Monday, May 3, 2010

20100503 1803 FCPO EOD Daily Chart Study.

FCPO closed : 2554, changed : -4 points, volume : lower.
Bollinger band reading : upside biased.
MACD Histrogram : near unchanged, buyer stayed with small exposure.
Support : 2550, 2521, 2500 level.
Resistant : 2570, 2600, 2620 level.
Comment :
Quiet volume tight range FCPO eased marginally lower following soy oil futures price development. Daily chart reading suggesting a upside biased potential market likrly in the near term.
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.

20100503 1728 FKLI EOD Daily Chart Study.

FKLI closed : 1343.5, changed : -0.5 point, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : turned higher, buyer seller still battling.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
FKLI started the month passively by closing half point lower in tight range lesser volume market. Daily chart is having a side way range bound little upside biased market reading for the near term.
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.

20100503 1308 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1344, changed : unchanged, volume : moderate.
Bollinger band reading : side way range bound upside biased.
MACD Histrogram : weakening, buyer profit taking.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Profit taking activities slash FKLI to close unchanged after reaching high near resistant level. Hourly chart reading shows that market started to retracing downward for a correction but still suggesting a side way range bound upside biased market in the near term. On the other hand, major world market are currently having negative development including the Dow that closed lower on last Friday.

20100503 1255 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2557, changed : -1 point, volume : low.
Bollinger band reading : upside biased.
MACD Histrogram : getting higher, buyer having small exposure.
Support : 2550, 2521, 2500 level.
Resistant : 2570, 2600, 2620 level.
Comment :
FCPO seems still trading in holiday mood by closing a point lower for halftime in thin volume. Hourly chart reading look upside biased but in question here will be sustainability as volume is just too low but let see hope that bigger volume will return to the market in the second half session. On the other hand,  soy oil futures is have a weaker price development and crude oil futures price is retracing downward after reaching 3 weeks high.

20100503 0953 Malaysia Corporate News.

Sri Lanka’s The Union Bank entered into a strategic partnership with Genting Bhd and USA-based fund, Shorecap to raise Rs 2bn additional equity capital to fulfill the banks’ fiveyear strategic plan. Genting will pay RS1bn (RM28m) for its 20% stake while Shorecap will invest Rs500m (RM14m) for its 13% stake. Union bank will go for an IPO shortly and will be listed in the stock exchange in year-end or early 2011. (Sri Lanka Daily News, Lanka Business Online)
We are negatively surprised by the group’s latest move to expand its business ventures into the banking sector. In our view, this latest subscription seems to be a stretched extension of its core gaming operations. Having said that, we note that the investment of RM28m is small as it makes up <2% of the group’s net cash balance as at end-2009.

Airbus has confirmed that A380 deliveries to Malaysia Airlines has been delayed for a few months. “We can confirm that there will be a delay in delivery of its first A380 by a few months,” spokesman Sean Lee said by phone from Singapore. A new delivery schedule is being finalised.
  • Deliveries will now begin in the first half of 2012, from 2011 previously. MAS said in December that it had been awarded RM330m in compensation from Airbus for previous delays, but additional compensation for the new delay is not yet known. (Bloomberg) 
MAS was originally scheduled to receive five A380s in 2011 and one in 2012, but the first A380 is now scheduled for 1H12. This is an unfavourable development for MAS, as it banks on replacing its older B747s with new A380s. In mitigation, MAS will be able to secure compensation, while its fleet renewal plans will still make progress via its new B737-800 and A330-300 orders that will be delivered from 2010-11 onwards.
Thai AirAsia has reduced flights on its Bangkok-Taipei and Bangkok-Guangzhou routes to reflect weakened demand largely caused by Thailand's political turmoil.
  • From last Saturday, the low-cost carrier has cut flights on the Taipei route from daily to four flights a week and Guangzhou to three flights a week from daily, said chief executive Tassapon Bijleveld. Traffic from China and other North Asian states has continued to plunge as their respective governments have advised citizens against travelling to the kingdom as violent political protests show no signs of stopping. 
  • Mr Tassapon indicated the political mayhem may influence the airline's plan to start daily services from Bangkok to New Delhi and Kolkata in June.
  • Thai AirAsia is also reducing frequencies on two domestic routes. The Bangkok-Chiang Mai route will be reduced to five flights a day from six now, and Bangkok-Krabi will drop to three flights from four at present. (Bangkok Post)
Over the weekend, Malaysia Airlines openly questioned through the media AirAsia X's insistence on wanting the rights to fly the Kuala Lumpur-Sydney route when the latter could opt to ply other international routes it has already received approvals for. MAS MD Tengku Datuk Azmil Zahruddin has come out to say that AirAsia X was not keen to operate new destinations such as Manchester, Vienna and Moscow, as it realises it takes years of investment to make a route profitable.
  • "It's not fair for another airline to want to ride on the investments made by us. Instead, they need to be able to develop their own routes," he said. For MAS, it may take up to five years before any new route is profitable as it must create awareness about that destination. (BT)
Malaysia Airlines has added five more flights to Ho Chi Minh City, the largest city in Vietnam, bringing the number of non-stop weekly flights to the city to 19. MAS senior general manager for network and revenue management Dr Amin Khan said the move was due to an increase in the demand. Passenger loads have been encouraging with an average of 75%. (Bernama, Star)

Malaysia would be preparing to defend its seat at the International Civil Aviation Organisation Council (ICAO) at the organisation's next elections in September this year. Transport Minister Datuk Seri Ong Tee Keat said retaining the seat was important to the country as the council was instrumental in deciding matters related to civil aviation standards and regulations.
  • He said Malaysia will have to strive and work hard to retain their seat at the ICAO council this year as other Asia Pacific regions have already shown interest in contesting for the seat. (BT)
Tenaga expects its 300MW coal-fired plant, costing more than RM1.3bn, in Felda Sahabat, Lahad Datu, Sabah to generate enough power supply to spur the development of the palm oil industrial cluster (POIC). This capacity will become an anchor power plant providing the base load power supply and grid system stability to the east coast of Sabah.
  • The detailed EIA of the proposed site is in progress and the final report is expected to be submitted by the middle of the month to the Department of Environment. (BT, Bernama)
Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said biomass energy has the potential to be exploited to help tackle electricity shortages, particularly in Sabah. "So I feel these resources can be exploited but I did not say that these resources can replace other sources," he said. He was commenting on the need to diversify energy sources in Sabah including the use of biomass and coal. (Bernama)

DRB-Hicom is looking into assembling Audi vehicles locally after recently securing franchise of the German marque in Malaysia. Group director of automotive Datuk Nik Hamdan Nik Hassan, however, stressed that any local production will hinge on it registering a minimum annual sales volume of 1,000 cars to make the plan viable.
  • The plan seems imminent as the group is confident of selling some 1,000 units of completely built up (CBU) units or fully-imported Audi vehicles this year given the strong demand for models like the A4 sedan and Q5 sports utility vehicle. (BT)
Kian Joo Can Factory (KJCF) is mulling expanding into Indonesia by year-end to capitalise on the republic's burgeoning food and beverage market. The company is currently conducting a feasibility study to set up a factory in Sumatra.
  • ED Datuk Anthony See Teow Guan declined to reveal investment cost but on average it cost RM100m to set up a tin can factory in Malaysia. Another possible destination is Thailand but it will wait until the ongoing political storm in the country subsides before making a decision. 
  • "Prospects for the coming years are good due to Malaysia's status as a halal hub giving the company an edge to supply to Islamic countries such as Indonesia and the Middle East," See said. (BT)
Real estate adviser CB Richard Ellis (Vietnam) Co Ltd says Malaysian developers should make inroads into Vietnam as the economy is improving. MD Marc Townsend said there was more affordability in the market, coupled with transparency and clearer rules regarding when a developer can sell a property and collect deposits. Townsend said developers looking to explore Vietnam should study Ho Chi Minh City and Hanoi as there was a lot of land for development. (BT)

Malaysia Airports will become the first international airport operator in Southeast Asia to use the TrackJet system on its runways to boost airport safety and cut maintenance costs. TrackJet is a high-pressure precision water jet system that uses little water, thus offering new operating conditions for airport runways and taxiway rubber, paint removal and maintenance. The system will boost the lifespan of the touchdown zone from eight to 12 years and the runway from 12 to 18 years. (BT)

YTL Corp’s Pangkor Laut Resort expects more business this year from Asia-Pacific on optimism that people will continue to travel with signs of the economy improving. Jeffrey Mong, the resort manager, said it has more bookings from Malaysia, South Korea, Japan, India, Singapore and Australia. "We are running on an average 70% occupancy. The best years for us were 2005 and 2006, with above 80% occupancy and we hope to get there," Mong added. (BT)

Scomi Oiltools, a subsidiary of Scomi Group, is aiming for 10% yoy growth over the next five years, given the positive signs of a world economic recovery. President Steve Bracker said that he was confident of achieving the target as the company has the capabilities and strong assets in place. He added that Scomi Oiltools saw potential in doing business in West Africa and East Asia, including Malaysia. (BT)

Several accounting firms have raised red flags at six companies last Friday, indicating they could not complete their audits properly. The companies are Nam Fatt Corp, Patimas Computers, Mangotone Group, Wawasan TKH Holdings, Luster Industries and KBB Resources. Five of them had their accounts qualified while Luster's auditors did not qualify its opinion but pointed out to shareholders that the company's fate rests on an approval by Bursa Malaysia. (BT)

Tanjung Offshore saw its unaudited net profit for FYE12/09 differ by almost half of its audited net profit due to a reversal of income recognised from claims made by its 20%- owned associate, Cendor Mopu Producer Ltd. It reported an unaudited net profit of RM6m for 2009, but the audited results for the period was RM3m. (BT)

20100503 0939 Malaysian Economic News.

Broad money (M3) grew at a higher annual rate of 8.7% in March (8.2% in Feb) underpinned by capital inflows, said Bank Negara Malaysia (BNM).The level of nonperforming loans, including impaired loans, remained stable at 1.8% of net loans as of March (1.9% as of Feb). Total deposits placed with the banking system increased by RM20bn on a month-on-month basis to RM1.07tr in March. On an annual basis, deposits expanded at a higher rate of 8.4% (7.4% in Feb). (Bernama) Please see our Economic Update for further details

Tun Abdullah Ahmad Badawi said he signed a land and sea boundary agreement with Brunei on 16 Mar 09 in which two overlapping offshore exploration fields came under Brunei after it was approved by the Malaysian Cabinet on 11 Feb 09. He confirmed that Block L and Block M concessions now belonged to Brunei but the agreement provided that Malaysia would be allowed to participate in joint development of oil and gas on a commercial basis in the two areas for a period of 40 years.
  • Details of this would be further discussed and thus, in so far as oil and gas resources, the agreement was not a loss for Malaysia, he added. 
  • While Dr Mahathir said the loss of the two blocks cost Malaysia at least US$100bn (RM320bn) from an estimated reserves of almost 1bn barrels of oil. (Bernama)
PM Datuk Seri Najib Tun Razak is confident that talks to resolve sea and land boundary issues between Malaysia and Brunei will result in a win-win solution for both countries. He said that both countries were negotiating the matter as a package, covering all aspects such as the role which Petronas could play with regard to exploration and development, and investment opportunities for Brunei corporations in Malaysia. (Bernama)

The National Economic Advisory Council (NEAC) is currently studying cutting the rate of corporate and individual income taxes, and moving towards a broad-based tax system such as goods and services tax (GST). "One of the proposals we are considering is lowering the taxes by 1%-pt every year for the next 3-5 years. We might begin by replacing the current service tax with GST which will exlude food and basic necessities,” said NEAC member Prof Danny Quah. (Bernama)

A total of 1,493,837 taxpayers submitted their income tax return forms via e-filing as at midnight last Friday, slightly less than the target of 1.5m set by the Inland Revenue Board (IRB) for this year. However, the figure is 18.78% higher compared to 1.3m e-filing usage in 2009. It also noted that total collection for 2009 was expected to remain flat at around RM89bn, similar to 2008's collection, even though there was an increase in the number of tax payers. (Bernama)

Malaysia's participation at the Shanghai World Expo is a good way to achieve the target of attracting 1.2m visitors from China this year, Tourism Minister Datuk Seri Dr Ng Yen Yen said. She said her ministry also hoped to attract investors from China to invest in tourism related products like restaurants or invest in property through the "Malaysia My Second Home" programme. (Bernama)

The Energy, Green Technology and Water Ministry has proposed that financial institutions provide installment payment plans for energy-saving goods. Minister Datuk Seri Peter Chin Fah Kui said the Finance Ministry could give incentives to financial institutions to come up with such facility so that the public could afford to enjoy these appliances. (Bernama)

Malaysia and the Gulf countries can join hands in creating more opportunities to boost trading in the secondary sukuk market, said Labuan Financial Services Authority (Labuan FSA) Deputy Director-General, Danial Mah Abdullah. According to a news report, the GCC is poised to play a key role in driving the global Islamic bond market to a two-fold growth of about US$200bn in 2010. (Bernama)

The government, via the Finance Ministry, is studying the possibility of allowing foreign companies to participate in government procurement contracts. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said this would enable Malaysia to participate in the Trans-Pacific Partnership (TPP) agreement. (Bernama)

Human Resource Minister Datuk Dr S Subramaniam
said a decision on the proposed pay rise for security guards in the private sector, effectively 1 Jul, would be made on Thursday or Friday. (Malaysian Reserve, Bernama)

SME Corp Malaysia has suspended all grants indefinitely as it restructuring funding facilities to stop abuses in the system. Grants under SME Corp will not be renewed even in the 10th Malaysia Plan (10MP) period, its CEO Datuk Hafsah Hashim said. Last year, SME Corp was allocated some RM300m by the government. The allocation for this year was reduced to only RM24m.“From now on we plan to offer soft loans through the Malaysian Industrial Finance Bhd with low interest rates of 4%,” she added. (BT)

20100503 0925 Global Economic News.

The US economy kept growing in the first three months of this year but at a much slower pace than at the end of 2009. Gross domestic product (GDP) rose at a 3.2% annual rate in 1Q10 (5.6% in 4Q09). This came slightly below economists' forecasts for a 3.3% increase. The report marked the third straight quarter of growth, confirming the view of many economists that the recession that started in December 2007 ended at some point in the middle of last year. (CNN Money)

The White House's US$787bn stimulus plan funded 682,779 jobs in the first quarter, administration officials said. The figure captures the number of people whose jobs were directly paid for with stimulus money, such as teachers, cops and road construction workers. It's based on more than 179,000 reports filed by state, local and corporate recipients. In the fourth quarter of last year the stimulus plan funded about 600,000 jobs.(CNN Money)

Business activity in the US expanded in April at the fastest pace in five years, indicating the manufacturing rebound accelerated entering the second quarter. The Institute for Supply Management-Chicago Inc. said that its business barometer rose to 63.8 this month, the highest level since April 2005, from 58.8 in March. Figures greater than 50 signal expansion. (Bloomberg)

US consumer confidence declined in April from the previous month, according to a Reuters/University of Michigan report. The final index of consumer sentiment dropped to 72.2, higher than forecast, from a reading of 73.6 in March. The gauge was projected to fall to 71 from a month earlier, according to the median forecast. (Bloomberg)

Thailand Finance Minister Korn Chatikavanij said protests that have paralyzed parts of Bangkok for the past seven weeks may reduce economic growth by as much as 2% pts this year. “If it prolongs like this for the whole year, the economy will be badly damaged,” Korn said. “It’s not necessary for us to fall into this situation. Our economy is very strong given recent economic indicators.” (Bloomberg)

Thailand’s industrial production rose for a seventh straight month in March as the global economic recovery helped boost export orders, even as prolonged political protests threaten the country’s recovery. Manufacturing output gained 32.6% yoy (30.5% in Feb), ahead of market consensus of 26%. (Bloomberg)

Chinese manufacturing expanded at a faster pace in Apr 10, highlighting overheating risks in the world’s fastest-growing major economy. The Purchasing Managers’ Index rose to a seasonally adjusted 55.7 from 55.1 in March. That was less than the median 55.9 estimate in a survey. Readings above 50 indicate an expansion. (Bloomberg)

Thailand’s industrial production rose for a seventh straight month in Mar 10 as the global economic recovery helped boost export orders, even as prolonged political protests threaten the country’s recovery. Manufacturing output gained 32.6% yoy, after a revised 30.5% gain in February. The median estimate in a survey was for a 26% increase. (Bloomberg)

Thailand’s foreign-exchange reserves rose 0.3% to US$146.7bn last week, from US$146.2bn a week earlier, the central bank said today. (Bloomberg)

Hong Kong had a more-than-forecast budget surplus of HK$25.9bn (US$3.3bn) for the fiscal year ended March 31. Financial Secretary John Tsang on Feb. 24 forecast a budget surplus of HK$13.8bn for the year through March 31, rather than the deficit he had predicted earlier, on land sales and extra government revenue from surging property and stock transactions. (Bloomberg)

China’s third increase of bank reserve ratios this year left benchmark interest rates and the yuan’s peg to the dollar unchanged, risking the need for more concerted effort to contain property prices and inflation in coming months. The requirement will increase 50 basis points effective May 10. The current level is 16.5% for the biggest banks and 14.5% for smaller ones. (Bloomberg)

Euro-region governments are betting US$146bn in economic medicine for Greece will be enough to inoculate the rest of their region from contagion. Finance ministers yesterday approved the unprecedented bailout for Greece after a week that saw the country’s fiscal crisis spread to Portugal and Spain. At the same time, they refused to say how they would help other indebted nations if the need arose, saying that Greece is a “special case.” (Bloomberg)