Thursday, April 1, 2010

20100401 1816 FCPO EOD Daily Chart Study.

FCPO closed : 2543, changed : -13 points, volume : higher.
Bollinger band reading : side way downside biased.
MACD Histrogram : recovering, seller reduce exposure.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2590 level.
Comment :
Tight range huge volume FCPO eased slightly lower recovered some of the early session fall as both crude oil and soy oil futures price rebounded. Daily chart continue to consolidate and is likely to trade side way range bound downside biased.
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.

20100401 1745 FKLI EOD Daily Chart Study.

FKLI closed : 1338, changed : +21 points, volume : high.
Bollinger band reading : bullish biased.
MACD Histrogram : reverse upward, buyer still in charge.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Flying high FKLI opened and ended boldly with sustainable volume transacted. Daily chart reading started to turned bullish biased as the Bollinger band width is turning outward signaling further upside potential. Having said that, correction could take place in the near term as today price surge seems too drastic and overdone.
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.

20100401 1251 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1337, changed : +20 points, volume : high.
Bollinger band reading : bullish biased.
MACD Histrogram : rising, buyer turned aggressive.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1360 level.
Comment :
Run away gap FKLI opened and climb higher in supportive volume changed change hand. Without having to elaborate further, I think whatever indicators or technical tool will give you a bullish upside biased market that facing immediate previous high resistant level at 1337. Having said that, market could have a pullback anytime as price upward movement is way over extended.

20100401 1235 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2536, changed : -20 points, volume : low.
Bollinger band reading : side way range bound.
MACD Histrogram : getting weaker, seller still in.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2590 level.
Comment :
Quiet FCPO opened and traded weaker in tight range thin volume following lower overnight soy oil futures price development. Hourly chart near term trend line still down with the indicators suggesting a side way range bound market testing support and resistant level.

20100401 1006 Malaysia Corporate News.

Supermax Corp set to export an additional 500m piece of rubber gloves to the US this year, following the recent US healthcare reform that will lead to heighten usage of examination gloves. "About 32m uninsured Americans will now be covered and be able to seek regular health check at health centres, nursing homes, dental clinics, pharmacies and hospitals. The rising healthcare activity will lead to rising demand for examination gloves and we're poised to leverage on that," said Supermax executive chairman and group managing director Datuk Seri Stanley Thai. "We're looking at an additional 5 -7% demand from the US and that amounts to around RM40m in sales," he said.
  • Thai said earnings this year will be buoyed by additional capacity from its new Meru plant in Klang, to be operational in phases from this month. 
  • On the outlook of the rubber glove industry, Thai said it remains resilient and is expected to post 10% annual volume growth.
  • Following this bright prospects, Supermax is hopeful of achieving RM168m profit this year. (BT) 
The group's net profit target is in line with our forecast of RM170m. New capacity is expected to be added progressively from 14.5bn pieces p.a last year to 21.7bn p.a by end of 2011.

Top Glove aims to raise its dividend payout ratio this year on the back of improved earnings, an executive said. The company aims to raise its dividend payout ratio to 40% from 30% of profits, executive director Lim Cheong Guan said. Earnings in the coming two quarters will match or exceed those in the 1H, Top Glove chairman Lim Wee Chai said. “Our company is still growing and there are still many areas we can improve and we can grow our business,” he said. Lim said the company is optimistic of delivering a profit margin of at least 14%, in view of rising global demand for gloves. (Bloomberg, BT)

Hartalega Holdings has allocated RM120m in capital expenditure for the next two years, part of which will be spent on plant expansion and technology investment, its chief says. The company, which operates five factories, is in the midst of upgrading an existing plant while completing the fifth one. The new capacity will boost its annual production by 3bn pieces of gloves by the end of next year when the plants are fully operational. (BT)
The capacity expansion plans is in line with our forecast. We believe most of the expansion will be financed by the company's internally generated funds given its strong net cash position since 1QFY3/10.

U.S. farmers may plant a record area with soybeans this year, after sowing the fewest acres with winter wheat since 1913, and on prospects for higher returns than corn. Soybeans will be planted on 78.1m acres (31.6m hectares), up 0.8% from 77.5m last year, the U.S. Department of Agriculture said. The average estimate of 31 analysts surveyed by Bloomberg News was for 78.5m acres. “Farmers are going to be intent on planting soybeans,” said Al Ambrose, a vice president of risk management with Country Hedging Inc. in Inver Grove Heights, Minnesota. “Conditions are about ideal” after two consecutive years of rain-delayed planting, he said. (Bloomberg)
The expectation of a record soybean planting and harvest in US may soften soybean and its related products prices. This could limit the upside potential of CPO price in the shortterm.

Malaysia’s palm oil exports rose 12.1% in March, independent market surveyor Intertek said. A total of 1,353,207 metric tons of the commodity were tracked on March 1 to 31, versus 1,206,859 tons in the same period in February, Intertek added. (Bloomberg)

IOI Corp will finish planting oil palms on 60,000 hectares of its Indonesian land holdings in five years and will then seek 'green certification' for these estates, a top official said.
  • Group ED Lee Yeow Chor said that while the 'noise by the environmentalists' had slightly affected palm oil exports to Europe, they had overlooked the fact that oil palm estates helped drive developing countries like Indonesia. 'We don't plan to expand further into Indonesia but we will focus on planting and developing the areas,' he said. 'And we will apply to the Roundtable on Sustainable Palm Oil for a green certification,' he said. 
  • 'There is a strong upward trend for palm oil prices and this current level of RM2,550 is very supportive,' Mr Lee said. 'Supply has been affected since a year ago and we only expect a moderate increase in Malaysian output this year.'
  • Mr Lee said preview sales of its Seascape Collection Residences in Singapore's Sentosa Cove have been encouraging and he expects the project to contribute positively to this year's earnings. 'This year, the property arm should contribute about 25-30% of the group's profits,' he said. The group may write back the impairment loss made in the FY6/09 on a jv property project in Singapore towards the end of the current financial year since the value of property has risen in the island state. (Financial daily, Reuters)
Sime Darby may miss its production target this year due to drier-than-usual weather conditions caused by El Nino, an executive said. Output might fall by between 5% and 7% below forecast, Sime Darby Plantation MD Datuk Azhar Abdul Hamid said. The company was targeting production of 2.4m tonnes from its plantations in Malaysia and Indonesia, Azhar had said on March 9. “It has a negative impact on us,” Azhar said. “Obviously production has been down.” Meanwhile, in an interview with Reuters, Azhar said Sime Darby would spend RM3 - RM5bn on its oil palm estates this year as global demand for the vegetable oil grows. (BT)

Menteri Besar Selangor Tan Sri Abdul Khalid Ibrahim said negotiations on the state's water industry restructuring will be extended till April 6 as no resolution had been found with the state's water concession companies. Asked on what issue had not been resolved, he said: "The price." (Bernama)

Telekom Malaysia says its high-speed broadband (HSBB) investments will hit its peak this year as it aims to wire up some 750,000 premises by year-end. "We are talking about RM2bn in capex," said group CEO Datuk Zamzamzairani Isa. Currently, the company is ahead of its rollout schedule. (BT)

DiGi Telecommunications wants to increase its proportion of Internet data revenue to between 15% and 20% in the next three to five years via a heavier usage of smartphones. DiGi CFO Stefan Carlsson said the data and short messaging service (SMS) revenue made up about 20% of its topline currently. "But only 6% to 7% is attributed to Internet data usage. We recognise that the revenue contribution will eventually be contributed by data, as opposed to voice currently," he said. On whether the high-speed broadband launched by Telekom Malaysia recently would put pressure on DiGi, he said it might not be the case as DiGi was more focused on the mobile network. (Financial Daily)

DiGi yesterday began offering the iPhone 3GS and the iPhone 3G in the country, ending Maxis' one-year monopoly. Pre-orders for the iPhone hit 10,000 and since the launch yesterday, new orders are stacking up as DiGi's tariff plan appears to be reasonable, at least for now. The big volume of pre-orders shows the strong demand for the phone as well as the expectation of lower pricing from DiGi. Its cheapest plan costs RM88/month, comes with 1GB of data, 200 voice minutes and SMS each and is RM12 cheaper than Maxis' iValue 1 offering. The most striking package is DiGi's all-in-one monthly fee of RM106/month where a user commits to 36 months' subscription but there is no upfront payment for the device. However, Maxis' Value1 Plan has the lowest iPhone prices and each model generally costs RM200 cheaper than DiGi's offerings. (Starbiz, BT)

Maxis will be spending more than RM700m or more than half its capex to expand its wireless broadband network this year as it wants to become the number one player in that segment, said its CEO Sandip Das. The investment may turn Maxis into the number one player in the mobile broadband segment in terms of coverage.
  • It hopes to hit 75-80% in mobile broadband coverage by year-end. "We are clear that we want to be the number one in broadband," Sandip said."I think Maxis is back with a big bang. We have some small issues in the first half, (and) we have fixed them. We have come back very strongly in the broadband (segment) in the last quarter." 
  • "This is the hype of competition in the country. Malaysia has never seen this kind of competition. You must give credit to Maxis that we still remain number one in most segments such as postpaid, prepaid and value-added services. (BT)
Maxis expect to maintain strong cash flow as the company targets a high single-digit revenue growth in 2010, a top executive said. Maxis' financing costs are expected to creep up this year after it recently borrowed RM5bn to repay its parent as part of its prelisting restructuring exercise. Maxis will spend RM1.4bn on capital expenditure this year, with the bulk on 3G broadband. Next year, the company expects to spend about "RM1bn or thereabouts," said CEO Sandip Das. (Financial Daily)

Malaysian Resources Corp is keen to participate in the development of a large area of land in Sungei Buloh, says it’s CEO Mohamed Razeek Hussain. MRCB's controlling shareholder, Employees Provident Fund (EPF) and the government will be forming a JV to promote the development of 1,214ha there into a new hub for the Klang Valley. PM Datuk Seri Najib Razak announced the JVwould lead to over RM5bn of new investments being made, with the private sector having enormous potential to participate prominently. "It is our task now to convince EPF to give us some work on the land. We'd like to participate in the development itself, a part of it, and also provide construction expertise and project management expertise for EPF," said Razeek. (BT)

Malaysia Resources Corporation (MRCB) is allocating up to RM380m to acquire more premium properties around Kuala Lumpur to add to its landbank following a rights issue earlier this year, said its CEO Mohamed Razeek Hussain. (Financial Daily)

Malaysia Airports Holdings (MAHB) expects revenue from its non-aeronautical business to increase by 20% to RM430m from RM350m last year, its CFO Faizal Mansor said. Meanwhile, managing director Tan Sri Bashir Ahmad said passenger tariff is expected grow better than the 4-5% projected for 2010. He also said there has been request for MAHB to manage two airports in Asia, but declined to reveal details. (BT)

The new low-cost carrier terminal (LCCT) is expected to be ready by late 2011 or early 2012, said Malaysia Airports' (MAHB) managing director, Tan Sri Bashir Ahmad. Earlier, it was expected to be ready by September 2011. "So far, MAHB has given out two contracts for earth works to WCT Bhd and Gadang Holdings Bhd," he said. He said the major contracts had not been given out yet. (Bernama, BT)

Malaysia Airports Holdings (MAHB) will unveil its plans for a special purpose vehicle (SPV) to spearhead overseas expansion. It is understood that the SPV will be a standalone company which MAHB will co-own with other partners. (BT)

S P Setia has recorded RM900m sales as of March 22, less than five months into the current FYE10/10. President and CEO Tan Sri Liew Kee Sin attributed this to the strong underlying demand for good properties, fuelled by an increasingly confident business and consumer sentiment as well as highly supportive financial sector. "This achievement clearly shows we are on track to meet the sales target of RM2bn set for the financial year," he said. Meanwhile, Liew said the company is keen to bid for the parcels of government land as announced by PM Datuk Seri Mohd Najib Tun Razak. (Bernama)

"Astro has better value in being taken off the market with the current stage of development of high definition television (HDTV) and the Indian market," says Khazanah Nasional’s MD, Tan Sri Azman Mokhtar. However, given Astro's substantial shareholder, Usaha Tegas Sdn Bhd's track record, it may relist the unit later, similar to Maxis, he said. (Bernama)

Khazanah Nasional hopes to conclude the divestment of a 32.2% stake in Pos Malaysia within this year. MD Tan Sri Azman Mokhtar said the company was seeing keen bidders but would not confirm or deny, that DRB-Hicom and Tune Group were among them. It was reported that the 32% Pos Malaysia stake is worth about RM390m. (Bernama)

The state government has rejected the timber industry's request for a 50% discount on royalty for timber extracted from agro-conversion areas. Sarawak Timber Association chairman, Datuk Wong, said its appeal for a similar royalty reduction for timber with a diameter of 30cm to 30cm was also turned down. (Star)

Sarawak’s tropical log exports have fallen sharply as the current dry spell is causing the water level in rivers to drop, making it difficult to transport the logs out from the interiors. Sarawak Timber Association chairman Datuk Wong Kie Yik said logging operators had problems rafting timber from Kapit and Baram areas because most of the rivers had been drying up in the past three to four months. “Some companies have temporarily halted logging operations as there is no point harvesting the timber if you cannot transport the logs downstream because of shallow rivers,” he said. (Starbiz)

KIC Group, a local private oil terminal operator, will purchase 22 vessels of various sizes valued at US$200m (RM654m) via a consortium set up with its partner, Nathalin Group of Thailand. Through the consortium, and in collaboration with Thailand's PTT Public Co Ltd, the parties will set up a shipping trust by the end of this year to finance the acquisition that will be completed within three years. KIC owns and operates petroleum terminals at the Port of Tanjung Pelepas in Johor and Westports, Port Klang, while Nathalin is Thailand's largest private shipping company.
  • KIC is also in the midst of developing the Asia Petroleum Hub (APH) in Johor that is slated for completion in 3Q11, with PTT Public Co committed to take up the entire space. APH, which is 61% completed, will help raise the group's capacity to 1.8m cu m from the current total combined storage capacity of over 0.9m cu m once operational in August next year. (BT)
Seremban Engineering (SEB), a process equipment fabricator, enroute for listing on the Main Market of Bursa Malaysia Securities in mid-May, plans to increase its production capacity following its flotation exercise. The company is expected to raise RM17m from its initial public offering (IPO) on the Main Market of Bursa Malaysia. The prospectus is expected to be out around mid April. (Bernama)

Ho Hup Construction Co may have to resort to bringing Malton to court if it is not able to renegotiate a fairer deal in their joint development agreement (JDA) involving a 60-acre plot of land in Bukit Jalil. “Any court proceedings will be messy, but Ho Hup must go through if it doesn’t have a choice,” the source said. (Financial Daily)

20100401 0955 Malaysian Economic News.

Bank Negara Malaysia (BNM) said broad money (M3) grew at a higher annual rate of 8.2% in February (7.9% in Jan), supported by greater credit extension by the banking system to the private sector. This, however, was partially offset by capital outflows, which were reflected in the decline in net foreign assets of the banking system. (StarBiz)

The government aims to have cooperatives contributing 5.0% of the Gross Domestic Product (GDP) by 2012, the Dewan Rakyat was told. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob said now, although the cooperative movement had many members, the contribution to GDP was a mere 1.0%. (Bernama)

The minimum wage for workers should be based on productivity to ensure that industries do not lose their competitive edge, said National Economic Advisory Council (NEAC) Chairman, Tan Sri Amirsham A Aziz. The government should act wisely before determining a minimum wage to ensure that industry growth would not be jeopardised. Amirsham was responding to calls by certain quarters and explained why the minimum wage was not included in the New Economic Model (NEM). (Bernama)

20100401 0952 Global Economic News.

US private-sector employers continued to cut jobs in March, highlighting the challenges still facing the nation's job market, according to a report released by Automatic Data Processing (ADP).
  • Private-sector employers cut payrolls by 23,000 jobs in March (-24k in Feb), marking the smallest monthly decline since February 2008. The decline was contrary to market estimates for a gain of 40,000 jobs in the month. 
  • The service sector reported an increase of 28,000 jobs in March, marking the second consecutive monthly increase and the highest job growth since March of 2008. However, that growth was offset by a loss of 51,000 jobs in the goods-producing sector and a drop of 9,000 manufacturing jobs.
  • "American businesses are on the cusp of recovery, yet this report shows that they remain hesitant to increase their payrolls," Gary Butler, chief executive of ADP, said. (CNN Money)
US mortgage applications rose in the latest week for the first time in three weeks as demand for home purchase loans reached the highest level since October. The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 1.3% for the week ended March 26. The four-week moving average of mortgage applications, which smoothes the volatile weekly figures, was up 2.2%. The MBA's seasonally adjusted purchase index increased 6.8%, hitting its highest level since the week ended Oct. 30. (CNBC)

US new factory orders rose for a sixth straight month in February as businesses rebuilt inventories, pointing to continued expansion in the manufacturing sector. Orders for manufactured goods increased 0.6% (2.5% in Jan). Economists polled had forecast factory orders rising 0.5% last month. Orders excluding transportation rose 0.7% (0.5% in Jan).
  • Orders for non-defense capital goods excluding aircraft, seen as a measure of business confidence, rose 2.0%(-4.4% in Jan). Inventories rose 0.5% in February (0.3% in Jan), the biggest increase since August 2008.That left the inventories-toshipment ratio, a measure of how long it would take to deplete current stocks, unchanged at 1.29 months' worth.(CNBC)
The Institute for Supply Management-Chicago business barometer slipped to 58.8 in March from 62.6 in February. Economists forecast the index at 61. A reading above 50 indicates expansion in the regional economy. The employment component of the index edged up to 53.1 in March from 53 in February. New orders fell to 61.8 in March from 62.2 in the previous month.(CNBC)

Atlanta Federal Reserve Bank President Dennis Lockhart warned of the possibility that the central bank could face circumstances that warrant the start of monetary policy tightening "well before" the rate of unemployment is at a "satisfactory level." Labor market trends appear to be moving in the right direction, Lockhart said, but added it's quite possible the recovery could be well advanced before any significant reduction of unemployment materialises. (Xinhua)

The decline in loan outstanding in US remains "of great concern" but Federal Reserve Governor Elizabeth Duke expressed optimism that the trend will begin to reverse later this year, partly in response to improved economic conditions. Overall, the central banker deemed the banking sector as still "weak," with commercial real estate the source of most stress for the majority of community banks. (Xinhua)

President Obama confirmed that he will be expanding offshore oil and gas exploration in the US, saying that "given our energy needs, in order to sustain economic growth, produce jobs, and keep our businesses competitive, we're going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy." (Xinhua)

Europe’s consumer prices increased 1.5% yoy in March (0.9% in Feb) on higher oil prices. That is the fastest inflation since Dec 08 and topped the economists’ forecast of 1.1%. Unemployment rose to 10.0% in February, marking the highest rate since Aug 98. (Bloomberg)

European Commission (EC) said that Germany and other European countries with strong exports need to boost domestic spending to help smooth out regional economic imbalances. “Export successes should translate into stronger domestic demand, thus boosting imports. The structural weaknesses of domestic demand need to be identified and tackled to ensure regional growth is balanced,” it said. (Bloomberg)

South Korea’s February industrial production gained 3.6% from January, when it was unchanged from the previous month, on increased orders for computer chips and automobiles. Economists forecast for a 1.5% mom gain for February. From a year earlier, output climbed 19.1% (36.9% in Jan). (Bloomberg)

South Korea’s president told the new central bank chief to coordinate with other countries in unwinding stimulus policy, reinforcing investors’ view that interest rates will stay low for a few more months. “Countries should coordinate with each other over exit strategy,” he said. (Financial Daily)

China’s central bank said the nation’s economic rebound has been “further cemented” and managing liquidity in the aftermath of a record credit expansion is “arduous.” China faces “extremely complex economic and financial situations” at home and abroad. The economy continues to rebound while pointing to “prominent problems” including an “urgent” need to “transform the growth model” and reduce reliance on exports. (Bloomberg)

The People’s Bank of China (PBoC) reaffirmed its appropriately loose monetary stance but said it would implement the policy more flexible. “We will apply various policy tools to keep banking liquidity reasonably ample and steer an appropriate rise in overall money supply and credit,” it said. (Financial Daily)

Emerging markets face the risks of asset bubbles that could burst dangerously once the US raises interest rates, a vice governor of China’s central bank, Zhu Min said, while also stressing the risks of an unsteady dollar. “What is worrisome is that once the US Federal Reserve embarks on interest rate increases, this dollar arbitrage may return (to the US), causing these bubbles to burst. The big fluctuations in the dollar have had quite a big impact on the global economy and financial markets,” he noted. (Financial Daily)

Thailand’s industrial production rose for a sixth straight month in February, as manufacturing output climbed 30.3% yoy (29.1% in Jan). The median estimate was for a 28% increase. Exports moderated to 23.5% yoy (31.4% in Jan) while import growth surged to 80.8% (50.1% in Jan). The current-account surplus narrowed to US$1.52bn in February (US$2bn in Jan). (Bloomberg)

Indonesia plans to allow foreigners to own property in the country and has completed its review of investment rules under the so-called negative list, the country’s investment coordination agency said. The country will deregulate its property industry by the end of the first half, paving the way for foreigners to buy homes and commercial real estate directly. (Bloomberg)