Friday, December 30, 2011

20111230 1813 FCPO EOD Daily Chart Study.

FCPO closed : 3175, changed : +20 points, volume : lower.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : resume upward, buyer still in charge.
Support : 3150, 3100, 3070, 3050 level.
Resistance : 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded gain with declining volume transacted. Overnight soy oil closed recorded loss and currently rebounding higher while crude oil price trading between gains and losses.
Weather factor still influencing market to trade higher while awaits next Tuesday export data.
Daily chart formed a small up bar candle closed below upper Bollinger band level after market opened higher and moved side way within 25 points range bound market to closed near the high of the day.
Chart reading remained suggesting a pullback correction little upside biased market development testing support and resistance 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.

20111230 1728 FKLI EOD Daily Chart Study.


FKLI closed : 1510.5, changed : +0.5 point, volume : lower.
Bollinger band reading : little upside biased with possible pullback correction.
MACD Histrogram : turned lower, buyer taking profit.
Support : 1505, 1500, 1494, 1485 level.
Resistance : 1515, 1530, 1540, 1550 level.
Comment :
FKLI closed 1 tick lower with quiet volume traded with Jan contract doing 9. points discount compare to cash market that closed substantially higher due last minutes window dressing activities. Overnight U.S. market closed recorded gains and today Asia markets ended mostly higher while European markets having little change.
Last minutes window dressing activities lifted cash market and Jan 2012 contract to surge higher.
Spot month daily chart formed a small down doji bar candle closed below upper Bollinger band level after market opened higher and trade side way within 5 points range bound market and closed near the low of the day.
Chart study still suggesting a little upside biased market development with possible pullback correction testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111230 1706 Regional Markets EOD Daily Chart Study.

 DJIA chart reading :  little upside biased.
 Hang Seng chart reading : side way range bound.
KLCI chart reading : upside biased with possible pullback.

20111230 1008 Global Economic Related News.

Vietnam: Growth holds near 6% as higher rates counter exports
Vietnam’s growth held near 6% this quarter, reducing the pressure for further monetary tightening after higher interest rates limited the boost to the economy from exports and domestic consumption. Gross domestic product increased 6.1% in the fourth quarter from a year earlier, the General Statistics Office said yesterday. The preliminary estimate compares with a revised 6.07% growth rate for the three months through September. For the full year, Vietnam’s economy expanded 5.89%, down from the 6.78% rate for 2010. Vietnam’s government has struggled this year to steady its economy, devaluing the dong as the currency weakened on the black market and raising borrowing costs to contain the fastest inflation in Asia. (Bloomberg)

Hong Kong: Trade deficit is biggest since ’52 as exports cool
Hong Kong’s trade deficit swelled to the biggest on record in November as export growth slowed on faltering European demand for Asian goods. Overseas shipments rose 2% from a year earlier to HKD278.6bn (USD35.8bn), and imports gained 8.8%, the government said yesterday. The deficit of HKD44.1bn was the highest since records began in 1952, according to Bloomberg data. The outlook for exports is also clouded by a slowdown in China’s economy as Premier Wen Jiabao prolongs a crackdown on property speculation. (Bloomberg)

US: Pending sales of existing homes rose 7.3% in November
The number of Americans signing contracts to buy previously owned homes rose more than forecast in November as falling prices and low borrowing costs boosted demand. The index of pending home sales increased 7.3% to the highest level since April 2010 after climbing 10.4% the prior month, figures from the National Association of Realtors showed yesterday. The industry that triggered the 18-month recession that ended in June 2009 is showing signs of stabilizing as construction picks up, builder confidence improve and the number of houses on the market declines. Nonetheless, another wave of foreclosures may weigh on real-estate values next year. (Bloomberg)

US: Jobless claims drop to three-year low in past month
Fewer Americans filed applications for unemployment benefits over the past month than at any time in the past three years, a sign the US labor market is on the mend heading into the new year. The four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008, Labor Department figures showed yesterday. Applications rose for the first time in a month in the week ended 24 Dec, climbing by a more-than-forecast 15,000 to 381,000. Their recent decline has stoked speculation the world’s largest economy was on the cusp of showing bigger gains in employment. (Bloomberg)

US stocks rise on bets economy will weather Europe’s crisis
US stocks rose, restoring the 2011 gain in the Standard & Poor’s 500 Index, as data signaled the world’s largest economy is weathering Europe’s debt crisis. The S&P 500 rose 1.1% to 1,263.02, almost wiping out yesterday’s slump. The Dow Jones Industrial Average climbed 135.63 points, or 1.1%, to 12,287.04. (Bloomberg)

20111230 1007 Malaysia Corporate Related News.

JCorp unlikely to accept Malay chamber’s bid for QSR, unit
Johor Corp (JCorp) is unlikely to accept a hastily planned competitive bid to buy Kulim (M) Bhd’s stake in QSR Brands and its fast food unit, KFC Holdings (KFCH). The Malay Chamber of Commerce Malaysia (DPMM) said yesterday it was rounding up “friendly parties” to jointly buy Kulim’s interests in QSR Brands and its unit, KFCH, even after the company had said it was not seeking other bids after accepting the one made by Massive Equity SB (MESB). However, JCorp had earlier said it will not sell its stake in MESB to “outsiders” and that CVC was roped in because of its expertise in the food business. (BT)

Cypark gets RM14.71m contract to upgrade landfill site
Cypark Resources Bhd has received a contract worth RM14.7m to upgrade the landfill site at Kok Foh, Jempol in Negeri Sembilan. It received the letter of acceptance for the contract dated 23 Dec from the National Solid Waste Management Department (NSMWD). (Financial Daily)

CCM streamlines operations
Chemical Company of Malaysia (CCM) has embarked on an internal restructuring to streamline and consolidate its polymer businesses into a single entity in a RM126.4m deal. The exercise would see the acquisition by CCM's wholly-owned subsidiary, Usaha Pharma (M) SB, of the entire equity interest in Innovative Polymer Systems SB, Innovative Resins SB and Delta Polymer Systems SB from CCM and CCM Usaha Kimia (M) SB. (StarBiz)

20111230 0959 Global Market Related News.

Asian Stocks Advance on U.S. Optimism (Source: Bloomberg)
Asian stocks (MXAP) climbed in the last trading day of 2011, with the region’s benchmark index trimming its biggest yearly decline since 2008, as rising U.S. home sales signaled the world’s largest economy is weathering Europe’s debt crisis. Sony Corp. (6758), Japan’s biggest exporter of consumer electronics, gained 1 percent. James Hardie Industries SE (JHX), a building-materials supplier that gets almost 70 percent of sales from the U.S. rose 1.2 percent. Billiton Ltd., Australia’s top oil producer, climbed 0.3 percent after crude prices increased. The MSCI Asia Pacific Index (MXAP) added 0.2 percent to 113.04 as of 9:52 a.m. in Tokyo. The measure has lost 0.5 percent this month and is set for an 18 percent drop this year. For the week, the gauge is down 0.6 percent.

Stocks in U.S. Advance on Bets Economy Will Weather European Debt Crisis (Source: Bloomberg)
U.S. stocks rose, restoring the 2011 gain in the Standard & Poor’s 500 Index, as data signaled the world’s largest economy is weathering Europe’s debt crisis. All 10 groups (SPXL1) in the S&P 500 advanced as financial, industrial and commodity gauges had the biggest gains. Bank of America Corp. (BAC), General Electric Co. (GE) and Alcoa Inc. increased at least 1.2 percent. A measure of 12 homebuilders (S15HOME) in S&P indexes climbed 4.4 percent as PulteGroup Inc. and Lennar Corp. (LEN) jumped more than 4.6 percent. The Dow Jones Transportation Average, a proxy for economic growth, added 1.4 percent. The S&P 500 rose 1.1 percent to 1,263.02 at 4 p.m. New York time, almost wiping out yesterday’s slump. The Dow Jones Industrial Average climbed 135.63 points, or 1.1 percent, to 12,287.04 today. About 4.2 billion shares changed hands (MVOLUSE) on U.S. exchanges, or 46 percent below the three-month average.

European Stocks Climb as U.S. Business Activity Expands More Than Forecast (Source: Bloomberg)
European (SXXP) stocks advanced for the fourth time in five days as business activity in the U.S. expanded more than forecast. Bayer AG (BAYN) led a gauge of chemical companies higher. Fiat SpA retreated 1.9 percent after Banca IMI SpA cut its recommendation on the shares. Mining companies followed a drop in copper. The Stoxx Europe 600 Index (SXXP) gained 0.9 percent to 242.46 at the close in London. The gauge has rallied 13 percent (SXXP) from this year’s low on Sept. 22 amid better-than-estimated U.S. economic data and optimism that policy makers will contain the euro-area debt crisis. “Generally news from the U.S. has been better than expected,” although projections had been muted, said Didier Abbato, a vice president and senior trading adviser at Saxo Bank in Copenhagen. “In absolute terms, U.S. figures are not great. They’re just slightly better than expectations.”

U.S. Business Activity, Housing Beat Forecasts (Source: Bloomberg)
Companies cranked out more goods in December and pending sales of existing homes jumped in November for a second month, pointing to a pickup in U.S. economic growth as 2011 comes to a close. The Institute for Supply Management-Chicago Inc. said today its business barometer (CHPMINDX) was little changed at 62.5 from a seven- month high of 62.6 in November. The index of signed contracts (USPHTMOM) to buy previously owned houses rose 7.3 percent after climbing 10.4 percent the prior month, the National Association of Realtors said. Both figures surpassed the median estimate of economists surveyed by Bloomberg News. “2011 is ending on a solid note,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who forecast a reading of 63 for the Chicago index. “Manufacturing has some momentum,” he said, and “we’re starting to see some signs of life in housing.”

Sales of U.S. Homes Beat the Forecasts (Source: Bloomberg)
The number of Americans signing contracts to buy previously owned homes rose more than forecast in November as falling prices and low borrowing costs boosted demand. The index of pending home sales (USPHTMOM) increased 7.3 percent to the highest level since April 2010 after climbing 10.4 percent the prior month, figures from the National Association of Realtors showed today in Washington. Economists forecast a 1.5 percent gain, according to the median estimate in a Bloomberg News survey. The industry that triggered the 18-month recession that ended in June 2009 is showing signs of stabilizing as construction (CNSTTMOM) picks up, builder confidence improves and the number of houses on the market declines. Nonetheless, another wave of foreclosures may weigh on real-estate values next year.

Consumer Comfort Fell From Five-Month High (Source: Bloomberg)
Consumer confidence in the U.S. retreated last week from a five-month high, showing an improvement in sentiment will take time to develop. The Bloomberg Consumer Comfort Index (COMFCOMF) dropped to minus 47.5 in the period ended Dec. 24 from minus 45 the prior week, the highest reading since July. A gauge of the buying climate fell by the most in three months. Declining home prices (SPCS20Y%), stagnating wages and an unemployment rate at 8.6 percent may be weighing on sentiment. At the same time, household spending, which accounts for about 70 percent of the world’s largest economy, continues to increase.

Jobless Claims in U.S. Drop to Three-Year Low (Source: Bloomberg)
Fewer Americans filed applications for unemployment benefits over the past month than at any time in the past three years, a sign the U.S. labor market is on the mend heading into the new year. The four-week moving average for claims, a less volatile measure than the weekly figures, dropped to 375,000 last week, the lowest level since June 2008, Labor Department figures showed today in Washington. Applications (INJCJC) rose for the first time in a month in the week ended Dec. 24, climbing by a more-than- forecast 15,000 to 381,000. The jump in claims last week may say more about their volatility during this time of year than about the state of the job market, according to economists like Eric Green. Their recent decline has stoked speculation the world’s largest economy was on the cusp of showing bigger gains in employment.

Fed Says Wall Street Dealers Tighten Terms on Hedge-Fund Securities Trades (Source: Bloomberg)
Wall Street dealers made it tougher for hedge funds to finance trading of securities and derivatives in the three months through November, a Federal Reserve survey showed today. Responses “indicated a broad but moderate tightening of credit terms applicable to important classes of counterparties,” especially hedge-fund clients, trading real estate investment trusts and nonfinancial corporations, according to the quarterly survey of senior credit officers at 20 dealers covering the period of September to November. The central bank released the report in Washington. The report adds to evidence of stress in the financial system from Europe’s sovereign-debt crisis. Investor concern about the continent’s turmoil has helped drive the premium banks pay to borrow dollars to the highest in more than two years. The Fed survey didn’t discuss causes of the tighter financing terms.

Rail-Freight Surge Shows U.S. Skirting Recession (Source: Bloomberg)
North American railroads’ freight volumes surged 17 percent last week, the most in a year, in an indication that the U.S. economy will avoid a second recession. Rising shipments of retail goods helped drive the jump in carloads for the period ended Dec. 24, the Association of American Railroads said today. The trade group released the results after government data showed U.S. jobless claims fell to a three-year low in the past month. The double-dip recession “that people feared only six, eight, 10 weeks ago never materialized,” said Tony Hatch, an independent railroad analyst in New York. “Things are going pretty well in a variety of the commodities that the railroads carry.” Analysts focused on pre-Christmas rail traffic this year because record retail sales over the Thanksgiving weekend suggested that the seasonal peak in freight shipping might extend into December. Many retailers delayed building inventory amid concerns that the economy was weakening.

Slowing Chinese Growth Means Ore-Vessel Rates at Lowest in Decade: Freight (Source: Bloomberg)
The weakest growth in demand in at least a decade for shipments of iron ore, the second-biggest commodity cargo after crude oil, means rates for the largest vessels will plunge to the lowest level since 2002. Capesizes, each hauling about 160,000 metric tons of ore, will earn an average of $15,000 a day next year, about 4 percent less than in 2011, the median estimate in a Bloomberg survey of 10 analysts shows. While that implies losses for ship owners and investors in their companies, speculators can profit because forward freight agreements, handled by brokers and used to bet on transport costs, are anticipating an average of $16,367, according to data from the London-based Baltic Exchange.
Owners are contending with the biggest fleet in history as vessels ordered when rates reached $233,988 in 2008 continue to leave ship yards. The glut may widen because trade in iron ore will expand 2.5 percent next year as the number of capesizes rises 9.8 percent, according to Clarkson Plc, the world’s biggest shipbroker. Economic growth in China, whose steel mills consume 65 percent of all seaborne ore, will slow to the weakest since 2001, economist estimates compiled by Bloomberg show.

South Korean Inflation Above Target Signals BOK May Hold Off on Rate Cut (Source: Bloomberg)
South Korea’s inflation remained above the central bank’s target range this month, bolstering the case for officials to refrain from cutting benchmark interest rates in January. Consumer prices (KOCPIYOY) rose 4.2 percent from a year earlier, matching November's gain, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of 12 economists was for a 4 percent increase. Prices increased 0.4 percent in December from the prior month, the biggest gain since August. Geopolitical risk from the death of North Korea’s leader this month is adding to uncertainty for Asian policy makers who have paused rate tightening or cut interest rates due to the European sovereign-debt crisis and global economic slowdown. The Bank of Korea will likely cut interest rates by March to support growth as average consumer price gains moderate to 2.6 percent next year and production is set to be weakest in the first quarter of 2012, according to HSBC Holdings Plc.

Singapore GDP Probably Fell in Fourth Quarter (Source: Bloomberg)
Singapore’s economy probably contracted in the fourth quarter as manufacturing slumped, increasing pressure on the island’s policy makers to stimulate growth even as inflation accelerates. Gross domestic product (SGDYTY) probably dropped an annualized 5 percent in the three months through December from the previous quarter, when it rose 1.9 percent, according to the median (SGAVYOY) of 11 estimates in a Bloomberg News survey. The report is scheduled for release at 8 a.m. on Jan. 3. Singapore forecasts economic expansion will moderate next year as a faltering global recovery weighs on demand for goods and services. The island’s exports have dropped even after the central bank, which uses the local dollar to manage inflation, moved in October to slow gains in the currency, which has retreated 4.7 percent against the dollar in the past two months.

Thai Central Bank May Be Saddled With Debt (Source: Bloomberg)
Thailand’s government will today press the central bank chief to take on $35 billion of legacy debt from bank bailouts as Prime Minister Yingluck Shinawatra looks for fiscal scope to finance flood defenses. Bank of Thailand Governor Prasarn Trairatvorakul meets with cabinet members in Bangkok over the proposal to shift the debt to the BOT’s balance sheet. Deputy Prime Minister Kittiratt Na- Ranong said yesterday the step would save the government as much as 65 billion baht ($2 billion) in annual interest costs that could be used to fund anti-flood measures. The push risks deepening concern that Yingluck’s administration is infringing on the central bank’s independence, after Kittiratt in October said the BOT should lower interest rates to help businesses cope with the country’s worst flooding since 1942. The government itself lacks unanimity on the move, with Finance Minister Thirachai Phuvanatnaranubala warning it could hurt investor confidence and stoke inflation.

ECB Has More Scope to Cut Rates as Prices Wane (Source: Bloomberg)
The European Central Bank has more room to cut interest rates to a record low early next year after reports showed the sovereign debt crisis is damping inflation pressures. The rate of growth in M3 money supply, which the ECB uses as a gauge of future inflation, fell to 2 percent in November from 2.6 percent in October, the Frankfurt-based central bank said today. Growth in loans to households and companies across the 17-nation euro area also slowed, while inflation in Germany, the region’s largest economy, decelerated in December. The data reinforce the view “that underlying inflationary pressures are easing and that the ECB has ample scope to cut interest rates again in the early months of 2012,” said Howard Archer, chief European economist at IHS Global Insight in London. “Euro-zone inflation is poised to retreat markedly over the coming months.”

Italy Auctions $25.8 Billion of Bonds in Week as ECB Buoys Investor Demand (Source: Bloomberg)
Italy auctioned 7 billion euros ($9 billion) of debt to bring the total raised this week to almost 20 billion euros, underscoring how the European Central Bank is helping the world’s fourth-biggest borrower tap markets. Today’s sale by the Treasury in Rome fell short of the 8.5 billion-euro target even as borrowing costs declined from last month. Italy sold 9 billion euros in bills yesterday at about half the rate of the previous sale last month in its first auction since the ECB loaned 489 billion euros to banks to ease credit amid the region’s debt crisis. “Italy was not able to raise the maximum amount they wanted to, but the fact that they managed to sell this much at the end of the year should be taken as a positive sign,” said Eric Wand, a fixed-income strategist at Lloyds TSB Bank Plc in London. “The level of excess liquidity from the ECB will remain elevated for a while and some of that may get recycled into sovereign debt. That should support short-dated peripheral bonds.”

20111230 0958 Global Commodities Related News.

Big Harvest, Weak Global Outlook To Pressure China's Agriculture Prices Further (Source: CME)
China's agricultural commodity futures fell across the board in 2011, as private stockpiling, worries over a double-dip global recession and tightening domestic credit cast a pall especially on cotton, sugar and edible oils. That was in sharp contrast to 2010 when changing appetites drove sharp price increases in China's agricultural markets, as the Asian giant became the largest agricultural export market for the U.S., the world's biggest agricultural producer. The pressure on prices could continue next year as a big domestic harvest and an uncertain global outlook continue to weigh on sentiment. Last year's rally, underscored by China turning a net corn importer, fizzled this year on a range of factors dominated by broadly weaker global markets. Soybean futures fell 4.4% on year while corn was 3.2% lower on the Dalian Commodity Exchange in line with softer Chicago farm futures. Wheat fell 14.3% on the Zhengzhou Commodity Exchange.
Prices are likely to remain under pressure after China announced another record harvest in December, taking its grain output up 4.5% to 571.2 million metric tons. Still, underpinned by China's fundamentally strong demand, soybean and corn prices have declined by smaller margins than prices of other commodities such as cotton and edible oils. Weighed by an inventory glut, cotton prices fell sharply in the first half this year and have not recovered much since. Zhengzhou cotton is down about 26% this year, the steepest fall among major agricultural contracts. In comparison, prices nearly doubled in 2010. Edible oils prices also fell sharply this year, with palm oil futures down 19.3% and soyoil down 15.3%. "Since September, edible oil prices have fallen sharply and medium-to-smaller traders incurred broad-based losses, negatively affecting restocking demand," the state-backed China National Grain and Oils Information Center said Thursday.
Despite a mild rebound in prices recently, bulk edible-oil sales have remained sluggish, it said. Sugar futures on the Zhengzhou bourse fell 15.6% this year, pressured by the weakness in global sugar prices and massive imports. Near-month ICE raw sugar futures are around 23.12 cents now, down 28% on year following a global surplus. China will likely mark a fourth consecutive year of sugar output falling short of demand this year, Rabobank said. In the first 11 months, sugar imports rose 48% to 2.4 million tons, with the pace of imports accelerating in November to reach the second-highest monthly volume on record. Despite hopes among global corn exporters that China would sharply hike its corn imports, Chinese corn intake fell 24% in the first 11 months to 1.2 million tons. A bumper corn harvest has taken the pressure off depleted state corn reserves.

Corn (Source: CME)
US corn futures close lower on profit-taking and an improved South America weather outlook. The lower settlement ends eight straight days of higher prices. Midday weather forecasts showing more rain potential in southern Brazil and Argentina helped prompt profit-taking, traders say. Still, given gains of more than 60c recently, "this isn't much of a selloff," Leffler Commodities' Tom Leffler says. March CBOT corn ends down 4 1/2c to $6.38 a bushel.

Wheat (Source: CME)
US wheat futures end lower as the market tracked corn, which fell on rain in the South America weather forecast. Traders say wheat has little fresh news and weak demand, and is taking cues from corn. Both crops compete in world feed markets. CBOT prices remain at their highest levels since mid-November, but volume is light. Profit-taking across the grains complex after recent gains pressured prices. CBOT March wheat ends down 6c to $6.45 1/4 a bushel; KCBT March wheat closes down 1 1/4c to $6.98; MGEX March wheat down 7 3/4c to $8.55 1/4.

Rice (Source: CME)
US rice futures spring to the highest close in three weeks, rallying by the exchange's 50-cent daily limit amid concern about a storm in India. "Some traders are taking notice of a cyclone hitting the south of India and the possible damage to rice, corn and groundnuts," brokerage FCStone says. Market has tumbled in recent months due to poor export demand. CBOT Jan rice closes up 3.6%, or 50c, to $14.25 per hundredweight.

Wheat Drops, Halting Eight-Session Rally, as Demand for U.S. Grain to Slow (Source: Bloomberg)
Wheat futures fell on speculation that demand will slow from importers and U.S. processors after the longest price rally in four years. Futures surged 12 percent in the previous eight sessions, the longest rally since October 2007, on speculation dry weather in South America would cut grain supplies. About 13.5 million bushels of U.S. wheat were inspected for export in the week ended Dec. 22, 18 percent less than a week earlier, according to the government. Competition has increased for U.S. suppliers, as countries including Russia and Australia boosted output. Prices “have gotten into levels that start affecting economics,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said in a telephone interview. “The competitiveness of the product becomes a little hard to justify.”

Corn Traders Extend Bullish Bets on South America Crop Damage: Commodities (Source: Bloomberg)
Corn traders are bullish for a fifth consecutive week on speculation that dry weather in South America is damaging crops, boosting demand for U.S. supplies at a time when stockpiles are predicted to shrink to a 16-year low. Nineteen of 25 traders surveyed by Bloomberg expect corn to advance next week. Lower-than-average humidity and dry soil will curb crop development in Argentina and southern Brazil through at least Jan. 7, according to T-Storm Weather LLC, a forecaster in Chicago. Argentina is the world’s biggest corn shipper after the U.S. and typically starts reaping its grain in March.
While prices doubled in the past two years as record demand eroded inventories, corn fell as much as 27 percent since the end of August as the U.S. forecast the biggest-ever global harvest. The grain rallied 10 percent in the past two weeks on mounting concern that South American weather will undermine that prediction and drive stockpiles lower. Argentina and Brazil are expected to produce 90 million metric tons, enough to supply the 27-nation European Union for 17 months, USDA data show.

China Industrial Corn Consumption May Slow (Source: Bloomberg)
Industrial use of corn in China, the second-biggest consumer, may grow at the slowest pace in at least five years as the economy cools, curbing the need for imports, said state-affiliated researcher Cngrain.com. The amount processed may expand by 5 percent in the year ending Sept. 30 to 55 million metric tons, compared with 11 percent last year, Cngrain.com analyst Zhang Zhixian said in an interview on Dec. 27. The researcher is owned by China Grain Reserves Corp., which manages state grain inventories. Lower Chinese demand for imported corn may pressure prices in Chicago, which have tumbled 17 percent since Aug. 31 on high global grain supplies and concern that Europe’s deepening debt crisis and a slowing global economy may sap demand. China’s economy will grow 8.5 percent next year, down from 10.4 percent in 2010, the Organization for Economic Cooperation and Development projected on Nov. 28.

Soybeans May Open Lower as Rain Forecast for Brazil Crops; Wheat May Fall (Source: Bloomberg)
What follows are opening calls for U.S. grain and oilseed markets.
-- Soybean futures may open 7 cents to 10 cents a bushel lower on the Chicago Board of Trade on speculation that rain in southern Brazil and Paraguay will revive yield prospects, Jim Gerlach, the president of A/C Trading Co. in Fowler Indiana, said in a telephone interview. Soybean-oil futures are expected to open 0.3 cent to 0.5 cent a pound lower, and soybean-meal futures may open $2 to $3 lower per 2,000 pounds.
-- Wheat futures may open 2 cents to 4 cents a bushel lower on the CBOT, the Kansas City Board of Trade and the Minneapolis Grain Exchange on speculation that U.S. exports will slow after the grain posted the longest rally since October 2007 and the dollar rose to a 15-month high against the euro, making American supplies more expensive on world markets, Gerlach said.

Taiwan Plans More Soybean Imports In Containers On High Bulk Prices (Source: CME)
After canceling a recent bulk tender due to rising prices, Taiwanese importers plan to buy soybeans in containers, which costs around 10 cents a bushel less, trading executives said. "We...plan to buy containerized cargoes if the prices continue to rise," said an importer in Taipei. The Kaohsiung branch of Taiwan's Breakfast Soybean Procurement Association Wednesday scrapped a tender to import 60,000 metric tons of soybeans, citing high prices. Traders said Cargill made the lowest cost-and-freight offer, around a premium of $2.069/bushel over the March contract on the Chicago Board of Trade. Soybean prices are rising due to unusually dry weather in major producing regions of South America, where crops are in the development stage, with CBOT futures hovering around a six-week high. The March contract is trading around $12/bushel. Taiwan is world's fifth-largest importer of soybeans after China, the European Union, Japan and Mexico, buying close 2.5 million tons a year.

India Food Ministry Wants Rice Exports To Continue (Source: CME)
India's food ministry is in favor of continuing rice exports as the country's stocks are at a comfortable level, Food Minister K.V. Thomas said, dropping an initial plan to limit the shipments. The government hadn't specified any limits on the quantity to be shipped when exports of rice and wheat were allowed Sept. 9, but the minister as well as some officials had previously said that no more than 2.0 million metric tons each of wheat and rice may be shipped so as to ensure sufficient stocks before the government introduces a food security law that is currently before parliament. "Our view is that more non-basmati rice can be exported as production is huge and stocks are comfortable," Thomas told Dow Jones Newswires, immediately after an internal meeting at the food ministry to assess the stock position. India shipped 1.6 million tons of rice between Sept. 9 and Dec. 27, and exports are expected to reach 2.0 million tons by February, traders say.
Thomas said there will be sufficient stocks to meet the proposed food security law even after continuing rice exports, but the final decision on the subject will need to be taken by a ministerial panel. India has nearly double the foodgrain stocks it needs under buffer stock requirements and has been finding it difficult to store grains as the new crop comes in, leaving large quantities stored in fields at the mercy of weather. The country had 54.72 million tons of wheat and rice stocks as of Dec. 1. The government allowed exports partly to ease the pressure on storage facilities. Any decision by the ministerial panel on allowing further exports will mainly depend on whether it feels there would be enough stocks left to meet the proposed food security law that guarantees cheap foodgrains to the majority of the population. No date has been fixed yet for the panel's meeting.
Traders have also been lobbying for continuing the rice exports, arguing that the wheat offtake for shipments has been poor, leaving scope for more rice sales from the country's granaries. The prospect for wheat exports has faded as local prices have inched above international rates. Also, expectations of a good winter-sown wheat crop means the country can easily allow export of another 2.0 million tons of rice, said a food ministry official, who didn't want to be identified.

Cyclone To Hit India's Southern Tamil Nadu State; May Damage Crops (Source: CME)
A severe cyclone is likely to hit parts of southern India Friday morning, which could damage some of the standing crops of rice and corn, the weather department's chief said. "We expect the cyclone Thane to be severe in four districts of Tamil Nadu," Ajit Tyagi, director general of the India Meteorological Department, said at a news conference. The cyclone may also cause some rains Friday in the western state of Maharashtra, the country's top sugar-producing province, Tyagi said.

Western Australia's Big Wheat Harvest Buoyed By Record Northern Crop -CBH (Source: CME)
A record crop in the northern Wheatbelt of Western Australia state is underpinning the state's second-largest harvest of winter grains on record, Cooperative Bulk Handling Ltd. reported. Deliveries of wheat, barley, canola and other winter grains to unlisted Perth-based CBH, which dominates storage and handling in Western Australia, reached 12.65 million metric tons on Wednesday, eclipsing the previous second-largest intake, set in the crop year ended March 31, 2006, of 12.5 million tons, the company said in a weekly harvest report. To date, around 92% of CBH's in 2011-12 intake--estimated at 13.5 million tons, more than double 2010-11's drought-reduced harvest--has been received, CBH said. Typically, 70% of the harvest is wheat and deliveries to CBH account for 90% of total state production--nearly all of which is exported. Grain receivals in the northern Geraldton Port zone have reached 3.4 million tons, easily exceeding the previous record of 2.6 million tons set in 2003-04, it said.
CBH General Manager Operations Colin Tutt said that though the harvest is one of the largest on record, it is also one of the most challenging. "We have seen significant weather delays [and] quality issues," he said, also citing a reduction in the performance of rail in hauling grain to port. "Although the harvest has been pleasing from a production [yield] perspective, with low grain prices and deteriorating grain quality due to inclement weather events, there will be growers in some districts struggling to make a profit, which is the disappointing part of such a high-production year," Tutt said. Separately, Viterra Inc. reported the harvest in South Australia slowed in the week ended Sunday due to wet weather, with the company, which dominates upcountry storage and export logistics in that state, having received 6.2 million tons of winter grains.
Harvest continues in the state's southeast, with grain receivals proceeding from growers who have finished harvesting but held grain on farms, helping fill the strong export shipping program, it said in a weekly harvest report issued Wednesday.

Corn, wheat snap 8-day rally; soy falls for 2nd day
SINGAPORE, Dec 29 (Reuters) - Chicago wheat slid 1 percent, while corn lost 0.8 percent as the grain markets snapped eight straight sessions of gains on risk aversion which weighed on equities and buoyed the U.S. dollar.
"Right now it seems like a bit of risk off environment as we are seeing that across the equity markets," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

Cyclone could damage south India coastal crops-weather office
NEW DELHI, Dec 29 (Reuters) - Rice, groundnut and maize crops in coastal areas of southern India could be damaged by a cyclonic storm which is currently expected to hit land on Dec. 30, the Indian Meteorological Department said on Thursday.
"Storm is expected to damage the standing rice, groundnut and maize in coastal districts of Tamil Nadu (state) and rice and groundnut in coastal Andhra Pradesh" state," the weather office said on its website.

Mexico dry bean output seen down due to drought-attache
Dec 28 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Mexico:
"The marketing year 2011/12 dry bean production estimate is lowered by 220,000 tonnes to 600,000 tonnes as a result of drought, lower yields, and lower-than-previously estimated planted area. The Secretariat of Economy is expected to issue a year-long 100,000 tonnes dry bean duty-free import tariff rate quota in early 2012 to compensate for the domestic production decline. Corn, sorghum, wheat, and rice supply and demand estimates remain unchanged."

Russia 2011 grain exports seen at 22.6 mln tonnes-attache
Dec. 28 - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in Russia:
"In July - November 2011 Russia exported over 15 million tonnes of grain, including 12.8 million tonnes of wheat and 1.7 million tonnes of barley. However, in November 2011, price competition in the world grain markets increased with low-priced Argentine wheat entering key Mediterranean markets.

La Nina dryness cuts Argentine corn forecasts
BUENOS AIRES, Dec 28 (Reuters) - Argentina's 2011/12 corn crop will be smaller than initial forecasts due to dry weather linked to La Nina, but production should still reach a record, analysts say.
The lowest estimates, figuring in losses caused by the La Nina climate phenomenon, remain higher than the record 23 million tonnes of corn harvested in the 2010/11 season.

Russian 2011 grain crop seen at 93.8 mln T - AgMin
MOSCOW, Dec 28 (Reuters) - Russian 2011 grain crop is preliminarily estimated at 93.8 million tonnes, up from 61 million tonnes in the drought-hit 2010, but down from 97 million in 2009, the Agriculture Ministry said on Wednesday.
This volume will allow Russia to cover all domestic needs and to export 25 million tonnes of grain in the 2011/12 crop year, the ministry said in a statement.

Ukraine grain exports at 1.65 mln T Dec.1-26
KIEV, Dec 28 (Reuters) - Ukraine exported 1.65 million tonnes of grain between Dec. 1-26 against 1.81 million tonnes in the same period in November, analyst UkrAgroConsult said on Wednesday.
The consultancy said in a report the volume included 1.22 million tonnes of maize, 380,000 tonnes of wheat and 50,000 tonnes of other cereals.

Sugar below 3-week peak, robustas above 2-month low
LONDON, Dec 29 (Reuters) - ICE raw sugar futures eased in early trading and hovered below the prior session's three-week high, while arabica coffee and cocoa dipped, and robustas were weaker and above a two-month low, pressured by a big crop in top producer Vietnam.ICE benchmark raw sugar futures dipped on light investor selling and book-squaring, trading below Wednesday's a three-week peak, and were pressured by big crops in the EU, Russia, Ukraine, India and Thailand.

Brazil's Bahia cocoa main crop now past peak
BRASILIA, Dec 28 - Warehouse deliveries in Brazil's top cocoa-producing state Bahia slowed in the week to Dec. 25 from the previous week, data from Bahia Commercial Association showed, marking the start of the harvest's declining phase.
"Arrivals from Bahia have started to diminish but still maintained a volume that is the highest for the Christmas week of the last 15 years," said Bahia-based cocoa analyst Thomas Hartmann.

Cocoa Drops for Fifth Day on Supply Outlook; Sugar, Cotton Futures Climb (Source: Bloomberg)
Cocoa fell for a fifth session on signs that supplies will be ample as Europe’s debt crisis threatens economic growth. Sugar, cotton and orange juice gained, while coffee slid. In the week ended Dec. 18, cocoa deliveries to ports from farms in Ivory Coast, the world’s biggest producer, rose 14 percent from a year earlier to 578,368 metric tons, a document from the industry’s regulator showed. Purchases from farmers in Ghana, the second-largest grower, rose 4.3 percent in the first nine weeks of the current season, the Ghana Cocoa Board said. “Prices have weakened on supply ideas, especially from western Africa, where arrivals and export declarations are running ahead of last year,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in an e-mailed report.

Cameroon raises cotton price to curb smuggling
YAOUNDE, Dec 28 (Reuters) - Cameroon state firm SODECOTTON has increased farmgate raw cotton price by 27.5 percent for the current harvest in an effort to dissuade farmers from smuggling their produce to neighbouring Nigeria, a spokesman said on Wednesday.SODECOTTON said it will pay farmers 255 CFA francs ($0.50)per kg of cotton this season from 200 CFA per kg in the previous season.

Ivorian cocoa buyers seek end to grinders tax break
ABIDJAN, Dec 28 (Reuters) - Major buyers of Ivorian cocoa have urged the government of the world's top producing nation to cut a 20-year old tax break given to local grinders, arguing the incentive handed grinders an unfair market advantage.
Members of an international and local buyers association, which includes France-based commodities firm Sucden and leading cocoa trader Armajaro, said in a letter to Ivorian authorities  the tax benefit distorted the market.

Mosaic cuts fertilizer output due to weak prices
Dec 28 (Reuters) - Fertilizer producer Mosaic Co  said on Wednesday it will cut production of phosphate, a key nutrient used for crop production, because prices have fallen to unsustainable levels.
The Minnesota-based company said it would cut its planned production of phosphate by 250,000 tonnes over the next three months, blaming economic uncertainty for a drop in prices. It said it still expected record global demand for fertilizer in 2012.

US gasoline demand up over Christmas holiday
Dec 28 (Reuters) - U.S. retail gasoline demand rose sharply last week from the previous week as Americans hit the road for the Christmas holiday, but demand was down from the same week in 2010, MasterCard said in its weekly SpendingPulse report on Wednesday.  
Last week's gasoline demand rose 7.7 percent compared with the previous week, MasterCard said, but demand was 1.6 percent lower than it was a year ago.

Oil Heads for Third Yearly Gain on Iran Tension, U.S. Economy Speculation (Source: Bloomberg)
Oil rose for a second day, heading for a third yearly increase, on speculation that escalating tension in the Middle East may disrupt supplies as a recovery in the U.S. economy bolsters demand. Futures advanced for the eighth day in nine, extending this year’s gain to 9.2 percent. A U.S. State Department spokeswoman yesterday called Iran’s threats to shut the Straits of Hormuz “irrational behavior.” About one-sixth of global supply travels through the seaway. The country faces sanctions on its crude exports and a possible boycott by European oil buyers over its nuclear program. Prices gained yesterday after U.S. jobless claims fell to a three-year low. Crude for February delivery gained as much as 19 cents, or 0.2 percent, to $99.84 a barrel on the New York Mercantile Exchange. It was at $99.74 at 8:20 a.m. Singapore time. Prices climbed 15 percent in 2010. This year’s gain would be the smallest since 2006 when the contract increased 0.02 percent.

Oil above $107, US stocks and Iran in focus
LONDON, Dec 29 (Reuters) - Oil held above $107 a barrel as investors looked ahead to a U.S. supply report expected to show a drop in crude stocks and as Iranian threats to halt a vital oil trade lent support.
"Worries over Iran are supportive. The market is up even though the API stats were bearish, so people may be waiting for the EIA," said Christopher Bellew, an oil broker at Jefferies Bache.  

Thailand, Cambodia aim for offshore oil development
PHNOM PENH, Dec 29 (Reuters) - Offshore oil and gas reserves in disputed waters of the Gulf of Thailand could take up to a decade to tap, despite progress between Thailand and Cambodia towards restarting talks on joint development, Thailand's energy minister said on Thursday.
The two countries are keen to reach an agreement on joint exploration and development of the Overlapping Claim Area (OCA) in the Gulf, which has been delayed by political upheaval in Thailand and sometimes deadly border disputes.

Vietnam 2011 crude oil output rises 1.1 pct y/y -govt
HANOI, Dec 29 (Reuters) - Vietnam produced an estimated 15.18 million tonnes, or 305,000 barrels per day (bpd), of crude oil this year, a rise of 1.1 percent from 2010, the government said on Thursday.
December's output reached an estimated 1.42 million tonnes, up 4.0 percent from the same month last year, the General Statistics Office said in its monthly report.

Gold Slides to Five-Month Low as Stronger Dollar Erodes Investment Demand (Source: Bloomberg)
Gold, on the brink of a bear market, posted the longest slump since March 2009 as gains in the dollar reduced demand for precious metals as alternative assets. The dollar climbed as much as 0.6 percent against the euro as an auction of Italian bonds fell short of the government’s target. Gold, down 12 percent in December, is headed for the biggest monthly drop since October 2008, compared to the greenback’s almost 3 percent gain against a six-currency basket. “The developments in Italy have perked up the dollar, and that is pushing gold down,” Sterling Smith, an analyst at Country Hedging Inc. in St. Paul, Minnesota, said in a telephone interview. “I expect gold to remain in negative territory this week.”

20111230 0957 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures end lower as South American weather forecasts eased worries about the crop and prompted profit-taking. Possible rains for southern Brazil this weekend and Argentina late next week prompted traders to extract risk premium from the market. Year-end positioning and profit-taking also dominating trade. Lackluster export demand, and questions about demand above the $12/bushel level also hang over the market. Still, prices up sharply from $11 on Dec 14. Jan. CBOT soy ends down 10 3/4c to $11.87 1/2 a bushel.

Soybean Meal/Oil (Source: CME)
Products followed soybeans lower with March soymeal down $3.30 to $310.80 per short ton and March soyoil down 0.64c to 51.52c/lb.

Palm oil retreats from 5-week high, weather eyed
SINGAPORE, Dec 29 (Reuters) - Malaysian crude palm oil futures dipped  in cautious year-end trading, but losses were limited by worries that heavy rains may hit production in second-largest producer Malaysia.
"There's light profit-taking in the market, but it's going to be a wait-and-see game on the severity of the rainfall," said a dealer with a foreign commodities brokerage in Malaysia.

Outlook still dry for south Brazil, Argentina soy
BRASILIA, Dec 28 (Reuters) - Brazil's southernmost soy state Rio Grande do Sul will have little rain in the next fortnight, forecaster Somar said on Wednesday, putting the newly sown crop there at greater peril of losses while Argentina's soy regions also remain dry.Drought fears in South America have been a key driver behind a rise in Chicago soybean futures, which surged 3 percent to a six-week high on Tuesday. On Wednesday, January soybean futures  slid 7-3/4 cents to $11.92 a bushel by 9:33 a.m. CST (1533 GMT), hit by profit-taking.

Thursday, December 29, 2011

20111229 1814 FCPO EOD Daily Chart Study.

FCPO closed : 3155, changed : -30 points, volume : lower.
Bollinger band reading : pullback correction little upside biased.
MACD Histrogram : turned lower, buyer taking profit.
Support : 3150, 3100, 3070, 3050, 3020 level.
Resistance : 3150, 3200, 3250, 3270, 3300 level.
Comment :
FCPO closed recorded loss with lower volume participation. Overnight soy oil closed recorded marginal loss and currently trading lower while crude oil price rebounding little higher after overnight falls.
FCPO doing pullback correction due to profit taking activities after recent rallies ahead of New Year holiday.
Daily chart formed a down doji bar candle closed lower from upper Bollinger band level after market opened lower, edge upward slightly and swing downwards before last minutes lift to closed off the low of the day.
Technical study revised to suggesting a pullback correction little upside biased market development testing support and resistance 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.

20111229 1742 FKLI EOD Daily Chart Study.

FKLI closed : 1510, changed : +5.5 points, volume : lower.
Bollinger band reading : little upside biased with possible pullback correction.
MACD Histrogram : rising, buyer taking exposure.
Support : 1505, 1500, 1494, 1485 level.
Resistance : 1515, 1530, 1540, 1550 level.
Comment :
FKLI closed recorded gain with relative low volume changed hand (due to holiday and change month) doing 3 points premium compare to cash market that closed slightly higher. Overnight U.S. market closed recorded loss and today Asia markets ended mixed while European markets also having mixed development.
Most market trading between gains and losses after news on record ECB balance sheet due to bank lending and ahead of New Year holiday.
Daily chart formed an up bar candle closed near upper Bollinger band level after market opened and traded lower followed by upward climbs before moved side ways range bound towards the end to closed near the high of the day.
Chart reading remained suggesting a little upside biased market development with possible pullback correction testing support and resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20111229 1658 Regional Markets EOD Daily Chart Study.

 DJIA chart reading :  little upside biased.
 Hang Seng chart reading : side way range bound.
KLCI chart reading : little upside biased with possible pullback.

20111229 1552 Global Market & Commodities Related News.

Asian stocks inch lower, euro extends drop
SINGAPORE, Dec 29 (Reuters) - Asian stocks fell, taking cues from weak U.S. and European shares, as players cut positions heading into the year end with an Italian debt auction later in the day keeping markets nervous.
"Everyone is holding onto their cash and people are not willing to invest in risk assets. With this kind of market sentiment, there's nowhere for the cash to go," said Hajime Nakajima, a sales trader at Cosmo Securities.

Corn, wheat snap 8-day rally; soy falls for 2nd day
SINGAPORE, Dec 29 (Reuters) - Chicago wheat slid 1 percent, while corn lost 0.8 percent as the grain markets snapped eight straight sessions of gains on risk aversion which weighed on equities and buoyed the U.S. dollar.
"Right now it seems like a bit of risk off environment as we are seeing that across the equity markets," said Adam Davis, a senior commodity analyst at Merricks Capital in Melbourne.

La Nina dryness cuts Argentine corn forecasts
BUENOS AIRES, Dec 28 (Reuters) - Argentina's 2011/12 corn crop will be smaller than initial forecasts due to dry weather linked to La Nina, but production should still reach a record, analysts say.
The lowest estimates, figuring in losses caused by the La Nina climate phenomenon, remain higher than the record 23 million tonnes of corn harvested in the 2010/11 season.
 
Ivorian cocoa buyers seek end to grinders tax break
ABIDJAN, Dec 28 (Reuters) - Major buyers of Ivorian cocoa have urged the government of the world's top producing nation to cut a 20-year old tax break given to local grinders, arguing the incentive handed grinders an unfair market advantage.
Members of an international and local buyers association, which includes France-based commodities firm Sucden and leading cocoa trader Armajaro, said in a letter to Ivorian authorities  the tax benefit distorted the market.
 
Outlook still dry for south Brazil, Argentina soy
BRASILIA, Dec 28 (Reuters) - Brazil's southernmost soy state Rio Grande do Sul will have little rain in the next fortnight, forecaster Somar said on Wednesday, putting the newly sown crop there at greater peril of losses while Argentina's soy regions also remain dry.
Drought fears in South America have been a key driver behind a rise in Chicago soybean futures, which surged 3 percent to a six-week high on Tuesday. On Wednesday, January soybean futures  slid 7-3/4 cents to $11.92 a bushel by 9:33 a.m. CST (1533 GMT), hit by profit-taking.
 
Brazil's Bahia cocoa main crop now past peak
BRASILIA, Dec 28 - Warehouse deliveries in Brazil's top cocoa-producing state Bahia slowed in the week to Dec. 25 from the previous week, data from Bahia Commercial Association showed, marking the start of the harvest's declining phase.
"Arrivals from Bahia have started to diminish but still maintained a volume that is the highest for the Christmas week of the last 15 years," said Bahia-based cocoa analyst Thomas Hartmann.
 
Russian 2011 grain crop seen at 93.8 mln T - AgMin
MOSCOW, Dec 28 (Reuters) - Russian 2011 grain crop is preliminarily estimated at 93.8 million tonnes, up from 61 million tonnes in the drought-hit 2010, but down from 97 million in 2009, the Agriculture Ministry said on Wednesday.
This volume will allow Russia to cover all domestic needs and to export 25 million tonnes of grain in the 2011/12 crop year, the ministry said in a statement.

Vietnam's coffee supply squeeze to perk up global prices
SINGAPORE/HANOI, Dec 28 (Reuters) - Global coffee prices may surge early next year as tighter bank lending in top robusta producer Vietnam chokes off cash to exporters, cutting supply and pushing up premiums even as the harvest rolls in.
London robusta prices could rise by about 10-20 percent, leaving roasters with no choice but to pay up until farmers in Vietnam decide to release stocks and beans from other key coffee growers resurface in the second quarter of 2012.

Brent oil eases towards $107, dollar weighs
SINGAPORE, Dec 29 (Reuters) - Brent crude oil edged lower towards $107 a barrel, as a stronger dollar and rising U.S. crude stocks offset Iranian threats to halt a vital oil trade route.
"A big increase in U.S. crude oil stocks and the falling euro against the dollar are the main pressure points for the market at the moment," said Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo.

Vietnam 2011 crude oil output rises 1.1 pct y/y -govt
HANOI, Dec 29 (Reuters) - Vietnam produced an estimated 15.18 million tonnes, or 305,000 barrels per day (bpd), of crude oil this year, a rise of 1.1 percent from 2010, the government said on Thursday.
December's output reached an estimated 1.42 million tonnes, up 4.0 percent from the same month last year, the General Statistics Office said in its monthly report.

EU starts antidumping probe on some Chinese steel
LONDON, Dec 28 (Reuters) - The European Commission has opened an anti-dumping investigation on some Chinese organic coated steel products and imposed definitive antidumping duty on imports of Chinese stainless steel seamless pipes and tubes.
The EU body started the investigation after the European steel producers association, EUROFER, filed a complaint earlier this year alleging China was selling pre-painted sheet and plastic-coated sheet metal at extra low prices, threatening the domestic industry, it was reported in the Official Journal of the European Union last week.

Copper drops as firm dollar weighs; Italy bond sale eyed
KUALA LUMPUR, Dec 29 (Reuters) - London copper fell, dropping for a second straight session as a firm dollar weighed, while investors eyed an important Italian bond auction later in the day for further trading cues.
LME copper has dropped about 23 percent this year, coming after a 30 percent gain in 2010 and a 140 percent jump in 2009.

Gold wallows near 3-month low; Italy bond sale eyed
SINGAPORE, Dec 29 (Reuters) - Gold wallowed near a three-month low, remaining under pressure due to a firm dollar, while investors fretted over an important Italian bond auction later in the day.
"Gold is still up on the year and there are relatively few markets moving in the positive territory," said Nick Trevethan, Senior Commodity Strategist at ANZ. "People close their profitable positions to cash out before the year-end."

20111229 1101 Global Market & Commodities Related News.

GLOBAL MARKETS-Euro weakens broadly; S&P 500 erases 2011 gains
NEW YORK, Dec 28 (Reuters) - The euro weakened about 1 percent against the dollar and the yen on Wednesday, one day before an important auction of long-dated Italian debt, while U.S. stocks slid more than 1 percent on concerns about the economy in early 2012.
"If European banks are still this concerned, it's not a good sign," said Karl Schamotta, senior markets strategist with Western Union Business Solutions. "That underlines the possibility that this liquidity crunch is getting worse and will continue into the new year.

COMMODITIES-Oil snaps 6-day run-up; gold at 3-month low
NEW YORK, Dec 28 (Reuters) - Oil closed lower on Wednesday, snapping a six-day run-up,and gold prices fell too, hitting three-month lows, as a rally in the dollar pressured commodities denominated in the U.S. currency.
"The worry is that (European) banks are borrowing and then sitting on the money and not lending it, and that will limit growth just like it did in the United States," said Mark Waggoner, president at Excel Futures Inc, an oil and commodities broker in Bend, Oregon.

US crude stocks seen down on imports, seasonal draws
Dec 28 (Reuters) - U.S. crude oil inventories are expected to have fallen for the seventh consecutive period last week as refiners delayed imports to keep inventories low for year-end tax considerations, an expanded Reuters poll of analysts showed on Wednesday.
Averaging the views of nine analysts, crude stockpiles were expected to be down 1.7 million barrels, the preliminary survey showed.

US gasoline demand up over Christmas holiday
Dec 28 (Reuters) - U.S. retail gasoline demand rose sharply last week from the previous week as Americans hit the road for the Christmas holiday, but demand was down from the same week in 2010, MasterCard said in its weekly SpendingPulse report on Wednesday.  
Last week's gasoline demand rose 7.7 percent compared with the previous week, MasterCard said, but demand was 1.6 percent lower than it was a year ago.

Oil falls on dollar's rise, Wall St pullback
NEW YORK, Dec 28 (Reuters) - Oil prices fell on Wednesday, snapping a string of six straight sessions of gains as part of a broad sell-off across commodities and equities.  
"The complex wasted little time in offsetting yesterday's strong gains as the Tuesday injection of geopolitical risk premium was negated by today's broad based de-risking," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.

NYMEX-Natural gas ends lower, Jan slips at expiration
NEW YORK, Dec 28 (Reuters) - U.S. natural gas futures ended lower on Wednesday, as concerns about record-high supplies outweighed the outlook for stronger demand due to colder Northeast and Midwest weather forecasts for next week.
"The colder forecast is a little supportive, but I think we just saw a little booksquaring today ahead of expiration and the end of the year," a Pennsylvania-based trader said, noting volume ahead of the New Year's holiday was very light.

Euro Coal-Market tracks oil during low activity
LONDON, Dec 28 (Reuters) - Physical prompt coal markets saw little activity in the first full day of trading after Christmas on Wednesday, and in the absence of spot trades to give price direction, coal was largely tracking the oil, as it has for the past few months.
There was little coal trading activity on Wednesday as many traders were bridging the Christmas and New Year holidays.

20111229 1059 Local & Global Economic Related News.

The Malaysia External Trade Development Corporation (Matrade) has  set a target to produce 200 new exporters through the Bumiputera Exporters  Development Programme (BEDP) and the Women Exporters Development  Programme (WEDP) by 2015. Matrade Deputy CEO Datuk Zakaria Kamarudin  said the focus was on small and medium scale entrepreneurs whose products  and services could be developed further and accepted by the market. It plans to increase bumiputra and women entrepreneurs’ contribution  to total exports to more than 20% by 2015.  Zakaria also said that Matrade was hopeful that the government, under  the Tenth Malaysia Plan, would increase the allocation for the  programmes to RM30m annually from RM5m presently so that it could  involve more participants. (Bernama, Starbiz)

The  Asean Economic Community (AEC) will continue to make headway  next year while economic integration will gather momentum in Asean which is  projected to see an economic growth of 5-6%.  International Trade and  Industry Minister Datuk Seri Mustapa Mohamed had said that Asean  was on track to realise the AEC by 2015. (Bernama)

The retail industry is expected to grow 6.5% this year (8.4% in 2010) and 6%  next year, the  Malaysia Retailers Association (MRA) said. For 4Q11,  retailers expect their sales to increase by 10.4%, with specialty retail stores  anticipated to record biggest sales growth at 15.9%.  This  is  followed by fashion and fashion accessories  (+14.9%),  department store-cum-supermarkets (+9.4%) and department stores at  modest (3.7%). Despite the optimism of these retailers, the association  itself estimates the retail sales to grow 5% in 4Q11 (7% in 3Q11). (BT)

Thailand’s industrial output fell the most in more than a decade in Nov due  to the floods. The manufacturing production index dropped 48.6% yoy (-30.1%  in Oct). The decline came in larger than market consensus for 38% drop.  (Bloomberg)

Thailand’s Finance ministry expects the economy will contract by 5% yoy in  4Q11 after flooding slashed production and reduced domestic demand, head of  the fiscal policy office, said. The Ministry of Finance expects the economy to  expand 1.1% in 2011. The ministry has downgraded its growth forecast twice  from earlier estimates of 2.6% and 1.7%- 2.0%. For 2012, the government  forecasts growth between 4.5% -5.5%. (Bloomberg)

The Bank of Thailand (BOT) will ask the government to clarify its proposal to  transfer public debts left over from the 1997 Asian financial crisis to the  central bank. Transferring the debt to the BOT, which already has negative  equity of THB400bn, could affect the bank's credibility, as its equity will be  negative THB1.5tr. (The Nation)  

Chinese Premier Wen Jiabao urged better protection for farmers’ rights to  ensure they receive a larger chunk of profits from the conversion of their land to  industrial and residential use. “We can no longer sacrifice farmers’ land  ownership rights to reduce urbanisation and industrialisation costs,” the official  Xinhua News Agency reported Wen as saying. “It’s both necessary and possible  for us to significantly increase farmers’ gains from the increase in land value.”  (Bloomberg)

China's government will run a smaller fiscal deficit in 2012 of Rmb0.8tr or  1.5% of GDP (from an estimated Rmb0.9tr in 2011), consisting of Rmb550bn by  the central government and Rmb150bn shared by local governments. Fiscal  outlays will increase 11% to Rmb11.1tr (US$1.75tr) in 2012, against a revenue  increase of 9%, according to figures which emerged at the conclusion of the  national Ministry of Finance Work Meeting. (Reuters)

China’s leading index was unchanged at 100.18 (100.17 in Oct). (Bloomberg)

China aims to change the  government’s role in the economy and reduce  microeconomic intervention, said Zhang Ping, chairman of the National  Development and Reform Commission. (Bloomberg)

China: Fiscal spending to rise at faster pace in 2012
Chinese Vice Premier Li Keqiang said central government spending will grow at a faster pace next year as officials seek to spur consumption in the world’s second- biggest economy. Fiscal policy will be targeted and “flexible,” Li told a meeting chaired by Finance Minister Xie Xuren. The government aims for an “appropriate” fiscal deficit and issuance of treasury bonds next year, Li said. (Bloomberg)

Philippine imports in Oct grew 2.3% yoy (+10.4% in Sep), as the  trade  deficit narrowed to US$932m (US$1,238m in Sep). Manila now expects  exports to fall 1% this year (5% in previous estimate), and imports to grow 7%  (13% in previous estimate). (Reuters)

The Philippines may increase its PP72bn  stimulus package approved in  Oct by a further PP20bn to boost growth, presidential spokesman Edwin  Lacierda said. (Bloomberg)

Vietnam’s export growth in the YTD eased to 33.3% yoy in Dec (34.7% in  Nov), while  imports increased 24.7% (26.4% in Nov). The  trade deficit widened to US$0.7bn (US$0.567bn in Nov). (Bloomberg)

Indonesia’s 4Q GDP may grow 6.5% or higher, said Finance Minister Agus  Martowardojo. (Bloomberg)

Indonesia’s finance ministry projected Dec CPI inflation to accelerate faster  than the 0.34% mom in Nov, due to food prices. Nevertheless the 2011 forecast  is expected to remain below 4%. (Xinhua)

Japan and India  renewed a  bilateral swap agreement that will make  available US$15bn to India to help it battle this year’s more-than-16% decline in  the rupee. The first such accord was signed in June 2008 to the tune of US$3bn,  and this recent one proffers Japan another avenue to use its US$1.2 tr of currency reserves, bolster its presence in international finance and foster a  closer trade relationship with Asia’s third-largest economy. (Bloomberg)

Japan’s industrial output fell 2.6% mom in Nov (a 2.2% gain in Oct) that  exceeded all forecasts in a Bloomberg survey. The biggest seasonally adjusted  monthly drops in industrial production were  in the information electronics  industry, with overall output contracting 23.7%. Passenger-car output lost  12.6%, whilst iron and steel production fell 1.2%. (Bloomberg)

Japanese consumer prices (excluding fresh food) fell 0.2% yoy in Nov (0.1%  decline in  Oct), the second straight monthly decline as energy cost increases  decelerated whilst prices of televisions and other durable goods continued their  losing streak. (The Mainichi Daily News)

Japan’s retail sales fell 2.3% yoy in Nov (a 1.9% gain in Oct), according to the  Ministry of Economy, Trade and Industry. Forecasts were for an increase of  0.1%. On a monthly basis, the gauge was down 2.1% in Nov after rising 1.4% in  Oct and falling 1.4% in Sep. (RTT News)

The European Central Bank’s balance sheet ballooned to a record 2.73 tr  euros (US$3.55tr) after it extended more credit to financial institutions last  week to maintain liquidity conditions in the economy during the debt crisis.  Lending to euro-area banks gained 214 bn euros to 879 bn euros in the week  ended 23 Dec. The balance sheet rise of 239 bn euros in the week makes it 553  bn euros higher than three months ago. (Bloomberg)

Indonesia’s Business Competition Supervisory Commission (KPPU) says the  state lost Rp240tr (US$26.16bn) in 2011 due to inflated contracts for goods  and services. The state allocated Rp800tr of its Rp1,435tr budget for goods  and services in 2011 that should have been procured through fair and  transparent tenders, commission chief Nawir Messi said, inflating prices by as  much as 30%. (Jakarta Post)

The Association of Indonesian Automotive Industries (Gaikindo) said that car  sales this year were likely to reach 880,000 units, exceeding an earlier target of  850,000.  The Indonesia Motorcycle Industry Association (AISI) forecast  motorcycle sales to reach 8.2m units in 2011, up 10% from last year. (Jakarta  Globe)

A record 7.6m tourists are expected to have visited  Indonesia by the end of  the year, up 0.6m from last year’s numbers but less than the government’s  optimistic target of 7.7m, the Ministry of Tourism and Culture has said. At  11M11, the number of tourists had reached 6.27m, up 8.47% yoy from 5.78m in  11M10. (Jakarta Globe)

Indonesia’s government agencies and departments have been in a  late-season rush to meet spending targets, data from the Ministry of Finance  showed. On 7 Dec, the government had spent 51% of the targeted Rp140.95tr  (US$15.5bn) set in the revised 2011 budget. But by 27 Dec, that had risen to  76.5%. In 20 days, the government accounted for 25.5% of its allotted annual  spending. (Jakarta Globe)

UK: Shop traffic falls on second sales day after Christmas
UK shopper numbers fell yesterday as discounting and mild weather failed to entice cost-conscious Britons to spend, according to market researcher Experian Footfall. Visits to shops and malls fell 0.7% on 27 Dec compared to the Tuesday after Christmas last year. Shopper numbers surged 21.5% on Boxing Day with extended hours helping boost business limited last year by Sunday trading restrictions. (Bloomberg)

EU: ECB balance sheet increases to record EUR2.73trn
The ECB’s balance sheet soared to a record EUR2.73tn after it lent financial institutions more money last week to keep credit flowing to the economy during the debt crisis. Lending to euro-area banks jumped EUR214bn to EUR879bn in the week ended 23 Dec. The balance sheet increased by EUR239bn in the week and was EUR553bn higher than three months ago. (Bloomberg)

US stocks hit as Italy’s debt sale spurs worry
The Dow Jones Industrial Average fell 139.94 pts, or 1.1%, to 12,151.41 with all of its 30 components ending in the red. US stocks suffered significant losses with the S&P 500 retreating to the loss column for 2011, on concern about Italy’s next auction of government debt. The Dow held a 5% gain for the year, with two sessions remaining. Back in negative terrain for 2011, the S&P 500 Index, shed 15.79 points, or 1.3% to 1,249.64, with natural-resource and energy shares hardest hit among its 10 major industry groups. The Nasdaq Composite declined 35.22 pts, or 1.3%, to 2,589.98, leaving the index in the red by 2.4% for the year. (Market Watch)

20111229 1055 Malaysia Corporate Related News.

Alam Maritim lands SHELL job
Oil and gas support services company Alam Maritim Resources Bhd has secured a RM29.8m job from Sarawak Shell to install offshore transport modules for the oil major. In a statement yesterday, Alam Maritim said the 9 month contract commenced in 4Q this year and is expected to complete by May 2012. The contract is not renewable, but is expected to positively boost earnings and net tangible assets for FY11 ending 31 Dec and beyond, it said. (Financial Daily ) Please see accompanying report.

Magna Prima to develop projects with RM1.6bn GDV
Magna Prima is set to develop high-end property projects with an estimated GDV of more than RM1.6bn in Jalan Ampang, KL and Jalan Gasing, Petaling Jaya. Magna Prima, an investment holding aims to develop comprising 2 towers, residential units and a hotel in Jalan Ampang as well as a mixed project in Jalan Gasing. “The Jalan Ampang project is expected to start next year and that for Jalan Gasing in 2013,” said Executive Director Datuk Rahadian Mahmud Mohd Khalil. (Financial Daily)

Box-Pak shares soar on talk of privatisation
Kian Joo Can Factory Bhd is planning to privatise subsidiary Box-Pak (Malaysia) Bhd under a multimillion ringgit deal that will involve certain Japanese firms, sources say. Kian Joo would pay RM3.20 a share for the remaining shares it does not own in its profitable corrugated carton boxes manufacturing unit, they said. Meanwhile, Box-Pak shares were the second top gainer on Bursa Malaysia yesterday. The stock soared 37 sen to close at RM2.47 with 2.81 million shares traded. YTD, Box-Pak has gained 107.56% or RM1.28, with a low of RM1.09 on 16 March this year. Kian Joo Can owns 32.91m shares, or a 54.83% stake, in Box-Pak. Another single largest shareholder is Amanah Saham Bumiputera Bhd with 5.16% stake. (BT)

The  Energy Commission expects the competitive bidding process for  4.5GW of power-generation capacity to involve a combination of new and  existing power plants. The new capacity will replace retired capacities that  expire in 2015-2016 and meet future demand in Peninsula Malaysia. An EC  official said that the process was still at the early stage of inviting prospective  bidders to register their interest and that the power regulator was  still working  out the details of the plan. (Star Biz)

The Energy Commission has moved to open up the bidding process for  the replacement of first generation Power Purchase Agreement (PPA). This was  revealed by Association of Water and Energy Research Malaysia (AWER)  President S. Piarapakaran in a statement. He did not elaborate.  While congratulating the Energy Commission for the move which he  described as bold, he called for a transparent and fair bidding process.  "Opening up the bidding up to 49% foreign equity will allow Malaysia to  have more industry players that can invest in better and efficient  technology," he said.  He also urged the Energy Commission to blacklist first generation  independent power producers that did not renegotiate their PPAs from  this bid. (Bernama)

MRT Corporation (MRT Corp) has achieved a significant milestone with the  signing of a Points of Agreement (POA) with the land owners in the  Jalan  Inai area which is affected by the MY Rapid Transit project.  The POA addressed issues such as the withdrawal of land acquisition,  access to the land for tunneling works, compensation and the judicial  review which some landowners have brought against the government.  The agreement will form the basis for the mutual agreements which is  expected to be signed between MRT Corp and the land owners end-Jan  2012, said MRT Corp in a statement Wednesday. The agreements are  expected to resolve all issues the land owners have with the MY Rapid  Transit project. (Bernama)

CIMB Group Holdings plans to introduce new Islamic products in Indonesia  and Singapore next year through its Islamic units in the two countries. The bank  is looking at introducing Islamic wealth management products and services as  well as basic consumer banking products such as deposits for the two countries.  (Starbiz)

Malayan Banking (Maybank) has made a subsequent issuance of RM1bn of  subordinated notes under its notes programme of up to RM3bn. Maybank said the subordinated notes issued comprised two trances – RM750m with tenure of  10 years on a 10 non-callable 5 basis (Tranche 1) and RM250m with tenure of 12  years on a 12 non-callable 7 basis (Tranche 2). It said the tranches were priced  at 3.97% and 4.12% respectively and had received strong support from investors,  resulting in an oversubscription of over 1.47 times for Tranche 1 and 1.48 times  for Tranche 2. (Starbiz)

EON Capital (ECB) paid its shareholders a final tax-exempt special dividend of  three sen per share. The final dividend is in addition to the previous first special  dividend and capital repayment paid out on  21  Jun and  23  Sept, 2011  respectively, amounting to a total of RM7.76 per share, ECB said. (Bernama)

Malaysia Airlines’ (MAS) unionized staff is unhappy over MAS’s  turnaround plan that will  downsize the airline’s workforce. MAS  Employees’ Union (Maseu) president Alias Aziz said that MAS management had  indicated its intention to reduce its workforce during a 16 Dec meeting but did  not say how many employees will be affected.  MAS will require existing employees to resign before they opt to join the  regional short haul airline. Maseu was told that only 3,000 staff was  needed for the airline’s short haul operations which included Firefly and  the yet to be named regional premium carrier. Currently, MAS has  20,000 staff.  Alias said that Maseu was not happy with MAS’s latest turnaround plan  and the union was concerned about the impact that cuts on unprofitable  routes, closing of overseas operations and spinning off subsidiaries  would have on MAS’s head count. Alias added, “The possibility of job cuts at MAS goes against what the  Prime Minister told me in a meeting in Sept 2011 that no job cuts or
voluntary separation schemes would result from the restructuring at  MAS”. (Sun Biz)

Boustead Holdings said that as at the close of acceptance and payment of its  restricted offer for sale at 5pm on Tuesday, the total acceptances and excess  applications received were 11.19m shares, representing about 73.86% of the  offer shares made available for subscription. Boustead is undertaking a series of  corporate exercises to cut its 97.81% stake in  Pharmaniaga  to 55%, in  compliance with Bursa Malaysia’s listing rules for listed companies to divest at  least 25% of its shares to the public. (Starbiz)

Boustead Holdings’ wholly-owned unit Boustead Building Materials has  completed the acquisition of 8.86m shares, representing a 70% stake, in  Boustead Sissons Paints from Boustead Holdings for RM10.5m. It has also  completed the acquisition of 3.8 million Boustead Sissons shares, representing a  30% stake, from  Lembaga Tabung Angkatan Tentera for RM4.5m.  (Starbiz)

PPB Group's flour-milling arm, FFM, has received regulatory go-ahead for one  of its three proposed 20%-stake acquisitions in  Wilmar International's  Chinese flour milling units totalling RM80.14m, paving the  way for greater  collaboration between the two companies controlled by Robert Kuok. (Financial  Daily)

Malaysian Rubber Board expects some RM275m will be invested under the  rubber National Key Economic Area (NKEA) mainly involving replanting  and new plantings of rubber trees nationwide, said director-general Datuk Dr  Salmiah Ahmad. In 2012, she said, active replanting activities would cover  about 38,000ha per year focusing mainly on Peninsular Malaysia while new  plantings would cover about 5,000ha each in Sarawak and Sabah. (Starbiz)

Property developer Mah Sing Group Bhd has taken legal action to restrain  Asie Sdn Bhd and  Usaha Nusantara Sdn Bhd from making deals  concerning a 4.08-acre leasehold parcel along Jalan Tun Razak, Kuala Lumpur.  (Starbiz)

Alam Maritim Resources Bhd has won a RM29.8m contract from  Sarawak Shell Bhd. It said its unit Alam Maritim (M) Sdn Bhd had received a  letter of award from Sarawak Shell for the E8 and F13K modules offshore  transportation and installation job. (Starbiz)

Huat Lai Resources Bhd is extending a mandatory takeover offer for egg and  poultry company TPC Plus Bhd at 30 sen cash, a mere 3.4% premium over  yesterday’s closing price. (Starbiz)

Three parties  - Faber Group Bhd's wholly-owned subsidiary  Faber  Mediserve Sdn Bhd, Pantai Medivest Sdn Bhd and Radicare (M) Sdn  Bhd which are vying for the hospital support services (HSS) concessions by the Government are likely to get their contracts renewed within the next  month, according to sources close to the matter. (Starbiz)

Bursa Malaysia has given Uzma Bhd an extension of six months until July 6  2012 to implement its private placement. Uzma had in May applied for the  listing of and quotation of up to 8m new ordinary shares of 50 sen each. (BT)

Star Cruise has earmarked RM79.2m (US$25m) to refurbish SuperStar Virgo  which will further strengthened its cruise holiday products for regional and  international passengers. Chief executive officer William Ng said in a statement  the investment underpinned the company’s continuous drive to grow Asia’s  cruise industry. (Bernama)

Financially distressed technology company Tricubes Bhd said there were typo  errors in its 2011 annual report which showed accumulated losses of RM7.3m  when in actual fact the figure was RM17.24m. (Starbiz)

Zecon Bhd's earnings are expected to increase with the imposition of new toll  rates on the privatised Tun Salahuddin Bridge across the Sarawak River here  beginning next year. From Jan 1, toll rates would be increased by between 7%  and 10% for various classes of motor vehicles. The new rate for cars/taxis is  RM1.60, up 10 sen, RM2.20 for pick-ups/vans and RM3.30 for buses/lorries, an  increase of 20 sen and 30 sen respectively. Motorcyclists will continue to pay 50  sen. Toll card users with a reload value of RM100 and above would continue to  have the RM15 free add-on value. (Starbiz)


Lion Corp: Gets lenders’ nod to defer payments totaling RM341m Lion Corp has secured its lenders’ approval to defer the repayment totaling RM341.10m by  one more year from Dec 31, 2011 to Dec 2012. The amounts deferred included the  redemption of the outstanding nominal value of the Class B(a) bonds and Class B(b) bonds  amounting to RM196.32m. Also deferred was the repayment of the outstanding nominal  value of the Class B debts of US$350,000 (RM1.11m). The lenders also deferred the payment  of the principal and coupon on the Class B(a) redeemable convertible secured loan stocks  (RCSLS), Class B(b) RCSLS and Class B(c) RCSLS amounting to RM143.68m. (Financial Daily)

Goldis: Trigoh buys out Macro Kiosk for RM15m The founders of Macro Kiosk, a multi-country mobile technology enabler, have initiated a  management buy-out of the latter from Goldis Bhd. Macro Kiosk said the MBO by Malaysian  brothers, Kenny Goh, Henry Goh and Goh Chee Seng will be carried out via their corporate  vehicle, Trigoh Sdn Bhd.  They are the  CEO,  COO and Head of Corporate Affairs of Macro  Kiosk, respectively. The MBO encompasses the purchase of the 70% stake in Macro Kiosk  currently held by Goldis for RM15m cash. The MBO will result in an estimated gain of about  RM9.5m derived from the buyout proceeds at the Goldis' Group level. (Business Times)  

20111229 1023 Renewable Energy Related News.

VATTENFALL IN FRENCH HYDROPOWER BID CONSORTIUM-REPORT
PARIS, Dec 26 (Reuters) - A new consortium, including Swedish energy firm Vattenfall  and France's train operator SNCF, has emerged to bid for hydropower concessions that the French government is due to put for auction, French newspaper Les Echos reported on Monday.
Citing no sources, Les Echos said steel major ArcelorMittal  and specialty chemicals maker Rhodia, which is now controlled by Belgian chemicals group Solvay , were also part of the consortium that will be unveiled in January.

US DELAYS DECISION IN CHINA SOLAR CASE UNTIL FEB
WASHINGTON, Dec 23 (Reuters) - The U.S. Commerce Department is giving itself an extra month to investigate charges of unfair Chinese government subsidies in a case brought by the U.S. unit of German solar energy company SolarWorld , a department official said on Friday.
The official, speaking on condition of anonymity, said the department will issue its preliminary decision on countervailing duties on Feb. 14, instead of around Jan. 12 as originally scheduled.

UK SOLAR IN LIMBO AFTER COURT RULING
LONDON, Dec 22 (Reuters) - Britons who wish to install solar panels this Christmas are left wondering about how much money they will receive in state subsidies after the High Court on Wednesday decided the government had acted unlawfully in its rate-setting process.
The government proposed at the end of October to halve so-called feed-in tariffs (FITs) for solar plants for projects below 4 kilowatts (kW) installed after Dec. 12, but the legal consultation process on the proposals will not finish until Dec. 23.

WEST JAPAN UTILITIES TO BOOST WIND POWER BY 400 MW
TOKYO, Dec 22 (Reuters) - Six regionally dominant electricity utilities in central and western Japan have agreed to coordinate the use of their grid to boost wind power capacity in the area by a total 400 megawatts from about 1,230 MW over the next four to five years.
Shikoku Electric Power Co  and Hokuriku Electric Power Co , both of which have a high potential for wind power, plan to start accepting applications from operators of wind turbines in the coming months, the six companies said in a statement on Thursday.

LOSING POWER: CHINA'S WIND GEAR MAKERS FACE LEAN RETURNS
HONG KONG, Dec 22 (Reuters) - Huge overcapacity and weak demand mean Chinese wind turbine makers, among the world's largest, are set for lower revenue and profits for at least the next two years.
China had more than 80 wind turbine makers as of 2010, capable of producing over 40 Gigawatts, yet wind equipment demand is expected to be just 15 GW a year.

UK PLAN TO CUT SOLAR SUBSIDY RULED LEGALLY FLAWED
LONDON, Dec 21 (Reuters) - British government plans to cut subsidies for solar panels on homes were ruled legally flawed by the High Court on Wednesday.
The decision was a victory for environmental campaigner Friends of the Earth and two solar companies, Solar Century and HomeSun, who said the plans were creating economic uncertainty.

BP TURNS OUT LIGHTS AT SOLAR BUSINESS
LONDON, Dec 21 (Reuters) - British oil major BP  shut down the remnants of its solar unit on Wednesday, drawing a line under the business on which most of its Beyond Petroleum tagline of the early 2000s was premised.
The unit, which BP has been scaling back since 2008, is the latest sun energy business to fall victim to rampant competition from China, falling prices, overcapacity and lower government subsidies on which the industry still depends.
 
BOSCH TIGHTENS SOLAR SECTOR GRIP WITH VOLTWERK BUY
FRANKFURT, Dec 21 (Reuters) - Robert Bosch, the world's top automotive supplier, will enter one of the last profitable niches of the solar industry by acquiring the inverter business of Conergy , a sign that competition in the sector is getting tougher.
Bosch has been gradually working its way through the solar value chain via takeovers, buying solar cell maker Ersol for more than 1 billion euros ($1.3 billion) in 2008 and panel maker Aleo Solar  a year later.

20111229 1022 Biofuel Related News.

ARGENTINE 2011 BIODIESEL EXPORTS SOAR TO $1.9 BLN
BUENOS AIRES, Dec 27 (Reuters) - Argentine biodiesel exports rose more than 58 percent to $1.9 billion in 2011 compared with the year before, the country's main biodiesel industry group said on Tuesday.
In volume terms, biodiesel exports from the South American country shot 18.5 percent higher to 1.6 million tonnes, according to a statement from the Argentine Biofuels Chamber, or CARBIO, as it is known by its Spanish initials.

BRAZIL TO FINANCE ETHANOL STORAGE AT MILLS
Dec 26 (Reuters) - Brazil's government will lend up to 500 million reais ($268.64 million) per year for ethanol makers to stock the biofuel, a measure aimed at securing adequate supplies in the interharvest, according to a decree published on Monday.
The measure, which had been announced in April but was not yet put into force, guarantees mills will have an annual loan available for storage over the next five years and sets the official sources for the credit.

NOVOZYMES SEES NEW BIOFUEL ENZYME BOOSTING GROWTH
COPENHAGEN, Dec 22 (Reuters) - Novozymes , the world's leading industrial enzyme producer, sees a new enzyme product for the biofuel industry helping boost revenue growth in 2012, as consumers look for alternatives to fossil fuels.
Bioethanol, which can be blended with gasoline to run cars, is seen as a growth market though development has been held back by uncertainties over U.S. regulations to support green energy.

ENI SIGNS MINING, BIODIESEL DEALS WITH SONANGOL
MILAN, Dec 22 (Reuters) - Italy's oil and gas major Eni  and Angola's national oil company Sonangol have signed an agreement to develop joint mining initiatives in Angola and abroad and other deals, Eni said on Thursday, as the group aims to boost its presence in the African country,
The two companies have also signed agreements to carry out a pilot project in food and biodiesel and non-associated gas development projects related to block 15/06 in Angola, Eni said in a statement.

U.S. ETHANOL TAX BREAK ENDS, BRAZIL SEES AN OPENING
WASHINGTON, Dec 21 (Reuters) - A U.S. ethanol tax credit costing roughly $6 billion a year will expire on Dec. 31, with the U.S. industry declaring itself ready to stand on its own and Brazil hoping for a biofuels bonanza in the years ahead.
Thanks to the high cost of crude oil, corn-based ethanol is attractively priced. Output and exports are record-high this year and a U.S. law assures renewable fuels a share of the U.S. motor fuel market.

20111229 1022 Global Market Related News.

Asia Stocks Drop Third Day on ECB Lending (Source: Bloomberg)
Asian stocks (MXAP) dropped for a third day, with the regional benchmark index heading to the first annual drop since 2008, after a surge in the European Central Bank’s balance sheet highlighted risks of the debt crisis and economic slowdown. Sony Corp. (6758), a consumer-electronics maker that relies on Europe for a 21 percent of its sales, slid 1.3 percent after the euro dropped to a 10-year low against the yen, diminishing the earnings outlook for Asian exporters. Lynas Corp., an Australian rare-earth explorer, slid 7.1 percent on reduced earnings prospects from China. OZ Minerals Ltd. (OZL), an Australian mining firm, fell 5.4 percent after metal prices slid and a train carrying copper concentrate derailed. The MSCI Asia Pacific Index fell 0.7 percent to 111.96 as of 10:28 a.m. in Tokyo with all but one of the gauge’s 10 industry groups falling. For the month, the index is heading for a 1.2 percent decline. The measure has dropped 19 percent this year, the most since 2008.

Japan Stocks Fall as Yen Reaches 10-Year High Against Euro on Debt Concern (Source: Bloomberg)
Japanese stocks fell for a third day as the yen rose to a 10-year high against the euro after a surge in the European Central Bank’s balance sheet to a record highlighted the growing risks of the debt crisis, clouding the earnings outlook for exporters. Sony Corp., a consumer-electronics maker that relies on Europe for a 21 percent of its sales, fell 1.4 percent. Sharp Corp. extended its decline as it and other makers of liquid- crystal display panels agreed to pay $538.6 million to settle antitrust claims. Elpida Memory Inc. sank 4.9 percent after the Asahi newspaper reported the chip maker may seek to delay debt payments. The Nikkei 225 Stock Average (NKY) fell 0.9 percent to 8,347.24 as of 9:50 a.m. in Tokyo. The broader Topix lost 0.5 percent to 718.21, with more than twice as many shares declining as advancing.

European Stocks Retreat After Italian Bill Sale; Carmakers, Banks Decline (Source: Bloomberg)
European stocks fell, snapping a three-day rally, as declines in carmakers and mining companies outweighed optimism that an easing in Italy’s borrowing costs indicated the region’s debt crisis won’t deepen. Bayerische Motoren Werke AG (BMW), the world’s biggest maker of luxury cars, lost 3.3 percent. Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s biggest lenders, slid at least 3 percent. Tesco Plc (TSCO), the U.K.’s largest supermarket chain, jumped 2.3 percent. The Stoxx Europe 600 Index dropped 0.7 percent to 240.20 at the close in London. The gauge rallied 2 percent in the previous three sessions as investors turned attention from the debt crisis to U.S. data that showed the recovery in the world’s largest economy is gathering pace. Stocks erased gains after a report said the European (SXXP) Central Bank’s balance sheet soared to a record after it lent financial institutions more money last week in an attempt to keep credit flowing to the economy during the debt crisis.

Euro, Stocks Retreat as ECB’s Balance Sheet Expands to Record Amid Crisis (Source: Bloomberg)
The euro slid to a 10-year low versus the yen and stocks fell, halting a five-day rally in the Standard & Poor’s 500 Index, as Italian bonds erased earlier gains and a surge in the European Central Bank’s balance sheet to a record highlighted risks from the region’s debt crisis. The euro lost as much as 1.1 percent to 100.73 yen and decreased 1 percent to an 11-month low of $1.2937. The S&P 500 dropped 1.3 percent to 1,249.64 at 4 p.m. in New York and the Dow Jones Industrial Average lost 139.94 points, or 1.1 percent, to 12,151.41. Ten-year Italian bond yields rose less than one basis point to 6.999 percent after losing as much as 25 basis points. Oil snapped a six-day advance and gold capped the longest slump in two years. U.S. Treasuries rallied.
The ECB’s balance sheet soared to a record 2.73 trillion euros ($3.55 trillion) after it lent financial institutions more money last week in an attempt to keep credit flowing to the economy during the debt crisis. Early gains in stocks and U.S. index futures came after Italy’s borrowing costs plunged at an auction of 9 billion euros of six-month bills, while investors turned their attention to the nation’s auction of longer-term bonds tomorrow.

S&P 500 Snaps Five-Day Advance Amid Concern About Europe’s Debt Crisis (Source: Bloomberg)
U.S. stocks declined, halting a five-day advance in the Standard & Poor’s 500 Index, as the European Central Bank’s balance sheet increased to a record after a surge of bank lending to stem the region’s debt crisis. Alcoa Inc. (AA) and Chevron Corp. (CVX) dropped at least 1.8 percent as the euro tumbled to the lowest level since January against the U.S. dollar, curbing demand for commodities. The Morgan Stanley (MS) Cyclical Index sank 1.9 percent as Caterpillar (CAT) Inc. and Ford Motor Co. (F) slid more than 2.3 percent. Bank of America Corp. (BAC) slumped 3.6 percent, extending yesterday’s decline.
The S&P 500 retreated 1.3 percent to 1,249.64 at 4 p.m. New York time. The benchmark gauge erased its 2011 gain and fell below its average price of the past 200 days. (SPX) The Dow Jones Industrial Average slid 139.94 points, or 1.1 percent, to 12,151.41 today. The Russell 2000 Index of small companies dropped 2.1 percent. About 4.4 billion shares changed hands on U.S. exchanges, or 42 percent below the three-month average.

BRIC Decade Ends With Record Stock Outflows as Goldman Says Growth Peaked (Source: Bloomberg)
In the past decade, mutual funds poured almost $70 billion into Brazil, Russia, India and China, stocks more than quadrupled gains in the Standard & Poor’s 500 Index and the economies grew four times faster than America’s. Now Goldman Sachs Group Inc. (GS), which coined the term BRIC, says the best is over for the largest emerging markets. BRIC funds recorded $15 billion of outflows this year as the MSCI BRIC Index sank 24 percent, EPFR Global data show. The gauge, which beat the S&P 500 by 390 percentage points from November 2001 through September 2010, has trailed the measure for five straight quarters, the longest stretch since Goldman Sachs forecast the countries would join the U.S. and Japan as the top economies by 2050.
“In emerging markets, we’re waiting for things to get worse before they get better,” said Michael Shaoul, the chairman of Marketfield Asset Management in New York who predicted in February that developing-nation stocks would fall this year. The $845 million Marketfield Fund (VONEMBI) has topped 97 percent of peers in 2011, data compiled by Bloomberg show.

Bernanke’s Drive for Openness May Include More Briefings by Fed: Economy (Source: Bloomberg)
Federal Reserve Chairman Ben S. Bernanke could double press briefings to improve understanding of policy changes that may include signaling interest rates will stay near zero longer, economists said. Adding briefings “is a viable option because Bernanke has been an effective communicator” of policy aims, said Sam Bullard, senior economist at Wells Fargo Securities. Fed officials may also replace their pledge to keep the benchmark rate close to zero through mid-2013 with a description of circumstances under which rates would rise, said Keith Hembre, chief economist at Nuveen Asset Management in Minneapolis. Boosting the frequency of press conferences would give Bernanke more opportunities to explain shifts in policy and the Fed’s outlook for the economy. The Standard & Poor’s 500 Index fell 6 percent over two days following the Fed’s statement in September that the economy faced “significant downside risks,” an assessment that wasn’t followed by a more detailed explanation.

Minimum Wage in U.S. Fails to Beat Inflation: Chart of the Day (Source: Bloomberg)
Workers in the U.S. earning the minimum wage are worse off now than they were four decades ago. The CHART OF THE DAY shows that after adjusting for inflation, the federal minimum wage dropped 20 percent from 1967 to 2010, even as the nominal figure climbed to $7.25 an hour from $1.40, a 418 percent gain. The decline would have been worse if not for increases that took place from 2008 through 2010 in how much employers were legally obligated to pay. Combined with more stable consumer prices, those adjustments helped trim the reduction in earnings from 41 percent at the end of 2007, following a decade of no change in minimum pay.

Treasuries Hold Gains Before Home Sales Data, as European Concern Grows (Source: Bloomberg)
Treasuries held yesterday’s biggest gain in seven weeks before an industry report that economists forecast will show U.S. pending home sales grew at a slower pace last month. Benchmark 10-year yields were about a quarter percentage point away from the record low as Italy prepared to sell as much as 8.5 billion euros ($11 billion) of notes today. Treasuries have returned 9.6 percent this year, according to Bank of America Merrill Lynch data, as the European debt crisis led investors to seek the relative safety of U.S. securities. It is the biggest gain since 2008. “U.S. Treasuries are a good place to be,” said Hideo Shimomura, who helps oversee the equivalent of $77 billion in Tokyo as chief fund investor at Mitsubishi UFJ Asset Management Co., a unit of Japan’s biggest bank. “We are focused on the most liquid markets.”

China-Japan Currency Deal Points Way to a New World Monetary Order: View (Source: Bloomberg)
The agreement announced between China and Japan to strengthen financial ties and promote yuan-yen trade is a small, but notable, step toward a new global economy. Its immediate practical significance is limited, yet the deal signals that a deeper transformation is under way -- and one that the world should welcome. The plan was a surprise: It marks a warming of relations that had been chilly of late. The accord still lacks a timetable for implementation, but once in force it will let Chinese and Japanese trading companies switch between yuan and yen without converting to dollars first. This will encourage commerce by reducing currency risk and trading costs.
The agreement will let a Japanese-backed institution sell yuan bonds in China, helping to open China’s capital market. In return, Japan will convert some of its foreign- exchange reserves into Chinese bonds. China has signed financial pacts with other nations, mainly in Asia, but the size of China-Japan trade -- $340 billion last year, and growing fast -- makes this deal the most important by far.

China’s EXIM Lend More to Sub-Sahara Africa Than World Bank, Fitch Says (Source: Bloomberg)
Export-Import Bank of China extended $12.5 billion more in loans to sub-Saharan Africa in the past decade than the World Bank, Fitch Ratings said. State-owned EXIM lent about $67.2 billion to the world’s poorest region between 2001 and 2010 compared with the World Bank’s $54.7 billion, the ratings company said in a report e- mailed from London today. “It is estimated that 20 percent of EXIM bank’s total business volume is conducted with Africa,” Fitch said. “Angola, Ethiopia, Nigeria and Sudan have been traditional recipients of EXIM loans since the bank’s founding in 1994. However, more recent projects suggest an even distribution across the African continent.”

Ma Stakes Re-Election on China Rapprochement Strengthening Taiwan Economy (Source: Bloomberg)
Taiwan President Ma Ying-jeou said his rapprochement with China will encourage other nations to strengthen trade with the island and make it less dependent on the mainland, rebutting opposition criticism that he’s left the economy more vulnerable. “Taiwan has transformed its role from a troublemaker to a peacemaker,” Ma, vying for a second four-year term in Jan. 14 elections, said in an interview in his Taipei office. “We’re seeing more windows and doors being opened for Taiwan because of improved cross-strait relations. They have lowered their concerns in developing relations with us, the logic being: If Beijing can develop better relations with Taiwan, why can’t we?”
Ma’s lead with voters has narrowed as slower growth in the export-reliant economy deepens concern over a wealth gap the opposition blames in part on Taiwanese jobs going to the mainland. Victory at the polls may turn on how close Taiwanese want China ties to be, said Alexander Huang, a professor of strategy and war-gaming at Tamkang University’s Graduate Institute of International Affairs.

Kim Jong Un May Open North Korea: Defector (Source: Bloomberg)
Kim Jong Un may relax state controls over North Korea’s economy and ease the isolation entrenched by his late father’s nuclear weapons program, according to a banker who fled the communist state after years working for the regime. Kim’s Swiss education and his reported fondness for basketball -- a sign he’s a team player -- may make him more open to change than his late father, Choi Se Woong, former deputy governor of the North’s Korea Reunification Development Bank, said in an interview in Seoul this week. “It’s better for North Korea to have Kim Jong Un as their leader than anyone else,” said Choi, 50, who defected to the South in 1995 and is the son of a former North Korean finance minister. “Kim Jong Un will seek to start a market economy but it will be uniquely North Korean-style, different from China, South Korea or any other capitalist country.”

ECB Balance Sheet Increases to a Record $3.55 Trillion on Loans to Banks (Source: Bloomberg)
The European Central Bank’s balance sheet soared to a record 2.73 trillion euros ($3.55 trillion) after it lent financial institutions more money last week to keep credit flowing to the economy during the debt crisis. Lending to euro-area banks jumped 214 billion euros to 879 billion euros in the week ended Dec. 23, the Frankfurt-based ECB said in a statement today. The balance sheet increased by 239 billion euros in the week and was 553 billion euros higher than three months ago. The euro weakened and stocks fell, halting a five-day advance in the Standard & Poor’s 500 Index, as the announcement highlighted risks from Europe’s debt crisis. “The market reaction is slightly incomprehensible,” said Jens Kramer, an economist NordLB in Hanover. “After that record liquidity injection it would follow that the balance sheet would swell. Seeing the figure in black and white, and the fear of what would happen to the ECB if a country defaulted, may have spooked the market.”

Swiss Leading Indicator at Two-Year Low Signals Deeper Slowdown: Economy (Source: Bloomberg)
Switzerland’s forward-looking economic indicator fell to the lowest in more than two years in December, adding to signs of a deepening slowdown. The monthly gauge, which aims to predict the economy’s direction about six months ahead, dropped to 0.01 from a revised 0.34 in November, the KOF Swiss Economic Institute in Zurich said in an e-mailed statement today. That’s the lowest reading since August 2009. Economists forecast a decline to 0.23, according to the median of 12 estimates in a Bloomberg News survey. Switzerland’s export-led economy is floundering as Europe’s debt crisis and the franc’s strength hamper foreign sales. The government on Dec. 13 lowered its projections for 2012 growth to 0.5 percent from 0.9 percent, and the Swiss central bank this month said “the substantial appreciation of the Swiss franc over the summer is weighing heavily” on the economy.

Italy to Tap Markets With $11 Billion Sale of Bonds as Monti Eyes Growth (Source: Bloomberg)
Italy will sell as much as 8.5 billion euros ($11 billion) in bonds today, one day after borrowing costs plunged at an auction of shorter-maturity debt. The Treasury in Rome will sell bonds maturing in 2014, 2018, 2021 and 2022. Italy yesterday sold 9 billion euros of 179-day bills to yield 3.251 percent, down from 6.504 percent at the last auction on Nov. 25, after the European Central Bank offered unlimited three-year loans to euro-area banks last week. The ECB’s measures “have clearly helped” and yesterday’s sale augurs well for today’s “more challenging auction of longer-term paper,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in an e-mail. Today’s auction results are expected shortly after 11 a.m. in Rome.

Italy’s Borrowing Costs Decline at Auction After Government Agrees on Cuts (Source: Bloomberg)
Dec. 28 (Bloomberg) --Italy sold 9 billion euros ($11.8 billion) of six-month Treasury bills, meeting its target, and borrowing costs plunged after the European Central Bank provided euro-region lenders with unlimited three-year loans last week. The Rome-based Treasury sold the 179-day bills at a rate of 3.251 percent, down from a 14-year-high of 6.504 percent at the last auction of similar-maturity securities on Nov. 25. Investors bid for 1.7 times the amount offered, up from 1.5 times last month. Demand “was quite good, a sign that market tensions have considerably eased from a month ago and that ECB liquidity may be working to support demand,” Luca Cazzulani, a senior fixed- income strategist at UniCredit Global Research in Milan, said in a note published today.