Monday, February 21, 2011

20110221 1830 FCPO EOD Daily Chart Study.

FCPO closed : 3656, changed : -27 points, volume : lower.
Bollinger band reading : little downside biased.
MACD Histrogram : getting lower, seller in control.
Support : 3650, 3620, 3550 level.
Resistance : 3700, 3720, 3750 level.
Comment :
Hit 4 week low FCPO closed recorded loss for the 5th consecutive day with lower volume traded as soy oil Friday night closed significantly lower due to China food import tax issue.
Daily chart formed an up doji bar candle positioned nearer to lower Bollinger band with the bandwidth started to expand a little. Chart wise, the reading turned into suggesting a little downside biased market development testing lower support 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.

20110221 1826 FKLI EOD Daily Chart Study.

FKLI closed : 1522 changed : 4.5 points,  volume : higher.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : recovering, seller reducing position.
Support : 1515, 1500, 1485 level.
Resistance : 1530, 1540, 1550 level.
Comment :
FKLI closed recorded gains with improving volume participation doing nearly 4 points discount compare to cash market while regional market closed mixed.
Daily chart formed an up doji bar candle with long lower shadow after market opened gap down, tested lower and recovered upward to closed little above middle Bollinger band level. Technical reading wise, market is likely to trade side way range range bound little downside biased.
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.

20110221 1026 Local & Global Economic Related News.

Malaysia: 2010 GDP expands 7.2%
Malaysia's economy outperformed expectations to chalk up a commendable growth of 7.2%t last year compared with a contraction of 1.7% in 2009, bolstered by a rebound in manufacturing and services as well as brisk exports and imports. The government, which implemented a RM67bn stimulus package two years ago to boost the economy severely affected by the global downturn, had earlier forecast gross domestic product to grow by 5- 6% last year. (BT)

Singapore: To spend SGD6.6bn as elections loom
Singapore will spend SGD6.6bn (USD5.2bn) on benefits including tax cuts and rebates as it strives to ease the burden of inflation ahead of elections due in the next year. The government will hand cash to all adult citizens as a “dividend” from record growth, upgrade homes and invest in improving productivity, Finance Minister Tharman Shanmugaratnam said in the city state’s budget speech. (Bloomberg)

China: Tells banks to set aside bigger reserves to cool inflation
China’s central bank ordered lenders to set aside more money as reserves for the second time this year, draining cash from the financial system to restrain inflation and limit the risk of asset bubbles. Reserve ratios will climb half a percentage point effective 24 Feb, the People’s Bank of China said, in an announcement made after its recent interest-rate increase. (Bloomberg)

Spain: Passes bank law, extends compliance deadline
Spain’s government extended a September deadline for banks to meet core financial targets if the lenders can show they are on track to bolster their capital levels, Finance Minister Elena Salgado said. Banks that “are basically complying” with the government’s strategy and calendar, without meeting the capital requirements by 30 Sept, may be able to extend the deadline by three months, Salgado said. (Bloomberg)

US: House approves Republicans’ USD61bn cut in US spending
The Republican-controlled US House of Representatives voted to cut at least USD61bin in federal spending this year, setting up a budget confrontation with Democrats that threatens a government shutdown. After more than 90 hours of debate, the House decided 235-189 yesterday to send the measure to the Senate. (Bloomberg)

US: Home sales probably fell, durables rose
Home sales probably fell in January, while orders for long-lasting goods climbed, a reminder that housing lags behind manufacturing as the US recovery strengthens, economists said before reports this week. Combined purchases of new and existing homes fell 2% to a 5.5m annual pace, according to the median forecast of economists surveyed. (Bloomberg)

20110221 1019 Malaysia Corporate Related News.

Khazanah starts restricted tender for Pos Malaysia
Khazanah has entered into the second stage of the divestment process of its 32.2% stake in Pos Malaysia, starting with the restricted tender process for bidders. It said bidding would be on a level playing field whereby the emphasis would be on bidders who would be able to introduce sound strategies and business plans sustainable to bring the postal entity to the next level of growth. (Financial Daily)

Johor Corp selling land to repay part of debt
Johor Corp will sell a parcel of land it owns in Johor that is worth more than RM2bn as part payment for the RM3.6bn debt due July 2012, according to president and CEO Kamaruzzaman Abu Kassim. The land is located within parts of Johor Baru that were earmarked for development under the RM1.8bn Johor Baru city centre transformation plan. Kamaruzzaman’s statement indicated a change in JCorp’s strategy as the original plan was to refinance the RM3.6bn debt rather than selling assets to repay the obligation. (StarBiz)

Ramunia eyeing RM300m worth of contracts
Ramunia Holdings is eyeing contracts worth RM300m this year as part of its strategy to get back on track after settling all its debts last year. The company’s two new fabrication yards in Port Dickson and Sandakan can handle businesses to the tune of RM300m. Ramunia’s current orderbook is negligible at less than RM10m. The company is eyeing to get its fair share of Petronas’ expected 150,000 tonnes steel works contract awards. (Malaysian Reserve)

Emkay to spend RM235m for Cyberjaya project expansion
Emkay Group plans to spend RM235m in the next four years to expand its development projects in Cyberjaya as most of its existing landbank has been developed. Emkay, the private vehicle of Tan Sri Mustapha Kamal Abu Bakar, will acquire some 145 acres of land in Cyberjaya for future projects that would include mixed developments, light industry and commercial developments, and residential properties. The investments will be funded through internally generated funds and bank borrowings. (Malaysian Reserve)

Bionas eyes GBP500m London listing
 Bionas Group is looking at raising up to GBP500m from the proposed listing of its subsidiary Bionas Fuel (UK) Ltd on London’s Alternative Investment Market by mid 2011. The Malaysia-based company plants jatropha fruits and produces jatropha additives to make biodiesel. The IPO proceeds will mainly be used to expand its jatropha plantings in Africa. The fruit is not edible, unlike conventional vegetable oils used for biodiesel, and thus does not face the food versus fuel dilemma. Barclays will be handling the IPO. (Business Times)

Berjaya Food eyes RM18.3m in proceeds from IPO
Berjaya Food en-route for listing on the Main Market of Bursa Malaysia next month, expects to raise RM18.3m from its IPO. The operator of Kenny Rogers Roasters restaurants in Malaysia said the proceeds would accrue entirely to the offeror, Berjaya Group.The company listing is scheduled for 8 March with a market capitalization of about RM72.1m. (Bernama) 

20110221 0913 Global Market Related News.

OIL: U.S. oil prices up over $1/bbl as Libya tension hots up
SINGAPORE, Feb 21 (Reuters) - London April Brent crude and U.S. crude futures rose more than $1 a barrel on Monday as the threat of supply disruptions from OPEC member Libya grew, with protesters calling for the departure of the country's veteran ruler, Muammar Gaddafi.
In Bahrain, opposition leaders met on Sunday to discuss demands they will present to the Gulf Arab country's rulers, as scores of protesters returned to the city centre in Manama after four people were killed on Thursday's night-time raid by riot police. 

COMMODITIES: China price policy hits copper, grains; helps gold
NEW YORK/LONDON, Feb 18 (Reuters) - China's efforts to curb inflation undermined copper and grains prices on Friday, and Mideast unrest sent gold up and silver to 31-year tops, while a tug-of-war for control of Ivory Coast's banks sent cocoa to a 14-month peak.
"These Chinese rate moves are just tapping on the brakes. It doesn't stop people from consuming. The Chinese populous will still want their dryers, their washing machines, air conditioners," said Frank Lesh, broker and futures analyst with Future Path Trading in Chicago.

GLOBAL: Asian shares ease as Middle East tensions spread
HONG KONG, Feb 21 (Reuters) - Asian stocks eased and oil prices jumped on Monday as a fresh round of policy tightening from China and spreading unrest in the Middle East encouraged some light profit-taking after last week's solid gains.
"The comments again highlighted that ECB officials are getting antsy about price pressures despite some notable concerns about the health of EU periphery nation's economic performances," said David Watt, strategist at RBC Dominion Securities.

Hoenig: Farm Price Surge May Be A Sign Of Fed-Driven Imbalances (Source: CME)
A farm country Federal Reserve official fretted before congress about the potential impact of monetary policy on the U.S. agricultural sector, which has seen strong growth and big increases in land prices. Federal Reserve Bank of Kansas City President Thomas Hoenig was speaking before the Senate Committee on Agriculture, Nutrition and Forestry in Washington. The central bank's most vociferous opponent of the policy to stimulate the economy via a large Treasury debt buying program, the official has long worried the effort will create financial imbalances. Rapidly rising prices for farm land could be one of those problem areas, in the view of some. "History has taught us that it is nearly impossible to determine how much of the farmland boom may be an unsustainable bubble driven by financial markets and how much results from fundamental changes in demand and supply conditions," Hoenig said in the prepared text of his testimony.
As a result, "it will surprise no one when I say we are watching the market closely, just as we are watching for imbalances emerging elsewhere in the economy. "My nagging concern remains that current distortions in financial markets are increasing the risk that imbalances in asset markets will catch agriculture--and the U.S. economy more generally--by surprise once again," the policymaker said. Thus far, the gains in farmland prices appear to the product of strong profit growth amid big demand for U.S. agricultural products, the official said. He added, agriculture is "benefiting directly from the rebounding economic strength of China and other emerging-market economies, where rapid income growth is driving up food demand." Hoenig expressed concern about the day the Fed does begin to push up interest rates. While agricultural balance sheets look good, a tightening cycle could be difficult to navigate, the central banker warned.
"Rising interest rates often coincide with falling farm revenues and higher capitalization rates, a depressing combination for farmland values," Hoenig said. "Even if crop prices remain high but capitalization rates return to their historic average, farmland values could fall by as much as a third, which most certainly would erode the financial health of the farm sector."

CBRC Says More Loans Needed For Water Projects To Ensure Grain Supply (Source: CME)
China's Banking Regulatory Commission said that banks should extend more loans to water conservation projects and drought-fighting efforts, in order to help ensure grain supply. Supporting water conservation and grain production should be banks' priority in rural lending, it said in a statement on its website. The banking regulator reiterated its financial commitment to the rural areas, shortly after the Ministry of Commerce Thursday released a draft measure on emergency management of food supply and China's central bank said Wednesday it will use monetary policy tools to promote grain production. Beijing has stepped up its fight against inflation, as soaring prices of food and other products have stoked price pressures that pose growing risks to the economy. Government departments have already undertaken several measures to keep food prices in check, such as programs aimed at boosting grain output, and creating reserves of vegetables.
Large- and medium-sized commercial banks should support key and large-sized watering facilities, while Agricultural Bank of China Ltd. should focus on lending to rural irrigation and hydropower construction. Agricultural Development Bank of China should take the responsibility of extending mid- and long-term loans to support medium- and small-sized watering projects. Banks should also expand credit support to manufacturers of seeds, machinery and fertilizers to prepare for spring ploughing and help drought-fighting work, the statement said. Banks facing capital shortage can apply to the central bank for relending. Prices of agricultural commodity futures have gained even faster than retail prices, which are capped by the government, with wheat, rice and sugar futures all hitting record levels recently. Wheat futures on China's Zhengzhou Commodity Exchange have risen around 6% this month due to concerns that prolonged drought may reduce wheat output.

Fed China raises banks' required reserves again
BEIJING, Feb 18 (Reuters) - China's central bank said on Friday that it would once again raise lenders' required reserves by 50 basis points, the second time this year and the eighth official increase since the start of last year.
In a short statement posted on its website, the People's Bank of China said the increase will be effective Feb. 24.

China steel prices seen rising in near term - CISA
SHANGHAI, Feb 18 (Reuters) - Steel prices in the Chinese domestic market will continue rising in the near term thanks to recovering demand and rising raw materials costs, the China Iron & Steel Association (CISA) said on Friday.
CISA said it expected a gradual pick-up in demand at home and abroad, with costs of raw materials such as iron ore, coke and scrap likely to keep surging, pushing steel prices upwards.

PRECIOUS-Gold hits 5-week high as Mideast concerns simmer
LONDON, Feb 18 (Reuters) - Gold hit five-week highs in Europe on Friday and silver its strongest since 1980 as growing unrest in the Middle East lifted interest in precious metals, though another reserve requirement hike from China curbed gains.
Gold's bounce-back after it fell more than 6 percent in January has wrong footed some investors who were waiting for lower price levels to buy into the market, analysts said.

FOREX-Euro slips, ECB data adds to mkt jitters
LONDON, Feb 18 (Reuters) - The euro slipped broadly on Friday on the view that euro zone debt problems will persist and as uncertainty about the cause of a spike in emergency borrowing from the European Central Bank added to market jitters.
The Australian dollar briefly hit a session low against the U.S. dollar after China's central bank raised its bank reserve requirement for the second time this year, following up on an interest rate rise earlier this month as it ratchets up its monetary tightening campaign.

China, oil worries knock equities from highs
LONDON, Feb 18 (Reuters) - World shares fell back from  fresh 30-month highs against a background of rising oil prices and new attempts by China to curb its inflation pressures.
"There is just a greater conviction in the more promising outlook in global economic growth," said Mike Lenhoff, chief strategist at wealth manager Brewin Dolphin.

20110221 0910 Soy Oil & Palm Oil Related News.

ITS CPO export down 3.2% to 825,180 tonnes for the period of 1~20 Feb 2011.
SGS CPO export up 1.5% to 811,813 tonnes for the period of 1~20 Feb 2011.

CBOT soybean products fell in tandem with soybeans, as a hike in China's bank reserve requirements raised questions about demand. Export demand for soy products has been weakening amid higher prices, an analyst added. March CBOT soyoil fell 3%, or 1.76c, to 56.49 cents per pound. March soymeal slipped 2.9% to $362 per short ton. (Source: CME)

China Mulls Ways To Boost Commodity Imports (Source: CME)
China is considering various ways to increase imports of commodities, including food-related products, a Ministry of Commerce official said. The official's comments reflect a shift seen recently in policy focus towards restocking of state reserves and containment of food-price inflation, rather than the usual focus on the need for self-sufficiency in grains and other staples. Also, the China National Grain & Oil Information Center, a key state-backed grain research agency, acknowledged market speculation that the government is also considering a reduction of import duties on soybean and soyoil. "China is definitely trying to see if we can adopt appropriate policies to enlarge our imports," said the ministry official, who declined to be identified.
Minister for Commerce Chen Deming, in an interview with local magazine Caijing published late last month, didn't mention import tax cuts directly, but left the door open for such actions to "widen the leeway" for an expansion of imports of agricultural commodities and the replenishing of reserve levels of key farm products. "We'll refine import credit and insurance, push for technical improvements in businesses, and widen the leeway for imports of grain, cotton and other commodities, to relieve domestic supply pressures," Chen said. The ministry official on Friday also declined to comment specifically on whether lower import duties are being considered, but the government-backed CNGOIC referred in a report to possible deliberations on two key agricultural products, boosting the credibility of rumors that such specific steps are among the arsenal of measures being actively considered.
"There's market speculation that the government is going to lower the import duties on soybean and soyoil," it said. The government may be considering lowering the import duty for soybeans to 1% from 3% and for soyoil to 5% from 9%, said an analyst with the influential Shanghai JC Intelligence Co. China's soybean imports have been surging due to strong domestic demand, reaching a record 54.8 million metric tons last year. "If it's true, the government's move is a sign of encouragement for more soybean imports," said Monica Tu, the Shanghai JCI analyst. It wouldn't be the first time the government has considered lower import duties on key farm products as part of efforts to curb inflation. In 2008, the government mulled similar tax cuts, including a reduction of the import tax on soyoil to 3%, but backed away as inflation receded following the global financial crisis.
Soyoil imports fell 44% in 2010 due to a months-long trade spat with China's largest supplier, Argentina, but customs data earlier this week showed edible oil imports in January rose 12% from a year earlier to 610,000 tons. Data on January imports of soyoil won't be available until late next week. The reduction of import duties on farm-product imports isn't out of line with expectations, given inflationary pressures, a senior executive with a Western farm lobby said. "They need to lower duties to reduce input costs," and increasing demand for edible oils falls within an expected consumption pattern for a fast-developing country, he said. Soybean and cotton top China's list of agriculture imports by demand, but the list also includes other products like wood, seafood and animal hides, the executive said.

U.S. soy, corn slip ahead of options expiry; wheat steady
SINGAPORE, Feb 18 (Reuters) - Chicago soybean futures fell 0.8 percent and corn lost around half a percent as expiry of March options later in the day pressured the grain markets, which rallied in the last session on higher U.S. weekly exports and news that China was mulling a cut in import tariffs.
"There is Chicago options expiry today, may be some impact on the market, but I would expect trade today to be subdued as it was pretty hectic on Thursday," said Ole Houe, an advisor on agricultural commodities at FCStone Australia.

Palm oil prices dip as traders eye China import tax
JAKARTA, Feb 18 (Reuters) - Malaysian palm oil futures fell reversing earlier gains as they took direction largely from other oil markets and possible food import tax changes in China.
"Some people say this (price fall) has happened because of an increase in palm oil supply, but it wouldn't affect prices this much," said Leonardo Gavaza, an analyst at Bahana Securities.

Argentine soy and corn crops seen steady - exchange
BUENOS AIRES, Feb 17 (Reuters) - Argentina's 2010/11 soy harvest is seen steady at 47.0 million tonnes, while the outlook for corn was held at 19.5 million tonnes, the Buenos Aires Grains Exchange said on Thursday in its weekly report.
Argentina is the world's No. 3 soybean exporter, and severe dryness linked to the La Nina weather anomaly prompted analysts to lower their forecasts for the harvest earlier this season, pushing up prices in international grain markets.

Brazil's No.3 soy state may harvest record crop
SAO PAULO, Feb 17 (Reuters) - Brazil's southernmost state of Rio Grande do Sul may harvest a record soy crop in 2011 after dryness caused by the La Nina anomaly was restricted to few areas, the state's crop agency Emater said on Thursday.
The soy crop of Brazil's No.3 producing state is now projected at 10.39 million tonnes, up from a previous estimate of 9.14 million tonnes.

China mulls import tax cuts to tame food inflation
BEIJING, Feb 17 (Reuters) - China's Ministry of Commerce has asked other ministries to consider potential cuts in import taxes on a range of goods including food, two sources said on Thursday, in a move seen aimed at taming rising inflation.
Speculation on which import duties could be cut reverberated through domestic and overseas agriculture markets. Soy and palm oil prices fell on talk of the possible cuts.

India's trade min: refined vegoil import tax "very fair"
KUALA LUMPUR, Feb 18 (Reuters) - India's Trade Minister said on Friday that import duties on refined edible oils were "very fair", playing down expectations the government will scrap the tax in its annual budget due later this month.
Soaring edible oil prices, owing to erratic weather in key exporters, have prompted some Asian countries to act. Bangladesh slashed import taxes earlier this week and China may be mulling a similar move.