Monday, March 22, 2010

20100322 1821 FCPO EOD Daily Chart Study.

FCPO closed : 2572, changed : -5 points, volume : lower.
Bollinger band reading : bearish biased market.
MACD Histrogram : recover slightly, seller reduce exposure.
Support : 2570, 2550, 2521 level.
Resistant : 2590, 2620, 2650 level.
Comment :
Low volume range bound continue correction FCPO eased marginally lower after mixture export figure data released by 2 export cargo surveyors. Daily chart formed a doji bar candle and overall reading remained biased to the downside with side way range bound market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with larger cut loss and profit target.

20100322 1730 FKLI EOD Daily Chart Study.

FKLI closed : 1294, changed : -4 points, volume : higher.
Bollinger band reading : side way correction.
MACD Histrogram : falling, seller still in.
Support : 1290, 1285, 1280 level.
Resistant : 1295, 1300, 1307 level.
Comment :
FKLI traded lower with sustaining volume changed hand after opened lower and recovered but last hour selling activities pushed price down from the high to end lower as trader reducing exposure after the announced negative news from US on the passed of Obama proposed medical bill. Daily chart candle faced some resistant today during the attempt to test the middle Bollinger band level but the chart reading has yet to turned negative and still suggesting a side way range bound 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.

20100322 1257 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1297.5, changed : -0.5 point, volume : high.
Bollinger band reading : side way downside biased.
MACD Histrogram : recovering, seller taking profit.
Support : 1295, 1290, 1285 level.
Resistant : 1300, 1307, 1315 level.
Comment :
FKLI opened lower but managed to recover most of the losses to ended the first session half point lower with high volume changed hand. Hourly chart wise, market seems testing the middle Bollinger band resistant level and is likely to trade side way range bound with a little downside biased. Having said that, there is a possible positive divergence in the forming between price and MACD.

20100322 1244 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2580, changed : +3 points, volume : low.
Bollinger band reading : side way range bound.
MACD Histrogram : rising, short covering.
Support : 2570, 2550, 2521 level.
Resistant : 2590, 2620, 2650 level.
Comment :
Side way range bound FCPO ended the morning session higher by a fraction with discouraging volume changed hand. Hourly chart reading suggesting market is likely to continue to trade side wy range bound with testing support and resistant.

20100322 1133 Malaysia Corporate News.

Selangor Chief Minister Tan Sri Abdul Khalid Ibrahim is spearheading a move to rehabilitate and develop the Klang River with the objective of raising the state’s economic and tourism profile. The plan is part of Selangor’s stimulus package which was unveiled in 2009.
  • The 120km river runs through Selangor and Kuala Lumpur and towards the Straits of Melaka. The project will be undertaken in sections, beginning with the 21km stretch towards Port Klang. This is a private funding initiative (PFI) where the rehabilitation and development cost will be borne by the private sector while the state government leads the project. 
  • According to the state economic development arm, the river banks of the 80km stretch in Selangor have as much as RM50bn development potential, i.e. GDV over 12-20 years and could create 150k jobs. The project development masterplan is being fine-tuned. Physical works is expected to start in mid 2010. (Edge Weekly) Please refer to our QT for details and comments.
Tengku Datuk Ibrahim Petra Tengku Indra Petra had ceased to be Petra Perdana's CEO effective 19 Mar. He was ousted from his position as chairman and director of Petra Perdana in an EGM on 4 Feb, along with three others. (Star) Please refer to our note today for comments.

Telekom Malaysia (TM) and Perbadanan Pembangunan Pulau Pinang Telecommunication Services Sdn Bhd (PDC Telco) has signed a five-year agreement which will help in expanding broadband services.
  • The agreement would also enable the telco structures under PDC Telco to be connected to the TM Wholesale Ethernet and High-Speed Broadband (HSBB) Transmission networks through high-speed fibre-optic technology. PDC Telco, which started operations in Jun-05, currently owns 28 telco structures. 
  • This year, 45 structures will be constructed and these will be rented and shared among the telco companies and WiMAX operators. (Bernama)
Axiata Group has set an indicative price range of 3,000-3,300 rupiah (1 rupiah = RM0.03) per share of its stake in Indonesian unit PT XL Axiata through an international private placement. “The final selling price for the offer shares can only be determined after the completion of the bookbuilding exercise, which will commence on March 22 2010,” it said. (BT)

Sabah’s palm oil industry produces enough waste to generate up to 700MW of electricity, an American energy researcher said. Dr Daniel M Kammen said biomass power generation plants were economically feasible and logistically achievable via a four-project per year ramp-up programme.
  • Meanwhile, Abdul Nasir, who represented Sabah Electricity (SESB), insisted that the biomass approach to generate power was not viable to generate 300MW of electricity need in the state’s east coast. (The Star)
YTL Power’s Wessex Water is expected to start work on rehabilitating the highly polluted Klang and Gombak River in Selangor and treating the water to make it safe for drinking at the latest by early 2011. The RM15bn project will span 15 years. Wessex Water will be working in the lower reaches of the Klang River, between Puchong and Shah Alam. Its portion of the project will cost RM400m-600m, depending on where the state government wants to locate the water treatment plant, among other considerations. (BT)

The Securities Commission (SC) had received some 30 applications from both local and foreign companies for IPOs as at March 15. According to issues and investment executive director Eugene Wong, the SC received two applications this year while the balance was brought forward from last year. (Starbiz)

Three more companies from China have been approved to be listed in Malaysia while another four are being considered, the Securities Commission (SC) said. "Three have been approved but yet to be listed, while another four are under consideration," the regulator's chairman Tan Sri Zarinah Anwar said.
  • These were part of 11 initial public offering (IPO) applications that the SC received from foreign-based companies last year. Of the 11, one was rejected and another three were listed on Bursa Malaysia. The three listed were Xingquan International Sports, Multi Sports Holdings and Xidelang Holdings, which together raised funds totalling RM421.8m. 
  • The SC ED for issues and investment Eugene Wong said companies from other countries have also shown interest to list here, but this would only happen gradually. "What we have to do is ensure that their regulatory framework is sufficient for our listing requirements. We have to be cautious about these things because investor rights have to be protected," he said.
  • The SC received 30 IPO applications as at 15 Mar, two of which came in this year while the rest were rolled over from the end of last year, he said. (BT)
MISC is one of eight companies that have expressed interest in bidding for PT Pertamina’s first offshore LNG import terminal in West Java. Pertamina is looking at having a floating, storage and regasification unit (FSRU) up and running by September 2011. An FSRU is usually an older LNG vessel converted for regasifacation.
  • The West Java FSRU of 3mtpa is being sought, and will be located some 15km offshore. LNG for the West Java FSRU is likely to come from the Bontang LNG plant, which operates on the Badak field in east Kalimantan. (The Edge Weekly)
Local contractors are going as far as Taiwan and China to buy steel bars in bulk because steel millers in the country have raised prices by 10% to RM2,200 a tonne. "Before Chinese New Year, steel bars were around RM2,000 per tonne. Now, they are RM2,200 per tonne because local steel millers have raised prices," said Master Builders Association Malaysia president Ng Kee Leen.
  • At current prices set by local steel millers, Ng said it is much cheaper for contractors to import steel bars from neighbouring countries. "We've been importing steel bars since March 2009, but now we need to ship in more from bigger millers in Taiwan and China," he said. (BT)
Perdana ParkCity, a subsidiary of Samling group, has shortlisted seven companies, including one from Japan, to build a RM250m hospital in Desa ParkCity in Bukit Menjalara, Kuala Lumpur. They are Sunway Construction, Crest Builder Holdings, Putra Perdana Construction, UEM Construction, Bina Puri Construction, Ahmad Zaki Construction and Japanese construction giant Obayashi Corp.
  • Sources familiar with the plan said that tenders for the 10-storey, 300-bed hospital, to be known as Sime Darby Medical Desa ParkCity, will close this Friday. "Perdana ParkCity will award the contract in April or May based on merits, technical expertise and track record. Construction will start by May or June, and be completed in 2012," one source said. (BT)
Road Builder, an indirect wholly-owned subsidiary of IJM Corp, has won a RM600m contract from Besraya (M) to build an extension of the Sungai Besi Expressway (Besraya) in Kuala Lumpur. Construction is expected to take 36 months. (BT)

The Real Estate and Housing Developers' Association Malaysia (REHDA) has proposed that all housing developers in the country, contribute 0.25-0.5% of the value of their projects, to a fund to ensure the interest of buyers is protected. President, Datuk Ng Seing Liong, said the move is to assist house buyers in the event, a developer fails to complete their dream home or if a project is abandoned. The proposal paper on the fund is being finalised while a working paper on it was submitted to the government last July. (Bernama)

Unisem (M) expects revenue to grow 44% this year to RM1.5bn, bringing performance back to pre-crisis levels, as demand for semiconductor equipment recovers. Chairman and MD John Chia anticipate the Asia-Pacific region to be the biggest market for the semiconductor industry, with Western economies and India lending strong support. "We intend to employ another 300-400 workers to sustain our production needs and meet maximum capacity. What a difference a year has made as 2009 was a difficult year during which stringent cost-control measures were placed. But we managed to get through the rough patch," Chia said. (BT)

PLUS Expressways is eyeing more highway concessions in the Asia Pacific region as part of its expansion plans. MD Noorizah Abd Hamid said the company is in talks with several countries in the region to build new highways or upgrade and maintain existing facilities. She did not name them.
  • "We have the potential to go abroad either to be an equity holder of a concession, (participate) on a JV basis or start from scratch by building a new highway altogether," she added. Noorizah cited Vietnam as a country with great potential due to its burgeoning population and surging economic growth. (BT)
CI Holdings' Permanis is confident it will not suffer the same fate as its rival F&N, which will be parting ways with The Coca-Cola Co, as Permanis’ business strategy is in line with that of its franchise partner PepsiCo. Permanis president and CEO Erwin Selvarajah said the relationship between the company and PepsiCo is strong as both share the same business direction in terms of product range. (Star)

The Port Klang Authority's (PKA) move to reduce the free storage period for full container load containers at Northport and Westports from five days to three, looks set to be delayed again, despite assurances to the contrary.
  • On December 31 2009, PKA had issued a directive that it would go ahead with the implementation of the decision to reduce the period in which containers can be stored at Port Klang for free to 72 hours. A three-month grace period, which ends on March 31, however, was given to help players in the shipping industry prepare for the transition phase. One possibility being discussed is to have the free storage period shortened to 96 hours, rather than 72 hours. 
  • The implementation of the new law has been postponed several times in the last eight years, following objections from some players in the shipping community in Port Klang who feel they were not quite ready yet. (BT)
Westports Malaysia charted a new record number of crane moves in one shift this month, with 734 moves per hour on the CSCL Pusan, belonging to China Shipping. The 9,600- TEU (20-foot equivalent unit) vessel was off-loaded by nine cranes, doing a total of 5,244 moves. The feat beat the previous record of 665 moves per hour set in 2008.
  • "The productivity achieved over such a large volume of moves across the vessel continues to boost the port's status as the world's best five for productivity and a leading mega transshipment hub in the region," said Westports executive director Ruben Emir Gnanalingam in a statement. (BT)
Lexus Malaysia is targeting to sell 400 units of new Lexus vehicles this year compared with 305 units a year ago. President Kuah Kock Heng said that some 20% of the sales would come from the northern region. “We will set up a showroom in Johor Baru at the end of this year. Subsequently, we will study the market in East Malaysia,” he said. (Starbiz)

Century Logistics is reviewing its business model in Thailand, after charting some RM2m losses there. "We want to go slow in Thailand and not put too much hope there. The risk is too big," MD Steven Teow Choo Hing said. While Vietnam was another target market for expansion for its total logistics and supply chain management division, Teow said the group has held off its plans to enter the market in view of the inflationary issues there. (BT)

Goldis expects three-quarters of its GTower building in Jalan Tun Razak, Kuala Lumpur, to be occupied by Jan-2011. The 30-storey office building has a built-up of 1.4m sq ft and over 800,000 sq ft in nett lettable area. "We have confirmed occupancy of 48%," Goldis' head of corporate investments Colin Ng said.
  • The tenants, mostly from the oil and gas and MSC-status companies, moved into the building in late Jan-2010. The rental at GTower including service charge is RM7.50 psf. Ng, who expects return on investment to take 7-8 years, said that among GTower's pull factor is the leasing flexibility which enables tenants to rent for short or long term. (BT)

20100322 1123 Malaysian Economic News.

Inflation remained at a low level with the Consumer Price Index (CPI) for February up 1.2% yoy (1.3% in Jan) but unchanged as compared to preceding month. This came below the market consensus of a 1.4% yoy gain in February. For the Jan-Feb 09, the CPI rose 1.3% yoy. (Bernama, BT) Please see our Economic Update for further details

Bank Negara Malaysia’s international reserves amounted to RM331.7bn (US$96.8bn) as at 15 Mar 10, against RM331.8bn (US$96.8bn) as at end-Feb. The reserves position is sufficient to finance 9.2 months of retained imports and is 4.3 times the short-term external debt. (BNM)

Minister of International Trade and Industry Datuk Seri Mustapa Mohamed said that there is an investment imbalance between Malaysian and Thailand at the moment, with Malaysians investing a total of RM3bn in Thailand while Thailand's investment in Malaysia is about RM500m.
  • Malaysia would like to see Thailand increase its investment in Malaysia in the area of agriculture, "halal" sector, small and medium enterprises, chemicals and food. "We expect the size of Thailand's investment in Malaysia to increase with the three important trade visits within the next three months. We also look forward to an increase in the number of joint-venture projects," Mustapa said. (Bernama)
PM Datuk Seri Najib Tun Razak said that the government will not neglect the rural sector in formulating the New Economic Model (NEM). The government had also allocated RM750m in additional fund to the Rural and Regional Development Ministry to implement rural development programmes. "The government will continue with the agenda to transform the rural community so that they can become self-sufficient and not relying too much on the government,” Najib said. (Bernama)

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said that the government decision to postpone the tabling of the Goods and Services Tax (GST) Bill for a second reading in parliament is not due to lack of political will. The government’s political will is putting the people first by providing adequate information before the GST is implemented to replace the Sale and Service Tax (SST). (Financial Daily)

Agriculture and Agro-based Industry Minister Datuk Seri Noh Omar said that the Federal Agriculture Marketing Authority (Fama) should play a more aggressive role in ensuring the country's agricultural products are marketed more successfully. "If they are successful, the agricultural sector's contribution to the country's economy will also increase," he said. (Bernama)

Malaysia needs to boldly reform economic policies to stay ahead of the competition and realise the aspiration of achieving the status of a high-income nation, said Koong Lin Loong, Deputy Chairman of the Associated Chinese Chamber of Commerce and Industry (ACCCIM) Small & Medium Enterprises and Human Resource Development Committee.
  • “As to the consequences of staying on the current course, we will pay a high price if our economy is not reformed now. As part of ASEAN, Malaysia has today been almost overtaken by Indonesia and Vietnam. If we remain as we are, Malaysia will be able to only compare itself with countries such as Myanmar and Cambodia,” he said. 
  • “The current policy focuses on aspects relating to the industrial sector which has benefited only foreign manufacturers, with local SMEs being excluded. If Malaysia intends to push towards a high-income status, the country must not rely on labour intensive industries, as we are unable to compete with those countries that have cheap labour resources," he noted. (Bernama)
At least 12 JobsMalaysia centres are to be opened nationwide to help job-seekers secure employment, Human Resource Minister Datuk Dr S. Subramaniam said. The other centres are in Port Klang and Kelana Jaya in Selangor, Johor Baharu (Iskandar Malaysia) and Segamat in Johor, Sungai Petani (Kedah), Kota Baharu (Kelantan), Ipoh (Perak), Georgetown (Penang), Kuching (Sarawak), Kota Kinabalu (Sabah) and Kuala Terengganu. (Bernama)

20100322 1116 Global Economic News.

As US Congress considers limiting the Federal Reserve's regulatory authority to just the country's largest bank holding companies, Fed Chairman Ben Bernanke reiterated on Saturday that the US central bank should retain power over banks of all sizes. The talk echoed points Bernanke has made in several previous speeches, when he has argued that the supervision of small banks helps the Federal Reserve monitor the pulse of the "continent-spanning, highly varied" economy.
  • That "breadth of vision" informs the Fed's decision-making process when setting monetary policy, Bernanke said Saturday. He added that the Fed is the only body with the expertise to keep close watch on big banks as well as regional community banks. (CNN Money)
US unemployment rates continue to rise, with the majority of US metropolitan areas showing an increase in January. There were 35 metropolitan areas with unemployment rates at or above 15% in January. California and Michigan remain the hardest hit, with 19 cities in California showing rates above 15%. (CNN Money)

International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn said European Union policy makers are not doing enough to introduce measures to manage and resolve future financial crises. Existing arrangements have been shown to be inadequate and the region should consider creating an authority with the power to deal with a bank failure that could impact numerous countries, Strauss-Kahn said. (Bloomberg)

Nobel Prize-winning economist Robert Mundell said the International Monetary Fund (IMF) should be an “extreme lender of last resort” for European nations debating how to help Greece end its budget crisis.” For Greece, the first resort is to the Europeans and to see what the Europeans could do, while making budget adjustments. Greece has to make a big contribution and then I think the other European countries will cough up funds,” Mundell said. (Bloomberg)

Greek Prime Minister George Papandreou is racing to secure an explicit pledge of European aid and cut his country’s borrowing costs as €20bn (US$27bn) of debt which comes due in the next two months. With investors still demanding Greece to pay 3% pt more than Germany on its 10-year debt, Papandreou says Greece can’t afford to hold out much longer at current market rates. His government still needs to raise another €10bn to repay bonds maturing on 20 Apr and 19 May. (Bloomberg)

Bank of England (BoE) policy maker Andrew Sentance said the recovery in the global economy, particularly in Asia, poses a risk of faster inflation. “There is a worry that growth in Asia and other emerging markets may prove too strong, fueling the growth of asset prices and putting upward pressure on global energy and commodity prices. If the momentum of the global recovery is sustained, there is a risk of further upward price pressure from this direction, with a knock-on impact on broader measures of inflation around the world,” he said. (Bloomberg)

National Strategy Minister Yoshito Sengoku said Japan has “extremely little” room for additional stimulus spending because of the country’s financial condition. “From a fiscal point of view, there’s extremely little room for such a thing. We need to carefully watch whether the situation would go to such lengths,” he said. (Bloomberg)

India’s central bank unexpectedly raised interest rates for the first time since Jul 08 after inflation accelerated to a 16-month high. Reserve Bank of India increased the benchmark reverse repurchase rate to 3.50% from a record low of 3.25% and the repurchase rate to 5.00% from 4.75%, saying containing inflation has become “imperative.” (Bloomberg)

Taiwan’s export orders rose 36.3% yoy in February (71.8% in Jan), marking the fifth consecutive month of increase as a resurgent global economy spurred demand for the island’s computers, mobile phones and television screens. Economists projected it would expand by 30.7%. (Bloomberg)

Thailand’s exports rose 23.2% yoy to US$14.4bn in February (30.8% in Jan), marking the fourth consecutive month expansion as orders for rice, electronics and automobiles climbed, supporting the nation’s economic recovery. Imports climbed 71.2% yoy in February (44.8% in Jan), the third consecutive month of gains after a year of contraction. The trade surplus narrowed to US$440m from US$516m in January. Economists projected the exports and imports would increase 18.8% and 55.8% respectively in February. (Bloomberg)

Thailand’s foreign-exchange reserves rose 0.6% to US$143.4bn in the week ended 12 Mar, from US$142.6bn a week earlier. The central bank’s holdings of forward contracts fell 2.4% to US$12.0bn in the same period, from US$12.3bn. (Bloomberg)

Indonesia plans to unlock more sectors to overseas investors including health, agriculture and creative, although it will not allow investment in telecommunication towers, Gita Wirjawan, the head of the country’s investment coordinating board said. A draft on investment in strategic areas, known as the negative list on foreign investment, had been finalised and should be approved soon, he added. (Financial Daily)

China warned its export-dependent economy is likely to experience a trade deficit in March – the first for a single month in six years. Commerce minister Chen Deming defended the nation’s exchange rate policy, arguing that a stronger yuan by itself could not resolve global trade imbalances. (BT)