Thursday, May 27, 2010

20100527 1249 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1264.5, changed : +11.5 points, volume : high.
Bollinger band reading : upside biased.
MACD Histrogram : continue higher, short covering with buyer taking small exposure.
Support : 1250, 1250, 1240, level.
Resistant : 1265, 1270, 1274 level.
Comment :
FKLI continue to trade firmer with ultra high volume changed hand having a technical rebound correction. Hourly chart reading has turned into a upside biased potential market testing upper resistant level.

201000527 1240 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2470, changed : +18 points, volume : low.
Bollinger band reading : side way downside biased.
MACD Histrogram : recovering, not much action from both buyer and seller.
Support : 2450, 2400, 2370 level.
Resistant : 2470, 2500, 2521 level.
Comment :
Holiday mood FCPO traded higher in ultra low volume ahead of long weekend holiday and rebound on crude oil and soy oil futures price. Hourly chart continue with it side way range bound downside biased market reading.

20100527 1110 Malaysia Corporate News.

Genting Malaysia announced that its earlier call option to acquire a 10% stake in related party entity, Walker Digital Lottery, has lapsed and the group did not exercise the option. (BMSB)
This latest development is positive and should clear earlier concerns of potentially another Walker Digital related-party transaction within the group. To recap, Genting Malaysia had, in Nov-08, acquired a 10% stake in Walker Digital Gaming from KHD, an entity owned by its chairman's family trust company.

Petra Perdana and its MD Shamsul Saad have requisitioned for an EGM to remove Tengku Dato’ Ibrahim Petra, Suhaimi Badrul Jamil and Lee Mee Jiong as directors of Petra Energy. Also, Petra Perdana and Shamsul are seeking the appointments of Francis Koh and Surya Hidayat Abdul Malik as directors of Petra Energy. The EGM is scheduled to take place on 24 June.
  • “It is nothing personal against Tengku Ibrahim or anyone. We’re just acting for the business benefits of both Petra Perdana and Petra Energy,” said MD Shamsul Saad, adding that Petra Perdana wanted to re-establish the synergy of business alliance for both companies. He is looking at the positive growth of the synergy between the two companies. 
  • Meanwhile, Tengku Ibrahim said he had always acted in the best interest of both Petra Perdana and Petra Energy and as such he questioned the true motives behind the requisition for the EGM. “I believe this attempt to remove me may be linked to the recent legal suit filed against Koh, amongst others, and interested parties to the suit may be seeking to influence its progress through the Petra Energy board,” he said. (BMSB, Star)
Malaysia ranks a lowly 102nd out of 152 countries in terms of its average download speed, according to analyses by leading internet speed testing website Malaysia ranks behind 101st placed St Kitts and Nevis (1.89 Mbps), Albania (100th, 1.91 Mbps) and Mozambique (99th).
  • Critics have long complained, however, that the lack of competition has hampered the nation’s broadband development. Incumbent broadband service provider, Telekom Malaysia, launched its high speed broadband service, UniFi, in March. 
  • Random tests done by The Malaysian Insider, which subscribes to the 20 Mbps UniFi package, on showed download speeds ranging from as high as 67.86 Mbps for servers located in Singapore to as low as 0.93 Mbps for servers located in San Francisco, US.Other server locations tested by The Malaysian Insider include London (8.16 Mbps); Hong Kong (3.15 Mbps); Reston, Virginia, US (5.07 Mbps); and Balikpapan, Indonesia (1.89 Mbps). (The Malaysian Insider)
Mobile banking which allows one to perform everyday transactions like transfer money, pay bills via mobile phones - has yet to take off in a big way. "Today, the market is fragmented, where everybody is talking about their own solution. We should talk about an industry effort to provide a common infrastructure for payment. The banks already got it through the likes of MEPS.
  • But, from the operators' perspective, we don't have yet. Everyone is still very individual in their approach ... I believe the industry will consolidate, it will happen, but it will take some time," said Maxis head of product development and infotainment services T. Kugan. Celcom Axiata Bhd head of mobile commerce Areehan Abdullah, said, "When it comes to customer experience, banks have their own mobile banking and Maxis, DiGi and Celcom have their own mobile banking. 
  • MEPS, which sits in the middle, has its own mobile banking. So, if you count all the financial institutions that we have, as well as the mobile operators in the country, we could have 14 different types of mobile banking," he said.He said Bank Negara Malaysia is now spearheading an initiative to promote customers from any phones, any network, can perform mobile banking to any bank. "It has moved forward from a conceptual stage, and now everyone, the telcos, the banks and MEPS, are ganging up together to make this happen," said Areehan. (BT)
Asiaspace says Telekom Malaysia's backhaul charges are expensive and as such it is forced to build its own microwave facilities. "We are replacing all our metro-E link of backhaul with microwave link, which is much more cheaper and serves the same purpose, so why should we pay more to TM?" Asiaspace chairman Datuk Abdul Ghani Abdullah. It is spending RM30m for the backhaul facilities and the vendor is Huawei.
  • It has so far spent RM90m for its network build-up. Ghani had in March written to the Information, Communicatins and Culture Minister to complain about TM's backhaul rates. In April he wrote to the Government, urging it to be forceful in ensuring that the incumbent reduce the cost of backhaul charges to facilitate growth of broadband in the country. 
  • On May 20, the industry regulator reminded players that access needs to be provided on reasonable terms and they should work towards concluding access agreements and not delay them any further. TM, in response, said, "As in all commercial arrangements with other service providers, the price was negotiated and agreed by both parties. 
  • As the backhaul service provider, TM fulfilled its obligation as set out in the agreement. Unfortunately, Asiaspace failed to honour its obligation on payment to payment to TM." (StarBiz)
Celcom Axiata has introduced the first real-time online payment update application in the telecommunications and banking industries, following a tie-up with CIMB Clicks. Previously, Celcom customers had to make payment over the counter or via the payment kiosk at a Celcom branch or Blue Cube outlet in order to receive immediate billing updates. (Bernama)

The Selangor Islamic Religious Department (Jais) is asked to state its stand on the government's decision to allow football betting. "I am surprised why Jais has kept mum although this is a clear-cut, non-negotiable issue," Shah Alam MP Khalid Samad from PAS said. He said he was seeking an audience with the Sultan of Selangor, Sultan Sharafuddin Idris Shah to ask for the ruler's consent to bring the issue of legalised football betting to the Conference of Rulers, scheduled to meet next month. (Bernama)

Becoming a major shareholder in Cardiff City Football Club is part of Berjaya Corp chairman Tan Sri Vincent Tan's plans to expand Cosway to Europe. He had flown to London last Saturday to watch Cardiff City take on Blackpool in the Championship play-off final.
  • Tan revealed that the jerseys of the Cardiff players will carry the name of Cosway and this will see the brand, which markets household, beauty, healthcare and other consumer products, get more exposure via television telecast, media coverage and matches at stadiums. 
  • At a board meeting in Cardiff City, Tan's business partner, Datuk Chan Tien Ghee, is set to be named as chairman of Cardiff City FC. Tan and Chan bought a 36.7% stake at STG6m (RM29m), giving them the controlling shares in Cardiff City FC. (BT)
Neste Oil's 800,000 mt/year NExBTL renewable diesel plant in Singapore is 90% complete and commercial start-up is targeted for the fourth quarter of 2010, a senior company official said.
  • "With the construction of our NExBTL renewable diesel plant in Singapore into its final stages, we are the world's leading provider of renewable diesel," Matti Lievonen, Neste's president and CEO said. 
  • The Eur550m Singapore plant will be Neste's third renewable diesel plant. It currently operates two 190,000 mt/year plants in Porvoo in Finland.
  • The company is building another 800,000 mt/year plant in Rotterdam, which is scheduled for startup around the middle of 2011. 
  • The Singapore plant will primarily be using palm oil as a feedstock, but has the flexibility to use other feedstocks such as jatropha oil and animal fats.
  • Neste has already sourced feedstock for the plant and has gotten into sales agreements for its output. The renewable diesel produced here will be shipped to Europe and North America, Lievonen said. (Platts)
Proton Holdings has officially confirmed talks with Volkswagen and the outcome would be revealed in two weeks time, its chairman Datuk Nadzmi Mohd Salleh said. He, however, declined to provide further information on the matter. According to group MD, Datuk Syed Zainal Abidin Syed Mohamed Tahir, Proton is expected to introduce a new model either in Oct/Nov this year. (Bernama)

Naza Kia, distributor of Kia vehicles in Malaysia, aims to sell 300 units of the limited edition higher-specification Citra II Rondo. The Rondo features 13 new aesthetic and practical enhancements that add a sporty and premium touch to the popular versatile CUV. However, Naza Kia will offer these higher specifications for only 300 units for a limited period. (Bernama)

The government has deferred the ban on 14-stick cigarette packets which was supposed to take effect on June 1, said sources. It is learnt that the decision was made during the Cabinet meeting yesterday. However, it is not known if a new deadline has been set. (Financial Daily)

AirAsia is giving away 10,000 free seats to Bangkok as part of its efforts to help revive the Thai capital’s travel and tourism industry. The promotion will be launched on Wesak Day on May 28, for travel between June 7 and Aug 31. Chief executive Tony Fernandes said AirAsia would aggressively market Bangkok as well as its other Thai destinations with low fares and attractive promotions. Besides free seats, 50 hotels in Bangkok were offering a free night stay with minimum of two nights’ stay and a half day free city tour. (Star)

Media Prima has implemented a state-of-the-art broadcast management application using Accenture's Integrated Broadcast System (IBS), replacing its legacy broadcast management system. Media Prima said it has streamlined and simplified its broadcast management process to achieve better time to market, higher productivity and efficiencies in its core broadcast operations. (Bernama)

IGB Corp is looking to aggressively expand its hospitality brand locally and abroad, this year. Group MD Robert Tan Chung Meng also said the group has changed its focus from property development to property investment, due to the strong recurring income. "We are reviewing several proposals and are in discussions for possible hotel projects in countries such as Japan, China, as well as the Indochina market," he said. (Bernama)

MTD Capital has signed a contract to build and operate the Yangshuo-Luzhai Expressway project in China’s Guangxi Zhuang Autonomous Region. The total project investment is expected to be RM1.8bn. (Bloomberg, BT)

Mamee-Double Decker will invest RM20m to plant oil palms in Central Kalimantan at the end of the year. It is part of the company's strategies to diversify its revenue base and produce enough palm oil for its own use in the future, says MD Datuk Pang Tee Chew. The investment will be split into three phases involving 10,000ha secondary land. Central Kalimantan in Indonesia was chosen because it is sparsely populated.
  • On its products, Mamee has added two more products to its range: Mister Rice Crisps and Indonesia Instant Fried Noodle. The former is free of monosodium glutamate. The latter, made in Indonesia through contract manufacturing, is aimed at meeting growing demand, especially from the younger generation and Indonesians. (BT)
Far East Holdings has signed an initial pact with Rangkaian Delima Sdn Bhd (RDSB) to develop 2,145ha of land in Tebu Hitam, Rompin, Pahang, into an oil palm plantation. The Pahang state government has transferred 72% of the land to RDSB and the rest has yet to be approved, Far East said in a statement to Bursa Malaysia. Far East and RDSB will form a 70:30 joint-venture company, which will lease the land from RDSB. (BT)

Bintai Kinden Corp’s Vietnamese unit has won a US$32.4m (RM105m) contract to do mechanical, electrical and plumbing works for the proposed Indochina Plaza project in Hanoi, Vietnam. Work will take 16 months and is due for completion in 2011. (BT)

20100527 1101 Malaysian Economic News.

The government will delay plans to cut state subsidies to allay inflation fears and allow more time for public feedback, Minister for Domestic Trade and Consumerism Ismail Datuk Sabri Yaakob said. The government may now phase out subsidies on essential items, from flour to highway tolls, “gradually” within 3-5 years. The government does not plan to implement the subsidy rationalization plan anytime soon or from 1 Jun 10,” Ismail Sabri added. (BT)

Based on the Performance Management & Delivery Unit (Pemandu) Subsidy Rationalisation Lab’s recommendations, the government will continue to provide affordable social services and protect the hardcore poor and vulnerable groups. One way of making subsidies work is to manage the transition and to provide assistance to cushion the impact like stablisation fund and subsistence allowance. If this can happen, 9% or RM2.9bn can be potentially rationalized, or saved from subsidy expenditure this year.
  • Studies done shows that the planned subsidy removal will trigger inflation by 4.0-4.5% next year before moderating to 2.9%. 
  • Subsidy savings should be invested or spent, otherwise GDP growth will decline from 5.4% to 5.2% between 2010 and 2015. 
  • Subsidy cuts will focus on the big ticket items: fuel, gas, electricity and tolls; but subsidies will continue in education, agriculture and fisheries, and healthcare. (The Sun)
The Federation of Malaysian Consumers Associations (FOMCA) has called on the government to systematically dismantle the various subsidies as they are a huge "waste" and not benefiting the target groups. Its secretary-general, Muhammad Shaani Abdullah, said besides removing the subsidies, the government should also ensure that development funds were properly and effectively utilised. (Bernama)

The government has delayed making a decision on the size and timing of its first sale of Islamic bonds in eight years due to unstable market conditions, said two people with direct knowledge of the plan. The decision won’t be made this week because of swings in emerging-market assets. (Bloomberg)

US-based MEMC Electronic Materials Corp will invest RM710m to set up a solar wafer plant at Sama Jaya Free Industrial Zone here, said Deputy Chief Minister, Tan Sri Dr George Chan Hong Nam. The plant is expected to commence operation by 2011 to cater to the rapid growth and demand of solar cells globally. It will generate about 4,000 jobs. (Bernama)

Sarawak has secured 48 projects with investments totalling RM2.86bn in the manufacturing sector for the first five months of this year, said Deputy Chief Minister Tan Sri Dr George Chan Hong Nam. 17 projects with investment of RM2.79bn were supported for Ministry of International Trade and Industry approval while another 31 projects, totalling RM68m, were approved by the State Industrial Coordination Committee.
  • These investments are predominantly in four main industries -- food manufacturing products (RM1.62bn), electronic and electrical appliances (RM710m), basic metal products (RM369m) and transport equipment products (RM82m). 
  • The total investment, RM2.2bn (77%) were foreign direct investments, while RM650m (23%) were domestic investments. (Bernama)

20100527 1058 Global Economic News.

US housing demand in May appears to have collapsed, the result of second-round stimulus which pulled sales into March and April. The Mortgage Bankers Association's purchase index fell another 3.3% in the May 21 week to sit at deeper 13-year lows (-27.1% in Apr). More and more homeowners are refinancing their existing mortgages to lock in the low rates as the refinancing index jumped 17.0% (14.5% in Apr). The average 30-year mortgage fell 3bp to 4.80%. (Bloomberg)

US durable goods orders surged 2.9% mom in April (-1.3% in Mar), beating market consensus for a 1.5% rise. Excluding the transportation component, new durables orders slipped 1.0% after a 4.8% spike in March. The jump in the headline number was led by huge 16.1% boost in the transportation component (-13.1% in Mar). (Bloomberg)

US new home sales surged 14.8% to a 504,000 annual rate in April (411 units in Mar), coming in above market expectations for only 425,000. The surge made for the biggest drop ever in supply, down 7.0% for the lowest level, at 211,000, in nearly 42 years. Supply at the current sales rate fell to 5.0 months vs. 6.2 months in March.
  • April's end to second-round stimulus was supposed to have depressed new home sales which are measured by contract signings, not by actual closings which had to make the April 30 deadline to qualify for tax credits. (Bloomberg)
US oil inventories rose for the 16th time in 17 weeks, up 2.4m barrels in the May 21 week to 365.1m, according the Energy Information Administrative (EIA) report. Refineries eased up on production, making for small draws in both gasoline and distillate stocks. Strong demand for distillates, up 15.8% yoy, indicates strong shipping and industrial demand. Gasoline demand eased to 1.2%. (Bloomberg)

The Organization for Economic Cooperation and Development (OECD) raised its growth forecasts for this year and next year as emerging economies outpace debtburdened developed countries to drive the global expansion. The economy of the OECD’s 30 members will grow 2.7% this year, more than the 1.9% predicted in November.
  • The global economy will expand 4.6% this year and 4.5% in 2011. While the economies of China and India risk overheating, indebtedness may threaten expansion in the developed world. 
  • The US economy will grow 3.2% in 2010 and next year instead of the 2.5% predicted in November. The Eurozone will advance 1.2% (0.9% previously) and Japan’s economy will expand 3% this year (1.8% previously).
  • China will expand more than 11% this year, India (8.3%) and Brazil (6.5%). While India will grow 8.5% next year, China and Brazil’s expansion will slow to 9.7% and 5% respectively as monetary policy is tightened to prevent asset bubbles and to keep inflation in check. (Bloomberg)
China is “worried about” the effect Europe’s debt crisis and the weak euro will have on the global economic recovery and its own exports, and will consider the currency’s movements when evaluating the yuan’s level, said Chinese diplomat He Yafei.
  • “The euro’s fluctuation will have an impact on China’s thinking, but it’s only one element” in any decision to allow the yuan to appreciate", he said. “It has to be reviewed in the context of China’s growth. We cannot afford to see China’s economy slowing down because of a move on the currency front.” (Bloomberg)
Nobel Prize winning economist Robert Mundell said debt restructuring may be “inevitable” in parts of the euro area and Steve Hanke, the architect of currency regimes from Argentina to Estonia, warned a Greek default may become unavoidable.
  • Mundell predicted debt restructuring for “one or two” euro nations within five years. Hanke of Johns Hopkins University said Greece’s “death spiral” will end in default if debt obligations can’t be renegotiated. (Bloomberg)
South Korea’s consumer confidence rose in May 10 for the first time in seven months as the nation’s economy strengthened. The sentiment index advanced to 111 in May (110 in Apr), the first increase since October 2009 when it reached a seven-year high of 117. A number exceeding 100 indicates optimists outnumber pessimists. (Bloomberg)

Thailand’s exports rose for the sixth consecutive month in April on overseas demand for electronics and automobiles, helping to sustain an economy hurt by the nation’s worst political violence in 18 years. Shipments jumped 35.2% yoy in April (40.9% in Mar) to US$14.1bn. The median estimate in a survey was for a 37.5% gain. (Bloomberg)

Singapore’s industrial production grew at a faster pace than economists estimated, spurred by a surge in the electronics and pharmaceuticals industries. Output at factories, which accounts for about a quarter of the economy, surged 51% yoy in April (+46.6% in Mar). That’s the fifth straight month of growth. The median estimate surveyed was for a 20.7% gain. (Bloomberg)

European Union regulators have refused to follow Germany’s unilateral ban on naked short-selling of sovereign debt securities and some financial shares, said Eddy Wymeersch, chairman of the Committee of European Securities Regulators. “An EU ban isn’t on the cards and it isn’t off the Cards. Regulators have not made up their minds, but there’s certainly not a unanimous move to follow the German route,” he said. (Bloomberg)

Prime Minister Silvio Berlusconi’s government approved EUR24bn (US$30bn) of budget cuts over the next two years as part of a European effort to convince investors that euro nations can trim deficits and defend the single currency. The measures include a three-year wage freeze for civil servants and a crackdown on tax evasion. The Italian measures, worth 1.6% of GDP, aim to bring the deficit within the EU limit of 3.0% of GDP in 2012 from 5.3% in 2009. (Bloomberg)

The Bank of England should start raising interest rates and scaling back its asset purchases no later than the end of this year as inflation pressures mount, the Organization for Economic Cooperation and Development said. “The authorities face the challenge of preserving credibility, with headline inflation and some measures of inflation expectations exceeding the targeted rate. Fiscal policy will be a “drag” on UK growth from this year,” it said. (Bloomberg)

South Korea reported a current-account surplus in April for a third month as a recovering global economy spurred demand for cars and semiconductors. The surplus narrowed to US$1.49bn from a revised US$1.8bn in March. (Bloomberg)

The two-day China-US Strategic and Economic Dialogue ended on 25 May with the signing of 26 agreements and both countries agreeing to deepen cooperation to strengthen and reinforce the global economic recovery. Consensus was reached in many issues involving financial, currency structure reforms, trade and investment and the stability and reform of the financial market. They also agreed to enhance dialogue and coordination in macroeconomic policies. (Bernama)

Thailand’s government plans to spend about a third of its THB2.07tr (US$63.6bn) budget next year on measures to narrow a divide between rich and poor that fueled deadly street protests in Bangkok this month. “The budget is a mechanism to expand the country’s economy and reduce income gaps in society,” Prime Minister Abhisit Vejjajiva said.
  • The plan to increase spending by 22.0% will widen the budget deficit to THB420bn in the fiscal year starting October, Abhisit said. The government targets revenue of THB1.65tr in fiscal 2011. 
  • Of the total budget, THB624.4bn will be used to help reduce inequality, alleviate poverty and improve education and health care. A further THB220bn will be spent on economic development. (Bloomberg)
Thailand’s finance ministry said this month’s deadly political protests in Bangkok may cost the nation’s economy as much as THB145bn (US$4.5bn). The disruption caused by the unrest may reduce gross domestic product this year by as much as 1.1%-pt, Satit Rungkasiri, head of the ministry’s fiscal policy office noted. The ministry estimates the economy may grow 4.5% this year. The forecast will be revised on 29 Jun, Satit added. (Bloomberg)

Bank of Thailand Governor Tarisa Watanagase said political unrest will have a significant impact on the nation’s economy in 2Q10, especially on tourism, investment and consumption. But, the country still have exports as a positive factor” for the economy. “The risk premium for Thailand has increased because of the unrest. We will have to see whether we will be downgraded. If that happens, the cost of funding will be affected,” she said. (Bloomberg)

Vietnam’s central bank is working on regulations that will help improve the competitiveness, efficiency and safety of the nation’s lenders and other financial institutions, Deputy Governor Nguyen Dong Tien said. The regulations are being reviewed by the National Assembly, he added. (Bloomberg)

The Philippine central bank said it will consider the European debt crisis and escalating tension on the Korean peninsula at its next policy meeting, suggesting it may refrain from raising interest rates in June. “We are watchful of developments in the other markets, particularly shifts in investor sentiment and their impact on the movements of international commodity prices and exchange rates,” Governor Amando Tetangco said. (Bloomberg)