Thursday, October 14, 2010

20101014 1828 FCPO EOD Daily Chart Study.

FCPO closed : 2916, changed : -14 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histrogram : turned lower, buyer taking profit.
Support : 2900, 2850, 2800 level.
Resistant : 2970, 3020, 3050 level.
Comment :
Firmer soy oil and crude oil futures prices lead FCPO to open and traded higher breaking higher ground promoted buyer to realising their huge profit sell down the market to lower ground to record small decline in higher volume transaction. Daily chart formed a down bar doji bar candle pulling back from the upper Bollinger and with the reading call for a correction range bound upside biased market development.
When to buy : buy at support and weakness with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20101014 1814 FKLI EOD Daily Chart Study.

FKLI closed : 1492, changed : unchanged,  volume : lower.
Bollinger band reading : upside biased.
MACD Histrogram : recovering, buyer insist to stay.
Support : 1485, 1470, 1458 level.
Resistant : 1500, 1530, 1550 level.
Comment :
Hit new high market FKLI closed unchanged after market opened and traded higher follow by profit taking activities triggered market to surrender a gain of the day with lesser volume transaction changed hand. Daily chart from a down doji bar candle with the high touched upper Bollinger band level and corrected downward. Reading wise, market still likely to trade upside biased with possible pullback correction to continue.
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.

20101014 0937 Local & Global Economics News.

Malaysia: Najib may jumpstart investment with budget incentives
Malaysian Prime Minister Najib Razak may open up more services industries to foreign companies, moving to end a slump in investment that’s threatening the country’s goal of becoming a developed nation in the next decade. Najib, who will unveil the country’s 2011 budget this week, is counting on private investment to drive projects from railways to a Kuala Lumpur shopping district as he seeks to contain state spending. (Bloomberg)

HK: Moves to cool property
Hong Kong will restrict immigration based on property investment and increase housing supply to try to cool the overheating sector, its leader said, prompting a sharp drop in local real estate stocks. In his annual policy address laying out the city's policy blueprint for the coming year, Kong Kong Chief Executive Donald Tsang said government will also supply more land for about 20,000 private flats annually over the coming decade, while about 61,000 private housing units would be added over the next three to four years. (Financial Daily)

China: Foreign-exchange reserves jump to USD2.65 trillion
China’s foreign-exchange reserves, the world’s largest, surged by a record to USD2.65 trillion at the end of September, adding fuel to complaints that the nation’s curbs on gains in the yuan are undermining the global recovery. Currency holdings rose about USD194bn in the third quarter, statement from the People’s Bank of China showed. September exports were the second-highest on record at USD145bn, a separate customs bureau report showed. (Bloomberg)

UK: Jobless claims rise the most in eight months
UK unemployment claims climbed for a second month in September with the biggest increase in eight months, a sign the economy is losing momentum. Jobless benefit claims rose by 5,300 from the previous month to 1.473 million, the Office for National Statistics said in London. Overall unemployment in the quarter through August fell by 20,000 to 2.45 million, led by 16 to 17 year-old people. (Bloomberg)

US: Inflation to fall short of Fed’s goal through 2012
Inflation in the US through 2012 will fall short of the Federal Reserve’s long-term goal as growth and employment are slow to rebound, according to economists surveyed by Bloomberg News. The Fed’s preferred price gauge, which is tied to consumer spending and excludes food and fuel costs, will climb 1.2% next year and 1.5% in 2012 on average. Most policy makers project those prices will increase 1.7% to 2% in the long run. (Bloomberg)

U.K: Consumer confidence plummeted in September to an 18 month low, Nationwide Building Society said. The index of sentiment fell 9 points from the previous month to 53, the lowest since March 2009. (Source: Bloomberg)

Japan: Machinery orders unexpectedly advanced in August . Factory orders rose 10.1% MoM from July, the largest increase since December. The data is an indicator of business investment in three to six months. (Source: Bloomberg)

China: Posted a USD16.9b trade surplus for September , capping the largest quarterly excess since the financial crisis in 2008. Exports rose 25.1% YoY and imports climbed 24.1% YoY. The third quarter trade gap was USD 65.6b, the most since a USD114b surplus in the final three months of 2008. (Source: Bloomberg)

Australia: Consumer confidence rebounded in October as the central bank extended a pause on interest rate increases and employment surged. The sentiment index rose 3.3% to 117 this month, after a 5% drop last month, according to a Westpac Banking Corp. and Melbourne Institute survey. (Source: Bloomberg)

Crude Oil: IEA raises oil demand forecasts amid OECD strength . Global oil demand will be higher than previously estimated this year and next amid signs of "apparently resurgent" consumption in the U.S, Germany and Japan in the past quarter, the IEA said. Crude oil use worldwide will average 86.9 million barrels a day in 2010 and 88.2 million barrels a day in 2011, the IEA said in its monthly Oil Market Report. That's 300,000 barrels a day more than last month's forecast for both those years. (Source: Bloomberg) 

20101014 0936 Malaysia Corporate News.

Malaysia defers implementation of GST
The Government has postponed the implementation of the goods and services tax (GST) to provide more breathing space for Malaysians. The Ministry of Finance (MOF), in a brief statement yesterday, said the decision was to allow for a more inclusive engagement with "all segments of rakyat pertaining to the GST". The MOF did not provide any new date but maintained that the GST is still important in ensuring a strong and sustainable fiscal position to support the country's long-term economic growth. Based on a proposed rate of 4% (as opposed to the sales and service tax's rate of between 5 and 10%), its implementation was projected to generate an additional RM1bn of revenue annually. (BT)

 Retailers raise sales forecast to 6.1%
Retail sales growth forecast for 2010 has been revised upwards to 6.1%, from an earlier projection of 5.5%, following a good showing in the first half. This second upward revision is expected to see Malaysian retailers sell products, not including bulk items like cars and houses, worth some RM75.3bn. In the first quarter, retail sales grew by 7.9% and in the second quarter by 5.8%, bringing the first half year's growth to 7.1%. "Profit margin of retailers improved by 4.3% during the second quarter of 2010. This is very encouraging for the industry, considering the heavy discounts and regular promotions required to get consumers to spend," RGM's managing director Tan Hai Hsin said in the latest report issued yesterday. It is projected that the July to September growth is around 6.8% with all retail segments registering improved performance. (BT)

Kencana gets RM16.4m contract from Petronas Carigali
Kencana Petroleum has secured a RM16.4m contract from Petronas Carigali SB for the provision of a single buoy mooring overhaul. The contract which was secured through its subsidiary Kencana HL SB, was for a oneoff period and was expected to commence in January 2011. The single buoy mooring overhaul will be for Petronas Carigali’s Sarawak operations. The contract is expected to contribute positively to the earnings and net asset per share of Kencana Petroleum Group for the financial year ending 31 July 2011. (FinancialDaily )

MMHE may have received 15 times bid for IPO
Malaysia Marine & Heavy Engineering Holdings (MMHE), a rig and shipbuilder, received bids or more than 15x the number of shares allocated for institutions in the country’s biggest initial public offer (IPO) so far this year, three people familiar with the matter said. The bids were at RM3.80 per share, which was at the top of its indicative price range. (Starbiz)

CIMB’s Bangkok listing delayed to 2011
Malaysia’s CIMB Group Holdings has postponed a plan to list on the Thai bourse to 2011 from the 4Q of this year, the head of its Thai unit, CIMB Thai Bank Pcl, said yesterday. Subhak gave no reason for the delay. He said CIMB Thai expected to return to a net profit in the first nine months of 2010 after posting a 40.6m baht (RM4.2m) loss a year earlier. (FInancialDaily)

Airasia’s Thai unit to fly at market value of RM1.7bn
Airasia, the largest low-cost airline in South East Asia, may list its Thai affiliate with a market capitalization of between US$500m and US$550m (RM1.7bn) by third quarter 2011. Thai AirAsia, 49%-owned by AirAsia, is in the midst of finalizing the listing structure and will select investment bankers by the end of this month for the initial public offering, according to Thai AirAsia chief executive officer (CEO), Tassapon Bijleveld. Separately, AirAsia is planning a dual-listing exercised on the Stock Exchange of Thailand that is expected to take place by next year. Thai AirAsia plans to expand its fleet from 19 planes presently up to 40 planes, within the next 5 years. (MalaysianReserve)

Consumer: Duty hike on brewers unlikely, says GAB. There is strong speculation that, after a four-year reprieve, brewers will be hit with an excise duty hike  in the 2011 Budget, to be tabled tomorrow. However, Guinness Anchor Bhd (GAB), the country?s largest brewer, argued that such a move does not seem likely as it would not make sense. An excise duty hike would lead to higher prices of beer and stout, and this would make the black market products more attractive to consumers, resulting in government losing out on the potential revenue. (Source: Business Times)

REIT: Boost in the offing. The Malaysian real estate investment trust (REIT) sector is likely to get a boost soon, with firmer plans for a national REIT company and a reduction or removal of the withholding tax for REIT investors, sources said. The national REIT will likely include a number of assets belonging to the government and the government-linked companies (GLCs). "There is a huge potential for "REITing" these government properties in a similar way Singapore did," said a source. It is understood that these proposals may appear in the soon-to-be announced Budget 2011. (Source: The Star)

Utilities: Bakun?s impoundment starts. Uncertainties on operations of the Bakun Hydroelectric Dam were lifted yesterday when Sarawak Hidro Sdn Bhd, the owner of the dam, started impounding operations yesterday morning. The exercise which will effectively flood the area as big as the size of Singapore started yesterday morning with the closure of the diversion tunnel at 10am. The impoundment or filling up of reservoir will take about 7 months to reach the minimum operation elevation of 195 m (above sea level) to run the turbines. Filling up the reservoir to its maximum operation elevation of 228m would take about 13 months depending on the rainfall in the catchment area. (Source: The Edge Financial Daily)

Autos: Kamaruddin to meet Dr M over Team Lotus rights dispute. Lotus Racing Formula One team shareholder and deputy team principal Datuk Kamaruddin Meranun hopes to meet Proton Holdings Bhd adviser Tun Dr Mahathir Mohamed today to resolve the ?Team Lotus? rights dispute between Lotus Racing and Proton?s wholly-owned Group Lotus. Kamarudin added that Lotus Racing?s earlier filing made to the London High Court was to determine who owned what rights to the ?Team Lotus? name. (Source: The Star)

BGroup: To exit aviation business? Berjaya Group (BGroup) may exit the aviation business as it is in talks with investors to dispose of Berjaya Air. Industry sources said BGroup's controlling stakeholder Tan Sri Vincent Tan is talking to a few local and foreign parties including one from Indonesia. Berjaya Air general manager Tan Bee Hock told Business Times that he is not aware of any plans by (Vincent) Tan to sell the aviation business. The sources, however, claimed an Indonesian tycoon, who runs several businesses in Malaysia, has expressed an interest to buy the airline. (Source: Business Times)

20101014 0912 Global Market News.

OIL: Crude rallies as dollar slides further
SINGAPORE, Oct 14 (Reuters) - Oil rose for a second day on Thursday, approaching five-month highs, dragged higher by a broad-based rally in commodities as investors dump the dollar in a flight to value-preserving assets. U.S. crude inventories fell unexpectedly last week, partly because of the closure of the Houston Ship Channel, shedding 4 million barrels compared to an expected increase of 1.1 million, the American Petroleum Institute (API) said on Wednesday. 

COMMODITY MARKETS: Copper, gold jump as dollar drops; CRB hits 300
NEW YORK, Oct 13 (Reuters) - Copper hit 27-month highs and gold returned to record peaks on Wednesday, propelling a widely watched commodity index to a two-year high as the dollar weakened again on expectations that the U.S. Federal Reserve will soon start a new round of monetary easing.
"The CRB is looking all vertical now and so are many commodities and this is great for market bulls, but the truth is we are close to exhaustion on many of these rallies," said Shawn Hackett, president at Hackett Financial Advisors, a money manager in soft commodities in Boynton Beach, Florida.

GLOBAL MARKETS: Stocks at 6-month high, gold hits record on Fed
NEW YORK, Oct 13 (Reuters) - World stocks jumped to a six-month high, gold hit another record, and the dollar weakened on Wednesday on expectations that the Federal Reserve will further loosen monetary policy, boosting risk appetite.
Gold prices reached an all-time high of $1,374.15 an ounce as investors sought protection against a sinking dollar. Other commodities also climbed -- oil prices shot up 1.6 percent to close just above $83 a barrel.
"The Fed minutes certainly induced a rally right across the board," said Peter Cardillo, chief market economist at Avalon Partners in New York.

PRECIOUS-Gold at 1-wk high as Fed signal sinks dollar
LONDON, Oct 13 (Reuters) - Gold held at its highest in nearly a week on Wednesday after the Federal Reserve signalled the U.S. economy may need extra stimulus, which hit the dollar, while evidence of strong investment demand lifted palladium.
"We're still very bullish. In May, we outlined $1,600 was our target. I guess that was quite aggressive at the time and now we see everybody migrating towards that level," said Deutsche Bank analyst Michael Lewis.

FOREX-Dollar falls, euro up on contrasting policy views
LONDON, Oct 13 (Reuters) - The dollar came under broad selling pressure on Wednesday, with investors pushing it towards key lows against the euro, the Swiss franc and a basket of currencies on more signs pointing to U.S. monetary easing.
"Little has changed on the dollar front, but more QE from the Fed has now become more of a likely reality," said Neil Mellor, currency strategist at Bank of New York Mellon.

World stocks hit 5-month high after Fed
LONDON, Oct 13 (Reuters) - World stocks hit a five-month high on Wednesday while emerging market equities held near a recent 27-month peak, driven by expectations of more money printing in the United States and upbeat corporate reports.
"We saw from the FOMC minutes that there is little doubt that a further round of (quantitative easing) is likely to happen at the next meeting," David Morrison, market strategist at GFT Global said.

20101014 0912 Soy Oil & Palm Oil Related News.

Soy product futures ended mixed, with soyoil rising on the unwinding of meal/oil spreads. Strength in world vegoil markets and strong export demand are underpinning features for soyoil, analysts said. Soymeal was pressured by spillover weakness from corn futures. Corn and soymeal are linked, as both are feed ingredients for the livestock industry. December soyoil settled 0.63 cents or 1.3% higher at 47.58 cents per pound. December soymeal ended $4.10 or 1.2% lower at $329.00 per short ton. Speculative fund buying was estimated at 4,000 lots in soyoil, while fund selling was pegged at 2,000 lots in soymeal.(Source: CME)

Rain Seen Returning To Brazil's Top Soy Region (Source: CME)
Heavy rain in Brazil's top soy-producing region next week is expected to give a boost to delayed planting of the new 2010-11 crop. Planting has been delayed in many areas of Brazil's center-west soy belt that includes Mato Grosso, the country's top soy-producing state, due to insufficient rainfall in recent months caused by the La Nina weather phenomenon, which typically brings drier weather than usual. News of the pending rain in Mato Grosso and neighboring soy-producing states, such as Goias, comes as soybean prices on the Chicago Board of Trade have been propelled to reach around 14-month highs this week on concerns of smaller U.S. supplies and strong export demand.
Uncertainties about supplies in South America's output also helped to spark recent rising prices as traders factored in the possibility of weak harvests due to dry weather in top producers such as Brazil, the world's No. 2 soy producer after the U.S. Soybean futures for November delivery, the most active contact, were trading down 0.04% to $11.78 a bushel on Wednesday. "Although light rain was insufficient for planting in September and early October, Mato Grosso should see seven days of widespread rain from Oct. 20 for seven days," Celso Oliveira, a meteorologist at private weather service Somar said. The rainfall in Mato Grosso and north Goias state will reach an accumulation of around 80 millimeters Oct. 20-27, he said.
This would be adequate for planting as farmers typically need some 60 to 80 millimeters to provide adequate soil moisture for their beans to grow. Farmers in Mato Grosso are typically the first to begin planting in mid-September, which means they can harvest and sell their beans ahead of rival neighboring states. This year, however, farmers in Parana--the country's second-largest soy-producing state--have managed to plant earlier than farmers in Mato Grosso. Local agricultural consultancy Celeres on Monday said farmers in Mato Grosso had planted only 3% of their soy area as of Oct. 8 compared to 12% a year earlier, while farmers had planted 9% of the Parana soy area, versus 10% a year earlier.
Oliveira said that a slight decrease of 10% to 20% lower rainfall will douse Mato Grosso in November. "As this level of rainfall is only slightly lower than historic levels, it isn't a problem for agriculture," Oliveira said, noting that the months ahead are typically wet. In Parana, farmers have seen good rainfall since September, he said. "Rain so far isn't a problem in the south," he said.

CBOT Corn Futures May Rise To $6/Bushel Next Few Days - Executives (Source: CMe)
Corn futures on the Chicago Board of Trade may rise to $6 a bushel within the next few days due to large-scale covering of short positions, but will likely pull back around that level, trading executives and analysts said. "There is still upside potential in corn futures because investors continue to buy back short positions," Koname Gokon, deputy general manager at commodity brokerage Okato Shoji Co.'s research division, said. He said immediate resistance for CBOT December corn futures is at $5.90/bushel, then $6/bushel. At 0843 GMT, December corn contract traded at $5.88/bushel.

U.S corn hits new 2-yr high, wheat gains
MILAN, Oct 13 (Reuters) - Chicago corn futures hit fresh  two year highs and helped push wheat prices higher on continued support from last week's bullish U.S. government report and bolstered by weakness in the U.S. dollar.
"The corn situation remains at the centre of concerns and speculation," a European trader said. "There exists the will to go and test the $6 threshold."

China soyoil off 25-mth high on reserve sale plans
KUALA LUMPUR, Oct 13 (Reuters) - Soyoil futures in China ended off 25-month highs hit earlier on news that the government will release vegetable oil reserves next week to rein in the recent run-up in prices.
"Above 9,000 yuan is a ceiling for soyoil as the government will release state reserves to control prices, and vegetable oils buyers may purchase rapeseed instead of soyoil," said an oil analyst in China's major soy producing province, Heilongjiang.

China to sell 300,000 T rapeseed oil reserves next week
BEIJING, Oct 13 (Reuters) - China is going to release 300,000 tonnes of rapeseed oil from state reserves next week as part of efforts to tame rising vegetable oil prices in the runup to national holiday early next year, according to an official announcement issued on Wednesday.
The sales will be held on Oct 20, according to the notice posted on the National Grain & Oil Trade Centre ( ), but it did not mention the sales of soyoil reserves.

China Sept soy imports at 4.64 mln T-Customs
BEIJING, Oct 13 (Reuters) - China, the world's largest soy buyer, imported 4.63 million tonnes of the oilseed in September, down 2.7 percent from August, but a rise of 68.5 percent from a year-ago period, official Customs figures showed on Wednesday.
The September figure brings China's total imports in 2009/2010 (Oct/Sept) marketing year exceeding 50 million tonnes, a record volume or a rise of 22 percent from the previous year following an ongoing expansion of the crushing industry.

Argentina says to resume soyoil exports to China
BUENOS AIRES/BEIJING, Oct 12 (Reuters) - Exporters in Argentina are set to resume shipments of soyoil to China after the Asian giant lifted a six-month de facto ban on soyoil imports from the South American country, the Argentine government said on Tuesday.
China effectively barred imports from the world's top supplier of the edible oil at the end of March amid a wider trade dispute, restating quality standards that traders described as impossible to meet in practice.