Friday, October 8, 2010

20101008 1731 FKLI EOD Daily Chart Study.

FKLI last looked : 1479.5, changed : -2 points, volume : lower.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : resume lower, seller taking small exposure.
Support : 1470, 1458, 1445 level.
Resistant : 1485, 1500, 1530 level.
Comment :
Marginally lower FKLI traded side way range bound in quiet volume transaction changed hand following a mix regional market development. Daily chart formed the 3rd continuous doji bar candle with the Bolligner band turning outward with the same old same old side way range bound little upside biased reading.
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.

20101008 1318 FKLI Mid Day Hourly Chart Study.

FKLI closed : 1482.5, changed : +1 point, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : getting lower, buyer defending as seller testing market.
Support : 1470, 1458, 1445 level.
Resistant : 1485, 1500, 1530 level.
Comment :
Tight 5.5 points range market FCPO edge u marginally higher with sleeping volume transaction as market seem struggling to determine its direction following a mixture development over regional market. Hourly chart continue to call for a tight ranging side way market development testing support and resistant level within the Bollinger upper lower band.

20101008 1309 FCPO Mid Day Hourly Chart Study.

FCPO closed : 2782, changed : -4 points, volume : moderate.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer taking partial profit.
Support : 2770, 2750, 2720 level.
Resistant : 2800, 2850, 2900 level.
Comment :
Profit taking FCPO eased little lower in moderate volume participation after market opened gap up higher above 2800 psychological level recorded new high followed by profit taking activities press price downwards. Hourly chart wise, price opened above upper Bollinger band and head south doing pullback correction with the reading suggesting a correction range bound upside biased market.

20101008 1226 Local & Global Economics News.

Malaysia: August exports expected to show 13.8% growth
August exports may have expanded although it is likely due to the base effects of low export sales in the same period a year ago, said economists. The strengthening ringgit (against the USD) is also expected to affect the flow of imports, they added. The Ministry of International Trade and Industry will release the data today. (BT)

Japan: says it won’t join currency devaluation race
Japan won’t weaken the Yen to become more competitive with other countries in trade and any currency intervention would be aimed at restraining excessive moves, Vice Finance Minister Fumihiko Igarashi said. Igarashi spoke as Japan’s currency reached its highest against the dollar since 1995, surpassing the level at which the nation’s authorities last month intervened for the first time since 2004. (Bloomberg)

UK: Manufacturing Output Rises More Than Forecast
UK manufacturing rose more than economists forecast in August as Bank of England policy makers debate whether they need to boost stimulus to sustain the recovery. Output climbed 0.3% from the previous month, when it gained a revised 0.4%, the Office for National Statistics said in London. The forecast was for an increase of 0.2%. On the year, production rose 6%, the most since December 1994. (Bloomberg)

UK: Home prices plunge most on record
UK house prices plunged in September by the most since at least 1983, adding to evidence that the housing market faces a renewed slump as the government readies the biggest spending cuts since World War II. The average cost of a home fell 3.6% from August to GBP162,096 (USD258,000). (Bloomberg)

US: Job openings rose in August to 3.2 million
Job openings in the US rose in August as more companies prepared to add staff amid signs demand was holding up, a government report showed. Openings increased by 60,000 to 3.2m, the Labor Department said in Washington. The number of people hired dropped from the prior month and separations also decreased. (Bloomberg)

US: Consumer borrowing falls on drop in credit cards
Consumer borrowing declined in August as Americans trimmed credit-card balances, showing consumers remained reluctant to take on more debt as joblessness climbed. Credit declined by USD3.34b after falling a revised USD4.09b in July, more than the previous estimate, according to a Federal Reserve report released. Credit-card debt decreased for the 24th consecutive month. (Bloomberg)

US: Jobless claims decrease to three-month low
Applications for US unemployment benefits unexpectedly fell last week to the lowest level in three months, indicating the labor market may be thawing. Jobless claims dropped by 11,000 to 445,000 in the week ended 2 October, the fewest since 10 July, Labor Department figures showed. (Bloomberg)

20101008 1225 Malaysia Corporate News.

SC cautions Mudajaya, company also to develop hydro power project in Laos
The Securities Commission (SC) yesterday issued “caution and reminder” to Mudajaya Group and its board to “strictly observe its disclosure obligations” on transactions relating to the company’s investment in an independent power plant (IPP) in India, in particular the transfer of funds between related entities. In a press statement yesterday, the SC said its review of the transactions had concluded that Mudajaya “failed to make adequate disclosures on pertinent matters”. In a separate announcement yesterday, Mudajaya Group has inked a memorandum of understanding (MoU) with the Laos government to develop a nominal 60MW Nam Poui 1 hydroelectric power project with a possible concession period of 30 years, said the company in a filing to Bursa Malaysia. Mudajaya said its wholly owned subsidiary Mudajaya Corp (MCB) had on 6 Oct signed the MoU with the Laos government’s Ministry of Planning and Investment for the production and supply of electricity. Mudajaya said under the MoU, the Laos government would grant MCB the “sole mandate and exclusive right to develop, implement and operate” the project on a build-operate-transfer basis if the project was “feasible in all aspects”. (Financial Daily)

Dialog gets exclusive rights to develop terminal
Dialog Group has been given the exclusive rights to develop an independent deep water petroleum terminal at Pengerang, Johor for a period of 60 years by the State government of Johor. Last June, it had signed an MOU with the Johor state government to own and develop an independent deep water petroleum terminal with harbour port, jetty and other marine facilities. (BT)

TNB wins arbitration against Prai Power
Tenaga Nasional has won an arbitration case against Prai Power SB, ultimately owned by MMC Corp, over payments to keep the capacity of a power plant at a certain level. Prai's claim of more than RM150m was dismissed and it also has to pay TNB more than RM10m following the utility's counterclaim. It also has to pay TNB's travel and other fees related to the arbitration. (BT)

Talam subsidiary sells land in Selangor
Talam Corp, under its wholly owned subsidiary Juara Tiasa SB, has sold a piece of land in Bukit Sentosa in Serendah, Selangor, for RM28.5m. The freehold land is designated for use as a private institution, hostel and club, including related structures. In a statement to Bursa Malaysia, Talam said the proceeds will be used to settle outstanding loan facilities. (BT)

Proton recalls cars
Proton Holdings has announced a voluntary recall of its Gen2 and Satria Neo cars manufactured between 2004 and 2008 due to a clock spring malfunction that raised safety concerns. The recall, which is part of Proton’s Global Quality Assurance programme, affects 15,911 or 2% of 660,000 cars produced and sold over that period. The clock spring connects switches and airbag to the radio, horn and cruise control. (StarBiz) 

20101008 1208 Global Market News.

Oil erases weekly gain; stimulus in doubt on jobs data
SINGAPORE, Oct 8 (Reuters) - Oil slipped a few cents, erasing gains for the week, on speculation the U.S. jobs market may have emerged from a soft patch, putting into question the urgency of further monetary stimulus.
"The dollar is the key short-term factor and the reinstatement of the linkage with the dollar will stay for a while yet," JP Morgan oil analysts led by Lawrence Eagles said, referring to the inverse relation between the U.S. currency and oil, which becomes dearer to most as the greenback strengthens.

Profit taking precedes US payrolls, G7
HONG KONG, Oct 8 (Reuters) - Investors took profits on Asian equities and gold while also buying back some U.S. dollars, squaring up before the latest U.S. employment report and potentially contentious international meetings about currencies.
"Positioning could limit the degree of dollar downside, particularly against the euro," Todd Elmer, currency strategist with Citi in Singapore, said in a note.

COMMODITY MARKETS: Gold, commods fall as dollar rises on job hopes
NEW YORK, Oct 7 (Reuters) - Most commodities fell on Thursday after signs of a possible improvement in U.S. jobs boosted the dollar, pushing gold off a record high for its biggest one-day loss in two months.
"The gold market has been overdone, and we have gone so far in such a short period of time, so a correction is inevitable," said Bruce Dunn, vice president of trading at Auramet Trading.

GLOBAL MARKETS: Dollar rebounds, gold falls before US jobs data
NEW YORK, Oct 7 (Reuters) - The U.S. dollar rebounded after sliding to a 15-year low versus the Japanese yen and commodity prices erased gains that pushed gold to yet another new high on Thursday as traders bet momentum had swung too far, too fast.
"It's been the same story, the dollar goes down, assets are all inflated -- gold, oil, stocks," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

OIL: Crude erases weekly gain; stimulus in doubt on jobs data
SINGAPORE, Oct 8 (Reuters) - Oil fell on Friday, erasing gains for the week, as the dollar strengthened on speculation the U.S. jobs market may have emerged from a soft patch, putting into question the urgency of further monetary stimulus.
New U.S. claims for jobless benefits hit a near three-month low last week, a report showed on Thursday, suggesting some let up in labor market distress ahead of a monthly report due later on Friday that is expected to show non-farm payrolls were unchanged in September.

U.S. private sector job cuts raise Fed easing chance
NEW YORK, Oct 6 (Reuters) - U.S. private employers unexpectedly shed jobs in September, reinforcing the conviction that the U.S. Federal Reserve as early as next month will embark on another round of monetary policy stimulus to support the economic recovery.
ADP's national employment report on Wednesday said U.S. private employer payrolls fell by 39,000 jobs in September. The median forecast from a Reuters poll was for an increase of 24,000 jobs.

PRECIOUS-Gold hits record, set for best week in six months
LONDON, Oct 7 (Reuters) - Gold rose to a third successive record high on Thursday, putting it on track for its strongest weekly performance in six months, as expectations for the Federal Reserve to prop up the economy undermined the dollar.
"We look at the reasons for holding gold and other precious metals and, above everything else, it is the idea of a store of value to protect against currency debasement," said Natixis strategist Nic Brown.

FOREX-Dollar falls on policy, imbalance concerns
LONDON, Oct 7 (Reuters) - The dollar's downtrend gathered pace on Thursday as it slid to a 15-year low versus the Japanese yen and an all-time low against the Swiss franc on the prospect of more money-printing by the U.S. Federal Reserve.
"The only story out there at the moment is what the implications of another massive surge of QE means for the dollar and global imbalances," said Maurice Pomery, managing director of Strategic Alpha.

World stocks hit 5-month peak; dollar tumbles
LONDON, Oct 7 (Reuters) - Malaysian palm oil hit a near 17-month high on Thursday as traders bet the weak dollar may spur more demand for U.S. priced vegetable oil from top buyers China and India.
The dollar held near a 15-year low on expectations the U.S. Federal Reserve will shift towards a looser monetary policy and spur another round of quantitative easing -- a scenario that has supported equity and commodity markets.

20101008 1200 Soy Oil & Palm Oil Related News.

Chinese buying lifts soy ahead of key U.S. report
SINGAPORE, Oct 8 (Reuters) - U.S. soybean futures jumped 1.3 percent to a one-week top as buying by Chinese traders after a week-long holiday buoyed the market amid expectations of lower output in Brazil and Argentina.
"It seems that with the Chinese market back open it is clearly bringing in some Asian buying in the run-up to the USDA report," said Adam Davis, senior commodity analyst at Merricks Capital, a Melbourne-based fund manager that invests in agriculture.

U.S. Harvest-Iowa soybeans pile up as storage runs out
CHICAGO, Oct 7 (Reuters) - A torrent of freshly harvested soybeans are flooding Iowa, forcing some grain elevators in the top soy-producing state to store the oilseed on the ground, trade sources said on Thursday.
A rapid harvest that followed fast maturation of the crop and ideal weather for running combines have put more than the usual amount of soybeans into the supply pipeline.

Soy product futures ended higher following soybeans, with soyoil the upside leader. Soyoil climbed despite the bearish influence of lower crude oil futures amid strong underlying export demand. "In the past six months bio-diesel production has climbed 92% from a year ago in Argentina and 64% in Brazil, and this elevated bio-diesel production in South America has impacted other markets, the main one being vegetable oil exports," said MaxYield commodity trade advisor Karl Setzer. "Many importers who used to go to South America for soy oil needs are now coming to the United States," he added. December soyoil settled 0.34 cents or 0.8% higher at 44.12 cents per pound. December soymeal ended $0.40 or 0.1% higher at $296.20 per short ton.(Source: CME)

Brazil Farmers Poised To Plant Record Soybean Crop (Source: CME)
Brazil's farmers have just started planting what could turn out to be a record soy crop for the second successive year, but strong demand from countries like China means the extra beans aren't likely to contribute to pressure on prices. Brazil--the world's second-largest soybean producer after the U.S.--is likely to produce more than 69 million metric tons in the upcoming harvest season, topping the 68.5 million tons from last season's crop. Strong demand from importers such as China has kept international prices high, trading above $10 a bushel in recent months, and Eduardo Godoi, an analyst at consultancy Agrural, said that has encouraged Brazil's farmers to plant more land with soybeans and use more inputs such as fertilizer. Godoi sees the crop hitting 69.8 million tons, based on 24.1 million hectares of land planted. Earlier this week, another local consultancy Celeres said it expects 69.1 million tons to be produced.
Although a bumper crop could threaten to lower soybean prices in the months ahead, Steve Cachia, an analyst at consultancy Cerealpar, believes that the hike in output is unlikely to alter prices on the Chicago Board of Trade or in the local market. An extra one million tons of beans from Brazil from the next crop is minimal in the global market, and demand from countries such as China should soak that up, Cachia said. Soy prices have remained high in August and September and farmers have been selling large quantities of their remaining old beans and locking in prices for the new beans from the crop that will be harvested in 2011. Indeed, farmers have already agreed to sell 26% of the 2010-11 soybean crop as of Sept. 31, compared to 18% at the end of August and 11% from the same time a year ago, according to Agrural's Godoi. Still, the main risk on the horizon is the effect of the La Nina weather phenomenon in the months ahead, which can cause prolonged periods of dry weather and loss of crops.
Cooler surface  waters off the coasts of South America generally leads to lower rainfall in Brazilian farmland. However, rains fell at the end of September in Mato Grosso and the southern state of Parana, the country's No. 2 soy producer, allowing farmers there to plant their beans in soft, wet soil. Cachia said that there could still be problems in southern Brazil, if there isn't enough rain during the growing period between January through March, as happened in 2008-09.

MPOB Cuts 2010 CPO Output Forecast To Steady Vs 2009 (Source: CME)
Malaysia's crude palm oil output this year will likely be unchanged from 17.6 million metric tons last year, the director-general of the government-linked Malaysian Palm Oil Board said. The MPOB trimmed its previous forecast for a slight output gain due to "bad weather, heavier-than-usual rain that has disrupted harvesting, and stagnant palm oil extraction rates," Mohd. Basri Wahid said on the sidelines of an event. This would be the third consecutive year of zero output growth for Malaysia, the world's second-largest palm oil producer after Indonesia. Though Mohd. Basri didn't give his prediction on CPO prices, slower production growth could catalyse a rise in prices. Palm oil futures on Malaysia's derivatives exchange have risen 4% since the start of the year. The benchmark December contract on Bursa Malaysia Derivatives was trading MYR47 higher at MYR2,777/ton, after rising as much as 2% to MYR2,788/ton, its highest level since May 2008.
Wet weather amid stagnant palm oil extraction rate may curb output towards the end of this year, Mohd. Basri said, even though the oil palm replanting plan is slower than expected. He said the country had only achieved 31%, or 139,000 hectares, of its replanting target of 200,000 hectares announced in 2008, as some planters probably delayed felling of old trees due to high prices. The replanting plan was part of the Government's plan to support prices of palm oil that declined to as low as MYR1,331/ton late 2008, as cutting down 200,000 hectares of old palm trees would have reduced 700,000 tons of palm oil annually. About MYR1,000 is given for a hectare that is replanted. Mohd. Basri said Malaysia may only replant 80,000 hectares in 2010. Many among trade participants said palm oil prices may reach MYR3,000/ton towards the end of the year as above-average rainfall, associated with the La Nina weather condition, may cause floods,
slow harvesting and affect transportation of fresh fruit bunches and extracted oils. While oil palm trees thrive in moist conditions, rising soil moisture can reduce yields.

US corn, soy rise ahead of key USDA report
SYDNEY, Oct 7 (Reuters) - U.S. corn, soybean and wheat futures posted modest gains on Thursday, supported by a weak dollar, although volumes were light ahead of a key U.S. supply/demand report due for release on Friday.
Markets are treading water ahead of the U.S. Department of Agriculture's (USDA) October world agricultural supply and demand estimates (WASDE) report due for release at 1230 GMT on Friday.

Palm at 1-year top on strong demand hopes
KUALA LUMPUR, Oct 7 (Reuters) - Malaysian palm oil hit a near 17-month high on Thursday as traders bet the weak dollar may spur more demand for U.S. priced vegetable oil from top buyers China and India.
The dollar held near a 15-year low on expectations the U.S. Federal Reserve will shift towards a looser monetary policy and spur another round of quantitative easing -- a scenario that has supported equity and commodity markets.

POLL-Malaysia's Sept palm oil stocks at 7-month high
KUALA LUMPUR Oct 7 (Reuters) - Malaysia's Septemberpalm oil stocks probably hit a seven-month high as slightly higher output and imports outpaced overseas and local demand, a Reuters poll showed on Thursday.
Inventories in the world's No. 2 palm producer probably rose 2.5 percent to 1.77 million tonnes, slowing its pace from the 22.6 percent jump in August, a median of five planters showed.

Soyoil to soar in 2011 on food, biofuel demand
MINNEAPOLIS, Oct 6 (Reuters) - Soaring demand for vegetable oils used in food and biofuel will send U.S. soybean oil prices to highs not seen since 2008 despite rising supplies of soyoil and competing palm oil, a renowned oilseed analyst said.
U.S. soyoil futures will reverse recent declines and climb to fresh highs above 45 cents per lb by early 2011, while other edible oils are also poised to appreciate, Thomas Mielke, executive director of Oil World, said on Wednesday.