Friday, October 14, 2011

20111014 1811 FCPO EOD Daily Chart Study.

FCPO closed : 2906, changed : +62 points, volume : higher.
Bollinger band reading : side way range bound downside biased.
MACD Histrogram : rising, buyer taking exposure.
Support : 2850, 2800, 2770, 2750 level.
Resistance : 2900, 2920, 2950, 2970 level.
Comment :
FCPO closed recorded huge gains with improved volume participation while overnight soy oil closed recorded gains and currently surging higher while crude oil price currently recording big gains.
Higher soy oil and crude oil prices plus anticipation of better CPO exports to be release next Monday pushed FCPO price to test higher ground.
Daily chart formed a wide range up bar candle closed above middle Bollinger band after market opened higher and traded side way range bound followed by second session upwards climb all the way to closed at the high of the day.
Chart study remained suggesting a side way range bound downside 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.

20111014 1727 FKLI EOD Daily Chart Study.

FKLI closed : 1446.5, changed : +7.5 points, volume : lower.
Bollinger band reading : little upside biased with possible pullback correction.
MACD Histrogram : rising, buyer having exposure.
Support : 1440, 1425, 1420, 1400 level.
Resistance : 1445, 1458, 1470, 1485 level.
Comment :
FKLI closed recorded gain with decreasing volume transacted doing 4 points premium compare to cash market that closed little lower. Overnight U.S. markets closed recorded loss and Asia markets traded mixed while European markets currently trading mostly higher.
Market reacted differently to news of Spain's credit rating downgrades by S&P, China reported continue high inflation that may lead to further tightening measure and G20 meeting discussion on dept crisis.
Daily chart formed an up doji bar candle positioned near upper Bollinger band level after market opened 1 tick higher, eased downward recording loss and surged up 14 point within 30 minutes and trade range bound toward the end to closed near the high of the day.
Chart analysis turned to suggesting a little upside biased market development with possible pullback correction.
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.

20111014 1658 Regional Markets EOD Daily Chart Study.

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

20111014 1622 Global Market & Commodities Related News.

Asia Stocks Decline as Spain Downgrade, China Inflation Sow Growth Concern (Bloomberg)
Asian stocks fell, ending a six-day winning streak for the regional benchmark index, after credit- rating downgrades of Spain and European banks fueled concern the region’s debt crisis slow global growth. Chinese companies tumbled as a report showed continued high inflation, lessening the chances of monetary-policy easing in the world’s second-largest economy. BHP Billiton Ltd. (BHP), the world’s No. 1 miner, fell 2.1 percent in Sydney after commodity prices slumped yesterday. Esprit Holdings Ltd. (330), a clothier that gets 83 percent of its revenue in Europe, dropped 1.4 percent in Hong Kong. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 1.5 percent after JPMorgan Chase & Co., the No. 2 U.S. bank by assets, said profit declined.
The MSCI Asia Pacific Index dropped 0.8 percent to 116.77 as of 4:03 p.m. in Tokyo. The gauge climbed 9.7 percent in the previous six days, setting the measure on course for its biggest weekly gain since March after German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged last weekend to deliver a plan to recapitalize Europe’s banks and address Greece’s debt crisis.

Commodity sell-off hits star hedgies' track records
LONDON, Oct 13 (Reuters) - A sharp sell-off in commodity markets in the past few weeks is wreaking havoc with the track records of some of the biggest-name funds in the sector, many of which now languish near the bottom of the $2 trillion industry's performance tables.
Funds like Mike Coleman's Merchant Commodity fund and Willem Kooyker's Blenheim Capital sit on hefty double-digit losses for the year after investors worried about global economic growth recently dumped gold, copper and cocoa for less-risky assets.

US soy dips after 4-day rally, wheat rebounds
SINGAPORE, Oct 14 (Reuters) - Chicago soy fell half a percent, as the market took a breather following a four-day rally, but stayed on track for its biggest weekly gain in almost two years on dwindling stockpiles and firm cash prices.
"We are still bearish on wheat as there is a lot of competition in the market and I don't see any fresh news which can trigger a surge in prices," said Lynette Tan, a grains analyst at Phillip Futures in Singapore.

Malaysia turns to South Asian rice as Thai floods delay cargoes -paper
KUALA LUMPUR, Oct 14 (Reuters) - Malaysia will source rice cargoes from India and Pakistan to meet its import needs after floods swamped farms and mills in Thailand, the world's largest exporter of the grain, the Star newspaper reported on Friday.
It quoted Deputy Agriculture Minister Johari Baharum as saying that while Malaysia has a stockpile of close to one million tonnes of rice that can last more than five months, it was awaiting a consignment from Bangkok where water levels were still rising.

Argentine wheat seen falling to 12.6 mln T-exchange
BUENOS AIRES, Oct 13 (Reuters) - Argentina's 2011/12 wheat harvest is expected to total at least 12.6 million tonnes, down from 15.8 million tonnes last season, the Buenos Aires Grains Exchange said on Thursday in its first estimate of the crop.
Dry weather has hurt this season's wheat crop, which is already being harvested in some northern areas. Argentina is a leading global wheat exporter as well as the No. 3 soybean exporter.

China makes big U.S. corn buy, more sales seen
CHICAGO/WASHINGTON, Oct 13 (Reuters) - The U.S. government on Thursday confirmed the sale of 900,000 tonnes of U.S. corn to China, signaling the country's emergence as a major importer that could prove to be explosive for grains markets.
It was the second largest sale of U.S. corn in a single day to China and was believed to be part of a sale reported by Chinese traders on Wednesday, traders said.

Guatemala, El Salvador coffee exports rise in season
GUATEMALA CITY, Oct 13 (Reuters) - Coffee exports from Guatemala and El Salvador rose in the 2010/11 harvest compared to the previous season, as farmers took advantage of higher prices, the national coffee associations of both countries said on Thursday.
Exports from El Salvador soared to 1.73 million 60-kg bags in the 2010/11 crop year, which ended last month. That amount was 74 percent more than were shipped in the 2009/10 cycle, while Guatemala saw exports increase by 6 percent during the same period.

Brazil cane growers see "small" 2012/13 crop
SAO PAULO, Oct 13 (Reuters) - Brazil's 2012/13 center-south cane crop will be similar to that being harvested now as bad weather over the past few months hurt crop development, the head of Brazil's main cane growers group said on Thursday.
The center-south, which accounts for 90 percent of Brazil's cane production, posted its first drop in output in 11 years this season due mainly to unfavorable weather conditions since 2009 and poor yields from aging cane fields.

EU clears 218,000 tonnes wheat exports this week
PARIS, Oct 13 (Reuters) - The European Union this week granted export licences for 218,000 tonnes of soft wheat, taking the total since the beginning of the 2011/12 (July-June) season to 4.1 million tonnes, official data showed on Thursday.
The total so far this season compared with 7.1 million tonnes of export licences cleared by the same stage in 2010/11.

Brent crude firms above $111; trade eyes U.S. data
SINGAPORE, Oct 14 (Reuters) - Brent crude rose further above $111, heading for a second-straight weekly increase, as investors looked to more data from top oil consumers United States and China for cues on economic health and fuel demand.
"Prices are consolidating, on a mix of positive and negative news for oil, as the market looks for a direction to go," said Jeremy Friesen, a Hong Kong-based analyst at Societe Generale, referring to the recent restart of Libyan oil exports and concern global economic growth will falter.

Japan utilities LNG usage up in Sept
TOKYO, Oct 14 (Reuters) - Japan's 10 utilities consumed 4.36 million tonnes of liquefied natural gas (LNG) in September, compared with 3.54 million tonnes a year earlier, reflecting their need to offset a fall in nuclear power generation to a record low by burning more gas, industry data showed on Friday.
A massive earthquake and tsunami on March 11 that hit northeast Japan triggered a crisis at the Fukushima Daiichi nuclear plant, forcing utilities to burn more fossil fuels to make up lost output from reactors either hit by the March disaster or unable to restart for a prolonged period amid safety concerns.

Copper rises but Spain fears may limit gains
SHANGHAI, Oct 14 (Reuters) - London copper edged higher , backed by short covering, limited restocking by Chinese consumers and positive sentiment over China's latest inflation data. 
"It's a technical rebound today, but there should still be a downtrend for copper in the longer term as credit remains very tight in China despite talks of Beijing holding its tightening policy for now," said Dongzheng Futures trader Du Xiao Hua.

Japan Sept aluminium stocks down 4.1 pct m/m
TOKYO, Oct 13 (Reuters) - Aluminium stocks held at three major Japanese ports at the end of September fell 4.1 percent during the month due in part to higher demand from the automobile sector, but overall demand lacks strength, trading house Marubeni Corp  said on Thursday.
Aluminium stocks at these ports fell by 9,800 tonnes to 231,400 tonnes as of the end of September from 241,200 tonnes a month earlier, said Marubeni, which collects data from the key ports of Yokohama, Nagoya and Osaka.

Gold flat after Spain downgrade; G20 eyed
SINGAPORE, Oct 14 (Reuters) - Gold traded flat but was headed for its biggest weekly gains in more than a month, shrugging off the credit rating downgrade of Spain ahead of a G20 meeting whose agenda will be dominated by the euro zone debt crisis.
"The bar is very high for Europe credit news to be considered 'bad' beyond what is priced in," said a Singapore-based trader.

India gold ETF demand likely to explode - WGC
MUMBAI, Oct 13 (Reuters) - Demand for gold exchange traded funds (ETF) in India is likely to "explode" as investors get accustomed to "click-and-park" mode of investing, shying away from sagging stock markets and as high inflation eats into bank savings, a trade body head told Reuters on Thursday.
"Clearly people are seeing convenience in the form of ETF, going through the same broker which he has for equities," said Ajay Mitra, managing director - India and the Middle East, World Gold Council (WGC).

JPMorgan trims commodities trading risk in Q3
NEW YORK, Oct 13 (Reuters) - JPMorgan  trimmed its commodities trading risk in the third quarter while upping its risk in currencies and bonds, as heightened volatility across markets reduced the attractiveness of riskier assets like raw materials.
JPMorgan Chase & Co, the first major U.S. bank to announce results for the period, reported lower third-quarter profits, including a decline in quarterly revenues in its Fixed Income Markets business, which includes commodities.

COLUMN-China commodity trade has something for everybody: Clyde Russell
SINGAPORE, Oct 13 (Reuters) - The marvellous, or vexing, thing about data and statistics is that they can generally be interpreted to fit your preferred narrative, and China's commodity trade numbers for September show this well.
For the bulls there was an 11.8 percent jump in copper imports from the prior month to the highest since May 2010, the biggest iron ore imports since January, slightly higher crude oil imports on a barrels-a-day basis and a gain in coal purchases.  

European aluminium premiums soften on 2012 caution
LONDON, Oct 13 (Reuters) - Falling European aluminium premiums reflect concerns over a potential 2012 economic slump, but German industrial demand and financing deals are buttressing demand for now, traders said on Thursday.
Traders noted a divide between countries in the north versus the south of the European Union. German industry has kept orders ticking over, while consumers in the debt-plagued south have preferred to de-risk and de-stock as 2011 business begins to wind down.

Pay protest paralyses Zambia Chinese copper plant
LUSAKA, Oct 13 (Reuters) - Production at Zambia's Chinese-owned Chambishi Copper Smelter ground to a halt on Thursday due to a wage strike that started a day earlier, labour sources said.
In a separate incident, about 500 workers seeking higher wages walked off the job on Thursday at Zambia's largest cobalt plant, Chambishi Metals, which is majority owned by Kazak miner ENRC .

Japan smelters plan 5.7 pct rise in H2 copper output y/y
TOKYO, Oct 13 (Reuters) - Japan's copper output will return to pre-quake levels in the October-March half-year, rising 5.7 percent from a year earlier to 762,000 tonnes as manufacturers recover from the March 11 disaster while demand in emerging markets remains solid.
Zinc smelters, which had lost nearly 70 percent of their output capacity after the quake due to damage to facilities, plan 311,600 tonnes of output in October-March, up 16.4 percent from a year ago.

China Sept copper imports up, may rise further in Oct
HONG KONG, Oct 13 (Reuters) - China's monthly imports of unwrought copper and semi-finished copper products rose 11.8 percent in September to a 16-month high and arrivals may rise further in October as importers take more spot metal on improved margins.
The data came as global miner Rio Tinto   forecast continued strong commodities demand in remarks that could allay investor fears over the economic vulnerability of its biggest market, China.

No recent iron ore shipment to China cancelled-BHP
PARIS, Oct 13 (Reuters) - Global miner BHP Billiton  has not had any iron ore shipment to China cancelled or renegotiated in the last few weeks, the company's Chief Executive Ferrous and Coal said on Thursday.
Concern had risen in markets that Chinese steel mills were seeking to postpone shipments or renegotiate fourth-quarter iron ore contracts as spot prices fell to their lowest since November 2010, traders said. "We haven't had any shipment to China cancelled or renegotiated," Marcus Randolph told reporters during the annual World Steel Association conference.

ArcelorMittal mining arm courts external customers
PARIS, Oct 13 (Reuters) - The mining division of ArcelorMittal  is aiming to increase raw material sales to other steelmakers as part of its new role as a standalone business within the world's largest steel group, a company executive said on Thursday.
ArcelorMittal has stepped up mining investments in an effort to secure raw material supply, and the company published for the first time separate results for its mining operations as part of its first-quarter earnings statement this year.

China seeks iron ore contract tweaks as prices fall
SINGAPORE, Oct 13 (Reuters) - Chinese steel mills are seeking to postpone iron ore shipments or renegotiate fourth-quarter contracts as spot prices fall to their lowest level since November 2010, traders said on Thursday.
China is the world's biggest buyer of iron ore, a major money maker for miners Vale , Rio Tinto   and BHP Billiton   which together control around two thirds of the global seaborne market. 

METALS-Copper rises but Spain fears may limit gains
SHANGHAI, Oct 14 (Reuters) - London copper edged higher on Friday, backed by short covering, limited restocking by Chinese consumers and positive sentiment over China's latest inflation data. 
But fears over a rating downgrade of Spain are expected to keep gains in check. 
Three-month copper on the London Metal Exchange  rose 1.2 percent to $7,396.50 a tonne by 0333 GMT, after dropping 2.9 percent in the previous session.

PRECIOUS-Gold flat after Spain downgrade; G20 eyed
SINGAPORE, Oct 14 (Reuters) - Gold traded flat on Friday but was headed for its biggest weekly gains in more than a month, shrugging off the credit rating downgrade of Spain ahead of a G20 meeting whose agenda will be dominated by the euro zone debt crisis.
Ratings agency Standard and Poor's downgraded the long-term credit rating of Spain by one notch on Friday, knocking the euro down by a third of a U.S. cent as the move followed hard on the heels of a similar downgrade by Fitch last week.

FOREX-Euro dips but poised for best week since Jan
SINGAPORE, Oct 14 (Reuters) - The euro dipped on Friday but hovered above an intraday low hit after S&P cut Spain's credit rating, and was on track for its biggest weekly rally since January after getting lifted by a flurry of short-covering.     
The euro slipped 0.1 percent to $1.3770 , having trimmed its losses after dipping to as low as $1.3723 following S&P's downgrade of Spain's credit rating to AA-minus. The move  mirrored last week's downgrade of Spain by Fitch.

20111014 1110 Global Market & Commodities Related News.

GLOBAL MARKETS-China data weighs on stocks, copper
NEW YORK, Oct 13 (Reuters) - Global stocks fell and oil and copper declined on Thursday after soft Chinese data drove worries about the strength of world economy.
"Over the last week we have seen a major short squeeze in a number of risk-sensitive assets," said Jens Nordvig, head of G10 currency strategy at Nomura in New York.

Asian Stocks Decline on Europe Downgrades (Bloomberg)
Asian stocks fell, ending a six-day winning streak for the region’s benchmark index, after credit- rating downgrades of Spain and European banks fueled concern the region’s debt crisis will hurt Asian economies and earnings. Esprit Holdings Ltd., a clothier that gets 83 percent of its revenue in Europe, dropped 0.5 percent in Hong Kong. Honda Motor Co., Japan’s second-largest carmaker by market value, lost 2.3 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 1.2 percent after JPMorgan Chase & Co., the second-largest U.S. bank by assets, said profit declined. BHP Billiton Ltd. (BHP), the world’s biggest mining company, fell 2.1 percent in Sydney after commodity prices slumped yesterday.
The MSCI Asia Pacific Index dropped 0.7 percent to 116.98 as of 10:51 a.m. in Tokyo. The gauge climbed 9.7 percent in the previous six days, setting the measure on course for its biggest weekly gain since March after German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to deliver a plan to recapitalize Europe’s banks and address Greece’s debt crisis.

COMMODITIES-Copper, oil lead commodities decline on China growth fears
KUALA LUMPUR, Oct 13 (Reuters) - Copper and crude oil fell in Asian trading on Thursday after China's trade surplus narrowed, raising concerns about growth in the world's second-largest economy at a time when the global outlook remains uncertain.
"The world economy isn't looking very rosy," said Brynjar Bustnes, an analyst at JPMorgan in Hong Kong.

Brent snaps six-day rally as China imports fall
NEW YORK, Oct 13 (Reuters) - Brent crude snapped six sessions of gains on Thursday, trading slightly lower after data showed further declines in oil demand from No. 2 consumer China.
"There is a squeeze going on ahead of November Brent crude's expiry," said Stephen Schork, editor of the Schork Report in Villanova, Pennsylvania.

Natural gas ends higher after 11-1/2-month low
NEW YORK, Oct 13 (Reuters) - U.S. natural gas futures ended up about 1 percent on Thursday in some short-covering ahead of cooler weather, reversing losses that sent the front-month contract to its lowest in nearly a year early in the session.
Government data showed a much larger-than-expected weekly build to inventories, pressuring the contract, but traders said longer-term forecasts calling for below-normal temperatures for much of the country helped boost prices late in the day.

Euro Coal-Prices drop 50 cents as oil falls
LONDON, Oct 13 (Reuters) -     Prompt physical coal prices dropped again by around 50 cents a tonne on Thursday as coal echoed oil's sharper fall but to a much lesser extent. Several key players were absent from the market on Thursday and few bids, offers or trades were seen.
Coal swaps, however, saw a steeper drop of over $1.75 in line with oil.

20111014 1048 Malaysia Corporate Related News.

Packet One Networks (P1) has signed an agreement with  Telekom to use  the national telecommunication company’s high speed broadband network in a  product offering that it plans to roll out in the first quarter next year. The  agreement will give P1 access to 1.3m homes covered by the HSBB.  P1 CEO  Michael Lai said the 10-year agreement would allow the  company to offer its 4G services, coupled with fibre optics. The product  might include IPTV and video-on-demand services. Telekom group CEO,  Datuk Seri Zamzamzairani said UniFi has  reached over 170,000 installations. Telekom’s foreign shareholding had  increased to 17% from less than 10%. (Star Biz)

The Genting group has taken another step forward in its US$3.8bn Resorts  World Miami development in Florida, the US, after reaching a deal to take over  the Omni Centre, according to a report by the Miami Herald. An agreement was  reached between Argent Ventures, the owner of the Omni Center, and the  Genting group. "Terms of any agreement between Genting and Argent have not  been released," it said. The Miami Herald report quoted Resorts World Genting  general counsel Jessica Hoppe as saying, "If all goes according to plan, Genting  should have title to the property by Nov 7." (Starbiz)

The slowdown in property sales in the country is not a sign of a property bubble,  said Housing and Local Government Minister Datuk Seri Wira Chor Chee  Heung. "I do not think so because we (Malaysia) still have not reached that  stage. If this is the sign (of property bubble) why are developers jumping in to  continue to build?" he said. He explained that the current slowdown in the property market is due  to the policy measures taken by the government to curb speculation.  "Property prices are still stable and no asset bubbles are seen,"  he  added. Chor said the government has issued more licences for developers to  sell and advertise their products this year. (Sun)

Integrated media group Media Prima Bhd has announced several key senior  management appointments.  In a statement today, it said Mohammad Azlan Abdullah has been  appointed chief operating officer of The New Straits Times Press (M)  Bhd (NSTP) and designated successor to Datuk Anthony Firdauz  Bujang as NSTP chief executive officer. Anthony will end his tenure as  NSTP chief executive officer in December after serving 12 years with  Media Prima. Other appointments include Abdul Jalil Hamid as NSTP group  managing editor. He will succeed Datuk Zainul Ariffin Mohamd Isa,  who will assume two new roles, as NSTP e-media managing editor and  Media Prima's New Media Division head. (Bernama)

Jerneh Asia’s proposal to buy a Sabah-based developer is said to be out of the  window as definitive terms could not be agreed upon. Both Jerneh and Generasi  Cipta, the controlling shareholder of Sagajuta (Sabah) have mutually agreed to  terminate discussions. It could not be immediately ascertained whether Jerneh  after selling its 80% stake in Jerneh Insurance is eyeing any other acquisition or  will continue with its earlier stated plans to return all cash to shareholders and  wind up the company. It illustrated that a capital repayment could be between  RM1.36 and RM1.41 per share. (Financial Daily)

Malaysian Airline (MAS) says it is enjoying a 30% reduction of its annual  cost of passenger revenue accounting data processing after outsourcing the  operation to the commercial arm of the Emirates Group IT,  Mercator.  Mercator has also been able to achieve on-time weekly and monthly closes,  giving MAS faster and more accurate revenue data. (Bernama)

Berjaya Sports Toto (BToto) emerged as the overall winner and also a winner  in the service sector category at the annual KPMG Shareholder Value Award  (SVA).  British American Tobacco won the SVA Exemplary Award, one of  the newly introduced awards to recognise consistent performance over the years.  "It is a great honour to win (in this overall category) this year. In the past, we  had won in our own segment a number of times, and of course we looked  forward to winning in the overall category," said BToto executive director  Vincent Seow. When asked about the adverse economic outlook, Seow said the  numbers forecasting industry would remain resilient in the face of a slowing  economy as proven in 1997, 2001 and 2008. (Financial Daily)

Oversea-Chinese Banking Corp Ltd of Singapore (OCBC) has emerged as a  substantial shareholder in WCT Bhd after buying shares in the company from  the open market. OCBC now has a 5.34% stake in WCT. (BT)

Felda Global Ventures Holdings Sdn Bhd plans to hire investment banks  by as early as next week to help arrange its initial public offering, said its group  president Datuk Sabri Ahmad. "We will hire them as soon as possible, perhaps  by next week," Sabri said at his office here yesterday. The company plans to hire  as many as two Malaysian investment banks. "We will also be hiring one or two  foreign merchant bankers." Felda Global is the commercial arm of the Federal  Land Development Authority (Felda), the world's largest estate owner. (BT)

The privatisation of  Eng Teknologi  has been postponed following the  disruption of its Thai operations since last Saturday due to the floods.  YTK  Capital sought to extend the due diligence and funding confirmation period by  45 days.  The Thai operations contribute about 40% to group revenue for FY10  ended Dec 31. (Financial Daily)

Nestle (M) Bhd plans to increase prices of some of its dairy products by as  early as next month. The price increase could be between 10-30%. The rationale  for the price increase is because of the floods in “Thailand, which have  drastically increased the cost of raw materials, production and transport.  Industry players say a price increase by Nestle will surely be followed by rivals  such as  Fraser & Neave Holdings Bhd which  has shut down its factory  operations in Thailand. (BT)

The US$8bn (RM25bn) Kuala Lumpur International Financial District,  to be jointly developed by 1MDB and Abu Dhabi’s Mubadala Development will get off the ground early next year. The project will be developed in phases  on a 30.35ha piece of land in the Imbi area fronting Jalan Tun Razak. The first  phase would comprise a tower and several buildings. (Bernama)

The Rubber Industry Smallholders Development Authority (Risda) has  zoomed in on Sarawak as the main region for its rubber replanting programme  from next year. Out of the planned 28,000ha nationwide to be replanted next  year, 10,000ha or more than 35% are in Sarawak. About 4,000ha are planned in  Sabah with the remaining 14,000ha replanting for the peninsula. Sarawak Risda  director Sopian Abu Bakar said Sarawak had been allocated RM53m, the biggest  sum for any state, to fund the replanting programme next year due to its great  potential. (Star Biz)

Ecofuture Bhd  announced Bursa Malaysia Securities has rejected the  company’s further appeal for an extension of time up to 31 December 2011 to  submit the regularisation plan. The Company will be removed from the official  list of the Bursa Securities on Monday, 17 Oct 2011. (BMSB)

Envair Holding Bhd's  board of directors  together with the key  management are deliberating on  the viability of the existing business of the  company and are considering options available to improve its long term and  sustainable future growth. As such, the Company is currently in talks with few  potential partners for joint collaboration to venture into the oil and gas services  sector. (BT)

Parkson Retail Group is in talks with banks to increase a loan taken out in  2010 to US$400m (RM1.26bn) from US$250m. The parent company, Parkson  Holdings operates department stores in China, Vietnam and Malaysia.  DBS  Bank, JPMorgan, Maybank, Natixis and Standard Chartered are arranging the  facility. (Bloomberg)

Pavilion REIT, part owned by  Qatar Investment Authority as well as  Malton’s chairman  Desmond Lim was looking to raise RM800m from a  planned floatation. The Pavilion REIT would be Malaysia’s fourth largest share  sale this year. The news may have highlighted  Malton’s undemanding  valuations which shares rose 7.8% and was the fourth most actively traded  counter yesterday. (Financial Daily)

Consumer: Indochina floods may force Malaysia to seek rice elsewhere. Some 1.5m hectares of the regions famous padi fields including Thailand, Vietnam, Cambodia and Laos have been affected and this has prompt Malaysia, which depends on these countries for 30% of its rice supply to look towards other nations for the precious commodity. (Source: The Star)

Retail: Mydin targets 16 low-price marts nationwide in 2012. Wholesale and retail giant Mydin has set its sight on opening 16 mini market outlets called "Kedai Rakyat 1Malaysia" (KR1M) in over 15 locations from Perlis to Johor and the East Coast. (Source: Malaysian Reserve)

Healthcare: PHB in property deal with Gleneagles. With a Gross Development Value (GDV) of RM1b, the first phase will be a RM138m extension project for the Gleneagles Hospital in Ampang. Covering a gross floor area of 300,000 sq ft, the extension project will consist of a 10-floor healthcare facility that is due to be completed within 3 years. The two-phase development will also include hotel facilities and an office building. (Source: The Star)  

20111014 1040 Local & Global Economic Related News.

The  Domestic Trade, Cooperatives and Consumerism Ministry will  propose to the Cabinet, to open the running of  Kedai Rakyat 1Malaysia (KR1M) to the public. Its minister Datuk Seri Ismail Sabri Yaakob said the  proposal was to provide an opportunity to the public, including sundry-shop  operators, to run these shops themselves without the involvement of Mydin as  the management.  "The committee has so far agreed with the idea but we will discuss the  matter at the Cabinet meeting today for approval," he said.  The ministry was studying the terms and conditions to ensure the  KR1M policy would not be affected, he added. (Bernama)

Asean is on track to realise the Asean Economic Community (AEC) by 2015  despite the many challenges, Minister of International Trade and Industry,  Datuk Seri Mustapa Mohamed said. The 10-nation grouping has to-date met its  commitments in goods, services and investment, and has implemented 83.8% of  the measures under phase I of the AEC Blueprint for the period of 2008-09 and  64.1% of the measures under phase II (2010-11). Malaysia implemented 103 out  of 110 measures with an implementation rate of 93.6%, he noted. (Bernama)

Asia: South Korea holds rates, BOJ talks stimulus on world risks
The Bank of Korea kept interest rates on hold and the Bank of Japan said its board had discussed more monetary easing, in further signs policy makers are moving to protect growth as the global economy weakens. Governor Kim Choong Soo and his board held the benchmark seven-day repurchase rate at 3.25% for the fourth straight month, the central bank said yesterday. In Japan, records of a BOJ meeting last month said “a few” members discussed extra stimulus. Asian policy makers are bolstering efforts to defend their economies from weakening growth in the US and Europe, with Indonesia’s central bank unexpectedly cutting borrowing costs and the Philippines unveiling a stimulus plan this week. (Bloomberg)

Some 10 Malaysian companies have been found affected by severe flooding  in Thailand. International Trade and Industry Minister Datuk Seri Mustapa  Mohamed said most of them were involved in the automotive and electrical and  electronic sectors. "Those who are affected operate in the flooded Ban Wa,  Rojana and Navanakorn industrial parks," he said. (Bernama)

Real estate sector is expected to expand by 6.8% this year and 5.7% next year,  despite a challenging external economic environment.  Second Finance  Minister Datuk Seri Ahmad Husni Hanadzlah said the domestic property  sector is expected to maintain its growth momentum as the 2012 Budget is  sufficiently accommodative to mitigate any systematic disruption to the  economy.  He also said that the business services sector will experience similar  growth of 6.8% this year and 5.7% next year.  The future of real estate development in the country is bright as the  government plans to build a public transportation system and establish  feeder services in the next 10 years, he added. (Bernama)

The  Malaysian Institute of Economic Research (MIER) has revised its  GDP growth forecast for 2011 to 4.6% from 5.2% previously. Its executive  director, Dr Zakariah Abdul Rashid, attributed the downward revision to weaker  export growth due to increasing regional and global economic uncertainties. However, the implementation of Economic Transformation Programme  (ETP) projects and handouts from the 2012 Budget, designed to cushion  the higher cost of living, will boost domestic demand, he said. The MIER also cut its 2012 GDP growth forecast to 5.0% from 5.5%.  Inflation is likely to moderate to 3.1% this year before trending lower  to 2.7% in 2012. Monetary policy will remain fairly accommodative to support growth  and the overnight policy rate is anticipated to stay at 3.0% in 2011 to  2012. The MIER expects the ringgit to hover around the 3.20 level per  US$ this year before appreciating to 3.10 in 2012. (Bernama)

The US$8bn (RM25.04bn)  Kuala Lumpur International Financial  District (KLIFD), to be jointly developed by 1Malaysia Development Bhd  (1MDB) and Abu Dhabi’s Mubadala Development Corp, will get off the ground  early next year. “The master plan is close to completion. We are working closely  with City Hall to get the details ironed out,” said its CEO Shahrol Azral Ibrahim  Halmi. Over the next six months, 1MDB will intensify talks with prospective  investors and developers, he said without revealing details. (Financial Daily)

The Malaysian Franchise Association (MFA) expects to see 25-30% growth in  the franchise industry next year onwards, helped by the tax rebate incentive  for franchise fee announced during 2012 Budget. Over the last decade, the local  franchise industry has been growing at a pace of 10-15% a year, said MFA  chairman Abdul Malik Abdullah. (BT)

The US trade deficit was little changed at a four-month low of US$45.6bn in  Aug (-US$44.8bn in Jul) as near- record exports helped keep the economy  expanding. Economists projected a US$45.8bn deficit.  (Bloomberg)

US initial jobless applications decreased by 1,000 to 404,000 in the week  ended 8 Oct (401,000 in the prior week), Labor Department figures showed.  Economists forecast 405,000 claims. The number of  people continuing to  collect jobless benefits dropped by 55,000 to 3.67m in the week ended 1 Oct,  the fewest since mid Apr. (Bloomberg)

A widening  gap between rich and poor is reshaping the  US economy,  leaving it more vulnerable to recurring  financial crises and less likely to  generate enduring expansions. Left unchecked, the decades-long trend toward  increasing inequality may condemn Wall Street to a generation of unimpressive  returns and even shake social stability, economists and financial-industry  executives say. (Bloomberg)

The  US Congress approved  free- trade agreements with  South Korea,  Colombia and  Panama, bringing an end to years of stalemate and offering  what supporters said was the biggest opportunity for  exporters in decades.  The South Korea deal removes duties on almost two-thirds of American farm  exports, and phases out tariffs on more than 95% of industrial and consumer  exports within five years. (Bloomberg)

US: Four-month low trade gap may help growth
The US trade deficit was little changed at a four-month low of USD45.6bn in August as near- record exports helped keep the economy expanding. Shipments abroad valued at USD177.6bn were the second-highest ever, the Commerce Department said in Washington. Growing sales overseas, particularly to economies in Asia and Latin America, are underpinning manufacturers like Alcoa Inc. Those gains may assist in sustaining the expansion by counterbalancing the slowdown in US demand that was reflected in a third consecutive drop in imports. (Bloomberg)

EU: Slovaks ratify Euro bailout fund, finish approval process
Slovakia approved Europe’s enhanced bailout fund, completing ratification across the 17 euro countries as the region’s leaders prepare for a summit. Lawmakers voted 114 to 30 with three abstentions to support the European Financial Stability Facility in the second attempt this week after parliament failed to approve the measures on 11 Oct. Enhancing the powers of the EFSF, the temporary bailout fund, is crucial for adopting the key element in the strategy to prevent contagion from the debt crisis that has spread from Greece to other countries. (Bloomberg)

UK: Trade deficit narrows as exports increase to record
The UK trade deficit on goods narrowed in August as exports rose to a record and imports declined. The goods-trade gap shrank to GBP7.77bn (USD12.2bn) from GBP8.15bn in July, the Office for National Statistics said yesterday. Exports rose 0.6% to GBP25.5bn, the highest since current records began in 1998. The Bank of England restarted asset purchases last week amid threats to the economy and the financial system from the debt turmoil in Europe, Britain’s biggest trading partner.(Bloomberg)

The  European Central Bank said in its monthly report that while the  economy is facing “intensified downside risks,” inflation may remain above its  2% ceiling for the rest of 2011. (Bloomberg)

Risks to Europe’s  bank industry are “rapidly” mounting as the fallout of  Greece’s  debt crisis engulfs the whole region, said Martin Andersson,  director- general of Sweden’s Financial Supervisory Authority. (Bloomberg)

Bank of Korea kept its benchmark interest rate unchanged at 3.25%,  marking the fourth month that rates have been on hold. The decision was in line  with market expectations. (Bloomberg)

The damage estimate from Thailand’s floods was revised up from THB130bn  or 1-1.3% pt, to THB156.7bn or 1.3-1.5% of GDP according to the University of  Thai Chamber of Commerce. (The Nation)

Severe floods as well as global economic uncertainties pressured the  Thai  consumer confidence index in Sept. The index dropped for two consecutive  month from 83.4 pt in Aug to 81.8 in Sep. The University of Thai Chamber of  Commerce which conducted the confidence poll attributed the lower confidence  to many negative factors from lower economic growth forecast, a sharp plunge  in the Stock Exchange of Thailand Index, a higher cost of living, and prolonged  floods. (The Nation)

Eight industrial estates and parks in  Thailand  are in danger of being  flooded, warns Industry Minister Wannarat Channukul. They include Bang  Chan and Lad Krabang in Bangkok, Bang Phli and Bang Poo in Samut Prakan, Kaeng Khoi in Saraburi, Hi-Tech in Ayutthaya, and Navanakorn and  Bangkradee in Pathum Thani. (Bangkok Post)

China’s Business Climate Index fell to 133.4 in 3Q11 (135.6 in 2Q11), while  the  Entrepreneur Confidence Index  decreased to 129.4 in 3Q11 (132.4 in  2Q11). (Bloomberg)

China exports rose 17.1% yoy in Sep (24.5% in Aug), while imports expanded  20.9% yoy (30.2% in Aug). The  trade surplus was US$14.51bn, the  smallest  since May. Economists expected exports to grow 20.5% yoy and imports to  increase 24.2% yoy. (Bloomberg)

China’s passenger-car sales rose 8.8% yoy to 1.32m units in Sep (+7.3% in  Aug). Total sales of vehicles including buses and trucks rose 5.5% yoy to 1.65m  units in Sep. (Bloomberg)

India’s wholesale prices of agricultural products gained 9.32% yoy in  the week ended 1 Oct (9.41% the previous week). (Bloomberg)

20111014 1003 Global Market Related News.

G-20 Weighing Boosting IMF Lending Power (Source: Bloomberg)
Nations from China to Brazil are considering increasing the International Monetary Fund’s lending resources to help stem the European debt crisis, Group of 20 and IMF officials said. Policy makers are discussing an expansion of the IMF’s firepower as part of a global G-20 agreement next month in Cannes, France, according to three officials, who declined to be named because the discussions are not public. Talks are in preliminary stages as potential contributors wait to see what measures Europeans take to end the debt turmoil at an Oct. 23 summit, they said. IMF Managing Director Christine Lagarde told member countries last month that her current $390 billion war chest may not suffice to meet all loan requests should the global economy worsen. Additional funds could be used to help shelter Italy and Spain with precautionary lending, the people said.

Asian Stocks Decline as Spain Downgrade Deepens Global Recovery Doubts (Source: Bloomberg)
Asian stocks fell, ending a six-day winning streak for the region’s benchmark index, after credit- rating downgrades of Spain and European banks fueled concern the region’s debt crisis will hurt Asian economies and earnings. Nissan Motor Co., a carmaker that gets about 80 percent of its sales overseas, slid 1.9 percent in Tokyo. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 0.6 percent after JPMorgan Chase & Co., the second-largest U.S. bank by assets, said profit declined. BHP Billiton Ltd. (BHP), the world’s biggest mining company, lost 2.3 percent in Sydney after commodity prices slumped yesterday. The MSCI Asia Pacific Index dropped 0.6 percent to 117.02 as of 9:44 a.m. in Tokyo. The gauge climbed 9.7 percent in the previous six days, with stocks advancing this week after German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged to deliver a plan to recapitalize Europe’s banks and address Greece’s debt crisis.

U.S. Economy: Four-Month Low Trade Gap May Help Growth (Source: Bloomberg)
The U.S. trade deficit was little changed at a four-month low of $45.6 billion in August as near- record exports helped keep the economy expanding. The shortfall compared with a median projection of $45.8 billion in a Bloomberg News survey of economists. Shipments abroad valued at $177.6 billion were the second-highest ever, the Commerce Department said in Washington. Two other reports today signaled Americans remain pessimistic as the labor market shows few signs of improving. Growing sales overseas, particularly to economies in Asia and Latin America, are underpinning manufacturers like Alcoa Inc. (AA) Those gains may assist in sustaining the expansion by counterbalancing the slowdown in U.S. demand that was reflected in a third consecutive drop in imports.

Consumer Comfort Hovered Near Low Last Week (Source: Bloomberg)
Consumer confidence hovered last week near a record low as Americans turned more pessimistic about the state of the U.S. economy. The Bloomberg Consumer Comfort Index fell to minus 50.8 in the week ended Oct. 9 from 50.2 the prior period. It was the fourth consecutive reading lower than minus 50, something that has happened just three previous times in its 26-year history. The outlook for spending may dim as the economic recovery fails to generate enough jobs to reduce unemployment and wage gains trail inflation. Policy makers face growing discontent as political independents, homeowners, full-time workers and even the highest earners are among groups whose views are souring.

Obama: Trade Deal Shows Parties Can Cooperate (Source: Bloomberg)
President Barack Obama said congressional passage of a free-trade agreement with South Korea will help create 70,000 U.S. jobs and shows Republicans and Democrats can cooperate on measures to improve the economy. The trade deal “shows that we are happy to work with Republicans where they are willing to put politics behind the interests of the American people and come up with proposals that are actually going to create jobs,” Obama said in a joint news conference with South Korean President Lee Myung-bak. Obama challenged Republicans, who control the U.S. House, to back his $447 billion jobs plan, which he said will be brought to Congress piecemeal after the Senate blocked consideration of the full plan on Oct. 11.

Growing Income Gap May Leave U.S. Vulnerable (Source: Bloomberg)
A widening gap between rich and poor is reshaping the U.S. economy, leaving it more vulnerable to recurring financial crises and less likely to generate enduring expansions. Left unchecked, the decades-long trend toward increasing inequality may condemn Wall Street to a generation of unimpressive returns and even shake social stability, economists and financial-industry executives say. “Income inequality in this country is just getting worse and worse and worse,” James Chanos, president and founder of New York-based Kynikos Associates Ltd., told Bloomberg Radio this week. “And that is not a recipe for stable economic growth when the rich are getting richer and everybody else is being left behind.”

Initial Jobless Claims Decrease to 404,000 (Source: Bloomberg)
The number of Americans filing claims for jobless benefits was little changed last week, showing the labor market is making scant progress. Applications for unemployment insurance payments decreased 1,000 in the week ended Oct. 8 to 404,000, Labor Department figures showed today. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls dropped to the lowest level in six months. While U.S. employers hired more workers than anticipated in September, elevated firings signal companies may be slower to expand payrolls in the next few months. Political gridlock in Washington, with the Senate this week blocking the advance of President Barack Obama’s jobs plan, is another sign that any improvement on the job front will be slow to develop.

Congress Approves Biggest U.S. Trade Agreement Since 1994 (Source: Bloomberg)
The U.S. Congress cleared free-trade agreements with South Korea, Colombia and Panama, bringing an end to years of stalemate and offering what supporters said was the biggest opportunity for exporters in decades. The bills go to President Barack Obama, who spent two years seeking to broaden Democratic support for pacts revised from initial agreements reached by his predecessor. The South Korea deal, the biggest for the U.S. since the North American Free Trade Agreement in 1994, removes duties on almost two-thirds of American farm exports, and phases out tariffs on more than 95 percent of industrial and consumer exports within five years. Yesterday’s step may diminish concern that the U.S. will turn to protectionism amid unemployment that exceeds 9 percent and an Oct. 11 Senate vote designed to punish China for an undervalued yuan. The approval may also give impetus to Obama’s trans-Pacific trade initiative, which Japan, the world’s third- largest economy, is considering joining.

U.S. Stocks Drop as JPMorgan Leads Banks Lower; Chipmakers, Yahoo Advance (Source: Bloomberg)
U.S. stocks fell, paring gains from the best Standard & Poor’s 500 Index rally over seven days since 2009, amid lower earnings from JPMorgan Chase & Co. (JPM) and concern equities rose too much on optimism about Europe’s debt crisis. Stocks trimmed losses as chipmakers in the S&P 500 added 1.9 percent and Yahoo! Inc. rose as much as 3.8 percent after people with knowledge of the matter said KKR & Co. and Blackstone Group LP are among firms considering bids for the company. JPMorgan dropped 4.8 percent after reporting a 33 percent profit decline, excluding a $1.9 billion accounting benefit, as investment banking and trading income slumped. The S&P 500 retreated 0.3 percent to 1,203.66 at 4 p.m. New York time, paring its loss from 1.4 percent. It had rebounded 9.8 percent from a 13-month low on Oct. 3 through yesterday. The Dow Jones Industrial Average decreased 40.72 points, or 0.4 percent, to 11,478.13 today. The Nasdaq Composite Index climbed 0.6 percent, rallying a fourth straight day.

Chinese Banks’ Bad Debt May Hit 60% of Equity Capital, Credit Suisse Says (Source: Bloomberg)
Loan losses at Chinese banks may climb to levels equivalent to 60 percent of their equity capital as real-estate companies and local governments fail to repay debts, according to Credit Suisse Group AG. Nonperforming loans will probably increase to 8 percent to 12 percent of total debt in the “next few years,” causing losses amounting to 40 percent to 60 percent of Chinese banks’ equity, Hong Kong-based analysts led by Sanjay Jain at Credit Suisse wrote in a research report dated Oct. 12. Jain cut 2012 and 2013 profit estimates by as much as 25 percent and maintained an “underweight” rating on the industry.
Chinese bank stocks have tumbled this year, sending the MSCI China Financials Index down as much as 43 percent, amid growing concern that slower economic growth will spur bad debts after a three-year credit boom. The retreat sent price-to- earnings ratios on bank stocks to record lows and prompted the government to begin buying shares in the four biggest lenders this week. The MSCI gauge gained 9 percent in the past two days.

China Stocks’ 20% Surge Leads Asia as Government Acts on Crisis (Source: Bloomberg)
The Hang Seng China Enterprises Index became the first of Asia’s major equity benchmark gauges to exit a bear market as the Chinese government bought bank shares and pledged support for small business, spurring the biggest rally in three years. Zijin Mining Group Co., Anhui Conch Cement Co. and Agricultural Bank of China Ltd. (601288) have rallied more than 39 percent since Oct. 4, sending the gauge of Chinese companies in Hong Kong to a 21 percent advance. The surge trimmed the 2011 loss for the H-share index to 23 percent. “People are now realizing stocks were oversold,” said Yoji Takeda, who manages about $1.1 billion at RBC Investment Management (Asia) Ltd. in Hong Kong. “China’s H shares fell more than other markets recently with fears, especially among Western investors, about China’s hard landing and off-balance sheet lending.”

Japan Stocks Drop as Spain’s Rating Downgrade Stokes Concern Over Europe (Source: Bloomberg)
Japanese stocks fell after Standard & Poor’s cut Spain’s credit rating, fueling concern that a deterioration of Europe’s debt crisis will weigh on Asian economies and corporate earnings. Nissan Motor Co., a carmaker that gets about 80 percent of its revenue overseas, dropped 1.8 percent. Mitsubishi UFJ Financial Group Inc., Japan’s biggest lender, fell 0.9 percent after JPMorgan Chase & Co., the second-largest U.S. bank by assets, said profit declined. Canon Inc. slipped 2.1 percent after the camera maker said it’s preparing to shift production at two factories affected by flooding in Thailand. “Investors are hoping Europe will find a solution to the sovereign-debt crisis, but if that doesn’t happen the market could come back down again,” said Lee King Fuei, a Singapore- based fund manager at Schroders Plc, which oversaw $323 billion as of June 30. “Politically, it’s going to be difficult to find a solution. Governments in the U.S. and Europe are left with limited stimulus options.”

European Stocks Decline From Two-Month High as Roche, Bank Shares Retreat (Source: Bloomberg)
European stocks fell from a two- month high as Chinese exports slowed and the European Central Bank warned imposing further losses on holders of Greek debt posed a risk to the euro area’s financial stability. Carrefour SA (CA) retreated 5.9 percent after saying its profit may drop as much as 20 percent this year. Roche Holding AG (ROG) slid 4.5 percent after posting third-quarter revenue that missed analysts’ estimates. Alcatel-Lucent surged 5.3 percent on a report France’s biggest telecommunications equipment maker will sell its corporate call-center business. The benchmark Stoxx Europe 600 Index dropped 1.1 percent to 236.53 at the close in London. The gauge rose 1.7 percent yesterday for its biggest six-day rally since January 2009. The Stoxx 600 has still tumbled 19 percent from its high on Feb. 17 amid concern that the sovereign debt crisis in Europe will spread from Greece to the larger economies of Italy and Spain.

Spain Credit Rating Cut by S&P on Weak Outlook (Source: Bloomberg)
Spain had its credit rating cut one level by Standard & Poor’s as rising defaults threaten efforts to stem Europe's sovereign-debt crisis and limit risks for the region's banks. The ranking slid to AA-, with a negative outlook, in the third reduction by S&P in three years. The ratings company announced the change in a statement. “Despite signs of resilience in economic performance during 2011, we see heightened risks to Spain’s growth prospects,” S&P said in the statement. “The financial profile of the Spanish banking system will, in our opinion, weaken further, with the stock of problematic assets rising further.”

Trichet Says It’s Up to Leaders to Solve Crisis With Appropriate Decisions (Source: Bloomberg)
European Central Bank President Jean-Claude Trichet said it’s now up to governments to solve Europe’s debt crisis as leaders get ready for a summit in Brussels in 10 days. “It’s our duty to tell governments and other institutions what we see, but up to them to take the appropriate decisions,” Trichet, 68, said in an interview with Bloomberg Television in London today. “I’m certainly not underestimating the difficulty of their task.” Policy makers earlier this month pushed back a debt-crisis summit to Oct. 23, as leaders are trying to solve a crisis that started in Greece two years ago and is now threatening to tip the global economy into recession. The ECB has shouldered the main burden of keeping Europe’s banking system from collapsing throughout that period, while pushing governments to take on more responsibility as leaders struggled to contain the turmoil.

GLOBAL MARKETS-Italian debt sale to test euro zone mood
LONDON, Oct 13 (Reuters) - Italy was set to test fragile investor confidence in the euro zone's ability to heal its debt problems, with a sale of bonds, while weaker Chinese trade data acted as a reminder of broader economic problems.
"Maybe the political decisions are finally coming through," said Justin Urquhart Stewart, director at Seven Investment Management.

Greece’s Bondholders Brace for Bigger Losses to Solve Crisis: Euro Credit (Source: Bloomberg)
Greek bondholders are preparing to lose as much as 60 percent of their investments as European leaders try to impose a solution that reduces the nation’s debt burden by enough to end the debt crisis. “Everyone is coming to the conclusion that a much deeper restructuring is needed to make Greece in any way sustainable,” said Emiel van den Heiligenberg, chief investment officer of global balanced solutions at BNP Investment Partners in London, which oversees about $742 billion. “If the stock of debt doesn’t diminish then the problems are going to be bigger and bigger and Greece will require rescue package after rescue package.” Greek 10-year bonds yielded 23.97 percent at 5 p.m. yesterday, with the price on the securities at 37.41 percent of face amount. The rate was 2,186 basis points, or 21.86 percentage points, more than benchmark German bunds and compares with a yield of 11.59 percent for similar-maturity Portuguese debt and 5.82 percent for Italian bonds.

U.K. Home Prices Post First Drop Since June, Acadametrics Says (Source: Bloomberg)
U.K. house prices fell for the first time in three months in September as turmoil in financial markets spurred by Europe’s debt crisis undermined confidence, Acadametrics Ltd. and LSL Property Services Plc said. The average price of a home in England and Wales fell 0.3 percent from August to 218,650 pounds ($343,000), the lowest since June, the groups estimated in an e-mailed report in London today. Prices dropped 2.3 percent from a year earlier. The housing market is struggling to gain momentum as banks restrict lending and inflation outpaces wage growth. While Bank of England policy makers expanded stimulus last month to aid the economic recovery, the escalation of the debt crisis threatens demand, Acadametrics Chairman Peter Williams said.

Lehman Catastrophic Moment Invoked as EU Seeks Crisis Solution (Source: Bloomberg)
“Cascading default, bank runs and catastrophic risk” lie ahead for the world economy unless Europe resolves its festering debt crisis, Timothy F. Geithner told global finance chiefs on the morning of Sept. 24. The U.S. Treasury secretary spoke from experience and lessons learned. Three years ago, he was president of the Federal Reserve Bank of New York and working to shore up a financial system in the chaos following the collapse of Lehman Brothers Holdings Inc. (LEHMQ) His warning last month at a meeting of the International Monetary Fund in Washington was the third in three weekends after he jetted to conferences in France and Poland to appeal directly to Europe’s policy makers for action.
After Lehman filed for bankruptcy on Sept. 15, 2008, financial institutions lost or wrote off almost $1 trillion; the Standard & Poor’s 500 Index fell 40 percent in six months; and the world slumped into the deepest recession since World War II. The global economy still hasn’t recovered and has been close to stalling anew for the past several months.

Euro Weakens for Second Day After S&P Cuts Spain’s Credit Rating One Level (Source: Bloomberg)
The euro declined for a second day against the dollar and yen after Spain’s credit rating was cut by Standard and Poor’s, increasing concern that leaders are struggling to stop Europe’s debt crisis spreading. The 17-nation currency pared its first weekly advance in a month against the dollar as S&P lowered Spain’s grade on long- term sovereign debt to AA- from AA with a negative outlook. The dollar and yen gained against most major peers as investors sought the safest assets amid concern Europe’s turmoil will infect the global economy. The downgrade will “keep the pressure on the negative aspects of the European story,” said Imre Speizer, a strategist in Auckland at Westpac Banking Corp., Australia’s second-largest lender. “It’s clearly a negative for risk sentiment. The euro had a decent drop. A month out and longer, I see it below $1.3150.”

Treasuries Advance as Spain Rating Cut Spurs Demand for Safer Securities (Source: Bloomberg)
Treasuries rose for a second day after Spain had its long-term sovereign debt rating cut by Standard & Poor’s, increasing investor appetite for the relative safety of U.S. government securities. Treasuries have returned 4 percent in the past three months, according to Bank of America Merrill Lynch indexes, as European officials struggled to contain the region’s debt crisis. S&P lowered Spain’s rating to AA- from AA and the outlook is negative, the company said in a statement. “The flight to quality will continue,” said Hiromasa Nakamura, an investor in Tokyo for Mizuho Asset Management Co., which has the equivalent of $43 billion and is a unit of Japan’s second-largest bank. “European turmoil is still going on.”

Singapore Cuts Economic Growth Forecast (Source: Bloomberg)
Singapore cut its economic growth forecast for this year and predicted a further slowdown in expansion in 2012 as the global outlook weakens, prompting the central bank to ease its monetary policy stance. Gross domestic product may increase 5 percent this year, compared with an earlier forecast range of 5 percent to 6 percent, the trade ministry said in a statement today. The Monetary Authority of Singapore, which uses the island’s dollar as its main tool to manage inflation, said it will reduce the slope of the policy band of its currency and continue with a modest and gradual appreciation.
The risk of another global recession erased $10 trillion of equities worldwide last quarter and prompted officials from China to Indonesia to boost fiscal measures or cut interest rates. With a potential Greek default threatening to disrupt world financial markets, Singapore is trying to stimulate growth just six months after its last monetary tightening, and the government said this week it will increase spending in the next five years.

Singapore Reduces Dollar-Band Slope (Source: Bloomberg)
Singapore will slow gains in the local currency because the deteriorating global economic outlook is expected to lead to a moderation in inflation, the central bank said today in its semi-annual exchange-rate review. “Given the stresses and fragility in the advanced economies, the prospects for growth in Singapore’s major trading partners have deteriorated,” the Monetary Authority of Singapore said in a statement. The nation’s dollar climbed against all its most-traded peers and advanced 0.2 percent to S$1.2748 against its U.S. counterpart as of 9:01 a.m. Singapore time. It reached S$1.3199 on Oct. 4, the lowest level this year, and has gained 0.7 percent since Dec. 31. Fourteen of 22 analysts in a Bloomberg News survey predicted the move. Seven forecast an easing of monetary conditions. One said the central bank will maintain the currency’s appreciation after re-centering the band upward at its last review in April to cool inflation.

20111014 1002 Global Commodities Related News.

Corn (Source: CME)
US corn futures finished lower on continued pressure from USDA's larger-than-expected inventory estimate. The market felt "a lot of hangover from yesterday's report" that raised the year-end supply outlook 29% from last month, says Brian Hoops of Midwest Market Solutions. Confirmation that China bought 900,000 tons of US corn didn't spark a rally, as the demand was priced in with Tuesday's surge on chatter about the deals. CBOT December corn drops 2 1/2c to $6.38 1/4 a bushel.

Wheat (Source: CME)
US wheat futures closed weaker as USDA's unexpectedly large supply estimate continues to hang over markets. The government raised its US and global inventory projections in crop reports yesterday, giving users of the grain "more breathing room," says Brian Hoops of Midwest Market Solutions. That means buyers do not need to worry about supplies and can take their time in making purchases. CBOT December wheat falls 8 3/4c to $6.18 a bushel; KCBT December drops 10c to $7.01; MGEX December loses 20 1/2c to $8.83 1/4.

Rice (Source: CME)
US rice futures edged higher as traders continue to worry about declining supply expectations. Market participants were surprised yesterday by USDA's 5% cut in the outlook for projected season-ending inventories. On Friday, they will review weekly export data from USDA to assess demand for the crop. CBOT November rice rises 5c to $16.40 1/2 per hundredweight.

US wheat falls for 2nd day on supply pressure, soy dips
SINGAPORE, Oct 13 (Reuters) - U.S. wheat slid 0.7 percent , falling for a second straight day as the market was weighed down by a U.S. government report that raised estimates for global supplies.
"U.S. and world wheat supplies are comfortable and are not supportive for high prices,"  Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report.

Thai floods damage rice, threaten exports
SINGAPORE/HANOI, Oct 12 (Reuters) - Thailand's worst floods in half a century have inundated farms and mills, squeezing rice supplies from the world's top exporter, while rival Vietnam is expected to default on half a million tonnes as prices of the staple climb.
Flood-damage to Thai rice comes as the nation's new government implemented a scheme that gives farmers a big increase in farmgate prices, raising concerns over food inflation among buyers in Asia, the Middle East and Africa.

China 2011 corn output seen at record 184.5 mln T -CNGOIC
BEIJING, Oct 13 (Reuters) - China's corn output this year is likely to rise 3.93 percent from last year to a record 184.5 million tonnes, according to the latest estimate published by an official think-tank on Thursday.
The China National Grain and Oils Information Centre revised up its estimate for corn output by 2 million tonnes from its earlier forecast due to an expanded planting area and favourable weather in most parts of the country.

Global grains picture brightens in U.S. forecast
WASHINGTON, Oct 12 (Reuters) - World grain supplies will be much healthier next year than previously forecast, the U.S. government said in a report that could put further pressure on crop prices that have already tumbled from their peaks.
Apart from an unexpectedly deep cut to its forecast of U.S. soybean stockpiles, the U.S. Agriculture Department's monthly report made surprisingly large upward revisions to global inventories of nearly every type of grain -- a welcome respite for consumers after over a year of steadily thinning supplies.

China imports corn, soy to rebuild state reserves
BEIJING, Oct 12 (Reuters) - China, the world's biggest agricultural products consumer, has swooped in to import copious amounts of corn and soy products from the United States and elsewhere this week, taking advantage of the slump in global prices to replenish its dwindling state reserves.
The large orders for corn, soybeans and soyoil underlines China's explosive appetite for grains and adds to growing evidence its corn imports could well exceed government forecasts this year.

UK wheat supplies seen barely changed in 2011/12
LONDON, Oct 12 (Reuters) - Wheat supplies in Britain are seen barely changed in 2011/12 as a slightly larger crop offsets lower opening stocks by comparison with the start of the previous season, the Home-Grown Cereals Authority said on Wednesday.  The HGCA, in its first supply/demand balance for the 2011/12 marketing season which began on July 1, put wheat availability at 17.83 million tonnes, marginally down from 17.91 million in the prior season.

Showers slow down U.S. corn and soy harvesting
CHICAGO, Oct 12 (Reuters) - Showers at mid-week will slow down the harvesting of corn and soybeans in the U.S. Midwest, but the delays will be short-lived, an agricultural meteorologist said Wednesday.
"There are some rains today and tomorrow in most of the Midwest and eastern Plains with the bulk of the rainfall in the west central and eastern Midwest including Missouri, Iowa, Minnesota and western Illinois," said Don Keeney, meteorologist for MDA EathSat Weather.

French farm body lifts non-EU wheat export forecast
PARIS, Oct 12 (Reuters) - Farm office FranceAgriMer on Wednesday raised by 500,000 tonnes its estimate for French soft wheat exports outside the European Union in the current 2011/12 season to 8.5 million tonnes.
That was still sharply lower than the record 12.9 million tonnes exported in 2010/2011 when Russia was mostly absent from the global export market.

Ukraine grain exports remain low - analyst
KIEV, Oct 12 (Reuters) - Ukraine's grain exports has totalled 3.7 million tonnes so far in the 2011/12 season compared to 4.5 million in the same period a season ago, analyst UkrAgroConsult said on Wednesday.
It said Ukraine exported 6.7 million tonnes of grain in the same period in 2009 and 6.6 million in 2008.

S.Africa maize deliveries rise to 9.342 mln T -SAGIS
JOHANNESBURG, Oct 12 (Reuters) - Maize deliveries to South African silos rose to 9.342 million tonnes in the week to Oct.7, up from a revised 9.326 million tonnes in the week before, data showed on Wednesday.
White maize deliveries rose to 5.692 million tonnes from a revised 5.685 million tonnes, while yellow maize submissions increased to 3.650 million tonnes from a revised 3.641 million tonnes, the South African Grain Information Service (SAGIS) said.

Mexico's Tortilla Prices Reach All-Time High (Source: CME)
Tortilla prices in Mexico have reached all-time highs this month due to problems with the country's corn harvests this year, a major concern for the Mexican population since tortillas are a dietary staple. Mexico is the world's largest producer of the white corn used to make tortillas, the main source of food for some of Mexico's rural poor. Freezes and dry spells that hurt Mexico's corn output this year helped push the nationwide average price per kilogram in tortilla shops above 11 pesos (83 U.S. cents) this month, according to the Economy Ministry's market information system. That was up 13% from October 2010 and up about 160% from a decade ago. "The current price of tortillas is a severe blow to the economy of families in Mexico," said Jose Jacobo, president of the country's group of rural organizations, Cocyp. "The situation is very serious." He added that some families in the rural sector spend about a third of their daily income on tortillas.
Mexico has almost always been self-sufficient in the production of white corn. But in the first eight months of this year, it imported 854,199 metric tons from the U.S, and South Africa, more than double the amount imported during the same period in 2010. The rising cost of tortillas indicates an increase in the cost of white corn, which was trading at $2.56 on Tuesday, according to the Agriculture Ministry's trade service. The Mexican government has taken steps to try to bring down tortilla prices, such as calling on local governments to make sure tortilla shop owners aren't agreeing to fix prices. Agriculture officials say the country's white corn output this year is expected to reach 18.3 million tons.

Corn Falls for Second Day as U.S. Raises Stockpile Estimates; Wheat Drops (Source: Bloomberg)
Corn fell for a second day in Chicago after the U.S. boosted estimates for local and global stockpiles, signaling more supplies for makers of food, animal feed and fuels. Wheat declined. Corn inventories in the U.S. will be 29 percent larger than forecast last month as exports slow, the Department of Agriculture said yesterday. Global corn reserves were pegged at 123.19 million metric tons, 4.9 percent above a September forecast. Projections exceeded analysts’ expectations. “Bigger-than-expected reserves have put pressure on corn prices,” Lynette Tan, an analyst at Phillip Futures Pte, said by phone from Singapore. “Prices may gain later boosted by strong demand.”

China Corn Output Hitting Record In 2011 (Source: CME)
China's corn output this year will likely increase 3.9% to a record level, indicating China's corn imports may slow as domestic corn prices fall with the arrival of new domestic crops. The state-backed China National Grain and Oils Information Center has revised its estimate for corn output to 184.5 million metric tons from an earlier estimate of 182.5 million tons, it said in a report. The report is in line with a U.S. Department of Agriculture report Wednesday that put China's 2011 corn output at 182 million tons, up 2.2% from its last estimate and 2.7% from actual output last year, while maintaining its import forecast for the marketing year that began Sept. 1 at 2 million tons. This increase is due to favorable weather that is boosting yields as well as increased crop area, said Dai Xiaojing, an analyst with Dalian Yigu Information Consulting Co., which runs the country's largest corn information portal.
Dalian Yigu forecast 2011-12 corn output at 170.4 million tons and imports at 4 million tons, she said, adding that if domestic prices continue to weaken, imports will fall short of the estimate. The U.S. Grain Council made a more conservative estimate, at 167 million tons, after it concluded a crop tour in China last month.

Ukraine's Grain Exports Slump 50% In Early October (Source: CME)
Ukraine's grain exports slumped almost 50% during the first nine days of this month to 201,000 metric tons from 400,000 tons during the same period last month, according to Ukrainian agricultural analysis body UkrAgroConsult Thursday. The shipments of grain were made up of 50,500 tons of wheat and 150,900 tons of corn, Sergey Feofilov, general director of UkrAgroConsult said.

Goldman Sees Downside Risks To Wheat Prices (Source: CME)
Wheat prices may have further to fall as improving prospects for the world harvest point to abundant supplies in the 2011-12 season, Goldman Sachs said. Grain prices stumbled Wednesday after the U.S. Department of Agriculture raised its forecast for world wheat ending stocks by 4% to 202 million metric tons due to higher output in Australia, Europe, Canada and Kazakhstan. Corn inventories, which have been a key driver for world grain markets in recent months, were raised to 866 million bushels from the 672 million expected in September, offsetting predictions for a smaller harvest. Goldman said it now sees a downside risk to its three- and six-month forecasts for U.S. wheat prices of $6.40 a bushel and $6.50/bushel. "We expect that wheat prices will underperform on higher foreign supplies," said analyst Damien Courvalin. The investment bank also reiterated its preference for soybeans, which it expects to outperform the grain complex.
Its stance was helped Wednesday by the USDA, which announced a surprise cut to its yield and ending stocks estimates. "We continue to expect that soybean prices will outperform corn prices, as reflected in our $12.60/bu and $13.00/bu 3- and 6-mo forecasts," said Courvalin. "The wheat and corn was destined for Egypt, Israel and Jordan," Feofilov said.

As US Corn Outlook Cut, Rivals Step Up (Source: CME)
The U.S. Department of Agriculture trimmed its projection of the U.S. corn harvest for the third consecutive month due to poor weather, but grain prices stumbled as the report provided fresh evidence that foreign competitors are gearing up. In trading Wednesday at the Chicago Board of Trade, the corn futures contract for December delivery dropped 4.25 cents, or 0.7%, to finish at $6.4075 a bushel. The December wheat futures contract plunged 34 cents, or 5.1%, to $6.2675 a bushel. Still, traders said the grain-price rally is long from over, in part because the U.S. corn inventory is expected to fall to its lowest level since the mid-1990s. What's more, any big dip in prices seems to fuel the appetites of big foreign buyers such as China. Sinograin, the country's official grain-stockpiling agency, bought about 59 million bushels of foreign corn on Tuesday, most of it likely from the U.S., two executives familiar with the matter said separately Wednesday.
"It's the China put," said Dan Basse, president of AgResource Co., a Chicago commodity forecasting company. "We think the high prices of grain will be maintained." Grain prices also dipped Wednesday because the USDA raised its one-month-old forecast of the amount of wheat and corn that will remain in U.S. inventories by the time the next harvest season replenishes supplies. In the wake of a Sept. 30 government report that found more-than-expected corn in inventory, the USDA said it expects the U.S. to have 866 million bushels of corn still around on Aug. 31, 2012, up 29% from its month-old forecast. The agency said it expects the corn harvest that is in full swing across the Midwest this month to produce 12.433 billion bushels, down slightly from its September projection and nearly the same size as last year's harvest. While such a corn crop would be the fourth-biggest on record, it is one billion bushels less than what the USDA had projected before a heat wave gripped the Midwest in July.
As a result, ethanol-fuel makers, livestock producers and food manufacturers likely will use more of the nation's biggest crop than farmers are able to produce for the second consecutive year, which will keep U.S. corn reserves at unusually tight levels for at least another year. But the crop-price rally, which began in June 2010, is encouraging foreign farmers to produce more corn, wheat, cotton and oilseeds. That, combined with good growing weather in many countries, is allowing several countries to increase exports, in some cases at the expense of U.S. farmers. Despite the drought that is searing wheat fields across the U.S. southern Plains, global wheat supplies are climbing in large part because good growing weather has returned to the wheat-growing region around the Black Sea. As a result, Russia, Kazakhstan and Ukraine are reclaiming customers in North Africa and the Middle East from U.S. shippers.
The USDA said it expects Russia to export 660 million bushels during the 2011-2012 crop year, up from last year's drought-stunted 146 million bushels. Russia is shipping out grain so quickly that Moscow this week tried to reassure food executives there with a promise to limit exports if necessary. But some analysts said the planned cap appears more political than practical because they don't expect Russian exports to exceed that level anyway. U.S. wheat exports, meanwhile, are forecast by the USDA to drop 24%, to 975 million bushels, during the year ending May 31, 2012. Likewise, the government expects the volume of U.S. cotton exports to drop 20% while U.S. soybean exports sink 8% and corn exports fall 13%.

ICE raw sugar, cocoa futures rise early
LONDON, Oct 13 (Reuters) - ICE sugar futures rose in early trade boosted by technically driven buying while cocoa climbed on bullish third-quarter European grind data.  Raw sugar futures on ICE rose to a three-week high in early trade, boosted by chart-driven buying.

Indonesia seeks to boost domestic cocoa consumption
JAKARTA, Oct 12 (Reuters) - Indonesia plans to triple domestic cocoa consumption over the next three years to boost the local manufacturing industry, which could impact exports from the world's No. 3 producer, an industry ministry official said on Wednesday.
Indonesia, Southeast Asia's largest economy, has set an ambitious target of boosting annual cocoa consumption to 0.6 kg per capita per year in 2014, from current levels of 0.2 kg, said Faiz Ahmad, director of food and fishery industry at the industry ministry.

Pakistan may import 400,000 T sugar next year
ISLAMABAD, Oct 12 (Reuters) - Pakistan may import up to 400,000 tonnes of refined sugar next year to bolster reserves despite expectations of a bumper crop, officials of the Ministry of Industries said on Wednesday.
The Economic Coordination Committee (ECC), the highest economic decision-making body, is expected to discuss the stock position and prospects for the next crop in a meeting on Thursday, the officials said.

Brent falls to near $111 as China crude imports slow
SINGAPORE, Oct 13 (Reuters) - Brent crude fell to near $111, snapping six days of gains, after trade data from China pointed to slower demand in the world's second-largest oil consumer.
"The fall in crude imports could be attributed to either weak demand or a draw down in inventories," said Brynjar Bustnes, J.P. Morgan analyst in Hong Kong.

Oil Falls for Third Day on U.S. Fuel-Consumption Drop, Spain’s Downgrade (Source: Bloomberg)
Oil declined a third day in New York as investors bet that demand will falter on signs of slowing U.S. fuel consumption and a worsening debt crisis in Europe. Brent oil’s premium to U.S. prices reached a record. Futures slipped as much as 0.6 percent, paring a second weekly gain, after Standard & Poor’s Ratings Services cut Spain’s long-term sovereign credit rating on risks to growth prospects. U.S. crude inventories climbed 1.34 million barrels last week and total products supplied, a measure of fuel use, slid an average 364,000 barrels a day to the lowest in four weeks, according to the Energy Department. “Confidence continues to deteriorate,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “We’ve currently got a neck-brace on Europe and we don’t know whether the head is going to topple or whether it’s going to hold. The larger than expected build in inventories was a little bit of a curve ball.”

Shell outage drives up Asia transport, heating costs
SINGAPORE, Oct 6 (Reuters) - The shutdown of Royal Dutch Shell's  biggest refinery is driving up the cost of transport and heating fuel to buyers from China to Indonesia as they scramble to secure alternative supplies.
The fire has knocked out 150,000 barrels per day (bpd) of distillate -- heating oil, jet fuel and diesel -- equivalent to the volume of diesel Southeast Asia's top consumer Indonesia imports. The shortage comes just as the world's number two and three oil consumers China and Japan build stocks of heating fuel for winter.

Q&A-Shell's shutdown may impact Asian gasoline mkt
SINGAPORE, Oct 3 (Reuters) - The shutdown of Royal Dutch Shell's Singapore refinery will impact the gasoline market as the massive 500,000 barrel per day (bpd) plant is a key supplier in the region.
Shell has a quarterly term agreement with Indonesia, and sells 92-octane spot cargoes to Vietnam and India.

S.Korean refiners to boost earnings with high exports
SEOUL/SINGAPORE, Sept 30 (Reuters) - South Korean refiners look set to maintain record high fuel exports by operating almost at full throttle, aiming to maximise earnings by taking advantage of a market where shipments from other top suppliers are shrinking.
Apart from lower exports from top fuel producers China and Japan, Royal Dutch Shell's  largest refinery shut this week after a fire, coming close on the heels of Taiwan's Formosa taking Asia's fifth-largest plant offline.

China Sept crude imports 12 pct off year-ago peak
BEIJING, Oct 13 (Reuters) - China's daily crude oil imports fell 12 percent in September from last year's record high, remaining below 5 million barrels per day for the fourth consecutive month as refiners drew on inventories amid volatile crude markets.
A marginal rise in September versus August fell short of estimates that imports would recover more quickly because of rising refinery throughput after maintenance and new plants coming onstream.

IEA cuts oil demand forecast while US more bullish
WASHINGTON/LONDON, Oct 12 (Reuters) - The International Energy Agency cut its global oil demand growth projection on Wednesday while the U.S. government increased its outlook for 2012, making it the most bullish forecaster as the economy heads into an uncertain year.
The U.S. Energy Information Administration's outlook for oil demand growth next year was much stronger than the Paris-based IEA's projection and the forecast issued by the Organization of the Petroleum Exporting Countries on Tuesday.

U.S. oil diplomacy targets consumer demand
ASTANA, Oct 12 (Reuters) -  The United States will press major oil-producing nations to ensure they are pumping enough oil to meet demand, regardless of price, while also encouraging a recovery of oil output from Libya and Iraq, a senior energy department official said on Wednesday.
"We don't assess the supply and demand equation as a function of price per se," U.S. Deputy Secretary of Energy Daniel Poneman told Reuters in an interview. "We look at satisfying consumer demand."

Silver Increases 0.6% in New York Trading While Gold Is Little Changed (Source: Bloomberg)
Silver for December delivery advanced 0.6 percent to $31.85 an ounce after dropping 3.4 percent yesterday in New York. Gold for December delivery was little changed at $1,668 an ounce.

Dubai Gold Buyers Seen Switching From To Bullion (Source: CME)
The recent violent volatility in gold prices is disrupting traditional buying patterns in Dubai with customers moving from jewelry to bullion as they renew a focus on the yellow metal's investment potential, a trend that is prompting more city jewelers to stock gold in the form of coins and bars. Dubai, known as the city of gold, is a long-established market for bullion and wholesale and retail jewelry. Its trade is fueled by demand from India, the world's number one gold consumer, and domestic consumption which, at 19 tons in the second quarter of 2011, makes the United Arab Emirates the second-largest consumer of gold jewelry and bullion in the Middle East after Saudi Arabia. Whereas traditional retail demand was for jewelry, there has been a change in buying patterns, said Pradeep Unni, senior relationship manager at Richcomm Global Services, a Dubai-based commodity services company and a broker of the Dubai Gold and Commodity Exchange, or DGCX, which trades a gold futures contract.
"Earlier while women would buy gold in the form of jewelry, now one can see men, finding themselves with a bit of spare cash, go into a jewelry shop and buying ten-tola bars," he says. A ten-tola bar, called TT bar in the trade, is a traditional Indian measure of weight that equals 3.75 ounces. "Sales of gold coins and TT bars are up 30-40% on year as they aren't as expensive as the kilo bar," said Unni. Cyriac Varghese, general manager of Sky Jewellery in Dubai, has noticed a similar trend. "When prices went up in early August, there was a drop in jewelry business and people who had spare cash moved into gold coins and bars as they thought the price would rise further," he said. The gold price has soared 35% since January 2011 to above $1900 per ounce in September as investors sought refuge in its safe haven status in the face of an uncertain global economic outlook and concerns about the health of the U.S. dollar.
According to Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre, those who are looking to invest in gold now are "those who don't have gold in their portfolios; people who think that in addition to having a bank account, they need to have gold." The Dubai Multi Commodities Center is one of the backers of the DGCX, and helps promote the local gold trade. The World Gold Council, an industry organization, says demand for physical bars and coins in the United Arab Emirates--the grouping of seven emirates that includes Dubai--rose 6% in the second quarter of 2011 from the previous year period, while demand for jewelry was down 1% in the same period.
If the trend continues, it could suggest that demand for gold in Dubai is becoming more speculative, local jewelers said, since buyers appear more willing to sell their bars and coins into any rise in the price. Buyers of jewelry, in contrast, are less likely to sell for cash as women prefer to exchange it for a newer design or pass it on from one generation to the next. "There is slightly more demand than before for bars and coins. This was also exacerbated by a shortage of supply for these in the market. We also noticed that when the price of gold fell, people came back into the stores to try sell the coins and bars back again," said Raj Sahai, director-retail, at jewelry retailer Damas.
Jewelry shops in Dubai, from souk to glittery malls, are stocking up on bullion to meet the higher demand. Damas has been ordering more coins and bars, Sahai noted. Gold certificates are also increasingly popular. Demand for local bank Emirates NBD's Gold Certificates, that can be redeemed either in cash or physical gold bars, has risen five-fold in August and September from the beginning of the year, Gerhard Schubert, head of precious metals, at Emirates NBD said. "There's been unprecedented buying from the moment of the market opening till close," he said adding that many of the certificate buyers are fresh buyers. However street wisdom holds that there's a marked preference for physical gold in Dubai. "Unlike in the West where people are happy to invest in gold certificates and exchange traded funds, here they like to handle gold; it's a cultural difference," said an analyst who declined to be named.

Gold Futures Fall as Equities Retreat, Dollar’s Gain Curbs Investor Demand (Source: Bloomberg)
Gold fell for the second time this week in New York as equities declined and gains in the dollar curbed demand for the precious metal as an alternative asset. The greenback climbed as much as 0.6 percent against a basket of six major currencies after a report showed exports from China rose the least in seven months. The dollar advanced 6 percent last month, while bullion declined 11 percent. The MSCI All-Country World Index of equities fell as much 1.1 percent. “Gold is muted by the strength in the dollar,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “Gold is taking cues from other markets.” Gold futures for December delivery dropped 0.8 percent to settle at $1,668.50 an ounce at 1:44 p.m. on the Comex in New York. Prices have slumped 13 percent since touching a record $1,923.70 on Sept. 6.

Gold Traders Turn Most Bullish in Three Months After 20% Rout: Commodities (Source: Bloomberg)
Gold’s biggest slump in three years means traders and analysts are now the most bullish in three months, speculating that Europe’s debt crisis, slowing growth and a bear market in equities will drive demand for bullion. Twenty-two of 25 people surveyed by Bloomberg expect the metal to rise next week, the highest proportion since mid-July. Prices rebounded 8.3 percent since reaching a two-month low at the end of September and investors are adding to their holdings in gold-backed exchange-traded products for the first time in a month, according to data compiled by Bloomberg. Traders also expect gains in copper, sugar, corn and soybeans, surveys show.
Gold slumped as much as 20 percent since reaching a record $1,923.70 an ounce on Sept. 6 as investors sold the metal to cover losses in other markets. As much as $4.2 trillion was erased from the value of global equities in the past month on mounting concern that economies will tip back into recession and European lawmakers will fail to prevent sovereign defaults. The last time traders and analysts were this bullish, bullion surged 21 percent to an all-time high within eight weeks.

20111014 1001 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures ended higher, fueled by bullish fundamental market outlooks. Soybeans showed a little more strength today as US crop size was in fact cut yesterday, and stocks to use remains quite thin, says Karl Setzer, analyst at MaxYield Cooperative in a market note. Solid demand, firm cash prices and an imbalance in futures prices that heavily favors corn production rekindled supportive longer range outlooks for soybean futures. CBOT Nov soybeans end up 17 1/2c or 1.4% at $12.57/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures spiked in step with soybeans, as bullish trader sentiment reemerged on tight longer term soybean inventory forecasts. Limited farmer sales of spot soybean supplies limit crushing of beans to produce soymeal and soyoil, supportive features for prices, analysts say. CBOT Dec soymeal ended up $4.00 at $326.70/short ton, and Dec soyoil end up 0.58c at 52.44 cents/pound.

Palm oil slips on higher global grain stocks
SINGAPORE, Oct 12 (Reuters) - Malaysian palm oil futures edged down as the market booked profits after a U.S. report raised the outlook for grain supply that weighed on food commodities.  
"When the report came out yesterday night, we saw that actually the numbers were kind of neutral to slightly bearish," said a Kuala Lumpur-based trader, referring to the monthly U.S. report that updates stock forecasts for grains and oilseeds.

China Sept soy imports down 11 pct on year at 4.13 mln T-customs
BEIJING, Oct 13 (Reuters) - China, the world's largest soy buyer, imported 4.13 million tonnes of soybeans in September, down 11 percent from the year ago period, official figures showed on Thursday.
September imports were down 8.4 percent from 4.51 million tonnes in August, figures from the General Administration of Customs of China showed.