Friday, December 10, 2010

20101210 1828 FCPO EOD Daily Chart Study.

FCPO closed : 3633, changed : +35 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakenning, buyer taking profit.
Support : 3620, 3550, 3500, 3470 level.
Resistant : 3650, 3700, 3720, 3750 level.
Comment :
FCPO closed recorded gain with better volume transacted ahead of tonight USDA data despite a weaker export data released while on the other hand MPOB Nov 2010 official data showing a lower output and stock levels rise concern on supply issue.
Daily chart formed an up bar candle after market opened lower and recovered upward to closed near the high with an unchanged reading 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.

20101210 1742 FKLI EOD Daily Chart Study.

FKLI closed : 1513.5, changed : -7.5 points,  volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : buyer taking exposure cautiously.
Support : 1500, 1485, 1470 level.
Resistant : 1530, 1550, 1580 level.
Comment :
FKLI having pullback correction recorded loss with higher volume changed hand due to last minute cash market selldown while major regional market traded mixed.
Daily chart formed a down doji bar candle correcting downward from the upper Bollinger band level while the bandwidth expanding mildly with the reading suggesting a correction range bound upside biased 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.

20101210 0951 Local & Global Economics News.

Malaysia: Production growth eased in October as global demand weakens
Malaysia’s industrial production growth slowed in October as weakening global demand capped output by manufacturers and mining companies. Production at factories, utilities and mines rose 3% y-o-y after gaining 5.6% in September. That compares with the median economist estimate for a 2.1% increase. Manufacturing output increased 4.5% in October, after a 7.6% gain the previous month. Mining fell 1.1%, while electricity production advanced 5%. (Bloomberg)

China: Property prices rose at slower pace
China’s property prices rose at a slower pace for a seventh month in November, when the government raised the reserve-ratio requirement for banks twice and expanded measures to limit the risk of asset bubbles. Home prices in 70 cities climbed 7.7% y-o-y, slower than the 8.6% increase in October and the 8% median estimate. China has tightened measures on home purchases this year, suspending mortgages for third-home purchases and pledging to speed up trials of property taxes nationwide. (Bloomberg)

Japan: Economy grew faster than initial estimate
 Japan’s economy expanded more than the government initially calculated in the third quarter because of a bigger-than-reported increase in capital spending. 3Q GDP grew at an annualized 4.5% rate y-o-y, faster than the 3.9% reported last month. In nominal terms, the economy grew 2.6%, less than the 2.9% earlier projected, as price declines deepened. Q-o-q, the economy expanded 1.1%. Capital investment advanced 1.3%, more than the 0.8% increase in the preliminary report. (Bloomberg)

South Korea: Bank of Korea holds interest rate
The Bank of Korea left borrowing costs unchanged after an appreciation in the nation’s currency moderated economic growth. The central bank left the seven-day repurchase rate at 2.5%, in line with economist predictions. The benchmark rate remains below November’s 3.3% pace of inflation (Bloomberg)

Australia: Employment growth exceeds forecasts
Employment in Australia jumped by the most in 10 months in November, driving up the nation’s currency and stocks as investors bet the economy will accelerate after slowing last quarter. Payrolls gained 54,600 from October, more than double the median forecast for a 20,000 increase. The jobless rate fell to 5.2% from 5.4%, even as more people entered the workforce. Australia’s participation rate, which measures the labor force as a percentage of the population over 15 years old, increased to 66.1% from 65.9% a month earlier. (Bloomberg)

EU: Ireland’s rating cut by Fitch
Ireland’s credit rating was cut three levels by Fitch Ratings to BBB+ from A+, the second cut in two months. The outlook on the rating, which is three steps above non-investment grade, is “stable”. Fitch commented that the downgrade reflects Ireland’s additional fiscal costs of restructuring and supporting the banking system and that its credit profile is no longer consistent with a high investment grade rating. (Bloomberg)

Brazil: GDP slowed less than forecast
Brazil’s economy slowed less than economists forecast in the third quarter on soaring investment and consumer spending. GDP grew 0.5% q-o-q and 6.7% y-o-y, compared to economist expectations of a 0.4% and 6.8% expansion. The pace of economic growth slowed from the revised 1.8% q-o-q expansion in 2Q and 2.3% expansion in 1Q. (Bloomberg)

US: Initial jobless claims fell, wholesale inventories rose
The number of workers filing first- time claims for unemployment insurance payments fell last week in the US, showing the labor market continues to improve. Applications for jobless benefits decreased to 421,000 from a revised 438,000 the prior week. The four-week moving average, a less-volatile measure, dropped to the lowest level in more than two years. Meanwhile, inventories at US wholesalers rose 1.9% in October as companies stocked up to meet the biggest sales gain in seven months. This compares to a 2.1% rise in September. (Bloomberg)

US: Lending to small businesses fell in 3Q
Lending to US small businesses fell in the third quarter, showing the companies that account for more than half of total job creation are still struggling to emerge from the recession. Net borrowing by non-financial noncorporate businesses shrank by an annualized USD162.7bn, the seventh consecutive quarterly decrease. Still, it was the smallest drop of the contraction in lending that began in the first three months of 2009. (Bloomberg)

20101210 0947 Malaysia Corporate News.

TNB wants Government to review gas tariff
TNB will ask the Government to review the tariff for natural gas if the coal prices were to rise significantly and become a financial burden. Its CEO Datuk Seri Che Khalib Mohamad Noh said the company would ask for the review because there was no way it could absorb the coal price increase. "The average coal price has increased to over USD110 a tonne and this will definitely affect our bottom line," he added. (Bernama)

Qatar MRT project on Gamuda's radar
Gamuda said it is eyeing opportunities in the massive USD45bn MRT project Qatar is planning to build next year. Qatar is building the new infrastructure as it prepares to host the 2022 FIFA World Cup finals. The MRT system will be part capital city Doha's key transport infrastructure. (BT)

 Maybank must sell down 20% stake in subsidiary
Maybank’s Indonesian subsidiary PT BII surged to a 10-year high on the republic’s stock exchange as the Malaysian parent was told to sell down a 20% stake in the bank by 1 June, 2011, by Indonesian regulators. This may put an end to any plans Maybank may have to request for a time extension from the regulators to mitigate losses, should there be any, from the paring down of its stake in that period. (Malaysian Reserve)

Kamaruzzaman is new JCorp CEO
Kamaruzzaman Abu Kassim was appointed CEO of JCorp at a board meeting chaired by Mentri Besar Datuk Abdul Ghani Othman yesterday. Ghani, who is also JCorp chairman, said the appointment of Kamaruzzaman as CEO took effect from 1 Dec. Kamaruzzaman, who was previously the senior vice-president of finance and corporate services of JCorp, was appointed the diversified conglomerate's acting president and chief executive on 29 July following the sudden resignation of Tan Sri Muhammad Ali Hashim. (BT)

DRB-HICOM not aware of talks on proposed privatisation
DRB-HICOM is not aware of talks on a proposed privatization. The company said it was not aware of such a proposal or has received any notice from its holding company, Etika Strategi SB. (Malaysian Reserve)

Peter Chin: No water bailouts
No bailouts, but the Federal Government will help to ensure the people of Selangor, Kuala Lumpur and Putrajaya have a continuous supply of water. That was Energy, Green Technology and Water Minister Datuk Seri Peter Chin’s message in response to the ongoing water dispute between the Selangor and federal governments. Asked if there is a deadline, Chin said “as long as we cannot resolve the issue on a willing buyer, willing seller basis, how can we set a deadline?”. (Financial Daily) 

20101210 0854 Global Market News.

Japan stocks slip but set to outperform Asia in week
HONG KONG, Dec 10 (Reuters) - Japanese stocks slipped from  a seven-month high on profit taking, though were  poised to outperform the rest of Asia this week, while U.S.  Treasuries were steady on the view yields had risen too high,  too quickly.
"The environment looks quite favourable for equities now,  but as we proceed through 2011 investors need to be alert to a  change," Larry Kantor, head of research at Barclays Capital,  said in a statement.

Gold steady on dollar, Ireland woe; choppy range seen
SINGAPORE, Dec 10(Reuters) - Gold held steady in  choppy trade, as a dollar rally took a breather, and  uncertainty over Europe's fiscal health continued to attract  investors to bullion.
"Gold seems to be finding a base after the last two-day  big sell-off," said a Singapore-based trader, "Physical demand  should be the key to support at these levels; with downside  critical support at $1,371."

China Nov soy imports up 47 pct vs Oct at 5.48 mln T
BEIJING, Dec 10 (Reuters) - China, the world's largest soy buyer, imported 5.48 million tonnes of soybeans in November, up 46.9 percent from October, figures from the General Administration of Customs showed on Friday.
Good crushing margins in the middle of the year coupled with expanding domestic crushing capacities have spurred crushers to increase imports of the oilseed, which is crushed into soyoil and soymeal, a feed ingredient.

Wheat heading for 3rd weekly gain; USDA report eyed
SINGAPORE, Dec 10 (Reuters) - U.S. wheat futures edged  lower ahead of a key U.S. crop report but are on  course to mark their third straight week of gains as weather  problems in Australia and the United States threaten global  supply.
"The market is trading sideways ahead of the USDA release  but there has been upside pressure on the market, particularly  for wheat, given the global concerns over weather in the past  two weeks," said Garry Booth, trader at MF Global Australia. 

Oil consolidates above $88 as China imports rebound
SINGAPORE, Dec 10 (Reuters) - Oil edged higher for a  second day and consolidated gains above $88, after  trade data showed China's crude imports rebounded in November,  returning to trend growth. 
"In terms of the dynamic of China, I believe the data, the  policy and the road map for reform is suggesting further  sustainable strong demand," said Geoff Howie, sales and  markets strategist at MF Global in Singapore.

OIL: Crude steady as China imports seen rising
SINGAPORE, Dec 10 (Reuters) - Oil was steady on Friday, consolidating gains above $88, before Chinese trade data that  may show imports from the world's second-largest crude user  rebounded in November.
China's November crude oil imports are expected to have  rebounded from a 19-month low in October, as refineries needed  to refill storage tanks after stockdraws for two consecutive   months and to sustain high production rates, with demand for   oil products at an all-time high.

COMMODITY MARKETS: Mixed in thin year-end trade; silver jumps
NEW YORK, Dec 9 (Reuters) - Oil ended slightly higher and silver rallied while a broad range of other commodities were mixed in thin trade on Thursday as a rebounding dollar made investors ponder about price outlook ahead of the year-end.
"If the uncertainty with regards to economy and investor anxiety hangs out here, and people seek more wealth protection in terms of buying silver and gold, then, who knows? Prices can clearly go higher," said Dennis Wheeler, chief executive of top
U.S. silver producer, Coeur d'Alene Mines Corp.
GLOBAL MARKETS: U.S. bonds, S&P 500 and Nasdaq rise, euro falls
NEW YORK, Dec 9 (Reuters) - U.S. government bond prices recovered on Thursday from a sharp sell-off earlier in the week, supporting equity markets, but the euro fell after a rating agency's downgrade of Ireland revived concerns about the euro-zone debt crisis.
"A great, great auction to end the week and the recent outperformance in 30-years was a strong hint that buyers lurked," said William O'Donnell, head of U.S. Treasury strategy at RBS Securities Inc in New York.

Cabinet Official: China May Not Sustain Grain Self-Sufficiency. (Source: CME)
China may not be able to sustain its growth trend in grain production, threatening its vaunted policy of self-sufficiency in grains, a senior cabinet official said. The remarks are a departure from government rhetoric, and an unusual warning just a week after officials celebrated a seventh consecutive record grain harvest. China wants its grain production to provide for 95% of the country's consumption, a policy that has come under siege from rising wealth, an exodus from rural areas and tight availability of arable land. "There's a greater concentration of (grain) output in producing areas, and with water scarce in northern areas, the sustainability (of output) is worrying," Chen Xiwen, who heads the State Council's office on rural policy, wrote in an essay published on the website of the Chinese Academy of Social Sciences' Rural Development Institute. "It's inevitable that the rate of self-sufficiency will decline," he wrote.
Chen's comments come a day after the Ministry of Agriculture, in a briefing to reporters, reiterated its commitment to delivering an eighth consecutive bumper harvest next year. Ministry officials downplayed the likelihood of grain supply problems, saying rising costs of production had contributed to a sharp rally in agriculture complex prices this year.  "I've gone to check in a lot of places and talked to a lot of experts, and I can tell you the main issue is the cost of production," said Sui Pengfei, the ministry's supervisor of market and economy communication. Sharply higher food prices drove China's inflation to two-year highs in October, prompting a raft of government measures to contain prices. By a conservative estimate, to increase domestic output enough to meet demand currently covered by imports would require more than 600 million mu, or 40 million hectares, of arable land that China doesn't have, Chen wrote. This "increases the government's difficulties in controlling prices," he wrote.
"The longer the period of grain output growth, the closer we get to the point of reversal," he warned. Chen acknowledged there isn't currently a serious problem, with output around 540 million metric tons a year and demand around 525 million tons. "In a normal year, there's still a surplus even after satisfying demand," he wrote. "But in terms of systemic demand and supply for grains, the outlook isn't that optimistic." China said it harvested 546.4 million tons of grains this year, a 2.9% increase from last year.

Commodity Price Volatility Must Be Reigned In (Source: CME)
Price volatility across the world's commodity markets has severe implications for the economic prospects of developing countries and needs to be contained, academics speaking at the Common Fund for Commodities conference in Brussels said. Market volatility has been dragged into the political spotlight in recent weeks after French President Nicolas Sarkozy told heads of state and government he wants to tackle choppy commodity prices as a key priority during France's presidency of the G-20 and G-8. The debate comes as prices in many commodities--like copper, which has traded as low as $2,817 a metric ton and high as $9,091/ton over the past three years--rocket to record or multiyear highs.
In an interview during the CTC conference, Machiko Nissanke, professor of economics at the University of London's School of Oriental and African Studies, argued unregulated trading activities in markets and the use of derivatives by speculators has generated "excessive" volatility, which make the economic management of commodity-dependent developing countries unworkable. In a new research paper, commissioned by the CFC and released at the conference Thursday, Nissanke calls for a wider debate among policy-makers on new initiatives to curtail excess volatility. Nissanke suggested schemes to reduce extreme market movements--such as "reserve" holdings, or the application of a multi-tier transaction tax system--as well as a global financial facility to ensure the fast disbursement of aid to in-need countries amid lows in the price cycle.
"The rapid increase in commodity price volatility is one of the most worrisome aspects of the recent development in commodity markets," Nissanke said. "This condition cannot be dealt effectively at the national level in isolation by the countries themselves," she said. "This calls for a serious rethinking and reappraisal with a view to creating a new international system of managing commodity-related developmental problems." Michael Morris, a professor at the University of Cape Town, said price volatility is keeping some developing economies in a cycle of commodity-dependence. "The real issue for Africa is can you industrialize on the back of commodities" by creating value-added services, he said. "For that we need to government policies" to improve price stability. The Commodity Futures Trading Commission, the U.S. futures regulator, is already writing up new rules for the $583 trillion over-the-counter derivatives markets under the Dodd-Frank financial overhaul law passed in July.
The expectation is the rules will increase transparency and regulators will be able to monitor the market, and speculation, more closely.

EU seeks curbs on energy and food speculators
BRUSSELS, Dec 8 (Reuters) - The European Commission unveiled plans on Wednesday to clamp down on speculators in commodities and combat insider trading and manipulation of gas and power markets as it sought to catch up with Washington's tough regime.
The two sets of blueprints were unveiled separately by the EU's financial services chief, Michel Barnier, and its energy commissioner, Guenther Oettinger.

ICE, CME more optimistic on CFTC position limits
CHICAGO/NEW YORK, Dec 8 (Reuters) - The top U.S. futures exchanges expressed confidence that a revised plan to clamp down on commodities market speculation will not unduly burden  the market.
The comments on Wednesday by the chief executives of IntercontinentalExchange Inc  and CME Group Inc  were more optimistic than in the past, when exchanges, banks and other market participants sharply criticized the U.S. Commodity Futures Trading Commission's plan.

Commodity bulls, bears polarized by bond yield surge
NEW YORK, Dec. 9 (Reuters) - A surge in U.S. Treasury yields is forcing commodity traders to confront the less-familiar bond market, with views split over whether one of the biggest two-day gains in years is a signal to get out in front of a stronger economy or brace for the worst as interest rates rise.
Talk of price spikes and asset bubbles have done little to calm rattled nerves as gold and copper reached record highs this week and oil touched $90 a barrel for the first time since the price crash of 2008.

PRECIOUS-Gold steadies but still under threat from dollar
LONDON, Dec 9 Reuters) - Gold stabilised on Thursday, as U.S. Treasury yields fell for the first time in three days, a day after a sharp sell-off that knocked the bullion price from a record high to one-week lows.
This week's quarter-point rise in 10-year Treasury yields to six-month highs has boosted the dollar and unnerved investors over the near-term impact of Washington's tax plans on domestic finances and inflation.

FOREX-Dollar rally pauses as Treasury yields retreat
LONDON, Dec 9 (Reuters) - The dollar's rally paused on Thursday as U.S. Treasury yields retreated from a dramatic climb, prompting investors to book profits on gains in the currency.
A slide in the benchmark 10-year U.S. Treasury yield from a six-month high hit on Wednesday quelled demand for the dollar, while moves in major currencies were subdued given a dearth of major economic data or events.

World stocks gain again, US bonds steadier
LONDON, Dec 9 (Reuters) - World stocks ratcheted higher on Thursday, adding to December's rally, and U.S. Treasuries steadied following their recent sharp sell off.  The dollar also clawed back some losses from the past couple of sessions. A combination of rising optimism about the U.S. economy, including over a    proposed extension of tax cuts, and concerns about the deficit that those measures would worsen, prompted a sharp spike in Treasury yields on Wednesday as investors dumped the bonds.
"My hunch is that we are near a selling climax in U.S. Treasuries. Such a feeling is also in the market, dampening the dollar now," said Koichi Yoshikawa, head of forex    trading at BNP Paribas in Tokyo.

20101210 0852 Soy Oil & Palm Oil Related News.

ITS CPO export down 23.7% to 298,005 tonnes for the period of 1~10 Dec 2010.
SGS CPO export down 9.0% to 351,598 tonnes for the period of 1~10 Dec 2010.

MPOB Official Data for the month of Nov 2010 from Oct 2010
Export up 2.69%
Stock down 8.72%
Output down 10.85%

Soy product ended lower, succumbing to spillover pressure from soybeans. Soyoil inched lower, with strong global vegoil demand providing support to limit losses, analysts said. The strength in world markets and higher than expected U.S. weekly export sales held prices in positive territory, until spillover pressure from soybeans dropped prices lower heading into the close, traders added. CBOT Jan soyoil ended 0.03c or 0.1% lower at 54.15 cents per pound, and Jan soymeal traded $6.40 or 1.8% lower at $340.70 a short ton. (Source: CME)

Corn, soy edge lower; wheat gains ahead of USDA report
SINGAPORE, Dec 9 (Reuters) - U.S. corn and soybean futures  retreated on Thursday as investors locked in recent gains  ahead of a key U.S. crop report expected to reflect shrinking  global supplies and a spike in demand for U.S. grains.
"Up until a month or two ago, stocks of Australian and  U.S. wheat were giving the world comfort as far as maintaining  healthy global supply. Now the risk in those two areas is a  concern," said Brett Cooper, senior manager for markets at  FCStone Australia.

Palm at new 29-mth high as output seen curbed by rain
KUALA LUMPUR, Dec 9 (Reuters) - Malaysian crude palm oil  rose to a fresh 29-month high on Thursday as investors bet  heavier monsoon rains next month would cut production.  Investors also expected a stocks and production report by  the Malaysian Palm Oil Board due on Friday to show a drawdown  in inventories and lower yields at a time of resilient export  demand.
"The palm oil market took a breather yesterday but more  cues from the grains markets indicate that food supplies are  tight," a trader with a foreign commodities brokerage said.

China to delay U.S soy cargoes amid poor crushing margins
BEIJING, Dec 9 (Reuters) - Some Chinese soy buyers are trying to delay shipment of their booked soy cargoes from the United States after Beijing's crackdown on rising food prices eroded into crushing margins, traders said on Thursday.
Traders said they had not heard of any cancellations as had been expected by some in the Chicago market, although some trading houses have resold cargoes to crushers in the eastern provinces, which enjoyed better crushing margins than those of loss-making crushers in the north.

Rain heads for Brazil's main soy belt states
SAO PAULO, Dec 8 (Reuters) - Brazil's soy belt, which is nearing the end of planting, is getting sufficient rainfall for crop development and a new cold front that will arrive over the weekend will moisten most of the main grain states, forecasters Somar said on Wednesday.
Rains following planting are critical for germinating soybeans that will need to form a canopy to help preserve soil moisture levels during dry spells that could befall the crop later in the season.