Tuesday, March 1, 2011

20110301 1254 Global Economic Related News.

Japan: Industrial production increases less than expected
Japan’s industrial production increased less than estimated in January, in a slowdown likely to be temporary caused by declining output of mobile phones and flat screen televisions. Factory output climbed 2.4% m-o-m after rising 3.3% the previous month. That’s lower than estimates for a 4% gain. Companies plan to increase output 0.1% this month and 1.9% in March. Retail sales rose 0.1% in January, beating for a 1.5% drop. (Bloomberg)

US: Consumer spending cools
Consumer spending cooled more than forecast in January as rising food and fuel prices caused Americans to cut back on post-holiday visits to malls and restaurants. Purchases rose 0.2%, the smallest gain since June, as winter storms may have also discouraged shoppers. Estimates were for a 0.4% advance. Adjusted for inflation, consumer spending fell 0.1%. Incomes climbed 1% in January while the savings rate increased to 5.8% from 5.4% in December. (Bloomberg)

US: Businesses expand at fastest pace in two decades
Businesses in the US unexpectedly grew in February at the fastest pace in two decades, indicating manufacturing remains at the forefront of the recovery. Institute for Supply Management (ISM)’s business barometer rose to 71.2, the highest level since July 1988, from 68.8 in January. The production gauge rose to 78.2 from January’s reading of 73.7 while the gauge of new orders climbed to 75.9 from 75.7. The employment measure fell to 59.8 from 64.1. (Bloomberg) 

U.S: Pending sales of existing homes fell 2.8% in January. The number of Americans signing contracts to buy previously owned homes fell, a sign the industry that triggered the recession was struggling at the start of 2011. The index of pending home resales dropped 2.8% after a revised 3.2% decrease the prior month that was initially reported as a gain, figures from the National Association of Realtors showed. (Source: Bloomberg)

Canada: Fourth quarter economy accelerated more than forecast from October to December on the biggest jump in exports since 2004 and faster consumer spending. GDP expanded at a 3.3% annual pace in the fourth quarter
following a 1.8% expansion in the previous three months that was higher than initially estimated, Statistics Canada said. (Source: Bloomberg)

E.U: Inflation accelerated less than initially estimated in January, as increases in food and transport prices eased from the previous month. Inflation in the 17-nation euro region quickened to 2.3% from 2.2% in December, the European Union's statistics office in Luxembourg said. (Source: Bloomberg)

Spain: Inflation accelerated in February to the fastest in more than two years as unrest in North Africa prompted a surge in the price of oil. Consumer prices rose 3.4% from a year earlier, based on a European Union measure, after advancing 3% in January, the Madrid-based National Statistics Institute said in a statement. (Source: Bloomberg)

Japan: Industrial production increased less than estimated in January, in a slowdown likely to be temporary caused by declining output of mobile phones and flat screen televisions. Factory output climbed 2.4% from December, when it rose 3.3%, the Trade Ministry said. (Source: Bloomberg)

Japan: Unemployment rate held steady while payrolls raised in January, adding to signs the nation's recovery is gaining pace after a temporary slowdown. The jobless rate remained unchanged from the previous month at 4.9%, the statistics bureau said. (Source: Bloomberg)

S.Korea: Will temporarily scrap or lower tariffs on 24 commodities to ease quickening inflation at home which includes cheese and aluminum ingots starting in early March. The government will also increase tariff-free imports of powdered milk and frozen pork bellies and cut tariffs further on eight other commodities including corn, olives and grapeseed oil this year, the Ministry of Strategy and Finance said in an emailed statement. (Source: Bloomberg)

Australia: Fourth-quarter business profits unexpectedly dropped in the three months through December as floods in the nation's northeast weakened earnings at mining and construction companies. Gross operating profits fell 2.8% in the fourth quarter from the previous three months, when they also declined a revised 2.8%, the Bureau of Statistics said in Sydney. (Source: Bloomberg)

20110301 1252 Malaysia Corporate Related News.

Sime Darby: Mulls plantation in Cameroon, Emery in JV. Sime Darby Bhd is mulling a 300,000ha oil palm plantation in Cameroon in view of rising demand and high crude palm oil (CPO) prices. The RM7.5b project will expand its 640,000ha land bank. Separately, Emery OIeochemicals Group, a JV between Sime Darby Plantation Sdn Bhd and Thailand's PTT Chemical International Pte Ltd, has inked a new JV for a synergistic collaboration with Europe-based ERCA Group, to increase the presence of both companies in the global home and personal wellness markets across Europe, Latin America and Asia. (Source: The Edge Financial Daily)

Tenaga: In RM120m green energy tie up with Felda. Tenaga Nasional Bhd and the Felda Global group will invest RM120m in a green energy in Jengka, Pahang that will generate electricity using oil palm empty fruit bunches (EFB). The construction is expected to be completed by Dec 2012 with a generation capacity of 12.5MW. (Source: The Edge Financial Daily)

AirAsia: AirAsia X on RM1.5b expansion route, Rafidah to airlines chairman. AirAsia X (AAX) has signed a contract to buy three new A330-200 aircraft for RM1.5b as part of its expansion strategy and it hoped to earn RM2b in revenue this year. This latest aircraft order that comes with an option to add two more aircraft will be deployed for long haul destinations into Europe and possibly Africa from next year onwards. Separately, Tan Sri Rafidah Aziz has accepted AAX's offer to be the new non-executive, independent chairman. (Source: The Star)

KNM: Expects stronger earnings this year. KNM Group Bhd, which has seen its earnings on a decline, expects better earnings this year underpinned by its all-time high order book of RM4.5b. Its debt level has also dropped significantly to about RM1b currently from the RM1.7b to RM1.8b level following the acquisition of Borsig in mid-2008. (Source: The Edge Financial Daily)

Aviation: APFT to raise RM11m from IPO. APFT Bhd, a flight education and training service provider, aims to raise RM11m from its IPO offering which is scheduled for March 18. The company is bound for the Main Market of Bursa Malaysia. (Source: The Sun)

KNM wants to buy foreign firms, expand product line
KNM aims to buy foreign firms and expand its product line in a bid to diversify and improve earnings, its MD Lee Swee Eng said. The group, which has RM300m cash, is eyeing companies with investments in green technology, total solution and process, nuclear and environment, among others. Lee expects KNM to do better this year and growth to accelerate from 2012, driven by its order backlog of RM4.5bn and business expansion. (BT)

Kencana Petroleum secures RM115m contract from Petrofac
Kencana Petroleum has secured a contract from Petrofac E&C for the engineering, procurement, construction and commissioning of Mobile Offshore Production Unit and Wellhead Support Structure, worth RM115m. The contract was for the Sepat Early Production System off the coast of Terengganu. (Bernama)

ManagePay goes public in bid to expand nationwide
ManagePay Systems hopes to expand nationwide with the RM7.3m it expects to raise from its IPO slated for 15 March. Applications for the issue shares will be closed at 5pm, 2 March. The IPO for the listing will see the company’s market capitalisation of RM29.3m at its IPO price. (The Malaysian Insider)  

20110301 0913 Global Market Related News.

OIL: Crude falls below $97 as Saudi output up, U.S. stocks to rise
SINGAPORE, March 1 (Reuters) - U.S. crude futures fell below $97 on Tuesday after Saudi Arabia reassured the market with extra supply to meet a shortfall caused by Libya output cuts.
Investors will be looking at weekly U.S. industry and government inventory data to be released later on Tuesday.

COMMODITIES: Crude, gold drop as extra Saudi oil eases fear
NEW YORK, Feb 28 (Reuters) - Commodity investors remained concerned about protests in the Middle East on Monday but Saudi Arabia's reassurance that it would pump more oil unwound gains in crude and gold, while U.S. cocoa futures rocketed to a
32-year peak after gun battles erupted in Ivory Coast.
"The Saudi's are supposedly producing more, but on the supportive side there is still the uncertainty about how much the unrest in Africa and Middle East will spread and how long Libya's oil will be shut off," said Chris Dillman, analyst at Tradition Energy in Stamford, Connecticut.

GLOBAL MARKETS: Asia stocks rise, tracking Wall Street
SINGAPORE, March 1 (Reuters) - Asian stocks rose in early trade on Tuesday, tracking U.S. shares which gained on optimistic remarks from influential investor Warren Buffett and positive economic data, while the dollar sank to its lowest in more than three months.
Japan's benchmark Nikkei average climbed 0.8 percent and the broader Topix index rose 1.1 percent, while Australian shares also gained.

OECD: Real Demand Driving Commodities (Source: CME)
A report being prepared for the world's Group of 20 leading economies indicates the main factor behind rising prices for wheat, sugar, cotton, metals, oil and other commodities isn't speculators, as some have suggested, but that the global demand to consume these goods is growing faster than the supply. The Organization for Economic Cooperation and Development's study, which is being put together ahead of the next G-20 meeting of finance officials in April in Washington, may lead to more efforts to boost commodities output around the world. It could also help temper criticism of the U.S. Federal Reserve's easy-money policies, which some policy makers have blamed for stoking global inflation. French President Nicholas Sarkozy, who heads the G-20, recently warned that rising commodity prices were a threat to the world economy and is one of several G-20 leaders who have blamed financial speculators for the strong increases in commodity prices in recent years.
The French leader earlier this month was critical of a draft report from the European Commission that had suggested no correlation between rising prices and a substantial increase in positions held by index funds. (The controversial paragraph was removed.)  Finance ministers and central bankers meeting in Paris a week ago said they would look into the underlying drivers of the price increases and consider possible actions. "It's very hard to distinguish between financial and structural factors behind the price increases, but it looks like demand and supply are playing the predominant role," Pier Carlo Padoan, chief economist and deputy secretary general at the OECD, said, describing the report's initial findings in an interview.

US economic growth trimmed, consumers more upbeat
WASHINGTON, Feb 25 (Reuters) - U.S. consumer confidence hit a three-year high in February, suggesting the economy remained on a solid footing despite soaring gasoline prices.
The rise in sentiment was a hopeful sign for the economic recovery after the government said on Friday that growth in the fourth quarter was not as robust as it previously estimated.

China FX chief says hard to invest in commodities
BEIJING, Feb 26 (Reuters) - China cannot invest much of its foreign currency riches in the global commodities market, because doing so would only push up the prices of the raw materials that the economy depends on, the country's top money manager said on Saturday.
Yi Gang, head of the State Administration of Foreign Exchange (SAFE), also said that monetary easing in wealthy countries was driving down China's returns on its $2.85 trillion in official currency reserves, the world's biggest such stockpile.

PRECIOUS-Gold rises above $1,410/oz on Mideast tensions
LONDON, Feb 28 (Reuters) - Gold rose above $1,410 an ounce in Europe on Monday as turmoil in the Middle East region lifted safe-haven buying and fuelled a fresh spike in oil prices, stoking concerns over U.S. growth and knocking the dollar.
Spot gold  was bid at $1,411.15 an ounce at 1028 GMT, against $1,409.15 late in New York on Friday. U.S. gold futures for April delivery  rose $2.50 an ounce to $1,411.80.

FOREX-Dollar hurt by high oil prices, hits 3-mth low
LONDON, Feb 28 (Reuters) - The dollar fell to three-month lows on Monday on expectations that the threat to growth from high oil prices would keep U.S. monetary policy loose, contrasting with a more hawkish outlook elsewhere.
The dollar index, which tracks the greenback's performance against a basket of major currencies, skidded to 76.812, its lowest level since November 9. The euro accounts for over half of the basket.

Wheat up half pct on strong consumer demand, soy dips
SINGAPORE, Feb 28 (Reuters) - U.S. wheat futures rose around half a percent extending gains as growing demand from top buyers in the Middle East continued to underpin the market amid concerns over supplies this year.
"The downside on wheat is going to be limited as governments across the world are going to ensure that there are adequate stocks, give the unrest," said Abah Ofon, an agricultural commodities analyst at Standard Chartered Bank.

S.Korea slashes import tariffs on corn, soymeal
SEOUL, Feb 28 (Reuters) - South Korea, heavily dependent on commodities imports and grappling with its worst foot-and-mouth outbreak, unveiled on Monday cuts to import tariffs on corn, soymeal and 32 other items to ensure supply and curb inflation.
The cuts are part of measures taking effect in early March that include previous decisions to expand tariff-free imports of pork, powdered milk, cheese and butter, the finance ministry said in a statement.

Oil rises on Middle East fears; stocks gain
LONDON, Feb 28 (Reuters) - Oil prices advanced as protests in Oman raised concerns about supply from the Middle East, though world stocks rose and were on track to post their third straight month of gains on an improving growth outlook.
"There is the continued threat that conflicts will spread in the region that produces a large amount of oil in the world," said Ben Westmore, a commodities economist at the National Australia Bank.

20110301 0911 Soy Oil & Palm Oil Related News.

Soy product futures ended lower, succumbing to profit taking following Friday's price spike in unison with soybeans. Soyoil futures garnered further price pressure from overnight weakness in world vegoil markets, analysts said. CBOT May soyoil ended 0.25 cents or 0.4% lower at 57.33 cents per pound, and May soymeal traded $2.80 or 0.8% lower at $361.90 a short ton. (Source: CME)

Rising biofuel demand lifts palm oil
KUALA LUMPUR, Feb 28 (Reuters) - Malaysian palm oil rose 1.2 percent as key U.S.  report signalled growing demand for biofuel with competing crude oil markets climbing although the vegetable oil is set for its worst monthly loss in more than a year.
"In the long terms, prices of global vegetable oils will be bullish as production for soy and palm oil this year might not keep up with the strong demand," said an oil analyst in Shanghai.

Sime eyes $2.5 bln oil palm expansion deal in Cameroon-FT
KUALA LUMPUR, Feb 28 (Reuters) - Malaysia's Sime Darby  is considering a $2.5 billion plantation expansion deal in Cameroon, the Financial Times reported on Sunday, signalling the global grab for land is well underway as food prices soar.
The Financial Times quoted Sime Darby Chief Executive Mohd Bakke Salleh as saying the project in the West African state will involve 300,000 hectares (741,300 acres) of oil palm estates although discussions have so far led to "nothing conclusive."

Malaysia needs to step up palm oil replanting -Unilever
JAKARTA, Feb 25 (Reuters) - Malaysian palm oil producers should replant ageing and low yielding estates or risk declines in production in coming years, the world's top palm oil buyer Unilever said on Friday.
Malaysia, the world's no. 2 producer, was expected in 2011 to produce above last year's 17.5 million tonnes of palm oil, but heavy rains and flooding have hurt output in recent months.