Monday, January 3, 2011

20110103 1829 Breaking News.

Chinese officials have faith in the Spanish financial system and will continue to participate in future government debt auctions, China's Vice Premier Li Keqiang wrote in an editorial in El Pais on Monday. "China
is a responsible, long-term investor in the European financial market and particularly in Spain, and we have confidence in the Spanish financial market, which has meant the acquisition of its public debt something which we will continue to do in the future," Keqiang wrote.

20110103 1828 FCPO EOD Daily Chart Study.

FCPO closed : 3852, changed : +64 points, volume : lower.
Bollinger band reading : upside biased.
MACD Histrogram : rising, buyer in control.
Support : 3800, 3770, 3750 level.
Resistance : 3870, 3920, 4000 level.
Comment :
Bullish FCPO closed the day recorded gain with lesser volume transacted while both export cargo surveyor released a lower export data for the entire month of December 2010 (ITS down 15% / SGS down 19.7%) as bad weather factor still having bigger influence over demand concern.
Daily chart formed a doji bar candle position right at the upper Bollinger band level with the bandwidth continue to expand outwards suggesting a further upside biased potential market development.
When to buy : buy at support, weakness or break up with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110103 1810 FKLI EOD Daily Chart Study.

FKLI closed : 1540.5, changed : +13.5 points,  volume : higher.
Bollinger band reading : upside biased with possible pullback.
MACD Histrogram : resume rising, buyer extending dominance.
Support : 1540, 1530, 1515 level.
Resistance : 1550, 1560, 1570 level.
Comment :
FKLI started the new year boldly rallied up 13.5 points(19 points for continuous chart) with better volume changed hand in tandem with Honk Kong, Taiwan and Singapore exhanges.
Daily chart formed a wide range up bar candle closed little above upper Bollinger band resistant level suggesting a possible pullback correction to take place within upside biased reading market.
When to buy : buy at support, weakness or break up with larger cut loss and profit target.
When to sell : sell at resistant or strength with quick cut loss and profit target.

20110103 1531 Global Economics Related News.

U.S: Jobless claims drop to two-year low. Applications for unemployment assistance decreased by 34,000 to 388,000 in the week ended Dec. 25, breaking the 400,000 level for the first time since July 2008. (Source: Bloomberg)

U.K: Home prices unexpectedly rose in December, Nationwide says. The average cost of a home rose 0.4% MoM from November to GBP 162,763 (USD 250,200), the first monthly increase since May, Britain's biggest customer-owned lender said in an emailed report. On the year, prices were 0.4% YoY higher. (Source: Bloomberg)

China: November manufacturing growth cools on tighter policies. The Purchasing Managers' Index fell to 53.9 from 55.2 in November. A measure of manufacturers' input costs also fell. (Source: Bloomberg)

S. Korea: Exports rise for 14th straight month in December. Overseas shipments increased 23.1% YoY, after gaining a revised 21.5% YoY in November. Imports climbed 23.3% YoY, leaving a trade surplus of USD 3.74b. (Source: Bloomberg)

S. Korea: Consumer prices increased 3.5% YoY in December accelerating from 3.3% YoY in November. Prices rose 0.6% MoM from the previous month. (Source: Bloomberg)

China & Taiwan: Tariff cuts start as relations warm
China and Taiwan will lower import taxes on more than 800 products under the first trade treaty between the former civil-war foes, an accord that the island called a “vitamin” for its economy. China will cut duties on 557 items imported from Taiwan including fish and bicycles, an increase from 539 when the agreement was signed in June, China’s Ministry of Commerce said in a statement on its website. Taiwan will lower tariffs on 267 items such as tea and cement from the mainland as part of the “early harvest” accord. (Bloomberg)

China: Inflation may cool as manufacturing slows
China’s inflation may cool after manufacturing growth slowed in December because of a tighter monetary policy and the closure of energy-wasting and highly polluting factories. A purchasing managers’ index fell to 53.9 from 55.2 in November, China’s logistics federation and the statistics bureau said. Manufacturers’ input costs rose at a slower pace, the report showed. (Bloomberg)

US: Employment probably picked up at year-end
Employment probably rose for a third month in December, bringing US payroll growth last year to about 1m and pointing to further improvement in the labor market in 2011, economists said before a report this week. A projected 140,000 gain in December payrolls is the median forecast of 61 economists surveyed by Bloomberg News before the 7 Jan 2011 report from the Labor Department. (Bloomberg)

20110103 1531 Malaysia Corporate Related News.

RHB, Pos Malaysia: To launch new banking service. RHB Banking Group, in a collaborative effort with Pos Malaysia Bhd, is launching the Pos Malaysia-RHB Shared Banking Services to enable banking services for its customers at selected Pos Malaysia outlets nationwide. The first phase would involve 21 selected Pos Malaysia outlets in the Klang Valley and Negri Sembilan. (Source: The Star)

Construction: RM144m allocated for infrastructure facilities in Kelantan. The Rural and Regional Development Ministry has allocated RM144m to provide infrastructure facilities in Kelantan during 2011. The projects include the provision of water and electricity supply, construction of roads, and building of houses for the poor. (Source: The Star)

Construction: RM1.46b island project revived. The RM1.46b Pulau Melaka twin reclaimed island project has been revived after a decade of financial and legal woes. The project, that involves the construction of some 400 commercial shop lots comprising a total of 1,534 units, would resume by September 2011. Most of the development work on the island has been completed with 521 units finished. (Source: The Star)

Mining: Advance SCT restarts Malaysian aluminium smelting plant. Advance SCT Ltd, one of Singapore's largest traders of aluminium, copper and stainless steel scraps, has restarted its aluminium smelting plant in Malaysia last month. The smelter would produce 200 to 400 tonnes of aluminium ingots monthly. It has also secured an exclusive contract to supply at least 1,000 tonnes a month of first grade copper scraps to China-based Qingyuan Shengli Copper Material Co Ltd. (Source: The Star)

Insurance: AXA Affin, BH Insurance to merge. AXA Affin General Insurance Bhd will merge with BH Insurance (M) Bhd and operate as single entity starting Jan 1. The combined turnover of the two entities puts them among the top five insurers in the country. (Source: The Star)   

IJM Land-MRCB merger called off
Property firms IJM Land Bhd and Malaysian Resources Corp Bhd (MRCB), which announced their plan last month to merge and potentially become the second largest property player, have aborted the plan. MRCB and IJM Land announced to Bursa Malaysia last Friday that the merger was aborted as both companies were not able to reach an agreement on the definitive terms and conditions of the proposed merger, following a series of discussions. They also announced that trading in the shares of both companies was suspended and would only resume on Monday. MRCB and IJM Land officials declined to comment when contacted by StarBiz. It is believed that the much anticipated merger between the two firms, announced on Nov 23, was called off due to issues over management and shareholding structure of the new entity post-merger. (StarBiz)

LTH, Columbia Asia to build new hospital in PJ
Lembaga Tabung Haji (LTH) and healthcare group Columbia Asia SB are currently in the final stages of discussions for the construction of a new 100-bed hospital in Section 17, Petaling Jaya, with an estimated development cost of around RM70m. The project will be carried out under a build-and-lease arrangement and scheduled to begin construction in the first-half of 2011. Under the arrangement, it is understood that Columbia Asia will be the turnkey contractor and operator of the community-based hospital. Both land and building are owned by LTH, which will lease them to Columbia Asia. (Malaysian Reserve)

Oil palm dealers concerned about MPOB’s new rule
The Malaysia Oil Palm Dealers Association (MOPDA) has expressed concern over the move by the Malaysian Palm Oil Board (MPOB) to bar dealers from buying and selling oil palm fresh fruit bunches (FFB). MOPDA president Datuk Abdul Fattah Abdullah said the new ruling was not beneficial to stakeholders, particularly dealers and the industry as a whole. The buying and selling of FFB among dealers was the norm and if small dealers were not allowed to trade among themselves, this would result in loss of employment, income and the eventual folding of the enterprises, he said. The MPOB ruling, said to take effect from today, was to give the opportunity for estates, smallholders and dealers to sell directly to millers, prevent small dealers from being monopolised by big dealers, and enhance the quality of oil palm fruits so that the oil extraction rate would exceed 25%. (StarBiz)

20110103 1522 Global Market Related News.

Argentine soy area unchanged despite severe dryness
BUENOS AIRES, Dec 30 (Reuters) - Argentina's 2010/11 wheat harvest is expected to beat initial estimates and reach 14.5 million tonnes, while the outlook for corn and soy area is stable despite dryness, Buenos Aires Grains Exchange said on Thursday.
The South American country is the world's No. 3 soybean supplier and the top global provider of soyoil and meal. It is also the second-biggest corn exporter and a major source of wheat, especially for neighboring Brazil.

Stocks end 2010 at over 2-year highs; Asia shines
LONDON, Dec 31 (Reuters) - World stocks are set to end the year at their highest levels in 28 months as investors gear up for continued risk-taking into 2011, prompted by a wilting dollar and narrowing yields on safe-haven U.S. bonds.
"In many ways 2010 is ending on a similar note to 2009, with markets rallying on hopes of economic recovery. This is certainly in line with our view of the world economy," said Keith Wade, chief economist at Schroders.

Argentine wheat output seen higher at 14.5 mln T
BUENOS AIRES, Dec 30 (Reuters) - Argentina's 2010/11 wheat harvest is expected to total 14.5 million tonnes, up from the previous estimate for output of 13.5 million tonnes, the Buenos Aires Grains Exchange said on Thursday.
The exchange also held its forecasts for 2010/11 corn and soy plantings despite dry weather that has driven global prices higher in recent weeks.

Brazil's South Faces Little Rain, Threatening Soy-Somar (Source: CME)
Southern and northeastern Brazilian states face little rain in the coming days while ample rains are forecast to fall in other states, according to private weather service Somar. A maximum of 10 millimeters of rain is forecast for Parana, Brazil's second-largest soy producer state, by Jan. 3, said Celso Oliveira, a meteorologist at Somar in Sao Paulo. In Rio Grande do Sul, Brazil's third-biggest producer of the oilseed, five millimeters of rain are forecast by Jan. 3, according to Oliveira. The farmers "still are not talking about losses though the sparse rain brings worries" in the two Brazilian states, Oliveira said. Dry weather caused by the La Nina weather pattern already is damaging fields in Argentina, which will be the world's second-largest corn exporter this crop year and third-largest soybean exporter, according to U.S. data. The forecast, though, is for ample rains in Mato Grosso, Brazil's largest producer of soy, and Goias, another significant producer of the oilseed, Oliveira said.
Brazil is the world's largest soy producer after the U.S. Brazil recently finished planting its 2010-11 crop, which will be harvested between January and May of the coming year. Rains may reach between 200 millimeters and 300 millimeters in some regions in Mato Grosso and Goias between now and Jan. 3, according to Oliveira. This compares with average rain of 400 millimeters for the entire month of December, he said. No rains, though, are forecast for Mato Grosso do Sul. There are worries about the dry weather in the soy producer state, though losses aren't yet recorded, Oliveira said. Though there are no losses yet, there could be soy crop losses in the northeastern Brazilian states of Maranhao and Piaui, according to Oliveira. The soil is already dry in the two states, he said. Oliveira, discussing weather throughout Brazil, said lack of rain in the states of Maranhao and Piaui is "the largest worry."
Brazil's 2010-11 soy crop is forecast to reach 68.6 million metric tons, the country's Ministry of Agriculture Conab unit announced earlier this month. Celeres, a Brazilian agricultural consultancy, forecast early this month that the 2010-11 Brazilian soy crop would reach 68.1 million tons.

China Aims To Boost Agricultural Self-Sufficiency Next 5 Years -Ministry (Source: CME)
China hopes to raise its self-sufficiency level for some important agricultural commodities, including vegetable oils, cotton and sugar over the next five years, in an effort that could limit import growth in the face of rapidly rising consumption. Realizing its targets won't be easy, as China's grain output growth is at the mercy of weather, while the expansion of farmland is limited by rapid urbanization and yields are constrained by a lack of irrigation infrastructure. Only 50% of China's farmland is effectively irrigated and about 70% of the nation's farmland is low- to medium-yielding. China will try to raise its self-sufficiency rate for vegetable oils beyond the 40% level--the government's threshold for national food security, between 2011 and 2015--while boosting output of oilseeds to 35 million metric tons, the Ministry of Agriculture said. The self-sufficiency rate is currently around 34%, according to state-backed Chinese Academy of Agricultural Sciences.
China's oilseed output this year is expected to exceed 31.5 million tons, steady on year, Vice Minister Wei Chaoan said, according to a transcript on the ministry's website of his comments at a national planting conference. The government is targeting annual cotton output of more than 7 million tons during China's 12th Five-Year Program period, compared with about 6.2 million tons this year, which was down 180,000 tons from 2009, Wei said. The government will increase vegetable output to about 650 million tons during the period, up from this year's 637 million tons and it will aim to expand planted vegetable area on the outskirts of China's medium- and large-sized cities to reduce transportation costs, Wei said. Self-sufficiency in sugar will be raised to more than 90% from about 80% by 2015, with output of sugar crops to reach about 140 million tons, he said, adding that the country is completely self-sufficient in rice, wheat and corn.
To realize its self-sufficiency targets, planted area must be guaranteed at more than 1.6 billion mu, or 110 million hectares between 2011 and 2015, he added. The area planted to corn, soybeans and rice will be increased, while wheat yields must be enhanced, he said. "Increasing grain output by merely expanding farmland area would come to a dead end," Wei said. China lost about 50 million tons of grain due to natural disasters and 25 million tons due to insect damage in 2010, about 14% of the nation's total grain output of 546.4 million tons, Wei said. China will allocate a larger share of its fixed-asset investment budget to rural infrastructure such as irrigation, the central government said Dec. 23, following the conclusion of its annual Central Rural Work Conference.

US Grain Exports-Wheat sales at 3-month low, soy down 20 pct
CHICAGO, Dec 30 (Reuters) - U.S. wheat export sales fell 27 percent to the lowest level in more than three months last week as demand waned after big rains in Australia prompted a rash of buying early this month, U.S. Agriculture Department data showed on Thursday.
Export sales of U.S. corn fell 17 percent to a one-month low, while soybean export were down 20 percent, USDA said.

U.S. wheat jumps to 5-month top on Australia floods
SINGAPORE, Jan 3 (Reuters) - U.S. wheat futures started  the New Year with a gain of 1.6 percent to a new  five-month top as floods in Australia hampered grain  shipments, threatening to further tighten global supplies.
"There is supporting news from Australia as it seems that  Australia is not going to recover from floods soon," said Ker  Chung Yang, an investment analyst at Phillip Futures in  Singapore.

Oil extends rally above $91, eyes US econ data
SINGAPORE, Jan 3 (Reuters) - Oil extended its rally above  $91 a barrel on optimism  that the global economic  rebound is gathering momentum, driving demand growth and  sending prices into triple-digit territory later this year.
"Snowstorms aside, more econ data will set the tone and  direction this week for oil," said Geoff Howie, markets  strategist at MF Global in Singapore.

OIL: Oil eases; holds above $91 on hopes of econ recovery
SINGAPORE, Jan 3 (Reuters) - Crude oil eased on Monday,  but held above the $91 a barrel mark on optimism the gathering  momentum in the global economic recovery would drive demand  growth and send prices into triple-digit territory later this  year.
Warmer weather forecasts after the blizzard that  pummeled the U.S. Northeast have cast doubts on sustained  domestic demand for heating fuel, and could cap gains in oil  prices.

COMMODITY MARKETS: Second year of top gains set high hopes for 2011
NEW YORK/LONDON, Dec 31 (Reuters) - Commodities head into 2011 with a second year of asset-beating gains that elevated oil and grains to their highest prices since the financial crisis and copper to a record.
"I think the fundamentals in commodities will overweigh any type of currency play in 2011. Supply situations from copper to coffee are really tight," said Sean McGillivray, vice-president at Oregon-based Great Pacific Wealth Management, which does asset allocation for over 30 commodity-based funds.

GLOBAL MARETS: Stocks, commodities shine in 2010; euro suffers
NEW YORK/LONDON, Dec 31 (Reuters) - World stocks ended 2010 at their highest levels in 28 months on Friday and oil touched a 26-month peak as expectations of a further recovery in the global economy supported investors' appetite for risk heading into the new year.
"In many ways 2010 is ending on a similar note to 2009, with markets rallying on hopes of economic recovery. This is certainly in line with our view of the world economy," said Keith Wade, chief economist at Schroders.

20110103 1520 Soy Oil & Palm Oil Related News.

ITS CPO export down 15% to 1,512,250 tonnes for the period of 1~31 Dec 2010.

CBOT soy products were mixed amid choppy trade in the soy complex. Worries about South American weather are underpinning the complex. Export sales were solid for soymeal but weak for soyoil, analysts said. Jan soymeal closed down $0.30 to $365.40 per short ton and Jan soyoil settled up $0.023, or 0.4%, to 56.61 cents per pound.  (Source: CME)

Argentine soy area unchanged despite severe dryness
BUENOS AIRES, Dec 30 (Reuters) - Argentina's 2010/11 wheat harvest is expected to beat initial estimates and reach 14.5 million tonnes, while the outlook for corn and soy area is stable despite dryness, Buenos Aires Grains Exchange said on Thursday.
The South American country is the world's No. 3 soybean supplier and the top global provider of soyoil and meal. It is also the second-biggest corn exporter and a major source of wheat, especially for neighboring Brazil.

Brazil's No. 2 soy state Parana to harvest earlier
SAO PAULO, Dec 30 (Reuters) - Soy producers in Brazil's Parana state will beat other regions to market with an earlier-than-usual harvest, and should reap a premium for their produce as a result, analysts said this week. Parana in the south of the world's No. 2 soy producer, got a head start with soy planting this year with plentiful rain that did not reach the top soy state Mato Grosso until weeks later, delaying the sowing of the oilseed there. Mato Grosso is usually the first to harvest its soy.
Soy in Parana, second to Mato Grosso for output, should reach the market by late January or early February and expected strong demand by then will guarantee firm prices for growers, said Felipe Prince, analyst at the Agrosecurity consultancy.

Indonesia sees palm oil output up 5.3 pct in 2011
JAKARTA, Dec 30 (Reuters) - Indonesia expects output of  key plantation crops, including palm oil and rubber, to  increase next year on the back of expanded acreage, improving  yields and expected good weather, a senior agriculture  official said on Thursday.
An unusually long rainy season this year has wreaked havoc  on most of the country's plantation crops, tightening supply  to global markets and driving up prices of rubber and palm oil.