Tuesday, January 4, 2011

20110104 1811 No Chart Study For Today Due to Charting Software Problem.

Overall :
FKLI : Uptrend Still Intact. Upside biased with possible pullback correction.
FCPO : Uptrend Still Intact. Upside biased with possible pullback correction.

20110104 0931 Local & Global Economics Related News.

Malaysia: November exports rise
Malaysia’s exports rose 5.3% in November, spurred by stronger demand from China for raw materials including palm oil, rubber and chemicals. Overseas shipments climbed to RM52.7bn y-o-y after gaining 1.3% in October. Exports to China increased 14.2% y-o-y to RM7.2bn while exports to the US fell 16.9% in November y-o-y on lower electronics demand. Imports in November rose 6.1% to RM43.7bn y-o-y while the trade surplus widened to RM9bn from RM6.85bn in October. (Bloomberg)

Singapore: Economy rebounds after manufacturing surge
Singapore’s GDP rose an annualized 6.9% in the three months through 31 Dec. Manufacturing rose 28.2% y-o-y after gaining a revised 13.8% in the previous quarter. Services grew 8.8% y-o-y, after climbing a revised 10% in the third quarter. Construction shrank 1.2%, compared with a 7.1% increase last quarter. (Bloomberg)

 Indonesia: Inflation climbs to 20-month high
Indonesia’s inflation accelerated to a 20-month high, putting pressure on policy makers to consider raising the benchmark interest rate. Consumer prices rose 6.96% last month y-o-y, compared to a 6.33% gain in November and a 6.71% median forecast. Meanwhile, exports jumped 42.3% in November. Consumer prices climbed 0.92% in December m-o-m after rising 0.6% in November. Core inflation was 4.28% y-o-y, easing from 4.31% the previous month. Indonesia’s exports rose to USD15.3bn in November after gaining a revised 17.6% in October. Imports surged 48.3%. (Bloomberg)

India & Australia: Manufacturing growth slows
India’s manufacturing growth slowed to a three-month low in December. The purchasing managers’ index fell to 56.7 from 58.4 in November. Any data above 50 indicates expansion. The reading has exceeded 50 since April 2009, showing that consumption is holding up amid the monetary policy tightening. Merchandise exports rose 26.5% to USD18.9bn in November y-o-y while imports gained 11.2% to USD27.89bn. Meanwhile, Australian manufacturing contracted in December for a fourth month to 46.3 from 47.6 as higher borrowing costs curbed consumer spending. (Bloomberg)

EU: Manufacturing expands more than expected
Europe’s manufacturing industry grew more than initially estimated in December, powered by Germany’s exportled expansion. A gauge of manufacturing in the euro area rose to 57.1 from 55.3 the previous month. That’s above the 56.8 reported earlier for December. A gauge of manufacturing in Germany, Europe’s largest economy, rose to 60.7 in December from 58.1 the previous month, while the indicator for France slipped to 57.2 from 57.9. A gauge for Italy advanced to 54.7 from 52. (Bloomberg)

US: Manufacturing rises to seven-month high, construction rises for third month
Manufacturing in the US expanded in December at the fastest pace in seven months, reinforcing signs the expansion is gaining momentum. The Institute for Supply Management’s index climbed to 57 last month from 56.6 in November. In the US, factories reported faster rates of orders and production. The ISM’s bookings measure rose in December to a seven-month high. Meanwhile, construction spending rose in November for a third month, gaining 0.4% after a 0.7% increase in October. The median estimate called for a 0.2% rise. (Bloomberg)

20110104 0930 Malaysia Corporate Related News.

Petra Energy to bag RM100m Murphy Oil job
Petra Energy is close to bagging a RM100m contract from Murphy Oil for hook-up and commissioning works, sources say. It is learnt that Petra Energy could make an announcement to the local bourse soon after ironing out a few minor issues. The job from Murphy is said to be at the same rates as the one offered by Petronas Carigali. (Financial Daily)

RHB Investment tops in deal value, CIMB in number
RHB Investment Bank worked on USD20.6bn of deals, followed by Morgan Stanley, UBS AG and CIMB. RHB Investment Bank (RHBI) emerged as the top adviser for mergers and acquisitions (M&A) in Southeast Asia (SEA) last year in terms of deal value, but rival CIMB Investment Bank dominated in terms of deal count. In second spot on the league table of announced deals was Morgan Stanley, followed by UBS AG and CIMB, which handled USD18bn (RM55.44bn) of deals. CIMB handled 39 M&A deals in total, the most in the region, followed by RHBI's 23. Malaysia turned out to be the second busiest market in the region for M&A activity last year, accounting for 29% of a total 1,523 deals, after Singapore (43%). (BT)

Tesco to spend big on expansion
Tesco Stores (Malaysia) SB plans to invest RM280m and open four more hypermarkets over the 12 months, from March this year. This would bring the number of stores it has nationwide to 40. Tesco Malaysia chief executive officer Tjeerd Jegen is bullish on business this year. "We expect to close the year with double-digit growth," he said yesterday in Mutiara Damansara, Selangor, after the closing of the SME Fair promotion. Last year, Tesco Malaysia made RM3.6bn in revenue. (BT)

Sunway awarded RM219m jobs
Sunway Holdings has secured two contracts totaling RM218.82m for the expansion of a Universiti Teknologi Mara campus and a proposed link bridge in the city centre. The proposed projects are expected to contribute positively to the earnings of Sunway Group for the financial year ending 31 Dec onwards (StarBiz)

MK Land sells land for RM130m
MK Land Holdings is selling two plots of leasehold land in Sungai Buloh, Selangor, to Foster Estate SB for RM130m cash. It told Bursa Malaysia yesterday that it had entered into sale-and-purchase agreements with Foster Estate on 30 Dec, 2010 to dispose of 18.54 acres for RM100.78m and another 8.32 acres for RM29.21m. MK Land said it was disposing of the two plots to unlock their value which it had no immediate plans to develop and the proposals were expected to be completed by the end of 2011. On a separate note, MK Land Holdings' deal raised eyebrows because the buyer shares the same set of shareholders for another major deal - the RM26bn bid to take over PLUS Expressways. According to the Companies Commission of Malaysia, Sumami Kiman and Saharuddin Abdullah hold one share each in the RM2 company. These two were also the same shareholders of Jelas Ulung SB, which is making the bid to buy PLUS. (StarBiz and BT)

MRCB-IJM Land merger aborted ‘over CEO choice’
The inability of Malaysian Resources Corp (MRCB) and IJM Land to come to an agreement over who will lead the new entity is the cause of the merger between the two property firms being called off. A source confirmed this to StarBiz yesterday following both companies' announcements to Bursa Malaysia last Thursday that the merger was aborted as they were unable to reach an agreement on the definitive terms and conditions of the proposed merger, following a series of discussions. The source said there was a difference in opinion on whether MRCB chief executive officer (CEO) Mohamed Razeek Hussain or IJM Land CEO-cum-managing director Datuk Soam Heng Choon should lead the new entity. (StarBiz)

Parkson receives licence to operate in Cambodia
Parkson Holdings’ unit has received the nod by the Minister of Commerce of the Kingdom of Cambodia to operate department stores in the Cambodia. Parkson Holdings added that the establishment of Parkson Cambodia did not have any material impact on the Group for the financial year ending 30 June, 2011. (FinancialDaily)

94.69% acceptance for United Kotak takeover
Oji Paper Asia SB (OPA) has received acceptances amounting to 94.69% of United Kotak’s shares on the closing date of its takeover for the latter last Friday. On Oct last year, OPA made a conditional takeover offer to United Kotak by acquiring all the voting shares in the company at an offer price of RM1.40 each. (FinancialDaily) 

20110104 0925 Global Market Related News.

OIL: Crude steady near 27-month peak; U.S. stocks seen lower
SINGAPORE, Jan 4 (Reuters) - Oil was steady near the  highest price levels in more than two years as accelerating  manufacturing activity in industrialized economies and winter  weather fanned optimism that U.S. crude inventories will  continue to drain.
Crude oil inventories in the U.S., the world's top  consumer, fell for the fifth straight time last week, down by  1.7 million barrels, as refiners continued to use up more of their stored supplies while holding off on imports to lower  their year-end taxes, a Reuters poll ahead of weekly supply  data showed on Monday.

COMMODITY MARKETS: Copper, oil extend run into 2011; natgas up 5 pct
NEW YORK, Jan 3 (Reuters) - Copper hit record highs on Monday and oil jumped to a two-year top while natural gas posted its biggest gain in more than a month as investors bought commodities to greet 2011, extending December's price peaks.
"People are generally upbeat over the index re-weightings. Also, there'll be new money coming into commodity hedge funds at the start of the year, so there's no real worry about inflows at the moment," said Shawn Hackett, commodities analyst at Hackett Financial Advisors in Boynton Beach, Florida. 

GLOBAL MARETS: Stocks resume rally on economy, oil gains
NEW YORK, Jan 3 (Reuters) - World stocks rallied in the first trading session of 2011 on Monday on stronger global manufacturing data, while oil closed at a 27-month high as the improved growth outlook increased demand expectations.
"There is a lot of money in cash, a lot of money in bonds that would like out of bonds. It's only natural, with the economic improvement, it's finding its way to equities," said Stephen Massocca, managing director at Wedbush Morgan in San Francisco.

Oil nears $100, 2008-style surge not in cards
NEW YORK, Jan 3 (Reuters) - Nearly three years to the day after oil prices first pierced $100 a barrel, they are again threatening to break triple digits on a wave of fund-led optimism, but similarities between 2008 and 2011 end there.
Even the most bullish analysts are quick to recite a litany of reasons why oil will not surge to near $150 again this year. Such a sharp spike would deal the world economy a heavy blow it can ill afford. 

India Offers 3.5 Mln Tons Wheat, Rice Sales To Trim Stocks (Source: CME)
India has offered to sell 3.5 million metric tons of wheat and rice to retail and bulk consumers over the next six months, a senior government official said, reviving a move to trim bulging federal stocks as well as to cool prices. The government tried to sell around 5 million tons of wheat and rice between April 2009 and December 2010, but only half the quantity was lifted because it was costlier than the grains sold in local markets. The government has kept the wheat and rice price unchanged from last year, but the response is likely to be better due to a sharp rise in local market prices. The government has offered to sell 1.5 million tons of wheat to bulk buyers, such as makers of flour and bakery products, for around INR1,200-INR1,400 per 100 kilograms, the official said, asking not to be named. Another 1.0 million tons wheat has been earmarked for retail buyers for a minimum of INR1,099/100kg, he said.
Spot wheat prices are currently around INR1,240-INR1,500/100kg. Rice from government stocks will be sold to retail consumers at INR1,585.5/100 kg, which is almost 30% cheaper than the market price. Sales of cheaper grain by the government will not only help reduce stocks and create space for fresh stock, but will also help cool surging local prices. Food inflation accelerated to 14.44% in the week ended Dec. 18 from 12.13% a week earlier, inviting sharp attacks from lawmakers and consumers. "It [the government's move to sell wheat] will help to bring down spot prices that have been on a high due to reduced supplies by traders," said Veena Sharma, secretary of the Roller Flour Mills Federation of India.

Commodities Off To Brisk Start In 2011 On Economic Optimism (Source: CME)
Commodity markets opened the year with a bang amid rising optimism about the health of the global economy. Crude oil futures breached $92 a barrel, and wheat closed above $8 a bushel. Both hit two-year highs on Monday, the first trading day of 2011, setting the tone for what is expected to be a year of strong commodity price performance. Copper, a bellwether for the manufacturing sector, edged up to set its third consecutive record. "There's a global optimism that's out there," said John Kilduff, a partner at hedge fund Again Capital. "Part of the reaction is going to be higher commodity prices." Analysts forecast that the momentum gained in the second half of 2010 will carry into 2011 thanks to growing worldwide demand, strains on supplies, and interest in the asset class, which has only been embraced by mainstream investors over the past decade. Monday's trading was thinner than usual and concentrated in the U.S., with markets closed across much of Asia and Europe.
Futures markets were closed for coffee and  sugar, which posted some of the sharpest gains last year. While China has become a major force in commodities due to its rapid growth, attention is turning back to the U.S. Not only is the U.S. the world's largest economy, it is still the biggest consumer of crude oil and a significant user of industrial metals. Stubbornly high unemployment and the struggling housing market kept certain commodities, including oil, in check for much of 2010. But stronger holiday sales in the U.S. may herald consumers' willingness to accept price increases on clothes and other goods, pointing to sustained high prices for commodities like cotton.

U.S. wheat jumps to 5-month top on Australia floods
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.

Australia's floods may disrupt grain movement for weeks
SINGAPORE, Jan 3 (Reuters) - Floods in Australia's  Queensland could disrput grains supply for weeks, top grains  handler GrainCorp Ltd said on Monday, further delaying the  transportation to market of the country's waterlogged wheat  crop.
Even ahead of the latest deluge, Australia's wettest  spring on record had damaged the crop quality in the world's  fourth largest wheat exporter, stoking supply concerns and  pushing up global wheat prices. U.S. wheat futures  rose  more than 1 percent in early Asian trade on Monday.

La Nina dryness threatens Argentine corn - Govt
BUENOS AIRES, Dec 31 (Reuters) - Parched, hot conditions caused by the La Nina weather phenomenon are threatening corn yields in Argentina, the world's No. 2 exporter of the cereal, and rains are urgently needed, the government said on Friday.
Argentine farmers gathered a record corn crop of 22.7 million tonnes last season, but the dry weather is raising concerns that production could be hit this season and U.S. corn futures have risen in recent weeks due to supply fears.

European shares open new year higher, euro falls
LONDON, Jan 3 (Reuters) - European shares rose on Monday in the first trading session of 2011, led by German automaker Porsche, while the euro fell against the dollar on concerns the euro zone sovereign debt crisis could resurface soon.
"Sentiment is positive and that is mainly because of the seasonality. Money managers typically get some new inflows at the start of a year and they put them to work," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.

20110104 0924 Soy Oil & Palm Oil Related News.

US soy product futures closed lower as forecasts for rain in dry Argentine growing areas sparked profit taking. Markets were due for a correction after soyoil on Monday reached its highest level since July 2008 and soymeal on Friday reached its highest level since Sep 2009, analysts say. Markets had climbed on worries about heat and dryness threatening output in Argentina, the world's leading exporter of soymeal and soyoil. CBOT March soymeal settled down $4.90 to $369 per short ton, and CBOT March soyoil dropped 0.67 cent to 57.70 cents per pound. (Source: CME)

Cooking Oil's Surge Shows How Inflation Hits Chinese (Source: CME)
These days, Liu Chuansheng nervously scouts five locations before he buys cooking oil, illustrating how a sudden spike in the price of the Chinese kitchen's most vital ingredient has become close to a national crisis. On a recent Friday, the 33-year-old, who runs a breakfast stand with his wife, wheeled a shopping cart into the aisle of a C.P. Lotus Corp. store in northern Shanghai, eying only prices. In seconds, his wife emptied the shelves of its 11 remaining bottles of Cofco Ltd. "Five Lakes" soybean oil, the discount choice at 47.90 yuan, or about $7.20, for five liters (1.32 gallons). At the checkout, Mr. Liu separated their $79 purchase into three batches to sidestep the store's four-bottle maximum and government bans on hoarding. To transport the provisions to their food stand, Mr. Liu placed two bottles into the basket of his blue electric scooter and balanced nine more on the running board. His wife plopped on back. Mr. Liu's livelihood is now just as precariously balanced.
He reckons his cooking-oil costs shot up 27% in 2010. Rising food prices helped push China's consumer price index to a two-year high of 5.1% in November, and nowhere are the pressures felt more deeply than with cooking oil, more vital in Chinese cooking than even rice. Rising oil prices mean daily hardship for Chinese on meager incomes. And though food represents only about one-third of the CPI, it accounts for about 75% of the index's recent rise. Such price challenges are a primary reason China's central bank abruptly raised interest rates twice in 10 weeks, most recently on Christmas Day. The next day, Premier Wen Jiabao went on national radio to take questions from anxious listeners worried about inflation. According to a report, China's official Purchasing Managers Index declined to 53.9 in December from 55.2 in November.
Bank of America-Merrill Lynch economist Lu Ting warned the input price reading is "still quite high," and that Chinese authorities "will have to tolerate a relatively high inflation in  the coming years." Chinese housing has long been pricey, and an increasingly broad array of prices appears to be following. The National Development and Reform Commission in late December, for instance, announced a 3.77% rise in retail gasoline prices, to the equivalent of $3.50 a gallon, for an 11% increase in about a year. But the main oil shock the Chinese face is at the stove rather than the pump. In a nation where few kitchens include an oven, cooking oil is so valued that a jug of it is an appropriate gift. It is a potentially explosive trend. Three years ago, as oil prices were similarly surging, a stampede killed three people and injured more than 30 during a promotion offering $1.50, or about 20%, off five-liter bottles of oil in the western city of Chongqing.
Prices ultimately hit $2,009 a ton in early 2008, according to Pansun.

Palm oil scores new 33-mth high on supply concerns
KUALA LUMPUR, Jan 3 (Reuters) - Malaysian crude palm oil hit a new 33-month high as robust demand chases tightening supplies and investors continue to place bets on commodities after a strong performance last year.
"Short term, there is bullish potential for palm oil and 4,000 ringgit is not a far-fetched idea," said a trader with a foreign commodities brokerage.