Wednesday, April 7, 2010

20100407 1816 FCPO EOD Daily Chart Study.

FCPO closed : 2539, changed : +19 points, volume : lower.
Bollinger band reading : side way downside biased.
MACD Histrogram : turned upward, seller took profit.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2600 level.
Comment :
Higher overnight soy oil futures price lead FCPO to recovered all of yesterday's loss ended the day higher in thin volume and boring 15 points tight range market. Daily chart side, reading remained side way range bound downside biased. However a possible tiny little double bottom could be forming that carrying a positive signal.
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.

20100407 1737 FKLI EOD Daily Chart Study.

FKLI closed : 1343, changed : -3 points0, volume : lower.
Bollinger band reading : bullish biased.
MACD Histrogram : turned lower, buyer taking profit.
Support : 1345, 1337, 1330 level.
Resistant : 1350, 1360, 1390 level.
Comment :
Quiet low volume FKLI traded lower as profit taking activities continue to took place today. Daily chart wise, upside biased with pullback correction reading still in the near term. On the longer time frame, trader should pay attention to a potential rising wedge pattern(bearish) in the forming.
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.

20100407 0942 Malaysia Corporate News.

RAM Ratings has revised the outlook on the AAA ratings of Idaman Capital’s RM50m Class A and RM430m Class B super senior fixed-rate bonds to negative from stable. The rating agency has also reaffirmed the ratings of Idaman Capital’s RM220m senior fixedrate bonds, RM20m mezzanine fixed-rate bonds and RM80m subordinated bonds at C3, with a negative outlook.
  • RAM Ratings said the revision of the rating outlook on the super senior bonds reflected its concerns that the over-collateralisation level of the papers could be diminished further by the rapid and severe deterioration in the general credit quality of its pool of obligors. 
  • Idaman Capital is a trust-owned, bankruptcy-remote, special-purpose vehicle, incorporated specifically to undertake a primary collateralised-loan-obligation transaction. “While the over-collateralisation level of 123% as at end-March 2010 still supports the AAA rating of the super senior bonds, the rating is vulnerable to the negative effects of any further substantial downward rating migration or additional defaults within the portfolio,” it said.
  • “Since our last review on Dec 9 2009, our analysis of the most recent quarterly performance has revealed steeper-than-anticipated deterioration in the credit quality of the obligors rated BB1 and below,” it added. (StarBiz) 
As a whole, any deterioration of the credit quality of Idaman Capital would be negative for Alliance Financial Group as it has RM240m exposure to collateralised loan obligation (CLO). Although Alliance's exposure has a provision coverage of 96%, any weakening of the credit quality could dim the prospects for subsequent recovery.

EON Capital will call for a general meeting soon to seek shareholders' approval on the revised RM5.06bn all-cash buyout proposal from Hong Leong Bank, says EON Bank Group chief executive Michael Lor.
  • He added that the decision could come anytime from now as the board of directors, in particular the independent director, was satisfied that the strategic option had been considered to preserve and enhance the value of EONCap. 
  • Besides, Lor said the bank was confident of securing 60,000 GSC-EON Bank credit card holders by the year-end. It has almost 30,000 to date. He also disclosed that the bank was allocating about RM10 million to promote all of its credit cards, aiming to attract another 120,000 new cardholders by the year-end. It has 620,000 currently. (BT, Bernama)
The Works Ministry may consider studying a proposal by Asas Serba Sdn Bhd to take over all 22 toll roads in the country for RM50bn. "If they have a good proposal we will look at it. However, there is nothing on the table now," Minister Datuk Shaziman Abu Mansor said. (BT)

The Works Ministry will propose to the Cabinet to allow toll expressway operators to build townships and industrial projects along the roads that they operate so that users pay less toll, said Minister Datuk Shaziman Abu Mansor said. "There are many potential that can be developed along the expressways. Private developers will not be affected as only certain stretches will be developed," he added.
  • Shaziman said his ministry may look at renewing toll rates yearly instead of every three years now but that requires further discussions. (BT)
Construction of the RM9bn Pahang-Selangor raw water transfer project officially took off Tuesday after a ground-breaking ceremony graced by Sultan Ahmad Shah of Pahang. Once completed in 2014, the project will pump 1,890m litres of raw water daily from Sungai Semantan in Pahang to the Hulu Langat water treatment facility in Selangor. The project was awarded to a joint venture company of Japan's Shimizu Corporation and Nishimatsu Construction, and local companies IJM Corp and UEM Builders. (The Star)

The government has not proposed a ceiling price for the tariff price structure for the Pahang-Selangor raw water transfer project. Energy, Green Technology and Water Minister Datuk Seri Peter Chin said the government would take note of the Pahang state government’s request to have the RM0.10 for each cubic meter to be raised 2-3x every five years. (Malaysian Reserve)

Palm oil futures declined as crude oil dropped for the first time in six days, curbing a rally in vegetable oils used in biofuels. June-delivery palm oil futures on the Malaysia Derivatives Exchange dropped 1% to RM2,506/MT at midday. Soybean oil in Chicago lost 0.6% to 39.10 cents/pound in after-hours trading. (Bloomberg, Malaysian Reserve)

Thai, Indonesian and Malaysian rubber grades have been traded at record prices well above US$3 a kg as tyre makers scramble to buy the commodity because of tight supplies, dealers said yesterday.
  • Thai RSS3 changed hands around $3.50 a kg late last week, Indonesia's SIR20 was sold late on Monday at 1.50 to 1.51 US cents a pound, while SMR20 was traded at between US$3.365 and US$3.405 a kg for nearby shipment, they said. (Reuters)
Malaysia plans to woo foreign investors to handle the expanding water services industry, said Deputy International Trade and Industry Minister Datuk Jacob Dungau Sagan. "We're taking a targeted approach to draw in capital intensive in industrial engineering support and biotechnology," he added. (BT)

The plan to remove 14-stick cigarette packs from the market will definitely help to prevent youths, especially schoolchildren from picking up the habit, said non-governmental organisations and consumer groups. However, the current no-smoking zones should be further extended to cover a wider area.
  • Meanwhile, many hardcore smokers said the move to remove 14-stick packs would not affect them, for now. "Many of us will consider quitting only if there's no place for us to smoke and cigarette prices are too high," a smoker said. (The Star)
Malaysian mills have raised rebar offer prices by RM100-200 per tonne over the past fortnight in response to higher raw material costs, and amid talk of a higher annual benchmark iron ore settlement. Mills are offering at RM2,300-2,400 per tonne this week, up from RM2,100-2,200 per tonne two weeks ago, said officials.
  • Transaction prices, however, are still lagging behind at RM2,150-2,250 per tonne, said sources. But demand remains weak, causing mills and traders to offer bulk RM50-150 discounts to push sales, said sources. (Metal Bulletin)
CIMB Group has completed the issuance of a RM750m Cumulative Subordinated Fixed Rate Notes. The notes comprise a callable five-year tranche amounting to RM150m and a callable 10-year tranche of RM600m.
  • Both tranches have a maturity of 50 years, with the 5-year tranche having a call option for the issuer to redeem at 5th year and on each subsequent coupon payment date, and the 10 year tranche having a call option for the issuer to redeem at year 10 and on each subsequent coupon payment date. (BT)
OSK Investment Bank plans to set up an Islamic stockbroking business and offer syariah equity-linked investments as it explores a greater use of equity products, its Islamic banking chief says. Islamic banks worldwide are considering the use of more equity or risksharing structures, estimated to make up only a tenth of Islamic financing globally, prodded by criticism that their industry mirrors conventional banking.
  • The industry is seeking "more equity-based instruments rather than debt-based instruments because that is ideally what Islamic finance is all about", OSK's Islamic banking head Yazit Yusuff said. 
  • OSK Investment Bank, part of financial group OSK Holdings, wants to set up Islamic stockbroking services next year to serve the domestic and foreign markets, including the Middle East, Yazit said.
  • Yazit said OSK is also looking into developing equity-linked investment products based on the salam contract where advance payment is made for goods. The bank is also pitching for a mandate for sukuk worth RM1.5 billion to be issued by government agencies, he said.
  • AMMB Holdings set up an Islamic stockbroking unit in 2008. To encourage more syariah stockbrokers, the government said last year that expenses incurred in setting up such firms would continue to get a deduction in the calculation of income tax until 2015. (BT)
Allianz General Insurance Company (Malaysia) has introduced the enhanced Personal Accident plan Allianz Shield, which is designed to provide a more comprehensive coverage. Allianz Shield is devised to cover among others, medical expenses that include dengue, malaria or Japanese Encephalitis, bungee jumping, amateur sports (except martial arts and boxing), natural disasters, scuba diving (up to 50 metres deep), kidnap coverage, evacuation programme, snatch theft and more. (BT)

Dato' Saiful Bahri Zainuddin has resigned from his position as the Executive Director, Operations of Affin Holdings effective from 1 Apr 10. (BMSB)

U Mobile incurred an audited net loss of RM242.3m for the year ended Dec 08, said its substantial shareholder Multi-Purpose Holding. Audited net assets stood at RM548m or RM1.44 per share. (Financial Daily)

WiMAX broadband operator Packet One Networks is tieing up with Pos Malaysia to make it easier to acquire new customers sign up for P1's Internet packages, as well as for existing ones to pay their P1 bills at almost 600 post offices nationwide.
  • "Tying up with Pos Malaysia will help us serve our customers in secondary towns - like Kluang, Batu Pahat, Muar - better. It will help us in terms of customer acquisition as well as retention rate, because we are now accessible in more places," said P1 CEO Michael Lai said. (BT)
Pos Malaysia will revise the price of its domestic postage stamps for the first time in 18 years, from RM0.30 to RM0.60. Starting July 1, price of stamps for sending mail up to 20g will be revised from RM0.30 to RM0.60. For those up to 50g, price would be raised from RM0.40 to RM0.70. (Star)

French carmaker Renault, Japanese alliance partner Nissan and Germany’s Daimler will unveil partnership plans today in Brussels, France’s industry minister said. Renault and Daimler have been discussing a partnership as carmakers worldwide seek to become more competitive by sharing technology costs and gaining scale. The groups are expected to announce a deal that will include plans for small, symbolic cross-shareholdings. (Reuters/BT)

DRB-Hicom is poised to become a sports car manufacturer after sealing a pact with the UK-based Potenza Sports Car Ltd. DRB-HICOM and Potenza plan to produce a range of models in Malaysia for the domestic and Asia-Pacific markets. Potenza is the designer and manufacturer of the niche Westfield and GTM brands of sports cars.
  • The company has sold over 10,000 cars since 1983 to Europeans and other driving enthusiasts around the world. DRB-HICOM MD Datuk Seri Mohd Khamil Jamil said that it could become the exclusive importer, manufacturer and distributor of the Potenza sports cars. "The vehicles will include electric and the hybrid variants in the right-handdrive markets of the Asia-Pacific region," Khamil said. (BT)
Jobstreet Corp was granted a patent for its “Text Zoning in a Semi-structured Text” method by Singapore’s Registry of Patents on 31 Dec 2009. “This is expected to actively enhance and hasten the process of candidate selection,” it said. (Financial Daily)

Tanjong plc’s listing status on the London Stock Exchange will be designated as standard listing from secondary listing, in line with changes implemented to its listing rules. (BT)

Iris Corp has been awarded a RM115.22m contract by Syarikat Prasarana Negara Bhd to install an automatic fare collection system (AFC) for the Kelana Jaya LRT line and Ampang LRT Line. (BT)

Haisan Resources is in talks with various parties to implement several corporate exercises. They include rationalising the company's assets and facilities, streamlining operations and improving efficiency. The group is also looking to reduce its debt, but nothing has been concluded at the moment, it said. (BT)

Loh & Loh Corp will soon launch two property projects in Selayang and Bandar Sri Damansara with a total GDV of about RM300m. “The property development business is an extension of our construction capabilities but we don’t have landbank, so projects will be correlated to acquisition of land,” CEO Jason Loh said.
  • Loh added that the company’s main focus will be the water sector. It is currently bidding for RM1.5bn worth of projects, 70-80% of which are water-related. (Malaysian Reserve)

20100407 0930 Malaysian Economic News.

The central bank has told the government the country’s 2010 economic growth can exceed the current forecast by as much as 2.0% through the “right policy intervention,” Prime Minister Najib Razak said. Gross domestic product can expand by 1-2% more than the central bank’s March forecast of 4.5-5.5%.
  • Measures including developing the Islamic finance industry will aid growth, he said, adding that the government will probably sell Shariah-compliant global bonds denominated in dollars. (Bloomberg)
Implementation of the rice subsidy programme (Subur) has been temporarily postponed to enable the re-checking and verification of the list of poor in the e-Kasih system, said Agricultue and Agro-based Industry Minister Datuk Seri Noh Omar. The step was taken following complaints and grumbling by people who said that the list of the poor in the e- Kasih system did not include all who were qualified.
  • “To date, we have received applications from 216 MPPP areas involving 450,296 families and this will reach up to 500,000 families after six more areas send in their lists. Meanwhile, the government had made available about RM50m a month to provide rice subsidy to those who needed it by supplying 55,000 tonnes of Super Tempatan rice with 15%t broken grain (ST15) throughout the country to ensure the rice was sold at not more than RM1.80 per kilo,” he said. (Bernama)
The new salary scheme and allowances for nearly 2,000 postmen and postal clerks nationwide so as to be in line with that enjoyed by other civil servants, will take effect in July. The salary restructuring exercise would also be supported by the increase in the stamp price and parcel delivery charges, effective from July.
  • The price for domestic postage stamps for standard mail weighing up to 20gm will be revised from 30 sen to 60 sen and for up to 50gm, it will be revised from 40 sen to 70 sen. People can still use the aerogram which will not be more than 30 sen. 
  • The government will also consider only a slight increase or no increase at all for postal delivery of books and magazines so that the public will not have to incur a high cost in acquiring educational materials. However, the increase is not applicable for nonstandard mail above 100gm up to 2kg, PO Box, locked bag and window delivery. (Bernama)
A total of 269 projects worth RM6.46bn have been proposed for implementation in Perlis for the 10th Malaysia Plan (10MP). Menteri Besar Datuk Seri Dr Md Isa Sabu said the agricultural sector had the most with a total of 102 projects (cost RM2.2bn), followed by 64 projects for infrastructure and public amenities (RM1.59bn), 16 commercial and industrial projects (RM1.77bn), 28 local government projects (RM388m), 16 tourism projects (RM277m) and 23 social projects (RM202m). (Bernama)

Pasar tani traders are drawing income of RM3,000 monthly, thanks to the Federal Agricultural Marketing Authority (Fama). "This is more than what most civil servants make. It places over 17,000 pasar tani traders above the poverty line," chairman Datuk Badruddin Amiruldin said.
  • Some RM490m sales were recorded from 364 pasar tani last year. Fama hopes to open 100 more pasar tani by year end involving 20,000 traders with sales estimated at RM800m annually. (Bernama)
The biggest beneficiaries of the New Economic Model (NEM) will certainly be the bottom 40% income earners now taking home less than RM1,500 per month, according to economist Datuk Dr Norraesah Mohamad. These include the lower-rung policemen, soldiers and municipal workers and ordinary people who are employed. (Bernama, Malaysian Reserve)

Malaysia will “most probably” issue a sukuk bond denominated in US dollar this year to test its financial standing in the world market, the PM Datuk Seri Najib Razak said. “We don’t actually need it. There is enough liquidity domestically for us. But this could be a good opportunity to see how the market rates Malaysia,” he said. (NST)

20100407 0927 Global Economic News.

Federal Reserve policymakers are worried that the economic recovery may lose steam going forward, despite recent moderate improvements, according to minutes. Though the latest data suggest an uptick in economic activity, Fed members believe that some sectors of the economy could stifle overall growth. But they could raise rates as soon as they see continued signs of life in the economy.
  • Fed members believed the central bank's policy of "exceptionally low rates" for "an extended period" is explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time." The central bank's current guidance does not limit the Fed from tightening or maintaining its monetary policy, it said. (CNN Money)
The US government increased its crude oil price forecast for 2010 on projections that the global economy will rebound through the end of the year. West Texas Intermediate oil, the US benchmark, will average US$80.74 a barrel this year, up from last month’s forecast of US$80.06, according to the Energy Department’s monthly Short-Term Energy Outlook.
  • That’s 31% higher than the 2009 average price of US$61.66 a barrel. Oil prices are forecast to climb 3.4% in 2011 to an average US$83.50, which was unchanged from last month’s estimate. (Bloomberg)
US crude oil inventories rose by 1.07m barrels last week to 353m, the American Petroleum Institute said. Gasoline inventories fell 2.96m barrels to 220.2m. Supplies of distillate fuel, a category that includes heating oil and diesel, climbed by 723,000 barrels to 148.3m. (Bloomberg)

Job openings in the US fell in February for the first time in three months, a sign employers will be slow to expand staff even as firings subside. Openings decreased by 131,000 to 2.72m, the Labor Department said. Fewer people were hired and the number of workers fired also decreased. (Bloomberg)

US Treasury Secretary Timothy F. Geithner said a new economic partnership with India offers “huge opportunities” for both nations as the world recovers from the worst recession since World War II. Geithner is focusing on global economic conditions, financial market stability and investment opportunities in infrastructure including roads and ports in his first trip to India as treasury secretary.
  • The visit marks the beginning of US-India talks to strengthen ties, similar to the Strategic Economic Dialogue started in 2006 between the US and China. (Bloomberg)
The US economic recovery appears to be underway but housing will take a while to recover and the outlook for unemployment "is not promising", Narayana Kocherlakota, president of Federal Reserve Bank of Minneapolis said.
  • He expects gross domestic product (GDP) growth of 3% per year over the next two years and he would be surprised if the unemployment rate, currently at 9.7%, were below 8.0% by the end of 2011. (Bloomberg)
European Union (EU) finance chiefs next week will discuss a tax on bank leverage and risk-taking that could generate as much as €50bn (US$67bn) a year for the region’s governments, the EU said. The prospective balance-sheet levy is among “innovative financing options.”
  • A separate levy on financial transactions, so-called Tobin tax, could bring in up to €20bn. “The financial sector needs to contribute to the costs of financial stability. This should be one of the building blocks in our effort to set up a crisis-management framework in Europe,” it said. (Bloomberg)
Greece said it hasn’t tried to exclude the International Monetary Fund (IMF) from a European Union-led rescue package as it tries to end speculation that pushed the country’s financing costs to an 11-year high. “There has never been any move on the part of our country to change the conditions of the recent agreement of the European Council on the support mechanism,” Finance Minister George Papaconstantinou said. (Bloomberg)

Japan’s broadest indicator of economic health rose for an 11th month, extending the longest streak since 1997, as the nation sustained an economic recovery amid deflation. The coincident index climbed to 100.7 in February from 100.3 in January. Economists forecast for 100.5. (Bloomberg)

Taiwan’s consumer prices rose 1.3% yoy for a third consecutive month in March (2.4% in Feb) after the economy exited its deepest recession on record, suggesting the central bank may move to tighten monetary policy in the second half of the year. Economists forecast for a 1.9% gain in the month. (Bloomberg)

Indonesia’s central bank kept its benchmark interest rate at a record low of6.5% for an eighth straight month, judging that inflation isn’t yet enough of a threat to require higher borrowing costs. It was the lowest level since the measure was introduced in 2005, Darmin Nasution, senior deputy governor said. The decision was predicted by all economists. (Bloomberg)

Philippine inflation accelerated to a three-month high of 4.4% yoy in March (4.2% in Feb) as oil and food costs rose, supporting the central bank’s decision to unwind stimulus measures. That compares with the economists’ forecast for a 4.5% increase. Policy makers will “monitor demand conditions” for any need to adjust the monetary policy stance, Governor Amando Tetangco said. (Bloomberg)

Crude oil rose to a 17-month high on signals that US economic growth will accelerate, bolstering fuel use in the world’s biggest energy-consuming country. Crude oil for May delivery rose 22 cents, or 0.3%, to US$86.84 a barrel on the New York Mercantile Exchange, the highest settlement since 8 Oct 08. Futures reached US$87.09, the highest intraday level since 9 Oct 08. Prices are up 9.4% this year. (Bloomberg)

Australia’s central bank raised its key cash rate by 25bp to a 14-month high of 4.25% and flagged further moves ahead as the resource-rich nation rides a tide of Asian demand. “The board judges that with growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average.
  • This decision is further step in that process,” Reserve Bank of Australia said, It indicated that the average or normal rate would fall somewhere in the range of 4.25-4.75%. (StarBiz)
Singapore's Education Ministry said that 92.2% of students who graduated from the three local universities last year found jobs within six months of graduation. The three public universities are the National University of Singapore (NUS), the Nanyang Technological University (NTU) and the Singapore Management University (SMU). (Bloomberg)

China is studying limits on the scale of local government debt, the Ministry of Finance said. The central government is also studying the set up of risk alert systems for local government financing. China will also separately manage the debt of local governments and that of their financing vehicles, the Ministry of Finance said. (Bloomberg)

Indonesia's central bank revised up the country's economic growth to 5.5% to 6% this year, from the initial target of 5% to 5.5%. The bank said in a statement that continuing strong consumption and increasing exports contributed to the improvement of the country's economy. (Bloomberg)