Wednesday, November 9, 2011

20111109 1834 FCPO EOD Daily Chart Study.


FCPO closed : 3034, changed : +11 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : turned downward, buyer taking profit.
Support : 3020, 2970, 2950, 2920 level.
Resistance : 3050, 3070, 3100, 3150 level.
Comment :
FCPO closed recorded small loss with slower volume transacted while overnight soy oil closed recorded huge gains and currently trading lower while crude oil price also easing lower after overnight gains.
FCPO buyer decided to lock in profit after recent gains and reducing exposure ahead of MPOB official data and export figure by both cargo surveyor. Soy oil trade also avoiding exposure ahead of USDA reports tonight.
Daily chart formed a down doji bar candle with upper and lower shadow closed below upper Bollinger band after market opened and traded higher, eased downward into negative territory and trade range bound between gains and losses to closed near the low of the day.
Chart reading switch to suggesting a pullback correction upside biased market development testing support and resistance.
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.

20111109 1807 FKLI EOD Daily Chart Study.


FKLI closed : 1475, changed : -9 points, volume : lower.
Bollinger band reading : pullback correction upside biased.
MACD Histrogram : weakening, buyer taking profit.
Support : 1470, 1458, 1445, 1440 level.
Resistance : 1477, 1485, 1491, 1500 level.
Comment :
FKLI closed recorded loss with shrinking down volume participation doing 14.5 points huge discount compare to cash market that closed higher. Overnight U.S. markets closed recorded gains and today Asia markets traded mostly higher while European markets currently trading lower after opened in positive zone.
Latest news on China reported slower inflation, IMF director Lagarde warned of the risk of a "lost decade" for global economy and political change in Greece and Italy  resulted regional market to trade differently.
Daily chart formed a down bar candle with small upper shadow closed below upper Bollinger band level after market opened higher, edge few ticks upwards and slide downward lower slowly followed by last 15 minutes sell down to closed near the low of the day.
Technical study remained suggesting a pullback correction upside biased market development tested support and resistance.
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.

20111109 1737 Regional Markets EOD Daily Chart Study.

 DJIA chart reading :  upside biased.
 Hang Seng chart reading :  upside biased.
KLCI chart reading : upside biased with possible pullback.

20111109 1710 Global Market & Commodities Related News.

European Stocks Advance on Berlusconi Offer (Bloomberg)
European stocks advanced for a second day after Italian Prime Minister Silvio Berlusconi offered to resign, boosting optimism that a new government will stem the debt crisis. Asian stocks rose and U.S. index futures declined. Metro AG (MEO) gained 1.4 percent after UniCredit SpA advised buying the shares of Germany’s largest retailer. The Stoxx Europe 600 Index rose 1 percent to 242.9 at 8:02 a.m. in London. The index has rallied 13 percent from this year’s low on Sept. 22 as investors speculated that the euro area would protect the economies of Italy and Spain from the sovereign-debt crisis. Futures on the Standard & Poor’s 500 Index expiring in December slipped 0.4 percent, while the MSCI Asia Pacific Index gained 1.2 percent.
Berlusconi’s resignation “will be seen as supportive, as something is moving in Italy,” Valentijn Van Nieuwenhuijzen, head of strategy and chief economist at ING Investment Management in the Hague, said in a Bloomberg Television interview. “If a unity government is formed, that would be the most positive step.”


FOREX-Euro rally fights resistance but outlook still grim
TOKYO, Nov 9 (Reuters) - The euro fought stiff chart resistance on Wednesday following a rally after Italy's premier said he would resign, but its outlook remained gloomy amid the political turmoil engulfing both Greece and Italy and with those countries' borrowing costs showing no signs of easing.
Greece is scrambling to win emergency funds to avert bankruptcy as soon as next month with political parties arguing over a new coalition government, while yields on Italian 10-year bonds  hover above 6.7 percent.

Corn, soy tick up ahead of USDA report; wheat dips
SINGAPORE, Nov 9 (Reuters) - Chicago wheat fell 0.2 percent, as the market came under pressure from plentiful global supplies, including expectations of a near-record Australian crop, which is likely to increase competition for U.S. suppliers.
"The sense that we are getting is that the soy market has been cautious because of slow U.S. exports, but today we are seeing a little bounce ahead of the report," said Abah Ofon, an analyst with Standard Chartered Bank in Singapore.

Thailand's Mitr Phol joins swoop on Australia sugar firms
SYDNEY, Nov 9 (Reuters) - Australia's sugar cane crushing industry is set to be dominated by foreigners after Thailand's Mitr Phol Sugar Corp Ltd on Wednesday launched a long awaited take-over offer for one the country's last remaining independent cane millers.  Australia's MSF Sugar Ltd , previously called Maryborough Sugar Factory Ltd, said it had received a takeover approach from its biggest shareholder valuing the company A$313 million ($324 million).
 
Next Brazil soy harvest seen rising a shade
SAO PAULO, Nov 8 (Reuters) - Brazil's next soy harvest should turn out a fraction larger than the previous record crop, with an estimated 74.6 million tonnes up from 74.3 million in the harvest now ended, grain crushing industry association Abiove said on Tuesday.
Abiove estimated soy exports would also nudge up to a record 33 million tonnes in the 2011/12 harvest from 32.4 million tonnes in the current season.

Australia bets on wheat quality, freight to grab global sales
SYDNEY, Nov 9 (Reuters) - Australian wheat exporters are counting on lower shipping costs and higher quality grain from the advancing harvest to give them the upper hand in South East Asian markets, allowing them to fend off aggressive competition from Black Sea suppliers.
But the threat of wet weather during what should be a bumper 2011/12 crop remains a risk that could cut the protein content and downgrade quality of exports from the world's fourth-largest shipper of the grain.

Italy 2011 sugar output down 22 pct,content up
MILAN, Nov 8 (Reuters) - Italy's output of sugar made from local beets fell below earlier forecasts to 341,000 tonnes in 2011 after a sharper-than-expected drop in sown areas, but sugar content rose from 2010, a senior official at Italian beet growers' body ANB said.  Sugar output fell about 22 percent from some 438,000 tonnes produced from local sugar beet last year, because sown areas dropped to 45,000 hectares in 2011 from 62,266 hectares in 2010, hit by bad weather, ANB's senior technical expert, Emilio Pattaro, told Reuters on Tuesday.

India cautious as its mills seek big sugar exports
MUMBAI/LONDON, Nov 4 (Reuters) - Sugar market heavyweight India is likely to delay half of this year's expected one million tonnes of unrestricted exports until early 2012 due to output delays, a decision that would protect Indian consumers and limit the country's impact on world prices.      
India, the world's top sugar consumer and biggest producer after Brazil, can cause big gyrations in international sugar futures prices because of its clout as either an exporter or an importer, depending on the progress of its crop.

European financial coal trading to dip in 2011-report
FRANKFURT, Nov 7 (Reuters) - Europe's financial coal trading business in 2011 is expected to fall 4 percent below estimated 2010 levels to 1,840 million tonnes, according to a study by British consultancy Prospex.
The report, abstracts of which were issued to media ahead of publication on Nov. 9, said the small size of the dip, down from 2010's 1,920 million tonnes, reflected dynamism in the sector, despite economic turmoil and ongoing credit concerns.

Brent rises above $115 on Chinese inflation data
SINGAPORE, Nov 9 (Reuters) - Brent crude gained for a fifth day, to stand above $115 a barrel, as positive Chinese inflation data soothed fears of a sharp slowdown in the world's second largest oil consumer.
"The data is bullish for oil as it indicates that there will be no hard landing for the Chinese economy," said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong.

POLL-US crude stocks seen up on higher imports
Nov 8 (Reuters) - U.S. crude oil inventories likely rose for a third straight week due to higher imports while distillate stockpiles were seen falling, an expanded Reuters poll of analysts showed on Tuesday.
On average, crude stockpiles were forecast up 400,000 barrels for the week ended Nov. 4, the poll of 10 analysts showed. Six of the analysts called for a stock build. One expected an unchanged level from the previous week, and three  projected a drawdown, citing a small drop in imports.

Iron Ore-China steel futures edge up, ore extends gains
SINGAPORE, Nov 9 (Reuters) - Shanghai steel futures rose for a third time in four sessions on Wednesday after in-line Chinese inflation data suggested there is room for Beijing to relax its monetary policy, a move that may revive demand.
Gains in Chinese steel prices bode well for iron ore, the steelmaking raw material which rose for a seventh straight day on Tuesday as Chinese steel mills continued to replenish inventories after prices slumped more than 30 percent last month.

OPEC raises oil demand view, says risk to downside
LONDON/VIENNA,  Nov 8 (Reuters) - Oil producer group OPEC is investing in new supplies to meet rising consumption, even as it sees the risk to the demand outlook as being on the downside because of Europe's sovereign debt crisis and a slowing global economy.
The Organization of the Petroleum Exporting Countries in its 2011 World Oil Outlook increased its estimate of supplies, saying the amount of unused oil production that the 12-member group holds in reserve in case of supply shocks would double by 2015.

European copper premiums drop on demand uncertainty
LONDON, Nov 8 (Reuters) - Copper premiums in Europe may slip further as uncertainty about the region's growth prospects dims the outlook for demand, while annual contracts are expected to meet consumers' needs until the end of the year, traders and consumers said.
The premium for copper Grade A Rotterdam  -- paid over the London Metal Exchange (LME) cash price  -- was quoted in a range of $40 to 60 a tonne, against $60 to 80 quoted previously.  

Copper up on China data, Berlusconi's exit pledge
SHANGHAI, Nov 9 (Reuters) - Copper rose after data showed China's inflation slipped in October, easing concerns that the government will further tighten monetary policy.
"We saw a rise earlier on short covering on the back of s decent equity close in the U.S. last night, where the markets were cheered by news that Berlusconi had fallen on his sword," said global head of base metals research David Thurtell.

Australian iron ore magnate Forrest returns to nickel
SYDNEY, Nov 9 (Reuters) - A company chaired by Australian iron ore magnate Andrew "Twiggy" Forrest wants to reopen a nickel mine in Western Australia shut more than 15 years ago.
A successful restart of the Mount Windarra mine by Poseidon Nickel Co , would mark Forrest's return to nickel mining after quitting the board of Anaconda Nickel in 2002 and founding Fortescue Metals Group , Australia's third-largest iron ore company.
 
Freeport Indonesia union plans to extend strike to Dec 15
JAKARTA, Nov 9 (Reuters) - Freeport McMoRan Copper & Gold Inc's Indonesian workers union plans to extend a strike at the Grasberg mine by one month to Dec 15, said union official Virgo Solossa on Wednesday.
Workers have been on strike over pay since mid-September, slashing production at the world's second biggest copper mine.

Freeport Indonesia mining union may cut pay demand
JAKARTA, Nov 8 (Reuters) - Freeport McMoRan Copper & Gold Inc's  union in Indonesia will consider almost halving its pay demand if the firm agrees  an extra pay hike when workers are promoted, the union said on Tuesday, taking the near two-month strike a step towards  resolution.
Virgo Solossa, a union official at the giant Grasberg mine, told Reuters that workers would consider cutting their wage  demand to $4.00 an hour from $7.50 if the company agrees to add another $1 when workers improve their skills and are promoted.

Scrap copper scarce in China's Guangdong after customs tightens checks
HONG KONG, Nov 8 (Reuters) - Copper scrap is in short supply in Guangdong province, one of the major industrial metal fabricating bases in China, after the customs authorities intensified checks on imports, trading sources said on Tuesday.
The new policy, which took effect on August 1, requires customs officials to tighten checks on all scrap imports and bans import licences from being transferred or sold, according to a document on the General Administration of Customs website (www.customs.gov.cn).

European debt crisis hits German steel industry
DUESSELDORF, Germany, Nov 8 (Reuters) - Europe's largest steel producer, Germany, will likely produce less crude steel this year than expected as the euro zone debt crisis creeps its way into the real economy.
"In the past few weeks business in the steel industry has become bleak, mainly due to the euro zone debt crisis," German Steel Federation President Hans Juergen Kerkhoff said on Tuesday.

Australia aluminium sector to contract over carbon plan
SYDNEY, Nov 8 (Reuters) - Australia's new carbon pricing plan will cause a contraction in the country's energy-intensive aluminium industry, already under pressure from cheaper Chinese output, the Australian Aluminium Council said on Tuesday.
"This puts us at more of a disadvantage than we were at without the scheme," the council's executive director, Miles Prosser,told Reuters.

Europe zinc premiums dip as steel mills cut output
LONDON, Nov 8 (Reuters) - The premium for physical zinc on the spot market in Europe dipped in recent weeks as key consumers like steel mills cut consumption amid concerns over the euro zone debt crisis, traders and analysts said.
The premium for special high grade zinc in Rotterdam - the price paid over and above LME cash  - is currently at around $125-140 a tonne, having averaged some $135-140 for most of the past two months.

METALS-Copper up on China data, Berlusconi's exit pledge
SHANGHAI, Nov 9 (Reuters) - Copper rose on Wednesday after data showed China's inflation slipped in October, easing concerns that the government will further tighten monetary policy.
News of Italian Prime Minister Silvio Berlusconi agreeing to step down also allayed some fears over Italy's commitment to the budget reforms crucial to keeping the euro zone debt crisis in check.

Gold edges up, Italy's debt worries linger
SINGAPORE, Nov 9 (Reuters) - Gold inched up on fears the euro zone debt crisis could engulf Italy, despite news that Prime Minister Silvio Berlusconi would resign, which was initially seen as clearing the way for a new leader to act more aggressively to tackle the country's debt problems.
"Are we still going to see the political willpower to resolve Italy's challenges? I think that is necessary before we can see a sustainable risk rally," said Ong Yi Ling, an analyst at Phillip Futures in Singapore.

China 2011 gold consumption to exceed 400 tonnes -paper
SHANGHAI, Nov 9 (Reuters) - China's gold consumption is expected to jump nearly 50 percent to reach 400 tonnes this year, exceeding the country's forecast production of more than 350 tonnes, the China Securities Journal reported on Wednesday, citing China Gold    Association President Sun Zhaoxue.
Gold production in the world's largest gold miner is likely to exceed last year's record, possibly increasing to more than 350 tonnes from last year's 340.9 tonnes, Sun was quoted as saying at a mining conference in Tianjin.

PRECIOUS-Gold edges up, Italy's debt worries linger
SINGAPORE, Nov 9 (Reuters) - Gold inched up on Wednesday on fears the euro zone debt crisis could engulf Italy, despite news that Prime Minister Silvio Berlusconi would resign, which was initially seen as clearing the way for a new leader to act more aggressively to tackle the country's debt problems.
Berlusconi said he would leave office after parliament approved a budget law that included reforms demanded by Europe as Italy's failure to fix its debt problems would have a far bigger impact on the euro zone than difficulties in Greece.

Baltic index at 2-month low, capes turn positive
LONDON, Nov 8 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in two months on Tuesday although the larger capesize segment turned positive with potential scope for further gains.
The overall index fell 7 points or 0.4 percent to 1,759 points in a tenth straight drop and was at its lowest since Sept. 7.

Singapore seizes COSCO ship over payment dispute
SINGAPORE, Nov 9 (Reuters) - A dry bulk vessel operated by China COSCO Holdings   has been seized by authorities in Singapore over a financial dispute with one of its clients, court documents and a shipbroker said on Wednesday.
The 74,000-tonne bulk carrier, Song Shan Hai, was seized on Friday by the law firm Asia Legal, which is representing an unknown client of COSCO's, according to Singapore's Supreme Court.

20111109 1143 Global Market & Commodities Related News.

GLOBAL MARKETS-Asian shares rise as concerns over Italy ease
TOKYO, Nov 9 (Reuters) - Asian shares rose and the euro steadied on Wednesday after Italian Prime Minister Silvio Berlusconi said he would resign, raising hopes the debt-ridden country would proceed with reforms to contain the euro zone's sovereign debt crisis from spreading.
"There will be a knee-jerk reaction to the news of Berlusconi resigning. But it is unclear who has enough political support to take his position and make real reforms in Italy," said Yumi Nishimura, senior technical analyst at Daiwa Securities.

COMMODITIES-US crude up for 5th day; gold at 7-week high
NEW YORK, Nov 8 (Reuters) - U.S. oil prices jumped a fifth straight day on Tuesday and most other commodities rose too as Italian Prime Minister Silvio Berlusconi's resignation gave hope for a clearer path to solving the euro zone debt crisis.
"There are several factors at play. Some are offsetting each other, but the general trend is to the upside," said Carsten Fritsch, energy analyst at Commerzbank in Frankfurt.

China’s Inflation Eases to 5-Month Low (Bloomberg)
China’s inflation cooled to the slowest pace in five months as gains in food costs moderated, giving policy makers more room to support economic growth as Europe’s debt crisis threatens exports. Consumer prices rose 5.5 percent in October from a year earlier, the statistics bureau said today. That matched the median forecast in a Bloomberg News survey and compared with a 6.1 percent gain in September. Producer prices rose 5 percent last month, less than any of 24 analysts’ forecasts. Moderating inflation may enable Premier Wen Jiabao to loosen fiscal and monetary policies as companies complain of a credit squeeze, the property market cools and a likely recession in the euro area threatens exports. Wen said consumer prices have shown an “obvious decrease” since October, the Xinhua news agency reported last night, citing comments to students in Russia.

Oil up as Italy's PM to resign, Brent slips vs WTI
NEW YORK, Nov 8 (Reuters) - Oil prices rose on Tuesday after volatile trading as news that Italy's Prime Minister Silvio Berlusconi is to resign following approval of a new budget deal sparked a late-session rally.
"This buying rotation back and forth within the complex is typical of a valid bull move and we feel that the recent expansion in Brent premium will be contained to about the $20 a barrel area," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.

POLL-US crude stocks seen up on higher imports
Nov 8 (Reuters) - U.S. crude oil inventories likely rose for a third straight week due to higher imports while distillate stockpiles were seen falling, an expanded Reuters poll of analysts showed on Tuesday.
On average, crude stockpiles were forecast up 400,000 barrels for the week ended Nov. 4, the poll of 10 analysts showed. Six of the analysts called for a stock build. One expected an unchanged level from the previous week, and three  projected a drawdown, citing a small drop in imports.

OPEC raises oil demand view, says risk to downside
LONDON/VIENNA,  Nov 8 (Reuters) - Oil producer group OPEC is investing in new supplies to meet rising consumption, even as it sees the risk to the demand outlook as being on the downside because of Europe's sovereign debt crisis and a slowing global economy.
The Organization of the Petroleum Exporting Countries in its 2011 World Oil Outlook increased its estimate of supplies, saying the amount of unused oil production that the 12-member group holds in reserve in case of supply shocks would double by 2015.

Natural gas ends up, weather limits gains
NEW YORK, Nov 8 (Reuters) - U.S. natural gas futures ended higher on Tuesday, underpinned by expectations for a smaller weekly inventory build on Thursday and some technical buying after an early test of support held.
"The market is short and may have bounced when prices couldn't break Monday's low ($3.652), and it looks like people are expecting a small inventory build Thursday, but the weather looks like 15 more days of no cold," a Texas trader said.

Euro Coal-Prices rise $1/T, tracking oil
LONDON, Nov 7 (Reuters) - Prompt physical coal prices rose by around $1 per tonne on Monday, in line with a rebound in oil prices on hopes that Europe can contain its debt crisis and on concerns about Iran's nuclear programme.
"Oil was much stronger today -- enough of a rise to pull coal up with it, but that was the only change from Friday," one European coal trader said.

20111109 1022 Malaysia Corporate Related News.

The high-speed rail  system linking KL and Singapore could take shape by  next year, with three groups leading the early race to win the multi-billion  ringgit job. The Land Public Transport Commission (SPAD) is expected to start  a feasibility study on the project early next year, which should take six to 12  months to complete, SPAD chief development officer Azmi Abdul Aziz said. The  project is estimated to cost as much as RM12bn. It is believed that  up-and-coming rail tycoon Tan Sri Ravindran Menon has teamed up with UEM  Group to vie for the project. Others said to be in the running for the job are  China Infraglobe Consortium-Global Rail, and YTL Corp. (BT)

Sabah's oil & gas industry is expected to create plenty of jobs in years ahead,  said C N Dumo Consulting Worldwide CEO Aminudin Sajadi. The RM4.6bn  Sabah Ammonia-Urea plant project in Sipitang, owned by  Petronas  Chemicals, will create at least 400 jobs for the locals once it is fully  operational.  Other Petronas projects that offer great prospects include the Sabah Oil  & Gas Terminal, Sabah-Sarawak Gas Pipeline Project, Kimanis and  Lahad Datu electricity power plants, Gumusut-Kakap deepwater project  and related ongoing developments. (Star)

The petroleum storage and trading business will create a completely new service  sector for Malaysia as it will allow the country to extract greater benefits from  the oil & gas value chain, says Ahmad Hizzad Baharuddin, Director General of  the Labuan Financial Services Authority (Labuan FSA). The country's competitive edge has catalysed the transformation of the  oil & gas industry to create business opportunities for foreign investors  as well as locals in terms of better career prospects and new skills. The  trading business is expected to generate a gross national income of  RM280m in 2020 and create more than 1,500 job opportunities by that  year, he added. Labuan FSA and Malaysia Petroleum Resources Corp in late Oct  launched the Global Incentives for Trading (GIFT) programme to  position Malaysia as the Asia Pacific hub for the growing petroleum  storage and trading business. (Bernama)

Kencana will jointly bid with  SapuraCrest for international engineering,  procurement, construction  and commissioning contracts upon completion of  their merger slated for 1Q12, said Kencana CEO Datuk Mokhzani Mahathir.  "With SapuraCrest winning the contract from Petrobras, this is good for the  merger. These are some of the things we are hoping to do as a bigger company.  To jointly bid for contracts is the whole purpose of our merger," he added. (Star)

Tenaga Nasional Bhd may need to increase its debt to fund its working  capital if the government fails to offer an interim solution to share the burden of  higher fuel costs. Moody's Investors Service, in its special commentary today,  said the national utility company has estimated that it was incurring an added  RM300m a month for an additional RM1.2bn in such costs in the fourth quarter  of this year.  "Any rise in Tenaga's debt will have a negative impact on its credit  profile for financial year 2012. "Nevertheless, despite rising pressure on interest coverage, the utility firm's rating still has sufficient headroom  for higher leverage before it reaches the downgrade trigger of 60-65%  leverage," it said. "Although acute shortages will diminish, the overall shortfall will not  disappear. Tenaga expects to receive in financial year 2012 an average  allocation of natural gas of 950-1,050 million metric standard cubic feet  per day (mmscfd)  - an amount still below its required levels for full  operations," it said.  It said its rating and stable outlook for TNB assuming that the gas  shortage will gradually diminish over the near term and the government  would likely decide on an appropriate cost-sharing mechanism over the  next six to eight months to compensate TNB's added costs. (Moody’s  Investors Service, Bernama)

Malaysia has the dubious distinction of topping the price charts for leased  access in key areas, according to the Asia Pacific Carriers’ Coalition (APCC).  Malaysia topped the survey in Ethernet access and charges $1,900 for a 2-Mbps  leased line – the most commonly deployed access bandwidth – compared with  the average Hong Kong price of $212, said the survey carried out for APCC.  Although telecom prices across the board are falling, prices in Malaysia  rose 28% even after adjusting for inflation and exchange rate  fluctuations. Telekom Malaysia officials did not respond to Telecom  Asia’s requests for comments on the issue.(Telecom Asia)

EA Holdings has proposed a 1-for-2 bonus issue. EA's issued share base is  currently 203.5m shares. Assuming the outstanding 77.5m warrants are all  exercised, EA's proposed bonus issue would raise its issued share base to  421.5m shares. (BMSB)  

Guocoland (Malaysia) Bhd wants to buy PJ City Development Sdn Bhd  from GuoLine Asset Sdn Bhd for RM29.8m. PJ City owns two parcels of land in  Petaling Jaya, one commercial and another industrial. (BT)

Kumpulan Jetson Bhd plans to buy Asian Corp Ltd Group (ACL) for RM11m.  The company signed yesterday a share sale agreement with Datuk Teh Kian An  and Dr Tong Soon Guan to buy the entire issued and paid-up share capital of  ACL. (BT)

Complete Logistics Services Bhd (CLSB) is buying a 40% stake in Guper  Integrated Logistics Sdn Bhd from Banjaran Unggul Sdn Bhd for RM13.6m.   The proposed acquisition is in line with CLSB’s ongoing plan to expand its  land-based logistic business, which is complementary to its businesses. (BT)

In a landmark decision for securities cases, the Court of Appeal yesterday  upheld a six-month jail term imposed by the High Court on two former  directors of  MEMS Technology Bhd (MEMS),  which was delisted in  Nov-2010. Ooi Boon Leong and Tan Yeow Teck were charged in the Sessions  Court in Kuala Lumpur in 2009 for giving misleading statement related to  MEMS's reported revenue of RM73.4m in FY07. The account contained over  RM30m of sales that did not take place. Ooi and Tan had on February 25 last year pleaded guilty at the Sessions  Court to committing the offence and were fined RM0.3m each upon,  which the public prosecutor appealed to the High Court on the grounds  that the sentence was manifestly inadequate. (BT)

UDA Holdings Bhd had two weeks ago submitted a proposal to  Syarikat  Prasarana Negara Bhd (SPNB) to jointly develop the Dang Wangi LRT station.  The land, measuring 11,008 sq m in Jalan Ampang, is strategically located and  has the potential for residential, commercial or mixed development.(BT)

KFC Holdings (Malaysia) Bhd will spend close to RM70m to expand its  outlets here and abroad next year. Its managing director Jamaluddin Md Ali  said RM50m had been set aside for 2012 to add another 15 local outlets. Of this,  10 will be drive-through outlets. "At present, we have 531 KFC outlets in Malaysia," Jamaluddin said. He  said the company is looking at expanding its presence in Singapore,  Brunei and India. "For the overseas expansion, we have set aside  between RM15m and RM20m," he said.  India is expected to benefit the  most as the company plans to add  another 15 new outlets from the 15 they have."At the end of next year,  we will have a total of 30 outlets in India mainly in Mumbai and Pune,"  Jamaluddin added. Singapore, with 80 outlets, will get two to three new outlets next year.  Brunei will get three more from the current 11. He said the KFC Double Zinger burger is the last product launch for  2011. Next year, it plans to unveil four more products on a quarterly  basis.
"The new products will not all be chicken as some will also be local  based," Jamaluddin said. (BT)

Glomac Bhd is looking to increase its projects in hand to improve earnings,  said its assistant GM marketing, Fara Eliza FD Mansor. "We are increasing our  landbank size and plan to launch more medium- to high-end developments. We  will go where the market is," she told BT in an interview recently. The company  has close to 405ha in its pocket with a potential to develop properties worth  RM3.8bn over the next seven years.  Glomac is currently focusing on four projects, namely Glomac  Damansara, Mutiara Damansara Residences and Glomac Utama in  Petaling Jaya, Selangor, and Glomac Cyberjaya. The projects are worth  close to RM2bn combined. (BT)

Toyota said first-half net profit tumbled 71.8% from a year earlier due to  impact of the March earthquake and tsunami on production, and to a strong yen.  It swung to an operating loss of 32.6bn yen for the six-month period.  "In Japan and North America, vehicle sales decreased severely  compared to the same period last fiscal year due to the large impact of  the Great East Japan earthquake," executive vice president Satoshi  Ozawa said. The impact of Thailand's worst flooding in decades has set  back post-quake recovery efforts. (BT, AFP)

The high-speed rail  system linking KL and Singapore could take shape by  next year, with three groups leading the early race to win the multi-billion  ringgit job. The Land Public Transport Commission (SPAD) is expected to start  a feasibility study on the project early next year, which should take six to 12  months to complete, SPAD chief development officer Azmi Abdul Aziz said. The  project is estimated to cost as much as RM12bn. It is believed that  up-and-coming rail tycoon Tan Sri Ravindran Menon has teamed up with UEM  Group to vie for the project. Others said to be in the running for the job are  China Infraglobe Consortium-Global Rail, and YTL Corp. (BT)

Sabah's oil & gas industry is expected to create plenty of jobs in years ahead,  said C N Dumo Consulting Worldwide CEO Aminudin Sajadi. The RM4.6bn  Sabah Ammonia-Urea plant project in Sipitang, owned by  Petronas  Chemicals, will create at least 400 jobs for the locals once it is fully  operational.  Other Petronas projects that offer great prospects include the Sabah Oil  & Gas Terminal, Sabah-Sarawak Gas Pipeline Project, Kimanis and  Lahad Datu electricity power plants, Gumusut-Kakap deepwater project  and related ongoing developments. (Star)

The petroleum storage and trading business will create a completely new service  sector for Malaysia as it will allow the country to extract greater benefits from  the oil & gas value chain, says Ahmad Hizzad Baharuddin, Director General of  the Labuan Financial Services Authority (Labuan FSA). The country's competitive edge has catalysed the transformation of the  oil & gas industry to create business opportunities for foreign investors  as well as locals in terms of better career prospects and new skills. The  trading business is expected to generate a gross national income of  RM280m in 2020 and create more than 1,500 job opportunities by that  year, he added. Labuan FSA and Malaysia Petroleum Resources Corp in late Oct  launched the Global Incentives for Trading (GIFT) programme to  position Malaysia as the Asia Pacific hub for the growing petroleum  storage and trading business. (Bernama)

Kencana will jointly bid with  SapuraCrest for international engineering,  procurement, construction  and commissioning contracts upon completion of  their merger slated for 1Q12, said Kencana CEO Datuk Mokhzani Mahathir.  "With SapuraCrest winning the contract from Petrobras, this is good for the  merger. These are some of the things we are hoping to do as a bigger company.  To jointly bid for contracts is the whole purpose of our merger," he added. (Star)

Tenaga Nasional Bhd may need to increase its debt to fund its working  capital if the government fails to offer an interim solution to share the burden of  higher fuel costs. Moody's Investors Service, in its special commentary today,  said the national utility company has estimated that it was incurring an added  RM300m a month for an additional RM1.2bn in such costs in the fourth quarter  of this year.  "Any rise in Tenaga's debt will have a negative impact on its credit  profile for financial year 2012. "Nevertheless, despite rising pressure on interest coverage, the utility firm's rating still has sufficient headroom  for higher leverage before it reaches the downgrade trigger of 60-65%  leverage," it said. "Although acute shortages will diminish, the overall shortfall will not  disappear. Tenaga expects to receive in financial year 2012 an average  allocation of natural gas of 950-1,050 million metric standard cubic feet  per day (mmscfd)  - an amount still below its required levels for full  operations," it said.  It said its rating and stable outlook for TNB assuming that the gas  shortage will gradually diminish over the near term and the government  would likely decide on an appropriate cost-sharing mechanism over the  next six to eight months to compensate TNB's added costs. (Moody’s  Investors Service, Bernama)

Malaysia has the dubious distinction of topping the price charts for leased  access in key areas, according to the Asia Pacific Carriers’ Coalition (APCC).  Malaysia topped the survey in Ethernet access and charges $1,900 for a 2-Mbps  leased line – the most commonly deployed access bandwidth – compared with  the average Hong Kong price of $212, said the survey carried out for APCC.  Although telecom prices across the board are falling, prices in Malaysia  rose 28% even after adjusting for inflation and exchange rate  fluctuations. Telekom Malaysia officials did not respond to Telecom  Asia’s requests for comments on the issue.(Telecom Asia)

EA Holdings has proposed a 1-for-2 bonus issue. EA's issued share base is  currently 203.5m shares. Assuming the outstanding 77.5m warrants are all  exercised, EA's proposed bonus issue would raise its issued share base to  421.5m shares. (BMSB)  

Guocoland (Malaysia) Bhd wants to buy PJ City Development Sdn Bhd  from GuoLine Asset Sdn Bhd for RM29.8m. PJ City owns two parcels of land in  Petaling Jaya, one commercial and another industrial. (BT)

Kumpulan Jetson Bhd plans to buy Asian Corp Ltd Group (ACL) for RM11m.  The company signed yesterday a share sale agreement with Datuk Teh Kian An  and Dr Tong Soon Guan to buy the entire issued and paid-up share capital of  ACL. (BT)

Complete Logistics Services Bhd (CLSB) is buying a 40% stake in Guper  Integrated Logistics Sdn Bhd from Banjaran Unggul Sdn Bhd for RM13.6m.   The proposed acquisition is in line with CLSB’s ongoing plan to expand its  land-based logistic business, which is complementary to its businesses. (BT)

In a landmark decision for securities cases, the Court of Appeal yesterday  upheld a six-month jail term imposed by the High Court on two former  directors of  MEMS Technology Bhd (MEMS),  which was delisted in  Nov-2010. Ooi Boon Leong and Tan Yeow Teck were charged in the Sessions  Court in Kuala Lumpur in 2009 for giving misleading statement related to  MEMS's reported revenue of RM73.4m in FY07. The account contained over  RM30m of sales that did not take place. Ooi and Tan had on February 25 last year pleaded guilty at the Sessions  Court to committing the offence and were fined RM0.3m each upon,  which the public prosecutor appealed to the High Court on the grounds  that the sentence was manifestly inadequate. (BT)

UDA Holdings Bhd had two weeks ago submitted a proposal to  Syarikat  Prasarana Negara Bhd (SPNB) to jointly develop the Dang Wangi LRT station.  The land, measuring 11,008 sq m in Jalan Ampang, is strategically located and  has the potential for residential, commercial or mixed development.(BT)

KFC Holdings (Malaysia) Bhd will spend close to RM70m to expand its  outlets here and abroad next year. Its managing director Jamaluddin Md Ali  said RM50m had been set aside for 2012 to add another 15 local outlets. Of this,  10 will be drive-through outlets. "At present, we have 531 KFC outlets in Malaysia," Jamaluddin said. He  said the company is looking at expanding its presence in Singapore,  Brunei and India. "For the overseas expansion, we have set aside  between RM15m and RM20m," he said.  India is expected to benefit the  most as the company plans to add  another 15 new outlets from the 15 they have."At the end of next year,  we will have a total of 30 outlets in India mainly in Mumbai and Pune,"  Jamaluddin added. Singapore, with 80 outlets, will get two to three new outlets next year.  Brunei will get three more from the current 11. He said the KFC Double Zinger burger is the last product launch for  2011. Next year, it plans to unveil four more products on a quarterly  basis."The new products will not all be chicken as some will also be local  based," Jamaluddin said. (BT)

Glomac Bhd is looking to increase its projects in hand to improve earnings,  said its assistant GM marketing, Fara Eliza FD Mansor. "We are increasing our  landbank size and plan to launch more medium- to high-end developments. We  will go where the market is," she told BT in an interview recently. The company  has close to 405ha in its pocket with a potential to develop properties worth  RM3.8bn over the next seven years.  Glomac is currently focusing on four projects, namely Glomac  Damansara, Mutiara Damansara Residences and Glomac Utama in  Petaling Jaya, Selangor, and Glomac Cyberjaya. The projects are worth  close to RM2bn combined. (BT)

Toyota said first-half net profit tumbled 71.8% from a year earlier due to  impact of the March earthquake and tsunami on production, and to a strong yen.  It swung to an operating loss of 32.6bn yen for the six-month period.  "In Japan and North America, vehicle sales decreased severely  compared to the same period last fiscal year due to the large impact of  the Great East Japan earthquake," executive vice president Satoshi  Ozawa said. The impact of Thailand's worst flooding in decades has set  back post-quake recovery efforts. (BT, AFP)

OM Holdings gets go ahead for Sarawak smelting project
Australian manganese producer OM Holdgins Ltd’s board has given the nod to proceed with the development of its USD501m ferroalloy smelting project in Sarawak, following the completion of a definitive feasibility study. The project is a joint venture between OM Holdings and Cahya Mata Sarawak and would produce 310k tonnes per year of ferrosilicon alloys and a further 290k tonnes per year of manganese ferroalloys. (Malaysian Reserve)

SP Setia launches exclusive residential project in Australia
Minister of Housing and Local government Datuk Chor Chee Heung officially launched SP Setia’s Fulton Lane residential project in Melbourne on Monday. The site was bought last year and SP Setia moved quickly to establish Fulton Lane as a premium address in the central business district; it comprises two towers made up of 700 apartments and is expected to complete in 2013. (Malaysian Reserve)

Sunrise unveils RM1.3bn project in city centre
Sunrise, a wholly-owned unit of UEM Land Holdings, has unveiled plans for its new landmark project, Angkasa Raya, which has an estimated gross development value of RM1.3bn and is poised to be the group’s new flagship development. Situated at the intersection of Jln Ampang and Jln P Ramlee, directly across the Petronas Twin Towers, the building will be on the 1.59-acre site of the former Wisma Angkasa Raya, which was demolished in August. (Financial Daily)

Telecommunications: MCMC chief tells telcos to buck up. The new chairman of the Malaysian Communications & Multimedia Commission (MCMC) wants the quality of service in the country raised and coverage for both cellular and broadband improved. (Source: The Star)

Aviation: A new super-premium airline in the works. AirAsia chief Tan Sri Tony Fernandes is set to expand his empire further as he moves to start a new super-premium full-service carrier (FSC) that will compete head-on with Qantas' upcoming Asia-based super-premium FSC called RedQ. Likely to be called Caterham Jet, sources said the new regional airline has yet to be granted an operating licence by the government, but has secured several Bombardier CRJs which have been sent for retrofitting. (Source: The Sun)

20111109 1014 Local & Global Economic Related News.

Funds amounting to RM581.8m were allocated through the Food Production  Incentive between 2008 and last year, during a food crisis and to ease the  burden of farmers, the Dewan Rakyat was told yesterday. Agriculture and  Agro-based Industry Minister Datuk Seri Noh Omar said contributions through  the Food Supply Guarantee Policy were divided into several sectors, namely  plantation crops, livestock and fisheries.  Incentives paid for plantation crops (vegetables and fruits) in 2009 for  claims made in 2008, totalled RM116.9m while RM47.3m was paid for  claims in 2009. For livestock, RM208m was given in 2009 for claims made a year  earlier, and RM84.2m for claims in 2009.  For fisheries, RM108.8m was paid out for 7,594 claims in 2008, and  RM16.6m for 706 claims in 2009, he noted. (Bernama)

A national institute of biotechnology will be set up next year to expand the herbal market internationally, the Dewan Rakyat was told yesterday. The  institute would merge the Malaysian Pharmaceutical and Nutraceutical Institute  (Ipharm), Malaysian Genome Institute and Malaysian Agrobiotechnology  Institute. Science, Technology and  Innovation Deputy Minister Datuk Fadillah  Yusof said the soon-to-be set up biotechnology institute would not only provide  basic infrastructure for the R&D but would also explore other supporting fields  for expansion. (Bernama)

The  Education Ministry will  spend RM500m next year to repair 600  dilapidated national schools, said its minister, Tan Sri Muhyiddin Yassin.  The ministry would channel most of the money to schools in Sabah and Sarawak.  These schools were identified from an audit carried out earlier this year to  determine the infrastructure in all schools, he said. (NST)

US companies in Malaysia are expected to continue their growth next year  despite the challenging global economy. American Malaysian Chamber of  Commerce (Amcham) VP Datuk Tim Yariq Garland said the key area of  growth in the country is in the services sector. Malaysia’s move to further liberalise 17 services subsectors had given a  big boost to the country’s efforts to attract investment, he noted.  “Many companies are looking at Malaysia  to set up a regional centre  and leverage Asean growth and opportunities that exist with the 600m  people in the region,” he added. (Malaysian Reserve)

Malaysia will negotiate for flexibility in “sensitive” areas during Trans-Pacific  Partnership trade talks this month, Datuk Seri Mustapa Mohamed,  Minister of the International Trade and Industry  said. This includes  government procurement, intellectual property rights, labor and the  environment, Mustapa said. Malaysia is open to new membership to the trade  grouping from the Asia-Pacific region “so long as they subscribe to the  high-level of ambition,” he said. (Bloomberg)

US consumer borrowing rose by US$7.4bn in Sep (-US$9.7 in Aug), Federal  Reserve figures showed. Economists projected credit to rise US$5.2bn.  (Bloomberg)

US job openings increased by 225,000 or 7.2% mom to 3.35m in Sep (3.13m  in Aug), the most since Aug 08, Labor Department data showed. (Bloomberg)

US stocks rise as Berlusconi offers to quit when plan approved
US stocks rose, sending the Standard & Poor’s 500 Index higher a second day, as PM Silvio Berlusconi’s offer to resign boosted optimism Italy will appoint a new leader who can tame the debt crisis. The S&P 500 climbed 1.2% to 1,275.92, after falling as much as 0.5% earlier yesterday. The benchmark gauge of American equities has increased 1.8% in two days. The Dow Jones Industrial Average advanced 101.79 points, or 0.8%, to 12,170.18 yesterday. (Bloomberg)

Japan's  foreign reserves rose to US$1.21tr at the end of Oct (US$1.20 in  Sep), the Ministry of Finance said. The data does not take into account Japan's  yen-selling currency market intervention on 31 Oct as those sales were settled in  Nov. In Aug, the nation's foreign reserves hit an all-time high (US$1.22tr).  (Reuters)

European finance ministers pledged to roll out a bulked-up rescue fund next month, leaving Greece and Italy on the front lines until then in the fight  against the debt crisis. Greece was ordered to provide written acceptance of  bailout terms in order to win an EUR8bn loan installment by the end of Nov,  while Italy was pressed to turn budget-cut promises into reality. (Bloomberg)

Greece: Papandreou Greek unity government wrangling drags into third day
Greek PM George Papandreou’s talks on forming an interim government to avert the economy’s collapse dragged into a third day as a near-agreement with the biggest opposition party stalled on European Union demands for written commitments. Former central banker Lucas Papademos appeared poised to be named to lead the new government as of late yesterday, according to reports from state-run NET TV and To Vima newspaper. While Papandreou told his ministers to prepare to submit their resignations because a government would be named “soon”, no official announcement was made. (Bloomberg)

Italy: Berlusconi to resign after passage of austerity, debt plan
PM Silvio Berlusconi offered to resign as soon as Parliament approves austerity measures pledged to European partners, after defections from his ruling party left him without a majority and bond yields surged to euro-era records. “Once that task has been achieved, the prime minister will tender his resignation to the president,” who will then begin consultations with all political parties, President Giorgio Napolitano said last night after meeting Berlusconi in Rome. The government has yet to present the final text of the amendment to the budget law with the austerity measures. (Bloomberg)

UK: Factory output increases for first time in four months
UK manufacturing production rose for the first time in four months in September, led by transport equipment and metals. Factory output increased 0.2% from the previous month, when it fell 0.3%, the Office for National Statistics said yesterday. Overall industrial output, which includes mining and oil and gas, was unchanged on the month. The statistics office said the data will have a “negligible impact on its gross-domestic-product estimate. (Bloomberg)

The  Thai government’s long-term  water management plan will ensure  there isn’t a repeat of this year’s flooding disaster, said Virabongsa Ramangkura,  the head of a new committee for reconstruction and development. Projects  planned over the next 12 months will ensure the safety of industrial parks based  in the country. Thailand will seek input from Japan’s government and industry  groups on measures the country can take to retain international investment,  Virabongsa said. (Bloomberg)

Vietnamese lawmakers approved a proposal that aims for annual economic  growth of 6.5-7% through 2015 and seeks to reduce inflation to 5-7% by the  end of that period, Nguyen Thi Kim Ngan, the deputy chairwoman of the  legislative body, said. (Bloomberg)

Indonesia’s money supply growth in M2 moderated to 16.2% yoy in Oct  (+17.2% n Sep). The growth rate in M1 was unchanged at 19.3% yoy.  (Bloomberg)

Singapore’s forex reserves increased to US$245.42bn in Oct, from  US$233.62bn. (Bloomberg)

India’s merchandise exports rose 10.8% yoy to US$19.9bn last month.  Imports gained 21.7% yoy to US$39.5bn, causing a  trade deficit of  US$19.6bn. That’s the biggest shortfall since Apr 94. (Bloomberg)

Indonesia’s balance of payments booked a US$4bn deficit in 3Q11 on the  large amount of capital outflows in the financial market. Forex reserves were  down by more than US$10bn from the Aug high of US$114.5bn, but could still  afford 6.6 months of import coverage. (Jakarta Post)

Indonesia’s government spending may only reach 90% of the overall target  this year as ministries and state bodies remain slow in disbursing allocated state  budgets, Finance Minister Agus Martowardojo says. (Jakarta Post)

Damage to property and assets from the Thai floods could range between  THB700bn and 1tr, including opportunity losses of THB350 to 450bn for  businesses, according to a new forecast by the University of the Thai Chamber of  Commerce. (Bangkok Post)

Airports of Thailand Plc (AoT) executives said  daily passenger  throughput now stands at just over 100,000 passengers, down from 130,000  in the last week of Oct when the threat of flooding was felt less. (Bangkok Post)

The Thai government has settled on a  three stage strategy to reconstruct  the country in the wake of the flood damage, Prime Minister Yingluck  Shinawatra said at a press conference on Tuesday.  The first stage involved the  flood centre solving various urgent  problems, distributing relief items to the flood victims, and providing  medical treatment for people at all evacuation centres. The second stage centred on  bringing every system back to  normal as soon as possible. It would be carried out while the  floodwater is receding or after it has receded. Measures to be taken at  this stage included compensation for damage and loans and other  privileges for affected individuals and the affected business sector. The third stage involved meting out solutions to  solve problems in  the long run and to prepare the country to cope effectively with  climate change and water management. (Bangkok Post)

Government deputy spokesperson Anuttama Amornvivat said the cabinet today  approved a  budget  of THB3.1bn baht to pay  compensation  of THB5,000  each to 621,355 households in Bangkok affected by the flood. (Bangkok Post)

The Bank of Thailand will drop its growth forecast even lower for GDP this  year  as the massive flood works its way through Bangkok and into Samut  Sakhon. "How much [the Monetary Policy Committee] will decide to revise  downwards the GDP figure on 30 Nov will depend on the latest estimated loss  figures. The situation has not yet stabilised," Deputy BOT Governor Suchada  Kirakul said yesterday. (The Nation)

The Bank of Thailand will use monetary policy to help revive the economy  from the nation’s worst floods in almost 70 years, which may trim 2011  economic growth to less than 2.6%, Deputy Governor Suchada Kirakul said.  “The central bank is unlikely to hold and raise the rate next time,” Suchada  said. (Bloomberg)

20111109 1000 Global Market Related News.

Asia Stocks Rise as Berlusconi Offers to Resign (Source: Bloomberg)
Asian stocks rose, with the regional benchmark index snapping a two-day loss, as Italian Prime Minister Silvio Berlusconi’s offer to resign bolstered optimism Europe may find a way to contain its sovereign-debt crisis. Westpac Banking Corp. (WBC), Australia’s second-largest lender by market value, gained 1.2 percent in Sydney as Australian home- loan approvals rose more than estimated in September. Woodside Petroleum Ltd. (WPL), Australia’s second-biggest oil and gas producer, climbed 2 percent after crude oil futures extended a rally. Newcrest Mining Ltd., Australia’s No. 1 gold producer, added 2 percent as futures on the precious metal advanced above $1,800 an ounce for the first time in seven weeks.
“A change in premiership is going to tame political risks somewhat because criticism against Berlusconi was strong,” said Ayako Sera, a market strategist at Sumitomo Trust & Banking Co. in Tokyo, which manages the equivalent of $322 billion. “Berlusconi’s resignation gives a short-term positive for the market, while the focus switches to austerity measures.”

U.S. Stocks Rise as Berlusconi Offers to Quit When Plan Approved (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher a second day, as Prime Minister Silvio Berlusconi’s offer to resign boosted optimism Italy will appoint a new leader who can tame the debt crisis. All 10 groups in the S&P 500 advanced as financial, energy and technology companies rallied at least 1.1 percent. JPMorgan Chase & Co. (JPM), Occidental Petroleum Corp. (OXY) and Intel Corp. (INTC) added more than 1.9 percent. A gauge of homebuilders in S&P indexes jumped 3.8 percent as Toll Brothers Inc. (TOL) gained 7.4 percent after the luxury-home builder said revenue increased. The S&P 500 climbed 1.2 percent to 1,275.92 as of 4 p.m. New York time, after falling as much as 0.5 percent earlier today. The benchmark gauge of American equities has increased 1.8 percent in two days. The Dow Jones Industrial Average advanced 101.79 points, or 0.8 percent, to 12,170.18 today.

European Stocks Rise as Berlusconi Loses Absolute Majority; Vodafone Gains (Source: Bloomberg)
European stocks rose, with the Stoxx Europe 600 Index rebounding from two days of losses, as Italy’s Prime Minister Silvio Berlusconi won a parliamentary vote on the budget yet still lost his absolute majority. Vodafone Group Plc (VOD) gained 1.8 percent after increasing its full-year earnings forecast as profit beat analysts’ estimates. Repsol YPF SA (REP) climbed 6.3 percent after raising its prediction for recoverable reserves in Argentina. Banks rallied as Societe Generale SA, France’s second-biggest bank, and Lloyds Banking Group Plc (LLOY), the largest mortgage lender in the U.K., both gained more than 4 percent. The Stoxx 600 rose 0.9 percent to 240.50 at the close. The benchmark measure has rallied 12 percent since this year’s low on Sept. 22 as investors speculated that the euro area would protect the economies of Italy and Spain from the sovereign-debt crisis.

Job Openings in U.S. Rose in Sept. to Three-Year High (Source: Bloomberg)
The number of positions waiting to be filled in the U.S. rose in September to the highest level in more than three years, indicating some companies are preparing for an improving economy. Job openings increased by 225,000 to 3.35 million, the most since August 2008, a month before the collapse of Lehman Brothers Holdings Inc. intensified the financial crisis, Labor Department data showed today in Washington. Hiring advanced by 185,000 to 4.25 million, and firings also climbed. Payrolls grew by 80,000 workers in October, and gains in the prior two months were revised up, Labor Department figures showed last week. At the same time, hiring is short of the pace needed to reduce unemployment hovering around 9 percent, helping explain why Federal Reserve Chairman Ben S. Bernanke has said the recovery is “frustratingly slow.”
“It is reassuring that the economy could muster a speed-up in job openings,” said Henry Mo, a senior economist at Credit Suisse in New York. At the same time, “we have a persistent but inadequate recovery. We need faster hiring.”

Kocherlakota: Fed Should Make Public Contingency Plan (Source: Bloomberg)
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said the U.S. central bank should develop and make public a contingency plan that would explain how it would react to developments in the economy. Such a contingency plan by the policy-setting Federal Open Market Committee would “provide clear guidance on how it will respond to a variety of relevant scenarios,” Kocherlakota said today in a speech in Sioux Falls, South Dakota. Kocherlakota said a contingency plan would reduce uncertainty about the Fed’s actions among consumers and companies, which he said has reduced incentives to spend and hire. It would also enhance the central bank’s credibility and transparency, he said.
His comments extend a discussion among members of the FOMC about how to better explain their forecasts and policies to the public. At a press conference last week, Fed Chairman Ben S. Bernanke said options include clarifying the central bank’s long-term inflation goal, publishing the likely path of interest rates, and tying the Fed’s pledge to hold rates low to specific levels of employment and inflation -- a strategy espoused by Chicago Fed President Charles Evans.

South Korea’s Jobless Rate Returns to 3-Year Low on Service Industry Hires (Source: Bloomberg)
South Korea’s unemployment rate fell back to a three-year low last month as jobs increased in the service industries and among retailers and wholesalers. The jobless rate was 3.1 percent in October, compared with 3.2 percent in September, Statistics Korea said today in Gwacheon, south of Seoul. The rate fell to 3.1 percent in August, the lowest since 2008. The median estimate in a Bloomberg News survey of 11 economists was for a rate of 3.3 percent. South Korea’s job market has so far withstood damage from slowing exports as service industries are hiring more workers. Concern that the European debt crisis and a global slowdown may weigh on the nation’s growth will probably prompt the Bank of Korea to keep borrowing costs unchanged Nov. 11, according to all 17 economists surveyed by Bloomberg News.
“The labor market will probably remain healthy in the fourth quarter, supporting the consumption outlook,” Oh Suk Tae, an economist at SC First Bank Korea Ltd. in Seoul, said before the release. “Still, the BOK policy rate will stay on hold into the first half of next year” due to the gloomy global outlook, slower economic activity and easing inflation.

Korean Won Rises on Surprise Unemployment Drop, Berlusconi’s Offer to Quit (Source: Bloomberg)
South Korea’s won rose for the first time in three days and government bonds fell after the unemployment rate unexpectedly dropped toward a record low, bolstering confidence in the economic outlook. The jobless rate declined to 3.1 percent last month from 3.2 percent in September, Statistics Korea said today. A 3 percent level in the first two months of 2008 was the lowest in data going back to 1999. Economists expected a 3.3 percent rate last month, based on the median estimate in a Bloomberg News survey. Italy’s Prime Minister Silvio Berlusconi offered to resign yesterday as soon as Parliament approves austerity measures pledged to European partners. “The Italian prime minister’s plan to quit and South Korea’s unemployment data will buoy market sentiment,” said Lee Jung Ha, a Seoul-based senior currency dealer at Korea Development Bank. “There’s not much momentum in the market and players are reacting to news headlines.”

Hong Kong’s Tsang ‘Pessimistic’ on Global Growth as City Risks Recession (Source: Bloomberg)
Hong Kong Chief Executive Donald Tsang said the city’s economy may have slipped into a recession in the third quarter as Europe’s debt crisis roiled markets. Growth may be as little as 2 percent next year after a likely expansion of 5 percent this year, Tsang said in an interview at Bloomberg LP’s head office in New York yesterday. That would compare with a 7 percent expansion last year. Hong Kong exports declined in September for the first time in almost two years, and the benchmark Hang Seng Index (HSI) plunged 21 percent in the third quarter. Third-quarter economic figures are due Nov. 11, with seven of 15 economists in a Bloomberg News survey forecasting a second straight contraction, meeting the technical definition of a recession.
“It’s very likely Hong Kong has entered into a recession, and I doubt if that will be a brief one,” said Law Ka Chung, chief economist at Bank of Communications Co. Ltd. in Hong Kong. “There are so many bombs in Europe waiting to explode and the impact on the global economy may be huge, similar to what we saw in late 2008.”

Ackman to Lose ‘a Lot of Money’ on Hong Kong Currency-Peg Bet, Tsang Says (Source: Bloomberg)
William Ackman, founder of hedge fund Pershing Square Capital Management LP, will “lose a lot of money” on his bet that Hong Kong will amend its currency peg to the dollar, city Chief Executive Donald Tsang said. Ackman, who netted more than $1 billion on a six-year short bet against the bond insurer MBIA Inc., said in September that he is buying Hong Kong dollar call options. The wagers will make money if Hong Kong changes its three-decade long linkage to the U.S. dollar and allows the currency to rise or if option prices increase before maturity. “I think he’s going to lose a lot of money on that,” Tsang, 67, said in a Bloomberg Television interview in New York yesterday. The peg is a “very important anchor underpinning Hong Kong growth and Hong Kong’s monetary stability and we are not going to change,” he said.
Policy makers have kept the currency at about HK$7.80 per dollar since 1983, linking monetary policy to the U.S. Federal Reserve’s. The city’s consumer prices rose 7.9 percent in July, the fastest pace since 1995, partly because the peg deprives the Hong Kong Monetary Authority the option to raise borrowing costs when the Fed keeps benchmark rates near zero. The yuan is up 24 percent against the dollar in the past five years, making the city’s imports from China more expensive.

Japan Stocks Rise as Berlusconi’s Resignation Lifts Mood: Nomura Rebounds (Source: Bloomberg)
Japanese stocks rose, snapping a two- day losing streak, after Italian Prime Minister Silvio Berlusconi offered to resign once austerity measures are approved, easing concern Europe’s debt crisis will damp the earnings outlook for Asian exporters. Honda Motor Co., Japan’s second-largest carmaker by market value that gets 83 percent of its sales abroad, rose 2.3 percent. Shares of Olympus Corp. (7733), a Japanese optical-equipment maker, may be active today after plunging by the daily limit to 734 yen yesterday. Nomura Holdings Inc. surged 5.7 percent, leading gains among securities firms after the brokerage plunged 15 percent yesterday. The Nikkei 225 (NKY) Stock Average rose 0.9 percent to 8,731.26 as of 9:20 a.m. in Tokyo. The broader Topix index advanced 1.1 percent to 745.47 with about four stocks rising for each that fell.

Thai Investments Put Japan Inc. in Flood’s Path (Source: Bloomberg)
Japan, Thailand’s biggest foreign investor, may also be the largest overseas economic victim of record floods forcing companies including Toyota Motor Co., Hitachi Ltd. (6501) and Canon Inc. (7751) to halt output in the country. Toyota, Asia’s biggest carmaker, scrapped its annual profit forecast yesterday, saying it needs more time to assess the financial toll from Thailand’s worst floods in almost 70 years. Canon, having shifted some camera production to the southeast Asian nation, cut its full-year profit outlook last month because of damage to output from the disaster. Japan’s most profitable exporters built up factories in Thailand in the past three decades to cut labor costs and stem the erosion of profit caused by the yen’s appreciation against the dollar. Japanese direct investment in Thailand jumped 35 percent to about 100 billion baht ($3.4 billion) in 2010, led by the auto, metals and machinery industries, according to the Thai Ministry of Industry’s Board of Investment.

Osborne Braces for More Public-Sector Job Cuts as New U.K. Recession Looms (Source: Bloomberg)
U.K. Chancellor of the Exchequer George Osborne may have to concede that many more government workers will lose their jobs than he forecast, heightening concern over an economy at risk of returning to recession. In the first three months of the fiscal year that began April 1, employment in central and local government plunged by 104,000, five times the number the Office for Budget Responsibility predicted in March for the year as a whole. The scale of the job shedding underscores the growing risks to the economic outlook at a time when unemployment is at a 15- year high and the threat of the euro area splintering is rocking financial markets. The budget watchdog, which scaled back its forecast for total public-sector job losses by 2016 to 400,000, may increase that prediction this month to closer to its initial estimate of 600,000.

European Banks Cutting Sovereign Bond Holdings Threatens to Worsen Crisis (Source: Bloomberg)
BNP Paribas SA and Commerzbank AG (CBK) are unloading sovereign bonds at a loss, leading European lenders in a government-debt flight that threatens to exacerbate the region’s crisis. BNP Paribas, France’s biggest bank, booked a loss of 812 million euros ($1 billion) in the past four months from reducing its holdings of European sovereign debt, while Commerzbank took losses as it cut its Greek, Irish, Italian, Portuguese and Spanish bonds by 22 percent to 13 billion euros this year. Banks are selling debt of southern European nations as investors punish companies with large holdings and regulators demand higher reserves to shoulder possible losses. The European Banking Authority is requiring lenders to boost capital by 106 billion euros after marking their government debt to market values. The trend may undermine European leaders’ efforts to lower borrowing costs for countries such as Greece and Italy, while generating larger writedowns and capital shortfalls.

Italy’s Political Crisis Ambushes Ireland After Greek Escape: Euro Credit (Source: Bloomberg)
After convincing investors and the European Central Bank that it’s not Greece, Ireland may find it harder to escape the fallout from Italian turmoil. Irish bonds have declined almost 3.6 percent since the end of September, eroding the highest returns in the world since June. Since falling to an eight-month low on Oct. 4, the yield on two-year Irish notes has jumped to about 75 basis points above its average of the past two months, according to data compiled by Bloomberg. Borrowing costs for Ireland, which announced additional austerity measures last week, have risen as Italian Prime Minister Silvio Berlusconi struggles to cut the region’s second- biggest debt load and Greek premier George Papandreou tries to form a unity government under a new leader.

Berlusconi to Resign After Austerity Passes (Source: Bloomberg)
Prime Minister Silvio Berlusconi offered to resign as soon as Parliament approves austerity measures pledged to European partners, after defections from his ruling party left him without a majority and bond yields surged to euro-era records. “Once that task has been achieved, the prime minister will tender his resignation to the president,” who will then begin consultations with all political parties, President Giorgio Napolitano said tonight in an e-mailed statement after meeting Berlusconi in Rome. The government has yet to present the final text of the amendment to the budget law with the austerity measures. The Senate was set to vote on the law next week, Senator Massimo Garavaglia told Ansa newswire tonight. The Chamber of Deputies would begin debate after the Senate’s approval. Napolitano gave no indication if the timing of the votes would be moved up.

Papademos to Be Named Greek PM: Reports (Source: Bloomberg)
Greece prepared for a new prime minister to lead an interim government of national unity as state-run NET TV and To Vima newspaper reported that former central banker Lucas Papademos will accept the post. Prime Minister George Papandreou said a Greek national unity government will be named “soon” and told his ministers to get ready to resign, spokesman Elias Mosialos said today in Athens. Both NET TV and To Vima named former European Central Bank Vice President Papademos as the next prime minister, without saying how they got the information. Papandreou and his rival, Antonis Samaras, leader of the opposition New Democracy party, agreed on the Greek unity government to win resumption of international aid. The government’s mission will be implementing a European Union summit decision on austerity measures from Oct. 26 in order to get a second Greek financing package of 130 billion euros ($179 billion) before leading the country to elections.

Napolitano Says Berlusconi to Resign After Measures Are Passed (Source: Bloomberg)
Italian President Giorgio Napolitano said Prime Minister Silvio Berlusconi has agreed to resign after the parliament approves the country’s austerity plans. Napolitano made his comments in an e-mailed statement after talks tonight with Berlusconi. The statement didn't say when the vote, which was tentatively slated for next week, will take place.

MF Global Settlement Over Losses in Doubt (Source: Bloomberg)
A $90 million settlement of an investor lawsuit against MF Global Holdings Ltd. and its former parent, Man Group Plc (EMG), over a 2008 wheat-trading loss was cast into doubt by the futures broker’s bankruptcy filing. A Manhattan federal judge is scheduled to decide on Nov. 18 whether to approve the settlement. The case is a class-action, or group, suit against MF Global, Man Group, underwriters of MF Global’s initial public offering in July 2007, and some of the firm’s officers and directors. The settlement allows investors to back out of the deal if they’re not paid the full $90 million, court records show. Lawsuits against the firm were automatically halted after MF Global filed for bankruptcy protection on Oct. 31. A bankruptcy judge must decide whether MF Global may contribute to the accord. MF Global’s portion of the settlement, which covers shareholders from July 2007 to February 2008, is $2.5 million.
“If the bankruptcy court gives us approval, we’ll go forward,” Mark Rosen, a lawyer for the investors, said in an interview today. “It’s not in our hands right now. It’s in the hands of the bankruptcy court.”

20111109 0959 Global Commodities Related News.

Corn (Source: CME)
US corn futures ended higher on outside market support as traders await Wednesday's USDA report. Market lifted by a strong rally in wheat, along with background support from a weaker dollar and higher crude oil. Traders expecting USDA to cut supply outlook Wednesday. But export demand remains weak, limiting market's upside. Dec. CBOT corn ends up 7 1/2c, or 1.1%, to $6.60 1/2 a bushel.

Wheat (Source: CME)
US wheat futures rallied amid lack of farmer selling ahead of Wednesday's USDA report. Tight-fisted farmers have helped drive cash prices higher, which is supporting futures, traders say. Initial rally led by Minneapolis spring wheat. Traders expect slight supply cut in Wednesday's USDA report, but weak export demand keeping a lid on prices. Dec. CBOT wheat ends up 18 1/4c, or 2.9%, to $6.57 a bushel, MGEX Dec. wheat ends up 18c to $9.46 1/4 and KCBT Dec. wheat ends up 14c to $7.38.

Rice (Source: CME)
US rice futures resumed their tumble on weak demand and technical selling. After halting a 6-session slide by squeezing out small gains Monday, the market fell to a fresh 1-month low today, finishing at session lows. Poor export demand continues to overshadow concerns about flood damage to Asia crops. CBOT November rice ends down 19c at $15.71/hundredweight.

Soy ticks up after losses, market eyes USDA report
SINGAPORE, Nov 8 (Reuters) - Chicago soybean futures rose half a percent, regaining some ground on bargain hunting after two
sessions of losses sparked by forecasts of a record large crop in Brazil and slowing U.S. exports.
"Soybeans have been under pressure on Brazilian crop forecast and harvest pressure in the United States but today we expect
trading volumes to be thin before the USDA report," said Ker Chung Yang, an analyst at Phillip Futures in Singapore.

S Korea corn imports revised up to 8 mln tonnes-attache
Nov 7 (Reuters) - Following are selected highlights from a report issued by a U.S. Department of Agriculture attache in South
Korea:
"MY 2011/12 wheat import estimate is unchanged at 4.2 million tonnes with 2.2 million tonnes for milling and 2 million tonnes
for feed. Imports of U.S. wheat are expected to be 1.3 million tonnes due to lower-than-expected exports of U.S. feed grade
wheat.

French farm office ups maize estimate to 15 mln T
PARIS, Nov 7 (Reuters) - French farm office FranceAgriMer raised its estimates of France's 2011 maize crop to 15.02 million
tonnes from 14.75 million estimated last month, for a jump of 8.6 percent on last year, data showed on Monday.
The office said the average yield in the harvest, now virtually over in France, was 9.8 tonnes per hectare, an estimate
revised up from 9.6 tonnes last month. In 2010, the yield was at 9.0 tonnes per hectare.

Ukraine grain harvest 95 pct complete at 52.4 mln T
KIEV, Nov 7 (Reuters) - Ukraine harvested 52.4 million tonnes of grain by bunker weight as of November 7 from 95 percent of
the planting area compared with 40.7 million tonnes at the same date in 2010, Agriculture Ministry said on Monday.
The ministry said in a report the yield averaged 3.6 tonnes per hectare in 2011 against 2.82 tonnes in 2010, when the harvest
was hit by severe drought.

Kazakh 2011 gross grain crop record 29.7 mln T-agency
ALMATY, Nov 7 (Reuters) - Kazakhstan's gross grain crop more than doubled this year, hitting a record 29.7 million tonnes,
Interfax news agency quoted the Agriculture Ministry as saying on Monday.
The ministry gave no data for this year's crop by clean weight.

Ukraine could lose 30 pct of its '12 winter grains
KIEV, Nov 7 (Reuters) - Ukraine could lose up to 30 percent of its winter grains sown for the 2012 harvest due to a severe
drought, which has covered almost all Ukrainian regions and caused a critical delay in sowing, weather forecasters said on
Monday.
"About 50 percent of the sown areas have not sprouted so far or are in poor state," Tetyana Adamenko, the head of the
agricultural department of Ukraine's meteorological centre, told Reuters.

Ukraine grain exports fall 12 pct in Oct vs Sept
KIEV, Nov 7 (Reuters) - Ukraine's grain exports fell to about 1.28 million tonnes in October from 1.45 million in September,
consultancy UkrAgroConsult said on Monday.
It said in a report that the volume had included 760,800 tonnes of maize, 193,900 of wheat and 310,700 of barley.

S Korea 2011-12 Corn Imports At 8M Tons On Feed Demand (Source: CME)
South Korea's 2011-12 corn imports are expected to hit 8 million metric tons, the U.S. Department of Agriculture's Seoul attache said, 300,000 metric tons more than its previous forecast, due to higher feed demand in the poultry and beef cattle sectors. The USDA kept its 2011-12 wheat import estimate at 4.2 million tons, with 2.2 million tons for milling and 2 million tons for feed, but said imports of U.S. wheat are likely to be 1.3 million tons, due to lower-than-expected exports of U.S. feed grade wheat. South Korea's 2011-12 wheat production is estimated to increase 12% on the year to 44,000 tons because of increased harvested area, the USDA said, as the government's loan program to finance purchases helped increase demand for domestic milling wheat. The government also provided drying and storing facilities to local wheat producers.
The USDA said Korean wheat farmers are expected to continue increasing the planted area in the near future in response to greater demand from the local bakery and confectionary sectors. South Korean corn production is negligible, accounting for less than 1% of total consumption. The planted area for 2011-12 is around 15,828 hectares, the USDA said, with an estimated production of 78,000 metric tons based on the preceding five-year average yield.

Western Australia To Release 15,200 Hectares Of New Farm Land (Source: CME)
Western Australia announced it will make available 15,200 hectares of new irrigable farm land near Kununurra in the state's deep north, more than doubling the size of an existing irrigation area, with the government hoping to attract interest from foreign investors. The existing Ord River irrigation area was set up in the 1960s aiming to combine use of some of the massive volumes of water available in the wet season and vast areas of unused land. The area currently comprises 14,000 hectares of farms, growing a variety of crops including cotton, rice, chia, sorghum, pumpkins, melons, mangoes and sandalwood, and even some sugar cane with varying degrees of success over the years. State Premier Colin Barnett said the new land release will further cement the Ord River irrigation area's reputation as a world-class agricultural precinct and provides opportunities for short, medium and long-term agricultural land development for a variety of crops.
The release of the land comes at a time of increasing concern within Australia and some other countries about purchases of farm land by foreigners. Last year, Brazil decided to limit the amount of land foreigners can buy. But State Regional Development and Lands Minister Brendon Grylls said the area was already attracting significant interest and this latest land release would help draw private sector investment into the growing region. "The multiple land release will draw both national and international attention from purchasers looking to benefit from the Ord's reliable water supply, productive soils and ideal growing climate," he said in a joint statement.

AB Foods Says Commodity Costs Easing (Source: CME)
Associated British Foods PLC said commodity cost pressures that have put earnings under pressure recently are easing, as it posted a rise in fiscal-year revenue. The maker of Silver Spoon sugar, Kingsmill bread and Twinings tea has been phasing in price increases to recover spiralling costs of corn oil, spices, barley and chocolate. It has also absorbed cost inflation to safeguard the price leadership position of its stellar-performing discount clothing chain Primark, even as rising cotton prices, increased sales tax and higher freight costs have put margins under pressure. Still, Chief Executive George Weston said the input cost situation today is very different from a year ago. "I think it is easing. Commodity prices are not going up any more and in some cases they have come down. Cotton is the big one for us. At its peak, it was trading at about 220 U.S. cents a pound. It is now sitting at about 100," he said in an interview.
"I struggle to think of any which are going up, even if some still sit at high levels. The increases that we saw last year seem to be behind us." Weston also said the declining price of cotton will bolster Primark's margins in the second half. Primark, which is in a strong competitive position in the U.K. as a result of its high volume, low price offer, has been a consistent outperformer for AB Foods, which is 55%-owned by a family holding of CEO Weston.

German 2011/12 sugar output seen up sharply
HAMBURG, Nov 8 (Reuters) - Germany's refined sugar output in the current 2011/12 season will rise to 4.67 million tonnes,
from 3.44 million tonnes in 2010/11, Germany's sugar industry association WVZ said on Tuesday.
A major rise had been expected following an expansion of German sugar beet plantings and favourable weather that has
increased beet sugar content.

China to import 3.3 mln tonnes of cotton this year
MUMBAI, Nov 7 (Reuters) - China is seen importing 3.3 million tonnes cotton this year, up 22.22 percent from last year's 2.7
million tonnes, a top industry body official said on Monday.
The international  cotton year is from August to July.
 
Zambia Sugar sees lower output this year
LUSAKA, Nov 7 (Reuters) - Zambia Sugar , the country's largest sugar producer, said on Monday sugar output in the current
financial year would be below last year's 385,000 tonnes due to lower cane yields and reduced sucrose levels.
However, the company, a unit of South Africa's Illovo Sugar , said improved factory performance would offset some of the
reduced production.

India cautious as its mills seek big sugar exports
MUMBAI/LONDON, Nov 4 (Reuters) - Sugar market heavyweight India is likely to delay half of this year's expected one million
tonnes of unrestricted exports until early 2012 due to output delays, a decision that would protect Indian consumers and
limit the country's impact on world prices.      
India, the world's top sugar consumer and biggest producer after Brazil, can cause big gyrations in international sugar
futures prices because of its clout as either an exporter or an importer, depending on the progress of its crop.

Roasted Green Mountain Coffee shares can rebound
Nov 7 (Reuters) - Green Mountain Coffee Roasters Inc , the leading U.S. single-cup coffee company, can shake off short seller
David Einhorn's warnings and again serve up a heady brew for investors, as its growth and earnings potential are sound.
The company's shares slumped almost 40 percent to a 7-month low after the Greenlight Capital hedge fund founder said in an
investor presentation last month that he turned negative on the stock and cast doubt on Green Mountain's business model,
accounting standards and long-term earnings potential.

Aluminum Slump Means 25% of Global Smelters Now Losing Money: Commodities (Source: Bloomberg)
The biggest decline in aluminum prices since the global recession means at least 25 percent of the world’s smelters may be unprofitable. The metal fell 23 percent to $2,135.50 a metric ton on the London Metal Exchange since May 1 and energy costs gained 16 percent in the past month. Twenty-five percent of production loses money below $2,350 and 50 percent under $2,000, according to estimates by Bloomberg Industries. About 10 percent of output may be shut by the first quarter, said Jochen Hitzfeld, the analyst at UniCredit SpA in Munich ranked by Bloomberg as the most-accurate price forecaster over two years.
Alcoa Inc. (AA), the largest U.S. producer, said last week that a “significant” part of global capacity is marginal. Aluminum Corp. of China Ltd. said in October that prices are close to output costs. When demand and prices weakened in 2009, smelters curbed supply by about 5 percent in the first half of the year, according to the International Aluminium Institute. Futures rallied 37 percent in the following six months.

Six major challenges for oil and gas in 2012: John Kemp
--John Kemp is a Reuters market analyst. The views expressed are his own--
LONDON, Nov 7 (Reuters) - In a presentation for clients, Reuters analyst John Kemp discusses the six major challenges confronting oil and gas markets in 2012 and beyond. The views expressed are his own.
Politics and regulation as much as economics and geology will determine how the industry develops and the outlook for prices.

China's CNOOC makes rare diesel purchase -sources
BEIJING, Nov 8 (Reuters) - China National Offshore Oil Corp (CNOOC), the country's third largest oil company, imported about 100,000 tonnes of diesel last month, joining bigger rivals in a buying spree to cover domestic diesel shortages, industry sources said on Tuesday.
It is the second-ever diesel purchase made by CNOOC, parent of Hong Kong-listed offshore oil and gas specialist CNOOC Ltd  .

Oil Rises a Sixth Day on Optimism Europe Nearer to Resolving Debt Crisis (Source: Bloomberg)
Oil rose for a sixth day in New York. Crude for December delivery gained as much as 47 cents, or 0.5 percent, to $97.17 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.95 at 12:01 p.m. Sydney time. The contract yesterday advanced $1.28 to $96.80, the highest settlement since July 28, as investors speculated that an offer to resign by Italy’s Prime Minister Silvio Berlusconi brings Europe closer to resolving its debt crisis.

Frying The Friendly Skies (Source: CME)
Americans are getting used to burning ethanol in their daily commute. Now, pond scum and french-fry grease could help fuel their next business trip. United Airlines flew from Houston to Chicago with a 40% blend of biofuel made from algae -- the first biofuel-powered commercial flight in the U.S. On Wednesday, Alaska Airlines launches the first of 75 flights powered by a 20% biofuel blend made from used cooking oil. Scientists in recent years have figured out how to make jet fuel from animal fat, garbage, shrubbery and dozens of other substances. But as the new fuels make their way from the lab to 30,000 feet, the economics are proving tricky. "This is expensive. It's about six times what we normally pay for fuel," said Bill Ayer, chairman and CEO of Alaska Airlines. "So the hope is as this industry develops, and it becomes scalable, the price comes down."
Airlines are eager to fly on fuel that can reduce carbon emissions up to 80% while diversifying the supply of their biggest expense. The price of jet fuel has jumped 87% since 2009 to $3.11 a gallon. But because of small-scale production, renewable jet fuel costs even more. "The capability's there," said chemist Jose Olivares, executive director of the National Alliance for Advanced Biofuels and Bio-products, a consortium of private companies, universities and laboratories. "Whether we can do it economically and at the same price of petroleum fuels, that's the challenge." Seattle-based Alaska Air Group Inc., parent of Alaska Airlines, bought 28,000 gallons of biofuel -- at $17 per gallon -- from Dynamic Fuels in Geismar, La., a joint venture of Tyson Foods Inc. and synthetic-fuel company Syntroleum Corp. Dynamic mostly makes diesel out of inedible animal parts from Tyson's factories and used cooking oil, some from area restaurants.
But its renewable jet fuel -- which must be able to withstand more extreme temperatures than diesel or gasoline -- is made only as ordered, and the plant won't ramp up production until there's demand to match. "Before we commit the capital, we've got to understand that the economics support it -- versus build it and they will come," said Bob Ames, Tyson's vice president of renewable energy.

METALS-Copper up on new Greek govt; Italy's finances weigh
SHANGHAI, Nov 8 (Reuters) - Copper edged up on Tuesday as Greek politicians compromised and worked to form a new unity cabinet to push through the bailout package, easing fears of a disorderly default by the indebted nation.
"The new Greek government is providing some optimism, but going forward, the markets are expected to turn their focus to Italy, which is too big to fail, yet too big to bail," said Phillip Futures analyst Ong Yiling.

PRECIOUS-Gold steady on mounting Italy debt worry
SINGAPORE, Nov 8 (Reuters) - Gold prices hovered above $1,790 on Tuesday, after soaring more than 2 percent in the previous session, supported by safe haven demand as Italy took centre stage in the euro zone debt crisis.
Italian government bond yields soared to near 15-year highs, putting the euro zone's third largest economy front and centre of the region's debt crisis, despite efforts by policymakers scrambling to stem growing contagion.

Gold Futures Rise, Topping $1,800 as Europe Crisis Spurs Investor Demand (Source: Bloomberg)
Gold futures topped $1,800 an ounce for the first time in almost seven weeks on concern that European leaders will be unable to contain the region’s debt crisis, fueling demand for the precious metal as a haven. Italian Prime Minister Silvio Berlusconi failed to muster an absolute majority on a routine parliamentary ballot today, fueling more calls for his resignation. Federal Reserve Chairman Ben S. Bernanke signaled more monetary stimulus may be needed to cut unemployment, while the European Central Bank last week unexpectedly lowered interest rates. Gold has rallied more than 11 percent since the end of September. “The turmoil in Europe has brought the fear trade back to gold,” Lance Roberts, the chief executive officer of Houston- based Streettalk Advisors, said in a telephone interview. “Also, a renewed wave of policy easing by central banks is helping gold.”

20111109 0957 Soy Oil & Palm Oil Related News.

Soybeans (Source: CME)
US soybean futures end higher, fueled by investors evening trades ahead of tomorrow's crop production updates from federal forecasters. Traders consolidating risk, bracing for any surprises in government crop estimates, particularly after prices stumbled yesterday, analysts say. A weaker US dollar added broad-based support to commodities, but outlooks for larger projected inventories and slower export demand limited advances, analysts add. CBOT Jan soy ended 3 1/4c higher at $12.05/bushel.

Soybean Meal/Oil (Source: CME)
Soy product futures finished mixed, as traders reduced risk exposure ahead of Wednesday's government supply and demand reports. Soyoil rose as trimmed short positions, while soymeal stumbled on the unwinding meal/oil spreads, analysts say. Dec soymeal ended down $1.70 at $307.60 per short ton, and Dec soyoil climbed 0.65c at $51.85 cents/pound.

Wilmar International Third-Quarter Profit Gains 24%, Misses Estimates (Source: Bloomberg)
Wilmar International Ltd. (WIL), the world’s biggest palm-oil processing company, said third-quarter profit gained 24 percent, missing analyst estimates, forecasting a challenging environment for its oilseed and grains operations Net income rose to $321 million, or 5.0 cents a share, in the three months ended June 30, compared with $259.5 million, or 3.9 cents, a year earlier, the Singapore-based company said today in a statement. That compares with the $443.3 million mean estimate of four analysts in a survey compiled by Bloomberg. Revenue increased 69 percent to $13 billion. Crude palm oil prices averaged 20 percent higher in the third quarter from a year earlier, increasing Wilmar’s production costs. China’s battle with inflation has also slowed the economy, eroding demand in the company’s biggest market for processed cooking oils.

Palm oil rises to 7-week high on weather concerns, data
KUALA LUMPUR, Nov 8 (Reuters) - Malaysian palm oil futures rose to a seven-week high  ahead of a slew of industry data this
week and as concerns of bad weather hitting output of the tropical oil spurred some investors to stock up.
"There is caution but investors do not want to let go of the fact that weather and production problems could push up the
market later on," said a trader with a foreign commodities brokerage.

Argentina Sept soy crushing down 1.2 pct year/year
BUENOS AIRES, Nov 7 (Reuters) - Argentine soy-crushing dropped 1.2 percent in September versus a year earlier to 3.7 million
tonnes due to a smaller 2010/11 harvest that followed a record 2009/10 crop, the government said in a crushing report.
Argentina is the world's top supplier of soyoil and soymeal and the third-biggest exporter of unprocessed beans.

Brazil to put out record soy and corn crop-Celeres
SAO PAULO, Nov 7 (Reuters) - Responding to appealing international prices and coming off successful harvests,    Brazilian
farmers are planting record soybean and corn crops this season, grain analysts Celeres said on Monday.
Brazil's 2011/12 soybean crop is seen at a record 75.5 million tonnes, up from the 75.18 million tonnes forecast in early
October, Celeres said in its fourth forecast of the new grain crop.