Monday, January 31, 2011

20110131 1817 FCPO EOD Daily Chart Study.

FCPO closed : 3809, changed : +109 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : recovering, buyer seems putting in more effort here.
Support : 3800, 3750, 3720 level.
Resistance : 3820, 3850, 3900 level.
Comment :
Flood in producing states like Sabah and Johor lead to deliveries delay push FCPO to rallied recorded gain with slowing down volume transacted despite export data released recorded drop while soy oil and crude oil futures price traded firmer.
Daily chart formed a wide range up bar candle after market opened gap up and surge higher to closed at the high of the day near upper Bollinger band resistant level while the band width turning inwards. Reading wise, market still likely to trade side way range bound but fundamentally supply concern due to flood issue may push price testing higher 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.

20110131 1740 FKLI EOD Daily Chart Study.

FKLI closed : 1517 changed : +0.5 point,  volume : lower.
Bollinger band reading : downside biased with pullback correction.
MACD Histrogram : turned upward, seller taking profit.
Support : 1515, 1500, 1485 level.
Resistance : 1530, 1540, 1550 level.
Comment :
FKLI ended 1 tick higher with slow volume traded on the last transaction day of the month as regional market closed mostly lower partly due to Egypt political condition intensified.
Daily chart formed an wide range up bar candle after market opened gap down severely due to panic selling and recovered upward to closed near the high of the day doing pullback correction after market opened way below lower Bollinger band with the bandwidth turning outward. Reading wise, market are current having pullback correction within a downside 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.

20110131 0939 Global Economic Related News.

U.S: Growth accelerates in 4Q10 as consumers boost spending. Gross domestic product grew at a 3.2% annual rate, Commerce Department figures showed. Excluding stockpiles, the economy rose at a 7.1% pace, the most since 1984. (Source: Bloomberg)

U.S: Consumer sentiment in January falls less than forecast. The Thomson Reuters/University of Michigan final index of consumer sentiment decreased to 74.2 from 74.5 in December. (Source: Bloomberg)

Japan: Deflation eased in December and the job market strengthened, supporting the central bank's view that the economy may pick up this quarter. Consumer prices excluding fresh food declined 0.4% YoY, the statistics bureau said, the smallest drop since 2009. The unemployment rate unexpectedly fell to 4.9% from 5.1%, the first decrease since September. (Source: Bloomberg)

S. Korea: Industrial output rose 9.8% YoY in December, supporting the case for the central bank to further raise interest rates. Output climbed a revised 10.7% YoY in November. (Source: Bloomberg)

South Korea: Manufacturers’ confidence declines to two-month low
South Korean manufacturers’ confidence fell to a two-month low as rising commodity prices and an appreciation in the Won clouded the outlook for exporters. An index measuring expectations for February fell to 91 from 92 for January, the Bank of Korea said. A measure of non-manufacturing companies’ expectations slipped to 84 from 87. “Sentiment has been under pressure due to rising raw material costs, sluggish domestic demand and currency rates,” the central bank said. (Bloomberg)

Spain: Approves pension bill in bid to woo investors
The Spanish government agreed to raise the retirement age in a renewed bid to restore investor confidence after a EUR20bn (USD27bn) plan to shore up savings banks failed to tame the nation’s borrowing costs. Four months after Spanish workers disrupted transport and broadcasts in a general strike aimed partly at the pension plan, the Cabinet approved a bill to increase the retirement age to 67 from 65, Deputy Prime Minister Alfredo Perez Rubalcaba told reporters. (Bloomberg)

UK: Consumer confidence plummets most since 1994
UK consumer confidence plunged the most since 1994 this month as an increase in sales tax hurt shoppers’ appetite for spending, a report showed. The index of sentiment fell 8 points from December to minus 29, the lowest since March 2009. All five measures of the index fell, with a gauge on the climate for making major purchases dropping 22 points to minus 29. (Bloomberg)

US: Payrolls probably rose at start of 2011
Payrolls in January probably grew at a pace that underscores the Federal Reserve’s concern it will take years for the job market to recover from the recession, economists said before a report this week. Employment increased by 140,000 workers this month after a 103,000 gain in December, according to the median forecast of 59 economists surveyed ahead of Labor Department data on 4 Feb. The report may also show the jobless rate increased to 9.5% from 9.4%. (Bloomberg)

US: Growth accelerates on consumer spending
The US economy accelerated in the 4Q of 2010 as consumer spending climbed by the most in more than four years. GDP grew at a 3.2% annual rate, Commerce Department figures showed, falling short of the 3.5% median forecast of 85 economists surveyed because of a slowdown in inventories. Excluding stockpiles, the economy rose at a 7.1% pace, the most since 1984. (Bloomberg)

20110131 0938 Malaysia Corporate Related News.

Alam Maritim: Bidding for RM400m jobs. Alam Maritim Resources Bhd is bidding for RM400m worth of jobs this year to ride on the recovering sector which was subdued last year due to the global economic crisis. The offshore marine transportation service provider will submit bids in Indonesia, Brunei and Sabah as part of the group's long-term growth plan. (Source: Business Times)

Gaming: Genting said to be keen on Pan Malaysian Pools. The Genting group is making a bid for Pan Malaysian Pools Sdn Bhd (PMP), the number forecast operator (NFO) owned by Tanjong plc. Its bid is in the higher end among bids that have been submitted. The other bids are believed to be between RM1.8b to RM2.5b. (Source: The Edge Financial Daily)

Infrastructure: No rates hike on two highways. The Prime Minister announced that the toll rates for the Kuala Lumpur-Karak Expressway and East Coast Expressway Phase One would not be increased for the next five years. The decision was made following a review of transportation costs, including restructuring of the toll charges and to ease the people's burden. Furthermore, no compensation would be paid to the concessionaires of the two highways. (Source: The Star)

Infrastructure: All eyes and ears on second MRT line. The second mass rapid transit (MRT) line, which circles the Kuala Lumpur city centre (KLCC) orbital and known as the "circle line", is already in the final planning stage. The details are expected to be announced in March. The circle line is expected to cover the hotspots surrounding the KLCC, Jalan Bukit Bintang, the new Kuala Lumpur International Financial District in Dataran Perdana, KL Ecocity, Pusat Bandar Damansara and Sentul, among others. (Source: The Star)

Regulations: Changes in takeover rules. The Securities Commission (SC) and Bursa Malaysia raised the minimum shareholder approval threshold for takeovers via asset and liabilities route to 75% from the previous simple majority minimum. Other significant changes include the need for companies undergoing privatisation to obtain independent advice to ascertain if the offer is fair and reasonable and to ensure high net-worth investors are well informed of any structured products being offered to them. (Source: The Star)

BN retains Tenang seat with bigger majority
Barisan Nasional (BN) retained the Tenang State Assembly when its candidate, Mohd Azahar Ibrahim, defeated PAS candidate Normala Sudirman with a bigger majority. Nohd Azahar garnered 6,699 votes while Normala had 2.992, giving the BN a majority of 3,707 votes. In the last general election, the BN candidate, the late Datuk Sulaiman Taha beat Md Saim Siran, from PAAS, with a majority of 2,492 votes. (Financial Daily)

MTD Capital gets RM3.5bn offer for toll operations
MTD Capital Bhd has received a RM3.53bn offer for its infrastructure units, MTD Prime SB and Metramac Corp SB. This was prior to an announcement by the Prime Minister Datuk Seri Mohd Najib Razak about the restructuring of toll operations of concessions operated by both companies. In a filing to Bursa Malaysia last Friday, the company said it had received a letter containing the offer from Datuk Nik Hussain Abdul Rahman and Datuk Azmil Khalili Khalid (joint offerors) to conduct the acquisition through a special purpose vehicle. (Malaysian Reserve)

Sapuracrest inks RM149m charter agreement
Sapuracrest Petroleum Bhd, an oil and has service provider, has signed a charter agreement valued at RM149.5m to lease its drilling rig to Seadrill UK Ltd, Seadrill will lease the so-called T-10 drilling rig owned by Crest Tender Rigs Pte Ltd, a 51% indirect subsidiary of Sapuracrest, for two years at USD61,000 (RM186,294) per day beginning the fourth-quarter of last year, according to a filing to Bursa Malaysia last Friday. The T-10 would be used by Seadrill UK to perform works under the contract with Chevron Thailand Exploration and Production Ltd for offshore drilling activities in Thailand.(Malaysian Reserve)

Semen Gresik keen to buy Malaysian cement company
PT Semen Gresik, Indonesia's largest cement producer is mulling to acquire a Malaysian cement company this year to boost its production capacity. Semen Gresik president director Dwi Soetjipto said the company will expand its business overseas this year, by initially focusing on acquiring a Malaysia-based cement company. "Semen Gresik is prepared to realise its acquisition plan towards cement companies located in Malaysia. This acquisition will enable the company to improve its production with an additional of 1.5m tonnes of cement," he said in a statement posted on Semen Gresik's website. He declined to explain in more specific details concerning the target company as well as the value of the acquisition. But speculation is that Semen Gresik is eyeing to buy Cement Industries of Malaysia Bhd (CIMA), a unit of UEM Group. According to Jakarta Post's online news portal, Semen Gresik is looking to buy CIMA, which has an 18% share of the Malaysian cement market. (BT)

Melati unit, PKNS in RM1.6bn project
Melati Ehsan Holdings Bhd’s wholly-owned subsidiary, Bayu Melati SB, has entered a joint venture agreement with PKNS Holdings SB to undertake a mixed commercial development with gross sales value of RM1.62bn. The projected gross costs value of the development is about RM1.07bn but Bayu Melati may propose improvements to the building and layout plans, design and building works on the 75,473sq m freehold commercial land in Kelana Jaya, currently with a sport complex known as “Kompleks Sukan PKNS”. In a filing with Bursa Malaysia last Frifay, Melati Ehsan said the proposed project entailed two blocks of service apartments, one block of Soho offices, one sports complex, two blocks of office tower, one shopping mall, one hotel, one performing arts centre and car park lots. (StarBiz)

Bintai Kinden bags RM86m Singapore job
Bintai-Kinden Corp Bhd has won a RM85.82m contract to build and maintain the ventilation, electrical and fire protection system for a mixed development project in Singapore. Works are expected to be completed by January 2013, according to a filing to Bursa Malaysia last Friday. (Malaysian Reserve)

Latexx to make announcement
Latexx Partners Bhd, which requested for a trading suspension last Friday, is expected to make a material announcement today. Speculation about a possible privatisation of Latexx had been rife following a news report. In a stock exchange filing, Latexx said it had received a proposal which was material in nature and that the company would make an announcement on 31 Jan. The Edge FinancialDaily reported on Thursday, 28 Jan that there was talk of privatisation of Latexx amid the continuous rise in latex price and the weakening US dollar which have hit the once-favoured rubber gloves industry. According to Bloomberg data, BT Capital Sdn Bhd is the major shareholder of Latexx with 49.57 million shares or a 22.55% stake, followed by Latexx's executive chairman and CEO Low Bok Tek 15.47 million shares (7.04%) and Lembaga Tabung Haji with 11.68 million shares (5.32%). (Various press reports)

20110131 0936 Global Market Related News.

Wheat up 0.8 pct as market eyes Egypt unrest, firm oil
SINGAPORE, Jan 31 (Reuters) - U.S. wheat futures bounced back, rising 0.8 percent following a decline of more than 2 percent on Friday as a civil unrest in the world's biggest wheat importer, Egypt, kept investors on tenterhooks. 
"We need to find out more before making claims of declining Egyptian imports and we need to remember that unrest which is affecting northern Africa is largely due to food price inflation," said Luke Matthews, a commodity strategist at the Commonwealth Bank of Australia.  

Gold firms after rally on Egypt, ETF at 8-mth low
SINGAPORE, Jan 31 (Reuters) - Gold edged up, extending gains seen in the previous session as buying continued on fears the unrest in Egypt will spread across the Middle East, but selling in the physical side and a drop in ETF holdings to an eight-month low capped gains.
"We need to see the holdings in the ETF increase again before we can see gold prices start to head up and make a new high. ETF in itself is a reflection of a longer-term demand for gold," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

Asia stocks fall, oil nears $100 on Egypt fears
HONG KONG, Jan 31 (Reuters) - Brent crude futures climbed near $100 a barrel and Asian stocks fell, hit by fears of unrest throughout the Middle East sparked by deadly protests in Egypt.
"To the extent that the instability continues, investor reaction will most likely push oil and Treasury bond prices higher, and global equities lower." Mohamed El-Erian, co-chief investment officer at bond giant PIMCO, told Reuters.

OIL: Brent oil surges to 28-month peak on Egypt unrest
SINGAPORE, Jan 31 (Reuters) - Brent oil surged to a 28-month peak near $100 a barrel on Monday on concerns anti-government protests in Egypt could spread instability across the Middle East and disrupt oil shipments through the Suez Canal.
"The Egyptian situation looks to be the primary factor ... on what this could mean in terms of stability for such a vital region for energy production," said David Land, chief market analyst at CMC Markets.

COMMODITIES: Oil near $100 in London, gold jumps, on Egypt scare
NEW YORK, Jan 28 (Reuters) - Oil closed near $100 a barrel in London and gold ended with its biggest daily gain in two months while wheat slumped on Friday as Egypt's worsening political crisis prompted mixed reaction in commodity markets.
"I think some people are starting to worry about what we call 'normal commercial trade,'" Dan Basse, president at Chicago's AgResource Co, said, commenting on the impact street protests in Egypt could have on movement of wheat through the country.  

GLOBAL MARKETS: Asian stocks to fall on Egyptian turmoil
WELLINGTON, Jan 31 (Reuters) - Asian stocks are likely to fall on Monday, with safer assets such as gold and bonds likely to benefit as unrest in Egypt continues to rattle world markets.
"The greater fear is that the turmoil could spread to other Middle East countries, including even Saudi Arabia. If that happens, then all bets on oil prices are off," Zollner said.  

UK Agriculture Minister Calls For Cuts To EU Farm Subsidies (Source: CME)
The U.K.'s agriculture minister called for substantial cuts to the European Union's farming subsidies program at a time when many of the bloc's member states are facing economic hardship. In a response to proposed reforms to the EUR55 billion scheme, Caroline Spelman said in a letter to E.U. farm commissioner Dacian Ciolos that the subsidies should face the same "hard choices being made elsewhere in the E.U." E.U. officials have put forward a paper of plans to reform the controversial Common Agricultural Policy from 2014. But the proposals contain no details of any cut to the size of the payments given to farmers.
"There must be a very substantial cut to the CAP budget in the next financial framework," the letter said. "We also want to see reform of trade-distorting elements of the CAP, particularly with respect to subsidies." The letter comes as the E.U. Commission released figures showing that 80% of beneficiaries received around 20% of the direct payments in 2009 in the E.U. group of 12.

Argentina Grain Port Strike Enters Third Day, Affects More Ports (Source: CME)
A strike that has disrupted activity at key river ports that ship a significant portion of Argentina's grain and edible oil exports to global markets entered its third day on Friday, with unionized workers blocking access to additional ports. Walter Cabrera, secretary general of the San Lorenzo chapter of Argentina's powerful Confederacion General de Trabajadores union umbrella group, said workers are currently picketing 17 ports to demand higher wages for its members who work in and around the ports. "We are demanding equal wages for all the workers in the oilseed crushing/port complex," Cabrera said in a telephone interview. The union is allowing security guards and some crushing mill workers to enter the ports to ensure a minimum level of industrial safety, he added.
Spokespersons for the San Lorenzo Chamber of Commerce, whose members include grain exporters, and the industry trade group representing Argentina's edible-oil makers and grain exporters, CIARA-CEC, weren't immediately available for comment. CIARA-CEC called on the federal government through the Labor Ministry to intervene in the conflict. The Labor Ministry can order workers to lift a strike while union leaders and employers negotiate a settlement. Labor Ministry officials weren't available for comment. The conflict started Wednesday at about 10 ports and related crushing plants that produce edible oils largely from soybeans near the city of San Lorenzo, Santa Fe Province. About three quarters of Argentina's agriculture exports are shipped from river ports clustered in and around the city of Rosario. Argentina leads the world in soymeal and soyoil exports, and is the third-largest soybean exporter.
San Lorenzo, located about 20 kilometers north of Rosario, alone is home to a dozen ports operated by major international grain exporters, including Cargill, Noble Argentina SA, Louis Dreyfus SA, and Bunge Ltd. Picketers affiliated with the CGT San Lorenzo are demanding the same minimum wage of 5,000 pesos ($1,256) a month won by the edible-oil-workers union in San Lorenzo last month following a strike. According to Cabrera, his workers earn about half that amount. The strike's impact on grain and edible oil shipments and the prices for those commodities will ultimately depend on the duration of the dispute. January is typically a period of low activity at the grain ports clustered along the Parana River as farmers only recently finished soy planting, while the sunflower harvest is still in its early stages. Cabrera said its to early to say when the conflict will end, adding that the union hasn't had any contact with the San Lorenzo Chamber of Commerce or grain exporters since the strike began.

US, Japan told time running out to deal with debt
TOKYO/WASHINGTON, Jan 28 (Reuters) - Japan and the United States faced new pressure to confront their swollen budget deficits as the IMF and rating agencies demanded more evidence they can bring their public debts under control.
The International Monetary Fund said the G7's two biggest economies needed to spell out credible deficit-cutting plans before the markets lose patience and dump their bonds.

U.S. manufacturing profits suggest stronger economy
NEW YORK/CHICAGO, Jan 27 (Reuters) - U.S. manufacturing companies posted higher-than-expected results, as sharply improved margins boosted profits amid strong industrial demand and growth in emerging markets.
Companies including Caterpillar Inc , Tyco International Ltd  and Eaton Corp  reported strong sales and earnings, and investors were looking ahead for signs the industrial rebound would begin to affect the wider economy and boost employment.

Mixed U.S. data points to growth momentum
WASHINGTON, Jan 27 (Reuters) - U.S. housing and factory data on Thursday showed the economy still gaining strength in December but at a pace unlikely to cause the Federal Reserve to rethink its stimulus program. Economists said they expected Friday's reading of gross domestic product to show the world's biggest economy picking up speed albeit short of the pace needed to bring down unemployment significantly.

PRECIOUS-Gold up from 4-month lows ahead of U.S. data
LONDON, Jan 28 (Reuters) - Gold edged higher as caution dogged the financial markets ahead of U.S. growth data due later, having earlier hit a near four-month low as a better economic outlook dented safe-haven buying of the metal.
Spot gold  was bid at $ an ounce at GMT against $1,312.24 late in New York on Thursday. U.S. gold futures for February delivery  fell $ an ounce to $.

FOREX-Yen revives on Japan exporter demand
LONDON, Jan 28 (Reuters) - The yen rose on Friday as demand from Japanese exporters and speculators helped the currency to claw back some losses from a broad sell-off triggered the previous day by a cut to the country's credit rating.
The euro was supported near a two-month high versus the dollar, and analysts said the U.S. currency may struggle if growth data later in the day fails to change the view that Federal Reserve interest rates are set to remain at rock-bottom levels.

Wheat steady near 29-month top, soy eases on LatAm rains
SINGAPORE, Jan 28 (Reuters) - U.S. wheat futures edged higher trading close to 29-month highs as investors awaited news on import tenders from the Middle East and Africa for price direction, while soybeans were under pressure following forecasts of rains in Argentina.
"I think the wheat market is looking forward to a Saudi tender which might provide support to the market but we have to see how much they buy," said Adam Davis, a senior grains trader at Melbourne-based Merricks Capital.

Indonesia suspends rice, soybean duties to combat inflation
JAKARTA, Jan 28 (Reuters) - Indonesia will suspend import duties on rice, soybeans and wheat as part of government efforts to fight inflation and the president warned about the global risks posed by scarce resources, as countries grapple with escalating food costs.
Rising food prices across many parts of the world have been partly responsible for a number of protests in the last week and world leaders warned on Thursday they risked stoking more unrest and even war.

Argentine grains firms ask gov't to resolve strike
BUENOS AIRES, Jan 27 (Reuters) - Grains exporters called on the Argentine government on Thursday to help end a pay strike before it disrupts shipments from one of the world's biggest food suppliers.
Soy-crushing plants in and around the central city of Rosario account for about 80 percent of soybean oil and meal output from the top global exporter, but activity is slow at this time of year because the harvest has yet to begin.

Euro rally falters, stocks eye U.S. GDP
LONDON, Jan 28 (Reuters) -The euro's rally against the dollar faltered and stocks opened weaker ahead of U.S. fourth-quarter GDP numbers on profit taking, although both look set to end the week in the black. "Barring a nasty return of sovereign-debt related concern (still likely at some point), the likelihood of the ECB leading the Fed by some distance in its tightening cycle suggests EUR/USD can rise further," he added.

201101231 0933 Soy Oil & Palm Oil Related News.

ITS CPO down 3.6% to 1,239,758 tonnes for the period of 1~31 Jan 2011.
SGS CPO down 4.6% to 1,202,368 tonnes for the period of 1~31 Jan 2011.

Floods in Malaysia delay palm oil deliveries, prices climb
KUALA LUMPUR, Jan 31 (Reuters) - Rain-driven floods have disrupted Malaysian oil palm estates from transporting the vegetable oil to refineries and ports, which may trigger a supply squeeze and boost prices.
La Nina-induced rains have inundated some estates in Sabah state on Borneo island and southern Johor state on mainland Malaysia -- the top oil palm growing regions that account for more than 50 percent of total output.

Soy product futures ended lower after prices jockeyed in both positive and negative territory over the course of Friday's session. Soyoil initially spiked to a 3-session high, bolstered by sharply higher crude oil futures and strength in world vegoil markets. However, futures backpedaled after midday, as traders booked profits ahead of the weekend in unison with soybeans, analysts said. CBOT March soyoil ended 0.14 cents or 0.2% lower at 57.27 cents per pound, and March soymeal traded $0.40 or 0.1% lower at $377.00 a short ton. (Source: CME)

Palm up on supply concerns; set for 1st monthly loss in 7 months
KUALA LUMPUR, Jan 28 (Reuters) - Malaysian palm oil futures extended gains as worries over heavy rains stalling harvesting lifted prices.
"The floods are not really serious and we are in a low production period, but if heavy rains continue in Johor for more than a week, we may have a problem," said industry analyst M.R. Chandran.

Argentine soy crop seen stable on recurring rains
BUENOS AIRES, Jan 27 (Reuters) - Argentina's soy crop is seen stable at 47 million tonnes after widespread rains, but with the key yield-setting stages ahead, soybean fields remain at risk, Buenos Aires Grains Exchange said on Thursday.
Two weeks of heavy rains have brought new life to soy crops in parts of Buenos Aires province, the top soy growing region, which could ease fears that the La Nina-triggered dryness will cripple Argentina's soy output.

Friday, January 28, 2011

20110128 1803 FCPO EOD Daily Chart Study.

FCPO closed : 3700, changed : +15 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : recovering, buyer and seller still battling.
Support : 3650, 3620, 3550 level.
Resistance : 3700, 3720, 3750 level.
Comment :
FCPO closed recorded small gain again with decreasing volume traded while soy oil futures price traded range bound.
Daily chart formed the second doji bar candle after market traded within a small 41 points range closed near middle Bollinger band resistant level with the reading still suggesting a 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.

20110128 1726 FKLI EOD Daily Chart Study.

FKLI closed : 1516.5 changed : -8.5 points,  volume : lower.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : falling, seller in control.
Support : 1515, 1500, 1485 level.
Resistance : 1530, 1540, 1550 level.
Comment :
FKLI ended weaker recorded loss with decreasing volume transacted doing 5.5 points discount compare to cash market while regional market ended mostly lower. 
Daily chart formed a down bar candle after opened gap up followed by selling activities pulled price to closed near the low of the day positioned near lower Bollinger band with the bandwidth started to turned outward suggesting a side way range bound little downside 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.

20110128 1024 Local & Global Economic Related News.

Malaysia: Bank Negara retains benchmark rate
Bank Negara has decided to maintain the overnight policy rate at 2.75% as it considers the existing monetary policy stance as appropriate and consistent with the current assessment of economic growth and inflation prospects. However, the central bank said additional policy tools might be considered if there were risks of macroeconomic and financial imbalances. (Starbiz)

Japan: Export growth accelerated for second month
Japan’s export growth accelerated for a second month in December, signaling the nation’s recovery will gain traction as global demand picks up. Overseas shipments rose 13% in December from a year earlier, from November’s 9.1% gain, the Finance Ministry said in Tokyo. The median estimate of 21 economists surveyed was for a 9.3% gain. (Bloomberg)

EU: Economic confidence holds near three-year peak
European confidence in the economic outlook held close to the highest in more than three years in January as manufacturers became more optimistic. An index of executive and consumer sentiment in the Euro area slipped to 106.5 from a revised 106.6 in Dec 2010, the European Commission in Brussels said. The December reading was the highest since Sep 2007. (Bloomberg)

US: Initial jobless claims rose 51,000 last week
More Americans than forecast filed first-time claims for unemployment insurance payments last week, indicating it will take time for the labor market to mend. Applications for jobless benefits increased by 51,000 to 454,000 in the week ended 22 Jan, Labor Department figures showed. Economists forecast 405,000 claims, according to the median estimate in a survey. (Bloomberg)

US: Investment climbs, housing stabilizes
Companies ordered more equipment in December for a second month, showing business investment will continue to bolster the US economic recovery into 2011. Bookings for capital goods like machinery and communications gear excluding aircraft climbed 1.4% after a 3.1% gain in November, the Commerce Department reported in Washington. (Bloomberg)

U.S: Federal Reserve policy makers maintained plans to buy USD600b of Treasuries through June, indicating the accelerating recovery still needs stimulus to produce a bigger reduction in unemployment. The expansion is "continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions," the Federal Open Market Committee said. (Source: Bloomberg)

France: Consumer confidence fell in January for a second month as joblessness jumped to a seven-year high amid concern about the strength of the economic recovery. Sentiment declined to 85 from 86 in December, national statistics office Insee said. The total of unemployed people actively looking for work rose by 27,100, or 1%, from the previous month, the Labor and Finance ministries said. (Source: Bloomberg)

China: Increased the minimum down payment for second-home purchases and asked local governments to boost land supply, seeking to further limit the risk of asset bubbles forming in the world's fastest-growing major economy. "China will continue to effectively curb investment and speculative purchases of houses to consolidate and expand on previous measures," the State Council said in a statement on its website. The minimum down payment for second house purchases rises to 60% from 50%, it said. (Source: Bloomberg)

S.Korea: Posts current-account surplus for a 10th straight month in December as demand for the nation's exports of cars and electronics products weathered an appreciation in the won. The surplus was USD2.11b, compared with a revised USD1.93b in November, the Bank of Korea said in a statement in Seoul. The current account is the broadest measure of international trade, tracking goods, services and investment income. (Source: Bloomberg)

Vietnam: Trade deficit narrowed in January from last month, which may ease pressure for another devaluation of the nations currency. The shortfall reached USD1b, down from a revised USD1.29b in December, based on preliminary figures released by the General Statistics Office in Hanoi. (Source: Bloomberg) 

20110128 1022 Malaysia Corporate Related News.

MAS: MASkargo to manage Fireflys east Msia ops out of KLIA. MASkargo has been contacted to manage and market cargo space for Firefly out of the KL International Airport (KLIA) to Sabah and Sarawak. This expansion will boost the development of Kota Kinabalu as Malaysia Airlines eastern hub and benefit regional cargo shippers. MASkargo would be dealing with a cargo capacity increase of around 100 tonnes per week or 400 tonnes a month. (Source: The Star)

Plantation: 17.6m tonnes of CPO output achievable. Malaysia's oil palm industry is hopeful of producing 17.6m tonnes of crude palm oil this year as the government eases its foreign labour hiring rule and age profile of palm oil trees mature. The forecast is not too ambitious because it is a reversion to 2009's level. (Source: Business Times)

Foreign investment: Investments from Britain set to roll in. A large listed British company will relocate its Southeast Asian headquarters to Malaysia soon as more investors from the UK make or bolster their presence in Malaysia this year. Meanwhile, another firm is making a sizeable investment in Johor to set up a RM80m factory. The plant, which is under construction, will produce medical devices for the domestic and export markets. Two more British companies - one is a manufacturer of hygienic door for the pharmaceutical industry and another, an aerospace components maker - are also poised to set up operations in Malaysia soon. Mida is also assisting two other organisations, including Glamorgan University, to set up joint ventures in the country. (Source: Business Times)

Petronas will start developing 25% of its marginal oil fields from this year
Petroliam Nasional (Petronas) plans to start rolling out contracts to develop marginal oil fields from this year, a move that will not just replenish oil reserves but also help local companies servicing the industry to grow further. Malaysia has 106 marginal oil fields with some 580 million barrels of oil, Petronas chief executive officer Datuk Shamsul Azhar Abbas said yesterday. Marginal fields are small oil fields with less than 30 million barrels of oil and are usually considered uneconomical to develop. But the current high oil price, at about USD87 (RM265) a barrel now in the US markets, makes it attractive for foreign firms with the technology and knowledge to explore such fields. The marginal fields plans also come under the Government's Economic Transformation Programme where incentives were announced to help Malaysia earn some RM50bn from oil and gas over 20 years. (BT)

Perisai buys into Intan Offshore
Perisai Petroleum Teknologi has agreed to buy 51% of Intan Offshore SB for RM45.24m. It will issue 70.68 million new shares at 64 sen each as payment. “The proposed acquisition is a strategic move by the company to expand its existing operations as a supplier of vessels and solutions provider for oil and gas sector in Malaysia,” said the company in its filing to Bursa Malaysia yesterday. Intan Offshore currently owns 8 vessels. (BT)

Multi-Code and partner secure RM125m Proton contract
Multi-Code Electronics Industries (M) and its technical partner, Hella Australia Pty Ltd, have secured a contract worth RM125m for a 5-year period from Proton Holdings. The contract is to develop and supply a rear combination lamp for one of Proton's new car models slated for launching in early 2012. Multi-Code said it had also signed a technical assistance agreement (TAA) with Hella, which would enable Multi-Code to make use of the exclusive right, permission and licence in Malaysia to use Hella technology to develop and sell the joint products. (StarBiz)

Sime Darby division forms joint venture with Mustang
Sime Darby's energy and utilities division and Mustang, a Wood Group Company, have formed Mustang Sime Darby, a joint-venture company that will provide project management, design, and procurement support services for the oil and gas (O&G) industry. Mustang is a leading global O&G engineering and project management company, providing project management, conceptual and detailed engineering, and construction management services. (StarBiz)

Benalec signs deals to buy two vessels for RM20.7m
Newly-listed Benalec Holdings via units Pacific Shipping Ltd and Pacific Link Ltd has entered into memoranda of agreement with Middlesbrough Shipping and Investment Ltd and Bolton Shipping and Investment Ltd for the acquisition of two vessels for RM20.75m. In a note to Bursa Malaysia yesterday, Benalec said the acquisitions would facilitate the expansion of the group's fleet of vessels, in particular vessels for transporting of sand for land-reclamation activities. (StarBiz)

Taliworks seeks new joint venture partner for China water project
Taliworks Corp will seek a new partner for a RM374.7m waste-water treatment project in Yinchuan City, China, after its original partner allegedly defaulted on its obligation. Taliworks said it had, on Tuesday, received a letter from the Yinchuan City Waste Water Treatment Co Committee indicating that both Taliworks and Beijing Puresino-Boda Environmental Engineering Co Ltd (BODA) had yet to formalize the joint-venture (JV) company, in which Taliworks would have a 70% stake, to undertake the project. In accordance with the terms of the tender requiring the JV partners to jointly and severally assume responsibility of the entire project and following a default by BODA to fulfill its obligation on its part, the company is now obligated to assume responsibility of the entire project. As a result, Taliworks has been offered to assume the project in its entirety in accordance with the terms of the tender. (StarBiz)

20110128 0930 Global Market Related News.

U.S. oil nears 2-mth low on weak data, OPEC output talk
SINGAPORE, Jan 28 (Reuters) - U.S. crude futures fell to a near two-month low on weak economic data and talk of OPEC raising output to cool prices, while a rosier outlook for Europe supported Brent. ."The first signs are emerging that OPEC is responding, with a thinly veiled call for an emergency OPEC meeting by a Kuwaiti official and indications others are unilaterally raising output," JPMorgan analysts led by Lawrence Eagles said in its monthly oil report.  

China's power demand growth to slow, gas speeds up
BEIJING, Jan 28 (Reuters) - China's power consumption growth will rise at a slower pace of about 9 percent this year, easing off a 14.6 percent expansion last year, the country's top energy agency predicted.
China will boost use of natural gas by a robust 20 percent this year, the National Energy Administration told reporters on Friday, as the world's top energy user aggressively promotes the lower-carbon fuel with a goal to triple its consumption in the next decade.

Spot gold hits 4-mon low; physical buying may support
SINGAPORE, Jan 28 (Reuters) - Spot gold fell to a four-month low, as an improved economic outlook in the U.S. and Europe continued to depress safe-haven demand, but physical buying is expected to lend some support.  "It does seem sentiment has been shaken and technical charts aren't looking fantastic," said Yingxi Yu, an analyst at Barclays Capital.

Asian stocks extend drops in broad based selling
HONG KONG, Jan 28 (Reuters) - Asian stocks fell by half a percent,succumbing to a broad bout of profit-taking, as concern about rising inflation outweighed robust earnings. The Nikkei average fell by nearly 1 percent, weighed down by financial stocks, as investors worried about higher borrowing costs after Standard & Poor's cut Japan's credit rating by a notch for the first time since 2002.

OIL: Crude at near 2-month low on OPEC output talk
TOKYO, Jan 28 (Reuters) - U.S. crude futures extended declines to hit a near two-month low on Friday, weighed down by talk of OPEC raising output and weak economic data.
Brent's flirtation with $100 a barrel has increased pressure on OPEC to be ready with more supply to keep high-priced oil from stalling the economic recovery.

COMMODITIES: Broadly lower after weak US data; metals jump
NEW YORK, Jan 27 (Reuters) - Prices of oil, gold and most crops fell on Thursday as weak U.S. job and manufacturing      indicators made investors worry about how demand for raw materials would fare in a struggling economy.
"It does show that the recovery is growing in fits and starts," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "The market was looking for an improving trend, but we didn't get it."

GLOBAL MARKETS: Yen weak on S&P downgrade; rate concerns hit gold
NEW YORK, Jan 27 (Reuters) - The Japanese yen fell sharply against both the U.S. dollar and the euro on Thursday after Standard & Poor's cut Japan's long-term credit rating while the prospect of higher European interest rates weighed on commodities' prices.
"It is reasonable to expect that the Japanese downgrade will raise concerns over the sovereign rating of the U.S.," said Vasileios Gkionakis, macro strategist at Fulcrum Asset Management LLP in London, which oversees $900 million in assets.

Russia Likely To Extend Grain Export Ban - ASTON FFI Executive (Source: CME)
Russia may extend its grain export ban until autumn 2011 as farmers are unlikely to produce the hoped-for grain harvest of 85 million metric tons this year, a senior executive at ASTON FFI said. The Kremlin announced last year that it would stop grain exports until next summer, after the country's worst drought in decades slashed the country's 2010 harvest by nearly 40% and sent domestic prices soaring. The Agriculture Ministry has forecast a crop of between 85 million and 87 million metric tons of grain this year as Russia prepares for its spring sowing campaign. Officials expect spring acreage will exceed last year's 29 million hectares, after plantings of winter grains fell nearly 3 million hectares short of forecasts. But Peter Biermann, general manager of grain export operations at Swiss grain trader ASTON FFI, said the ban is likely to remain in place as farmers struggle against poor weather and financing to improve production.
ASTON FFI has assets in Russia including storage and oil seed crush. "Even if they do manage to get a crop of 85 million tons, that would be used to build government stocks," he said. "I think they will keep the ban until at least October." The Agriculture Ministry couldn't immediately be reached for comment Thursday. But Russia's trade representative in Australia, Yury Aleshin, last month said the government may extend the ban if there are problems with production. "It all depends on weather; we are not interested in artificial obstacles to trade but just compelled to do it," Aleshin said. Financial problems faced by Russia's farmers were evident this month when the government estimated spring sowings will cost $7.3 billion. The Kremlin said it has already given $1.2 billion to support purchases of fertilizers, fuel and seeds. "Farmers are facing a huge problem to get their grain in the ground and have a decent crop for 2011," said Biermann.
"We might see the seed go in the ground, but if so, it may not be good quality." Russia sent shockwaves through international markets when it announced its grain export ban at the end of June 2010. European wheat prices shot to highs not seen since 2008 and are now trading at double their levels from a year ago.

China Grain Demand To Rise 4 Mln Tons Annually (Source: CME)
China's grain demand will likely increase by 4 million metric tons a year over the next five years, while the local supply of agricultural products will face huge pressure, Vice Agricultural Minister Chen Xiaohua said. "It's becoming more and more difficult to effectively guarantee supply of major agricultural products," as availability will be restricted by tight land and water resources, extreme weather conditions and intense competition in international markets, Chen said at a conference, according to a transcript of his remarks on the ministry's website. Edible oil demand will rise by about 800,000 tons a year and meat demand about 1 million tons, he said. China's grain output in 2010 was around 546.4 million tons, while edible oil and meat production were 39.2 million tons and 77.8 million tons respectively, according to government data.
Compared with Chen's forecast, which represents about 1% in annual growth in grain demand, the agriculture ministry has yet to set a specific target for 2011 grain output; instead, the government said it would ensure grain output this year at above 500 million tons. Vice Agricultural Minister Han Changfu said earlier the amount was a "must" for grain self-sufficiency. But China's grain consumption will exceed output in the next 10 years amid population rise, change in diets and expansion in modern food and animal feed sectors, said Ding Shengjun, a researcher at the Academy of State Administration of Grain, in an commentary carried by the state-owned newspaper Futures Daily in mid-January. By 2010, China's grain demand is expected to be more than 600 million tons, exceeding the amount it can produce, Ding said.
To ensure grain supply, the agricultural ministry has ordered that grain acreage must be stabilized at more than 1.07 million hectares and the total arable land area must stay above 120 million hectares. Meanwhile, the government is increasing the role of science and technology in raising grain output.

Fed cautious on recovery, focused on joblessness
WASHINGTON, Jan 26 (Reuters) - The Federal Reserve showed  on Wednesday it was in no rush to cut short its rescue of the U.S. economy, saying high unemployment still justified its $600 billion bond-buying plan even though the economy has shown some signs of improvement.
In a statement that was a bit more upbeat than after its meeting in December, the Fed acknowledged for the first time a rise in commodity prices that has fueled global inflation, but signaled it would not throw the U.S. central bank off course.

China Q1 GDP seen up 9 pct y/y, CPI up 5 pct -report
SHANGHAI, Jan 27 (Reuters) - China's annual economic growth is expected to ease to about 9 percent in the first quarter while consumer inflation is projected at 5 percent, according to a government think tank report published in the official Chinese Securities Journal on Thursday.
The economy grew 9.8 percent in the fourth quarter from a year earlier, while annual consumer inflation eased to 4.6 percent in December from a 28-month high of 5.1 percent hit the month before, according to data published last week.

Euro zone sentiment eases, inflation outlook surges
BRUSSELS, Jan 27 (Reuters) - Euro zone economic sentiment edged lower in January, pulled down by the services and retail sector and consumers, while inflation expectations jumped among companies and especially households.
The European Commission's monthly survey showed economic sentiment among the 17 countries using the euro eased to 106.5 this month from a revised 106.6 in December, well short of economists' expectations of a rise to 107.0 in a Reuters poll.

PRECIOUS-Gold eases below $1,340/oz as demand wanes
LONDON, Jan 27 (Reuters) - Gold fell in Europe on Thursday as the previous session's price rise dampened physical metal demand, and as a more positive view of the global economy reduced interest in the metal as a haven from risk.
A raft of positive economic data from the United States and more hawkish signals from some other central bank officials have also sparked speculation that certain major economies would move to raise interest rates sooner rather than previously thought.The precious metal, a non-interest bearing asset, tends to do less well in an environment when rates are rising.

FOREX-Euro hits 2-month highs vs dlr, yen on ECB comments
LONDON, Jan 27 (Reuters) - The euro hit a two-month high against the dollar on Thursday after a euro zone policymaker expressed concern about inflationary pressures, further highlighting a policy divergence with the United States.
The single currency also hit a two-month high against the yen, which fell broadly after S&P cut Japan's long-term debt rating to AA minus, saying the country's government lacked a coherent plan to tackle its mounting debt.

Wheat rises for 8th day; corn, soy near 2-1/2 year top
SINGAPORE, Jan 27 (Reuters) - U.S. wheat futures rose 0.6 percent the eighth straight gain, to a new 29-month top as buyers scrambled for supplies amid fears of food inflation causing unrest in top importing nations.
"I think there is heightened attention to food inflation as  we don't know what is going to happen to crops in Argentina and we don't know whether La Nina is going to wipe out more crops," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

S&P rattles investors with Japan credit cut
LONDON, Jan 27 (Reuters) - The yen fell and investors took a cautious stance on stocks and riskier assets after Standard & Poor's cut Japan's credit rating in a forceful reminder of the fragile state of some leading countries' finances.
"It is not a good sign.... A major economy like Japan being cut is not going to go down very well," said Mark Priest, senior equities trader at ETX Capital.

20110128 0925 Soy Oil & Palm Oil Related News.

Soy product futures rallied in step with advances in soybeans. Soyoil was the upside leader of the products, gaining versus soymeal on solid underlying strength in global vegoil markets, analysts said. Soymeal advances were tempered by net cancellations in old crop weekly export sales, and higher-than expected Dec inventories reported in the Census Bureau's soy crush report, analysts said. CBOT March soyoil ended 0.71 cents or 1.3% higher at 57.41 cents per pound, and March soymeal traded $3.00 or 0.8% higher at $377.40 a short ton. (Source: CME)

Palm bounces from one-week lows on global supply snags
KUALA LUMPUR, Jan 27 (Reuters) - Malaysian palm oil futures rebounded from one-week lows hit the previous day, buoyed by global commodities markets and stronger demand ahead of Lunar New Year.  "Production for this month might remain low, but overseas demand could recover after the festival."

Brazil soy crop seen record 70.3 mln T-agroconsult
SAO PAULO, Jan 27 (Reuters) - Brazil's 2010/11 soybean crop that is beginning early harvest is forecast at a record 70.3 million tonnes, up from the 68.4 million tonnes forecast in December, analysts Agroconsult said on Thursday.
The forecast comes ahead of Agroconsult's annual crop tour that will start on Jan. 31 and run through March 27.

Rains seen saving some drought-hit Argentine soy
BUENOS AIRES, Jan 26 (Reuters) - Heavy rains this week brightened prospects for soy crops in Argentina's main farming belt, allowing plants to recover from dryness caused by the La Nina weather phenomenon, a crop weather specialist said on Wednesday.
Argentina is one of the world's biggest exporters of soy and corn, but scant rainfall has driven down 2010/11 harvest estimates and boosted global grains prices on supply fears.

Rains blanket Brazil soy belt - Somar
SAO PAULO, Jan 26 (Reuters) - A cold front passing through Brazil's southern coast is creating wet weather over most of the soy belt this week, as the near record crop moves closer to harvest in the coming months, meteorologists said on Wednesday.
"It will rain over the coming days from Rio Grande do Sul to Maranhao," independent meteorologists Somar said in a daily soy weather bulletin.

Thursday, January 27, 2011

20110127 1805 FCPO EOD Daily Chart Study.

FCPO closed : 3685, changed : +15 points, volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : turned upward, buyer and seller battling.
Support : 3650, 3620, 3550 level.
Resistance : 3700, 3720, 3750 level.
Comment :
FCPO closed recorded small gain with lower volume transacted after 2 days of severe fall while soy oil futures price traded weaker after overnight closed rebounded higher.
Daily chart formed a down doji bar candle after market traded range bound tested resistant and support levels and closed near middle Bollinger band resistant level with the reading calling for a 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.

20110127 1725 FKLI EOD Daily Chart Study.

FKLI closed : 1525 changed : +1.5 point,  volume : lower.
Bollinger band reading : side way range bound.
MACD Histrogram : falling, seller taking changes.
Support : 1515, 1500, 1485 level.
Resistance : 1530, 1540, 1550 level.
Comment :
FKLI recovered slightly recorded small gain with lower volume changed hand after yesterday intraday panic sell down doing nearly 2 points discount compare to cash market while regional market closed mixed.
Daily chart formed an up doji bar candle after traded within 10 points range bound market tested higher resistant level followed by selling pressure pressed price to closed near the low positioned near lower Bolinger band support level while reading changed to suggesting a 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.

20110127 1218 Global Economics Related News.

Singapore: May revise growth after Dec dip in manufacturing
Singapore's economic growth for 2010 may be revised slightly downwards after December manufacturing data came in below forecasts, economists said. Singapore's industrial output fell a seasonally adjusted 11.8% in December from November, hurt by a drop in pharmaceutical production which tends to be highly volatile on a month-to-month basis. (BT) Japan: Deficit expansion may lead to record bond sales The Japanese government’s prediction of wider budget deficits for the next three years may boost bond sales just as waning domestic demand drives yields higher. Yields on benchmark 10-year bonds rose 0.02 percentage points to 1.24%, and are up from a seven-year low of 0.82% in October. The government projected a combined shortfall of JPY155.5trn (USD1.9trn) through the three years ending March 2015. (Bloomberg)

China: Rate increases ‘necessary,’ Central Bank adviser Li says
China needs to extend interest rate increases and allow the yuan to gain by about 5% annually to combat inflation and avoid fuelling asset bubbles, said Li Daokui, a central bank monetary policy committee member. The People’s Bank of China has raised benchmark lending rates twice by a quarter-point since October to 5.81%. Consumer prices rose 3.3% in 2010, breaching a government target of 3%. (Bloomberg)

US: Sales of new homes in US rise more than forecast
Purchases of new houses in the US rose more than forecast in December, propelled by a record surge in the West as buyers in California may have rushed to qualify for a state tax credit before it expired. Sales climbed 18% to a 329,000 annual pace, figures from the Commerce Department showed. The percentage gain was the biggest since 1992, and was led by a record 72% jump in the West. (Bloomberg)

US: Fed maintains stimulus, seeking faster job gains
Federal Reserve policy makers maintained plans to buy USD600bn of Treasuries through June, indicating the accelerating recovery still needs stimulus to produce a bigger reduction in unemployment. The expansion is “continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions,” the Federal Open Market Committee said in its statement after a two-day meeting in Washington. (Bloomberg)

Germany: Import prices rose at the fastest annual pace in more than 29 years in December, driven by soaring costs for commodities such as energy and metal. Import-price inflation accelerated to 12% YoY, the highest rate since October 1981, from 10% YoY in November. (Source: Bloomberg)

Spain: Says some savings banks may need 10% capital. Spain will impose a core capital requirement of as much as 10% on lenders that don't have private investors and depend on wholesale funding, Finance Minister Elena Salgado said. The target exceeds the 8% minimum capital requirement she set two days ago and follows a slump in bonds and financial shares that followed the Jan. 24 announcement. (Source: Bloomberg)

Belgium: Faces rating cut as political crisis deepens. Belgium's political crisis escalated as the mediator charged with jump-starting stalled coalition talks gave up the job, putting the debt-laden nation's credit rating at risk. King Albert II accepted Johan Vande Lanotte's resignation and will start consulting with political party leaders, the royal palace in Brussels said in a statement. Vande Lanotte had undertaken a reconciliation mission after seven- party coalition talks broke down in September, leaving Belgium with a caretaker government and without a 2011 budget more than seven months after an inconclusive election. (Source: Bloomberg)

S. Korea: Posts current-account surplus for 10th month in December as demand for the nation's exports of cars and electronics products weathered an appreciation in the won. The surplus was USD 2.11b, compared with a revised USD 1.93b in November. (Source: Bloomberg)

Singapore: Industrial production rose at the slowest pace in four months as electronics and pharmaceutical manufacturers capped output amid easing orders. Manufacturing, which accounts for about a quarter of the economy, climbed 9% YoY in December after a revised 40.5% YoY increase in November, the Economic Development Board said in a statement. (Source: Bloomberg)

Singapore: Expects inflation to ease in second half after accelerating in the early part of the year. The Monetary Authority of Singapore said "headline inflation is expected to be higher over the next few months, mainly due to the recent surge" in car-permit and global food prices. "However, we expect it to moderate in the second half." (Source: Bloomberg)

Thailand: Interest rate needs to rise, central bank says. The Bank of Thailand needs to boost borrowing costs again to damp quickening inflation and may use capital controls if needed, Governor Prasarn Trairatvorakul said. The bank this year "needs to continue to raise the key interest rate further to bring monetary policy to a normal level in line with economic conditions," Prasarn said at a news conference in Bangkok. Inflation is the key risk, though not so serious that rates have to go up quickly, he said. (Source: Bloomberg)

U.S: Confidence increases more than forecast in January, reaching an eight-month high, as the outlook for jobs brightened. The Conference Board's sentiment index increased to 60.6 from 53.3 the prior month, figures from the New York-based private research group showed. (Source: Bloomberg)

U.S: Home prices declined 1.6% YoY in November, signaling housing has yet to join the U.S. rebound. The S&P/Case-Shiller index of home values in 20 cities fell 1.6% YoY, the biggest 12-month decrease since December 2009. (Source: Bloomberg)

U.K: 4Q10 GDP unexpectedly shrinks as construction slumped and the coldest December in a century hampered services and retailing. Gross domestic product fell 0.5% QoQ after increasing 0.7% QoQ in the previous quarter. From a year earlier, the economy expanded 1.7% YoY. (Source: Bloomberg)

France: Consumer spending on manufactured goods gained in December as the last month of a government-auto subsidy boosted sales. Spending rose 0.6% MoM from November, when it increased a revised 2.7% MoM. Spending advanced 0.4% YoY. (Source: Bloomberg)

Spain: Debt costs fall at auction as deficit shrinks. Spain sold EUR 2.2b (USD 3b) of Treasury bills and its borrowing costs fell as the central government said the budget deficit narrowed to within its target last year. The Bank of Spain said the country sold three-month bills at an average yield of 0.98%, compared with 1.804% the last time securities of the same maturity were auctioned on Dec. 21. It sold six-month bills at 1.801%, compared with 2.597% at the December auction. (Source: Bloomberg)

Japan: Bank of Japan raised its growth forecasts for the year through March and predicted faster inflation as strength in overseas demand bolsters exports and pushes up commodity prices. "The economy will probably emerge from its slump soon and return to a moderate recovery path, although I cannot say for sure whether it will happen in the first quarter," Governor Masaaki Shirakawa said at a press conference after his board raised its growth forecast to 3.3% from 2.1%. "The economy is headed in a desirable direction," where it can achieve stable prices and sustainable growth, he said. (Source: Bloomberg)

India: Central bank increased the benchmark interest rate to a two-year high and signaled further gain in borrowing costs as it raised the inflation forecast. Governor Duvvuri Subbarao lifted the repurchase rate to 6.5% from 6.25%, according to a statement from the Reserve Bank of India in Mumbai. (Source: Bloomberg)

S. Korea: Economic growth slowed in 4Q10 after industrial production moderated. Gross domestic product rose 0.5% QoQ in the three months through December from the previous quarter, when it advanced 0.7% QoQ. GDP increased 4.8% YoY. (Source: Bloomberg)

Australia: CPI advanced last quarter at the slowest pace in almost two years as a stronger currency lowered costs for household appliances, clothing and cars from abroad. The consumer price index rose 0.4% QoQ from the July-September period, when it increased 0.7% QoQ. Prices were 2.7% YoY, the smallest gain in a year. (Source: Bloomberg)

20110127 1216 Malaysia Corporate Related News.

Puncak Niaga and Syabas say Selangor state government offer has many ambiguities
Puncak Niaga and Syabas say they would not be able to make a decision on the offer made by the Selangor state government to take over the two companies. There are numerous ambiguities on the offer made to take over the companies, a statement issued today by the parent company Puncak Niaga Holdings said. Its MD Datuk Hashim Mahfar said the two subsidiaries found numerous ambiguities which require clarification and explanation from the Selangor state government especially specifics pertaining to the offer price and other issues. (Bernama)

Pengurusan Aset Air sells RM2.7bn sukuk
Pengurusan Aset Air has sold RM2.7bn of Islamic bonds. The issuance was part of a RM20bn government guaranteed Islamic fund-raising program. (StarBiz)

Kencana completes placement, gets RM398m
Kencana Petroleum’s private placement of 166.7m shares of 10 sen each via its book-building exercise has been completed. The issue price has been fixed at RM2.38 each, representing about 1.65% discount to its last closing price of RM2.42. This would result in gross proceeds of about RM398m. (StarBiz)

Muhibbah, partner bag RM1.1bn project
Muhibbah Engineering in a consortium with Perunding Ranhill Worley SB has been awarded a RM1.1bn contract by Petronas Gas for works under its LNG regasification project. The proposed facilities will be located in Malacca and have a maximum send-out gas capacity of 3.8m tonnes a year. (StarBiz)

TH Plantations evaluates RM550m land purchase proposals
TH Plantations is currently evaluating two proposals for landbank acquisition in east Kalimantan and Sarawak that could cost up to RM550m. Management aims to achieve its target of having 50ha plantation land this year. It currently has a total plantation landbank of about 39,113ha, of which 37,483 has been planted. (Financial Daily)

SapuraCrest gets USD32m Petronas job
SapuraCrest Petroleum’s unit was awarded a USD32m job by Petronas for the provision of transportation and installation of offshore facilities for PC Myanmar’s Yetagun Phase 4 development in the Andaman Sea. (Financial Daily)

Hartalega: Miti confirms compliance with environmental standards. The Ministry of International Trade and Industry (Miti) said Hartalega Holdings Bhd's facility in Bestari Jaya complies with the Malaysian environmental regulatory standards. The ministry has consulted the relevant authorities on this issue and the Department of Environment assessment clearly shows that the company did not violate its requirements on effluent discharge. (Source: Business Times)

Wah Seong: Unit sells stake in JV, assets for RM10.5m. Wah Seong Bhd's wholly owned indirect subsidiary Yadong-Anti Corrosion (Int) Co Ltd is selling of its 50% stake in Arabian-Yadong Coating Co Ltd and steel pipe coating equipment for USD3.45m (RM10.5m). The sell down was due to termination of the JV company. (Source: Bursa Malaysia)

Building materials: Local cold rolled coil producers raise prices. Local cold rollers have raised the prices of cold rolled coils (CRC) in view of the general increase in the cost of raw materials and the recent floods in Australia. The latest sales were at USD840 to USD850 per tonne this week, up from deals done at USD780 to USD800 in the first week of January. (Source: The Star)

Property: Supply of office space in the city to considerably exceed demand. According to property consultant - DTZ Nawawi Tie Leong, the supply of new office space in Kuala Lumpur will be overwhelming this year. An additional 2.3m sq ft in new office space during 2011 will put more pressure on the market. The average rental rate for office space in the city would ease by 5% to RM5.90 per sq ft compared to last year. The rate of unoccupied space is expected to go up to 15% by next year. (Source: The Star)

PLUS: Shareholders to receive proceeds from sale in September. PLUS Expressways Bhd's shareholders will receive the proceeds from the disposal of their company's assets in early September this year. The tentative date for the completion of the disposal of PLUS' assets would be at the end of July, followed by a mid-August date for securing the High Court order for the selective capital repayment. Shareholders will then be paid the proceeds of the sale by early September and PLUS will be tentatively delisted by end-September. (Source: The Star)

Ramunia: To buy Oilcorp's fabrication yard. Ramunia Holdings Bhd has proposed to acquire the Pulau Indah Integrated Fabrication Yard and the moveable and immoveable assets located thereon from Oilfab Sdn Bhd (Oilfab), a 51%-owned indirect subsidiary of Oilcorp Berhad, for RM83.8m. The acquisition will be settled with RM3.8m cash deposit and issuance of new ordinary shares of Ramunia to Oilfab for the RM80m balance. (Source: Bursa Malaysia)

Mah Sing: Targets 30% sales from overseas ops. Mah Sing Group Bhd is targeting to get 30% of its revenue from overseas projects in five years. It is looking at China, Vietnam, Indonesia, Singapore and Australia for the company's overseas expansion plan. (Source: The Star)

IOI: To set up own broadband services. IOI Properties Bhd plans to develop its own broadband services for its townships in order to provide faster and better broadband connection to home owners. By 2Q11, the developer plans to come up with its own application called One IOI Net for some 150,000 households and 2,500 businesses in IOI townships in the Klang Valley and Johor. (Source: Business Times)

Ann Joo: To buy stake in Anshin. Ann Joo Resources Bhd has proposed to acquire a 38% stake in Anshin Steel Processor Sdn Bhd worth RM12m. Ann Joo currently holds the balance of 62% of the share capital of Anshin which operates a steel service centre. Upon completion of the acquisition, Anshin will become a wholly-owned subsidiary of the Ann Joo. (Source: Bursa Malaysia)

Proton, AirAsia: Team Lotus wins 1st round UK court battle with Proton. Datuk Tony Fernandes' Formula 1 team, Team Lotus, has won the first round of the UK court battle with Proton. The full trial has now been brought forward to March 21. (Source: The Malaysian Reserve)

Logistics: Projected to hit RM121b this year. According to Frost & Sullivan, Malaysia's logistics industry is expected to grow by 11.5% to RM121b this year from RM108.5b in 2010. The high-technology and capital-intensive projects under the 10th Malaysia Plan and the Economic Transformation Programme would create opportunities for the industry. Malaysia's external trade is expected to increase by 10% to RM1.28t this year from RM1.16t last year. Meanwhile, the total cargo volumes are expected to increase by 12.4% to 498.4m tonnes this year from 443.4m tonnes in 2010. (Source: The Star)        

20110127 0920 Renewables Energy Related News.

WASHINGTON, Jan 25 (Reuters) - President Barack Obama will set a goal for U.S. power plants to produce 80 percent clean electricity by 2035 in his State of the Union address on Tuesday to help boost the economy and create jobs.
Obama will say clean coal and natural gas, two fossil fuels that have not often been considered forms of clean energy, would be needed to meet that goal.

IGNEY, France, Jan 21 (Reuters) - An increasing number of farmers will try to claim a share of France's renewable energy sector to help cope with farm price volatility and counter environmental criticism that has tarnished their rural image.
Solar, wind and biomass energy are taking off in France in the wake of national and European energy targets. Farmers see them as a potential source of steady income amid erratic commodity prices, a way of cutting costs and a riposte to an image of farms as polluting.

REYKJAVIK/VANCOUVER, Jan 25 (Reuters) - Iceland said on Tuesday it would hold talks with Canada's Magma Energy Corp  on increasing its stake in HS Orka either by buying back shares in the Icelandic geothermal company or shortening Magma's lease.
The government said in a statement it wanted to hold discussions with Magma, a small Vancouver-based geothermal company, about shortening the 65-year lease that Magma has on the right to exploit geothermal energy on the volcanic island.

SAINT-NAZAIRE/PARIS, France, Jan 25 (Reuters) - France unveiled on Tuesday a 10 billion euro ($13.6 billion) plan to build its first offshore wind project in a bid to catch up with European neighbours in the development of renewable energy.
France, which produces 74 percent of its electricity from nuclear power plants, will build 600 offshore wind turbines with a total capacity of 3,000 megawatts, said President Nicolas Sarkozy, adding they would be built in the western regions of Loire-Atlantique, Brittany and Normandy.

SOFIA, Jan 25 (Reuters) - Swiss energy firm Alpiq  will invest about 36 million euros ($49.02 million) to expand its wind farm in Bulgaria and boost its installed capacity to 72.5 megawatts, the company said on Tuesday.
Alpiq put in operation 20 wind turbines with a total output of 50 megawatts near the city of Kazanlak, some 200 km east of Sofia in November last year. The new nine turbines should be ready by the end of 2011.

SEOUL, Jan 25 (Reuters) - South Korea, heavily dependent on energy imports, said on Tuesday domestic firms were likely to beef up investment in renewable energy businesses this year to double their exports of products in the sector.
About 100 firms in Asia's fourth-largest economy are expected to invest 4.5 trillion won ($4.03 billion) in renewable energy this year, up 23 percent from the previous year, the Ministry of Knowledge Economy said in a statement.

SEOUL, Jan 25 (Reuters) - Hyundai Heavy Industries , the world's largest shipbuilder, will double its investment in the renewable energy business during the next three years, mostly for solar power products, a company spokesman said.
"We have an investment plan to spend around 1 trillion won for about the next three years," the spokesman said, compared with 500 billion won ($447.2 million) during the past three years.

MILAN, Jan 24 (Reuters) - Enel Green Power , Italy's biggest renewable energy company, has agreed a deal to develop geothermal energy in Turkey as the group moves to expand.
Enel Green Power (EGP) said on Monday it has reached an agreement with the Uzun group to set up a company that will hold 142 exploration licenses to explore for geothermal resources in the west of Turkey.

LOS ANGELES, Jan 21 (Reuters) - U.S. Geothermal Inc   is in talks with Canada's Enbridge Inc  about a second equity investment in one of the company's geothermal power plants, Chief Executive Dan Kunz said in an interview.
Enbridge, Canada's No. 2 pipeline company, is beefing up its renewable power business and last year paid $23.8 million for a 20 percent stake in U.S. Geothermal's Neal Hot Springs project in Oregon.

20110127 0919 Biofuels Related News.

FRANKFURT, Jan 25 (Reuters) - A "worrisome" rise in world food prices may be long-lived, the chairman of Nestle, the world's biggest food group, told a German newspaper.
"The financial and economic crisis in 2008 put an abrupt end to price rises. I am afraid that this time the rise could be lasting," Peter Brabeck told the Frankfurter Allgemeine Zeitung in an interview released on the paper's Internet site ahead of publication on Wednesday.

WASHINGTON, Jan 25 (Reuters) - A bipartisan group of senior farm-state senators planned to introduce a bill on Tuesday that would put more ethanol-fueled vehicles on America's highways and provide government aid for pipelines and pumps to dispense the biofuel.
The legislation comes as the Obama administration said it wants to boost the amount of ethanol in gasoline by 50 percent for cars and trucks built in the last decade -- a goal constrained by a lack of infrastructure for handling the corn-based additive.

WASHINGTON, Jan 21 (Reuters) - The higher quality of the U.S. corn crop could yield more ethanol per bushel and divert less of the crop to biofuels, which could raise tight ending stocks by 20 percent, said a biofuels executive on Friday.
End stocks for 2010/11 are estimated by the Agriculture Department at 745 million bushels, the smallest in 15 years due to strong export and domestic demand. USDA estimates 4.9 billion bushels of the 2010 corn crop, or 39 percent, will be used in making ethanol.

WASHINGTON, Jan 21 (Reuters) - U.S. regulators on Friday backed a request that would sharply boost the use of corn-based ethanol in more than half the nation's cars, elevating the stakes in a contentious debate over the safety and cost of converting more corn into fuel.
The U.S. Environmental Protection Agency's announcement boosting the ethanol blend rate in gasoline to 15 percent from 10 percent in vehicles built from 2001 to 2006 was not a surprise, coming just months after it allowed so-called E15 in cars and trucks built in 2007 or later.

BRUSSELS, Jan 21 (Reuters) - Jatropha, a biofuel-producing plant once touted as a wonder-crop, is turning out to be much less dependable than first thought, both environmentalists and industry players say.
Some biofuel producers found themselves agreeing with many of the criticisms detailed in a report launched by campaign group Friends of the Earth this week -- "Jatropha: money doesn't grow on trees".

WASHINGTON, Jan 21 (Reuters) - The U.S. Environmental Protection Agency said on Friday it would allow cars and trucks built in the last decade to run on gasoline with a higher blend of ethanol.
The agency approved gasoline containing up to 15 percent ethanol for use in vehicles built from 2001 to 2006. Most gasoline now has up to 10 percent ethanol.

20110127 0918 Global Market Related News.

Brent hovers below $98 on U.S. economy, stimulus
SINGAPORE, Jan 27 (Reuters) - Brent crude hovered at below $98 after better-than-expected U.S. home sales data and a pledge by the Federal Reserve to keep monetary policy steady drummed up market sentiment.
"Any good economic data out coming out of America is good for oil," said Ben LeBrun, a Sydney-based markets analyst at CMC Markets.

China's Tianjin eyes big crude storage, refining base -paper
BEIJING, Jan 27 (Reuters) - China's northern city of Tianjin aims to have 30 million cubic metres, or 189 million barrels, of crude oil storage capacity within 10 years, the China Daily reported on Thursday.
By itself, the storage would be 85 percent more than the 102 million barrels of capacity in China's first phase of state strategic oil reserves and 10 percent higher than the second phase.

Wheat rises for 8th day; corn, soy near 2-1/2 year top
SINGAPORE, Jan 27 (Reuters) - U.S. wheat futures rose 0.6 percent, the eighth straight gain, to a new 29-month top as buyers scrambled for supplies amid fears of food inflation causing unrest in top importing nations.
"I think there is heightened attention to food inflation as  we don't know what is going to happen to crops in Argentina and we don't know whether La Nina is going to wipe out more crops," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.

Argentine grains port strike affects top exporters
BUENOS AIRES, Jan 26 (Reuters) - Argentine workers at some of the country's biggest grains export ports started an indefinite pay strike on Wednesday, threatening shipments in one of the world's biggest food suppliers.
The strike in the area north of Rosario paralyzed export facilities and crushing plants operated by Cargill, Bunge , Molinos Rio de la Plata , Vicentin and ACA, trade union and company sources said.

Gold steady; physical buying seen to slow
SINGAPORE, Jan 27 (Reuters) - Spot gold prices held steady on slowing physical and fund demand, though cautious economic views on the economy offered by the U.S. Federal Reserve lent support.
"Physical buying has started to slow down, after prices have gone up a bit," said a Singapore-based dealer, adding there was also some profit-taking trades.

Dollar slips to 11-week low after Fed, stocks rise
SYDNEY, Jan 27 (Reuters) - The U.S. dollar slipped to 11-week lows, while commodity prices and Asian stocks rose after U.S. Federal Reserve policymakers voted unanimously to maintain a $600 billion bond-buying plan to fuel an economic recovery.
"In this sort of environment, you look for growth assets. So investors are looking to park their money in investments that will provide good returns over time. As a result, equities and commodities are high up on the list," said Craig James, chief economist at CommSec in Sydney.   

OIL: Crude extends gains on Wall St, demand hopes
TOKYO, Jan 27 (Reuters) - U.S. crude futures extended gains on Thursday, gaining support from a rise in Wall Street stocks after President Barack Obama's call for lower corporate taxes spurred hopes for higher profits and stronger energy demand.
The market also got a boost after U.S. Federal Reserve policymakers, at the end of a two-day meeting, said they would press on with a plan to buy $600 billion in government debt to further stimulate the economy.

COMMODITIES: Biggest loss in 3 weeks after India rate hike
NEW YORK, Jan 25 (Reuters) - Commodities fell their most in three weeks on Tuesday after major consumer India indicated it will tighten its economy as much as needed to fight inflation, just like China.
"There is increasing concern about rising interest rates in Asia. It's raising the fear that liquidity in the global markets will continue to shrink," said Stephen Briggs, commodities analyst at BNP Paribas in London. 

GLOBAL MARKETS: Wall St ends flat, euro up on euro-zone hopes
World stocks and crude oil gained on Wednesday, shrugging off a lukewarm outlook from the Federal Reserve, as investors latched onto the growth prospects of U.S. President Barack Obama's pledge to trim spending.
"The market is not willing to buy into the Fed's vision," said Jim Vogel, interest rate strategist at FTN Financial in Memphis.

Japan 2010 crude import volume up 0.8 pct
TOKYO, Jan 27 (Reuters) - The volume of Japan's customs-cleared crude oil imports fell slightly in December from a year earlier, but imports for the whole of 2010 rose for the first time in two years helped by unexpectedly high oil demand due to the hottest summer on record.
Japan, the world's third-biggest oil consumer, imported 20.406 million kilolitres (4.14 million barrels per day) of crude oil last month, down 1.7 percent from a year earlier, the first decline in three months, preliminary data from the Ministry of Finance showed on Thursday. 

EU Report Undermines Sarkozy's G20 Commodity Regulation Plans (Source: CME)
A European Union study questioning the link between speculation in commodities markets and rising prices has thrown a spanner in the works of French plans to increase trading regulation. The long-awaited report was due to be released Wednesday but has been delayed until next week, or definitely by March 31, after French President Nicolas Sarkozy lambasted its findings. "I will recommend a date for the publication of a study showing that speculation does not result in global price rises of raw materials: 1 April," he told reporters Monday, referring to April fool's day. Sarkozy has put the regulation of commodity markets at the top of his agenda during France's upcoming presidency of the Group of 20 nations this year. The report in its current form would mark a home-ground defeat ahead of his push to create a global system to improve transparency in commodity markets ahead of elections in May 2012.
A draft of the report seen by Dow Jones Newswires said that it has found no evidence of "a correlation between the substantial increase in index fund positions and commodity futures prices." "Similarly, while there is a strong correlation between positions on derivative markets and spot prices, there is no conclusive evidence on the causality between speculation in derivatives markets and increased volatility and price increases in the underlying physical markets," the report added. Volatility in agricultural commodity markets has risen up the global agenda after data from the United Nation's food agency showed prices reached a record high at the end of 2010, above even the peaks of the 2007-08 food crisis. A wave of deadly riots against unemployment and food prices spreading across North Africa has also caused unease among leaders of the developing world, who fear a repeat of the widespread unrest of three years ago.
A spokesman for the European Commission said the bloc's government "remains serious about the issue," despite delays to the report's publication. "We have started technical work on the link between commodities prices, volatility and financial markets," he said. "We are confident that the Commission will adopt a solid contribution probably next week and certainly well before April 1." France's stance on commodity-market regulation comes amid evidence of surging speculative investment in resources. In the run up to commodities boom, institutional investors boosted inflows into commodities markets from $15 billion in 2003 to between $250 and $300 billion in 2008. Secretary-general of the Organization for Economic Co-operation and Development Angel Gurria Tuesday welcomed Sarkozy's push to make the regulation of volatility in commodity markets a priority. "Commodity markets need to function better and more transparently," Gurria said in a statement.
Other institutions have been more cautious in ascribing blame to speculators, with one study by the IMF earlier this month suggesting rising demand from emerging nations such as China and India was the driving factor for commodity prices.

Speculative Rally In Food Prices May Fuel Regulatory Backlash (Source: CME)
Global commodity prices are rising, fueled in part by speculative trading that could mark commodities as the latest asset class bubble and spur a regulatory backlash from governments keen to control the price of basic foodstuffs. The prices of many commodities undoubtedly would have risen anyway in response to recent supply disruptions and rising demand; but it's the outsized impact of investors leveraging on low interest rates to speculate on commodities which could prompt un-sustainable bubbles in some markets, anger consumers, and draw yet more fire from politicians on the dangers of derivatives trading. That commodity prices are spiking so soon after a similar run-up in 2008 could indicate that some markets are sufficiently untethered from their supply-demand fundamentals so as to jeopardize wider economic growth. Already, many developing nations are instigating price controls on foodstuffs to combat inflation and ward off the kind of discontent that led to riots in 2008.
France, which holds the presidency of the Group of 20, is pushing for tighter regulation and transparency in the trading of commodities, including derivatives trading. "We share the view that commodity price fluctuations have been, from time to time, excessive, and destabilize the growth of the economy," Rintaro Tamaki, Japan's vice minister of finance for international affairs said last week. On futures exchanges in the US, the world's biggest grains exporter, aggregate net long speculative positions in 14 major agricultural derivative contracts hit a record high of 104 million tons in November, well above the previous peak of 78 million tons in March 2008, an ANZ Banking Group report said. That's a big swing from earlier last year, when speculators were net short in U.S. agricultural futures, and the Commodity Futures Trading Commission is considering imposing limits on speculation, including restrictions on the number of contracts a company can hold.
Excess speculation from "investment tourists" aggravates instability, sending signals that aren't substantiated by fundamentals, said Abdolreza Abbassian, secretary for the Intergovernmental Group on Foodgrains at the United Nations Food and Agriculture Organization. According to Nobuyuki Chino, president of Unipac Grain, a Tokyo-based commodities trading company, US wheat prices would be closer to $6 a bushel compared with current prices of around $8/bushel, had there been no speculative interest in wheat. Corn should be trading around $5/bushel versus $6.5/bu now, and soybeans around $13.20, compared with $14/bu, he said. Others say it's difficult to quantify the speculation premium. "I've seen some sort of studies (suggesting) speculation has added 20%-30% to market prices but they are never substantiated. What you can say is the futures markets at times trade at substantial premia to the underlying cash market," said Ann Berg, a consultant to the FAO.
That's great news for investors who have bet on rising food prices. But for consumers, particularly in poorer countries, it could be disastrous and the spur for governments to either attempt to rein in food prices or act against speculators. With Asian derivatives exchanges gaining market share in recent years, there has been a surge in interest from global investors who want to park their funds in derivative products in the region, without the hassle of owning or storing physical commodities. In India, for example, the cumulative value of futures trading in commodities in the nine months to December rose 50% to INR82.7 trillion, according to data from the Forward Markets Commission, regulator of the country's futures exchanges.

US consumer morale at 8-mth high; home prices sag
WASHINGTON, Jan 25 (Reuters) - U.S. consumer confidence rose in January to its highest level in eight months, underscoring the brightening economic outlook, although declining housing prices still cast a cloud on the recovery.
The Conference Board, an industry group, said on Tuesday its index of consumer sentiment jumped to 60.6 from 53.3 in December. The rise topped economists' expectations for a reading of 54.3 and reflected gains in stock market prices and some labor market strength, which offset sustained drops in home values and high gasoline costs.

China banks ratchet up lending rates to ration credit
BEIJING, Jan 26 (Reuters) - Some Chinese banks have drastically raised interest rates on loans to comply with government orders to rein in credit growth after another lending surge at the start of the year, state media reported on Wednesday.
Instructions have come down from head offices to some bank branches, saying they must strictly abide by credit quotas this month, the China Securities Journal reported, with regulators keeping a closer eye than normal on lending activity as part of their campaign against inflation.

EU considers tough stance on raw materials - draft
BRUSSELS, Jan 25 (Reuters) - The European Union will consider stockpiling raw materials and will confront any country that restricts supplies, according to a European Commission strategy document.
"The EU will continue to pursue barriers hampering the sustainable supply of raw materials to the EU economy," said a draft paper seen by Reuters on Tuesday, which will feed into a strategy review to be launched before April.

OECD backs French push for commodity transparency
PARIS, Jan 25 (Reuters) - The Organisation for Economic Development and Cooperation (OECD) on Tuesday welcomed France's move to put commodity price volatility and food security at the top of its G20 presidency agenda, echoing the need for more transparency.
"Agriculture markets have always been volatile, but if governments act together then extreme price swings can be mitigated and vulnerable consumers and producers better protected," OECD Secretary-General Angel Gurria said in a statement.

Strong investment flows create commodity bubbles
LONDON, Jan 25 (Reuters) - High fund allocations into commodities have caused price bubbles in parts of the metals market that are likely to deflate once fundamentals begin to reassert themselves, according to a senior fund manager.
While active investment strategies are on the increase, analysts say a significant portion of the likely half a trillion dollars going into the asset class in 2011 will go via indexes, which offer exposure to the entire commodities block.

PRECIOUS-Gold edges up ahead of Fed as buyers hunt bargains
LONDON, Jan 26 (Reuters) - Gold edged up in Europe on Monday as the metal's fall to a near three-month low attracted physical buyers back to the market, though moves were muted ahead of an announcement on U.S. monetary policy later in the day.
Pressure is likely to remain on gold, however, after a run of positive economic data undermined the metal's safe-haven appeal. The main gold exchange-traded fund, the SPDR Gold Trust, recorded its biggest ever one-day outflow on Tuesday.

FOREX-Euro boosted on rate view; nears key resistance
LONDON, Jan 26 (Reuters) - The euro hit a two-month high versus the dollar on Wednesday on perceptions that interest rates will rise sooner in the euro zone than in the U.S., taking out option barriers on the way and approaching key resistance.
The dollar hit a 10-week low against a basket of currencies with the market looking for confirmation from the Federal Reserve later in the day that its focus remains on supporting growth.

U.S. wheat climbs to 29-month top as supply worries mount
SINGAPORE, Jan 26 (Reuters) - Chicago wheat jumped around 1 percent to its highest since August 2008 in anticipation of increased demand for high-quality U.S. wheat from key importers nervous about food security amid shrinking world supplies.
"This is telling us that demand for U.S. wheat is likely to increase for the coming weeks and even months," said Ker Chung Yang, investment analyst at Phillip Futures.

Dollar down on Obama cuts, benign Fed view
LONDON, Jan 26 (Reuters) - World stocks rose and the dollar hit a two-month low against the euro after a promise of spending cuts from U.S. President Barack Obama cemented expectations the Fed will retain faith in its ultra-loose policy.
"The stock market should be fine with the spending freeze," said Christopher Low, chief economist at FTN Financial in New York. "People don't want additional stimulus here. This will allow investors to focus on the Fed."

Argentine pay talks loom over grains shipments
BUENOS AIRES, Jan 25 (Reuters) - Double-digit inflation in Argentina is spurring demands for hefty wage hikes, raising the risk of strikes among soy crushers, port workers and truckers that could hit grains exports and contribute to rising global food prices.
With President Cristina Fernandez urging moderation in an election year, pro-government unions could lower their demands.

20110127 0915 Soy Oil & Palm Oil Related News.

ITS CPO export up 5.73% to 1,003,459 tonnes for the period of 1~25 Jan 2011.
SGS CPO export down 2.14% to 1,040,145 tonnes for the period of 1~25 Jan 2011.

Soy-product futures climb after Tuesday's drop as they move higher along with soybeans. Soyoil also gathered support from strength in crude-oil futures, with talk of firm world vegoil demand ahead of the Asian Lunar New Year underpinning prices. Meanwhile, soymeal gains capped by sluggish domestic demand. CBOT March soyoil ends 1.6% higher at 56.70 cents per pound while soymeal added 0.5% to $374.40 a short ton. (Source: CME)

Argentine port workers to strike in grain export hub
BUENOS AIRES, Jan 25 (Reuters) - Workers in ports around Argentina's grains export hub of Rosario confirmed on Tuesday that they will begin a strike this week that could put exports from the world's top soyoil and meal supplier at risk.
Major exporters and soy crushers such as Cargill Louis Dreyfus, Noble  and Bunge  own plants near Rosario, an area that accounts for about 80 percent of the country's soybean oil and meal output.

Palm oil off one-week lows on lower output talk
KUALA LUMPUR, Jan 26 (Reuters) - Malaysian palm oil bounced off fresh one-week lows  on talk of production falling further this month as rains continue to batter estates.  "There is a perception that the market was oversold. Also, there is talk that production could be at least 5 percent lower in January," said a trader with a foreign commodities brokerage.

Paraguay soy harvest seen at 7.48 mln T in 2010/11
ASUNCION, Jan 25 (Reuters) - Paraguay's 2010/11 soy output is expected to reach 7.48 million tonnes, a record for a second consecutive season, as sufficient rains boost crop yields during planting, the Agriculture Ministry said on Tuesday.
The poor South American country is the world's No. 4 exporter of the oilseed, though it trails far behind neighboring Brazil and Argentina.

Rains could bring relief to Argentine soy, corn
BUENOS AIRES, Jan 25 (Reuters) - Widespread rainfall forecast across Argentina's farming belt in the coming days should boost soy and corn crops suffering from drought caused by the La Nina weather anomaly.
The lack of rainfall is hitting some of Argentina's 2010/11 soy crop after causing irreversible damage to corn, which has already passed through the critical pollination phase when yields are largely determined.

China to slow soybean imports near term-Oil World
HAMBURG, Jan 25 (Reuters) - China's soybean imports in January and February are likely to slow down following a recent surge as stocks are building up in the country's ports, Hamburg-based oilseeds analysts Oil World said on Tuesday.
Growth in overall global import demand for soybeans has also been dented by the rise in U.S. soybean prices, it said. U.S. soybean futures  rose to a 30-month high in January partly because of Chinese demand and crop concerns in Argentina.