Tuesday, October 19, 2010

20101019 1828 FCPO EOD Daily Chart Study.

FCPO closed : 2919, changed : +30 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 2900, 2850, 2800 level.
Resistant : 2930, 2970, 3020 level.
Comment :
Rebounding higher soy oil futures price lead FCPO to trade higher recorded gain recovered partial of yesterday losses with little higher volume transaction after market opened gap up and traded side way range bound with a 25 points range market. Daily chart formed the third doji bar candle seems facing difficulties to determine its direction as the reading still suggesting a correction range bound upside biased market testing support and resistant level.
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.

201019 1739 FKLI EOD Daily Chart Study.

FKLI closed : 1490, changed : +14 points,  volume : higher.
Bollinger band reading : correction range bound little upside biased.
MACD Histrogram : turned upward, buyer gather courage to stay.
Support : 1485, 1470, 1458 level.
Resistant : 1500, 1530, 1550 level.
Comment :
FKLI recorded gain recovering some of last 2 days drop with improving volume changed hand rebounded from middle Bollinger band support level. Daily chart formed a wide range bar after market opened gap up and surging upward with a correction range bound little upside biased market reading testing resistant level near upper Bollinger band 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 quick cut loss and profit target.

20101019 1107 Global Economics News.

Singapore: Export growth eases as global slowdown hurts demand
Singapore’s export growth slowed in September as shipments of electronics and pharmaceuticals eased, heralding softening demand in the coming months as the global economy weakens. Non-oil domestic exports climbed 22.7% y-o-y, after a revised 30.8% gain in August. Electronics shipments climbed 21.2% in September y-o-y to SGD5.8bn (USD4.4bn), after a revised 34.8% gain the previous month. Non-electronics shipments, which include petrochemicals and pharmaceuticals, gained 23.7%. (Bloomberg)

Japan: Service demand declines as recovery loses momentum
Japan’s demand for services fell for the first time in three months in August, adding to signs of a weakening recovery. The tertiary index fell 0.2% from July, when it rose 1.6%, supporting Prime Minister Naoto Kan’s case for compiling a second economic package as the yen approaches a record high against the dollar which threatens Japan’s export-reliant recovery. Kan’s cabinet this month endorsed a JPY5.1trn (USD63bn) stimulus plan to safeguard the economy and help local governments and small businesses cope with the surging yen as consumer spending, which accounts for more than half of economy, remains sluggish. (Bloomberg)

Brazil: Taxes raised on some foreign inflows to 6%
Brazil raised taxes on foreign investments in fixed-income securities for the second time in a month, and Finance Minister Guido Mantega said countries trying to defend exports must end the “currency war.” The socalled IOF tax on foreign inflows will climb to 6% from 4%. The tax on foreign investors’ margin deposits for futures markets will also climb to 6% from 0.38%.The moves aim to curb foreigners’ appetite for short-term investments and curb the dollar inflows that have contributed to the real’s 7.1% gain in the past three months. (Bloomberg)

US: Production decreased in September
Production in the US unexpectedly dropped in September for the first time in more than a year. Output at factories, mines and utilities fell 0.2%, the first decline since the recession ended in June 2009. Slackening production means it will take longer for the economy to make a dent in the excess capacity that is containing prices. Factory production decreased 0.2%, the first drop since June, reflecting a 0.9% fall in consumer durables, like appliances and furniture. Output of motor vehicles and technology equipment, including computers and semiconductors, rose. The latter signals business investment in new equipment was still growing. (Bloomberg)

US: Homebuilder confidence rises to four-month high
Confidence among US homebuilders rose in October to the highest level in four months, a sign residential construction is stabilizing at depressed levels. The National Association of Home Builders/Wells Fargo confidence index increased to 16, beating estimates of a rise to 14. Index readings lower than 50 mean more respondents said conditions were poor. The measure reached a record low of 8 in Jan 2009 and averaged 54 in the five years before the recession began in Dec 2007. (Bloomberg)

20101019 1056 Malaysia Corporate News.

Ekuinas takes control of Konsortium for RM206.6m
Ekuinas has made its third investment by taking control of Konsortium Logistik and plans to expand the business in the oil and gas sector. The state private equity company is buying 56.5% of Konsortium for RM206.6m, or RM1.55 per share. This triggers a MGO for the rest of the shares in Konsortium at the same price. But Ekuinas plans to keep Konsortium listed. (BT)

PLUS could gain RM5bn compensation for toll freeze
PLUS may gain as much as RM5bn over the next 5 years as compensation for a freeze in toll increase which was announced under Budget 2011. A new concession agreement would be inked once UEM Group and EPF complete the takeover of PLUS for RM23bn within the next 12 months, according to UEM Group CEO Datuk Izzadin Idris. (The Malaysian Reserve)

Vehicle sales down 6% in September
Vehicle sales in September declined by 6%, the first time this year, to 43,443 units from 46,104 units in the same month last year. MAA attributed the cooling off period after the rush deliveries in the previous month for the Hari Raya Aidilfitri festival and short working month in September caused sales growth to slow. However, between January and September, sales rose by 14% to 453,249 units compared with 397,950 units in the same period last year. (Bernama)
TRC Synergy, UEM Group in final race for LRT extension job
TRC Synergy and UEM Builders Intria Bina SB are believed to be at the last mile of the race to win the contract for the extension of the LRT near Kelana Jaya. Sources said Syarikat Prasarana Negara had recommended TRC Synergy to the MoF to be the main contractor for the 9.2km LRT extension project and it could bag the job as early as next month. (Financial Daily)

Xingquan to raise RM76m via Taiwan listing
Xingquan has proposed to issue new shares via a Taiwan Depository Receipts (TDR) program to raise RM76m from the Taiwan Stock Exchange. The proposed exercise involves the issuance of 46.1m new shares of USD0.10 each at an indicative price of RM1.65 per share. The issue size represents 15% of Xingquan’s existing and paid-up share capital, (StarBiz)

MHB sets retail IPO share price
MHB has fixed the institutional and retail prices of its IPO at RM3.80 and RM3.61 respectively. It is en route to a Main Market listing later this month with a public issue of 262m new shares and offer for sale of 146m shares. (StarBiz) 

20101019 0907 Global Market News.

OIL: Crude holds above $83 as product markets tighten
SINGAPORE, Oct 19 (Reuters) - Oil was steady on Tuesday, holding on to gains of more than 2 percent in the previous session, as product markets were seen tightening with maintenance at U.S. refineries and strike-idled plants in France.
U.S. inventories of distillate fuel including heating oil and diesel probably fell 1 million barrels last week, a Reuters poll showed before industry group the American Petroleum Institute (API) publishes weekly supply statistics on Tuesday at 2030 GMT.

COMMODITY MARKETS: Oil, copper rise; grains down on profit-taking
NEW YORK, Oct 18 (Reuters) - Oil prices rose 2 percent on Monday on refinery strikes in France and copper followed stock markets higher, while agricultural markets fell broadly on profit-taking and a stronger dollar.
"There is an expectation the U.S. will be exporting more gasoline and distillate and that cargoes from Europe will not be coming here," said Phil Flynn, analyst at PFGBest Research in Chicago.

GLOBAL MARKETS: Financials rally stocks, dollar up on Geithner
NEW YORK, Oct 18 (Reuters) - Financial shares led U.S. and European stock markets higher on Monday after Citigroup reported profits while the U.S. dollar rallied late after Washington said it would not devalue the greenback.
"It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to (be) competitive," Geithner said. "It is not a viable, feasible strategy and we will not engage in it."

(Reuters) - Treasury Secretary Timothy Geithner vowed on Monday that the United States would not devalue the dollar for export advantage, saying no country could weaken its currency to gain economic health.
"It is not going to happen in this country." Geithner told Silicon Valley business leaders of devaluing the dollar. Geithner broke his silence on the dollar's protracted slide ahead of this weekend's meeting of finance leaders from the Group of 20 wealthy and emerging nations in South Korea, where rising tensions over Chinese and U.S. currency valuations are expected to take center stage.
"It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to (be) competitive," Geithner added. "It is not a viable, feasible strategy and we will not engage in it." Answering audience questions before the Commonwealth Club of California in Palo Alto, he said the United States needed to "work hard to preserve confidence in the strong dollar."
Geithner, normally reluctant to publicly discuss currency and market movements, has not uttered the so-called "strong dollar mantra" -- a refrain he helped create at Treasury in the 1990s -- since February. On Friday, the dollar index hit a 10-month low against a basket of major currencies, while the greenback has been plumbing fresh 15-year lows against Japan's yen . Many emerging market countries are complaining that Fed money creation is weakening the dollar, and causing more funds to flow into their markets, pushing up their currencies.
Talk of a "currency war" has persisted as countries take action to keep from losing export competitiveness. Brazil on Monday moved to cool a strong rally in its currency by raising taxes for foreigners buying local bonds and trading in foreign exchange derivatives. Finance Minister Guido Mantega said the move was aimed at reducing foreign investment into Brazil, and he urged other countries to take coordinated action against the weak dollar. Argentina's Minister of Economy and Public Finance Amado Boudou on Monday called on developed nations to focus on creating jobs rather than actions that weaken their currencies, saying a "true currency war" was underway.

The G20 finance ministers and central bank governors at the meetings in Gyeongju, South Korea are expected to tackle head-on the disparities in currency policies that are distorting capital flows in the hopes of achieving a more coordinated approach. But U.S. officials have put most of the blame on China's highly restrictive exchange rate regime, which until recently had kept the yuan largely pegged to the dollar. The United States is pressuring China to allow the value of its yuan to rise to take some pressure off capital flows and to rebalance its economy away from exports.

PRECIOUS-Gold slips below $1,360/oz as dollar recovers
LONDON, Oct 18 (Reuters) - Gold slipped below $1,360 an ounce in Europe on Monday as the dollar bounced back from its recent hefty losses, with market watchers worried that expected U.S. monetary easing had already been too heavily priced in.
"(The question is), do we see more quantitative easing around the world? If there is, there will be more gold momentum," said David Wilson, an analyst at Societe Generale.

FOREX-Dlr index off lows on doubts how far Fed will ease
LONDON, Oct 18 (Reuters) - The U.S. dollar bounced from a 10-month low against a basket of currencies on Monday, as investors uncertain how much monetary easing the Federal Reserve will resort to trimmed bearish bets against the greenback.
"The dollar's move down has been extremely aggressive and there are investors wondering whether or not too much quantitative easing has been priced in," said Jane Foley, senior currency strategist at Rabobank.

Dlr up, emerging stocks fall on QE jitters
LONDON, Oct 18 (Reuters) - Investors pulled back some of their bets on additional monetary easing by the Federal Reserve, lifting the dollar and generally selling off equities.
"What's behind this is a tug-of-war among views on the United States implementing additional easing measures. If earnings results show that U.S. companies are actually generating strong profits, that would weaken the case for easing expectations," said Kazutaka Oshima, president of Rakuten Investment Management in Japan.

20101019 0906 Soy Oil & Palm Oil Related News.

Soy up half pct on Chinese buying; wheat, corn firm
SINGAPORE, Oct 19 (Reuters) - U.S. soybean futures rose half a percent to trade near 14-month highs as strong demand from China, the world's biggest importer, continued to support the market.
"The demand from China continues to underpin soybeans and really, the weakening of U.S. dollar which has been happening for some months has helped Chicago grains," said Garry Booth, a trader with MF Global Australia.

US soy product futures settle mixed as markets pause following recent rally. Soybeans set tone for soy complex by "taking a breather" after touching 14-month high Friday, a market analyst says. Soymeal stabilizes after strong export demand and spillover buying pushed prices to one-year high Friday. Soyoil pulls back slightly from two-year high Friday. CBOT Dec soymeal closed up 10c, or 0.03%, at $328.30 per short ton. CBOT Dec. (Source: CME)

Brazil Farmers Plant 10% Of Soy Area As Of Oct 15 - Celeres(Source : CME)
Brazil's farmers have planted 10% of the expected total soy area as of Oct. 15, agricultural consultancy Celeres said. The pace of seeding for the 2010-11 crop year is two percentage points behind a year ago, according to Celeres. The Uberlandia, Brazil-based consultants estimate that a total of 23.6 million hectares will be planted in soy for the crop to be harvested between February and May of next year. The Brazilian area planted is an advance from a figure of 3% for the oilseed a week earlier. Brazil is the world's second-largest soy producer after the United States. Growers in Mato Grosso, Brazil's largest soy-producer state, had planted 15% of their crop area as of Oct. 15, a surge from 3% a week earlier, Celeres said in the weekly report.
The comparable figure a year ago for the state was 23%, according to the consultants. Growers in Mato Grosso, typically the first to begin planting in Brazil, have been forced this season to postpone seeding in many regions due to the La Nina weather phenomenon which caused drier weather than usual. Farmers in Parana, Brazil's second-largest soy-producing state, have had more rainfall. Growers had planted 18% of the Parana soy area as of Oct. 15 compared with 14% a year ago, Celeres said. Last week's figure for the area seeded in Parana state was 9%. Celeres said that Brazil's advance sales of the 2010-11 crop reached 23% as of Oct. 15 compared with 20% a week ago.

India 2010-11 Rapeseed Area Likely Up 10%-15% As Rains Help (Soirce : CME)
India's rapeseed area in the crop year through September 2011 is likely to rise 10%-15% from about 6.5 million hectares last year as ample rains have improved soil moisture, industry officials and analysts said. Last year's area under rapeseed was expected to be around 7 million hectares, but the country's worst drought in nearly four decades--with rains 22% below average--hit sowing. Rains recovered to 2% above average in this year's June-September monsoon season. Rains are crucial for India as more than half the country's farmland is rain-fed. Vijay Data, managing director of Vijay Solvex Ltd. and vice president of the Solvent Extractors' Association of India, said rapeseed sowing has already started in major producing regions. Sowing continues until December and harvesting normally starts from the end of February.
India is one of the world's top three rapeseed producers, and the northwestern state of Rajasthan is the country's largest rapeseed producing state. Badruddin Khan, assistant vice president with Angel Commodities, added that higher oilmeal export demand is also likely to encourage more farmers to expand the area under cultivation. India's oilmeal exports in September jumped 53% to 354,252 metric tons from 231,297 tons a year earlier, according to the Solvent Extractors' Association. Rapeseed carryover stocks are expected to be 400,000-500,000 tons in 2010-11, down from about 700,000-800,000 tons last year, Vijay Data said, adding that there is enough supply to meet demand until the arrival of the new crop.

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.

Retreat on stronger dollar; palm oil at one-week low
KUALA LUMPUR, Oct 18 (Reuters) - Malaysian palm oil fell to its lowest in a week and other vegetable oil prices stalled as a stronger dollar and more favourable weather outlooks in South America sapped sentiment.
"Above 3,000 ringgit ($973.4) is still the target to hit although the market was due for a correction after it rose more than 200 ringgit," said a trader with foreign brokerage in Kuala Lumpur.

Indonesia says to review palm oil export tax policy
JAKARTA, Oct 18 (Reuters) - Indonesia will "restructure" its export tax policy on crude palm oil, as the levy has not spurred more local processing into downstream products as intended in the world's largest producer of the oil, a government official said.
"The government is going to restructure the export tax policy on palm oil because the current policy, which has been imposed since 2007, has not been effective in encouraging the palm oil downstream industry domestically," said Benny Wachjudi of the industry ministry, pointing to increasing crude palm oil exports.