Wednesday, September 21, 2011

20110921 1818 FCPO EOD Daily Chart Study.

FCPO closed : 3066, changed : -1 point, volume : higher.
Bollinger band reading : side way range bound little upside biased.
MACD Histrogram : turned lower, buyer reduce exposure.
Support : 3050, 3020, 2970, 2950 level.
Resistance : 3070, 3100, 3150, 3200 level.
Comment :
FCPO closed nearly unchanged down by 1 tick with increasing volume participation. Overnight soy oil ended lower and currently trading higher while crude oil trading weaker.
News wise, Indonesia official announced will lift its crude palm oil export tax to 16.5 percent for October from the current 15 percent while China reported resilient August 2011 commodities imports. Meanwhile, Reuters reported that Malaysia may announce some measure to protect and support the local palm oil industry in order to counter Indonesia new palm olein export tax structure implementation.
Daily chart formed a small up bar candle closed in between middle and upper Bollinger band level after market opened lower and edge upwards slowly towards the end to closed near the high of the day.
Chart study remained calling for a side way range bound little upside biased market development testing support and resistance 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.

20110921 1751 FKLI EOD Daily Chart Study.

FKLI closed : 1417.5, changed : +9 points, volume : lower.
Bollinger band reading : pullback correction downside biased.
MACD Histrogram : turned upward, seller taking profit.
Support : 1405, 1395, 1385, 1375 level.
Resistance : 1425, 1445, 1458, 1470 level.
Comment :
FKLI closed recorded gain with little lower volume changed hand doing about 1.5 point discount compare to cash market that also closed soar higher. Overnight U.S. market closed nearly unchanged and Asia markets ended mostly higher while European markets currently mostly lower.
Global markets reacted differently on news of China leading indicator shows growth and European officials plan to return to have a complete review of the Greek economy and ahead of the two-day U.S. Federal Reserve policy meeting in which Chairman Ben Bernanke is widely expected to announce further steps to stimulate the U.S. flagging economic recovery.
Daily chart formed an up bar candle with lower shadow closed above lower Bollinger band level after market opened weaker, dip lower and climb higher into positive territory before traded range bound to closed near the high of the day.
Technical reading revised to suggesting a pullback correction downside biased market development possible testing higher resistance level.
When to buy : buy at support or weakness with quick cut loss and profit target.
When to sell : sell at resistance or strength with quick cut loss and profit target.

20110921 1750 Regional Markets EOD Daily Chart Study.

DJIA chart reading : side way range bound.
Hang Seng chart reading :  downside biased.
KLCI chart reading : pullback correction downside biased.

20110921 1718 Global Market & Commodities Related News.

Stocks edge up ahead of Fed, euro recovers
SINGAPORE/HONG KONG, Sept 21 (Reuters) - Asian stocks edged up and the euro clawed back lost ground as investors waited for the end later of a Federal Reserve policy meeting expected to announce further steps to stimulate the flagging U.S. economic recovery.
"Markets fluctuate so much during the day these days it's very hard to pick a trend," said David Spry, analyst at F.W. Holst in Melbourne. "Anyone who thinks the market's just going to recover quickly is going to be misplaced."

The Lloyd's of London insurance market crashed to a first-half loss of 697 million pounds ($1 billion), weighed down by record claims from natural catastrophes including the March 11 Japanese earthquake and tsunami.The loss compares with a profit of 628 million pounds a year earlier, and reflects a total of 6.7 billion pounds in claims absorbed during the first half, making it the costliest six-month period in Lloyd's 323-year history.Many insurers have reported steep half-year losses after an unprecedented run of natural disasters which also included an earthquake in New Zealand and heavy flooding in Australia. (Source: Unknown)

Most Asian Stocks Rise as China’s Economy Seen Withstanding Europe Crisis (Bloomberg)
Most Asian stocks rose after a gauge of economic indicators signaled growth in China is withstanding Europe’s debt crisis and a faltering U.S. economy. The MSCI Asia Pacific Index trimmed advances in late trading as European markets opened lower. China Life Insurance Co., the nation’s biggest insurer by market value, rose 1.6 percent in Hong Kong after the Conference Board said its leading indicator index for the world’s second- largest economy rose 0.6 percent in July, citing a preliminary reading. BHP Billiton Ltd. (BHP), the world’s largest mining company, climbed 0.9 percent in Sydney, reversing an earlier decline of as much as 0.5 percent. Esprit Holdings Ltd. plunged 11 percent after Morgan Stanley listed it as one of the Asian companies most at risk from Europe’s debt crisis.
The MSCI Asia Pacific Index, which swung between gains and losses at least seven times today, rose 0.1 percent to 117.99 as of 5:44 p.m. in Tokyo. About five stocks rose for each four that fell, as speculation grew that the Federal Reserve will today announce steps to bolster the world’s biggest economy. The gauge fell for the past two weeks on concern Europe’s debt crisis is spreading and signs of slowing U.S. growth.

Bernanke Has Few Tools to Heal Economy (Bloomberg)
U.S. mortgage rates are the lowest in at least four decades, with a 30-year fixed loan available at 4.09 percent. That didn’t help Alexis Wolf buy a townhome in Beaverton, Oregon. “Unless you have family help, you’re stuck renting,” said Wolf, 26, a real estate broker who turned to relatives for a loan because she didn’t have the credit and employment history needed to qualify for a mortgage. Wolf’s experience illustrates the predicament for Federal Reserve policy makers as they end a two-day meeting today to consider ways to boost economic growth. Low interest rates, the traditional medicine for a flagging economy, aren’t helping housing, which since 1982 has aided every recovery except the current one.

U.S. wheat, soy tick up; corn awaits China's move
SINGAPORE, Sept 21 (Reuters) - U.S. wheat and soy futures ticked higher despite escalating worries about the global economy and the IMF warning the United States could slip back into recession, while corn hardly moved as dealers awaited a possible purchase by China.
"Under normal circumstances we would expect prices to rise. But what we have right now in terms of the global economic environment is anything but a normal environment, and that's what's pressuring prices lower," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.

Indonesia Sulawesi Aug cocoa exports drop 76.7 pct y/y
JAKARTA, Sept 21 (Reuters) - Indonesia's cocoa bean exports from the main growing island of Sulawesi continued to drop in August to 8,421.50 tonnes from 36,167.56 tonnes a year ago, or 76.7 percent, industry data showed on Wednesday.
Indonesia is the world's third largest cocoa producer after Ivory Coast and Ghana.Cocoa shipments from Sulawesi to the United States have stopped since at least July because of high premiums and quality problems that led to automatic detention by U.S quarantine.

China to release 3.7 mln tonnes corn reserves, imports expected
BEIJING/SINGAPORE, Sept 20 (Reuters) - China will sell about 3.7 million tonnes of state corn reserves by November in a bid to cool record prices  and take the heat off food inflation, which the government fears may fuel social unrest.
Tuesday's announcement by the State Grain Administration is likely to support corn prices, with some traders in the United States saying the world's second-biggest consumer of the grain was asking about buying up to 5 million tonnes of U.S. corn.

Russian wheat seeks to conquer fresh markets
HAMBURG/LONDON, Sept 20 (Reuters) - Russian wheat exporters aim to ramp up sales to nascent markets such as South America due to their cheap price edge, which may also give a boost to freight rates which are struggling with a ship glut.
Millions of tonnes of low-priced Russian wheat have surged onto global markets since Russia ended a near year-long grain export ban in July, sweeping aside competitors including those from Europe and the United States.

Centam, Mexico, Colombia coffee exports rise in Aug
MEXICO CITY, Sept 20 (Reuters) - Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic rose 12 percent to 24.7 million 60-kg bags in October through August from the prior harvest, Guatemalan growers' group Anacafe said Tuesday.
The 2010/11 coffee harvesting season will come to a close next month.

Corn fungus adds to hard year for U.S. farmers
OVERLAND PARK, Kan., Sept 20 (Reuters) - Corn farmers in some parts of the U.S. Plains are finding their newly harvested crop has to be heavily discounted or cannot be sold at all due to the presence of a vicious fungus that makes the corn dangerous to eat.
The culprit is "aflatoxin" - toxins produced by a fungus that can harm and possibly kill livestock and are considered carcinogenic to animals and humans.

Cargill to rebuild, expand N.Dakota oilseed plant
Sept 20 (Reuters) - U.S. agribusiness giant Cargill Inc  said on Tuesday it is planning a $50 million-plus project to rebuild and expand its 30-year-old oilseed processing plant in West Fargo, North Dakota.
Construction is set to begin this fall with completion  expected by the 2013 U.S. harvest, Cargill said.

Russia in zinc mining deal with Iran
MOSCOW, Sept 20 (Reuters) - Russia has agreed to develop an Iranian zinc deposit that is among the largest in the world in a deal involving an Iranian bank facing international sanctions, its Energy Ministry said on Tuesday.
The agreement to develop the Mehdiabad zinc and lead deposit was reached at a trade meeting on Sept. 11 that brought Russia's Energy Minister Sergei Shmatko to Iran, the ministry said in emailed comments.

Dry Argentine weather fuels fight for crop acreage
BUENOS AIRES, Sept 20 (Reuters) - Dry weather that is delaying corn plantings in the world's No. 2 exporter, Argentina, could force some farmers to turn over more land to later-planted soybeans instead.
Growers in the South American country recently started sowing 2011/12 corn, but parched fields are slowing their progress, leading industry analysts to predict some will hold off and plant more lucrative soy toward the end of the year.

Indonesia to lift palm oil export tax to 16.5 pct in Oct
JAKARTA, Sept 20 (Reuters) - Indonesia will lift its crude palm oil export tax to 16.5 percent for October, from 15 percent this month, the industry ministry said on Tuesday.
The rise was based on a reference price for crude palm oil of $1,044 a tonne, said Saiz Ahmad, director for food industries at the industry ministry.

Brent slips closer to $110 as IMF cuts growth forecast
SINGAPORE, Sept 21 (Reuters) - Brent crude futures slipped closer to $110, reversing from gains in the previous session after the International Monetary Fund warned that the United States and Europe could slip back into recession.
"It is very difficult to hold on to your positions given the uncertainty in the global economy," said Tetsu Emori, a fund manager at Tokyo-based Astmax Co Ltd.

Libya to restart Mesla oilfield in 2-3 days
TRIPOLI, Sept 20 (Reuters) - Libya's Benghazi-based Arabian Gulf Oil Company (Agoco) said it plans to restart production at its Mesla field in eastern Libya within two to three days.
"We will start in two to three days the Mesla field. We will then start blending it with Sarir," said Agoco spokesman Abdeljalil Mayuf.

Malaysia expansion sets the stage for 'Greater Singapore' oil hub
SINGAPORE, Sept 20 (Reuters) - An unprecedented expansion of oil infrastructure in southern Malaysia over the next five years is set to create a "Greater Singapore" trading hub that will help the region retain its edge over competitors such as China.
Instead of competing with Singapore, the new infrastructure -- including a state-of-the-art petroleum complex and capacity increases to storage -- will lead to greater flows of oil and help meet growing demand from traders for more liquidity to feed increasing pricing activity.

Russia in zinc mining deal with Iran
MOSCOW, Sept 20 (Reuters) - Russia has agreed to develop an Iranian zinc deposit that is among the largest in the world in a deal involving an Iranian bank facing international sanctions, its Energy Ministry said on Tuesday.
The agreement to develop the Mehdiabad zinc and lead deposit was reached at a trade meeting on Sept. 11 that brought Russia's Energy Minister Sergei Shmatko to Iran, the ministry said in emailed comments.

Europe steel production: the boom is over
LONDON, Sept 20 (Reuters) - European steelmakers will be forced to cut crude steel capacity utilisation and may idle some furnaces in the next few months, after producing at high levels in the first half this year, as weaker demand, prices and destocking hit their sales.
Last spring, crude steel production in Europe was accelerating and it seemed that the industry was slowly but surely sailing back towards record levels last hit in 2008.

Japan August crude steel output down 2.7 pct mth/mth
TOKYO, Sept 20 (Reuters) - Japan's crude steel output fell 2.7 percent in August from the previous month as construction steelmakers stepped up seasonal output cuts, while the yen's strength hurt exports at Japan's top two steelmakers, an industry body said on Tuesday.
August output, which is not seasonally adjusted, came to 8.91 million tonnes, the Japan Iron and Steel Federation said.

Australia lifts iron ore projections, coal lags
SYDNEY, Sept 20 (Reuters) - Australia lifted its projections for iron ore output and exports on Tuesday, defying concerns over the global economy as Asian demand roars along, though it cut its forecast for coal output on a slow recovery from natural disasters.
Exports of iron ore, a key steelmaking ingredient, are seen at 449 million tonnes -- 40 percent of global trade -- in fiscal 2012, a 3 percent increase from an earlier projection and a 10 percent rise on the previous year, as Japanese and Chinese steel output expands rapidly.

Copper in London rises from 9-month low
SINGAPORE, Sept 21 (Reuters) - Copper on the London Metal Exchange rose as investors purchased the metal after prices fell to the lowest level in nine months, making the commodity attractive to purchase.
"The economy is still the general concern and the negative sentiment remains but China's restocking," said Jonathan Barratt, managing director for Commodity Broking Services in Sydney.

Japan Aug rolled copper output down 5.3 pct yr/yr
TOKYO, Sept 21 (Reuters) - Japan's output of rolled copper products in August logged its biggest year-on-year fall this year, dropping 5.3 percent as demand for use in chips, connectors and automobiles remained weak, an industry body said on Wednesday.
Production has stayed at a low level since early this year as user industries reduced domestic output particularly after the massive earthquake on March 11.

Copper market deficit at 130,000 T in H1 2011
NEW YORK, Sept 20 (Reuters) - World refined copper consumption exceeded production by 130,000 tonnes during the first half of this year compared with a deficit of 286,000 tonnes in the first six months of 2010, an industry report showed on Tuesday.
"During the first half of 2011, world apparent usage grew by a modest 1 percent compared with that in the first half of 2010," the International Copper Study Group (ICSG) said in its latest monthly bulletin.

Russia in zinc mining deal with Iran
MOSCOW, Sept 20 (Reuters) - Russia has agreed to develop an Iranian zinc deposit that is among the largest in the world in a deal involving an Iranian bank facing international sanctions, its Energy Ministry said on Tuesday.
The agreement to develop the Mehdiabad zinc and lead deposit was reached at a trade meeting on Sept. 11 that brought Russia's Energy Minister Sergei Shmatko to Iran, the ministry said in emailed comments.

Gold hovers around $1,800 ahead of Fed meeting
SINGAPORE, Sept 21 (Reuters) - Gold prices hovered around $1,800 an ounce as worries about a worsening euro zone debt crisis supported the safe-haven sentiment, while investors awaited the conclusion of a U.S. Federal Reserve policy meeting for trading cues.
"The expectation of some sort of easing from the Fed and poor economic data will make it difficult for gold to break much sharply below $1,800," said Li Ning, an analyst at Shanghai CIFCO Futures.

Gold bug turned bear strikes lone pose
MONTREAL, Sept 20 (Reuters) - After gold's 10-year winning streak shattered all but the most bullish forecasts, it takes a brave man to call for a correction. It takes an even braver man to do so at the year's biggest bullion conference.
Christoph Eibl, CEO and founding partner of the $2 billion Swiss commodity hedge fund Tiberius Group, says he knows all the arguments that have underpinned bullion's long rally, which has accelerated with a 50 percent gain in the past 12 months.

Gold to clear $2,000 in 2012 as rally cools-LBMA poll
MONTREAL, Sept 20 (Reuters) - Gold's rally will extend beyond $2,000 an ounce in the next year, but won't match the record-breaking 50 percent surge of the last 12 months, according to an annual survey of gold investors and analysts at the world's biggest bullion traders event.
With no let up seen in the financial markets uncertainty that fanned the safe-haven investment spree, bullion  is expected to rise to $2,019 an ounce by November 2012, according to an anonymous survey of delegates at the conclusion of the London Bullion Market Association's (LBMA) annual conference on Tuesday. That is about 12 percent above current levels.

METALS-Copper in London rises from 9-month low
SINGAPORE, Sept 21 (Reuters) - Copper on the London Metal Exchange rose as investors purchased the metal after prices fell to the lowest level in nine months on Tuesday, making the commodity attractive to purchase.
"The economy is still the general concern and the negative sentiment remains but China's restocking," said Jonathan Barratt, managing director for Commodity Broking Services in Sydney.

PRECIOUS-Gold hovers around $1,800 ahead of Fed meeting
SINGAPORE, Sept 21 (Reuters) - Gold prices hovered around $1,800 an ounce, as worries about a worsening euro zone debt crisis supported the safe-haven sentiment, while investors awaited the conclusion of a U.S. Federal Reserve policy meeting for trading cues.
"The expectation of some sort of easing from the Fed and poor economic data will make it difficult for gold to break much sharply below $1,800," said Li Ning, an analyst at Shanghai CIFCO Futures.

20110921 1212 Global Market & Commodities Related News.

GLOBAL MARKETS-Stocks steady ahead of Fed, euro recovers
HONG KONG, Sept 21 (Reuters) - Asian stocks held steady on Wednesday ahead of the conclusion of a two-day U.S. Federal Reserve policy meeting in which Chairman Ben Bernanke is widely expected to announce further steps to stimulate a flagging economic recovery.
The Fed is expected to announce plans to intervene in the bond market to push long-term interest rates -- already near historic lows -- even lower in a move known as Operation Twist.

Japanese Stocks Advance After China Leading Indicator Shows Growth (Bloomberg)
Japanese stocks advanced after a leading Chinese indicator signaled economic growth in Japan’s biggest export market is withstanding a global slowdown. The Nikkei 225 (NKY) Stock Average gained 0.4 percent to 8,759.40 as of 12:45 p.m. in Tokyo, after earlier falling as much as 0.2 percent. The broader Topix index advanced 0.4 percent to 757.83.

China’s Stocks Rise Most in Two Weeks as Indicator Shows Growth (Bloomberg)
China’s stocks rose, sending the benchmark index to its biggest gain in two weeks, after a gauge of economic indicators signaled growth is withstanding Europe’s debt crisis and faltering growth in the U.S. PetroChina Co. led gains by commodity producers after the The Conference Board said its leading indicator index rose 0.6 percent in July, citing a preliminary reading. Dongfang Electric Corp. paced a rally by nuclear power-related companies after the China Securities Journal said the government may resume approvals for nuclear-power projects next year. The Shanghai Composite Index added 1 percent to 2,472.02 at 10:58 a.m., set for the biggest advance since Sept. 7 and erasing a 0.4 percent drop. The measure closed at a 14-month low on Sept. 19. The CSI 300 Index (SHSZ300) rose 0.8 percent to 2,710.81.

Japan Aug crude oil import volume up 1.2 pct
TOKYO, Sept 21 (Reuters) - The volume of Japan's customs-cleared crude oil imports rose 1.2 percent in August from the same month a year earlier, the Ministry of Finance said on Wednesday.
Japan, the world's third-biggest oil consumer, imported 18.376 million kilolitres (3.73 million barrels per day) of crude oil last month, the preliminary data showed.

US crude and oil products stocks rise-API
NEW YORK, Sept 20  (Reuters) - U.S. crude stocks rose last week as imports expanded, while oil product stocks rose modestly as refiners boosted utilization, weekly data from trade group American Petroleum Institute (API) showed on Tuesday.
Crude stocks in the United States rose by 2.6 million barrels in the week to Sept. 16, API said.

Nigeria crude oil output 1.8 mln bpd - NNPC
ACCRA, Sept 20 (Reuters) - Nigeria is producing 1.8 million barrels of crude oil per day, down from a capacity of 2.5 million bpd as the West African nation adheres to its OPEC output restrictions, an official at Nigerian National Petroleum Corporation told Reuters on Tuesday.
OPEC's most recent monthly report says in August Nigeria produced 2.27 million bpd.

Oil downside risk rises as economic outlook darkens
LONDON, Sept 20 (Reuters) - A series of supply squeezes have helped keep oil strong this year but some of them have been short-term factors and could give way to longer-term weakness as the outlook for the world economy and global fuel demand dims.
The uprising against Muammar Gaddafi in Libya, production problems in the UK and Norwegian North Sea, lower supplies from Russia, central Asia, Nigeria and Angola have all cut supplies, especially of high quality, light, low sulphur crude oil.

Oil rises on Fed expectations
NEW YORK, Sept 20 (Reuters) - Oil rose on Tuesday after steep losses in the previous session, as financial markets got a lift from hopes the U.S. Federal Reserve's policy Panel could act to boost the economy.
"I think the news overall for the last week has been somewhat negative for the price of oil, but I think we're getting a little bit of short covering as we get closer to Bernanke's final testimony tomorrow," Richard Ilczyszyn, senior market strategist for MF Global in Chicago.

NYMEX-Natural gas ends down, widening spreads to winter
NEW YORK, Sept 20 (Reuters) - U.S. natural gas futures ended lower on Tuesday, with front-month contracts again pressured by milder autumn weather that has slowed overall demand, while winter months lost less ground.
"There are expectations for some big storage builds in the next couple of weeks, and the weather is cooler, so demand has backed off some," a Houston-based trader said, noting wider spreads to winter months could prompt stronger storage builds.

COMMODITIES-Fed hopes boost oil; gold rises on euro zone woes
NEW YORK, Sept 20 (Reuters) - Most major commodities ended higher on Tuesday, rebounding from losses a day earlier as expectations for more U.S. Federal Reserve stimulus boosted oil while European debt woes had some investors clinging to gold.
"The news overall for the last week has been somewhat negative for the price of oil, but I think we're getting a little bit of short-covering," said Richard Ilczyszyn, senior market strategist for MF Global in Chicago.

20110921 1013 Local & Global Economic Related News.

The government is aiming for a  domestic direct investment (DDI)-foreign direct  investment (FDI) ratio of 73:27 by 2020. In the first seven months of 2011, the FDI-DDI  ratio in terms of approved investments was 50:50 compared with 60:40 last year, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.  
• The government would promote domestic investments through various incentives  including tax incentives which were still being studied.  
• He said the manufacturing, tourism, hotel and hospitality sectors were expected to  continue drawing the attention of domestic investors. (Bernama)

The government's revenue from taxes has not been increasing for the past three to four years, Deputy Finance Minister Senator Datuk Donald  Lim Siang Chai said. The amount  was around RM160bn a year even though expenditure was on an increasing trend.  
• He said one third of the government's revenue came from oil and gas, one third from  taxes from companies and individuals while the remaining one third from indirect taxes  such as stamp duties and customs.
• "There is a need to increase the number of skilled labour so that the government would  be able to collect more taxes and increase its revenue," he noted.
• In Malaysia, out of the 12.8m workers, only 29% were skilled labour. Out of the 12.8m  workers, only 1.65m pay taxes, he added. (Bernama)

The  Malaysian Franchise Association (MFA) expects the number of  local franchise  companies establishing their business overseas to grow 10% annually. A main committee  member of the MFA, Abdul Rahman Mohamed said 10% was the minimum target, with 39  companies currently operating in 51 countries. "The food and beverages sector and  education business will have the most potential in  expanding its business overseas," he  said. On the other hand, Indonesia and China host the most Malaysian franchise  companies at 18 and 14, respectively. (BT)  

The lure of delicious food has enticed tourists to spend RM9.7bn on  food and beverage last year.  Tourism Minister Datuk Seri Dr Ng Yen Yen said the figure accounted for  17.2% of overall tourist expenditure for 2010. Tourism sector has grown to become the  second largest foreign exchange earner after manufacturing, she said. Malaysia was the  ninth most visited country in the world, and recorded 24.6m tourist arrivals with RM56.5bn  annually (23.6m tourists and spent RM53.4bn in 2009), she noted. (The Star)  

Malaysia is a leading option among Asean countries for Japanese companies that plan to  relocate to the Asean region following the 11 Mar earthquake and tsunami. Deputy  International Trade and Industry Minister Datuk Mukhriz Mahathir said Malaysia could  expect a surge in investment flows from Japan within the next one to two years. Many  Japanese companies hit by the 11 Mar disaster had expressed strong interest to either  relocate to Malaysia or expand their operations in  Malaysia due to the nation’s political  stability and the fact that it did not suffer major natural disasters, he noted. (Starbiz)

Growth in  Indonesia,  Thailand,  Malaysia,  the Philippines and  Vietnam will climb to  5.6% in 2012 from 5.3% this year, both 0.1% pt lower than its Jun predictions.
• Domestic demand - in particular, robust investment – is expected to offset the slowdown  in export momentum.
• Economic threats may warrant a “wait-and-see approach” for monetary policy  
• Further exchange-rate flexibility remains a key policy priority for  emerging Asia  (Bloomberg)  

U.S. trade officials will announce a major  trade enforcement action against  China on  Tuesday, according to an advisory from the U.S. Trade Representative's office. Possible  actions could target:
• China's export restrictions on rare earths, crucial for electronics, defense and renewable  energy industries
• Solar panel subsidies reportedly driving U.S. producers out of business.
• Anticompetitive currency practices  (Reuters)  

Indonesia's finance ministry said on Tuesday it plans to buy back  bonds maturing in  2012-2016 on 21 Sep. Government bond yields have jumped in the past week on a sell-off  by investors because of increased global risk aversion. (Reuters)  

U.S. homebuilders began work on fewer homes than forecast in Aug, showing the  industry remains flat on its back even as mortgage  rates fall to record lows.  Housing  starts dropped 5% to a three-month low 571,000 annual rate (601,000 in Jul), Commerce  Department figures showed. Economists called for a 590,000 pace. (Bloomberg)  

U.S. building permits  rose 3.2% mom to a 620,000 annual rate in Aug (601,000 in Jul),  the highest this year and a sign construction may stabilize. On a yoy basis, building permits  rose 7.8% higher. Economists expected an annual rate of 588,000 for Aug. (Bloomberg)  

Japan’s  leading composite index, which measures the state of the economy three  months ahead, rose to 104.6 in Jul (102.6 in Jun),  posting the third mom rise in a row.  (MNI) Hong Kong said its  unemployment rate has fallen to its lowest in more than 13 years  thanks largely to a strong local economy, but analysts warned the figure could rise again.  The unemployment rate for the Jun-Aug period fell to 3.2%, from 3.4% in the May-Jul,  which marked Hong Kong's lowest jobless rate since Feb 98, the Census and Statistics  Department said. Economists expected an average reading of 3.5%. (AFP)

Japan: Noda unveils first plan to counter damage from yen
Japanese PM Yoshihiko Noda unveiled his first plan as premier to lessen the pain of a JPY near postwar highs, including a pledge to grant “large” subsidies for domestic construction of factories. “We have to establish a strong economic structure that won‟t be affected by movements in currency markets, whether it‟s a strengthening or a weakening in the JPY,” Motohisa Furukawa, the economy minister, told reporters in Tokyo after the government released its interim report on measures to respond to the JPY‟s appreciation. (Bloomberg)

Italy: Credit rating cut by S&P as crisis contagion spreads
Italy‟s credit rating was cut by Standard & Poor‟s, the country‟s first downgrade in five years, as Greece‟s worsening fiscal crisis fans concern that contagion will engulf countries such as Spain and Italy. S&P lowered its rating last night to A from A+, with a negative outlook, saying weak economic growth, a “fragile” government and rising borrowing costs would make it difficult to reduce Europe‟s second-biggest debt. The yield on Italy‟s 10- year bond rose 9 basis points to 5.674%, 387 basis points more than similar German debt. The cost of insuring Italy against default surged to a record. (Bloomberg)

IMF: Cuts global growth estimate; Europe may worsen outlook
The International Monetary Fund cut its forecast for global growth and predicted “severe” repercussions if Europe fails to contain its debt crisis or US policy makers deadlock over a fiscal plan. The world economy will expand 4% this year and next, the IMF said, compared with June forecasts of 4.3% in 2011 and of 4.5% in 2012. The US growth projection for 2011 was lowered to 1.5% from 2.5% in June. (Bloomberg)

20110921 1011 Malaysia Corporate Related News.

MAHB, Nagamas in JV for China airports services
Malaysia Airports Holdings and Nagamas International have, via their respective wholly-owned subsidiaries, entered into a JV for the joint provision of airport operation, management and technical consultancy services for the Yongzhou Lingling Airport and other airports in China. The subsidiaries, Malaysia Airports Consultancy Services SB and Nagamas Enterprise (HK), will contribute 60% and 40% of the working capital for the JV company respectively. (Malaysian Reserve)

Petronas calls for tender in Mozambique
Petroliam Nasional is calling for tenders to select a company to conduct a study to find a suitable drilling site in tis concession in the Rovuma Basin, off the coast of Cabo Delgado province in northern Mozambique. Petronas Carigali SB, the corporation‟s exploration and production subsidiary, has gathered and processed 2D seismic data covering an area of 7,000 sq km and these need to be interpreted to locate the best spot to drill for oil and gas. (Malaysian Reserve)

Uzma bags seismic data contract from Carigali
Uzma‟s wholly-owned unit, Uzma Engineering SB, has secured a contract from Petronas Carigali SB for the provision of marine 2D and 3D seismic data services. The contract is effective from 18 Aug for a period of three years, with an extension option of two years. The value of the contract was not revealed. (Malaysian Reserve)

CIMB’s Thai unit expects loans to meet target
CIMB Thai Bank expects lending to expand 20% in 2011, meeting its forecast. CEO Subhak Siwaraksa said that Thai companies have very strong demand for new loans to fund their expansion; the increased lending in the second-half will help offset lower-than-expected growth in the first eight months when loans expanded approximately 15%.(Malaysian Reserve)

EFB subscribes to RM7m shares in CMTP
Evergreen Fibreboard (EFB) has entered into a share subscription agreement with Craft Master Timber Products SB (CMTP), to subscribe to 7m ordinary shares of RM1 each, equivalent to 51% of capital in CMTP. EFB is of the opinion that there is a demand for finger-jointing and solid furniture parts, which will help strengthen and consolidate its objective of becoming one of the most comprehensive wood based producers in this region. (Malaysian Reserve)

Alam Maritim bags RM22m contract
Alam Maritim Resources bagged its second contract for September with a RM22.1m contract for the provision of a straight vessel to a local oil and gas firm. The company said the contract is expected to positively contribute to earnings and net assets of Alam Maritim for FY11 and beyond. (Financial Daily)

Bandar Raya Developments Bhd : Asset sale may face shareholder hurdle
Bandar Raya Developments Bhd (BRDB) may have a tough time convincing minority shareholders to approve a major asset sale as the offer was below book value and it is not using the bulk of the proceeds to replenish land. On Monday, BRDB agreed to accept a RM914.0mil offer from major shareholder Ambang Sehati Sdn Bhd to buy four properties from the group. The assets have a book value of RM942.0mil. Ambang Sehati is buying CapSquare Retail Centre, Permas Jusco Mall and all of BR Property Holdings Sdn Bhd, which owns Bangsar Shopping Centre (BSC) and Menara BRDB. Ambang Sehati, which owns 18.8% of BRDB, is controlled by Datuk Mohamed Moiz Jabir Mohamed Ali Moiz, who is chairman of the property firm. It proposes to pay a preliminary cash payment of RM430.0mil and assume RM484.0mil in liabilities related to BSC and Menara BRDB. Following the proposed disposal, BRDB plans to distribute RM390.0mil from the assets sale to shareholders via a net cash dividend of 80 sen apiece, and use RM302.0mil to pare down debt.
– Business Times

MISC Bhd : Moody’s downgrades MISC on weak outlook
Moody’s Investors Service has downgraded the issuer and senior unsecured ratings of MISC Bhd, the world’s single largest owner-operator of liquefied natural gas tankers, to Baa1 from A3 with a negative outlook, affecting about US$700.0mil of debt. According to Moody’s, the prolonged weakness in MISC’s credit metrics, operating losses in its liner, chemical and petroleum segments, and large capital expenditure plans amidst a difficult operating environment, had triggered the review for downgrade initiated on June 27. The downgrade encompasses the change in MISC’s stand-alone rating to Ba1 from Baa3 while maintaining a three-notch uplift based on strong parental support from Petroliam Nasional Bhd with A1/stable ratings. – StarBiz

Malaysian Resources Corp Bhd : Ahmad Zaki leaves MRCB
Malaysian Resources Corp Bhd (MRCB) executive director Datuk Ahmad Zaki Zahid will resign from his post in the property company effective Oct 15. According to a filing with Bursa Malaysia yesterday, Ahmad Zaki was appointed an independent director of MRCB on Jan 12, 2005 and subsequently re-designated as an executive director on May 4, 2009. In late 2009, there was talk that Ahmad Zaki would replace MRCB group MD Shahril Ridza Ridzuan at the helm of the company. At the time, the latter was tipped to become chief investment officer of the Employees Provident Fund (EPF). However, after Shahril Ridza had left MRCB to join EPF – he is now the fund’s deputy CEO (investment) – Datuk Mohamed Razeek Hussain became MRCB’s CEO. – StarBiz

Automotive Sector Industry outlook remains positive
Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said despite growing concerns about the global economy, the outlook of the domestic auto industry still “looks positive”. She said the supply chain issues after the tsunami and earthquake in Japan have been resolved and that orders have strengthened. In view of the economic uncertainties, she notes that MAA has trimmed the forecast on total industry volume (TIV) for the second half of the year. The forecasted growth will move slightly downward in 2H from 618,000 units to 608,000. – The Edge

In the last two years,  Xingquan International Sports Holdings Ltd has re-modelled itself  to become an outdoor casual wear company. It has taken on the Gertop brandname and  now competes directly in  the China market with American labels like Jeep and Camel.  "Last year, we have the point-of-sales makeover expenses as part of our Gertop brand upgrade initiative. Expansion of sales network and other distribution expenses amounted to  over RMB150m," say Chairman Wu Qingquan.  He said the company plans to focus on  growing its business in China.  
• "We hope to increase another 200 to 250 stores each year, for the next two years,  subject to fund availability."  It plans to expand into five new provinces; namely Shaanxi,  Gansu, Qing Hai, Ningxia and Guizhou. Its Gertop stores are typically located in popular  shopping areas within first-, second- and third-tier cities in China.(BT)

Speculation of an impending rights issue by Eastern & Oriental has been put to rest by  the company. “E&O is not planning a rights issue,” Eric Chan, deputy MD of E&O, said in  an email reply. Talk of a rights issue surfaced recently after Sime Darby Bhd had emerged  as the single largest shareholder of E&O after buying a 30% block in the latter from three  major shareholders. It was speculated that the rights issue was to fund the land  reclamation works for E&O's Seri Tanjung Pinang project in Penang. If a rights issue were  to have been called, there would have been the likelihood of Sime Darby taking up more  than its entitlement. This, in turn, could lead to the plantation giant crossing over the 33%  shareholding mark, thus triggering a mandatory general offer (MGO) for the rest of the  E&O shares. However, now that E&O has denied that it is proposing a rights issue in the  near future, Sime Darby's stake in E&O is likely to remain status quo. (Starbiz)  

There are more big government-controlled assets that may be floated on the stock market  it seems. At the recent Forbes Global CEO Conference in Kuala Lumpur, Deputy Prime  Minister Tan Sri Muhyiddin Yassin said there would be several big initial public offering (IPOs) in Malaysia in the coming years. One government asset that had been slated for an  IPO but never materialised is Felda Holdings. (Starbiz)  

Malaysia's biggest independent power producer (IPP), Malakoff, may build another power  plant in Johor to meet future power demands of the state. A source said the plant will be  located in Johor to supply power to existing industries, but priority may be given to the  upcoming petrochemical complex to be built by Petroliam Nasional Bhd (Petronas). "Part  of the power plant will supply to existing oil and gas activities, help meet Petronas'  expansion of its petrochemicals business and further spur the growth of Malaysia's oil and  gas downstream sector," the source said.  (BT)    

Tenaga Nasional  bought 105,000 tonnes of October-delivery fuel oil  and is expected to  continue purchasing steady volumes until next year, industry sources said. This is the  firm's largest import in a single month since it started buying large quantities of fuel oil in  the second quarter, due to natural gas shortages that have resulted in the country's power  sector receiving a third less of its allocation from Petronas. (Reuters)  

MTD Capital, which made its maiden venture into the Indonesian port business in 2008,  aims to recoup its US$42m (RM132m) investment in five years, says CEO Datuk Azmil  Khalili Khalid. He said the new port business holds enormous potential for the group due to  Indonesia's position as the world's number one producer of coal and palm oil. MTD, which  opened its port for business yesterday, was offered by the Indonesian government to  upgrade the port, now called PT Cigading International Bulk Terminal, in 1995.  (BT)

The Malaysian Franchise Association (MFA)  expects the number of local franchise  companies establishing their business overseas to grow 10%. A main committee member  of the MFA, Abdul Rahman Mohamed said 10% was the minimum target, with 39  companies currently operating in 51 countries. "The food and beverages sector and  education business will have the most potential in  expanding its business overseas," he  said after a media briefing on the upcoming Malaysian Franchise Awards 2011, here  yesterday. To date, businesses such as Nelson Franchise (M) Sdn Bhd and Daily Fresh  Food Sdn Bhd have expanded to 17 nations.On the other hand, Indonesia and China host  the most Malaysian franchise companies at 18 and 14, respectively. (Bernama)  

San Miguel Corp may invest up to US$1.2bn to upgrade and expand the oil refinery and  retail station network it acquired from Exxon Mobil in Malaysia last month. "The estimate,  although it's still a very preliminary one, is something between US$800m to US1bn to  upgrade the Malaysian refinery," said Eric Recto, president of San Miguel's Philippine oil  refining arm Petron Corp. "The network expansion project could be another US$200m."
• "We see the potential in Malaysia and we have to develop that potential the way we saw  the potential in Petron," Recto said, adding there were no plans to merge the group's  Philippine and Malaysian oil businesses. “We are a smaller player (in Malaysia) but we  intend to be a strong, secondary player in that market. We think we will continue to grow  from a consumption standpoint". (Reuters)  

AirAsia Bhd said its Thai unit's initial public offering is on track to take place in the fourth  quarter. "AirAsia Group would like to state and confirm that the newsflow is incorrect and  that the IPO is still scheduled for 4Q11 listing,"  a spokesperson for the airline said in a  statement. (Reuters)  

AirAsia Bhd has entered into a joint venture with  Tune Money Sdn Bhd (TMSB) in  relation to the launch of a customer loyalty programme and pre-paid card services under  the brand 'BIG'. Under the JV, the new company will own, launch, market and operate the  Loyalty Programme and AirAsia will issue loyalty points, which shall be sold to the jointventure company at RM0.01 per point. "The loyalty points shall be managed and  distributed by the joint-venture company to AirAsia customers and third-party  merchants."The loyalty points are to be collected and used to redeem AirAsia flights by the  company's customers and third-party merchants," AirAsia said. (BT)

Asdion Bhd has signed a contract with Synergy Technology & Engineering (Shanghai) Co  Ltd for the Shanghai Hua Min Sofitel Hotel project worth approximately  RM3.1m.  The  contact was signed by its subsidiary, Asdion Exim (Shanghai) Co ltd. Asdion said the  contract, for the supply and commissioning of a hotel room control system, is slated to be  completed by the first quarter of next year. The company said, "The project is expected to  contribute positively to the earnings and net assets of the group for the financial year  ending March 31, 2012." (BMSB, BT)

20110921 1005 Global Market Related News.

Most Asian Stocks Rise on Europe Optimism (Source: Bloomberg)
Most Asian stocks rose on optimism Europe’s debt crisis may ease and lift exporters’ earnings, overshadowing concern after the International Monetary Fund cut its global growth forecast. Brambles Ltd. (BXB), the supplier of wooden pallets that gets more than a third of its sales in Europe, gained 1.2 percent in Sydney. Canon Inc., which also depends on the region for about a third of its sales, climbed 1 percent in Tokyo. BHP Billiton Ltd. (BHP), the world’s biggest mining company, added 0.1 percent. Lynas Corp., a rare-earths mining company slumped 14 percent in Sydney. The MSCI Asia Pacific Index rose 0.2 percent to 118.17 as of 10:03 a.m. in Tokyo, with about three stocks rising for each two that fell on the measure. The gauge has fallen for the past two weeks on concern Europe’s crisis is spreading and on signs of slowing U.S. economic growth.

GLOBAL MARKETS - Italy downgrade, Greek worry dominates
LONDON, Sept 20 (Reuters) - Standard & Poor's downgrading of Italian debt hit the euro on Tuesday, although stock investors shrugged off the move to push European stocks higher.  
Markets remain on edge about Greece's rickety finances and French banking stress and world stocks as measured by MSCI were down slightly. But the pan-European FTSEurofirst 300 gained a third of a percent.

Fed May Extend Duration of Treasuries With ‘Operation Twist,’ Survey Shows (Source: Bloomberg)
Federal Reserve officials tomorrow will probably announce a program for monetary easing that will do little to help 14 million unemployed Americans find work, according to economists in a Bloomberg News survey. The Federal Open Market Committee will decide to replace short-term Treasuries in its $1.65 trillion portfolio with long- term bonds, according to 71 percent of 42 surveyed economists. The move, known as “Operation Twist” for its goal to bend the yield curve, will probably fail to reduce the 9.1 percent unemployment rate, 61 percent of the economists said. Among those, 15 percent predict it will be “somewhat harmful.”
Operation Twist is among a few untested policy tools that Chairman Ben S. Bernanke has said the Fed could use as risks to the U.S. recovery rise and unprecedented easing falls short of fulfilling the Fed’s mandate for full employment. The yield on the 10-year Treasury note already fell to a record low this month on concerns global growth is flagging and Europe’s sovereign-debt crisis will intensify.

Builders Began Work on Fewer U.S. Homes (Source: Bloomberg)
Builders began work on fewer U.S. homes than forecast in August, showing the industry remains flat on its back even as mortgage rates fall to record lows. Housing starts dropped 5 percent to a three-month low 571,000 annual rate, Commerce Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for a 590,000 pace. Building permits, a proxy for future construction, unexpectedly climbed. Foreclosures, declining prices and a lack of employment are holding back residential construction, which has typically helped spark economic rebounds from past recessions. Tighter lending rules and declining homeowner equity mean fewer buyers are able to take advantage of lower borrowing costs, highlighting the limits faced by Federal Reserve policy makers as they consider new ways to stimulate the economy when they meet today and tomorrow.

Treasury 10-Year Yield Approaches Record Low Before Fed Announces Policy (Source: Bloomberg)
Treasury yields were seven basis points away from a record low as economists said the Federal Reserve will announce plans to buy long-term debt after a meeting today as part of its effort to spur growth. Rates on 30-year Treasury zero-coupon bonds, those most sensitive to inflation, fell to a 30-month low of 3.49 percent. The International Monetary Fund cut its forecast for global growth yesterday and predicted repercussions if Europe fails to contain a debt crisis or if U.S. policy makers deadlock over a fiscal plan. “People will continue to purchase Treasuries,” said Kei Katayama, leader of the foreign fixed-income group in Tokyo at Daiwa SB Investments Ltd., home to Japan’s second-biggest bond fund. “The market is risk-averse. The flight-to-quality flows will continue.”

U.S. Stocks Drop as Concern Over Greece Crisis Offsets Fed Stimulus Bets (Source: Bloomberg)
U.S. stocks fell, erasing a 1.4 percent rally by the Standard & Poor’s 500 Index, amid concern international officials won’t make a decision on Greece’s next aid payment until October. The yield gap between two- and 30- year Treasuries narrowed to the smallest level in a year. The S&P 500 lost 0.2 percent to 1,202.09 at 4 p.m. New York time. The difference between two- and 30-year Treasury yields fell to 304 basis points amid speculation the Federal Reserve will increase holdings of longer maturities. Credit-default swaps on Italy jumped 25 basis points to a record 514 basis points after S&P cut the nation’s rating. Oil added 1.4 percent.
Officials from the so-called troika, comprising the European Union, European Central Bank and International Monetary Fund, plan to return to Athens in early October to complete their review of the Greek economy, the state-run Athens News Agency reported, without citing sources. Equities rose in Europe and the U.S. earlier as investors speculated the Fed will announce steps tomorrow to shore up the economy and optimism grew that Greece will satisfy requirements for aid.

U.S. Files WTO Complaint Over Chinese Duties (Source: Bloomberg)
The U.S. filed a complaint with the World Trade Organization over what it called unfair trade practices by China that have slashed U.S. poultry exports. The complaint today to the Geneva-based WTO targets Chinese anti-dumping and countervailing duties on American poultry products. A request for consultations is the first step in the case, and the U.S. and China must now hold talks for at least two months in a bid to resolve the dispute. China put in place a duty of as much as 105.4 percent last year on U.S. broiler-chicken products. About 300,000 workers and farmers have been hurt by China’s actions, U.S. Trade Representative Ron Kirk said at a Washington news conference.

China Growth Forecasts Trimmed by IMF (Source: Bloomberg)
The International Monetary Fund cut its China growth estimates for this year and next and indicated that a stronger yuan would help to contain inflation and rebalance the economy. Gross domestic product will grow 9.5 percent this year, less than a June estimate of 9.6 percent, the Washington-based lender said yesterday in its World Economic Outlook report, citing policy tightening and moderating external demand. The 2012 forecast was lowered to 9 percent from 9.5 percent. China has offered a bright spot amid a deepening debt crisis in Europe and the threat of renewed recession in the U.S. At the same time, the nation needs to move more quickly to boost domestic demand as part of rebalancing the global economy for more stable and sustainable growth, the IMF said.

Japan Exports Gain Less Than Forecast on Waning World Demand, Rising Yen (Source: Bloomberg)
Japan’s exports increased less than expected as shipments of electronic parts fell, an indication that slowing growth abroad and a rising yen may weigh on the economy’s recovery. Overseas shipments increased 2.8 percent in August from the same month a year earlier, the first increase since the March 11 earthquake, according to a Ministry of Finance report from Tokyo today. The gain was slower than lowest forecast of 22 economists surveyed by Bloomberg New, whose median estimate was for an 8 percent increase. Analysts are predicting that the world’s third-largest economy will grow this quarter as companies restore facilities damaged by a temblor that left about 19,000 dead or missing. The resurgence in demand may be undermined by slowing overseas economies, with the International Monetary Fund cutting its global growth forecast to 4 percent for this year and next.

Japan Stocks Swing Between Gains, Losses as Investors Await Fed Statement (Source: Bloomberg)
Japanese stocks swung between gains and losses amid uncertainty about a resolution to Greece’s debt crisis and amid speculation the Federal Reserve will take action to spur the world’s biggest economy. Advantest Corp. (6857), a maker of memory-chip testers, fell as much as 4.5 percent after Nomura Holdings Inc. lowered a forecast for semiconductor shipments. Canon Inc. (7751), a camera maker that gets about 80 percent of its sales outside Japan, advanced 1.5 percent. Fanuc Corp (6954), the world’s biggest manufacturer of factory robots, gained 1.8 percent. The Nikkei 225 (NKY) Stock Average dropped 0.1 percent to 8,719.75 as of 9:55 a.m. in Tokyo, after earlier gaining as much as 0.3 percent. The broader Topix index advanced 0.1 percent to 755.94 ahead of the conclusion of a Fed meeting today in Washington.

South Korea Jobless Rate Unexpectedly Falls to 3-Year Low as Economy Grows (Source: Bloomberg)
South Korea’s unemployment rate fell to a three-year low as the economy’s expansion boosted hiring in the service sectors. The jobless rate was at 3.1 percent in August, the lowest since July 2008 and down from 3.3 percent in the previous month, Statistics Korea said today in Gwacheon, south of Seoul. The median estimate in a Bloomberg News survey of eight economists was for a rate of 3.3 percent. Sustained job growth has been fueling inflation exceeding the central bank’s target since January, prompting the bank to raise the benchmark interest rate three times this year. Still, Bank of Korea Governor Kim Choong Soo kept borrowing costs unchanged for a third month on Sept. 8, saying the bank may not be able to resume rate increases until “external” factors such as Europe’s debt crisis look to be under control.

U.K. Government Must Bring Forward Spending to Boost Economy, Huhne Says (Source: Bloomberg)
U.K. Energy Secretary Chris Huhne said the government should speed up spending plans to help the economy, after the International Monetary Fund said ministers may need to consider delaying some of their fiscal squeeze. “We’ve got to be creative and imaginative about bringing forward more spending,” Huhne told a fringe event last night at his Liberal Democrat party’s annual conference in Birmingham, central England. He said the option of “pump-priming” the economy by increasing expenditure is “blocked off to us” because of “the scale of our budget deficit.” Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, said Sept. 14 the government was going to “unblock” 40 infrastructure projects in an effort to spur growth. He said the government wanted to “put its foot on the accelerator.”

Greece Default Would Leave German Taxpayers Facing Bills From ‘Bad’ Banks (Source: Bloomberg)
Germany’s bad banks, backed by the state to prevent the collapse of Hypo Real Estate Holding AG and WestLB AG during the credit crisis, would be the hardest hit in the event of a Greek default, leaving taxpayers to shoulder the bill a second time. Hypo’s FMS Wertmanagement, with 8.76 billion euros ($12 billion) in Greek sovereign investments and loans, and WestLB’s Erste Abwicklungsanstalt, with 1.21 billion euros, bear more than half of German banks’ Greek debt, according to data compiled from company reports and statements. By contrast, Deutsche Bank AG (DBK) and Commerzbank AG (CBK), Germany’s two biggest lenders, hold a combined 3.35 billion euros.
The specter of a Greek insolvency was raised this month by members of Chancellor Angela Merkel’s coalition, when Economy Minister Philipp Roesler said there can be no “taboos” when considering action “to stabilize the euro in the short term.” The German government is considering a “Plan B” to help shield banks and insurers from losses if Greece defaults, three coalition officials said on Sept. 9.

Greece Making ‘Good Progress’ in Talks on Receiving Next Bailout Payment (Source: Bloomberg)
Greek Finance Minister Evangelos Venizelos made “good progress” in a second round of talks with the European Union and International Monetary Fund aimed at staving off default, the EU said. The telephone meeting late yesterday, which followed discussions the day before, were intended to damp concerns that Greece may miss deficit-reduction targets required to received rescue loans. The EU statement said a “full mission” will return to Athens next week after Venizelos’s talks in coming days at the IMF annual meeting in Washington. Staying in the euro area is an “irreversible and fundamental national choice,” Venizelos said in a statement yesterday. “We acknowledge that our fiscal data and economic structures are a problem for the euro area, which we are determined to tackle once and for all.”

German Investor Confidence Drops to 2 1/2-Year Low on Debt Crises, Economy (Source: Bloomberg)
German investor confidence fell to the lowest in more than 2 1/2 years in September as Europe’s debt crisis and a global slowdown damped the outlook for growth. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict developments six months in advance, declined to minus 43.3 from minus 37.6 in August. That’s the lowest since December 2008. Economists expected a drop to minus 45, according to the median of 37 estimates in a Bloomberg News survey. Germany’s benchmark DAX share index has plunged 25 percent since late July as the global outlook worsens and Europe’s debt crisis erodes confidence in its banking sector. The European Commission last week cut its euro-area growth forecasts for the second half and warned the economy may come “close to standstill at year-end.” Standard & Poor’s today lowered Italy’s credit rating, saying weaker growth may mean the nation won’t be able to reduce the region’s second-largest debt load.

Italy’s Rating Cut One Level by S&P as Greek Crisis Fans Contagion Concern (Source: Bloomberg)
Italy’s credit rating was cut by Standard & Poor’s, the country’s first downgrade in five years, as Greece’s worsening fiscal crisis fans concern that contagion will engulf countries such as Spain and Italy. S&P lowered its rating last night to A from A+, with a negative outlook, saying weak economic growth, a “fragile” government and rising borrowing costs would make it difficult to reduce Europe’s second-biggest debt. The yield on Italy’s 10- year bond rose 9 basis points to 5.674 percent, 387 basis points more than similar German debt. The cost of insuring Italy against default surged to a record.
The European Central Bank was forced to buy Italian and Spanish bonds last month after their yields surged to euro-era records on concern they’ll be the next victims of the two-year- old debt crisis that led to bailouts for Greece, Ireland and Portugal. Moody’s Investors Service is set to decide in the next month whether to downgrade Italy and Spain, as Greece struggles to convince international creditors it deserves its next bailout payment to stave off a default.

European Stocks Rise as Greece Calls Debt Talks ‘Productive;’ EON Advances (Source: Bloomberg)
European stocks climbed as Greece described its debt talks with the European Union and the International Monetary Fund as “productive” and investors speculated the Federal Reserve will provide more stimulus. EON AG and RWE AG (RWE), Germany’s biggest utilities, climbed more than 3.5 percent after a court suspended a nuclear-fuel tax. Barratt Developments Plc (BDEV) surged 5.7 percent after Citigroup Inc. advised buying the shares. SAP AG (SAP) rose 2.3 percent. The Stoxx Europe 600 Index rose 1.8 percent to 229.1 at the 4:30 p.m. close in London. The Federal Reserve, led by Chairman Ben S. Bernanke, will decide tomorrow to replace short-term Treasuries with long-term bonds, according to the majority of economists surveyed by Bloomberg. The move is known as “Operation Twist,” for its goal to bend the yield curve.

IMF Cuts Global Growth Estimate on Europe (Source: Bloomberg)
The International Monetary Fund cut its forecast for global growth and predicted “severe” repercussions if Europe fails to contain its debt crisis or U.S. policy makers deadlock over a fiscal plan. The world economy will expand 4 percent this year and next, the IMF said today, compared with June forecasts of 4.3 percent in 2011 and of 4.5 percent in 2012. The U.S. growth projection for 2011 was lowered to 1.5 percent from 2.5 percent in June. “Global activity has weakened and become more uneven, confidence has fallen sharply recently, and downside risks are growing,” the IMF said in its World Economic Outlook report today. In Europe “leaders must stand by their commitments to do whatever it takes to preserve trust in national policies and the euro” while in the U.S. “deep political divisions leave the course of U.S. policy highly uncertain.”

Australia, New Zeland Dollars Pare Early Losses as Asia’s Stocks Rebound (Source: Bloomberg)
The Australian and New Zealand dollars pared earlier losses as Asian stocks snapped a two-day decline, supporting demand for higher yielding currencies. The Aussie was little changed at $1.0275 as of 10:16 a.m. in Sydney from $1.0276 in New York yesterday, after earlier declining as much as 0.4 percent. New Zealand’s dollar was at 82.28 U.S. cents from 82.42 cents.

20110921 1004 Global Commodities Related News.

Corn (Source: CME)
US corn futures end mostly lower, stumbling late in the session after an early rally failed to attract follow-through buyers. Lack of follow-through support reinforced a negative technical picture, analysts say. Ongoing harvest is adding seasonal pressure to the market, analysts add, as more supplies enter the pipeline. Meanwhile, chatter about potential buying by China, which a sparked a rebound Monday, has yet to be confirmed, and in general traders say demand is lackluster. Volume was light, traders say. Dec CBOT corn ends down 2c to $6.90 1/4 per bushel, 13c off the intraday high.

Wheat (Source: CME)
US wheat futures end mixed, retreating from early strong gains as corn prices sagged. Grains are being led by corn, traders say, and has little fresh news of its own currently. Wheat demand has been weak in the face of significant competition from Russia in the export market, although some traders are optimistic that dynamic will soon change. Worries about the U.S. crop, while not acute, are underpinning the market, traders add. December CBOT wheat ends up 1 3/4c to $6.74 3/4 per bushel while KCBT Dec wheat closes down 3c at $7.65 and MGEX December settles up 3/4c at $8.42 1/2.

Rice (Source: CME)
U.S. rice futures end lower, continuing their sharp decline from the November contract high. The Nov contract down 6.4% since peaking Sept. 12, and has been pressuired by outside markets and unexceptional demand. The market is also facing seasonal pressure from the onoging U.S. harvest, which is pushing more supplies into the pipeline. Longer-term, tight long-grain rice stocks are supportive to prices, the Arkansas Farm Bureau says. Nov rice ends down 19 1/2c to $17.19 1/2.

U.S. grains rise 1 pct; strong dollar weighs
SINGAPORE, Sept 20 (Reuters) - U.S. wheat and soy futures gained around 1 percent as bargain hunters resurfaced after prices dropped in the previous session on concerns about the global economy, but a strong U.S. dollar was likely to cap gains.  
"There's probably not a lot of bullish U.S.-centric grain news out there. So, there's probably not a lot of fundamental news to push these markets higher," said Brett Cooper, a senior manager of markets at FCStone Australia.  

Drought delays Ukraine winter grain sowing
KIEV, Sept 20 (Reuters) - Ukraine's farms have sown 2.09 million hectares for the 2012 winter grain harvest or 26 percent of the expected area as of September 19 but dry weather is delaying the process, the Agriculture Ministry said on Tuesday.
The ministry said in a report the area included 1.82 million hectares of winter wheat, 169,000 of winter rye and 39,000 of winter barley.

Hungary's 2011 wheat crop 4.13 mln T –stats
BUDAPEST, Sept 20 (Reuters) - Hungary had a total wheat crop of 4.13 million tonnes this year, below 3.75 million tonnes harvested last year, the Central Statistics Office (KSH) said on Tuesday.
This year wheat was harvested from a total area of 980,000 hectares, versus 1.01 million in 2010.

Mexico set to expand GMO corn planting-group
MEXICO CITY, Sept 19 (Reuters) - Permits to plant large extensions of genetically modified (GM) corn for the first time in Mexico are likely to be approved before the end of the year, said a company lobby group on Monday.
Monsanto , DuPont's  Pioneer seed unit and Dow Chemical's  agricultural arm have all applied to expand on tiny experimental plots of GM corn in northern Mexico, said AgroBIO, an organization that represents the biotech companies.

Hyundai Heavy to invest $13 mln in Russia farm venture
SEOUL, Sept 20 (Reuters) - South Korea's Hyundai Heavy Industries Co Ltd  said on Tuesday that it will invest a total of $13 million over the next three years to boost soybean and wheat production in Russia in a move to hike overseas food supplies.
South Korea is heavily dependent on imported grains and other commodities to feed Asia's fourth largest economy.

Bangladesh eyes 700,000T wheat import tenders
SINGAPORE, Sept 20 (Reuters) - Bangladesh is likely to tender for 700,000 tonnes of wheat imports in the period until next April as it builds domestic stocks of the grain, a top procurement official said on Tuesday, in a move that spells opportunity for neighbour India.  
Giving the first official pointers to Bangladesh's appetite for wheat, Mohammad Badrul Hassan told Reuters the south Asian nation aimed to buy at least half its annual imports of 3 million tonnes from India, thanks to its competitive prices.

Western Canada harvest 78 pct done
Sept 19 (Reuters) - Western Canada's overall harvest moved to 78 percent complete, the Canadian Wheat Board said on Monday, ahead of the normal pace of 71 percent at this time of year.
The western Prairies got their first widespread frost last week, ending the growing season in most areas, except for western Alberta, the board said in a statement.

Rains ease Argentina farmland dryness, but more needed
BUENOS AIRES, Sept 19 (Reuters) - Weekend rains brought much-needed moisture to farming areas in Argentina, but growers in the corn belt urgently need more rainfall in order to press on with plantings, a weather forecaster said on Monday.
If severe dryness persists, many farmers could shelve plans to seed corn and sow soy instead when the planting season for the oilseed starts in October.

'Corn Sugar' Goes On Trial (Source: CME)
The "all natural" battle isn't the only one roiling the food industry. In a Los Angeles courtroom, two big industries are going after each other over the definition of a word well-known by every first-grader: sugar. In April, eight leading sugar companies and two trade associations sued six corn processors and a lobbying group, alleging the corn industry is improperly using the term "corn sugar" in advertisements and elsewhere to describe high-fructose corn syrup, a widely used sweetener used in snack foods, condiments, fruit drinks and other products. "Seeking to co-opt the goodwill of 'sugar' and even changing the [high-fructose corn syrup] name by calling it a kind of sugar... is paradigmatically false and misleading," reads the sugar companies' complaint. Last year, the nation's corn-refining giants asked the Food and Drug Administration for permission to use the "corn sugar" appellation on packages instead of "high-fructose corn syrup."
The sugar companies allege the move was prompted by declining sales of high-fructose corn syrup. The reason for the market softness, claim the sugar companies: a growing popular sense that high-fructose corn syrup has played a big role in the national obesity problem. The lobbying group, the Corn Refiners Association, and other defendants moved to dismiss the lawsuit, arguing that the plaintiffs fail to show any evidence that consumers have been deceived by the phrase "corn sugar" and that, in any event, the issue should be decided by the FDA, not a federal judge. On a website it runs on the topic, the CRA points to a variety of statements from the American Medical Association and others that high-fructose corn syrup and sugar aren't meaningfully different. "Like table sugar, high fructose corn syrup is roughly half glucose and half fructose and is metabolized by the body in the same way as table sugar," said a CRA spokesman, in a statement.
Still, some food-makers have in recent years ditched high-fructose corn syrup for cane or beet sugar. Among them: Starbucks Corp., Snapple Beverage Corp., and Kraft Foods Inc. The switches have come largely as a response to a growing sentiment among some consumers that sugar is more "natural" than high-fructose corn syrup and therefore is healthier. But why the lawsuit? Why didn't the sugar industry just plead its case in front of the FDA and let regulators make the call? "Damage has been done," said Daniel Callister, a lawyer for the plaintiffs. "We need to make up for the last 2½ years of falsehoods."

Speculation Doesn't Cause Commodity Market Volatility - FOA (Source: CME)
Speculation is not a major cause of market volatility in commodity markets, although it can amplify underlying price movements, the Futures and Options Association said at a briefing in London. According to an independent study produced by economic research group FTI Consulting on behalf of the FOA, fundamental supply and demand factors have been the main driver of price movements in recent years, although the exact proportion of the influence of speculators compared with fundamental factors is still up for debate. Anthony Belchambers, chief executive of the FOA, said it's important to adopt a "balanced approach in recognizing the key role of speculators in contributing to market liquidity and facilitating the risk management transactions of real economy enterprises--a capability that is critical in the current economic climate."
The role of speculators has been hotly debated for some years, and regulators in the U.S. and Europe are considering stricter positions limits on energy, agriculture and metals derivatives in an attempt to curb the potential manipulation of prices to unnaturally elevated levels. Belchambers urged that government regulators exercise caution in implementing new position requirements on commodities. "The government must be very careful about what action they take," he said. "If you're exercising position management, then it must be on the basis of public criteria." While the excessive 'financialization' of commodity markets has the potential to damage the price formation process if it causes a strong disconnect between market prices and fundamental supply and demand, speculation can also play a key role in providing liquidity to the markets, arguable reducing market volatility, he added.
"We mustn't lose sight of the importance of free markets," he said. The Futures and Options Association is the principal European association for the futures and options industry, representing its interests in the public and regulatory domain.

More to 2012 acres than soybean/corn ratio: Gavin Maguire
--Gavin Maguire is a Reuters market analyst. The views expressed are his own. To get his real-time views on the market, please join the Global Ags Forum. --
CHICAGO, Sep 20 (Reuters) - With the 2011 U.S. corn and soybean harvest upon us, grain analysts are already turning their attention to the 2012 season for signs on what the potential acreage jigsaw will look like next spring.
A quick glance at the widely tracked soybean-to-corn ratio for harvest-slot futures contracts would suggest corn has the upper hand in terms of making an early claim on available acres. But after two consecutive years of subpar corn yields, U.S. producers are likely to consider more than market prices when finalizing production plans for next year.

Sugar Production in India Seen at Four-Year High as Farmers Boost Planting (Source: Bloomberg)
Sugar output in India, the second- biggest producer, may surge to the highest level in four years after farmers boosted planting, potentially increasing exports. Production may total 25.83 million metric tons in the year starting Oct. 1, according to a compilation of estimates by sugar cane commissioners of 10 states including Uttar Pradesh and Maharashtra, the biggest growers. That compares with 26 million tons forecast by the Indian Sugar Mills Association and 24.2 million tons estimated this year. Rising production may prompt the government to lift curbs on exports, helping ease a shortage caused by a decline in supplies from Brazil, the biggest producer and shipper. Futures have declined 17 percent this year on expectations of increased production from Thailand, Russia and European Union.

Sugar up, underpinned by demand, cocoa firm
LONDON, Sept 20 (Reuters) - ICE raw sugar futures rose, supported by demand on the physical market, while cocoa and coffee were also firm.
Raw sugar futures on ICE edged higher in early trading, consolidating following Friday's sharp losses, with lower prices stimulating demand.

Cargill in Brazil cane crushing joint venture
SAO PAULO, Sept 19 (Reuters) - Cargill plans to expand cane crushing capacity in Brazil through a joint venture with local group Usina Sao Joao, to meet growing demand for ethanol, the U.S. agribusiness giant said on Monday .
The joint venture SJC Bioenergia has two mills in the center-western state of Goias.

Brent crude steady above $109, euro zone woes weigh
SINGAPORE, Sept 20 (Reuters) - Brent crude futures steadied above $109 on Tuesday, after two days of heavy losses on worries that a looming default by Greece will destabilise the global financial system, threaten global growth and pare oil consumption.
"Investors are very worried about Europe, and this is not just impacting oil but it is across the board to stocks and other markets," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage.

Oil Drops in New York on Speculation Demand Will Falter as Supplies Rise (Source: Bloomberg)
Oil declined in New York on speculation that fuel demand will falter amid rising crude supplies in the U.S., the world’s biggest consumer of the commodity, and concerns Europe’s debt crisis will persist. Futures declined as much as 0.7 percent after the American Petroleum Institute said crude stockpiles rose 2.57 million barrels last week. An Energy Department report today is forecast to show they fell 1.3 million barrels. The International Monetary Fund cut its estimate for U.S. growth this year. Equities erased gains after a report that international officials won’t make a decision on Greece’s next aid payment until October. Crude for November delivery slipped as much as 58 cents to $86.34 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.37 at 9:13 a.m. Sydney time. The contract yesterday advanced $1.11 to $86.92. Prices are 17 percent higher the past year.

China crude stocks up for the 3rd month in Aug -report
BEIJING, Sept 20 (Reuters) - China's commercial crude oil stocks at the end of August increased 2 percent from a month earlier, the third consecutive gain since June, a report by the official Xinhua News Agency showed on Tuesday.
Inventories of refined oil products stocks fell 1.1 percent from the end of July, declining for the third month in a row, according to the China Oil, Gas and Petrochemicals publication.

OPEC watching Europe closely, supply comfortable - Qatar
DOHA, Sept 20 (Reuters) - Market oil supply is at a comfortable level, Qatar's oil minister said on Tuesday, and it was too early to say whether OPEC would trim production as Libya gets back on its feet.
"We have been watching the situation in European countries very closely, both at a national level here in Qatar and at the OPEC level," Mohammed al-Sada told reporters on the sidelines of a conference in the Qatari capital. "But supply is at a very comfortable level."

Gold Prices May Top $2,000 This Year on ‘Confidence Crisis’ (Source: Bloomberg)
Gold will probably top $2,000 an ounce by year-end amid surging investor demand, a Bloomberg survey showed. Prices will rise to a peak of $2,038 before Dec. 31, based on the average of 16 respondents in a Bloomberg survey at the London Bullion Market Association’s annual conference in Montreal. Next year, gold will rally as high as $2,268, according to the average in the survey. Gold has surged 25 percent this year, touching a record $1,923.70 in New York on Sept. 6. The metal climbed as escalating debt woes in Europe and the prospect of faltering U.S. growth boosted demand. Today, gold futures for December delivery advanced $4.80, or 0.3 percent, to $1,783.70 at 9:13 a.m. on the Comex in New York.

20110921 1002 Soy Oil & Palm Oil Related News.

US soybean futures end higher, managing to hold onto modest gains despite seasonal harvest selling pressure. Uncertainty of 2011 crop potential, a recovery in external financial markets and fresh export sales to China fueled the initial price push, analysts say. However, overall export demand is still sluggish, traders remain cautious of the fragile world economy and the approaching harvest continues to attract selling to limit advances, analysts add. CBOT Nov soy end up 2c at $13.38/bushel.

Soybean Meal/Oil
Soy product futures end mixed, with soymeal rising in unison with soybean futures. Soyoil futures stumbled lower, with pressure from ample inventories and slowing demand encouraging traders to buy soymeal versus soyoil on spreads, analysts say. CBOT Dec soymeal end up 0.5% at $350.30/short ton, Dec soyoil dropped 0.4% to 55.63 cents/pound.

Weaker ringgit currency props up palm oil
KUALA LUMPUR, Sept 20 (Reuters) - Malaysian palm oil futures inched up as the weaker ringgit  made the vegetable oil cheaper to process at time when exports could start rising again ahead of an Indian festival and a national holiday in China.
"The only reason the market is higher is because of the super-duper weak ringgit, making palm oil look cheap in relative value," said a trader in Kuala Lumpur.

Bunge to expand Canada canola plant
Sept 19 (Reuters) - Bunge Ltd  said on Monday that it will boost capacity at a canola-processing plant in western Canada, adding to an expansion across the industry.
Bunge said it would more than double the current capacity of its 850-tonnes-per-day plant at Fort Saskatchewan, Alberta by 2014, pending necessary approvals.

The Malaysian Palm Oil Council (MPOC)  lauded the move by a committee in the  Australian House of Representatives to reject a proposed food labelling legislation that  singled out palm oil. MPOC chief executive officer Tan Sri Dr Yusof Basiron was pleased  by the Economics Committee Report, which recognised the success and importance of the  palm oil industry to Malaysia. (BT)

India should raise import duties on  refined palm oil to 16.5% from the current 7.7%, the  chief of a top trade body said, as the domestic refining industry seeks to insulate itself from  cheaper overseas supplies.  Indonesia, the world's top palm oil producer, has cut export  tax on refined palmoleins and raised the tax on overseas sale of the crude variant to  promote the sale of its finished products, hurting domestic refining industries in countries  such as India.  The Southeast Asian country announced new palm oil export tax rules last  month, which included setting the minimum for the CPO export tax at 7.5% versus 1.5%  previously.  (Economic Times)