Monday, March 15, 2010

20100315 1828 FCPO EOD Daily Chart Study.

FCPO closed : 2590, changed : -59 points, volume : higher.
Bollinger band reading : side way downside biased market.
MACD Histrogram : falling, seller in charge.
Support : 2590, 2570, 2521 level.
Resistant : 2620, 2650, 2670 level.
Comment :
Confirm black Monday! Despite the released of encouraging export data, FCPO failed to escape from the hand of seller that turned fierce today defeating all the buyers to end the day right at the low. Daily chart reading turned slightly negative biased within a side way range bound market with testing effort seen at 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.

20100315 1730 FKLI EOD Daily Chart Study.

FKLI closed : 1303, changed : -13 points, volume : lower.
Bollinger band reading : side way correction.
MACD Histrogram : weaker, buyer off loading.
Support : 1300, 1295, 1290 level.
Resistant : 1307, 1315, 1325 level.
Comment :
Lack of catalyst and anticipation of a possible non friendly market announcement from the US meeting tomorrow trapped FKLI to trade badly with the continue downward market correction that ended near the low of the day in lower volume participation. Daily chart shows correction continue to took place for the third consecutive days within a small uptrend market and suggesting market to trade side way range bound testing support and resistant level 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.

20100315 1250 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1304.5, changed : -11.5 points, volume : moderate.
Bollinger band reading : downside biased.
MACD Histrogram : weaker but not much movement, buyer off loading, seller present.
Support : 1300, 1295, 1290 level.
Resistant : 1307, 1315, 1325 level.
Comment :
Broken 2 level support and buyer punishing FKLI trader badly today with moderate volume changed hand despite a firmer overnight DJIA market. Further downside potential with test at support level presented at the hourly chart suggest seller to sit tight and alerted buyer to take cover.

20100315 1233 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2624, changed : -25 points, volume : low.
Bollinger band reading : downside biased.
MACD Histrogram : weak but not moving much, seller temporary in control.
Support : 2620, 2590, 2570 level.
Resistant : 2650, 2670, 2700 level.
Comment :
Moderate volume FCPO continue to trade lower following soy oil futures price that traded negatively overnight. Hourly chart remained in negative territory through out the whole morning without much buying interest and still potentially trade lower as the Bollinger band width expanded larger.

20100315 0946 Malaysia Corporate News.

Three top officials of Maybank have submitted their resignation, say sources. “The resignations were announced on last Friday at an internal meeting,” says a source. The three are believed to be Maybank Investment Bank’s (Maybank IB) CEO Mohammed Rashdan Yusof, chief credit officer Jamaludin Nasir and head of corporate banking Tracy Ong. Industry sources say the resignations were a coincidence and not coordinated. There are talks that Ong is one of the candidates for the post of CEO at Alliance Bank. (The Edge)

Sime Darby Property hopes to maintain its 28% profit margin for its current financial year, said MD Datuk Tunku Putra Badlishah. "The margin is among the best in the industry," he said, adding that lady luck has been with Sime Darby Property as all its launches have had good sales. "All our recent launches have been very successful, with 80% sales rate within three months of the launch," he said after unveiling its high-end property development in Ara Damansara named "Seri Pilmoor". (Bernama)

Expanding economies and rising population leading to a chronic shortage of oil and fats will continue to make Malaysia palm oil a highly sought after edible oil in the global arena. Although palm oil accounts for 34% of the global output of 160m tonnes oil and fats, it is still not enough to meet the high demand from importers, said Malaysian Palm Oil Council (MPOC) CEO Tan Sri Dr Yusof Basiron. He said the situation was made more acute by the fact that the only other major producers besides Malaysia was Indonesia followed by Argentina at a distant third to serve world oils and fats demand especially from the food sector. (Bernama)

Malaysia's palm oil has attained a high level branding internationally. This is not only as a top quality edible oil but also due to Malaysia's reliability in supplying to a global market that continues to face a severe shortage of oil and fats, a top industry official said. Tan Sri Dr Yusof Basiron, the CEO of the Malaysian Palm Oil Council (MPOC), said Malaysia was recognised as a key supplier to food security globally. It includes, he added, some Muslim countries where food security is a major problem. (Bernama)

Soyoil is sold at a premium to palm oil owing to market-distorting agricultural subsidies given to US and European farmers by their governments, according to the Malaysian Palm Oil Council (MPOC). It is not due to any inability of the Malaysian commodity to compete on the world stage, said MPOC CEO Tan Sri Dr Yusof Basiron. Yusof said it was difficult for palm oil to be at par with soyoil or other oils as these were being highly supported through their countries' subsidy systems. (Bernama)

Malaysian palm oil refineries should venture into more downstream value-added products to remain profitable, said Felda Vegetable Oil Products Sdn Bhd CEO Ismail Hasan. "It is important to produce and export more value-added products as it would help increase margins for refineries. "The prices of refined products do not move in tandem with the commodity's high price. "Therefore, with more value-added products produced such as margarine, soaps and cosmetics, refiners would be able to survive comfortably," he added. (Bernama)

The construction of a biomass power plant in Sabah will not be economically feasible and will have a negative impact on consumers if electricity tariffs soar. Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui said shortage of fuel resources like empty fruit bunches (EFB) would result in inconsistent output from the power plants. "To obtain 300 Megawatts of electricity, the biomass plants will annually need 6.6m tonnes of EFB as raw material to feed the plants. Chin said biomass was not the obvious choice for generating electricity, although there were three biomass plants in Sabah, with a combined capacity of 30 Megawatts, as power generation will be inconsistent because of irregular supply of raw materials. "Besides, building a small-scale biomass plant will require the installation of a new delivery line to supply electricity to the grid system. "This will not only be uneconomical but will also invite other problems," he added. (Bernama)

The first highly efficient and fuel-saving Frame 6FA gas turbine at the Ranhill Powertron II plant in Sabah has been commissioned by GE. Ranhill Power Sdn Bhd chief executive officer Norlian Abd Rahim said the 190 MW combined-cycle power plant will help Sabah meet its short-term energy needs and boost the region’s energy infrastructure. (BT)

Of the four mobile players in the country, DiGi.Com seems to have the least bandwidth, hence the company feels it should get more of the GSM 900 megahertz (MHz) spectrum so that it can reach out to a wider segment of the population. “We have a little bit of the 900MHz spectrum and we need more. The beauty of the 900MHz spectrum is that it is easier to have nationwide coverage with it, while with the 1,800MHz we can easily provide services in the city centre and that is why we need more of the 900MHz spectrum,’’ said DiGi chairman Sigve Brekke. The company is also one of four mobile players with a 1,800MHz, or 3G spectrum, which it got through a share-swap exercise with Time dotCom after failing to secure a spectrum directly from the Government.
  • DiGi has only 4MHz of the 900MHz spectrum band while its rivals, Celcom Axiata and Maxis Communications, have 34MHz and 32MHz respectively. Celcom and Maxis got more spectrum as they had acquired other celcos. 
  • Whether DiGi will get its wish is not known but telecommunications players are in constant dialogue with regulators over spectrum issues. (Starbiz)

DiGi's classified portal, mySimplifieds is teaming up with global online payment giant PayPal, and one of Malaysia's largest online payment system iPay88, to provide online payment convenience to Malaysians. "The agreement with these two well known online payment providers is an important step for mySimplifieds to make it easier for Malaysians to buy and sell online. (Bernama)

Hong Leong Bank (HLB) has launched its enhanced business online banking, called Hong Leong Online (Business), which sees account management functions such as current account, foreign currency accounts, loan accounts and fixed deposits balance inquiries being incorporated into it. (BT)

Bank Rakyat will open its ninth branch in Kedah in middle of this year, Bank Rakyat's Northern Region Head Mohd Azmir Mohd Nasurdin said. He said the branch in Kuala Nerang, which would also be the bank's 18th outlet in the Northern region, would provide banking convenience for local residents. (Bernama)

MASwings, which currently only serves the travel needs of Sabah and Sarawak, is banking on expanding its services to the BIMP EAGA region by October this year, said managing director Datuk Salleh Tabrani. (BIMP EAGA refers to Brunei, Indonesia, Malaysia, the Philippines, East Asean Growth Area.) Some of the new routes being considered include Brunei, southern Philippines, and Kalimantan and Sulawesi in Indonesia. The move, it is hoped, will create a growth driver for the Malaysia Airline’s wholly owned and loss-making subsidiary. Some 75% of its routes under the Rural Air Services (RAS) are not commercially viable but are undertaken as a social obligation whereby the government subsidises the losses. (Star)

MISC has launched a dedicated liner feeder service to and fro Thailand, to capitalise on the growing demand for carriage of cargo within intra-Asia region, especially cargo from and to Thailand. MISC announced the introduction of a direct weekly liner shipping service called "Siam Singapore Shuttle Service" between ports of Bangkok and Singapore. A 500- TEU (20-foot equivalent unit) vessel will be deployed on the route, with a minimum of 60 reefer plugs that will present greater opportunity for MISC in the growing reefer market. The service commenced on March 8 with its inaugural voyage starting from Singapore. (BT)

China Shipping Container Lines Co Ltd (CSCL) will continue to make Westports Malaysia in Port Klang its mega transshipment hub in Southeast Asia. A Westports statement said Ma Zehua, CSCL vice-president, made the commitment to Westports' executive chairman Tan Sri G. Ghanalingam during a recent visit to the port. CSCL is Westports' second largest customer after French liner CMA CGM. (Bernama)

Scomi Group is scouting for investment opportunities in Egypt, especially in the transportation and oil industries and the manufacturing of trains and buses. Last week, a Scomi team led by chief executive officer Shah Hakim met with Egypt’s Investment Minister Dr Mahmoud Mohieldin to discuss cooperation in transport and logistics sectors. (BT)

Encorp announced a proposed renounceable rights issue of up to RM111.75m nominal value of five-year six per cent redeemable convertible secured loan stocks (RCSLS) at 100% of its nominal value together with up to 55.87m free detachable warrants.
  • This is on the basis of two RM1 nominal value of RCSLS together with one warrant for every four existing shares of RM1 each in Encorp, the company said. 
  • Encorp also announced a proposed placement of up to RM22.35m nominal value of RCSLS at 100% its nominal value together with up to 11.175m free detachable warrants to identified investors.
  • It said proceeds amounting RM134.105m arising from the rights issue would be used for capital, project development and construction expenditures, finance working capital requirements and expenses related to the proposals. (Bernama)
Investigations into the financial irregularities in Maxbiz Corp Bhd's subsidiaries are expected to be completed in about four to five weeks, said its investigation adviser. Maxbiz, which is involved in commercial dyeing and knitting fabric, had last month appointed Ferrier Hodgson MH to conduct the probe into MKK Industries and Mayford Garments on missing assets and documents. Ferrier Hodgson partner Andrew Heng said the assets include machinery worth over RM40m at the two companies' garment and textile factories in Batu Pahat, Johor. Ferrier Hodgson is also investigating the transfer of Geahin Engineering's listing status to Maxbiz in 2004 and some missing documents. "We are going through the documents. There are some incomplete papers. We are trying to trace all the missing items," Heng added. (BT)

20100315 0936 Malaysian Economic News.

Bank Negara Malaysia (BNM) said it may increase interest rates further to avert asset bubbles and discourage risky investments by people seeking better returns, even as inflation will likely remain “modest” this year. “We will review the conditions at our next monetary policy meeting and work towards further normalizing if necessary. Inflation will continue to be modest and therefore it would not prompt us towards tightening, but that does not preclude that we will continue to normalize interest rates,” Governor Zeti Akhtar Aziz said. (Bloomberg)

Deputy International Trade and Industry Minister Datuk Seri Mukhriz Mahathir said the government intends to increase the number of Bumiputera exporters under the Tenth Malaysia Plan (10MP) through various programmes. The number was expected to increase two-fold from some 2,500 currently registered with the Malaysia External Trade Development Corporation (Matrade). “We aim to have between 800 and 1,000 more Bumiputera exporters each year of the 10MP and hit 5,000 by 2015,” he said. (NST)

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that the Goods and Services Tax (GST) Bill would not be tabled for second reading in the March/April session of Parliament so as to gather more feedback from the people. There was a lack of feedback, which he described as vital prior to the implementation of any policy by the government. No time frame had been set for the public to provide their input, but much time to engage the people. “We have had discussions with the private sector and we find that the sector generally understands and supports the move (to introduce the GST) except for several organizations which have given critical views,” he added. (Bernama, Financial Daily)

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob advised the people not to believe rumours of an impending increase in the prices of fuel and essential goods. He said speculation on prices increases would give rise to a panic situation among consumers and irresponsible wholesalers and retailers would take advantage of the situation to reap excessive profits. (Bernama)

International Trade and Industry Deputy Minister Datuk Mukhriz Tun Dr Mahathir said that a 37.0% surge in exports for January is indication that the economy has recovered. The government will not make such statements without facts to support them, he said. He also said the New Economic Model (NEM) which will focus on biotechnology, innovation, renewable energy, aerospace, medicine and education to rid of elements that can prevent rapid economic growth under the Tenth Malaysia Plan (10MP). As such, entrepreneurs and exporters should be prepared for the removal of subsidies to face competition with implementation of the Asean Free Trade Area (AFTA). (Bernama)

Malaysia Industrial Development Authority’s (MIDA) director-general Datuk Jalilah Baba said that the government should give out more incentives under the New Economic Model (NEM) in order to encourage and attract more local and foreign investments into the country. She said the government should also encourage more mergers and acquisitions (M&As) especially in the high-tech industry and green technology industry that had been growing steadily in the country. The M&As with foreign firms would provide a catalyst for local firms to grow, she added. (Financial Daily)

PM Datuk Seri Najib Tun Razak is targeting to achieve not less than 6.0% economic growth for this year. Najib said he would go all out and put all the efforts possible to achieve the highest possible growth rate for the nation. "I have been informed by Treasury officials that the World Bank is likely to revise its growth projection for Malaysia this year,” he added. (Bernama)

PM Datuk Seri Najib Tun Razak said that the country needs to transform its economy into one that is highly competitive, rich in knowledge and technology, and driven by ideas, innovation and talent. “As the World Bank points out in its latest assessment of the prospects for 2010, it will continue to be a challenging year despite the recovery. But Malaysia has turned the corner and we are back on the road of economic growth. I am determined to ensure that growth gathers momentum and remains robust and sustainable despite continuing challenges to the global economy," he added. (Bernama)

The government will introduce the old-age and self-employed pension schemes, possibly by the middle of next year, under the government's caring concept, Human Resource Minister Datuk Dr S. Subramaniam said. The Social Security Organisation (Sosco) has been tasked to conduct actuarial studies on the two new schemes before their implementation and it would have to determine the minimum age and period of payment for its contributors. "We are already in the process of introducing the Retrenchment Fund for private sector workers," he added. (Bernama)

20100315 0931 Global Economic News.

US retail sales unexpectedly climbed in February signaling consumers will contribute more to economic growth. Purchases increased 0.3% (+0.1% in Jan), the fourth gain in the past five months. Retail sales were projected to fall 0.2$. Sales excluding autos rose 0.8%, exceeding market estimates of +0.1%. (Bloomberg)

US consumer confidence unexpectedly declined for a second month in March, a sign Americans are discouraged about the labor market. The Reuters/University of Michigan preliminary consumer sentiment index fell to 72.5 from February’s final reading of 73.6. Economists surveyed projected the gauge would increase to 74. (Bloomberg)

San Francisco Federal Reserve Bank President Janet Yellen is a leading contender to be the next vice chairman of the Fed, according to White House press secretary Robert Gibbs. Gibbs, speaking to the press Friday, also said that Sarah Raskin, the Maryland Commissioner of Financial Regulation, and Peter Diamond, a professor at the Massachusetts Institute of Technology, are under "strong consideration" for two longstanding vacancies on the central bank's seven-member board of governors. (CNN Money)

European industrial output rose 1.7% mom in January (0.7% in Dec 09), marking the biggest increase in two decades as the reviving global economy prompted companies to boost production of goods including steel and machinery parts. The January increase was more than double the 0.7% mom gain projected by economists. From a year earlier, output rose 1.4 % (-4.0% in Dec 09), marking the first annual increase since Apr 08. (Bloomberg)

Greece’s budget deficit narrowed by 77.0% yoy to €903.0m (US$1.2bn) in the first two months of the year, the government said. Ordinary revenue climbed 7.8% to €9.4bn, less than the government’s target, while spending fell 9.6% to €8.9bn. Prime Minister George Papandreou’s government plans to cut spending and increase taxes to shave 4.0% pt from the deficit to 8.7% of output this year. (Bloomberg)

European Central Bank (ECB) council member Ewald Nowotny said that some euroregion governments may face a “debt spiral” if they don’t starting cutting their budget deficits next year. “The economic situation is still very tense and problematic,” Nowotny said. (Bloomberg)

Chinese Premier Wen Jiabao reiterated that China would keep the Renminbi (RMB) exchange rate stable and vowed to further improve the country's currency exchange formation mechanism. “A stable RMB exchange rate had played an important role in helping the world to recover from the latest economic crisis. I don't think RMB is under valued, from our survey of 37 countries on their exports to China, 16 of them saw an increase, even the EU, its overall exports had declined 20.3% but its exports to China only declined 15.3%. We oppose countries pointing fingers at each other and even forcing a country to appreciate its currency," said Wen. (Bernama, Bloomberg)

Chinese Premier Wen Jiabao hopes the US would take concrete steps to assure its foreign investors on the safety of US treasury bonds. He stressed that the US should know that its treasury bonds were guaranteed by its national credibility. He was still worried over the country's investment in US assets and security, especially the treasury bonds, since last year. The instability of the US dollar is a great concern for China's foreign assets. China could not afford any mistake in the management of the country's financial assets, he added. (Bernama)

China’s bank governor Zhou Xiaochuan said the higher-than-expected inflation data hasn’t altered the central bank’s policy plan. “The central bank’s interest rate stance is mainly based on the outlook for inflation and changes in the overall economy rather than published numbers. The monetary policy must be pre-emptive. We need data forecast in advance, because monetary policy has a fairly long lag – it takes a time lag of a few months or even one year for money supply to work into the economy,” Zhou said. (Financial Daily)

Thailand’s foreign-exchange reserves rose 0.6% to US$142.6bn in the week ended 5 Mar, from US$141.8bn a week earlier. The central bank’s holdings of forward contracts fell 1.6% to US$12.3bn in the same week, from US$12.5bn a week earlier. (Bloomberg)

Red-shirt supporters of ousted prime minister Thaksin Shinawatra have given the Thai government until lunchtime today to resign or face rolling protests. Yesterday the red shirts held a rally which attracted an estimated 100,000 people - well short of the 1m they had predicted. (ABC News)

Indonesia’s sovereign debt rating was raised to the highest level in 12 years by Standard & Poor’s after the central bank increased the country’s economic growth forecasts last week. S&P lifted Indonesia’s long-term foreign-currency rating one level to BB from BB-. The outlook is positive. The rating, which was last increased in July 06, is two levels below investment grade and on par with Turkey and Jordan. (Bloomberg)

India’s industrial production rose 16.7% yoy in January (17.6% in Dec 09), diminishing spare capacity and contributing to inflationary pressures that may spur the central bank to raise interest rates within weeks. Economists had projected the industrial production would increase by 17.0% yoy in January. (Bloomberg)