Monday, May 24, 2010

20100524 1806 FCPO EOD Daily Chart Study.

FCPO closed : 2490, changed : -1 points, volume : lower.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : recovering, seller reducing exposure.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550 level.
Comment :
Marginally lower FCPO traded in light volume range bound today without firm direction. Daily chart reading suggesting market to trade side way range bound with still a little downside biased as the middle BOllinger band resistant level tested for the second time.
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.

20100524 1726 FKLI EOD Daily Chart Study.

FKLI closed : 1272, changed : -14.5 points, volume : higher.
Bollinger band reading : downside biased.
MACD Histrogram : continue lower, seller ruled.
Support : 1270, 1265, 1260 level.
Resistant : 1274, 1280, 1290 level.
Comment :
Seller dominated FKLI closed the day near the low with increasing volume transacted despite a recovery recorded with major regional market. Daily chart continue to shows a way oversold downside biased market without any pullback correction as seller give no chance for Mr Bull to come back for the time being.
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.

20100524 1438 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2492, changed : +1 point, volume : low.
Bollinger band reading : side way upside biased.
MACD Histrogram : weakening, not much action from both buyer and seller.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550 level.
Comment :
Quiet volume tight range market FCPO traded 1 point higher without much action for the entire morning session. Hourly chart reading suggesting a side way range bound upside biased market that is near resistant level.

20100524 1431 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1280, changed : -6.5 points, volume : high.
Bollinger band reading : side way downside biased.
MACD Histrogram : rising higher, seller locking in profit.
Support : 1274, 1270, 1265 level.
Resistant : 1280, 1290, 1300 level.
Comment :
Ultra high volume FKLI continue to trade in negative breath ended the first session lower despite recovery taking place in world major stock market but manage to have a 5 points premium compare to cash market. Hourly chart reading still shows a downside biased market with correction taking place after few support level is been tested.

20100524 1415 Malaysia Corporate News.

Close to three years after the much-hyped mega-merger that created the world's largest listed plantation company, the unthinkable has happened. Instead of creating value, value has been destroyed. Massive write-downs from engineering projects gone awry, from a cost standpoint, has hurt the giant. If not for the huge earnings from its core business of plantations, Sime Darby could easily have been crushed by the size of these write-offs. All is not lost though, according to its newly appointed acting group chief executive Datuk Azhar Abdul Hamid. “We need to create value again for shareholders to make up for what we have lost,” he says. While admitting that the “hole” created by the overruns is challenging to fill because of its size, Azhar says Sime Darby has “unlocked values” within the group. “We've not been too visible or focused enough on real value generation,” he adds. The plantations division, Sime Darby's single largest profit contributor, makes up more than half of profits, and which Azhar himself has headed since the group's 2007 mega-merger, has much room for growth. (Starbiz)

Sime Darby has clarified that an internal probe it is conducting over losses incurred in the Middle East and the Bakun hydroelectric dam project remains confined to its energy and utilities division. It was reported on Friday in the New Straits Times that Sime Darby chairman Tun Musa Hitam had said that the probe had been extended to all the group's six business divisions. What Musa said at the press conference on Thursday was that the huge losses incurred by the energy and utilities division had provided the group an opportunity to look also at its other business units. Sime Darby also clarified that external professionals and its own management were looking into the energy and utilities division at present and not the entire group. (BT)

Sarawak Hidro, the owner of the Bakun Dam, is believed to have agreed in principle to sell power to Sarawak Energy for less than 10 sen per kWh, according to sources. However, no PPA has been draw up yet. Based on a transmission cost of 5-6 sen, the aluminium smelters would have to buy power at 15-16 sen per kWh – higher than the 9 sen that Sarawak Aluminium is looking at. The rate is also higher than the 6.42 sen per kWh rate that other aluminium smelters around the world are sourcing hydropower, experts say. (The Edge Weekly)

EON Capital will recommend that shareholders accept a RM5.06bn takeover bid from Hong Leong Bank to create the country's fourth largest banking group. EONCap, in a filing to the stock exchange yesterday, said all but one of its board members felt that the takeover offer is credible and in the company's best interest. The board took into consideration Credit Suisse's independent advice that the offer was "unfair from a financial perspective", as well as international adviser Goldman Sach's views, and decided to take "a holistic approach", it said.
  • It plans to let shareholders vote on the offer, which works out to RM7.30 a share, an improvement from a previous offer of RM7.10 a share, at an extraordinary general meeting (EGM). It is believed that the meeting is being targeted for end-June. 
  • The views of Credit Suisse and Ng Wing Fai, the board member who is opposing the deal, will be included in a circular to shareholders. Ng is the MD of EONCap's single largest shareholder, Hong Kong's Primus Pacific Partners Ltd, which holds a 20.2% stake.
  • EONCap plans to use the disposal proceeds to pay its shareholders a special dividend of RM3.3bn and capital repayment of RM1.76bn. If all approvals are obtained, the special dividend exercise is expected to be completed within one month of the disposal, while the capital repayment will be done by the end of this year. (BT)
Maybank, which currently commands 82% market share of the debit card market, is hopeful of billings surpassing RM3bn this year. "A year ago, we were seeing an average of RM220m debit card transactions. But as our client base expands, we see monthly billings at RM250-300m," said Maybank consumer banking head Lim Hong Tat.
  • Maybank debit cards will now be accepted for Auto Paybills by a number of corporations like Telekom Malaysia, Astro, Tenaga Nasional, Sarawak Electricity, Celcom and Maxis. 
  • "We are targeting at 30% growth in debit card billings to RM3bn this year compared to the last financial year, as a result of the new e-Commerce initiative," Lim said. (BT)
Berjaya Corp’s tycoon, Tan Sri Vincent Tan, has defended legalisation of sports betting, calling on all parties to look at the broader picture. “The government has made it really clear that Muslims are not in any way allowed to bet with us. So my question is why are these groups so unhappy,” he said. Tan said those opposing were not being sensible as the government would earn an extra few million ringgit in revenue through legalised sports betting. (The Star)

Telcos, chipmaker Qualcomm and mobile internet companies are all expected to bid aggressively in the Indian broadband auctions starting today, squaring off against each other to win crucial airwaves, which can be used for offering broadband as well as future technologies. Analysts have billed the broadband wireless spectrum auctions (BWA) to be as fiery as that of 3G because at stake are 20 MHz of airwaves — four times that of 3G — with also the possibility that these frequencies can be used for voice services in the future. The reserve price for a pan-India broadband licence is Rs17.4bn (US$0.4bn). India, with about 600m mobile users, has over 50% tele-density as against less than 1% broadband penetration, offering a huge potential for successful winners. As per data compiled by the telecom regulator, India had a mere 8.75m broadband users as of Mar 2010. Poor broadband penetration is seen a roadblock impacting the country’s ambitious economic expansion and social justice programmes. (Economic Times of India)

Indonesia will keep its crude palm oil (CPO) export tax at 4.5% in June and maintain its cocoa export tax at 10%, an official at the industry ministry said on Friday. "Average prices of CPO and cocoa have been relatively at the same level compared with the last month, so we didn't see any reasons to raise the export tax in June," said Faiz Achmad, director of food industry at the industry ministry. Indonesia, the world's top palm oil producer, relies on overseas markets, mainly China and India, to buy nearly 70% of its palm oil output. Exports of palm oil products in the first quarter rose 7% to 3.62m tonnes against the same period last year, according to the Indonesian Palm Oil Association. The export tax on crude palm oil is aimed at ensuring the domestic requirement for cooking oil is met and to help reduce volatility in domestic cooking oil prices. (Reuters)

The move by Indonesia and Malaysia, the top two palm oil producers, to take up the industry trade dispute against the European Union (EU) will clear the name of the commodity, says Malaysian Palm Oil Council (MPOC) CEO Tan Sri Yusof Basiron. There are currently too many exaggerated figures being used to "bash" palm oil from making its mark in the European market, he said. "We have done a study and there is a case against the EU for the way it has formulated the Renewable Energy Directive and that is already against the WTO guidelines," he said. There was also a recent report stating that the EU, through its environmental ministries and commissions, is funding up to 70% of the operating budgets of environmental NGOs. Such funding implicates the EU for creating barriers to trade for agricultural products from developing countries. (BT)

The sustainability criteria in the European Union (EU) Renewable Energy Directive (RED), due to come into force on December 5, will not affect Malaysia's palm oil exports to the region. EU ambassador and head of delegation to Malaysia Vincent Piket said there will be no change for crude palm oil (CPO) imports. "The EU will not block any Malaysian CPO exports. Exports into the EU can continue just as they are today, with no new tariffs, quotas, restrictions or conditions," he said. (BT)

Shin Yang Shipping Corp is confident of strong growth for its shipping business, backed by increasing demand for the group's services and expansion to the Middle East. Growth is also expected to come from its other core activities of shipbuilding and ship repair. Shin Yang, which is seeking a listing by the middle of 3Q10, expects to expand its fleet size to 300 vessels by 2015. At present, it has 245 vessels. (BT)

Stainless steel tubes and pipes maker K Seng Seng Corporation (KSSC), which is undertaking a listing exercise, will use the funds to acquire new machinery as it seeks to expand its range of products and find new markets. According to a draft prospectus posted on the Securities Commission website, its listing exercise will involve the sale of 42.3m 50 sen shares, comprising 20.1m new shares, while the shareholders will offer 22.2m existing shares for sale. (Financial Daily)

Goodway Integrated Industries aims to boost the manufacturing capacity at its two local plants by 50% over the next three years to ramp up production to 40,000 retreaded tyres a month, said CEO Tai Boon Wee. In the near term at least, growth will likely be in double digits in terms of output at the Shah Alam plant, he said. With regard to prices of raw materials, Tai said reasonably low commodity prices worked in favour of Goodway. Moving forward, Tai said Goodway's focus would be on increasing its market presence and rebuilding its presence in China's rubber compound segment. (Financial Daily)

Talam Corp is hopeful of getting out of the Practice Note 17 (PN17) list if auditors give it a clean bill of health. The company, which has been on the PN17 list since Sept 1, 2006, has taken longer than expected to exit from the troubled companies list because of prolonged negotiations on asset disposals. It plans to dispose land and buildings to pay off its outstanding loans. Its debt restructuring exercise involves three parts - a capital reduction and a share split, the issuance of new convertible instruments to address certain defaulted debts and a proposed asset divestment programme. (Starbiz)

20100524 1405 Malaysian Economic News.

The Consumer Price Index (CPI) for April was higher by 1.5% yoy (1.3% in Mar). On a month-on-month basis, the main groups showed increases except those of clothing and footwear (-0.3%), and communication (-0.3%). For the January-April period, the CPI rose 1.3%. (Bernama) Please see our Economic Update for further details

The Cabinet is to meet this week to discuss politically unpopular changes to its subsidy regime for petrol, natural gas, food and road tolls. Subsidies alone chewed up RM24.5bn in 2009, 15.3% of the total operating spending, pushing Malaysia’s budget deficit to a more than 20-year high of 7.0% of GDP. There are three options the Government may consider: (i) complete withdrawal of subsidies in one go, (ii) a gradual approach, and (iii) just make minor changes or do nothing. (StarBiz)

Bank Negara Malaysia's international reserves amounted to RM314.2bn (US$96.1bn) as at 14 May 10, from RM313.9bn (US$96.0bn) as at end-April. The reserves position is sufficient to finance 8.3 months of retained imports and is 4.4 times the short-term external debt. (BNM)

Malaysia and Chile wrapped up talks for a free trade agreement (FTA) in Santiago last Friday, paving way for a bilateral FTA to be signed before the year-end. International Trade and Industry Ministry secretary-general Tan Sri Rahman Mamat said it will allow 99% of Chilean exports to enter Malaysia without tariffs and 95% of Malaysian imports to Chile to be tariff-free. The final announcement would be made by the government later. (BT)

The government has agreed to partially finance the maintenance cost of public housing infrastructures in the Kuala Lumpur Federal Territory. DPM Tan Sri Muhyiddin Yassin said that the cabinet made the decision because it did not want the public housing areas to fall into further disrepair. Nonetheless, the government has a plan to resolve the traffic congestion problem in Kuala Lumpur with a mammoth long-term programme; he said but declined to divulge the details. (Bernama)

The Federal Agricultural Marketing Authority (Fama) has set a target of 1,000 farmers' markets nationwide under the 10th Malaysia Plan (10MP). Its director-general, Datuk Mohamed Shariff Abdul Aziz, said there were about 500 of these markets now, involving 17,800 agro-entrepreneurs and annual sales worth RM500m. (Bernama)

The Northern Corridor Economic Region (NCER) has received investments to the tune of RM1.4bn between Jun 08 and April this year. The chief executive of the Northern Corridor Implementation Authority (NCIA), Datuk Redza Rafiq said that currently, 28 various programmes were being implemented within the four states in NCER by NCIA. (Bernama)

The Ministry of International Trade and Industry (MITI) is expected to make several announcements on the development of entrepreneurs at national level, particularly Bumiputeras, following the Entrepreneurs Development Council (MPU) meeting on 25 May. Senior Director of the Entrepreneurs Development Division, MITI, Datuk Abdul Ghafar Musa said the announcements will be made by the Minister Datuk Seri Mustapa Mohamed after the meeting. (Bernama)

The government hopes to identify more rural areas in Sarawak for inclusion in its price controlled item programme. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Sabri Ismail Yaakob said essential daily items cost more in the rural areas due to the high transportation cost, causing the government had allocated RM96m as subsidy for the transportation cost nationwide since last year and to last for the whole of this year. For next year, a permanent budget has been considered and which does not require Cabinet approval. (Bernama)

The government will ensure that the levy on foreign workers will be reasonable and will not adversely affect the industries, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said. At present, the annual levy rate for the manufacturing and construction sectors is RM1,200, plantation (RM540), agriculture (RM360), welfare home services (RM600) and other services except resorts and welfare homes (RM1,800). (Bernama)

Malaysians will have a chance to have a chance to have say in open day organized by the Government this Thursday (27 May) to gather feedback on the inevitable reduction in subsidies on items including sugar and petrol. The open day on subsidy rationalization will be held at the Kuala Lumpur Convention centre from 9am to 2pm. Recommendation from the Performance Management and Delivery Unit (Pemandu) subsidy rationalization lab will be publicly displayed during the open day. (Star)

Prime Minister, Datuk Seri Najib Tun Razak is set to unveil more measures to improve the country's standing. These include relaxing the requirements to grant PR status to former Malaysian citizens and foreign professionals to ensure a sufficient pool of skilled workers. The new initiatives will be released during the tabling of the 10th Malaysia Plan and the New Economic Model in Parliament early next month. (Star)

20100524 1401 Global Economic News.

More than half of all U.S. states posted lower unemployment rates in April, the government’s job report said. Jobless rates rose in six states in April, and 10 states reported no change. A total of 27 states posted unemployment rates below the national average of 9.9% in April, while 10 states and D.C. reported higher rates. (CNNMoney)

The US Senate on Thursday passed the most sweeping regulatory overhaul of the financial system since the New Deal. The bill, which passed 59-39, imposes more oversight and stronger capital cushions for the largest banks and Wall Street firms, while aiming to stop bailouts, shine a light on complex financial products and strengthen consumer protection. (CNNMoney)
  • The legislation would establish a consumer financial protection regulatory agency that could write new rules to protect consumers from unfair or abusive mortgages and credit cards. 
  • It would create a council of regulators that would sound an alarm before companies are in position to trigger a financial crisis.
  • The bill would also establish new procedures for shutting down giant financial firms that are collapsing.
Federal Reserve Bank of New York President William Dudley said that while the economic recovery is slower than desired he sees the start of substantial growth in employment. “The U.S. economy is recovering and we are now seeing the first signs of significant employment growth, but is still far from where we want to be.” Employers added 290,000 jobs in April, the most in four years, as the unemployment rate rose to 9.9% from 9.7% in March, according to the Labor Department. (Bloomberg)

Oil prices fell around $70 a barrel, as investors remained wary that Europe's debt crisis and growing oil stockpiles will cut demand for fuel. Crude for July delivery, which becomes the active contract Friday, slipped 76 cents, or 1.07%, to settle at $70.04 a barrel? The day before, the June futures contract settled at $68.01 when it expired. (CNNMoney)

European Union finance ministers pledged to stiffen sanctions on high-deficit countries and ruled out setting up a mechanism to manage state defaults, saying no euro country will be allowed to renege on its debts. The ministers vowed to plug holes in the euro region’s system of penalties for countries with runaway deficits. “We will provide new sanctions, more than is now provided,” EU President Herman Van Rompuy said after the four- hour brainstorming session in Brussels on 21 May. (Bloomberg)

Bank Indonesia Acting Governor Darmin Nasution is the “strongest” pick to fill the job permanently, a presidential aide said, an appointment that may bring an end to a one-year impasse over the central bank’s leadership. Nasution was head of the nation’s tax office before becoming senior deputy governor and acting chief last year. An appointment would plug a vital gap in the country’s top economic leadership, after Yudhoyono named Agus Martowardojo as Indonesia’s finance minister last week. (Bloomberg)

Growth in Europe’s services and manufacturing industries slowed more than economists forecast in May, suggesting the euro-region economy may struggle to gather strength as a fiscal crisis hurts confidence. A composite index based on a survey of euroarea purchasing managers in both industries fell to 56.2 in May (57.3 in Apr) in an initial estimate today. Economists forecast a drop to 57.2, the median in a survey showed. (Bloomberg)

The Bank of Japan (BOJ) decided Friday to hold its key interest rate unchanged at 0.1% as widely expected. (Xinhua)

Thai authorities launched a massive clean-up operation in Bangkok's charred commercial district yesterday as the city prepared for the resumption of business after the worst riots in modern history. Financial markets, government offices and schools are scheduled to reopen today. (FinancialDaily)