Wednesday, February 9, 2011

20110209 1819 FCPO EOD Daily Chart Study.

FCPO closed : 3931, changed : +41 points, volume : higher.
Bollinger band reading : upside biased.
MACD Histrogram : getting higher, buyer taking chances.
Support : 3920, 3900, 3850 level.
Resistance : 3950, 4000, 4070 level.
Comment :
New 3 year high FCPO continue to trade firmer recorded gain with increasing volume changed hand on tight supply concern and ahead of tomorrow export data while soy oil futures price traded higher.
Daily chart formed an up doji bar candle positioned at upper Bollinger band level with the bandwidth turning outwards suggesting a potential further upside biased market development testing higher resistance.
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.

20110209 1752 FKLI EOD Daily Chart Study.

FKLI closed : 1525 changed : -8 points,  volume : higher.
Bollinger band reading : correction range bound downside biased.
MACD Histrogram : recovering, seller realising profit.
Support : 1515, 1500, 1485 level.
Resistance : 1530, 1540, 1550 level.
Comment :
FKLI closed recorded loss with higher volume participation doing 11 points discount compare to cash market after China official announce a rate hike of 0.25 triggered regional market to closed in red despite overnight U.S. market continue to surged higher.
Daily chart formed a wide range down bar candle after market opened gap up and dive lower to closed near the low of the day and market could possibly resuming its downward movement after few day of correction range bound with the reading suggesting a correction range bound 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.

20110209 1201 Global Economic Related News.

China: Yuan seen reaching 17-year high on rate increase
China’s yuan may hit a 17-year high as stocks rise and bonds fall after the central bank raised interest rates for the third time in four months to curb inflation, if history is a guide. The currency of the world’s fastest-growing economy climbed 0.1% to 6.5555 per dollar in Hong Kong trading yesterday, bringing its gain to 0.26% since the Shanghai market closed for a weeklong break for the Lunar New Year holiday on 2 Feb. The offshore one-year interest-rate swap climbed five bps to 3.72%, suggesting bonds will drop.(Bloomberg)

Japan: Yield curve at steepest since June on GDP growth
Traders are lifting yields on longer- term Japanese bonds to an eight-month high relative to shorter- term debt on expectations the central bank will keep interest rates near zero as the economy returns to growth. Yields on benchmark 10-year government bonds rose to 1.315% yesterday and two-year rates increased to 0.225%, driving the so-called yield curve to 109 bps, the most since June and up from 72 in October. (Bloomberg)

Japan: Current-account surplus in December widens as export grow. The gap expanded 30.5% YoY to JPY 1.195tr (USD 14.5b), the Finance Ministry said. (Source: Bloomberg)

Japan: China sells Japanese debt in December after Yen, bonds declined. China sold a net JPY 177.3b
(USD 2.15b) of Japanese bonds in December, capping the biggest yearly decrease since at least 2005, after the yen and benchmark government debt fell in November. China sold a net JPY 243.5b in short-term Japanese debt and bought JPY 66.1b yen in long-term bonds. That resulted in net sales of JPY 467.7b in 2010. (Source: Bloomberg)  

Germany: Industrial output drops on construction slump
Industrial production in Germany, Europe’s largest economy, unexpectedly fell for a second month in December as cold temperatures sparked a construction slump. Output dropped 1.5% from November, when it slipped a revised 0.6%, the Economy Ministry in Berlin said today. Economists had forecast a 0.2% gain, the median of 38 estimates in a Bloomberg News survey showed. In the year, production rose 10% when adjusted for work days.(Bloomberg)

France: Business sentiment jumps to three-year high
French manufacturing confidence rose to the highest in more than three years in January as an accelerating global economy buoyed export orders. The Bank of France’s Business Sentiment Indicator for manufacturers advanced to 110 from a revised 107 in December, the central bank in Paris said in a statement today. That was the highest since October 2007 and more than the 108 reading economists predicted, according to the median of three forecasts in a Bloomberg News survey. (Bloomberg)

US: Job openings in decrease to three-month low
Job openings in the US decreased in December to the lowest level in three months, signaling a sustained labormarket recovery will take time to develop. The number of positions waiting to be filled fell by 139,000 to 3.06 m, the fewest since September, the Labor Department said today in Washington. The number of people hired also dropped, as did the number of workers fired. Employers added a fewer-than-forecast 36,000 jobs in January while the unemployment rate unexpectedly fell to 9%, the lowest level since April 2009, the Labor Department reported last week. (Bloomberg)

U.S: Confidence at small companies climbs in January to a three-year high, as the outlook for sales and profits improved. The National Federation of Independent Business optimism index increased to 94.1, the highest since the recession began in December 2007. The reading was lower than the average 100.7 during the last expansion that started in November 2001. (Source: Bloomberg)

U.K: Retail sales in January advance at fastest pace in 10 months, the British Retail Consortium said. Sales at stores open at least 12 months, measured by value, rose 2.3% YoY compared with a 0.8% YoY decline in December. Pent-up demand after December's snow and New Year discounts contributed to the gain, it said. (Source: Bloomberg)   

20110209 1157 Malaysia Corporate Related News.

Earlier auto sector liberalisation
The Government may bring forward the liberalisation of the automotive industry to several years earlier than 2020, amid mounting pressure for a level playing field between national and non-national players, and as foreign automakers express keen interest to set up or expand their manufacturing presence in the country, say sources. It is learnt that financial benefits such as R&D grants under the Industrial Adjustment Fund as well as soft loans from the Automotive Development Fund are likely to cease with liberalisation. When contacted, industry officials do not discount the possibility of a deadline earlier than 2020 being set. (Financial Daily)

MPHB suspended on possible relisting of Magnum
Speculation is rife that Multi Purpose Holdings may soon announce a corporate exercise either involving its numbers forecast operator (NFO) Magnum Corp or a major acquisition. This follows the suspension yesterday. Industry observers speculated that the exercise could be to facilitate the exit of Magnum’s strategic investor CVC Asia Pacific Ltd from the NFO, which could pave the way for a relisting of Magnum, three years after it was privatized. (Financial Daily, others) UOA to list development arm The board of United Overseas Australia Ltd (UOA) has submitted documents to Bursa Malaysia for a proposed listing of its development arm on the local bourse’s market. UOA is expected to hear a reply from regulators soon and hopes to have its redevelopment arm listed on Bursa by June 2011. (Financial Daily)

PJD plans RM1.7bn projects by Q3
PJ Development Holdings (PJD) aims to ride on the positive economic data by launching four projects worth about RM1.7bn by third quarter of this year. Chief operating officer Lim Lian Seng said the projects are located in Sri Hartamas and Cheras in Kuala Lumpur, Butterworth in Penang, and Kuantan in Pahang. This would be the first round of major projects it is launching since 2009. PJD had spent the last two years working on new plans after the economic crisis in 2008. (BT)

PNB buys 5% in Naim
Permodalan Nasional Bhd (PNB) has emerged a substantial shareholder in Naim Holdings Bhd, a Sarawakbased property and construction firm, after acquiring 12.5m shares or a 5% stake. PNB paid RM3.40 per share for the stake from Naim managing director/chief executive officer Datuk Hasmi Hasnan on 28 Jan. Naim closed at RM3.58 the same day on Bursa Malaysia. With the divestment, Hasmi's stake (direct and indirect) in the company has been reduced to 22.86%. (StarBiz)

Tabung Haji, Mara in medical venture
It is understood that Lembaga Tabung Haji and Majlis Amanah Rakyat (Mara) are expected to end up with a total of 45% equity stake in the newly-established Academic Medical Centre SB (AMC) that has a tie-up with world renowned Johns Hopkins Medicine International and Royal College of Surgeons (RCSI) in Ireland to offer courses at the soon to be set up RM2bn Perdana University Graduate School. Tabung Haji is likely to end up with 30% stake while Mara 15% in AMC. The remaining 55% equity will be held jointly by two companies controlled by businessman Tan Sri Dr Mohan Swami. The two companies are Turiya and Chase Perdana SB. (StarBiz)

PJI Holdings wins RM55.9m IJM Construction sub-contract
Engineering firm PJI Holdings has won a RM55.9m sub-contract from IJM Construction SB for mechanical and electrical service works in the construction of a university campus in Kedah. The proposed project is not expected to have any significant impact on net asset per share and share capital but is expected to improve earnings and gearing of the PJI Group.

Unisem: Plans to spend RM250m to ramp up plant expansion. Unisem (M) Bhd may spend more than RM250m this year to construct and equip new plants as capacity fills up with rising sales. Among others, Unisem plans to build a new plant in Ipoh, Perak, as the existing facility is nearing its production limit even after an expansion in 2010 to upgrade the assembly, test and wafer-bumping capabilities. (Source: The Malaysian Reserve)

Banking: Below 10m credit cards issued, corporate loans growth to continue. The total number of credit cards in circulation in the country has dropped below 10m, partly affected by the RM50 service tax introduced in Budget 2009 and as more people opt for debit cards. Separately, corporate loans growth fuelled by working capital loans is expected to continue its upward trend this year supported by the multitude of projects under the Economic Transformation Programme (ETP) and the 10th Malaysian Plan (10MP). (Source: The Star)

Property: UOA to list development arm. The board of United Australia Ltd (UOA) which is listed primarily on the Australian Stock Exchange (ASX), has submitted documents to Bursa Malaysia for a proposed listing of its development arm on the main market. UOA hopes to have its development arm listed on Bursa by June 2011. (Source: The Edge Financial Daily)

Property: Proposal for higher licence deposits set to test developers. The possible raising of the deposit required for a property developer's licence may not reduce the number of abandoned projects, but could instead lead to costlier homes, said the Real Estate and Housing Developers Association (Rehda). (Source: The Edge Financial Daily)

20110209 1151 Global Market Related News.

Gold falls after chart-driven trade, China rates
SINGAPORE, Feb 9 (Reuters) - Gold slipped, after rising 1 percent the previous session, as investors and other physical buyers in Asia hugged  the sidelines following China's second interest rate increase in just over six weeks.
"I think we could look for further gains in gold on follow-through strength," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore. "Investors were already expecting that China would raise interest rates sometimes during this Lunar New Year holiday." 

OIL: Oil inches up on surprise U.S. inventory drawdown
PERTH, Feb 9 (Reuters) - U.S. crude oil prices rose slightly on Wednesday after news that oil inventories in the United States, the world's largest oil consumer, dropped unexpectedly and ship movements in the Suez Canal remained unaffected by the unrest in Egypt.
The American Petroleum Institute reported an unexpected drawdown in U.S. crude stocks last week, contrary to analyst expectations.

COMMODITIES: Markets rebound from drop on China rate hike
NEW YORK, Feb 8 (Reuters) - Wheat jumped on Tuesday, hitting near 30-month highs, while other commodities rebounded from early losses as investors deemed China's latest rate hike inadequate to slow the country's hunger for raw materials.
"China probably needs to raise rates by 100 basis points," said Sterling Smith, commodities analyst at Country Hedging in St. Paul, Minnesota. "That will probably deliver a message that would slow some things down fairly quickly."

GLOBAL MARKETS:Asian markets take China rate hike in their stride
SINGAPORE, Feb 9 (Reuters) - Shares in Asian developed markets rose and the dollar and Swiss franc eased on Wednesday as investors bet that China's latest interest rate rise would not derail hopes of a sustained economic recovery.
"Chinese policymakers' efforts to rein in overheating pressures are now seen in a relatively more positive light by global investors in that they will help slow growth to a more sustainable pace, while other engines of growth in the region begin to rev up," said Samarjit Shankar, analyst at BNY Mellon.  

China Wheat Production At Risk From Severe Drought - FAO (Source: CME)
Severe drought in China's main winter wheat region, could pose a serious threat to the Asian giant's output at a time when world markets are already strained, the United Nation's food body said. The Food and Agriculture Organization said some 5.16 million hectares out of the total of about 14 million hectares under winter wheat could be under threat from poor rainfall and low snowcover. "The ongoing drought is potentially a serious problem," the FAO said in a special report. The Chinese government has allocated $15 billion to help farmers in areas at risk but so far temperatures have remained mild enough that the crop has not been killed by frost. But Standard Chartered said that any reduction in production could put severe pressure on already strained world markets.
"Should conditions in China worsen, the immediate risk is for additional grain import demand in the current season," the bank said. World wheat prices are hovering at highs not seen since the 2007-08 food crisis as a surge of demand from North African and Middle-Eastern governments has pushed up prices this year. China's national average retail price of wheat flour rose 8% in the two months to January and are 16% higher than a year earlier as concerns have mounted over the effect of the drought, the FAO said. The country's grain imports are pegged at under 6,000 tons this year compared to 128,000 tons the year before.

ECB could hike rates before liquidity exit-Mersch
LUXEMBOURG, Feb 7 (Reuters) - The European Central Bank could raise interest rates to contain inflation even before it exited measures to support liquidity in the euro zone, Governing Council member Yves Mersch said on Monday.
Mersch said inflationary pressures were undoubtedly rising, principally because of increasing commodity prices, against which the ECB was powerless to act.

PRECIOUS-Gold edges up, gains tempered by China
LONDON, Feb 8 (Reuters) - Gold edged up for a second day on Tuesday, shrugging off a rise in China's benchmark interest rates, while equities fell, the euro picked up and flows of metal out of exchange-traded funds stabilised.
The gold price came under intense pressure last week after more signs emerged that global growth continues to improve and that the euro zone debt crisis has not worsened, which eroded some investor appetite for the metal.

FOREX-Australian dollar slips after China rate rise
LONDON, Feb 8 (Reuters) - The Australian dollar slipped on Tuesday after a Chinese interest rate rise spurred speculation growth in the world's No. 2 economy may slow, while the euro rose against the dollar, boosted by Asian demand.
China's central bank raised its benchmark one-year deposit rate by 25 basis points to 3 percent on Tuesday, its second increase in just over a month in its intensifying fight against stubbornly high inflation.

European stocks, oil turn lower after China
LONDON, Feb 8 (Reuters) - European stocks and oil prices turned lower after China raised interest rates for the second time in just over a month, intensifying its fight against inflation.The commodity-sensitive Australian dollar also fell but world stocks still held near the previous day's 29-month high as China's monetary tightening did little to immediately change the favourable outlook for global growth this year.
"It is a clear concern of the markets that a tightening in policy in China will have a dampening effect on demand growth, but probably what more you're seeing here is a knee-jerk reaction to the initial news," said Gayle Berry, analyst at Barclays Capital.

USDA to further tighten U.S., world soy stocks
CHICAGO, Feb. 7 (Reuters) - The U.S. Department of Agriculture is expected to report additional tightening of U.S. and global soybean ending stocks in its February report, with total supply pared by high levels of exports, analysts said Monday.
"Red-hot, old-crop soybean exports suggest USDA should lower its forecast of ending stocks to under 100 million bushels," said Bryce Knorr at Farm Futures magazine, but he added the agency was not likely to make such a dramatic move.

USDA to trim wheat stocks view; exports remain high
CHICAGO, Feb 7 (Reuters) - The U.S. Agriculture Department was expected to trim its forecast for wheat ending stocks as export demand remains firm even with prices trending near 30-month highs, traders and analysts said.
Problems with crop production in Australia as well as the lingering effects of last summer's drought in the Black Sea region have boosted the role of the United States on the export market.

20110209 1147 Soy Oil & Palm Oil Related News.

Soy product futures bounce in unison with soybeans, managing to recover from choppy price action that saw prices trade in both positive and negative territory. The market was a bit cautious ahead of Wednesday's crop reports, but strong world vegoil demand supported soyoil, while frigid Midwest temperatures spur talk of increased soymeal feed usage, analysts say. CBOT March soyoil ended 0.36c or 0.6% higher at 58.77c per pound, and March soymeal traded $3.30 or 0.9% higher at $385.70 a short ton. (Source: CME)

Palm oil recovers on tight supply concerns
KUALA LUMPUR, Feb 8 (Reuters) - Malaysian palm oil reversed losses as traders focused on prospects of tighter supplies after heavy rains and floods curbed production.
"Supplies are looking quite tight from January when the weather was at its worst and we could see further declines in February when countries like China restock," said a trader with a foreign commodities brokerage in Kuala Lumpur.

Brazil soy crop views rise into record territory
SAO PAULO, Feb 7 (Reuters) - Forecasts of Brazil's new soybean crop that recently started early harvest are increasingly being pushed into record territory by analysts based on improving yields from good rains.
Analysts Celeres on Monday raised its view of the new 2010/11 crop to a record 69.8 million tonnes, up from 68.1 million forecast in January due to improving yields following regular and plentiful rains over the past few months.

Rains benefit driest Argentine farming areas
BUENOS AIRES, Feb 7 (Reuters) - Rains over the last day in Argentina replenished soils and rejuvenated soy crops in farming areas where dryness had lingered, an agricultural meteorologist said Monday.
Heavier rainfall since mid-January has eased the impact of several months of dry weather linked to La Nina, but many crop analysts have lowered their forecasts for soy production to below 50 million tonnes.