Monday, May 17, 2010

20100517 1803 FCPO EOD Daily Chart Study.

FCPO closed : 2425, changed : -22 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : continue lower, seller in control.
Support : 2400, 2370, 2340 level.
Resistant : 2450, 2470, 2500 level.
Comment :
FCPO traded cheaper today with slower volume changed hand following a negative crude and soy oil futures price development. Daily chart reading shows that market is having a negative downside biased development with possible pullback correction as price is dropped way below the lower Bollinger band 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.

20100517 1728 FKLI EOD Daily Chart Study.

FKLI closed : 1333, changed : -5 points, volume : higher.
Bollinger band reading : side way range bound.
MACD Histrogram : reversed lower, seller testing market again.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1350 level.
Comment :
Interest rate hike, Sidu election defeat plus negative regional market pressured buyer to retreat from the market during the morning session follow by second half session pullback effect correction and positive European market opening pushed market to recover some of earlier losses in high transaction volume. Daily chart wise, market is still trading side way range bound within the Bollinger band width with battle still going ob between bull and bear.
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.

20100517 1409 Malaysia Corporate News.

Maybank is considering a dual listing in Indonesia once rules there permit this, its chief said. It is the second Malaysian lender to have voiced interest in a dual-listing there after CIMB Group Holdings earlier this month. "It's something we're exploring. Clearly, it will create better visibility for Maybank in Indonesia," Maybank's president and CEO Datuk Seri Abdul Wahid Omar said.
  • Wahid said the group, in its pursuit of growth, is looking to add more Maybank branches in the region. In Cambodia, it plans to add three branches to its existing eight over the next one year, while in China it aims to convert a representative office in Beijing into a full-fledged branch, and also set up two new branches in other cities. It has only one branch in China now, in Shanghai. 
  • Wahid expects Maybank's earnings to be "good" in its final quarter, but cautioned that some currency gains which helped boost its third quarter net profit may not be repeated.
  • Maybank shareholders, at the meeting yesterday, approved the group's plan to implement dividend reinvestments in future. The plan, which it will initiate in Nov, gives shareholders the option to receive cash or reinvest in Maybank through the subscription of additional shares. 
  • Meanwhile, Maybank is considering migrating towards a holding company structure in preparation for stricter capital rules under Basel III. Such a move could help it increase its equity capital ratio to the higher levels that may be required under the new rules, Wahid said. Banks don't have to implement the new rules, which are still being discussed, till the end of 2012, so Maybank still has time to reorganise itself, he said. (BT) 
We are positive for Maybank’s plan to list in Indonesia as this would create greater visibility in the country which will in turn help its subsidiary in the country, Bank Internasional Indonesia to grow its business. However, the plan would take a longer time, probably around 2 years, to materialise because there are no concrete rules for this in Indonesia for now. In terms of regional expansion, we are encouraged by the group’s thrusts to open more branches in Indonesia, Cambodia and China. However, the largest overseas contributors will still be Singapore and Indonesia. The loan base of the operations in Singapore and Indonesia accounts for about 19.7% and 7.2% of the group’s total loan.

CIMB Group Holdings plans to raise its stake in Indonesia's fifth largest lender by up to 19.7% to better leverage on that country's fast-growing economy. If successful, its shareholding in Bank CIMB Niaga will increase to 97.9% from 78.3% at present. CIMB announced in a stock exchange filing that it would buy about 17% of the lender from Khazanah Nasional for RM1.7bn.
  • Khazanah, which is Malaysia's investment arm, has the option of selling to CIMB another 2.7% stake for RM254m if it wants to dispose of its entire holdings in CIMB Niaga. As payment, CIMB will issue up to 134m new shares to Khazanah priced at RM14.50 each. Khazanah currently owns 28% of CIMB.
  • "This deal increases our exposure to Indonesia and is consistent with our optimism about the market as a whole, and CIMB Niaga in particular. We expect it to be EPS accretive," CIMB group chief executive Dato’ Sri Nazir Razak said.
  • The transaction is expected to be completed in 4Q10.
  • The new CIMB shares to be issued to Khazanah represent about 3.7% of the group's issued and paid-up capital as at 30 Apr. (BT)
F&N Holdings has proposed to sell its 100% equity interest in Malaya Glass Products Sdn Bhd to Thailand’s Berli Jucker Public Company Ltd and Australia’s ACI International Pty Ltd for US$221.7m (RM712m) cash. The deal is expected to be completed in 4QFY9/10, resulting in a disposal gain of RM325m. Separately, the company is rolling out more products and launching plans for expansion in Malaysia, Singapore and Indochina. Also, CEO Tan Ang Meng hopes to hammer out another deal similar to the one for Red Bull by year-end. (BMSB, Edge Weekly)

The entire Sime Darby board of directors should be held responsible for the losses incurred by the conglomerate and not solely place the blame on its CEO. Chairman of Composites Technology Research Malaysia Sdn Bhd (CTRM) Datuk Wira Syed Ali Alhabshee said it was not fair for the CEO alone to take the wrap for the losses as any decision made in a company must be approved by the board. (Bernama)

Palm oil futures dropped, heading for a second straight weekly decline, as losses in soybeans and soybean oil reduced its appeal as well. July-delivery palm oil lost as much as 0.5% to RM2,459/MT and traded at RM2,471/MT at the 12.30pm trading pause last Friday on the Malaysia Derivatives Exchange. (Bloomberg, Malaysian Reserve)

Genting Plantations has signed a US$145m (RM463m) 10-year syndicated term loan from OCBC and DBS Bank. The loan will be used to fund its plantation development and for working capital of its plantation business and construction of palm oil mills in Kabupaten Kapuas, central Kalimantan. (BT)

International Trade and Industry Minister Datuk Seri Mustapa Mohamed is expected to give answers to some issues in the National Automotive Policy highlighted by Bumiputera car importers. Malay Car Importers and Dealers Association's (Pekema) acting president Datuk Zainuddin Abdul Rahman said Pekema has received positive feedback from the trade ministry over its request that the open AP policy to import vehicles that have been around since 1970s be maintained. The association has also requested that the RM10,000 levy to be paid on every open AP be reduced by half to RM5,000, with the payment being made only after a car is sold. (BT)

Bank Negara Malaysia is finalising the new third-party motor insurance scheme and is expected to submit its proposal to the Finance Ministry by Jul for approval by the Cabinet, said its Deputy Minister Datuk Dr Awang Adek Hussin. He said the central bank was collecting feedback from relevant parties before getting back to the ministry. "They are paying out RM2.70 for each RM1 premium they collected. They do not want to issue the insurance policies as it is not good business," he said. (BT)

Aluminium smelters hoping to get cheap power from the Bakun hydroelectric dam are likely to be disappointed because of cost overruns in constructing the dam, sources said. Cahya Mata Sarawak and Australia-based Rio Tinto Alcan own one smelter while the other is owned by tycoon Tan Sri Syed Mokhtar Al-Bukhary’s GIIG Holdings together with Aluminium Corp of China. The construction of the Bakun dam was initially budgeted for RM7bn but the ultimate cost could be RM1bn higher. (Financial Daily)

DiGi and Baraka Telecom, mainly owned by Middle Eastern individuals, has terminated the MVNO agreement signed last year which was for a period of three years with the possibility of extending for another two years. The termination is due to Baraka "reconsidering its MNVO business" in Malaysia, according to the filing by DiGi.
  • The termination would have no effect on the earnings, gearing and net assets of DiGi. Under the previous MVNO agreement, Baraka would be able to use DiGi's GSM network and could include additional services such as 3G. (BMSB, Malaysian Reserve)
Indian communications minister A Raja on Fri said the government will listen to mobile phone operators’ concerns before finalising plans to impose new fees on 2G spectrum. Mr Raja’s response comes as large telcos accused the telecom regulator of discriminating against them by suggesting that companies pay a one-time fee for 2G radio-spectrum they bagged several years ago.
  • Trai had recommended 2G airwaves fees be benchmarked against prices fetched in the ongoing 3G auctions. Calculations by ET show Bharti will have to cough up Rs 45.9bn (US$1.1bn), while Vodafone will have to pay Rs 35.9bn (US$0.8bn), BSNL and MTNL combined at Rs 80.3bn (US$1.8bn) and Idea Cellular must pay Rs 12.6bn (US$0.3bn) for all ‘excess’ 2G spectrum they hold over the 6.2 Mhz. (Economic Times of India)
Faster-than-expected global economic recovery and acceleration in the demand for natural rubber (NR) will likely keep rubber prices high in the short and medium term, said the Association of Natural Rubber Producing Countries (ANRPC). The association said in its latest NR Trends and Statistics report that demand for rubber was strongly dependent on the global economic growth.
  • “These fundamentals will likely continue to support rubber prices as growing demand may offset the post-wintering rise in supply.” In addition, the high NR import and consumption in China, India and Malaysia in the first quarter of this year were clear indications of acceleration in NR demand. 
  • Malaysia, for example, posted an annualised 13.3% rise in consumption and 28.3% in NR import in 1Q10. “The country is in transition from an NR exporter to NR importer,” ANRPC said adding that Malaysia imported an estimated 183,500 tonnes of NR during 1Q10. Malaysia's dominant glove manufacturing industry looks set to benefit from the higher demand resulting from the US government US$940bn health bill. (The Star)
Malaysian police broke up a protest by Islamists last Friday against US rapper Pitbull's concert and the government award of a sports betting licence, underscoring a deepening tide of Islam in the country. About 300 Malay Muslims representing several groups led by opposition Pan Malaysian Islamic Party (PAS) gathered in the compound of a mosque to denounce gambling and pop concerts.
  • A PAS official said the protest was part of an ongoing awareness campaign against "immorality" in the country. "We must act before gambling floods our country," PAS official Kamaruzaman Mohamad said. (Reuters)
Malaysia Airports Holdings has lined up investors for a 20ha site in the vicinity of the KL International Airport Aeropolis in Sepang, Selangor. Under its five-year development plan, the airport operator has earmarked some 1,092ha surrounding the KLIA for commercial development to increase its non-aeronautical income.
  • MAHB land development general manager Muhd Najib Mohd Rawi said it was evaluating proposals from interested investors.It wants to develop the site into an automotive city, a food and beverage centre with an al fresco setting and a factory outlet facility. A tender for earthworks has already gone out and work is slated to start by 3Q10. 
  • On the theme park, MAHB MD Tan Sri Bashir Ahmad said he was in talks with GMR Infrastructure Ltd, its partner in India. A theme park is also being planned for Hyderabad airport. Bashir said the theme park need not necessarily be a big brand name, but one that is unique and appeals to the masses. He likened it to the first in-door ski resort in the Middle East, which can be found in the Mall of Emirates, Dubai. (BT)
Iskandar Investment, tasked to build catalytic projects in Iskandar Malaysia, will tender out another six packages of contracts worth a combined RM250m by month-end. The contracts include jobs to build two schools, a stadium and college buildings. It was earlier reported that IIB will give out RM2bn worth of contracts this year. (BT)

Malaysia is urged to sign the bilateral voluntary partnership agreement (VPA) with EU to reinforce the Forest Law Enforcement Governance and Trade (Flegt) action plan in an effort to expedite local timber export access to the EU, says Timber Exporters' Association President George Tan.
  • Under the VPA, timber exported to the EU must be certified legally harvested. EU is the third most important destination for Malaysian timber. Flegt is seen as an important marketing tool for timber products. (Starbiz)
Ho Kay Tat, editor-in-chief of the Edge group of publications, is likely to be appointed as the COO of Star Publications. He is likely to replace Ng Beng Lye, one of three executive directors in the firm. The other two directors are editor-in-chief Wong Chun Wai and Clement Hii, who is also deputy chairman.
  • The move could reflect changes in the leadership of the Malaysian Chinese Association (MCA). The MCA is the second biggest component party in the ruling Barisan Nasional coalition, and its investment arm Huaren Holdings is the single largest shareholder in Star Publications. (SBT)
YTL Corp will inject some of its overseas projects into YTL Land by year-end to transform the property unit into an international player. For a start, it will place its three projects in Singapore - Sandy Island and Kasara villas in Sentosa Cove, and the redevelopment of Westwood Apartments on Orchard Boulevard - under YTL Land.
  • Stressing that Singapore will be a huge market for YTL Land, Deputy MD Datuk Yeoh Seok Kian says the company will bid for land that will be put up for sale by Singapore's Urban Redevelopment Authority. The development of Sandy Island and Kasara villas in Sentosa Cove is underway and the projects are scheduled for completion by 2015. (Starbiz)
Jaks Resources’ venture as an IPP in Vietnam is meant to buffer the company from the ups and downs of steel manufacturing and construction industries. “Our aim is to have a recurring income that will benefit the company in the long run,” group general manager of finance, Chee Seong Heng said.
  • “The IPP project is scheduled to start by 4Q this year. Although we are now at the MoA stage, this project is already confirmed as all major agreements have been signed,” Chee added. The commercial operation of the first unit of 600 MW is scheduled to start in 4Q 2014, while the second unit of 600 MW will follow in the 2Q 2015. (Starbiz)

CBS Technology is developing a website, scheduled to be launched in 3Q, to enable SMEs to market their halal products and services online. MD Sun Chee Keong said the new online portal will mirror the popular trading portal, but will focus solely on the halal market. The website launch is targeted to coincide with CBS Technology's move to transfer its listing status to the Main Market. (BT)

I-Bhd expects 80 more local and international knowledge-based companies to set up offices at i-City, Shah Alam, by year-end, said CEO Eu Hong Chew. He added that I-Bhd had so far invested RM200m-300m to develop the smart city since 2005. On Friday, it signed a heads of agreement with the Malaysian-Russian Business Association and Hexagon Solutions to set up a joint centre of innovation in i-City. (Starbiz)

Gula Perak has been classified a PN17 company after failing to provide a solvency declaration to Bursa Malaysia. (Starbiz)

Bursa Malaysia will lift the trading suspension of Oilcorp’s shares from 9am today after the latter submitted its outstanding annual audited accounts for FYE12/09 to the exchange. (Starbiz)

20100517 1359 Malaysian Economic News.

The leading index (LI) increased 3.7% mom to 177.5pt in March (-0.5% in Feb). The coincident index (CI) rose by 1.6% mom to 121.8pt (1.1% in Feb). On an annualized sixmonth smoothed growth rate, the LI and CI grew by 11.2% and 9.4% respectively in March. Thus, the economy is expected to continue to grow in the coming months. (Department of Statistics) Please see our Economic Update for further details

The government may raise US$1.0bn to US$1.5bn from the sale of dollar-denominated Islamic bonds, its first global offering in almost 8 years, according to a finance ministry official with direct knowledge of the plan. The government is still aiming to start the debt sale in June, the official said. (Malaysian Reserve)

DPM Tan Sri Muhyiddin Yassin announced a cash incentive for principals, head teachers and teachers who help boost the academic performance of their schools. Those attained the Key Performance Indicator (KPI) target set by the ministry could get a cash incentive of between RM900 and RM7,500 beginning this year. (Malaysian Reserve)

Malaysia will begin cross-trading shares with Thailand by the 2H11, followed by Singapore and the Philippines, in a regional drive to lure more overseas funds, the head of Malaysia’s exchange said. The exchange of Malaysia, Indonesia, Singapore, Thailand and the Philippines on 23 Feb 09, signed a preliminary agreement to develop links for crossborder trading among the Association of South-East Asian Nations. (Malaysian Reserve)

20100517 1356 Global Economic News.

US retail sales rose 0.4% mom to US$366.4bn in April (2.1% in Mar), as consumers continued to show signs of returning to stores. Economists had expected sales would grow 0.2%. Total sales were up 8.8% yoy in April. Sales excluding autos and auto parts jumped 0.4% mom in April. (Bloomberg)

US industrial production jumped 0.8% mom in April (0.1% in Mar), with the manufacturing component showing a back-to-back 1.0% gain. This is higher than market consensus of 0.6%. Capacity utilization rose to 73.7% in April from 73.2% in March. (Bloomberg)

US business inventories rose 0.4% mom in March (0.5% in Feb), meeting market consensus of 0.4%. Manufacturers’ inventories up 0.3%, followed by retailers up 0.4% and wholesalers up 0.4%. (Bloomberg)

The Reuter's/University of Michigan's Consumer sentiment index rose to 73.3 in May from 72.2 in April. The index came in below market consensus for a rise to 73.8. The expectations component improved to 68.3 while the current conditions component at 81.1, a little changed from April. (Bloomberg)

Treasury Secretary Timothy F. Geithner expressed confidence that Europe will resolve the debt crisis buffeting the region and said the U.S. economy is strong enough to withstand any fallout. In an interview on Bloomberg Television, Geithner said he is “confident” China will allow the value of the renminbi to rise against the dollar. “It is in China’s interest that they move to let their exchange rate start to gradually reflect market forces.” (Bloomberg)

Thai troops battled with protesters for a third day in downtown Bangkok as the government ruled out talks to end a two-month standoff with opponents seeking an immediate election. At least 18 people died and more than 140 were injured since the military moved to seal off a business district. Former Thai leader Thaksin Shinawatra, whom many of the red-shirted protesters support, called on Prime Minister Abhisit Vejjajiva to restart talks. In a related development, Thai authorities set a deadline for women, children and other unarmed protesters to leave their Bangkok site as the group battled to prevent soldiers from sealing off the area, turning downtown Bangkok into a war zone. (Bloomberg)

Hong Kong’s economy expanded 8.2% yoy in the first quarter (2.5% in 4Q09), the fastest pace in four years, as exports and retail spending rebounded from the global crisis. The increase was a shade lower when compared with the 8.3% median forecast. The government maintained a forecast for full-year growth of between 4% and 5% and inflation of 2.3%. (Bloomberg)

The chief economist for the World Bank, Justin Yifu Lin said that if China were to revalue its currency it would actually hurt rather than help the US economy. Chinese exports would become more expensive and the cost of those goods would rise for US consumers. (Financial Daily)

Singapore’s retail sales unexpectedly fell 2.4% yoy in March (+4.6% in Feb) as rising car prices prompted consumers to hold off purchases, a decline that may ease as record economic growth and improving tourism revive spending in the coming months. Economists had projected for a 1.0% gain. (Bloomberg)

The Thai government on 16 May night declared two days public holiday starting 17 May for the capital and extended the emergency rule in another five provinces (Ubon Ratchathani, Mahasarakham, Roi Et, Sakon Nakhon and Nong Bua Lampu) as battles between government and anti-government protesters continued. Acting Government Spokesman Dr Panitan Wattanayagorn said the holidays were to facilitate government efforts in dealing with the current situation. (Bernama)

Thailand’s foreign-exchange reserves fell 0.8% to US$146.4bn in the week ended 7 May, from US$147.6bn a week earlier. The central bank’s holdings of forward contracts fell 2.8% to US$11.6bn in the same period, from US$11.9bn a week earlier. (Bloomberg)

Thailand’s economy has been hurt by ongoing anti-government rallies that will “significantly” reduce tourism in the coming months, Finance Minister Korn Chatikavanij said as he called for an end to the protests. “We estimate that growth has already been about 0.4 to 0.5% less than it ought to have been,” Korn said. Prolonged unrest may reduce growth this year by as much as 2.0% pt. (Bloomberg)

Indonesian Economic Coordinating Minister, Hatta Radjasa, said that the government expected the economic growth would increase up to 6.0% in 2Q10 in line with the increasing private sector and government spending following the enactment of the revised state budget 2010. (Bloomberg)

20100517 1255 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1325.5, changed : -12.5 points, volume : high.
Bollinger band reading : downside biased.
MACD Histrogram : dive deeper, seller seized control.
Support : 1325, 1321, 1318, 1310 level.
Resistant : 1330, 1337, 1345 level.
Comment :
Interest rate hike plus negative regional market development continue to huant FKLI to fall lower in supportive volume transacted. Hourly chart reading shows a negative downside biased market with possible temporary pullback correction to take in the near term.

20100517 1233 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2420, changed : -27 points, volume : low.
Bollinger band reading : downside biased.
MACD Histrogram : continue lower, seller in control.
Support : 2400, 2370, 2340 level.
Resistant : 2450, 2470, 2500 level.
Comment :
Weaker Soy oil and Crude oil futures price lead FCPO to opened and traded in negative zone through the morning session in passive rate of transaction volume. Hourly chart shows that market is having a temporary pullback correction after opened gap down within a downside biased potential market.