Friday, October 22, 2010

20101022 0933 Global Economics News.

China: 9.6% growth adds weight to calls for yuan gains
China’s economy grew 9.6% in the third quarter and inflation accelerated to the fastest pace in almost two years, adding weight to calls for the engine of the global recovery to let its currency appreciate more rapidly. Consumer prices jumped 3.6% in September from a year earlier, the statistics bureau said in Beijing. (Bloomberg)

China: PBOC rate increases likely in 2011, survey shows
China’s central bank will likely hold off from adding to this week’s interest-rate increase until 2011, when it will raise borrowing costs at least twice to tame inflation, according to economists surveyed by Bloomberg. The People’s Bank of China will leave the benchmark one-year lending rate at 5.56% through December. (Bloomberg)

Asia: Leads global recovery, raising inflation concern, IMF says
Asia’s world-leading economies will keep drawing capital because interest rates in the US and other advanced nations will be low for a prolonged period, the International Monetary Fund (IMF) said, urging officials in the region to withdraw stimulus to contain inflation. “The main short-term policy challenge for Asian policy makers is to manage the exit from policy stimulus now that the recovery is well under way.” (Bloomberg)

UK: Retail sales unexpectedly drop, mortgage approvals fall
UK retail sales unexpectedly dropped in September for a second month and mortgage approvals fell to the lowest in 1 1/2 years as consumers braced for the deepest budget squeeze since World War II. Sales fell 0.2% from August, when they declined 0.7%, the Office for National Statistics said in London. Mortgages approved by the six biggest banks dropped to 44,000 from 45,000 in August, the Bank of England said in a separate report. (Bloomberg)

US: Seeks G-20 cooperation on currencies, pushes China on yuan
Group of 20 policy makers will try to resolve differences over exchange-rate policies this weekend as US officials continue to press China to let the yuan appreciate faster. The US is pushing for the G-20 to agree on a statement of cooperation on exchange-rate issues, a US official said. The US has said it wants currencies to respond to market forces and economic fundamentals, rather than government intervention. (Bloomberg)

US: Leading index rises, signaling growth
The gauge of the US economy’s prospects rose in September for a third month, signaling the recovery will extend into 2011. The New York-based Conference Board’s index of leading economic indicators climbed 0.3%, matching the median forecast of 57 economists surveyed by Bloomberg News. The number of claims for jobless benefits last week was consistent with little progress in the labor market, another report showed. (Bloomberg)

U.S: Philadelphia-area manufacturing expanded in October to 1 from minus 0.7 a month earlier. Readings greater than zero suggest expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware. (Source: Bloomberg)

U.S: Initial jobless claims fell 23,000 to 452,000 in the week ended Oct. 15. The total number of people receiving unemployment insurance fell, while those getting extended payments rose. (Source: Bloomberg)

E.U: Services and manufacturing industries expanded at the weakest pace in a year in October . A composite index based on a survey of euro-area purchasing managers in both industries fell to 53.4 from 54.1 in September, London-based Markit Economics said. A reading above 50 indicates expansion. (Source: Bloomberg)

E.U: Consumer confidence remained unchanged in October . An index of consumer sentiment in the 16-nation euro area held at minus 11, the same as in September. (Source: Bloomberg)

20101022 0932 Malaysia Corporate News.

KL Kepong: To expand Indonesian landbank. Kuala Lumpur Kepong Bhd (KLK) is expanding its oil palm landbank in Indonesia by another 7,177ha. Its unit KL-Kepong Plantation Holdings Sdn Bhd is buying 95% of PT. Bumi Makmur Sejahtera Jaya (PT BMS) from Tjong Hasan Agus Salim and Tjhang Ardy Fadrinata. Since KLK has engaged a high conservation value study on the land and is carrying out legal and financial due diligence, the deal is likely to materialize in the first quarter of 2012. (Source: Business Times)

SP Setia: Plans 40 corporate office buildings in Setia City. SP Setia Bhd plans to set up about 40 corporate office buildings in its 96ha integrated green commercial hub, Setia City that is worth RM5b in gross development value when completed in 10 to 15 years. The company has secured Top Glove Corp Bhd and Khind Holdings Bhd to set up their corporate headquarters in the hub, which will comprise office towers, hotels, service apartments and a retail mall. ?We are now in talks with a few local companies to set up their corporate office towers here and are not discounting the possibilities to talk to multinational companies in the future,? SP Setia president and CEO Tan Sri Liew Kee Sin said. (Source: The Star)

Maybank: Opens ninth branch in Cambodia. Malayan Banking Bhd (Maybank) has opened its ninth branch in Cambodia to expand customer reach and tap the growing economic potential in that country. ?We have been on an aggressive expansion trail in Cambodia with eight branches opened in the last two years and are targeting to open two more branches by end of 2011,? said Maybank head of global wholesale banking Abdul Farid Alias. Located in Sihanoukville, the latest branch was the third provincial Maybank branch outside Phnom Penh City, after branches in Siem Reap and Battambang. (Source: The Star) 

Silverstone sold for RM462m
Lion Forest Industries’ (LFI) subsidiary, Silverstone Corp is selling its entire stake in automotive tire maker Silverstone Bhd to Japan's Toyo Tire & Rubber Co Ltd for RM462m. LFI stands to gain some RM140m from the disposal for the year ending June 2011. The transaction is expected to be completed by the first quarter of next year. (BT)

Kulim: No plans to take group private
Kulim says it is not interested in taking KFC Holdings private for now. "The possibility of privatization is very remote but we never know. Currently, we are not talking or thinking about it but it's never a never," Kulim deputy chairman and MD Ahamad Mohamad said. (BT)

RM5bn compensation for PLUS not guaranteed
The Government may restructure its current concession agreement with PLUS to avoid paying compensation of as high as RM5bn to freeze toll hikes for the next 5 years under the present agreement. However, Minister in the Prime Minister’s department Tan Sri Nor Mohamed Yakcop said this would depend on the outcome of the restructuring to be undertaken by the EPF and UEM Group upon taking over the largest toll operator in Malaysia. (The Malaysian Reserve)

TM confident of wooing 5,000 SMEs to Unifi this year
TM is confident of having 5,000 small businesses use its Unifi high-speed broadband service this year. Since its launch in March, TM has 16,000 Unifi customers with more than 2,400 of them from small and medium enterprises, said TM EVP of SME Shanti Jusnita Johari. (BT)

KFC plans to operate 17 outlets in India by next year
KFC expects to operate 17 KFC fastfood stores in India by the end of 2011, starting with restaurants in Mumbai and Pune. By year-end, the company will have 9 operating restaurants, with 4 more new outlets and 2 existing outlets in Pune being acquired from Kernel Foods Pvt Ltd, an existing franchisee of KFC in India. (The Malaysian Reserve)

Fajarbaru gets RM36.5m job
Fajarbaru Builder has obtained a RM36.5m contract from East Coast Economic Region Development Council for the proposed construction and completion of earthworks and infrastructure works for Pasir Mas Halal Park Phase 1 in Kelantan. The construction period is 15 months commencing November. (StarBiz)

20101022 0909 Global Market News.

Dollar falls, commodities jump after G20
HONG KONG, Oct 25 (Reuters) - The dollar fell broadly after a Group of 20 meeting produced enough agreement despite discordant policies to keep the status quo on the trade of selling the U.S. currency and buying stocks and commodities such as gold.
"It looks like the market has taken the G20 as a green light to continue with the trends up to that point, which have been towards U.S. dollar weakness," said Sue Trinh, senior FX strategist at Royal Bank of Canada in Hong Kong.

OIL: Crude gains; U.S. data shows stimulus needed
SINGAPORE, Oct 22 (Reuters) - Oil rose on Friday after jobs and business activity data signalled the U.S. economy would require additional stimulus, while G20 finance ministers meet in South Korea as dollar volatility rattles commodities markets.
A batch of new U.S. data on Thursday painted a picture of an economy stuck in slow-growth mode, reinforcing views the Federal Reserve will ease monetary policy further next month to try to reinvigorate the recovery.

COMMODITY MARKETS: Most markets slump as dollar rises; coffee jumps
NEW YORK, Oct 21 (Reuters) - Oil, gold and grains slumped on Thursday, pressured by the dollar's rebound in a volatile week during which most commodities took their direction from the currency.
"There is little on the horizon that has the potential to derail the short dollar/long commodity trade that still seems to be the driving force behind most strategies," said Edward Meir, energy and metals analyst at MF Global in New York.

GLOBAL MARKETS: Dollar rebounds, stocks edge up ahead of G20
NEW YORK, Oct 21 (Reuters) - The dollar rebounded from earlier losses in volatile trade on Thursday amid questions about the extent of the Federal Reserve's economic stimulus measures, while world stocks edged higher in tandem with the U.S. currency's turnabout.
"Since it is clear that the direction is toward an expansion of quantitative easing (in the United States), it is hard to expect a sustained rebound in the dollar," said Taisuke Tanaka, FX strategist at Nomura Securities in Tokyo.

Stocks up, dollar down as G20, earnings awaited
LONDON, Oct 21 (Reuters) - World stocks ticked higher and the dollar slipped against a backdrop of nerves about political currency machinations as well as caution about corporate earnings.
"Since it is clear that the direction is toward an expansion of quantitative easing (in the United States), it is hard to exsustained rebound in the dollar," said Taisuke Tanaka, FX strategist at Nomura Securities in Tokyo.

ANALYSIS-China rate hike seen calming, not cooling, commodities
BEIJING, Oct 20 (Reuters) - China's interest rate hike on Wednesday could signal a period of slower, steadier growth for commodities prices, as the central bank tightens just enough -- but not too much.
The rate hike by the People's Bank of China was both a vote of confidence in the economic recovery and an antidote to speculation, which is booming because inflation is higher than interest rates, encouraging people to park their savings in hard assets.

China's port of Shenzhen shut ahead of typhoon
SINGAPORE, Oct 21 (Reuters) - China's major port of Shenzhen was shut down on Thursday ahead of Typhoon Megi, which is expected to make landfall this weekend east of Hong Kong, a shipping agent said.
"Yes, Shenzhen port is shut down now," said an agent with shipping and logistics firm GAC in Shenzhen.

Morgan Stanley overtakes Goldman in commodity risk
NEW YORK, Oct 20 (Reuters) - Morgan Stanley raised its commodities trading risk in the third quarter, overshooting Goldman Sachs the first time since 2007 and standing apart from major rivals that have pared risk as new regulations loom.
Morgan Stanley posted a surprising $91 million net loss during the quarter, falling further behind Goldman, which beat market expectations with a $1.9 billion profit. Investors were also disappointed to see the largest investment bank after Goldman in the red after encouraging results in the same period from lesser rivals such as Citigroup.

PRECIOUS-Gold edges higher as dollar eases
LONDON, Oct 21 (Reuters) - Gold steadied above $1,340 an ounce on Thursday, as waning investor interest was offset by a pull-back in the dollar ahead of a key G20 meeting and after currency remarks from U.S. Treasury Secretary Tim Geithner.
"Despite the renewed dollar weakness, we've been struggling to regain traction to the upside. There have been a lot of investors going into gold already and probably at this juncture, would probably be a little hesitant, because now everyone is focusing on currency moves and the outcome of what could happen at the weekend," said Ole Hansen, a senior manager at Saxo Bank.

FOREX-Dollar trims gains made on Geithner comments
LONDON, Oct 21 (Reuters) - The dollar trimmed gains against the euro on Thursday as investors reckoned comments from U.S. Treasury Secretary Timothy Geithner may not have warranted a brief jump in the U.S. currency earlier in the day.
"What Geithner said was not targeted at the U.S. dollar. He was making his position clear before the G20 that the U.S. would not fight everybody on FX, just China," said Ulrich Leuchtmann, currency strategist at Commerzbank in Frankfurt.

Oil falls on Geithner comments, China slowdown
SINGAPORE, Oct 21 (Reuters) - Oil declined as the dollar strengthened after U.S. Treasury Secretary Timothy Geithner said there was no deliberate policy to devalue the currency, while China's economy slowed in the third quarter.
"The market is uncertain about how a tightening policy in China will impact on growth," said David Taylor, an analyst at CMC Markets in Sydney. "The China growth story is crucial to the sustainability of the Asian region."

China Sept power output growth slowest since March
BEIJING, Oct 21 (Reuters) - China's electricity output in September grew at the slowest pace since March this year amid a final nationwide push to curb energy use and reach energy efficiency goals.
Data from the National Bureau of Statistics showed on Thursday that power generation increased 8.1 percent from a year earlier to 348.7 billion kilowatt hours last month, a rate sharply down from August's 12.6 percent growth.

20101022 0908 Soy Oil & Palm Oil Related News.

U.S. soy product futures ended lower. Soyoil stumbled after climbing to a new two-year high overnight, backpedaling on broader-based weakness with 2% declines in crude oil influencing prices, analysts said. Soymeal futures slipped in unison with the rest of the complex, falling prey to speculative profit taking after setting a new 1-year high overnight. December soyoil settled 0.23 cent or 0.5% lower at 48.24 cents a pound. December soymeal ended $4.40 or 1.3% lower at $333.40 a short ton. (Source: CME)

USDA Forecasters Under Fire After Deep Cut in Corn Crop Estimate (Source : CME)
A flaw in government projections for the U.S. corn crop is contributing to a recent surge in prices and undermining confidence in the estimates. The U.S. Department of Agriculture this month predicted a larger-than-expected fall in U.S. corn production, triggering a rally in agricultural commodities that is rippling through into higher food prices. The agency admits its computer models failed to account for the declining quality of what is still seen as the third-largest corn crop on record until late in the harvest season. However, critics maintain government forecasters should have been aware of what was happening in the fields.
"Our confidence in the USDA to have any reasonable numbers available to us has been shaken to the very core," said Dennis Gartman, publisher of the Gartman Letter, an influential industry newsletter. Traders and analysts lean heavily on the agency's crop reports, and while forecasting isn't an exact science, USDA estimates have historically been on target and retain a strong influence on global commodity prices. The fallout from the Oct. 8 corn report promises to be a key area of discussion when USDA officials gather with the industry for an annual data users' meeting in Chicago on Monday. A senior USDA official said the sharp cut in corn output reflected problems in estimating the average weight of corn kernels, leading it to reduce its forecast twice since predicting a record crop in August.
Corn crop forecasts are based on surveys of farmers' expectations and actual field visits. Joseph Prusacki, director of the statistics division for USDA's National Agricultural Statistics Service, said the August forecast was made despite the uncertainty over kernel weights. Lacking hard data, Prusacki said USDA officials followed the typical practice of using a historical, five-year average for kernel weight in its model, which also includes a count of corn ears and projections for how much of the crop won't be harvested. Prusacki said the estimated kernel weight missed the mark. Some analysts said USDA staff should have recognized corn ears were underdeveloped and included that in their models. Damage was apparent in fields in August because the crop was more advanced than usual because of early planting and warm weather.
"Are these people even getting out of the truck?" asked Jim Gerlach, president of A/C Trading, an Indiana-based brokerage. "Anyone who's walked a field knows corn yields were short." Some observers view the problems with USDA forecasting seen this year as an anomaly, rather than a signal that forecasting methods need to be overhauled. Damage to the crop was based on "a unique set of circumstances related to weather that we're unlikely to see again," said Emerson Nafziger, an agronomist at the University of Illinois.

U.S. soy up on China demand, corn recovers
SYDNEY/MADRID, Oct 21 (Reuters) - U.S. soybean futures extended a rally to a fresh 14-month high, supported by strong Chinese demand, but grains futures came off the day's highs on a spike in the dollar.
"The move is almost exclusively currency-related after Geithner's comments," said Garry Booth, a senior adviser at MF Global Australia.     "The strength in the U.S. dollar certainly took the shine off prices," he said.

Hit two-year highs on demand, palm above 3,000 rgt
KUALA LUMPUR, Oct 21 (Reuters) - Dalian soyoil hit a 26-month high and Malaysian palm oil rose above 3,000 ringgit as traders bet strong vegetable oil demand will continue to drive soybean crushing in China.
"There are lots of excuses to be a bull in the vegetable oil market," said a regional vegetable oil trader in Malaysia. "Apart from China, the weaker dollar is making soybeans more attractive and investors are getting back into commodities in a big way again."

Indonesia to import 1.6 mln T soybeans in 2010-assoc
JAKARTA, Oct 21 (Reuters) - Indonesia is forecast to import 1.6 million tonnes of soybeans this year, up from a previous forecast of 1.4 million and a third higher than imports last year of around 1.2 million tonnes, an industry official said.
Ali Basry, director of the Indonesian representative office of the American Soybean Association, told Reuters on Thursday the higher imports were because of unusually wet weather reducing local soybean production.

China snaps up LatAm soy, imports 5 mln T-trade
SINGAPORE, Oct 21 (Reuters) - Chinese soybean processors are aggressively snapping up South American new-crop soybean cargoes, with 5 million tonnes booked so far, or a quarter higher than a year ago, traders said on Thursday.
"The demand is strong as the crush margins are pretty good," said one Singapore-based trading manager with an international trading company that has direct sales to China.

China 2010/2011 soy import seen at record 54 mln T-CNGOIC
BEIJING, Oct 21 (Reuters) - China, the world's largest soy importer, is likely to import 54 million tonnes of the oilseed in 2010/2011 (Oct/Sept), according to the latest estimate by an official think tank.
The revision is due to China's rising demand for vegetable oils and protein meal, said the China National Grain and Oils Information Centre (CNGOIC) in a report posted on its web site (

Paraguay soy sowing seen up despite weather doubts
ASUNCION, Oct 20 (Reuters) - Paraguay's soy farmers plan to plant 2.8 million hectares of soybeans in 2010/11, up slightly from the previous year when they gathered a record harvest, growers said on Wednesday.
The landlocked, South American country is the world's fourth-biggest supplier of the oilseed, although it trails far behind neighboring Brazil and Argentina -- the No. 2 and No. 3 exporters, respectively.

US to subsidize farmers to grow new biofuel crops
WASHINGTON, Oct 20 (Reuters) - The U.S. government plans a half billion dollars in subsidies to help farmers grow the next generation of biomass crops -- switchgrass and woody plants instead of corn, farm lobbyists and congressional staff workers told Reuters.
Agriculture Secretary Tom Vilsack will announce the subsidy program on Thursday, they said. An estimated $525 million would be paid over 15 years to defray farmers' costs.

US soy up on China demand, corn slips on firm dollar
SYDNEY, Oct 21 (Reuters) - U.S. soybean futures extended a rally to a fresh 14-month high, supported by strong Chinese demand, but all grains futures came of the day's highs on a spike in the dollar.
"The move is almost exclusively currency related after Geithner's comments," said Garry Booth, a senior advisor at MF Global Australia.

China 2010/2011 soy import seen at record 54 mln T-CNGOIC
BEIJING, Oct 21 (Reuters) - China, the world's largest soy importer, is likely to import 54 million tonnes of the oilseed in 2010/2011 (Oct/Sept), according to the latest estimate by an official think tank.
The revision is due to China's rising demand for vegetable oils and protein meal, said the China National Grain and Oils Information Centre (CNGOIC) in a report posted on its web site (

China 2010/11 corn demand seen up, supply deficit likely-JCI
BEIJING, Oct 21 (Reuters) - China's corn consumption is expected to grow to 160 million tonnes in 2010/2011 (Oct/Sept) and production at 153 million tonnes, with a supply deficit seen at 7 million tonnes, an influential private consultance company said.
China, the world's second-largest consumer, is expected to import 5.8 million tonnes of corn next year, according to estimates by the Shanghai JC Intelligence (JCI) Co Ltd.

Malaysia palm oil tops 3,000 ringgit first time in 2 years
KUALA LUMPUR, Oct 18 (Reuters) - Malaysian crude palm oil futures rose above 3,000 ringgit for the first time in more than two years as strength in other vegetable oil markets and the weaker dollar boosted prices.
The benchmark January contract  on the Bursa Malaysia Derivatives Exchange rose as much as 1.2 percent to 3,021 a tonne -- a level last traded on July 31, 2008.