Friday, September 23, 2011

20110923 1807 FCPO EOD Daily Chart Study.

FCPO closed : 2992, changed : -17 points, volume : higher.
Bollinger band reading : side way range bound little downside biased.
MACD Histrogram : falling lower, seller taking exposure.
Support : 2970, 2950, 2920, 2900 level.
Resistance : 3020, 3050, 3070, 3100 level.
Comment :
FCPO closed recorded small loss with rising volume transacted. Overnight soy oil ended severely lower and currently trading weaker(once recording huge losses) while crude oil rebounding higher.
Broad commodities including soy oil witnessed heavy sell down activities once recording huge losses of about 4 to 5% during the FCPO lunch break session and currently recovering partial of the intraday losses. Back home, FCPO closed little lower despite the broad commodities sell down ahead of Monday export data.
Daily chart formed an up bar candle closed little above lower Bollinger band after market opened gap down below lower Bollinger band level, recover higher followed by after lunch session gap down and recover upwards again to closed near the high of the day.
Chart reading suggesting a side way range bound little downside biased market development testing support and resistance level with MACD indicator having negative cross down.
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.

20110923 1731 FKLI EOD Daily Chart Study.

FKLI closed : 1368.5, changed : -10 points, volume : higher.
Bollinger band reading : downside biased with possible pullback correction.
MACD Histrogram : falling, seller in control.
Support : 1360, 1350, 1345, 1337 level.
Resistance : 1375, 1385, 1395, 1405 level.
Comment :
FKLI closed recorded loss with increasing volume participation doing 3 points premium compare to cash market that closed recorded huge losses. Overnight U.S. market closed severely lower and Asia markets ended mostly weaker while European markets currently rebounding mostly higher.
Asia market fell lower on rising concern of world leader running out of ways to and times to avoid another global economic recession. On the other hand, European market trading trading in positive zone ahead of G20 meeting on putting effort to salvage the getting worst global economy recovery.
Daily chart formed a doji bar candle with longer lower shadow closed outside of lower Bollinger band after market opened gap down, fall lower followed by upward climb to recovered partial of the day losses and traded range bound towards the end to closed near opening price.
Chart reading suggesting a downside biased market development with possible pullback correction 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 resistance or strength with moderate cut loss and profit target.

20110923 1655 Regional Markets EOD Daily Chart Study.

DJIA chart reading : little downside biased.
 Hang Seng chart reading :  downside biased with possible pullback correction.
KLCI chart reading : downside biased with possible pullback correction.

20110923 1625 Global Market & Commodities Related News.

Global Stocks Drop 20% Into Bear Market (Bloomberg)
Stocks fell, pushing the MSCI All- Country World Index of 45 nations into a bear market for the first time in more than two years, after the worsening European debt crisis and threat of a U.S. recession erased more than $10 trillion from equities since May. The MSCI index, which slipped 0.3 percent as of 1:33 p.m. in Hong Kong today, has lost more than 20 percent since peaking on May 2, meeting the common definition of a bear market. It tumbled 4.5 percent to a 13-month low of 277.38 yesterday. The MSCI World (MXWO) Index of shares in developed nations also fell into a bear market yesterday, plunging 4.2 percent. The MSCI Emerging Markets Index reached the 20 percent threshold on Sept. 13.
The world is poised for a financial crisis, Mohamed El- Erian, chief executive officer of Pacific Investment Management Co., said in Washington yesterday. Finance chiefs from the Group of 20 nations pledged late yesterday to address “heightened downside risks” to the global economy, echoing language used by the Federal Reserve on Sept. 21 when it announced a $400 billion plan to spur growth as the recovery from the worst contraction since the Great Depression falters.

Asia stocks slide, euro gains after G20
SINGAPORE, Sept 23 (Reuters) - Asian stocks fell to a 16-month low and emerging market currencies tumbled amid fears of a global recession, but a pledge from the G20 to preserve financial stability helped stem the scale of losses.
"There is not much progress so far in Europe, and we are only hearing bad news on both the credit and economic fronts right now," said Hong Soon-pyo, a market analyst at Daishin Securities in Seoul.

European Stocks Fluctuate Near Two-Year Low; U.S. Index Futures Increase (Bloomberg)
European stocks fluctuated near a two-year low as a pledge from the Group of 20 to address risks to the economy offset a slide in commodity producers. U.S. futures gained while Asian shares fell. Adidas AG (ADS) climbed 2.6 percent after rival Nike Inc. raised its annual sales forecast and reported earnings that topped estimates. Rio Tinto Group led a retreat among raw-material producers as copper slumped. The Stoxx Europe 600 Index rose 0.2 percent to 215.23 at 9:01 a.m. in London after earlier falling 0.1 percent. The gauge plunged 4.6 percent yesterday. Futures on the Standard & Poor’s 500 Index gained 0.7 percent while the MSCI Asia Pacific Index retreated 1.1 percent.

China Stock Index Falls to 14-Month Low on Policy, Global Economic Outlook (Bloomberg)
China’s stocks fell, dragging the benchmark index to its lowest level in more than 14 months, as mounting concerns over the faltering global economy prompted speculation the government will take steps to support markets. Bank of Communications Co. dropped to the lowest level in almost seven weeks after the central bank asked lenders to maintain a stable loan-to-deposit ratio during public holidays next month. Gemdale Corp. (600383) lost 1.7 percent after the banking regulator was said to be looking into the financing of property developers through trust companies. The Shanghai Composite Index lost 0.4 percent to 2,433.16 at the 3 p.m. local-time close, the lowest level since July 16, 2010. The CSI 300 Index sank 0.6 percent to 2,669.48. The MSCI All-Country World Index of 45 nations entered a bear market yesterday for the first time in more than two years, after the European debt crisis and threat of a U.S. recession erased more than $10 trillion from equities since May.

Commodities Poised for Worst Week in 4 Months (Bloomberg)
Commodities were set for their worst week in more than four months as copper and tin tumbled on deepening concern that policy makers are running out of tools to avert another global recession, hurting demand for metals, fuel and food. Soybeans dropped. The Standard & Poor’s GSCI Index of 24 commodities lost as much as 0.9 percent to 602.28 before trading little changed at 608.30 by 3:59 p.m. in Seoul, bringing the week’s decline to 6.9 percent, the worst since May 6. The gauge is heading for its biggest quarterly loss since 2008. Copper fell to a more than one-year low and spot gold was set for its worst week since February 2009. Oil was poised for the biggest weekly drop in almost two months. “Markets latched onto the downbeat tone,” Natalie Robertson, a commodity analyst at Australia & New Zealand Banking Group Ltd., wrote in a report today. “Sentiment is bearish, so we can expect some more selling pressure unless policy circuit breakers are enacted.”

Deutsche Bank upbeat on gold, corn; cautious on oil
BEIJING, Sept 22 (Reuters) - Gold prices should continue to rise as investors seek safety from risky currencies, and corn is also likely to be the best performer among commodities in the next three to six months, a senior asset manager with Deutsche Bank  said.
Theresa Gusman, global head of Deutsche Bank's RREEF Commodity Advisors who manages $4.5 billion in assets, saw commodity prices over a 12-month period average 6 to 8 percent above current levels, despite being cautious in the near term on industrial metals and energy-related products.

China's corn imports to surge, self-sufficiency policy hit
CHANGCHUN, China, Sept 22 (Reuters) - China's much-vaunted policy of self-sufficiency in corn production is under threat from scarce water supplies and shrinking farmlands, making imports inevitable in the face of rapidly growing demand, traders and officials said on Thursday.
China is the world's second largest corn consumer and producer, and it uses the grain largely for animal feed.

US wheat rebounds, corn firm on bargain hunting
SINGAPORE, Sept 23 (Reuters) - U.S. wheat rose more than 1 percent, while corn firmed as bargain hunting by end-users supported grains, which slid in the previous session to their lowest in more than two months amid recession fears.
"It is certainly going to start interest among consumers -- last night we saw Egyptians back in the market taking a big chunk of the Russian wheat once again," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.

Argentina dryness seen hurting wheat; corn better
BUENOS AIRES, Sept 22 (Reuters) - Dry weather in Argentina has dimmed the outlook for 2011/12 wheat output although rains in recent days have allowed progress on delayed corn sowing, the government and a grains exchange said on Thursday.
Farmers in the South American country, a leading global wheat exporter and the No. 2 corn supplier, have dedicated almost 3 percent more land to wheat this season, according to Agriculture Ministry estimates.

Ghana Cocobod secures $2 bln for '11-12 cocoa buys
ACCRA, Sept 22 (Reuters) - Ghana cocoa regulator Cocobod has secured $2 billion from an oversubscribed loan facility to fund purchases for the 2011-12 cocoa season, it said in a statement on Thursday.
"Ghana Cocoa Board (COCOBOD) has signed a syndicated receivables-backed pre-export finance facility of $2 billion for the 2011/2012 crop season. The facility, which is the largest soft commodity deal in sub Saharan Africa, was once again oversubscribed by over 20 international and Ghanaian banks," it said.

Brazil soy growers start planting in isolated rain
SAO PAULO, Sept 22 (Reuters) - Brazilian soy farmers in the No. 1 growing state of Mato Grosso have begun planting the new crop after some isolated rains and predictions for more moisture to come in early October, forecasters Somar said Thursday.
The official planting season for soy started Sept. 15 in the state, but the weather has been widely dry over the center-west region that normally kicks off planting in Brazil.

Argentine gov't sees new wheat crop at 11-13 mln T
BUENOS AIRES, Sept 22 (Reuters) - Argentina's 2011/12 wheat crop is seen at between 11 million and 13 million tonnes, down from 14.7 million tonnes in the prior season, the Agriculture Ministry said in a monthly report on Thursday.
The government raised its forecast for 2010/11 corn output to a record 22.9 million tonnes from 21.9 million tonnes previously. It did not give an estimate for 2011/12 corn, which farmers are already seeding.

EU cleared 213,000 tonnes wheat exports this week
PARIS, Sept 22 (Reuters) - The European Union this week granted export licences for 213,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 (July-June) season to 3.1 million tonnes, official data showed on Thursday.
The export volume remained well below the level seen last season when 5.3 million tonnes of export licences were cleared by the same stage.

Bangladesh to buy wheat from Ukraine at $320/T
DHAKA, Sept 22 (Reuters) - Bangladesh will import 100,000 tonnes of wheat from Ukraine at $320 a tonne, including CIF, in its first government-to-government wheat deal with Kiev, a top procurement official said on Thursday.
"We have already signed the deal and shipment will start soon," Ahmed Hossain Khan, director general of the state grain buyer, told Reuters.

IGC cuts maize crop outlook, demand also trimmed
LONDON, Sept 22 (Reuters) - The International Grains Council on Thursday cut its forecast for global maize production in 2011/12, reflecting diminished prospects for the U.S. crop, but also trimmed the outlook for consumption as high prices begin to curtail demand.
"With international prices (for maize) likely to remain strong against a backdrop of tight U.S. supplies, growth in world demand will be lower than in recent years," the IGC said in a monthly update.

US wheat farmers on edge as Plains drought threatens
CHICAGO, Sept 22 (Reuters) - Winter wheat growers in the U.S. Plains hard red winter wheat growing region remain on edge as they seed the 2012 crop amid a devastating drought, an agricultural meteorologist said Thursday.
"There has been some rain over the last week that may get the crop out of the ground, but it will wither unless they get some more significant rains in October," said Andy Karst, meteorologist for World Weather Inc.

Kazakh grain crop could hit 25 mln T-AgMin official
ASTANA, Sept 22 (Reuters) - Kazakhstan's 2011 grain harvest could approach 25 million tonnes by bunker weight as good weather and better yields promise a record crop for the Central Asian state, an Agriculture Ministry official said on Thursday.
Kazakhstan, the world's seventh or eighth-largest wheat exporter in a typical season, will subsidise exports this season to regain a foothold in Black Sea markets and help clear a potential grain glut at home.

Brent crude above $106 as investors buy on dips
SINGAPORE, Sept 23 (Reuters) - Brent crude rose above $106 as investors took the opportunity to buy on the dip after a plunge in the previous session took prices to their lowest since early August.
"It is just a short-covering rally that we are seeing today," said Jonathan Barratt, managing director for Commodity Broking Services in Sydney. "Otherwise, the overall direction is weak. Oil has been moving in line with equities."

Syrian oil exports paralysed as sanctions bite
LONDON, Sept 22 (Reuters) - Syria's oil exports have come to a standstill due to sanctions and this may force a cut in production, weakening President Bashar al-Assad's ability to generate cash but not threatening his grip on power yet, traders and analysts say.
After a series of piecemeal measures, European governments have acted vigorously in recent weeks to tighten the screws on Assad in hopes of reining in his bloody crackdown on protesters, which has killed some 2,700 people in six months, the U.N. says.

Full Libyan oil output could be three years away
LONDON, Sept 22 (Reuters) - Oil, the lifeblood of the battered Libyan economy, is starting to trickle onto the world market as the country recovers from seven months of fighting, but it could take as long as three years to get back to pre-war output levels, analysts say.
Before the conflict, Libya turned out 1.6 million barrels per day (bpd) of high quality crude and the loss of that oil has helped keep oil prices at historically high levels with Brent crude above $100 per barrel for most of this year.

LME copper falls to 1-yr low as sell-off grows
MANILA, Sept 23 (Reuters) - London copper extended losses to hit its lowest in a year and is on course for its steepest weekly loss since December 2008 as a lethargic global economy fueled another round of selling.
"At this stage it's very sentiment driven, and sentiment right now is bearish. The market is focusing on the macroeconomic environment, which is not very positive," said Natalie Robertson, an analyst at Australia and New Zealand Bank.

Raw uranium stored near Libya's Sabha - IAEA
VIENNA, Sept 22 (Reuters) - The U.N. atomic agency said on Thursday that Libya's previous government had stored raw uranium near Sabha, after CNN reported that anti-Gaddafi forces had found a military site containing what appeared to be radioactive material.
The CNN report and the comment by the International Atomic Energy Agency seemed to contradict a U.S. statement last month that Libya's store of so-called yellow cake was held at the  Tajura nuclear research facility near Tripoli.

Peru raises mining taxes to fund social programs
LIMA, Sept 22 (Reuters) - Peru's Congress raised taxes and royalties on the lucrative mining sector on Thursday, handing a legislative victory to leftist President Ollanta Humala after he campaigned on promises to ramp up welfare spending.
Humala, a former army officer, has said more must be done to fight poverty that still affects a third of Peruvians even though the Andean country's economy has surged for the last decade and is expected to grow 6 percent this year.

China unlikely to scrap minor metals duties -Antaike
STOCKHOLM, Sept 22 (Reuters) - China is unlikely soon to scrap high export duties on minor metals, including tungsten and molydenum, as they are strategic materials vital to its industry, said Xu Aihua, chief analyst at Chinese state-backed research body Antaike.
"Both minor metals are strategic metals so it is not likely that China will get rid of them," Xu told Reuters on Thursday on the sidelines of a China Metal Forum organised by Antaike and research body Raw Material Group.

Costly copper faces another year of strikes
LONDON, Sept 22 (Reuters) - Strikes could keep the heat under copper prices next year as workers, seeing mining companies reap fat profits from the expected high prices and tight market, try to rewrite expiring contracts.
A large number of wage contracts are due to expire between now and the end of next year at copper mines and plants in Chile, Canada and Peru, giving a hint of potential flashpoints.

Copper crashes to lowest since Sept 2010
LONDON, Sept 22 (Reuters) - Copper collapsed below $8,000 a tonne level on Thursday to hit one-year lows as economic fears escalated after news of manufacturing contraction in top consumer China combined with a grim outlook for the U.S. economy.
Other industrial metals followed, hitting 2011 lows.  Aluminium  touched $2,275.50 a tonne, zinc  $1,987, lead  $2,145, tin  $19,700 and nickel  $19,400 a tonne.

METALS-LME copper falls to 1-yr low as sell-off grows
MANILA, Sept 23 (Reuters) - London copper extended losses to hit its lowest in a year and is on course for its steepest weekly loss since December 2008 as a lethargic global economy fueled another round of selling.
"At this stage it's very sentiment driven, and sentiment right now is bearish. The market is focusing on the macroeconomic environment, which is not very positive," said Natalie Robertson, an analyst at Australia and New Zealand Bank.

PRECIOUS-Gold heads for third weekly drop on firm dollar
SINGAPORE, Sept 23 (Reuters) - Gold edged up 0.4 percent after the previous day's drop, but remains on track for a third straight week of decline as investors worried about grim global growth outlook piled into the dollar, which weighs on bullion prices.  
"The dollar has strengthened in all of this and everyone is de-risking and putting money into the dollar because of the deteriorating economic outlook," said Soozhana Choi, head of commodity research in Asia at Deutsche Bank in Singapore.

Copper, Nickel, Tin Extend Tumbles in London on Debt, U.S. Growth Concerns
Copper dropped to the lowest in more than a year while nickel and tin plunged as the deepening European debt crisis and threat of a U.S. recession spurred investor concerns that demand for raw materials will slow. Copper for delivery in three months fell as much as 7.3 percent to $7,115.75 per metric ton on the London Metal Exchange, the lowest price since August 2010, before trading at $7,329.75 a ton by 3:56 p.m. in Singapore. The metal has lost 16 percent this week, the most since October 2008. Tin plunged as much as 14.3 percent to $17,000 a ton and nickel by as much as 11 percent to $16,800 a ton. The world is poised for a financial crisis, Mohamed El- Erian, chief executive officer of Pacific Investment Management Co., said in Washington yesterday. The Federal Reserve said Sept. 21 that there are “significant downside risks” in the U.S. economy, prompting the central bank to announce a $400 billion plan to spur growth as the recovery from the worst contraction since the Great Depression falters.

Gold heads for third weekly drop on firm dollar
SINGAPORE, Sept 23 (Reuters) - Gold edged up 0.4 percent after the previous day's drop, but remains on track for a third straight week of decline as investors worried about grim global growth outlook piled into the dollar, which weighs on bullion prices.  
"The dollar has strengthened in all of this and everyone is de-risking and putting money into the dollar because of the deteriorating economic outlook," said Soozhana Choi, head of commodity research in Asia at Deutsche Bank in Singapore.

FOREX-Euro up on profit-taking; no surprise from G20
SINGAPORE, Sept 23 (Reuters) - The euro rose on profit-taking on Friday after slipping to an eight-month low the previous day, but its gains could prove fleeting after market players were unimpressed by a G20 pledge to preserve financial stability.    
"There is nothing new, nothing substantial where we can grasp and say 'this is good, now we can put on some risk again.' I don't think it changes the bigger picture," said Jesper Bargmann, Asia head of G11 spot FX for RBS in Singapore.

20110923 1139 Malaysia Corporate Related News.

SapuraCrest: Orders two new ships costing USD227m. SapuraCrest Petroleum Bhd unit TL Offshore Sdn Bhd has issued two letters of award to Cosco Nantong Shipyard Co Ltd to build two ships costing a total USD227m (RM714.4m). The acquisition will enable TL Offshore to capitalise on the positive outlook for the installation of pipelines and facilities segment of the oil and gas industry. (Source: The Star)

MAA: Open to acquisitions. MAA Holdings Bhd is considering buying companies to boost profits to the level before it sold its core insurance business. The group expects to achieve scale in business rapidly by buying good companies cheap and selling them expensive. (Source: Business Times)

Malaysia Airports (MAHB) is privatising the construction and financing of the integrated  complex at KLIA2 under a 25-year concession period  to  Segi Astana Sdn Bhd – joint  venture between  WCT and MAHB. The construction cost is RM530.3m to be funded  through external borrowings and shareholders equity. WCT will hold 70% or RM74.24m of Segi Astana’s paid-up capital and MAHB 30% or RM31.818m.
• The complex comprises of a transportation hub for the Express Rail Link, buses, taxis,  car rental services and private transport. It would have a commercial complex consisting  of a shopping mall with net lettable area of approximately 350,000 sq ft; and car parks  with 6,000 parking bays.
• The concession shall be for a period of up to 25 years and may be extended for a further  period of 10 years at the option of the concession  company. Upon the expiry of the  concession period, Segi Astana shall transfer the integrated complex including the  building, fittings and relevant documents at no cost to MAHB
• Segi Astana would pay MAHB a lease rental of RM31.818 million which will be net off  against the subscription price payable by MAHB in respect of their 30% equity holding in  Segi Astana.  MAHB may also be entitled to royalty payments. (Financial Daily)

From next year, Bursa Malaysia will have teeth to go after listed companies that make  questionable choices in appointing board members and top managers. The latest  amendments to the exchange's listing requirements include an obligation imposed on listed  companies to ensure that each of the directors, CEOs and CFOs has "the character,  experience, integrity, competence and time" to carry out his role. If the companies cannot  provide convincing evidence that they have complied with this rule in appointing and  retaining these directors, CEOs or CFOs, the exchange can direct the companies to make  the necessary changes. (Starbiz)    

SapuraCrest  has issued two letters of award to Cosco Nantong Shipyard for the  construction of two pipelay cum heavylift offshore construction vessels at a combined  contract price of US$227m. The vessels will be completed and delivered within 26-28  months from 23 Aug 11. Funded by internally generated fund and bank borrowings, the  vessels will enable SapuraCrest to capitalise on the positive outlook in the installation of  pipelines and facilities segment. (BMSB)  

Sime Darby said the acquisition of a 30% stake in Malaysian property developer  Eastern and Oriental Bhd. may boost earnings. “Taking on this 30% stake, at the  stroke of a pen, we have property market presence in three key areas -- Klang Valley,  Penang and Johor,” Sime Group CEO Mohd Bakke Salleh said in an interview.
• “We’re looking at this company as a brand that we can latch onto and also benefit from  particularly in terms of high-end, niche development, hospitality business and more  importantly, the entrepreneurial way of things.”  Sime Darby may be forced by the  Securities Commission to make a mandatory general offer, or full takeover, for Eastern  and Oriental as the company, together with the three shareholders who sold the 30%  stake, have about 41% interest, the Edge Financial Daily reported, citing market talk.
• “This story actually caught on and it spread like wildfire and people believed in it,” Mohd  Bakke said. “Currently, it doesn’t even cross our mind, because we decided just to take a  stake below the mandatory trigger level.” Any general offer wouldn’t have implications on  dividend payment ability or hurt earnings as the company’s gearing at 0.3 is “very low,”  Bakke said. Sime was open to the possibility of making a general offer in the future, he  added. (Bloomberg)      

Pakistan, the world’s third-largest buyer of palm oil, may boost purchases from Indonesia  next year after it agreed to slash a tax on imports under a free-trade treaty, reducing  dependence on Malaysia. Purchases from Indonesia, the biggest producer, may increase  to as much as 30% of Pakistan’s annual imports of about 1.9 million metric tons from an  estimated 5% this year, Abdul Rasheed Janmohammad, vice chairman of the Pakistan  Edible Oil Refiners Association, said. Under the treaty, the South Asian nation will reduce  by 15% the duty it levies on palm oil, Commerce Secretary Zafar Mahmood said.  (Bloomberg)    

Palm oil price in Malaysia may average RM3,100 a ton in 2012, Derom Bangun, deputy  chairman of the Indonesian palm oil board, said. Indonesia’s 2012 palm oil production may  rise to 25.9m tons from 24.1m tons this year, Bangun said. Indonesian biodiesel producers  will likely use 700,000 tons of palm oil next year, he also said. The use of palm oil for  biodiesel will support palm oil prices next year as this will reduce exports, he added. (Bloomberg)  

Kuala Lumpur mayor Tan Sri Ahmad Fuad Ismail said that Tradewinds Corp Bhd (TCB)  has been granted a development order for the 20-year-old Hotel Istana, located at the  corner of Jalan Raja Chulan and Jalan Sultan Ismail. Ahmad Fuad said the order was  granted this year to make way for another project. The 30-year-old Hotel Istana sits on a  freehold land measuring 11,803 sq m. The 25-storey hotel has a room inventory of 516  rooms.
• TCB had last year been granted an order that would allow it to bring down the 39-yearold Crowne Plaza Mutiara Hotel and the 32-year-old Kompleks Antarabangsa.The  demolishment of these two assets located along Jalan Sultan Ismail is to make way for a  "multi-billion-ringgit" mixed commercial development. The project, dubbed the  "Tradewinds Centre", is said to involve a total gross area of 3.17m sqm. (BT)  

Bank Islam is still open to the idea of growing through M&A despite two unsuccessful  attempts earlier. It was speculated some time back that Bank Islam was eyeing a merger  with Maybank Islamic Bank but the talks fizzled out. Lately, Bank Islam was in the news  with a potential tie-up with  Bank Muamalat but that did not take off due to lack of  synergies between the two banks. (Star Biz)  

MISC Bhd : To proceed with capex plan
MISC Bhd, the world’s largest owner and operator of liquefied natural gas (LNG), will proceed with its committed capital expenditure of between RM4.0bil and RM5.0bil in mainly new vessels for the next two to three years despite the signs of a prolonged economic downturn. MISC’s president and chief executive officer Datuk Nasarudin Md Idris said that although they will take deliveries of committed programmes, capital expenditure plans on new programmes, like clean petroleum production freight, have been deferred. According to its annual report, MISC has 14 newbuilds on order for the next two years for its petroleum shipping division. MISC recently saw both Standard & Poor’s and Moody’s rating agencies downgrade its debt paper ratings on concerns about continued operating losses in its petroleum, chemical and liner businesses and large capital expenditure plans. According to MISC chairman Datuk George Manharlal Ratilal, the company has over RM3.0bil of cash. It also has a few unutilised credit lines to draw down from. MISC expects its petroleum, chemical and liner shipping divisions to continue to suffer losses this year, but is hopeful that its other divisions, mainly LNG shipping, tank terminal and offshore business, will help cushion the effects of it. – Business Time

SP Setia is highly confident of meeting its sales target of RM3bn after raking in RM2.3bn in  the first 10 months of its current financial year to October (Bloomberg)  

Former  Bursa Malaysia CEO Datuk Yusli Mohamed Yusoff has been appointed the  chairman of Mudajaya Group. Yusli will replace Asgari Mohd Fuad Stephens as chairman,  though Asgari will remain as a board member of the company. Elsewhere, in a string of  other board changes,
• Mudajaya's managing director Ng Ying Loong tendered his resignation effective 30 Sep,  citing family commitments as the main reason. Ng's  role will be assumed by Anto  Joseph, who has been with the group for the last 18 years and has co-helmed the group  as joint MD since April. However, Ng will continue  playing a key role in the group as  advisor to the board. (BT)    

MAA Holdings is considering buying companies to boost profits to the level before it sold  its core insurance business, its top executive says. MAA executive chairman Tunku Datuk  Ya'acob Tunku Abdullah said without any acquisition, it would take up to 10 years for its  existing businesses in unit trusts and takaful to reach pre-MAA Assurance levels.
• MAA has overseas businesses via PT MAA Life Assurance and PT MAA General  Assurance in Indonesia. It also has a general insurance operations in the Philippines,  MAA General Assurance Philippines, Inc. (BT)    

Results from the latest Illegal Cigarettes Study for the period March – May 2011 revealed  that the level of  illegal cigarettes in Malaysia has hit 37.3%, up from an annualised  average of 36.3% in 2010. It is estimated that this illegal trade is costing the Government  RM2bn loss in tobacco excise revenue annually. (BT)  

Eversendai has secured RM371m worth of projects in India, Qatar and Oman through its  various subsidiaries. The contracts are expected to contribute positively to the earnings of  the group for FY12 ending Dec 31. (Financial Daily)  

Naza Group’s joint group executive chairman SM Nasarudin SM Nasimuddin said in the  next four years, the company targets to produce 170,000 vehicles under its Kia and  Peugeot range. "We have been in the automotive manufacturing industry since 2007 and  produced about 150,000 units of vehicles in various segments. We are positive that the  company will perform better in the future. To help  achieve our production target, we will  introduce 16 new models throughout the four-year period," he said. (BT)  

Mitsubishi Motors Malaysia, the distributor of Mitsubishi Motors vehicles, expects its  market share to at least double by 2015, thanks to the tie-up between Mitsubishi Motors  Corp and  Proton Holdings. "It is a very positive collaboration. In the near future,  Mitsubishi model line up will be much wider with competitive prices. Our responsibility is to sell these cars, and to offer good services to the  customer, with the total customer  satisfaction.
• Our current market share is around 2%, and for the non-national brand, we are having a  5% market share.  We believe our market share can more than double, or maybe triple,  after this collaboration," said CEO Tetsuya Oda. (BT)    

Ireka Corp Bhd, which is expanding its property development portfolio, aims to launch  three projects next year with a combined gross development value of RM700m. The three  projects, wholly-owned by Ireka, are located in Nilai (Negri Sembilan) and Bangi  (Selangor). "We are optimistic of  the prospects in the property sector. We see strong growth opportunities in industrial parks and the mid-market residential and commercial  segments," said its group executive director, Lai Voon Hon. (BT)

EON Capital Bhd : Special dividend for EON Cap investors
EON Capital Bhd (EON Cap) shareholders on the register as at Sept 15 will receive a tax-exempt final special dividend of about 2.45 sen per share in addition to a capital repayment of RM2.60. The capital repayment will be on Sept 23 while the special dividend will be paid later. In addition to the first special dividend of RM5.16 paid in June, the total payout to EON Cap shareholders will amount to about RM7.78 per share. EON Cap had in May this year completed the disposal of its entire assets and liabilities including EON Bank Group to Hong Leong Bank Bhd. Trading in EON Cap shares on Bursa Malaysia had been suspended since Sept 9. Pending Bursa’s confirmation, EON Cap shall be delisted on Sept 26, the next market day after the completion of the capital repayment. – StarBiz

Tobacco Sector : Manufacturers hope for moderate tax increase approach
Tobacco manufacturers have appealed to the government for a moderate tax increase approach in the upcoming Budget 2012. In a statement, the Confederation of Malaysian Tobacco Manufacturers  (CMTM) said that smaller and gradual tax increases will allow consumers to adjust to price changes, and are therefore less likely to fuel demand for illegal cigarettes. Last year, the government had imposed an increase in excise duty of three sen per cigarette stick. Citing the latest “Illegal Cigarettes Study for the period March – May 2011”, the CMTM said the level of illegal cigarettes in Malaysia had hit 37.3%, up from an annualised average of 36.3% in 2010. According to the study, illegal trade is costing the government RM2.0bil in loss in tobacco excise revenue annually. The CMTM was established by the three major cigarette manufacturers in Malaysia, namely, British American Tobacco Malaysia Bhd, JT International Bhd and Phillip Morris Malaysia. – Bernama

20110923 1128 Local & Global Economic Related News.

The  international reserves of Bank Negara Malaysia (BNM) amounted to RM414.5bn (US$137.1bn) as at 15 Sep 2011, up from RM412.1bn (US$136.3bn) as at 29 Aug 2011.  The reserves position is sufficient to finance 9.5  months of retained imports and is 4.5  times the short-term external debt. (BNM)  

PM Datuk Seri Najib Tun Razak on Thursday unveiled  four approaches for  entrepreneurship development in the country to be more successful and viable. The  approaches are introducing new ideas which are more creative; inject innovations in  business; applying stronger and popular branding; and using websites to expand the  market for products.  
• Najib said among the approaches or new ideas that should be practised was to look at  areas where the business competition was not that intense to the extent the margin or  profit to entrepreneurs was negligible.
• PM announced RM50m initial allocation under the Small-Scale Dynamic Entrepreneur  Programme to help traders, particularly in rural areas. (Bernama)

Dow posts biggest two-day slump since 2008 on policy concern
US stocks slumped, giving the DJIA its biggest two-day decline since December 2008, amid investors’ concern that policy makers are running out of tools to avoid another global economic recession. All 10 industries in the S&P’s 500 Index retreated at least 1.8% as losses were led by commodity and industrial shares. The S&P 500 fell 3.2% to 1,129.56 at 4pm New York time, dropping 7.1% in four days. The Dow lost 391.01 points, or 3.5%, to 10,733.83, bringing its two-day retreat to 5.9%. (Bloomberg)

US: Dollar gains most in 2 weeks as Fed acts to support US growth
The dollar rose the most in two weeks against the yen after the Federal Reserve moved to lower only long-term borrowing costs and on concern the Bank of Japan may act to stem gains in the nation’s currency. The Dollar Index climbed to a seven-month high after the Federal Open Market Committee said there are “significant downside risks” to the economic outlook. The euro advanced versus the yen as Greece said it will accelerate budget cuts to keep emergency loans flowing. New Zealand’s dollar weakened after data showed economic growth almost stalled. Australia’s dollar slid below parity with the greenback after a survey said China’s manufacturing may slow. (Bloomberg)

U.S. initial jobless claims decreased by 9,000 to 423,000 in the week ended 17 Sep  (432,000 in the prior week), Labor Department figures showed. Economists forecast  420,000 claims. (Bloomberg, U.S. Department of Labor)  

U.S. continuing claims decrease by 28,000 to 3,727,000 during the week ended 10 Sep,  a from the preceding week's level of 3,755,000. (U.S. Department of Labor)  

The  U.S. leading index for economic indicators increased more than forecast in Aug,  easing concern the economy is headed for recession. The Conference Board’s gauge of  the outlook for the next three to six months climbed 0.3% in Aug (+0.6% in Jul), the  research group said. Economists projected a 0.1% rise in Aug. (Bloomberg)  

U.S. home prices declined in the 12 months through Jul as concerns that the economy  may enter another recession sapped the confidence of would-be buyers. Prices dropped  3.3% yoy in Jul, the Federal Housing Finance Agency said in a report. On a mom basis,  they rose 0.8%, more than the 0.1% gain estimated by economists. (Bloomberg)  

The eurozone composite index, based on a survey of purchasing managers in services  and manufacturing industries, fell below 50, indicating contraction for the first time since Jul  09, Markit Economics said in an initial estimate. The index fell to 49.2 in Sep (50.7 in Aug).  Economists forecast a drop to 49.8. (Bloomberg)
• The euro-area services indicator fell to 49.1 this month from 51.5 in Aug, Markit said.
• The manufacturing gauge decreased to 48.4 from 49. Both indexes dropped more than  economists had forecast. (Bloomberg)  

Eurozone industrial new orders fell by 2.1% mom in Jul (-1.2% in Jun). On a yoy basis,  industrial new orders increased by 8.4% (10.6% in the prior month). (Eurostat)  

EU: EU presses Greece on asset sales, civil service to win aid
The European Commission pressed Greece to spell out “key elements” of a new savings package such as the timetable for state asset sales in order to qualify for the next aid installment. Stabilizing Greece’s situation is the “immediate challenge” facing European officials who are grappling with the debt crisis and trying to prevent contagion from any “uncontrolled default,” EU Economic and Monetary Affairs Commissioner Olli Rehn said. “A condition for the new program is that Greece implements all the corrective measures required, without any wavering,” Rehn said. “In the past couple of weeks Greece has gone a long way toward meeting these demands, but we are not quite there yet.” (Bloomberg)
EU: Services, manufacturing shrink more than forecast
Euro-area services and manufacturing output shrank for the first time in more than two years in September as the region’s worsening debt crisis added to concerns that the economy could slide back into a recession. A composite index based on a survey of purchasing managers in both industries fell below 50, indicating contraction, for the first time since July 2009, London-based Markit Economics said in an initial estimate. The index fell to 49.2 this month from 50.7 in August, a deeper slide than the drop to 49.8 that economists had forecasted. Europe’s economy is cooling as governments struggle to restore investor confidence in their ability to prevent a Greek default and stop the crisis from spreading. (Bloomberg)

Hong Kong: Warns inflation yet to peak after prices rise 5.7%
Hong Kong’s government warned that inflation is yet to peak after consumer prices rose 5.7% in August because of higher costs for rents and vegetables. The increase was less than a 7.9% gain in July, the biggest in 15 years that was partly caused by changes to public housing subsidies, a government statement showed. The underlying rate last month excluding such one-off factors was 6.3%, the highest since Aug 2008. Hong Kong officials are concerned that low interest rates in the US and other advanced economies will lead to capital inflows that fuel inflation and asset bubbles. (Bloomberg)

International Monetary Fund  Managing Director Christine Lagarde said the  European  Central Bank must continue to provide “solid, reliable” funding for eurozone banks and  economies as parliaments in the region pass measures into law to fight the region’s debt  crisis. (Bloomberg)  

China will levy a  tax on resource producers based on the value and volume of their  output, according to a statement on the government’s website, citing a decision from a  State Council meeting. The country will adjust tax  ratios on crude oil and natural gas  exploration, the statement said, without giving details. It currently imposes a tax on  producers of oil, gas and coal based on output volume. (Bloomberg)  

China: Yuan options turn more bearish on global slump
Options traders are the most bearish on the Chinese Yuan since Mar 2009 amid concern Europe’s debt crisis and stalling US economic growth will cut demand for goods from the world’s biggest exporter. The premium earned on three-month put options granting the right to sell the Yuan was 0.725ppt more than call options on buying it today, according to the currency’s three- month risk-reversal rate tracked by Bloomberg. The contracts favored Yuan purchases by as much as 0.3ppt in June. Risk-reversal rates for the currencies of Brazil, Russia and India were the most bearish in more than a year this week. (Bloomberg)

The preliminary HSBC China Manufacturing PMI fell to 49.4 in Sep from a final reading of 49.9 in Aug. The fall in the PMI could reignite some concerns over a sharp economic  slowdown in China, due to weakening global demand for Chinese goods and various  tightening measures. (Wall Street Journal)  

Bank Indonesia stepped in on Thursday to prop up the  rupiah, intervening in the forex  market and buying government bonds after selling by foreign investors drove the domestic  currency sharply lower. Bank Indonesia bought Rp1.74tr (US$196m) of long-dated, mostly  21-year government bonds as it sought to stabilise a selloff that also took gains in  benchmark 10-year sovereign yields to 120bp in two weeks. (Reuters)  

Thai exports rose 31.1% yoy in Aug (+38.3% in Jul), according to the Ministry of  Commerce.  Imports surged 44% yoy to US$22.77bn because of strong demand for  commodities, to post a  trade deficit of US$1.2bn (US$2.8bn surplus in Jul). Economists  had expected 28% yoy and 22% yoy increases in exports and imports, respectively for a  trade surplus of US$1.4bn (Reuters)  

Floods in the country have taken a toll on  Thailand's economic  growth, with losses  estimated at THB58.4bn.  
• The Business and Economic Forecast Centre predicts the country's economic growth  this year will be in the range of 3.5%-4%, compared to earlier forecasts of 4%-4.5%.  
• The last two months of flooding in the northern and central parts of the country, coupled  with the Apr-May floods in the south, had had a serious impact on the economy.
• The agricultural sector has been the hardest hit, with estimated losses of THB31.5bn,  followed by the trading sector THB11.7bn), public property (THB8.7bn), housing  (THB2.2b), tourism (THB1.8bn) and industry (THB1.4bn). (Bernama

20110923 1119 Global Market Related News.

GLOBAL MARKETS-Euro, S&P futures firm on G20; Asian stks weak
HONG KONG, Sept 23 (Reuters) - The euro rose briefly early on Friday on talk of a G20 emergency statement to address the euro zone crisis, but the prospect of a global recession kept Asian stocks firmly on track for their worst weekly drop since November 2008.
Alarm about the risk of another economic downturn, after the U.S. Federal Reserve's dire forecast at its two-day policy meeting which finished on Wednesday, pushed world stocks to 13-month lows as investors shed risky assets from portfolios and scurried to safer havens.

Global Stocks Enter Bear Market (Source: Bloomberg)
Stocks fell, pushing the MSCI All- Country World Index of 45 nations into a bear market for the first time in more than two years, after the worsening European debt crisis and threat of a U.S. recession erased more than $10 trillion from equities since May. The MSCI index has lost more than 20 percent since peaking on May 2, meeting the common definition of a bear market, after slipping 4.5 percent to a 13-month low of 277.38. The MSCI World (MXWO) Index of shares in developed nations also fell into a bear market yesterday, plunging 4.2 percent. The MSCI Emerging Markets Index reached the 20 percent threshold on Sept. 13.
The world is poised for a financial crisis, Mohamed El- Erian, chief executive officer of Pacific Investment Management Co., said in Washington yesterday. The Federal Reserve said Sept. 21 that there are “significant downside risks” in the U.S. economy, prompting the central bank to announce a $400 billion plan to spur growth as the recovery from the worst contraction since the Great Depression falters.

Asian Stocks Set for Worst Week Since 2008 on Recession Concern (Source: Bloomberg)
Asian stocks fell, driving a regional benchmark index toward its biggest weekly drop in almost three years, as concern intensified that policy makers worldwide may be running out of tools to avert another global economic recession. BHP Billiton Ltd. (BHP), the world’s No. 1 mining company, slumped 2.8 percent after crude oil and metal prices tumbled yesterday. Alumina Ltd. (AWC), a partner in the largest global producer of the material used to make aluminum, retreated 1.4 percent in Sydney. Korea Zinc Co., which produces gold and silver, plunged 13 percent in Seoul and Samsung Electronics Co., South Korea’s biggest exporter of consumer electronics, lost 2.7 percent. The MSCI Asia Pacific excluding Japan Index dropped 2.5 percent to 370.04 as of 10:32 a.m. in Tokyo. The gauge is set for an 11 percent weekly drop, the most since October 2008.
The measure has tumbled 16 percent this month amid concern Europe’s debt crisis is spreading and signs of slowing U.S. economic growth. Japanese markets are closed today for a public holiday.

European Stocks Drop as Fed Sees ‘Significant’ Economic Risks; Rio Tumbles (Source: Bloomberg)
European stocks tumbled to a two- year low as the Federal Reserve signaled “significant downside risks” to the world’s largest economy and Moody’s Investors Service downgraded three U.S. banks. Logitech International SA (LOGN), the world’s biggest maker of computer mice, plunged 12 percent after cutting its forecasts for the second time in two months. Rio Tinto Group, the world’s second-largest mining company, sank the most in more than two years as copper fell for a fifth day. LVMH Moet Hennessy Louis Vuitton SA (MC) and Burberry Group Plc (BRBY) led luxury stocks lower. The Stoxx Europe 600 Index sank 4.6 percent to 214.89 at the 4:30 p.m. close in London, the lowest since July 2009. Today’s drop was the biggest in five weeks and extends the decline from this year’s high on Feb. 17 to 26 percent amid concern the global economic recovery is stalling and the European debt crisis is spreading.

Obama Urges Coordinated Action Among Allies to Aid Recovery (Source: Bloomberg)
President Barack Obama used the annual meeting of the United Nations General Assembly to press leaders, in public and private, to take “coordinated action” to prevent the world’s economy from slipping into a recession. As a bid by Palestinians for United Nations recognition dominated discussions at the world body in New York, Obama conferred with French President Nicolas Sarkozy, U.K. Prime Minister David Cameron and Japanese Prime Minister Yoshihiko Noda on finding a way to sustain a fragile recovery amid the European debt crisis and sluggish U.S. growth. “We acted together to avert a depression in 2009,” Obama said in his speech to the General Assembly yesterday. “We must take urgent and coordinated action once more.”

Geithner Predicts Europe Will Act With ‘More Force’ to Resolve Debt Crisis (Source: Bloomberg)
U.S. Treasury Secretary Timothy F. Geithner said Europe will act “with more force” to combat a sovereign-debt crisis that is threatening global growth. “You are going to see them act with more force in the coming weeks and months,” Geithner said at a National Journal event in Washington today. “It’s a difficult challenge to do because it’s not just about financial support.” Geithner spoke as finance ministers and central bankers from the Group of 20 nations gather in Washington for the annual meetings of the International Monetary Fund and World Bank, where the European crisis will be a focus. He said European countries will do what is necessary to address the debt crisis and they, along with the IMF, have the capacity to meet the challenge.

Home Prices Decline 3.3% in U.S. as Buyer Confidence Sapped (Source: Bloomberg)
U.S. home prices declined in the 12 months through July as concerns that the economy may enter another recession sapped the confidence of would-be buyers. Prices dropped 3.3 percent, the Federal Housing Finance Agency in Washington said in a report today. Compared with June, they rose 0.8 percent, more than the 0.1 percent gain that was the average estimate in a Bloomberg poll of 15 economists. Americans are becoming more pessimistic about the economy after growth weakened in the first half of the year to its slowest pace since the recovery began. The unemployment rate has stayed above 9 percent for more than two years, with the exception of slight dips in February and March. The median income for U.S. households dropped in 2010 to the lowest level since 1996, according to a Census Bureau report this month.

U.S. Leading Economic Indicators Rose 0.3% in August, More Than Estimated (Source: Bloomberg)
The index of U.S. leading economic indicators increased more than forecast in August, easing concern the economy is headed for recession. The Conference Board’s gauge of the outlook for the next three to six months climbed 0.3 percent after a 0.6 percent gain in July, the New York-based research group said today. Economists projected a 0.1 percent rise in August, according to the median forecast in a Bloomberg News survey. The figure was boosted by a surge in money supply, a sign investors may be losing confidence in the global economy and reducing their holdings of riskier assets. The Federal Reserve yesterday decided to extend maturities of its Treasury holdings in a bid to push down long-term borrowing costs and said the economy faces “significant downside risks.”

U.S. Consumer Confidence Falls to Lowest Since June ’09 in Bloomberg Index (Source: Bloomberg)
Consumer confidence in the U.S. dropped last week to the weakest point since the recession ended in June 2009 as Americans’ views of the economy worsened. The Bloomberg Consumer Comfort Index fell to minus 52.1 in the period to Sept. 18 from minus 49.3 in the prior week. Sentiment among men slumped to an all-time low. A monthly expectations gauge held at minus 34, the worst reading since March 2009. Stock-market volatility linked to Europe’s debt crisis, declining home values and a lack of job creation help explain why the smallest share of Americans since February 2009 say the economy is improving. Federal Reserve officials yesterday employed another round of unconventional monetary policy to help shore up an economy showing “significant downside risks.”

Treasury 30-Year Bonds Head for Biggest Weekly Gain Since 2008 Recession (Source: Bloomberg)
Treasury 30-year bonds headed for their best week since the U.S. economy was in a recession in 2008 after the Federal Reserve and Pacific Investment Management Co., manager of the world’s biggest bond fund, issued warnings on the economy. Long bonds have returned 16 percent this month, according to Bank of America Merrill Lynch data. The MSCI All Country World Index of stocks handed investors a 10 percent loss, according to data compiled by Bloomberg. The difference between two- and 30-year yields narrowed to 2.56 percentage points yesterday, the least since March 2009. “We’re darn close to a recession,” said Marc Fovinci, who helps oversee $2.9 billion as head of fixed income at Ferguson Wellman Capital Management Inc. in Portland, Oregon. “We bought last week” in the Treasury market.

China Can Help World ‘At the Margin’: Yi (Source: Bloomberg)
China can support the European and global economies “at the margin,” though Europe must find the solution to its debt crisis itself, Chinese central bank Deputy Governor Yi Gang said. “At the margin we can do quite a bit to help,” Yi said in a panel discussion yesterday at the International Monetary Fund in Washington. At the same time, “the real solution of the European sovereign debt crisis has to be done by Europeans themselves.” The remarks come amid investors’ expectations that China may help stabilize the euro region, after Italy this month followed Spain, Portugal and Greece in seeking investment from the world’s fastest-growing major economy. Chinese Premier Wen Jiabao, facing calls to widen support for indebted European countries, signaled this month developed nations should cut deficits and open markets rather than rely on China to bail out the world economy.

China’s Stocks Fall to 14-Month Low on Policy, Economy Outlook (Source: Bloomberg)
China’s stocks fell, dragging the benchmark index to its lowest level in more than 14 months, on concern the global economy may not avoid entering a recession. China Vanke Co. sank 1.9 percent, pacing losses by developers after the Shanghai Securities News said some trust firms had halted real estate trust business. Industrial & Commercial Bank of China (601398) Ltd. declined 1 percent after the central bank asked lenders to maintain a stable loan-to-deposit ratio during public holidays next month. The Shanghai Composite Index lost 1.4 percent to 2,407.70 as of 9:49 a.m. local time, set to close at the lowest level since July 5, 2010. The MSCI All-Country World Index of 45 nations yesterday entered a bear market for the first time in more than two years, after the worsening European debt crisis and threat of a U.S. recession erased more than $10 trillion from equities since May.

China’s Banking Regulator Evaluates Trust Companies’ Loans to Developers (Source: Bloomberg)
China’s banking regulator is looking into financing of developers through trust companies as part of a broader evaluation of real estate lending, a person familiar with the matter said. The inquiries by the China Banking Regulatory Commission are part of regular monitoring and aren’t targeting any individual company, said the person, who declined to be identified because the regulator’s queries were meant to be private. Chinese property developers led by Greentown China Holdings Ltd. (3900) plunged in Hong Kong trading yesterday on concern tightened access to loans will force them to cut prices. Greentown said it hasn’t received any notice following a Reuters report that the banking regulator ordered trust companies to report dealings with the developer.

India’s Rate-Increase Cycle ’Nearing Its End,’ Gokarn Says (Source: Bloomberg)
The Reserve Bank of India is close to the end of its record series of interest-rate increases as inflation will probably slow next year, Deputy Governor Subir Gokarn said. “You could say that the cycle is nearing its end,” he said, “Given the projection that inflation will start coming down and will continue to move down from December onwards.” He declined to specify when the Reserve Bank of India may stop raising rates. The inflation rate will drop because “oil prices do not appear to be going higher,” and “we are seeing some deceleration in domestic growth because demand is being moderated,” Gokarn said in an interview in New York yesterday. Rising interest rates have helped slow consumer demand, he said.

Greece on Edge of Biggest Insolvency 24 Centuries After First City Default (Source: Bloomberg)
History’s first sovereign default came in the 4th century BC, committed by 10 Greek municipalities. There was one creditor: the temple of Delos, Apollo’s mythical birthplace. Twenty-four centuries later, Greece is at the edge of the biggest sovereign default and policy makers are worried about global shock waves of a insolvency by a government with 353 billion euros ($483 billion) of debt -- five times the size of Argentina’s $95 billion default in 2001. “There is a monstrously large amount of uncertainty and a massive range of possibilities,” said David Mackie, chief European economist at JPMorgan Chase & Co. in London. “A macroeconomic disaster could be averted but only by aggressive policy action” by central banks and governments.

Greece Speeds Budget Cuts to Ensure Aid as Transport Workers Hold Strike (Source: Bloomberg)
Greece said it will accelerate budget cuts to keep emergency loans flowing, extending austerity measures that have deepened a recession and failed to ease doubts that it can avoid default. Public-transit workers unions will hold a second 24-hour strike tomorrow, extending today’s action that shut subway, tram, train, and bus services, to protest cuts in civil servants’ wages and pensions. The latest round of deficit fighting was demanded by international lenders to ensure Greece reach targets in a 110 billion-euro ($151 billion) bailout and receive a payment due next month.
“The situation is extremely critical and even dangerous because there is a high level of anxiety in the euro area, the European banking system and the world economy,” Greek Finance Minister Evangelos Venizelos told lawmakers in Athens today, according to a transcript provided by the ministry.

Lagarde: ECB Must Continue ‘Reliable’ Funding (Source: Bloomberg)
International Monetary Fund Managing Director Christine Lagarde said the European Central Bank must continue to provide “solid, reliable” funding for euro-area banks and economies as parliaments in the region pass measures into law to fight the region’s debt crisis. The ECB “plays and can play and I hope will continue to play a critical role,” Lagarde, who took the helm at the IMF in July, said in a Bloomberg Television interview with Tom Keene today. Investors should also “allow the time for democracy” in euro countries that need to approve changes to the bailout mechanism agreed upon by leaders in July. The Washington-based IMF this week cut its global growth forecast and predicted “severe” repercussions if Europe failed to contain its debt turmoil. The ECB started buying Italian and Spanish government bonds last month after investors demanded euro-era record yields while policy makers grew increasingly divided over the best way to fight the crisis.

IMF’s Lagarde Says ‘Downside Risks’ Are High for Global Economic Recovery (Source: Bloomberg)
International Monetary Fund Managing Director Christine Lagarde said “downside risks” are high for the world economy. “We’re in it together and we will be able to solve it together,” Lagarde said in an interview on Bloomberg Television with Tom Keene. “Growth has slowed, the downside risks are high.” Lagarde said she will try to instill a “sense of urgency” at the IMF’s annual meetings this week.

South Africa Keeps Lending Rate at 30-year Low as Economic Growth Slows (Source: Bloomberg)
South Africa’s central bank left its benchmark lending rate unchanged at a 30-year low today to help support economic growth while curbing price pressures from a weakening rand. The repurchase rate was kept at 5.5 percent for a fifth consecutive meeting, Governor Gill Marcus said in a televised speech from the capital, Pretoria, today. That was in line with the forecast of 18 of 19 economists surveyed by Bloomberg. The rand plummeted to 8.3264 against the dollar today, its lowest level in more than two years as concerns of a weakening global economy spurred a sell-off of riskier assets. Africa’s largest economy expanded at the slowest pace in two years in the second quarter, while inflation has stayed inside the bank’s 3 percent to 6 percent target range.
“Downside risks on the growth side, the lack of core inflationary pressures and the widening output gap are being counteracted by the risks surrounding headline inflation pressures, from the currency in particular,” Peter Attard Montalto, an economist at Nomura Plc in London, said in an e- mailed note today.

Dollar Strengthens on Concern Growth Slowing; Commodity Currencies Decline (Source: Bloomberg)
The dollar jumped and currencies of commodity exporters tumbled on concern global growth is stalling after the Federal Reserve said yesterday it saw “significant downside risks” to the U.S. economy. The Dollar Index climbed to a seven-month high as the Fed’s statement stoked concern the global economy is headed for a recession and currency volatility surged to a 16-month high. The euro reached a fresh decade-low against the yen after region’s services and manufacturing contracted. Brazil’s real erased losses against the dollar as the central bank sought to stem the decline. “We’re seeing a disproportionate amount of buying in the dollar right now because there really is no other choice for a safe haven,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp. “Investors have finally recognized that the deterioration in the Group-of-Seven outlook is going to have negative consequences for emerging markets.”

Australian, New Zealand Dollars Advance as IMF, World Bank Hold Meetings (Source: Bloomberg)
The Australian and New Zealand dollars rebounded from their lowest levels in more than five months as policy makers gather in Washington for annual meetings of the International Monetary Fund and World Bank. The so-called Aussie gained versus most of its 16 major counterparts after U.K. Prime Minister David Cameron and five other leaders of Group of 20 nations urged French President Nicolas Sarkozy to use his chairmanship of the body to find agreement on actions to boost the global economy. New Zealand’s currency rose against the yen for the first time this week as a technical indicator signaled currency losses were too rapid. “Traders tend to speculate around meetings, particularly” when major leaders are involved, said Kara Ordway, a foreign- exchange strategist at City Index Asia Pacific in Sydney. “I do think this will be a catalyst for them, combined with such big moves overnight, to cover their short positions.”

FOREX-Dollar at 7-mth high as Fed outlook hits risk
LONDON, Sept 22 (Reuters) - The dollar rose to a seven-month high after the Federal Reserve flagged "significant downside risks" to the economy, but stopped short of bold monetary easing, leading to a sell off in higher-yielding currencies. Analysts questioned whether the Fed's move to shift its portfolio in favour of long-term debt would bolster the economy.

20110923 1118 Global Commodities Related News.

COMMODITIES-Sliding global demand, Fed policy sinks markets
NEW YORK/LONDON Sept 22 (Reuters) - Commodity markets were sharply lower on Thursday afternoon as they continued to be battered by news from the day before that the U.S. Federal Reserve would not deliver for a third time easy money to rescue a trembling economy.
"We can have bear market rallies, but I can't see in the background where the big good news is going to come from," said Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland.

Corn (Source: CME)
US corn futures slump as economic jitters fuel heavy selling amid many asset classes, pushing corn to a 2 1/2-month low. Traders reduce risk following the FOMC's gloomy outlook and increasing concerns about European debt. Meanwhile, commodity funds sell an estimated 25,000 contracts, a large amount. The selling was an accelerated version of what likely would have played out during a longer period of time due to declining demand for corn, says John Kleist of "Because of the financial crisis, we're down here a lot faster than I thought it would happen." CBOT December corn loses 35 3/4c to $6.50/bushel.

Wheat (Source: CME)
US wheat futures close sharply lower as widespread selling hits commodity and equity markets. Traders reduce risk amid concerns about a global economic slowdown, with commodity funds selling an estimated 6,000 wheat contracts at CBOT. Economic gloom adds to worries about declining foreign demand, as Egypt, the world's top wheat buyer, bought 240,000 tons from Russia and none from the US. CBOT December wheat closes down 33c, or 4.9%, at a 2 1/2-month low of $6.33 3/4 a bushel. KCBT December loses 39 1/2c, or 5.2%, to $7.21; MGEX December slides 20 1/2c, or 2.4%, to $8.20.

Rice (Source: CME)
Rice futures finish with heavy losses after temporarily dropping the daily 50c limit amid widespread selling in many markets caused by increased concerns about the global economy. Export demand offered no support to prices today as weekly rice sales to foreign buyers were weak at 31,500 metric tons. CBOT November rice slumps 47.5c, or 2.8%, to $16.66 1/2 per hundredweight.

Domestic wheat dulls China's hunger for corn, for now
SINGAPORE/BEIJING, Sept 22 (Reuters) - China is likely to at least quadruple corn imports in the next crop year to fatten its animal feed sector and squeeze food inflation, but how much grain it buys will depend on the amount of wheat it uses for rations from its large reserves.
China's emergence as a significant importer would bolster prices at a time when corn supplies are estimated at 16-year lows, and traders say Beijing has little choice but to shop abroad due to its rapidly growing meat consumption.

Wheat at 6-week low, corn falls for 3rd day on Fed warning
SINGAPORE, Sept 22 (Reuters) - U.S. grain futures slid, with wheat falling 1 percent to its lowest in six weeks  and corn losing ground for a third straight session, weighed down by a warning from the U.S. Federal Reserve of significant risks to the economy.
"Today's selloff is linked to the pessimistic macro-economic sentiment," said Lynette Tan, an investment analyst at Phillip Futures in Singapore.

Ukraine raises grain harvest f'cast to 52-53 mln T
KIEV, Sept 22 (Reuters) - Ukraine has raised its 2011 grain harvest outlook from the previous estimate of 51 million tonnes, First Deputy Prime Minister Andriy Klyuev said on Thursday.
"We will harvest 52-53 million tonnes of grain in 2011," he told the parliament.

China's rising corn demand to spur imports -COFCO Exec
CHANGCHUN, Sept 22 (Reuters) - China is likely to harvest 181.5 million tonnes of corn this year while its consumption is projected to rise to 181.3 million tonnes, an executive with a state-owned trading house said in a prepared speech on Thursday, reflecting a trend that could lead China to become a regular corn importer in the future.
The estimated 2011 output growth, 4.25 million tonnes, cannot meet demand growth, estimated at 11.6 million tonnes, from 2010, Fan Zhenyu, deputy general manager with COFCO's corn division, said in remarks for a prepared speech to a corn conference.

CWG cuts U.S. corn yield estimate to 147.3 bu/acre
CHICAGO, Sept 21 (Reuters) - Commodity Weather Group (CWG) said on Wednesday it had lowered its yield forecast for the 2011 U.S. corn crop to 147.3 bushels per acre, from its August estimate of 148.7.
The firm estimated U.S. corn production at 12.370 billion bushels.

Drought bedevils U.S. winter wheat, minor rain to fall
CHICAGO, Sept 21 (Reuters) - Drought kept a harsh grip on the U.S. Plains hard red winter wheat region, with only minor amounts of rainfall forecast for this week on powder dry soils, an agricultural meteorologist said Wednesday.
"Pretty limited relief. They had some showers over the past weekend and at mid-week maybe a half inch or less in the Texas Panhandle and Oklahoma, then dry from there on out," predicted John Dee, a meteorologist with Global Weather Monitoring.

OECD Farm Support Hit 30-Yr Low In 2010 As China's Surged To Record (Source: CME)
Soaring food prices meant the world's richest countries paid the lowest support to farmers in decades last year, even as China boosted its agricultural payments to a record $147 billion. Data from the Organization for Economic Cooperation and Development showed the share of farmers' income derived from subsidies fell to 18% in 2010, down from 22% in 2009, marking a "record low since the start of the series in 1986." Carmel Cahill, agriculture counselor in the OECD's directorate for Trade and Agriculture, said the fall is "mainly due to current market conditions," as higher food prices have meant farmers need less support. Last year, the 34 countries that make up the OECD spent $227 billion on farming subsidies, down almost 6% from 2009, the data show. But she added that in some regions, like Europe, the decline marked a long-term reduction in assistant--a policy advocated by the Paris-based body--and a trend that could be supported by higher food prices in the future.
"The medium-term outlook suggests that prices for the main agricultural commodities will be significantly higher over the next decade than the previous decade," she said. The lowering farm support in OECD countries contrasts markedley with many emerging economies, where pressure from expanding populations has spurred investment in domestic food production. In China, the world's second-largest economy, farming payments rose 40% to a record $147 billion in 2010 compared with 2009. That pushed the share of Chinese farm income derived from subsidies to 17%, only one percentage point below the OECD average of 18%, the data show. Much of this was down to policies triggered by the rise in world prices, which account for about 60% of China's support mechanisms, noted Cahill. In Russia too, "producer support has increased since the mid-1990s to a level that currently exceeds the OECD average," said the report.
"The recent food price surges have increased concerns on import dependency and have further strengthened the focus on increasing domestic food supplies." Agricultural subidies are a contentious polticial issue in many countries and were a key factor in the breakdown of the moribund Doha world trade talks. Debate on how to reform Europe's Common Agricultural Policy next month and the U.S.'s farm bill next year will give a key indication of whether lawmakers still see farming support as a priority amid the gathering financial gloom. Cahill said that with food prices expected to continue high over the next decade the opportunity to cut payments is there, but there is no guarantee that governments will do that. "The direction that they're moving in is toward allowing market signals to play out," she said.

IGC Cuts World Corn 2011-12 Output View 4Mln Tons To 845Mln Tons (Source: CME)
International Grains Council cut its estimate for world 2011-12 corn output by 4 million metric tons to 845 million tons due to diminishing prospects for the U.S. harvest. The London-based body reduced its forecast for this year's crop in the world's largest corn producer by 10 million tons from its previous estimate to 315 million tons--which would be the smallest crop since 2008-09. And despite a 4 million ton upward revision to prospects in both Brazil and Argentina, which are now expected to produce a total of 95.2 million tons, the IGC said world consumption is still expected to outstrip supply in 2011-12. "The further downward revision in the U.S. maize production forecast is only partly balanced by an enhanced outlook for crops shortly to be planted in South America," it said.
Still, improving prospects for the world wheat crop, which was revised up by 2 million tons to 679 million tons thanks to "upward revisions for Russia, Ukraine and Australia," means "there is little overall change in the 2011-12 supply and demand outlook," said the council.

Tesco Moves First In Cutting U.K. Prices (Source: CME)
Tesco PLC said it will invest GBP 500 million ($775 million) in price cuts in a move that could spark a price war among U.K. supermarkets. The supermarket chain said it will cut prices on thousands of essential items from Monday, with most of the financial investment going into reducing the price of Tesco's own-branded goods. It will also simplify and scale back promotions and end its double-Clubcard-points promotion for its loyalty scheme, which has been running for the past two years, to fund the move, which U.K. Chief Executive Richard Brasher insisted wouldn't affect margins. Analysts believe the move will prompt competing grocers to launch their own initiatives, and force those supermarkets that match prices on Tesco products to reduce their prices in line with Tesco's. Still, a severe price war is unlikely as investors and analysts think the cut-throat U.K grocery market is relatively rational.
Shore Capital analyst Clive Black said Tesco's price initiative is "measured, planned and rational," although it will still put pressure on Tesco's supermarket competitors, whether through margin investment or lost revenue. Wal-Mart Stores Inc.-owned Asda Supermarkets said it will continue to guarantee that its shopping basket is 10% cheaper than its rivals. Wm Morrison Supermarkets PLC declined to comment on Tesco's move, while J Sainsbury PLC and Ocado Group PLC weren't immediately available for comment. The difficult consumer environment in the U.K. has forced all retailers to compete more vigorously on price, with a raft of promotions such as price-match promises, new marketing tag-lines focusing on value and offers of cash returns if customers can shop for cheaper elsewhere. Tesco has lagged behind its U.K. rivals for several quarters, not least because it is the most heavily exposed to nonfood sales.
Sales of these goods have suffered as food and fuel-price inflation have crimped consumer spending on no nessential items. "We're giving customers a more straightforward shop - reducing the number of promotions and putting the emphasis on clear and reliable savings that everyone can benefit from," Mr. Brasher said. He said there will be some price cuts on nonfood items but the main thrust of the cost savings will be focused on everyday grocery essentials. Coordinated price cuts aren't new to the U.K. grocery market. Supermarkets traditionally invest in new-year promotions, and in January Tesco pledged GBP 340 million of price cuts, while Morrisons promised to cut weekly shopping bills by GBP 40 a week and Sainsbury announced savings of GBP 300 million. Panmure analyst Philip Dorgan believes Ocado will be the hardest hit by a Tesco price move, because it matches the prices on more than 7,000 of Tesco's products and doesn't have the same scale as the other, larger supermarkets.
Tesco shares closed down 2.25%, or 8 pence, at GBP 3.56 in a sharply lower London market.

Corn Futures Gain to $6.535 a Bushel in Chicago, Wheat, Soybeans Advance (Source: Bloomberg)
Corn for December delivery rose 0.5 percent to $6.535 a bushel on the Chicago Board of Trade at 9.04 a.m. in Sydney. November-delivery soybeans advanced 0.45 percent to $12.88 a bushel. Wheat for December delivery gained 0.8 percent to $6.39 a bushel.

Coffee Output in Vietnam May Reach Record on Weather, Area, Survey Shows (Source: Bloomberg)
Vietnam, the second-largest coffee grower, may produce a record crop in the upcoming harvest as favorable weather and a larger cultivated area boost output in the 2011-2012 season, increasing global supplies. Production may total 1.32 million metric tons, according to the median estimate in a Bloomberg survey of 12 traders, growers and exporters. That compares with 1.12 million tons, or 18.7 million, 60-kilogram bags, in the last crop, according to a U.S. Department of Agriculture estimate. For 2011-2012, the USDA has forecast output of 1.24 million tons, which would be an all-time high, according to data stretching back to 1959. Record production from Vietnam, the largest grower of robusta coffee, used in instant drinks, may boost exports and further lower prices that have shed 24 percent from their peak this year. Coffee has slumped on speculation that supplies may gain as a slowdown in global growth pares demand.

ICE cocoa, sugar, coffee join commodities retreat
LONDON, Sept 22 (Reuters) - ICE cocoa, raw sugar and arabica coffee futures all fell in early trade, tracking a broad-based setback in crude oil and other commodity markets.
Indonesia's cocoa output is seen rising 19 percent to around 500,000 tonnes next year, from 420,000 tonnes this year, the country's cocoa association said.Production will still be down from 2010 levels because of crop disease, an official at the association said.

Japan lowers 2011/12 sugar import estimate
TOKYO, Sept 22 (Reuters) - Japan has revised down its sugar import estimate for the year to September 2012 from three months ago as local sugar beet output is likely to rise and inventories remain sufficient, a government official said on Thursday.
Japan now estimates sugar imports for the year from Oct. 1 to Sept. 30, 2012 at 1.304 million tonnes on a refined basis, down 3.7 percent from a year earlier, a quarterly report from the Ministry of Agriculture showed.

Indonesia cocoa output to rise 19 pct in 2012 - assoc
JAKARTA, Sept 22 (Reuters) - Indonesia's cocoa output is seen rising 19 percent to around 500,000 tonnes next year, from 420,000 tonnes this year, the country's cocoa association said on Thursday.
Production will still be down from 2010 levels because of crop disease, an official at the association said at a conference.

S Africa sugarcane output seen up 6 pct-attache
Sept 21 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in South Africa:
"Sugar cane production in South Africa is expected to increase by only 6 percent to 16.98 million tonnes in the 2011/12 season due to the worst drought in 20 years that hit the main sugar producing area in 2010.

Sustainable cocoa powder demand lags butter-Cargill
LONDON, Sept 21 (Reuters) - Demand for sustainable cocoa powder is lagging that of sustainable cocoa butter, U.S. agribusiness Cargill said.
Demand for sustainable cocoa butter from chocolate manufacturers has been driving demand for sustainably grown cocoa beans, Taco Terheijden, sustainable cocoa manager at Cargill, said  on the sidelines of a conference.

India initial 2011/12 sugar output seen at 24.6 mln T
NEW DELHI, Sept 21 (estimated by the farm minister last week. That was also an initial estimate.
"This is a conservative estimate and production will not fall below this. There are also reports that production could be 25.0-25.5 million tonnes," Thomas said.

India cotton exports seen up 17 pct over govt f'cast
MUMBAI, Sept 21 (Reuters) - India's cotton exports could rise 17 percent, or 1.4 million tonnes, over an official forecast in the year to September 2012, spurred by a record harvest, a weaker domestic currency and a freer trade policy, the top exporter of the fibre said.
India contributes 22 percent of global output and is expected to have a bumper harvest of 6.14 million tonnes, pushing it into competition with suppliers from Latin America, Australia and Africa, that will squeeze world prices.

Uralkali: Potash Market May Reach 58 Mln-59 Mln Tons In 2011 (Source: CME)
The global potash market may reach between 58 million and 59 million metric tons in 2011, above the pre-crisis level of 56 million tons in 2007, Russian fertilizer giant OAO Uralkali said. "Given the current market trends and the fact that major potash producers work at the capacity exceeding 90%, Uralkali believes that the potash market in 2011 may reach 58-59 million tons," Uralkali said in a statement. The company said potash prices are still significantly lower than before the global financial crisis started in 2008. "Despite the volatility on the international commodities markets, the potash market continues to be very resilient, largely due to strong demand," Uralkali said. "The situation on the potash market in first half of 2011 as well as its development in the second half gives us confidence to believe that the upward trend will continue in 2012," the company said.

U.S. ethanol output falls 8,000 barrels per day
Sept 21 (Reuters) - U.S. ethanol production fell nearly 1 percent last week as gasoline demand dipped, limiting blender consumption. The Energy Information Administration said on Wednesday that U.S. ethanol production totaled 871,000 barrels per day in the seven days to Sept. 16, down 8,000 barrels per day, or 0.9 percent, from the previous week.

S.Korea's Aug crude oil imports down 3.8 pct yr/yr -KNOC
SEOUL, Sept 22 (Reuters) - South Korea's crude oil imports fell about 4 percent on the year in August, swinging from two months of year-on-year growth due to delayed maintenance shutdowns at some local refining units.
Crude imports by South Korea, the world's fifth-largest crude buyer, stood at 72.8 million barrels last month compared to 75.6 million barrels imported a year earlier, state-run Korea National Oil Corp (KNOC) said on Thursday.

China resumes tax on some naphtha, fuel oil
BEIJING, Sept 22 (Reuters) - China will resume its consumption tax on naphtha and fuel oil from Oct 1 when producers of the two products sell them to ethylene and aromatics makers, the Ministry of Finance said on Thursday.
The charge will be refunded to ethylene and aromatics makers based on the actual volumes of naphtha or fuel oil they use.

Oil tumbles more than 4 pct on recession fears
NEW YORK, Sept 22 (Reuters) - Oil tumbled more than 4 percent on Thursday after alarmingly weak Chinese industrial data and a bleak economic outlook from the U.S. Federal Reserve triggered the biggest commodity sell-off since May.
"We're just not seeing any real signs of life out there economically. Traders are heading to higher ground," said Rob Kurzatkowski, futures analyst with OptionsXpress.

NYMEX-Natural gas ends down, front hits 11-month low
NEW YORK, Sept 22 (Reuters) - U.S. natural gas futures trimmed early losses but still ended lower on Thursday, with mild weather and a government report showing another big inventory build driving the front contract to an 11-month low.
"The (EIA build) was neutral to bearish. We're going to see a lot more gas go into storage over the next couple of weeks, particularly if spreads to winter stay wide, and that should put storage in good shape," a Massachusetts trader said.

Euro Coal-Prices stable despite general slump
LONDON, Sept 22 (Reuters) - Prompt physical coal prices were little changed on Thursday although swaps fell by over $1 in line with the slump in world stocks by more than 4 percent.
"Very prompt physical prices have barely moved, they're flat to Wednesday's levels in fact, because the front months are well bid for Richards Bay and DES ARA," one utility source said.

Oil Rises After Slipping to Six-Week Low on Economy; Heads for Weekly Drop (Source: Bloomberg)
Oil rose from a six-week low in New York as investors speculated the biggest weekly decline in almost two months is exaggerated before central bankers from the Group of 20 nations meet in Washington to discuss the global economic slowdown. Futures rose as much as 1.6 percent after plunging 6.3 percent yesterday. Finance heads are gathering for the International Monetary Fund’s annual meeting, while European officials said they may use leverage to increase the firepower of their regional bailout fund. OPEC said it will decide whether to cut supply after monitoring the global economy over the next two months and the pace of Libya’s output recovery. “After such a big move often there are shorts that are looking to take a profit,” Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney, said by telephone. “We haven’t seen any evidence yet of people getting aggressively into oil. The macro situation is also a very poor backdrop for oil at the moment.”

Brent crude falls more than $1 on grim econ outlook
SINGAPORE, Sept 22 (Reuters) - Brent crude lost more than $1 on Thursday on concerns oil consumption may fall, as steps announced by the U.S. Federal Reserve were seen as insufficient to jump-start an economy the central bank said faces significant downside risks. "It is hard to ignore the macroeconomic picture. Oil seems to have fallen in line with equity markets," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.

Iron Ore’s Four-Year Slide Hitting Mining Earnings: Commodities (Source: Bloomberg)
Iron ore is set for the first four- year drop since at least 1982 as supplies surge, threatening to end record earnings at Vale SA (VALE3), Rio Tinto Group and BHP Billiton Ltd. (BHP), the world´s biggest producers. Global prices may fall 29 percent to an average $123 a metric ton in 2015 from a record $173 this year, according to the median estimates of 10 analysts surveyed by Bloomberg News. The decline contrasts with estimates for little change in copper and a 10 percent increase for aluminum in the same period, London Metal Exchange futures prices show. Iron ore supplies for export will jump 53 percent by 2015 even as slower growth in Chinese steelmaking saps demand, Goldman Sachs & Partners Australia Pty. said. That will reduce prices and profit that reached records this year for BHP and Brazil’s Vale, whose net income will fall almost 50 percent by mid-decade, according to data compiled by Bloomberg.

Copper Tumbles Most Since 2008 on China Manufacturing Data, Global Concern (Source: Bloomberg)
Copper futures plunged the most since 2008 as a China factory index signaling contraction added to speculation that metal demand will slump amid signs of faltering economies in the U.S. and Europe. A preliminary index of China purchasing managers was 49.4 this month, according to HSBC Holdings Plc and Markit Economics. A reading below 50 indicates contraction. Copper has dropped 22 percent this year as Europe’s debt crisis and the possibility of another contraction in the U.S. economy hampered demand. In 2008, during the U.S. recession, copper fell 54 percent. “The meltdown of 2008 is in the cards if the defaults start in Euroland,” said David Threlkeld, the president of Resolved Inc., a trading company in Scottsdale, Arizona.

Gold Set for Worst Week in More Than Four Months on Global Asset Selloff (Source: Bloomberg)
Gold headed for its worst weekly performance in more than four months as investors sold the metal alongside global equities and other commodities on concern the world economy will falter. Immediate-delivery gold traded little changed at $1,739.97 an ounce at 6:44 a.m. in Singapore, after shedding 2.4 percent yesterday, the most in two weeks. The metal, which slumped to a one-month intraday low of $1,722.03 yesterday, is down 4 percent this week, the biggest such drop since the period to May 6. “Gold has been caught up in the overall flight to the exit, but in a normal, sensible world, we should expect to see some support from the fear and trepidation investors are facing,” Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd., wrote in an e-mail.

20110923 1117 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures tumbled to six-month lows, fueled by broad based selling across asset classes. Fears of a global economic recession encouraged investors to reduce risk exposure, a feature that overshadowed fresh export demand and crop uncertainties. Almost 100% of the day's losses are attributable to macro economic factors, said Mike Zuzolo, president Global Commodity Analytics and Consulting. Investors pulled money off the table in risky assets, worried global economic weakness will last longer than expected, he adds. CBOT Nov soy dropped 37 1/2c or 2.8% to $12.83/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures tumble with soybean futures, driven lower by investors reducing exposure in risky commodity markets. Soyoil and soymeal were consumed with the risk off trade theme, as investors reduced positions across broader markets, analyst said. CBOT Dec soymeal was down 2.6% at $335.10/short ton, and Dec soyoil fell 2.5% to 53.94 cents/pound.

Palm drops to one-week lows on cloudy global outlook
KUALA LUMPUR, Sept 22 (Reuters) - Malaysian palm oil dropped to one-week lows after the U.S. Federal Reserve warned of significant risks to the world's largest economy, building on concerns of a recession stalling commodity demand growth.
"Palm oil is finally reacting to a sell-off. The question we should ask is: once the festival season is over, what happens them?" said a trader with a foreign brokerage in Malaysia.

India buys palm olein after Indonesia tax change -trade
KUALA LUMPUR, Sept 22 (Reuters) - India struck deals for 50,000 tonnes of refined, bleached and deodorised (RBD) palm olein from Indonesia in the last week, traders said on Thursday, in an immediate reaction to Jakarta's tax cut on exports of processed oils from September 15.
The world's largest vegetable oil importer bought the RBD palm olein cargoes at $1,100 to $1,120 CIF per tonne for October delivery to meet festival demand, Indonesian and Indian traders said.