Friday, April 2, 2010

20100402 1830 FCPO Weekly Chart Study.

FCPO closed : 2559, changed : +25 points, volume : higher.
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 ended the week slightly higher with improved volume changed hand. Weekly chart wise, market continue to trade side way range bound as the Bollinger band width continue turning inwards.

20100402 1818 FCPO EOD Daily Chart Study.

FCPO closed : 2559, changed : +6 points, volume : lower.
Bollinger band reading : side way downside biased.
MACD Histrogram : recovering, seller reduce exposure.
Support : 2550, 2521, 2500 level.
Resistant : 2570, 2590, 2620 level.
Comment :
Quiet FCPO ended the day fraction higher within a tight 19 points range market as major commodities market closed for Good Friday. Daily chart wise the rebound continue to take place with some test near middle Bollinger band resistant level. Expect market to trade side way range bound downside biased in the near term with some test at higher resistant level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20100402 1751 FKLI Weekly Chart Study.

FKLI closed : 1342.5, changed : +21.5 points, volume : slightly higher.
Bollinger band reading : bullish biased.
MACD Histrogram : rising, buyer still in charged.
Support : 1335, 1310, 1300 level.
Resistant : 1350, 1360, 1375 level.
Comment :
FKLI ended the week firmer with a up wide range bar candle in sustainable volume traded. Weekly chart wise, market continue its uptrend movement but price seems a little over extended upward as this week candle closed above the upper Bollinger and level. Expect market to traded upside biased with possible pullback downward correction to take place in the near term.

20100402 1734 FKLI EOD Daily Chart Study.

FKLI closed : 1342.5, changed : +4.5, volume : lower.
Bollinger band reading : bullish biased.
MACD Histrogram : rising, buyer stayed.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
FKLI managed to climb another peak with lesser volume on Good Friday where major World major took a day off. Bullish biased reading continue on the daily chart with possible pullback correction 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 quick cut loss and profit target.

20100402 1053 Malaysia Corporate News.

ETCM (L), a wholly-owned subsidiary of Tan Chong Motor Holdings Group (TCMH), has entered into a distribution agreement with Nissan Motor in respect of the sole and exclusive right to distribute Nissan brand completely built-up (CBU) vehicles in Laos. The total financial commitment for the new Nissan business in Laos for the first five years of operation including setting up of showrooms and working capital is estimated at US$5.0m to be funded by TCMH Group from its internal sources. Distribution of the vehicles is expected to commence in the 2Q10 with an initial sales volume of 200 units per year. (BMSB)
This news is not a surprise as we had indicated in our recent note of the potential for Tan Chong to penetrate the Laos market. It comes hot on the heels of its recent penetration into Cambodia. Given Laos’ small auto industry, earnings accretion from this new venture is unlikely to be significant in the near future. However, we are positive on this development as it will give Tan Chong access to this emerging market and allow it to diversify from an arguably saturated Malaysian auto industry. More importantly, it strengthens Tan Chong’s position as a representative for Nissan, not just within Malaysia, but now in the region as well. We think that this could pave the way for further appointments by Nissan.

Edaran Tan Chong Motor will continue to offer special hire purchase packages with interest rates starting from 1.98- 2.78% despite the increase in overnight policy rate (OPR). The packages would be offered to buyers of Nissan Sylphy, Grand Livina, Sentra, X-trail and Serena. "Going forward, we expect the OPR to rise gradually and the best thing to do is to lock in the current lower interest rates before they rise further," said ETCM executive director, Datuk Ang Bon Beng. (Bernama)
This is in line with our expectations. We have earlier argued that the higher HP rates for non-national cars following the increase in OPR rate is unlikely to dent vehicle sales as banks and HP companies might be prompted to cut rates to attract sales. Apart from that, the anticipation of a further OPR hike might also prompt consumers to bring forward their purchases.

Hong Leong Bank has raised its buyout offer to smaller rival EON Capital to RM7.30 a share. Yesterday's last-minute change came about after EONCap's new board, led by acting chairman Gooi Hoe Soon, who is among the seven independent directors appointed recently, told Hong Leong that it would reject the proposal if the offer price was not raised before the deadline today. The board of EONCap will have to decide today if it will table the RM5.06bn sweetened deal to shareholders. Like in the previous proposal, Hong Leong has required EONCap to deal with it exclusively on the sale in good faith. (BT)

Maybank has secured an additional US$200m funding facility from the Japan Bank for International Cooperation (JBIC) bringing it to US$400m the total financing it has received from the Japanese bank to date. The additional facility would be used to support customers which had business relations between Japan enterprises in Malaysia and other Asean countries where Maybank or its subsidiaries operated. (Starbiz)

The Securities Commission (SC) has appointed Nik Mohd Hasyudeen Yusoff as executive chairman of the Audit Oversight Board (AOB), a special independent body set up to monitor auditors. The AOB began operations yesterday. The regulator also appointed six non-executive members of the AOB: Datuk Ali Abdul Kadir, Nor Shamsiah Mohd Yunus, Goh Ching Yin, Datuk Azmi Ariffin, Cheong Kee Fong and Chok Kwee Bee. Nik Hasyudeen brings with him 23 years of industry experience and international exposure. Prior to joining the AOB, he was chief executive officer of Thought Leader of Inovastra Sdn Bhd, a strategic business advisory practice based in Kuala Lumpur.(BT)

Malaysia Airport Holdings plans to grow revenue from commercial or non-aeronautical activities to RM2.14bn in 2014, says MD Tan Sri Bashir Ahmad. Commercial development, including growing its retail sales and developing part of its landbank around KL International Airport (KLIA) in Sepang, will be the key driver of MAHB's goal of achieving RM1.1bn net profit by 2014. This is set against a revenue target of RM3.2bn.
  • Development of its landbank includes the Malaysia International Aerospace Centre (MIAC) at Sultan Abdul Aziz Shah Airport in Subang, Selangor, and the proposed KLIA Aeropolis in Sepang. "We have an extensive landbank (at KLIA) that is available for commercial development where we will establish strategic alliances with major commercial property developers before the end of the year," says Bashir. (BT)
Berjaya Corp, controlled by tycoon Tan Sri Vincent Tan Chee Yioun, plans to list Berjaya Roasters (M), the operator of Kenny Rogers Roasters chain of restaurants. It plans to list Berjaya Roasters through Berjaya Food (BFood). Under the proposal, Berjaya Group Bhd, a wholly-owned unit of Berjaya Corp, will inject the entire stake of Berjaya Roasters into BFood, which will be satisfied by an issue of 141.35m new BFood shares at 51 sen each, worth RM72.09m in total. (BT)

Tan Sri Vincent Tan Chee Yioun has handed over the reins of Berjaya Media that publishes the Sun newspaper to son Datuk Robin Tan Yeong Ching. Robin, 35, replaces Vincent, 58, as chairman and director effective immediately. Robin joined Berjaya Group Bhd in 1995 as an executive and subsequently became the general manager of corporate affairs in 1997. Currently, he is the chief executive officer of Berjaya Sports Toto and an ED of Berjaya Corp and Sports Toto Malaysia. (BT)

Multi Purpose Holdings Bhd (MPHB) announced that it will acquire 18m shares or 2.37% equity in U Mobile from Detik Ria for RM54m. MPHB also said it had acquired 15m shares or 1.98% stake in U Mobile from its parent U Television (UTV) for RM75m. MPHB revealed that it had subscribed to 15m rights share issue (one for one basis) at RM1 per rights share thus now bringing its stake in U Mobile to 6.33% valued at RM144m. (Malaysian Reserve)

AET Tanker Holdings Sdn Bhd, a subsidiary of MISC, has taken delivery of its 49th Aframax tanker. Called "Eagle Kuantan", the 107,000-deadweight-tonne tanker will initially be employed on a time charter with one of AET's long-term customer-partners. Eagle Kuantan is the second of eight Aframax vessels to be built by Tsuneishi Shipbuilding Co Ltd at its yard in Tadotsu, Japan, for AET. The rest are scheduled for delivery later this year and next. (BT)

Malaysia Airlines will start flying to the Saudi Arabian city of Dammam next month. The service begins on May 5, twice weekly every Wednesday and Saturday. (Bernama)

Sunway Holdings has won a RM88m contract from Heritage Lane Sdn Bhd, a whollyowned subsidiary of KLCC Holding Sdn Bhd, for Phase 2 of Impiana KLCC hotel development in Jalan Pinang, Kuala Lumpur. The job involves building an extension to the existing hotel wings comprising an additional three-storey car park podium and 22-storey tower block above the existing four-storey car park podium. The proposed project is targeted to be completed on November 2 2011. (BT)

Amanahraya Real Estate Investment Trust (ARREIT) is looking at buying a few more buildings in the Klang Valley and Penang, a move that will swell its total assets beyond RM1bn. The REIT now has 13 assets with a combined fund size of RM748m. It will soon complete the purchase of two more that will increase its size to RM913m."The acquisitions of Selayang Mall and the 13-storey Dana 13 in Ara Damansara should be completed in May," said chief operating officer Abas A Jalil. (BT)

The project to deepen Penang Port channel to allow larger vessels to come in will be made a priority under the 10th Malaysian Plan, Deputy PM Tan Sri Muhyiddin Yassin said. He said the government's commitment would complement the RM1.1bn investment pledged under Penang Port's expansion and improvement business plan from 2008 to 2012. (Bernama, Malaysian Reserve)

20100402 1047 Malaysian Economic News.

PM Datuk Seri Najib Razak said that the second and third round of announcements on the New Economic Model (NEM) would give more details on the key economic areas and activities the government has planned to make Malaysia a high economy by 2020. The timeline for its targets would also be announced in stages this year. He added that a lot of work and planning was needed to ensure NEM’s success and the government needed to carry this out in phases and could not announce all the details in one go. (NST)

The bidding and awarding of Government tenders will now be more transparent via Finance Ministry’s tender portal – MyProcurement w.e.f 1 Apr 10. The government would require bidders to sign a pledge to be graft-free when bidding and after securing contracts. (The Star)

There is a great potential to further develop the halal markets and industries in European countries, says Malaysian Ambassador to the European Union, Datuk Hussein Haniff. "The halal industry in Europe is currently valued at about US$66bn and is expected to expand by 20-25% in the next decade," he said. (Bernama)

A total of 319 projects worth RM27.78bn were proposed by the Works Ministry to the Economic Planning Unit (EPU) under the 10th Malaysia Plan (10MP), Minister Datuk Shaziman Abu Mansor said. Among proposed projects are:
  • the construction of a 73km road from Kota Baharu to Kuala Krai in Kelantan 
  • to build the Jalan Segama Northern Bypass Lahad Datu (cost: RM150m
  • to build the Jalan Jeroco Lahad Datu (Phase Three) (cost: RM120m)
  • upgrading works on the 33km stretch of Jalan Ranau (cost: RM180m)
  • the construction of three bridges from the Betong/Sarikei border to the Jalan Repok/Jalan Bulat junction (cost: RM85m). (Bernama)
The Ministry of Science, Technology and Innovation (MOSTI) has granted about RM157m to 183 projects for research and development of green technology. Its Deputy Minister, Fadillah Yusof said these projects were granted under the Intensification of Research in Priority Areas (IRPA), ScienceFund, TechnoFund, Commercialisation of Research & Development Fund (CRDF) and Community InnoFund (CIF). (Bernama)

Detailed studies must be carried out before any changes are made to the country's labour laws to ensure that workers rights are not compromised due to the changes. The Director General of Institute of Strategic and International Studies (ISIS) Datuk Dr Mahani Zainal Abidin said if there was any need for changes in the laws, discussions with parties involved such as unions must be held.
  • She said Malaysia also needed a social safety network system so that changes made in labour laws do not affect workers. "The move to amend labour laws are timely considering the changes in the current environment," she said. (Bernama)

20100402 1042 Global Economic News.

US job cuts accelerated in March, driven by planned reductions on government payrolls, a report by out placement firm Challenger, Gray & Christmas Inc showed. Employers announced plans to cut 67,611 jobs in March, which is up 61% from February, when 42,090 jobs were lost. (CNN Money)
A separate report from payroll processor ADP showed that private-sector employers cut payrolls by 23,000 jobs in March. ADP's report does not include government jobs. These two reports set the stage for the highly anticipated monthly jobs report from the government due later today. The US Labor Department is expected to show a gain of 184,000 jobs in March, compared to the 36,000 lost in February. Economists forecast the unemployment rate will remain unchanged at 9.7% according to a Bloomberg survey.

US manufacturing activity grew for the eighth straight month in March, as the Institute for Supply Management's (ISM) manufacturing index rose to 59.6 from the February reading of 56.5. Economists surveyed were expecting a reading of 57. The strong number was driven by significant growth in new orders and production, as well as larger inventories, which grew for the first time in 46 months. While the report's employment component slipped 1 point to 55.1 in March, that still indicates growth. (CNN Money)

US initial jobless claims fell by 6,000 to 439,000 claims filed in the week ended March 27. Economists surveyed expected new claims to dip to 440,000 in the week. The report also said that 4,662,000 people filed continuing claims in the week ended March 20, the most recent data available. That figure, the lowest level since Dec. 20, 2008, was down 6,000 from the preceding week's 4,668,000 claims. (CNN Money)

US construction spending fell 1.3% to a seasonally adjusted annual rate of US$846.23bn for a fourth straight month in February (-1.4% in Jan). This is the slowest rate in nearly 7-1/2 years which was due to softening activity in every major sector from homebuilding to public construction projects. Economists forecast for a 1.0% drop in the month. Private sector construction recorded a 1.2% decline and the public sector was down 1.7%. Private residential construction fell 2.1% (+1.0% in Jan). (CNBC, Xinhua)

US auto sales rebounded 24.0% in March with virtually every automaker posting doubledigit gains in sales. But the industry is not in as strong shape as those surges in sales would suggest. General Motors (+37.8%), Ford Motor (+34.4%) and Toyota Motor (+35.3%) all posted sharp year-over-year sales gains in March, benefiting from new incentives and a slowly improving economy. (CNN Money, CNBC)

Treasury Secretary Timothy Geithner said that focusing on cutting the US's big budget deficit now would jeopardize economic growth at a time when jobs are starting to be created. But even if that occurs, the unemployment rate will stay high for "a long period of time." (CNBC)

New York Fed President William Dudley says the US appears to be on the verge of sustained employment growth, although job creation still much too slow. Recovery is unlikely to be as strong as we would desire. Output gap to close very gradually, keeping inflation 'subdued.' But longer term inflation expectations remain 'well anchored.' (Xinhua)

Fitch Ratings is revising up its 2010 growth forecasts for major developed economies, with the largest revisions to US and Japanese GDP, the credit ratings agency said Thursday in its latest Global Economic Outlook. Against this backdrop and given higher inflation due to rising commodity prices, the Federal Reserve is likely to hike its Fed funds rate by 25bp in the fourth quarter of this year. (Xinhua)

Europe’s manufacturing index expanded at a faster pace than initially estimated to 56.6 in March (54.2 in Feb), due to reviving global demand prompted companies to step up output. The initial estimate was 56.3. (Bloomberg)

Japan’s largest manufacturers became the least pessimistic about the economy since 2008 as a global rebound drove demand for exports. The Tankan index of sentiment rose to -14 in 1Q from -25 in 4Q09. This matched the economists’ forecast. (Bloomberg)

South Korea’s exports rose 35.1% yoy to US$37.7bn in March (30.5% in Feb) as a recovering global economy boosted demand for semiconductors, cars and petrochemicals. Imports climbed 48.4% yoy to US$35.5bn (37.5% in Feb), leaving a trade surplus of US$2.2bn (US$2.1bn in Feb). Economists forecast the exports and imports would increase by 31.7% yoy and 43.0% yoy respectively for March. (Bloomberg)

South Korea’s consumer prices climbed 2.3% yoy in March (2.7% in Feb), marking the slowest pace in six months as a stronger currency helped cap the cost of manufactured goods. From a month earlier, prices rose 0.3% (0.4% in Feb). Economists projected the inflation would advance to 2.7% yoy and 0.7% mom in March. (Bloomberg)

China’s Purchasing Managers’ Index of manufacturing rose to a seasonally adjusted 55.1 in March (52.0 in Feb), adding to the case for a wind-back of stimulus measures that policy makers say may be contributing to asset-bubble risks. The figure was in line with the market consensus (55.0). (Bloomberg)

Indonesia’s inflation slowed to 3.4% yoy in March (3.8% in Feb), giving the central bank room to refrain from raising interest rates when it meets next week. Market estimated a 3.7% gain in the month. (Bloomberg)

India’s food-price inflation accelerated 16.35% yoy in the week ended 20 Mar (16.22% in the previous week), marking the first time rise in four weeks. Exports rose 34.8% yoy to US$16.1bn in February (11.5% in Jan) while imports expanded 66.4% to US$25.0bn (25.5% in Jan). Purchasing Managers’ Index of manufacturing fell to 57.8 in March (58.5 in Feb). A reading above 50 indicates a gain in factory production. (Bloomberg)

Oil prices rose to 17-month highs on further signs that a global economic recovery would boost consumption. In New York the price of a barrel of light sweet crude for delivery in May rose over a dollar to US$84.87 by the end of trade on 1 Apr, up from US$83.76 the day before. Brent North Sea crude for May also hit a similar high at US$84.04, before pulling back slightly to US$83.96, up US$1.26. (Channel News Asia)

Thailand’s consumer prices rose for a sixth month in March, putting pressure on the central bank to raise interest rates from a five-year low. An index of consumer prices rose 3.4% yoy in March (3.7% in Feb). That compares with the median forecast for 3.7%. (Bloomberg)