Wednesday, March 17, 2010

20100317 1813 FCPO EOD Daily Chart Study.

FCPO closed : 2595, changed : +26 points, volume :  lower.
Bollinger band reading : side way downside biased market.
MACD Histrogram : weaker, seller still in control.
Support : 2590, 2570, 2550 level.
Resistant : 2620, 2650, 2670 level.
Comment :
Boring tight range FCPO opened and traded mostly in positive territory with lower volume changed hand that still managed to break 2 levels of resistant. Daily chart reading remained unchanged with a side way range bound downside biased market testing higher resistant 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.  

20100317 1720 FKLI EOD Daily Chart Study.

FKLI closed : 1307, changed : +1.5 point, volume : lower.
Bollinger band reading : side way correction.
MACD Histrogram : weaker , buyer reduce exposure.
Support : 1300, 1295, 1290 level.
Resistant : 1307, 1315, 1325 level.
Comment :
Correction 8.5 points range FKLI climb slightly higher with lesser volume participation despite major regional market reacted positively to US unchanged interest rate policy announcement. Technical reading still showing a side way range bound market testing higher resistant 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.

20100317 1429 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1310.5, changed : +5 points, volume : moderate.
Bollinger band reading : side way range bound.
MACD Histrogram : improved, buyer still holding.
Support : 1307, 1300, 1295 level.
Resistant : 1315, 1325, 1335 level.
Comment :
FKLI opened and traded side way range bound in positive territory through out the whole morning session with sustainable volume. Hourly chart suggest market continue to trade side way range bound testing support and resistant level.

20100317 1236 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2592, changed : +23 points, volume : moderate.
Bollinger band reading : side way range bound.
MACD Histrogram : recovered, seller reduce exposure
Support : 2590, 2570, 2550 level.
Resistant : 2620, 2650, 2670 level.
Comment :
FCPO price improved better tracking soy oil and crude oil futures price that trade higher after US meeting decided not to raised interest rate for the time being. Hourly chart wise, price pump up to middle Bollinger band level with the band width narrowing suggesting market to trade side way range bound testing higher resistant level.

20100317 0922 Malaysia Corporate News.

Wah Seong is in talks to acquire a pipe-coating business in Nigeria to tap demand for its products amid increased exploration. The company may provide technical assistance and later take up an equity stake in Nigeria's Orleans Group, said deputy group MD Giancarlo Maccagno. Details will be known by the end of April. (Bloomberg)
This news did not come to us as a surprise as we have highlighted Wah Seong's expansion strategy in West Africa in our notes.

The Institute of Plantations and Commodities Malaysia (IMPAC) launched on Tuesday will be the main source of producing skilled workers and experts to meet the needs of the commodity-based industry. In stating this, Plantations Industries and Commodities Minister Tan Sri Bernard Dompok said that IMPAC needed the involvement of the industry in order to be successful. "It needs to establish good relations with industry players who should be close to IMPAC and make use of it," he said. IMPAC groups the existing training centres of the agencies under the ministry. (Bernama)

Prices of vegetable oils must rise to encourage farmers to boost planting and meet surging global demand for food and biofuels, Godrej International Ltd. said. “I believe oilseeds and grains have been left behind in comparison with metals or energy,” Dorab Mistry, a director at Godrej, said. “We shall have to look to higher prices in the future to attract acreage to oilseeds and to palm. Consumers will have to get used to paying higher prices.” (Bloomberg)

Telekom Malaysia (TM) has signed a licensing agreement with the England Football Association to be the official England telco licensee in Malaysia. The partnership with the FA which runs through to the end of 2010, will give TM to have the exclusive use of the England crest and England player imagery in the telco category in Malaysia. (Financial Daily)

A RM3m investment by Syarikat Prasarana Negara Bhd to build a new integrated terminal on Penang island for its Rapid Penang buses is expected to see the project completed by the end of this year. Rapid Penang Sdn Bhd, a subsidiary of Prasarana, is currently in final negotiations with the Penang state government to develop 0.4ha of stateowned land at Weld Quay on the island.
  • "The proposed integrated terminal will also cater to the needs of the ferry and taxi services on Penang island," Rapid Penang CEO Azhar Ahmad said. "The existing terminal is already congested and the new terminal is expected to have four bus lanes and one lane dedicated for work will another four months" he added. (BT)
The Klang River rehabilitation and development project (RM50bn), which is part of the Selangor state's economic stimulus package, is expected to be under a private financing initiative (PFI). MB Tan Sri Abdul Khalid Ibrahim said a detailed briefing on the project would be held on March 29, 2010.
  • "We will come out with a detailed briefing whereby all the four companies involved (TSSMako Engineering, GJA Engineering, Wessex Water, and DPZ Asia) and the state will discuss on the scheme and how to allocate the task of cleaning up the river," he said. 
  • "In terms of equipments and assignment of jobs, it will be done through open tender and it will be transparent but in terms of planning and strategic equity, it will be managed by the four companies," he added. (Bernama)
Malaysian rebar prices have gone up by RM100 per tonne over the fortnight as mills and traders push up prices in response to higher scrap costs. Rebar was trading in the market at RM2,100-2,200 per tonne, up from RM2,000-2,100 per tonne two weeks ago, in line with ex-works prices, said sources.
  • Scrap prices have increased to US$420 per tonne cfr, from US$380-390 cfr two weeks ago while domestic billet prices have jumped to US$550 per tonne, from US$525 per tonne last week. 
  • "There is an absence of mega-projects in Malaysia, thus demand remains so-so. We are depending on the small to mid-scale projects such as government housing projects and the bridge construction in Penang," said a mill official. "We hope that demand will pick up by June, when iron ore price negotiation is likely to be settled. By then, we should know the magnitude of the price increase, and hope to lock in orders," he added. (Metal Bulletin)
The Coca-Cola Company plans to invest RM1bn in Malaysia over the next five years and to start off, it is setting up a 12ha bottling plant at the Enstek Industrial Park in Nilai, Negri Sembilan, which is expected to be operational by the end of next year.
  • The investment is expected to create as many as 800 jobs at the plant and up to 8,000 jobs with local suppliers. "With the new plant, one of the most modern of its kind in this part of the world, we will be able to support our core brands of Coca-Cola and Sprite," said Glenn Jordan, president of the firm's Pacific Group. 
  • New beverages will be introduced in the coming months, he added. Its Malaysian unit, Coca-Cola Bottlers (M) will be taking over the bottling and distribution operations once its existing franchise agreement with local partner Fraser & Neave Holdings expires next Sep. (BT)
MASwings, a subsidiary of national carrier Malaysia Airlines, expects to carry 1.1m passengers this year, as it operates an all-new fleet of ATR 72-500s. It is due to phase out the last of its eight Fokker 50s next month, with 10 new ATR72-500s through a RM700m investment.
  • The Fokker planes will be returned to Penerbangan Malaysia Bhd. MASwings managing director Datuk Salleh Tabrani said the airline carried 900,000 passengers last year, up 24% from 2008. From inbound flights in Sabah and Sarawak, 
  • Salleh said MASwings is now eyeing the Brunei-Indonesia-Malaysia- Philippines East ASEAN Growth Area (BIMP-EAGA) to expand its area of operation. It has cut losses by half last year and envisages its newer profitable routes in its network will cross subsidise those that are not economically viable. (BT)
SP Setia has been slapped with a counter suit filed by PPH Resorts (Penang) seeking a RM5.7m claim for damages following the termination of a JV agreement between the two parties. (Financial Daily)

The Employees Provident Fund has denied that it is interested in acquiring a part or the whole of UEM Group Bhd’s 87% stake in Pharmaniaga, as reported by an Englishlanguage daily yesterday. An official with the EPF said there was nothing further to comment as “this is not true”.
  • Meanwhile, in an e-mail reply to a query by StarBiz, UEM Group said it was unable to comment on any speculation. UEM Group is a wholly-owned unit of government investment vehicle Khazanah Nasional. (Star)
Diversified Mofaz Group has denied that it is in talks to buy the distribution rights to Fiat cars in Malaysia.
  • The group is looking instead at expanding its motorcycle business under Mofaz Motosikal (Momos), through the introduction of the Momos Madass 125 motorcycle. 
  • Ally Azran Holdings, a former franchise holder for Fiat cars in the country, said that it terminated the franchise agreement with the Italian carmaker in December last year, after 15 years, because of poor demand.
  • "Fiat cars are not popular in Malaysia because many are made with a small engine capacity of 1.4L and sold at a high price ranging from RM100,000 above. (BT)
Siemens Malaysia will study the feasibility of providing solar-powered electricity to rural areas in Sabah and Sarawak, said its vice-president for management coordination office Eric Loo. The German company plans to partner utility companies to do this. Tenaga Nasional (TNB) is already doing the same thing by providing hybrid energy systems. (BT)

Malaysian Merchant Marine (MMM)'s staff have accepted a voluntary separation scheme (VSS) offered by the shipping company. "Accordingly, following the completion of the VSS on March 15, all the staff of the company are considered retrenched," MMM said in a statement. (Financial Daily)

Daya Materials has proposed a 10% private share placement to raise gross proceeds of up to RM22.71m to fund future acquisitions and the expansion of the group. The proceeds amount was based on an indicative issue price of 25 sen per share. (Financial Daily)

EcoFirst Consolidated group has proposed to dispose of its collective 19.86% stake comprising 17.69m shares in education services provider SEG International (SEGi) to Rexter Capital for RM30.6m cash, representing RM1.73 per share.
  • EcoFirst said the group's original cost of investment in SEGi shares was RM36.1m since 2001, but said the disposal would result in an estimated gain of RM2.4m. The proceeds would be used to repay borrowings of about RM7m and the balance for working capital purposes. (Financial Daily)
Choong Khuat Hock, 49, head of research at Kumpulan Sentiasa Cemerlang, a Kuala Lumpur based fund management company, has been found dead in Bentong, Pahang. He was reported missing for a week. Bentong deputy chief Mohamad Mansor has classified the case as murder as post-mortem revealed blunt force trauma with several broken ribs.
  • Hock was rated as one of the top analysts in the country for most of the 1990s and wrote columns for The Edge and The Star. He had more than 20 years of experience in investment banking, having worked in London, Hong Kong, Singapore and Malaysia. (Star & NST)
Pengurusan Aset Air Bhd (PAAB) will complete the takeover of water assets in Perlis and Perak by end-May as part of the national initiative to regulate the water services industry. PAAB has said it planned to wrap up the deals in all states by mid-year although CEO Ahmad Faizal Abdul Rahman, who took over from Suhaimi Kamaralzaman in July, said in a December interview with StarBizWeek that “he didn’t like deadlines.”
  • So far, PAAB, a unit of Minister of Finance Inc, has completed in three states – Negri Sembilan, Malacca and Johor – deals valued at a total RM6.12bn. Selangor remains the most fragmented and complicated with many different players. (Star)

20100317 0912 Malaysian Economic News.

Deputy Prime Minister Tan Sri Muhyiddin Yassin said that the New Economic Model (NEM) to be launched soon will be capable of being an important instrument for breaking down racial barriers and prejudices in this country. All races would have a role and opportunity to make full use of their potential, and compete fairly in the economic sector. He believes that when every citizen regardless of race and religion is guaranteed of equal rights, then true racial unity and harmony can be realised. (Bernama)

The government is still competent in luring more foreign investments this year despite stiff competition, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. He was confident both foreign and domestic investments would continue to increase in Malaysia given the government's transformation announced in January and the various steps taken to strengthen the economy. (Bernama)

Corporate default rate is projected at 3.3% this year in view of the continuous improvement in economic activity going forward, according to Malaysian Rating Corporation Bhd (MARC). This was a drop compared with a 5.6% in 2009. The projected default rate was premised on its recently revised gross domestic product (GDP) growth forecast of 5.2%.
  • "Going into 2010, the agency expects the tail risk from corporate defaults to remain, mainly contributed by the 2009 surviving fallen angels. On a positive note, however, with the recovery taking hold in the economy, corporate credit quality should see improvement," it said. (Bernama)
Minister of International Trade and Industry Datuk Mustapa Mohamed said that the participation of bumiputera companies in all the 27 services sub-sectors since they were liberalised in Apr 09 remains small in terms of equity interest. However, he said the level of bumiputera equity interest in the services sub-sectors was not affected at this stage following the liberalisation as foreign investor participation was “not significant” to date. (Financial Daily)

20100317 0910 Global Economic News.

The Federal Open Market Committee Tuesday left the fed funds rate unchanged at 0- 0.25% and kept the language “remaining exceptionally low for an extended period of time.” The Kansas City Fed's Thomas Hoenig dissented, arguing that the "exceptionally low levels" language was no longer warranted, as it could lead to the buildup of financial imbalances, increase risks to long-run macroeconomic and financial stability. The FOMC also noted that "economic activity has continued to strengthen" and that the labor market is "stabilising." (Xinhua) Kindly refer to today’s Economic Update for further details.

US new home construction and building permits fell in February, but both readings beat economists' expectations. Construction of new homes, or housing starts, fell to an annual rate of 575,000 during the month, down 5.9% from January's revised rate of 611,000 but up 11.3% from the February 2009 rate of 550,000.
  • Economists surveyed expected February housing starts to dip to an annual rate of 570,000. The number of building permits issued during February fell to a seasonally adjusted annual rate of 612,000, which was 1.6% below the revised January rate of 622,000, but up 11.3% from the February 2009 rate of 550,000. Economists had expected building permits would fall to 601,000. (CNN Money)
US import prices decreased 0.3% in February (+1.3% in Jan), marking the first decline in seven months. Prices excluding petroleum climbed 0.2% last month and were up 2.1% from a year earlier. (Bloomberg)

The Obama administration officials urged lawmakers Tuesday to support the president's budget, saying it will drive job growth.
  • In a joint written statement, the officials said that although the stimulus package has helped turn around the economy from when "the threat of a second Great Depression was frighteningly real," the 9.7% unemployment rate is "unacceptable by any metric."
  • An economic forecast produced by the officials' three offices estimates that the labor market will add 100,000 jobs per month in 2010. However, they said the unemployment rate may still rise slightly over the next few months.
  • The officials said that jobs will grow by 200,000 a month in 2011, bringing the unemployment rate down to 8.9%. In 2012, payrolls will improve by 250,000 jobs each month, pushing the jobless rate down to 7.9% by the fourth quarter.
  • Real GDP growth will tick higher by 3.0% in 2010, and grow 4.3% annually in 2011 and 2012. They expect inflation to remain low, at 1.0% in 2010, 1.4% in 2011 and 1.7% in 2012. (CNN Money)
Europe’s core inflation rate fell to a record low in February as companies continued to cut jobs and consumers held back spending. Core consumer prices, which exclude volatile energy and food costs, rose 0.8% yoy (0.9% in Jan). That’s the lowest since data was first compiled in 1997. Headline inflation was 0.9% yoy in February (1.0% in Jan), matching consensus estimate. (Bloomberg)

Standard & Poor's Ratings Services said Tuesday that it has affirmed its 'BBB+' longterm and 'A-2' short-term sovereign credit ratings on the Hellenic Republic (Greece). At the same time, the ratings were removed from CreditWatch, where they had been placed with negative implications on 7 Dec 09 (the long-term rating) and 16 Dec 09 (the short-term rating). The outlook, which was stable prior to the CreditWatch placement, is now negative. (Xinhua)

The European Commission will tell Britain to do more to cut its ballooning budget deficit in the medium term, saying the country’s fiscal programme lacks ambition, a draft from the European Union (EU) executive showed. The programme failed to guarantee Britain would meet an EU deadline of 2014-15 for cutting the deficit to below bloc’s cap of 3.0% of economic output. The British government defended its budget plans in response to the leaked draft, saying they took into account a need to support the economy through the downturn. (Financial Daily)

South Korea’s president named Kim Choong Soo governor of the central bank as policy makers face political pressure to keep the benchmark interest rate at a record-low 2.0%. Kim, 63, currently envoy to the Paris-based Organization for Economic Cooperation and Development, will succeed Lee Seong Tae at the end of the month. (Bloomberg)

China’s inflation expectations are rising, making it more difficult for Premier Wen Jiabao to meet his 3.0% full-year price target and adding to the case for an interest-rate increase. The number of Chinese households expecting prices to rise in the next three months increased in a quarterly survey conducted last month, the central bank said. The data was seasonally adjusted. (Bloomberg)

Singapore’s small and medium-sized enterprises can soon access funds to help them grow their business overseas. From 1 Apr 10, local firms can apply for a S$10.0m SME Market Access Programme or SME MAP, administered by trade promotion agency IE Singapore. This is part of the government's recent budget announcement to help SMEs go global. (Channel News Asia)

The Philippines may further pare a lending program for banks or consider raising the interest rate for the facility as it unwinds more stimulus measures, central bank Assistant Governor Cyd Amador said. “We are looking at” reducing the so-called rediscounting budget for loans to banks. We might even look at the pricing of those loans as authorities aim to “normalise” the lending window,” she said. (Bloomberg)