Wednesday, April 21, 2010

20100421 1813 FCPO EOD Daily Chart Study.

FCPO closed : 2471, changed : -27 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : getting lower, seller in control.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550 level.
Comment :
FCPO ended the day right at the low in lesser volume transacted within a 29 points range market. Daily chart reading suggesting a further downside potential market likely to develop in the near term. However the correction could still take place due to Monday over extended plunge below the lower Bollinger band.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/break down with quick cut loss and profit target.

20100421 1741 FKLI EOD Daily Chart Study.

FKLI closed : 1334, changed : -2.5 points, volume : lower.
Bollinger band reading : side way range bound upside biased.
MACD Histrogram : lower, seller taking small exposure.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1350 level.
Comment :
FKLI forgo all the morning session gain and drop into the negative zone to end the day lower in lesser volume traded. Daily chart reading continue to stay side way range bound with still a little upside biased. On the other hand, market could possibly trading within the purple colour symmetrical triangle waiting for a break up or down.
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.

20100421 1318 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1340, changed : +3.5 points, volume : moderate.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : getting weaker, buyer lock in profit.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
4.5 points range market FKLI traded higher in sustaining volume changed hand in tandem with most Asia market positive development. Hourly chart reading also voting for a further upside potential market likely in the near term testing previous high resistant level.

20100421 1310 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2489, changed : -9 points, volume : lower.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : edge up higher, not much action from both buyer and seller.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550 level.
Comment :
Quiet FCPO traded in negative zone through out the entire morning session within a 12 points range market.
Hourly chart shows that market is currently having a upward correction within a side way range bound downside biased market after market plunged heavily at Monday morning session.

20100421 1258 Malaysia Corporate News.

Splash has made a revised offer to the federal government and Selangor state government to take over all the water concessionaires in Selangor. The acquisition price of RM10.8bn is unchanged from Splash’s previous offer on 24 Mar 10. Structurally, the takeover offer now comprises PAAB’s RM8.1bn offer topped up by Splash’s offer of RM2.6bn. The revised offer is in response to the federal government’s view that Splash’s previous takeover offer did not meet the conditions under the Water Services Industry Act (WSIA) where water operators should be asset light. Post acquisition, Splash will undertake a sale and leaseback agreement of the assets with PAAB at 6% p.a. with annual escalation of 2.5%. Splash will operate the 30-year O&M concession/licence. (BMSB)

EON Bank said its business continues to run as usual despite "all the noises" surrounding the bank following the takeover bid by Hong Leong Bank and the possibility of Affin Holdings getting into the picture. Its group CEO Michael Lor said the bank has never slowed down its business and expects to continue to record strong growth this year. "Business as usual for us. Nothing has changed," he said. Lor said the Hong Leong takeover offer will be tabled at the company's annual general meeting and extraordinary meeting which is expected to be held in late May or early June. When asked to comment on Affin's interest over the bank, he said no official offer has yet to be made. (BT)

A number of local investment banks are in the midst of preparing proposals to secure the mandate to handle the IPOs of Malaysia Marine and Heavy Engineering and Petronas' petrochemicals business. It is understood that among those Petronas issued a request for proposal are the investment banking arms of CIMB, RHB, Maybank and AmBank. The deadline for submitting the proposals is sometime next week and that the banks would be assessed on their broad approach to the IPOs. (Star)

Supermax Corporation's executive chairman and group MD Datuk Seri Stanley Thai said the robust global demand coupled with constraints in expansion has helped boost the profitability of rubber glove manufacturers in Malaysia and should continue at least for the next one-and-a-half to three years.
  • He said that rubber glove manufacturers were set to see a spike in demand by July this year after seeing a drop in orders in recent months. The demand dropped as customers, especially the multinationals (MNCs), had reduced their orders because of the high latex price, he said. 
  • He said the latex price, which was now around RM7.71/kg, was expected to fall to between RM5.50-RM6.00/kg going forward. Thai said latex prices were expected to start dropping in May or June as by then, the wintering season will be over with latex production seeing an increase.
  • As for expansion, Thai said such plans remained slow in the glove industry due to nonavailability of natural gas for all new project sites as Gas Malaysia Sdn Bhd had not committed to capex for pipelines. He said unless the government intervened, Gas Malaysia was unlikely to invest in infrastructure for new industrial project sites, while in existing sites such as Klang, Selangor, the pipeline had reached maximum utilisation. As result, many glove manufacturers were resorting to alternative fuel such as biomass. (Bernama)
All public service projects and programmes costing over RM50m under the 10MP will require value management analysis to ensure they provide value for money, Tan Sri Nor Mohamed Yakcop said. He expected the Government to save at least 20% overall with the implementation of the new system. All government agencies submitting proposals to the EPU for projects under the 10MP would also have to list the total cost including the cost of operating and maintaining them. He said the EPU also wanted to avoid cases it encountered previously where a project failed to take off despite the funds being given to the agency concerned. (Star)

Proton Holdings is optimistic of recording 6 to 7% growth in sales this year on improved consumer sentiment and demand for its core models, launches of improved version of existing models as well as unveiling of all-new models. "We are looking at 6 to 7 per cent growth in our own volume alone from the domestic market. We are quite happy based on the current customer demand, and are quite confident we can see another growth year for Proton in the domestic market. "But, I think the focus will be more on the overseas market, which we are pushing very hard. And I believe this year, there will be another big growth for our export drive," its MD Datuk Syed Zainal Abidin Syed Mohamed Tahir said. (BT)

Malaysia’s palm oil exports fell 9.1% in the first 20 days of April compared with the previous month, estimated Societe Generale de Surveillance, an independent cargo surveyor. A total of 767,251 metric tons of palm oil were tracked April 1-20, SGS said. Malaysia exported 844,474 tons of palm oil during the same period in March, according to the surveyor. (Bloomberg)

Indonesia’s palm oil exports in March fell 9% from a month earlier to 1.06m tons, the nation’s palm oil association said in an e-mailed statement today. (Bloomberg)

Palm oil producers from Indonesia and Malaysia plan to meet in Kuching, Malaysia, early next month to discuss a strategy for tackling challenging environmental and labor issues which threaten to hinder the development of the multi-billion dollar industry. In March, producers from the two countries signed a memorandum of understanding in which they agreed to collaborate and improve communication to counter the impact of industry critics and to improve sustainability. Daud Darsono, president director of PT Sinar Mas Agro Resources and Technology, said producers will meet in Kuching to follow up on March’s agreement. (Jakarta Globe)

DRB-HICOM’s defence arm, DRB-HICOM Defence Technologies has received a letter of intent (LOI) from the Government to manufacture 257 units of 8X8 armoured wheeled vehicle for the usage of Angkatan Tentera Malaysia worth about RM8bn. Chairman Datuk Seri Mohd Khamil Jamil said the project value, as disclosed by the Government, was subject to commercial and technical terms between both parties as the project would span six years. “We will deliver the 257 units of 8X8 armoured wheeled vehicle to the Government by 2016. The company will come out with the first vehicle by January 2012,” he added. (Starbiz)

Mah Sing Group said it is "actively" scouting for more land at home and abroad, either via outright sales or joint ventures with land owners. It also expressed interest in participating in the government's tender process for several parcels of land in Jalan Stonor, Jalan Ampang, Jalan Lidcol in Kuala Lumpur, that will be developed by the private sector as well as the development of 1,200ha in Sungai Buloh into a new hub for the Klang Valley by the government and the EPF. (BT)

Malaysia Airlines is evaluating the potential of allowing wholly-owned FlyFirefly to operate its B737-400 planes when it replaces its fleet gradually from the end of this year. The national carrier will receive three of its B737-800 this year and the next. It will also receive five A330-300 and another five A380 next year. Sources said that Firefly would either lease or buy up to 35 of the used MAS jets, and would use the aircraft for shortrange domestic and regional routes. The plan is expected to take off from December this year until the end of 2013 when MAS stops using the B737-400. Firefly may either operate the Boeings from the KL International Airport (KLIA) or the new Low-Cost Carrier Terminal (LCCT). (BT)

Standard Chartered has appointed Sean Wallace as Group Head of Origination and Client Coverage (OCC) with immediate effect. He will continue to be based in Singapore. Reporting to Mike Rees, CEO of Wholesale Banking, Sean will lead the Bank's Origination and Client Coverage Group, which shapes the client-centric strategy of deepening client relationships across its key markets. (Bernama)

Citibank expects to record strong double-digit growth in revenue this year, driven by new branches and offerings. Its CEO Sanjeev Nanavati said the bank plans to grow and expand aggressively across all businesses in Malaysia. "We expect significant growth opportunities this year, with branch expansion and increased autoteller machine touch points," he said. Sanjeev said Citibank's growth strategy in the country will be three-pronged, namely physical, virtual and digital.
  • Its four new branches in Taipan USJ, Bandar Tun Hussein Onn in Cheras, Malacca and Kuantan will extend Citibank's network to 11 from seven now, following the authorisation given by Bank Negara Malaysia in 2009. In addition to branch expansions, Sanjeev said the bank will further enhance its mobile and Internet banking platforms to reach more Malaysians and support the growth of virtual banking platforms. (BT)
British American Tobacco (Malaysia) said it has lined up strategies to counter the impact of a new rule that bans the sale of small packs starting June 1 this year. "This will be another challenging year for different reasons, but we have been preparing as we are aware of this for a long time," finance director Stephen James Rush said. "We need to convince the customers of Dunhill 14s not to change brand by giving them extra features. We have successfully launched the Dunhill Reloc, and there are other plans too. We believe we can meet the challenge."
  • Reloc is a new pack design with a resealable feature to keep the cigarettes fresh, which may help convince customers to convert to the bigger packs of 20s, especially since they are cheaper for every stick. 
  • BAT had estimated that it will lose RM80m in operating profit a year once the new rules kick in requiring it to withdraw cigarette packs with fewer than 20 sticks. (BT)
Ramunia Holdings, which has just sold its main asset, expects to be back in the black and free from the PN17 status this year as it partners shipbuilder Coastal Contracts. It plans to continue with the engineering business, servicing the oil and gas industry, despite selling its fabrication yard in Johor to Sime Darby for RM515m, says Ramunia director Too Kok Leng. Coastal offers a wide range of marine services and vessels to worldwide clients of different industries and has a fabrication yard in Sandakan, Sabah. "It is a good marriage. We have the licence and expertise, and Coastal has a yard. So we are complete in that sense", says Too. (BT)

Scomi Marine is on the lookout to expand its business through acquisitions. "We are looking at opportunities to acquire additional assets. However, we will look at the returns (on investment) carefully," said president Mukhnizam Mahmud. The company will look for companies in which it will be able to take a majority stake to maximise shareholders' return. Shareholders yesterday approved Scomi Marine's bid to dispose of its 29.07% stake in CH Offshore to Falcon Energy Group for RM348.7m to pare down its debts. (BT)

Axis REIT Managers (ARMB) announced that OSK Trustees, the trustee of Axis Real Estate Investment Trust (Axis-REIT) has entered into an agreement with Zone Capacity with regard to a property acquisition in Tanjung Kupang, Johor Bahru. Axis-REIT had proposed to acquire the unexpired 44 years 11 months sub-lease interest of a portion of land in Tanjung Kupang known as Plot D8 at Distripak A, Pelepas Free Zone, for RM30m. (Bernama)

20100421 1251 Malaysian Economic News.

The leading index (LI) declined by 0.5% mom in February (0.6% in Jan). The six-month smoothed growth rate of the LI in February declined to 5.2% from 7.7% in January, suggesting that the economic scenario remains favourable in the near term. (Department of Statistics) Please see our Economic Update for further details.

Deputy Prime Minister Tan Sri Muhyiddin Yassin says there will be a review of subsidies, price controls and other incentives that give way to distortion and affect the competitiveness of local economy. These incentives will be replaced by a better safety net for those who qualify and within the target audience. (Bernama)

Malaysia External Trade Development Corporation (Matrade) has targeted a 20% increase in immediate sales at Malaysia International Halal Showcase (MIHAS) 2010 (vs. RM226.4m in 2009), which will be held in conjunction with Halal Malaysia Week on 23- 27 Jun. Its chief executive officer Datuk Noharuddin Nordin said the corporation was confident of achieving the target due to improved economic conditions as well as an increase in participation from exhibitors. (Bernama)

The Asean Trade Centre, expected to be established by October this year, will further support small and medium enterprises (SMEs) to penetrate the Asean market as well as new markets. The initiative will also help the SMEs to cut down their production costs and help them in buying raw materials in bulk, said Kuala Lumpur Malay Chamber of Commerce Malaysia's president Datuk Syed Amin Al-Jefri. Initial cost of setting up the centre is estimated at RM2m. The proposed trade centre would also provide warehousing and logistics facilities and possibly financing for the SMEs to access new markets. (Bernama)

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said that under the 10th Malaysia Plan (10MP), value management analysis will be undertaken on development programmes and projects costing RM50m and above. For projects costing less than RM50m, meanwhile, the ministries and agencies will also be encouraged to conduct value management analysis, especially for recurring and complex programmes and projects. This value management analysis would save government expenditure by between 20-30% and speed up project completion. The method would also ensure projects under 10MP are completed in time. (Bernama)

Bank Negara Malaysia (BNM) has proposed to restructure the country's motor insurance policy in line with the government's aim of ensuring access for motorists to the mandatory Third-Party Bodily Injury and Death (TPBID) insurance coverage. The establishment of a new company that would provide such claims is costing the general motor industry about RM1bn p.a.
  • Its Financial Sector Development Department director Abdul Rasheed Ghafur said the central bank for now has proposed that the overall liability limit could potentially be up to RM2m per life/injured person.
  • Two scenarios are currently being considered for the proposed scheme, whereby in Scenario A, payment will be based on a fixed scale provided or in Scenario B, payment will be determined based on injury or death. (Bernama, Financial Daily)
There is no reason why Malaysia cannot move up the competitiveness ranking globally to be among the top 20 countries, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. In the latest global competitiveness report 2009-2010, Malaysia is ranked 24th among 133 countries. Malaysia can be in the top 20s in a couple of years along with productivity enhanced through innovation and creativity.
  • Among the regional Asian Productivity Organisation member countries, Malaysia's productivity level was US$12,793, Thailand US$4,596, China US$3,734, Philippines US$3,192, Indonesia US$2,471 and India US$2,051. (Bernama)
Some 36,000 Class F contractors nationwide may have to close shop due to lack of business as government projects have been slow in coming. Perak Malay Contractors Association president Datuk Jamaludin Abdul Rahim said the 2,800 Class F contractors in the state were fully dependent on the government for construction jobs. He urged the government to hasten implementation of Tenth Malaysia Plan (10MP) projects for the sake of some 40,000 bumiputera contractors. (Bernama)

Malaysia is in a strong position to maintain its position among the top three leading shared services centre globally in view of the multiskilled and multi language workforce, said Executive partner, finance and performance management of Southeast Asia for Accenture, Paul Prendergast. "More companies are using a "hub-and-spoke" model to satisfy local needs while leveraging global advantages and Malaysia is a platform for that," Prendergast said. (Bernama)

The Works Ministry’s work-from home programme has help its employees save up to RM500 a month on toll, petrol, maintenance for their cars and food expenses, said Minister Datuk Shaziman Abu Mansor. The programme is found to be a success as it helped to increase productivity rate by up to 88% in some sectors while some have shown a 100% increase The government has allowed for it to be extended for another three months ended on 30 Jun. (The Star, Bernama)

20100421 1245 Global Economic News.

Federal Reserve Chairman Ben Bernanke called the issue of "too-big-to fail" financial institutions a major concern and said he wants regulators to have the power to wind-down large firms before they fail and cause considerable harm to the financial system. (Xinhua)

Easing financial and economic strains have led the IMF to cut its estimate of global banking writedowns from the financial crisis back down to US$2.3tr from US$2.8tr, but at the same time it warns that continued fragilities and growing sovereign risks could slow the recovery.
  • The stability of the global financial system is not assured, despite the signs of improvement, and continued steps are needed including fiscal adjustment in major economies and making the US$600tr global derivatives markets safer and more transparent, a senior International Monetary Fund official said. The IMF cautioned that rising government debt has replaced financial industry stress as the biggest threat to the global economy. (Xinhua, Bloomberg)
The UK’s inflation rate jumped 3.4% yoy in March (3.0% in Feb), more than economists forecast and breaching the government’s upper limit for the second time this year after energy costs rose within weeks of the election. Economists had projected the prices would increase 3.1% yoy in March. Month-on-month, inflation rose 0.6% (0.4% in Feb). (Bloomberg)

Japan’s demand for services fell less than economists estimated in February, highlighting an economic recovery that is starting to benefit households. The tertiary index slipped 0.2% mom in February (+2.5% in Jan). Economists had projected for a 1.0% drop. (Bloomberg)

Japanese Finance Minister Naoto Kan said the central bank and government should work toward pushing inflation as high as 2% and reiterated his hope for an end to consumer price declines this year. “I think inflation targeting is an attractive policy. We could have a goal of 1% or something a little higher, like 2%, and work with the BOJ until that goal is met,” Kan said. (Bloomberg)

Bank of Korea Governor Kim Choong Soo said he’s undecided on whether to press the government to refrain from discussing the bank’s monetary policy. Government officials have repeatedly said that it’s too soon to raise borrowing costs in Asia’s fourth-largest economy. He also said the current benchmark rate of 2% is “appropriate.” (Bloomberg)

China ordered developers not to take deposits for sales of uncompleted apartments without proper approval and barred them from charging “abnormally high” prices, stepping up efforts to prevent a property bubble. Developers must disclose to the public all apartments available and prices, and start selling within 10 days of getting pre-sale approval, the Ministry of Housing and Urban-Rural Development said. It vowed to punish developers that “artificially” create supply shortages. (Bloomberg)

Taiwan’s export orders rose 43.7% yoy in March (36.3% in Feb), faster than economists expected as the global economic recovery boosted demand for computers and mobile phones. Market forecast it would increase 40.1% in March. (Bloomberg)

India’s central bank raised interest rates for the second time in a month and ordered lenders to set aside more cash as reserves, seeking to slow the fastest inflation among Group of 20 nations. The Reserve Bank of India boosted the three policy rates by a quarter point. The reverse repurchase rate rises to 3.75%, the repurchase rate to 5.25% and the cash reserve ratio to 6.00%. This decision matched the median forecasts. (Bloomberg)

The undervaluation of China’s currency and dumping of Chinese-made goods in the European Union (EU) are contributing to strains in trade relations between Beijing and the 27-country bloc, the EU’s trade chief said. But European Trade Commissioner Karel De Gucht said the EU would hold discussion with China to try to solve the disputes rather than take retaliatory action which could increase tensions. (Financial Daily)

The International Monetary Fund (IMF) cautioned that rising government debt has replaced financial industry stress as the biggest threat to the global economy and cut its estimate for asset writedowns by 19%. Banks reduced the value of loans and securities by US$2.28tr since 2007, two-thirds of which had been realized by the end of 2009, down from the IMF’s October estimate of US$2.81tr, it said. About 39% of the writedowns were in US banks, 29% in the euro area and 20% in the UK. (Bloomberg)