Monday, April 26, 2010

20100426 1821 FCPO EOD Daily Chart Study.

FCPO closed : 2560, changed : +20 points, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : getting higher, buyer present.
Support : 2550, 2521, 2500 level.
Resistant : 2570, 2600, 2620 level.
Comment :
FCPO ended the day firmer in sustaining volume transacted following a stronger soy oil futures price development. Daily chart reading has turned into a side way range bound market little upside biased market with MACD Histrogram positive divergence spotted.
When to buy : buy at support/weakness/break up with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20100426 1721 FKLI EOD Daily Chart Study.

FKLI closed : 1343, changed : +3 points, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : recovering, seller reduce exposure.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Improved volume FKLI closed higher after traded mostly range bound the entire day. Daily chart seems having a yet to be confirm symmtrical triangle break up as today doji bar candle closed little above the plotted purple colour triangle. Nevertheless technical reading suggesting a side way range bound little upside 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.

20100426 1300 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1339.5, changed : -0.5 point, volume : moderate.
Bollinger band reading : side way range bound with a little upside biased.
MACD Histrogram : weakening, buyer seems not interested.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Despite a stronger regional Asia market, 6.5 point range FKLI ended half point lower on half time with sustaining volume changed hand. No follow through after market opened on higher ground lead the hourly chart to form a side way range bound little upside biased reading.

20100426 1245 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2556, changed : +16 points, volume : low.
Bollinger band reading : upside biased with possible pullback correction.
MACD Histrogram : stay at positive zone but not much movement, mild buying activities by buyer.
Support : 2550, 2521, 2500 level.
Resistant : 2570, 2600, 2620 level.
Comment :
FCPO continue to trade firmer this morning and reach 11 day high as long position stop covering triggered within minutes after opening. Hourly chart reading favour a potential upside biased market with possible temporary pullback correction.

20100426 1003 Malaysia Corporate News.

PAAB has narrowed down the list of companies that can bid to build a RM2bn water treatment plant in Hulu Langat, Selangor, to 12 from more than 30 before. A source said PAAB will call for a tender in May or June. The 12 groups are expected to submit a detailed proposal, outlining the framework, costing and design of the project. "The 1,130 MLD treatment plant, which will take two to three years to construct, will process the raw water transferred from Pahang to Selangor via a 44.6km tunnel," the source said. The 12 groups are Gamuda and Biwater International, MMC and Salcon, Loh & Loh and UEM Builders, WCT and Sinohydro Corp, LGB Engineering, George Kent and Taliworks. Others include LBH Group, Puncak Niaga, IJM, Kumpulan Perangsang Selangor, Hati Muda Sdn Bhd, Mewah Kota Sdn Bhd and Asia Baru Construction Sdn Bhd. (BT)
The timeline of the tenders are within our expectations. This development is positive for the construction sector as the progress of water infrastructure works are beginning to pick-up pace. Initial estimates for the total project value of the Langat 2 water treatment plant was RM5bn for over 2,000 MLD, and it appears that the tenders in June/May is for phase 1 of the project.

Palm oil may advance in the second half as dry weather caused by El Nino pares output in Malaysia and Indonesia, according to Godrej International Ltd.
  • The tropical commodity may rise as high as RM3,200 a metric ton after June, Dorab Mistry, a director at Godrej said, restating a prediction made in March. 
  • El Nino, which damages crops of rice, corn, sugar cane and palm oil in Asia, has started to weaken after reaching a peak in the third week of December, according to India’s weather bureau. Still, its effects will be felt later in the year. “Typically the effect on production comes after a time lag and we are yet to see them,” said Mistry, who has traded edible oils for more than three decades. 
  • Palm oil will rise “substantially” after June and trade between RM2,800 and RM3,200, he added. (Bloomberg)
Malaysian Palm Oil Council (MPOC) reiterated that palm oil is safe for consumption as well as the environment despite the negative news on palm oil, CEO Tan Sri Dr Yusof Basiron said. “Claims of negative health effect of palm oil was initiated by soybean producers in the mid-80s in order to protect interest of market share in the US,” he said. Basiron said the “public was misled” by allegation that saturated fat raised blood cholesterol level in the body, leading to hear diseases. He said the semi solid appearance of palm oil was also being claimed by soft oil producers as not healthy for human consumption. “Such claims subsided after research found that trans fatty acid formed during hydrogenation process have more adverse effect on health than saturated fats” he said, adding that many researches have been done and found palm oil was safe for consumption. (Starbiz)

Palm oil imports by India, the largest buyer, may drop this year as buyers switch to soybean oil to profit from China’s ban on shipments of the commodity from Argentina, the biggest global supplier. Purchases may fall to 6.7m metric tons in the year to Sept. 30, from 6.9m tons a year ago, Thomas Mielke, executive director of Oil World, said. Soybean oil shipments may rise to as much as 1.5m tons from 1.06m tons a year ago, he said. “The price of soybean oil is attractive because of the lack of Chinese buying,” he said. “That’s impacting palm oil as India is buying less.” he added. (Bloomberg)

Indonesia will keep May export taxes for crude palm oil and cocoa beans unchanged from April, the trade ministry said. The export tax for crude palm oil in May will remain at 4.5%, while the base export price for the vegetable oil is set at $752 a tonne against $755 in April, the ministry said in a statement. (Reuters)

Hong Leong Bank has submitted its improved RM5.06bn all-cash bid for EON Capital to Bank Negara Malaysia and shareholders of both banks are set to vote on it in May. At the same time, Hong Leong said it plans to raise up to RM1.6bn from a renounceable rights issue and RM1.8bn from the sale of capital qualifying securities.
  • The submission brings the deal, which would create the country's fourth biggest banking group, a step closer to completion. However, it did not include a share option that was requested by EONCap. 
  • Hong Leong's offer comes with several conditions. Chief among them is that it has to be satisfied after going through the books of EONCap. If the due diligence reveals any adverse effects on EON Capital's financial position or any contingent liability that amounts to at least RM100m, Hong Leong will offset its bid price against that sum or it could also choose to drop the deal. (BT)
Affin Bank will work with its parent company to convert PT Ina Perdana into a syariah bank once the purchase of the Indonesian lender is concluded, as the group expands into the populous Muslim country. "Our holding company is looking at it, it will acquire the bank and then we will work together to convert it into an Islamic bank. It is now a conventional lender," Affin Bank MD Datuk Zulkiflee Abbas Abdul Hamid said. The legal and financial due diligence have been done recently.
  • The group's deputy chairman Tan Sri Lodin Wok Kamaruddin told reporters this month that he hopes the purchase will be concluded by the third quarter this year. 
  • PT Bank Ina Perdana is a tiny lender in Indonesia's fragmented market, which has 121 commercial banks. It operates about 20 branches, most of them in Jakarta. Despite its small size, Zulkiflee said the bank is profitable with relatively low NPLs. Most of PT Bank Ina Perdana's business comes from consumer banking, like car loans, while business banking only takes up a small portion of its portfolio.
  • "We are of the view that, if we want to go (into Indonesia), this is the time for us to go. There are not too many Islamic banks in Indonesia considering its big population. Islamic finance is still in the early stage of development as compared to Malaysia, so there is vast potential for growth," he said. (BT)
MASkargo plans to mount additional charter flights into Europe in the coming weeks, said MD Shahari Sulaiman. "2010 has started off with a much more optimistic outlook with demand improving to pre-crisis levels and shows sign that it will be sustainable at least for the rest of the year." Cargo load factors have improved to above 70% and revenue has increased by more than 50% yoy so far.
  • MASkargo will start additional flights to Narita, Japan, from May 16. "This is timely in light of Japan Airlines' decision to pull away from the freighter business," he said. Also in the pipeline is an additional flight to Jakarta and two flights to Manila onwards to Shanghai. If approval is granted for the Kuala Lumpur-Manila-Shanghai route, MASkargo will be the only airline which has freighter capacity between Manila and Shanghai. 
  • Meanwhile, to meet the government's request to support the local perishable industry, MASkargo will increase the allocation to certain key destinations by over 20% compared to 2009. MASkargo will also be upgrading the material handling system in KLIA not only to resolve the obsolescence issue but also to increase the capacity from 700,000 tonnes to 1m tonnes.
  • Finally, MASkargo is exploring the viability of freighter flights into the US via China, with its newly signed US-based wet lease operator. MASkargo is expected to make a firm decision by the end of June. The last time the air cargo operator had a freighter service into the US was in 2001. (BT)
The bid for all-India 3G spectrum crossed the Rs 79bn (US$1.8bn) mark on Saturday, ensuring the government a minimum revenue of Rs 319bn (US$7.2bn). On the 13th day of the auction, the activity level in the metros and 'A' category circles continued to remain high. The operators are yet to venture into the categories 'B' and 'C' service areas, according to DoT sources. There was a jump of Rs12bn (US$0.3bn) today in government's revenues, from yesterday's level of Rs308bn (US$6.9bn). India now expects its 3G and broadband spectrum auctions to raise Rs500bn rupees (US$11.2bn), much higher than the government's budget estimates of Rs 350bn (US$7.9bn), India telecommunications minister Andimuthu Raja said. (Economic TImes of India)

Rubber is one of the hottest commodities traded so far this year with price rallies seen in most international rubber exchanges. Tyre-grade Standard Malaysian Rubber (SMR 20) has also been hitting new highs particularly in the past three months and currently trading above the RM10,600 per tonne level.
  • According to Association of Natural Rubber Producing Countries (ANRPC) directorgeneral Prof Djoko Said Damardjati, tightness in rubber supply would remain an issue amid an upsurge in demand from China and India for their booming auto and tyre manufacturing industries. “Severe drought, the current wintering season as well as active replanting activities in most major producing countries could affect rubber output. “Even the preliminary estimates from members of ANRPC indicate that the global rubber supply is unlikely to rise above 6% this year,” he added. (Starbiz)
Hartalega Holdings remain buoyant on the outlook of the rubber glove industry this year and beyond despite concerns over raw material costs of following the rise in natural rubber (NR) prices to a 20-month high and the ringgit's speculation against the US$. Hartalega's managing director Kuan Kam Hon sees demand growth stemming from the healthcare reform in the US and China, as well as emerging markets such as South America, Middle East and Africa. He said the recent US Healthcare reform would boost demand by 10%, while the reform in China which spreads over the next decade, would see an initial 850bn yuan (RM397bn) to be spent by 2011. "The impact is very much dependent on the execution of the reform. Conservative estimate usage of 30 pieces per capita will drive China's increase in glove usage exceeding 40bn pieces per annum". (Financial Daily)

Northport said in the January-March period, the port handled a total of 779,867 TEUs, which was one of the strongest growth in recent years.
  • The number of export containers rose by 25% to 223,450 TEUs for the quarter under review, while import container volume climbed 21% to 231,450 TEUs over a year earlier. Transshipment containers rose 30% to 324,899 TEUs. “It exceeded all expectations considering the fact that the container traffic fell marginally by 2% in 2009 on account of the global economic slowdown," said managing director Datuk Basheer Hassan. Noncontainerised traffic grew 40% in 1Q10 to 1.8m tonnes. 
  • Basheer expects the year-on-year growth in cargo volumes (both containerised and noncontainerised cargo) at Northport could even increase to between 10-15% in 2010. Meanwhile, NCB Holdings Bhd has put aside some RM300m to expand Northport. (BT)
Takaful Ikhlas, a subsidiary of Main Board-listed MNRB Holdings, is weighing options of expanding its business overseas and is looking at three countries including Indonesia as its foreign debut. "We are monitoring certain markets and we have our eyes set on three countries which include Indonesia," its president and CEO Datuk Syed Moheeb Syed Kamarulzaman said. He did not name the other two countries under their expansion radar but said they were neither from the Gulf region nor Asia.
  • Takaful Ikhlas is confident of meeting its targeted premium growth of RM625 million in the current year to 31 Mar. The company, which has 1.4 million customers, posted a premium growth of RM580m last year. (BT)

20100426 0951 Malaysian Economic News.

The Consumer Price Index (CPI) for March rose by 1.3% yoy to 113.2 (1.2% in Feb). Compared with the previous month, the CPI remained unchanged at 113.2. Ytd, the inflation increased by 1.3% yoy. Economists had projected it would advance to 1.5% yoy for March. (Bernama, Bloomberg) Please see our Economic Update for further details

The government has agreed to increase by RM150 a month the motorcycle allowance for members of the police volunteer reserve (PVR) serving in hot areas. DPM Tan Sri Muhyiddin Yassin said that the allowance for members of the People's Volunteer Corps (Rela) would also be increased and that a proposal to that effect had been submitted to the Public Service Department. (Bernama)

The Human Resources Ministry has proposed an allocation of RM50m to enable plantation workers to apply for loans to buy houses under the 10th Malaysia Plan (RMK- 10) said its deputy minister Datuk Maznah Mazlan. "Employers have been urged to build comfortable houses for their workers by 2013," she said. (Bernama)

Malaysian Industrial Development Finance Bhd (MIDF) expects to disburse RM200m under Soft Loan Scheme for Small and Medium Enterprises (SMEs) before year-end. So far, RM34m had been disbursed to 44 SMEs. (Bernama)

Terengganu is expected to get a RM1bn investment from China to build an iron factory in the Teluk Kalong industrial zone. Menteri Besar Datuk Ahmad Said said the agreement to build the factory, expected to start early next year. He added that the Chinese investors were expected to invest RM50m to build bird's nests in various places in the state. (Bernama)

Recent liberalisation of terms and conditions in the loan scheme for the Malaysia Kitchen Global Campaign is expected to promote more Malaysian restaurants abroad. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said Exim Bank had revised equity conditions owned by Malaysia from 70% to 51%.
  • The repayment structure has also been liberalised to a maximum of 5 years inclusive of a 6-month grace period plus 3-month moratorium. 
  • The government allocation amounted to RM180m, of which RM20m has been disbursed. The loans are also open to all franchises from Malaysia, at an interest rate of 3%. (Bernama)
PM Datuk Seri Najib Tun Razak announced a RM4m allocation for the Sikh community. Of that amount, RM2m was for upgrading and maintaining the Sikh community's 118 houses of worship or Gurdwara, RM1m for teaching of the Sikh language to the young and RM1m for Siklh cultural programmes. (Bernama)

20100426 0948 Global Economic News.

US new home sales improved in March at the fastest single-month rate in 47 years. Newhome sales rose 26.9% to a seasonally adjusted annual rate of 411,000 last month, compared to an upwardly revised annual rate of 324,000 in February. The gain snapped a four-month streak of declines. This was well ahead of consensus forecasts for March sales to rise to an annual rate of 330,000. (CNN Money)

The cost of the US government's controversial bailout of the financial system could amount to less than a third of what the Obama administration originally expected, Treasury Secretary Timothy Geithner said. "A year ago we estimated that our support for the financial system could cost more than US$500bn or 3.5% of GDP," Geithner wrote. "We now expect that the direct costs of all our interventions will cost less than 1% of GDP." Citing the White House's Fiscal 2011 budget, Geithner estimated losses from the Troubled Asset Relief Program (TARP) at US$117bn. The Congressional Budget Office in March estimated the loss from TARP would be US$109bn. (CNN Money)

The World Bank forecast global economic growth of 3.1% this year, more than the 2.7% it forecast in January, and cautioned that not all risks to the recovery have subsided. For 2011, it predicts the global economy to grow 3.3%, could be “as low as 2.5% or as high as 3.5%.” (Bloomberg)

European industrial orders rose 1.5% mom in February (-1.6% in Jan), led by demand for intermediate goods such as car engines. Economists forecast an increase of 1.0% mom. From a year earlier, February industrial orders jumped 12.2% (7.5% in Jan). (Bloomberg)

The UK gross domestic product rose 0.2% qoq in 1Q (0.4% in 4Q09). Economists had projected for a 0.4% increase. Prime Minister Gordon Brown said that the economy still needs stimulus to avoid a “double-dip recession” and that Conservative leader David Cameron’s plans to cut spending this year are a “risk” to growth. (Bloomberg)

China’s industrial production is outpacing the trend rate by the most since 1998, adding to concern the world’s third-largest economy may be overheating. The industrial output gap, which gauges actual production against so-called potential, widened to 3.06% in March. (Bloomberg)

China’s central bank governor, Zhou Xiaochuan
, said the country will keep its “proactive” fiscal measures and maintain its “relatively easy” monetary policy as the global economic recovery remains tentative. China will continue with “stable and relatively rapid” growth this year, while balancing “inflation expectations,” Zhou said. The primary risks to the global economy come from developed countries and he urged developed nations to “restore fiscal discipline as quickly as possible” to contain “sovereign risks” and avoid “contagion”. (Malaysian Reserve)

Singapore’s consumer prices rose 1.6% yoy in March (1.0% in Feb), marking the highest level in 12 months amid an economic rebound that has led policy makers to allow the island’s currency to strengthen. On a m-o-m basis, prices rose 0.1% (0.4% in Feb), without adjusting for seasonal factors. Economists had projected the inflation would increase 1.8% yoy and 0.2% mom for March. (Bloomberg)

Thailand’s foreign-exchange reserves rose 1.0% to US$146.2bn billion in the week ended 16 Apr, from US$144.8bn a week earlier. The central bank’s holdings of forward contracts fell 7.4% to US$12.6bn from US$13.6bn a week earlier. (Bloomberg)

Vietnam’s consumer prices climbed 9.2% yoy in April, down from 9.5% in March, as food prices eased and higher interest rates cut into borrowing. Prices rose 0.1% mom, the lowest figure since a decline in monthly inflation in Mar 09. (Bloomberg)

China tightened real-estate financing by requiring developers to submit fund-raising plans for review, stepping up efforts to prevent a property bubble, as the central bank pledged to maintain “proactive” fiscal measures. The China Securities Regulatory Commission has sent financing requests from 41 companies to the Ministry of Land and Resources for reviews of land use compliance. (Bloomberg)

Greece moved toward securing an emergency aid package before debt payments come due in mid-May as Finance Minister George Papaconstantinou warned investors they will “lose their shirts” if they bet the cash-strapped nation will default. Papaconstantinou said money will be available “rather soon” and his country wouldn’t restructure its debt. IMF Managing Director Dominique Strauss-Kahn said talks will end “in time to meet Greece’s needs.” (Bloomberg)

Greece on Friday called for activation of a financial life-line of as much as €45bn this year. The request came a day after the yield on the country’s benchmark 2-year note topped 11%, and Moody’s Investor’s Service lowered Greece’s creditworthiness by one notch to A3. (Malaysia Reserve)

Protesters in Thailand readied themselves for a military offensive on the Bangkok business district they have shut down for 23 days after Prime Minister Abhisit Vejjajiva called off peace talks and pledged to disperse them. “We aim to return the site to the public,” Abhisit said in a nationally televised address yesterday with army chief Anupong Paojinda at his side. “We shouldn’t set the precedent that threatening and using force will lead to political gains.” (Bloomberg)

World Bank member countries reached a preliminary agreement on a 3.13% shift in voting power to give emerging and developing nations greater influence in the global institution. This would increase the votes of the developing world to 47.19%. (Financial Daily)