Wednesday, March 24, 2010

20100324 1814 FCPO EOD Daily Chart Study.

FCPO closed : 2560, changed : -31 points, volume : higher.
Bollinger band reading : side way downside biased.
MACD Histrogram : rising paused. seller refuse to leave.
Support : 2550, 2521, 2500 level.
Resistant : 2570, 2590, 2620 level.
Comment :
Improved volume and volatility FCPO eased lower due to weaker soy oil and crude oil futures price and a stronger US Dollar exchange rate. Daily chart shows that the upward correction could have possibly stop and market may resume it downward movement from here waiting for tomorrow price movement for confirmation. Expect market to trade side way range bound downside biased 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 larger cut loss and profit target. 

20100324 1723 FKLI EOD Daily Chart Study.

FKLI closed : 1313, changed : +1 point, volume : slightly lower.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : recovering, buyer taking chances.
Support : 1312, 1307, 1300, 1295 level.
Resistant : 1318, 1325, 1330 level.
Comment :
Closed fraction a point higher FKLI trade side way ranging within a 7.5 point range. Daily chart reading continue to show a side way range bound little upside biased 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 quick cut loss and profit target.

20100324 1257 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1314, changed : +2 points, volume : high.
Bollinger band reading : side way upside biased.
MACD Histrogram : weakening, buyer lock in profit.
Support : 1312, 1307, 1300, 1295 level.
Resistant : 1318, 1325, 1330 level.
Comment :
Traded in convincing volume FKLI opened higher followed by profit taking activities press price down to ended the first session marginally higher. Hourly chart reading shows that market is corrently having a downward correction as price touched the upper Bollinger band level during the opening session. Expect a side way range bound correction market with a little upside biased.

20100324 1244 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2577, changed : -14 points, volume : low.
Bollinger band reading : side way downside biased.
MACD Histrogram : weakening, low buying and selling interest.
Support : 2570, 2550, 2521 level.
Resistant : 2590, 2620, 2650, 2670 level.
Comment :
Quiet FCPO traded lower in thin volume tight range. Hourly chart outlook remain side way range bound testing support and resistant level.

20100324 0944 Malaysia Corporate News.

A month after Alliance Bank Malaysia group CEO Datuk Bridget Lai resigned, two other top executives have submitted their resignations. Alliance Bank said the two were Sachi Ratnajoothy, executive vice president / CEO of Alliance Investment Bank and head of financial markets at Alliance Bank as well as Lok Eng Hong, the head of dealing, equity markets at Alliance Investment Bank. A source close to the bank said the resignations of Sachi and Lok were not related to Lai’ departure. (StarBiz) Any further resignations of key personnel in the bank would be, to certain extent, negative for the earnings prospects of the group, especially after the departures of the group CEO and COO.

Former British Prime Minister Sir John Major commended Datuk Seri Najib Tun Razak for his candour and being straightforward with foreign fund managers here in outlining the state of the Malaysian economy and listening to their concerns.
  • "Malaysia is in very good hands indeed, based on what the Malaysian Prime Minister has been telling foreign fund managers at the Credit Suisse Asian Investment conference here Tuesday and his commitment to change Malaysia into a truly developed economy," he said. 
  • Major, a special adviser to Credit Suisse, was addressing a dinner function hosted by CIMB and the financial services group where Najib was guest of honour after the highlevel conference which brought together some 100 top-notch regional fund managers.
  • Najib had back-to-back meetings with fund managers as well as captains of industry and delivered a keynote address at a luncheon which was moderated by Major.
  • Najib said he took cognizance of what changes fund managers wanted to see in the Malaysian capital market. The Prime Minister said that after intense deliberations with the fund managers, he had a good sense now of how they perceived Malaysia.
  • He said it was crucial to make them understand why Malaysia needed to be more competitive, stronger economically and thereafter emerge as an attractive investment destination. "This is what the New Economic Model (NEM) is all about, which will set the future direction in terms of the economic transformation of Malaysia," he said.
  • Najib said that the NEM, to be unveiled on March 30, should be nothing short of a transformation and should not be merely an incremental change. "I believe we should move right across the board so that there is a massive transformation of Malaysia in due course," he said.
  • To this end, he called on foreign fund managers to invest in Malaysia for the long haul and expressed confidence that the country would emerge as an exciting prospect for them and the investors. (Bernama)
Khazanah Nasional will explore international acquisitions in Asia instead of high-profile purchases of Western companies, said Azman Mokhtar, managing director of the Malaysian state investment agency yesterday.
  • It will target buying opportunities in South-east Asia, especially Indonesia and Singapore, as well as in China, India and the Middle East, Mr Azman said outside a Credit Suisse Group AG-sponsored conference. 
  • Khazanah currently makes 12% of its investments outside Malaysia, rising from zero five years ago. International operations of companies it has stakes in, such as the country's second-largest bank CIMB Group Holdings Bhd, will take the percentage to about 20%, he said.
  • 'It's a gradual approach,' Mr Azman said. 'It will continue to rise.' Khazanah as 'a sovereign development fund' and its international investments will be more geographically focused because of the company's mandate, he said. (SBT)
CIMB-Principal Asset Management aims to manage assets worth RM30bn by year-end, as it is confident that the total asset value under its care is poised to expand by some 30% this year. CIMB-Principal, a joint venture between CIMB Group and US-based Principal Financial Group, managed funds worth RM22.1bn as of last year. (BT)

The resignation of EON Capital's chairman Tan Sri Syed Anwar Jamalullail and Yeo Kar Peng is now official with the central bank's clearance. Bank Negara's has only approved only two out of four independent directors who resigned last week to leave.
  • This is to meet Bank Negara Malaysia's ruling that at least a third of the company's board is made up of independent directors. Meanwhile, Datuk Dr Mohd Shahari Ahmad Jabar and Rodney Gordon Ward will stay, probably until the new independent directors recently appointed by EONCap's shareholders are approved by Bank Negara. It is understood that the central bank has left it to the four to decide who will stay for the moment, just to ensure a functional board at all times. 
  • In a separate statement, EONCap said it was unaware of any discussions concerning the sale of a stake in the company by any of its shareholders to a group of private investors from Abu Dhabi.(BT)
Mah Sing Group is looking for land in Sabah to build residential homes and villas for foreign buyers interested in the "Malaysia My Second Home" (MM2H) programme. Group MD Tan Sri Leong Hoy Kum said the company was seeking land in Kota Kinabalu to develop into a mixed range of properties, including villas and residential homes.
  • "We decided on Sabah because we find that many foreigners are interested to buy properties there." The group is on track to meeting its RM1bn sales target for the year through several property developments in the Klang Valley, Penang and Johor. 
  • We are on track to achieving our sales target, based on our performance in the first three months of this year during which we hit RM516m. That is 3x more than the RM170m sales achieved in the same period in 2009," Leong said.
  • The group also plans to acquire at least 405ha in prime areas in Selangor and Johor Baru. "We have bought two pieces of land since the beginning of the year and are looking for more land to buy, especially in prime locations in Selangor." Mah Sing has a GDV and unbilled sales of RM6bn, which provides earnings visibility for about six to eight years. (BT)
Malaysian contractors are making inroads abroad, having directly been involved in 614 construction projects worth US$24.3bn (RM81bn) in several countries, Works Minister Datuk Shaziman Abu Mansor said. "Of these, 489 projects worth US$9.3bn have been completed, while the remaining 125 projects are under construction," he said.
  • He said local construction-based professional services companies have also shown remarkable performance globally, whereby out of 361 firms registered with the ministry's Professional Services Development Corp, 109 have started to make inroads, being involved in 412 overseas projects. "Of these, 208 projects that the local professional service providers are involved in have been completed," he said. (BT)
The government will review any proposals for sports betting in Malaysia, said PM Datuk Seri Najib Razak. "There are proposals but we'll see first," he said. It was reported that sports betting may soon be legalised in Malaysia. The Berjaya Group is seeking approval from the authorities to operate sports-betting activities in the country. (NST)

Globetronics will spend between RM60-70m as part of plans to boost the group's presence in the global light-emitting diode (LED) market. The company is spending on technology investment, capacity expansion and research and development (R&D) this year.
  • This is part of the company’s plans to boost its presence in the global light-emitting diode (LED) market, said CEO Heng Huck Lee. This is also in line with Malaysia's aim to replace all traditional light bulbs by 2014 to LED, compact fluorescent lamps and fluorescent tubes due to their energy-efficient and environment-friendly nature. 
  • Globetronics sees LED as its main source of growth, as it already supplies to the world's top five multinational light bulb companies. It ventured into LED in 2000 when it bought over ISO Technology S/B. Today, the LED business contributes about 20% of the group's revenue, or about RM100m a year, and it is slated to grow by 15% annually. By 2012, the global LED market is projected to reach a value of US$10bn with an average annual growth of between 20-25%. Countries such as Australia and Japan are already putting a ban on incandescent light bulb beginning this year. (BT)
Volkswagen Group Malaysia expects to finalise its plans to set up an assembly plant for its completely-knocked-down (CKD) models in Malaysia by first half of this year. Its MD, Andreas Prinz, said the company was currently considering various options, including local partners as well as the plant site.
  • "Once finalised, it will take us about 15 to 18 months to set up our plant," he added. He said the plant would assemble CKD Volkswagen models for the local as well as the Asian markets. (Bernama)
Sindora Bhd, a Johor Corp subsidiary, is going into biotechnology in a big way, following its 60% equity acquisition of bio-fertiliser manufacturer Microwell. For starters, Sindora, which has eight companies under its belt, is setting up a RM36m biofertiliser factory in Bandar Tenggara, Johor, by mid-2011. Sindora chairman Tan Sri Muhammad Ali Hashim said the company's move into biofertiliser would help reduce its dependency on imported fertilisers. (BT)

20100324 0937 Malaysian Economic News.

Malaysia’s Prime Minister Najib Razak said the economy may expand more than 5% this year as the country recovers from last year’s recession. “I’m on record to say I am looking at 5% and beyond,” Najib said in Hong Kong. “But that’s a general kind of goal for the government.” The central bank will release its official economic forecast tomorrow. The government is also considering whether to issue a global bond after fund managers indicated such a security would be “viewed very favorably,” Najib added. (Bloomberg)

The government is seriously considering a sovereign bond issue purely to gauge its credit worthiness and to get the right kind of signals from foreign fund managers, Prime Minister Datuk Seri Najib Tun Razak said. The reaction from foreign fund managers was that the market would be very receptive to the idea.
  • Asked what the money would be used for if such a bond was issued, Najib said it was not so much for the money as there was enough liquidity in the domestic system for development purposes. (Bernama)
Malaysia needs to implement structural fiscal reforms like a goods and services tax to boost its credit rating, ratings agency Fitch said. “Disappointingly, fundamental reforms to budget revenues with the introduction of goods and services tax have been postponed. That kind of reform and structural improvements in the budget revenue is what we look for to restore positive pressure in the credit ratings,” it said. (BT)

PM Datuk Seri Najib Tun Razak said Malaysia should see higher foreign direct investment (FDI) this year after the government implements administrative reforms. The New Economic Model (NEM), to be announced later this month, will include unspecified administrative reforms that should result in a “marked improvement” in FDI. The government has been considering proposals to end its subsidy regime and phase in a new goods and services tax as it begins dismantling a four-decade race-based economic system that has deterred foreign investment.
  • He has given the assurance that Malaysia will address the needs of foreign fund mangers for increased liquidity plus good and well-governed listed companies in making the local equity and capital markets more attractive to portfolio inventors. 
  • “We don’t want the investments to be in labour-intensive industries. We want to look at backward linkage to the domestic economy and the creation of high value or paying jobs,” he added. (BT, Financial Daily, StarBiz)
PM Datuk Seri Najib Tun Razak said he would keep rolling back policies that give preferential treatment to ethnic Malays as he seek to lure investment and boost stockmarket liquidity. “Whether we will do away completely with affirmative action is something we have to consider very carefully. Affirmative action will be more market friendly, more transparent and will be more merit-based. These policies will be outlined in the New Economic Model (NEM) which will be announced next week,” he said. (StarBiz)

20100324 0933 Global Economic News.

Federal Reserve Bank of Chicago President Charles Evans said the US central bank is likely to maintain an “accommodative” interest-rate stance for at least six months to support the momentum of economic growth. “I would expect it will hold for the next 3-4 meetings, that’s about six months,” Evans said. “I won’t be surprised if it carried into 2011.” (Bloomberg)

The National Association of Realtors (NAR) reported that February US existing home sales fell 0.6% to a seasonally adjusted 5.02m (5.05m in Jan), the third monthly loss in a row. Still, sales are 7% higher than in February 2009. The figures came in slightly above analyst expectations of an annual rate of 5m units. The NAR's chief economist said the rise in February inventory is 'discomforting' but still hoped for another sales surge in the April- May-June period to beat the end of tax credits. Inventory rose by 311,000 units, the strongest January-February rise in 20 years, to 8.6 months supply on the market. (Xinhua, CNN Money)

US house prices fell 0.6% on a seasonally adjusted basis in January (-2.0% in Dec 09), according to the Federal Housing Finance Agencys monthly House Price Index. For the 12 months ending in January, US prices fell 3.3%. The US index is 13.2% below its April 2007 peak. (Xinhua)

San Francisco Federal Reserve Bank President Janet Yellen made it clear Tuesday she sees no urgency for the Fed to consider tightening monetary policy, presenting a fairly gloomy outlook for employment and housing as well as minimised inflation risks. Yellen, who the White House has identified as a leading candidate to succeed retiring Federal Reserve Board Vice Chairman Donald Kohn, said there will eventually come a time for the Fed to tighten.
·    But she said that time will only come when "recovery takes firm root" and GDP growth "moves toward its potential" -- this after predicting that the economy will operate "well below its potential for several years." (Xinhua)

President Obama signed the sweeping health care legislation into law Tuesday morning, and said the landmark bill will provide necessary health insurance for millions of Americans who don't now have it while also reducing the nation's future budget deficits by US$1tr. "It is paid for. It's fiscally responsible and will end a decade long drag on our economy," Obama said. (Xinhua)

It will likely take several months to review the possible options for the future of Fannie Mae and Freddie Mac and housing finance in general, but Treasury Secretary Timothy Geithner ruled out some options Tuesday, including those that would give no role to the government.
  • There is a "quite strong" economic and policy case for "continued provision of a carefully designed guarantee by the public sector going forward because housing market is so critical to overall economic activity," Geithner said. 
  • He also stressed that the government "will make sure" Fannie Mae and Freddie Mac have the resources they need to meet their obligations "past and future." In other comments, he said the Treasury is looking at covered bonds as a tool that could be used more in the housing finance system. (Xinhua)
Japan’s fiscal plan to be released by June may include a numerical goal for reducing the ratio of debt to gross domestic product, National Strategy Minister Yoshito Sengoku said. “We need to consider steadily reducing the accumulated long-term public debt relative to GDP once the economy returns to cruising speed,” Sengoku said. “We need to show some sort of numerical target” in the mid-term fiscal framework, he said. (Bloomberg)

China’s inflation rate probably eased in March from the previous month, according to the National Development and Reform Commission (NDRC). The average pace of inflation for the first quarter will be between 2-2.5%, a “mild” pace, the NDRC said. (Bloomberg)

Singapore’s consumer prices increased for a second month in February as food and transport costs rose amid a regional economic rebound that has spurred some Asian central banks to raise interest rates. The consumer price index rose 1% yoy in February (0.2% in Jan). That matched the median estimate. (Bloomberg)

Taiwan’s industrial production climbed for a sixth consecutive month, boosted by rising orders for computers, mobile phones and television screens. Output advanced 35.17% yoy in February (70.08% in Jan). The median estimate was for a 37.75% gain. (Bloomberg)

Philippines reported a tenth monthly budget deficit in February as revenue declined, hurt by lower investment income and delays in asset sales. The shortfall was 33.2bn pesos (US$729m), which compares with the 29bn peso gap a year earlier. The two-month deficit climbed to 70.3bn pesos from 67bn pesos in the same period last year. (Bloomberg)

Governments must bite the bullet in the next three months and announce action to cut back huge debt and budget deficits, or put themselves deeper into trouble, the Organisation for Economic Cooperation and Development (OECD) warned. Without significant action, debt levels would continue to rise in the medium term from already high levels in a number of countries, including Japan, US and UK. (Channel News Asia)

India said it must double infrastructure spending in its next five-year economic plan to achieve 10% p.a. economic growth as it seeks to combat poverty. It will have to spend about US$1tr on improving highways, ports, airports, power plants and other infrastructure over the five years to 2016-17 to attain its growth target, Prime Minister Manmohan Singh said.
  • That is up from US$500bn in planned infrastructure spending in the five years to 2011- 12. Private participation in infrastructure development is indeed a feasible proposition and can help expand infrastructure much faster than it would have relying only on public resources, he noted. (Channel News Asia)
Indonesia may scrap electricity and fuel subsidies by 2014-2015 so that energy prices reflect market levels, reducing the financial burden on the state, the Mines and Energy Minister Darwin Saleh said. “The government will carefully study the subsidy issue in consultation with parliament. Indonesians should know the real economic price for energy,” he added.
  • Previously, Finance Minister Sri Mulyani Indrawati noted that spending on subsidised electricity and fuel would rise to Rp143.8tr in 2010, up from the earlier budget target of Rp106.5tr. (Financial Daily)
China will probably run a trade deficit of more than US$8bn in March, Premier Wen Jiabao said. It would be China’s first monthly deficit since Apr 04, but is expected to be a one-time blip rather than the start of a new trend for China. “To be honest, I was happy when I learnt of the situation (of the expected deficit). China is by no means seeking a trade surplus. On the contrary, we have left no stone unturned in expanding imports to achieve a trade balance,” Wen said. (Financial Daily)

Germany and France, paving the way for a European Union plan to aid Greece, agreed to involve the International Monetary Fund in any potential EU package for the debtburdened nation, a German Finance Ministry official said. (Bloomberg)

Britain might not face as “monumental” a situation as people assume if the nation were to lose its top AAA credit rating, former Bank of England policy maker David Blanchflower said. (Bloomberg)