Friday, March 26, 2010

20100326 1853 FCPO Weekly Chart Study.

FCPO closed : 2534, changed : -43 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : getting lower, seller taking exposure.
Support : 2530, 2500, 2450 level.
Resistant : 2580, 2630, 2700 level.
Comment :
FCPO continue to trade lower in diminishing volume week on week. However, weekly chart reading has yet to turn negative and still suggesting a side way range bound market as the Bollinger band width continue to turn inward. Should price continue to trade lower with supportive volume in the coming week and Bollinger band width stop contracting will lead market to a negative biased development.

20100326 1836 FCPO EOD Daily Chart Study.

FCPO closed : 2534, changed : -41 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : reversed lower, seller taking chances.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2590 level.
Comment :
Weaker soy oil futures price development lead FCPO to trade lower with improved volume changed hand. Daily chart recorded a weaker outlook with further downside potential.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/breakdown with larger cut loss and profit target.

20100326 1802 FKLI Weekly Chart Study.

FKLI closed : 1321, changed : +23 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histrogram : recovering, buyer still in charged.
Support : 1310, 1300, 1270 level.
Resistant : 1335, 1350, 1360 level.
Comment :
FKLI ended the week boldly forming a up wide range bar with increased volume transacted. Weekly chart wise, the market downward correction has ended and resumed its uptrend movement. Expect market to trade side way range bound with a little upside biased in the coming week.

20100326 1740 FKLI EOD Daily Chart Study.

FKLI closed : 1321, changed : +3.5 points, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : rise higher, buyer still defending.
Support : 1318, 1312, 1307, level.
Resistant : 1325, 1330, 1335 level.
Comment :
Closed near the high FKLI traded firmer with continue improving volume following major Asia market that closed in positive territory. Daily chart reading outlook starting to turn bullish biased with potential testing further upside resistant level.
When to buy : buy at support/weakness/break up with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20100326 1250 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1315, changed : -2.5 points, volume : high.
Bollinger band reading : side way range bound.
MACD Histrogram : not much changes, battle still on between buyer and seller.
Support : 1312, 1307, 1300, 1295 level.
Resistant : 1318, 1325, 1330 level.
Comment :
FKLI opened and traded side way range bound with better volume changed hand. Hourly chart continue to show a side way range bound market trading within the immediate support and resistant level of 1312 and 1318
until price break away from this range to identify the market new direction.

20100326 1239 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2552, changed : -23 points, volume : low.
Bollinger band reading : side way downside biased.
MACD Histrogram : falling, seller returned.
Support : 2550, 2521, 2500 level.
Resistant : 2570, 2590, 2620 level.
Comment :
Weaker overnight soy oil futures price lead FCPO to opened and traded lower in light volume. Hourly chart suggesting market to trade downside biased with possible small upward correction as price once overly penetrated below the lower Bollinger band level.

20100326 1015 Malaysia Corporate News.

Maybank proposed to undertake a recurrent and optional dividend reinvestment plan, which allows its shareholders to reinvest their dividends in new ordinary Maybank shares. The subscription to the new Maybank shares will be at a discount of not more than 10% to the 5-day volume weighted average market price prior to the price fixing date. The proposed dividend reinvestment plan will provide shareholders with greater flexibility in meeting their investment objectives as they will have the choice of receiving cash or reinvesting in the company through subscription of additional Maybank shares without having to incur material transaction or other related costs. Whenever a cash dividend (interim, final, special or other dividend) is announced, the board will decide if the reinvestment plan applies to the whole or a portion of the dividend. (BMSB)

Indonesia in April will raise the tax on palm oil exports to 4.5% from 3%, Diah Maulida, director general of foreign trade at the Trade Ministry, said in a mobile-phone text message today. The government raised the base price used to calculate the duty to US$752 a metric ton from US$708 a metric ton, she said. (Bloomberg)
This is expected and is in line with the rising international CPO price.

Hartalega Holdings is spending some RM40m to upgrade Plant 1 which will help to almost triple production capacity by next year. With 10 production lines, Plant 1 currently is only producing about 500m pieces of gloves a year. The refurbished plant will increase production to 1.7bn pieces of gloves a year. The refurbished plant is expected to be ready by July next year. Hartalega is also in the midst of completing its Plant 5 by November which will have 10 production lines. Currently, the group produces 7bn pieces of gloves a year and once all the new plants are upgraded and completed, the group will produce 9.7bn pieces of gloves a year. Kuan said the group is continuously looking to acquire land to prepare for the next phase expansion. (BT) Management's comments are in line with our estimates. Thus, no change to our earnings forecasts.

Malaysia Airlines is targeting a profit of RM100-300m this year, which would mark an improvement in operating terms from 2009, CEO Tengku Azmil Aziz said on Wednesday.
  • Mr Azmil said at the FIDAE air industry fair in the Chilean capital that the carrier would look at debt financing, possibly including corporate bonds, to fund its fleet renewal, but had no plans for any additional equity raising. 
  • 'Results for last year incorporated a lot of the fuel price difference. So if you strip that out, RM100-300 million would be better. We did lose money at an operating level last year,' he added.
  • 'The key thing will be what happens to the global economy. We are seeing quite different regions recovering at different paces. Fuel prices obviously are a concern as well. Those are the two big elephants in the room. The other things don't matter as much.' (Reuters, SBT) 
We are currently projecting operating loss under FRS of RM432m for 2010, so MAS’s projections for RM100-300m profit exceed our expectations.

Malaysia Airlines will reinstate most of the capacity it took out during the economic downturn in the coming days to months as demand for air travel picks up except for its American route.
  • Its forward bookings for 2Q10 is also showing a strong growth trend with bookings hitting 70% despite 2Q being traditionally a slower quarter. “We carried about 62% load last year,’’ MAS senior general manager (sales) Datuk Bernard Francis said. 
  • Traffic picks up in 3Q and exceptional growth is experienced by most airlines in 4Q. Bernard said it would be good if the airline could end the year with loads of 70% to 75%. He said there was a lot of growth in the Asia-Pacific region, Asean, Europe and Australia but a bit slower in the United States.
  • To reinstate capacity, the airline will add flights from Kuala Lumpur to Auckland (from four to five weekly) and Perth (from nine to 10 weekly) before end of March. For Paris, the plan is to add two weekly flights from five to seven, and recently it added two weekly flights to Brisbane. “With this and some more, we would have added back more than half the capacity that we took out during the crisis,’’ he said.
  • By the last quarter of this year the airline will take delivery of three new aircraft and for that it is reviewing its network to add more frequency and routes. It has eyes on the Indian sub continent, Middle East and Asean. “We run labs to determine profit viability of each route that we intend to mount and we will make the announcements in mid-year,’’ he said. (StarBiz)
A Malaysia Airlines Boeing 737 from Singapore to Langkawi via Penang, with 83 passengers and seven crew members on board, made an emergency landing at the Bayan Lepas International Airport yesterday. The plane landed safely and all passengers and crew on board were safe. A passenger on the flight, Eddie O’Hara from Sydney, said that before the plane made an emergency landing, he heard loud noises and saw fire and thick smoke from one of the engines. “The captain made a circular movement and attempted to land on the runway but had to abandon the move and take off before making a second attempt successfully.” He also praised the pilot for being very professional throughout the ordeal and for his ability to land the plane safely without causing any injuries to the passengers or crew. (Bernama)

A battle royal is shaping up between Gamuda and the Selangor government over the longdrawn planned consolidation of the water services industry in the state. A day after Gamuda made a RM10.75bn takeover bid, Selangor said it would continue to negotiate with federal government for it to be in the driver's seat in the exercise. "The state will continue to work with the federal government to implement the Water Services Industry Act (WSIA) 2006 to consolidate all water concession operators into a single entity under the control of the state government," the Selangor government said yesterday. However, Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd (Splash) which is 40% owned by Gamuda, said it has the shareholders' mandate to legally challenge the WSIA. "We have a clear mandate from our shareholders to challenge the constitutionally of WSIA 2006 in court if we are pushed to the corner," Splash said. (Financial Daily)

Telekom Malaysia (TM) which has just launched its high speed broadband (HSBB), UniFi is maintaining the pricing for most of the packages offered under its current broadband service, Streamyx. Group CEO Datuk Zamzamzairani Mohd Isa said although TM had introduced the 5 Mbps package for UniFi, it was maintaining the prices for the current 1 Mbps and 2 Mbps by Streamyx. However, TM is offering new and existing 4 Mbps Streamyx combo and non-combo customers a rate of RM140/month effective immediately regardless of their location. TM's UniFi pacakges comrpise triple-play service of highspeed Internet, video (IPTV) and phone, with speeds of 5 Mbps, 10 Mbps and 20 Mbps. The 5 Mbps packaged is priced at RM149/month, the 10 Mbps at RM199, and the 20 Mbps at RM249 with a two-year contract. (Starbiz)

Freight Management Holdings, a Port Klang-based multimodal freight service provider, is planning to enter the Vietnamese market under a joint venture (JV) with a local partner Dang Anh Binh. Under the deal, Freight Management will hold 51% of the stake in the JV and the rest will be owned by its Vietnamese partner. The new Ho Chi Minh City-based JV will initially operate a freight forwarding business. It had last year entered into JVs with local partners in Thailand and Indonesia in 2008. In 2006, it bought a 51% equity interest in TCH Marine Pte Ltd, a Singapore-based barge and tugboat operator. Prior to that, Freight Management also established its first overseas office in Western Australia with the setting up of a JV company, Icon Freight Services Pty Ltd, in which it controls 55%. "After Vietnam, Freight Management is likely to venture into neighbouring Cambodia," said the source. (BT)

The Kuala Lumpur International Airport has emerged tops in the Best Airport Immigration Service and Staff Service Excellence category in Southeast Asia, in the recent Skytrax 2010 World Airport Awards. For the top 25 rankings in the World Airport Awards for 2010, KLIA improved its position to fifth placing, from seventh previously. (Bernama)

Kuala Lumpur tops the list for cheapest holiday destination, according to global travel specialist STA Travel UK. The list is based on what is described by STA Travel as the main ingredients for a good holiday -- a meal in a local restaurant, a pint of beer, a night in a hostel, a bus ride and a sightseeing bus tour around the city. When totalling the typical price for such items, Kuala Lumpur emerged the cheapest at £13.09, followed by Hanoi (£18.29), Seoul (£18.38), Mexico City (£22.84), Beijing (£24.82), Istanbul (£27.38), Bangkok (£27.40) and Cape Town (£31.68). (Bernama)

Loh & Loh Corp said a 60:40 JV between its subsidiary has accepted the terms of Tenaga Nasional Bhd's (TNB) letter of intent for the award of a RM828.3m contract involving the Hulu Terengganu hydroelectric project. The project should be completed in 56 months with a defect notification period of 12 months. (BT)

Holcim Malaysia Sdn Bhd, a subsidiary of Swiss-based Holcim Ltd, has launched the first in a series of technologically-advanced and eco-friendly cement products for the country's building industry. The new range of Holcim products contains fly ash, which makes cement stronger, more durable and resistant to chemical attack. The new portfolio of products offers not only total solutions to customers, but is also expected to contribute significantly to Holcim's corporate purpose of providing solutions in building foundation for a sustainable future. (BT)

20100326 1009 Malaysian Economic News.

The Malaysian Industrial Development Authority (MIDA) is encouraging German companies to enter the machinery and equipment, and renewable energy sectors in Malaysia. "The oil and gas industry is quite advanced here and there are many openings. In addition, the renewable energy sector is another important platform that has room for investment as Malaysia is accelerating efforts and initiatives in this sector,” said MIDA director-general and chief executive officer Datuk Jalilah Baba. (Bernama)

Germany expects its trade with Malaysia to increase by 5.0% with more interest in the renewable energy and green technology industries, said German ambassador to Malaysia Dr Gunter Gruber. "We foresee more business activities taking place in green technology and renewable energy industries as the interest among industry players is increasing," he said. (Bernama)

The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) is optimistic the government's target of 6.0% economic growth this year will be achieved on the back of global recovery, improvements in local sales and overseas orders. "The government needs to open up more land for mining tin, iron ore and coal because these are the rich resources," its president, Tan Sri William Cheng Heng Jem said. (Bernama)

The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM)’s survey on the economic situation for 2H09, which involved 310 respondents, found that most of the respondents were more confident and optimistic of the future of the economy and businesses outlook for this year and next year. About 75% of them said they would be able to maintain or achieve export sales and local orders in 1H10. While13% of the respondents planned to increase their investments in new resources/plants during 1H10. More than half of the respondents said that the good and services tax (GST) would bring negative impact to their businesses. (Bernama)

Malaysian Employers Federation (MEF), the country's premier employers organization, proposed that the Employees Provident Fund (EPF) be revamped into a pension scheme for private sector workers. Its executive director, Shamsuddin Bardan, said a separate pension scheme for this category of workers would merely be a duplication of the EPF. It would be unfair and costly for the private sector employers to be imposed with compulsory contributions to the EPF and also the proposed pension scheme. (Bernama)

Deputy International Trade and Industry Minister, Datuk Mukhriz Tun Mahathir said that the tenacity of local workers is not at par with foreign workers from neighbouring countries. "This was a loss for the industry member after having given them the training. Their salaries had been considered but even that was not enough for them to stay on the job," he added. (Bernama)

The government is poised to attract more foreign direct investment (FDIs) when higher skills and productivity set In through the New Economic Model (NEM). “This is our wakeup call. With stiff competition for FDIs from our neighbours and the world’s focus on the larger Asian economies of China, India, Vietnam and Indonesia, Malaysia faces challenges in not just attracting FDIs but also in attracting talent to our shores,” Umno’s economic bureau member Datuk Dr Norraesah Mohamad said. (The Star)

The country’s electric and electronics (E&E) sector has been seeing persistent pick-up in orders the past five months, according to International Trade and Industry Minister Datuk Seri Mustapa Mohamed. He said the ministry would continue working with companies in ensuring Malaysia progressed and remained competitive, especially in the E&E industry. (StarBiz)

20100326 1006 Global Economic News.

To Wall Street's delight, Federal Reserve Chairman Ben Bernanke signalled once more that the Fed will keep interest rates at very low levels for some time to come in congressional testimony on Thursday. Bernanke said there will come a time when the Fed will need to tighten its unprecedentedly easy money policies and said the Fed has the tools to do so. But he made clear he is no hurry to raise rates. (Xinhua)

US initial jobless claims dropped 14,000 to 442,000 in the week ended March 20. The level was just below the 450,000 level expected by the market. The 4-week moving average of initial claims, which smoothes out volatility in the measure, was 453,750. That's down 11,000 from the previous week's revised average of 464,750. The report also said 4,648,000 people filed continuing claims in the week ended March 13 vs. preceding week's revised 4,725,500 claims. (CNN Money, Xinhua)

The Federal Reserve must start making plans now for asset sales to meet its goal of returning a record US$2.32tr balance sheet to its pre-crisis size and makeup, St. Louis Fed President James Bullard said. “You have to think about what kind of time horizon you want to get back to that normal balance sheet, and probably that has to involve some asset sales at some point,” said Bullard. He said there’s no agreement among policy makers on when to start the sales, and the economic recovery remains too fragile to start now. “I don’t think you could do any kind of tightening policy right now,” Bullard said. (Bloomberg)

Europe’s loans to households and companies declined 0.4% yoy in February, marking the sixth straight month of decline as sluggish economic expansion reduced demand for credit. M3 money supply, which the ECB uses as a gauge of future inflation, fell 0.4% yoy in February (+0.1% in Jan), worse than market consensus of a 0.1% yoy drop. M1 money supply growth eased to 10.9% (+11.5% in Jan). (Bloomberg)

European Central Bank (ECB) President Jean-Claude Trichet said the bank will leave emergency collateral rules in place into 2011, softening his stance as Greece struggles to reduce the European Union’s largest budget deficit. “It is the intention of the ECB’s Governing Council to keep the minimum credit threshold in the collateral framework at investment grade level (BBB-) beyond the end of 2010,” he said. (Bloomberg)

European chiefs agreed to bring in the International Monetary Fund (IMF) to help aid debt-stricken Greece in the face of opposition from the European Central Bank (ECB). Leaders of the 16-nation euro region endorsed a Franco-German proposal for a mix of IMF and bilateral loans as the ECB’s president, Jean-Claude Trichet, said Europe has to resolve the crisis on its own. “If the IMF or any other authority exercises any responsibility instead of the eurogroup, instead of the governments, this would clearly be very, very bad,” Trichet said. (Bloomberg)

Australian borrowing costs need to continue being moved gradually toward “more normal levels” to prevent the nation’s economic rebound from stoking inflation, Assistant Governor Philip Lowe said. “We need to ensure that inflation pressures remain contained and that inflation expectations remain well anchored,” he noted. (Bloomberg)

Japan’s government, faced with more houses than households, is encouraging people to renovate their homes as a step toward creating a strong resale market. Prime Minister Yukio Hatoyama’s administration is offering environmental incentives to homeowners to remodel, rather than follow the postwar scrap-and-build policy of tearing down old houses. The ruling Democratic Party of Japan aims to boost sales of existing homes and extend their lifespan from an average of 30 years, compared with 55 in the US. (Bloomberg)

Taiwan’s central bank signaled it will accelerate the withdrawal of funds from the financial system and impose “prudent” measures on property lending to prevent the emergence of asset bubbles. The central bank will issue longer-dated certificates of deposit to banks to soak up liquidity, it said. Governor Perng Fai-nan and his board left the benchmark discount rate on 10-day loans to banks at 1.25%, as forecast by economists. “Taiwan’s property prices are high in certain areas, so we can’t use blunt policy. We need to use targeted measures and supervision to handle the matter,” Perng said. (Bloomberg)

Indonesia hopes to attract US$90bn of private infrastructure investment in the next five years to help it reach its growth target of 7.0%. Poor infrastructure is one of the main obstacles to unlocking the huge potential for Southeast Asia's biggest economy. "We plan to spend US$140bn for infrastructure spending in the next five years. However, US$90bn of that has to come from the private sector," Investment Coordinating Board chairman Gita Wirjawan said. (Channel News Asia)

Debt-laden Dubai World said it has proposed to repay its creditors in full through the issuance of two tranches of new debt maturing in five and eight years. It said that the total debt owed to creditors which will be negotiated amounts to US$14.2bn, implying that the remaining of total liabilities of US$23.5bn "as at 31 Dec 09" will be paid by the government. The government will convert its financial support of US$8.9bn to the group into equity. The government will also commit to inject up to US$1.5bn in cash into Dubai World "to fund the company's working capital and interest payment commitments that will arise from the new debt facilities," the firm added. (Channel News Asia)

Hong Kong’s exports rose 28.5% yoy in February (18.4% in Jan). That compares with the median estimate for a 25.3% gain. Import growth slipped to 22.4% yoy (39.5% in Jan), narrowing the trade deficit to HKD19.7bn (-HKD29.5bn in Jan). (Bloomberg)

India’s food-price inflation rate fell to a five-month low, a drop that may be insufficient to avert further interest-rate increases by the central bank. An index measuring wholesale prices of lentils, rice, vegetables and other food articles compiled by the commerce ministry rose 16.22% yoy in the week ended March 13, after a 16.3% gain the previous week. (Bloomberg)

The world’s largest economies, including the US, UK and Europe, face “difficult fiscal decisions” in coming years to curb debt levels, according to Australian central bank Governor Glenn Stevens, the only Group of 20 policy maker to boost borrowing costs this year. “At some point, significant discretionary tightening will be required. Without a “credible path to fiscal sustainability” economic growth “could easily be stunted by rising risk premia built into interest rates as markets worry about long-run solvency,” Steven noted. (Bloomberg)

China central bank Deputy Governor Zhu Min said interest rates are a “heavy-duty weapon” and alternative tools for addressing liquidity are working well, helping to explain why the bank hasn’t raised borrowing costs. “We are very careful on the interest rate, because it is a heavy-duty weapon. We are very careful managing liquidity” with other instruments, and it looks like that “works very well,” he said, citing an expected slowdown in credit growth in March. (Bloomberg)

South Korea’s economy expanded 0.2% qoq in 4Q09 (3.2% in 3Q09), matching the initial estimate. Gross domestic product (GDP) increased 6.0% yoy (0.9% in 3Q09), also matching the January estimate. (Bloomberg)

The University of the Thai Chamber of Commerce said anti-government protests in Thailand could harm growth, forecasting the economy may expand as little as 3% in 2010. Thailand might lose as much as THB100bn (US$3.1bn) from falling consumption and lost investment and tourism revenue should the protests last for three months, the university said. (Bloomberg)