Friday, January 28, 2011

20110128 1803 FCPO EOD Daily Chart Study.

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

20110128 1726 FKLI EOD Daily Chart Study.

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

20110128 1024 Local & Global Economic Related News.

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

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

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

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

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

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

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

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

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

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

20110128 1022 Malaysia Corporate Related News.

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

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

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

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

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

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

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

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

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

20110128 0930 Global Market Related News.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

20110128 0925 Soy Oil & Palm Oil Related News.

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

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

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

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

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