Tuesday, May 4, 2010

20100504 1818 FCPO EOD Daily Chart Study.

FCPO closed : 2515, changed : -39 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : turned lower, seller returned.
Support : 2500, 2470, 2450 level.
Resistant : 2521, 2550, 2570 level.
Comment :
Improved volume 33 points range market FCPO closed weaker right at the low of the day. Daily chart reading suggesting a side way range bound 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. 

20100504 1727 FKLI EOD Daily Chart Study.

FKLI closed : 1338.5, changed : -5 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : reversed lower, seller testing the market strength.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Improved volume FKLI closed right at the low of the day after tested another new high forming a bearish engulfing classic candlestick pattern. Daily chart wise, market is near middle Bollinger band support level and suggesting a side way range bound market 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.

20100504 1246 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1344, changed : +0.5 point, volume : high.
Bollinger band reading : side way range bound.
MACD Histrogram : turned lower, buyer taking profit.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
Reach new high FKLI but no follow through with profit taking activities push price to closed half point higher in improving volume transacted. Hourly chart wise, market is have a correction after opened gap up signifacantly and is likely to trade side way range bound still upside biased.

20100504 1236 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2543, changed : -11 points, volume : low.
Bollinger band reading : side way range bound.
MACD Histrogram : getting lower, seller testing their luck.
Support : 2521, 2500, 2470 level.
Resistant : 2550, 2570, 2600 level.
Comment :
Seems like the side way market is going to continue draging for a little longer. 11 point range near dead volume FCPO eased lower during the first half session. Hourly chart reading continue to show a side way range bound market with a little upside biased.

20100504 0932 Malaysia Corporate News.

Asas Serba Sdn Bhd is still awaiting the government's decision on its proposal to take over toll concessionaires in the country. Director Ibrahim Bidin said Asas Serba would set up a concession company to issue dividend bonds of up to RM50bn to finance the acquisition of all toll roads.
  • "The dividend bonds will pay annual dividends of 7% plus share of profits," he said. He said Asas Serba proposed a 20% discount from the current toll rates and there would be no more rate increases. "It is estimated that possible savings on subsidies payable by the government will amount to RM114bn," he said. 
  • The other three directors of Asas Serba are Sepang Aircraft Engineering Sdn Bhd CEO Syed Budriz Putra, the Kuala Lumpur Malay Chamber of Commerce president Datuk Syed Amin Aljeffri, and former director of Babcock & Brown and Fieldstone International, Wan Kamaruddin Wan Mohamed Ali.
  • Tan Sri Halim Saad, former executive chairman of Renong Bhd, and the previous owner of PLUS Expressways, was not involved in the take over proposal. (Bernama) 
Re-emergance of this news is not a surprise as it is one of the two proposals pending decision by the government. The other proposal is the government's initiative to restructure toll rates which completed its first phase of study in late Mar-2010. We gather that the government is likely to fully consider the toll restructuring option first before exploring the alternative by Asas Serba. In May last year, Asas Serba submitted its proposal to the government to take over all toll concessionaires.

Premium Commerce Berhad has completed the third issuance under the up to RM600m MTN-Programme on 3 May 2010. The RM224m notes forms part of the securitization of hire purchase receivables programme undertaken by Tan Chong Motor’s wholly-owned subsidiary, TC Capital Resources. TC Capital will utilize proceeds from the sale of the hire purchase receivables as working capital. (BMSB) This follows the second issuance under the MTN Programme in June last year. It effectively converts TC Capital’s HP loans into cash, enabling the company to further fund sales of Nissan's vehicles in the future. This should quicken its cash-to-conversion cycle and speed up the turnover of its working capital into cash.

Prime Minister Datuk Seri Najib Razak has apparently stepped in to resolve long-standing disputes between AirAsia and airport operator Malaysia Airports over the design and location of the new permanent Low-Cost Carrier Terminal (PLCCT) and the existing LCCT.
  • The agreements include an addition eight aircraft parking bays at the LCCT and sufficient parking bays for 76 aircraft at the PLCCT. AirAsia will also be allowed to build its headquarters next to the PLCCT. 
  • The low-cost carrier had previously complained that the lack of parking bays had hampered its expansion plans. Fernandes said with the added capacity, the airline will now relook routes that were discontinued such as Haadyai, Palembang and Balikpapan. The airline is expected to start flights to the Maldives in the next six months.
  • Fernandes added that a new “commercial deal” comprising incentives for new routes is being worked out with MAHB, and will allow AirAsia to take more risks in developing new routes but he declined to elaborate.
  • MAHB had also agreed to provisions for covered pedestrian walkways to the car parks at the LCCT, a semi-automated baggage handling system, and check-in counter designs that incorporate AirAsia’s input. Fernandes then urged KTM to build an extension from Nilai to the PLCCT. The PLCCT is expected to be completed between September 2011 and March 2012. It will have a capacity of 30m passengers or double the capacity of the present LCCT.
  • “A big battle ended for us today,” said Fernandes. “This enables us to plan for the next 10 years. The PM played a key role in getting us together,” said AirAsia deputy group CEO Datuk Kamarudin Meranun. (Malaysian Insider)
Malaysia and Indonesia may file a complaint to the World Trade Organisation (WTO) over protectionist measures, disguised as environmental concerns and imposed by developed nations and activist groups, against the oil palm industry. "I'll be in Indonesia later this month. Although non-tarriff trade barriers are not on the official agenda, I will explore this topic with my counterpart," Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said.
  • "We need to find out more about the legal definition of 'trade barriers'. We need to be sure what constitutes a substantive complaint before we make a joint decision," he told reporters after opening the Indonesia-Malaysia Palm Oil Meeting in Kuching, Sarawak. 
  • One such law in Europe that blatantly discriminates against the import of palm oil is the European Union (EU) renewable energy directive. The directive seeks to restrict the import of palm oil for biofuel use in Europe in favour of the heavily subsidised homegrown rapeseed oil. Adopted last year, the directive will take effect at the end of this year, which means member states must draft their laws based on it.
  • Dompok's views echoed that of former PM Tun Dr Mahathir Mohamad, who, six months ago at the 2009 Malaysia-Indonesia Economic Seminar, had called on leaders of both countries to be more vocal in their stand at international forums." If both Indonesia and Malaysia speak out with one voice, it will be more effective. This way, both countries will earn the respect of others," he said. (BT)
Palm oil producers in Indonesia and Malaysia have established the Indonesia-Malaysia Palm Oil Group (IMPOG) to formalise their collaboration on sustainable palm oil development. “The chairmanship will be rotated bi-annually,” said a joint communique issued after the first meeting yesterday. The communique said the group had set up a steering committee to focus on emerging research and development, sustainability related issues and communication to stakeholders. (Starbiz)

Malaysia's five corridors of development have so far received a total of RM244.3bn in investments. The five are Score, Iskandar, ECER, NCER and SDC. Former prime minister Tun Abdullah Ahmad Badawi, who is the adviser, said all the projects implemented under the 9MP are ongoing and he is happy with the overall progress.
  • "Currently, 75% are under the 9MP. The remaining 25% will be implemented under the 10MP," he said. The government has also allocated RM2bn to help develop the corridors. He said Score has the most investors. (BT)
The overwhelming response to ongoing auctions of 3G airwaves, with a single slot of pan- India airwaves nearing Rs 10,000 crore, is set to increase pressure on government to award all future radio frequencies on 2G only through an auction route.
  • The country’s GSM-based incumbents — Bharti Airtel, Vodafone, Idea Cellular and BSNL — are all vehemently backing the auction methodology for all future allocations of 2G spectrum. But, recent entrants in the GSM space are opposed to any move to adopt the auction mechanism for all future allocation. (Economic Times of India)
P1, Green Packet's subsidiary, has awarded a full turnkey contract, including the design, construction and maintenance of its 4G WiMAX network (Phase 3), to ZTE. The contract, valued at US$76.8m, was to extend P1's coverage, Green Packet said. The works under the contract were expected to be completed over the next two years and would be satisfied entirely by cash and funded through vendor financing and/or internal funds and/or bank borrowings, it said. (Starbiz)

Cagamas will join hands with Al-Rajhi Banking and Investment Corp (Malaysia) to develop and issue first-of-its kind sukuk by June to woo Middle East investors. President and CEO Steven Choy said there has always been an issue of global compliance in terms of Islamic principles that rendered Malaysian sukuks never really acceptable by the Middle East investors.
  • Asked to elaborate on the sukuk size, Choy said: "We've issued from a few hundred millions up to RM2bn. It will be around that range (and) it will depend on what asset we buy, but it will be sizeable." (BT, Bernama)
Danajamin Nasional will guarantee the RM200m private debt securities programme of Syarikat Kapasi, a property developer that is a unit of Asian Pac Holdings. The company will use the funds to finance the construction of a real estate project in Kota Kinabalu known as KK Times Square II, which will comprise a retail shopping mall, serviced apartments and shoplots. (BT)

Kencana Petroleum has won a RM166m contract from Saipem S.A, an oil and gas service company, for the fabrication of a Liquefied Natural Gas (LNG) jetty and marine structures for Chevron Australia. It will be delivered in stages from 2Q11 to 3Q12. (BT)

Scomi Marine will use the RM348.7m (S$143.5m) proceeds from the disposal of its Singapore-listed CH Offshore Ltd (CHO) to reduce its debts. "The disposal will result in a net gain of RM63.6m for the company in the current financial year," it added. Meanwhile, president Mukhnizam Mahmud said the company would explore various opportunities in India and leverage on its strong presence in the oil and gas sector as well as the transportation sector there. (Bernama)

Notion Vtec (Notion) expects revenue to double in two years as it plans an aggressive expansion to tap rapid growth of its global customers, said its chairman. "We are embarking on major moves in scaling up to the next level," Thoo, one of the founders said.
  • "The two manufacturing facilities will boost our topline for the next couple of years substantially," he said. Notion has seen a surge in investor interest after Nikon, took up a 10% share in the company in Jan this year. 
  • Orders from Nikon account for more than a third of Notion's total sales. Notion exports more than 90% of its products. For every 5% drop in the US$/RM exchange rate, Notion's profit could fall by 1-1.5%. (Reuters)
Sunway Holdings will partner Opus Developers and Builders Pte Ltd to set up a JV company and expand its business to India. The JV group will import and sell finishing products like sanitary wares and fittings, ceramic tiles, marble, pipes, iron-mongering and hardware products, paints and home furniture. (BT)

Boustead Holdings’ BHPetrol will invest RM50m this year to open 10 new petrol stations in Peninsular Malaysia, says MD Tan Kim Thiam. The company has identified three locations since the beginning of the year and is still looking for the best locations for the other seven petrol stations. (BT)

The shares of Ho Hup Construction Co will be suspended from trading from May 10 until further notice if the company fails to submit the annual audited financial statements for FYE12/09 within the stipulated timeframe. Meanwhile, Bursa Securities has publicly reprimanded Ho Hup for failure to make an immediate announcement on default in payments in respect of banking facilities granted by Ambank, CIMB Bank and RHB Bank. (Starbiz)

Miri-based shipping company, Shin Yang Shipping Corp has received the Securities Commission's (SC) approval to list on the Main Market of Bursa Malaysia by 3Q 2010. The company plans to use its listing proceeds for the construction of additional vessels to further tap growth demand from the East Asian market. (BT)

Magna Prima plans to start development work on its 6.95-acre land in Jalan Gasing, Petaling Jaya by next year. CEO Yoong Nim Chee said the company would develop a neighbourhood type lifestyle centre consisting of commercial and retail outlets. "The Jalan Gasing development's estimated GDV is RM300m," he said. The Jalan Gasing project is part of the RM1bn worth of projects that Magna Prima will be launching over the next 18 months. (Bernama)

Tan Sri Dr Ninian Mogan Lourdenadin, the largest shareholder in MBf Holdings, has raised his stake to 81.22%. Ninian, who is also the group CEO and ED of MBf, saw his offer to take the company private at 65 sen/share plus 10 sen in final dividend fail last Tuesday after a group of minority shareholders held out for an offer closer to the company’s NTA of RM1.01/share. (Starbiz)

Warisan TC Holdings (WTCH) is optimistic about its potential in the commercial vehicle sector, according to ED Ngu Ew Look. “The market is growing and it is a good time to venture into it,” he said. Ngu declined to disclose further information about its earlier deal with China’s Changsha Foton Vehicle Technology for the assembly and distribution, aftersales service and distribution of parts of Changsha’s CKD commercial vehicles, saying that it still had a few issues to iron out.
  • Ngu acknowledged that breaking into the commercial vehicle segment would be challenging, given that the sector was dominated primarily by Japanese makes, such as Hino and Daihatsu. (Starbiz)

20100504 0922 Malaysian Economic News.

The production quota of 40,000 tonnes of ST15 grade rice per month is enough to meet one-third the needs of the poor and needy, the Dewan Negara was told. Deputy Agriculture and Agro-based Industry Minister Datuk Rohani Abdul Karim said the government would look into the proposal to abolish the ST10 variety of rice based on the people's needs. (Bernama)

The Works Ministry will ensure that all abandoned in the country were given priority to be revived although the number was not large and involved just 1% (or 1,673 projects) under the 9th Malaysia Plan. In the plan the Public Works Department had planned for 3,737 projects. (Bernama)

More than 1.91m legal foreign workers were recorded to be in this country up to 31 Dec 09. Deputy Home Minister Datuk Wira Abu Seman Yusop said the government however had no accurate data on the number of foreign workers without permits. But the government estimates that there are 1.9m illegals in this country, on the basis that for every legal foreign worker there is one illegal. (Bernama)

The five corridors of development have so far received a total of RM244.3bn in investments. “Currently, 75% are under the 9th Malaysia Plan. The remaining 25% will be implemented under the 10th Malaysia Plan. The government has also allocated RM2bn to help develop the corridors,” former PM Tun Abdullah Ahmad Badawi said. (BT)

20100504 0917 Global Economic News.

US manufacturing sector grew for the ninth consecutive month in April, and at its fastest rate since June 2004. The Institute for Supply Management (ISM) manufacturing index rose to 60.4 in April (59.6 in Mar). April's number is slightly better than expected, driven by increases in productivity, new orders and manufacturing jobs. Economists surveyed were expecting a reading of 60.
  • "Overall, the recovery in manufacturing continues quite strong, and the signs are positive for continued growth," Norbert Ore, chairman of the ISM's survey committee, said. The employment component of the report grew for the fifth consecutive month, rising to 58.5 in April (55.1 in Mar). (CNN Money)
US personal spending rose for the sixth month in a row during March, while income also increased. Individual spending rose 0.6%, or US$36bn, last month after an upwardly revised 0.5% increase in February.
  • Personal income climbed 0.3%, or US$32.3bn, in April following a 0.1% rise the month before. Both figures matched market estimates. The report also showed that personal savings as a percentage of disposable personal income, known as the savings rate, was 2.7% in March (3% in Feb). That was the third consecutive monthly decline. (CNN Money)
There are signs of a thaw in the US credit crunch, but the availability and cost of credit remains very uneven, according to results of a Federal Reserve survey released Monday. The Fed's April survey of senior loan officers at 79 banks shows a small net fraction of banks eased lending conditions for large and medium-sized business borrowers in 1Q10.
  • That was the first time since 2006 that banks have eased business loan standards and terms for two straight quarters. However, the Fed said loan standards "remain quite stringent." (Xinhua)
The US Treasury estimated it will borrow US$340bn of net marketable debt for 2Q10, assuming a US$280bn cash balance on June 30. The cash balance includes US$200bn for the Supplementary Financing Program (SFP). For 3Q10, Treasury estimated it would borrow US$376bn, assuming a US$270bn cash balance on September 30. (Xinhua)

US construction spending unexpectedly rose 0.2% in March (-2.1% in Feb), marking the first advance since Oct 09. Economists surveyed had forecast construction spending falling 0.3%. This was lifted by a rebound in public construction of 2.3%. Private construction was down 0.9%, including a 1.1% drop in residential. (Xinhua)

Europe’s manufacturing industry expanded at the fastest pace in almost four years in Apr 10 as companies increased production to meet export orders. A manufacturing index based on a survey of euro-area purchasing managers increased to 57.6 in Apr 10 (56.6 in Mar), the highest since Jun 06 and above an initial estimate of 57.5 published on April 22. A reading above 50 indicates expansion. (Bloomberg)

Thailand’s inflation slowed in Apr 10, giving the central bank room to keep borrowing costs low to support an economy threatened by political unrest. The consumer price index rose 3% yoy in April after climbing 3.4% in March. The median estimate in a survey was for a 3.2% increase. (Bloomberg)

Indonesia’s inflation stayed below 4% as rice harvests boosted food supplies and a stronger rupiah reduced import costs, giving the central bank room to keep interest rates unchanged this week. The consumer price index rose 3.91% yoy in Apr 10 (3.43% in Mar). That compares with the 3.72% median estimate in a survey. (Bloomberg)

Hong Kong’s retail sales rose for a seventh straight month in Mar 10 after unemployment fell, supporting consumption and economic growth. Sales rose 19% yoy to HK$24.7bn (US$3.18bn), after a 35.8% gain in February. That compares with the median estimate of a 27.5% increase in a survey. (Bloomberg)

European Central Bank President Jean-Claude Trichet, who capitulated on a January pledge not to relax lending rules for the sake of one country, may have to sacrifice more principles to prevent Greece from bringing down the euro.
  • Trichet yesterday diluted rules for the second time in a month to guarantee the ECB will keep taking Greek government bonds as collateral for loans. 
  • The central bank may have to extend that to other nations, renew a program of lending unlimited cash to banks for a year, and even start buying government debt if the EUR110bn (US$146bn) bailout plan for Greece fails to stem the euro’s slide, economists said. (Bloomberg)
Indonesia’s central bank may keep its benchmark interest rate at a record low this week as a strengthening currency and rising food supplies keep inflation at “moderate” levels. Bank Indonesia will keep its reference rate unchanged at 6.5% for a ninth consecutive month tomorrow, according to all 20 economists in a Bloomberg News survey. The measure is at the lowest level since it was introduced in 2005. (Bloomberg)

The head of the American Chamber of Commerce in China, Christian Murck said the country may allow its currency to appreciate against the dollar during 2H10. (Bloomberg)

Thai Prime Minister Abhisit Vejjajiva proposed holding a 14 Nov election if opposing groups agree to a reconciliation process, a move that may end eight weeks of deadly protests that have shut down Bangkok’s commercial center. (Bloomberg)