Wednesday, December 29, 2010

20101229 1835 FCPO EOD Daily Chart Study.

FCPO closed : 3733, changed : -45 points, volume : lower.
Bollinger band reading : correction range bound upside biased.
MACD Histrogram : reverse lower, buyer defending as seller testing market.
Support : 3720, 3700, 3650 level.
Resistance : 3750, 3770, 3800 level.
Comment :
FCPO corrected downward recorded loss with lower volume transacted after hitting new high yesterday as soy oil and crude oil also having pullback correction as U.S. dollar rebounded overnight.
Daily chart formed a down bar candle pulling back after hitting upper Bollinger band resistant level yesterday with the 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.

20101229 1817 FKLI EOD Daily Chart Study.

FKLI closed : 1531, changed : +7 points,  volume : lower.
Bollinger band reading : upside biased.
MACD Histrogram : rising, buyer in advantage.
Support : 1530, 1515, 1500 level.
Resistance : 1540, 1550, 1560 level.
Comment :
Year end window dressing pushed FKLI continue to trade firmer recorded gain with lower volume traded following most regional markets that closed in positive territory.
Daily chart formed an up bar candle closed near upper Bollinger band resistant level with the band width continue to expand outwards suggesting a further upside biased potential market development.
When to buy : buy at support, weakness or break up with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20101229 0944 Local & Global Economics Related News.

China: Beijing to raise minimum wage 21% in 2011 as inflation quickens
Beijing will raise the minimum wage by 20.8% in 2011, becoming the latest local government to lift pay in a country where inflation is running at the fastest clip in more than two years. The increase to RMB1,160 (USD175) a month from RMB960, the second boost this year, will take effect on 1 Jan 2011, according to a statement from the Beijing Human Resources and Social Security Bureau. The city will also raise pension and unemployment benefits, the agency said. (Bloomberg)

Taiwan: May raise interest rate to damp inflation, home prices
Taiwan will probably increase borrowing costs for the third time this year to curb gains in property prices and tackle accelerating inflation. Governor Perng Fai-nan will raise the benchmark interest rate by 0.125 percentage point to 1.625%, according to all 14 economists in a survey. Perng boosted the rate by the same amount in June and September from a record-low 1.25%. (Bloomberg)

Japan: Consumer prices fall as deflation persists
Japan’s consumer prices fell for a 21st month in November, a sign sustained deflation may prompt the central bank to revise its price projections. Consumer prices excluding fresh food declined 0.5% from a year earlier, the statistics bureau said in Tokyo. That compared with a median 0.6% drop predicted by 28 economists surveyed by Bloomberg News. (Bloomberg)

US: Confidence falls on concern over jobs
Confidence among US consumers unexpectedly fell in December, restrained by concern that jobs will remain scarce in 2011. The Conference Board’s confidence index unexpectedly fell to 52.5, lower than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the New York-based research group showed. Another report showed home values dropped more than economists projected. (Bloomberg)

Malaysia: South Korea slaps duties on Malaysian plywood
The Korean Trade Commission has imposed anti-dumping duties on the import of Malaysian plywood, ranging from 5% to 38%, for three years. The decision was based on a probe that nine Malaysian plywood exporters were allegedly selling their products below production cost. Malaysian plywood exporters got a temporary relief three months ago when South Korea decided to defer its anti-dumping duties by reversing an earlier ruling to slap punitive duties ranging from 5% to 34%. (StarBiz)

China: Industrial profits rise 49% Chinese industrial companies’ profits rose 49.4% in the 11 months through November y-o-y, putting pressure on the central bank to add to this year’s two interest-rate increases. Income climbed to RMB3.88trn (USD585bn) That compared with a 7.8% gain in the same period in 2009 and an increase of 55% in January through August. Industrial companies’ sales gained 31.8% in the 11 months through November to RMB62.4trn. (Bloomberg)

Taiwan: Limit cuts on bank’s holdings of currency derivatives
Taiwan’s central bank said it will rein in limits on the use of exchange-rate derivatives to combat currency speculation by foreigners. Banks’ holdings of non-deliverable forwards and options in the Taiwan dollar will be limited to 20% of their positions in the local currency with immediate effect, down from the previous ceiling of 33.3%. Deliverable forwards are exempt from the restrictions as they are used by local companies to protect earnings against exchange-rate fluctuations. (Bloomberg)

UK: December home prices fall for sixth month
UK house prices fell for a sixth month in December and will extend their decline in 2011 on weak demand and tighter mortgage-lending conditions, according to Hometrack Ltd. The average cost of a home fell 0.4% m-o-m, and prices will drop a further 2% in 2011, the property researcher said. Demand for homes, measured by the change in new buyers registering with real-estate agents, fell 4.8% m-o-m, the biggest drop since Jan 2009 and the sixth consecutive monthly decline. The number of homes for sale fell 1.5%. (Bloomberg)

US: Retailers’ holiday sales increase 5.5%
US retailers’ 2010 holiday sales jumped 5.5% for the best performance in five years. Retail sales, excluding autos, rose to USD584bn from 5 Nov through 24 Dec, compared to a 4.1% gain last year. Apparel sales grew the fastest in the 50 days before Christmas, with an 11% gain, more than 10 times the pace of last year. Sales of jewelry accelerated 7.2%, more than twice as fast as in 2009. Luxury sales rose 6.7%, compared with 0.9% in 2009. Consumer electronics sales increased 1.2% after falling 4.6% a year earlier. Furniture climbed 3.8% after a 2.2% drop last year. (Bloomberg)

20101229 0942 Malaysia Corporate Related News.

JAKS subsidiary gets RM201m building job
JAKS Resources’ subsidiary has won a RM201m construction contract for a commercial development in Petaling Jaya, Selangor, from MNH Global Assets Management SB. The commercial development of Phase 1-5 Commercial Block of 15-storey and 4-storey basements by JAKS SB (JSB) is due to be completed by March 2012. MNH Global Assets is wholly owned by Island Circle Development (M) SB, a major shareholder of JAKS Island Circle SB, which in turn is majority owned by JSB. (BT)

SunCity acquires land in Johor for expansion
Sunway City’s wholly owned subsidiary Asli Budimas SB has entered into an agreement with Bukit Ledang Development SB to purchase approximately 64.6 acres of land for RM134.52m in tandem with its expansion plan in Johor. According to its announcement to Bursa Malaysia, the acquisition will provide SunCity an estimated GDV of RM932m when the land in Plentong, which is strategically located within the Iskandar Malaysia development region, is fully developed. The land price works out to RM47.78 per sq ft. (Financial Daily)

Sime to build pilot bio-ethanol plant
Sime Darby Plantation SB is partnering Japan's Mitsui Engineering and Shipbuilding Co Ltd to build and operate a bio-ethanol demonstration plant, which will convert empty oil palm fruit bunches into bio-ethanol. Sime Darby officials said the plant would cost about USD10m (RM30.9m). Bio-ethanol is used as fuel for cars and unlike biodiesel, which is a blend of palm oil and diesel, it is made from plantation waste. The bio-ethanol plant will use fruit bunches as the main raw material, which is abundant and available throughout the year, Sime said in a statement. The collaboration is being undertaken by Sime Darby Research SB, the research and development arm of Sime Darby Plantation. The joint-venture plant will be built next to Sime Darby Plantation's Tennamaram palm oil mill at Bestari Jaya in Selangor. (BT)

PNB mum on talk of potential mergers
Permodalan Nasional Bhd (PNB) was mum on speculation of mergers among its property companies or the relisting of its wholly-owned property group Island & Peninsular Group SB (I&P). "We will make the necessary announcements when the time comes," president and group chief executive Tan Sri Hamad Kama Piah Che Othman told reporters yesterday. There have been reports that major property groups like SP Setia and Sime Darby Property could be persuaded to merge. PNB is the single biggest shareholder in SP Setia and it also controls Sime Darby. As for the I&P group, it is the result of a merger with sister companies Petaling Garden and Pelangi. All three were once listed before being taken private by PNB in July 2007. The group now has a combined landbank of about 2,200ha in the Klang Valley and Johor, and has developed property projects over 35 townships such as Bukit Damansara, Bandar Kinrara, and Alam Damai (BT)

CIMB: CIMB Niaga's second sub debt over-subscribed. CIMB Group Holding Bhd's (CIMB Group) subsidiary PT Bank CIMB Niaga Tbk (CIMB Niaga) completed the issuance of IDR1.6t (RM552.3m) subordinated debt, which was oversubscribed by three times. The successful transaction was anchored by a good spread of order book with 55% orders from institutional investors, 25% corporate and 20% retail. Another important breakthrough is the increased cross-border interest that accounted for 16% of the total order book. (Source: The Edge Financial Daily)

Banking: Foreign banks join MEPS. Five major foreign banks in Malaysia have joined the Malaysian Electronic Payment System (MEPS) automated teller machine (ATM) network. The five banks are HSBC Bank Malaysia Bhd, OCBC Bank (M) Bhd, United Overseas Bank (M) Bhd, Standard Chartered Bank Malaysia Bhd and Citibank Bhd. The banks will launch the service individually over time as soon as their respective systems are fully operational. (Source: The Star)

Plantation: Mohd Isa new Felda chairman. Former Negeri Sembilan menteri besar Tan Sri Mohd Isa Abdul Samad has been appointed chairman of the Federal Land Development Authority (Felda) effective Jan 1 next year. Mohd succeeds Tan Sri Dr Mohd Yusof Noor who has been appointed as adviser to the minister in charge of Felda. (Source: The Edge Financial Daily)

Transportation: Locations of seven LRT stations approved. The Subang Jaya Municipal Council (MPSJ) has approved seven new locations for the light-rail transit (LRT) stations. The stations approved at the Kelana Jaya link consist of Station 5 at SS15, Station 6 at SS17, Station 8 at USJ 10, Station 9 at USJ 15, and Station 10 at USH 21. Station 3 and Station 4 at the Ampang link which will be built along the Bukit Jalil-Puchong highway were approved as well. (Source: New Straits Times)

DRB-Hicom to divest stakes in Uni.Asia?
DRB-Hicom is exploring the possibility of divesting its interests in insurers Uni.Asia Life Assurance and Uni.Asia General Insurance, say sources. There has been an interest in DRB’s insurance units but the potential buyer is still studying the numbers. It has not reached the decision stage yet. DRB’s major shareholder, Tan Sri Syed Mokhtar Al Bukhary, declined to comment. DRB has a 51% stake in Uni.Asia Life and 34.73% stake in Uni.Asia General. Its current equity partner in the two units is Singapore’s UOB. (Financial Daily)

QSR, KFC not for sale
Speculation about Johor Corp Bhd's (JCorp) plan to divest its stakes in QSR Brands Bhd and KFC Holdings (M) Bhd was put to rest yesterday after the state investment company reiterated it has no plans to sell those prized assets. “QSR and KFC are not for sale,” JCorp president and chief executive Kamaruzzaman Abu Kassim said in a statement, adding that it did not make sense for the company to sell its “core business”. (StarBiz)

EPF investment income at RM5.8bn
The Employees Provident Fund (EPF) raked in RM5.75bn in investment income for the third quarter ended 30 Sept, a 5.12% increase from RM5.47bn registered in the same quarter last year. In a statement yesterday, it said equities investment was the largest contributor with RM2.4bn, representing a 2.56% increase compared with RM2.34bn recorded in the previous corresponding period. (Bernama)

MAHB unveils headline KPIs for 2011
Malaysia Airports Holdings Bhd (MAHB) has highlighted achieving earnings before interest, tax, depreciation and amortisation of RM773.4m; a return on equity of 10.73% and a top 5 worldwide ranking for KL International Airport as its headline key performance indicators (KPIs) in 2011. MAHB told Bursa Malaysia yesterday that the headline KPIs were set based on its strategic plans and long-term targets that were developed under its fiveyear (2010-2014) business direction planning initiative. MAHB said it believed that 2010 would end with a double-digit passenger and cargo growth compared with 8.2% achieved for passengers in 2009. The sustained 2010 growth, it added, was expected to lay the foundation for further growth in 2011. (StarBiz)

F&N to redevelop PJ Land
Fraser & Neave Holdings (F&N) will redevelop the land in Petaling Jaya that has been housing its dairy manufacturing plant since 1959 to feature commercial and residential properties with gross development value of at least RM1bn. The project is expected to kick start another major property venture for the group, which would see its development in Pudu coming to an end. F&N said the existing manufacturing plant in Section 13 would be relocated to Pulau Indah commencing end-2011. (FinancialDaily)

MESB shareholders advised to reject takeover offer
The independent adviser has recommended that shareholders and directors of MESB reject the takeover offer by the company’s executive director Teoh Hwa Peng, who had recently offered 33 sen apiece for shares he did not already own in the engineering outfit. TA Securities, the appointed independent adviser, said Teoh’s cash offer was “not fair and not reasonable” given that the proposal did not include a premium on the offer price. (FinancialDaily) 

20101229 0853 Global Market Related News.

Oil steadies above $91 ahead of U.S. inventory data
SINGAPORE, Dec 29 (Reuters) - Oil steadied above $91 a  barrel, as forecasts for warmer weather in the  U.S. Northeast offset expectations for a further drawdown in  crude stocks in the world's largest oil user.
"Oil is tracking the cold weather in the Northeast of the United States and also the dollar against the euro," said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd.

U.S. corn, soy dip from over 2-year highs, wheat firm
SINGAPORE, Dec 29 (Reuters) - U.S. corn and soybean futures edged lower, easing from highest in over two years scaled in the previous session as dry weather in Argentina continued to raise concerns over supplies. 
"Soybeans, corn and wheat should continue the bullish trend next year, but there could some profit-taking at the end of the year," said Kazuhiko Saito, chief commodities analyst at Fujitomi Co in Tokyo.

Japan, China shares fall after rate rise; euro up
SINGAPORE, Dec 28 (Reuters) - Shares in Japan and China  eased as concerns that further Chinese monetary  tightening will cool the engine of world economic growth  overshadowed Japanese data that pointed to improving demand.  "Data in recent weeks have been supportive of the stocks  and commodity markets globally," said David Cohen, director of  Asian economic forecasting at Action Economics.

Oil prices climb above $91/bbl, dollar, cold snap supports
SINGAPORE, Dec 28 (Reuters) - U.S. crude prices rose above  $91 a barrel, hovering just below a 26-month top hit in the  previous session, supported by a weaker dollar and hopes that  a major snow storm on the U.S. East Coast would stoke demand  for heating oil.
"Data in recent weeks have been supportive of the stocks and commodity markets globally. The U.S. will avoid a double-dip. The Asian region including Japan looks a little bit better, with its industrial production finally showing an increase," said David Cohen, director of Asian Economic Forecasting at Action Econ.

Gold up on dollar weakness, Asian buying
SINGAPORE, Dec 28 (Reuters) - Spot gold prices firmed as it was supported by a weaker dollar and buying  interest in Asia, while investors hoped for a further rally in prices next year.
"Gold is riding high on its own, but with the euro/dollar bid, it's even better," said a Singapore-based trader. "Asians have been non-stop buyers, and want to load up when gold is some 40 bucks off the all-time highs."

COMMODITY MARKETS: Markets hit new highs as China rate hike barely hurt
NEW YORK, Dec 27 (Reuters) - Commodity markets took China's surprise rate hike in stride on Monday, with soybeans and oil hitting two-year peaks and copper hitting record highs amid razor-thin trade as investors stayed focused on fundamentals in the final trading week of the year.
"A lot of people were unable to come to work today because of the storm and when you add the uncertainties from the Chinese rate hike to that, it explains the volumes you have," said George Gero, senior vice president at RBC Wealth Management in New York.

GLOBAL MARETS: US stocks recover after China rate move, euro up
NEW YORK, Dec 27 (Reuters) - U.S. stocks closed little changed and the dollar lost ground to the euro in thin trade on Monday, buffeted by China's Christmas Day interest rate hike and a blizzard that pounded the northeastern United States.
"The market is pretty much flat but we ended well off our lows and although we have no buyers stepping in, we have to give the bulls the victory seeing how the market turned around," said Ryan Detrick, technical analyst at Schaeffer's Investment Research at Cincinnati, Ohio.

20101229 0852 Soy Oil & Palm Oil Related News.

US soy-product futures end higher as heat, dryness raise worries about Argentine production. Argentina is world's leading exporter of soymeal and soyoil. Poor weather may reduce output potential or discourage farmers from finishing planting soybeans, which are about three-quarters sown, analysts say. Export demand for soy could shift to the US from Argentina, they add. CBOT March soymeal closes up $6.90 at $370.30 per short ton. CBOT March soyoil closes up 0.52 cent at 57.75 cents per pound. (Source: CME)

U.S. soy climbs to near 28-month top; corn, wheat firm
SINGAPORE, Dec 28 (Reuters) - U.S. soy futures rose for a  seventh straight session to its highest in nearly  28 months, while corn hovered around its 29-month peak as dry  weather in Argentina raised crop concerns amid strong global  demand.  "The most important factor is the weather in Argentina  where forecasts show that extremely high temperatures and  below normal rains are likely to hit production," said Ker  Chung Yang, an analyst at Phillip Futures in Singapore. (Source: CME)

Weather concerns lift palm oil to fresh 33-mth highs
KUALA LUMPUR, Dec 28 (Reuters) - Malaysian crude palm oil  futures rose to fresh 33-month highs  driven by  prospects of erratic weather sapping vegetable oil supplies at  a time when demand remains resilient.  "Palm oil production will fall more than 15 percent in  this month as the weather is pretty bad in palm oil producing  states," said a trader with a foreign brokerage in Kuala Lumpur.

Funds widen net longs in corn and soybeans - CFTC
CHICAGO, Dec 27 (Reuters) - Large speculators aggressively expanded their net long position in Chicago Board of Trade corn futures in the week ended Dec. 21, data from the U.S. Commodity Futures Trading Commission showed on Monday.
Noncommercial traders held a net long in CBOT corn of 331,018 contracts, up 25,503 lots from the previous week, CFTC's Commitments of Traders Supplemental Report showed.

La Nina dryness batters Argentina's soy belt - govt
BUENOS AIRES, Dec 27 (Reuters) - Dryness caused by the La Nina weather phenomenon persisted in Argentine soy-growing regions last week, slowing plantings and preventing soy crops from developing normally, the government said in a report.
Argentina is the world's No. 3 soybean exporter and the government has forecast 2010/11 area at 18.7 million hectares (46.20 million acres), slightly above last season despite some farmers favoring corn over soy. The two crops fight for acreage in Argentina.