Wednesday, November 10, 2010

Interactive Futures Event @ Klang Hokkein Association Wed 10 Nov 2010 6.30pm

20101110 1025 Breaking News : China Data

Nov. 10 (Bloomberg) -
- China posted a larger-than-forecast $27.1 billion October trade surplus, a day before Group of 20 leaders including Presidents Barack Obama and Hu Jintao meet in Seoul to tackle global imbalances in spending and capital flows. Exports gained 22.9 percent from a year earlier and imports rose 25.3 percent, the customs bureau said on its website today. With the surplus pumping more cash into the fastest-growing major economy, the central bank ordered some lenders to set aside more money as reserves in an effort to damp liquidity.

Reuters :
CHINA Oct 2010 Trade Balance(Surplus) @ $27.1 Billion vs forecast of $ 25 Billion.
CHINA Oct 2010 Imports up 25.3% vs forecast of up 28.5%.
CHINA Oct 2010 Exports up 22.9% vs forecast of up 23.5%.

20101110 1003 Global Economics News.

Asia: World Bank says region may need some capital controls . Asian economies may need to turn to capital controls as quantitative easing by the U.S. threatens to spur asset bubbles in the region's stock, currency and property markets, the World Bank said. Any curbs should be "targeted," temporary and tailored to address specific problems, Sri Mulyani Indrawati, a World Bank managing director, said in an interview. This could include countries tying up funds for as long as a year to help limit hot-money, she said. (Source: Bloomberg)

China: Dagong lowers U.S. credit rating on Fed monetary policy . China's Dagong Global Credit Rating Co. reduced its credit rating for the U.S. to A+ from AA, citing a deteriorating intent and ability to repay debt obligations after the Federal Reserve announced more monetary easing. The credit outlook for the U.S. is "negative", as the Fed's plan to buy government debt will erode the value of the dollar and "entirely encroaches" on the interests of creditors, analysts at Dagong, one of China's five official ratings companies, said in a statement. The U.S. is rated Aaa and AAA by Moody's Investors Service and Standard Poor's Corp., the highest credit ratings of the New York-based companies. (Source: Bloomberg)

Japan: Current account surplus widened in September as exports increased , indicating that demand from Asia has helped offset the impact of a yen near its highest level against the dollar since 1995. The gap expanded 24% YoY to JPY1.96tr (USD24b), the Ministry of Finance said in Tokyo. (Source: Bloomberg)

Australia: November consumer confidence falls to a five-month low after the central bank resumed raising interest rates, sending mortgage payments higher. The sentiment index fell 5.3% to 110.7 this month, according to a Westpac Banking Corp. and Melbourne Institute survey of 1,200 consumers conducted Nov. 1-7. (Source: Bloomberg) 

China: October property price growth slows on government curbs
China’s property prices rose at a slower pace in October after the government raised interest rates and expanded measures to limit the risk of asset bubbles in the world’s fastest-growing major economy. Home prices in 70 cities climbed 8.6% from a year earlier. That’s slower than the 9.1% increase in September and the 8.9% median estimate in a survey of six economists. (Bloomberg)

Australia: Says deficit to worsen as currency surges
Australia’s budget deficits will be wider this year and next than the government predicted before an 21 Aug election as a rising exchange rate slows tax revenue from exporters, the Treasury said in a midyear review. The shortfall in the fiscal year ending 30 June will be AUD41.5 bn (USD42bn), compared with a July estimate of AUD40.7bn, a report released showed. The gap the following year was forecast to be AUD12.3bn, compared with a previous projection of AUD10.4bn. (Bloomberg)

UK: Factory production expands for a fifth month
UK manufacturing expanded for a fifth month in September to reach the strongest level in almost two years as the economic recovery sustained its momentum. Output climbed 0.1% from the previous month, the Office of National Statistics said in London. The median forecast of 25 economists in survey was for an increase of 0.2%. Overall industrial production rose 0.4%, and the trade deficit narrowed as exports gained. (Bloomberg)

US: Wholesale inventories rose 1.5% in September
Inventories at US wholesalers climbed twice as much as forecast in September as suppliers stocked up ahead of the holiday sales season. The 1.5% increase in the value of inventories followed a revised 1.2% rise in August that was larger than initially estimated, Commerce Department figures showed. The median of economists surveyed projected a 0.7% gain. Sales climbed 0.4% to USD353.9bn, the highest since September 2008. (Bloomberg)

US: Job openings decreased 163,000 in September
Job openings in the US dropped in September for a second month, signaling a sustained labor market rebound will take time to develop, a government report showed. Openings decreased by 163,000 to 2.93m, the Labor Department said. The number of people hired rose from the prior month and separations declined. The unemployment rate was 9.6% for a third month in October even as payrolls increased 151,000, Labor Department figures showed last week. (Bloomberg)

20101110 1001 Malaysia Corporate News.

KFC Holdings: MD not aware of any plans to privatise KFCH. KFC Holdings Bhd's (KFCH) top official has brushed off talks that the firm is a takeover target by a substantial shareholder, as the stock surged to a fresh high yesterday. The counter had risen 130% over the past six months while shares in QSR surged 80% and Kulim rose 76% over the same period. (Source: The Star)

Autos: Consolidation of auto sector could be done soon. The Malaysian Automotive Institute (MAI) is understood to have submitted its proposals and recommendations pertaining to the consolidation of the automotive sector to the government for a final decision of the merger between the players. The proposed consolidation is expected to entail a merger between two national automakers, Proton Holdings Bhd and Perusahaan Otomobil Sdn Bhd (Perodua). (Source: The Edge Financial Daily)

Banking: RM150mil banking talent boost. The Institute of Bankers Malaysia plans to use the RM150mil staff training fund for various capacity development initiatives in the financial services sector over the next five years. They included collaborations with local and foreign universities to churn out more learning programmes to help reduce the shortage of talent in the banking and financial services sector. (Source: The Star)

Plantation: RSPO unveils "Sustainable Palm Oil" Trademark. The Roundtable on Sustainable Palm Oil (RSPO) Tuesday unveiled a trademark that will enable consumers to identify consumer products containing sustainable palm ingredients. (Source: Bernama) 

IJM Corp bags RM690m cancer institute contract
IJM Corp’s (IJM) joint-venture company Kiar Teratai-IJM Joint Venture yesterday received a letter of award from Kiara Teratai SB for the construction and maintenance of the National Cancer Institute. The contract worth RM690m involves the construction of a hospital block, which entails the building of a sub-basement for radiotherapy treatment, one level for a carpark, four levels of oncology diagnostic and treatment services, and two blocks of seven levels for in-patient wards. The construction is targeted to be completed on 31 Aug 2013. Kiara Teratai-IJM joint venture is 60% controlled by Kiara Teratai SB and 40% by IJM Construction SB, a wholly owned subsidiary of IJM. (FinancialDaily)

Salcon secures RM52m contract in Kelantan
Salcon’s wholly-owned subsidiary, Salcon Engineering has accepted a RM52.462m contract from Air Kelantan SB, the water supplier and distributor in the state. The contract is for construction, upgrading, completion, testing and commissioning of the Pintu Geng Water Treatment Plant and related works in Kota Baharu. The project is to be completed in 20 months from the date of the site possession. (MalaysianReserve)

Bintulu Port hires boats for two companies
Bintulu Port Holdings has hired three handling tug boats for a total cost of RM66.38m. The two tug boats will be 25-tonne ship-handling tugs and come complete with crew. These vessels are chartered for 10 years from Sing Kiong Hong SB at a cost of RM37.91m, or RM5,192.5 per day, for Bintulu Port SB. The single 45-tonne ship handling tug vessel is chartered from Bunga Tenaga SB for RM28.47m or RM7,800 per day for a 10-yaer period as well. (MalaysianReserve)

PLUS accepts UEM-EPF offer
PLUS Expressway has given the go-ahead to UEM Group and the Employees Provident Fund’s (UEM-EPF) take over offer of RM23bn. Earlier, PLUS requested an extension to the acceptance deadline from 29 Oct to yesterday. Now the offer will be tabled to PLUS’ shareholders at an extraordinary general meeting, scheduled to take place next month. To recap, on 15 Oct, PLUS received an offer from UEM-EPF to acquire all its businesses and undertakings, including assets and liabilities for RM4.60 per share. UEM-EPF would then incorporate a special purpose vehicle for the acquisition, where UEM would hold 51% with the EPF holding the rest. (FinancialDaily)

20101110 0949 Biofuels Related News.

US Farm, Food Groups, Oil Cos File Lawsuit Over EPA Ethanol Decision(Source: CME)
Meat producers, restaurant chains and oil companies are all challenging the U.S. Environmental Protection Agency's decision to increase the amount of ethanol that can be blended into gasoline. In two separate lawsuits filed, the groups say EPA acted illegally when it made a controversial decision in October to increase ethanol levels in gasoline from 10% to 15%. The EPA was not available for comment.
One lawsuit--filed by the Grocery Manufacturers Association, the American Meat Institute and the National Council of Chain Restaurants, among others--said the EPA can't allow higher levels of ethanol for new cars, while continuing to study its effect on older vehicles. Granting a "partial waiver," the EPA allowed higher ethanol levels for model-year 2007 cars and newer and said it would consider raising levels for older cars in coming weeks.
The meat producers, grocers and restaurants also contend that increasing the use of ethanol in cars will increase corn prices and make food more expensive. A second lawsuit, filed by the American Petroleum Institute, challenges the EPA's statutory authority. In a statement released Tuesday, the petroleum group said the EPA should have waited to rule on the issue until certain tests had been completed. "Results so far have revealed potential safety and performance problems that could affect consumers and the investments they've made in thier automobiles," said Bob Greco, API's director of downstream operations. 

Biofuels Could Be Bonanza For Marginal Farmland In Southeast US(Source: CME)
Marginal farmland in the U.S. southeast could be put to use as the federal government starts paying farms to grow crops for a new generation of biofuels. The U.S. Department of Agriculture said last month it will pay farmers to grow crops for so-called biomass, which ranges from trees to grass to corn cobs, and to transport them to refineries and power plants. The announcement gives a number of fledgling projects the chance to grow and become commercially viable, and could be a boon for farm owners as investors eye land for crops, officials said. "I think there's going to be a gold-rush to lower-priced lands," said Phillip Jennings, chief operating officer for Repreve Renewables, a biofuels venture partly owned by textile company Unifi Inc. "The winners are going to be the landowners." Energy from biomass is expected to remain relatively small in the near term, and it's unclear which crop -- if any -- will capture a sizable share of the markets for transportation and power-plant fuels.
The new biofuels will supplement, not replace, the vast corn-based ethanol industry. Some researchers say grasses show the most promise because they can thrive on marginal lands. Crops such as switchgrass, miscanthus and energy cane can be planted in areas where they won't compete with food crops--a big concern about biofuels. Repreve focuses on giant miscanthus, a perennial grass native to Asia. It is planted on about 10,000 acres in the Southeast now. While that is a sliver of the roughly 85 to 90 million acres of corn planted annually in the U.S., Jennings said there is growing interest from large, publicly traded companies and hedge funds to ramp up planting. BP PLC, for instance, is increasing its investment in biofuels. Earlier this year, the British oil giant bought Verenium Corp.'s bioenergy business for $98.3 million, a purchase that includes a plant in Highlands County, Fla., which will produce an estimated 36 million gallons of biofuels when it opens in 2013.
The plant will use primarily switchgras s and energy cane--a crop similar to sugar cane produced specifically for energy. The project gives a new opportunity for farmers in the southeast where citrus crops have been plagued by disease and the sod industry has collapsed because of the housing crisis, BP spokesman Tom Mueller said. The USDA's support is going to be critical for the industry to generate momentum for farmers, refineries and seed producers. It will pay farmers as much as 75% of the cost of establishing biomass crops, and then provide continued payments for up to five years. The USDA also will pay the cost of shipping the crops to the small number of biofuel plants.

20101110 0948 Global Market News.

Oil dips towards $86; China imports slump
SINGAPORE, Nov 10 (Reuters) - Oil fell for a second day after China's crude imports tumbled last month and the dollar strengthened, suppressing the bullish effect of an unexpected drop in inventories in top consumer the United States.
"With China coming off, combined with a stronger dollar, we should have a downward correction," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp. "The market went up too much over the past couple of weeks."

China Oct crude oil imports lowest in 19 mths
BEIJING, Nov 10 (Reuters) - China's crude oil imports in October fell 15 percent from a year ago to the lowest level since April, as oil firms drew on stocks following record imports in September, preliminary trade figures showed on Wednesday.
China, the world's second-largest crude buyer, brought in 16.39 million tonnes of crude last month, or 3.86 million barrels per day, and imports for the first 10 months gained 19.5 percent at 197.55 million tonnes, the General Administration of Customs said on its website

Global oil use higher in 2011 on better economy-EIA
WASHINGTON, Nov 9 (Reuters) - Global oil demand next year will be higher than previously thought, thanks to stronger economic growth, the U.S. government's energy forecasting agency said on Tuesday.
The U.S. Energy Information Administration boosted its 2011 world oil demand growth forecast by 33,000 barrels per day to 1.44 million bpd, with fuel use next year now pegged at nearly 87.8 million bpd.

OIL: Crude extends fall from 2-yr high as dollar firms
TOKYO, Nov 10 (Reuters) - U.S. crude futures extended declines on Wednesday after hitting a two-year high the day before, as a stronger dollar outweighed the impact of sharp declines in U.S. oil inventories.
The International Energy Agency said global oil supplies will near a peak by 2035 and oil prices might exceed $100 a barrel in 2015 and $200 in 2035.

COMMODITY MARKETS: Mkts advance but dlr rebound takes away some gains
NEW YORK/LONDON, Nov 9 (Reuters) - A sharp climb in the dollar eroded early gains in gold, oil and silver on Tuesday, but soft commodities extended their runaway surge and soybeans belatedly joined the rally.
"The selloff started because the market had gone too far, too fast," said Frank McGhee, head precious metals trader at Chicago's Integrated Brokerage Services LLC.

GLOBAL MARKETS: US stocks, commodities drop on risk aversion
NEW YORK, Nov 9 (Reuters) - Investors pulled away from speculative bets late on Tuesday, roiling U.S. stock and commodities markets and pushing the dollar higher.
"The markets in general are severely overbought and something has to give," Troy Buckner, managing principal of hedge fund NuWave Investment Management LLC of Morristown, New Jersey.

Global oil use higher in 2011 on better economy-EIA
WASHINGTON, Nov 9 (Reuters) - Global oil demand next year will be higher than previously thought, thanks to stronger economic growth, the U.S. government's energy forecasting agency said on Tuesday.
The U.S. Energy Information Administration boosted its 2011 world oil demand growth forecast by 33,000 barrels per day to 1.44 million bpd, with fuel use next year now pegged at nearly 87.8 million bpd.

PRECIOUS-Gold hits record on inflation worry, Europe debt
SINGAPORE, Nov 9 (Reuters) - Gold rose to a record for the fourth straight session on Tuesday as inflation worries and euro zone sovereign debt woes continue to lure investors to precious metals.
Spot silver hit a new 30-year high of $28.16, and palladium extended gains to a new nine-year peak of $714.25. Spot gold rose to an all-time high of $1,414.60 an ounce, before easing to $1,413.50 by 0706 GMT.

FOREX-Euro undermined by sovereign debt worries, yen up
LONDON, Nov 9 (Reuters) - The euro extended losses on Tuesday, under pressure over renewed concerns about peripheral euro zone debt as some players closed long euro positions against the dollar ahead of year-end book-closing.
The euro fell to its lowest in over a week against the dollar, at $1.3823, and was down 0.5 percent for the day to trade at $1.3850.

GLOBAL ECONOMY-Obama returns fire after China slams Fed's move
NEW DELHI, Nov 8 (Reuters) - U.S. President Barack Obama defended the Federal Reserve's policy of printing dollars on Monday after China and Russia stepped up criticism ahead of this week's Group of 20 meeting.
The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency row escalating into a rush to protectionism that could imperil the global recovery.

World stocks gain despite euro zone debt worry
LONDON, Nov 9 (Reuters) - World stocks gained and Wall Street looked set to rise despite increasing concerns in Europe about the state of some euro zone debt.
"You've had the best of both worlds in equity markets. You've had good data, particularly in jobs, earnings growth and the Fed stimulus has brought bond yields down," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

20101110 0947 Soy Oil & Palm Oil Related News.

ITS CPO export down 1.1% to 390,534 tonnes for the period of 1~10 Nov 2010.
SGS CPO export up 1% to 386,762 tonnes for the period of 1~10 Nov 2010.

MPOB Official Data for the month of Oct 2010
Export down 0.6%
Stock up 4.9%
Output up 4.7% 

Heavier rains may cut Malaysia palm output-planters
JAKARTA, Nov 10 (Reuters) - Malaysia's palm oil production may fall 5 to 10 percent each month for November and December as heavy rains curb yields and floods make transportation of the vegetable oil difficult, planters said on Wednesday.
Rains in northern mainland Malaysia have led to flooding and planters are concerned the northeast monsoon season in the third quarter of this year will bring heavier than usual rains to key palm oil growing areas in the south.

China Oct soy imports fall to 3.73 mln T - customs
BEIJING, Nov 10 (Reuters) - China, the world's largest soy buyer, imported 3.73 million tonnes of soy in October, the lowest since March and down 19.6 percent from September, official customs figures showed on Wednesday.
The low figure was partly due to customs clearance delays during the week-long National Day holidays, said one analyst with the official think tank, the China National Grain and Oils Information Centre (CNGOIC).

U.S. soy product futures climbed in step with soybeans. Soyoil raced to a new 27-month high while meal rose to 16-month highs. CBOT Dec soyoil ended 1.39c higher at 53.40 cents a pound, while December soymeal traded $17.40 higher at $362.30 a short ton. (Source: CME)

Commodities Soar As Surging Demand Meets Dwindling Supplies(Source: CME)
A broad array of commodities hit multiyear highs as producers of metals and agricultural goods are finding it increasingly more difficult to meet robust demand. The growing threat of a supply crunch in markets such as copper and soybeans adds to last week's buying frenzy that followed the U.S. Federal Reserve's announcement that it would buy $600 billion in Treasury bonds over the next eight months. While intended to boost the economy, printing more money would also undermine the value of the dollar, a prospect that has sent commodity prices soaring over the last few weeks. December gold futures reached a record $1,423.80 an ounce on the Comex division of the New York Mercantile Exchange, gaining additional momentum from renewed fears about the European Union's ability to handle some members' high sovereign debt levels. The contract ended up 0.5% at $1,410.10 an ounce, after some investors used an afternoon rebound by the dollar as an excuse to book profits.
But the markets with the greatest fear of a supply crunch held onto big early gains. November soybean futures ended at a 26-month high of $13.1925 a bushel after the U.S. Department of Agriculture cut its crop forecast while raising projected exports. Cotton ended up 3.4% at a record $1.5123 a pound, the maximum daily gain allowed by ICE Futures U.S. Surging demand from China is expected to cause supplies of both crops to tighten. China was also on the mind of copper traders, as futures leaped over the $4-a-pound mark for the first time since July 2008, helped by strong Chinese car sales data. China's passenger vehicle sales rose 27.1% in October to 1.2 million units, semi-official industry group China Association of Automobile Manufacturers said Tuesday. Copper, which is widely used in automotive manufacturing, ended up 2.2% at $4.0430 a pound. Still, there are questions about the sustainability of recent gains in certain markets, particularly crude oil, where supplies remain ample.
Investors have flocked to hard assets like metals and oil that will hold value should the Fed's stimulus cause inflation to take off or the dollar's standing to crumble. But those markets have already priced in the $600 billion announced last week, and could snap back to earth if the Fed's next round of stimulus is also its last. "Will these markets continue to climb when the Fed starts to consider removing the punch bowl?" said Matt Zeman, head of sales at LaSalle Futures in Chicago. Oil futures swung to a loss as soon as the dollar began to recover on Tuesday, ending 0.4% lower at $86.72 a barrel, after ending the last two sessions at a two-year high.

Palm oil hits new two-year highs as commodities gain
KUALA LUMPUR, Nov 9 (Reuters) - Malaysian crude palm oil futures rose nearly 3 percent to touch a fresh two-year high, supported by gains across the commodity markets.
"Palm oil investors covered their short positions during the last hour before closing as most of the commodities rallied on the back of a weaker dollar," said a trader with foreign brokerage in Kuala Lumpur.

Indonesia's forest ban may not hurt palm oil output yet
JAKARTA, Nov 9 (Reuters) - Indonesia's proposed ban on forest clearing is unlikely to impact palm oil production in the short term as growth from new plantings in previous years remain in the pipeline, a government official said on Tuesday.
Palm oil output in the world's No.1 producer could rise to 22-23 million tonnes in 2011 versus a projected 21 million tonnes this year, said Mukti Sarjono, acting director general of plantations with the Agriculture Ministry.

Brazil laws for palm may deter foreign cos for now 
JAKARTA, Nov 9 (Reuters) - Brazil's strict environment laws for oil palm cultivation will keep away Southeast Asian plantation firms away for the time being despite a new policy to encourage the industry's expansion, an official said.
Malaysian planters want to expand into Brazil but find it difficult to do so as local laws stipulate estates must be surrounded by forests at a 1:4 ratio, said Marcello Brito, a director with unlisted Brazilian planter Agropalma.

Indonesia palm firm uses degraded land, not forest
JAKARTA, Nov 8 (Reuters) - An Indonesian planter has taken steps to use 12,000 hectares of degraded land instead of forests for its planned oil palm estates, the largest such swap so far in the country as a ban looms on forest clearing.
The World Resources Institute (WRI), a Washington-based environmental think tank, said on Monday it was working with the planter to preserve forests standing on its concession and look elsewhere for land with little biodiversity or carbon stocks.