Tuesday, November 23, 2010

20101123 1019 Local & Global Economics News.

Malaysia: 3Q GDP slows to 5.3% Malaysia’s GDP growth for 3Q 2010 moderated to 5.3% y-o-y, largely due to weaker external demand amidst a slowdown in the global economy. Private sector consumption led the domestic demand expansion of 5% y-o-y by growing 7.1%. Public sector consumption contracted 10.2%, while exports increased 6.6% and imports grew by 11%, resulting in a decline in net exports of 31.7%. Most sectors continued to expand. Agriculture grew 2.7%, manufacturing expanded 7.5%, construction increased 2.8%, and services grew 5.4%. Q-o-q, the economy grew 2.4%.Net foreign direct investment increased to RM5bn from RM2.4bn q-o-q. (Financial Daily)

Thailand: Economic growth slows as global demand eases
Thailand’s economy grew at the slowest pace in three quarters as exports eased and agriculture declined, prompting the government to predict the central bank will refrain from raising interest rates for the next year. 3Q 2010 GDP rose 6.7% y-o-y, lower than median estimates of a 7.2% growth. 2Q 2010 GDP growth was revised to 9.2%. Q-o-q, the economy shrank by 0.2%, putting the country into a technical recession after GDP fell 0.6% q-o-q in 2Q 2010. (Bloomberg)

Hong Kong: Consumer prices increased 2.6% in October
Hong Kong’s inflation rate held above 2% for a straight third month in October on higher rents and food prices. Consumer prices increased 2.6% y-o-y, the same as in September. That was more than the median 2.4% estimate. Private home rents rose 15% in October y-o-y. Excluding one-off government measures like electricity subsidies and property rates waivers, inflation was 2.3%, compared with 2.2% in September. Hong Kong this month boosted its 2010 inflation estimate to 2.5% from an August forecast of 2.3%. (Bloomberg)

EU: Irish aid bid triggers election and may prompt Moody’s downgrade
Ireland’s bid for financial aid prompted Prime Minister Brian Cowen to call elections after support for his government unraveled. He said the vote will come early next year after passage of a 2011 budget. A rescue package estimated to total EUR95bn failed to damp speculation that Portugal and Spain would follow Ireland in tapping the fund set up by the EU and IMF. Meanwhile, Moody’s said Ireland’s bailout may increase the debt burden and pose a “credit negative” for the country. A multi-notch downgrade from its current Aa2 rating, leaving Ireland ‘s rating still within the investment-grade category, is now the most likely outcome. (Bloomberg)

EU: November consumer confidence unexpectedly increases
European consumer confidence unexpectedly rose in November, suggesting the region’s recovery may be weathering government budget cuts. The index of consumer sentiment increased to minus 9.5 from a revised minus 10.9 in October, the highest since Dec 2007 and beating a forecast of minus 11. In Germany, Europe’s largest economy, investor confidence rose for the first time in seven months in November. (Bloomberg)

US: Consumer property prices jump most on record
US commercial property prices rose 4.3% in September m-o-m, the biggest gain in a decade of records. The Moody’s/REAL index climbed 0.3% y-o-y as a small number of high-priced deals drove up values. The measure had fallen to an eight-year low in August and is still 43% below its Oct 2007 peak. While the number of repeat sales had only a “slight uptick” in September, the dollar volume of those transactions doubled from August to $3.7 billion. That was the largest volume since Jan 2008. (Bloomberg)

20101123 1017 Malaysia Corporate News.

Salcon gets 40% partner for China venture
Water and waster water engineering company Salcon has got a 40% partner for its China concession, which will subsequently be listed on the Hong Kong Stock Exchange in the next two to three years. The company signed a deal, in Petaling Jaya yesterday, with Emerging Markets Infrastructure Fund Pte Ltd (EMIF) to sell a 40% stake in its China unit, Salcon Water (Asia) Ltd (Salcon Asia), to the latter for RMB238m. EMIF is an infrastructure fund managed by Mitsui & Co Ltd and Challenger Financial Services Group. Salcon Asia's project portfolio comprises six concessions that operate raw water, water and wastewater businesses in Shandong, Zhejiang and Fujian provinces. Another two concessions are expected to be injected into the company in early 2011. Three of the six concessions have raked in RM60m in revenue, and this figure is expected to double by 2012. The sale allows Salcon to recoup its investments in the six concessions since it entered China in 2004. (BT)

Texchem excited by China's appetite for seafood products
Texchem Resources plans to invest more in aquaculture activities over the next 10 years to meet rising demand from markets like China. While no definite investment figures were revealed, chairman Tan Sri Fumihiko Konishi said one or two fishmeal processing factories are likely to be set up in Indonesia in a few years. (BT)

IJM Land and MRCB shares suspended, they are to announce potential corporate exercise today
Market talk of a potential merger, or takeover, involving IJM Land and Malaysian Resources Corp Bhd (MRCB) has intensified with the suspension of the shares of IJM Land, its parent IJM Corp Bhd and MRCB since 9am yesterday pending a material announcement on a potential corporate exercise. The companies are expected to announce details of the corporate exercise later today. There are various possibilities how the exercise will be carried out. One involves the merger of IJM Land and MRCB into a new entity and the other is via the takeover route (StarBiz)

20101123 0919 Global Market News.

OIL: Crude steady below $82/bbl; tracking dollar swings
SINGAPORE, Nov 23 (Reuters) - U.S. crude futures were steady on Tuesday, trading around $82 a barrel, tracking moves in the dollar and worries about euro zone indebtedness.
The euro stayed on the backfoot early in Asia on Tuesday, having suffered a steep reversal overnight after political uncertainty in Ireland quickly quashed initial euphoria over a bailout plan.

COMMODITY MARKETS: Down as Ireland problem festers; cotton off 5 pct
NEW YORK, Nov 22 (Reuters) - Copper fell 2 percent on Monday and oil and most crops extended losses from last week as fading investor enthusiasm over Ireland's debt rescue bumped up the dollar and weighed on commodities.
 "This thing is not for the faint of heart," said Jim Nunn, a cotton dealer at Nunn Cotton Co in Brownsville, Tennessee. "All of these markets tend to over-extend themselves at some point in time, and this one certainly has been that."

GLOBAL MARKETS: Euro, stocks edge down amid Irish gloom
SINGAPORE, Nov 23 (Reuters) - The euro fell on Tuesday  after suffering a sharp reversal in the previous session, as  initial relief at a bailout plan for Ireland was undermined by  political turmoil in the former "Celtic Tiger" and fears of a  wider euro zone crisis.
"They've addressed the Greek problem, they're addressing  the Irish problem, people are now questioning where is the  next one ... the political turmoil in Ireland also doesn't  help," said Grant Turley, strategist at ANZ in Sydney.

Commods open interest decline biggest since '08
NEW YORK, Nov 19 (Reuters) - Open interest in U.S. commodities fell more this week than any week since Lehman Brothers collapsed in 2008, data showed Friday, as investors pulled money from markets on concern about debt in the euro zone and higher interest rates in China.
Data on trader commitments compiled by the Commodity Futures Trading Commission showed a drop of 328,179 contracts in open interest for 18 commodities during the week to Nov. 16, accounting for a 3.75 percent fall.

Markets, partners relieved at Ireland rescue
DUBLIN/LONDON Nov 22 (Reuters) - Financial markets rallied slightly and European Union partners voiced relief on Monday after Ireland agreed in principle on a three-year bailout package with the EU and the IMF to salvage its shattered banks.
European shares rose 0.7 percent in early trade, the euro  climbed and Irish borrowing costs fell in response to an outline rescue deal intended to stop contagion spreading to other fragile euro zone economies.

China says confident price pressures in check  
BEIJING, Nov 22 (Reuters) - China sought on Monday to  reassure people that inflation will remain in check, voicing  confidence that ample grain supplies and excess capacity in  industry will keep a lid on price pressures.
Economists said the effort to manage inflation  expectations was meant to reinforce an array of measures in  recent days to curb actual inflation, including Friday's order  to banks to hold more of their deposits in reserve instead of  lending them out.

PRECIOUS-Gold tracks euro higher, shrugs off China's move
SINGAPORE, Nov 22 (Reuters) - Gold ticked higher on Monday  as the euro gained after Ireland's rescue deal, helping the  metal resist pressure from China's move to tighten its economy.
China's steps to rein in inflation could dim gold's appeal  in the world's second-largest consumer after India, but  dealers said a drop in bullion prices from all-time high  levels were   attracting purchases from other consumers in Asia.      

FOREX-Euro gains after Ireland seeks aid; market wary
LONDON, Nov 22 (Reuters) - The euro rose on Monday after Ireland sought an international bailout to tackle its debt crisis but analysts said budgetary worries in other euro zone countries would keep investors wary about the single currency.
The euro climbed to a one-week high of $1.3786 , piercing the 38.2 percent retracement of its Nov 4-18 fall at $1.3765, with analysts saying a sustained break would be needed for a further correction towards resistance at $1.3864, a 50 percent retracement of that November sell-off.

Euro, Asia stocks get fillip from Irish bail-out
SYDNEY, Nov 22 (Reuters) - The euro, Asian stocks and  commodities jumped in a relief rally after global  financial authorities agreed to save debt-swamped Ireland and  protect Europe's wider financial stability.
"There are still a lot of issues in Europe," said Alex  Boggis, who heads fund manager Aberdeen's business in Hong  Kong. Aberdeen manages around $15 billion in Hong Kong and  China.

Grains have increasing impact on shipping market
PARIS, Nov 19 (Reuters) - Grains trades have increased volatility in the global dry bulk shipping market and will start to support freight rates from 2012, ship broker Howe Robinson's joint chairman said on Friday.
Deliveries of new bulkers ordered before global turmoil in 2008 have been weighing on the freight market even as a record large U.S. soybean crop and the third-largest corn crop come off the fields and head to destinations across the world.

20101123 0917 Soy Oil & Palm Oil Related News.

US soy product futures finish stronger with soybeans as markets recover from steep slide Friday. Soyoil on Friday dropped 3.8% on fears of tempered demand from China, while soymeal fell 2.7%. No solid signs have emerged that China, largest importer of U.S. soybeans, will ease its buying, analysts say. "We got ourselves a bit oversold," says John Kleist, broker/analyst at Allendale. CBOT Jan soyoil closes up 0.21c at 49.51 cents per pound. CBOT Dec soymeal climbed $7.8 to $333.60 per short ton. (Source: CME)

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.

Palm oil drops on more China controls
KUALA LUMPUR, Nov 22 (Reuters) - Malaysian palm oil  futures dropped 2.1 percent after China's central  bank stepped up controls on money supply and credit last week,  a move that limits the country's demand for vegetable oils.   
"Palm oil is taking a cue from China scenario and  adjusting to overseas markets last week's losses, although our  exports are good," said a trader in Malaysia.

Indonesia to lift Dec palm export tax to 15 pct - source
JAKARTA, Nov 22 (Reuters) - Indonesia will raise its palm oil export tax for December to 15 percent, up from 10 percent this month, because of gains in palm oil prices, a source familiar with the matter told Reuters on Monday.
The increase would be higher than market expectations for a hike to 12.5 percent. The decision is still subject to approval by the trade ministry, said the source, who declined to be identified because he was not authorized to speak to the media.

China to sell 100,000 T rapeseed oil reserves on Friday
BEIJING, Nov 22 (Reuters) - China plans to release a total of 100,000 tonnes of rapeseed oil from state reserves in 10 provinces on Friday, according to an announcement posted on an official grain trading web site (www.cereal.com.cn).
The sale, in line with expectation by traders, is part of government efforts to cool food price rises, which have pushed up the country's inflation to 25-month high in October.

India's edible oil imports may grow 6-7 pct/yr-report
NEW DELHI, Nov 22 (Reuters) - India's edible oil imports could grow 6-7 percent per year to 12 million tonnes by 2015 amid rising demand and stagnant oilseed output, Pranav Adani, managing director of Adani Wilmar, told the Financial Express newspaper.
"The level of import can go up to 12 million tonnes by 2015," Adani, whose company is India's top seller of packaged cooking oils, said in the interview published on Monday.

Lack of rains hinders soy sowing in Argentina-gov't
BUENOS AIRES, Nov 19 (Reuters) - Sparse rains in Argentina's agricultural belt slowed farmers' progress in planting 2010/11 soybeans over the last week, the Agriculture Ministry said on Friday.
Argentina is the world's No. 3 soybean supplier and Agriculture Minister Julian Dominguez has forecast 2010/11 soybean output at 52 million tonnes, just slightly down from last season's record harvest of 52.7 million tonnes.

India soybean rises on meal demand, overseas markets
MUMBAI, Nov 22 (Reuters) - Indian soybean futures rose on Monday afternoon on good export demand for Indian soymeal and firmness in the U.S. market, analysts and an oil miller said.
Soyoil futures also edged up taking support from soybean, while rapeseed futures were steady as hopes of higher area under the winter-sown oilseed weighed, they said.