Monday, November 22, 2010

20101122 1826 Breaking News.

The European Union's bailout of Ireland may give short-term relief to markets, but despite euro zone hopes, may not prevent markets from pushing Portugal to get EU assistance too, unless a more general solution is found soon.On Sunday, Ireland applied to the EU and the International Monetary Fund for a financial aid package to cover its fiscal needs and potential future capital requirements of its banking system. pricorn23: EU finance ministers backed the request for aid, which an EU source put at 80-90 billion euros, to stop market concerns about Ireland's debt from spreading to other countries with big budget gaps such as Spain and Portugal, threatening a systemic crisis. 

The top 35 US banks will be short of between $100 billion and $150 billion in equity capital after the new Basel III global bank regulations are imposed, with 90 percent of the shortfall concentrated in the biggest six banks, according to Barclays Capital.The BarCap study assumes the banks will need to hold top quality capital equal to 8 percent of their total assets, adjusted for risk.
This 8 percent tier one capital ratio, a key measure of bank strength, provides a one point cushion against falling below the effective global minimum of 7 percent set in September by the Basel Committee on Banking Supervision.

The Basel III reforms will hit banks in two ways – by gradually tightening the definition of what counts as tier one capital; and by forcing banks to increase the risk adjustment for big swathes of their businesses. Banks can respond by increasing their capital through retained earnings or equity issuance or they can cut their risk-weighted assets through sell-offs and by cutting back on risky business lines.

20101122 1824 FCPO EOD Daily Chart Study.

FCPO closed : 3184, changed : -142 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : falling lower, buyer closing position as seller taking some position testing market.
Support : 3150, 3100, 3070 level.
Resistant : 3200, 3270, 3300 level.
Comment :
Slam Dunk! FCPO closed recorded huge losses down 4.27% with lower volume traded after opened gap down and dive deeper despite increased export data released most probably due to catching up with last Friday soy oil severe price fall and China move the hike higher bank reserve to  control inflation. Daily chart formed a wide range down bar candle closed below middle Bollinger band support level with the reading remained suggesting a correction range bound upside biased market development 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.

20101122 1810 FKLI EOD Daily Chart.

FKLI closed : 1505.5, changed : +3.5 points,  volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : turned upward, buyer seems taking some chances.
Support : 1500, 1485, 1470 level.
Resistant : 1530, 1550, 1580 level.
Comment :
Quiet volume transaction FKLI recorded small gain doing 2 points premium compare to cash market as regional market still traded mixed as China move to hike bank's reserve to control price inflation. Daily chart formed another doji bar candle rested right at the middle Bollinger band level with unchanged reading of side way range bound 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.

20101122 1021 Global Economics News.

Hong Kong: Adds tax, intensifies housing bubble fight
Hong Kong intensified a yearlong battle to curb surging home prices with additional taxes and higher down payments a day after the IMF warned that asset inflation may derail the city’s economy. Homes sold within six months of purchase will incur a 15% stamp duty, Financial Secretary John Tsang said. Down payments for homes costing HKD12m (USD1.5m) or more will rise to 50%, from 40%. (Bloomberg)

China: ‘Fighting Mode’ on reserves ratios may hurt stocks, bonds
China’s stocks and bonds may fall, and Yuan forwards may advance, as the world’s fastest-growing major economy increases the amount of money that banks must set aside to fight inflation. The reserve ratio increase of 50 basis points by the People’s Bank of China to cool the fastest rise in consumer prices in two years was the second in two weeks. China’s benchmark stock index had its biggest two-week decline since May on speculation the monetary tightening will crimp economic growth. (Bloomberg)

Ireland: Seeks bailout as ‘outsized’ problem overwhelms nation
Ireland applied for a bailout to help fund itself and save its banks, becoming the second Euro member to seek a rescue from the EU and the IMF. Irish prime minister Brian Cowen said he expects talks on the package to be completed in the “next few weeks”. Finance Minister Brian Lenihan said the loan will be less than EUR100bn (USD137b), though he refused to give any further details. (Bloomberg)

US: Obama says surplus nations must allow currency gain, spur demand
President Barack Obama said countries running trade surpluses should boost domestic demand and allow their currencies to strengthen, repeating criticism he made of China a week ago at a meeting of global leaders. “Countries with big surpluses have to figure out how they can expand demand,” Obama said. “Countries with significant deficits will have to save more and focus not only on consumption, but also on production and exports.” (Bloomberg)

US: Consumer, business spending probably rose
Consumer spending probably picked up in October, and factories took more machinery orders, showing the US recovery strengthened entering the final quarter of 2010, economists said before reports this week. Household purchases rose 0.5% after a 0.2% gain in September, according to the median estimate of 61 economists surveyed ahead of 24 Nov figures from the Commerce Department. (Bloomberg)

20101122 1020 Malaysia Corporate News.

Reshuffle likely as PM sets sights on general election
A Cabinet reshuffle is on the cards as Datuk Seri Najib Tun Razak sets his sights on a general election next year. The reshuffle, expected by next month, will enable him to form a strong team to help him implement the economic and transformation policies he has put in place and carry the Government into the 13th general election. It is understood the impending reshuffle will not be as major as Najib’s first reshuffle shortly after he came in as Prime Minister, nor as minor as the one last year. But it will be quite substantial, with at least three ministers likely to make way for younger leaders. Of the three, one is said to be a senior face from the Tun Dr Mahathir Mohamad era while the other two had joined the Cabinet of Tun Abdullah Ahmad Badawi. Among some of his choices to promote to the Cabinet are deputy ministers Datuk Saifuddin Abdullah (Higher Education), Datuk Mukhriz Mahathir (International Trade and Industry), Datuk Dr Latiff Ahmad (Defence) and Datuk Razali Ibrahim (Youth and Sports). (TheStar)

Samy to reveal resignation details on 13 Dec
Datuk Seri S. Samy Vellu said Sunday that he will reveal on 13 Dec details about his resignation as MIC president. The 74-year-old leader said he looked forward to stepping down as MIC president as it would give him plenty of time to spend with his family, friends and also the community. "On that particular day (13 Dec), I will also announce what my plans are after I step down as president," he told reporters after officiating Malaysian Hindu Youth Council's 46th AGM here. Samy Vellu is the longest serving MIC chief, holding the post since 1979 for 11 consecutive terms. He was Works Minister and the longest serving minister in the cabinet until he lost his parliamentary seat in the 2008 general elections. (TheStar)

Halim Saad eyes QSR
Tan Sri Halim Saad, the former boss at Renong/UEM Group, has made an offer to acquire Pizza Hut restaurant operator QSR Brands’ entire business that includes its controlling stake in KFC Holdings (M) Bhd. The board is in the midst of deliberating on the proposal and will make further announcements in due course,'' QSR said in a short statement to Bursa Malaysia last Friday. QSR indicated that the offer was priced at RM5.60 per share, at a discount to the last closing price. Idaman Saga is owned by Halim and Datuk Che Mokhtar Che Ali, the statement said. The latest filing with Bursa Malaysia showed Johor Corp-controlled Kulim (M) Bhd owned a 57.8% stake in QSR. (Financial Daily, Bursa)

YTL Comms extending coverage
YTL Communications SB (YTL Comms) will roll out its 4G mobile Internet-with-voice service, Yes, to cover 80% of the population by end-2011. YTL Comms, a unit of YTL Power International Bhd, currently has a coverage of 65%. To date, it has invested some RM2.5bn in the Yes 4G infrastructure. Executive director Datuk Yeoh Seok Hong said that with 1,500 base stations, the event marked the largest network ever launched in the country. We still have 1,000 base stations to be deployed. By then, 80% of the population will be covered, he said. (StarBiz)

Brunei to buy power from Lawas, Limbang plants
Brunei has offered to purchase power to be generated by the proposed hydroelectric plants to be set up in Limbang and Lawas, Sarawak. Sarawak’s Second Minister of Planning and Management, Datuk Amar Awang said in Lawas that while the actual commencement dates for the projects have yet to be fixed, Brunei had already showed keen interest in the power plants. Sarawak recently invited several foreign competitors to bid for the two hydroelectric projects which would have a total generating capacity of 343MW. The Limbang project is estimated to generate 245MW and Lawas the remaining 100MW. (Malaysian Reserve) 

20101122 0943 Global Market News.

Oil rises above $82 as Eurozone concerns ebb
SINGAPORE, Nov 22 (Reuters) - Oil on Monday rose to above  $82 a barrel, rebounding from two straight weeks of losses, as  the dollar weakened after Ireland sought an international  bailout to tackle its banking and budget crisis.
"They want to cool the market which is good for the economy," said Ken Hasegawa, commodities derivatives sales manager at Newedge Japan.  "It's a strategy to prevent inflation. They really want to grow gradually." 

China fuel stocks in 8th monthly fall, led by diesel
BEIJING, Nov 22 (Reuters) - Combined inventories of gasoline, diesel and kerosene held by China's top two oil firms were down 3.4 percent in October versus September, the eighth monthly decline, led by a steep draw in diesel as demand for the fuel surged, an industry official said on Monday.
Diesel stocks held by Sinopec Corp and PetroChina were down a sharp 14.3 last month from September, while that of gasoline rose 6.8 percent, said the official who is not authorized to release the data.

OIL: Crude gains above $82/bbl on euro strength
TOKYO, Nov 22 (Reuters) - U.S. crude futures rose above $82 a barrel on Monday, helped by a weaker dollar against the euro after the EU and IMF agreed to help bail out Ireland with loans to tackle the country's banking and budget crisis.
Late on Friday, the U.S. government reported that money managers cut net long crude oil positions on the NYMEX in the week to Nov. 16, from record high levels the previous period.

COMMODITY MARKETS: China bank move has little impact, rate rise eyed
LONDON, Nov 19 (Reuters) - Oil, gold and industrial metals were slightly firmer on Friday, supported by a weaker dollar and talk of a multi-billion euro deal for Ireland, but some other commodities fell on news of tighter Chinese monetary policy.
"Anything that acts a gentle brake on the runaway growth in China will be a very good thing in the longer term," said Christopher Bellew at Bache Commodities in London.

GLOBAL MARKETS: Ireland bail-out aids euro, Asian stocks
SYDNEY, Nov 22 (Reuters) - The euro, Asian stocks and  commodities got a fillip on Monday after global financial  authorities agreed to bail out debt-swamped Ireland and  protect Europe's wider financial stability.    
 The EU and the IMF agreed to lend Ireland cash to tackle its banking and budget crisis. The size of the loans has not been decided but is likely to be smaller than Greece's 110 billion euro bailout last May.

US factory,jobless data show some economic strength
WASHINGTON, Nov 18 (Reuters) - A closely watched gauge of U.S. jobless benefits hit a two-year low last week and factory activity in the country's Mid-Atlantic region accelerated in November, suggesting the economy's recovery was gaining speed.
The improving economic picture was further bolstered by a third report on Thursday showing a measure of future economic activity increased 0.5 percent in October.

China raises RRR again to fight inflation
BEIJING, Nov 19 (Reuters) - China ordered lenders on  Friday to lock up more of their money with the central bank  for the second time in two weeks, stepping up its battle to  pull excess cash out of the economy before inflation has a  chance to take off.
The People's Bank of China said that it would increase  banks' required reserves by 50 basis points, its fifth such  announcement this year. Including a temporary increase, the  move takes required reserve ratios (RRR) to 18.5 percent for  big banks, a record high.

Raw materials present EU with trade, growth conundrum
BRUSSELS, Nov 18 (Reuters) - To fuel its economic recovery, Europe needs raw materials. But its efforts to acquire them are being frustrated by a mistrust of foreign supplies and internal disagreement over what a raw material is.
The European Union, the world's largest trading zone, has complained for years about non-EU countries restricting the export of essential materials used by European manufacturers to make products such as steel, semiconductors and light bulbs.

PRECIOUS-Gold extends gains as Ireland aid talk lifts euro
LONDON, Nov 19 (Reuters) - Gold prices climbed in Europe on Friday, building on the previous session's gains, as expectations that Ireland is near a multi-billion euro deal to help its beleaguered banks lifted the euro.
Spot gold  was bid at $1,360.00 an ounce at 1042 GMT, against $1,352.65 late in New York on Thursday. U.S. gold futures for December delivery  rose $6.70 to $1,359.70.

FOREX-Euro edges up on Irish hopes, China move hurts Aussie
LONDON, Nov 19 (Reuters) - The euro edged up on Friday, recouping earlier losses on expectations that Ireland was near a deal to get tens of billions of euros from its European partners and the IMF for its shattered banks.
The euro may also have been helped after China tightened monetary policy on Friday by raising banks' reserve requirements, as traders has already been positioning for a possible change in Chinese policy, a trader said.

US wheat up over 1 pct on strong U.S. exports
SYDNEY, Nov 19 (Reuters) - U.S. wheat, corn and soybeans futures all posted gains in early Asian trade, continuing to regain lost ground, with sentiment helped by a  weakening dollar and returning investor appetite for riskier assets.
Corn, soybean and wheat prices are expected to be influenced by factors such as gold prices, China rate moves and the dollar for the next month due to a lack of new fundamental inputs.

More China corn imports decided by market-official
BEIJING, Nov 19 (Reuters) - China's grain deputy chief said commercial companies and market prices would decide if more corn would be imported into the country while the government holds ample reserves and can ensure supplies.
"Corn imports currently are conducted by enterprises, not at the needs of the government in ensuring domestic supplies," Zeng Liying, deputy director of the State Grain Administration, told state media.

Asian markets rise on U.S., Europe cheer
SINGAPORE, Nov 19 (Reuters) - Asian stock markets rose  slightly on Friday and the euro held recent gains after a  strong Wall Street performance and moves towards heading off a  potential Irish debt crisis.
"Many hedge funds close books in November and now is a  time when short-covering tends to emerge. Solid U.S. economic  data and GM's listing yesterday are also lending help," said  Hiroaki Kuramochi, chief equity marketing officer at Tokai  Tokyo Securities.

China food demand boosts Brazil growers' profits
SAO PAULO, Nov 18 (Reuters) - Brazil growers will reap healthy profits from the 2010/11 grain crop, despite the high cost of getting goods to port, because strong demand from China is supporting prices, consultants MB Associados said. Despite the downward correction in world commodities prices in the past week, futures prices of commodities from grains to iron ore are still historically firm, economist Jose Roberto Mendonca de Barros, founder of MB Associados, told Reuters in an interview on Thursday.

20101122 0942 Soy Oil & Palm Oil Related News.

ITS CPO export up 11.5% to 1,053,520 tonnes for the period of 1~20 Nov 2010.
SGS CPO export up 18.3% to 1,099,451 tonnes for the period of 1~20 Nov 2010.  

U.S. corn, soy jump over 1 pct on Ireland bailout
SINGAPORE, Nov 22 (Reuters) - U.S. corn and soybean  futures rose more than 1 percent in choppy trading  as the EU and IMF agreed to help bail out Ireland and dry  weather threatened crops across Argentina.
"The U.S. dollar has opened sharply lower and that is supportive across the entire commodity complex," said Luke  Mathews, commodity strategist at Commonwealth Bank of Australia.

Dry weather forecast for U.S. winter wheat, Argentine soy
SINGAPORE, Nov 22 (Reuters) - Dry weather forecast across  the U.S. Southern Plains this week with wide swings in  temperature will hamper development of winter wheat crop, a  forecaster said on Monday.
"With little or no precipitation in the forecast during  the next 10 days, there will be additional stress on the  winter wheat crop especially in the dry areas of western  Kansas, eastern Colorado and southwest Nebraska,"  said Mike  Palmerino, agricultural meteorologist with Telvent DTN.

Soy product futures tumbled in unison with soybean futures. Soyoil futures led the downward push in the products. Fears of tempered demand from China and reports of China looking to release soyoil supplies from their reserves next week enticed traders into reducing their long position exposure ahead of the weekend, analysts said. Soymeal futures declined in step with the rest of the complex, but found some support from oil/meal spreading and a smaller amount of fund long position risks, analysts said. CBOT Dec soyoil ended 1.96c or 3.8% lower at 48.96 cents per pound, and Dec soymeal traded $9.20 or 2.7% lower at $325.80 a short ton. (Source: CME)

US Grain Exports-Wheat sales hit 10-week high, soy sales rebound
CHICAGO, Nov 18 (Reuters) - U.S. wheat export sales climbed for the fifth consecutive week last week and hit a 10-week peak on improving demand for U.S. supplies after weather woes cut crops in parts of Europe and the Black Sea region this year, trade sources said on Thursday.
Soybean export sales rose 26 percent and topped 1 million tonnes for the seventh time in nine weeks amid continued strong sales to China, the world's top importer, the sources said after the U.S. Agriculture Department released its weekly export sales report.

Palm oil up as Irish debt concerns ease
KUALA LUMPUR, Nov 19 (Reuters) - Malaysian palm oil edged higher as anxieties over Irish debt crisis eased a little, although gains were limited by a likelihood of China interest rates hike.
"The market stabilised after a sharp fall early in the week due to the uncertainty surrounding China's food price controls and Irish debt worries," said a dealer with a foreign commodities brokerage in Kuala Lumpur."

La Nina triggering heavier monsoon in Malaysia-Met Dept
KUALA LUMPUR, Nov 19 (Reuters) - The La Nina weather pattern will trigger heavier-than-usual monsoon rains this year for Malaysia's key oil palm growing region on Borneo island, the country's weather office said on Friday.
Director General of the Malaysian Meteorological Department Yap Kok Seng said the weather condition will induce five to six episodes of heavy rain in the world's second largest palm oil producer and No.3 rubber supplier.

20101122 0929 FCPO EOD Daily Chart Study (19 Nov 2010).

FCPO closed : 3328, changed : +8 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : turned lower, buyer reducing exposure.
Support : 3300, 3270, 3200 level.
Resistant : 3350, 3420, 3450 level.
Comment :
FCPO traded marginally higher with lesser volume changed hand ahead to ITS and SGS export cargo surveyor data. Daily chart formed a doji bar candle rebounding from the middle Bollinger band support level with the reading still suggesting a correction range bound upside biased market development.
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.

20101122 0928 FKLI EOD Daily Chart Study.(19 Nov 2010)

FKLI closed : 1502, changed : +6.5 points,  volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : turned upward, buyer seems taking some chances.
Support : 1500, 1485, 1470 level.
Resistant : 1530, 1550, 1580 level.
Comment :
4 points discount to cash market FKLI traded firmed recorded gain with lesser volume changed hand as regional market having mixed development as each market still try to digest the latest happening news on potential China rate hike to counter inflation and Euro zone(Irish) economy condition. Daily chart formed the 5th doji bar candle rebounding from the lower Bollinger band support level and seems putting effort to test the middle Bollinger band resistant level with a side way range bound market reading.
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.