Wednesday, December 15, 2010

20101215 1825 FCPO EOD Daily Chart Study.

FCPO closed : 3669, changed : -11 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 3650, 3620, 3550 level.
Resistance : 3700, 3720, 3750 level.
Comment :
Profit taking FCPO continue to retrace lower with slower volume changed hand after hitting 33 month high yesterday as today export data released continue to decline lower while soy oil and crude oil futures price also eased lower.
Daily chart formed a classic down doji bar candle after market tested resistance and support level and recovered to closed near opening price with a correction range bound upside biased market reading 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.

20101215 1757 FKLI EOD Daily Chart Study.

FKLI closed : 1504.5, changed : -6 points,  volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : weakening, buyer reducing position.
Support : 1500, 1485, 1470 level.
Resistance: 1530, 1550, 1580 level.
Comment :
FKLI continue to do downward correction closed recorded loss for the 4th day with improve volume transacted doing 4 points discount to cash market as most major Asia exchange closed negatively and lack of fresh lead triggered participant to lock in profit and stay sideline .
Daily chart formed a  down bar candle with lower shadow after market opened gap up and traded downward tested support level near middle Bollinger band support level and rebounded to closed off the low of the day with an unchanged reading of a correction range bound upside biased market development testing supports and resistant level.
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.

20101215 0933 Global Economics News.

India: Inflation rate cools to cools to lowest level in 2010
India’s inflation slowed to an 11- month low, giving the central bank scope this month to pause Asia’s fastest round of interest-rate increases. The wholesale-price index rose 7.48% in November y-o-y after an 8.58% jump in October. Price pressures may strengthen as industrial production grew at the fastest pace in three months in October, signaling consumer demand remains strong even after six rate increases in 2010. The Reserve Bank of India aims to slow inflation to between 4% and 4.5%. (Bloomberg)

UK: Inflation rate unexpectedly increases
UK inflation rate unexpectedly accelerated to a six-month high in November, adding to the case for policy makers to rein in cost pressures. Consumer prices rose 3.3% y-o-y after a 3.2% increase in October, the highest since May. Core inflation remained at 2.7%. Food prices jumped 1.6% m-o-m. M-o-m, consumer prices rose 0.4%, exceeding forecast of a 0.4% increase. Clothes prices jumped 2% m-o-m and furniture prices rose 1.6%. Inflation has been above the government’s 3% limit for nine months and a sales-tax increase in January may add to prices in 2011. (Bloomberg)

EU: Industrial production rises on capital goods
European industrial production increased in October led by orders for capital goods. Output in the euro region rose 0.7% m-o-m, when it fell a revised 0.7%. Production increased 6.9% y-o-y, after gaining 5.4% in September. Production of capital goods jumped 1.8% m-o-m, output of intermediate goods rose 0.2% and energy production increased 0.4%. Output of durable consumer goods slipped 0.1%. (Bloomberg)

EU: German investor confidence increases for second month
German investor confidence improved for a second month in December as the recovery in Europe’s largest economy showed signs of broadening. The index of investor and analyst expectations, which aims to predict developments six months ahead, increased to 4.3 from 1.8 in November, beating estimates of a gain to 3.9. Germany’s economy has fueled the euro region’s expansion this year as companies stepped up hiring and output to meet export demand, encouraging consumer spending. (Bloomberg) US: Inventories increase 0.7%, sales up 1.4% Inventories in the US rose less than forecast in October, restrained by the biggest drop in retail stockpiles in more than a year as merchants had trouble keeping up with surging demand. The 0.7% increase in inventories compared with a 1.4% jump in sales in October that was the biggest gain in seven months. Companies had enough goods on hand to supply 1.27 months’ worth of sales at October’s pace. (Bloomberg)

US: Producer prices increased 0.8% in November, small business optimism climbs
Wholesale costs in the US rose in November by the most in eight months, led by higher prices for gasoline, heating oil and fruit. The producer price index increased 0.8% m-o-m. Core prices rose 1.2% in November y-o-y The cost of food increased 1% and energy prices rose 2.1%. Prices of crude goods increased 0.6% while expenses for intermediate goods rose 1.1% m-o-m. (Bloomberg)

US: Federal Reserve retains USD600bn bond-purchase program
Federal Reserve officials kept their plan to expand record monetary stimulus, saying the economic expansion hasn’t been strong enough to reduce joblessness. The central bank commented that the USD600bn of Treasury purchases are aimed at boosting a recovery that has been “disappointingly slow” and repeated its pledge to leave the benchmark interest rate low for an “extended period.” Fed officials left their target for the federal funds rate in a range of zero to 0.25%, marking two years of the policy .(Bloomberg)

20101215 0932 Malaysia Corporate News.

KNM forms JV with Sabah state unit
Process equipment maker KNM Group has formed a strategic collaboration with a Sabah state-owned unit to offer support services to oil and gas majors operating here. The company had signed a joint venture (JV) agreement with Petrosab Logistick SB on 13 Dec to establish a JV company, KNM Petrosab SB. KNM and Petrosab Logistik will own 51% and 49% respectively in the new entity. The investments are generally aimed at tapping into various existing for oil, gas and petrochemical projects in Sabah, which is in line with KNM’s overall objective of expanding and growing the businesses of KNM and its group of companies throughout Malaysia. Under its deal with Petrosav Logistik, KNM would spearhead fund raising to finance future projects via issuance of new shares and bonds, apart from financial derivatives and convertible instruments. (FinancialDaily)

KLK to fork out RM210m for Yule Catto’s rights issue
Kuala Lumpur Kepong (KLK) and its wholly owned subsidiary, KL-Kepong International Ltd (KLKI), have proposed to subscribe to their rights issue entitlement in Yule Catto & Co Plc for £42.4m, or RM209.8m. KLK and KLKI currently hold a total of 27.41m shares in Yule Catto, or 18.82% of its issued share capital. KLK intends to assign to KLKI all of its rights entitlement arising from its existing Yule Catto shareholding, and KLKI will thus subscribe in full for both its and KLK’s entire rights entitlement arising from the rights issue. Upon subscription of the rights issue, the KLK Group will acquire 36.55m new Yule Catto ordinary shares representing approximately 18.82% of the new ordinary shares to be issued under the rights issue. (FinancialDaily))

Hiap Teck to raise funds for furnace
Hiap Teck Venture, a maker of steel pipes, plans to raise about RM800m to put up a blast furnace in Terengganu. "The blast furnace is estimated to cost around RM750m to RM850m. We'll need to raise the funds by mid-2011 and it'll be a combination of debt and equity," Hiap Teck executive director Low Choong Sing said. The fund-raising plan for a steel slab plant stems from Hiap Teck's 55% stake purchase in Eastern Steel SB, which owns 240ha of land in Teluk Kalung, Kemaman, Terengganu. (BT)

YTL denies given spectrum for LTE
Tan Sri Francis Yeoh says the YTL group had never received any spectrum from the Malaysian Communication and Multimedia Commission (MCMC) for Long Term Evolution (LTE), the latest standard in the mobile network technology. Yeoh described recent talk as baseless and said he was saddened and disappointed that many quarters had been twisting facts about his recently introduced YES 4G mobile and Internet services as well as the Sezmi Hybrid TV. "We have never received any spectrum from MCMC for LTE; what we have done is sent our proposal over to MCMC for it to consider our roll-out of the Sezmi Hybrid TV." he said. (BT)

YTL Power buys stake in Jordan oil shale project
YTL Power has acquired a 30% stake in Estonian state oil company Eesti Energia's oil shale project in Jordan, marking its foray into the upstream oil business, the power producer said yesterday. YTL Power is joining power and utility companies from India, South Korea and Japan in investing in overseas fuel assets to manage the escalating costs of fuel and gas. Under the agreement, Eesti Energia and its Jordanian partner Near East Investment, along with YTL Power, will develop an oil plant with an output of about 38,000 barrels per day (bpd) and a 900 megawatt oil-shale fired power plant. "We are going into Jordan on a holistic basis, which means we are going to be involved in every part of the project," YTL Power's director of financial analysis Lucius Chong said.(BT)

DRB-HICOM eyes firm deal with Russian truck maker
DRB-HICOM is seeking to strike a firm deal with one of Europe's largest truck makers to assemble and distribute its heavy-duty trucks in Malaysia. The group yesterday sealed a memorandum of understanding (MOU) with Russia's Kamaz INC for the purpose. If it materialises, DRB-HICOM will have the rights to also distribute Kamaz's right-hand-drive trucks to the Asean region. The MOU is the result of an earlier discussion between the two groups on the possibility of working together to produce and manufacture Kamaz trucks in Malaysia for the local market as well as in Asean," group managing director Datuk Seri Mohd Khamil Jamil told the media yesterday. The MOU, he added, will pave the way for a feasibility study as well as detail costing studies in respect of setting up the facilities in Malaysia. (BT)

Time dotCom wins RM139m DiGi deal
TIME dotCom has won a 10-year contract worth RM139m from DiGi.Com to provide high-speed backhaul capacity and maintain the links between its aggregation wireless towers and its mobile switching centres. This is the first peninsula-wide deployment of a full optical switched fibre network to support mobile backhaul traffic. (BT)

TM, Maxis ink 10-year deal
Telekom Malaysia (TM) and Maxis Broadband SB have signed a 10-year agreement for TM to provide high speed access connectivity, via its high speed broadband access (HSBB Access) service to Maxis. Both parties signed the agreement yesterday that would enable Maxis to offer bundled services, including Internet Protocol (IP) based offerings, to 700,000 homes at present and 1.3m households by the end of 2012. (Starbiz)

Sunway City, Sunway Holdings boards accept merger proposal
Sunway City and Sunway Holdings, two Malaysian property developers, said their respective boards accepted a merger proposal by Tan Sri Dr Jeffrey Cheah, chairman of both companies. (MalaysianReserve)

Maybank to issue 244.257m new shares under dividend plan
Malayan Banking (Maybank) is required to issue 244.257m new shares pursuant to the Dividend Reinvestment Plan applied to the final dividend of the bank for financial year ended 30 June 2010. The new shares represented approximately 88.59% of the 275,728,660m new Maybank shares had all the entitled shareholders elected to reinvest their respective electable portions in new Maybank shares. (MalaysianReserve) 

20101215 0904 Global Market News.

Oil prices ease after U.S. Fed dampens fast recovery hopes
SINGAPORE, Dec 15 (Reuters) - Oil prices eased after the U.S. Federal Reserve dampened rising  expectations for a faster economic recovery, seen as critical  to reigniting oil demand in the world's biggest energy user.
"Some of the U.S. macroeconomic data has been more  positive in the last month or two and some corners of the  market had been hoping the Fed would have been more upbeat,"  said Ben Westmore, a commodities analyst at National Australia  Bank. 

Oil platform fire to have little impact on Malaysia exports-sources
SINGAPORE, Dec 15 (Reuters) - A fire at an oil platform  operated by Petronas Carigali, a unit of Malaysia's state oil  firm Petronas , is expected to have little impact on  the country's exports of Tapis crude, trade sources said on  Wednesday.
The Bekok C platform, located 200 kilometres off the  eastern shore of peninsular Malaysia, is one of several fields  that produces the country's flagship Tapis crude, they said. 

Soybeans rise on Argentina crop outlook, wheat flat
SINGAPORE, Dec 15 (Reuters) - U.S. soybean futures rose as dry weather in major producer Argentina raised  concern about its crop, while wheat prices steadied after  sharp losses in the previous session.
"Higher exports out of the U.S. and some lingering concern  about the South American crop are enough to keep the soybean  market well supported," said Brett Cooper, senior manager for  markets at FCStone Australia.

Gold moves little ahead of holidays, dollar weighs
SINGAPORE, Dec 15 (Reuters) - Spot gold was little changed  as the market entered consolidation mode ahead of  the year-end, but a rebound in dollar put pressure on the  bullion.
"It's really nothing new. Gold recently hit a record high,  and has been under some profit-taking pressure. It would need  fresh impetus to go higher, but there isn't any around," said  Hou Xinqiang, an analyst at Jinrui Futures in China. 

GLOBAL MARKETS-Treasury yields climb, dollar benefits
SINGAPORE, Dec 15 (Reuters) - Yields on U.S. Treasuries  climbed to seven-month highs in Asia on Wednesday and the  dollar rebounded as upbeat retail sales data added to evidence  that America's economy is gathering steam.
"The U.S. Fed's statement strengthened the likelihood the  U.S. would continue its quantitative measure. Combined with a  good set of retail data, sentiment is still good," said Hong  Soon-pyo, a market analyst at Daishin Securities  

OIL: Oil slips after U.S. Fed says recovery still slow
PERTH, Dec 15 (Reuters) - Oil prices edged lower on  Wednesday on a stronger dollar and the U.S. Federal Reserve's  comments that recovery in the world's largest economy remained  slow.
The U.S. Federal Reserve on Tuesday offered only a cautious nod to the economy's improving prospects as it put a spotlight on lofty unemployment and reaffirmed its commitment to buy $600 billion in bonds.

COMMODITY MARKETS: Wheat slides, oil, gas lower as dollar firms
CHICAGO, Dec 14 (Reuters) - Wheat posted its biggest drop in a month on profit-taking while oil and gas edged lower in a choppy, low-volume day for most commodities as the dollar rallied on comments from the U.S. Federal Reserve.
"I think ultimately it's dollar positive given that there were some fears they could announced further expansion of quantitative easing," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.
GLOBAL MARKETS: U.S. stocks, bond yields rise on recovery outlook
NEW YORK, Dec 14 (Reuters) - U.S. stocks eked out gains and U.S. Treasuries prices slumped on Tuesday after the U.S. Federal Reserve showed no signs of curtailing its economic stimulus measures and U.S. retail sales data signaled an accelerating economic recovery.
"The economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment," the Fed said in a statement at the conclusion of a one-day meeting. 

FAO Ups World 2010 Cereals Estimate As Food Prices Near Highs (Source: CME)
World food prices are within reach of their June 2008 highs despite improving prospects for global cereal production this year, the United Nation's Food and Agriculture Organization said. Total cereal production is expected to hit 2.229 billion metric tons in 2010, the FAO said in its latest food security report, increasing its November estimate of 2.216 billion tons. Yet despite the improving outlook for grain production, food prices remain high. The FAO's Food Price Index averaged 205 in November, up seven points from October and only seven below its record high two years ago, when the rising cost of food caused widespread riots in developing countries. The rise in the index, which measures the monthly change in international prices of a basket of commodities, was driven largely by rising "sugar and oils" prices, the FAO said.
Global cereals markets are also expected to remain tight as consumption outpaces demand, eating into world inventories, the Rome-based FAO said. "World supply and demand balance for cereals could still tighten considerably with total utilization exceeding world production; thus necessitating a 6% decline in ending stocks," it said.

Corn, wheat ease; weather worry caps losses
SINGAPORE, Dec 14 (Reuters) - U.S. corn and wheat futures slipped on Tuesday as investors cashed in recent gains  although a bleak global weather outlook which may tighten supplies has capped losses.
"Weather is still a major concern. If those fundamentals  remain into the new year and, combined with fresh money  flowing into commodity markets, then clearly that'll be enough  to push this market higher."  

PRECIOUS-Dollar dip lifts gold; focus on Fed later
LONDON, Dec 14 (Reuters) - Gold rallied for a second day on Tuesday to reach one-week highs above $1,400 an ounce, taking advantage of a slide in the dollar ahead of a U.S. policy meeting.
The Federal Reserve gathers for a one-day rate-setting meeting on Tuesday at which policy makers are expected to assess the central bank's $600 billion bond-buying plan but are not forecast to signal any shift or change in the programme.

FOREX-Euro hits 3-week high vs dlr, Aussie at parity
LONDON, Dec 14 (Reuters) - The euro hit three-week highs versus the dollar and yen in thin trade on Tuesday, as investors took the view that a recent rise in front-end U.S. yields had gone too far, prompting a squeeze of euro shorts.
The Australian dollar jumped to a one-month high above parity with the U.S. dollar, helped by a rise in prices of gold and other commodities such as copper and by broad dollar weakness.

20101215 0903 Soy Oil & Palm Oil Related News.

ITS CPO export down 24% to 568,127 tonnes for the period of 1~15 Dec 2010.
SGS CPO export down 29.5% to 548,372 tonnes for the period of 1~15 Dec 2010.

Soy product futures ended lower in unison with soybeans. Soyoil and soymeal slipped on profit taking of earlier gains, but soyoil lost product value to soymeal, as traders unwound soyoil positions after the market rallied 13% since Nov 17, analysts said. Soymeal futures were up 2% in the same time frame. CBOT Jan soyoil ended 0.36c, or 0.6%, lower at 55.09 cents per pound, and Jan soymeal traded $0.60, or 0.2%, lower at $342.20 a short ton. (Source: CME)

Media Rebuts China Assurance On Edible Oil Supply (Source: CME)
Insistence by China's National Development and Reform Commission that the country has sufficient edible oil stocks drew an unusual rebuttal from a newspaper, aimed at defending a recent report the paper carried on production stoppages of cooking oil. The statement by China Business News was a rare, direct challenge to the official line of the country's top economic policy planning agency, which is sensitive to rising food prices that have driven inflation to three-year highs. The newspaper, owned by the Shanghai Media Group, in a statement on its website Tuesday saying that its article was "independently sourced with documents" after the NDRC said Monday that the newspaper and other local media outlets had misreported on production halts at some edible oil plants. The NDRC said Monday that supplies of edible oils are "absolutely guaranteed." The statement, issued by its editorial department, added there were recordings to back up critical elements of its report. "The contents of our paper's report had data, documents and recordings as proof," it said. "As a responsible paper, we have issues with what the commission is saying." China Business News was one among five media outlets named in the commission's statement about edible oil production stoppages. The others were China Times, Sina, and Chongqing Evening News. In its statement Monday, the NDRC had focused on a recent China Times report that there were signs that edible oil producers would suspend large-scale production due to price-cap-related losses.

Palm eases after hitting 33-mth highs
KUALA LUMPUR, Dec 14 (Reuters) - Malaysian palm oil futures hit more than two-and-a-half-year highs on Tuesday amid firmer soyoil in China and worries over weaker production in the monsoon season, before paring some gains to settle 1 percent lower. "The market is down purely on profit-taking in the  afternoon session after it rallied since early this month,"  said a trader in Kuala Lumpur.

Rains soak Brazil's southern soy belt - Somar
SAO PAULO, Dec 13 (Reuters) - A cold front dumped heavy rains on Brazil's southern soy producing states over the weekend, easing concerns of dry weather of late in No. 3 soy producer state Rio Grande do Sul, forecaster Somar said Monday. The La Nina weather anomaly tends to reduce rainfall over Brazil's grain belt. Spring showers were about two months late to arrive in the soy-rich center-west and Rio Grande do Sul suffered from dry weather in November.

China edible oil supply guaranteed ample - NDRC
BEIJING, Dec 13 (Reuters) - Domestic supplies of edible oils are guaranteed to be ample, said the country's top economic planner on Monday, refuting a media report of possible shortages during the Spring Festival.
"With a surge in soybean imports this year, state oilseed and oil stocks are ample, while enterprise stocks are plentiful and production levels are normal," said the National Development and Reform Commission in a statement published on its website. 

World stocks rise, dollar falls before Fed
LONDON, Dec 14 (Reuters) - The dollar fell to a three-week low against the euro and Treasuries steadied ahead of a Federal Reserve policy meeting on Tuesday, while stocks held near a two-year peak, supported by optimism over Chinese growth. "Markets have been breaking out into a higher range and now consolidating," Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin, said. "Investors are awaiting for the Fed for clues about the economy."