Wednesday, May 12, 2010

20100512 1654 Sleppy Day Ahead!!!

Sleppy Day Ahead!!!

20100512 1651 FCPO Incomplete Daily Chart Reading.

FCPO last looked : 2515, changed : +10 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : turned lower, no significant exposure by both buyer and seller yet.
Support : 2500, 2470, 2450 level.
Resistant : 2521, 2550, 2570, 2600 level.
Comment :
Continue one day up one day down and one day up FCPO traded higher today in drying out volume.
Yet to complete daily chart reading remained showing a side way range bound market with some downside biased potential.

20100512 1642 FKLI Incomplete Daily Chart Reading.

FKLI last looked : 1340.5, changed : +8 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : receovering, buyer testing market.
Support : 1337, 1330, 1325 level.
Resistant : 1345, 1350, 1360 level.
Comment :
FKLI recovering most of yesterday losses in lack of volume changed hand as major world market ended mixed shows that buyer is not turned aggresive. Yet to be complete daily chart continue showing a side way range bound market reading.

20100512 1634 Malaysia Corporate News.

The sports betting licence issued to tycoon Tan Sri Vincent Tan’s Ascot Sports early this year comes with several conditions attached.
  • Ascot Sports will be allowed to operate in only 200 of Berjaya Sports Toto’s 680 outlets in non-Muslim areas in major towns and online betting would not be allowed. 
  • It is also understood that Ascot Sports is unlikely to be ready for the FIFA World Cup. “Ascot Sports has been busy preparing to commence operations but it is expected to start business only in Aug/Sep,” the sources added.
  • Berjaya Corp yesterday requested for a suspension of trading today pending an announcement of an acquisition from a related party and a capital raising exercise. It is understood that Ascot Sports is likely to be eventually acquired by Berjaya Corp. (Starbiz)
News that a sports betting licence has already been issued to Ascot Sports is a surprise to us, given that the government has not made an official announcement on the matter. The smaller-than-expected distribution outlets are slightly disappointing and this could reduce the likelihood that Tanjong's PMP and Multi-Purpose's Magnum Corp outlets would eventually be roped in to further expand the distribution points. But we were not surprised that the impending legal sports betting activities would not involve internet betting. Timingwise, we had earlier said that even if a licence was issued in the near-term, it is unlikely that the impending operator would be able to take bets in time for the World Cup - which is just one month away. We do not expect a sports betting licence to affect Genting Malaysia’s casino operations. Although B-Toto’s outlets would be used as distribution points, we do not expect a material impact to its ongoing NFO and lotto sales.

Tenaga wants new coal-powered plants built in Peninsula Malaysia to generate power at competitive rates so as not to burden consumers, said president and CEO Datuk Seri Che Khalib.
  • Although Peninsula has an estimated 40% reserve margin, this margin is expected to shrink to 20% by 2015, which is the minimum consideration for secure power supply. 
  •  Meanwhile, Che Khalib also confirmed that the undersea cable project from Sarawak to Peninsula has been scrapped. “That said, the government is still looking at the option of bringing power from Sarawak,” he added. (Financial Daily)
Although disappointing, news that the undersea cable project has been scrapped is not a surprise as press reports and Tenaga have highlighted this possibility several times over the past few months. For Tenaga, the scrapping of this project meant that the national utility company would now need to look at coal- and gas-fired power plants for future plant ups given Peninsula Malaysia's limited hydropower potential.

The number of withdrawal applications made by Employees Provident Fund (EPF) members to invest in approved unit trust funds under the EPF-Members Investment Scheme (EPF-MIS) is expected to exceed 1m anmually by 2015. Federation of Investment Managers Malaysia (FiMM) president Tunku Ya'acob Tunku Abdullah said the number of applications is anticipated to be over 500,000 compared with 300,000 in 2007.
  • As at Mar-10, net asset value (NAV) under the EPF-MIS is more than RM15bn, which is about 7.4% of the total unit trust industry's NAV of RM204bn. "Each year, EPF members represent 30% of the volume of business, while the remaining 70% are cash-pay customers. 
  • "We expect the ratio to stay the same but with the implementation of the E-PPA (Elektronik - Pilihan Pelaburan Ahli), EPF members don't have to wait for two weeks to find out whether their applications have been approved or not as the system can process it in two days only," he said.
  • The EPF-MIS was launched 15 years ago to allow EPF members to invest part of their savings in the approved unit trust funds. Tunku Ya'acob said the electronic processing system has been implemented in stages since Jan-10. So far, 16 unit trust companies are already onboard the E-PPA system, while another 25 will hop on later. (BT)
An expert has suggested that wind power be harnessed to provide an alternative source of energy in the country. “Offshore wind power generation, for instance, is capable of producing electricity at a high capacity just like a nuclear power plant. It is also more competitive compared to solar power,” Principal fellow of Universiti Kebangsaan Malaysia’s Solar Energy Research Institute (Seri) Dr Mohamad Yusof Sulaiman said. (Financial Daily)

Rebar prices in Malaysia are unchanged for the fourth consecutive week despite mills' efforts to push up the market. "Mills try to push prices up, but demand is not there yet to support prices," said a Singapore-based trader with operations in Malaysia.
  • Mills are even offering trade discounts of RM50-100 per tonne to push sales, according to a source. Rebar continues to trade at RM2,250-2,350 per tonne, unchanged since early April due to slow demand, mill officials and traders said. This is below prevalent offers of RM2,350-2,400 per tonne, also unchanged since last month. (Metal Bulletin)

Alliance Financial Group said it has identified a replacement for Datuk Bridget Lai as group chief executive officer of its banking unit. Alliance Bank Malaysia will announce the name once the appointment has been endorsed by Bank Negara Malaysia. (Bloomberg)

Tan Sri Abdul Rahman Omar, former DRB-HICOM adviser for automotive, is tipped to become chairman of UMW Holdings, replacing Tan Sri Asmat Kamaludin. Abdul Rahman has been offered the post and an official announcement is expected by the end of next month, sources said.
  • His appointment may lead to the shake-up of the automotive-to-oil-and-gas group's top management, now led by president and chief executive officer (CEO) Datuk Abdul Halim Harun. Abdul Halim is expected to leave UMW by end-Oct when his contract expires, sources said. 
  • Abdul Rahman has emerged as a favourite to help make UMW stronger, given his vast experience and network in the corporate world, especially the automotive sector. He was DRB-HICOM executive director from Feb 06-Dec 07 and chairman of Edaran Otomobil Nasional (EON) from Feb 06-Jul 08. (BT)
UMW Holdings is still waiting for the right timing to list its oil and gas division, said President and Group CEO Datuk Abdul Halim Harun. "Hopefully, the listing takes place sometime this year and the timing must be right," he said. "We want make sure everything is in good condition. Then, we will start to list but there is no time frame yet," he added. (Bernama, BT)

Petra Perdana has proposed a private placement of up to 10% of its paid-up share capital or 29.76m new shares to investor(s) to be identified at an issue price to be determined later. After the completion of the proposed placement, the company has proposed to undertake a renounceable rights issue at an issue price and entitlement basis to be determined later, with new free detachable warrants. Proceeds will be used to repay borrowings and purchase new vessels (BMSB)

Astro says it is on track to signing up 0.5m B.yond subscribers by the end of January 2011 as it introduces more high-definition content. "We are going to have more sports content on high-definition coverage, which is a key driver for the take-up of our Astro B.yond subscriber base," DEO Datuk Rohana Rozhan said.
  • Currently, Astro B.yond customers can watch HBO movies, National Geographic, History programmes and selected English Premier League football games on high definition. Next month, they can also watch the World Cup matches live on high definition. This year, Astro will be introducing 12 channels, including 10 dedicated to bringing all 64 World Cup matches live in both high and standard definition. (BT)
India telco regulator recommended ending restrictions on telco firms selling out, a move which will help consolidation in the world's fastest growing telecoms market. Currently, India restricts telecoms firms from selling majority stakes within three years of getting licence. India's telco regulator also suggested telcos pay a one-time fee for holding radiospectrum beyond 6.2MHz based on 3G prices, a move that will hit established operators like Bharti Airtel and Vodafone.
  • India currently grants additional radio airwaves to firms when they reach subscriberaddition milestones, only charging a usage fee for the resource. The recommendations of the Telecom Regulatory Authority of India (TRAI) have to be accepted by the telecoms ministry before they become law. (Economic Times of India)  

20100512 1628 Malaysian Economic News.

The Industrial Production Index (IPI) increased 14.1% yoy in March (4.8% in Feb). This growth was due to the increases in two indices, namely manufacturing (20.3%) and electricity (24.9%). The index of mining posted a decrease of 0.5%. On a mom basis, it was up 15.1% (-11.2% in Feb). Economists had projected it would increase 13.4% in March, (BT, Bloomberg)

Total manufacturing sales rose 27.7% yoy to RM46.6bn in March (16.8% in Feb). On a mom basis, the sales value also increased by 16.0%. Total employment in the manufacturing sector increased 0.9% yoy or 8,407 persons to 962,833 persons in March (952,189 persons in Feb). Total salaries and wages paid in March upped 17.9% yoy to RM2.18bn (RM2.16bn in Feb). (Department of Statistics)

The guarantee on all cash deposits in banks will be raised to RM250,000 from RM60,000, effective 1 Jan 11. It’s a new proposal that is being worked out by the Ministry of Finance (MoF) together with the Malaysia Deposit Insurance Corporation (PIDM).
  • Another measure being proposed as part of a package to further enhance consumer protection is an insurance compensation scheme (ICS) for general and life insurance policy holders. The plan is for this legislation package to be tabled in Parliament, for debate and enactment before the end of this year. (BNM, Financial Daily)
The productivity of Malaysian workers, the highest in Asia, could grow as much as 4.0% this year (2.3% in 4Q09), helped by a recovering economy, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.
  • Trade, transport and finance sub-sectors are to lead the growth with more than 4.5% expansion, while the services sector will grow by more than 4.1% due to the liberalisation measures and broadband initiatives. The manufacturing sector’s productivity is expected to grow 2.3% supported by higher domestic consumption and a recovering exports market.
  • However, this target requires efforts by all sectors, especially under the New Economic Model (NEM). (BT, Bloomberg)

20100512 1625 Global Economic News.

Inventories at U.S. wholesalers rose 0.4% for a third month in March (0.6% in Feb), and sales climbed even more (2.4%), a signal companies will need to step up orders to try to meet demand. Economists forecast wholesale inventories would rise 0.5%. Inventories of metals, computers, electrical goods, lumber and autos all rose. At the current sales pace, wholesalers had enough goods on hand to last 1.13 months, down from 1.16 in February and the least since comparable records began in 1992. (Bloomberg)

The European economy will continue its tenuous recovery this year and next, but European Union policymakers need to address some long-standing problems to ensure fiscal discipline going forward, the International Monetary Fund said Tuesday. In its May outlook for the European economy, the IMF said economic activity in the region will pick up in 2010 and 2011 from depressed levels due to stronger exports and the impact of government stimulus measures. But the pace of growth will be weak: Unemployment is expected to rise, and ongoing problems in the banking sector continue to weigh on credit. (CNNMoney)

Europe still needs economic-support measures as their early withdrawal may jeopardize the recovery, the International Monetary Fund said.
  • “Aiming to stabilize public debt in the short run is neither feasible nor desirable, given the risk of a relapse into recession and the magnitude of the required fiscal retrenchment,” the IMF said. (Bloomberg)
European Central Bank President Jean-Claude Trichet is buying time for the euro region as investors speculate on whether the US$1 trillion bailout plan is enough to stop the sovereign debt crisis. Spanish and Portuguese bonds have rebounded as the ECB snapped up government debt, reversing a rout that threatened the nations’ ability to borrow.
  • At the same time, the euro fell yesterday and stock indexes pared gains on concern about how indebted countries will cut deficits and access aid if needed. (Bloomberg)
Credit rating agency Moody's cautioned investors that two of the euro zone's hardest hit countries aren't out of the woods just yet. In the last month, Moody's has said several times that debt-strapped Greece and Portugal are under review for future downgrades to their credit ratings. But in a report to investors on Monday, the agency said those downgrades could occur within a month. Both reviews will be decided on within the next four weeks. (CNNMoney)
  • Greece's downgrade would probably be more "substantial" than previously indicated, with cuts to the Baa range, or just above junk status, the report said. "This will depend on developments in the Greek economy once the fog of financial panic, supportmobilisation and street demonstrations dissipates," 
  • Moody's wrote. "The country's debt is large but not unbearable; however, the required adjustment is obviously very painful, and short-term economic prospects are clearly dismal.
  • "Portugal's possible downgrade is less severe than that of Greece, as Moody's said it is considering a one-notch cut to Aa3 from Aa2. Both ratings are so-called investment grade and considered relatively low risk.
China's consumer price index (CPI), the main gauge of inflation, rose 2.8% yoy in April (2.4% in Mar), according to the National Bureau of Statistics (NBS) released yesterday. The April CPI figure was within market expectations of between 2.6% and 3.0%. Food prices jumped 5.9% yoy last month. China's Producer Price Index (PPI) grew 6.8% yoy in April (5.9% in Mar). (Xinhua)

China's retail sales, the main gauge of consumer spending in the world's fastest-growing economy, rose 18.5% yoy to 1.15 trn yuan in April (18.0% in Mar), the National Bureau of Statistics (NBS) said. Urban consumption up 18.9% yoy while rural residents spent rose 16% in April.
  • High growth were reported in the catering sector (+17% yoy), commodities retail sales (+18.7%), sales of cars, furniture as well as home appliances and AV equipment (Xinhua)

China's home prices in 70 large and medium-sized cities rose by 12.8% yoy in April (11.7% in Mar), the National Bureau of Statistics said (Xinhua).

Urban fixed asset investment in China for the first four months this year rose 26.1% yoy to 4.67 trn yuan (26.4% in 1Q), according to the National Bureau of Statistics announced Tuesday. The slowdown in investment growth was a result of a higher comparison base during the same period last year. Growth in central government projects investment also slowed. (Xinhua)

China's industrial value-added output growth was 17.8% yoy in April (18.1% in Mar), the National Bureau of Statistics (NBS) announced yesterday. Industrial value-added output rose 19.1% from January to April. (Xinhua)

Australia’s government aims to bring the budget into surplus three years ahead of forecast, seeking a “solid buffer” against a European debt crisis that threatens to undermine the global recovery.
  • Treasurer Wayne Swan, releasing the annual budget yesterday, estimated a A$1bn (US$900m) surplus in 2012-13, from a A$40.8bn deficit in the year to 30 Jun 11. He said he’ll keep a 2.0% cap on spending growth until the surplus reaches 1.0% of GDP. (Bloomberg)
New Zealand’s employment is likely to grow between 0.1% and 0.5% in the next two quarters and “slightly more” in 4Q10, the Department of Labour said. (Bloomberg)

China’s bank lending exceeded estimates in April. New yuan loans increased to Rmb774.0bn from Rmb510.7bn from March. Economists had projected it would rise to Rmb585.0bn. (Bloomberg)

Thailand’s cabinet has approved the THB2.07tr 2011 fiscal budget bill proposed by the Ministry of Finance, deputy spokesman Watchara Kannika said. The cabinet also agreed to bring forward the date for the parliamentary budget debate to 24-26 May, from the previously set 26-27 May.
  • It was expected that the scrutinising of the 2011 budget bill would take about 125 days. The bill would likely be approved by the House no later than 10 Sep, he said. (Bangkok Post)
Indonesian Finance Minister Sri Mulyani Indrawati said that the government expects the economy will grow by 6.3% in 2011. The assumption is made amid the continuation of global economic recovery, despite concerns that the crisis in Greek may impact emerging markets, including Indonesia, but high amount of global liquidity may neutralize the impact, the minister said.
  • Exports are forecast to grow at 10.8% next year, lower than this year's prediction of 15.8% as the country survived from the fallout of the global financial routs. 
  • Imports are forecast to grow at 12.1% in 2011.
  • Consumption is seen to grow at 5.4% in 2011.
  • The unemployment rate is forecast to decrease to 7.0% next year from the current level of 7.3%.
  • The other variables, including the assumptions of inflation, oil price and central bank interest rate, will be updated and announced later, she said. (Bloomberg)