Monday, July 12, 2010

20100712 1816 FCPO EOD Daily Chart Study.

FCPO closed : 2340, changed : +40 points, volume : lower.
Bollinger band reading : correction downside biased.
MACD Histrogram : recovering, seller reducing exposure
Support : 2330, 2300, 2270 level.
Resistant : 2350, 2370, 2400 level.
Comment :
Lower crude palm oil stock level reported by MPOB plus positive export figure release by ITS and SGS lead FCPO to surge and close higher in supportive volume traded. Daily chart shows market up strongly breaking and stay above resistant level with the reading suggesting a side way range bound correction upside biased market testing higher resistant level.
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.

20100712 1803 FKLI EOD Daily Chart Study.

FKLI closed : 1328.5 changed : unchanged, volume : lower.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : continue higher, buyer testing market strength.
Support : 1325, 1318, 1310 level.
Resistant : 1330, 1337, 1345 level.
Comment :
Half volume FKLI closed unchanged ahead of US earning season. Daily chart shows market tested resistant level but failed to sustained closing unchanged with the reading suggesting a side way range bound little upside biased.
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.

20100712 1434 Palm Oil Stocks at 10 months lows.

KUALA LUMPUR, July 12 (Reuters) - Malaysia's palm oil stocks tumbled to 10 month lows in June as exports surprisingly outpaced a weaker-than-expected recovery in production, data from an industry regulator showed on Monday.  Malaysian Palm Oil Board said June stocks in the world's No.2 producer tumbled 7.1 percent to 1.45 million tonnes from a month ago, going against market estimates for a rise and setting the stage for a price rally. [PALM/POLL]
 "This is super bullish, phones are ringing as consumers are shocked by the numbers," said a trader. "Buying will definitely come in... a kneejerk reaction.   The benchmark September contract on the Bursa Malaysia Derivatives Exchange rose 1 percent to 2,324 ringgit by the midday break and ahead of the data release and also hit a one-week high at 2,326 ringgit.     The market reopens at 0700 GMT.
 For a graphic on Malaysia's palm oildata for June, see:
 Production rose 2.5 percent to 1.42 million tonnes in June, unexpectedly lower than market estimates for a six percent, as yields from key oil palm growing region of Sabah on Borneo Island were still lagging.
 "El Nino has passed but the trees are still taking some time to recover," said a planter from Sabah state that accounts for about 25 percent of Malaysia's total production.  El Nino-driven drier weather in early 2010 prolonged yield stress for oil palms after seasonally higher production in the last quarter of 2009.
But planters say higher temperatures then may have stunted female flowers that will produce oil palm fruits six months later in time for the seasonal output peak in October.   June exports rose 1.44 million tonnes from May as India and China, the world's top palm oil buyers, started taking up more cargoes as prices declined slightly in June.   Traders expect the export momentum to continue in July as cargo surveyor Intertek Testing Services reported a 9.1 percent increase in Malaysian shipments for the first ten days of this month.

20100712 1415 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1334.5 changed : +5.5 points, volume : low.
Bollinger band reading : upside biased.
MACD Histrogram : weakening, buyer book in profit partially.
Support : 1330, 1325, 1318 level.
Resistant : 1337, 1345, 1350 level.
Comment :
After world cup final morning FKLI seems to be in sleepy mood as only mild volume traded as price continue move upwards. No much action shows on hourly chart and the outlook stay unchanged with upside biased reading.

20100712 1247 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2324, changed : +24 points, volume : low.
Bollinger band reading : range bound upside biased.
MACD Histrogram : rising higher, not much action from both buyer and seller.
Support : 2300, 2270, 2250 level.
Resistant : 2330, 2350, 2370 level.
Comment :
Continue firmer FCPO traded in light volume after ITS released up 9.14% export data for the period of 1~10 Jul 2010. Hourly chart shows market continue to test higher resistant level by registering higher highs and higher lows. Outlook wise, market is trading in range bound upside biased reading.

20100712 1130 Global Economic News.

China: Export rebound may lose steam on Europe crisis, yuan gain
China’s unexpected rebound in overseas shipments to a record last month may lose steam as the European debt crisis, a moderating US recovery and yuan appreciation curb demand for goods from the world’s largest exporter. Customs officials said Europe’s debt woes and the “sharp decline” in the value of the euro have started to affect China’s sales to the bloc. (Bloomberg)

China: Trade surplus widens in June, adding pressure on yuan
China’s trade surplus widened to the highest this year and exports climbed more than estimated to a record in June, adding pressure on the government to let the currency gain after the US said the yuan “remains undervalued”. The gap increased 140% to USD20bn from a year earlier. (Bloomberg)

China: Forex reserves increase at slowest pace in 11 years
China’s foreign exchange reserves, the world’s largest, rose at the slowest pace in 11 years in the second quarter as expectations for a yuan appreciation diminished and the European sovereign debt crisis saw capital move out of emerging markets. The nation’s holdings rose by USD7.2bn at the end of June from the end of March, the smallest increase since the second quarter of 2001. Reserves dropped 2% in May, the first monthly decline since February 2009. (Bloomberg)

US: Wholesale inventories rose 0.5% in May, sales fell
Inventories at US wholesalers rose in May for a fifth month as companies ensured they had enough goods on hand to keep pace with demand. (Bloomberg)

Japan: Consumer prices declined at slower pace in May
Japan’s consumer prices fell at a slower pace in May, a moderation that may be insufficient to ease government pressure on the central bank to fight deflation. Prices excluding fresh food slid 1.2% from a year earlier, easing from a 1.5% decline in April. (Bloomberg)

US: Economy in US expands 2.7%, less than forecast
The US economy grew at a 2.7% annual rate in the first quarter, reflecting a smaller gain in consumer spending and a bigger trade gap. The increase was smaller than a 3% estimate issued last month. (Bloomberg)

Global: G-20 agrees to cut deficits once recoveries cemented
Group of 20 leaders endorsed targets to cut deficits and agreed to pursue higher capital requirements for banks once their economic recoveries take root. Advanced economies will aim to at least halve deficits by 2013 and stabilize their debt-to-output ratios by 2016. (Bloomberg)
Global : IMF raised its forecast for global growth this year, reflecting a stronger-than-expected first half, while warning that financial- market turmoil has increased the risks to the recovery. The world economy will expand 4.6% in 2010, the biggest gain since 2007, compared with an April projection of 4.2%, the Washington-based fund said in revisions to its World Economic Outlook. Growth next year is projected to be 4.3%, unchanged from the April forecast. (Source: Bloomberg)

U.S : Consumer credit declined more than forecast in May. The USD 9.1b decrease followed a revised USD 14.9b slump in April that was initially estimated as a USD 1b increase, the Federal Reserve reported. (Source: Bloomberg)

U.S : Jobless claims declined last week to 454,000. Initial claims for benefits decreased by 21,000 in the week ended July 3. (Source: Bloomberg)

E.U : IMF says sovereign, banking risks threaten stability. The International Monetary Fund urged European Union policy makers to take further "decisive" steps to combat a sovereign-debt crisis that it said poses a threat to the world financial system. "Recent global stability gains are threatened by a confluence of sovereign and banking risks in the euro area that, without continued and concert attention, could spill over to other regions," the IMF said in an update released of its Global Financial Stability Report. (Source: Bloomberg)

U.K : BOE keeps stimulus as budget cuts threaten recovery. The Bank of England kept its bond-stimulus plan in place and left its benchmark interest rate at a record low to help prevent the economic recovery from stalling during the biggest budget squeeze since World War II. The Monetary Policy Committee, led by Governor Mervyn King, held the target for its asset-buying plan unchanged at GBP 200b (USD 303b). The bank also kept its key interest rate at 0.5%. (Source: Bloomberg)

Japan : Machine orders in May slump most since 2008, a sign that any rebound in business investment may be too weak to drive an economic recovery that is showing signs of losing momentum. Orders, an indicator of future capital spending, slid 9.1% MoM in May from April. (Source: Bloomberg)

China : Moderately loose' policy will stay as economic growth becomes better balanced between consumption, investment and exports. Money and loan growth was "reasonable" in the first six months and liquidity in the banking system "basically appropriate," the central bank said in a statement after its second-quarter monetary policy meeting. (Source: Bloomberg)

Australia : June jobs growth capped the best quarter in almost four years. The 45,900 increase last month exceeded all 22 forecasts in a Bloomberg News survey. (Source: Bloomberg)

20100712 1127 Malaysia Corporate News.

Gaming: NFOs to lobby for lower prize payouts.
While 4D lottery prize payouts remain unchanged for now, number forecast operators (NFOs) are said to be lobbying for it to be reduced. Industry sources said three NFO operators are in the midst of lobbying the Finance Ministry to reduce the 4D first prize payouts by RM200. This would bring the current payout ratio for every RM1 bet to RM2,300 for the first prize of "4D Big" and RM3,300 for "4D Small". NFOs presently pay out RM2,500 and RM3,500 for those bets, respectively. (Source: The Star)

Gamuda, MMC: 12 weeks to conduct RM36b MRT feasibility study.
The feasibility study on the proposed RM36b mass rapid transit (MRT) system by Gamuda Bhd and MMC Corp Bhd is expected to be presented to the Government in about 3 months time, said a source familiar with the matter. It was earlier reported that the Government had appointed 2 independent consultants - Minconsult Sdn Bhd and Andercon Technologies Ltd - to carry out the study. (Source: The Star)

Markets: 3rd-party insurance draft will be sent to Govt in Dec.
Bank Negara will submit the final proposal for a new basic 3rd-party motor cover scheme framework to the Government in December. In a statement yesterday, the central bank said it had, together with the Ministry of Finance, completed initial consultation sessions on the proposed framework with key stakeholders in April. (Source: The Star)

Port: Potential RM1.5b investment from Mideast.
Middle Eastern investors may invest some RM1.5b in a petroleum tank farm and halal industrial park in Penang Port. Penang Port Sdn Bhd (PPSB) chairman Datuk Seri Dr Hilmi Yahaya yesterday said potential investors have approached PPSB to set up shop in the port area to tap the export potential of the Indonesia-Malaysia-Thailand Growth Triangle. (Source: Business Times)

Tanjong: Bidding for new power projects.
Tanjong plc is hoping that some of its bids for new power projects will come to fruition over the next few quarters. In the meantime, earnings from its existing power assets are expected to remain relatively resilient although overseas earnings, denominated mostly in US dollars, are hurt by the stronger ringgit. (Source: The Edge Financial Daily)

Strategic partner to enhance Scomi Marine’s coal division.
Scomi Marine Bhd will see the emergence of a strategic investor to enhance the group’s coal handling operations, said a source. The investor, who will enter the company as a strategic partner, is expected to expand the coal handling businesses of the marine transport company regionally. (Malaysian Reserve)

Dubai World property arm sells off Malaysia stake.
A property arm of struggling state conglomerate Dubai World is backing out of a plan to build luxury homes in Malaysia as it looks to shore up its finances. The cash-strapped company's Limitless division is selling off its stake in a partnership with Malaysia's Bandar Raya Developments to develop waterfront land in the southern city of Nusajaya. Limitless will generate about USD23.8m in the deal, according to a regulatory filing on Malaysia's stock exchange. Limitless said in a statement Sunday that it continues "to review our business activity to reflect market conditions." The company's parent Dubai World needs cash as it works to pay back USD23.5bn in debt. (Associated Press)

Awaiting right suitor for Transmile.
Pos Malaysia Bhd is keen to sell its 15% stake in Transmile Group Bhd but the challenge lies in finding an investor that can give the latter a new lease of life. "We want to sell if we can sell. But because it is a PN17 (Practice Note 17) company and we have a 15% block, we need somebody who can come in and pump new business into Transmile and make something out of it," group managing director and chief executive officer Datuk Syed Faisal Albar told Business Times in an interview last Thursday. He added that there were no buyers in the open market even if Pos Malaysia were to sell on a daily basis due to Transmile's financially-troubled status. "So we are just going to hold currently," he said. Transmile, an air cargo operator which suffered a financial scandal in 2007, has a new management and board that are required to do a debt restructuring to regularise its financial position. The challenge for Transmile is in it utilising the landing rights that it has and increasing its business volume, said Syed Faisal. (BT)

Japan’s SMBC unlikely to buy into RHB Cap.
Sumitomo Mitsui Banking Corp (SMBC) of Japan is unlikely to buy part of the Employees Provident Fund’s (EPF) 57% stake in RHB Capital Bhd (RHB Cap). SMBC was one of five foreign banks that were given commercial banking licences in the country last month as part of Bank Negara’s aim to liberalise the financial sector. The EPF is said to be on the lookout for buyers to reduce its stake in RHB Cap, as under regulatory requirements it can only hold a 35% stake in the banking group. The pension fund had obtained an extension of time from Bank Negara until June next year to do so. (StarBiz)

F&N weighs move on cash.
Fraser & Neave Holdings Bhd (F&N) will consider returning to shareholders part of its RM1bn cash reserves that it will have after disposing of its glass-bottling division, said chief executive officer Tan Ang Meng. “If the board is unable to find viable opportunities to use the funds, we will consider returning part of the cash after taking into consideration future capital expenditure and working capital needs,” Tan said in an email reply to StarBizWeek queries. He said F&N would take between 12 and 24 months to evaluate any business growth and expansion initiatives including possible mergers and acquisitions. On possible acquisitions, Tan said: “Food and beverage is our core business and we will focus on that.” Early this week, the group obtained shareholders’ approval to divest Malaya Glass Products Sdn Bhd for RM738.6m. On completion of the sale, F&N is expected to have cash reserves of over RM1bn. (StarBiz)

20100712 1115 Soy Oil & Palm Oil Related News.

ITS Cargo Surveyor Export : 474,928 tonnes, up 9.14%.

Soyoil futures settled higher as well, rallying in tandem with the rest of the complex on supply concerns in soybeans and supportive influences from energy markets, analysts said. Crude oil influences soyoil due to their use in making renewable fuels. December soyoil settled 0.52 cent, or 1.5%, higher at 38.27 cents per pound.(Source: CME)

Palm oil ends up 0.48 pct on firm grains, oil
JAKARTA, July 9 (Reuters) - Malaysian crude palm oil settled up 0.48 percent Friday on gains crude oil and grains markets with players expect gains to continue next week, traders said.
"Rising grains and energy prices helped prices sustain itself in positive territory," a trader in a local brokerage firm said.

20100712 1102 Global Market News.

July 12 (Bloomberg) -
- China’s unexpected rebound in overseas shipments to a record last month may lose pace as the European crisis, a moderating U.S. recovery and yuan gains curb demand for goods from the world’s largest exporter. China’s overseas sales jumped 43.9 percent in June from a year earlier to $137.4 billion and the trade surplus more than doubled to $20 billion, the highest level in eight months, the government said July 10.

GLOBAL MARKETS: Japan's Nikkei rises, brushes aside election
SYDNEY, July 12 (Reuters) - Japanese shares rose and the yen largely held its ground in early trade on Monday, with investors seemingly indifferent to a major election loss suffered by Japan's government over the weekend.
"It's political paralysis," said Gerry Curtis, a professor at Columbia University. "Kan is not going to quit and it's going to be very difficult to govern." 

LONDON, July 9 (Reuters) - Potentially robust second-quarter corporate earnings and more clarity on the state of European banks in the coming week should help calm investors stressed by a possibility of a double-dip recession.
"In the past three weeks we've downgraded our view in order to take into account the deteriorating state of the global economy. But we're not in a camp to expect a disaster," said Alain Bokobza, head of global asset allocation strategy at Societe Generale.