Wednesday, September 22, 2010

20100922 1406 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1482.5, changed : +4 points, volume : low.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 1470, 1458, 1445 level.
Resistant : 1500, 1530, 1550 level.
Comment :
5 points range market FKLI traded side way range bound after opened little higher to closed for lunch recorded minor gain. Daily chart shows that market opened and moved side way with lack of participation by both buyer and seller with a side way range bound little upside biased reading.

20100922 1359 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2677, changed : +7 points, volume : low.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : getting lower, buyer taking profit.
Support : 2670, 2650, 2620 level.
Resistant : 2700, 2720, 2750 level.
Comment :
29 point range, low volume participation FCPO traded range bound and closed the first session edge up slightly after soy oil futures price recorded not much changes. Hourly chart wise, price hovering near the middle  Bollinger band level with the reading suggesting a correction range bound upside biased market.

20100922 1159 Local & Global Economics News.

Malaysia: Economy can grow more than 6% in 2010
The Malaysian economy is expected to achieve better than 6% GDP growth for the full year, despite a slight moderation in the global economy in the second half of the year. Prime Minister Datuk Seri Najib Tun Razak said the advanced economies were experiencing moderating growth, which in turn could have some impact on the local economy in the second half of the year. (StarBiz)

Malaysia: Central bank won’t allow offshore ringgit trade soon
Malaysia isn’t likely to let its currency to be fully traded overseas anytime soon, central bank Governor Zeti Akhtar Aziz said, downplaying the imminence of such a move. “We’re not going to rush to have full internationalization; it could be in phases,” she said. "Offshore ringgit trading won’t be allowed in the near term, unless we achieve all the preconditions and international markets stabilize and return to more normal conditions.” (Bloomberg)
Indonesia: Bans maids from coming to Malaysia
Indonesia's Labour and Transmigration Minister Muhaimin Iskandar announced that prospective maids from the country would be banned from leaving for Malaysia until the Indonesian government could ensure their safety. He said the move was in response to the case where an Indonesian maid was allegedly abused by her employer in Penang on Sept 13. (BT)

China: Sees need to rebalance economy, Zoellick says
World Bank President Robert Zoellick said Chinese officials understand the need to rebalance their economy toward more domestic consumption, and that allowing the currency to appreciate is not the only tool for it. “They recognize this is an issue, in part for their own interest,” Zoellick said "A stronger yuan is appropriate, but the question is how they accomplish it, how you press them and also what the US has to do.”(Bloomberg)

China: Yuan highest since 1993 after US criticism
The yuan climbed to the strongest level since 1993 after President Barack Obama criticised China for not letting its currency strengthen. China's leaders haven't done "everything they said would be done" to allow appreciation, Obama said. Yuan forwards gained for a fourth day as the dollar weakened against Asian currencies and the euro. (StarBiz)

UK: Posts largest August deficit since at least 1993
Britain posted the largest budget deficit for any August since records began in 1993 as debt costs soared, underscoring the pressure on Chancellor of the Exchequer George Osborne to rein in record levels of borrowing. Net borrowing was 15.3 billion pounds (USD23.7bn), compared with 13.5 billion pounds a year earlier, the Office for National Statistics said in London. (Bloomberg)

US: Housing starts increase, permits lag
Housing starts in the US increased more than forecast in August, outstripping a gain in building permits that signals residential construction will stay close to record lows. Builders began work on 598,000 homes at an annual rate, up 10.5% and the most since April, the Commerce Department said in Washington. (Bloomberg)

US: Economic slump ended in June '09
The worst US recession since the Great Depression ended in June 2009, the National Bureau of Economic Research said, as a slowdown in economic growth raises the possibility of another slump. "We are still expanding, but disappointingly slowly. It's still too early to tote up the cost, given that we are still far from recovered from its effects." (StarBiz)

20100922 1158 Malaysia Corporate News.

Hock Seng Lee wins RM99m road job
Hock Seng Lee has won a contract worth RM98.7m from AF Construction SB to build the Gedong-Simunjan Road in Samarahan, Sarawak. The scope of works includes earthworks, road, drainage, bridges and other related works. The project is expected to be completed by March 2013 and contribute positively to the company’s earnings up to financial year 2013. (BT)

Genting’s UK casino price up on lower net debt
Genting Malaysia’s acquisition price of a casino business in the UK from Genting Singapore plc would be increased to £351.5m from £340m. The revised acquisition cost was due to the lower net debt position of £74.4m as at 20 June compared with the net debt amount of £85.9m as at 31 May. In accordance with the terms of the sales and purchase agreement, the purchase consideration will be revised by the net debt difference from £340.0m to £351.5m to reflect the reduction in net debt. Genting Malaysia had on 20 Sept obtained approval from the British Gambling Commission for the proposed acquisition. (Starbiz)

HELP in talks with Singapore group
HELP International Corp announced that it is in talks with a Singapore-based education provider to offer joint programmes there. The education service provider said the venture could involve an investment by HELP in the Singapore entity. The company also said it is considering various fund raising options for its business expansion, without stating if that included a secondary listing in the island republic. (MalaysianReserve)

MISC unit MHB expected to be listed at RM3.80 a share
MISC is expected to list subsidiary Malaysian Marine and Heavy Engineering (MHB) on the main market of Bursa Malaysia by the end of next month at an indicative price of RM3.80 per share. MISC shareholders, had approved the proposed initial public offering (IPO), which includes an increase in authorised share capital, a share split, a dividend and bonus issue, an offer for sale and a public issue as part of the listing exercise. According to the MISC circular to its shareholders, the IPO is expected to raise up to RM2.1bn, with MHB's market capitalisation being RM6.08bn upon listing. From the total gross proceeds, about RM995m - which is from the public issue - will directly go to MHB's coffers. MISC, meanwhile, expects to receive up to RM1.16bn from the strategic investor allocation and proposed share sale to institutional investors. Last month, MISC - the shipping arm of Petroliam Nasional (Petronas) - had agreed to sell up to 9.9% of the enlarged issued and paid-up capital of MHB to French oil and gas engineering group Technip under the IPO. MISC intends to utilise more than four-fifths of the proceeds for capital expenditure to buy new petroleum tankers, while the remaining for working capital and other expenses. (BT)

Berjaya Food releases IPO prospectus exposure
Tan Sri Vincent Tan’s plan to list Berjaya Food (B-Food) took another step forward when its prospectus exposure was published on the Securities Commission website yesterday. According to the prospectus exposure, the vendor is offering 35.84m shares of 50 sen each, or 25.35% stake in B-Food, via its initial public offering (IPO) exercise. The tranche consisted of 3.53m shares to be offered to the Malaysian public, 3.53m shares to the bumiputra public, 9.73m shares for private placement to selected investors, and 14.13m to bumiputra investors approved by the Ministry of International Trade and Industry. (FinancialDaily)

CIMB seeks 6-month extension for Thai listing
CIMB Group Holdings is seeking a six-month time extension to complete its proposed dual listing on the Stock Exchange of Thailand. Malaysia’s second largest lender said it has sent its request to the Securities Commission without giving reason for the extension request. (MalaysianReserve)  

AirAsia: May fan price war in Japan skies. AirAsia, the first international budget carrier to fly to Tokyo's Haneda airport, plans to kick off service with USD58 (USD1 = RM3.10) flights between Tokyo and Kuala Lumpur  and said it could expand to three more Japanese airports. In a move that could pour fuel on increasing price competition over Japan's skies, the 5,000 yen (100 yen = RM3.62, RM181) flights are on offer from December until July next year, after which prices will start at 10,000 yen (RM362), with premium lie-flat seats costing 48,000 yen (RM1737.6). (Source: Business Times)

Airlines: Sharp rebound by global airlines seen. The International Air Transport Association (IATA) has almost tripled its global airline profit forecast for 2010, but warns that this could be the last time it does it. "2010 is as good as it gets. We look to be at the peak of the cycle, and 2011 looks to be a tougher year, for the simple reason of the big economic picture." "Governments are running out of cash for pump priming. Unemployment remains high and business confidence is weakening. And we expect the 3.2% gross domestic product growth of 2010 to drop to 2.6% in 2011," IATA director-general and CEO Giovanni Bisignani said. (Source: Business Times)

Autos: Syed Hafiz is Naza Kia's new COO. Naza Kia Sdn Bhd, the local distributor of Kia Motor vehicles, has appointed Datuk Syed Abdul Hafiz Syed Abu Bakar, former MD of Perusahaan Otomobil Kedua Sdn Bhd (Perodua), as its new COO. Syed Hafiz will assume the position on October 1 2010, replacing Datuk Syed Hisham Syed Wazir who left Naza Kia at the end of last month to join UMW Holdings Bhd as its president and CEO. (Source: Business Times)

Plantation: Premium Renewable to build RM124m plant. Premium Renewable Energy (Malaysia) Sdn Bhd will spend USD40m (RM124m) to build a rapid thermal process (RTP) bio-oil plant near Lahad Datu, Sabah in 2011. Dubbed as first of its kind in Malaysia, the plant will use oil palm biomass as feedstock in partnership with one of the country's largest plantation companies. (Source: Business Times)

Proton: Lotus to unveil 4 new models next week. Lotus Group International Ltd, a wholly owned subsidiary of Proton Holdings Bhd, will unveil 4 new sports car models at the 2010 Paris Motor Show next week, 2 of which are relaunched models called Lotus Elite and the Esprit, said industry sources. (Source: The Edge Financial Daily)

Regulatory: AOB accepted into International Forum of Independent Audit Regulators. The Audit Oversight Board (AOB) has been admitted as a member of the International Forum of Independent Audit Regulators (IFIAR), making Malaysia only the second country from Asean to be admitted. Securities Commision said AOB's entry is important to promote investor confidence in Malaysia's capital market. (Source: The Star) 

20100922 1153 Global Market News.

OIL: Crude slips on surprise inventory gains
SINGAPORE, Sept 22 (Reuters) - Oil fell on Wednesday for a sixth session in seven after an industry report showed surprise gains in U.S. inventories, while the Federal Reserve stopped short of laying out a timetable for more economic stimulus.
The outlook for oil demand remained sluggish after the U.S. central bank's policy-setting panel opened the door wider to pumping hundreds of billions of new dollars into the economy, although it made no policy shift at the end of a Tuesday meeting, keeping overnight interest rates near zero.

COMMODITY MARKETS: Some markets see profit taking after Fed
NEW YORK, Sept 21 (Reuters) - Investors took profits in some commodities on Tuesday, selling oil, copper and grains futures after the U.S. Federal Reserve left near-term monetary policy unchanged as expected.
"I think the gold bulls really got what they wanted from this Fed policy statement," said Bill O'Neill, partner at LOGIC Advisors in Upper Saddle River, New Jersey.

GLOBAL MARKETS: Dollar, US yields fall on Fed easing view
HONG KONG, Sept 22 (Reuters) - The U.S. dollar and Treasury yields fell on Wednesday in the wake of the Federal Reserve's  move closer to buying more bonds to support the economy, a prospect that kept gold near record highs.
"We continue to expect that a sizable asset purchase program will be implemented in coming months," economists at Goldman Sachs said in a note.

Dollar weak as Fed in view; euro bond sales ok
LONDON, Sept 21 (Reuters) - World stocks ticked upwards and the dollar fell broadly  as investors braced for a Federal Reserve meeting that may discuss whether the fragile U.S. economy needs a fresh infusion of cash.
"The statement might be quite dovish, which could intensify speculation of more QE later in the year," said Niels Christensen, currency strategist at Nordea in Copenhagen.

20100922 1149 Soy Oil & Palm Oil Related News.

Soy-product futures ended lower, retreating in step with soybeans in the absence of fresh news to promote buying interest, analysts said. Soyoil futures managed to grab some product-share value on spreads due to ongoing concerns about tighter global vegoil supplies, analysts said. December soyoil settled 0.23 cent, or 0.5%, lower at 42.82 cents per pound. Speculative December soymeal ended $2.80, or 0.9%, lower at $307.40 per short ton.(Source:CME)

Malaysia Hopes To Boost Palm Oil Yields With Mandatory Replanting (Source:CME)
Malaysia hopes to boost palm oil yields, which have remained stagnant the past 20 years, through mandatory replanting programs, an industry executive said Tuesday at a government briefing. Replanting activities are currently carried out on a voluntary basis. "Upstream plantations have a backlog of 365,000 hectares of palm trees that are over 25 years old and need to be replanted," Genting Plantations Bhd. Vice President Chew Jit Seng said. "This has brought down productivity." Chew said the mandatory replanting plan may target smallholders owning lands with palm trees over 25 years old and yielding less than 13 metric tons of palm oil per hectare as well as plantation firms that get less than 16 tons per hectare. The government hopes to boost yearly national yields to 26 tons a hectare from the current 21 tons and increase oil extraction rates to 23% from 20.5%.
Plans to boost productivity, the move to high-value oleochemicals and more downstream business would cost a total of MYR125 billion over the next 10 years, with 97.7% of the funding coming from the private sector. The plan is part of the ambitious goal of a government think-tank called Performance Management and Delivery Unit or Pemandu to catapult the middle-income nation to high-income status within a decade. Pemandu said plans for 131 private sector-led projects in 11 key industries would triple Malaysia's gross national income to MYR1.7 trillion in 2020 from MYR660 billion in 2009.

China Frost Won't Affect Corn, Soybeans -State Think Tank
Early frost in China's grain-producing areas isn't expected to affect output of soybeans or corn, the state-backed China National Grain and Oils Information Center said Tuesday. China's grain harvest is closely watched, as it affects global grain flows, the level of state grain reserves and the government's goal of 95% grain self-sufficiency. "A third of this year's soybean harvest has already been collected, and all of it is already mature, so even if there's frost, it won't affect the harvest," a researcher with the semi-official think tank said. The frost isn't expected to heavily affect corn production, he said, adding that this year's output projections for corn were the "best in five years."
The researcher, who didn't wish to be named, attributed weekend reports of early frost affecting the crops to "market speculation by external sources." China's soybean crop is expected to be entirely harvested by the end of September, he said, adding that this was a slightly earlier harvest than normal. The harvest is usually completed by mid-October. Corn is slightly more vulnerable as its harvest season extends into November. However, analysts project the upcoming corn harvest to rise about 5% on year to 165 million metric tons. Last week, the center maintained its forecast for the soybean harvest at 14.8 million tons, down 1.3% from last year's 15 million tons.

Ease on technicals; weather concerns linger
KUALA LUMPUR, Sept 21 (Reuters) - Most vegetable oil prices dipped  as traders booked some profits after concerns of dry weather in the Americas and frost in China and Canada drove markets up the previous day.
"Traders are booking profits ahead of the Mid-Autumn festival, but losses were limited by U.S. soyoil's strength," said a Shanghai-based oil analyst with a local brokerage.

Analyst cuts Ukraine '10 rapeseed crop forecast
KIEV, Sept 21 (Reuters) - UkrAgroConsult agriculture consultancy on Tuesday revised down its forecast for Ukraine's 2010 rapeseed harvest to 1.45 million tonnes from the previous outlook of 1.50 million.
The consultancy said in a report it had cut the harvested area to 870,000 hectares from 915,000 hectares a month earlier.

India monsoon may not withdraw this week:climate centre head
NEW DELHI, Sept 21 (Reuters) - India's monsoon may not start withdrawing this week, a top forecaster said on Tuesday, raising the risk of floods in some areas and further delays to soybean and cotton harvesting.
"The monsoon withdrawal appears unlikely this week," D. Sivananda Pai, director at the Pune-based National Climate Centre, which is part of the India Meteorological Department, told Reuters.