Monday, October 18, 2010

20101018 1818 FCPO EOD Daily Chart Study.

FCPO closed : 2889, changed : -41 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 2850, 2800, 2770 level.
Resistant : 2900, 2970, 3020, 3050 level.
Comment :
FCPO traded weaker recorded drop with higher volume changed hand after most commodities and equity market corrected lower after Mr. Ben Benanke statement triggered a US Dollar rebound. Daily chart formed another doji bar candle corrected downward from the high with the reading suggesting a correction range  bound upside biased market testing lower support levels.
When to buy : buy at support and weakness with quick cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20101018 1722 FKLI EOD Daily Chart Study.

FKLI closed : 1476, changed : -9 points,  volume : higher.
Bollinger band reading : correction range bound little upside biased.
MACD Histrogram : getting lower, buyer reducing position.
Support : 1470, 1458, 1445 level.
Resistant : 1485, 1500, 1530 level.
Comment :
FKLI ended softer in better volume traded in tandem with a negative regional market development after US Dollar rebounded upward. Daily chart doji bar candle tested below and closed right above the middle Bollinger band support level continue to have correction take place with the reading suggesting a correction range bound little upside biased testing lower support level market development.
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.

20101018 1000 Local & Global Market News.

Malaysia: Budget 2011 unveiled
Malaysia will build a 100-floor tower and a mass rail project as Prime Minister Najib Razak boosts spending in a budget that he says is “pivotal” to spurring growth and helping the nation achieve developed status. Najib presented a 2011 budget plan on Friday for government spending of RM212bn (USD69 billion), 2.8% larger than this year’s outlay. GDP may expand 5% to 6% next year after growing a faster-than-forecast 7% in 2010, according to the Ministry of Finance’s 2010/2011 economic report. (Bloomberg)

EU: Exports increase, inflation accelerates
European exports increased in August, suggesting the Euro-region economy is weathering a global slowdown and a stronger Euro. Exports from the economy of the 16 nations that use the single currency rose a seasonally adjusted 1% from July, when they slipped 0.2%, the EU’s statistics office said. Inflation accelerated to 1.8% in September from 1.6% in the previous month, it said in a separate statement. (Bloomberg)

UK: BOE will increase bond plan by GBP100bn, CEBR says
The Bank of England will increase its emergency bond-purchase plan by 100bn pounds (USD160bn) to aid the economy as the government cuts spending, the Centre for Economics and Business Research said. The central bank will also keep its benchmark interest rate at a record low of 0.5% until at least “late” 2012, the Londonbased group mentioned. The bank kept its stimulus plan at 200bn pounds this month. (Bloomberg)

US: Posts second-largest annual budget deficit
The US government posted its second straight annual budget deficit in excess of USD1trn as lingering unemployment constrained tax revenue. The shortfall totaled USD1.294trn in the fiscal year ended 30 September 2010, second only to the USD1.416trn deficit in 2009, the Treasury Department said. (Bloomberg)

US: Sales exceed forecasts, inflation cools
Retail sales in the US climbed more than forecast in September, easing concern that unemployment stuck near a 26-year high will bring the recovery to a halt. Purchases rose 0.6% following a 0.7% gain in August that was larger than previously estimated, according to Commerce Department data issued. Other reports showed inflation cooled and manufacturing in the New York region accelerated. (Bloomberg)

US: Homebuilding probably fell, output rose
Builders in the US probably started fewer homes in September, while production rose for a seventh month, evidence of uneven growth, economists said before reports this week. Work began on 580,000 houses at an annual rate, down 3% from August, according to the median estimate of 56 economists surveyed before Commerce Department figures on 19 October. (Bloomberg)

20101018 0959 Malaysia Corporate News.

Khazanah, EPF offer RM23bn for PLUS
The much-anticipated plan to privatise PLUS Expressways Bhd was announced yesterday, with Khazanah Nasional Bhd and the Employees Provident Fund (EPF) offering a cash offer for the assets and liabilities of the highway concessionaire for RM23bil, which works out to RM4.60 per share of the latter. Using a co-investment vehicle in which Khazanah’s wholly-owned unit, UEM Group, will own 51% and the rest by EPF, the offer is subject to a successful restructuring of the concession agreement on acceptable terms. The proposed deal is said to be the largest merger and acquisition in Malaysia so far and is tied in with an announcement in Budget 2011 yesterday that the Government will not raise toll rates for PLUS-owned highways for the next five years with immediate effect. (StarBiz)

Selangor-SPAN to thrash out water issues
A meeting between the Selangor State Government and Suruhanjaya Pengurusan Air Negara (SPAN) is slated for today, to determine the critical issue of when taps in Selangor could run dry. The outcome of the meeting will have an impact on the implementation of a proposed RM9bn Pahang-Selangor Interstate Water Project, which the state has opposed on the ground that the water consolidation exercise in Selangor should be completed first. Previously Selangor state MB Tan Sri Abdul Khalid Ibrahim said that the state felt a water shortage could only occur in 2019. Hence there was no necessity to expedite. This is in contrast to the forecast of the federal government that has put 2014 as the date when taps could run dry and hence Selangor should facilitate the inter-sate water project. (Financial Daily)

Technip to acquire 8% stake in MMHE
Technip SA will take an 8% stake in Malaysia Marine and Heavy Engineering (MMHE) in connection with the listing and initial public offering of MMHE’s ordinary shares on Bursa Malaysia expected at month end. Technip SA will pay RM496.1m for the strategic stake in MMHE, according to a filing made to Bursa Malaysia by MMHE’s parent, MISC Bhd, last Friday. The company will buy 128m shares a RM3.876 each in MMHE’s IPO. The investment and collaboration extends Technip’s local content in Malaysia and reinforce its position in the fast growing Asia pacific region in line with Technip strategic goals. (Malaysian Reserve)

Turiya in RM2b healthcare project
Two companies, including a listed entity linked to businessman Tan Sri Dr Mohan Swami, will partner world renowned Johns Hopkins Medicine International and the Royal College of Surgeons in Ireland (RCSI) in the RM2bn healthcare project announced during the 2011 Budget last Friday. It was revealed that Malaysia's Academic Medical Centre Sdn Bhd (AMC) will be involved in the project. AMC is 80 per cent-owned by Chase Perdana Bhd and 20 per cent-owned by Turiya Bhd (previously known as Sitt Tatt Bhd). Prime Minister Datuk Seri Najib Razak, when tabling the 2011 Budget last Friday, announced the partnership as part of the government's effort to intensify the Public-Private Partnership (PPP) initiative. (BT)

MSC share issue proposal
Malaysia Smelting Corp Bhd (MSC) has proposed to issue between 12.5m and 25m new ordinary shares to be made available to retail investors in Singapore, and/or institutional and selected investors. In a statement to Bursa Malaysia, MSC said it would seek to secure a secondary listing of the entire issued and paid-up share capital of the Singapore Stock Exchange. “In expanding its operations and diversifying its investor base, subject to amongst others, the equity market conditions in Singapore, MSC is seeking to raise capital amounting to between RM50m and RM100m,” it said. (StarBiz)

20101018 0853 Global Market News.

Gold falls 1 pct as dollar rebound weighs
SINGAPORE, Oct 18 (Reuters) - Gold fell nearly one percent, weighed down by a rebound in the dollar, after Federal Reserve Chairman Bernanke on Friday gave few details of the much-anticipated easing move being weighed by the central bank.
"For today, gold prices will continue to slip a bit, and the longs liquidate their positions. On Friday gold's performance was lacklustre due to profit-taking, as investors think the gold rally may get beaten up after it reached record prices recently," said Ong Yi Ling, an analyst at Phillip Futures.

Dollar firms, stocks lower after Bernanke
HONG KONG, Oct 18 (Reuters) - The battered dollar rose to edge further away from a 10-month low on Friday, while a rally in Asian stocks paused as investors took some profits ahead of a widely expected easing in U.S. monetary policy.
"The key concern is still the appreciation of the Taiwan dollar, so most technology shares weakened," said Tom Tang, a vice president at Masterlink Investment Advisory.

OIL: Oil falls towards 1-week low as investors ponder stimulus
SINGAPORE, Oct 18 (Reuters) - Oil fell towards one-week lows on Monday as a rebound in the dollar prompted investors to halt their charge into commodities, while waiting for details about U.S. economic stimulus measures.
"QE2, which had been progressively bullish for oil over the course of September and into early October, ran out of steam as a driver for prices, at least for the time being, and probably until it is actually announced, along with details of its implementation," by November 3, when the next Fed meeting concludes, said Mike Wittner, Societe Generale's head of oil market research.

COMMODITY MARKETS: Rally pauses on dollar; CRB up 8th week
NEW YORK, Oct 15 (Reuters) - Most commodities fell on Friday as investors took profits after a week-long rally in gold, oil and grains supported by the notion that the Federal Reserve will soon purchase government debt to stimulate the economy.
"The question is for how much longer the market is prepared to run just on the quantitative easing story," said Ole Hansen, senior manager at Denmark's Saxo Bank, a major European commodities dealer.

GLOBAL MARKETS: Stocks slip, dollar gains after Bernanke
NEW YORK, Oct 15 (Reuters) - World stocks slid and the dollar rebounded on Friday as a growing U.S. foreclosure crisis undermined an initial boost after U.S. Federal Reserve Chairman Ben Bernanke indicated more monetary stimulus was on the way.
"The dollar is somewhat oversold against a number of its key counterparts, but I don't really see much scope for sustained dollar gains ahead of the Fed meeting in November," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.

Profits taken, pressure high ahead of Bernanke
HONG KONG, Oct 15 (Reuters) - Investors took profits on gains in Asian equities this week but kept the U.S. dollar close to a 10-month low and commodities near two-year highs ahead of a speech by the head of the Federal Reserve.
"We are concerned that the market is short dollar based on a deep expectation that the Fed Chairman will hint strongly at an aggressive QE programme," Steven Englander, head of G10 foreign exchange stratgey at Citi, said in a note.

PRECIOUS-Gold holds steady below $1,380/oz ahead of Bernanke
LONDON, Oct 15 (Reuters) - Gold held steady near $1,380 an ounce in Europe on Friday, with the precious metal's sharp run higher losing momentum as the dollar steadied, but lingering doubts over the currency continued to support prices.
"A barrage of key economic data, including a most awaited speech from Federal Reserve Chairman Ben Bernanke, is due today, and markets seems to be bracing for any cues on the proposed QE2," said Pradeep Unni, senior analyst at Richcomm Global Services.

FOREX-Dollar under pressure as market seeks Fed policy clues
LONDON, Oct 15 (Reuters) - The dollar hovered near a 10-month low versus a currency basket on Friday as investors seeking more clues on likely U.S. monetary easing waited for Federal Reserve head Ben Bernanke to speak.
"There is growing expectation that he (Bernanke) may provide more clarity on the Fed's proposed QE2 today ... The criteria for perceived success is important to provide a guide as to when it may end," a London-based trader said.

20101018 0851 Soy Oil & Palm Oil Related News.

Corn, soy fall on dollar strength, LatAm weather
SINGAPORE, Oct 18 (Reuters) - U.S. corn fell more than one percent to a near 1-week low, while soy and wheat slipped as a stronger dollar and an improved weather outlook in South America weighed on the grain markets.
"It's a soft start to the week as there is an outlook for improved weather in South America," said Adam Davis, a senior commodity analyst at Merricks Capital, a Melbourne-based funds manager that invests in agriculture.

Belated seeding quickens in No.1 Brazil soy state
SAO PAULO, Oct 15 (Reuters) - The planting of the 2010/2011 soybean crop in Brazil's No. 1 producing state Mato Grosso reached 6.7 percent by Oct. 14, well behind the 22.4 percent planted at this time last year, the state farm economy institute Imea said  on Friday.
Planting is up 5 percentage points from the previous week as producers plant in isolated areas that saw sufficient rain in the past weeks to start the new crop. Last year's crop had near perfect rainfall and produced a record 18.8 million tonnes of soybeans in the state.

U.S. soy product futures settled lower, retreating from earlier advances in unison with soybeans. Traders taking profit taking on the week's gains overshadowed supportive demand outlooks in both soymeal and soyoil, analysts said. December soyoil settled 0.25 cents or 0.5% lower at 47.77 cents per pound. December soymeal ended $3.50 or 1.1% lower at $328.20 per short ton.(Source: CME)

India September Vegetable Oil Imports Up 6% At 960,752 Tons (Source : CME)
India's vegetable oil imports in September rose 6% from a year earlier because of a surge in soyoil purchases, the Solvent Extractors' Association of India said. Vegetable oil imports during the month increased to 960,752 metric tons from 905,192 tons, the trade body said. Total imports in the first 11 months of the marketing year that began November 2009 increased 5% to 8.41 million tons from 7.98 million tons, it said. India is the world's second-largest vegetable oil importer after China and meets more than half its requirements through imports as local production lags consumption.
The trade body also said that edible oil imports in September increased 8.9% to 942,257 tons. Crude palm oil imports grew 8% to 588,618 tons, but imports of refined, bleached and deodorized palm olein fell 36.6% to 93,158 tons. Soyoil imports surged 72% to 189,930 tons from 110,205 tons. The country imports palm oil mainly from Indonesia and Malaysia, and soyoil mostly from Brazil and Argentina. Soyoil imports have been rising for the past few months as its price gap with palm oil has narrowed to less than $100/ton. That makes soyoil attractive to import as it is considered a healthier oil.

Cargill CEO: Commodity Prices Not Sign Of Crisis; Concerns Remain (Source : CME)
Agricultural commodity prices aren't signaling a supply crisis, but increased government intervention and a rise in crude oil prices remain vulnerabilities for global food supplies, Cargill Inc. chief executive Greg Page said. Page, in an interview, said global agriculture is in a "constant state of disequilibrium," and while commodity prices remain well below 2008 record highs, grain stocks as a percentage of usage are "less stable than one would have expected." A key factor preventing a repeat of two years ago are crude oil prices, which soared close to $150 a barrel in 2008 but now trade around $80 a barrel. A surge in oil prices can drag corn futures higher, while increasing production costs across the agriculture supply chain. Cargill is the largest U.S. private company by sales and among the world's largest agribusiness companies.
"The biggest element is the absolute price of oil," Page said on the sidelines of the World Food Price conference in Iowa. "I think if we had the same oil price that we had before, we might have a different set of price signals." Page sees government intervention in global trade as an additional concern. The 2008 food crisis, which resulted in riots in some poor countries, was exacerbated by trade restrictions, with 20 countries enacting barriers at some point, he said. More recently, Cargill has been critical of Russia's ongoing grain export ban announced in the summer, even though analysts say Cargill and other large global grain merchandisers benefited as Russia's customers looked elsewhere for supplies. Other countries so far haven't added their own bans, but "people have their anxiety meter dialed up" over tight grain supplies, Page said.
Government ethanol policy remains a concern of Page, who reiterated his opposition to mandates for the corn-based fuel. He said such policies lock in demand even when crop production is disappointing, such as this year. That results in the livestock sector, which depends on corn to feed its animals, cutting back production because of prices, Page said. Cargill's businesses include meat processing. "Everyone would be better off if all the elements participated in the adjustment," he said. This week the U.S. government announced it was increasing the amount of ethanol that could be blended into gasoline for many cars to 15%, up from 10%. Another key U.S. policy decision remains over whether to extend the 45-cent tax credit to ethanol blenders. The credit expires at the end of the year and the tight time frame lawmakers have left to decide is "anxiety-inducing," Page said.
Page said that agricultural development in Africa, a focus of the Thursday's conference, is dependent on better government institutions that give confidence to private investors. Cargill can contribute to food security through its price-setting, transportation, processing and farmer education, he said.

U.S. soybeans hit 14-month high on strong demand
SYDNEY, Oct 15 (Reuters) - U.S. soybean futures broke through $12 per bushel for the first time in 14 months, boosted by strong demand from U.S. domestic processors and exporters as well as fund buying.
"Soybean and soy oil demand from China remains high while prices are also being supported by the weak U.S. dollar," said Garry Booth, a senior advisor at MF Global Australia.

Two-year highs for most oils; palm near 3,000 ringgit
KUALA LUMPUR, Oct 15 (Reuters) - Global vegetable oil markets hit fresh two-year highs with palm oil hovering near a key resistance level as markets continued to price in a possible supply shortfall and a weaker dollar.
"Soyoil prices might climb to 9,150 yuan with the additional effects from firmer U.S. soy that increased on strong demand."

China to buy domestic new soy at higher price-traders
BEIJING, Oct 15 (Reuters) - The central government will continue to buy soy from the new domestic harvest for state reserves at 3,800 yuan per tonne, 1.6 percent higher than last year's price, trading sources said on Friday.
"The related document will be issued to local governments soon," said one industry source.

China soyoil demand could boost Argentine soy crop
BUENOS AIRES, Oct 14 (Reuters) - The end to China's six-month boycott of Argentine soyoil shipments could spur farmers to plant more soybeans in the South American country, as prices for soyoil rise.
China, the world's largest soyoil buyer, halted shipments from No. 1 global exporter Argentina in late March in apparent retaliation for Argentine anti-dumping measures applied to some Chinese manufactured goods.