,000 units this year, up from 166,700 last year. (BT)

While there is still no decision on whether or not to extend the incentives for fully-imported hybrid cars, other ways to incentivise their promoters can be explored, Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir said. Fully-imported hybrid cars are exempted from import duty and enjoy a 50% discount on excise duty. The exemptions, introduced under the 2009 Budget, will end on December 31 this year. (BT)

MTD Capital is not selling its 80% stake in Philippines South Luzon Expressway Corp (SLTC), said its president and CEO Datuk Azmil Khalili Khalid. SLTC is a venture with state-led Philippine National Construction Corp (PNCC), which has a 30-year toll concession agreement over the South Luzon Expressway. "We are now at the tail end of the construction phase and we will complete it by the end of the first half 2010. MTD Group is putting its undivided attention to complete the South Luzon Expressway," Azmil said. (BT)

Ho Hup Construction said a major shareholder of the company has filed an injunction to stop an extraordinary general meeting (EGM) scheduled for March 17. It said the application for the injunction will be heard on March 15. (BT)

TRC Synergy's wholly-owned subsidiary Trans Resources Corp has been awarded the tender of a RM45.98m project in Port Klang. The tender would see TRC developing a project called "RTG Block and Associated Works" at Container Terminal One for Northport in Port Klang. (Financial Daily)

BCB is buying two plots of vacant Kuala Lumpur land of about 2.04ha in total from vendors Warta Development and Yap Khay Cheong & Sons Realty for RM50.96m in total, with the price inclusive of a RM2.11m land conversion premium to be paid to the Lands and Mines Office. Some 70% of the total consideration and conversion premium will be financed via bank borrowings while the 30% balance is from internally generated funds. (Malaysian Reserve)

Hong Kong's Sun Bear Solar will invest RM5.2bn in Malaysia to produce solar glass for the photovoltaic industry. Malaysia's first solar glass manufacturing plant in Kota Kinabalu, Sabah, is expected to be operational in the first quarter of 2012. The new solar glass plant will have the potential to create spin-off benefits to the economy, through the introduction of new and advanced solar technologies and the creation of potential downstream industries such as lighting, green building, home applications and solar heating. The plant is expected to create about 1,200 job opportunities in the country. (BT)

20100311 0940 Malaysian Economic News.

The New Economic Model (NEM) will look at high income as well as productivity while providing the flexibility to address a global crisis. Deputy International Trade and Industry Minister, Datuk Mukhriz Tun Mahathir said the country's business strategy could no longer be based on low-cost labour as it was no longer an advantage. “We are trying to push for a new economic strategy based on innovation and creativity. The government will continue to provide incentives,” he said. (Bernama)

The services sector contribution to the country's gross domestic product (GDP) could have been higher than what has been reported due to missing links and figures in the final data compilation, said Malaysian Industrial Development Authority (MIDA) director-general Datuk Jalilah Baba. However, unlike the manufacturing sector, the services industries are more complex and cover diverse range of intangible products and activities that are difficult to encapsulate within a simple definition. Therefore, there are still much more in the services sector statistics compilation awaiting to be tabulated, which MIDA hopes to improve upon on a progressive basis if not in the immediate term, she said. The sector's contributions this year is expected to soar further to 60%, she added. (Bernama, BT)

Prime Minister Datuk Seri Najib Razak believes Malaysia can achieve more than 6.0% economic growth if all quarters work together to increase investments. He said the government would do its best to provide an efficient and business-friendly environment so that the business community could invest more in the country. “For new investments, the government will play our part to help you all the way, look for new opportunities, find new partners and work with our GLCs,” he said. He urged the business community to take advantage of the current situation where all indicators were looking positive, whereby prices of rubber and palm oil were also likely to go up this year and exports had rebounded. (NST)

Germany's continuous flow of investments in hi-tech industries will help realise Malaysia's aspirations to emerge a developed nation in less than 10 years. Malaysia's emergence as an advanced nation will, among others, be thrust upon on highly-skilled human capital, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed. (Bernama)

There has been a strong signal of interest from potential investors from Holland to invest in Malaysia, especially in the services sector, says Datuk Jalilah Baba, Director- General of the Malaysian Industrial Development Authority (MIDA). "The focus in Holland is the services sector as it contributes 80% to the country's gross domestic product (GDP)," she said. (Bernama)

The Ministry of Higher Education (MOHE) has requested the government for an increased allocation of RM1.2bn for its Fundamental Research Grant Scheme (FRGS) under the 10th Malaysia Plan (10MP) from RM550m in the 9MP. The Director of IPT Excellence Planning of the Department of Higher Education, Dr Mohamad Jailani Mohamad Nor said the proposal for the increased allocation would be submitted to the Economic Planning Unit (EPU) by Jun 10. (Bernama)

Deputy Chief Minister and Minister of Agriculture and Food Industry, Datuk Seri Panglima Yahya Hussin has called for the industrialisation of aquaculture in the wake of the declining seafood supply in the country. "With increased seafood demand and declining supplies, there is a need for the industrialisation of aquaculture," he said. (Bernama)

20100311 0938 Global Economic News.

The February US budget deficit was US$220.9bn, even though the month saw the first year-over-year rise in receipts in 22 months boosted by big Federal Reserve returns, the Treasury Department reported. The year-ago deficit was US$193.9bn. The fiscal-year to date deficit, a record, was US$651.6bn, on track to the expected US$1.3tr. (Xinhua)

Containerised trade volumes in and out of the US softened alongside seasonal demand at several major ports in January, but compared to a year ago, broader trends of rebounding exports and stabilizing imports are surfacing, according to port officials. Following the worst year in container shipping history, the path to recovery isn't obvious, maritime executives said. (Xinhua)

US wholesale inventories unexpectedly fell in January for a second month, signaling companies had difficulty keeping pace with demand. The 0.2% decline in the value of stockpiles followed a revised 1% gain in Dec 09. Sales jumped 1.3%, the most since November, after a 1.2% gain. At the current sales pace, wholesalers had enough goods on hand to last 1.1 months, the lowest since record-keeping began in 1992 and down from 1.12 months in December. (Bloomberg)

Unemployment decreased in nine US states in January, led by an improvement in Michigan that demonstrates factories are driving the economic rebound. The jobless rate climbed in 30 states at the start of 2010, signaling the thawing of the labor market is not broad-based after the loss of 8.4m jobs since the recession began in December 2007. (Bloomberg)

US mortgage applications rose for a second week, as the Mortgage Bankers Association’s index increased 0.5% in the week ended March 5. The group’s purchase gauge climbed 5.7%, while its refinancing measure fell 1.5%. The increase in requests for purchase financing may be a precursor of sales gains in coming months. (Bloomberg)

The US Senate on Wednesday approved a wide-ranging bill that would push back the deadline to file for extended unemployment insurance until year-end and extends dozens of expired tax breaks. The bill, passed by a 62-36 vote, is the latest job creation effort to go before lawmakers, though it contains virtually no new initiatives. Its price tag has wavered between US$140-150bn. (CNN Money)

Global confidence dropped for a second month in March amid concern the fallout from Greece’s budget crisis will undermine the global recovery. The Bloomberg Professional Global Confidence Index fell from 54.9 to 53.8 in March. (Bloomberg)

Japan’s machinery orders slipped in January after the biggest jump since 2000. Orders, a signal of business investment in three to six months, dropped 3.7% mom (20.1% in Dec). The government said after the report that machinery demand is “bottoming.” (Bloomberg)

South Korea’s bank lending to households fell KRW248.0bn to KRW407.3tr in February (KRW407.6tr in Jan) for a second month as income-tax refunds and New Year bonuses enabled consumers to borrow less. Loans to companies rose by KRW2.9tr to KRW513.2tr. Non-mortgage lending fell KRW900.0bn while mortgage lending rose by KRW701.7bn. The broadest measure of money supply, M2, grew 9.3% yoy in January (9.3% in Dec 09). (Bloomberg)

China’s exports
rose more than forecast in February and posted a third straight gain. Shipments abroad gained 45.7% yoy in February (21% in Jan). This came in higher than market estimates of 38.3%. Imports rose 44.7% (85.5% in Jan). The trade surplus hit a one-year low of US$7.6bn, affected in part by the Lunar New Year holiday. (Bloomberg)

Taiwan’s central bank is using open-market operations to drain excess cash from the nation’s financial system, a bank official said, as policy makers seek to avoid excess liquidity fueling asset prices. The central bank has been issuing negotiable certificates of deposit to absorb cash. (Bloomberg)

Singapore’s economy may grow faster this year than economists initially predicted, boosted by manufacturing, construction and private consumption, a central bank survey showed. Gross domestic product may expand 6.5% in 2010, according to the median forecast in a survey of 20 economists by the Monetary Authority of Singapore. That compares with a December forecast of 5.5%. (Bloomberg)

Singapore’s social workers will see their salaries go up by 14.0-16.0% from 1 Apr 10. The pay hike is part of measures to attract and retain dedicated professionals in the sector. The revision will cost the government an additional S$3.9m per year. (Channel News Asia)

Thailand kept its benchmark interest rate unchanged at 1.25% for a seventh meeting, refraining from following neighbor Malaysia in raising borrowing costs as political protests threaten the nation’s economic recovery. The decision came widely expected. However, the central bank said it may “normalize” interest rates at the next meeting after refraining from raising borrowing costs this month as it watches for the impact of the political tension. (Bloomberg)

Philippine exports rose at the fastest pace in more than 14 years in January as demand for electronics goods gained. Shipments abroad increased 42.5% yoy (23.8% in Jan). That compares with the median forecast for a 30.2% gain. (Bloomberg)

Chinese bank extended about RMB700.0bn in new yuan loans in February, as the government clampdown on lending took hold. That compared to RMB1.4tr in January and market had projected it would moderate to RMB675.0bn. (Financial Daily)

Indonesia should be able to reach investment grade within one year, Finance Minister Sri Mulyani Indrawati said. Indonesia is rated below investment grade by international ratings agencies but an upbeat economic outlook, high local interest rates and a firm rupiah have attracted investors, with about a fifth of Indonesian bonds currently owned by foreigners. In January, Fitch Ratings upgraded Indonesia's sovereign rating to one notch below investment grade. (SBT)

Thailand’s Board of Investment said 116 companies plan to invest a combined THB177.9bn (US$5.4bn) this year to cope with rising orders. According to a survey conducted in January, 223 companies plan to hire more staff, led by those in the electronics and automobile sectors, the investment board said. (Bloomberg)

Crude oil rose to an eight-week high and gasoline surged after a government report showed that US fuel supplies declined as demand climbed and refineries idled units. Crude oil for April delivery rose 60 cents, or 0.7%, to US$82.09/bbl on the NYME. (Bloomberg)