Wednesday, May 26, 2010

20100526 1806 FCPO EOD Daily Chart Study.

FCPO closed : 2452, changed : +16 points, volume : lower.
Bollinger band reading : side way downside biased.
MACD Histrogram : reversed higher, seller still in.
Support : 2450, 2400, 2370 level.
Resistant : 2470, 2500, 2521 level.
Comment :
FCPO traded higher on recovering crude oil and soy oil futures prices in lower volume transacted. Daily chart reading still suggesting a downside biased market development.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant/strength/breakdown with quick cut loss and profit target.

20100526 1722 FKLI EOD Daily Chart Study.

FKLI closed : 1253, changed : +12 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : continue lower, seller still in control.
Support : 1250, 1240, 1232 level.
Resistant : 1260, 1265, 1270 level.
Comment :
Partly recovered FKLI ended the day higher with sustaining volume traded to have a market correction after past few days of selldown activities in tandem with major regional market. Daily chart wise today doji bar candle positioned at the upper part of yesterday down bar candle body formed a classic harami candlestick pattern within a downside biased market with upward correction taking place.
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.

20100526 1301 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1257, changed : +16 points, volume : high.
Bollinger band reading : side way correction downside biased.
MACD Histrogram : rising higher, seller taking profit.
Support : 1250, 1240, 1232, 1220 level.
Resistant : 1260, 1265, 1270 level.
Comment :
Finally, pullback correction took place today in FKLI that traded higher after yesterday panic selldown in unison with major regional recovering market. However, the hourly chart reading still showing a correction taking place side way range bound downside biased market.

201000526 1254 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2474, changed : +38 points, volume : low.
Bollinger band reading : side way little downside biased.
MACD Histrogram : recovering, seller reducing position.
Support : 2470, 2450, 2400 level.
Resistant : 2500, 2521, 2550  level.
Comment :
Recovery on crude oil and soy oil futures price after market sell down yesterday lead FCPO to end the first session on higher ground recovered most of yesterday losses in lesse volume traded. Hourly chart reading shows a pullback correction market taking place after yesterday panic selling closing within a little downside biased market.

20100526 1134 Malaysia Corporate News.

The Malaysian Anti-Corruption Commission (MACC) has initiated investigations into the massive losses suffered by Sime Darby. Investigations will start with a probe focusing on the internal inquiry being carried out by the conglomerate. The company's internal investigation, believed to have started eight months ago, is to determine the real extent of the losses in its energy and utilities division and whether they were anything beyond just making bad investment calls. There may also be probes into other divisions and projects. MACC investigations director Mustafar Ali confirmed that the commission had started investigations. "We will indentify areas that have elements of corruption, misappropriation and abuse of power. Like all cases, we'll deal with this one with urgency, not only because this probably involves billions of ringgit but also the interests of the people, Separately, Sime Darby is also expected to disclose tomorrow the findings of the task force set up to investigate its energy and utilities division. (NST)
This is negative for Sime as the on-going investigations by external parties may affect staff morale and result in further short-term uncertainties in the group's prospects. On a more positive front, the investigations could help shed some light on the massive losses recently discovered at the energy and utilities division.

The Securities Commission (SC) is studying the developments at Sime Darby, which is carrying out a probe after cost overruns of almost RM1bn for this year alone. "We are assessing the developments at Sime Darby. At this stage, the SC prefers not to comment any further," an SC spokesperson said. (BT)

Kencana Petroleum has been awarded a US$15.5m contract by Larsen & Toubro to construct jackets for offshore platforms to be located in India. This one-off contract is expected to run from 1Q-2Q11. (BMSB)

Tenaga (TNB) plans to bid for two or three power generation projects in the Middle East and South Africa, together with local and foreign partners. It has to bid as a group to minimise risk, among others, because each project is worth more than US$2bn (RM6.7bn). CFO Mohamed Rafique Merican Mohd Wahiduddin said TNB is looking at several projects currently and it has submitted pre-qualification bids for some. (BT)

Sarawak Energy (SEB) is exploring the potential for long-term transmission of hydropower from Sarawak to Peninsula Malaysia. Besides Bakun, other sources with a combined capacity of 20,000MW can also be tapped. “SEB needs to establish the right pricing for hydropower which should be more competitive than coal-fired plants,” an industry source said, adding that SEB’s plans would be more relevant post-2017. When contacted, Tenaga’s CEO Datuk Seri Che Khalib said, “If it makes financial and technical sense, we will consider it. However, there is no concrete proposal for us at this juncture to look into.” (Starbiz)

Exports of Indonesia's crude palm oil and its derivative products increased slightly in the first four months to 4.65m tons, Indonesia Palm Oil Producers Association (Gapki) reported. Director Executive of Gapki, Fadhil Hasan said the demand of the commodity from Indonesia keeps rising despite domestic green campaign against the CPO consumption. "India has been the main destination country for Indonesia's CPO exports so far," he said. The European Union has said that it will continue purchasing CPO from Indonesia, ignoring environmental concern from the public. The director said that the shipments during the first four months comprised 2.5m tons of CPO and 2.15m tons of its derivative products. (Xinhua)

Palm oil should not be singled out for sustainability compliance unless other competing oils are practising the same; delegates to the International Palm Oil Sustainability Conference 2010 were told. Extensive scientific studies should be carried out to determine the true situation, said the Malaysian Palm Oil Council (MPOC) CEO Tan Sri Dr Yusof Basiron, obviously referring to the misinformation circulated on palm oil by Western Green Non-Governmental Organisations (WEGNGOs). Lamenting that other competing edible vegetable oils, like soyoil, rapeseed and canola, were not subjected to similar requirements, he said Malaysia should therefore commission more scientific studies. Dr Yusof said if legislation was passed in the European Union and Australia, on the basis of non-scientific evidence, this would be discriminatory to trade and unnecessarily drive oil palm farmers to poverty in Indonesia and Malaysia. (Bernama)

The Roundtable on Sustainable Palm Oil (RSPO), in a move to segregate functions, will soon contract Accreditation Services International (ASI) of Germany as an accreditation agency to take over the functions of awarding certification for sustainable crude palm oil, its Secretary-General Dr Vengeta Rao said. He said "there has to be separation of powers" as the RSPO cannot be "writing and policing" the accreditation process. He said a pilot project would be carried out soon and within one-and-a-half years from now, this would become a reality. (Bernama)

It would be a healthy year for the construction industry with support expected in the next two quarters from projects awarded under the RM60bn second stimulus package, Master Builders Association Malaysia (MBAM) said. Among projects under the country's stimulus packages include the RM2bn new low-cost carrier terminal (LCCT) and the RM3bn LRT extension (two lines) in the Klang Valley. "After that, we will see how the 10MP (is working) as the effects will be seen by year end and next year," president Ng Kee Leen said. The construction sector saw a growth of 8.5% in 1Q 2010. (Bernama)

Thailand, Indonesia and Malaysia, the world’s top three rubber producers, want to set up a cash market for the commodity that would make pricing more transparent and stable, industry officials said on Tuesday. A regional rubber market might also reduce the influence on physical prices of futures markets such as the Tokyo Commodity Exchange (TOCOM), said Abdul Rasip Latiff, chief executive officer of the International Rubber Consortium (IRCo). “The concept has been agreed upon and a special committee of experts has been established to study the feasibility of this concept in greater detail,” Latiff said. (Reuters)

Supermax Corp aims to increase revenue from the Asian market to 10% next year from the current 6% as it has identified the region as the new growth area. Its executive chairman and group managing director, Datuk Seri Stanley Thai Kim Sim, said the rising income level, fuelled by economic growth, would lead to the increase in health spending following the increase in awareness. "We are tapping Asia's emerging market economies for our future growth. We will see significant growth in the future if, for example, China decides to have healthcare reforms like in the US," he said. (Bernama)

Edaran Tan Chong Motor (ETCM) will continue with efforts to explore opportunities for regional expansion. Executive Director Datuk Dr Ang Bon Beng also said ETCM is still an auto company at heart but is extending its reach to new product segments and markets regionally. Locally, he said, the company will introduce at least one completely knocked down (CKD) model annually, particularly in segments it was not represented, over the next three years. "Overseas, our Indo-China strategy is slowly taking shape with exclusive distribution rights in Cambodia and Laos, as well as a full manufacturing, distribution and after sales investment certificate in Vietnam. Our total investment is US$25m in total,” he disclosed. (BT)

Ann Joo Resources is bullish on the outlook for this and next year, thanks to the massive pump-priming activities worldwide with the bulk of the funds being channelled towards infrastructure sector. Its group executive chairman, Datuk Lim Kiam Lam, said the tight supply of construction steel and the demand-pull price upswing were expected in the medium term. "The demand is expected to pick up in 2H10. However, in the immediate term a lot of correction is expected as the economies are still in early stage of recovery," he said. Going forward, he said, the company planned to acquire companies to provide synergy to the group, especially in terms of efficiency. "Our main focus in within the Asean market. Talks are at a preliminary stage," he said. (Bernama)

PT Semen Gresik is considering to buy cement plants in Malaysia, the Philippines and Thailand, President Director Dwi Soetjipto told reporters in Jakarta today. The company may spend 3 trillion rupiah on acquisitions this year, Soetjipto said. (Bloomberg)

Johor Corp’s (JCorp) CEO Tan Sri Muhammad Ali Hashim said several companies including Sime Darby and Malton are interested in the redevelopment of Pusat Bandar Damansara in Kuala Lumpur. “But who gets it depends on who gives the best price," he said, noting that no decision has been made. "It is obvious that something needs to be done on the property and unlock its true value," Muhammad Ali said. (BT)

KUB Malaysia plans to buy 12 floors of commercial and retail office space at Oasis Ara Damansara for RM39.1m from Sime Darby’s units. KUB will use this office space to house its new corporate headquarters. (BT)

Malaysia Airports Holdings (MAHB) is still looking at various options for its funding requirements including via any ringgit and US dollar debt fund-raising exercises. This reply was in response to recent press reports suggesting that MAHB would issue RM2.5bn bonds for the construction of the country's second low-cost carrier airport and to refinance existing debts. (Bernama)

Singapore's CapitaMalls Asia is keen to expand in Malaysia and plans to have a property trust in the future are still on the drawing board. CapitaMalls, a unit of property developer CapitaLand, views Malaysia as a key market in the region and it could develop new properties or buy existing ones, said its head for Malaysia Sharon Lim. When asked about plans to develop a mall in I-City owned by I-Berhad as previously reported, Lim said "we have spoken to them. But we are not ready to announce anything." As for plans to set up a real estate investment trust in Malaysia, it is still an option. "It is our stated strategy that ultimately, the aim is to list in the market where we operate in," she added. (BT)

It is the second time in three years that a substantial stake in Magna Prima has changed hands, after Tan Sri Chua Hock Chin's exit from the company in 2007. Filings to the stock exchange show that Tan San Li and Wong Bin Chen have ceased to be substantial shareholders after selling their entire stakes in Fantastic Realty, which owns 15.41% of Magna Prima and more than half of its warrants. The duo were replaced by Lee Ban Chuan and Lee Hing Lee. (BT)

Eng Teknologi Holdings will continue to expand its capacity regionally to cope with the strong Hard Disk Drive (HDD) demand. "Mobile 2.5" drive components will be our key focus of growth in our new capital investment," CEO Datuk Teh Yong Khoon said. He said the group was also making efforts to expand its range of products to cover a more balanced product portfolio mix. (Bernama)

CCM Duopharma Biotech (CCMD) is confident of achieving more than 10% growth in its international sales this year. But its CEO Leonard Ariff Abd Shatar is concerned over certain challenges with the ringgit having appreciated quite substantially since last year. Leonard said the company was also looking into the Australian market this year and was already in talks with one party. He said CCMD would continue to focus on the Middle East and Northern Africa markets. (Bernama)

20100526 1128 Malaysian Economic News.

It would be a healthy year for the construction industry with support expected in the next two quarters from projects awarded under the RM60bn second stimulus package, Master Builders Association Malaysia (MBAM) said. "After that, we will see how the 10th Malaysia Plan (is working) as the effects will be seen by year end and next year," its President Datuk Ng Kee Leen added. (Bernama)

Tourist arrivals increased 5.0% yoy to 5.75m in Jan-Mar this year compared with 5.46m in the same period last year. Tourism Ministry secretary-general Datuk Dr Ong Hong Peng said that the Influenza A (H1N1) disease did not have any effect on tourist arrivals. The ministry is expecting 24.0m tourist arrivals for this year with a targeted revenue of RM56.0- 57.0bn (23.65m and RM53.4bn in 2009). (The Star)

The Government will look into ways to get more bumiputra entrepreneurs to graduate from traditional businesses to a more “advanced” manufacturing sector. International Trade and Industry Minister Datuk Seri Mustapa Mohamed said only 3% of bumiputra enterprenuers had companies with turnover exceeding RM25m a year, who are mostly operated in Terengganu and Kelantan. (The Star)

Three medical device multi-national corporations (MNCs) are planning to set up manufacturing facilities in Penang, lending further credibility to the state’s growth as a medical device hub. One of the three incoming MNCs, Accellent Inc, is looking to invest over RM300m in manufacturing facility at the Bukit Minyak Science Park (BMSP). The other two MNCs are from US and Germany. The Association of Malaysian Medical Industries (AMMI) said the medical devices industry in the country should register double digit growth this year. (StarBiz)

This year’s International Halal Showcase (Mihas 2010) is expected to see more sales and deals as a result of the improving economy, said Datuk Mohamad Kamarudin Hassan, deputy chief executive officer of Matrade. Last year, Mihas generated total sales of RM3.23bn. (Malaysian Reserve)

The “ultimate” government service is for it to be accessible and mobile so the public can get things done in the simplest and shortest manner. “It is incredible how the use of IT can improve services, including that provided by the Government, and boost productivity,” Chief Secretary to the Government Tan Sri Sidek Hassan said. He added that US$9.5bn (RM29.5bn) had been allocated by Microsoft this year for research and development. (The Star)

20100526 1126 Global Economic News.

The Federal Reserve doesn’t intend to sell any of its assets, including more than US$1.1trn in mortgage-backed securities, until after it begins raising interest rates, the central bank said in a report to Congress. “The Federal Reserve currently does not anticipate that it will sell any of its securities holding in the near term, at least until after policy tightening has gotten under way and the economy is clearly in a sustainable recovery,” the Fed in its annual report, which was posted on its Website. (Bloomberg)

US home prices fell in the first quarter of 2010 but are still higher than they were a year ago. According to the S&P/Case-Shiller nation-wide index, home prices fell 3.2% qoq in 1Q but have still managed to climb 2% yoy. The index continued to show weakness despite very low mortgage interest rates and tax incentives to encourage home purchases. Two other indexes tracked by Case-Shiller registered declines for the month of March, 0.5% for its index of 20 major cities and 0.4% for the 10-city index. (CNNMoney)

U.S. consumers are much less pessimistic, rising by 6.6pts to 63.3 in May (57.7 in Apr), according to the Conference Board's measure of consumer confidence index. Market had expected a reading of 59. The assessment of the jobs market has improved for a third month with 43.6% describing jobs as currently hard to get (47.3% in Feb). 20.4% of total respondents see more jobs six months from now (17.7% in Apr) and fewer see fewer jobs ahead, at 17.7% (19.9% in Apr).
  • The Conference Board’s measure of present conditions increased to 30.2 this month, the highest level since December 2008. 
  • The gauge of expectations for the next six months surged to 85.3, the highest point since August 2007, four months before the recession began. (Bloomberg)
The Federal Reserve will probably transfer record earnings exceeding US$70bn to the US Treasury Department this year (US$47.4bn in 2009, US$15.7bn higher than in 2008) on income from assets including mortgage-backed securities, according to the Congressional Budget Office. “The Federal Reserve’s actions to stabilize the financial markets are likely to significantly increase the amount of its remittances over the next few years,” the CBO said. The CBO report estimated that the value of subsidies from the Fed’s aid during the financial crisis was US$21bn. The biggest subsidies occurred through the Term Asset- Backed Securities Loan Facility, or TALF, where subsidies totaled US$13.0bn. (Bloomberg)

The German Finance Ministry proposes to ban the so-called naked short selling of all shares of German companies listed on German exchanges, as well as naked short sales of euro region bonds admitted for trading on German exchanges. The proposed law would also ban naked sales of some credit default swaps on euro region bonds. The discussion paper also aims to ban certain euro currency derivatives. (Bloomberg)

The U.K. economy grew more than previously estimated, with real GDP growth of 0.3% qoq in 1Q10 (0.2% previously estimate) as rebounding investment and the biggest jump in manufacturing for four years strengthened the recovery. That matched the median forecast. Manufacturing surged 1.2%, the most since the first quarter of 2006. (Bloomberg)

European industrial orders jumped 5.2% in March (1.9% in Feb), the most in almost three years, led by surging demand for capital goods such as machinery. That’s the biggest gain since June 2007. Economists forecast an increase of 2.5%. March’s industrial orders rose 20% yoy. (Bloomberg)

Bank of Korea board members voted unanimously to keep the benchmark interest rate unchanged at 2.0% in April, even as one urged a pre-emptive increase in borrowing costs and two wanted to signal the policy stance may change. The central bank will maintain its “easy policy,” it said in minutes of the April 9 meeting released yesterday. The bank also kept the rate at a record-low 2% at its latest meeting on May 12. (Bloomberg)

A Thai court issued orders on Tuesday, May 25 to arrest former Prime Minister Thaksin Shinawatra on terrorism charges in connection with riots over the past two months that were the worst in the country's modern history. Armed with the arrest warrant, Thai prosecutors and the Foreign Ministry will launch a global hunt for the fugitive telecoms tycoon, a top government official said. Thaksin was last believed to be in France, but he keeps his location secret.
  • "The court said there was enough evidence to believe that Thaksin was the mastermind, having played a significant role in instructing and manipulating the incidents," Department of Special Investigations chief Tharit Pengdit said, referring to the riots. 
  • Government officials say Thaksin funded the 10-week, anti-government protests to the tune of about US$1.5m a day and is believed to have organised the smuggling of arms and fighters from Cambodia. (TheEdge)
The Philippine economy probably expanded at the fastest pace in more than a year last quarter as remittances boosted consumer spending and exports surged, reducing the need for record-low interest rates. Gross domestic product increased 4.4% yoy in 1Q10 (+1.8% in 4Q09), according to the median forecast surveyed. The government will release the report at 10 a.m. tomorrow in Manila. (Bloomberg)

South Korea's sentiment index advanced to 111 in May (110 in Apr) as the nation’s economy strengthened. This was the first increase since Oct 09 when it reached a sevenyear high of 117. A number exceeding 100 indicates optimists outnumber pessimists. (Bloomberg)

Singapore’s visitor arrivals surged 20.4% yoy to 938,000 in April as a recovery in the global economy encouraged travel and the island’s two casino-resorts attracted tourists to their roulette tables, shops and hotels. The arrivals were the highest ever for April, and followed four months of record gains. Singapore aims to lure 17m visitors and reach annual tourism revenue of S$30bn by 2015, helped by casino resorts run by Las Vegas Sands Corp. and Genting Singapore Plc. The island may get as many as 12.5m visitors this year and tourism receipts may reach as much as S$18.5bn, Senior Minister of State for Trade and Industry S. Iswaran said. (Bloomberg)

Vietnam’s trade deficit narrowed 35.0% mom to US$750.0m in May (US$1.2bn in Apr) as exports rebounded from US$5.3bn to US$6.1bn in May, buoyed by a reviving global economy and a weaker currency. That brings the deficit for the year to US$5.4bn, more than four times the shortfall of US$1.1bn for the same period in 2009. For the first five months of 2010, exports increased 12.6% yoy to US$25.8bn. (Bloomberg)