Monday, May 31, 2010

20100531 1813 FCPO EOD Daily Chart Study.

FCPO closed : 2436, changed : -21 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : turned lower, seller still in control.
Support : 2400, 2370, 2340 level.
Resistant : 2450, 2470, 2500 level.
Comment :
FCPO continue to head south today with quiet volume traded. Daily chart reading still remained showing a downside biased market likely to develop in the near term but having said that soy oil futures price seems having some recovery.
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.

20100531 1748 FKLI EOD Daily Chart Study.

FKLI closed : 1284, changed : +5 points, volume : lower.
Bollinger band reading : correction side way downside biased.
MACD Histrogram : recovering, seller short covering.
Support : 1280, 1274, 1270 level.
Resistant : 1290, 1300, 1318 level.
Comment :
FKLI started the week in recovery pace by traded higher in lesser volume. Daily chart reading shows market continue to have correction within a downside biased market testing further resistant levels.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with larger cut loss and profit target

20100531 1437 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1284, changed : +5 points, volume : high.
Bollinger band reading : upside biased.
MACD Histrogram : weakening, buyer in and taking profit.
Support : 1280, 1274, 1270 level.
Resistant : 1290, 1300, 1318 level.
Comment :
FKLI continue to trade firmer with sustainable volume upward correction with hourly chart suggesting a side way range bound upside biased market reading.

201000531 1426 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2440, changed : -17 points, volume : low.
Bollinger band reading : downside biased.
MACD Histrogram : getting lower, seller in control.
Support : 2400, 2370, 2340 level.
Resistant : 2450, 2470, 2500 level.
Comment :
World cup mood FCPO traded lower in ultra low volume changed hand. Hourly chart reading shows a downside biased potential market.

20100531 1048 Malaysia Corporate News.

The ban on sale of cigarette packs of less than 20 sticks per pack will take effect from Jan 1 next year. Deputy Director-General of Health (Public Health) Datuk Dr Hasan Abdul Rahman said the provision for the ban had been gazetted on Sept 23, 2004 through the Control of Tobacco Products Regulations 2004. “It is hoped that with this notification, tobacco manufacturers will have sufficient time to make changes,” he said. (Bernama)

It could be a a start of a consolidation of the oil & gas sector given the local and regional jobs that are coming onstream over the next few years and the rise in M&A activities in the past six months. The business area that is expected to be most active in the upturn of the sector is fabrication. Also, the listing of Malaysia Marine and Heavy Engineering S/B could be a re-rating catalyst for the sector. (Edge Weekly)

Sime Darby has been dethroned as the largest company on the FTSE Bursa Malaysia KL Composite Index (FBM KLCI) and now occupies third place after having shed close to RM5.89bn in market capitalisation over the last one month. Instead, Malayan Banking (Maybank) now reigns as the largest company on Bursa Malaysia with a market cap of RM50.54bn as at May 27. Second spot is held by CIMB Group Holdings Bhd with a market cap of RM47.89bn. (Starbiz)

The new acting president and chief executive officer of government-linked conglomerate Sime Darby was questioned by the Malaysian Anti-Corruption Commission (MACC) as part of its probe into the recent massive losses incurred by the company. The MACC lodged a report and started investigating the case following a revelation on May 13 by the company that it had incurred losses amounting to RM964m.
  • Azhar said that the anti-graft body questioned him as part of its preliminary investigations. “I had a three-hour serious discussion with (the MACC). They asked general questions as (the probe) is still in the early stages. Sime Darby will give our fullest cooperation,” he said. (Starbiz)
Sime Darby has appointed a legal firm, believed to be Zaid Ibrahim & Co, to investigate if fraud had taken place at the conglomerate’s stricken energy and utilities (E&U) division.
  • “The board has appointed a legal firm to independently conduct follow-through investigations to determine culpability, based on the findings of the work group on the four key projects of the division,” it said. 
  • Sime Darby also said it had commissioned PricewaterhouseCoopers (PwC) to review the group and its reporting structure as well as to conduct forensic audits into the affected projects in conjunction with the legal review. (Starbiz)
A source close to Khazanah says the investment arm is not interested in a corporate brawl, but instead continues to see healthcare as a strategic business. Government investment arm Khazanah Nasional will not sell its stake in Singapore's healthcare group Parkway Holdings Ltd even if Indian shareholder Fortis Healthcare Ltd launches a counter offer, a source close to the company said.
  • On Saturday, India's The Economic Times said that Fortis was in discussion with the Government of Singapore Investment Corp Pte Ltd (GIC) over financing options as the former considers the possibility of launching a counter offer on Parkway. 
  • Quoting a source familiar with the situation, the publication said that Fortis is also in talks to buy Khazanah's shares in Parkway after Khazanah made a S$1.18bn (RM2.8bn) offer last Thursday to take control of the healthcare group. (BT)
Trade in palm oil products should not be victimised by legislation in the European Union (EU), and in Australia, arising from the Western anti-palm oil campaigns, said the Malaysian Palm Oil Council (MPOC) CEO Tan Sri Yusof Basiron.
  • Such legislation would be seen as a trade protection measure, which could force the affected countries to retaliate. Malaysia's above average performance in habitat conservation of the orang utan and in greenhouse gas emission (GHG), as well as being a net sequester of carbon, deserves recognition, he said. 
  • "We have earned our right to trade. We should not be asked to clean the mess (GHG emission) of developed countries," Yusof said. He cited the refusal of Russia, a world leader in timber production and export, to comply with the EU-certified timber scheme. Likewise, palm oil should not be singled out for sustainability compliance unless other competing oils are also subjected to similar requirements.
  • GHG emission is not an issue as Malaysia is a net carbon sink country with more than 82% tree cover provided by permanent forests and plantation crops, including oil palms, rubber, cocoa and coconuts. 
  • Yusof said the Western non-governmental organisations (NGOs) should focus on campaigning for the reduction of GHG emission in their own countries, for instance, closing polluting coal mines. 
  • "How is it that the UK produces 18m tonnes of coal per year and the NGOs do not seem to notice the GHG emitted but they can detect burning of a few hectares of forest for agricultural conversion in Indonesia 10,000 km away?"
  • He pointed out that 66m tonnes of carbon dioxide emitted a year from 18m tonnes of coal produced in the UK was equivalent to deforestation of 378,000ha of degraded rainforests. "This is more than double the yearly expansion of oil palm cultivation in Malaysia which in the past involved deforestation of degraded forest land zoned for agriculture." (BT)
European Union (EU) lawmakers are increasingly convinced that Malaysia is on the same path as the EU on the sustainability of palm oil production, but would need more scientific data to support Malaysia's case. Dan Jorgensen, who is the vice-chair of the environment, public health and food safety committee in the European Parliament, has promised to bring Malaysia's case on its discrimination versus other oils in the Renewable Energy Directive (RED). "We don't want any discrimination at all of the palm oil sector, and we promised the industry here to help have discussions with the EU on this," he said.
  • Jorgensen, who was in Malaysia last week with two other Members of the European Parliament (MEPs) Martin J. Callanan and Ole K. Christensen, were impressed with the work undertaken by the government and the palm oil industry and the sustainability efforts. 
  • "People there don't know how efficient an oil it (palm oil) is. I wasn't aware myself how much oil you can get per hectare compared with other oils - in that way it is iscriminated against," he added. According to the RED which will come into force in December this year, biofuels must have greenhouse gas savings of at least 35% and according to EU's calculation, the use of palm oil-based biodiesel failed the requirement as it achieved only 19%. (BT)
Penang has banned Berjaya Corp’s Ascot Sports to conduct any sports betting business in the state. CM Lim Guan Eng said “I believe Penang is the first state to apply this ban state-wide.” Lim added the decision did not mean that the state was against betting or gaming outlets but it was concerned over the excessive number of draws and special draws being conducted by the licensed operators.
  • Meanwhile, the Selangor government will also not allow premises in the state to be used for football betting, MB Tan Sri Abdul Khalid Ibrahim said. "Although the federal government had issued football betting licence, the state government, via local authorities has the power to stop it,” he said. 
  • Kelantan is likely to follow suit. (The Star)
Celcom Axiata foresees good growth in its enterprise segment with the signing of an MoU with SME Corporation Malaysia (SME Corp), which has about 40,000 SMEs registered, to promote a range of customised wireless products and services to its members.
  • "The enterprise segment alone contributes more than 10% to our revenue. We can grow it bigger as the machine-to-machine segment in Malaysia has yet to progress compared with other countries," Celcom Axiata CEO, Datuk Seri Shazalli Ramly said. (Bernama)
SK Telecom will invest US$100m in 25% of Packet One (P1) Networks, a unit of Green Packet, pending a final contract signing in June. After seeing little success in its earlier drive to directly enter the mobile business in the United States and China, SK Telecom is shifting focus to business-to-business network services and seeking alliances with Asian operators to tap corporate clients in the region. P1, which pioneered mobile WiMAX broadband service in Malaysia, had 175,000 subscribers as of end-March, according to SK. (Reuters)

Petra Energy will hold an EGM on 24 Jun to remove Tengku Datuk Ibrahim Petra, Lee Mee Jiong and Suhaimi Badrul Jamil as directors of the company. It is believed that the move is spearheaded by Petra Perdana's MD Shamsul Saad with the backing of Datuk Henry Kho and Francis Koh.
  • It is also believed that Shorefield Resources Sdn Bhd, which owns 30% of Petra Energy, is currently inclined to support the removal bid. Tengku said it is too early to say if he can muster enough shareholder support to defeat the resolution at the EGM. (BT)
Malaysia's latest issue of five-year global bonds advanced on their first day of trading after yesterday's sale attracted orders for more than five times the US$1bn (RM3.3bn) originally sought. "Malaysia is oil-rich, the fundamentals are solid and they don't have funding needs," Paul Chan, the Hong Kong-based CIO at Invesco Asia Ltd, said before the sale. "There will be scarcity value in Malaysia's dollar bonds. Asian countries are generally underrated" given what's happening in Europe”, he added.
  • Malaysia's sale of so-called sukuk notes, its first international debt issue since 2002, will set a new benchmark for pricing bonds in the nation, Prime Minister Datuk Seri Najib Razak said. (BT)
Promoting takaful via agency is fast gaining prominence with more players now investing significantly to beef up their agency channel and grab a larger slice of the competitive takaful market. This mode of distribution, according to an industry player, had become more significant in view of the “Takaful For All” approach adopted by newer takaful entrants whereby takaful could be sold or promoted by anyone regardless of faith and religious beliefs. The earlier operators were mainly using direct marketing to promote their products and services. (StarBiz)

Some 30km of beach near Teluk Ramunia are polluted with oil sludge following the collision between two ships in Singaporean waters last Tuesday. Fishermen said the sludge hit the beaches on Friday night. On Tuesday, MISC’s MT Bunga Kelana collided with bulk carrier MV Waily, causing about 2,500 tonnes of crude oil to spill from a gash on the double-hulled tanker's port side.
  • Efforts to contain the spill have been carried out, with crews using biogradable dispersants and absorbent materials to soak up the oil, while 3.3km of booms circled the main slick in the shipping lanes that straddle the waters of Singapore, Malaysia and Indonesia. It is understood that the fishermen have not been going out to sea since the oil spill began. (NST)
CSC Steel Holdings hopes to maintain its full-year pre-tax profit at some RM100m compared with last year's RM116.6m, says outgoing MD Su Wei Jin. CSC Steel Holdings Bhd, the country's largest producer of cold rolled steel by volume, expects to post higher profits and revenue for the first half of this year from a year ago, driven by stable domestic demand, a continuing recovery in steel prices from 2008 lows and cost cuts.
  • "Our first half performance should be better (than the year-ago period). And as long as the market remains in the same mood, the second half of the year will still be good. Liang Shiu-Chang has since 1 May assumed the role of the company's group MD, replacing Su who has taken a larger role as assistance vice-president (commercial) of China Steel Corp, Taiwan's largest steelmaker. CSC Steel is a 45% owned by China Steel. (BT)

20100531 1040 Malaysian Economic News.

Malaysians must bite the bullet and wean off subisidies to save the government RM103bn in five years to reduce the nation's deficit and debt, said Datuk Seri Idris Jala, Minister in the Prime Minister's Department. He said the government would focus on big ticket items such as fuel, electricity and toll to achieve the savings but it would continue to subsidise the poor and disadvantaged. Studies by Bank Negara have shown that inflation will rise to 4.0% (2011-2012) and 3.0% post 2013. (Bernama)

The proposal made by the Subsidy Rationalisation Lab (SRL) to increase the charge for outpatient treatment at public clinics and hospitals from RM1 to RM3 is important to improve the quality of health facilities in the country, said Health Minister Datuk Seri Liow Tiong Lai. The SRL had also proposed that the cost for in-patient treatment be doubled to RM160 for Class One wards, RM40 (Class Two) and RM6 (Class Three).
  • Those whose household income is under RM2,160 or categorised under the Fees Act will still enjoy fee exemption. 
  • It also proposed that from 2013, patients pay a percentage of their in-patient cost instead of the current flat rate, and from 2015, patients are to pay a percentage of their outpatient treatment and medication. (Bernama)
The rural and regional development ministry will establish a special laboratory to plan and outline strategies to strengthen the rural economy. The laboratory -- to be placed under the ministry's National Key Result Area and New Economic Model -- would see the participation of its various agencies to help generate the economy of the target group. (Bernama)

Malaysia is targeting at least RM40bn worth of investments this year from the RM32.6bn approved in 2009, says Minister of International Trade and Industry Datuk Seri Mustapa Mohamed. The 10th Malaysia Plan would emphasise on greater efforts to attract more private investments as they would be a major engine to drive the country's economic growth. (Bernama)

Local institutions should explore the possibility of establishing partnerships and joint ventures with globally-renowned asset management companies to explore the potential in that segment. Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the potential in that segment can be seen through the combined wealth of the Asia Pacific and the high net worth of individuals in the Middle East, which is estimated to grow at an annual rate of 8.8% and 15.6% respectively until 2018. It’s faster than the global average of 7.1%. (Bernama)

20100531 1032 Global Economic News.

US personal spending was flat in April, after six months of increases, while income rose, according to the Commerce Department report. This shows consumers are now taking a step back to moderate their spending and build their savings.
  • Individual spending rose less than 0.1% mom in April (0.6% in Mar), coming below market expectations (0.3%). 
  • Personal income climbed 0.4% in April (0.4% in Mar). Personal savings as a percentage of disposable personal income, was 3.6% in April (3.1% in March). That's the first increase after three months of declines. (Bloomberg)

The Commerce Department revised US GDP downward to a 3% annual rate in 1Q10 from 3.2% previously. This means the economy grew in the first quarter, but not quite as much as the government originally reported. Meanwhile, the core personal consumption expenditures index, a closely watched inflation gauge that excludes food and energy was also flat. (Bloomberg)

US initial jobless claims fell to 460,000 in the week ended May 22, down 14,000 from an upwardly revised 474,000 the previous week. The number of claims was slightly higher than expected (455,000). The report also said 4,607,000 people continued to file unemployment claims for their second week or more during the week ended May 15, the most recent data available. That's down from an upwardly revised 4,656,000 the week before. (Bloomberg)

Fitch Ratings cut Spain’s credit grade one step from AAA to AA+ and assigned it a “stable” outlook. Spain has held the top rating at Fitch since 2003. Standard & Poor’s lowered Spain’s ratings to AA on April 28. “The process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term,” the statement said. (Bloomberg)

The Thai government has ended the curfew in Bangkok and 23 other provinces. Prime Minister Abhisit Vejjajiva said the decision followed assurances from security forces that they had regained control following recent riots and a deadly crackdown in Bangkok and some other provinces that left 85 dead in the capital. The curfew, which had been in place since May 19, ended at 4am yesterday. (Bangkok Post)

Thailand’s general election is unlikely to be held before the end of the year, Prime Minister Abhisit Vejjajiva said, but added he had not ruled out early elections. "Obviously it's a lot more difficult now to have elections before the end of the year because the November date was set with the (idea of) protesters joining the plan right from the start," the prime minister said.
  • Mr Abhisit had proposed November polls in a bid to end two months of crippling protests in Bangkok by the anti-government United Front for Democracy against Dictatorship (UDD), but he shelved the plan because demonstrators did not agree to it and refused to disperse. (Bangkok Post)

The Thai government says a fresh tax incentive is in the pipeline as it wants to rejuvenate the tourism industry which has been devastated by the political unrest. Finance Minister Korn Chatikavanij said he wants income tax rebates for individuals using domestic hotel accommodation as part of measures to revive tourism. (Bangkok Post)

Investors are demanding greater yields to lend to China property firms, a sign they expect borrowers will have a harder time meeting debt payments amid a government clampdown down on lending.
  • Yields on the US$3.9bn of bonds issued by Kaisa Group Holdings Ltd., Country Garden Holdings Co. and seven other developers since January widened by an average 2.26 percentage points relative to Treasuries as of last week, more than the 2.05 percentagepoint increase in spreads for the seven dollar-denominated bonds sold by other companies in Asia outside Japan. (Bloomberg)

Australia’s central bank may keep its benchmark interest rate unchanged this week after the most aggressive round of increases in the Group of 20 restrained retail sales and slashed mortgage lending by a quarter. The central bank will leave the overnight cash rate target at 4.5 percent tomorrow, according to all 22 economists surveyed.
  • The Reserve Bank of Australia’s decision may be echoed across Asia this week as central banks from Indonesia to Thailand and the Philippines are forecast to hold off on rate increases as they gauge fallout on the global economy from Europe’s debt crisis. (Bloomberg)

South Korea proposed central banks set up a permanent arrangement for foreign currency swaps to help address the type of funding shortages that emerged during the global financial crisis. “Broadening and institutionalization” of such measures could help establish “a global financial safety net,” Bank of Korea Governor Kim Choong Soo said. (Bloomberg)

Japan’s unemployment rate unexpectedly increased in April, household spending fell and deflation deepened, signaling domestic demand is restraining the nation’s recovery from its worst postwar recession. The jobless rate rose to 5.1% from 5%. The median forecast surveyed was for no change. Consumer prices excluding fresh food slid 1.5% yoy after dropping 1.2% in March. (Bloomberg)

Japan’s exports rose 40.4% yoy in April (43.5% in Mar), more than economists estimated (38.3%) in April, the first sign that the nation’s trade-led expansion extended into the second quarter. Imports climbed 24.2% yoy, leaving a trade surplus of JPY742.3bn. That’s about 15 times bigger than the JPY49bn surplus posted in Apr 09, when Japan was beginning to emerge from its worst postwar recession. (Bloomberg)

South Korea’s current-account surplus narrowed from US$1.8bn to US$1.5bn in April as the nation’s companies paid more of their dividends to international investors. Dividend payments to foreign shareholders amounted to US$2.3bn in April. “The current-account surplus will likely rise to US$2.5bn in May, the biggest so far this year,” Lee Young Bog, a Bank of Korea official said. He added that there is “no sign” that the European debt crisis is affecting the nation’s “export and capital flows.” (Bloomberg)

Hong Kong’s exports rose 21.7% yoy to HK$242.2bn in April (32.1% in Mar), marking the sixth month increase and buoyed by demand from China, the world’s fastest-growing major economy. That was more than the 19.3% median estimate. Imports rose a more-thanestimated 28.8% in April, leaving a trade deficit of HK$35.2bn. (Bloomberg)

The members of Thai parliament late Thursday night voted 250 to 172 to approved the first reading of the THB2.07tr (about US$63.61bn) 2011 draft fiscal budget bill. According to Bangkok Post online, the House meeting also agreed to set up a 63-member panel to consider details of the draft budget bill and submit to the House meeting for the second reading within 30 days. The ad hoc panel will convene its first meeting at 4:00pm on Tuesday. (Bloomberg)

Thailand’s foreign-exchange reserves fell 0.7% to US$143.9bn in the week ended 21 May, from US$145.0bn a week earlier. The central bank’s holdings of forward contracts rose 11.6% to US$13.2bn in the same week, from US$11.8bn a week earlier. (Bloomberg)

Philippine economic growth accelerated more than forecast in the first quarter, putting pressure on the central bank to raise interest rates even amid concern the European debt crisis will derail the global recovery. Gross domestic product increased 7.3% yoy in 1Q (2.1% in 4Q09). That’s the fastest pace since 2Q07, and beats the 4.4% median forecast. (Bloomberg)

India’s food inflation slowed from 16.5% yoy to 16.2% yoy in the week ended 15 May. This marked the first time ease in three weeks as Prime Minister Manmohan Singh pledged to drive down prices. (Blooomberg)