Thursday, April 8, 2010

20100408 1835 FCPO EOD Daily Chart Study.

FCPO closed : 2500, changed : -39 points, volume : higher.
Bollinger band reading : downside biased.
MACD Histrogram : down up and down again, seller insist to stay.
Support : 2500, 2470, 2450 level.
Resistant : 2521, 2550, 2570 level.
Comment :
FCPO surrender back last 2 days recovery effort to end the day at the low with better volume changed hand eliminating the potential tiny little double bottom formation. Daily chart wise, the reading turned from a side way range bound market into continue downside biased market.
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.

20100408 1813 FKLI EOD Daily Chart Study.

FKLI closed : 1332, changed : -11 points, volume : improved.
Bollinger band reading : downward correction but still bullish biased.
MACD Histrogram : weaker, buyer off loading as seller appetite increase.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1350 level.
Comment :
FKLI closed the day lower in improve volume traded as buyer continue to offload position to lock in profit. Daily chart wise, the downward correction continue to take place for the 3rd day and could possibly continue to do so testing lower support level near middle Bollinger band level but the underlying trend is still up.
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.

20100408 1307 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1334.5, changed : -8.5 points, volume : moderate.
Bollinger band reading : bearish biased.
MACD Histrogram : getting lower, buyer off loading.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1350 level.
Comment :
Buyer profit taking continue to push FKLI lower in unison with major Asia market that traded weaker. Hourly chart reading shows that the market negative sentiment increased and suggesting a downside biased market development with potential technical rebound to take place in the near term as price traded a little outside the lower Bollinger band level.

20100408 1246 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2550, changed : +11 points, volume : low.
Bollinger band reading : side way range bound.
MACD Histrogram : getting higher, buyer show some mild interest.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2600 level.
Comment :
Firmer overnight soy oil futures price spillover to FCPO that traded higher in low volume participation within a tight 12 points range market. Hourly chart reading suggesting market is likely to trade side way range bound after testing the strong support line at 2500 level and rebounded with the overall down trend market(base on hourly chart bigger picture). Factor to watch will be soy oil futures price and the continue stronger Ringgit.

20100408 0954 Malaysia Corporate News.

The RM10.7bn bid by Gamuda for water assets in Selangor runs counter to the the spirit of the law, says Energy, Green Technology and Water Minister, Datuk Seri Peter Chin. The Water Services Industry Act 2006 aims to promote an asset-light environment in which water service companies just focus on operations and maintenance.
  • Assets would be owned by Pengurusan Aset Air Bhd, a federal government body. "This is to ensure water companies in Selangor operate in an environment where they do not burden themselves with heavy capital expenditure on pipe replacement," Chin said. (BT)
The negotiations on the consolidation of Selangor’s water assets among the water concessionaires, the state and the federal government would be finalised by next week, Selangor MB Tan Sri Abdul Khalid Ibrahim said.
  • He said an announcement would be made a week after the deal was finalised. Khalid maintained the stance that the issue was “still in the hands” of the federal and state governments to consider the bid for the water assets in Selangor. (Financial Daily)
Malaysia can utilise groundwater in a sustainable manner if the right policy, coupled with better management groundwater systems are implemented, an expert says. Hydrogeology Research Centre Director Dr Saim Suratman said that currently, groundwater made up only 2% of total public water usage while the rest was from surface water.
  • "Many states actually have the potential for groundwater development and Kelantan is one of the states that probably has the most viable groundwater development," Saim said. (Bernama)
As the debate on takeover rule changes heats up, a corporate lawyer argues that the role of independent advisers can be boosted instead to protect small investors and help them get a higher offer price.
  • Sreesanthan Eliathamby, a partner of law firm Kadir Andri & Partners, who has in the past advised on several major transactions in the country, said there are other more effective ways to achieve a better price for minority investors in a merger and acquisition (M&A) deal, rather than tightening the rules outright. 
  • "For example, you can expand the role of independent financial advisers to ensure that the advice given is more granular and assist the minority in making an informed decision," Sreesanthan said. "If the price difference between what the independent adviser has recommended and the offer is more than 10%, the regulator can require that the deal cannot go through," he suggested.
  • He said the Securities Commission (SC) should look into these alternatives because a tougher rule will immediately drive away potential buyers on impression that a deal is harder to be done, and yet there is no guarantee that minorities will get a higher offer once the bar is raised. (BT)
Malaysia should revive the now defunct Bumiputera Stock Exchange (BSE) so that Bumiputera-owned companies would have an avenue to raise funds for their development, suggests the former president of the local stock exchange. "The reason is this: local companies, especially Malay entrepreneurs, have got very limited avenues (to raise funds) although they've been told there are a lot. They go to banks and banks say no," Datuk Mohd Salleh Abdul Majid said.
  • Malaysia first had a BSE which was formed by Mara in 1969 and became operational in 1971, to encourage Bumiputeras to make stock market investments and help Bumiputera companies tap investment capital. The exchange however failed and was dissolved in 1989 after 20 years as it faced many challenges, including lack of trading activity. 
  • "Unfortunately, it did not have a system ... so if you wanted to sell, you'd have to wait for 3 or 4 months before a buyer could be found. But (now), we want to introduce a system, new trading rules and supervision by the proper authorities," Mohd Salleh said.
  • Mohd Salleh said with the new BSE, companies going for a listing should be subjected to different rules than that of the current stock exchange. For instance, it shouldn't matter what a company's paid-up capital is, as long as it has a sponsor of strong standing to back it up. Sponsors could be statutory bodies, government agencies, banks or even strong listed companies, he said.
  • As for shareholding, he said perhaps a certain percentage could be allocated to non- Bumiputras, or, the shares could be open to anybody as long as it belonged to a Bumiputra. People should also be able to trade the shares over the Internet, he added. (BT)
Logistics company, Nationwide Express Courier Service, may bid for a stake in Pos Malaysia. "Whichever company that goes in will definitely change the landscape of the industry. Obviously, it depends from which industry the investor is from, and as a major player in the (logistics industry) we want to be a part of that. If there is any synergy whichever way around, we are open to discussions,” chairman Rozilawati Basir said. She declined to comment whether the company was in talks with Khazanah. (BT)

Affin Bank relaunched its latest financial product, Affin Smartmoney, with enhanced features and a competitive interest rate. Affin Smartmoney allows customers with a minimum fixed deposit (FD) account of RM10,000 to open an equivalent overdraft facility (OD) of up to 100% of their FD. The facility helps customers to maintain interest rates on their FDs while paying minimum sum for the overdraft,” said Affin Bank director for consumer banking Idris Abd Hamid. (BT)

AmInvestment Bank's fund management division expects to grow assets under management to RM28bn by year-end, through the promotion of new funds, existing ones and by securing new mandates from institutional investors. The company currently manages some RM20bn.
  • "We are increasingly more active in the region, not only in Malaysia and the Middle East, and we will build upon that direction," funds management division CEO Datin Maznah Mahbob said. The bank's fund management division plans to launch another 10 funds this year. (BT)
Deutsche Bank officially launched the Islamic Securities Services (SS-i) on Wednesday, the first Shari'ah-compliant product of its kind in Malaysia. The SS-i also complements DBMB's suite of Islamic Banking products. Its Head of Global Transaction Banking, Ridzal Sheriff said the product is targeted at both domestic and foreign Islamic fund providers.
  • "It facilitates DBMB's clients in achieving Shari'ah-compliance in their operational and day-to-day activities while ensuring Shari'ah transparency to their end investors," he said. (Bernama)
DiGi has appointed Henrik Clausen as CEO following the resignation of Johan Dennelind, who will leave the company on May 17. It remains unclear, however, why Dennelind is leaving or where he is going to, after having been with DiGi for six years. He took over as CEO in Apr 2008.
  • "After six very rewarding years, leaving DiGi and Malaysia will naturally be difficult for my family and I, but the timing is right for me to move on to new challenges," he said. Clausen has served as Telenor Denmark CEO for the last five years. (Financial Daily)
Domestic long and flat steel products will see substantial price increase at least for the next three months following an imminent shift in the annual iron ore contract to quarterly pricing by the world's top three iron ore mining companies.
  • The cost of iron ore to Asian steelmakers could now rise 80-100% or US$110-120 per tonne, under the new pricing mechanism said industry players. Malaysian Iron and Steel Industry Federation (Misif) president Chow Chong Long said that there was a huge potential for local steel bar prices to trade above the current RM2,300-2,400 per tonne level. 
  • "Local steel millers, like their international counterparts, will be affected by the shorter term iron ore contracts. There is no choice but to pass the higher iron ore cost to our customers," he added.
  • Chow said steel demand was also expected to accelerate in the coming months with rising orders from the Asean region, structurally weak US$ and resurgence in domestic steel consumption. (Starbiz)
KNM announced that the Ministry of Finance on 6 Apr approved a total tax incentive of RM1.4bn to be granted and applied over four years with effect from 2009 in respect of the Borsig acquisition. (BMSB)

Danajamin Nasional, a state-owned financial guarantee institution, will announce by month-end its commitment to guarantee an additional RM1.15bn worth of bonds issued by five companies from the oil and gas, infrastructure, property, construction and plantation sectors.
  • This is part of its target to guarantee RM3bn worth of bonds this year. Last year, the issuance of private debt securities (PDS) by the Malaysian corporate sector stood at RM36bn. 
  • Since its set-up in May last year as part of the RM60bn stimulus package, Danajamin has entered into an agreement with Kencana Petroleum to guarantee the latter's RM250 million Islamic bond, or sukuk, issuance. (BT)
BMW Malaysia expects sales of its X-series model this year to increase by 20% compared with 15% last year. MD, Geoffrey Briscoe, said encouraging sales would continue to be driven by its existing and the new BMW X1 sports activity vehicle (SAV). Currently, the BMW X1 is available in the form of the diesel-powered BMW X1 xDrive20d with a price tag of RM299,800, while the petrol-driven BMW X1 sDrive 18i, which would be available by Jun-10, is priced at RM263,800. (Bernama)

Sunway City has proposed to sell all its stake in eight properties to a REIT for a price that has yet to be fixed. The properties are Sunway Pyramid shopping mall, Sunway Resort Hotel & Spa, Pyramid Tower hotel, Menara Sunway, Sunway Carnival mall, Sunway Hotel Seberang Jaya, SunCity Ipoh hypermarket and Sunway Tower.
  • It also plans to sell three pieces of leasehold land in Selangor to Sunway Pyramid Sdn Bhd (SPSB). SunCity also signed letter of intents to buy 48% of SPSB and Sunway Resort Hotel Sdn Bhd. (BT)
Dijaya Corp will jointly develop a mixed property project worth US$174m (RM560m) in Mongolia following the acquisition of a 75% stake in Transglobal Ltd for US$50,000. The overall development will be undertaken in three phases and would include apartments and one shopping podium. Dijaya expects the acquisition of Transglobal to be completed by Jun-10 while funding for the project may be sourced internally and from bank borrowings. (Malaysian Reserve)

Dayang Enterprise has won a RM400m maintenance contract from Sarawak Shell. The contract is for five years initially, with a one-year renewal option. (BMSB)

Prudential Assurance Malaysia has appointed Lai Leong Pin as its general manager. Prudential CEO Charlie Oropeza said Lai’s appointment underlined the importance of the agency distribution channel to the continued growth and success of the company. Prior to his appointment, Lai was the company’s chief agency officer. (BT)

20100408 0946 Malaysian Economic News.

The international reserves of Bank Negara Malaysia (BNM) amounted to RM311.7bn (US$95.3bn) as at 31 Mar 10 (US$96.8bn as at 15 Mar 10). This reserves level has taken into account the quarterly adjustment for foreign exchange revaluation loss, following the strengthening of the ringgit against all major currencies during the quarter. The reserves position is sufficient to finance 8.8 months of retained imports and is 4 times the short-term external debt. (BNM)

Malaysia is expected to receive investments amounting to RM2.3bn in the next 2-4 years from French investors, particularly in the aerospace field, Deputy Prime Minister Tan Sri Muhyiddin Yassin said. Among the industries in which the French investors are keen to invest are aerospace where there are 4 interested companies, information communication technology (3 companies) and electronics (2 companies). The biotechnology, automotive, engineering, hotel, defence and private business industries have attracted one investor each.
  • A company has also offered its expertise in halal product certification and forensic DNA identification, which it is expected to set up a laboratory in Malaysia with an initial investment of about €500,000 to €1.0m to identify halal contents, especially food products. (Bernama)
The sugar subsidy will be withdrawn in stages as part of the government's drive to encourage the public to consume less sugar, said Domestic Trade, Cooperatives and Consumerism Deputy Minister Datuk Tan Lian Hoe. She said however,
  • if there was any further increase in sugar price, it would be minimal and would not burden the people. The government was expected to spend RM1.008bn to subsidise sugar this year or 80 sen per kg to ensure that the retail price remained at RM1.65 per kg. (Bernama)
The Employees Provident Fund (EPF) General Manager for Public Relations, Nik Affendi Jaafar annnounced a revision on the minimum withdrawal quantum for accounts in excess of RM1m. The minimum quantum that can be withdrawn each time has now been reduced from RM100,000 to RM50,000. "Members having at least RM1.05m in their accounts are eligible to withdraw RM50,000 and above once every three months subject to there being sufficient savings," he said. (Bernama)

The Employees Provident Fund (EPF) can consider application by members to withdraw money from account two to rebuild houses destroyed by fire after verification by the Fire Department and police, Dewan Rakyat was told. Deputy Finance Minister Datuk Dr Awang Adek Hussin said the withdrawals allowed will be based on the value of houses destroyed by fire. Destruction must be total as it will not be allowed if only the kitchen has been destroyed. (Bernama)

The National Higher Education Fund Corporation (PTPTN) still has RM6bn to cover its expenses for this year and next, Higher Education Minister Datuk Seri Mohamed Khaled Nordin said. The unused fund was part of the allocation received by the corporation under the Ninth Malaysia Plan (9MP). To date, PTPTN had spent RM32bn to provide study loans for students, of which 52% had been repaid. Last year alone, it only managed to collect over RM400m from the total RM1.07bn loans disbursed. (Bernama)

The Asean economic integration is set to advance this year, with the coming into force two key agreements, hence liberalising trade and investment in the region soon, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.
  • Asean Eonomic Ministers pledged to implement the Asean Trade in Goods Agreement (ATIGA) by next month following the readiness by Thailand and the Philippines to sign the pact on 8 Mar 10. The Asean Comprehensive Investment Agreement (ACIA) would be enforced by October after Indonesia signed the agreement soon. (Bernama)
Cuepacs has urged the government to reduce the interest rate on housing loans from 4% to 2% in keeping with the market rates. Its secretary-general, Ahmad Shah Mohd Zin, said many commercial banks were charging less than 4% and the government should also adjust the rates which were first introduced in the early 70s. (Bernama)

The Department of Statistics will carry out a nationwide population and household census from 6 Jul to 22 Aug. The census exercise would involve 29m people, including about 7.3% foreigners. (Bernama)

A Unesco-Malaysia Co-operative Trust Fund has been set up to help poor nations achieve the Education For All (EFA) target by 2015. Deputy Prime Minister Tan Sri Muhyiddin Yassin, who announced this yesterday, said Malaysia would contribute US$5m (RM16.5m) for the launching grant and an additional annual grant of US$1m (RM3.3m). The fund will be utilised to organise capacity-building courses for participants from leastdeveloped countries, small island states and Africa, he added. (The Star)

The lower income group will pay less tax for goods and services under the proposed Goods and Services Tax (GST), Prime Minister Datuk Seri Najib Tun Razak said. He said these people would need to pay an average of RM79.57 monthly in tax for goods and services although they were exempted from paying income tax. (The Star)

20100408 0939 Global Economic News.

US consumer borrowing fell the most in three months in February, declining by US$11.5bn or 5.6% yoy in February (vs. +US$10.6bn or +5.2% yoy in Jan). This reflects weakness in revolving loans (i.e. credit cards) which dropped 13.6% and non-revolving loans (i.e. auto loans) which fell 1.6%.
  • It marks a setback to hopes that consumers are beginning to feel more confident and will start spending more. This came in weaker than the small US$500m gain that economists had expected. (CNBC)
Federal Reserve Chairman Ben Bernanke said the economy still faces significant headwinds, including a housing sector that has yet to recover convincingly and an ailing employment market. The central bank chief was in no rush to begin raising interest rates. Against that backdrop, the Fed chairman saw no immediate reason to be worried about inflation, which he characterized as ''well controlled." (CNBC)

Kansas City Federal Reserve Bank President Thomas Hoenig said that although an accommodative monetary policy is still warranted to promote economic recovery, he proposes that the Fed move "soon" to raise the federal funds rate toward a still accommodative 1%.
  • Hoenig, a voting member of the Fed's policymaking Federal Open Market Committee, warned that by holding the funds rate near zero and advertising its expectation that it will stay there "for an extended period," the FOMC is risking financial imbalances and other problems. (Xinhua)
William Dudley, president of the New York Federal Reserve Bank, argued that asset price bubbles do exist but that in most cases macro prudential tools are more effective in tackling sharp rises in asset prices, rather than relying on monetary policy that is "too broad." Assessing whether there is a bubble or the size of the prospective bubble is going to be very challenging for central banks. (Xinhua)

The chances of enacting financial reform this year are getting better and should include some type of ban on proprietary trading by banks, White House economic adviser Paul Volcker said. He thinks a bill could be ready for President Barack Obama's signature shortly before or after the Congressional recess in August. Dubbed "the Volcker rule," it also would ban banks from the hedge fund business and limit their future growth. (CNBC)

Thailand Prime Minister Abhisit Vejjajiva conceded the enforcement of Internal Security Act (ISA) had failed to deter the protests by the red shirts. Abhisit then deemed it necessary to invoke a state of emergency decree over Bangkok. Deputy Prime Minister Suthep Suban has been appointed to supervise the emergency rule. (The Nation)

The World Bank expects Thailand's gross domestic product (GDP) to expand 6.2% this year, up from a contraction of 2.3% last year, according to its East Asia & Pacific Economic Update, released yesterday. The bank's earlier forecast was 3.5%. Despite a pick-up in domestic consumption in the fourth quarter last year, exports would be the main contributor to growth in the near term, said the World Bank's report. The Bank projected that Thailand's exports would expand by 11.5% yoy up from a contraction of 13.9% last year. (The Nation)

Any increase in Thailand’s interest rates will have only a “marginal” impact on the economy because borrowing costs are at a historical low, Finance Minister Korn Chatikavanij said.
  • “They (Bank of Thailand) already indicated that that’s exactly what they’ll do,” Korn said. “The only question in my mind is whether the current political situation would delay their decision to send a signal to the market that the era of historically low rates may be over.” 
  • Thailand did “very well” in the first quarter even though the protests hurt growth in March, Korn said. (Bloomberg)
The Group of Seven’s economic recovery is likely to be sustained at a slower pace in the first half of this year with the US outpacing Japan and the euro area, according to the Organization for Economic Cooperation and Development (OECD). The G-7 economy grew 1.9% in the first three months of the year from the prior period on an annualized basis and will expand 2.3% in the current quarter, it said. That follows growth of 3.7% in the final quarter of last year. (Bloomberg)

Europe’s Purchasing Managers’ Composite Index of services and manufacturing rose to 55.9 from 53.7 in February. That’s the fastest pace since Aug 07 and above an initial estimate of 55.5 published on 24 Mar. (Bloomberg)

Europe’s economy unexpectedly stagnated in 4Q09 as companies cut spending more than previously estimated. Gross domestic product in the 16-nation euro region remained unchanged compared with the third quarter, when it rose 0.4%. It had previously reported a fourth-quarter expansion of 0.1%. Corporate investment dropped 1.3% instead of the 0.8% estimated earlier. (Bloomberg)

The Bank of England will keep the benchmark interest rate at a record low of 0.5% until at least November because the economic recovery remains “vulnerable,” the British Chambers of Commerce (BCC) said. “In the last forecast, we envisaged an increase to 0.75% in August and to 1.0% at the end of the year,” BCC Chief Economist David Kern said. (Bloomberg)

The Bank of Japan refrained from expanding measures to fight deflation and Governor Masaaki Shirakawa said a return to recession is unlikely as the recovery begins to sustain itself. It also left the key interest rate at 0.1%. “We have confirmed that the economy is currently picking up steadily and on top of that, we are seeing some signs of future progress,” Shirakawa said. (Bloomberg)

China’s central bank said it will sell three-year bills for the first time since Jun 08, prompting speculation it is preparing to raise interest rates and allow gains in the yuan to help curb inflation. The sale of Rmb15bn (US$2.2bn) in the securities today will be followed by issuance every two weeks, the People’s Bank of China said. (Bloomberg)

China is considering allowing the yuan to trade against the Russian ruble, South Korean won and Malaysian ringgit to promote its use in cross-border trade, an official at the China Foreign Exchange Trade System said. The People’s Bank of China is investigating the possibility of offering new currency pairs. (Bloomberg)

The Philippines may need to raise interest rates this year as the economy improves, central bank Deputy Governor Diwa Guinigundo said. “I’m sure we may have to consider an upward adjustment in the policy rate. But at this point, given that the recovery continues to gain more traction and inflation expectations continue to be benign, we can still afford to keep our policy rates,” he said. (Bloomberg)

The Indonesian government raised its proposed oil price assumption for the revised 2010 state budget to US$80/bbl from US$77, Evita Legowo, director general of oil and gas at the nation’s energy ministry, said. (Bloomberg)

Singapore’s central bank will favor a stronger currency by October to curb inflation and catch up with regional peers in withdrawing economic stimulus, a survey Of economists showed. (Bloomberg)

East Asian economies have emerged stronger from the global crisis and may experience “rapid growth” in coming years, the World Bank said, adding it’s still premature for many nations to withdraw the fiscal stimulus that has helped mitigate the effects of the slowdown.
  • Emerging East Asia, which excludes Japan and the Indian subcontinent, will expand 7.6% this year, more than a November estimate of 6.4%. The World Bank has upgraded its growth forecast for Developing East Asia this year by almost 1% pt higher to 8.7%. China’s economy may expand 9.5% this year. (Bloomberg)

20100408 0853 Crude Palm Oil Futures News

Palm oil futures up on soyoil; ringgit weighs
KUALA LUMPUR, April 7 (Reuters) - Malaysian palm oil futures ended higher on the back of firmer soyoil markets although the surging ringgit currency nipped gains.

"It's a war out there. Plantation firms are taking up positions because a stronger ringgit means better returns for their crude palm oil sales to refiners," said a trader with a foreign commodities broker.

"It's a war out there. Plantation firms are taking up positions because a stronger ringgit means better returns for their crude palm oil sales to refiners," said a trader with a foreign commodities broker.
"Refiners are losing their margins because the crude palm oil raw material is too expensive. The dollar is weaker as well, so they are staying away or closing positions,"the trader added.
By the midday break, the benchmark June crude palm oil contract on Bursa Malaysia Derivatives Exchange was up 16 ringgit. or 0.6 percent, at 2,536 ringgit ($789.5). Traded volume stood at 5,728 lots of 25 tonnes each.
The ringgit rose 0.6 percent to 3.1930 per dollar, eating into refiners' margins as crude palm oil feedstock for refined products is priced in the Malaysian currency.
The market is also watching for cues from Malaysia's palm oil exports, production and stocks due to be released over the weekend and on Monday. Reuters will issue a poll for March palm oil stocks, production and exports on Thursday.
Vegetable oil traders were also tracking developments from a brewing trade dispute between China and Argentina.
A China Ministry of Commerce source has refuted claims it was curbing soybean oil shipments from Argentina, saying new quality standards were for consumer safety, the China Daily reported on Wednesday.
Oil was choppy, trading near 18th month highs around $87 and giving support to U.S. soyoil futures. China's Dalian Commodities Exchange rose 1.2 percent.