Thursday, April 22, 2010

20100422 1810 FCPO EOD Daily Chart Study.

FCPO closed : 2490, changed : +19 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : turned higher, seller reduce position.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550 level.
Comment :
30 points range FCPO managed to recovered some of yesterday losses ended the day higher but in lesser contracts changed hand. Daily chart reading still favour a further downside potential market with correction still taking place 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/strength/break down with quick cut loss and profit target.

20100422 1732 FKLI EOD Daily Chart Study.

FKLI closed : 1342, changed : +8 points, volume : higher.
Bollinger band reading : side way range bound upside biased.
MACD Histrogram : turned higher, short covering by seller.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Improved volume FKLI ended the day surprisingly higher with a 5 points premium compare to cash market recovered all the early session losses. However, daily chart reading remained the same with a side way range bound little upside biased market. Should market continue to move higher tomorrow With Bolligner band width turned expanding outward, market is likely to test the previous high 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.

20100422 1352 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1332.5, changed : -1.5 point, volume : low.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : recovering , seller still in.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1350 level.
Comment :
5 points range FKLI closed the morning session lower in lesser contracts changed hand. Hourly chart technical reading suggesting a side way range bound downside biased market development in the near term.

20100422 1239 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2483, changed : +12 points, volume : low.
Bollinger band reading : side way range bound with a little upside biased.
MACD Histrogram : edge up higher, seller leaving.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550 level.
Comment :
Quiet 16 points range FCPO traded higher despite weaker overnight soyoil futures price development. Market continue to do correction and is likely to stay side way range bound with a little upside biased in the near terms as shown on the hourly chart reading.

20100422 1026 Malaysia Corporate News.

Kossan proposed a final DPS of 9 sen for its FYE Dec 09 yesterday. It also announced a 1-for-1 bonus issue that could take its paid-up share capital from 159.9m shares to 319.7m shares. The proposals are due for completion by June this year after the company's AGM. (BMSB)
The proposed final DPS is below our forecast of 10 sen. The news on the bonus issue, however, is not a surprise as the company did indicate earlier its intention to reward its shareholders this way. We take a positive view of this as it will boost liquidity and make the stock more affordable in terms of absolute cost.

UMW Holdings is targeting RM1.75bn pre-tax profit by 2015 under a five-year blueprint, after hitting the RM1bn mark in 2008, people close to the group said. The oil and gas (O&G) division has been challenged to generate as much money as the group's core automotive business within the five years, they added. The blueprint was conceptualised as the Penang Declaration during a retreat for UMW's top executives in Penang late last year.
  • The group currently generates 60% of revenue from the automotive business, which covers distribution and sales to manufacturing and assembly of Toyota, Perodua and Lexus cars and related parts. The O&G division contributes another 20% of total revenue. The equipment and manufacturing divisions account for 15% and 5% respectively. 
  • UMW MD and CEO Datuk Dr Abdul Halim Harun acknowledged that it had come out with the Penang Declaration, but did not comment on the profit target. (BT)
Sales of passenger cars and commercial vehicles in March 2010 increased 25% yearon- year to 56,139 units from 44,896 units. This brought the January to March sales higher by 27,026 units or 22% when compared with the same period of 2009. The Malaysian Automotive Association (MAA) attributed the higher sales to continued improvement in market sentiment and consumers' confidence. (Bernama)

Proton will finalise its partner in India for a CKD and assembly operation as soon as possible, said MD Datuk Syed Zainal Abidin. “We cannot do a CBU operation in every core market. It is not economical in the long term,” he added. He did not, however, reveal the identity of the local partner. (Bernama)

The Sarawak state government is in advanced negotiations with a foreign investor to set up a manganese smelter in Sarawak Corridor of Renewable Energy (SCORE), said State Planning Unit director Datuk Ismawi Ismuni. “The investor will make the announcement (when an agreement is reached),” he said. Ismawi, who is also SDI deputy chairman, said the proposed manganese smelter project would be the next major foreign direct investment (FDI) in SCORE, after the proposed aluminium smelters and polysilicon project. (Starbiz)

The government is keeping mum for now on the new offer by Gamuda’s unit to buy water assets in Selangor for RM10.75bn. When asked on the matter, Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui said, “We will hold a meeting on the Selangor water assets soon.” (BT)

CIMB Thai Bank recorded a net profit of 348m baht for the first quarter ended March 31 compared with a net loss of 257m baht for the previous corresponding period, helped by better balance sheet management. In a statement yesterday, the subsidiary of CIMB Group Holdings said strategies in rightsizing the deposit book as part of better balance sheet management “continued to bear fruit” as this lowered funding costs and helped improve the bank’s net interest margin. (Starbiz)

Axiata plans to sell US$300m of bonds at a spread of about 170 bps basis above Treasuries, according to a person familiar with the matter. (Bloomberg)

Malaysia Airlines said it may allow turboprop operator Firefly to use its fleet of B737-400 planes as it receives new aircraft. MAS MD Tengku Datuk Azmil Zahruddin said MAS was evaluating the best way to optimise its B737-400 planes. "As we receive the B737-800s progressively through five years, we have not made any firm decisions," he said. "We have a number of options in front of us: the B737-400s could remain as part of the Malaysia Airlines operating fleet, with the B737-800 aircraft used to expand into new and growth routes, or they could be deployed to Firefly." (BT)

Malaysia Airlines (MAS) said it hopes to clear within a week the passenger backlog built up following a grounding of flights due to the Iceland volcanic ash cloud by mounting as many extra flights as possible. Malaysia Airlines MD Tengku Datuk Azmil Zahruddin said some 16,000 passengers were affected because of the flight restriction.” It’s a very chaotic time in Europe at the moment because there's a huge pent-up demand, so there's going to be a lot of flights coming up but we will try as much as possible to mount additional flights to make sure passengers stranded are able to get back home", he added. (BT).

The Government wants to have more Tier 1 local automotive component makers that have the quality for export market, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed. Currently, only 131 of the 274 vendors are in Tier 1, he said. "It is very important that in the future we continue to encourage auto component manufacturing to go for export market," he told. (Bernama)

The legal fraternity has described Bank Negara Malaysia's proposed reform of the thirdparty motor insurance scheme as "evil" and against public interest. The Malaysian Bar Council is opposing vehemently the proposed RM2m liability cap and the set-up of a new company (Newco) to manage the scheme. Its president Ragunath Kesavan said a motor insurance scheme must provide adequate protection for everyone and not just 90% of all claims. "This is one of the most drastic and evil schemes," he added. (BT)

MMC Corp’s Port of Tanjung Pelepas (PTP) is well-placed to capitalise on additional demand and new opportunities this year based on its increased port capacity of 8.5m TEUs. Last year, PTP posted a 7% increase in container volume, MMC's CEO Datuk Hj Hasni Harun said. He also said that the port's major customers undertook a restructuring in their services to cut costs which resulted in higher transshipment volume calling at the port. (Bernama)

Kumpulan Wang Persaraan (KWAP) has emerged as a substantial shareholder of Kossan Rubber Industries. KWAP bought 8.21m or 5.14% of Kossan on April 14. (BT) Kumpulan Wang Persaraan (KWAP) has increased its stake in Media Prima to 56.14m shares or close to 6%, after recently acquiring 4.45m shares. (Starbiz)

LCL Corp has announced that it could face legal implications for defaulting a loan from CIMB Islamic Bank. “CIMB may initiate legal proceedings against LCL to recover the outstanding sum,” it told Bursa Malaysia. In a note to the local bourse, LCL said it had failed to settle the amounts owing under the Term Financing-i Facility totaling RM43.7m as at 9 Apr to CIMB. (Starbiz)

Property prices in Mont Kiara have appreciated in tandem with demand and not due to speculation, according to Ireka Development. “There is no oversupply issue in Mont Kiara,” Ireka Development’s CEO Lim Ech Chan said. Property prices in Mont Kiara were reportedly seeing capital appreciation of 5-20% a year despite multitudes of new launches. (Malaysian Reserve)

Sunrise scored two wins in the Best Residential High-Rise Development award for its 28 Mont’ Kiara project at the Asia Pacific Property Award 2010. (Financial Daily)

AmanahRaya Real Estate Investment Trust (ARREIT) is targeting to grow its total assets to RM1.5bn in the next two years from RM748m currently by injecting new properties into its portfolio and improving the value of its existing assets. ARREIT manager AmanahRaya- REIT Managers COO Abas A. Jalil said ARRM was now evaluating the possibility of injecting more properties into its REIT. “We are looking at acquiring office buildings, warehouses and hotels in the Klang Valley, Penang, Johor Baru and Kota Kinabalu. “These buildings have a similar asset class. They have reputable tenants, a long-term lease and generate a stable income stream,” he added. (Starbiz)

Bank Kerjasama Rakyat Malaysia will send top officials over to Brunei next month for further talks on expanding business to the oil rich nation. Its MD Datuk Kamaruzaman Che Mat said this is still preliminary and more details will be released after the meetings next month. "There is nothing much to say now. But the focus will be on the Ar-Rahnu syariahcompliant pawnbroking concept," he added. (BT)

The instant noodle business in Malaysia is worth almost RM1bn and Nestle's Maggi brand holds half of that market. But the value of Malaysia's industry is just 1.2% of the global industry estimated at around US$25bn. "We come in as the 13th country that consumes the most number of instant noodles with close to 1.3m packets sold daily to consumers in Malaysia," said Nestle Products Sdn Bhd executive director Izham Mohamed. Although there was a perception that instant noodles were unhealthy, Nestle plans to reduce the salt content and encourage people to add vegetables to raise its nutritional value. (BT)

Microlink Solutions may expand into the Islamic retail banking business in China and Indonesia, prompted by the huge population in both countries, said CEO Peter Yong Kar Seng. "We have initiated discussions with our partner to enter the Chinese market," he said. Meanwhile, the group expects a better financial performance this year with "OneSolution", its new banking application. (BT)

United Malacca plans to boost annual fresh fruit bunch (FFB) production by a tenth over the next few years as its young oil palm trees mature. The group, which produces about 280,000 tonnes of FFB a year, also plans to buy more land and continue with its replanting programme. It bought two plots of land with the combined size of 10,125ha in Kinabatangan, Sabah, for RM240m last year and plans to invest RM100m over the next few years to develop them. "Half of the land (in Kinabatangan) has already been planted with young elite palms between one and five years old, we will be developing the other half of the land over the next few years. "I believe the production will increase when the young palms start to produce," said MD Leong Tat Thim. (BT)

Bursa Malaysia has directed embattled shipping-related company, Malaysian Merchant Marine (MMM) to “immediately engage” external auditors, Messrs Ernst & Young, to commence an audit for its FYE3/10 financial statements. Bursa’s request for a speedy presentation could be due to several developments affecting MMM's PN17 status. (Financial Daily)

Bank Negara has given its nod to PacificMas to start talks with the Great Eastern group on the disposal of the former’s wholly-owned subsidiary The Pacific Insurance Bhd. (Starbiz)

20100422 1019 Malaysian Economic News.

Only 11 of the 26,820 Ninth Malaysia Plan (9MP) development projects nationwide have yet to begin and will be implemented under the 10th Malaysia Plan (2011-2015), the Dewan Rakyat was told. PM Datuk Seri Najib Tun Razak said that the 11 projects had an allocation ceiling of RM82.0m, 16,334 projects were in various stages of implementation with an allocation ceiling of RM193.9bn and that 10,482 projects with an allocation ceiling of RM36.0bn had been completed, taking the total allocation ceiling for projects under the ninth plan to RM230.0bn. (Bernama)

Sabah received another 1,000 tonnes of sugar starting this month to overcome shortage. Community Development and Consumers Affairs Minister Datuk Azizah Mohd Dun said the shortage was due to a 13% drop in supply as two suppliers had stopped buying from the peninsula. (Bernama)

State-owned pension fund Employees Provident Fund (EPF) will increase its overseas investments to improve returns and sustain its dividend rate. Chairman Tan Sri Samsudin Osman said the fund already has the nod to invest in global bonds. In fact, it can invest more than US$10bn (RM31.9bn) in stocks and bonds outside Malaysia. "This is indeed a very sizable amount, making up approximately 10% of our total fund of RM380bn as at end-February this year," he said. (NST)

Domestic Trade, Co-operatives and Consumerism Minister Datuk Ismail Sabri Yaakob said that the proposed Competition Act 2010 would be implemented by the middle or end of 2011. (The Star)

20100422 1017 Global Economic News.

US mortgage applications bounced from three-month lows last week as potential buyers locked in lower borrowing costs before the federal tax credit expires, the Mortgage Bankers Association said. Demand for loans to buy a home increased 10.1% to send the industry group's total applications index up 13.6% on a seasonally adjusted basis (-9.6% in the previous week). (CNBC, Bloomberg)

Thailand’s central bank left its benchmark interest rate unchanged at 1.25% for an eighth meeting, refraining from increasing borrowing costs as political unrest threatens to slow the country’s economic recovery. The decision came widely expected. The Thai central bank’s next step will be interest-rate normalization, Assistant Governor Paiboon Kittisrikangwan said. (Bloomberg)

Thai manufacturers’ confidence fell in March to the lowest level in five months as antigovernment protests and drought curbed consumer demand. The Thai Industries Sentiment Index dropped to 101.6 from 114.5 in February, the Federation of Thai Industries said. (Bloomberg)

The International Monetary Fund says the global economy, after enduring a crippling recession, should see better-than-expected growth this year, led by strength in China and other developing nations. It forecast that the world economy would expand 4.2% this year, faster than its previous projection (3.9%) and a sharp improvement from 2009 (- 0.6%). For 2011, the IMF projected global growth of 4.3%, no change from its January outlook.
  • However, it warned that the recovery still remained vulnerable with the biggest threat likely to come from a surge in government debt burdens. China should let the yuan gain to cool growth, while Japan must be prepared to widen its stimulus measures as Asia’s two biggest economies diverge. 
  • For the United States, the IMF expects growth of 3.1% this year. China's economy would surge 10.0% and that India would grow 8.8% in 2010. European countries would see economic growth of just 1.0% in 2010 and that Mideast and North Africa region (MENA) would grow as a whole by 4.5%. (CNBC, Bloomberg)
The International Monetary Fund (IMF) has proposed two new global taxes on banks and other financial institutions to cover the cost of future bailouts. The measures would see all institutions pay a bank levy as well as a further tax on profits and pay. Insurers, hedge funds and other financial institutions would also be required to pay the taxes under the IMF proposals, despite the fact they were less implicated in the recent financial crisis. (Channel News Asia)

There are positive signs Japan will escape deflation, a deputy governor of the central bank, Kiyohiko Nishimura said, but positive growth in consumer prices alone may not appease ruling party calls for higher inflation. “There’s about one-year lag until changes in the economy affect the inflation rate,” he noted. (Financial Daily)

Hong Kong Financial Secretary John Tsang said any swift appreciation in China’s yuan would risk hurting the city’s exports and could push up inflation. A stronger Chinese currency would also boost spending by visitors from the mainland, Tsang added. (Malaysian Reserve)

India’s central bank Governor Duvvuri Subbarao said he will do “everything possible” to prevent Asia’s third-largest economy from overheating, indicating policy rates may be increased again to slow inflation. The central bank is trying to sustain economy recovery, control inflation and also manage the government’s borrowing program in a way that it doesn’t disrupt the financial market, Deputy Governor Subir Gokarn said.
  • To balance these three broad objectives, they have come to a conclusion that moderate action on rates and liquidity provides the best prospect, Gokarn added. (Malaysian Reserve)
Singapore said it will review rules for its investment management industry, including hedge-fund and private-equity managers, as regulators increase oversight globally. The Monetary Authority of Singapore “will consult the public within the next two weeks on proposals to enhance our regulatory regime to ensure that it remains sound and responsive to the changing needs of the various stake holders in the fund management industry,” it said. “This is essential for the long-term and sustainable growth of the fund management industry.” (Bloomberg)

Banks in Singapore are raising charges for mortgages tied to two key interest rates even after borrowing costs declined, the Straits Times reported. DBS Group Holdings, Standard Chartered Plc and Oversea-Chinese Banking Corp. are among lenders that have increased the spreads for home loans tied to the 3-month Singapore interbank offered rate, or Sibor, as well as the Singapore dollar swap offer rate, in part because of a surging property market, the newspaper said. (Bloomberg)

China’s export orders fell 19% at the opening session of the nation’s biggest trade fair from the same period in 2008, before the global financial crisis deepened, the commerce ministry said. Orders at the Canton Fair in Guangzhou totaled US$17.1bn from April 15 to 19. “Enterprises generally reported that foreign trade is still facing many unstable and uncertain factors and they took a cautiously positive outlook,” the ministry said. (Bloomberg)

Faced with a growing volume of capital inflows, large emerging market economies will need to use macro prudential policies to avoid excess currency appreciation and asset bubbles, but also are likely to join the pressure on China to allow the yuan to float, a senior World Bank official said. World Bank's outlook for the region shows a faster recovery than most of the world and better outcomes than in previous crises. The lack of inflation in this crisis/recovery phase, as well as the degree of financial stability means the region has built reserves and has become a net creditor to the rest of the world. (Xinhua)

China currency appreciation, as part of a move to boost domestic consumption and reduce savings, would be "desirable" for that nation's own interests, but also "useful" in supporting the adjustment advanced economies must make, a senior IMF official said. Output in advanced economies is now 7% below pre-crisis trend and "this output gap is expected to remain large for many years to come," said Olivier Blanchard, director of the IMF Research Department. Blanchard said advanced economies must implement fiscal adjustment policies which will slow growth. "To offset these adverse effects and maintain growth, advanced countries as a whole may need to depreciate their currencies so as to increase their net exports," he said. (Xinhua)