Monday, December 20, 2010

20101220 1826 FCPO EOD Daily Chart Study.

FCPO closed : 3518, changed : +15 points, volume : higher.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : falling, buyer closing position as seller testing market.
Support : 3500, 3470, 3450 level.
Resistance : 3550, 3620, 3650 level.
Comment :
FCPO managed to closed in positive zone recorded small gain with better volume transacted despite export data released today shows that demand is still lacking while soy oil futures price rebounding little higher.
Daily chart formed a doji bar candle within last Friday wide range down bar candle as price seems supported near middle Bollinger band level with the reading remained suggesting a correction range bound upside biased market development with potential rebound.
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.

20101220 1807 FKLI EOD Daily Chart Study.

FKLI closed : 1492, changed : -7.5 points,  volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : falling, selling taking small exposure.
Support : 1485, 1470, 1458 level.
Resistance : 1500, 1530, 1550 level.
Comment :
FKLI closed recorded loss with lower volume traded following most Asia market that close lower doing 3.5 discount compare to cash market. Daily chart formed the 3rd doji bar candle after market traded range bound tested near support and then resistance level and close lower with an 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.

20101220 1201 Global Economics News.

EU: Ireland’s rating cut five levels by Moody’s to Baa1
Ireland’s credit rating was cut five levels by Moody’s Investors Service and further downgrades are possible as the government struggles to contain losses in the country’s banking system. The rating was lowered to Baa1 from Aa2, that’s three levels above non-investment grade and the same level as countries including Russia and Lithuania. The outlook on the rating is “negative,” Moody’s said. (Bloomberg)

EU nations violating deficit caps may be fined up to 0.5% of GDP
Euro-area governments may under European Commission proposals be fined as much as 0.5% of their countries’ gross domestic product if they ignore recommendations to fix economic imbalances, European Union President Herman Van Rompuy said. The commission “will develop a number of indicators that show if a country gets into problems economically,” and “we’ll check that for the first time in March,” Van Rompuy said. (Bloomberg)

US: Payrolls drop in 28 states, joblessness up in 21
Payrolls decreased in 28 US states and the unemployment rate climbed in 21, showing most parts of the world’s largest economy took part in the November labor-market setback. North Carolina led the nation with 12,500 job cuts last month, followed by Massachusetts with 8,600 dismissals, and Ohio with 7,800, figures from the Labor Department showed today in Washington. The report is consistent with figures on 3 Dec that showed unemployment increased last month for the first time since August. (Bloomberg)

US: Consumer, business spending probably rose
Spending by US consumers and businesses probably accelerated in November, a signal the economy is speeding up at the end of the year, economists forecast before reports this week. Household purchases rose 0.5% after a 0.4% increase in October, according to the median estimate of 62 economists surveyed by Bloomberg News ahead of 23 Dec figures from the Commerce Department. The same day, another report from the agency may show demand for durable goods excluding cars and aircraft climbed 2%. (Bloomberg)

20101220 1200 Malaysia Corporate News.

IJM Corp secures RM460m contract from Naza
TTDI IJM Corp Bhd, a property developer and contractor, has secured a RM460.59m contract from Naza TTDI Construction SB for the “superstructure work” for Platinum Park’s phase three. The project involves the development of a 50- and 38- storey office towers comprising a one level facilities area at level 10, eight levels of podium carparks and a three-level basement carpark, according to a filing to Bursa Malaysia last Friday. The completion date is 31 Dec, 2013, IJM said in the filing. (Malaysian Reserve)

More funding for EC Expressway
The Works Ministry has provided an additional allocation of RM410m to get work started on six packages under Phase 2 of the East Coast Expressways, which have been delayed due to problems, and due to be completed by early 2012. Minister Datuk Shaziman Abu Mansor said work on the six packages was halted due to increase in the prices of building materials, like iron, steel and cement as a result of the increase in petroleum price in 2007 and 2008. “The contracts on the six packages were terminated, five by mutual termination,” he said in Kuantan, on Saturday. (Malaysian Reserve)

Selangor govt enters new talks with Syabas
The Selangor State government has vouched to remain “highly professional, transparent and ethical” in the new negotiations between Selangor Government and Syarikat Bekalan Air Selangor SB (Syabas) despite the RM471m legal suit initiated by the water concessionaire against the state government. In a statement released last Friday, Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim said he is unsure if Syabas can reciprocate the same conduct since the company is clearly bitter over the state’s stand not to allow tariff increases until the water negotiation are finalized. The statement said Selangor is currently preparing an offer document for the water concessionaires – Syabas, Puncak Niaga SB, Konsortium Abass and Syarikat Pengeluaran Air Selangor SB - to take over the water services industry. (Malaysian Reserve)

DiGi to spend RM700m to improve services next year
The robust growth in data/broadband/Internet is forcing telcos and celcos to invest more to upgrade and expand their networks and DiGi.Com Bhd says it will invest RM700m in 2011 in capital expenditure. Although the amount is similar to what it has spent this year, a lot more will go towards enhancing data and Internet rather than voice services next year. We are in the new era of data and Internet. We know where our growth is going to come from and we will invest RM700m to grow our coverage and capacity,'' DiGi chief executive officer Henrik Clausen told StarBiz in an interview. “We can still grow our voice (business) but it would not be as big; the potential is limited for we see a turning point in voice,'' he said. (StarBiz)

JCorp seeks to remove Muhammad Ali
Johor Corp (JCorp) is seeking to remove Tan Sri Muhammad Ali Hashim, its previous head for 18 years, from the boards of three listed companies it has direct stakes in. The move seems to confirm speculation that Muhammad Ali, who had suddenly resigned as JCorp's CEO in July, is no longer in the good books of the powers that be in the state of Johor. JCorp has called for EGMs at Kulim (M) Bhd, KPJ Healthcare Bhd and Damansara Realty Bhd (DRealty) for this purpose. The removal of Muhammad Ali will be via ordinary resolutions at each of these companies, which means that a simple majority of shareholder votes would achieve the desired result. While JCorp controls more than 50% of the equity of Kulim and DRealty, it owns only 237.8 million shares in KPJ Healthcare, according to the latest shareholding changes filed with Bursa Malaysia. And according to Bloomberg data, this number of shares amounts to only a 42.6% stake in KPJ. (StarBiz) 

20101220 1157 Global Market News.

OIL: Oil rises on U.S. economic growth hopes
SINGAPORE, Dec 20 (Reuters) - Oil prices rose on Monday as  supportive U.S. economic data boosted optimism for growth  prospects for the world's largest oil user next year.
The Conference Board of leading economic indicators  jumped 1.1 percent in November, the biggest rise since March  and the fifth straight monthly gain.

COMMODITY MARKETS: Mostly thin gains for the week; sugar up 13 pct
NEW YORK, Dec 17 (Reuters) - Commodities mostly posted modest gains on Friday, but sugar jumped 13 percent on the week and coffee, corn and cotton also logged outsized gains on selective buying in thin, pre-holiday trade.
"Some people may want to take those profits ahead of the end of the year," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

GLOBAL MARETS: Euro dips on Ireland, U.S. Treasuries rally
NEW YORK, Dec 17 (Reuters) - The euro fell against the dollar for a second straight week and global stocks edged lower on Friday, weighed by renewed concerns over euro zone debt after a multi-notch downgrade of Ireland's credit rating.
"While the Moody's downgrade of Ireland isn't any surprise, the sheer magnitude of five notches warrants a mention. We haven't seen anything like this since the Asian crisis," said Win Thin, senior currency strategist at Brown Brothers Harriman in New York.

Real Estate May Be Hurting; But Farmland Has Become A Hot Commodity (Source: CME)
The price of farmland is climbing sharply again. Will a new round of pleas for aid from Willie Nelson be close behind? The rally in land values stirs memories of the 1980s farm debt crisis, when many farmers borrowed heavily as property values soared, then faced foreclosure after the bubble burst. The farmers' plight prompted musicians led by Mr. Nelson to stage high-profile Farm Aid concerts. Arable land has again become a hot commodity -- despite the struggles of the broader real-estate industry. It's attracting buyers ranging from wealthy individuals and institutional investors to farmers themselves. Many are investing in farmland funds, though some farmers are expanding operations. "It's just gotten sexy lately," says Shonda Warner, managing partner of Chess Ag Full Harvest Partners, which has a fund with about $50 million invested in farmland in four states.
Farmland values in key upper Midwest states shot up 10% in the third quarter compared with last year, according to the Federal Reserve Bank of Chicago. The Kansas City Fed says prices of irrigated farmland jumped 12% in Kansas and Nebraska in the same period. The recent increases follow a 55% rise in value in real terms over the past decade. Investors are plowing money not just into prime U.S. soil, but into major agricultural areas abroad as well. Some expect the land to appreciate in value. Others are betting that fast-growing nations will need to import more food to satisfy increasingly prosperous populations, boosting farm income. In October, Teachers Insurance & Annuity Association of America -- part of the mammoth TIAA-CREF retirement plan for academics -- bought Westchester Group Inc., which already managed some of TIAA's farmland investments. TIAA has about $2 billion invested in more than 400 farms in the U.S., South America, Australia and Eastern Europe.
George Washington University, in Washington, D.C., began buying in 2007 and now has $80 million of its endowment invested in farmland. One-quarter of that amount is in the U.S., and the rest is abroad -- including money in a fund that leases land in Poland. And Luminous Capital, an investment adviser in Los Angeles and Menlo Park, Calif., that serves wealthy individuals, has put $45 million of its clients' money into a fund that plans to buy 20 to 25 U.S. farms growing crops such as corn, cotton and wheat. "We believe that the emerging markets are going to continue to grow in wealth," says Kim Ip, who oversees the farmland portfolio at Luminous. That, she says, will mean increased meat consumption, which in turn will drive greater demand for feed grains.
U.S. farms are well-positioned to benefit from strong global demand for key crops, because they produce so much more than Americans consume. U.S. farms will provide more than half the world's corn exports and over 40% of its soybean and cotton exports this crop year, according to the U.S. Department of Agriculture. Exports can help farms earn significant revenue, particularly at times when prices are rising. Grain prices shot up this summer after a harsh summer drought in Russia that led to an export ban in that country on wheat. Corn and wheat prices were both up more than 65% recently from June lows, with soybeans up nearly 40%." U.S. farmland is also growing scarcer, which can bolster its value. The nation's farmland acreage has been declining steadily for more than half a century, from more than 1.2 billion acres in the mid-1950s to a little less than 920 million acres last year, according to the Department of Agriculture. Farming, however, is a notoriously perilous business.
Outside investors typically rely on tenant farmers or management companies to run the farms day-to-day, putting a premium on selecting skilled farmers. Farms are also heavily exposed to nature's whims. "The biggest risk is operational," says Don Lindsey, chief investment officer at George Washington University. He tries to mitigate the risk by investing in different regions, and with a variety of managers.

European Bioethanol Firms Switching To Corn From Wheat
Several European bioethanol processors have switched from wheat to cheaper corn in a bid to improve refining margins, an analyst at an influential grains forecaster said. Currently maize [corn] is much cheaper than wheat and as maize has a much better ethanol yield than wheat it is more attractive," Christophe Cogny, market analyst with Strategie Grains, said. In it latest report, the French grains analysis company upped its prediction for European Union corn usage in bioethanol due to favorable prices. Cogny said refiners in the Netherlands, Spain, Germany and Austria that can use either grain have already switched to corn, a choice that may have boost acreage for the grain in the season ahead. "If [the refiners] switch from one grain to another it has price implications and planting implications," said Cogny. "And not only for biofuels, but exactly the same in the animal feed sector." Both grains are used for animal feed.

German business sentiment hits record high
BERLIN, Dec 17 (Reuters) - German business morale rose to its strongest level since 1991 in December, buoyed by an increasingly strong domestic sector that is helping the economy power ahead of weaker euro zone peers.
The Munich-based Ifo think tank said on Friday its business climate index, based on a monthly survey of some 7,000 firms, rose to 109.9 from 109.3 in November. The rise was the seventh in a row and surpassed expectations for a fall to 109.1

China can cap inflation next year-regulator
BEIJING, Dec 17 (Reuters) - China will be able to keep a  grip on inflation next year, but will have a harder time in  coping with hot money inflows fanned by loose polices in the  West, the country's chief banking regulator said on Friday.
Chinese consumer inflation raced to a 28-month high in  November of 5.1 percent and the country's top leaders have  declared that stabilising prices is a priority for 2011.

PRECIOUS-Gold rises above $1,375/oz as dollar retreats
LONDON, Dec 17 (Reuters) - Gold prices firmed in Europe on Friday, supported by a retreat in the dollar versus the euro, and by persistent concerns over sovereign debt levels in the euro zone after Moody's cut Ireland's credit rating.
Spot gold  was bid at $1,375.45 an ounce at 1028 GMT against $1,370.46 late in New York on Thursday, having slipped to a near three-week low of $1,361.35 an ounce in that session.

FOREX-Euro recovers on German data, but risks lurk
LONDON, Dec 17 (Reuters) - Upbeat German data helped the euro overcome a sharp credit ratings downgrade for Ireland on Friday, although investors were wary about pushing it higher while worries persist about peripheral euro zone debt.
Moody's slashed Ireland's sovereign rating by five notches, to Baa1 from Aa2, and warned further downgrades could follow if Dublin is unable to stabilise its debt situation.

U.S. wheat futures up on wet forecast for Australia
SYDNEY, Dec 17 (Reuters) - U.S. wheat futures gained about  1 percent in Asia on the back of forecasts that  Australia can expect a wetter-than-normal summer, raising  fresh concerns of crop damage.  The gains partially offset an overnight tumble in wheat  prices blamed on a bearish mix of technical selling and  earlier expectations that Australia's eastern crop fields were  drying out.  "Just when it looked like the east was drying out, the  forecast is for more rain over the summer," said a grains  trader in Sydney.

Argentine wheat crop estimated higher at 13.5 mln T
BUENOS AIRES, Dec 16 (Reuters) - Argentina's 2010/11 wheat harvest is seen reaching 13.5 million tonnes, up 4.0 percent from the previous outlook, due to high yields and harvesting advances, Buenos Aires Grains Exchange said on Thursday.
Current dry conditions are hurting corn and soy crops and delaying seedings in the South American country, a leading global grains exporter, but the grains exchange held its estimate for plantings.

Stocks firm; euro shrugs off Irish rating cut
LONDON, Dec 17 (Reuters) - World stocks advanced on Friday, partly lifted by firmer commodities as the dollar fell, while Irish and Portuguese bond yields rose after Moody's Investors Service cut Ireland's rating by five notches.
"The Irish downgrade was significant and severe," said Nick Stamenkovic, bond strategist at RIA Capital Markets in Edinburgh.

20101220 1057 Soy Oil & Palm Oil Related News.

ITS CPO export down 26.3% to 776,910 tonnes for the period of 1~20 Dec 2010.
SGS CPO export down 27.3% to 799,071 tonnes for the period of 1~20 Dec 2010.  

Soy product futures ended higher, with soymeal taking a leadership role in the advances. The strength in soymeal prices was a pure weather play, as cold, icy conditions force feeders to increase protein intact in livestock ward off freezing temperatures, said Jack Scoville analyst with Price Futures Group. Livestock generate internal warmth by eating increased amounts of corn and soymeal, Scoville said. Soyoil edged higher on outlooks for increased usage for biodiesel, but advances were limited by traders taking profits on long soyoil/short soymeal spreads, analysts said. CBOT January soyoil ended 0.06 cents or 0.1% higher at 54.13 cents per pound, and January soymeal traded $4.00 or 1.2% higher at $347.80 a short ton. (Source: CME)

World Food Markets Face Long-Term Price Rises-FAO (Source: CME)
World food markets face an unprecedented long-term rise in prices and may reach record peaks by the end of the year, a senior executive for the United Nation's Food and Agriculture Organization said. The FAO's food price index, which monitors the monthly change in international prices of a basket of commodities, climbed to within seven points of its June 2008 record high in November at 205 points, data released this week showed. A surge in food prices in 2007-8 caused widespread riots in many developing countries. Boosted by a surge across other commodities, such as oil, the spike was sharp but short-lived, with prices pulling back by the following season as the world economy tumbled and farmers increased grain plantings on a vast scale.
But Abdolreza Abbassian, Secretary of FAO's Intergovernmental Group on Foodgrains, said that while the rise in agricultural markets this year may not lead to a similar "food crisis," it may herald the beginning of a long-term increase in food costs after a century of deflation. "We have to see what December gives us but I would be very surprised if we don't see more rises," he said. "The firm prices of the sort that we're seeing today and its continuation is a departure from the past. Gradually we've been learning that food will not be as cheap as it has been." Most agricultural markets have seen bull runs this year as weather patterns damaged output from many key producing regions. Grain markets have soared to near record peaks while sugar futures have hit their highest point since the early 80s, and many observers predict further increases ahead.
For many soft commodities--cocoa, coffee and sugar--this year's increases have been accentuated by perilously low stock levels. Several deficit seasons in a row for sugar in particular have left global inventories even more run-down than in 2007-8, leaving markets vulnerable to supply shocks. Abbassian said many markets could face even higher and more volatile prices ahead. "Unlike the previous episode where we had high prices for 2007-8 which peaked and then came down very quickly, the likelihood of prices coming down in 2011-12 is almost non-existent," he said. "Almost all commodities are in a tight supply-demand situation and so we would need to see high production in all commodities, which is unlikely." And while most forecasters expect a significant increase in plantings next season (the International Grain Council recently predicted a 4% global rise in wheat acreage) he said that a rise in world production is not a given.
"So far I would say that on balance it looks like we will get bigger plantings," he said. "But whether we get good yields or bigger outputs is another question."

Palm at over 2-wk lows on weak demand outlook
KUALA LUMPUR, Dec 17 (Reuters) - Malaysian crude palm oil  futures dropped to a two-week low on Friday as market players  squared positions on worries over weak overseas demand ahead  of export data early next week.  "The market was down on long-liquidation on anticipation  that overseas demand for December 1-20 will fall further,"  said a trader with foreign brokerage in Kuala Lumpur. 

La Nina fuels price rally across commodities
SINGAPORE, Dec 17 (Reuters) - La Nina-driven weather from  South America to Australia and southern Asia will extend into  early next year, disrupting seasonal crop output and  supporting long bets on grains and soft commodities that have  gained sharply since the phenomenon began in mid 2010.
Normal seasonal output patterns for wheat, rubber, coffee,  soy and palm oil, among others, have been upended in these  countries and regions directly affected by La Nina, caused by  temperature changes in the Pacific Ocean and linked to  heavier-than-normal rains in the Australia and southern Asia,  and drier conditions in South America.