Thursday, June 24, 2010

20100624 1846 FCPO EOD Daily Chart Study.

FCPO closed : 2390, changed : +6 points, volume : lower.
Bollinger band reading : downside biased.
MACD Histrogram : recovering, seller reducing position.
Support : 2370, 2350, 2330 level.
Resistant : 2400, 2450, 2470 level.
Comment :
Tiny 14 points range market with lesser volume traded FCPO closed the day up slightly as seller reducing exposure ahead of tomorrow export data release. Daily chart reading remained unchanged with a tight range trading downside biased outlook.
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.

20100624 1838 FKLI EOD Daily Chart Study.

FKLI closed : 1321.5 changed : -10.5 points, volume : higher.
Bollinger band reading : side way correction upside biased.
MACD Histrogram : weakening, buyer reducing exposure.
Support : 1318, 1310, 1300 level.
Resistant : 1325, 1330, 1337 level.
Comment :
Second session turned negative sentiment due to weaker regional market development caused FKLI to reverse and traded lower closed near the low of the day in slightly improved volume. Daily chart reading continue to show a correction side way range bound upside biased market.
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.

20100624 1442 Latest Malaysia Corporate News.

KUALA LUMPUR, June 24 (Reuters) - A slate of Malaysian companies are planning to tap the stock market for funds later this year but uncertainty about the debt crisis in the euro zone may cast a shadow over the outlook for the IPOs.
Following are some major IPOs that have been announced:
  • State oil firm Petronas has hired Deutsche Bank,  CIMB and Morgan Stanley as book-runners to advise on a planned $2 billion listing of its petrochemical business. The listing will likely take place in the fourth quarter of this year depending on market conditions. 
  • Property developer Sunway City Bhd is planning the listing of a real estate investment trust (REIT) mid-July. The REIT, with a fund size of 2.78 billion units, will raise around $500 million and is set to become Malaysia's largest when it is listed. 
  • Malaysia's long-haul budget carrier AirAsia X plans to launch an initial public offering in the second half of 2011 to tap public funds for growth, the company said. Asia's biggest budget airline by fleet size, AirAsia, owns 16 percent of AirAsia X. 
  • Shipping firm MISC has hired Credit Suisse and Maybank for the initial public offering of its heavy engineering unit, said IFR, a Thomson Reuters service. The proposed IPO of Malaysia Marine Heavy Engineering will raise over $300 million.
  • Bumi Armada, an offshore oil services company controlled by Malaysian billionaire Ananda Krishnan, is planning an IPO that was earlier estimated at $450 million in size but could be larger following a reorganisation, according to IFR.

20100624 1418 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1335 changed : +3 points, volume : low.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : rising gradually, buyer holding on.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1350 level.
Comment :
Upward movement momentum continues in FKLI that traded firmer in slow volume changed hand. Hourly chart outlook suggesting a side way range bound little upside biased reading.

20100624 1405 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2390, changed : +6 points, volume : low.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : continue rising, seller continue to take profit.
Support : 2370, 2350, 2330 level.
Resistant : 2400, 2450, 2470 level.
Comment :
Directionless tight 13 points range FCPO traded slightly higher in thin trading volume as seller partial profit taking activities continue to take place. Hourly chart reading showing a side way range bound downside biased market.

20100624 1006 Global Economic News.

Malaysia: No FX intervention after yuan policy
Bank Negara Malaysia’s governor said yesterday she did not expect to intervene in foreign exchange markets following China’s announcement of a more flexible policy on the yuan. China said over the weekend it would allow its currency greater flexibility, strengthening Malaysia’s ringgit versus the dollar, but governor Tan Sri Dr Zeti Akhtar Aziz said that Malaysia would stick to its exchange rate policy and saw limited impact in Asia. (Financial Daily)

Australia: Rudd resigns as PM, Gillard takes post
Australian Prime Minister Kevin Rudd resigned as Labor Party leader and was replaced by his former deputy Julia Gillard before a general election due to be held in the next 10 months. Rudd stood down amid signs he would be replaced by Gillard, 48, party spokesman Michael Forshaw said. Welsh-born Gillard took the leadership and needs to be sworn in as prime minister by Governor-General Quentin Bryce. Rudd’s term of two years and seven months is the shortest for an Australian leader since 1971; Welsh-born Gillard becomes the country’s first female prime minister. Treasurer Wayne Swan was elected Gillard’s deputy after abandoning Rudd, a schoolmate from Queensland. Swan will continue to serve as Australia’s treasurer, Sky News said. (Bloomberg)

UK: Banks find liabilities levy better than expected
Chancellor of the Exchequer George Osborne said lenders need to share the pain of tax increases as he announced a levy on lenders’ balance sheets. Investors and analysts say banks have dodged a bullet. Osborne told lawmakers the tax will raise GBP2bn (USD3bn) a year. The 0.07% levy on wholesale liabilities is less than half the 0.15% rate being considered by the US government. (Bloomberg)

G20: Needs ‘Growth-friendly’ budget cuts
Group of 20 nations need to cut their budgets without sacrificing the global economic recovery, South African Finance Minister Pravin Gordhan said. Spending cuts and tax increases should be “growth friendly,” Gordhan told reporters in the capital, Pretoria, ahead of his trip with President Jacob Zuma to attend the G-20 meeting in Toronto on 26-27 June. US President Barack Obama is pushing G-20 nations to do more to bolster the global economic recovery, while European governments, such as Germany and France, are focusing on slashing budget deficits, setting a course for conflict at the summit. G-20 leaders are also expected to discuss proposals for a global bank levy and a tax on securities transactions to clamp down on financial speculation. (Bloomberg)

EU: Soros says Germany ‘is the main protagonist’ in euro’s crisis
Germany “is the main protagonist” in the euro’s crisis and risks inflicting deflation on the European Union because of its insistence on budget austerity, billionaire investor George Soros said. “As the strongest and most creditworthy country it is in the driver’s seat,” Soros said in a speech at Humboldt University in Berlin. “As a result Germany objectively determines the financial and macroeconomic policies of the euro zone without being subjectively aware of it. When all the member countries try to be like Germany, they are bound to send the euro zone into a deflationary spiral.” (Bloomberg)

E.U : Manufacturing, services expansion slowed in June, adding to signs the region's recovery is cooling as the sovereign debt crisis clouds the growth outlook. A composite index based on a survey of euro-area purchasing managers in both industries fell to 56 from 56.4 in May, London-based Markit Economics said in a report. (Source: Bloomberg)

US: Fed keeps rate pledge, says markets ‘Less supportive’
Federal Reserve officials retained a pledge to keep the benchmark interest rate at a record low for an “extended period” and signaled that Europe’s debt crisis may harm American growth. “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad,” the Fed’s Open Market Committee said in a statement in Washington. Central bankers cited slowing inflation and said the recovery is “proceeding,” altering April language that the economy has “continued to strengthen,” while reaffirming they foresee a “moderate” pace of growth. (Bloomberg)

U.S : Sales of new homes plunged in May to record low after a tax credit expired, showing the market remains dependent on government support. Sales collapsed an unprecedented 33% MoM from April to an annual pace of 300,000. Demand in prior months was revised down. (Source: Bloomberg)

France : Business confidence dropped in June on concern that Europe's sovereign-debt crisis will prompt banks to reduce lending and governments to trim spending. The index of sentiment among factory executives declined to 95 from 97 in May. (Source: Bloomberg)

Iceland : Central bank cut the benchmark interest rate by half a point after international lenders said the island's efforts to rebuild its financial system were on track, supporting the krona as bailout flows resumed. The bank also cut the deposit rate to 6.5% from 7%. (Source: Bloomberg)

Singapore : Inflation holds at 14-month high in May as the island's economic rebound boosted food, housing and car prices. The consumer price index climbed 3.2% YoY, Singapore's Department of Statistics said in a statement. (Source: Bloomberg)

Philippines : Plans to increase spending, revenue to boost growth. The government raised its 2010 spending budget for public works, salaries and debt payments to a record PHP 1.62tr (USD 35b) from a previous forecast of PHP 1.58tr. Revenue, including gains from the sale and lease of assets, may climb to PHP1.32tr compared with an earlier estimate of PHP 1.28tr. (Source: Bloomberg)

20100624 1004 Malaysia Corporate News.

Malaysia listed as China’s QDII destination
The ample investment fund in China can now flow into Malaysian capital markets as the country has been approved as an investment destination under the republic’s Qualified Domestic Institutional Investor (QDII). Malaysia is the 11th member of a small group of approved investment destinations which comprises Australia, Canada, Hong Kong, Germany, Japan, Luxembourg, Singapore, South Korea, the UK and the US. Chinese investors are typically not allowed to invest outside the country due to strict capital controls. The QDII scheme exempts certain funds, approved by Chinese regulators, to do so via portfolio investments. The amount than can be invested offshore is governed by a quota system. (Financial Daily)

PNB plans detailed study on Kg Baru
Permodalan Nasional (PNB) will carry out a detailed study on the proposed mixed development in Kampung Baru, Kuala Lumpur, to gauge if it will get competitive returns from the project. "The study will take time (but) we need to be careful before we decide on this project. The outcome will depend on the study," said president and group chief executive Tan Sri Hamad Kama Piah Che Othman yesterday. An earlier report had indicated that the Government had agreed to appoint PNB as the master developer for Kampung Baru, while government-linked companies Lembaga Tabung Haji and Permodalan Hartanah, had also been asked to come onboard. (BT)

P1, SK Telecom in alliance talks
Green Packet said its subsidiary, Packet One Networks (M) SB (P1), is in advanced negotiations with SK Telecom for a strategic alliance, which may include an acquisition of an equity stake in P1. “The company will make the announcement once a definitive agreement is entered into between P1 and SK Telecom,” Green Packet told Bursa yesterday. The company was responding to a news article in a Chinese daily that SK Telecom is expected to sign an agreement in June to acquire a 25.8% equity in P1. (BT)

Fajr Capital to invest in Bank Islam Brunei
Fajr Capital Ltd, the Islamic investment firm in which Khazanah Nasional has a 25% stake is buying into Bank Islam Brunei Darussalam (BIBD) in one of its first significant investments since its inception last year. It is understood that Fajr Capital is now awaiting key approvals, including from Brunei Sultan’s office, to conclude the deal estimated to be worth USD200m (RM 674.3m).The move marks the beginning of Fajr Capital’s investment plans after raising funds, including the USD150m for a 25% stake Khazanah announced in October 2009, after having raised USD588m in its first round of funding from its shareholders. (Malaysian Reserve)

Konsortium Logistik keen on Pos Malaysia
Konsortium Logistik, which is on an expansion mode this year, has expressed its interest to bid for Khazanah Nasional’s 32.2% stake in Pos Malaysia. Executive director Che Azizuddin Che Ismail said Pos Malaysia could provide speed due to its widespread logistics network with more than 692 post offices, over 355 mini post offices and more than 223 independent postal agents nationwide. “We are interested to acquire the stake. Whatever can bring profit to the company we will get involved and we will add value because at the end of the day that is what shareholders look at,” he said after the company AGM yesterday. (StarBiz)

Linear slips into PN17 status
Troubled Linear Corp Bhd, a manufacturer of cooling systems which is under investigation by stock exchange regulators, has entered into Practice Note 17 (PN17). The company came into prominence recently after revealing that its RM1.67bil King Dome project awarded by Seychelles-based Global Investment Group Inc late last year had not seen any significant progress towards execution of the contract while adding that there was no documentary evidence to demonstrate the overall viability of the project. The company told Bursa Malaysia that it was now an “affected listed issuer” pursuant to the PN17 of the Main Market listing requirements and was unable to provide a solvency declaration to Bursa Securities. (StarBiz)

KNM: order backlog may swell to RM3b.
According to MD Lee Swee Eng, KNM Group Bhd has hinted that its order backlog will swell to more than RM3b this year from RM2.1b currently. He has also said that he would not rule out the possibility of another privatization exercise in the future. (Source: Business Times)

Maybank: To convert PT Bank Maybank to syariah banking.
Malayan Banking Bhd (Maybank) is proposing to convert the banking operations of its 96.8%-owned subsidiary, PT Bank Maybank Indocorp, to syariah banking and also to reduce the Indonesian subsidiary's share capital. The proposal was subject to Bank Indonesia's approval. The Bank said in line with the proposed conversion, a capital reduction exercise would be undertaken to reduce PT Bank Maybank's share capital to RM300.7m from RM346.8m. (Source: The Star)

Salcon: Eyes energy ops.
Water engineering group Salcon Bhd plans to venture into building hydroelectric, biomass and solar power plants within next year to expand and boost earnings. It has seven 30-year water concessions in China and one in Vietnam. According to Director Eddy Leong Kok Wah, Salcon is also planning to venture into new markets such as India, Indonesia and Bangladesh, where there is an urgency to build water and waste water treatment plants. (Source: Business Times)

MISIF: Steel consumption may grow 5%.
Malaysian Iron and Steel Industry Federation (MISIF) president Chow Chong Long said domestic steel usage is projected to grow at only 5 per cent to 7.5 million tonnes this year compared with 7.1 million tonnes last year, lower than an earlier forecast of 8-10 per cent growth. (Source: Business Times)

20100624 0945 Global Market News.

GLOBAL MARKETS: Dollar off on Fed view as stocks dip, bonds rise
NEW YORK, June 23 (Reuters) - The dollar weakened across the board while Treasuries rallied on Wednesday after the U.S. Federal Reserve acknowledged a faltering economic recovery and data showed sales of new U.S. homes fell to a lifetime low.
"There's no rate hike expected for the foreseeable future - at least not until the end of the year, if not 2011," said Michael Woolfolk, senior currency strategist at BNY Mellon in New York. "The longer the Fed keeps kicking the can down the road, the less positive this is for the U.S. dollar outlook."  

World stocks retreat on growth fears
LONDON, June 23 (Reuters) - European and Asian stocks fell  as fears about the global economic recovery dominated investors thinking and renewed concerns over Europe's banking system undermined flows into risky assets.
"(The Fed) may downgrade its view of the US economy ... citing the latest disappointing employment data, renewed weakness in the housing sector and recent turmoil in Europe," said Nick Stamenkovic, rate strategist at RIA Capital Markets.

20100624 0942 Soy Oil & Palm Oil News.

Soyoil futures garnered pressure from weakness in soybeans and spillover pressure from crude oil. Crude oil influences soyoil due to its use in making renewable fuels. July soyoil settled 0.34 cent, or 0.9%, lower at 37.59 cents per pound. Speculative funds were estimated sellers of 3,000 lots in soyoil. July soymeal ended $1.40, or 0.5%, lower at $289.30 per short ton. Speculative funds were estimated sellers of 1,000 lots in soymeal.(Source: CME)

Indonesia To Maintain CPO Export Tax At 4.5% In July
Indonesia will maintain its export tax on crude palm oil at 4.5% in July, the Ministry of Trade said Wednesday. The base price for CPO in July has been lowered to $732 a metric ton from $754/ton in June, it said.(Source: CME)

Asian CPO Output To Rise In 2H, Bearish For Prices-Analyst
Crude palm oil production in Indonesia and Malaysia may rise further in the second half of the year, pushing inventory to a level where it could start weighing on prices, a Netherlands-based analyst at Rabobank International said in an interview. 
"Prices are definitely vulnerable to further declines given high volatility in the market now. The global economic (outlook is still) uncertain. On the production front, yields will increase in the second half of the year... depressing prices," said Chan Wei Siang, analyst at Rabobank International's Food & Agribusiness Research and Advisory.
Malaysia and Indonesia together account for 80% of the palm oil produced globally. Southeast Asia's total palm oil stocks are likely to be around 3.6 million tons now as output in June would have risen significantly, traders in Malaysia and Indonesia estimated. Unofficial projections put current Indonesian stocks around 2 million tons. Malaysia's official June estimates will be released in the second week of July.
According to market participants, output in Malaysia would have risen some 15% in June while in Indonesia the gain was as much as 20% on month. But it may not all be bad news for producers. "Though output will increase in the second half, (overall) growth in CPO output will likely be muted in 2010 due to the residual effect of El-Nino," Chan said. Even though the El-Nino has officially ended, its impact can last six to ten months as oil palm trees continue to remain under stress caused by dry weather during the El-Nino months.
Total CPO production in 2010 may rise by only 3% or 500,000 tons to 18.1 million tons in Malaysia, while Indonesia's output could rise by 7% or 1.5 million tons to 22.4 million tons, he said.
The record high South American soybean harvest this year has already reduced soyoil prices, narrowing the price gap with the lower-priced palm oil. In some cases, palm oil is even trading at a slight premium to soyoil.
"The narrow price differential has made soyoil very competitive (in international markets) with more buyers making the switch from palm," Chan said.
Palm oil traditionally trades at a discount of more than $100/ton to soyoil, but that has narrowed to the point where palm olein now trades in a range that is just $20 above or below soyoil.(Source: CME)

Degraded land rules key to Indonesia climate goal
SINGAPORE, June 23 (Reuters) - Indonesia needs to quickly settle rules for deciding what is degraded land and spell out how much is available to palm oil and timber firms in order to strengthen investment certainty, an environmental expert says.
Such a move would also boost a $1-billion climate deal signed last month by Indonesia and Norway.

Indonesia lowers July CPO, cocoa base export prices
JAKARTA, June 23 (Reuters) - Indonesia will keep its July export taxes for crude palm oil and cocoa beans unchanged from June levels, but will lower base export prices, the trade ministry said on Wednesday.
The crude palm oil export tax will stay at 4.5 percent in July while the cocoa export tax will remain at 10 percent, the ministry said in a statement.